ANNEX to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Hungary - Hoofdinhoud

Council of the European Union

Brussels, 1 December 2022 (OR. en)

15447/22

Interinstitutional File: ADD 1

2022/0414 (NLE)

ECOFIN 1259 FIN 1280 UEM 341

NOTE

From: General Secretariat of the Council

To: Delegations

Subject: ANNEX to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Hungary

Delegations will find attached the above-mentioned annex to the Council Implementing Decision

based on the Commission Proposal COM (2022) 686.

ANNEX

SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN

• 1. 

  Description of reforms and investments

• A. 

  COMPONENT 1: DEMOGRAPHY AND PUBLIC EDUCATION

This component of the Hungarian recovery and resilience plan addresses challenges related to the inclusive access to quality school education, the labour market integration of vulnerable groups, and broader demographic developments facing the Hungarian economy, public finances and society.

The main objectives of the component are to:

• improve access to quality school education by providing pupils and teachers with the

devices necessary to participate in modern digital education, and developing their digital skills;

• increase the participation of disadvantaged pupils and students with special education needs

in quality mainstream education;

• reduce the risk of segregation in schools; • increase the attractiveness of the teaching profession and reinforce the skillset of teachers

and school managers;

• improve access to early childhood education and care to reduce social inequalities and

facilitate labour market integration of vulnerable groups; and

• promote medium and long-term fiscal sustainability and adequacy of the pension system.

The component includes measures reflecting principles of the European Pillar of Social Rights on education, training and lifelong learning, on gender equality and on childcare and support to children. The component also supports the digital transition by increasing the digital capacities in the public education and by enhancing the digital skills of pupils and teachers. The focus on reducing segregation in schools contributes to social cohesion. The component also contributes to the green transition, as the planned infrastructure developments shall apply high standards of energy efficiency.

The component is in line with the Hungarian public education strategy prepared for the period 2021-2030, the Hungarian National Energy and Climate Plan, the National Energy Strategy 2030 and the National Clean Development Strategy.

The component contributes to addressing the Country Specific Recommendations on the need to continue the labour market integration of the most vulnerable groups, in particular through upskilling and to improve education outcomes and increase the participation of disadvantaged groups, in particular Roma in quality mainstream education (Country Specific Recommendation 2 in 2019 and Country Specific Recommendation 3 in 2022), to focus investment-related economic policy on energy and resource efficiency (Country Specific Recommendation 3 in 2019), to ensure access to essential services and quality education for all (Country Specific Recommendation 2 in 2020), and to focus investment on the green and digital transition and digital infrastructure for schools (Country Specific Recommendation 3 in 2019). It also contributes to addressing the Country Specific Recommendation to improve the long-term sustainability of the pension system, while preserving adequacy in particular through addressing income inequalities (Country Specific Recommendation 1 in 2022).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

A.1. Description of the reforms and investments for non-repayable financial support

C1.R1: Development of competitive public education using 21 st century technology

The objective of the reform is to support the digital transformation of public education by increasing the availability and use of digital devices and tools by teachers and pupils, thereby facilitating the systematic integration of digital teaching and learning methods in the education process. The reform shall also aim to contribute to improving education outcomes in an inclusive manner, reducing early school leaving and, more broadly, ensuring the availability of a competitive labour force in the future.

Under this measure, modern digital devices shall be made available to teachers, pupils and schools. Digital notebooks (standard and 2-in-1 types) shall be purchased and delivered to public education institutions, for the use of students in grades five and nine, for the use of teachers and for schools to develop their IT classrooms, during the academic years 2021/2022, 2022/2023, 2023/2024 and 2024/2025. Altogether, by the end of the four-year-programme, at least 579 000 digital notebooks shall be purchased and delivered under this measure, of which at least 55 000 shall be provided for teachers and at least 10 000 for schools to develop their IT classrooms. Pupils shall be able to keep the notebooks until they finish their school education and hand them over afterwards to the new cohorts.

For the distribution of digital notebooks priority shall be given to disadvantaged pupils and teachers in schools with an above-average share of disadvantaged pupils. A means-testing strategy for the allocation of digital notebooks to pupils shall be developed and published. The strategy shall specify, among others, that pupils with disadvantaged background and without a digital notebook shall have the highest priority for receiving such a device. Disadvantaged pupils are defined in paragraph (1) section 67/A of the Child protection act (XXXI/1997).

Furthermore, at least 3 100 schools shall be provided with interactive display tools and devices to develop pupils’ creativity and problem-solving capacity and algorithmic and programming competences, such as robots, drones and special computers. Schools operating in disadvantaged regions and schools with a high share of pupils with disadvantaged background shall be given priority in the dissemination of those supporting Information and Communication Technology (ICT) devices. Teachers shall receive targeted training on how to use the digital devices and they shall have access to an IT help desk.

The implementation of the reform shall lead to at least 45% of teachers using Information and Communication Technologies in at least 40% of their classes (as compared to 33% of teachers in 2019).

The implementation of the reform shall be completed by 30 June 2026.

C1.I1: Improving access to quality education in lower secondary schools

The objective of the measure is to improve the access of students to quality education in lower secondary schools and address challenges related to shortages of teachers in small settlements.

The measure shall be implemented in a stepwise approach. As a first step, a nation-wide mapping of the school network shall be carried out with a view to identifying and selecting schools for implementing the integration of low-performing lower secondary classes into larger schools in the neighbouring settlements. The mapping shall be based on evidence and a diagnosis of needs and shall be carried out with consultation of stakeholders (in particular students and their parents, teachers, school staff, communities and local governments). This shall lead to selecting at least 5-10 State-maintained lower secondary schools to be integrated into larger host schools, as part of a pilot phase. The mapping shall assess the impact of the integration of schools on student composition, the risk of segregation, the number of teachers and staff, school performance, learning outcomes, completion rates, the share of students with high risk of early school leaving, the location of schools, school profiles and expected future needs with regard to demographic developments. Regarding the host schools, the physical properties of the building and its infrastructure shall be taken into account, among other criteria. The host schools shall not operate as boarding schools for the new pupils.

In the second step, lower secondary classes in at least five State-maintained schools shall be integrated in larger host schools in neighbouring settlements, as part of a pilot phase. The selected host schools shall integrate lower secondary classes from small schools where quality education cannot be efficiently ensured. The number of teachers and staff shall be adequate in the host schools to accommodate the new pupils and the teachers and staff shall receive training in inclusive pedagogy. The commuting and housing needs related to the measure shall be adequately addressed. The integration process shall not lead to increased segregation in the host schools. The host schools shall not operate as boarding schools for the new pupils.

In the final step, the results of the pilot institutional reorganisations and the corresponding recommendations and implementation guidelines shall be included in a publicly available report. Based on the report and the mapping, additional lower secondary classes in at least 30 schools shall be effectively integrated into larger host schools in neighbouring settlements.

The implementation of the investment shall be completed by 30 September 2025.

C1.I2: Supporting the education of students with special education needs

The aim of this investment is to improve the quality of specialised services provided to schools integrating students with special education needs, those in long-term care and children who require specialised pedagogical services. The implementation of this investment is thus expected to contribute to improving student learning outcomes, reducing the risk of drop-out and supporting students to thrive in adulthood and perform on the labour market.

The investment shall be targeted at schools with students with special education needs, those in long-term care and children who require specialised pedagogical services for themselves or for their support network, including parents, teachers and educational teaching staff. A mapping of needs for equipment, services and special education teachers shall be prepared and published based on the individual development plans of the schools. Based on this mapping, the investment shall provide specialised educational services, including early development support, expert committees diagnostics, education counselling and career guidance, physical education, speech therapy, conductive education, kindergarten-school psychology and care for children with special needs. The support shall also include, as appropriate to the situation of the schools concerned: (i) enhanced services for both teachers/staff and pupils, in particular enhanced mobility support, equipment rental, school transportation services, training, knowledge-sharing and social acceptance programmes, and (ii) purchase of physical and ICT accessibility equipment, development tools, special medical and technical equipment, general and adapted electric vehicles for the provision of services.

Under this measure, at least 50% of the special education institutions (schools with students with special education needs, those in long-term care and children who require specialised pedagogical services) functioning during the school year 2025/2026 shall have received support for the education of pupils with special education needs, those in long-term care and children who require specialised pedagogical service. As a result, at least 45 000 pupils shall benefit from an improved quality of specialised services. Moreover, at least 5 000 special education teachers shall receive dedicated training on competence development and professional use of diagnostic procedures and tools required for working with students with special education needs, those in long-term care and children who require specialised pedagogical services.

The implementation of the investment shall be completed by 30 September 2026.

C1.R2: Reduction of segregation risk in schools

The objective of the reform is to support equal access to high quality school education and to reduce segregation in schools.

The measure shall consist of adopting legislation for the reduction of State support for primary and lower secondary schools (grades 1 to 8) with a low proportion of disadvantaged students. According to the new legislation, the State support for primary and lower secondary schools (both State schools and non-State maintained schools receiving State funding) functioning in multi-school settlements shall be reduced by 10% if the proportion of disadvantaged students in those schools is lower than the average proportion in the settlement where the school is located by more than (i) 20 percentage points at the beginning of the school years 2023/2024 and 2024/2025 and (ii) 15 percentage points at the beginning of the school year 2025/2026 and of the subsequent years. The legislative provisions shall be applied from the 2023/2024 school year and the reduction of State support shall apply for an entire calendar year.

A report shall be published demonstrating that the new legislation providing for the reduction of State support for the primary and lower secondary schools with a low proportion of disadvantaged students has been applied. The report shall present the initial implementation results in the schools concerned during the school years 2023/2024 and 2024/2025 and the beginning of the school year 2025/2026 as well as the impact in terms of distribution of disadvantaged students in the settlements where those schools are based (including the surrounding settlements). The report may include recommendations for improving the legal framework and enhancing its effectiveness in reducing segregation risk in primary and lower secondary schools.

The implementation of the reform shall be completed by 31 December 2025.

C1.R3: Improving the attractiveness of the teaching profession

The objective of the reform is to improve the attractiveness of the teaching profession and reduce the shortage of teachers, thereby contributing to high quality school education for all.

The measure shall consist of adopting legislation according to which the average wage of teachers in the public education system holding a tertiary degree (excluding those teaching in the vocational education field) shall gradually reach at least 80% of the average wage of tertiary graduates in 2025 and shall be maintained at a level of at least 80% of the average wage of tertiary graduates until at least 31 December 2030.

The new legislation shall also include provisions according to which the wage of teachers who work in schools with a proportion of disadvantaged pupils of at least 10% (and defining special pedagogical methods for inclusive education in their pedagogical programmes) or in disadvantaged settlements is higher by at least 12.5% compared with the wage of other teachers with the same qualification and experience, as of 1 January 2023 and at least until 31 December 2030. In addition, the wage increase in 2025 for the entry-level teachers shall be 10 percentage points higher than the average wage increase for all teachers in the public education system in that year while their yearly wage increases shall be at least the same as the average yearly wage increase for all teachers in the public education system between 1 January 2023 and 31 December 2030.

The draft legislation enshrining the aforementioned approach to increasing the wages of teachers shall be subject to meaningful social dialogue with the largest trade unions of the teachers.

The financing for the implementation of the reform shall be provided exclusively by the national budget and EU funds (ESF+). No costs associated with this measure are included in the recovery and resilience plan.

The implementation of the reform shall be completed by 30 June 2026.

C1.I3: Training of teachers and improving the management skills of heads of institutions

The objective of the measure is twofold: to increase the supply of teachers in subjects for which there is large demand and to improve the management skills of heads and deputy heads of public education institutions.

Under this measure, 5 000 teachers in lower and upper secondary schools shall receive training to acquire additional specialisation and certificates to teach study fields in high demand (in particular physics, chemistry, mathematics and digital education). The trainings shall be organised in the format of two- and four-semester higher education courses. In addition, around 3 000 heads and deputy heads of public education institutions shall receive specialised training on the management of education institutions. Teachers and their employers shall conclude a training contract.

The implementation of the investment shall be completed by 30 June 2026.

C1.I4: Creation of new crèche places

The objective of the investment is to increase the availability of early childhood education services by creating new crèche places. This measure is expected to contribute to higher employment rates among parents, notably women, thus contributing to gender equality and social inclusion. The measure is underpinned by a recent survey showing a demand for 12 000 crèche places in addition to both the existing ones and those that are currently under preparation.

Under this measure, at least 3 593 new crèche places across Hungary shall be created in entirely new buildings or by extending existing ones. The investment shall also include auxiliary equipment and infrastructure such as classroom equipment, furniture, playground and bike parking. The construction of new buildings shall have a primary energy demand at least 20% below the nearly zero-energy buildings requirement. As a result of the investment, at least 3 593 children shall be enrolled in the new places.

The implementation of the investment shall be completed by 31 December 2025.

C1.R4: Improving the sustainability of the pension system

The objective of the reform is to promote the medium and long-term fiscal sustainability of the Hungarian pension system and to contribute to lengthening working lives, while strengthening the adequacy of pensions paid to lower-income pensioners. To the extent necessary, the reform shall introduce automatic balancing mechanisms in the pension system and other parametric changes.

The reform shall consist of:

• a. 

  The publication of an independent international expert report on policy options to address long-term sustainability challenges of the Hungarian pension system. The report shall provide a diagnosis on the pension system and its financial sustainability, and put forward concrete policy proposals to ensure the medium and long-term fiscal sustainability of the pension system through appropriate revenue measures and automatic balancing mechanisms, and by containing the increase in the projected pension expenditure as percentage of GDP by 2070 compared to the latest Ageing Report projections, while preserving adequacy, in

  particular through addressing income inequalities.

  • b. 

    The preparation by the government of a policy proposal for amending the pension system.

  As part of the preparation, the policy proposal shall be consulted with social and economic

  partners and other relevant stakeholders, presented and discussed at the Economic Policy

  Committee’s Ageing Working Group, and submitted for public consultation.

  • c. 

    The preparation by the government of a legislative proposal for the amendment of the

  pension system accompanied by a detailed impact assessment. The impact assessment shall

  demonstrate how the legislative proposal ensures long-term fiscal sustainability of the

  pension system through appropriate measures and possible automatic balancing

  mechanisms, and by containing the increase in the projected pension expenditure as

  percentage of GDP by 2070 compared to the latest Ageing Report projections. The impact

  assessment shall be based on the common assumptions on macroeconomic and demographic

  projections of the latest Ageing Report.

  • d. 

    The entry into force of the legislation amending the pension system based on the

  government’s legislative proposal.

The implementation of the reform shall be completed by 31 March 2025.

A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Related Qualitative Quantitative indicators

Indicative timeline

Sequential Measure (for targets)

for completion

Number (Reform or Milestone/Target Name

indicators

(for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

At least 120 000 digital notebooks (standard and 2-in-1 types) shall be purchased and delivered in school education institutions, for the use of pupils in grades nine (for learning purposes), for the use of teachers (for teaching purposes), for schools to develop their IT C1.R1 classrooms and for the school administration centrum Development (Klebersberg Központ). The notebooks shall be of delivered during the school year 2021/2022. Pupils competitive shall be able to keep the notebooks until they finish

1 public Target Number of digital notebooks delivered 120 000 Q2 2022 their school education and hand them over afterwards education for pupil or teacher use

Number 0 to the new cohorts. The share of pupils receiving a

using 21st personal ICT device shall be at least 90% among century disadvantaged pupils. The share of teachers receiving a technology personal ICT device shall be at least 90% among teachers who apply for a device in schools with an above-average share of disadvantaged pupils and among teachers applying for a device who did not receive any personal ICT device in the three school

years preceding the 2021/2022 school year.

C1.R1 Development

of A means-testing strategy for the allocation of digital competitive Development of a means-testing notebooks to pupils shall be developed and published.

2 public Milestone strategy for the allocation of digital Publication of The strategy shall specify, among others, that pupils education notebooks to pupils the strategy

Q4 2022 with a disadvantaged background and without a digital using 21st notebook shall have the highest priority for receiving

century such a device.

technology

C1.R1 Development The share of teachers in public education, who use of Information and Communication Technologies in at

3 competitive Target Share of teachers using Information and public Communication Technologies in at least

% 33 35 Q4 2023 least 40% of their classes shall increase to at least 35%

education 40% of their classes

by 31 December 2023. The baseline data is for 2019

(source: KIR-STAT).

using 21st

century

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indicators

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technology

C1.R1 Development At least 3 100 school education institutions shall be of equipped with modern display tools (interactive panel)

competitive Number of school education institutions and devices that improve student creativity and 4 public Target equipped with modern display tools and 3 100 Q4 2024 problem-solving skills, such as programmable robots,

education tools that develop student creativity and

Number 0 programmable microcircuits, and drones. Equipping

using 21st problem-solving skills schools with a high share of disadvantaged pupils shall

century be given priority. technology

Taking into account the means-testing strategy referred to in milestone 2, additional digital notebooks (standard and 2-in-1 types) shall be purchased and delivered in public education institutions, for the use of C1.R1 students in grades five (six in the 2022/2023 school Development year) and nine, for the use of teachers and for schools of to develop their IT classrooms during the school years competitive 2022/2023, 2023/2024 and 2024/2025 as part of the

5 public Target Number of additional digital notebooks four-year programme. Altogether, by the end of the education delivered for pupil or teacher use

Number 120 000 579 000 Q2 2025 four-year-programme (school year 2024/2025), at least

using 21st 579 000 digital notebooks shall be purchased and century delivered under this measure, of which at least 55 000 technology shall be provided for teachers and at least 10 000 for schools to develop their IT classrooms. Pupils shall be able to keep the notebooks until they finish their school education and hand them over afterwards to the new

cohorts.

C1.R1 The share of teachers in public education, who use Development Information and Communication Technologies in at of least 40% of their classes shall increase to at least 45%

6 competitive public Target Share of teachers using Information and Communication Technologies in at least % 35 45 Q2 2026 by 30 June 2026. A report assessing the use of digital solutions in schools

education 40% of their classes by teachers and pupils shall be published. The report using 21st shall use, among others, data produced by KIR-STAT on century the share of teachers in public education, who use technology Information and Communication Technologies in their

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Number (Reform or Milestone/Target Name (for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

classes and the data from the OECD TALIS survey.

A nation-wide mapping of the school network shall be carried out with a view to identifying and selecting schools for integration of small lower secondary classes into larger schools in the neighbouring settlements. The mapping shall be based on evidence and diagnosis of needs and shall be carried out with consultation of stakeholders (in particular students and their parents, C1.I1 teachers, school staff, communities and local Improving governments) to select at least 5-10 State-maintained

access to Mapping of the school network with a view to selecting schools for integration lower secondary schools to be integrated in larger host 7 quality schools, as part of a pilot phase. The mapping shall education in Milestone of small lower secondary classes into Publication of assess the impact of the integration of schools on

lower larger schools in the neighbouring

the mapping Q2 2023

student composition, the risk of segregation, the

secondary settlements number of teachers and staff, school performance,

schools learning outcomes, completion rates, share of students with high risk of early school leaving), the location of schools, school profiles and expected future needs with regard to demographic development. Regarding the host schools, the physical properties of the building and its infrastructure shall be taken into account, among other criteria.

The mapping shall be made public.

C1.I1 Lower secondary classes in at least 5 state-maintained Improving schools shall be effectively integrated into larger host access to schools in neighbouring settlements, as part of a pilot

8 quality

Implementation of pilot institutional phase. The selected host school shall integrate lower

education in Target reorganisations for the integration of Number 0 5 Q3 2023 secondary classes from small schools where quality lower small lower secondary classes into larger education cannot be efficiently ensured. The number of secondary schools in the neighbouring settlements teachers and staff shall be adequate in the host schools

schools to accommodate the new pupils and the teachers and staff shall receive training in inclusive pedagogy. The

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Number (Reform or Milestone/Target Name

indicators

(for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

commuting and housing needs related to the measure shall be adequately addressed. The integration process shall not lead to increased segregation in the host schools. The host schools shall not operate as boarding

schools for the new pupils. The results of the pilot institutional reorganisations and the corresponding recommendations and implementation guidelines shall be included in a publicly available report. Based on the report and the mapping referred to in milestone 7, additional lower

C1.I1 secondary classes in at least 30 schools shall be Improving effectively integrated into larger host schools in access to Implementation of additional neighbouring settlements. The selected host schools

9 quality institutional reorganisations for the

shall integrate lower secondary classes from small

education in Target integration of small lower secondary Number 5 35 Q3 2025 schools where quality education cannot be efficiently lower classes into larger schools in the ensured. The number of teachers and staff shall be secondary neighbouring settlements adequate in the host schools to accommodate the new

schools pupils and the teachers and staff shall receive training in inclusive pedagogy. The commuting and housing

needs related to the measure shall be adequately addressed. The integration process shall not lead to increased segregation in the host schools. The host schools shall not operate as boarding schools for the

new pupils. C1.I2 Publication of

Supporting the mapping

the education by the A mapping of needs for equipment, services and special

10 of students Milestone Mapping of needs for the education of

with special pupils with special education needs

ministry 0 Q2 2023 education teachers shall be prepared and published

responsible based on the individual development plans of the

education for public schools.

needs education At least 50% of the special education institutions

C1.I2 functioning during the school year 2025/2026 shall Supporting receive support for the education of pupils with special the education Share of special education institutions education needs. The support shall be provided for

11 of students with special Target having received support for the education of pupils with special % 0 50 Q2 2026 pupils with special needs or for their support network, including parents, teachers and educational teaching

education education needs staff and shall include, as appropriate to the situation, needs the following: (i) enhanced services for both teachers/staff and pupils, in particular enhanced mobility support, equipment rental, school

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transportation services, training, knowledge-sharing and social acceptance programmes, (ii) purchase of physical and ICT accessibility equipment, development tools, special medical and technical equipment, general and adapted electric vehicles for the provision of

services. C1.I2 At least 45 000 pupils with special education needs Supporting (SEN) shall benefit from the enhanced services referred the education Number of pupils with special education to in target 11. 12 of pupils with Target needs having benefited from enhanced Number 0 45 000 Q3 2026

special services education needs C1.I2 Supporting At least 5 000 special education teachers shall receive

the education Number of special education teachers special training (competence development, diagnostics

13 of pupils with procedures and utilisation of special tools), and special Target having received professional in-service Number 0 5 000 Q3 2026 professional development, including in particular

education training training to acquire special pedagogical skills to support

needs SEN pupils.

Entry into force of legislation for the reduction of State support for primary and lower secondary schools (grades 1 to 8) with a low proportion of disadvantaged

students.

The legislation shall include provisions according to

Provisions in which the State support for primary and lower

C1.R2 Entry into force of legislation providing the

secondary schools (both State schools and non-State

14 Reduction of Milestone for the reduction of State support for legislation

maintained schools receiving state funding) functioning

segregation primary and lower secondary schools indicating its

Q1 2023 in multi-school settlements (meaning settlements with

risk in schools with a low proportion of disadvantaged entry into

more than one school or more than one school

students force building) is reduced by 10% if the proportion of disadvantaged students in those schools is:

• i. 

  more than 20 percentage points lower than the average proportion in the settlement (at LAU level) where the school is located, as determined at the beginning of the school years 2023/2024 and 2024/2025;

• ii. 

  more than 15 percentage points lower than the average proportion in the settlement (at LAU

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level) where the school is located, as determined at the beginning of the school year

2025/2026 and of the subsequent school years.

The legislative provisions shall be applied from the 2023/2024 school year. The applicability of the provisions to individual schools shall be determined at the beginning of each school year and no later than 15 October. The 10% reduction of State support shall apply as of 1 January during that school year and for

the entire calendar year.

A report shall be published demonstrating that the new legislation providing for the reduction of State support for the primary and lower secondary schools (grades 1 to 8) with a low proportion of disadvantaged students

has been applied. Report on the application of the new Publication of

C1.R2 legislation providing for the reduction of the report by The report shall present the initial implementation 15 Reduction of Milestone State support for primary and lower the ministry Q4 2025 results in the schools concerned during the school

segregation secondary schools with a low proportion responsible years 2023/2024 and 2024/2025 and the beginning of risk in schools of disadvantaged students for public the school year 2025/2026, as well as the impact in education terms of distribution of disadvantaged students in the settlements where those schools are based (including the surrounding settlements). The report may include recommendations for improving the legal framework and enhancing its effectiveness in reducing segregation

risk in primary and lower secondary schools. A law shall enter into force, establishing that the average wage of teachers in the public education system (all teachers in public education system holding

C1.R3 Provisions in a tertiary degree as defined in the Public Education Act,

Improving the Entry into force of legislation to increase the excluding vocational education) shall reach at least 80% of the average wage of tertiary graduates by 1 January 16 attractiveness of the Milestone wages of teachers in the public legislation education system up to at least 80% of indicating its Q1 2023 2025 and shall be maintained at a level of at least 80%

teaching the average wage of tertiary graduates entry into of the average wage of tertiary graduates until at least

profession force 31 December 2030.

The law shall also include provisions according to which, as of 1 January 2023 and until at least 31 December 2030, the wage of teachers in the categories

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listed below shall be higher by at least 12.5% of the wage of teachers with the same qualification and

experience not included in these categories: - teachers working in disadvantaged settlements as defined by the Government Decree 105/2015 on the classification of beneficiary local governments and the conditions of classification and the Government Decision 1057/2021. (II. 19.) on the catching-up settlements programme;

• - 

  teachers working in schools with a proportion of disadvantaged pupils of at least 10% and defining special pedagogical methods for inclusive education in their pedagogical programmes (source: KIR).

The law shall also include provisions according to which the yearly wage increases for the entry-level teachers (gyakornok) shall be, as of 1 January 2023 and until at least 31 December 2030, at least the same as the average yearly wage increase for all teachers in the public education system. The yearly increases shall apply retroactively from 1 January of the respective

year.

During its preparation, the draft law shall be subject to meaningful social dialogue with the largest trade

unions of the teachers.

The average wage of teachers in the public education system (all teachers holding a tertiary degree in public education system as defined in the Public Education

C1.R3 Act, excluding vocational education) shall reach at least

Improving the 64.7% of the average wage tertiary graduates, as Average wage of teachers in the public compared to 59% in 2022.

17 attractiveness of the Target education system in 2023 relative to the % 59 64.7 Q2 2023

teaching average wage of tertiary graduates

The increase in the average wage of teachers for the

profession year 2023 shall be determined based on outturn data for the average salaries of tertiary graduates in 2022 (as

published by the Hungarian Statistical Office) and the official forecasts of the Ministry of Finance for wage growth in the national economy for the year 2023. The

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resulting increase of teachers’ wages shall apply

retroactively from 1 January 2023.

The average wage of teachers in the public education system (all teachers holding a tertiary degree in public education system as defined in the Public Education Act, excluding vocational education) shall reach at least

C1.R3 71.8% of the average wage of tertiary graduates, as

Improving the compared to at least 64.7% in 2023. Average wage of teachers in the public

18 attractiveness of the Target education system in 2024 relative to the % 64.7 71.8 Q2 2024 The increase in the average wage of teachers for the

teaching average wage of tertiary graduates year 2024 shall be determined based on outturn data

profession for the average salaries of tertiary graduates in 2023 (as published by the Hungarian Statistical Office) and the

official forecasts of the Ministry of Finance for wage growth in the national economy for the year 2024. The resulting increase of teachers’ wages shall apply

retroactively from 1 January 2024. The average wage of teachers in the public education system (all teachers holding a tertiary degree in public education system as defined in the Public Education Act, excluding vocational education) shall reach at least

C1.R3 80% of the average wage of tertiary graduates, as

Improving the compared to at least 71.8% in 2024. Average wage of teachers in the public

19 attractiveness of the Target education system in 2025 relative to the % 71.8 80 Q2 2025 The increase in the average wage of teachers for the

teaching average wage of tertiary graduates year 2025 shall be determined based on outturn data

profession for the average salaries of tertiary graduates in 2024 (as published by the Hungarian Statistical Office) and the

official forecasts of the Ministry of Finance for wage growth in the national economy for the year 2025. The resulting increase of teachers’ wages shall apply

retroactively from 1 January 2025. C1.R3 Provisions in

Improving the the Legislation shall enter into force, establishing that the

20 attractiveness

Entry into force of legislation setting out legislation wage increase for the entry-level teachers (gyakornok)

of the Milestone the wage increase for the entry-level Q2 2025 for the year 2025 shall be 10 percentage points higher

teaching teachers for the year 2025

indicating its

entry into than the average wage increase for all teachers in the

profession force public education system in 2025.

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Indicative timeline for completion

Sequential Measure (for targets)

Number (Reform or Milestone/Target Name

indicators

(for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

A report shall be prepared that demonstrates the

C1.R3 Application of the wage increases for application during the period 2023-2026 of the wage Improving the teachers working in disadvantaged Report on the increases referred to in milestones 16 and 20 for the

21 attractiveness settlements, teachers working in schools application of

teachers working in disadvantaged settlements,

of the Milestone with a proportion of disadvantaged the wage Q2 2026 teachers working in schools with a proportion of teaching pupils of at least 10%, and entry-level increases disadvantaged pupils of at least 10% and defining

profession teachers special pedagogical methods for inclusive education in their pedagogical programmes, and for entry-level

teachers. C1.I3 Training of teachers At least 3 000 heads and deputy heads of public

and Number of heads and deputy heads of education institutions shall participate in continuing 22 improving the Target public education institutions having Q2 2026 professional development to improve their digital and

management participated in continuing professional

Number 0 3 000 management skills.

skills of heads development

of institutions Based on the preliminary consultation with teachers

C1.I3 Training carried out through the existing public education

of teachers Number of teachers from public coordination organisations (National Public Education

and education institutions having Council, Public Education Strategic Round Table), at

23 improving the Target participated in continuing professional Number 0 5 000 Q2 2026 least 5 000 teachers in lower and upper secondary

management development schools shall participate in continuing professional

skills of heads development to acquire additional specialisation and

of institutions certificate to teach study fields in high demand.

