The EU is set to provide €900 million ($980 million) to Hungary as an advance on its share of post-Covid pandemic recovery funds, which remain frozen in a rule of law dispute.
The European Commission said the money, which it called "pre-financing", would be directed towards greening Hungary's energy production once EU member states sign the agreement.
Brussels' announcement came after Hungarian Prime Minister Viktor Orban was accused of being prepared to veto further EU aid to Ukraine and delay Kiev's bid for membership talks in order to unblock the frozen funds.
Orban recently launched a public campaign hostile to the Commission.
The European Union has announced that it has approved Hungary's plan to spend €10.4 billion allocated to it from the post-pandemic recovery and resilience fund, but the disbursement of most of it has been suspended until Budapest meets the conditions for respecting the rule of law.
However, the €900 million advance was not subject to those conditions, European Commission spokeswoman Veerle Nuyts said.
She said it was granted to Budapest because of the "urgent need" to provide "necessary liquidity" to Hungary, which has a fragile economy, and to launch energy projects.
To receive the rest of the EU funds, Hungary must meet 27 conditions imposed by Brussels, called "super milestones", which cover areas such as the independence of the judiciary, the fight against corruption and public procurement rules.
The Commission spokeswoman said the EU would not pay any requests to Hungary to use the fund "until we have established that the Hungarian plan satisfactorily meets all 27".
She said the amount for "pre-financing" would be deducted from any future payments and the commission "will reimburse" them if no payments are eventually made.
In addition to the frozen billions in the post-Covid reconstruction fund, Brussels has placed a freeze on €22bn in separate cohesion funds for Hungary until it can prove reforms have been made to ensure the independence of judges, the rights of LGBTQI+ minorities and the independence of academics.
Hungary has adopted some changes that it claims meet the requirements relating to the judiciary in an attempt to obtain 13 billion euros of these funds.
Nuyts said these changes were seen as a "good step in the right direction". /BGNES
