Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Hungary
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Hungary, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, labour market, social policy, stability pact

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   EUROPEAN COMMISSION  Brussels, 4.6.2025  COM(2025) 217 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Hungary {SWD(2025) 217 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies of Hungary 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121(2) and Article 148(4) thereof, 

Having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29  April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular 
Article 3(3) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16 November 2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

General considerations 

(1) 

Regulation (EU) 2024/1263, which entered into force on 30 April 2024, specifies the 
objectives  of  the  economic  governance  framework,  which  aims  at  promoting  sound 
and  sustainable  public  finances  and  sustainable  and  inclusive  growth  and  resilience 
through reforms and investments, and preventing excessive government deficits. The 
Regulation  stipulates  that  the  Council  and  the  Commission  conduct  multilateral 
surveillance in the context of the European Semester in accordance with the objectives 
and requirements set out in the TFEU. The European Semester includes, in particular, 
the  formulation,  and  the  surveillance  of  the  implementation  of  country-specific 
recommendations.  The  Regulation  also  promotes  national  ownership  of  fiscal  policy 
and  emphasises  its  medium-term  focus,  combined  with  more  effective  and  coherent 
enforcement. Each Member State must submit to  the Council and the Commission  a 
national  medium-term  fiscal-structural  plan,  containing  its  fiscal,  reform  and 
investment  commitments,  over  4  or  5  years,  depending  on  the  length  of the  national 

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2 

OJ L, 2024/1263, 30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1263/oj. 
OJ L 306, 23.11.2011, p. 25, ELI: http://data.europa.eu/eli/reg/2011/1176/oj. 

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legislative  term.  The  net  expenditure3  path  in  these  plans  has  to  comply  with  the 
Regulation’s  requirements,  including  the  requirements  to  put  or  keep  general 
government debt on a plausibly downward path by the end of the adjustment period, or 
for it to remain at prudent levels below 60% of gross domestic product (GDP), and to 
bring  and/or  maintain  the  general  government  deficit  below  the  3%-of-GDP  Treaty 
reference value over the medium term. Where a Member State commits to a relevant 
set  of  reforms  and  investments  in  accordance  with  the  criteria  set  out  in  the 
Regulation, the adjustment period may be extended by up to three years.  
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council4,  which 
established  the  Recovery  and  Resilience  Facility  (the  ‘RRF’),  entered  into  force  on 
19 February 2021.  The  RRF  provides  financial  support  to  Member  States  for 
implementing  reforms  and  investments,  delivering  a  fiscal  impulse  financed  by  the 
Union.  In  line  with  the  priorities  of  the  European  Semester  for  economic  policy 
coordination, the RRF fosters economic and social recovery while driving sustainable 
reforms and investments, in particular promoting the green and digital transitions and 
making  Member  States’  economies  more  resilient.  It  also  helps  strengthen  public 
finances  and  boost  growth  and  job  creation  in  the  medium  and  long  term,  improve 
territorial cohesion within the Union and support the continued implementation of the 
European Pillar of Social Rights. 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council5  (the 
‘REPowerEU  Regulation’),  which  was  adopted  on  27 February 2023,  aims  to  phase 
out the Union’s dependence on Russian fossil-fuel imports. This helps achieve energy 
security  and  diversify  the  Union’s  energy  supply,  while  increasing  the  uptake  of 
renewables,  energy  storage  capacities  and  energy  efficiency.  Hungary  added  a  new 
REPowerEU chapter to its national recovery and resilience plan in order to finance key 
reforms and investments that will help achieve the REPowerEU objectives. 

On 11 May 2021, Hungary submitted its national recovery and resilience plan to the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to Article 19 of that Regulation, the Commission assessed the relevance, effectiveness, 
efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in  accordance  with  the 
assessment guidelines set out in Annex V. On 15 December 2022, the Council adopted 
its  Implementing  Decision  approving  the  assessment  of  the  recovery  and  resilience 
plan  for  Hungary6,  which  was  amended  under  Article  18(2)  on  8  December  2023  to 

Net  expenditure  as  defined  in  Article  2,  point  (2),  of  Regulation  (EU)  2024/1263:  ‘net  expenditure’ 
means government expenditure net of (i) interest expenditure; (ii) discretionary revenue measures; (iii) 
expenditure  on  programmes  of  the  Union  fully  matched  by  revenue  from  Union  funds;  (iv)  national 
expenditure  on  co-financing  of  programmes  funded  by  the  Union;  (v)  cyclical  elements  of 
unemployment benefit expenditure; and (vi) one-offs and other temporary measures. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12 February 2021 
establishing 
(OJ  L  57,  18.2.2021,  p.  17,  ELI: 
http://data.europa.eu/eli/reg/2021/241/oj). 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27 February 2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1, ELI: http://data.europa. eu/eli/reg/2023/435/oj). 
Council  Implementing  Decision  of  15  December  2022  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for Hungary (ST 15447/2022). 

the  Recovery  and  Resilience  Facility 

(2) 

(3) 

(4) 

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(5) 

(6) 

(7) 

include  the  REPowerEU  chapter7.  The  release  of  instalments  is  conditional  on  the 
adoption  of  a  decision  by  the  Commission,  in  accordance  with  Article  24(5),  stating 
that Hungary has satisfactorily achieved the relevant milestones and targets set out in 
the  Council  Implementing  Decision.  Satisfactory  achievement  requires  that  the 
achievement  of  preceding  milestones  and  targets  for  the  same  reform  or  investment 
has not been reversed. 

On  18 February 2025,  the  Council,  upon  the  recommendation  of  the  Commission, 
adopted a recommendation endorsing the national medium-term fiscal-structural plan 
of Hungary8. The plan was submitted in accordance with Article 11 and Article 36(1), 
point (a), of Regulation (EU) 2024/1263, covers the period from 2025 until 2028 and 
presents a fiscal adjustment spread over four years.  