C1.I4 Number of children enrolled in newly

24 Creation of

At least 500 children shall be enrolled in new crèche

new crèche Target created crèche places Number 0 500 Q4 2024 places created with support from the recovery and

places resilience plan.

At least 3 593 children shall be enrolled in new crèche places created with support from the recovery and resilience plan. The measure shall earmark at least 70%

C1.I4 Number of additional children enrolled of its allocation to construction of new buildings and at

25 Creation of new crèche Target in newly created crèche places Number 500 3 593 Q4 2025 least 11% to energy efficiency renovation of infrastructure. The eligibility criteria shall specify that

places the primary energy demand of any new buildings shall be at least 20% lower than the nearly zero-energy building requirement.

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for completion

Number (Reform or Milestone/Target Name

indicators

(for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

An independent international expert report on policy options for addressing long-term sustainability challenges shall be prepared by an independent provider with widely recognised expertise (based on common assumptions and projections of the latest joint European Commission-EPC’s Ageing Report). The

report shall:

• (1) 

  cover the public pension pillar of the pension system, the labour market and, to the necessary extent, employment and tax policies relevant for extending working lives. It shall cover both the new entrants and

  the existing contributors;

  • (2) 

    provide a diagnosis on the pension system and its

  financial sustainability;

C1.R4 (3) put forward concrete policy proposals (focusing on,

Improving the Independent international expert report but not limited to, lengthening working lives, including

sustainability Publication of by linking the statutory retirement age to life

26 of the Milestone

on policy options to address long-term sustainability challenges of the the report Q4 2023 expectancy and by raising effective retirement ages

pension Hungarian pension system through incentives to encourage longer working lives system and penalties for early retirement while also addressing

income inequalities among pensioners (taking into

account best practices in the EU Member States));

• (4) 

  ensure the long- and medium-term sustainability of the pension system through appropriate revenue measures and automatic balancing mechanisms, and by containing the increase in the projected pension expenditure as percentage of GDP by 2070 compared to the 2021 Ageing Report projections, while preserving adequacy, in particular through addressing income

  inequalities;

• (5) 

  provide an impact assessment (sustainability, inequality, and adequacy point of view) on those policy

  proposals.

  The report shall be made public.

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Sequential Measure indicators (for targets)

Number (Reform or Milestone/Target Name (for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

The government shall prepare a policy proposal based on the findings of the report referred to in the milestone 26, in which the proposed reform options shall be outlined. The policy proposal shall be:

C1.R4 Government (1) – Endorsed by the government by means of a government decision;

Improving the policy

27 sustainability Preparation of a policy proposal for

proposal for (2) – Consulted with social and economic partners and

of the Milestone amending the pension system reform and Q2 2024 other relevant stakeholders, including but not limited

pension consultations to National Economic and Social Council and Council of

system the Elderly;

• (3) 

  – Presented and discussed at the EPC’s Ageing

Working Group;

• (4) 

  – Submitted for public consultation.

The legislation for amending the pension system based on the government’s legislative proposal shall enter

into force. The legislation shall:

(a) promote medium and long-term fiscal sustainability;

(b) strengthen the adequacy of pensions paid to lower

C1.R4 Provisions in income pensioners;

Improving the the (c) contribute to the lengthening of working lives; and

28 sustainability legislation of the Milestone Entry into force of the legislation amending the pension system indicating its Q1 2025 (d) to the extent necessary, introduce automatic

pension entry into balancing mechanisms in the pension system and other

system force parametric changes.

The legislative proposal of the government for such an act shall take into account the results of the consultations and shall be accompanied by a detailed

impact assessment.

The impact assessment shall demonstrate how – based on the legislative proposal of the government – the long-term sustainability of the pension system is

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Sequential Measure (for targets)

Number (Reform or Milestone/Target Name

indicators

(for Description of each milestone and target

Investment) milestones) Unit of measure Baseline Goal Quarter Year

ensured through appropriate measures and possible automatic balancing mechanisms, and by containing the increase in the projected pension expenditure as percentage of GDP by 2070 compared to the latest Ageing Report projections. The impact assessment shall be based on the common assumptions on macroeconomic and demographic projections of the

latest Ageing Report.

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• B. 

  COMPONENT 2: HIGHLY QUALIFIED, COMPETITIVE WORKFORCE

This component of the Hungarian recovery and resilience plan contributes to the modernisation of the vocational and higher education systems. It addresses the challenges of the green and digital transition by implementing energy efficiency renovation and digital equipment solutions in buildings in higher and vocational education institutions. The component also addresses challenges related to skills development and levels of research and innovation by incentivising businessacademia research projects. The measures in this component are important for the recovery of the economy and for enhancing future crisis resilience.

The central objective of this component is to strengthen the labour force and related training institutions in light of current and possible new crises, and to improve the socio-economic environment of Hungary. To this end, the component aims to (i) create a competitive higher education system; (ii) contribute to increasing the availability of skilled workers; and (iii) support an ecosystem for science, innovation and training.

The component supports addressing the Country Specific Recommendations on promoting investment and reform on research and innovation, and green and digital skills (Country Specific

Recommendation 5 in 2022); on focusing investment on the green and digital transitions and on the digital infrastructure of schools (Country Specific Recommendation 2 in 2020); and on focusing investment-related economic policy on research and innovation (Country-Specific Recommendation

3 in 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

B.1. Description of the reforms and investments for non-repayable financial support

C2.R1: Modernisation of higher education courses

The objective of the reform is to modernise higher education by including more practice-oriented elements in the training requirements. It focuses on establishing training and infrastructural cooperation with vocational training and innovation institutions in certain areas, and on strengthening the system of higher education upskilling and retraining, in line with labour market requirements.

As part of the measure, several regulations shall be reviewed and modified, including on intellectual property management and on operating rules of examination centres in the Vocational Training Act, on determining the performance of examination tasks by the examination centres, on in-service teacher training, and on digital (e-learning, distance learning, blended type) trainings covering adult training and adult education. The modernisation of the study fields and the revision of the legislation shall take into account the labour market needs related to green and digital skills. The reform shall result in the modernisation of 15 higher education study fields such as law and public administration, economics, medical and health sciences, agriculture, art and natural sciences. The reform shall be based on a report identifying the regulations that would be reviewed for the higher education study fields. Such report shall be prepared jointly by the Hungarian Accreditation

Committee, the Hungarian Rectors’ Conference and the Educational Authority, involving as appropriate the higher education institutions. The features of the modernised training structure shall be disseminated among stakeholders and target groups as a part of the reform.

The implementation of the reform shall be completed by 31 December 2023.

C2.I1: Institutional innovation and strengthened activities in higher education

The objective of the investment is to develop distance learning content, training management system and adult training courses in higher education institutions providing micro-credential certificates. A micro-credential is a proof of the learning outcomes that a learner has acquired following a short learning experience and which have been assessed against transparent standards.

The proof is contained in a certified document that lists the name of the holder, the achieved learning outcomes, the assessment method, the awarding body and, where applicable, the qualifications framework level and the credits gained. Micro-credentials are owned by the learner, can be shared, are portable, may be combined into larger credentials or qualifications, and provide

European Credit Transfer and Accumulation System (ECTS) credits. They are underpinned by quality assurance following agreed standards.

Under this measure, 19 micro-credential courses shall be developed and start to be used in higher education institutions. The newly developed micro-credentials shall take into account the needs of the economy. The micro-credentials shall be developed in line with the definition and European standard elements to describe a micro-credential as set out in the Council Recommendation of 25

May 2022 on a European approach to micro-credentials for lifelong learning and employability. As a result of the investment, an increasing number of students/persons shall receive micro-credential certificates and shall take part in digital skills development programmes delivered by higher education institutions. At least 600 persons engaged in adult training activities in the higher education institutions concerned shall acquire credit-bearing micro-credentials with ECTS credits.

In addition, at least 1800 digital learning contents shall be developed, including teaching materials, scripts, podcasts, screen recordings, videos, quizzes, reference materials, computer content, webbased content, digital games, etc. At least 34 000 students and staff (including teachers) in the involved higher education institutions shall take part in digital skills, competences and knowledge development programmes under this measure. Specifically, the training for teachers shall focus on skills for using digital tools for teaching and developing digital learning content.

The implementation of the investment shall be completed by 30 June 2026.

C2.I2: Modernisation of infrastructure and digitalisation in higher education institutions

The objective of the investment is to increase the attractiveness of higher education institutions and support the green and digital transition through modernised infrastructure, digitalisation and capacity development activities.

The investment shall consist of:

• i) 

  energy efficiency refurbishment of higher education institutions, achieving, on average, at least 30% primary energy savings.

• ii) 

  the construction of new buildings for higher education institutions, which shall have a primary energy demand at least 20% below the nearly zero-energy buildings requirement.

• iii) 

  the purchase and installation of digital equipment in higher education institutions, such as interactive whiteboards or large touch screens, laptops, digital notebooks, PCs, multimedia studios, multimedia and/or interactive devices supporting digital teaching/learning/learning management system, ICT tools necessary for e-learning material development/structured collection, storage, classification and accessibility of content, in line with the EU's FAIR (Findable, Accessible,

Interoperable, Reusable) Directive, systems used to broadcast education, communication and collaboration systems supporting digital education, multimedia storage system, online catalogue that ensures the searchability and accessibility of digital content, educational software licenses, closed system distance learning training management system and related curriculum editing system licenses, systems for cloud-based service.

• iv) 

  capacity development activities, including the organisation of trainings, conferences and skills development activities; equipping workshops and laboratories for learning purposes; the development of core facilities, skills laboratories, language courses and competence training based on the needs of the universities.

The implementation of the investment shall be completed by 30 June 2026.

C2.I3: Development of digital curricula for vocational education and training

The objective of the investment is to contribute to the availability of qualified labour force by providing digital education to all students pursuing vocational education and training.

As a result of the investment, at least 75 digital learning materials shall be developed for vocational education and training related to specific professions and at least 13 000 students (individual users) in vocational education and training or attending adult education in relevant professions shall have access to these digital learning materials. The digital learning materials shall be developed in sectors that are not under the control of the Ministry of Culture and Innovation, in line with Article

45(1) of the Government Decree 12/2020. (II. 7.).

The investment is carried out through a call for projects for developing digital curricula, which shall be published by the National Office of Vocational Education and Training and Adult Learning.

The implementation of the investment shall be completed by 31 March 2026.

C2.I4: Vocational education and training infrastructure for the 21 st century

The objective of the investment is to foster energy efficiency, carry out general infrastructure improvements and improve the digitalisation of vocational training centres. The improved building and digital infrastructure of vocational schools shall also create a better learning environment for students, which is expected to benefit their educational outcomes.

The investment shall include the energy efficiency renovation and purchase of ICT equipment for at least 16 selected vocational education and training centres. It shall also include other infrastructure improvements in these centres, such as equipping workshops, renovation of teaching areas and purchasing of learning materials, tools and furniture. The selection of centres shall be based on objective and transparent criteria, including the labour market demand in the specific economic area, the status of the infrastructure and assets of the vocational training centres, whether the centres are located in disadvantaged regions, the share of disadvantaged students, and the links and coherence with earlier programmes. The energy efficiency renovation programme shall lead to achieving on average either at least 30% primary energy savings or at least a 30% reduction of direct and indirect greenhouse gas emissions.

The implementation of the investment shall be completed by 31 March 2026.

C2.I5: Development of the Central Examination Centre

The objective of the investment is to establish a central examination centre in Budapest to create the conditions for high-quality professional examinations in certain professions for which the network of examination centres does not ensure appropriate territorial coverage at regional level.

This investment shall consist of the completion of the Central Examination Centre, through which examinations for at least 30 professions and professional qualifications shall be organised. The measure shall include the renovation of the Centre’s building, including energy efficiency improvement, other building renovations, and redesign and equipping of the classrooms, examination rooms, workshops and service rooms.

The energy efficiency renovation shall lead, on average, to at least 30% primary energy savings or at least 30% reduction of greenhouse gas emissions. The examination centre shall be developed as a separate examination place from the vocational education and training centres.

The implementation of the investment shall be completed by 31 March 2026.

C2.I6: Establishment of national research and development laboratories

The objective of the investment is to establish additional national research and development laboratories in order to strengthen the innovation ecosystem in the country. These national laboratories are formalised research consortia, including universities, research institutes and other public actors (such as the National Food Chain Safety Office and the Hungarian Meteorological

Service), which shall be set up with the aim of conducting research and publishing studies in relevant research areas.

The measure consists in the setting up of national laboratories, which shall include research grants, purchase of equipment and infrastructural development. The national laboratories shall cover relevant research areas for the green/digital transition and socio-economic challenges of Hungary and shall be organised in the thematic areas of safe society and environment; health; industry and digitalisation. These thematic areas shall include topics such as renewable energy, data-driven health, pharmaceutical research and development, water security, artificial intelligence and autonomous systems. The research projects of the laboratories and their related contracts (including labour contracts for researchers and other staff involved) shall have a fixed term, which shall not go beyond 30 June 2026.

The measure includes the publication of a report on the performance of these national laboratories, prepared by the National Research, Development and Innovation Agency. The report shall include information about (i) the activities and outcomes of the laboratories in the field of research in which they were active, including the global challenge they addressed at national level, (ii) the composition of consortia (public and private partners), and (iii) how these national laboratories contributed to strengthening the Hungarian innovation ecosystem.

The implementation of the investment shall be completed by 30 June 2026.

B.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Quantitative indicators Indicative timeline for completion

Sequential Related Measure Qualitative indicators (for targets)

Number (Reform or Investment) Milestone/Target Name (for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

The Hungarian Accreditation Committee, the Hungarian Rectors’ Conference, the Educational Authority and the

Higher Education Institutions shall modernise the 15 higher education study fields by including more

C2.R1 Modernisation of Number of modernised practice-oriented elements in the curriculum and revise

29 higher education Target higher education study Number 0 15 Q4 2023 the relevant regulations, including on intellectual

courses fields property management, and on operating rules of examination centres in the Vocational Training Act, on

determining the performance of examination tasks of examination centres, on in-service teacher training, on digital (e-learning, distance and blended learning) trainings, covering adult training and adult education. A call shall be launched for the development of closed system distance learning content and training management system and higher education adult training (micro-credentials providing European Credit Transfer and Accumulation System (ECTS) credits). The

C2.I1 Institutional Launch of a call for the Publication of the call

requirements in the call documentation shall ensure

selection of the by the National non-discrimination among Hungarian higher education

30 innovation and strengthened activities Milestone universities performing Authority of the Q2 2023 institutions, including based on their ownership

in higher education e-curriculum Recovery and

structure. The list of potential micro-credentials shall

development Resilience Plan take into account the needs of the economy. The micro-credentials shall be developed in line with the

definition and European standard elements to describe a micro-credential as set out in the Council Recommendation of 25 May 2022 on a European approach to micro-credentials for lifelong learning and employability. Following the call mentioned under milestone 30, digital learning materials for at least 19 credit-bearing courses offering micro-credentials with ECTS credits

C2.I1 Institutional Number of courses shall be developed by higher education institutions. The

31 innovation and strengthened activities Target offering micro credentials with digital Number 0 19 Q4 2024 micro-credentials shall be developed in line with the definition and European standard elements to describe

in higher education content a micro-credential as set out in the Council Recommendation of 25 May 2022 on a European approach to micro-credentials for lifelong learning and employability.

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Sequential Related Measure (for targets)

for completion

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

At least 600 students/persons engaged in adult training activities in the involved higher education institutions

Number of shall acquire credit-bearing micro-credentials with ECTS C2.I1 Institutional students/persons credits.

32 innovation and having received a strengthened activities Target micro-credentials Number 0 600 Q2 2026

in higher education certificate in higher education institutions

At least 1 800 digital learning contents for the involved

C2.I1 Institutional Number of developed higher education institutions shall be developed. Digital

33 innovation and digital learning content

learning content shall include teaching materials,

strengthened activities Target for higher education Number 0 1 800 Q2 2026 scripts, podcasts, screen recordings, videos, quizzes,

in higher education reference materials, computer content, web-based content, digital games, etc.

At least 34 000 students and staff (including teachers) Number of higher in the involved higher education institutions shall take C2.I1 Institutional education students and part in digital skills, competences and knowledge

 34 innovation and staff having taken part strengthened activities Target in digital skills Number 0 34 000 Q2 2026 development programmes under this measure. The training for teachers shall focus on skills for using digital

in higher education development tools for teaching and developing digital learning programmes content.

A call for projects regarding energy efficiency renovation, construction of new buildings, purchase

Launch of a call for and installation of digital equipment and capacity projects for energy development activities in higher education institutions efficiency shall be launched. The call shall earmark at least 2.5%

C2.I2 Modernisation of refurbishment, Publication of the call of the measure’s allocation to construction of new

35 infrastructure and construction of new by the ministry

buildings, at least 22.5% to energy efficiency renovation

digitalisation in higher Milestone buildings, new digital responsible for higher Q1 2022 of infrastructure, at least 41.5% to new ICT equipment education institutions equipment and education institutions and the remaining allocation to capacity development capacity development activities including: the organisation of trainings, activities in higher conferences and skills development activities;

education institutions equipping workshops and laboratories for learning purposes; the development of core facilities, skills

laboratories, language courses and competence training based on the needs of the universities. The

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for completion

Number (Reform or Investment) Milestone/Target Name (for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

eligibility criteria for energy efficiency investments shall include, among others, a requirement that as a result of

the renovation at least 30% primary energy savings shall be achieved, on average, across the refurbished infrastructure. The eligibility criteria shall also specify that the primary energy demand of any new building shall be at least 20% lower than the nearly zero-energy building requirement. The requirements in the call documentation shall ensure non-discrimination among Hungarian higher education institutions, including based on their ownership structure. Public trust funds shall not be eligible as recipients under the call. The selection of the projects shall be based on objective criteria set out in the call, including the energyefficiency gain related to investment costs, costefficiency of the purchase of digital equipment, number of available computers per teacher, share of teachers with high academic degree and share of disadvantaged students in the universities. At least 25 145 square meters of infrastructure of higher education institutions shall be either renovated

Energy efficiency to achieve at least 30% primary energy savings or

C2.I2 Modernisation of refurbishment of constructed as a new building to achieve at least 20%

36 infrastructure and building infrastructure Square digitalisation in higher Target and construction of meters 0 25 145 Q2 2026 lower primary energy demand than the nearly zeroenergy

building requirement. education institutions new buildings in higher

education institutions

At least 22 300 items of ICT equipment shall be purchased and installed in higher education institutions. This ICT equipment shall include interactive whiteboards or large touch screens, computers and

C2.I2 Modernisation of Installation of digital Number of laptops, multimedia studios, multimedia and/or

37 infrastructure and digitalisation in higher Target equipment in higher ICT 0 22 300 Q2 2026 interactive devices supporting digital teaching, learning,

education institutions education buildings equipment

learning management system, ICT tools necessary for elearning material development/ structured collection, storage, classification and accessibility of content, in line with the EU's FAIR (Findable, Accessible, Interoperable, Reusable) Directive, systems used to broadcast education, communication and collaboration

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for completion

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measure Baseline Goal Quarter Year

systems supporting digital education, multimedia storage system, online catalogue that ensures the searchability and accessibility of digital content, educational software licenses, closed system distance learning training management system and related curriculum editing system licenses, systems for cloudbased service.

A report shall be published, presenting the outcomes of

capacity development activities carried out under this

C2.I2 Modernisation of Report on capacity measure, including: the organisation of trainings,

38 infrastructure and development activities Publication of the digitalisation in higher Milestone in higher education report Q2 2026 conferences and skills development activities; equipping workshops and laboratories for learning

education institutions institutions purposes; the development of core facilities, skills laboratories, language courses and competence training based on the needs of the universities.

A call for projects for developing digital learning Publication of the call materials shall be launched by the National Office of C2.I3 Development of for projects by the Vocational Education and Training and Adult Learning.

39 digital curricula for

Launch of a call for National Office of The call shall specify that the digital learning material

vocational education Milestone projects for developing Q2 2023 shall concern sectors that are not under the control of

and training digital curricula

Vocational Education and Training and Adult the Ministry of Culture and Innovation, in line with Learning Article 45(1) of the Government Decree 12/2020. (II. 7.).

At least 75 digital learning materials shall be developed for vocational education and training related to specific

professions and be ready to be used by students.

C2.I3 Development of Number of digital learning materials

40 digital curricula for vocational education Target developed for Number 0 75 Q3 2025

and training vocational education and training

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for completion

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

Number of apprentices At least 13 000 students (individual users) in vocational education and training or attending adult education in

C2.I3 Development of in vocational education and training having professions belonging to the sectors concerned by the

41 digital curricula for vocational education Target attended courses Number 0 13 000 Q1 2026 digital learning materials referred to in milestone 40

and training based on improved

shall have access to improved digital learning materials.

digital learning The number of students shall be extracted from the

materials data recorded in the registration and study system of vocational education and training centres.

At least 16 centres to be involved in the development programme shall be selected on the basis of the

Selection of at least 16 Publication of decision development plans of the various centres. The selection C2.I4 Vocational vocational education to select at least 16 shall be based on objective and transparent criteria,

42 education and training vocational education infrastructure for the Milestone and training centres to participate in a and training centres Q4 2022 including the labour market demand on the specific economic area, the status of the infrastructure and

21st century development on the webpage of the assets of the vocational training centres, whether the programme ministry responsible vocational education and training centres are located in for vocational training disadvantaged region, share of disadvantaged students, links and coherence with earlier programmes.

At least 69 175 square meters of buildings in at least 16 vocational training centres shall undergo energy efficiency renovation and achieve on average at least

C2.I4 Vocational Energy efficiency 30% reduction of direct and indirect greenhouse gas

43 education and training renovation of Square emissions or at least 30% primary energy savings. infrastructure for the Target vocational education meters 0 69 175 Q2 2026

21st century and training centres

13 825 items of ICT equipment shall be purchased and put in use in at least 16 vocational training centres. New ICT equipment shall include digital notebooks,

C2.I4 Vocational Purchase of ICT tablets, collaboration learning spaces and knowledge

44 education and training infrastructure for the Target equipment for vocational education Number 0 13 825 Q2 2026 sharing devices.

21st century and training centres

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for completion

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

At least 16 vocational training centres shall receive upgrades such as energy efficiency renovations (as

C2.I4 Vocational Number of vocational referred to in target 43), new ICT equipment (as

45 education and training referred to in target 44) and other general infrastructure for the Target education and training centres with upgraded Number 0 16 Q2 2026 infrastructure improvements (including renovating and

21st century infrastructure equipping workshops, renovation of teaching areas, purchasing learning materials, tools, furniture (benches and cupboards)).

The public procurement procedures for the renovation and development of the Central Examination Centre shall be carried out and the public contracts shall be

Award of the public awarded. The scope of the contracts shall include the

C2.I5 Development of contract(s) for the renovation of the Central Examination Centre’s

46 the Central Examination Milestone renovation and building, including the redesign and equipping of the

Centre development of the

Notification of award Q4 2023 classrooms, examination rooms and workshops, and

Central Examination of public contract(s) service rooms. At least 20% of the budget of the

Centre measure shall be allocated to energy efficiency renovation, which shall result in at least 30% primary energy savings or at least 30% reduction in greenhouse gas emissions.

The development of the Central Examination Centre shall be completed and the centre shall enter into operation. It shall be the central examination centre

C2.I5 Development of Completion of the Entry into operation of established in Budapest to create the conditions for 47 the Central Examination Milestone Central Examination the Central Q1 2026 high-quality professional examination, covering at least

Centre Centre Examination Centre 30 professions and professional qualifications for which the network of accredited examination centres does

not ensure appropriate territorial coverage at regional level. 14 additional national laboratories shall be set up in consortia consisting of higher education institutions, research institutes, companies and other public actors

C2.I6 Establishment of Setting up of additional (such as National Food Chain Safety Office and

 48 national research and national laboratories in development Target five thematic research Number 15 29 Q2 2022 Hungarian Meteorological Service). National laboratories shall be organised around research themes

laboratories areas in the thematic areas of safe society and environment; health; industry and digitalisation. The laboratories

shall be set up with the objective to contribute to strengthening the Hungarian innovation ecosystem.

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Sequential Related Measure (for targets)

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Description of each milestone and target Unit of

measure Baseline Goal Quarter Year

A report on the performance of the national laboratories set up under this measure shall be prepared and published by the National Research, Development and Innovation Agency. The report shall provide information about the activities of the national laboratories concerned, including at least the following

C2.I6 Establishment of Publication of the elements (i) the activities and outcomes of the Report on the report by the National laboratories in the field of research in which they were 49 national research and development Milestone performance of Research, Q2 2026 active, including the global challenge they addressed at

laboratories national laboratories Development and national level, (ii) the composition of consortia (public Innovation Agency and private partners), and (iii) how these national

laboratories contributed to strengthening the Hungarian innovation ecosystem. The report shall also evaluate the effectiveness of the national laboratories in supporting research and innovation activities in the economy, and make recommendations for improving research support.

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• C. 

  COMPONENT 3: CATCHING UP SETTLEMENTS

This component of the Hungarian recovery and resilience plan addresses the socio-economic and territorial challenges that have been amplified by the COVID-19 pandemic, particularly in the poorest settlements, and tackles issues such as the lack of access to the labour market and public services, the shortage of primary care professionals and more generally poverty.

The main objective of this component is to provide basic services for the inhabitants of the 300 most disadvantaged settlements in Hungary (as defined by the Government Decision 1404/2019

(VII.05.) and the Government Decision 1057/2021. (II.19.)) through an integrated social policy intervention. The scope of measures in this component is an integral part of the wider Catching up

Settlements Programme. The component contributes to the housing part of principle 19 of the European Pillar of Social Rights and to principle 20 on access to essential services.

To this end, the component aims to (i) build and renovate social houses to improve access to appropriate housing conditions; (ii) establish social solar power plants; (iii) promote employment and skills development based on local specificities and the strengthening of the local economic culture; and (iv) achieve better learning outcomes through community-oriented pedagogy.

The component shall contribute to addressing the Country Specific Recommendations on improving the adequacy of social assistance and ensure access to essential services, quality education and adequate housing for all (Country Specific Recommendations 2 in 2020 and 3 in 2022), on ensuring labour market integration of the most vulnerable groups (Country Specific Recommendations 2 in

2019 and 3 in 2022), and on making investments focused on the green and digital transitions (Country Specific Recommendations 3 in 2020 and 6 in 2022).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

C.1. Description of the reforms and investments for non-repayable financial support

C3.R1: Creating framework conditions for an effective integrated support to the most disadvantaged settlements

The objective of the measure is to support the effective and transparent implementation of the Catching up Settlements programme, which aims to develop the most disadvantaged settlements in

Hungary and address key socio-economic challenges of their inhabitants.

The measure shall consist of two actions to establish framework conditions for the implementation and monitoring of the Catching-up Settlements programme. First, the non-governmental organisations implementing the various elements of the programme shall be selected through a transparent procedure based on criteria related to professional experience, capacity and merit. The

Rules of procedure shall be published on the dedicated website of the Programme. Second, a thematic monitoring committee for the Catching up Settlements programme shall be established to review the results and provide recommendations for further increasing the effectiveness of the programme. The scope of the monitoring committee’s review shall cover the relevant interventions

– from national and EU funding sources (including ESF+ and ERDF elements) – supporting the programme’s objectives in the 300 most disadvantaged settlements. To this end, the membership of the monitoring committee shall include competent ministries and authorities, representatives of municipalities, civil society organisations working on social inclusion and Roma inclusion. The civil society organisations shall be selected based on professional experience, capacity and merit.

The monitoring committee shall meet on a regular basis, at least quarterly. Its documents, including the minutes, shall be published on the dedicated website of the programme.

The implementation of the reform shall be completed by 31 March 2023.

C3.I1: Construction and renovation of social housing, improvement of housing conditions

The objective of the investment is to improve the quality of life and housing conditions of people living in the most disadvantaged municipalities selected under the Catching up Settlements

Programme and to alleviate housing poverty, in line with the European Pillar of Social Rights.

The measure shall consist of purchasing and renovating at least 1 600 dwellings, as well as building 400 new houses and renting them out as social houses. The construction of new houses shall take place as centrally as possible within a municipality to make use of dilapidated houses and empty plots of lands. No social housing shall be provided in isolated areas or beyond the populated area of a municipality. New and renovated houses for social purposes may be placed outside the targeted municipalities in a minority of cases, in non-segregated areas with better access to employment and services, but in those cases the social housing stock shall be allocated to people living in those 300 targeted municipalities, who may apply for rental housing through an open call for applications, and may, on a voluntary basis, move in a dwelling outside of their settlement.

As part of the measure, an Intervention Plan shall be prepared and published. This Plan shall provide guidance on the selection of the dwellings to be refurbished and the new social houses to be built. The Plan shall take into account the surveys conducted to map out the needs and the selection of projects shall prevent further risks of segregation and combat existing risks of segregation.

