The European Union has blocked foundation-funded Hungarian universities from signing EU grant agreements as the bloc flexed its financial muscles over rule-of-law concerns in the country.

Neither public trust foundations nor the 21 universities they fund can sign new EU grant agreements, including for Erasmus+ or Horizon Europe. The political capture of foundation boards was among the concerns that led to €7.5 billion (£6.6 billion) in EU funds for Hungary being held back.

The government has played down the freeze. , it said no students would be affected in 2023 because agreements had already been signed, adding that it would ensure the “continued smooth provision of funding for higher education until the March deadline”, the point by which it must show the EU that it has started rule-of-law reforms.

that a recent beefing-up of conflict-of-interest rules “still does not prevent top-level officials, including senior political executives from the National Assembly and Hungary’s autonomous bodies, from sitting on boards of public interest asset management foundations”.

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Fixing that is one of the 17 conditions that Hungary must now meet to get its EU dues. “They will have to voluntarily leave these boards and offer these seats to new personnel, which will be similarly on the side of Fidesz, but will not be in office,” István Kenesei, a professor emeritus at the University of Szeged, told ����Vlog, referring to the party of government, led by Viktor Orbán.

The reforms to meet EU demands could block national politicians from serving on university boards but still leave the door open to party loyalists from lower rungs, said Professor Kenesei. “You put the local mayor on the board. So what? That’s customary in Europe, I could see it in Finland, in Norway, so nobody can object.”

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About 20,000 students and some 6,500 staff went on Erasmus+ exchanges to or from Hungarian universities in 2021, with institutions receiving almost €15 million in mobility grants that year, according to .

The ban on Horizon Europe grants could drive high-flying Hungarian researchers abroad, according to Viktor Lőrincz, vice-president of the Hungarian Academy Staff Forum, an association founded to protect academic freedom after the government hived off the Hungarian Academy of Sciences’ research network. “There will be many researchers whose career will be impacted,” he said.

While the EU has promised to honour signed EU grant agreements, among the collateral damage will be Hungarian researchers who have spent months preparing now-ineligible bids and partners in other countries who now face an uncertain relationship with their Hungarian collaborators on EU projects, Dr Lőrincz added.

“These measures aim to ensure the transparent use of EU support by public interest asset management foundations and do not, of course, intend to impede academic mobility, research and innovation in Hungary,” a European Commission spokesperson said in a statement.

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The government’s 2021 decision to privatise most Hungarian universities was criticised for limiting transparency and accountability, with some fearing closer political control. Since then, more generous funding has been welcomed by some, although this has also been interpreted as another form of coercion. The few remaining public universities that rejected the model face now uncertainty about their eligibility for EU funding.

ben.upton@timeshighereducation.com