On  26  November  2024,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the 
Commission  adopted  the  2025  Alert  Mechanism  Report,  in  which  it  identified 
Hungary as one of the Member States for which an in-depth review would be needed. 
The  Commission  also  adopted  a  recommendation  for  a  Council  recommendation  on 
the economic policy of the euro  area and  a proposal  for the 2025 Joint  Employment 
Report,  which  analyses  the  implementation  of  the  Employment  Guidelines  and  the 
principles  of  the  European  Pillar  of  Social  Rights.  The  Council  adopted  the 
Recommendation on the economic policy of the euro area9 on 13 May 2025 and the 
Joint Employment Report on 10 March 2025. 

On  29 January 2025,  the  Commission  published  the  Competitiveness  Compass,  a 
strategic framework that aims to boost the EU’s global competitiveness over the next 
five  years.  It  identifies  the  three  transformative  imperatives  of  sustainable  economic 
growth: (i) innovation; (ii) decarbonisation and competitiveness; and (iii) security. To 
close  the  innovation  gap,  the  EU  aims  to  foster  industrial  innovation,  support  the 
growth of start-ups through initiatives like the EU Start-up and Scale-up Strategy, and 
promote the adoption of advanced technologies like artificial intelligence and quantum 
computing.  In  pursuit  of  a  greener  economy,  the  Commission  has  outlined  a 
comprehensive Affordable Energy Action Plan and a Clean Industrial Deal, ensuring 
that  the  shift  to  clean  energy  remains  cost-effective,  competitiveness-friendly, 
particularly  for  energy-intensive  sectors,  and  is  a  driver  for  growth.  To  reduce 
excessive dependencies and increase security, the Union is committed to strengthening 
global  trade  partnerships,  diversifying  supply  chains  and  securing  access  to  critical 
raw materials and clean energy sources. These priorities are underpinned by horizontal 
enablers, namely regulatory simplification, deepening of the single market, financing 
competitiveness and a Savings and Investments Union, promotion of skills and quality 
jobs, and better coordination of EU policies. The Competitiveness Compass is aligned 
with  the  European  Semester,  ensuring  that  Member  States’  economic  policies  are 
consistent with the Commission’s strategic objectives, creating a unified approach to 
economic governance that fosters sustainable growth, innovation and resilience across 
the Union. 

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Council  Implementing  Decision  of  8  December  2023  amending  the  Implementing  Decision  of  15 
December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary (ST 
15964/2023). 
Council  Recommendation  of  18  February  2025  endorsing  the  medium-term  fiscal-structural  plan  of 
Hungary, OJ C/2025/1707, 18.3.2025. 
Council  Recommendation  of  13  May  2025  on  the  economic  policy  of  the  euro  area  (OJ  C, 
C/2025/2782, 22.5.2025, ELI: http:// data.europa.eu/eli/C/2025/2782/oj).) 

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(8) 

In  2025,  the  European  Semester  for  economic  policy  coordination  continues  to 
develop  alongside  the  implementation  of  the  RRF.  The  full  implementation  of  the 
recovery and resilience plans remains essential for delivering on the policy priorities 
under the European Semester, as the plans help effectively address all or a significant 
subset  of  challenges  identified  in  the  relevant  country-specific  recommendations 
issued  in  recent  years.  These  country-specific  recommendations  remain  equally 
relevant  for  the  assessment  of  amended  recovery  and  resilience  plans  in  accordance 
with Article 21 of Regulation (EU) 2021/241. 

(9) 

the  key  economic  policy 
The  2025  country-specific  recommendations  cover 
challenges that are not sufficiently addressed by measures included in the recovery and 
resilience  plans,  taking  into  account  the  relevant  challenges  identified  in  the  2019-
2024 country-specific recommendations. 

(10)  On  4  June  2025,  the  Commission  published  the 2025  country  report  for  Hungary.  It 
assessed  Hungary’s  progress 
relevant  country-specific 
in  addressing 
recommendations  and  took  stock  of  Hungary’s  implementation  of  the  recovery  and 
resilience plan. Based on this analysis, the country report identified the most pressing 
challenges Hungary is facing. It also assessed Hungary’s progress in implementing the 
European  Pillar  of  Social  Rights  and  in  achieving  the  Union  headline  targets  on 
employment, skills and poverty reduction, as well as progress in achieving the United 
Nations Sustainable Development Goals.  

the 

(11)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No  1176/2011  for  Hungary.  The  main  findings  of  the  Commission’s  assessment  of 
macroeconomic vulnerabilities for  Hungary for the purposes of that Regulation  were 
published  on  13  May  202510.  On  4  June  2025,  the  Commission  concluded  that 
Hungary  is  experiencing  macroeconomic  imbalances.  In  particular,  vulnerabilities 
primarily related to competitiveness and government financing needs remain relevant. 
Rapid  wage  growth  has  compromised  cost  competitiveness  in  recent  years  and 
inflationary pressures stronger than in the rest of the EU persist, while the economic 
recovery  is  slow  and  subject  to  downside  risks.  The  external  account  recorded  a 
surplus  in  2024,  but  policies  boosting  domestic  demand  pose  risks  to  external 
sustainability. The government deficit decreased in 2024 due to lower investment and 
a fall in spending on energy subsidies but remains high and is not forecast to improve 
much  this  year  or  next.  The  government  debt  ratio  is  not  falling  and  debt-servicing 
costs and gross financing needs remain high. The bank-sovereign nexus has deepened 
due to  tax incentives for domestic banks to  purchase government  debt.  House prices 
accelerated markedly in 2024 driven by strong demand, which has been compounded 
by  demand  supporting  government  measures.  Policy  progress  has  been  limited. 
Hungary will need to introduce permanent fiscal measures and rely less on temporary 
windfall  profit  taxes  or  cuts  in  investments.  Monetary  policy  has  been  tight,  but  its 
effectiveness  has  been  weakened  by  government  interventions:  poorly  targeted 
subsidies and loans to household and corporations persist and controls of lending rates 
limit  the  effectiveness  of  monetary  policy.  At  the  same  time,  housing  subsidies  and 
preferential  lending  schemes  continue  to  distort  the  housing  market  and  exacerbate 
house price pressures. 