The renovation work shall include interventions such as the renovation of at least one heatable room and one bathroom per dwelling as well as the preparation of safe electricity collection points, building fences, rodent control and use of insecticide. These post-renovation and newly constructed dwellings shall be owned by the organisations implementing the Catching up Settlements

Programme for at least 20 years and managed by a social housing agency under a public service contract. The social housing agency, to be selected by an open tender, shall allocate the housing to eligible tenants in the form of a rented property, through a public tender system. New buildings shall comply with Nearly Zero Energy Buildings requirements.

The implementation of the investment shall be completed by 30 June 2026.

C3.I2: Production and use of renewable energy in disadvantaged municipalities

The objective of the investment is to build photovoltaic power plants within or in the proximity of the most disadvantaged municipalities selected under the Catching up Settlements Programme. The production capacity shall be owned by the organisations implementing the Catching up Settlements

Programme for at least 20 years. The net revenue generated by the new power plants shall be used for financing various social transfers in kind for households living in energy poverty, in particular families with children below the age of three, such as at least one heated room with electric heating.

Families shall be selected through an open selection procedure. As a result of this investment, the living conditions of low-income households are expected to improve. Moreover, the new electric heating shall replace the fossil fuel heating, and the measure is thus expected to also improve air quality in the targeted settlements.

In cases where the network capacity does not allow the investment to take place within the administrative area of targeted municipalities, photovoltaic power plants may also be built outside the targeted municipalities if technically justified, provided that the revenue generated is used to subsidise the heating of households in the targeted municipalities.

The investment shall result in the installation of a renewable energy production capacity of at least 25 000 kWp to support the annual electricity needs of at least 5 000 vulnerable families.

The implementation of the investment shall be completed by 31 December 2025.

C3.I3: Promoting employment and skills development based on local specificities

The objective of the measure is to nurture local economic development and to create local economic structures focusing on the people living in the 300 most disadvantaged municipalities. This should contribute to reducing the labour market vulnerability of people living in those settlements, increasing their integration in the labour market and improving job opportunities in the targeted municipalities. The measure shall make use of a broad set of instruments for economic development interventions based on action plans and economic development strategies derived from local diagnoses. The launch of economic development interventions shall build on field social work and the network of local social helpers.

This investment shall consist of the participation of at least 10 000 persons in labour socialisation programmes. Such programmes shall include training, personal mentoring, personalised services and a minimum six-month employment experience. More specifically, these programmes shall support the integration of working age people living in the disadvantaged municipalities into the open labour market with training activities, and providing them with intensive and comprehensive mentoring to enter and stay in work. As a result of the measure, the skills and employability of the programme participants is expected to improve, thus contributing to the employment of disadvantaged groups.

The implementation of the investment shall be completed by 30 June 2026.

C3.I4: Community-oriented pedagogy

The objective of the measure is to improve learning outcomes and participation rates in education in the most disadvantaged areas by providing pupils targeted support and involving their families in school life.

This measure shall provide inclusive pedagogical developments in at least 100 public education institutions in the most disadvantaged municipalities selected under the Catching up Settlements

Programme. The support shall include social diagnoses for public education institutions, extended school programmes and scholarships for secondary education in educational tracks that lead to

‘matura’ (high-school diploma). The measure shall prevent further educational segregation and combat existing educational segregation.

The implementation of the investment shall be completed by 30 June 2026.

C.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Quantitative indicators Indicative timeline for completion

Sequential Related Measure Qualitative (for targets)

Number (Reform or Milestone/Target Name indicators Description of each milestone and target Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

C3.R1 Creating

framework Transparent selection of Publication of Rules of procedure shall ensure a transparent selection of nonconditions

for an the organisations that Rules of governmental organisations and other organisations that shall implement the various elements of the Catching-up Settlements 50 effective integrated support to the Milestone shall implement the procedure for various elements of the the selection of Q4 2021 Programme. The Rules of procedure shall be published on the

most Catching-up Settlements implementing dedicated website of the Catching-up Settlements Programme. disadvantaged Programme organisations Selection shall be based on criteria related to professional

settlements experience, capacity and merit.

A thematic monitoring committee shall be established for the Catching up Settlements programme, including its ESF+ and ERDF

C3.R1 Creating elements, possibly together with other similar social inclusion framework programmes. The committee shall review the results and provide

conditions for an Establishment of a recommendations for further increasing the effectiveness of the monitoring committee programme. Members of the monitoring committee shall include 51 effective integrated support to the Milestone for the support for the Q1 2023 competent ministries and authorities, representatives of

most most disadvantaged municipalities, civil society organisations working on social disadvantaged settlements inclusion and Roma inclusion. The civil society organisations shall

settlements be selected based on professional experience, capacity and merit. The monitoring committee shall meet at least quarterly. Its

documents, including the minutes shall be published on the

dedicated website of the programme.

An Intervention Plan shall be adopted by the main organiser of

the Catching-up Settlements Programme to identify the

renovation needs and the settlements where new social houses

shall be built or purchased. New and renovated houses for social

purposes may exceptionally be placed outside the 300 most

C3.I1 Construction disadvantaged municipalities (in non-segregated areas with better

and renovation of Adoption of an

Publication of the intervention access to employment and services), but in those cases the social

52 social housing, Milestone intervention plan based Q2 2022 housing stock shall be allocated to people living in those 300 improvement of on housing diagnoses for

plan on the dedicated targeted municipalities, who may apply for rental housing through

housing conditions the settlements involved website an open call for applications, and may, on a voluntary basis, move

in a dwelling outside of their settlement. The plan shall take into account the surveys conducted to map the needs and the selection of projects shall not generate segregation risk. The plan shall be published on the dedicated website of the Catching-up

Settlements Programme. C3.I1 Construction Purchasing and renovation of at least 800 dwellings selected

53 and renovation of Target Refurbishment of social housing, dwellings

Number 0 800 Q4 2024 according to the published Intervention Plan and rent them out as social houses. This includes interventions such as renovation of at

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Quantitative indicators Indicative timeline for completion

Sequential Related Measure Qualitative (for targets)

Number (Reform or Milestone/Target Name indicators Description of each milestone and target Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

improvement of least one heatable room and one bathroom per dwelling as well housing conditions as preparation of safe electricity collection points, building fences, rodent control, insecticide. These post-renovation dwellings shall be owned by the organisations implementing the Catching up Settlements Programme for at least 20 years and managed by a social housing agency under a public service contract. The social housing agency shall allocate the housing stock to eligible tenants

in the form of a rented property, through a public tender system. Purchasing and renovation of at least 800 additional dwellings selected according to the published Intervention Plan. This

C3.I1 Construction includes interventions such as renovation of at least one heatable and renovation of room, one bathroom per dwelling, preparation of safe electricity

54 social housing, Target Refurbishment of collection points, building fences, rodent control, insecticide. improvement of additional dwellings

Number 800 1 600 Q2 2026 These post-renovation dwellings shall be owned, managed and

housing conditions rented to eligible tenants according to specifications in milestone 53.

Construction of at least 200 new social dwellings based on the

C3.I1 Construction published Intervention Plan. New buildings shall comply with the and renovation of Nearly Zero Energy Buildings requirements. The construction of

55 social housing, Target Construction of new new houses shall take place as centrally as possible within a improvement of social housing

Number 0 200 Q4 2024 municipality to make use of dilapidated houses and empty plots

housing conditions of lands. These newly constructed dwellings shall be owned, managed and rented to eligible tenants according to

specifications in milestone 53. Construction of at least 200 additional new social dwellings based

C3.I1 Construction on the published Intervention Plan. New buildings shall comply and renovation of Construction of with the Nearly Zero Energy Buildings requirements. The

56 social housing, Target additional new social Number 200 400 Q2 2026 construction of new houses shall take place as centrally as improvement of housing possible within a municipality to make use of dilapidated houses

housing conditions and empty plots of lands. These newly constructed dwellings shall be owned, managed and rented to eligible tenants according to

specifications in milestone 53. Renewable energy production power plants shall be built in some

C3.I2 Production Installation of renewable of the 300 most disadvantaged settlements, with a production

and use of energy production capacity of at least 12 500 kWp.

57 renewable energy Target capacity in or for the kWp 0 12 500 Q4 2023 In cases where the network capacity does not allow the

in disadvantaged benefit of disadvantaged investment to take place in catching-up settlements within the

municipalities municipalities administrative area of targeted municipalities, photovoltaic power plants may exceptionally be built outside the 300 targeted

municipalities if technically justified, provided that the revenue

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Sequential Related Measure Qualitative (for targets)

for completion

Number (Reform or Milestone/Target Name indicators Description of each milestone and target Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

generated is used to subsidise the heating of households in the

300 targeted municipalities.

The production capacity shall be owned by the organisations

implementing the Catching up Settlements Programme for at

least 20 years. These organisations shall use the net revenue (the

difference between the income from energy selling and the

expenditures related to the operation of the power plant) of the

electricity production to support the annual electricity need for

heating purposes of at least one heated room for at least 2500

vulnerable families with children in the 300 settlements, via an

open tender. A separate accounting is maintained by the owner

for the purposes of recording and reporting about the revenues,

expenditures and redistributed financial supports linked to the

operation of the power plants.

Additional renewable energy production power plants shall be

built in some of the 300 most disadvantaged settlements, with a

production capacity of at least 12500 kWp.

In cases where the network capacity does not allow the

investment to take place in catching-up settlements within the

administrative area of targeted municipalities, photovoltaic power

plants may exceptionally be built outside the 300 targeted

Installation of additional municipalities if technically justified, provided that the revenue generated is used to subsidise the heating of households in the

C3.I2 Production renewable energy 300 targeted municipalities. and use of production capacity in or

58 renewable energy Target for the benefit of

The production capacity shall be owned by the organisations

in disadvantaged disadvantaged

kWp 12 500 25 000 Q4 2025 implementing the Catching up Settlements Programme for at

municipalities municipalities

least 20 years. These organisations shall use the net revenue (the difference between the income from energy selling and the expenditures related to the operation of the power plant) of the electricity production to support the annual electricity need for heating purposes of at least one heated room for at least 2500 (additional to the previous target) vulnerable families with children in the 300 settlements, via an open tender. A separate accounting is maintained by the owner for the purposes of recording and reporting about revenues, expenditures and redistributed financial supports linked to the operation of the

power plants. C3.I3 Promoting At least 4 000 persons from the targeted settlements shall

59 employment and skills development Target Participation in labour socialisation programmes Number 0 4 000 Q4 2023 participate in labour socialisation programmes, which include training, personal mentoring, personalised services and a

based on local minimum six-month employment. Public works participation shall

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Sequential Related Measure Qualitative (for targets)

for completion

Number (Reform or Milestone/Target Name indicators Description of each milestone and target Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

specificities not count as employment under this investment.

C3.I3 Promoting employment and Additional participation At least 6 000 additional persons from the targeted settlements

60 skills development Target in labour socialisation Number 4 000 10 000 Q2 2026 shall participate in employment programmes, according to the based on local programmes specifications in milestone 59.

specificities

Pedagogical development At least 40 public education and vocational training institutions in of public education and selected settlements shall benefit from inclusive pedagogical

61 C3.I4 Communityoriented pedagogy Target vocational training Number 0 40 Q4 2023 development. Support shall include social diagnoses for public

institutions in the education institutions, extended school programmes, scholarships

selected settlements for secondary schools leading to ‘matura’, application of community-oriented teaching methods, and career guidance.

Pedagogical development At least 60 additional public education and vocational training of additional public institutions in selected settlements shall benefit from inclusive

62 C3.I4 Communityoriented pedagogy Target education and vocational Number 40 100 Q2 2026 pedagogical development. Support shall include social diagnoses

training institutions in the for public education institutions, extended school programmes,

selected settlements scholarships for secondary schools leading to ‘matura’, application of community-oriented teaching methods, and career guidance.

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• D. 

  COMPONENT 4: WATER MANAGEMENT

This component of the Hungarian recovery and resilience plan aims at addressing the challenges that Hungary faces with water management, in particular related to the risk of drought. Water scarcity has a detrimental effect on the status of water bodies, ecosystems and agricultural lands.

The objective of this component is to contribute to introducing solutions in the field of water management in agriculture through the development of new water networks and reconstruction of existing systems, through the establishment of an effective monitoring system at local and national levels and through the establishment of new sustainable water management communities. The component also includes measures aiming at improving the security of water supply in the Hanság

Natura 2000 site and at launching a reflection and at implementing measures in order to accelerate climate adaptation measures in water management, notably through the deployment of nature-based solutions.

The measures of this component focus mostly on restoring water supply and improving water retention in the areas affected by water scarcity, giving priority to the retention of precipitation and water from upstream watercourses, protecting groundwater resources, and ensuring ecologically appropriate retention of water resources. Improving Hungary’s water management monitoring system by increasing the number of monitoring stations is expected to contribute to a better management of water abstraction by the relevant authorities.

The component contributes to addressing the Country Specific Recommendations to focus investment-related economic policy on sustainable water management (Country Specific

Recommendation 3 in 2020 and Country Specific Recommendation 5 in 2022).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

D.1. Description of the reforms and investments for non-repayable financial support

C4.R1: Awareness raising

The objective of the reform shall be to broaden the scope of existing farmers’ associations, also called “Irrigation communities”, into “Sustainable water management communities” focusing on sustainable water management practices and sustainable climate adaptation solutions. To this end,

Act CXIII/2019 and Government Decree No 302/2020 shall be amended to extend the scope of the existing farmers’ associations. New “sustainable water management communities” shall be established to promote sustainable water management solutions (among others, water retention) and exchange of best practices. The reform shall also launch information campaigns in the form of information sessions organised by the Ministry of Interior so that newly established “sustainable water management communities” as well as all already existing communities improve their awareness of the importance of sustainable water management and gain the know-how of effective solutions for its implementation.

The reform shall include a minimum of 50 000 hectares of arable land undergoing changes to water saving agricultural practices. 1

The implementation of the reform shall be completed by 31 March 2026.

1 Infiltration of water from canals through their banks shall not be considered as nature-based solutions.

C4.I1: Construction of main water replacement systems, development of new networks and systems

The objective of the investment shall be to refurbish water replacement systems that restore water to areas with no water connection and to ensure that water is provided to water-dependent ecosystems, nature reserves and Natura 2000 network sites. The underlying objective of the interventions shall be to protect groundwater resources without damaging surface water resources. Taking into account the conservation objectives of land management, the planned activities shall include the necessary renovation of some sections of the riverbed and treatment strips, the renovation of structures for water control and retention and the construction of new structures.

To minimise the risk of unsustainable demand for water supplied from outside the affected areas, which would raise the need to abstract groundwater resources in times of low river flows in particular, specific safeguards shall be put in place to maximise the retention of water resources in the soils of the affected territories resulting from precipitation or received from upstream watercourses.

To this end, Hungary shall include in the design of the projects substantial nature-based solutions

for water retention 2 , in particular N01 (basins and ponds), N07 (reconnection of oxbow lakes and similar features) and N13 (restoration of natural infiltration to groundwater) 3 .

The investment shall consist of two projects:

• i) 

  Improvement and restoration of the water deficit ecological status of the Danube

Tisza Interfluve Homokhátság (Sand Ridge) – Phase I.

This project concerns the northern plot of the Homokhátság and the reconstruction and further development of the Tiszaalpár water supply system based on the water resources of the river Tisza.

Water recharge based on the water resources of the Tisza shall include the reconstruction and further development of the Tiszaalpár water recharge system. The extension of the current system shall be achieved through the reconstruction of the previously constructed water supply works, the restoration of the Baloghalmi canal and the construction of the Alpár-Nyárlőrincincpuszta reservoir.

The pumping stations on the river (Tiszaalpár main water intake and Alpár pressure centre) and the water control structures shall be built to deliver water to the canal sections to be reconstructed. The other part of the development shall be the water replacement and revitalisation for ecological purposes of the Szikrai Holt-Tisza and of the Alpári Holt-Tisza reservoirs.

The aim of the project shall be to create the conditions for a safe supply of water that meets ecological needs, to increase the quantity and quality of water resources, and to increase the effectiveness of protection against water damage. While maintaining existing water resources, its operational objective is to ensure the safe diversion of periodically occurring floods and inland waters, to provide water supply opportunities and to improve conditions for the use of water resources. As a result of the project, water retention and water storage capacity of the area shall increase and the water balance of the soils shall improve.

The implementation of the project shall be completed by 30 June 2026.

2 Such nature-based solutions include, based on NWRM report – 53 NWRM illustrated : N01 – Basins and ponds that infiltrate slowly the rains or runoff water towards the groundwater; N02 – Wetland restoration and management; N03 –

Floodplain restoration and management; N04 – Re-meandering; N05 – Stream bed re-naturalization; N06 – Restoration and reconnection of seasonal streams or temporary streams; N07 – Reconnection of oxbow lakes and similar features;

N13 – Restoration of natural infiltration to Groundwater .

3 Infiltration of water from canals through their banks shall not be considered as nature-based solutions.

• ii) 

  Rábaköz-Tóköz water supply development.

This project shall consist of the reconstruction and widening of a section of the Vág-Sárdos-Megág canal. The project shall also consist of the renovation of estuary sluices, the construction of a weir, a control structure, and culverts on the connecting ditches. The reconstruction of the canal linked to the Keszeg river shall involve, among others, the sludge treatment of riverbeds. Between the two canals, a new canal and a new weir shall be built to supplement the ecological water supply from the Kis-Rába water supply through the Keszeg-ér to the Vág-Sárdos-Megág canal.

The implementation of the project shall be completed by 30 June 2026.

For these two projects:

All parts of the projects likely to have significant effects on the environment shall be subject to an Environmental Impact Assessment (EIA) in accordance with Directive 2011/92/EU, as well as to relevant assessments in the context of Directive 2000/60/EC. Required mitigation measures shall be integrated into the projects. The requirements of these projects, as set out above, may be deviated from to the extent necessary to comply with required mitigation measures.

The investments shall also comply with the provisions of Directive 2009/147/EC on the conservation of wild birds (Birds Directive) and Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora (Habitats Directive).

A climate risk analysis shall be undertaken.

Where water is abstracted, a permit shall be granted by the relevant authority. Water abstraction shall be avoided where the concerned water bodies are, or are projected to be, in less than good status or potentially good status.

Hungary shall achieve good ecological status or potential of the surface and groundwater bodies affected by the investments by 31 December 2025 (or if good status has been achieved, it shall not have been deteriorated).

C4.I2: Establishment of a monitoring system

The objective of the investment shall be to contribute to the sustainable management of water resources. Knowledge of the water flow in surface water courses and other hydrological and water quality parameters of the region is a fundamental prerequisite for sustainable water resource management. Thanks to the investment, actions are expected to be undertaken on the basis of the real-time data from the monitoring systems in the event of a qualitative and quantitative deterioration of the status of water bodies. The use of smart monitoring, IT tools, the interconnection of data systems and the dynamic planning and control function are expected to provide the necessary input information that is necessary for planning.

The investment shall consist of developing a comprehensive monitoring system of water abstractions at local and national levels. This monitoring system shall be used to assess the abstractions both from groundwater and surface water.

This investment shall include the construction of surface hydrographic stations, the installation of state-of-the-art hydrographic monitoring equipment, and the further development of underground monitoring systems through the construction of new ground water level detection wells, which are built with an integrated pressure probe for remote detection systems.

The implementation of the investment shall be completed by 31 December 2025.

C4.I3: Nature protection

The investment shall be carried out in the Hanság area of the Rábaköz-Tóköz water system, in order to improve the water balance of the Natura 2000 area and to make its ecological water replenishment more secure and to improve the retention of surface and groundwater. The objective of the investment shall be to protect and improve the ecological status of protected and Natura 2000 habitats in Hanság in the 4950 ha target area by improving the groundwater and surface water storage capacity.

The main activities of the investment shall focus on upgrading the canal system previously developed to ensure a balanced water supply. With the conservation objectives of land management in mind, the planned activities shall include the necessary renovation of some sections of the riverbed and treatment strips, the renovation of structures for water control and retention and the construction of new structures.

The investment shall contribute to an increased retention and a more conservative management of locally available water resources. It is expected to ensure the ecological conditions necessary for the protection of wetland ecosystems hosting habitats and species of community interest.

Retention of water received through precipitation or from upstream natural watercourses shall be given a priority. The design of the project shall include substantial nature-based solutions for water

retention 4 , wetlands and peatlands restoration, in particular N02 (wetland restoration and management) and N13 (restoration of natural infiltration to groundwater) 5 . Overall, the design shall prioritise the use of nature-based solutions, based on best practices.

All projects likely to have significant effects on the environment shall be subject to an Environmental Impact Assessment (EIA) in accordance with Directive 2011/92/EU, as well as to relevant assessments in the context of Directive 2000/60/EC. Required mitigation measures shall be integrated into the projects. The requirements of these projects, as set out above, may be deviated from to the extent necessary to comply with required mitigation measures.

A climate risk analysis shall be undertaken.

The investments shall also comply with the provisions of Directive 2009/147/EC on the conservation of wild birds (Birds Directive) and Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora (Habitats Directive).

Where water is abstracted, a permit shall be granted by the relevant authority. Water abstraction shall be avoided where the concerned water bodies are, or are projected to be, in less than good status or potentially good status.

Hungary shall achieve good ecological status of the surface and groundwater bodies affected by the investment by 31 December 2025 (or if good status has been achieved it shall not have been deteriorated).

The implementation of the investment shall be completed by 30 June 2026.

C4.R2: Accelerating climate adaptation measures in water management

4 Such nature-based solutions include, based on NWRM report – 53 NWRM illustrated : N01 – Basins and ponds that infiltrate slowly the rains or runoff water towards the groundwater; N02 – Wetland restoration and management; N03 –

Floodplain restoration and management; N04 – Re-meandering; N05 – Stream bed re-naturalization; N06 – Restoration and reconnection of seasonal streams or temporary streams; N07 – Reconnection of oxbow lakes and similar features;

N13 – Restoration of natural infiltration to Groundwater .

5 Infiltration of water from canals through their banks shall not be considered as nature-based solutions.

The purpose of this reform shall be to engage different stakeholders on the matter of sustainable water management. In order to adapt to climate change, the reform shall focus on reaching new public consensus regarding land use.

As a first step, a taskforce shall be set up to assess the current national climate situation, with the participation of international experts. The report produced by the taskforce shall include recommendations and shall be presented for public consultation and in international fora. Based on those recommendations and exchanges, an action plan shall be developed and implemented, including any necessary legislative amendments.

The implementation of the reform shall be completed by 30 June 2025.

D.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Quantitative indicators Indicative timeline for

Sequential Related Measure Milestone/ Qualitative (for targets) completion

Number (Reform or Description of each milestone and target Investment) Target Name indicators (for milestones)

Unit of

measure Baseline Goal Quarter Year

Act CXIII/2019 and of Government Decree No 302/2020 shall be amended to extend the scope of the existing associations of farmers called “irrigation communities” – "öntözési közösség" into

Amendment of Act “sustainable water management communities”. CXIII/2019 on Their missions shall be extended beyond irrigation matters to focus

63 C4.R1 Awarenessirrigation farming

Entry into force

raising Milestone and of Government of legislative Q2 2023

on sustainable water management practices, sustainable climate adaptation solutions and micro-regional water supply and demand

Decree No amendments measuring. They shall also regularly assess information provided by

302/2020 the authorities on the condition of water bodies and provide regular information on water abstraction, water supply and water demand projects. Current membership shall be adjusted accordingly.

Establishment of 100 new “sustainable water management communities” (as

64 C4.R1 Awarenesssustainable water raising Target management Number 0 100 Q3 2024 defined by the new legislative framework) shall be established.

communities Existing communities shall be adapted to the new legal framework.

Information sessions shall be organised by the Ministry of Agriculture for all new sustainable water management

Organisation of Planned communities as established pursuant to target 64 as well as for all

65 C4.R1 Awarenessraising Milestone information information Q4 2025 existing communities as adapted to the legal framework pursuant sessions sessions are to target 64. These information sessions shall raise awareness on completed the importance of sustainable water management practices, of

natural water retention solutions, on the use of efficient

agricultural techniques and of less intensive crops.

50 000 hectares of arable land at the national level shall have

Hectares of arable undergone at least one of the following: (i) applied measures to

land having increase the organic matter content of soils; (ii) switched to less

66 C4.R1 Awarenessundergone changes Number of raising Target to water saving hectares 0 50 000 Q1 2026 water demanding/more drought resistant crops; (iii) use arable land for nature-based water retention; (iv) drip irrigation

agricultural techniques and use of recycled water for irrigation. In addition, at practices least 75% of the abovementioned 50.000 hectares of arable land

shall have undergone one of the practices (i), (ii) and/or (iii). C4.I1-3 Achieving good Publication of Monitoring of the water bodies concerned by investments 1 and 3 67 Investments 1 and Milestone ecological status of results on the Q4 2025 shall have been carried out in order to ensure that the surface and

3 – Water the surface and website of the groundwater bodies affected by the investments under the

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Sequential Related Measure Milestone/ Qualitative (for targets) completion

Number (Reform or Description of each milestone and target Investment) Target Name indicators (for milestones)

Unit of

measure Baseline Goal Quarter Year

management groundwater bodies national water recovery and resilience plan are in good ecological status (or that if affected by the authorities good status has been achieved it has not deteriorated). Good

investments under ecological status of the relevant water bodies as defined in the this component Water Framework Directive 2000/60/EC shall be achieved. (Investment 1 and Investment 3) The design of the project aiming at improving and restoring the water deficit of the Homokhátság area shall be adopted. Substantial nature-based solutions for water retention (in particular N01 – basins and ponds, N07 – reconnection of oxbow lakes and similar features, and N13 – restoration of natural infiltration to

C4.I1 Construction Design of the groundwater) shall be included in the design of the project. The of main water project "Improving infiltration of water from canals through their banks shall not be replacement and restoring the considered as nature-based solutions.

68 systems, Milestone water deficit Adoption of the An EIA shall be completed in accordance with Directive development of ecological status of design

Q1 2023 2011/92/EU, as well as relevant assessments in the context of

new networks Homokhátság Directive 2000/60/EC. Any measures identified in the framework of

and systems (Danube-Tisza) – the EIA and the assessment under Directive 2000/60/EC shall be Phase I” integrated into the project. Compliance with the conservation

objectives of Natura 2000 shall be ensured. Where water is abstracted, a relevant permit shall be granted by the relevant authority. Water abstraction shall be avoided where the concerned water bodies are, or are projected to be in less than good status or potentially good status.

C4.I1 Construction Finalisation of the of main water project “Improving Completion report of the project aiming at improving water deficit replacement and restoring the of the Homokhátság area. The report shall demonstrate that the

69 systems, Milestone water deficit Completion project has been completed in line with the design of the project. development of ecological status of report

Q2 2026 The report shall be accompanied by an assessment of the

new networks Homokhátság implementation of the nature-based solutions as incorporated in

and systems (Danube-Tisza) – the design of the project. Phase I”

C4.I1 Construction The design of the project aiming at improving and restoring the of main water Design of the water deficit if the Rábaköz-Tóköz area shall be adopted.

70 replacement systems, Milestone project “Rábaköz Adoption of the Tóköz water supply design Q4 2022 Substantial nature-based solutions for water retention (in particular N01 – basins and ponds, N07 – reconnection of oxbow lakes and

development of development” similar features, and N13 – restoration of natural infiltration to new networks groundwater) shall be included in the design of the project. The

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Sequential Related Measure Milestone/ Qualitative (for targets)

timeline for completion

Number (Reform or Name indicators Description of each milestone and target Investment) Target (for milestones)

Unit of

measure Baseline Goal Quarter Year

and systems infiltration of water from canals through their banks shall not be considered as nature-based solutions.

An EIA shall be completed in accordance with Directive 2011/92/EU, as well as relevant assessments in the context of Directive 2000/60/EC. Any measures identified in the framework of the EIA and the assessment under Directive 2000/60/EC shall be integrated into the project. Compliance with the conservation objectives of Natura 2000 shall be ensured. Where water is abstracted, a relevant permit shall be granted by the relevant authority. Water abstraction shall be avoided where the concerned water bodies are, or are projected to be in less than good status or potentially good status.

C4.I1 Construction Completion report of the project aiming at improving and restoring of main water the water deficit of the Rábaköz-Tóköz shall be finalised. The report

replacement Finalization of the shall demonstrate that the project has been completed in line with

71 systems, Milestone project “Rábaköz Completion

development of Tóköz water supply report

Q2 2026 the design of the project. The report shall be accompanied by an assessment of the

new networks development” implementation of the nature-based solutions as incorporated in

and systems the design of the project. A comprehensive monitoring system of groundwater and surface water (quantitative and qualitative status) has been put in place at local level in line with the recommendations of the Groundwater Monitoring Guidelines (Guidelines 15, Common Implementation Strategy, Water Framework Directive 2000/60/EC). The increase in

C4.I2 Comprehensive remote monitoring stations shall cover the regions where the

72 Establishment of investments under this component are being implemented. The a monitoring Milestone monitoring system Completion Q4 2024 data from the monitoring system shall be made publicly available.

system at local level Data from the local monitoring system shall be used to assess

water abstractions from both groundwater and surface water in areas affected by the investments supported under the plan. Based on real-time data, the monitoring system shall be used as a tool to ensure that immediate action is taken in the event of a deterioration in water quality or quantity

C4.I2 Comprehensive A comprehensive monitoring system of groundwater and surface

73 Establishment of a monitoring Milestone monitoring system Completion Q4 2025 water (quantitative and qualitative status) has been put in place at national level in line with the recommendations of the

system at national level Groundwater Monitoring Guidelines (Guidelines 15, Common

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Sequential Related Measure Milestone/ Qualitative (for targets)

timeline for completion

Number (Reform or Name indicators Description of each milestone and target Investment) Target (for milestones)

Unit of

measure Baseline Goal Quarter Year

Implementation Strategy, Water Framework Directive 2000/60/EC).

