The European Commission confirmed on 25 September 2026 that Hungary will now ask for only €5.4 billion under the bloc’s Security Action for Europe (SAFE) loan scheme. The figure represents less than one-third of the €16.4 billion originally proposed by former Prime Minister Viktor Orbán’s government.
Hungary’s new premier, Péter Magyar who took office in April, ordered a review of the earlier request, citing concerns about potential corruption linked to the previous administration. SAFE is the EU’s low-interest financing instrument designed to modernise defence industries and improve military readiness across member states in response to the ongoing Russian threat.
Why the defence loan request was reduced
Commission spokesperson Thomas Regnier explained that Brussels had warned the incoming Hungarian authorities that they could reassess the allocation. Magyar’s team decided to pursue a markedly smaller amount, emphasizing a desire to avoid the scrutiny associated with the larger sum. The revised request still aims to support domestic production of weapon systems, but under stricter conditions that require at least 65 % of the procurement value to come from EU members, Ukraine, or EEA/EFTA nations.
At the same time, Italy’s own SAFE application was confirmed at €8 billion – roughly half of the €14.9 billion the Meloni government had initially signalled. The parallel reductions in both countries illustrate a broader trend of member states tempering ambitions as Brussels imposes tighter eligibility rules.
EU moves to release frozen cohesion funds
In a related development, the Commission proposed on 23 September 2026 to unlock €4.2 billion of previously frozen cohesion funds for Hungary. The money, part of a €16.4 billion block frozen in May over alleged corruption, will be released after the new government implemented reforms in public procurement, anti-corruption mechanisms, conflict-of-interest safeguards, and prosecutorial efficiency.
Commission President Ursula von der Leyen praised Budapest for “strengthening the rule of law and protecting the Union’s financial interests.” The proposal also includes the reinstatement of Hungary’s participation in the Erasmus+ and Horizon Europe programmes, allowing students and researchers to once again access EU-wide academic and innovation networks.
Next steps for the funding
Before the €4.2 billion can be transferred, all EU member states must endorse the Commission’s plan at the Council level. If approved, the funds will complement the SAFE loan and help Hungary meet its defence-industry targets while demonstrating adherence to EU governance standards.
They reflect both the EU’s insistence on transparency and the new Hungarian government’s effort to restore credibility after years of dispute with the Union.