Assessment of the Annual Progress Report 

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SWD(2025) 127 final. 

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(12)  On 18 February 2025 the Council recommended the following maximum growth rates 
of net expenditure for Hungary: 4.3% in 2025, 4.0% in 2026, 3.9% in 2027, and 3.7% 
in  2028,  which  correspond  to  the  maximum  cumulative  growth  rates  calculated  by 
reference to 2023 of 9.1% in 2025, 13.5% in 2026, 17.9% in 2027, and 22.2% in 2028. 
In  2025-2026,  these  maximum  growth  rates  of  net  expenditure  coincide  with  the 
in  accordance  with  Article  3(4)  of  Regulation  1467/97,  as 
corrective  path 
recommended by the Council on 18 February 2025 with a view to bringing an end to 
the situation of an excessive deficit11. On 30 April 2025 Hungary submitted its Annual 
Progress  Report12, on action taken in  response to  the Council recommendation of 18 
February 2025 with a view to bringing an end to the situation of an excessive deficit 
and the implementation of reforms and investments responding to the main challenges 
identified  in  the  European  Semester  country-specific  recommendations.  The  Annual 
Progress  Report  also  reflects  Hungary’s  biannual  reporting  on  the  progress  made  in 
achieving its recovery and resilience plan in accordance with Article 27 of Regulation 
(EU) 2021/241. 

(13)  Russia’s  war  of  aggression  against  Ukraine  and  its  repercussions  constitute  an 
existential  challenge  for  the  European  Union.  The  Commission  recommended  to 
activate the national  escape clause of the Stability and Growth Pact  in  a coordinated 
manner to support the EU efforts to achieve a rapid and significant increase in defence 
spending and this proposal was welcomed by the European Council of 6 March 2025. 
Following the request of Hungary on 30 April 2025, on [date] the Council, upon the 
recommendation of the Commission, adopted a recommendation allowing Hungary to 
deviate  from,  and  exceed,  the  recommended  maximum  growth  rates  of  net 
expenditure13. 

(14)  Based  on  data  validated  by  Eurostat14,  Hungary’s  general  government  deficit 
decreased from a deficit of 6.7% of GDP in 2023 to a deficit of 4.9% in 2024, while 
the general government debt rose from 73.0% of GDP at the end of 2023 to 73.5% at 
the  end  of  2024.  According  to  the  Commission’s  calculations,  these  developments 
correspond to a net expenditure growth rate of 2.3% in 2024. In the Annual Progress 
Report, Hungary estimates the net expenditure growth in 2024 at 2.3%. Based on the 
Commission’s  estimates,  the  fiscal  stance15,  which  includes  both  nationally  and  EU 
financed expenditure, was contractionary, by 3.3% of GDP, in 2024. 

(15)  According to the Annual Progress Report, the macroeconomic scenario underpinning 
the budgetary projections by Hungary expects real GDP growth at 2.5% in 2025, while 
HICP  inflation  is  projected  at  4.5%  in  2025.  The  Commission  Spring  2025  Forecast 

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15 

Council  Recommendation  with  a  view  to  bringing  an  end  to  the  situation  of  an  excessive  deficit  in 
Hungary, C/2025/5896. 
The  2025  Annual  Progress  Reports  are  available  on:  https://economy-finance.ec.europa.eu/economic-
and-fiscal-governance/stability-and-growth-pact/preventive-arm/annual-progress-reports_en  
Council  recommendation  allowing  Hungary  to  deviate  from,  and  exceed,  the  recommended  net 
expenditure path (Activation of the national escape clause), [Please complete OJ C/2025/xxx, x.x.2025]. 
Eurostat-Euro Indicators, 22.4.2025. 
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 
those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure net of discretionary revenue measures and including expenditure financed by non-repayable 
support (grants) from the Recovery and Resilience Facility and other Union funds. 

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(16) 

projects real GDP to grow by 0.8% in 2025 and 2.5% in 2026, and HICP inflation to 
stand at 4.1% in 2025 and 3.3% in 2026.  

In the Annual Progress Report, the general government deficit is expected to decrease 
to  4.1%  of  GDP  in  2025,  while  the  general  government  debt-to-GDP  ratio  is  set  to 
decrease  to  73.1%  by  the  end  of  2025.  These  developments  correspond  to  net 
expenditure growth of 7.4% in 2025. The Commission Spring 2025 Forecast projects a 
government  deficit  of  4.6%  of  GDP  in  2025.  The  decrease  of  the  deficit  in  2025 
mainly reflects lower interest expenditure due to decreasing coupon payments on the 
inflation-linked bonds and a further decrease in subsidies to utility companies for the 
losses  incurred  due  to  caps  on  residential  energy  prices.  According  to  the 
Commission’s calculations, these developments correspond to net expenditure growth 
of  6.1%  in  2025.  This  is  lower  than  the  Hungarian  authorities’  projection  in  the 
Annual  Progress  Report  due 
lower  nationally  financed  expenditure.  The 
Commission forecast projects a higher deficit due to significantly lower revenue from 
production  and  income  taxes  driven  by  weaker  GDP  growth.  Based  on  the 
Commission’s  estimates,  the  fiscal  stance,  which  includes  both  nationally  and  EU 
financed expenditure, is projected to be expansionary, by 0.4% of GDP, in 2025. The 
general government debt-to-GDP ratio is set to increase to 74.5% by the end of 2025. 
The  increase  of  the  debt-to-GDP  ratio  in  2025  mainly  reflects  the  high  general 
government deficit and a positive stock-flow adjustment due to large interest payments 
in cash terms accrued in the previous year. 

to 

(17)  General  government  expenditure  amounting  to  0.4%  of  GDP  is  expected  to  be 
financed  by  non-repayable  support  (“grants”)  from  the  Recovery  and  Resilience 
Facility  in  2025,  compared  to  0.2%  of  GDP  in  2024,  according  to  the  Commission 
Spring  2025  Forecast16.  Expenditure  financed  by  Recovery  and  Resilience  Facility 
non-repayable  support  enables  high-quality  investment  and  productivity-enhancing 
reforms  without  a  direct  impact  on  the  general  government  balance  and  debt  of 
Hungary.  

