The EU is a voluntary club, EU Commissioner for Cohesion and Reforms reminds at the end of visit to Hungary

Elisa Ferreira, the European Commissioner for Cohesion and Reforms visited Hungary at the end of last week. One of the highlights of her trip was a visit to the Mátra Power Plant. The region where it is located is trying to adapt to the transformation of the plant with EU support, but the delay of the investment and the circumstances of the project have been complicating the situation.

Earlier, Hvg360 warned that by burning the local lignite – which has poor calorific value – beyond the deadline, could result in having up to a thousand billion forints of EU money go up in smoke unless the government manages to secure a delay. The paper recalled that in an annex to one of its operational programmes detailing the use of catch-up funds, the Hungarian government has pledged to stop using highly pollutant lignite by 2025. Meanwhile, in March, the plant's environmental permit was extended until 2029.

The impact of abandoning lignite mining in the area would be mitigated by the Just Transition Fund, which is part of Ferreira's portfolio. According to Szabad Európa, last year the local Coal Region Committee requested a postponement on the use of the funds, which could be used mainly for training.

In response to a question from Telex, the Commissioner for Cohesion and Reforms said that several Member States have asked for an extension of one or two years due to the unforeseen problems with the energy market, and this is not a problem in and of itself. Europe is committed to being the first climate neutral continent, and all member states have made commitments "with a certain timeframe". Ferreira also said that they are not forcing the transition with the Fund, they are just supporting it in order to minimize its social and economic impact.

At the same time, she confirmed that the European Commission has sent a letter requesting further information, to which they are awaiting a reply. Last Thursday they had a meeting with the management of the company that operates the Mátra power plant, at which local authorities and trade unions were also represented.

She stressed that they were in favour of switching to clean energy or other economic activities and that "this aspect must be addressed". She did not explicitly mention that lignite would be replaced by natural gas, which is cleaner than brown coal, nor that solar panels had been installed on the premises of the plant, which doesn’t change the fact that gas is a fossil fuel which emits harmful substances.

The Commissioner indicated that "there's a time limit" on the Just Transition Fund. Roughly half of the fund comes from the EU budget, and it is enough to account for this part until 2029, but the other half comes from the jointly borrowed money that must be used up until 2026.

When Telex asked whether it would therefore be a problem if the switchover, originally planned for 2025, was postponed until after 2026, she replied with a clear no. If there is a plan for phasing out the polluting source, preparations for training and tendering should begin now, Ferreira explained. The switch to gas should be coordinated with the European Commission's energy department. If it is approved by the body, they expect the switchover plan to receive the green light as well, and "wouldn't start when the plant has closed down". The Commissioner made it clear that at this point there is no danger of losing out on funds, "I'm just warning you of the fact that we need to speed things up" because in 2026 the money that can be spent up to that point will disappear from the fund.

During her visit to Hungary, the Commissioner also met with ministers Tibor Navracsics and János Bóka – the two government ministers who often negotiate about the frozen Hungarian funds. On whether these were discussed during the meetings, Ferreira said they were so central to their ongoing dialogue that there was no need to "additionally mention" them. She said that the main focus of her visit last week was Hungary's presidency of the EU Council of Ministers, which will begin in July.

Concerning Hungary's presidency, she pointed out that several of its priority areas were linked to her portfolio. One of them deals with convergence itself and the other with demographic decline. She said that cohesion policy must always be strengthened in order to enlarge the EU, and that it should be upheld in the case of the countries which have already joined. This will be especially crucial now in view of the rebuilding of Ukraine, which "will present great financial demands". During the presidency, the long-term reform of the cohesion policy will be addressed, and the Commissioner said that the introduction of regional milestones could be a good idea, instead of the current collection of invoices, but said that they are monitoring the feedback.

By the twentieth anniversary of its EU accession, Hungary's economy has drawn closer to the EU average, and while some of its regions have barely caught up, Budapest's performance has improved significantly more. We asked the Commissioner how this reflects on the EU's cohesion policy. Ferreira said that Hungary has made a lot of progress thanks to the catch-up funds, although sometimes the public does not quite see the impact. She said that certain regions getting ahead compared to others is not only a problem in Hungary, but if one cuts off resources, it will only slow down the dynamism of the more developed centres. Big cities can evolve 'endlessly', but poverty 'pockets' can still develop in some places.

When asked about the status of the funds blocked from Hungary due to rule of law concerns, she admitted that "there are problems at times" but added that "significant progress" had been made, with €10 billion becoming available (last December) and advance payments being transferred as well. Nevertheless, she pointed out:

The EU is a "voluntary club" and anyone who decides to join must abide by the rules. “There are benefits, but there are also obligations.”

She said she hoped that the remaining problems could be solved quickly and smoothly, that all resources would be managed properly, and that "things would gradually become normal in the relationship, because it is important" for the development of Hungarians' lives. They deserve to have things resolved and for Hungary to have a normal relationship, while Europe must remain united in the face of the many threats it faces, she opined.