The data from the monitoring system shall be made publicly

available. Based on real-time data, the monitoring system shall be

used as a tool to ensure that immediate action is taken in the event

of a deterioration in water quality or quantity.

C4.I2 Development of a The project shall include the construction of at least 30 new surface Number of hydrographic stations and the drilling of more than 60 new wells to

74 Establishment of a monitoring Target comprehensive monitoring system equipments 0 90 Q4 2025 improve the subsurface monitoring system. The data produced by

system at national level installed the monitoring system shall be made publicly available in a timely manner.

Adoption of the design of the project aiming at improving the security of water supply in the Hanság Natura 2000 site. The design of the project shall include substantial nature-based solutions for water retention, wetlands and peatlands restoration, in particular N02 – wetland restoration and management, and N13 – restoration of natural infiltration to groundwater. Overall, the design shall prioritise the use of nature-based solutions, based on best practices. A description of the nature-based solutions integrated in the project shall be provided, as well as a justification

Design of the for situations where nature-based solutions could not be taken up project “Improving in the design of the project. The infiltration of water from canals the security of through their banks shall not be considered as nature-based

75 C4.I3 Nature protection Milestone ecological water Adoption of the Q2 2023 solutions.

supply in the design

Hanság Natura 2000 An EIA shall be completed in accordance with Directive site” 2011/92/EU, as well as relevant assessments in the context of Directive 2000/60/EC and Directive 92/43/EEC. Any measures identified in the framework of the EIA and the assessment under Directive 2000/60/EC and Directive 92/43/EEC shall be integrated into the project. Where water is abstracted, a relevant permit shall be granted by the relevant authority. Water abstraction shall be avoided where the concerned water bodies are, or projected to be in less than good status or potentially good status.

76 C4.I3 Nature

Completion of the Completion Completion report of the investment developed to improve the

protection Milestone project “Improving the security of report Q2 2026 security of ecological water supply in the Hanság Natura 2000 site. It shall demonstrate that the project has been completed, in line

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Name indicators (for milestones) Unit of

measure Baseline Goal Quarter Year

ecological water with the design of the investment. supply in the The report shall include an assessment of the use of nature-based Hanság Natura 2000 solutions for water retention, wetlands and peatlands restoration. site” The combined coverage of green infrastructure, protected or Natura 2000 sites targeted by restoration of natural hydrology shall increase by 4950 hectares.

Increase in the This is measured by the number of hectares restored in line with combined coverage the conservation objectives and in accordance with the provisions

of hectares of green of Directive 2009/147/EC on the conservation of wild birds (Birds Directive) and Directive on the conservation of natural habitats and

77 C4.I3 Nature infrastructure or protection Target protected or Natura Number 0 4.950 Q2 2026 of wild fauna and flora 92/43/EEC (Habitats Directive (Habitats

2000 sites targeted Directive). by restoration of In addition, the Ferto-Hanság National Park Directorate shall

natural hydrology provide an assessment report on the impact of the investment on the restoration of wetlands and peatlands in view of the

conservation objectives of the Natura 2000 site, including the hydrology and the improvement of the status of habitats and species. A task force on sustainable water management shall be set up, including notably international experts recognised in the field of

C4.R2 sustainable water management practices and nature-based Accelerating solutions.

climate Report of the

78 adaptation Milestone taskforce on Publication of

The task force shall publish a report including recommendations

measures in sustainable water the report

Q4 2023 on: increased preparedness and response to extreme weather

water management

events; monitoring of climate adaptation strategies (including policy framework and governance structure); improvement of

management adaptation knowledge and environmental awareness and on improvement of the use of climate adaptation interventions such as nature-based solutions.

C4.R2

Accelerating Implementation of The report produced by the task force shall be presented for public climate an action plan consultation and in international forums.

79 adaptation Milestone building on the The action plan measures in recommendations is implemented

Q2 2025 Based on those recommendations and exchanges, an action plan shall be developed and published.

water developed by the Its implementation shall be completed, including any necessary management task force legislative amendments.

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• E. 

  COMPONENT 5: SUSTAINABLE GREEN TRANSPORT

This component of the Hungarian recovery and resilience plan addresses the need to strengthen the contribution of the transport sector to the reduction of greenhouse gas and pollutant emissions, to speed up the modernisation of the transport network and rolling stock, to increase the attractiveness of sustainable transport modes, in particular public transport, and to improve social and territorial cohesion.

The objective of this component is to promote sustainable mobility, strengthen low-carbon public transport, reduce negative externalities of transport (in particular congestion, emissions and accidents) and provide accessible modes of transport, mostly through a strengthening of public transport infrastructure and vehicles. The measures of this component are expected to lead to a reduction of emissions due to transport by encouraging the use of environmentally friendly urban and suburban modes of transport and more generally by strengthening alternatives to individual cars and road freight. Public transport is expected to be made more attractive, which would lead to more users shifting from private car to public transport. More robust railway infrastructure are also expected to facilitate modal shift of freight. To this end, this component shall consist of reforms and investments that promote sustainable transport through the modernisation of important railways lines in the region of Budapest and in the TEN-T corridor, the purchase of zero emission buses for public transport, the modernisation of the management system of railway lines, and the introduction of a uniform price and information system for public transport.

The component contributes to addressing the Country Specific Recommendations on focusing investment-related economic policy on transport infrastructure, taking into account regional disparities, and on focusing investment on the green transition, in particular sustainable transport

(Country Specific Recommendation 3 in 2019 and 2020) and on the reduction of the dependency on fossil fuels in transport by stepping up efforts on energy efficiency, in particular through electrification (Country Specific Recommendation 6 in 2022).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the plan in accordance with the DNSH Technical

Guidance (2021/C58/01).

E.1. Description of the reforms and investments for non-repayable financial support

C5.I1: Capacity building of suburban rail network

The objective of the investment is to increase the attractiveness of public transport by rail around and in Budapest through the modernisation of 56 km of railways on the following sections of three main suburban railway lines (HÉV):

• Szentendre – Pomáz – Budakalász – Batthyány tér (H5);

• Ráckeve – Tököl – Szigetszentmiklós – Pesterzsébet (H6);

• Csepel – Kvassay Bridge (H7).

The HÉV system is a stand-alone light rail system, in suburban/urban environment, which shall be upgraded in order to tap its full potential. The investment shall consist of the upgrade of the railway tracks and shall also include the modernisation of stops and stations along these lines, the modernisation of converters, the installation of new B+R bicycle storage facilities and the creation of new intermodal hubs.

The implementation of the investment shall be completed by 30 June 2026.

C5.I2: Rail network congestion switching on TEN-T corridor

The objective of the investment is to channel long-distance freight traffic towards low CO2 emission modes and to improve the use of long-distance freight and passenger transport by removing bottlenecks and capacity constraints in the rail TEN-T network.

The investment shall consist of upgrading significantly two electrified railway sections:

• - 

  The 11 km long Almásfüzitő-Komárom line section is a critical narrow section currently subject to constant slow signals. The investment shall allow an increased speed on this section (authorised speed of 160 km/h). It shall also include the construction or upgrading of respectively missing or outdated passenger transport facilities, such as overpasses or pedestrian crossings. The implementation of this action shall be completed by 31 March

  2026.

• - 

  The investment shall reconstruct the 30.3 km long railway Békéscsaba – Lőkösháza section to allow an increased speed on this section (authorised speed of 160 km/h), including the extension of the line to two tracks and a complete overhaul with the development of ETCS L2 train control and the modernisation of Kétegyháza and Lőkösháza stations. The

  implementation of this action shall be completed by 31 December 2025.

C5.I3: Development of zero-emission bus transport

The objective of the investment is to renew and decarbonise the public transport fleet in Hungary through the provision of zero emission buses.

The investment shall consist of the replacement by local authorities or public service operators of 300 buses using fossil fuels by new electric buses and in the construction of the same number of recharging points in the framework of the Green Buses Programme. The financial support shall be provided in the form of a grant to municipalities or service operators (which shall be eligible in all cities with more than 25 000 inhabitants) after a call for proposals. The buses shall be used for the provision of public passenger transport services under public service contracts. The vehicle safety systems of the buses purchased shall meet EU requirements.

The implementation of the investment shall be completed by 31 December 2025.

C5.I4: Deployment of central traffic management on TEN-T railways

The objective of the investment is to improve the reliability and the security of the rail network through the deployment of a centralised management system, improving its efficiency and ultimately its attractiveness.

The investment shall consist of the construction of a central traffic management system (KÖFI) for 272 km of main suburban and national railway lines, with computer support and real-time train information. The investment shall cover the railway lines 70 and 140, part of the TEN-T comprehensive network, and the railway lines 100a and 80, part of the TEN-T core network. It shall provide control staff with real-time monitoring of train running information, improving train traffic control from a single centre. The investment is expected to increase the robustness of the sections of the railway line concerned, to ensure the traffic flow, to make use of scheduling reserves, to increase the capacity to pass through, and to ensure uniform audiovisual passenger information.

The implementation of the investment shall be completed by 31 March 2026.

C5.R1: Deployment of a single national tariff, ticketing and passenger information system for bus and rail by the National Public Transport Authority

The objective of this reform is to facilitate the use of public transport in a multimodal manner, by enabling an easier combination of rail and bus transport services through the deployment of a single tariff, ticketing and passenger information system by the newly established National Public

Transport Authority at national level.

The reform shall consist of the introduction of a single national system for tariffs, ticketing and passenger information for the various modes of public transport (local and inter-urban buses and trains) through digital means. The infrastructure for the delivering of e-tickets is not part of this reform and is not funded under the recovery and resilience plan.

The reform shall put in place the relevant regulatory framework. A National Public Transport Authority shall notably be established and a new regulation shall set the institutional framework in terms of methods and procedures for the new tariff system, the ticket schemes and passenger information availability.

The reform shall also put into operation the necessary infrastructure, notably a database server, a platform for real time travel and tariff information, an OpenData portal containing passenger transport data and a real-time passenger information system.

The reform shall enable users to purchase tickets for the whole country, request timetable information and check the current traffic situation via a single platform. The resulting system shall treat all rail-bus interchange journeys as a single entity, provide aggregated information and issue a single ticket for the entire route. Real-time information shall be publicly available and displayed in train and bus stations.

The system shall be non-discriminatory and based on data exchange formats compliant with EU requirements (Commission Delegated Regulation (EU) 2017/1926) and shall be in accordance with the tasks of the National Public Transport Authority on all levels and service area of the regional transport companies.

The implementation of the reform shall be completed by 31 December 2024.

E.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Indicative

Sequential Related Measure Qualitative

Quantitative indicators (for targets) timeline for

Number (Reform or

Milestone/ indicators completion Description of each milestone and target

Investment) Target

Name

(for milestones) Unit of

measure Baseline Goal Quarter Year

Completed open public procurement procedure for the modernisation and extension of suburban railway lines for the following suburban electrified railway sections: — Szentendre – Pomáz – Budakalász – Batthyány tér (H5); — Ráckeve – Tököl – Szigetszentmiklós –

C5.I1 Capacity building Signature of works Milleniumtelep (H6);

80 of suburban rail Milestone contracts for the Signature of — Csepel – Kvassay Bridge (H7).

network renewal and extension contracts

Q3 2023 The contracts signed shall include the refurbishment of

of H5, H6 and H7 lines the track for a total of 56 km (the action does not include the Batthyány tér-Békásmegyer section over a length of 10 km), the electrical power supply (1500 V DC traction system), the rebuilding of stopping points, crossings, the installation of signalling equipment and train control and the installation of a modern passenger information system.

C5.I1 Capacity building 50 % physical Engineer report Report of the independent engineer showing the

81 of suburban rail Milestone readiness for the confirmed for 50 technical progress and the completion of the works

network extension of the % physical

Q2 2025 contracts signed for: construction and refurbishment of

suburban rail network readiness railway lines, stations and stops and vehicle yards.

Upgraded railway line km on the planned sections in accordance with the technical specifications set out in

C5.I1 Capacity building Refurbishment of nonthe public procurement notice.

82 of suburban rail Target TEN-T railway lines km 56 Q2 2026 With the investment, a fully modernised suburban highnetwork

(H5, H6 and H7) speed railway infrastructure shall be established by switching to a 1500 V DC traction system, lifting speed

restrictions, providing signalling equipment and train control and access to the high railway network.

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Sequential Related Measure Qualitative

Quantitative indicators (for targets) timeline for completion

Number (Reform or

Milestone/ Description of each milestone and target

Investment) Target

Name indicators

(for milestones) Unit of

measure Baseline Goal Quarter Year

Completing the upgrading of 22 stops and 11 stations along lines H5, H6 and H7 by providing intermodal

C5.I1 Capacity building Refurbishment of connections: P+R car park with at least 2.700 seats,

83 of suburban rail Target railway stations and Number 33 Q2 2026 recharging points and real-time passenger information

network stops system. All stops and stations shall be made accessible for groups with specific needs, including high platforms

ensuring barrier-free vehicle-platform connections and visual and acoustic passenger information.

New current

C5.I1 Capacity building transformers or Installation of new current transformers or complete

84 of suburban rail Target complete

network modernisation of

Number 12 Q2 2026 refurbishment and commissioning of existing current

existing current transformers.

transformers

C5.I1 Capacity building New B+R bicycle Installation of new B+R bicycle storage facilities at 85 of suburban rail Target storage facilities at Number 1500 Q2 2026 various HÉV stops and stations for a total of 1500

network HÉV stops bicycles.

C5.I1 Capacity building Creation of three intermodal hubs along the renovated

86 of suburban rail Target New intermodal bus - HÉV lines in the Budapest agglomeration providing

network HÉV hubs

Number 3 Q2 2026 direct transfers for passengers between buses and

trains.

Signature of a contract C5.I2 Rail network for the refurbishment Signature of works contracts for the renewal of the

87 congestion switching Milestone of the railway line Signature of railway line (Almásfüzítő-Komárom section) following on TEN-T corridor (Almásfüzitő- works contract

Q3 2023 an open public procurement procedure.

Komárom)

The renovated railway line shall be put in service, ensuring a speed of 160 km/h and an axle load of 225

C5.I2 Rail network Placing in service of

kN over the whole 11 km section of line. It shall include

88 congestion switching Target the renovated railway

the reconstruction of main road No 1 at a separate

on TEN-T corridor line (Almásfüzitő-

km 11 Q1 2026 level, as well as the modernisation of the overhead

Komárom) contact line and energy supply system, making interlocking equipment high speed. It shall also include

the construction/upgrading of missing or outdated facilities, including:

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Indicative

Sequential Related Measure Qualitative

Quantitative indicators (for targets) timeline for completion

Number (Reform or

Milestone/ Description of each milestone and target

Investment) Target

Name indicators

(for milestones) Unit of

measure Baseline Goal Quarter Year

• Construction of 3.9 km of track • New turnaround installation •Reconstruction of two km of overhead contact line •Five new pedestrian overpasses •Two crossings to be rebuilt •Construction of one overpass for car, pedestrians and cyclists • Construction of noise shading walls.

Signature of a contract C5.I2 Rail network for the refurbishment

89 congestion switching Milestone of the Békéscsaba Signature of

Signature of works contracts for the renewal of the Q2 2021 railway line (Békéscsaba-Lőkösháza) following an open

on TEN-T corridor Lőkösháza railway line works contract public procurement procedure.

section The renovated Békéscsaba-Lőkösháza railway line

Placing in service of section shall be put in service, ensuring a speed of 160 C5.I2 Rail network the renovated railway km/h and an axle load of 225 kN. It shall include the

90 congestion switching Target line (Békéscsabakm 30,3 Q4 2025 construction of a second parallel track, the on TEN-T corridor Lőkösháza railway line development of ETCS Level 2 train control system, and section) the modernisation of Kétegyháza and Lőkösháza stations.

Signature of grant agreements concluded with all the

Signature of grant Signature of grant selected final recipients (municipalities and public

C5.I3 Development of agreements for the agreements with transport service companies in all cities with more than

91 zero-emission bus purchase of new municipalities or

25 000 inhabitants shall be eligible) as a result of

transport Milestone electric buses and public passenger Q2 2023 conducting an open and transparent call for proposal

installation of charging transport and selection process for the purchase of 300 new

points companies buses with only electric drive. The selection of final recipients shall ensure that as many obsolete vehicles

as possible are replaced.

C5.I3 Development of Putting into service of 100 electric buses and the same number of recharging

92 zero-emission bus Target additional electric Number 100 Q1 2025 points put into service replacing at least the same

transport buses and associated recharging points number of old fossil fuel buses.

C5.I3 Development of Putting into service of 300 electric buses and the same number of recharging

93 zero-emission bus Target additional electric Number 100 300 Q4 2025 points put into service replacing at least the same

transport buses and associated recharging points number of old fossil fuel buses.

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Indicative Quantitative indicators (for targets) timeline for

Sequential Related Measure Milestone/ Qualitative completion

Number (Reform or Name indicators Description of each milestone and target Investment) Target (for milestones)

Unit of

measure Baseline Goal Quarter Year

Signature of a contract for the construction of a Central C5.I4 Deployment of Signature of a contract Traffic Management System operating on four main

94 central traffic for the establishment

Signature of railway line sections (70, 100a, 80 and 140) following an

management on TEN- Milestone of a central traffic contracts for Q2 2023 open public procurement procedure, including the

T railways management system works necessary interlocking equipment and

telecommunications parts.

A central traffic management system shall be established. The investment shall include the deployment of central traffic management on the two busiest suburban railway lines in Budapest (70 and

Installation of the 100a) and on two main rural railway lines (80 and 140) C5.I4 Deployment of Central Traffic over a total length of 272 km. The investment shall also

95 central traffic include the related refurbishment and replacement of management on TEN- Target Management System operated on suburban km 272 Q2 2026 signalling equipment, the construction/extension of the

T railways and other large overhead line, the construction/extension of KÖFI railway lines centres in three locations, the development of a security system (surveillance cameras, lighting), the development of a modern passenger information system, and the construction of the necessary

telecommunications data networks. Entry into force of the modification of the Act on Passenger Transport Services establishing a National Public Transport Authority.

C5.R1 Deployment of

a single national tariff, Entry into force of

Entry into force of legislation and implementing

ticketing and legislation setting up Provision in the

regulations setting up the institutional framework, procedures and processes regarding the tariff system,

96 passenger information Milestone the institutional legislation system for bus and rail framework, indicating entry

Q2 2023 passenger information procedures, workflows between National Public Transport Authority and public service

by the National Public procedures and into force operators, public service contracts frameworks, and Transport Authority processes correspondence and emergency management. This

legislation shall be in line with regulations on passengers’ rights and shall be drafted after analysis of current information security and procedures.

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Sequential Related Measure Qualitative

Quantitative indicators (for targets) timeline for

Number (Reform or

Milestone/ indicators completion Description of each milestone and target

Investment) Target

Name

(for milestones) Unit of

measure Baseline Goal Quarter Year

C5.R1 Deployment of Entry into Entry into operation of a database server infrastructure a single national tariff, and related services for OpenData BI system

ticketing and Database server

operation of a database server infrastructure.

97 passenger information Milestone infrastructure and Q2 2023 system for bus and rail development of an

infrastructure and availability of The platform for real time travel and tariff information

by the National Public information platform the information shall be available on a public platform as well as

Transport Authority platform through an Application Programming Interface.

An OpenData portal containing passenger transport C5.R1 Deployment of OpenData portal data, notably time schedules, real time travel a single national tariff, Introduction of an is available for the information, tariffs and ticketing shall be made publicly ticketing and OpenData portal public and a realavailable by the national public transport authority 98 passenger information Milestone and of a real-time time passenger Q4 2024 upon registration.

system for bus and rail passenger information information by the National Public system system is Real-time passenger information system, including Transport Authority deployed vehicle occupancy, shall be deployed at train stations, train stops and central bus stations.

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• F. 

  COMPONENT 6: ENERGY – GREEN TRANSITION

This component of the Hungarian recovery and resilience plan addresses several challenges of the energy sector. The objective of the component is to contribute to the attainment of Hungary’s 2030 climate and energy targets, also considering the need to raise Member States’ ambition in the context of the EU-wide 2030 objective of reducing greenhouse gas emissions by at least 55 % relative to 1990 levels. The National Energy Strategy 2030 and the National Energy and Climate

Plan aim at strengthening energy sovereignty and energy security by reducing import dependency, ensuring affordable energy supply for the population and decarbonising energy production, including the increase of the share of energy generation based on renewable sources.

In this context, the component aims at creating additional capacities based on renewable energy sources and ultimately reducing greenhouse gas emissions. The amendments to the legal framework shall establish the supportive regulatory environment to achieve this objective. With a view to integrating the energy production capacities from renewable energy sources into the electricity network in a secure and flexible way, the component shall support the investment related to the network development and investments into electricity storage facilities. The investment into smart meters is expected to contribute to the optimisation of electricity demand in the long term. The component shall also result in creation of additional renewable energy production capacity by supporting the installation of residential solar panel systems. Furthermore, in order to address air pollution and energy efficiency-related challenges, it shall also provide support to households for the installation of electric heating systems and for windows replacement, in addition to the solar panel systems and storage units.

The measures under this component are expected to contribute to the green transition and to the achievement of the climate neutrality objective by 2050.

The smart network development based on innovative technical solutions is an important step towards digitalisation. The exploitation of data through digital solutions ensures better forecast of supply-demand balances and better regulation of energy production.

The component contributes to the strategic autonomy and security of Hungary as part of European objectives. The upscaling of renewable energy production capacities shall lead to increased energy sovereignty through increasing the share of domestic energy sources. The grid development shall also contribute to improving the security of the electricity network.

The investments are also expected to contribute to job creation at local level, including for the SME sector.

The component contributes to addressing the Country Specific Recommendations regarding the need to focus on the green and digital transitions, in particular clean and efficient production and use of energy (Country Specific Recommendation 3 in 2020) and to put low carbon energy and energy and resource efficiency in the centre of investment-oriented economic policy (Country

Specific Recommendation 3 in 2019). It also contributes to addressing the Country Specific Recommendation 6 in 2022 regarding the need to reduce overall reliance on fossil fuels by accelerating the deployment of renewables, by streamlining the permitting procedures and the upgrading of the electricity infrastructure, as well as “by stepping up efforts on energy efficiency measures.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

F.1. Description of the reforms and investments for non-repayable financial support

C6.R1: Transformation of electricity regulation

The aim of the reform is to improve the legal framework of the Hungarian electricity market by amending Act LXXXVI of 2007 on electricity and by amending certain related government decrees, including Government Decree 273/2007 (X.19), 389/2007 (XII.23) and 299/2017 (X.17).

The present reform foresees the introduction of separate accounting for the electricity fed into the grid and electricity consumed from the grid. Hungary commits to require the implementation of this separate accounting system from prosumers that shall benefit from public financial support for the installation of their solar panel systems as from 1 January 2023.

The implementation of the reform shall be completed by 31 March 2023.

C6.R2: Encouraging the development of onshore wind energy

The objective of the measure is to allow for the development of additional onshore wind power generation capacity in Hungary by removing the existing general restrictions on the installation of wind power plants and by creating ‘go to areas’ where investments in wind power are encouraged.

The reform shall amend, after public consultation, the currently applicable legislative framework in order to remove unnecessary restrictions on the installation of wind power plants in the country, notably regarding the setback distance for wind turbines (distance between the wind energy installations and residential or other affected areas), wind turbine height (or maximum diameter of windmill rotor blades) and power capacity of turbines. The restrictions shall be eliminated or be defined in such a way as to allow for an effective installation of wind energy power plants and in line with European benchmarks and comparable best practices. The amended regulations may include minimum requirements regarding technical safety, the protection of human and animal health and the environment and local authorities may impose justified requirements. The amended regulations shall not introduce any other impediment, such as restrictions based on size, capacity, or height.

The reform shall also introduce, after public consultation, “go-to areas” for wind power plants in line with the approach of the Commission proposal in COM(2022)222 of 18 May 2022.

“Go-to areas” shall be specific locations that are particularly suitable for installation of wind power plants. These areas shall be defined following objective criteria such as wind energy density or wind speed. The legislation setting up these areas shall also establish specific simplified permitting procedures for the installation of wind power plants in such areas, resulting in easier procedures and shorter deadlines.

The implementation of the reform shall be completed by 31 March 2023.

C6.R3: Improving the permit granting procedures for renewable energy projects

The objective of the measure is to support the deployment of renewable energy projects by facilitating permit granting procedures.

The reform shall put in place an integrated procedure for the environmental protection permit and the construction permit for solar and wind power plants with a built-in capacity above 0.5 MW.

This shall ensure a shorter effective time of permitting. Beyond 75 days, the absence of reply by the administration shall result in the granting of authorisation. The reform shall also establish a onestop-shop, acting as a single contact point for investors for the handling and delivery of such integrated permits.

The reform shall also simplify the grid connection procedures for small photovoltaic installations (below 0.8 kW). For those, only registration before installation shall be necessary, without the need to introduce a permit request. The investor shall not be required to sign a specific contract with the

Distribution System Operator (DSO) for the use of the small PV plant, and the registration shall replace the connection contract for the small PV plant. Deadlines for the connection of the small power plant shall not be longer than two months unless the reason for the delay falls outside the competence of the respective DSO.

In order to promote the deployment of solar energy, the recently introduced temporary cessation of the possibility for newly built residential PV systems (up to 50 kVA) to supply power to the grid shall be removed as soon as possible, and no later than by 31 December 2024. For this purpose, the

Hungarian Energy and Public Utility Regulatory Authority (MEKH) shall review regularly, at least every six months, this temporary limitation, at a regional level in liaison with the Transmission

System Operator (TSO) and DSOs, on the basis of technical and objective criteria. As soon as the result of the evaluation establishes that the grid is capable to integrate the electricity produced, the restriction shall be lifted, at regional level if appropriate.

The implementation of the reform shall be completed by 31 March 2023.

C6.R4: Improving transparency, predictability and availability of the grid connection

The objective of the measure is to increase the transparency and predictability of the coordinated grid connection procedure for weather dependent renewable energy investments, and ultimately to increase the availability of grid connections.

The reform shall amend the relevant legislation on grid connection procedures to ensure a nondiscriminatory approach between power generating technologies. Connection requests exceeding connection limits shall always be accepted upon the condition that the investors fulfil the balancing capacity requirements and pay the direct connection fees. The legislation shall define the maximum level of balancing capacity that may be requested. This maximum shall be objectively justified and proportionate, shall not exceed 30% and shall be gradually reduced.

The reform shall also increase the transparency of the grid connection procedure with several actions to raise awareness and foster informed decisions by market participants. These shall include notably the regular publication of accepted and rejected requests, of updated projections for the grid connection capacities and of simplified examples for different connection types, as well as the organisation of information sharing forums for market participants. To improve the effectiveness of the procedure, the TSO and the DSOs shall also create the necessary IT infrastructure to be able to gather and use data from installed smart meters.

The reform shall contribute to Hungary’s capability to significantly increase the solar and wind power plant capacity connected to the grid at the national level. A government database shall monitor progress towards corresponding targets.

The implementation of the reform shall be completed by 30 June 2026.

C6.R5: Strengthening energy efficiency requirements

The objective of the measure is to improve energy efficiency of buildings in Hungary, which is expected to contribute to lower energy consumption of buildings and thus to lower exposure to

Russian gas.

The reform shall introduce minimum energy efficiency standards (at least 30% energy consumption reduction) for building renovation support schemes financed from EU funds.

The implementation of the reform shall be completed by 31 March 2023.

C6.I1: Classic and smart grid development for transmission system operator and distribution system operators

The purpose of the investment is to develop the electricity network with a view to ensuring secure integration of additional capacities to be created by renewable energy sources and increasing the flexibility of the system. In accordance with Hungary’s energy policy strategy, Hungary intends to increase the share of renewables in its energy mix and to triple its current domestic solar power plant capacity by 2030. This requires sufficient network access and necessary grid capacity. The transmission and distribution network needs to be developed to be able to meet these challenges.

Thus, the investment shall contribute to the elimination of some of the scarce grid capacities, and to the safe integration of additional production resulting from the increased renewable energy production capacity. The investment shall in particular include development elements, such as high/medium/low voltage network construction and upgrades, new substation installations, substation transformer replacements and expansions, constructions and replacement of controls as well as digitalisation developments.

The completion of the investment that consists of the increased ability of integration of power plants using renewable energy sources to the grid shall result in an ability to integrate an additional power plant capacity of 2925 MW by 30 June 2026 through actions under the present investment.

The implementation of the investment shall be completed by 30 June 2026.

C6.I2: Support for the use of residential solar panels and heating modernisation

The objective of the measure is the upscaling of residential renewable energy production capacities, the increase of energy efficiency leading to reduced greenhouse gas emissions as well as the reduction of air pollution stemming from outdated heating solutions (such as particulate matter and sulphur dioxide). This measure shall benefit households exposed to higher-than-average risk of energy poverty. For this purpose, the income level of the recipient shall be determined based on one of the following two possibilities: either persons with an income below the national average wage or households with average per capita income below the national average, both established based on statistics from the Hungarian Central Statistical Office.