(18)  General  government  defence  expenditure  in  Hungary  amounted  to  1.1%  of  GDP  in 
2021,  1.4%  of  GDP  in  2022  and  1.9%  of  GDP  in  202317.  According  to  the 
Commission  Spring  2025  Forecast,  expenditure  on  defence  is  projected  at  2.0%  of 
GDP in both 2024 and 2025. This corresponds to an increase of 0.9 percentage points 
of  GDP  compared  to  2021.  The  period  when  the  national  escape  clause  is  activated 
(2025-2028)  allows  Hungary  to  reprioritise  government  expenditure  or  increase 
government revenue so that lastingly higher defence expenditure would not endanger 
fiscal sustainability in the medium term.  

(19)  According  to  the  Commission  Spring  2025  Forecast,  net  expenditure  in  Hungary  is 
projected to grow by 6.1% in 2025 and 8.6% cumulatively in 2024 and 2025. Based on 
the Commission Spring 2025 Forecast, the net expenditure growth of Hungary in 2025 
is  projected  to  be  above  the  recommended  maximum  growth  rate  established  by  the 

16 

17 

According  to  the  Guidance  note  on  the  statistical  recording  of  the  RRF,  similarly  to  ‘traditional’  EU 
grants, the expenditure to be financed by RRF grants is recorded in national accounts at the time it is 
incurred,  and  matched  in  time  and  in  size  with  an  imputed  revenue  from  the  EU,  regardless  of  the 
timing of the cash settlements, which are conditional on the satisfactory fulfilment of the milestones and 
targets.  Hungary  has  so  far not  submitted  any payment  request  under  the  RRF  and  has  only  received 
pre-financing disbursements. Eurostat (2021) Guidance note on the statistical recording of the Recovery 
and Resilience Facility. 
Eurostat, government expenditure by classification of functions of government (COFOG).  

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corrective path, corresponding to a deviation18 of 0.7% of GDP in annual terms. When 
considering 2024 and 2025 together, the cumulative growth rate of net expenditure is 
projected  to  be  below  the  recommended  maximum  growth  rate.  The  projected 
deviation  is  within  the  flexibility  of  the  national  escape  clause  based  on  current 
projections  for  defence  spending.  Therefore,  the  excessive  deficit  procedure  for 
Hungary is held in abeyance. 

(20)  Moreover, the Council recommended that Hungary wind down the emergency energy 
support measures before the 2024/2025 heating season. According to the Commission 
Spring  2025  Forecast,  while  the  net  budgetary  cost19  of  emergency  energy  support 
measures is estimated at 1.0% of GDP in 2024, it is projected to decrease to 0.5% in 
2025. In particular, subsidies to utility companies for the losses incurred due to caps 
on  residential  energy  prices  remained  in  force.  The  emergency  energy  support 
measures were not  wound down before the 2024/2025 heating season. This  is  not  in 
line with what was recommended by the Council. 

(21)  The  Annual  Progress  Report  does  not  include  budgetary  projections  beyond  2025. 
Based on policy measures known at the cut-off date of the forecast, the Commission 
2025 spring forecast projects a government deficit of 4.7% of GDP in 2026. The slight 
increase of the general government deficit in 2026 mainly reflects the impact of higher 
tax  exemptions  for  mothers  and  public  sector  wage  increases  and  bonuses.  These 
developments  correspond  to  net  expenditure  growth  of  6.0%  in  2026.  Based  on  the 
Commission’s  estimates,  the  fiscal  stance,  which  includes  both  nationally  and  EU 
financed expenditure, is  projected to  be expansionary by 1.0% of GDP in 2026. The 
general government debt-to-GDP ratio is projected by the Commission to decrease to 
74.3%  by  the  end  of  2026.  The  decrease  of  the  debt-to-GDP  ratio  in  2026  mainly 
reflects higher nominal GDP growth. 

Key policy challenges 

(22)  Some  practices  distort  the  functioning  of  the  financial  and  retail  market,  which  may 
also  limit  the  effectiveness  of  monetary  policy.  While  caps  on  bank-deposit  and 
corporate-lending rates were phased out in 2024, banks are widely expected to lower 
lending  rates.  Additionally,  to  boost  domestic  demand,  there  is  widespread  use  of 
broadly  targeted  subsidised  loans  to  households  and  corporations,  as  well  as 
administratively controlled mortgage rates. The proportion of subsidised loans remains 
high compared to pre-COVID-19 levels, which leads to suboptimal capital allocation 
by financing projects with low returns and limited productivity gains. Although price 
caps on food products were phased out in 2024, in 2025, the government capped the 
difference between the retail purchase price and the sales price of a wide range of food 
products.  

(23)  Weaknesses  in  budget  planning  and  execution  have  limited  policy  transparency  and 
contributed  to  the  expansionary  bias  of  fiscal  policy  in  the  past.  The  very  early 
adoption  of  annual  budgets  since  2016,  with  an  exception  in  2024,  has  reduced  the 
reliability of macroeconomic and budgetary forecasts. The introduction of a ‘state of 
danger’, in force since 2020, has increased the discretion in implementing the annual 
budgets.  Hungary’s  national  fiscal  framework  has  not  led  to  a  more  prudent  fiscal 

18 

19 

From  2026  these  figures  will  appear  in  the  control  account  that  is  established  in  Article  22  of  the 
Regulation (EU) 2024/1263. 
The figure represents the level of the annual budgetary cost of those measures, including revenue and 
expenditure and, where applicable, net of the revenue from taxes on windfall profits of energy suppliers. 

