Brussels is currently withholding nearly €28 billion in EU funds from Hungary and Budapest will not get the totality of the money until it implements 27 so-called "super milestones" negotiated with the Commission.
Hungary on Thursday accused the European Commission of being biased against the country "for political reasons" and withholding EU funds "unfairly".
Foreign Affairs Minister Péter Szijjártó told reporters in Brussels that a law adopted by the Hungarian parliament the day before fulfilled requirements by the Commission to strengthen judicial independence in the country and that should therefore lead to a thaw of frozen EU funds.
"The European Commission had clear expectations, Hungary fulfilled this set of expectations in the fall of last year and with the legislation that has just been adopted," Foreign Affairs Minister Péter Szijjártó told reporters in Brussels.
"Something always comes up. There's always something more. It is clear that those Commissioners who constantly express new doubts about Hungary's commitment, always make new demands, they are simply biased against us for political reasons. And they are withholding our EU funds completely unfairly, without any legal basis or good reason," he added.
Brussels is currently withholding nearly €28 billion in EU funds from Hungary. This includes the country's entire share of the bloc's cohesion funds for the 2021-2027 period amounting to €22 billion and €5.8 billion under the Recovery and Resilience Facility (RRF), the bloc's post-COVID stimulus programme.
The Commission and member states had initially agreed to freeze just €6.3 billion in cohesion money — on top of the €5.8 billion in RRF funds — over rule of law issues under the new conditionality mechanism. But it was widened to the whole €22 billion cohesion envelope in late December after the EU's executive ruled that several other laws — over academic freedoms, LGBTI rights and the asylum system — did not respect the Charter of Fundamental Rights.
To unlock all the money, Budapest must implement 27 so-called "super milestones" including four pertaining to judicial independence, 21 under the rule of law conditionality mechanism and two additional ones over the audit and reporting of EU funds.
The law adopted on Wednesday that aims to fulfill the judicial independence milestones and which is expected to come into force on 1 June was described by a Commission spokesperson as "a good step in the right direction."
"It is, however, not the end of the process. Further steps need to follow," Christian Wigand said.
"The formal preliminary assessment by the Commission under the RRF will only be made afterward in the context of Hungary's first payment request once all super milestones have been effectively implemented," he added, making it clear that the €5.8 billion from the RRF that are withheld will only be disbursed once all 27 milestones have been successfully rolled out.
But the new legislation would enable Budapest, after it has taken additional operation steps such as allocating funding to the National Judicial Council which supervises the central administration of the courts and received a positive preliminary assessment by the Commission, to tap into €13 billion of the cohesion funds withheld.
It will not however receive that in a lump sum as cohesion funds are allocated over several years and disbursed following reimbursements requests.
To unlock €6.3 billion in additional cohesion funds, Budapest will have to fulfill the 21 super milestones linked to the conditionality mechanism, with the remaining €2.6 billion to be distributed only after issues over academic freedoms, LGBTI rights and the asylum system have been resolved.
One key battle will be over the so-called Child Protection law, which bans depictions of homosexuality and gender reassignment in media content and educational material addressed to audiences under 18 years of age and seemingly conflates paedophilia with homosexuality.
The law has been widely criticised as anti-LGBT and prompted the Commission and 15 member states to mount a legal case against Hungary.
But Szijjártó said last month that "for us, the matter of child protection knows no compromises, we will protect our children", suggesting the government is not prepared to back down on the topic.
"This is not a simple government decision, nor a parliamentary decision, but this is the will of the people, as it was expressed in a referendum and we do not know of a higher-level decision in a democracy. Therefore, of course, we will stand by child protection, by protecting Hungarian children, regardless of how many countries decide to join the ongoing lawsuit against us," he added.