The measure shall support two types of activities. The first type of activity is the installation of solar panel systems on roof structures for self-consumption. The second type of activity consists of the installation of solar panel systems on roof structures for self-consumption, combined with the replacement of windows, the establishment of storage capacity (maximum 14kWh) and the installation of electric heating (heat pumps, if necessary accompanied by electric heating panels depending on the technical circumstances of the building benefiting from the support). The measure shall benefit 34 920 households, of which at least 11 600 households shall carry out the investment falling under the second type of activity.

The implementation of the investment shall be completed by 30 June 2026.

C6.I3: Installation of energy storage facilities for the transmission system operator and distribution system operators

The objective of the investment is to support the installation of short-term energy storage facilities by the transmission system operator and distribution system operators, which are to be used by the transmission system operator and those distribution system operators for the sole purpose of ensuring a secure and reliable operation of the transmission or distribution system and indirectly support the further integration of energy production resulting from the increased renewable energy production capacity. The storage facilities shall not be used for balancing or congestion management.

The transmission system operator and distribution system operators shall receive support to install their energy storage facilities based on the derogation provided for in Article 54(2) and Article

36(2) of Directive (EU) 2019/944, i.e. based on the energy storage facilities being fully integrated network components and receiving approval from the regulatory authority (Hungarian Energy and

Utilities Regulatory Authority, MEKH). MEKH shall monitor and ensure that the storage facilities are used only as integrated network components and shall check regularly that the owning, developing, managing and operating of these storage facilities do not distort the market.

The total capacity of the electricity storage installed as fully integrated network component as a result of this investment shall be at least 146 MWh.

The implementation of the investment shall be completed by 30 June 2025.

C6.I4: Installation of grid energy storage facilities for market participants

The objective of this investment is to provide market participants already present or wishing to enter the balancing market (e.g. aggregators, electricity producers and large industrial consumers) with access to technologies that provide a pollution-free flexibility service.

This measure shall support market participants to install grid energy storage facilities.

Recipients shall be selected through an open call for proposal. In the selection process, project proposals to be implemented with different technologies shall be scored and selected on the basis of a cost-benefit analysis, thus ensuring a technology-neutral selection process with a focus on total cost-effectiveness. Recipients shall be required to introduce all or part of the capacity stemming from the subsidised electricity storage facility into the balancing market.

The total capacity of the electricity storage installed as part of the balancing market as a result of this investment shall be at least 311 MWh.

The implementation of the investment shall be completed by 30 June 2025.

C6.I5: Dissemination of smart metering

The objective of the measure is to support the purchase and installation of smart meters.

The application of smart meters is expected to play an important role as an end-to-end tool for the accurate determination of consumer profiles and the optimisation of electricity demand, and their data collection and communication functions shall be exploited in many other areas of application as well. Smart meters shall be remotely controllable, they shall be able to switch the meter's rated output on and off in case of direct measurement, shall be able to provide controllability and have a communication module. The roll-out of smart meters and the flexible tariffs that build on them are expected to provide the basis for demand-side responses in the long term, which is expected to help to build flexibility into the electricity system in the long term.

The national legislation provides for certain type of consumers to have smart meters installed at their place of consumption. Pursuant to Government Decree 273/2007 (X. 19.) on the implementation of certain provisions of Act LXXXVI of 2007 on Electricity, a smart meter needs to be installed for users connected to low voltage in case of annual consumption of 5000 kWh or more; in the case of new connections with a power demand of 3x32 A but not exceeding 3x80 A; and for users who already have a household-sized small power plant or shall install such a system in the future. The investment shall contribute to the dissemination of smart meters.

The recipients of the investment are the distribution system operators, based on a call for priority projects. The distribution system operators shall receive the subsidy in proportion to the number of physical sites required to install smart meters in the geographical areas where they operate.

The measure shall result into a total number of at least 290 680 newly installed smart meters.

The implementation of the investment shall be completed by 30 June 2026.

F.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

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measure Baseline Goal Quarter Year

Entry into force of Entry into force of the amendment of the Government decree

C6.R1 legislative Entry into force of 273/2007 (X.19) regarding the rules on mandatory gross settlement

99 Transformation amendments to the

the legislative scheme for prosumers. The decree shall ensure that as of 1 January

of electricity Milestone Government amendment Q1 2023 2023 prosumers benefiting from public financial support for the regulation Decree 273/2007. including gross installation of their electricity generation units shall account

(X.19.) settlement separately the amount of energy produced and the amount of energy consumed.

Entry into force of the amended legislation removing the unnecessary restrictions on the installation of wind power plants for the entire country. The legislation shall allow an effective installation of wind energy power plants. Specifically, the minimum distance rules in the currently applicable legislation shall be significantly reduced and any minimum distance between the wind energy installations and residential or

C6.R2 other affected areas shall not exceed European benchmarks and Encouraging the Amending Entry into force of comparable best practices. The maximum allowable wind turbine

100 development of Milestone legislation in favour the amended Q1 2023 height (or maximum diameter of windmill rotor blades) shall be onshore wind of utilising wind legislation eliminated or increased to be in line with European benchmarks and

energy energy comparable best practices. No maximum capacity limit per wind turbine shall remain or be introduced. The national legislation may

authorise local authorities to impose justified requirements to take into account other legitimate interests, such as other land use, nature or landscape protection. The legislation shall also ensure that spatial planning shall handle wind energy in a similar manner as other sources of renewable energy without any specific restrictions. Public consultation and transparent dialogue with local authorities shall take place before the adoption of the new legislation. Entry into force of the regulation defining ‘go to areas’ for wind power plants and setting up specific simplified permitting procedures for the installation of such power plants in such areas (10% shorter deadlines

C6.R2 for procedures related to granting permits and providing the legal

101 Encouraging the Creation of ‘go to Entry into force of possibility to obtain the statements of the relevant authorities – such development of Milestone areas’ for wind the relevant Q1 2023 as land protection authority, fire department – before launching the

onshore wind energy legislation permission procedure). energy These ‘go to areas’ shall be defined, at the minimum, as the areas in the country where the energy density of the wind is at least 500 W/m2 at 150 meters height, or using similar average wind speed value on the condition that the resulting covered area is not smaller. The go-to

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areas shall in any event cover the areas currently used for wind turbines so that permitting for repowering is facilitated. Public consultation and transparent dialogue with local authorities shall take place before the adoption of the new legislation. Entry into force of the legal and administrative framework for an

C6.R3 integrated handling of the provision of the environmental protection Improving the permit and the construction permit for weather-dependent renewable

102 permit granting Integrated Entry into force of - solar and wind - power plants with a built-in capacity above 0.5 MW.

procedures for Milestone procedure for RES the amended Q1 2023 The legislative framework shall also ensure a shorter effective time of

renewable permitting legislation permitting, by providing that the integrated permit shall be granted

energy projects within 75 days, and that if no reply of the administration has been forthcoming during that period, the authorisation shall be considered

to be granted. C6.R3 A one-stop-shop shall be operational and have started to offer services Improving the to investors interested in setting up weather-dependant renewable - 103 permit granting solar and wind - energy power plants.

procedures for Milestone

One-stop-shop for Start of operations

RES permitting of a one-stop-shop Q1 2023 The one-stop-shop shall be a centralised entity at the national level,

renewable acting as a single contact point for investors for the handling and energy projects delivery of permits. Entry into force of the amended legislation allowing for a simplified procedure for the installation and launch of operation, including C6.R3 connection to the grid, for small photovoltaic installations with a Improving the

104 permit granting Simple grid Entry into force of

maximum built-in capacity of 0.8 kW. The simplified procedure shall

procedures for Milestone connection of small the amended Q1 2023

take the form of a simple registration.

renewable PV plants legislation

The legislation shall also provide that the deadline for the connection of these small power plants shall not be longer than two months

energy projects following the complete network request. Delays in ensuring the connection by the respective DSO shall only be allowed in cases where the delay is caused by factors not falling under its competence. Entry into force of the amended legislation imposing an obligation for the Hungarian Energy and Public Utility Regulatory Authority (MEKH)

C6.R3 to review regularly the recently introduced temporary cessation for Improving the Entry into force of newly built residential PV systems (up to 50 kVA) to supply power to

105 permit granting Removal of feed-in the amended the grid.

procedures for Milestone limitations for legislation for the Q4 2022 The amended legislation shall at least include the following elements:

renewable households PV regular review of - MEKH shall review at least every six months region by region the

energy projects the restriction adequacy of the temporary limitation in the relevant regions; - this review shall be based on technical information provided by

the DSOs and the TSO; - technical and objective criteria for the removal of the restriction

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measure Baseline Goal Quarter Year

shall be set up and published; - MEKH shall publish its reasoned decision per region every six

months; MEKH shall inform the government when the assessment based on objective criteria mentioned above reveals that the grid is capable of integrating energy generated by household PVs in view of removing completely this limitation;

• - 

  the restriction shall be removed in the relevant region as soon as the technical and objective criteria mentioned above are met.

The temporary cessation for newly built residential PV systems (up to 50 kVA) to supply power to the grid shall be removed in the entire country at the latest by 31 December 2024. The legislation shall be amended to: - ensure that the same connection rules (‘coordinated grid connection procedure’) apply to all power generating technologies in a non-discriminatory approach; - provide that this process shall be based on objective technological parameters and that it shall be published in advance of the calls; - ensure that TSO and DSOs shall be allowed to reject the connection request of weather-dependent renewable - solar and wind - power plants only in a non-discriminatory manner and based on technical criteria, and only if the submitted capacity

C6.R4 needs exceed the weather dependent renewable - solar and

Improving Increasing wind - power plant connection capacity limit and the applicant

106 transparency, Entry into force of does not modify the proposed technical conditions of the power predictability Milestone predictability of the

and availability grid connection

the amended Q4 2022 plant to ensure the maintenance of the balance of power of the electricity system through providing reserves as balancing

of the grid procedures

legislation services;

connection - provide that for individual requests, investors shall have the certainty that their request is to be accepted upon the condition that they agree to provide a balancing capacity as requested by the TSO/DSOs at the relevant point in time and pay the direct connection fees;

• - 

  define the maximum level of balancing capacity to be requested in that case. This maximum balancing capacity shall not exceed 30% of the RES capacity to be installed as of 2022. The legislation shall establish a procedure via which the maximum mandatory balancing capacity ratio set in the legislation shall be revised

  every year on the basis of an analysis of the system imbalance and its main factors, and shall be gradually reduced, taking into

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account expected investments in the grid and the outcome of the grid connection procedures. The level of the balancing requirement shall be objectively justified and proportionate.

The legislation shall be amended to ensure that before issuing a new

C6.R4 call and at least every six months, the TSO and DSOs shall publish the Improving Publication of anonymised connection requirements of accepted requests and of

107 transparency, information on grid

Entry into force of rejected requests with an associated justification, as well as provide

predictability Milestone connection the obligation of Q1 2023 additional information for new connection requests that are possible and availability requests and publication by as a result of all necessary grid investments, including projects funded of the grid capacities TSO/DSOs through the recovery and resilience plan, and updated projections for

connection the grid connection capacities in the coming five years. In addition, simplified examples for different connection types shall be

published on the internet site of the Hungarian TSO (MAVIR). C6.R4

Improving Setting up the Information sharing forums for market participants shall be organised

108 transparency, to support the understanding of the grid connection procedure. A first predictability Milestone Information sharing information sharing round of forums shall be organised before the end of 2022, followed

and availability forums forums for market

Q4 2022 by information sharing forums every six months. These forums should

of the grid participants be organised prior to the publication of new grid connection calls.

connection C6.R4

Improving Creation of the IT The TSO and the DSOs shall create the necessary IT infrastructure to

109 transparency, be able to gather and use data from installed smart meters. The data predictability Milestone infrastructure for Start of operation of relevant databases Q2 2026 shall be used for increasing the accuracy of the network development

and availability the use of data and IT tools plan, as well as for the development of flexible connection and of the grid from smart meters operation options.

connection C6.R4

Improving A grid connection authorisation executable from the date of granting Grid connection shall be issued by the DSO or TSO to weather dependent renewable

110 transparency, predictability Target authorisation for Total authorised

and availability renewable power renewable capacity

MW 3 500 8 000 Q3 2024 energy - solar and wind - power plants for a total capacity of at least 8 000 MW. The target covers all categories of such power plants (small

of the grid plants capacity and large-scale plants), including renewable power plants that are only connection covered by a registration procedure and are registered. C6.R4 Grid connection A grid connection authorisation executable from the date of granting

111 Improving shall be issued by DSO or TSO to weather dependent renewable transparency, Target authorisation for Total authorised MW 8 000 10 000 Q2 2026 energy - solar and wind - power plants for a total capacity of at least

predictability renewable power renewable capacity 10 000 MW. The target covers all categories of such power plants and availability plants (small and large-scale plants), including renewable power plants that

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of the grid are only covered by a registration procedure and are registered. connection Entry into force of legislation setting up minimum energy efficiency

C6.R5 Strengthening standards for public support schemes for building renovation financed from the EU. The legislation shall at least provide that for renovation

112 Strengthening energy efficiency energy Milestone requirements for Entry into force of support schemes (co-) financed by EU funds, at least a 30% energy

efficiency building renovation the legislation

Q1 2023 consumption reduction shall be achieved in residential, corporate and

requirements support schemes public buildings. This objective shall be reflected in calls for projects (with an exception of already ongoing published programmes for local

governments buildings). Conclusion of all grant agreements on the implementation and support conditions of the investment between the organisations

C6.I1 Classic Signature of grant involved in the investment (the authorised transmission system and smart grid agreements with all operator and distribution system operators) and the Managing

development of authorised on the Authority (Prime Minister’s Office). The grant agreements concluded with the transmission system operator and all distribution system

113 transmission implementation system Milestone and support Signed grant 2022 operators involved shall lead to creating the ability of integrating an

operator and conditions of the agreements

Q2 incremental capacity of 2925 MW of electricity generated by

distribution development of renewables into the electricity network through this investment. The

system transmission and grant agreement shall describe the planned investments, which shall

operators distribution grids include the development elements, such as high/medium/low voltage network construction and upgrades; new substation installations;

substation transformer replacements and expansions; constructions and replacement of controls; and digitalisation developments.

C6.I1 Classic Capacity increase of

and smart grid power plants using Increased ability of the power grid to integrate additional power plant

development of renewable energy capacity using renewable energy sources through actions under this investment.

114 transmission sources that may system Target be integrated to MW 0 119 Q3 2023 The Hungarian Energy and Public Utility Regulatory Authority shall

operator and the power grid as a verify it and provide a validation report using a methodology that distribution result of the elaborates the necessary actions on the grid, financed under the system improved grid recovery and resilience plan, in order to integrate the energy operators (cumulated, MW) produced by additional renewable energy production capacity.

C6.I1 Classic Capacity increase of Increased ability of the power grid to integrate additional power plant and smart grid power plants using capacity using renewable energy sources through actions under this

115 development of renewable energy investment. transmission Target sources that may MW 119 772 Q3 2024 The Hungarian Energy and Public Utility Regulatory Authority shall

system be integrated to verify it and provide a validation report using a methodology that operator and the power grid as a elaborates the necessary actions on the grid, financed under the distribution result of the recovery and resilience plan, in order to integrate the energy

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system improved grid produced by additional renewable energy production capacity. operators (cumulated, MW)

C6.I1 Classic Additional capacity and smart grid increase of power Increased ability of the power grid to integrate additional power plant

development of plants using capacity using renewable energy sources through actions under this renewable energy investment.

116 transmission system Target sources that may The Hungarian Energy and Public Utility Regulatory Authority shall

operator and be integrated to

MW 772 1749 Q3 2025 verify it and provide a validation report using a methodology that

distribution the power grid as a elaborates the necessary actions on the grid, financed under the

system result of the recovery and resilience plan, in order to integrate the energy

operators improved grid produced by additional renewable energy production capacity. (cumulated, MW)

C6.I1 Classic Additional capacity and smart grid increase of power Increased ability of the power grid to integrate additional power plant

development of plants using capacity using renewable energy sources through actions under this renewable energy investment.

117 transmission system Target sources that may

operator and be integrated to

MW 1 749 2 925 Q2 2026 The Hungarian Energy and Public Utility Regulatory Authority shall verify it and provide a validation report using a methodology that

distribution the power grid as a elaborates the necessary actions on the grid, financed under the system result of the recovery and resilience plan, in order to integrate the energy

operators improved grid produced by additional renewable energy production capacity. (cumulated, MW)

Based on the call for proposals, two types of activities may be supported: (i) only installation of a solar panel system on roof

Publication of the structures for self-consumption or (ii) besides installation of a solar panel system on roof structures, also replacement of windows,

C6.I2 Support Launch of the call call for proposals on installation of storage devices and electric heating system. The for the use of for proposals for the official website eligibility criteria shall include: (i) the technical suitability of the

118 residential solar projects regarding of the Government

panels and Milestone the use of for calls, including Q3 2021

building to host the planned investment (such as condition of the roof

heating residential solar the eligibility

and the electricity network installed in the building) and (ii) the

modernisation panels and heating conditions and the

income level of the recipient. The income level of the recipient shall be

modernisation scope of activities to determined based on one of the following two possibilities: either

be supported persons with an income below the national average wage or households with average per capita income below the national

average, both established based on statistics from the Hungarian Central Statistical Office.

C6.I2 Support Number of Number of households with installed household solar panel systems or 119 for the use of

residential solar Target

households

equipped with solar Number 0 13 793 Q3 2024

equipped with solar panel system, electric heating systems, window replacement and storage unit as a result of the investment.

panels and panels or equipped Solar panel system of 4-5 kW on average, storage unit of max 14 kWh,

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Number (Reform or Target Name indicators completion Description of each milestone and target

Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

heating with solar panels, electric heating system of 5-12 kW, window replacement based on modernisation storage unit, standards according to the applicable construction requirements. electric heating system and window replacement (cumulated, number of households) Number of Number of households with installed household solar panel systems or additional equipped with solar panel system, electric heating systems, window households replacement and storage unit as a result of the investment.

C6.I2 Support equipped with solar Solar panel system of 4-5 kW on average, storage unit of max 14 kWh, for the use of panels or equipped electric heating system of 5-12 kW, window replacement based on

120 residential solar with solar panels, standards according to the applicable construction requirements.

panels and target storage unit, Number 13 793 23 320 Q3 2025

heating electric heating

modernisation system and window replacement

(cumulated, number of households) Number of households with installed household solar panel systems or

Number of equipped with solar panel system, electric heating systems, window additional replacement and storage unit as a result of the investment. households Solar panel system of 4-5 kW on average, storage unit of max 14 kWh,

C6.I2 Support equipped with solar

electric heating system of 5-12 kW, window replacement based on

for the use of panels or equipped

standards according to the applicable construction requirements.

121 residential solar with solar panels,

panels and Target storage unit, Number 23 320 34 920 Q2 2026

At least 11 600 households of the 34 920 households shall receive not

heating electric heating only the solar panel systems, but besides the solar panel system, also

modernisation system and window

electric heating systems, window replacement and storage unit. replacement

(cumulated, number of households)

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The call shall describe the main principles – including the technological Launch of the call neutrality towards storage facilities – for the installation of short-term C6.I3 for proposals on energy storage facilities by the transmission system operator and Installation of the implementation distribution system operators. The call shall include the requirement energy storage and support Publication of the that the transmission system operator and distribution system

122 facilities for conditions of call for proposals on operators shall receive support for their energy storage facilities on distribution Milestone storage facilities - the official website Q4 2022 the basis of the derogation provided for in Directive 2019/944, i.e. on

and as fully integrated of the Government the basis of the energy storage facilities being fully integrated network transmission network for calls components and receiving approval from the regulatory authority system component - to be (Hungarian Energy and Utilities Regulatory Authority, MEKH) before operators installed by the signing the grant agreement. The call shall also specify that storage TSO/DSOs facilities shall not be used for balancing or congestion management.

Conclusion of all

C6.I3 grant agreements Grant agreements shall be signed for all projects selected following Installation of on the the call referred to in milestone 122. energy storage implementation The grant agreement shall include the requirement that the TSO and

123 facilities for

and support DSOs shall receive support for their energy storage facilities on the

distribution Milestone conditions of Signed grant basis of the derogation provided for in Directive 2019/944, i.e. on the and storage facilities - agreements Q2 2023 basis of the energy storage facilities being fully integrated network transmission as fully integrated components and receiving approval from the regulatory authority system network (Hungarian Energy and Utilities Regulatory Authority, MEKH).

operators component - to be installed by the

TSO/DSOs Newly installed electricity storage capacity by TSO and/or DSOs as fully integrated network component with effective capacity measured in

C6.I3

Installation of MWh

energy storage Capacity of newly

124 facilities for

installed storage as

distribution Target fully integrated Q4 2024 and network

MWh 0 60

transmission component for the system TSO and DSOs

operators

125 C6.I3 Additional capacity

Installation of Target of newly installed MWh 60 146 Q2 2025

Newly installed electricity storage capacity by TSO and/or DSOs as fully integrated network component with effective capacity measured in

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measure Baseline Goal Quarter Year

energy storage storage as fully MWh facilities for integrated network distributioncomponent for the and TSO and DSOs transmission (cumulated, MWh) system operators A call for proposals for the implementation and support conditions of storage facilities to be installed for market participants shall be launched. The call shall describe the main principles for the installation

Launch of the call of short-term energy storage facilities by market participants, C6.I4 for proposals for including the technological neutrality towards storage facilities, Installation of the implementation Publication of the technical requirements for balancing defined by the transmission

126 grid energy and support call for proposals on system operator and that recipients are required to introduce all or storage Milestone conditions of the official website Q4 2022 part of the capacity stemming from the subsidised electricity storage

facilities for storage facilities to of the Government facility into the balancing market. energy market be installed for for calls In the selection process, project proposals to be implemented with participants market participants different technologies shall be scored and selected on the basis of a

cost-benefit analysis, thus ensuring a technology-neutral selection process with a focus on cost-effectiveness.

Grant agreements shall be signed for all the projects selected under the call referred to in milestone 126. The grant agreements shall ensure that recipients are required to introduce all or part of the

Conclusion of all capacity stemming from the subsidised electricity storage facility into C6.I4 grant agreements the balancing market.

Installation of on the

127 grid energy implementation storage Milestone and support Signed grant Q2 2023

facilities for conditions of agreements

energy market storage facilities to participants be installed for market participants

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Related

Sequential Measure Milestone/ Qualitative

Quantitative indicators Indicative

(for targets) timeline for

Number (Reform or Target Name indicators completion Description of each milestone and target

Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

C6.I4 Newly installed electricity storage capacity for market participants Installation of with effective capacity measured in MWh.

128 grid energy Capacity of newly storage Target installed energy - MWh 0 100 Q4 2024

facilities for storage facilities energy market participants C6.I4 Newly installed electricity storage capacity for market participants Installation of with effective capacity measured in MWh.

129 grid energy Capacity of newly storage Target installed energy - MWh 100 311 Q2 2025

facilities for storage facilities energy market participants A call for priority projects addressed to the distribution system Launch of a call for Publication of the operators for purchase and installation of smart meters C6.I5 priority projects call for priority implementation and support shall be launched. The call shall describe

130 Dissemination addressed to DSOs projects on the

of smart Milestone for the purchase official website of Q4 2022

the technical requirements for the installation of smart meters.

metering and installation of the Government for The distribution system operators shall receive the subsidy in

smart meters calls proportion to the number of physical sites required to install smart

meters in the geographical areas where they operate.

Grant agreements shall be signed for all the projects selected under

C6.I5 Conclusion of all the call referred to in milestone 130.

131 Dissemination grant agreements

of smart Milestone on the purchase

Signed grant

metering and installation of

agreements Q2 2023

smart meters

New installation of single-phase or three-phase electricity meters with

C6.I5 direct connection and communication unit.

132 Dissemination Number

of smart Target

Newly installed

smart meters of smart 0 213 297 Q3 2024

metering meters

New installation of single-phase or three-phase electricity meters with C6.I5

133 Dissemination Additional newly Number

direct connection and communication unit.

of smart Target installed smart of smart 213 297 254 065 Q3 2025 metering meters (cumulated) meters

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Related Indicative

Sequential Measure Milestone/ Qualitative

Quantitative indicators timeline for

Number (Reform or Target Name indicators

(for targets) completion Description of each milestone and target

Investment) (for milestones) Unit of

measure Baseline Goal Quarter Year

New installation of single-phase or three-phase electricity meters with

C6.I5 Additional newly direct connection and communication unit.

134 Dissemination installed smart Number

of smart Target meters of smart 254 065 290 680 Q2 2026

metering (cumulated) meters

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• G. 

  COMPONENT 7: TRANSITION TO A CIRCULAR ECONOMY

The objective of this component of the Hungarian recovery and resilience plan is to facilitate the transition to a circular economy and contribute to reaching the 2025 and 2030 waste management targets set out in EU legislation. This requires establishing the main legislative and procedural requirements for preparing the Hungarian economy to the transition to the circular economy, including a well-functioning waste management sector. One of the pillars of this process is the renewal of the domestic waste management system. Hungary’s circular material use rate is 8.7%, which is below the EU average (12.8%). The recycling rate (municipal waste) – at 33% – is considerably less than the 2025 target.

The measures under this component contribute to the green transition and climate neutrality objectives, as well as to a more developed waste management system in Hungary. They shall support the implementation of investments in chemical recycling of plastic waste that is not suitable for mechanical recycling. They shall also support sustainable growth through the uptake of innovative solutions, such as chemical recycling. The objectives of this component are consistent with the targets of the EU Waste Management Framework.

The component contributes to addressing the Country Specific Recommendations on the need to focus investment-related economic policy on sustainable waste management (Country Specific

Recommendation 3 of 2019 and 3 in 2020) and to promote reform and investment on sustainable waste management and the circularity of the economy (Country Specific Recommendation 5 in

2022), which identified the circular economy as an area for improvement, in particular in municipal waste management and in the waste collection and treatment system.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

G.1. Description of the reforms and investments for non-repayable financial support

C7.R1: Domestic regulation of the transition to a circular economy

The purpose of the reform is to create a sound strategic and legal framework for the transition to the circular economy.

In order to set the strategic framework for the investments, the National Waste Management Plan for the period 2021-2027 as required by the Directive 2008/98/EC on waste shall be adopted and the

National Circular Economy Strategy and Action plan, aligned with the OECD recommendations of the ongoing technical support instrument project, shall be finalised. Together, these documents shall constitute the framework for the transition to a circular economy in Hungary.

A further aim of the reform is to create a sound legal environment to efficiently regulate the transition to the circular economy and establish detailed rules for a new waste management model.

The changes in the legislative framework shall contribute to creating an enabling environment for waste management in Hungary, in particular by eliminating barriers in the waste management sector, including those related to competition, to establish a competent waste management authority, to regulate the deposit system for beverage bottles and to strengthen the extended producer responsibility legislation. The amendments shall also include a regulation reducing the impact of plastic products on the environment going beyond the requirements of the Directive (EU)

2019/904 on single-use plastics.

The implementation of the reform shall be completed by 30 September 2023.

C7.I1: Strengthening a smart, innovative and sustainable waste management industry and secondary raw materials market

The aim of the investment is to support chemical recycling in order to facilitate the transition to a circular economy. The investment supports the reduction of the proportion of waste disposed of by landfilling in accordance with the National Waste Management Plan 2021-2027 and it shall also increase the proportion of waste recycled. The investment is expected to significantly improve the recycling of waste, to contribute to promoting separate collection, and to develop infrastructure for pre-treatment and recycling, contributing to both collection and recycling targets.

In the framework of the investment, a chemical recycling and hydrogen production plant shall be established, which shall be suitable for processing 40 000 tonnes of non-reusable and not suitable for mechanical recycling plastic waste. The infrastructure development shall contain all relevant technological steps of chemical recycling, including the management of waste suitable for chemical re-use, the transformation of waste into a feedstock suitable for use by the petrochemical processes, and the production of plastics containing chemically recycled polymers. The output of the chemical recycling process shall be secondary raw materials and not fuels, and as such this process shall not

constitute energy recovery 6 . In order to ensure that the measure complies with the ‘Do no

significant harm’ Technical Guidance (2021/C58/01), in case the measure includes activities under the EU Emission Trading System (ETS), they shall achieve projected greenhouse gas emissions

lower than the relevant benchmarks 7 . Green hydrogen from renewable energy sources (in

accordance with applicable EU law) shall be produced as part of the investment, to be used as part of the chemical recycling process. The aim of the technology is to break down the selected waste into secondary raw products (conversion of at least 50 %, in terms of weight, of the processed separately collected non-hazardous plastic waste into secondary raw materials) that shall be partly used as a chemical input in the production process of plastic products.

Once in operation, the recycling plant shall be suitable for the chemical recycling of 40 000 tonnes of plastic waste not suitable for mechanical recycling.

The implementation of the investment shall be completed by 30 June 2026.

6 Energy recovery shall be understood as per the Waste Framework Directive.

7 Where the activity supported achieves projected greenhouse gas emissions that are not significantly lower than the relevant benchmarks, an explanation of the reasons why this is not possible shall be provided. Benchmarks established for free allocation for activities falling within the scope of the EU Emissions Trading System, as set out in the

Commission Implementing Regulation (EU) 2021/447.

G.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Indicative Quantitative indicators timeline for

(for targets) completion

Sequential Related Measure Milestone/ Qualitative

Number (Reform or Description of each milestone and target Investment) Target Name indicators (for milestones)

Unit of

measure Baseline Goal Quarter Year

The National Circular Economy Strategy and Action Plan (based on the final recommendations of the Technical Support

Adoption of Instrument project implemented by the OECD) shall constitute

Adoption of the the National the framework for the transition to a circular economy and

C7.R1 Domestic National Circular Circular Economy contribute to the EU targets especially on waste recycling.