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stance and presents a number of shortcomings, such as procyclical features of the debt 
rule and weak enforcement of medium-term budget planning. Frequent and significant 
revisions  of  fiscal  targets  have  undermined  the  role  of  the  budget  as  an  anchor  for 
market participants and have called into question the credibility of medium-term fiscal 
plans.  Basing  medium-term  fiscal  planning  on  multiannual  spending  ceilings,  as  set 
out in the revised EU fiscal rules, would help address the expansionary bias of fiscal 
policy.  The  mandate  and  operational  capacities  of  the  Hungarian  Fiscal  Council 
remain  limited.  The  new  public  fund  management  structures  such  as  public  interest 
trusts  weaken  budgetary  oversight  as  they  seem  to  operate  without  effective  control 
mechanisms. 

(24)  Population  ageing  is  set  to  intensify  the  long-term  fiscal  sustainability  challenges  in 
Hungary.  The  ratio  of  working  age  population  to  individuals  aged  65  or  older  is 
projected to decline from 2.9 in 2023 to 1.8 by 2070. As a result, pension expenditure 
is projected to rise substantially, from around 7.7% in 2022 to above 12% of GDP in 
2070. According to the Commission’s debt sustainability analysis, fiscal risks are high 
in the medium term and medium in the long term. The design of the pension system 
generates  equity  issues,  such  as  increasing  expenditure  on  pensions  for  high-income 
individuals and large pension gaps between pensioners from different age cohorts due 
to  the  sensitivity  of  the  pension  calculation  method  to  fluctuations  in  the  national 
average wage. The minimum pension has remained nominally unchanged since 2008 
and  is  not  effective  at  ensuring  adequate  pensions  for  those  with  an  interrupted 
employment history and low average earnings during their career. 

(25) 

In accordance with Article 19(3), point (b), of Regulation (EU) 2021/241 and criterion 
2.2  of  Annex  V  to  that  Regulation,  the  recovery  and  resilience  plan  includes  an 
extensive set  of mutually reinforcing  reforms and investments  to  be implemented by 
2026.  These  are  expected  to  help  effectively  address  all  or  a  significant  subset  of 
challenges  identified  in  the  relevant  country-specific  recommendations.  Within  this 
tight timeframe, finalising the effective implementation of the recovery and resilience 
plan,  including  the  REPowerEU  chapter,  is  essential  to  boost  Hungary’s  long-term 
competitiveness  through  the  green  and  digital  transitions,  while  ensuring  social 
fairness. To deliver on the commitments of the recovery and resilience plan by August 
2026, it is essential for Hungary to urgently accelerate the implementation of reforms 
and  investments  by  addressing  relevant  challenges,  in  the  first  place  by  swiftly 
implementing  the  necessary  measures  to  ensure  effective  protection  of  the  financial 
interests  of  the  EU.  Strengthening  the  anti-corruption  framework  and  increasing 
competition in public procurement are key elements in this respect and also crucial to 
improve  the  business  environment  and  foster  competitiveness.  The  systematic 
involvement  of  local  and  regional  authorities,  social  partners,  civil  society  and  other 
relevant  stakeholders  remains  essential  in  order  to  ensure  broad  ownership  for  the 
successful implementation of the recovery and resilience plan. 

(26)  The implementation  of  cohesion  policy programmes, which encompass support from 
the  European  Regional  Development  Fund  (ERDF),  the  Just  Transition  Fund  (JTF), 
the European Social Fund Plus (ESF+) and the Cohesion Fund (CF), has accelerated in 
Hungary. It is important to continue efforts to ensure the swift implementation of these 
programmes,  while  maximising  their  impact  on  the  ground.  Furthermore,  it’s  key  to 
the successful implementation of cohesion policy programmes that Hungary  urgently 
resolves  the  pending  issues  on  the  enabling  conditions,  in  particular  the  outstanding 
issues  as  regards  compliance  with  the  Charter  of  Fundamental  Rights,  and  on  the 
protection of the Union’s financial interests. Hungary is already taking action under its 

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cohesion policy programmes to boost competitiveness and growth. At the same time, 
Hungary  continues  to  face  challenges,  including  those  relating  to  enhancing 
competitiveness  in  the  context  of  industrial  transition,  strengthening  innovation  and 
digital  capacities,  accelerating  the  energy  transition,  improving  access  to  affordable 
housing,  including  social  housing,  the  upskilling  and  labour  market  integration  of 
disadvantaged groups, combatting poverty and social exclusion as well as educational 
inequalities,  and  increasing  water  resilience.  In  accordance  with  Article  18  of 
Regulation (EU) 2021/1060, Hungary is required – as part of the mid-term review of 
the  cohesion  policy  funds  –  to  review  each  programme  taking  into  account,  among 
other things, the challenges identified in the 2024 country-specific recommendations. 
The  Commission  proposals  adopted  on  1  April  202520  extend  the  deadline  for 
submitting  an  assessment  –  for  each  programme  –  of  the  outcome  of  the  mid-term 
review  beyond  31  March  2025.  It  also  provides  flexibilities  to  help  speed  up 
programme  implementation  and  incentives  for  Member  States  to  allocate  cohesion 
policy resources to five strategic priority areas of the Union, namely competitiveness 
in strategic technologies, defence, housing, water resilience and energy transition. 

(27)  The  Strategic  Technologies  for  Europe  Platform  (STEP)  provides  the  opportunity  to 
invest in a key EU strategic priority by strengthening the EU’s competitiveness. STEP 
is channelled through 11 existing EU funds. Member States can also contribute to the 
InvestEU  programme  supporting  investments  in  priority  areas.  Hungary  could  use 
these initiatives to support the development or manufacturing of critical technologies, 
including clean and resource-efficient technologies.  

(28)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan  and  other  EU  funds,  Hungary  faces  several  additional  challenges  related  to  the 
business environment, access to finance, innovation, reliance on Russian fossil fuels, 
fossil-fuel  subsidies,  balancing  of  the  electricity  network,  water  management, 
education,  skills  levels  and  integration  of  disadvantaged  groups  into  the  job  market, 
social assistance, social dialogue and housing.  

(29)  As  set  in  the  Competitiveness  Compass,  all  the  EU,  national,  and  local  institutions 
must  make  a  major  effort  to  produce  simpler  rules  and  to  accelerate  the  speed  of 
administrative  procedures.  The  Commission  has  set  ambitious  goals  for  reducing 
administrative burden: by at least 25% and by at least 35% for SMEs; and has created 
new  tools  to  achieve  these  goals,  including  systematic  stress  test  of  the  stock  of  EU 
legislation and enhanced stakeholders’ dialogue. To match this ambition, Hungary also 
needs  to  take  action.  49%  of  businesses  consider  the  complexity  of  administrative 
procedures to be a problem for their company when doing business in Hungary21. The 
weak  business  environment  is  still  a  major  barrier  to  innovation.  According  to 
competitiveness  indicators,  Hungary  was  among  the  worst  performers  in  the  EU  in 
2024.  Businesses  face  a  high  level  of  regulatory  volatility,  which  makes  long-term 
business planning difficult. The public and stakeholders are not consulted on important 
draft laws, as they are often tabled in parliament by individual members instead of the 
government,  thus  not  requiring  a  public  consultation.  The  government  continues  to 
widely use emergency decrees to amend laws during the ‘state of danger’, which has 
been  continuously  extended  for  the  last  five  years  for  various  reasons.  The 

20 

21 

Proposal  for  a  regulation of  the  European  Parliament  and of  the  Council  amending  Regulations  (EU) 
2021/1058  and  (EU)  2021/1056  as  regards  specific  measures  to  address  strategic  challenges  in  the 
context of the mid-term review - COM(2025) 123 final. 
‘Businesses' attitudes towards corruption in the EU’ Flash Report, Eurobarometer Report (April 2024)  

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taxes  complicates 

longstanding  emergency  regime  limits  public  consultation  and  makes  it  possible  to 
introduce  sudden,  often  major,  policy  shifts  potentially  disrupting  normal  business 
operations. The lack of equal treatment of companies limits competition.  The market 
structure is concentrated and only a few firms compete in specific markets22. Several 
services are entrusted to state-owned or private firms that operate without competition. 
The large-scale use of  framework  agreements in  public procurement procedures  also 
limits  competition  by  locking  in  certain  firms  and  helping  them  acquire  a  dominant 
market  position.  The  retail  sector,  in  particular,  operates  in  an  unstable  business 
environment. Retailers are also affected by administrative interventions, such as retail 
price  caps,  limits  on  sales  margins,  mandatory  discounts,  prohibition  of  selling  food 
products  48  hours  before  their  expiry  date  and  mandatory  online  price  reporting. 
Policy  measures  and  high  taxes  decrease  the  competitiveness  of  retailers.  The 
tax  system  and 
increasing  use  of  sector-specific 
disproportionately impacts larger, often foreign-owned firms. In 2023, revenues from 
sector-specific  taxes  accounted  for  2.7%  of  GDP.  The  sectors  most  affected  include 
banking,  energy,  retail,  construction  materials,  insurance,  telecommunication  and 
utilities. The State is active in business transactions and crowds out private actors by 
purchasing  or  facilitating  the  purchase  of  several  large  companies  with  subsidised 
financing.  Various  state  interventions  have  been  used  to  force  –  mostly  foreign  – 
owners to sell their firms, facilitating the creation of public or government-connected 
national  champions.  The  increasing  presence  of  private  equity  funds  creates  new 
challenges. This company structure is used, in particular, by individuals with links to 
the government as it ensures anonymity, similar to offshore companies. Private equity 
funds have increased significantly in number and size in recent years and represented 
more  than  2.5%  of  GDP  in  2024.  Private  equity  funds  are  increasingly  investors  in 
companies  winning  public  procurements  and  securing  high-value  concessions,  and 
have  a  strong  presence  in  business  transactions  with  the  State.  The  weak  business 
environment  contributed 
the  erosion  of  competitiveness  and  holds  back 
investments,  and  ultimately  leads  to  higher  inflation  and  slow  economic  recovery  as 
shown  by  the  in-depth  review  on  Hungary  under  the  macroeconomic  imbalance 
procedure. 

the 

to 

(30)  Capital  markets  as  channels  to  finance  start-ups  and  highly  innovative  small  to 
medium-sized enterprises are underdeveloped in  Hungary.  In 2023, the stock market 
capitalisation  stood  at  17.6%  of  GDP  (EU  average:  68%).  Recent  policy  measures 
have further obstructed the development of capital markets, such as tax-free long-term 
bonds for retail investors and tax incentives for housing investment.  

(31)  R&D intensity has increased only marginally over the past decade and  was still well 
below  the  EU  average  in  2023  (1.4%  vs  2.2%  of  GDP).  Public  R&D  spending, 
including  in  universities, is  one of the lowest  in  the EU, which holds back scientific 
excellence.  The  ongoing  reorganisation  of  research  institutes,  as  well  as  unclear 
internal  evaluation  mechanisms,  contribute  to  uncertain  working  conditions  for 
researchers.  Technology  transfer  offices  are  not  yet  sufficiently  embedded  in  and 
accepted  by  academic  circles,  and  spin-off  channels  are  not  yet  well  developed. 
Cooperation  between  academia  and  businesses  is  mainly  limited  to  incumbent  firms 
with  links  to  universities.  Only  a  few,  mainly  large,  companies  innovate  and  benefit 
from the various subsidies due to the heavy administrative burden and not always clear 
eligibility rules on innovation expenditure.  

22 

World Bank’s Business Ready report. 

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(32)  Hungary continues to heavily rely on Russia for fossil fuels. In 2024, more than 70% 
of  natural  gas  and  more  than  80%  of  crude  oil  consumed  was  of  Russian  origin. 
Hungary’s efforts to shift away from Russian dependence are slow.  