135 regulation of the Economy Strategy and

Strategy and The National Waste Management Plan shall plan the necessary

transition to a Milestone Action Plan, and the Action Plan and of Q1 2023 actions to meet the targets on waste referred to in the Directive circular economy National Waste the National 2008/98/EC on waste. The development of a separate collection

Management Plan Waste system and an increase in treatment rates shall be reflected in Management Plan the National Waste Management Plan, which shall regulate the

2021-27 framework to foster waste prevention and to stimulate the return to the wider economic cycle, reduce the amount of waste deposited and reduce the demand for primary raw materials. Legislation shall enter into force on the following:

• - 

  The establishment and detailed rules of the deposit system for beverage bottles;

C7.R1 Domestic Entry into force of the Provision in the - Setting up a waste management authority to rationalise legislative acts legislative acts the waste management sector;

136 regulation of the transition to a Milestone necessary to indicating the Q3 2023 - Reducing the environmental impact of certain plastic

circular economy operationalise waste respective entry products (regulating certain single-use plastic products); management practice into force - Rules of the extended producer responsibility;

• - 

  Legislation providing proof of the removal of abandoned waste from immovable property and of transport to an appropriate waste treatment place.

C7.I1 Award of contracts for Notification of the award of public contracts for main Strengthening a the construction of a engineering procurement for the construction of a chemical smart, innovative chemical recycling and Notification of the recycling plant (for chemical recycling of at least 40 000 tonnes and sustainable green hydrogen award of public of plastic and production of at least 750 tonnes of green

137 waste Milestone production plant (for contracts for main management chemical recycling of Engineering,

Q4 2023 hydrogen from renewable energy sources), selected on the basis of an open and competitive call for proposals.

industry and at least 40000 tonnes Procurement and secondary raw of plastic and at least Construction

materials market 750 tonnes of green hydrogen)

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Indicative Quantitative indicators timeline for

(for targets) completion

Sequential Related Measure Qualitative Number (Reform or

Milestone/ Description of each milestone and target

Investment) Target

Name indicators

(for milestones) Unit of

measure Baseline Goal Quarter Year

The construction of the chemical recycling and hydrogen power plant shall be completed and the plant shall have started operation.

At least 50 %, in terms of weight, of the processed separately

C7.I1 collected non-hazardous plastic waste entering the chemical Strengthening a The independent recycling plant shall be converted into secondary raw materials. smart, innovative Completion and entry engineer’s report and sustainable into operation of the is issued on the The plant shall only treat plastic waste that cannot be recycled

138 waste Milestone chemical recycling and completion of the mechanically. management green hydrogen construction

Q2 2026

industry and production plant works and the Hydrogen shall be produced from electrolysis using renewable secondary raw plant has started energy sources in accordance with applicable EU law.

materials market operations The annual capacity of the plant for quantity of separately collected non-hazardous plastic waste processed shall be at

least 40 000 tonnes. The annual capacity of the plant for green hydrogen production shall be at least 750 tonnes. The capacity of the plant shall be certified by the regional waste management authority with a waste treatment permit.

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• H. 

  COMPONENT 8: HEALTH

This component of the Hungarian recovery and resilience plan addresses several challenges that the Hungarian health system currently faces, such as unequal access to services and the high incidence of informal (gratuity) payments; an excessive reliance on hospitals in the provision of services; a considerable hospital debt linked to financing problems; and regional shortages of workforce within the health system.

The main objective of the component is to develop a modern and efficient care system capable of responding to the challenges of the twenty-first century and accessible to all, in line with principle

16 of the European Pillar of Social Rights. To this end, the component aims to (i) eradicate gratuity payments in the health system; (ii) reinforce the role of general practitioners; (iii) streamline inpatient care and upgrade its infrastructure; (iv) increase the use of information and communication technologies (ICT) to improve the quality and efficiency of healthcare services; and (v) develop a remote health surveillance programme for elderly people.

The component supports addressing the Country Specific Recommendations on supporting preventive health measures and strengthening primary healthcare (Country Specific

Recommendations 2 of 2019 and 3 in 2022), on addressing shortages of health workers and ensuring an adequate supply of critical medical products and infrastructure (Country Specific

Recommendation 1 in 2020), and on ensuring access to essential services for all (Country Specific Recommendation 2 in 2020). It should also contribute to the implementation of the European Pillar of Social Rights.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

H.1. Description of the reforms and investments for non-repayable financial support

C8.R1: Eradication of gratuity payments in the healthcare sector

The objective of the measure is to eradicate the practice of informal gratuity payments in healthcare services while creating better financial and working conditions for doctors.

The measure shall consist of adopting legislation for introducing a new employment contract for doctors aiming at eradicating gratuity payments and, linked to this, increasing the salaries for doctors and residents employed under the provisions of such contract. Together with the legislated criminalisation of gratuity payments, the measure is expected to eradicate such payments in healthcare services. The effectiveness of the measure is expected to be reinforced by the parallel increases of wages in the healthcare sector (which are financed separately from the RRP).

The impact of the measure shall be evaluated by an independent study whose results shall be made public. The study shall also assess to what extent the reform shall have contributed to improving the attractiveness of the medical doctor profession and the retention of doctors in Hungary.

The implementation of the reform shall be completed by 31 December 2023.

C8.I1: Developing the conditions for healthcare in the 21st century

The objective of the measure is to strengthen in-patient care and its infrastructure. Emphasis is placed on the development of a network of day surgery, out-patient and in-patient care providers with new and refurbished buildings and modern medical devices that help to increase the efficiency of healthcare, also in view of the possible future occurrence of health crises.

The measure shall consist of four actions. First, the entry into force of legislation to develop a single and transparent new national health management system. Second, the creation of 22 county-level hospital networks with integrated patient pathways, according to a mapping report to be provided by the Ministry of Interior. The integrated patient pathways shall define which institution in the network is responsible for each type of medical intervention within each county-level network of healthcare institutions. Third, at least 40 new or renovated health infrastructure buildings shall receive new and modern healthcare equipment, and newly constructed buildings shall also comply with high energy efficiency requirements. Fourth, an increase in the number of whole blood collection events on mobile collection sites in small settlements.

The implementation of the investment shall be completed by 30 June 2026.

C8.I2: Supporting the digital transformation of health

The objective of the investment is to increase the use of information and communication technologies to enhance the efficiency of the health sector, facilitate access to services and improve the quality of care and services.

The measure shall consist of six actions. First, 65 hospitals shall be equipped with upgraded IT security systems. Second, new databases and disease registers shall become accessible digitally in the Electronic Healthcare Service Space (EESZT). The EESZT is an existing integration platform where all patients' health data can be retrieved, with the right authorisation, through local hospital, general practitioner or pharmacy systems. Third, the proportion of health authority procedures that may be initiated electronically shall increase to 60%. Fourth, the number of telemedicine interventions provided through info-communication tools shall increase. Fifth, new modules shall be launched on the EESZT portal to support supply management and digitised care processes. Sixth, a new central healthcare mobile application (myEESZT) shall be developed and put into operation for households and professional users.

The implementation of the investment shall be completed by 31 March 2026.

C8.I3: Remote health monitoring programme for the elderly

The objective of the investment is to provide remote health surveillance services for elderly people above age 65. The investment is also expected to reduce the de-institutionalisation of long-term care.

The measure shall consist of two actions. First, the entry into operation of dispatching services which shall organise telemedicine services and emergency care for the participants among elderly people above age 65. The system shall allow participants to ask for help from the 24-hour service with their own GSM-based personal emergency call. The dispatching service staff shall have expertise in ambulance or emergency care services. Second, at least 1 500 000 elderly people above age 65 shall be equipped with wearable sensory devices. A dedicated service shall provide a 24- hour surveillance of these elderly people, who shall be able to call the dispatching service in case of medical emergency.

The implementation of the investment shall be completed by 31 December 2025.

C8.I4: Development of primary health care

The objective of the measure is to make primary health care services accessible to as many citizens as possible, in particular by strengthening the role of general practitioners, increasing close-to-home services and relieving the burden of specialised care.

The measure shall consist of four actions. First, a new legal framework shall be adopted for establishing and operating praxis communities of general practitioners. Second, the number of doctors participating in established and operational praxis communities shall be increased. Third, the number of patients enrolled in the Chronic Disease Management Programme, which provides care for clients diagnosed with chronic non-infectious diseases, shall increase. Fourth, the number of patients enrolled in prevention and health promotion programmes shall increase.

The implementation of the investment shall be completed by 31 December 2025.

H.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure Qualitative indicators

Number (Reform or Investment) Milestone/Target Name (for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

The Act on Healthcare Service Relationship shall enter into force. The Act shall contain the employment contract of state-owned healthcare service providers, the elimination and criminalization of gratuity payments and the salary for doctors under the new employment contract.

C8.R1 Eradication of Provision in the Act The Act shall transform employment relationships

139 gratuity payments in Milestone Entry into force of the Act on indicating its entry into Q4 2020 in state-owned healthcare service providers,

the healthcare sector Healthcare Service Relationship force increasing doctors’ salaries and eradicating gratuity payments in the healthcare sector. The legislated

change in the employment contract, the elimination and criminalisation of gratuity payments and the salary increase shall aim – as part of a coherent reform – at improving doctors’ financial and working conditions and helping staff retention. A study by independent experts, based on objective data such as official statistics and surveys, shall establish whether the implemented reforms have been successful in eliminating the practice of gratuity payment and shall assess the

C8.R1 Eradication of Publication of independent study Publication of effectiveness of legal provisions criminalising the

140 gratuity payments in the Milestone providing evidence on the impact of independent study on

healthcare sector the implemented healthcare reforms the website of the

Q4 2023 gratuity payments. It shall also assess to what

on the practice of gratuity payment Ministry of Interior extent the reform shall have contributed to improving the attractiveness of the medical doctor

profession and the retention of doctors in Hungary. The study may include recommendations for further measures to enhance the effect of the reforms.

C8.I1 Developing the Provision in the The Government Decree on the tasks of the National Directorate-General for Hospitals shall lay

141 conditions for

Entry into force of the Government

healthcare in Milestone Decree on the tasks of the National

Government Decree Q1 2021 down the basis for developing a single and

the 21st century Directorate-General for Hospitals

indicating its entry into

force transparent new national health management system.

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Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

The Ministry of Interior shall carry out a mapping process to identify the roles of various institutions

C8.I1 Developing the in the county-level integrated patient pathways, Completing a mapping process for Publication of the based on available capacities and demographic

142 conditions for healthcare in the Milestone creating county hospital system with mapping report in the Q2 2023 trends. The published mapping report shall

21st century integrated patient pathways Official Journal include the timetable for setting up the countylevel hospital networks with integrated patient

pathways.

The ministerial decision establishing the number of county-level hospital networks with integrated patient pathways shall be published in the Official

C8.I1 Developing the Number of county Journal. County-level hospital networks with

143 conditions for integrated patient pathways shall be established, healthcare in Target level hospital networks Number 0 22 Q1 2024 covering the entire area of Hungary. The integrated

the 21st century with integrated patient pathways patient pathways shall define which institution in

the network is responsible for each type of medical intervention within each county-level network of healthcare institutions.

C8.I1 Developing the Number of whole blood collection Organisation of voluntary blood donation in mobile

144 conditions for healthcare in Target events on mobile collection sites Number 0 480 Q1 2026 donation units in settlements with population

the 21st century in small settlements below 3 000.

At least 40 health infrastructure buildings shall be constructed or renovated. The constructed or renovated buildings shall be put into operation after the purchase and installation of modern healthcare equipment. Such equipment may

C8.I1 Developing the Entry into operation of new or include transport equipment used in hospitals,

145 conditions for

prefabricated modular surgery rooms and surgical

healthcare in Target

modernised health infrastructure

buildings equipped with new and Number 0 40 Q2 2026 tools, hand instruments, childcare tools, diagnostic

the 21st century modern healthcare equipment tools, endoscopy and laparoscopy tools, pathology and laboratory tools, rehabilitation tools, medical

image storage and transmission system tools, totalling 140 000 pieces of equipment. This equipment shall be installed and put into operation in, or –as appropriate to the situation - related to, the health infrastructure buildings constructed or

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Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

renovated under this investment.

At least 139 701 square meters of floor area in the

C8.I1 Developing the new or modernised health infrastructure buildings Floor area of health infrastructure referred to in target 145 shall benefit from

146 conditions for healthcare in Target buildings having benefitted from Square Q2 2026 efficiency improvement. The primary energy

the 21st century energy efficiency improvement

meter 0 139 701 demand of any new buildings shall be at least 20%

lower than the nearly zero-energy building requirement. At least 65 hospitals shall benefit from upgrades to their IT security systems. In order to count as an institution with upgraded IT security system, the following elements shall be operational in the

C8.I2 Supporting the hospital: adopted IT security governance; a central

147 digital transformation of Target Number of hospitals with an identity management system; use of the Office health upgraded IT security system

Number 0 65 Q4 2024 Gateway (Hivatali Kapu); the existence of hardware and software inventories; a data backup system; an IT security knowledge centre. The existence of these elements shall be certified through an external audit by IT security experts. At least 17 new databases shall be made accessible on the Electronic Healthcare Service Space

C8.I2 Supporting the Number of new healthcare (Elektronikus Egészségügyi Szolgáltatási Tér - 148 digital transformation of Target databases and disease registers Number 0 17 Q1 2026 EESZT).

health available digitally The new databases may be authenticated or public databases, or medical registers related to different medical specialties.

The proportion of health authority procedures that may be initiated digitally shall increase to at least 60% by 31 December 2025, compared to 5% in February 2020. Such procedures may be official notifications, authorisation procedures and data

C8.I2 Supporting the Increase of the proportion of types collections. Procedures that are currently partially

149 digital transformation of Target of health authority procedures that % Q4 2025 electronic and shall become fully electronic: health can be initiated electronically (Percentage)

5 60 - Notification of activities involving dangerous substances or compounds (including notification of changes); - Notification of hazardous substances used exclusively for industrial purposes; - Notification of biocidal products;

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Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure Qualitative indicators

Number (Reform or Investment) Milestone/Target Name (for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

• - 

  Notification of activities against public health pests; - Notification of fumigation activities by pest control operators; - Notification of mosquito and rodent control by pest control operators; and - Authorisation of biocidal products under the transitional measures of the Regulation (EU) No 528/2012 of the European Parliament and of the Council concerning the making available on the market and use of biocidal products. The number of telemedicine interventions provided annually to patients shall increase up to at least 690 000 in 2025. Such interventions include

C8.I2 Supporting the Number of telemedicine services services provided through telecommunication

150 digital transformation of Target provided via digital tools in a single Number 0 690 000 Q4 2025 devices without in-person doctor-patient

health year interaction, such as teleconsultation and diagnostics. The number of such interventions shall

be recorded by the National Healthcare Service Centre, the institution managing central telemedicine services, as actual care services. The following EESZT modules shall be developed and launched: central patient registry; central

C8.I2 Supporting the New EESZT modules launched to treatment registry, patient journey planning and

151 digital transformation of Milestone support supply management and Entry into operation of Q4 2025 resource publication; central patient health digitised care processes the new modules documentation database; laboratory ordering

system. The modules shall be operational and made available to the users. The myEESZT mobile application and web framework and their associated personal and

C8.I2 Supporting the professional e-Health functions shall be developed

152 digital transformation of Milestone Launch of a central healthcare and put into operation for households and

health mobile application (myEESZT)

Q2 2024 professional users. The planned functionalities of

the application shall include at least a health diary, educational content and the online booking of appointments for medical visits and treatments.

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Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure

Number (Reform or Investment) Milestone/Target Name

Qualitative indicators

(for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

C8.I2 Supporting the The number of unique users of

153 digital transformation of Target Number of unique users of the 100 000 Q4 2025 the central healthcare mobile

health central healthcare mobile application

Number 0 application (myEESZT) shall reach at least 100 000

on 31 December 2025.

The dispatching service for the programme shall enter into operation. The location of the dispatching service shall be designated, and the necessary infrastructure and the specialised staff shall be established and operational. The dispatching centre shall receive the incoming emergency calls by the users of the service (elderly

C8.I3 Remote health Launch of the dispatching service for people above age 65); it shall have access to the

154 monitoring programme Milestone the remote health monitoring Entry into operation of family members, the patient’s general practitioner,

for the elderly programme for the elderly the dispatching service

Q3 2022 health and social service providers of the patient.

The staff of the dispatching service shall communicate with the patients and call relatives or healthcare providers in case of an emergency. The staff shall have expertise in ambulance or emergency care services. The IT system of the dispatching service shall guide the patient and the staff through a questioning protocol in order to ensure a high-quality service. At least 1 500 000 participants (elderly people above age 65) in the programme shall be equipped

C8.I3 Remote health Number of participants in the with wearable sensory devices. The service shall

155 monitoring programme Target remote health monitoring Number 0 1 500 000 Q4 2025 provide a 24-hour surveillance of these elderly

for the elderly programme for the elderly people, which shall allow them to call a dispatching centre in case of medical emergency. Family

members and relatives may also receive notification in case of an emergency. The Government Decree on Praxis

Entry into force of Provision in the Communities shall create the legal framework for

156 C8.I4 Development of establishing and operating praxis communities, primary health care Milestone the Government Decree on Praxis Government Decree

Communities indicating its entry into

Q1 2021 including their possible forms, the legal procedure

force of their establishment, their extra professional duties and the delimitation from basic GP activities.

157 C8.I4 Development of primary health care Target Number of doctors participating in newly established and Number 515 4 000 Q3 2025 At least 4 000 GPs shall have signed a cooperation agreement to establish a community of practice,

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Quantitative indicators Indicative timeline (for targets) for completion

Sequential Related Measure Qualitative indicators

Number (Reform or Investment) Milestone/Target Name (for milestones) Unit of Description of each milestone and target

measure Baseline Goal Quarter Year

operational GP communities compared to 515 in March 2021.

At least 43 000 patients shall be enrolled in the Chronic Disease Management Programme, which refers to the complex process of providing

Number of patients enrolled in the effective, timely and accessible care for clients

158 C8.I4 Development of primary health care Target Chronic Disease Management Number 0 43 000 Q4 2025 diagnosed with chronic non-communicable

Programme diseases. The chronic diseases covered by the programme shall include hypertension and other cardiovascular diseases, type II diabetes and chronic obstructive pulmonary disease (COPD).

At least 30 000 patients shall be enrolled in prevention and health promotion programmes. These are defined as programmes aimed at preventing chronic non-communicable diseases and supporting lifestyle change through activities such as: programmes to advocate a healthy diet;

Number of patients enrolled in programmes to advocate regular physical exercise;

159 C8.I4 Development of primary health care Target prevention and health promotion Number 0 30 000 Q4 2025 programmes supporting lifestyle change;

programmes workplace health promotion programmes; school health promotion programmes; programmes to preserve and develop mental health; programmes against excessive alcohol consumption;

programmes to support giving up smoking; and programmes to prevent the use of illegal substances.

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• I. 

  COMPONENT 9: GOVERNANCE AND PUBLIC ADMINISTRATION

Hungary has a number of long-standing horizontal challenges related to the robustness and functioning of the public institutions in general, which has implications also on economic and social processes in the country. Specific issues in this regard relate to the anti-corruption framework, competition in public procurement, judicial independence, as well as the predictability, quality and transparency of decision-making. Hungary ranks low in corruption perception indicators and the level of competition in public procurements is moderate. Accountability for decisions to close investigations remains a matter of concern as there are no effective remedies against decisions of the prosecution service not to prosecute alleged criminal activities. Recurrent challenges in the application of the rules on transparency and access to public information further weaken the anticorruption framework as well. As regards judicial independence, concerns described in the 2022

Rule of Law Report relate in particular to the challenges faced by the independent National Judicial Council in counter-balancing the powers of the President of the National Office for the Judiciary, the rules on electing the President of the Supreme Court, the possibility of discretionary decisions as regards judicial appointments and promotions, case allocation as well as bonuses to judges and court executives, as well as the possibility for public authorities to challenge before the

Constitutional Court final judicial decisions. The quality, predictability and transparency of decision-making and the absence of effective consultation of social partners and stakeholders in the decision-making processes, represent recurrent challenges. The complexity of the tax system and the risks of aggressive tax planning have also been identified as issues to tackle; and so is the need to improve the sustainability of public finances.

This component of the Hungarian recovery and resilience plan aims to address these challenges. It includes measures that are expected to contribute to reinforcing the anti-corruption framework, including by establishing an Integrity Authority and an Anti-Corruption Task Force, developing comprehensive anti-corruption strategies and strengthening the capacities of the Hungarian audit bodies, in particular with regard to spending from the EU budget. It also includes measures to strengthen prosecutorial efforts. Measures are also included to increase competition in the field of public procurement and ensure the transparency of and public oversight over public procurements.

Measures included in the component also address the long-standing issues concerning the independence of the judiciary, to raise the standard of judicial protection and to improve the investment climate in Hungary, by strengthening the guarantees of independence and impartiality of courts, namely by establishing stronger powers for the National Judicial Council to counterbalance the powers of the President of the National Office for the Judiciary, strengthening the judicial independence of the Supreme Court, removing obstacles to references for preliminary rulings to the

Court of Justice of the European Union, and removing the possibility for public authorities to challenge before the Constitutional Court final judicial decisions.

The measures in this component are also expected to improve the quality and transparency of decision-making, including by a more systematic involvement of social partners and stakeholders, and to facilitate access to public information, as well as ensuring effective oversight on how public interest asset management foundations make use of EU support. The component also features measures to tackle the risk of aggressive tax planning and simplify the tax system. Lastly, the component includes measures that aim to improve the quality and sustainability of public finances.

In several instances, this component also contributes to the digital transition of public institutions by supporting the digitalisation of public administration and services.

The component contributes to addressing the Country Specific Recommendations on the need to “Reinforce the anti-corruption framework, including by improving prosecutorial efforts and access to public information” (Country Specific Recommendation 4 of 2019, Country Specific

Recommendation 4 of 2022), “Improve competition in public procurement” (Country Specific Recommendation 4 of 2020, Country Specific Recommendation 4 of 2022), “Strengthen judicial independence” (Country Specific Recommendation 4 of 2019, Country Specific Recommendation

4 of 2022), “Improve the quality and transparency of the decision-making process through effective social dialogue, engagement with other stakeholders and regular impact assessments” (Country

Specific Recommendation 4 of 2019, Country Specific Recommendation 4 of 2022), “Continue simplifying the tax system” (Country Specific Recommendation 4 of 2019, Country Specific

Recommendation 4 of 2022), “Strengthen the tax system against the risk of aggressive tax planning” (Country Specific Recommendation 4 of 2019, Country Specific Recommendation 5 of

2020), and “Achieve prudent medium-term fiscal positions” (Country Specific Recommendation 1 of 2022).

A number of these measures have been put forward by Hungary and discussed with the European

Commission in the context of the procedure under the Conditionality Regulation 8 . The content of

the related milestones and targets is aligned with the commitments taken in that context and some of these milestones shall be implemented before the submission of the first payment request under the

Recovery and Resilience Facility.

In accordance with Article 20(5)(e) of Regulation (EU) 2021/241, in order to comply with Article 22 of that Regulation, the implementation of the milestones in this component that are related to the

Hungarian control system aiming at the protection of the financial interests of the Union shall be a

precondition for any payment under Article 24 of the RRF Regulation 9 .

In accordance with Article 24(3) of Regulation (EU) 2021/241, any reform by Hungary shall be undertaken without weakening this result and negatively impacting the below elements.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

I.1. Description of the reforms and investments for non-repayable financial support

C9.R1: Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud, conflicts of interest and corruption as well as other illegalities and irregularities concerning the implementation of Union support in Hungary

The objective of this reform is to reinforce the prevention, detection and correction of fraud, conflict of interest and corruption as well as other illegalities and irregularities concerning the implementation of Union support in Hungary, with a particular focus on public procurement, through the establishment of an Integrity Authority.

The mission of the Integrity Authority shall be to intervene in all cases where in its views competent national authorities have not taken the necessary steps to prevent, detect and correct fraud, conflict of interests, corruption and other illegalities or irregularities that have affected or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union.

8 Procedure under Article 6 of Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget.

9 This is the case for milestones 160, 166, 169, 171, 174, 175, 195, 197, 198, 200, 201, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227 and 228.

The Integrity Authority shall be set up and shall start its operations before the submission of the first payment request under the recovery and resilience plan.

It shall be guaranteed that the Integrity Authority has full independence, including that the Integrity Authority and its staff shall neither take nor seek instructions from any other person or institution.

Strong guarantees shall apply for the selection of its staff, management and budget.

The Integrity Authority shall have, among others, the power to instruct contracting authorities to suspend a procurement procedure (for a maximum of two months); to request administrative investigative bodies to carry out investigations on its behalf; to recommend the exclusion of specific economic operators from Union funding for a certain period of time; to instruct relevant national authorities or bodies to carry out their supervisory or control functions, in particular as regards procedures to verify conflicts of interest declarations and suspicions in relation to the management of Union funds; to recommend contracting authorities to use a specific procurement procedure; to initiate procedures before the relevant national authorities or bodies with the aim of establishing suspected illegalities or irregularities; from 31 March 2023, the exclusive competence to verify asset declarations of senior political leaders not having a mandate as members of the National

Assembly (Prime Minister, ministers, the Prime Minister’s political directors, secretaries of state), the power to directly verify publicly available asset declarations of all high-risk officials, including the President, members of Parliament, heads of central executive authorities, other political officials, staff of private offices of political officials, regional governors, mayors of large cities, judges, prosecutors, members of the judicial and prosecutorial governance bodies, anti-corruption investigators and senior executives of state-owned enterprises, and for non-public asset declarations at least the power to request the competent bodies to carry out the verification of those declarations and obtain the result of that verification; to initiate asset declaration verification procedures upon own-initiative, complaint and suspicion and have direct and unlimited access to the relevant databases and registries it deems necessary to verify the veracity of the information contained in the asset declarations; to request the judicial review of all decisions of authorities concerning public procurement procedures that involve any Union support and may be subject to judicial review; and to challenge the inaction of an authority concerned in court. The Integrity Authority shall have unequivocal and unlimited powers to continue to exercise its powers even in cases where the affected projects or procedures initially envisaged for Union support were subsequently withdrawn from Union support.

The Integrity Authority shall have access to all information, databases and registries required to carry out its tasks related to public procurements, cases of suspected corruption, including the verification of asset declarations, fraud and conflict of interest involving any Union support. It shall be ensured that authorities concerned by an information request or instruction from the Integrity

Authority act within a reasonable period of time.

The Integrity Authority shall carry out an Integrity Risk Assessment Exercise to evaluate the state of play of the integrity situation of the Hungarian public procurement system, to identify integrity risks, systemic risks to integrity and the tools available to address these, within four months of its establishment.

The Integrity Authority shall prepare its first annual Integrity Report for the year 2022 by Q2 2023, and by Q2 subsequently every year thereafter. The reports shall be made public. The government shall examine each report of the Integrity Authority and provide in writing its explanation how it will address each of the findings in those reports within three months from their publication.

The implementation of the reform shall be completed by Q4 2023.

C9.R2: Establishment of an Anti-Corruption Task Force to monitor and review the measures taken in Hungary to prevent, detect, prosecute und sanction corruption

The objective of this reform is to establish an Anti-Corruption Task Force to monitor and review the measures taken in Hungary to prevent, detect, prosecute und sanction corruption.

The Anti-Corruption Task Force shall examine the existing anti-corruption measures and elaborate proposals concerning the improvement of detection, investigation, prosecution and sanctioning of corrupt practices and other practices such as nepotism, favouritism or ‘revolving doors’ between the public and private sectors. It shall also notably put forward proposals for measures to improve corruption prevention and detection, and to improve the flow of information between administrative and control authorities of the state and criminal investigation authorities.

At least half of the members of the Anti-Corruption Task Force shall be independent nongovernmental organisations active in the field of anti-corruption with proven expertise and sufficiently long verifiable activity, selected based on an open, transparent, non-discriminatory selection process and objective criteria related to the candidates’ expertise and merit.

The president of the Integrity Authority as established under reform C9.R1 shall act as the chair of the Anti-Corruption Task Force, but the two entities shall work separately and independently from each other.

The Anti-Corruption Task Force shall meet at least twice a year and take its decisions by a simple majority of votes cast. The minutes of its meetings shall be made publicly available on the website for the Anti-Corruption Task Force along with written contributions and observations sent by its members before or after its meetings requested to be attached to the minutes of the meeting. The

Anti-Corruption Task Force shall adopt its own rules of procedures on a proposal by its chair at its first meeting.

The Anti-Corruption Task Force shall publish its first report for the year 2022 by Q1 2023 and annual reports by Q1 each year thereafter. Non-governmental members of the Anti-Corruption Task

Force shall have the possibility to issue shadow reports setting out their positions. Such reports shall also be made publicly available together with the report of the Anti-Corruption Task Force.

The Government shall examine the reports of the Anti-Corruption Task Force within two months from their issuance, and provide its comments – including a detailed reasoning as regards each proposal from the Anti-corruption Task Force it decided not to implement – to the Anti-Corruption

Task Force.

The Anti-Corruption Task Force shall hold its first meeting before the submission of the first payment request under the recovery and resilience plan.

The implementation of the reform shall be completed by Q2 2023.