(33)  Hungary  records  sizeable  relevant  fossil-fuel  subsidies  without  a  planned  phase-out 
before 2030. In particular, fossil-fuel subsidies that address neither energy poverty in a 
targeted way nor genuine energy security concerns, hinder electrification and are not 
crucial  for  industrial  competitiveness  could  be  considered  a  phase-out  priority. In 
Hungary, fossil-fuel subsidies – such as the utility cost reduction programme, a value 
added  tax  reduction  for  district  heating  using  natural  gas,  and  excise  tax  refunds  for 
agricultural use of diesel – are economically inefficient, perpetuate reliance on fossil 
fuels and do not incentivise electrification in the residential sector. Scaling down and 
phasing out these subsidies is in line with EU commitments and can help Hungary to 
control government spending. 

(34)  Without  more  system  flexibility,  fast  deployment  of  renewables  fails  to  reduce 
reliance  on  electricity  imports  and  has  led  to  extreme  volatility  of  the  wholesale 
electricity price over the course of individual days. Household consumers have limited 
access to dynamic pricing, and the roll-out of smart meters is low (below 10%), also 
impeding flexibility. Limited cross-border trade prevents Hungary from exploiting the 
full benefits  of the single market  by letting  electricity flow  where demand is  higher. 
Furthermore,  low  competition  in  the  Hungarian  balancing  market  results  in  higher 
costs.  The  energy  price  for  businesses  in  Hungary  is  one  of  the  highest  in  the  EU. 
Energy imports decreased in 2024 but remain substantial, making the external balance 
vulnerable  to  increases  in  energy  prices,  which  is  a  challenge  identified  under  the 
macroeconomic imbalance procedure. 

(35)  Hungary  is  increasingly  affected  by  climate  risks,  evidenced  by  the  droughts  it 
experienced in 2022, in particular, but also in 2024, which led to significant losses in 
the  agricultural  sector.  Weak  administrative  capacities  and  insufficient  green 
infrastructure  undermine  Hungary’s  overall  water  resilience,  and  in  particular  its 
natural water retention capacity. Moreover, water quality is poor due to pollution from 
agriculture, industry and human settlements, with only 11.3% of surface waters having 
good  ecological  status  (EU  average:  37.3%).  Hungary’s  progress  in  embracing  the 
circular  economy  is  slow,  with  insufficient  emphasis  on  reuse,  repair  and  recycling. 
According to 2023 data, Hungary’s resource productivity of 1.33 EUR/kg and circular 
material  use  rate  of  5.9%  are  substantially  below  the  EU  average  (2.74 EUR/kg  and 
11.8%)  and  no  convergence  can  be  observed.  Scarce  resource  allocation  and 
insufficient  treatment  capacities  in  the  waste  management  sector  have  resulted  in 
relatively low recycling rates and an over-reliance on landfilling.  

(36)  Hungary’s  competitiveness  and  innovation  potential  are  limited  by  weak  basic  skills 
among  disadvantaged  and  vocational  education  and  training  (VET)  students,  low 
tertiary  education  attainment,  and  limited  up-skilling  and  reskilling  for  vulnerable 
groups. Strong inequalities in education, particularly affecting Roma, leave one in two 
disadvantaged pupils  with  low basic skills. The  2022 PISA survey shows one of the 
largest  gaps  in  average  mathematics  performance  between  general  and  vocational 
programmes in the EU, largely due to socio-economic disparities. VET participation is 
increasing,  yet  the  system  is  still  insufficiently  permeable23  and  the  three-year  VET 

23 

Smooth  transition  of  learners  within  the  entire  education  and  training  system,  horizontally  and 
vertically. 

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programmes  –  with  their  reduced  general  education  content  –  fail  to  provide  direct 
access  to  educational  pathways  leading  to  higher  qualification  levels.  Teacher 
shortages  are  a  pressing  concern  against  the  background  of  an  ageing  workforce, 
especially in the most disadvantaged regions and rural areas. In 2024, Hungary started 
to implement a major reform of teacher salaries, co-financed by the ESF+. In addition, 
greater teacher autonomy and a teacher assessment  system  rewarding innovative and 
inclusive  pedagogical 
teaching  approaches,  could  help  attract  high-achieving 
candidates and retain young teachers in the profession. Despite an increasing demand 
for a highly skilled workforce, tertiary education attainment remains one of the lowest 
in the EU. This is combined with low shares of science, technology, engineering and 
mathematics graduates,  which further reduces Hungary’s ability to attract investment 
in high-tech sectors.  

(37)  The average employment rate is high, but some disadvantaged groups, such as people 
with  a  low  level  of  educational  attainment,  persons  with  disabilities  and  Roma, 
continue  to  face  barriers  to  accessing  upskilling  and  reskilling  opportunities  and 
entering into stable employment. This remains an untapped reserve of workers, while 
Hungary  also  relies  on  foreign  workers.  Effective  reskilling  and  upskilling 
opportunities,  and  appropriate  tailor-made  support  services  –  including  transversal 
skills  development,  health  and  psychological  support  and  job-seeking  support  –  are 
lacking  for  disadvantaged  groups.  The  recent  amendment  of  the  legal  framework 
governing  the  public  employment  service  enables  training,  and  there  is  scope  for 
improving  the  capacities  of  the  public  employment  services  in  this  respect.  The 
three-month 
average  duration  of  unemployment 
unemployment  benefit  limits  the  time  for  upskilling  or  finding  suitable  employment 
and increases risks of low-quality jobs, long-term unemployment and poverty. 

is  over  12  months.  The 

(38)  Social dialogue between employers and trade unions remains weak, especially in the 
public sector. Although the private sector tripartite forum received a legal framework 
for  minimum  wage  negotiations  in  2024,  major  economic  policies  proposed  in  2024 
and  2025  were  adopted  without  consulting  relevant  employers  and  trade  unions. 
Workers’  rights  in  the  public  sector  have  gradually  eroded.  For  certain  public 
employees,  a  separate  employment  status  has  been  created,  which  weakens  their 
ability to collectively defend their interests.  