C9.R3: Introduction of a specific procedure in the case of special crimes related to the exercise of public authority or the management of public property (‘judicial review’)

In order to improve prosecutorial efforts and to ensure that determined action is taken to prosecute corruption and similar criminal offences, this reform shall establish a specific procedure that ensures an effective judicial review of decisions of investigating authorities or the prosecution service to dismiss a crime report or to terminate proceedings. The procedure shall be possible to be triggered by anyone, natural and legal persons shall have the possibility to file a motion for revision of such decisions and for a repeated motion for revision to request that the investigation or the proceeding concerned is continued. The Integrity Authority (see reform C9.R1) shall also have the possibility to file a motion for revision and a repeated motion for revision. Following a repeated motion for revision, natural and legal persons may file a motion for prosecution, provided there are reasonable grounds to bring the matter to prosecution. The person filing a repeated motion for revision will act as prosecutor. In such cases, a preliminary examination of the ground for the motion for prosecution by the trial court shall not be envisaged. The procedure shall be applicable as of 1 January 2023, including also to non time-barred criminal offences committed before that date.

The implementation of the reform shall be completed before the submission of the first payment request under the recovery and resilience plan. A comprehensive review of the reform shall be carried out by Q4 2023.

C9.R4: Strengthening rules related to asset declarations

The aim of this reform is to strengthen the anti-corruption framework by introducing more stringent rules related to asset declarations, through extending their personal and material scope, ensuring frequent disclosure of such declarations and ensuring their transparency by making them available to the public and by introducing effective sanctions for the breach of related rules and obligations.

The reform shall consist of related legislative changes that shall enter into force and start being applied before the submission of the first payment request under the recovery and resilience plan.

They shall in particular ensure that persons entrusted with senior political functions and their relatives living in the same household, as well as members of the National Assembly and their relatives living in the same household shall submit asset declarations for the first time under the new asset declaration rules by 31 January 2023 relating to the state on 31 December 2022, and shall be obliged to declare their assets (notably, their revenues, real estate properties, other valuable properties, savings in bank deposits and cash, assets in stocks, securities and private equity funds, life insurance policies, trusts, and beneficial ownership of enterprises).

Additionally, by Q1 2023, a new system shall be set up where asset declarations shall be filed electronically and where asset declarations of persons entrusted with senior political functions is accessible to the public free-of-charge.

Finally, an effective, proportionate and sufficiently dissuasive sanctioning regime (including both criminal and administrative sanctions) concerning serious violations related to the obligations of persons subject to the rules on asset declarations shall be introduced and start being applied as of

Q3 2023.

The implementation of the reform shall be completed by Q3 2023.

C9.R5: Ensuring the transparency of the use of public resources by public interest asset management foundations

The objective of this reform is to ensure effective oversight on how public interest asset management foundations make use of Union support.

For that purpose, to clarify applicable legal provisions related to access to public information, public procurement rules and tasks and responsibilities of public interest asset management foundations when they are involved in the implementation of Union support in any capacity, dedicated legislative amendments shall enter into force to:

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  explicitly designate public interest asset management foundations performing public interest activity, and the legal persons established or maintained by them, as ‘contracting authorities’ under public procurement rules;

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  ensure that public interest asset management foundations performing public interest activity, and legal persons established or maintained by them as well as their staff, involved in the implementation of Union support in any capacity, shall be subject to the same requirements as those applicable for public entities, concerning access to public information and audit and controls;

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  and ensure the full application of rules related to conflict of interest for all individuals holding office or being employed by public interest asset management foundations performing public interest activity and the legal persons established or maintained by them.

The reform shall be implemented before the submission of the first payment request under the recovery and resilience plan.

C9.R6: Enhancing the transparency of public spending

The objective of this reform is to increase the transparency of public spending by removing obstacles to access to public information, by setting out an obligation for all public bodies to proactively disclose a wide range of pre-defined information on the use of public funds into a central register with public access.

The obligation on all public bodies for publishing such data in the central register and the scope of information to be proactively disclosed shall be specified in a legislative act, which shall enter into force before the submission of the first payment request under the recovery and resilience plan. The legislative act shall also establish clear procedures and rules for the publication of such data, including the deadline for and the form of publication.

Information concerning proof of performance and invoices shall continue to be made available upon access to documents requests. The central register shall include unique identifiers of contracts in the

Electronic Public Procurement System (EPS). Information indicating if the public funds involve (fully or partially) Union support above the national public procurement threshold shall also be made available. For procurement procedures started after 31 March 2023, such information shall be included also for procedures involving Union support not exceeding the national public procurement thresholds. Data sets published in the central register shall be in an open, interoperable and machine-readable format, which allows bulk download and data to be sorted, searched, extracted, compared and reused. Access to the data shall be provided free-of-charge and without the need to register.

Public bodies shall be obliged to update the data in the central register at least every two months. The Government shall supervise the compliance with and enforce the obligations stemming from the above legislative act on public bodies and shall ensure that public bodies comply with their obligation to upload all relevant data in full and in a timely manner.

The central register shall be fully operational, and the full set of data shall be uploaded in it by Q1 2023.

The implementation of the reform shall be completed by Q1 2023.

C9.R7: Development and implementation of a National Anti-corruption strategy and action plan

The objective of the reform is to strengthen the anti-corruption framework by ensuring the implementation of the current National anti-corruption strategy and action plan and by developing a new National Anti-corruption strategy and action plan, aiming at improving the mechanisms to effectively ensure the prevention, detection and correction of fraud and corruption (including in the public procurement system) and to strengthen the system of how the risks of conflicts of interest are addressed.

The new National Anti-corruption strategy and action plan shall be prepared with the effective involvement of the Anti-corruption Task Force (see reform C9.R2) based on policy advice from the

OECD, following extensive consultations with national and international stakeholders, including the Commission and GRECO, and in dialogue with stakeholders incorporating their recommendations. It shall give particular attention to strengthening the institutional and normative framework for the fight against high-level corruption through enhancing the transparency of the work of public bodies (including on senior political level). Building on and in consistency with the anti-fraud and anti-corruption strategy mentioned in reform C9.R20 (which is expected to be limited to Union support), the National Anti-corruption strategy and action plan shall ensure a coherent implementation of anti-fraud and anti-corruption measures for both national and Union financial support.

The action plan shall include dedicated actions to strengthen the repression of corruption; to strengthen administrative control related to asset declarations; to develop efficient internal mechanisms to promote and raise awareness of integrity matters in the government; to review the application of the Code of Professional Ethics by the Hungarian Government Official Corps as well as practices of local governments to identify and promote best practices regarding contacts with lobbyists and preventing conflict of interest; and to adopt, make publicly available and start to apply a code of conduct for persons with top executive functions (as defined by GRECO), including contact with lobbyists, post-employment restrictions and relatives’ employment and the promotion for employment.

The National Anti-corruption strategy and action plan (covering the period between 1 July 2023 and 31 December 2025) shall be adopted, and the implementation of its action plan shall start, by Q2

2023. The National Anti-corruption strategy and action plan shall be reviewed regularly, taking into account the content of the reports of and the work carried out by the Anti-Corruption Task Force

(see reform C9.R2) and the Integrity Authority (see reform C9.R1).

The Government shall adopt and make publicly available a report assessing the implementation of the new National Anti-corruption strategy and the actions under the action plan by Q1 2026.

The implementation of the reform shall be completed by Q1 2026.

C9.R8: Upgrading the cooperation systems of the prosecution service to tackle corruption practices

The objective of this reform is to increase the efficiency of public administration and thereby contribute to strengthening the anti-corruption framework by putting in place:

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  by Q2 2024, a new IT system for the handling of sensitive documents, thus supporting and facilitating the administrative work and information exchange of at least seven organisational units involved in prosecutorial investigations; and

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  by Q4 2025, a new IT system for the management of case files, thus supporting and facilitating the investigative work of seven organisational units involved in prosecutorial investigations.

The implementation of the reform shall be completed by Q4 2025.

C9.R9: Awareness-raising for the eradication of gratuity payments in the healthcare sector

The aim of this reform is to raise awareness among citizens about the criminalisation of gratuity payments in the healthcare sector – including through printed, TV and online campaign material, information dissemination – and thus contribute to their eradication.

This measure is a complement to the legal changes to criminalise gratuity payments in the healthcare sector and of the legislation to introduce a new employment contract for doctors aiming at eradicating gratuity payments and, linked to this, increasing the salaries for doctors and residents employed under the provisions of such contract.

The measure shall consist of carrying out a comprehensive information and awareness-raising campaign to reach at least five million citizens. An interim assessment of the first results of the campaign identifying the number of citizens reached, the change in citizens’ perception on the acceptability of gratuity payments in healthcare compared to the situation before the launch of the awareness-raising campaign, identifying lessons learnt and drawing up recommendations for the rest of the campaign shall be published by Q3 2023.

The implementation of the reform shall be completed by Q4 2024.

C9.R10: Reducing the share of single-bid public procurement procedures

The objective of the reform is to improve competition in public procurement and to increase the transparency, effectiveness and robustness of related processes by reducing the share of single-bid public procurement procedures financed from Union funds or the national budget.

This reform includes a comprehensive set of actions aiming to increase competition in public procurements.

The share of public procurement tender procedures – both above and below the EU public procurement thresholds – with single bids shall be reduced and then maintained below 15% (i) for public procurements financed fully or partially from Union support; and (ii) for public procurements financed from national resources respectively, in accordance with the timeline specified in the targets below. The calculation of the share of single bids shall be carried out in accordance with the Single Market Scoreboard methodology. Final audit reports with unqualified audit opinions by EUTAF shall also confirm that the share of single bids is below the corresponding targets.

A monitoring and reporting tool (“single-bid reporting tool”) shall be set up and put in operation before the submission of the first payment request under the recovery and resilience plan to allow for the monitoring and reporting of progress towards the targets related to this measure. Compliance of that tool with the methodology of the Single Market Scoreboard, that data in the tool is accurate and complete, including for the level of the baselines, shall be confirmed by a final audit report with an unqualified audit opinion by the EUTAF. By Q4 2022, the tool shall also include data on geographical indications. The first written report based on information from the single-bid reporting tool, including absolute figures and shares, geographical indications and identification of services and products, shall be prepared by the ministry responsible for public procurement and shall be made publicly available on the EPS website by Q1 2023 and annually thereafter.

The implementation of the reform shall be completed by Q1 2023.

C9.R11: Development of the Electronic Public Procurement System (EPS) to increase transparency

The objective of this reform is to increase the transparency of public procurements and facilitate the independent oversight and analysis of competition in public procurements by making publicly available, free-of-charge, all tender data in bulk download and machine-readable format through the development of the Electronic Public Procurement System (EPS).

The EPS shall be upgraded before the submission of the first payment request under the recovery and resilience plan, to allow for the regularly updated publication of all contract award notices of public procurement procedures in a structured form, which shall allow for the search, bulk export and processing by machine means of all data related to contract award notices. In this database, all economic operators, including individual members of consortia, shall be identifiable by a unique identifier. The regularly updated database shall be accessible and downloadable by anyone from the

EPS homepage without registration.

Before the submission of the first payment request under the recovery and resilience plan, information related to sub-contractors shall also be made available in the EPS in a structured format. By Q1 2023, the database shall also contain all contract award notices from 1 January 2014 onwards, with all necessary information, including on sub-contractors.

The implementation of the reform shall be completed by Q1 2023.

C9.R12: Performance measurement framework for public procurements

The objective of this reform is to set up a comprehensive performance measurement framework to continuously monitor and assess the efficiency and cost effectiveness of public procurements in

Hungary.

The performance measurement framework shall be developed with the full and effective involvement of independent non-governmental organisations active in the field of public procurement and public procurement experts. The independent non-governmental organisations shall be selected through an open, transparent and non-discriminatory selection procedure based on objective criteria related to expertise and merit.

The performance measurement framework shall enter into operation before the submission of the first payment request under the recovery and resilience plan. It shall enable in particular the annual analysis of the level of unsuccessful public procurement processes and their reasons; the share of contracts that are entirely cancelled during contract execution; the share of occurrence of delays in contract completion; the share of occurrence of cost overruns (including their proportion and volume); the share of awarded procurement contracts in which the whole life-cycle or life-cycle costing is explicitly taken into consideration; the share of successful participation of micro- and small enterprises in public procurements; the value and share of public procurement procedures with single bids financed from national resources and from Union support separately and/or both.

The analysis based on the above shall be carried out with the full and effective involvement of selected independent non-governmental organisations and independent public procurement experts and its results shall be made publicly available by Q1 2023 for the first time for the year 2022 and each year thereafter.

The implementation of the reform shall be completed by Q1 2023.

C9.R13: Action plan for increasing the level of competition in public procurement

The objective of this reform is to increase the level of competition in public procurement through the adoption and implementation of a comprehensive action plan.

Actions in the action plan shall be based on an assessment of good practices to facilitate competition in the field of public procurements; the first results of the performance measurement framework (see reform C9.R12) and proposals drawn up based on it to facilitate competition in public procurement; available findings, decisions and recommendations of the Integrity Authority

(see reform C9.R1) relevant for competition in public procurements.

The action plan shall set out specific and measurable objectives to be achieved each year; define measures relevant to achieve the related objectives; set precise deadlines for the implementation of the measures and assign relevant indicators for each measure to monitor the progress of its implementation; identify the relevant authority or institution responsible for implementing each measure; establish a monitoring mechanism to assess progress towards the achievement of the objectives in the action plan; include a specific provision to annually review the action plan and revise it as necessary; and ensure that an annual state of play on the implementation of actions in the action plan or its revisions are made publicly available without delay.

The action plan shall be adopted by Q1 2023. Following the first annual review, the Government shall adopt and make publicly available the revised action plan, including a state of play on the implementation of each of the measures therein, by Q1 2024.

The implementation of the reform shall be completed by Q1 2024.

C9.R14: Training scheme and support scheme for micro-, small and medium-sized enterprises to facilitate their participation in public procurement procedures

The objective of this reform is to facilitate the participation of micro-, small and medium-sized enterprises (with a focus on micro- and small enterprises) in public procurement procedures.

For this purpose, Hungary shall develop and implement a training scheme providing, free of charge, the most important theoretical and practical information to micro-, small and medium-sized enterprises on how they may successfully participate in public procurement procedures. The training shall be based on newly developed trainings and e-learning materials. Newly developed training materials shall cover at least matters of public procurement procedures and their preparation stage, the effective use of remedies and the specificities arising in the performance of a public contract. The evaluation of the efficiency of the trainings shall be ensured. Trainings shall be provided to at least 1 000 micro-, small and medium-sized enterprises by Q1 2024 and to at least 2

200 micro-, small and medium-sized enterprises by Q2 2026. An evaluation report evaluating the effectiveness and efficiency of the training measure shall be made publicly available by Q2 2026.

Hungary shall also set up, by Q1 2023, and implement a support scheme that shall provide lumpsum compensation, based on objective, non-discriminatory and transparent selection criteria, to be paid directly to at least 1 800 micro-, small and medium-sized enterprises (with a focus on microand small enterprises) by Q2 2026, for their costs associated with their participation in public procurement procedures. By Q3 2024, a mid-term evaluation of the support scheme, and by Q2

2026, a final evaluation of the support scheme shall be carried out, on the programme’s added value and effectiveness.

The implementation of the reform shall be completed by Q2 2026.

C9.R15: Strengthening the role and powers of the National Judicial Council to counterbalance the powers of the President of the National Office for the Judiciary

The objective of the reform is to establish stronger powers for the National Judicial Council (NJC) so that it can effectively exercise its constitutional role in supervising the central administration of courts, while maintaining the Council’s independence based on its members being elected by judges. The reform shall result in a strengthening of the independence and impartiality of courts and judges established by law in accordance with Article 19 of the Treaty on European Union (TEU) and the relevant EU acquis.

The reform shall establish stronger powers for the NJC and shall include legislative amendments to ensure that the NJC shall give a motivated binding opinion on a number of matters regarding both individual decisions and regulations.

The reform shall also ensure that the NJC has adequate resources, including staff and offices, to carry out its tasks in an effective manner.

Before tabling the draft laws required for the implementation of this reform, a stakeholder consultation shall be organised, allowing at least the NJC, judicial associations, the Hungarian Bar

Association, civil society organisations, the Kúria, the National Office for the Judiciary (NOJ), the Constitutional Court, and the Prosecutor General to give comments within no less than 15 days.

The implementation of the reform shall be completed by Q1 2023 and before the first payment request under the recovery and resilience plan.

C9.R16: Strengthening judicial independence of the Supreme Court (Kúria)

The objective of the reform is to strengthen the judicial independence of the Supreme Court (Kúria). The reform shall result in a strengthening of the independence and impartiality of courts and judges established by law in accordance with Article 19 of the TEU and the relevant EU acquis.

The reform shall consist of amending the rules on the election of the Kúria President; the rules on the case allocation scheme of the Kúria; and the rules on the functioning of the Kúria to (i) establish stronger powers for the judicial council of the Kúria and the departments of judges (‘kollégium’) concerned, (ii) remove the possibility for members of the Constitutional Court to become judges and then be appointed to the Kúria without following the normal application procedure, and (iii) ensure that the NJC gives a motivated binding opinion on the suitability of candidates for the posts of President and Vice President of the Kúria; the suitability criteria, including independence, impartiality, probity and integrity, shall be determined by the law. The candidates found unsuitable by the NJC shall have access to an accelerated judicial review before the competent court.

The reform shall also ensure that the strengthened powers of the NJC referred to in reform C9.R15 also apply in relation to the Kúria President when acting as appointing authority (in line with Act

CLXII of 2011).

Before tabling the draft amendments required for the implementation of this reform, a stakeholder consultation shall be organised, allowing at least the NJC, judicial associations, the Hungarian Bar

Association, civil society organisations, the Kúria, the NOJ, the Constitutional Court, and the Prosecutor General to give comments within no less than 15 days.

The implementation of the reform shall be completed by Q1 2023 and before the first payment request under the recovery and resilience plan.

C9.R17: Removing obstacles to references for preliminary rulings to the Court of Justice of the European Union

The objective of the reform is to remove obstacles for courts to independently refer cases for preliminary rulings to the Court of Justice of the European Union (CJEU), thereby ensuring compliance with the CJEU’s jurisprudence. The reform shall result in a strengthening of the independence and impartiality of courts and judges established by law in accordance with Article 19 of the TEU and the relevant EU acquis.

The reform shall consist of amending Sections 666 et seq. of the Criminal Procedure Code to remove the possibility for the Kúria to review the legality of the decision of a judge to make a preliminary reference to the CJEU, and Section 490 of the Criminal Procedure Code on staying the proceedings to remove any obstacle to a court to make a preliminary reference in line with Article

267 TFEU.

Before tabling the draft laws required for the implementation of this reform, a stakeholder consultation shall be organised, allowing at least the NJC, judicial associations, the Hungarian Bar

Association, civil society organisations, the Kúria, the NOJ, the Constitutional Court, and the Prosecutor General to give comments within no less than 15 days.

The implementation of the reform shall be completed by Q1 2023 and before the first payment request under the recovery and resilience plan.

C9.R18: Reform regarding the review of final judgments by the Constitutional Court

The reform shall consist of removing the possibility, introduced in 2019 by amending Section 27 of Act CLI of 2011, for public authorities to challenge before the Constitutional Court final judicial decisions. The reform shall result in a strengthening of the independence and impartiality of courts and judges established by law in accordance with Article 19 of the TEU and the relevant EU acquis.

Before tabling the draft laws required for the implementation of this reform, a stakeholder consultation shall be organised, allowing at least the NJC, judicial associations, the Hungarian Bar

Association, civil society organisations, the Kúria, the NOJ, the Constitutional Court, and the Prosecutor General to give comments within no less than 15 days.

The implementation of the reform shall be completed by Q1 2023 and before the first payment request under the recovery and resilience plan.

C9.R19: Reinforced legal provisions setting out implementation, monitoring, and audit and control arrangements to guarantee the sound use of Union support

The objective of the reform is to ensure the effective implementation, monitoring, control and audit of Union support and the protection of the financial interests of the Union.

For that purpose, legal provisions setting out the roles and responsibilities of bodies involved in the implementation, monitoring, control and audit of Union support in Hungary shall enter into force before the submission of the first payment request under the recovery and resilience plan, to ensure:

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  that risk-management, prevention, detection and correction of fraud, corruption, conflict of interest and double funding are strengthened;

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  that effective rules, procedures and control mechanisms are put in place concerning conflict of interest declarations; and

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  that staff in sensitive positions are regularly rotated and their effective oversight is ensured.

In relation specifically to the recovery and resilience plan, the abovementioned legal provisions shall also establish the legal mandate by setting out the detailed roles and responsibilities of the bodies involved in the implementation, audit and control of the implementation of the recovery and resilience plan, set out rules related to the collection and reliability of data linked to the monitoring of the achievement of milestones and targets in the plan, procedures for the drawing up and reliability of the management declarations, audit summaries and payment requests, as well as procedures ensuring the collection of all data in accordance with Article 22 of the RRF Regulation.

As a complement to the abovementioned legal arrangements, Hungary shall develop and start applying comprehensive guidelines ensuring the effective prevention, detection and correction of conflict of interest situations before the submission of the first payment request. The guidelines shall set out in detail the related tasks and obligations for each of the bodies involved in the implementation, management and control of Union support ensuring the effective prevention, detection, control and correction of conflict of interest situations.

The implementation of the reform shall be completed before the submission of the first payment request under the recovery and resilience plan.

C9.R20: An effective anti-fraud and anti-corruption strategy for the implementation, audit and control of Union support

The objective of the reform is to ensure the effective prevention, detection and correction of fraud and corruption related to any Union support in Hungary by putting in place a comprehensive anticorruption and anti-fraud strategy and implementing it.

The anti-fraud and anti-corruption strategy shall be complemented by an action plan setting out clear and comprehensive actions corresponding to the objectives set out in the strategy. For each of the actions, clear deadlines for implementation, responsible bodies, and specific indicators for measuring progress shall be identified.

The strategy and the action plan shall be adopted before the submission of the first payment request under the recovery and resilience plan.

C9.R21: Full and effective use of the Arachne system for all Union support

The objective of the reform is to ensure the effective prevention, detection and correction of fraud, corruption, conflict of interest, double funding and other irregularities related to any Union support in Hungary through the full and effective use of the Commission’s Arachne data-mining and risk scoring tool.

For that purpose, the Government shall approve and start applying procedures ensuring that relevant national authorities upload all relevant data into the Arachne system every two months, that they provide regular and effective follow-up to the risk-scoring generated by the Arachne system. A final audit report of EUTAF with an unqualified audit opinion shall confirm the appropriateness of the procedures and arrangements and the completeness of the data uploaded.

The reform shall be implemented before the submission of the first payment request under the recovery and resilience plan.

C9.R22: Establishment of a Directorate of Internal Audit and Integrity to reinforce the control of conflicts of interest when implementing Union support

The objective of the reform is to ensure effective prevention, detection and correction of conflicts of interest in the implementation of Union support, by establishing a Directorate of Internal Audit and

Integrity (DIAI) within the ministry responsible for the implementation of Union support in Hungary.

The DIAI shall carry out a regular and effective control of conflict of interest declarations and investigate reported suspicions of conflict of interest. Upon request, the DIAI shall provide without delay full access to all conflict of interest declarations and to all its files to the Integrity Authority

(as established under reform C9.R1). The law establishing the DIAI shall ensure its full independence and the appropriate competences to act in relation to any national authority or body involved in the implementation of Union support in Hungary. The DIAI shall prepare an annual report of its work and submit it to the Integrity Authority.

The reform shall be implemented before the submission of the first payment request under the recovery and resilience plan.

C9.R23: Ensuring the capacity for the EUTAF to effectively carry out its tasks

The objective of this reform is to ensure the effective prevention, detection and correction of fraud and corruption in the implementation of Union support, by ensuring that the Audit Authority

(EUTAF) has the necessary financial and human resources to safeguard its independence and enable it to carry out its tasks in an effective and timely manner.

The reform shall ensure that the annual budget of the EUTAF shall be established on the basis of an initial proposal by the EUTAF, and shall only be modified if publicly justified, and not in a manner that would undermine the EUTAF’s ability to carry out its tasks in an effective and timely manner; that the remuneration of the staff of the EUTAF is set at 70% of that applicable to the staff of the

State Audit Office; that the head of the EUTAF shall have the same prerogatives to decide on the basic principles of salary, benefits and working conditions as those available to the president of the

State Audit Office, and that any arrangement deviating from those applicable to the State Audit Office shall only be possible upon a written and duly justified proposal from the head of EUTAF; and that the functional and professional independence of the EUTAF shall be maintained and the staff of EUTAF shall continue not to seek or accept instructions regarding its audit work.

The reform shall be implemented before the submission of the first payment request under the recovery and resilience plan.

C9.R24: Strengthening cooperation with OLAF to reinforce the detection of fraud related to the implementation of Union support

The objective of the reform is to reinforce the arrangements related to the detection of fraud concerning the use of Union financing and to strengthen cooperation with OLAF.

For that purpose, legislation shall enter into force to designate a competent national authority to assist OLAF with its on-the-spot checks in Hungary, and to introduce the possibility to levy financial sanctions on economic actors that do not cooperate with OLAF during its on-the-spot checks and inspections.

The legislation shall enter into force before the submission of the first payment request under the recovery and resilience plan.

C9.R25: Effective implementation, control and audit of the Recovery and Resilience Plan and the protection of the financial interests of the Union

The objective of this reform is to ensure the effective implementation, control and audit of the recovery and resilience plan and the protection of the financial interests of the Union, by putting in place a proper repository system for recording and storing of data when implementing the recovery and resilience plan, and by ensuring that the EUTAF has in place an effective audit strategy for the audit of the implementation of the recovery and resilience plan.

For that purpose:

• - 

  a repository system for recording and storing all relevant data related to the implementation of the recovery and resilience plan – the achievement of milestones and targets, data on final recipients, contractors, subcontractors and beneficial owners – shall be fully functioning and operational. A final audit report by the EUTAF, with an unqualified audit opinion, shall confirm the functionalities of the repository system and that the system is fully functional and is in operation;

• - 

  in order to ensure the reliability of and the assurance obtained from its audit summaries, the audit authority of the Hungarian recovery and resilience plan (EUTAF) shall adopt an audit strategy ensuring the effective audit of the implementation of the Hungarian recovery and resilience plan, in accordance with internationally accepted audit standards.

The reform shall be implemented before the submission of the first payment request under the recovery and resilience plan is submitted to the Commission.

C9.R26: Improving transparency and access to public information

The objective of the reform is to reinforce transparency and improve access to public information.

A first sub-measure shall facilitate access to public information by ensuring that public data shall, as a principle, be provided free of charge. In exceptional cases when fees may be charged for access to public information, those fees shall be reasonable and sufficiently low and shall not include associated labour costs. For that purpose, legislative amendments shall enter into force and start being applied that (i) abolish the possibility for the holder of public information to charge labour costs for fulfilling an access to public information request; (ii) introduce an overall ceiling of HUF

190 000 to fees that can be charged to a data requestor for fulfilling its access to public information request; (iii) fees charged shall not exceed the actual costs incurred by data holders and they shall only relate to the costs of copying and the delivery of information may be charged by the holder of public information and only if those costs exceed HUF 10 000. Before tabling the abovementioned amendments, the Government shall take into account the proposals of the National Authority for

Data Protection and Freedom of Information (NAIH) related to unit costs concerning the cost of copying and delivery of data as well as the calculation method of fees that may be charged for access to information requests. The Government shall also ensure that any information made available upon an access to information request shall be made available simultaneously in the central register referred to in reform C9.R6.

A second sub-measure shall ensure that a regular review of public bodies’ compliance with access to public information rules shall be carried out by the Government Control Office (KEHI). The

Government Control Office shall carry out comprehensive and detailed checks on all public bodies at least twice per year to assess whether they comply with their respective requirements on transparency of public data and providing access to data of public interest. The findings of these checks shall be set out in a publicly accessible comprehensive report identifying the shortcomings per public body concerned (at least identifying the number of requests for access to public data received, the number of complaints related to the sharing of public data, the number of requests fulfilled and the number of days it took to fulfil them), how these shortcomings shall be remedied and followed up, as well as recommendations how access to public data may be improved. The first such report shall be published by Q4 2022, followed by subsequent reports every half year until Q2

2026.

Finally, a third sub-measure shall facilitate access to public information and limiting the duration of judicial procedures by introducing an exceptional procedure for court cases related to access to public information. To this end, a legislative act setting out that exceptional procedure shall establish the same procedural steps and deadlines as applied in the case of press rectification cases as set out in Act CXXX of 2016 on civil procedures, with the sole exception that the deadline for the summons period in Section 497(1) of Act CXXX of 2016 shall be at least three working days.

The implementation of the reform shall be completed by Q4 2022.

C9.R27: Improving the quality of law-making and effective involvement of stakeholders and social partners in decision-making

This reform aims at increasing the quality and predictability of law-making by ensuring the systematic use of impact assessments and the effective involvement of social partners, stakeholders and non-governmental experts in law-making. It also aims at establishing a framework for the systematic and effective consultation of social partners and stakeholders relevant for the implementation of the measures of the recovery and resilience plan, in order to contribute to improving the quality of legislation, reducing the risk of policy mistakes and enhancing oversight over the implementation of the recovery and resilience plan as a whole.