(39)  Social exclusion and poverty are on the rise, especially among children, older people 
and persons with disability. Wealth inequality has increased significantly and is among 
the  highest  in  the  EU.  The  tax  system  favours  high-income  households,  while  most 
social support is provided through tax credits. The adequacy of the minimum income, 
especially  of  the  employment replacement benefit  (FHT), is  one of the lowest  in  the 
EU.  The  impact  of  social  benefits  declined  further  in  2023  in  terms  of  reducing 
poverty  (especially  for  children)  and  remained  low  in  terms  of  reducing  income 
inequality.  An  EU-funded  programme  supporting  housing,  social  services  and 
education  in  the  300  most  disadvantaged  municipalities  is  a  major  step  forward,  but 
more targeted measures to improve access to mainstream social and basic services are 
needed. The uneven geographical distribution of doctors is a major barrier to accessing 
care  in  outlying  regions  of  the  country.  Policy  measures  to  address  low  healthcare 
spending  and  persistent  shortages  of  health  professionals  remain  limited.  Life 
expectancy at birth is among the lowest in the EU. Addressing these challenges would 
also contribute to supporting upward social convergence, in line with the Commission 

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services’  second-stage  country  analysis  in  line  with  the  Social  Convergence 
Framework24. 

(40)  Housing costs, which increased by 230% between 2010 and 2024, negatively impact 
living  standards,  in  particular  among  people  living  below  the  poverty  threshold.  The 
social housing stock is small and decreasing, and low-income households have limited 
access to housing support in absence of clear and more targeted government housing 
policy  support.  Generous  and  untargeted  housing  subsidies  and  restricted  housing 
supply contributed to house price increases. 

(41) 

In light of the Commission’s in-depth review and its conclusions on the existence of 
imbalances,  recommendations under Article 6 of Regulation  (EU) No 1176/2011  are 
reflected  in  recommendations  (1),  (2),  (3),  (4)  and  (6).  Policies  referred  to  in 
recommendations  (1),  (2),  (4)  and  (6)  help  to  address  vulnerabilities  linked  to 
government and external financing needs. Policies referred to in recommendation (3) 
help to address vulnerabilities linked to cost competitiveness and price pressures.  

HEREBY RECOMMENDS that Hungary take action in 2025 and 2026 to:  

1. 

2. 

3. 

Reinforce overall defence spending and readiness in line with the European Council 
conclusions  of  6 March  2025.  Adhere  to  the  maximum  growth  rates  of  net 
expenditure  recommended  by  the  Council  on  18  February  2025,  with  a  view  to 
bringing  an  end  to  the  situation  of  an  excessive  deficit  while  making  use  of  the 
allowance  under  the  national  escape  clause  for  higher  defence  expenditure.  Wind 
down  the  emergency  energy  support  measures.  Pursue  effective  coordination  and 
clear  demarcation  of  macroeconomic  policies  to  ensure  fiscal  and  external 
sustainability.  Phase  out  remaining  price  and  interest-rate  caps,  and  equivalent 
measures,  to  reduce  distortive  effects  and  facilitate  the  smooth  transmission  of 
monetary  policy.  Strengthen  the  medium-term  budgetary  framework,  align  the 
preparation  of  annual  budgets  with  the  budgetary  year  and  limit  discretion  in  the 
implementation  of  annual  budgets.  Improve  the  long-term  sustainability  of  the 
pension  system,  while  preserving  adequacy,  in  particular  by  addressing  income 
inequalities.   

(EU)  2021/241,  urgently 

In  view  of  the  applicable  deadlines  for  the  timely  completion  of  reforms  and 
investments  under  Regulation 
the 
implementation  of  the  recovery  and  resilience  plan,  including  the  REPowerEU 
chapter, swiftly implementing the necessary measures to ensure the protection of the 
EU’s  financial 
implementation  of  cohesion  policy 
the 
programmes  (ERDF,  JTF,  ESF+,  CF),  building,  where  appropriate,  on  the 
opportunities offered by the mid-term review. Make optimal use of EU instruments, 
including the opportunities provided by the InvestEU and the Strategic Technologies 
for Europe Platform, to improve competitiveness. 

interests.  Accelerate 

accelerate 

Improve the regulatory framework and enhance competition in product markets and 
services,  in  particular  in  retail,  by  avoiding  arbitrary  administrative  interventions, 
tailor-made  legislation  providing  undue  advantage  or  disadvantage  to  specific 
companies  and  market-distorting  state-supported  transactions  and  by  reducing  the 
use of emergency measures to what is strictly necessary, in line with the principles of 
the single market and the rule of law. Stimulate the development of capital markets 

24 

SWD(2025)  95  –  Second-stage  country  analysis  on  social  convergence  in  line  with  the  Social 
Convergence Framework (SCF), 2025. 

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4. 

5. 

6. 

by increasing tax and regulatory incentives. Strengthen the innovation framework for 
the  public  sector  and  businesses  by  improving  the  predictability  of  public  R&D 
spending and better targeting existing measures towards SMEs. 

Accelerate  the  diversification  of  fossil  fuel  supply  to  phase  out  dependence  on 
Russian  sources  and  take  concrete  steps  to  phase  out  fossil-fuel  subsidies,  in 
particular those related to excise duties on diesel and those hindering electrification 
in the residential sector. Improve flexibility and competition in the electricity sector, 
by strengthening the balancing market  and boosting cross-border electricity trading. 
through  natural  water  retention  and  strengthened 
Improve  water  resilience 
administrative  capacities,  and  improve  circularity,  in  particular  by  strengthening 
waste treatment capacities. 

Improve  education  outcomes  and  tertiary  attainment  rate,  and  increase  the 
participation  of  disadvantaged  groups,  particularly  Roma,  in  quality  mainstream 
education by further increasing the attractiveness of the teaching profession and the 
share  of  pupils  obtaining  an  upper-secondary  qualification  that  gives  access  to 
tertiary education. 

Increase access to effective active labour market measures, in particular by providing 
upskilling and reskilling opportunities to the most disadvantaged groups, and ensure 
the  adequacy  of  social  assistance  and 
effective  social  dialogue.  Improve 
unemployment benefits, and ensure access to essential services for all. Target support 
measures  in  the  housing  sector  to  low-income  households  and  increase  housing 
supply, including for social housing.  

Done at Brussels, 

For the Council 
The President 

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