For that purpose:

• - 

  Legislative amendments shall enter into force that introduce in particular a mandatory minimum consultation period of eight days for all legislative acts adopted or tabled for adoption by the

Government; introduce a minimum period of five days for the Government to consider the inputs received during the consultation before finalising its proposal for a legislative act; introduce the obligation that the Government Control Office (KEHI) shall annually assess the compliance of the Government and ministries with the obligations set out in Act CXXXI of 2010 on social participation in law-making (including whether exceptions were duly justified); and introduce the obligation for the Government Control Office to impose a fine on the ministry responsible for the preparation of the legislative act in case of non-compliance with the

provisions of Act CXXXI of 2010 on social participation in law-making.

• - 

  In order to ensure that the above obligations are effectively complied with in practice and

limiting the scope of exceptions from applying those rules, it shall be ensured that each calendar

year at least 90% of all government decrees, ministerial decrees adopted by the government and

all bills submitted by the government to the Parliament are subject to public consultation, and

that all the summary impact assessments required to be published are made publicly available.

A final audit report with an unqualified audit opinion by the EUTAF shall confirm each of the

annual targets.

• - 

  In order to provide the possibility for a more systematic and effective involvement of social

partners and stakeholders and experts in law-making as well as for the preparation of impact

assessments for amendments to bills or bills proposed by the Members and Committees of the

National Assembly, additional administrative capacity shall be established in the Office of the

National Assembly. Members or Committees of the National Assembly shall have the

possibility to turn to the Office of the National Assembly to prepare effective impact

assessments and conduct effective stakeholder consultations concerning the bills proposed by

them or amendments to bills they intend to submit for consideration. In order to facilitate the

quality of impact assessments to be carried out by the Office of the National Assembly, the

systematic data provision by the Hungarian Statistical Office for the purpose of such impact

assessments shall be ensured.

• - 

  In order to facilitate the preparation of regulatory impact assessments and to adequately assess

the different types of impacts of legislation, the Government shall adopt and start applying a

new methodology for the systematic impact assessment of all legislative proposals. The new

methodology shall be prepared with the effective involvement of international organisations

with widely recognised expertise in the field of regulatory impact assessment (such as the

OECD) and social partners and non-governmental stakeholders taking due account of best

practices of other Member States and international institutions. The new methodology shall start

to be applied systematically to carry out impact assessments of all legislative proposals from Q4

2023.

• - 

  In order to ensure the effective and full involvement of social partners and stakeholders in the

implementation of the recovery and resilience plan, a legislative act shall set out a clear

obligation that relevant social partners and stakeholders shall be consulted during the

implementation of the plan; set out a binding strategy defining tasks and responsibilities on how

the main stakeholders shall be involved in the implementation of the measures under the plan;

and establish a monitoring committee, tasked to continuously monitor the effective

implementation of the plan, consisting of stakeholders and social partners relevant for the

implementation of the components of the plan, with at least 50% of the members of the

monitoring committee representing civil society organisations independent from the government

and public bodies. Members of the monitoring committee representing civil society shall be

selected through an open, transparent, and non-discriminatory selection process based on

objective criteria related to expertise and merit.

The implementation of the reform shall be completed by Q4 2023.

C9.R28: Support to the data-based decision-making and legislative process with a view to increasing efficiency, transparency and reducing risks of irregularities

The objective of this reform is to improve the visualisation and explanation of the effects of legislation to the public in a transparent and objective manner.

For that purpose, a data platform and a data modelling tool shall be set up to ensure the connection of databases – in full compliance with data protection rules – and develop the capacities for data modelling based on these data. In addition, at least 200 persons from the staff of line ministries, government institutions and representatives of social partners involved in strategic planning and legislative preparatory work shall complete a training course on data visualisation tools and practices.

The data platform and data modelling tool shall be set up by Q2 2024, while the training shall take place by Q1 2025.

The implementation of the reform shall be completed by Q1 2025.

C9.R29: Extension of the automatic administrative decision-making system with a view to increasing efficiency, transparency and reducing risks of irregularities

The objective of the reform is to expand the automatic administrative decision-making system, with a view to increasing its efficiency and transparency and reducing risks of irregularities such as corruption, mistakes and inconsistencies in decision-making.

For that purpose, three types of new cases – vehicle administration, simplified naturalisation (obtaining citizenship) and land registry – with fully operational functionalities shall be introduced in the automatic administrative decision-making system, allowing their fully automated processing, by Q4 2024.

The implementation of the reform shall be completed by Q4 2024.

C9.R30: Strengthening the national IT equipment management system to increase the efficiency of public services

The objective of the reform is to strengthen the national IT equipment management system to increase the efficiency of public services.

For that purpose, a central IT equipment management and software licensing system shall be set up. This system shall provide a comprehensive register and life-cycle monitoring of IT equipment and a flexible and client-friendly central service to ensure the supply, upgrade, repair, change, scrapping, installation and related services for IT equipment for at least 3 000 public bodies in the field of health, public education and social care, by Q4 2025.

The implementation of the reform shall be completed by Q4 2025.

C9.R31: Introduction of minimum substance requirements for corporate income tax purposes

The objective of this reform is to ensure that companies shall not be established in Hungary exclusively for tax planning purposes and without carrying out any real economic activity. The reform shall contribute to the fight against the use of letterbox and shell companies, while contributing to stronger job creation and higher government revenues.

The reform shall consist of the entry into force of new legislation establishing minimum substance requirements for corporate income tax purposes and the tax consequences in case the requirements are not met. The legislation shall be based on the recommendations of an independent international expert review.

The implementation of the reform shall be completed by 31 December 2023.

C9.R32: Strengthening of transfer pricing regulations

The objective of this reform is to tackle tax evasion and improve the international transparency of the Hungarian tax system by strengthening the data reporting obligations on related party transactions for transfer pricing purposes.

The reform shall consist of the entry into force of new legislation setting out detailed requirements for a new transfer pricing data reporting. The scope of the legislative provisions shall cover transactions between associated enterprises reaching at least HUF 100 million. This is expected to improve the risk analysis of the tax administration and allow it to carry out more targeted audits and to focus on potential tax evaders.

The implementation of the reform shall be completed by 31 December 2023.

C9.R33: Broadening the scope of non-deductibility rules for outbound payments

The objective of this reform is to tackle the risk of double non-taxation of outbound payments flowing from Hungary to zero- or low-tax jurisdictions, thus limiting opportunities for aggressive tax planning.

The reform shall broaden the scope of non-deductibility rules for Hungarian corporate income tax purposes. Legislative amendments covering at least the following elements shall enter into force:

• - 

  all transactions of outbound royalty and interest payments to jurisdictions that are either i) listed on the EU list of non-cooperative jurisdictions or ii) considered to be zero- or low-tax jurisdictions shall be covered by the broadened non-deductibility rules;

• - 

  criteria shall be established on when a tax consequence shall be applied, taking into account the business reasons behind the transaction and the tax treatment of the transaction; and

• - 

  a tax consequence to mitigate the risk of aggressive tax planning shall be identified.

An independent evaluation of the rules related to aggressive tax planning, assessing the Hungarian tax framework holistically, shall also be conducted. Based on this, further legislative amendments to improve the effectiveness of measures to tackle aggressive tax planning shall be adopted and enter into force.

The implementation of the reform shall be completed by 30 June 2026.

C9.R34: Digital transformation of tax compliance procedures

The objective of this reform is to streamline tax compliance procedures and reduce compliance costs by creating new, user-friendly digital services for taxpayers and financial intermediaries.

The reform shall consist of the creation of the following digital services:

• - 

  “ePayroll” (Employment Data Provision Platform). This platform shall allow employers to streamline the reporting of employment data to the administration;

• - 

  “eReceipt”. This service shall gradually replace the current system of online cash registers via the creation of a fully platform-independent service for the collection of receipts;

• - 

  “eVAT”. This shall consist of the creation of an online platform for the provision of pre-filled VAT returns.

The implementation of the reform shall be completed by 30 June 2026.

C9.R35: Simplifying the tax system by reducing the number of taxes

The objective of this reform is to simplify the tax system by reducing the number of taxes and consolidating personal income taxation.

The reform shall consist of the following actions:

• - 

  the temporary tax measures introduced in the context of the COVID-19 pandemic and the energy crisis shall be phased out, in line with the sunset date laid down in their legal basis;

• - 

  the number of taxes in Hungary shall be reduced by 10% compared to the number being in effect on 1 January 2023, based on the recommendations of a dedicated working group set up by the authorities;

• - 

  personal income taxation shall be simplified and consolidated, with a view to eliminating inefficient tax expenditures, making tax rules easier for the taxpayers and reducing distorting or unwarranted incentives.

The implementation of the reform shall be completed by 30 June 2024.

C9.R36: Reforming the tax on public utility pipelines

The objective of this reform is to simplify the tax system while fostering a tax environment which stimulates investments in large utility infrastructure projects.

The reform shall either repeal Act number CLXVIII of 2012 on the tax on utility pipelines or amend it to introduce a tax rule allowing the owners of utilities to discharge or credit the itemised tax payable on their lines for the amount they invest in the maintenance or upgrade of those lines. A decision between the two options shall be made by the government.

The implementation of the reform shall be completed by 31 December 2024.

C9.R37: Mainstreaming the use of communication campaigns and behavioural insights by the tax administration

The objective of this reform is to promote voluntary tax compliance and improve the interaction between taxpayers and the tax administration with more targeted and personalised communication strategies and the use of behavioural insights.

The reform shall consist of the following actions:

• - 

  “Step-by-step” guidance shall be published on the National Tax Collection Authority’s (NTCA) digital platforms to assist and inform taxpayers on specific topics related to their tax rights and obligations;

• - 

  the NTCA shall prepare a report on how behavioural insights (BI) can improve the effectiveness of the tax administration. Based on this, at least three new BI pilot projects shall be carried out in cooperation between the NTCA and the Ministry of Finance;

• - 

  the different IT platforms of the NTCA shall be consolidated into a single-channel, centralised platform and at least three new functionalities shall become operational and available to users on the platform.

The implementation of the reform shall be completed by 30 September 2025.

C9R38: Improving the efficiency of public expenditure by carrying out spending reviews

The objective of this reform is to evaluate and improve the efficiency of public expenditure, with a view to enhancing the medium-term sustainability of public finances and government debt and strengthening economic growth.

The reform shall introduce a regular review of expenditure in selected priority areas of public expenditure from 2023 onwards, based on a medium-term work plan. Four spending reviews shall be conducted in 2023 and 2024 and shall cover altogether at least 20% of the general government expenditure.

Two dedicated reports shall be published by the government in 2024 and 2025, respectively, to present the concrete outcomes of the reviews in terms of potential savings and efficiency gains, as reflected notably in the budgetary planning (i.e. in annual budgets and medium-term budgetary plans). A concluding report shall provide overall evidence on the results of the spending reviews.

The implementation of the reform shall be completed by 31 December 2025.

I.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Quantitative indicators Indicative timeline

Sequential Related Measure Qualitative (for targets) for completion Number (Reform or

Milestone/ Name indicators Description of each milestone and target

Investment) Target (for milestones) Unit of

measure Baseline Goal Quarter Year

Setting up and entry into operation, before the submission of the first payment request under the recovery and resilience plan, of an Integrity Authority to reinforce the prevention, detection and correction of fraud, conflicts of interest and corruption as well as other illegalities and irregularities concerning the implementation of Union support in Hungary. It shall be guaranteed that the Integrity Authority has full independence. The Authority shall intervene in all cases where in its views competent authorities have not taken the necessary steps to prevent, detect and correct fraud, conflicts of interests, corruption and other illegalities or irregularities that may affect or seriously risk affecting the sound financial management of the European Union budget or the protection of the financial interests of the

C9.R1 Establishment European Union. The Integrity Authority shall be a truly independent of an Integrity institution. The Integrity Authority and its staff shall neither seek nor take Authority to reinforce instructions from any other person or institution. The Integrity Authority shall the prevention, be given an annual budget that is commensurate with its tasks and detection and responsibilities, and it shall be responsible for managing its own budget

correction of fraud, without outside interference (as a separate chapter in the State budget). Start of activity of The budget allocation available for the Integrity Authority shall not be reduced

160 conflicts of interest and corruption as Milestone Setting up of an Integrity Authority the Integrity Q4 2022 during the fiscal year without the consent of the Integrity Authority.

well as other Authority The work of the Integrity Authority shall be organised and managed by a board illegalities and composed of a president and two vice-presidents. The three members of the irregularities board shall be appointed by the President of Hungary upon a nomination by concerning the the President of the State Audit Office for a non-renewable six-year term implementation of without the need for countersignature by any member of the Government

Union support based on their professional qualities, qualifications, extensive and undisputed experience and reputation (including internationally) in legal and financial

matters concerning public procurement and anti-corruption, as well as their proven competence in those fields. The members of the board shall be selected following an open call for expression of interest on the basis of the binding opinion on the fulfilment of the eligibility of the candidates by an Eligibility Committee set up for this purpose. The Eligibility Committee shall be convened by the Director General of the EUTAF following an open call for expression of interest. It shall be composed of three independent persons with a background from recognised international institutions who shall have a sufficiently long, verifiable and relevant experience in the area of public procurement and/or anti-corruption activity. Members of the Eligibility Committee shall not have in the last five years: held elected political position

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Investment) Target

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or a political position in the Government, been employed by a political party or political foundation, or carried out voluntary or remunerated activity for such entities. Conflict of interests rules in line with the principles set out in Article 61 of Regulation (EU, Euratom) 2018/1046 shall apply to members of the eligibility committee for five years after the issuance of the binding opinion. The members of the Eligibility Committee shall publish their declaration of interests and assets and declare their absence of conflict of interest prior to starting their work in the Eligibility Committee. The members of the board shall not have in the last five years: held elected political position or a political position in the Government, been employed by a political party or political foundation, or carried out voluntary or remunerated activity for such entities. In addition, the members of the board shall not pursue any remunerated activities during their mandate working for the Integrity Authority (with the exception of academic activity and related publications), shall not have a controlling stake in a business entity, shall not be members of any political party or political foundation. A member of the board shall only be dismissed in case of a conflict of interest following their appointment or in case a final criminal judgment is issued against them for issues that relate to the work of the Integrity Authority or affect the independence and impartiality of the member concerned. The president of the Integrity Authority shall also act as an ex officio member of the Public Procurement Council and as the chair of the Anti-corruption Task Force (milestone 166). The president of the Integrity Authority shall exercise the employer’s rights over the staff of the Authority, which shall at least comprise 50 FTEs. Staff shall be selected by the board based on professional merit. The Integrity Authority shall be endowed with extensive powers, including the following: (i) the power to instruct contracting authorities to suspend a procurement procedure (for a maximum of two months); (ii) the power to request administrative investigative bodies to carry out investigations on its behalf; (iii) the power to recommend the exclusion of specific economic operators from Union funding for a certain period of time; (iv) the power to instruct relevant national authorities or bodies to carry out their supervisory or control functions, in particular as regards procedures to verify conflicts of interest declarations and suspicions in relation to the management of Union funds; (v) the right to request access to all relevant files, including on ongoing or upcoming public procurement procedures; (vi) the power to recommend contracting authorities to use a specific procedure in a specific procurement or in a category of procurement procedures; (vii) the right to initiate procedures before the relevant national authorities or bodies with the aim of establishing suspected illegalities or irregularities; (viii) the exclusive competence to verify

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Quantitative indicators Indicative timeline

Sequential Related Measure Qualitative (for targets) for completion

Number (Reform or

Milestone/ Description of each milestone and target

Investment) Target

Name indicators

(for milestones) Unit of

measure Baseline Goal Quarter Year

asset declarations of persons who fall under the scope of Section 183 of Act CXXV of 2018 (including the Prime Minister, ministers, state secretaries, political director of the Prime Minister), the power to directly verify public asset declarations of all high-risk officials (including the President, members of Parliament, heads of central executive authorities, other political officials, staff of private offices of political officials, regional governors, mayors of large cities, judges, prosecutors, members of the judicial and prosecutorial governance bodies, anti-corruption investigators and senior executives of state-owned enterprises), and for non-public asset declarations of high-risk officials at least the power to request the competent bodies to carry out the verification of those declarations and obtain the result of that verification, as of 31 March 2023; (ix) the right to have access to all relevant databases and registries for the purposes of verifying asset declarations in accordance with data protection and privacy regulations; (x) the right to initiate asset declaration verification procedures upon own-initiative, complaint and suspicion; (xi) the right to request the judicial review of all decisions of authorities concerning public procurement procedures that involve any Union support and may be subject to judicial review; (xii) the right to initiate the proceedings of the Public Procurement Arbitration Board; (xiii) the right to challenge the inaction of an authority concerned in court in accordance with Section 15(2) and 25 of Act CL of 2016 on General Administrative Code. It shall be guaranteed that the Integrity Authority shall have access to all information, databases and registries required to carry out its tasks related to public procurements, cases of suspected corruption, including the verification of asset declarations, fraud and conflict of interest involving any Union support in any way. Legal provisions shall ensure that the authorities concerned by an information request or instruction of the Integrity Authority shall act within a reasonable period of time, not exceeding 60 calendar days. The Integrity Authority shall act either on its own initiative based on available information or on the basis of complaints or reports it receives. The Integrity Authority shall establish a whistle-blower interface where anonymous and confidential communication may be conducted. The Integrity Authority shall set up, update and operate a register of economic operators concerned by a final judgment of the court or a final administrative decision excluding those economic operators from public procurement procedures. The Integrity Authority shall be obliged to report suspected cases of fraud, corruption, conflict of interest or any other irregularities and illegalities to the relevant national authorities and, where applicable, to OLAF. The Integrity Authority shall have unequivocal and unlimited powers to continue to exercise its powers even in cases where the affected projects or procedures initially envisaged for Union support were subsequently withdrawn

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Quantitative indicators Indicative timeline

Sequential Related Measure Milestone/ Qualitative (for targets) for completion

Number (Reform or Description of each milestone and target Investment) Target Name indicators (for milestones) Unit of

measure Baseline Goal Quarter Year

from Union support. C9.R1 Establishment

of an Integrity A comprehensive report on the Integrity Risk Assessment Exercise carried out Authority to reinforce by the Integrity Authority shall be made publicly available. This exercise shall the prevention, include an evaluation of the state of play of integrity in the public procurement detection and system in Hungary, by identifying integrity risks and systemic problems with correction of fraud, Report on the integrity that need to be addressed, the tools available to address those risks

161 conflicts of interest Publication of the

and problems, the gaps in addressing those risks and problems as well as

and corruption as Milestone

Integrity Risk

Assessment report Q1 2023 propose possible solutions. The exercise shall be carried out in close

well as other Exercise cooperation with relevant and knowledgeable international bodies (e.g. the

illegalities and OECD, World Bank) and be based on the indicators of the “IV Pillar of the

irregularities Methodology to Assess Procurement Systems (MAPS), Accountability, Integrity

concerning the and Transparency of the Public Procurement System”. The exercise shall also

implementation of take into account the contributions of national or international civil society

Union support organisations monitoring the state of integrity in Hungary.

Start of application of the provisions transferring the exclusive legal responsibility and competence to verify the asset declarations of persons who fall under the scope of Section 183 of Act CXXV of 2018 to the Integrity Authority, ensuring that the Integrity Authority has the power to directly verify the public asset declarations of all high-risk officials, for non-public asset declarations of high-risk officials at least the power to request the competent

C9.R1 Establishment bodies to carry out the verification of those declarations and obtain the result of an Integrity of that verification, and has direct and unlimited access to the relevant Authority to reinforce databases and registries it deems necessary to verify the veracity of the

the prevention, Start of information contained in the asset declarations, as of 31 March 2023. Highdetection and application of the

Start of application risks officials shall include the President, members of Parliament, members of

correction of fraud, powers and

of powers and

competences on competences for Government, heads of central executive authorities, other political officials,

162 conflicts of interest staff of private offices of political officials, regional governors, mayors of large and corruption as Milestone the verification of the verification of asset declarations Q1 2023 cities, judges, prosecutors, members of the judicial and prosecutorial

well as other asset declarations by the Integrity governance bodies, anti-corruption investigators and senior executives of illegalities and by the Integrity Authority state-owned enterprises. This shall include the verification of asset declaration irregularities Authority irrespective of whether they have been verified before or not. For persons who

concerning the fall under the scope of Section 183 of Act CXXV of 2018 that shall also include implementation of the following: (i) that such a verification procedure by the Integrity Authority Union support may be initiated by the Integrity Authority upon its own-initiative, suspicion or upon complaint by anyone submitting a formal claim indicating an alleged incorrect item in an asset declaration; (ii) that the Integrity Authority has the possibility to instruct the person whose asset declaration is under verification by the Integrity Authority to present supporting data and documents regarding the content of its asset declaration; (iii) that the Integrity Authority has the possibility to request and receive data from all relevant databases and

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Sequential Related Measure Qualitative (for targets) for completion Number (Reform or

Milestone/ indicators Description of each milestone and target

Investment) Target

Name

(for milestones) Unit of

measure Baseline Goal Quarter Year

registries, including, but not limited to, the company register, the National Tax and Customs Administration, the property register and vehicle register, to verify the content of an asset declaration; (iv) that the Integrity Authority may instruct a person the content of whose asset declaration the Integrity Authority found to be incorrect to correct its asset declaration within 10 days; (v) that the failure to act upon the instruction of the Integrity Authority by the person whose asset declaration the Integrity Authority found to be incorrect or by a person who knowingly provided false data in its asset declaration shall result in automatic dismissal from her/his employment. The first annual Integrity Report of the Integrity Authority shall be made publicly available, covering the calendar year of 2022. The report shall include at least the following: (i) a fully-fledged and comprehensive analysis of the concentration of the public procurement market (as indicated by the number and value of successful tenders by economic operators); (ii) an analysis of the differences between estimated and

C9.R1 Establishment final prices in tender procedures; (iii) an assessment of applicable public of an Integrity procurement rules, bottlenecks in their implementation and the related Authority to reinforce administrative practices; (iv) the identification of risk indicators; (v) an the prevention, assessment of the use of framework agreements (including the distribution of detection and contracts awarded to and agreements concluded with economic operators and

correction of fraud, The annual the distribution of specific contracts awarded under framework agreements Integrity Report Publication of the between economic operators); (vi) an assessment of whether and to what

163 conflicts of interest and corruption as Milestone for the year 2022 first annual extent the existing control system is capable of identifying and effectively

well as other is made publicly

Integrity Report, Q2 2023

for the year 2022 preventing, detecting and correcting risks of corruption, fraud and conflict of

illegalities and available interest; (vii) activities related to the verification of asset declarations; (viii)

irregularities recommendations on improving the systems and practices related to points (i)

concerning the to (vii).

implementation of The first annual report shall also include: (i) an assessment whether relevant

Union support arrangements and practices related to conflict of interest in Hungary are consistent with the Commission Notice on Guidance on the Avoidance and

management of conflict of interest under the Financial Regulation (2021/C 121/01) and – if relevant – an identification of what improvements would be necessary to ensure consistency; (ii) specific indicators for the risks of fraud, corruption and conflict of interest. Appropriate procedures shall be in place ensuring that annual reports for the subsequent years are prepared and made publicly available.

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C9.R1 Establishment The Government shall examine the first annual Integrity Report and provide in of an Integrity writing its assessment, including a detailed explanation on how it intends to Authority to reinforce Publication of the address each of the findings, including recommendations, therein. Appropriate the prevention, The Government Government’s procedures shall be in place ensuring that annual reports for the subsequent detection and examines the first response on the years are examined and the government’s comments are made publicly correction of fraud, annual Integrity first annual available in line with the above.

164 conflicts of interest and corruption as Milestone Report of the Integrity Report Integrity Authority and its detailed Q3 2023 The milestone shall be considered fulfilled when the government makes publicly available in writing its assessment and appropriate procedures are put

well as other and provides its explanation on how in place ensuring the same procedure for all subsequent annual Integrity illegalities and responses in it intends to Reports. irregularities writing address each of the concerning the findings therein implementation of Union support C9.R1 Establishment The Integrity Authority shall carry out a comprehensive review of the of an Integrity regulatory framework and the functioning of the Hungarian system of asset Authority to reinforce declarations, including its scope and verification processes and shall make its the prevention, findings publicly available in a report.

detection and Publication of a

correction of fraud, Review of the report on the results of the

165 conflicts of interest and corruption as Milestone asset declaration system by the Integrity Q4 2023

well as other Integrity Authority Authority’s review illegalities and of the asset irregularities declaration system

concerning the implementation of Union support Before the submission of the first payment request under the recovery and resilience plan, an Anti-corruption Task Force shall be established and it shall C9.R2 Establishment hold its first meeting. of an Anti-Corruption The tasks of the Anti-corruption Task Force shall be the following: (a) examine

Task Force to monitor The Anti-corruption the existing anti-corruption measures and elaborate proposals concerning the and review the Establishment of Task Force shall be

166 measures taken in Milestone an Anti-corruption established and

improvement of detection, investigation, prosecution and sanctioning of

Hungary to prevent, Task Force hold its first

Q4 2022 corrupt practices and other practices such as nepotism, favouritism or

detect, prosecute meeting

‘revolving doors’ between the public and private sectors; (b) put forward proposals for measures to (i) improve corruption prevention and detection

und sanction (including the effective use of all available corruption prevention and detection corruption tools), (ii) improve the flow of information between administrative and control authorities of the state and criminal investigation authorities; (c) assess how its previous proposals were followed-up and implemented; (d) prepare an annual

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report and send it to the Government by 15 March each year. That report shall (i) analyse the risks and trends of corruption and corrupt practices, (ii) propose effective countermeasures and best practices for the prevention, detection and sanctioning corruption risks and corruption types, assessing their effective implementation, (iii) assess how its previous proposals were followed up and implemented in relevant legislative and non-legislative initiatives and government programmes. The applicable rules shall ensure that the Government shall discuss the report of the Anti-corruption Task Force and the proposals included therein within two months and that, if it does not decide to implement a proposal of the Anti-corruption Task Force, it shall provide the chair of the Anti-corruption Task Force with a detailed reasoning for its decision. Relevant non-governmental actors active in the field of anti-corruption shall be involved in the activities of the Anti-corruption Task Force and their full, structured and effective participation shall be ensured. It shall be ensured that such members are demonstrably independent from the government, public authorities, political parties and business interests, have proven expertise and sufficiently long verifiable professional activity in one or more of the following fields: anti-corruption, transparency, access to public information, protection of human rights, public procurement procedures, law enforcement related to those topics. Non-governmental members of the Anti-corruption Task Force shall be selected based on an open call for applications by the board of the Integrity Authority and following the binding opinion regarding the eligibility of the candidates by the eligibility committee referred to in milestone 160. That selection shall be based on an open, transparent, non-discriminatory selection process and objective criteria related to the candidates’ expertise and merit. It shall be ensured that the number of non-governmental members shall amount to 50% of the members of the Anti-corruption Task Force (the chair excluded), or, if this cannot be ensured, that the share of votes of nongovernmental members is modulated to achieve 50% of the total of votes (excluding the chair). The president of the Integrity Authority (referred to in milestone 160) shall act as the chair of the Anti-corruption Task Force. At the same time, the members of the Task Force shall not interfere with the work of the Integrity Authority or have access to its work. Public authorities shall ensure that they are represented by sufficiently high-level competent persons in the Anti-corruption Task Force. The task force shall meet at least twice a year and make decisions by a simple majority of votes cast. The minutes of its meetings shall be made publicly available on the website for the Anti-corruption Task Force along with written contributions and observations sent by its members before or after its meetings requested to be attached to the minutes of the meeting. The Anti

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corruption Task Force shall adopt its own rules of procedures on a proposal by its chair at its first meeting. For the purposes of the work of this Anticorruption Task Force, corruption shall be understood as defined by Article 4(2) Directive (EU) 2017/1371, the offences under Chapter III of the United Nations Convention Against Corruption, the criminal offences set out in Chapter XXVII of Act C of 2012 on the Criminal Code as well as other practices such as nepotism, cronyism or revolving doors between the public and the private sectors. The Anti-corruption Task Force shall also take into account situations of conflicts of interest as defined by Article 61(a) of Regulation (EU, Euratom) 2018/1046 and Article 24 of Directive 2014/24/EU, as complemented by the Commission Guidance on the avoidance and management of conflicts of interest under the Financial Regulation (C/2021/2119), and by relevant national provisions. The milestone shall be reached when the Anti-corruption Task Force is established in line with the above requirements, it holds its first meeting and the minutes of that meeting are published on the website for the Anticorruption Task Force.

C9.R2 Establishment The Anti-corruption Task Force shall operate as specified in milestone 166 and of an Anti-Corruption

Task Force to monitor The annual Publication of the

shall adopt and make publicly available its first annual report along with the

and review the analysis of the first annual report

shadow report of non-governmental actors that are members of the Anti

167 measures taken in Milestone Anti-corruption of the Anticorruption

Task Force if such a report is prepared, covering the 2022 calendar

Hungary to prevent, Task Force for the corruption Task

Q1 2023 year. That report shall also include the comments and recommendations of the

detect, prosecute year 2022 is Force for the year

Anti-corruption Task Force on the draft National Anti-Corruption Strategy and

und sanction publicly available 2022

Action plan (milestone 178). Appropriate procedures shall be in place ensuring that annual reports for the subsequent years are prepared and made publicly

corruption available.

The government shall examine and discuss the first report of the Anticorruption Task Force and provide its comments – including a detailed

C9.R2 Establishment reasoning as regards each proposal from the Anti-corruption Task Force it of an Anti-Corruption decided not to implement – to the Anti-corruption Task Force.

Task Force to monitor The Government Publication of the The milestone is met once the list of measures taken and to be taken (with an and review the examines the first Government’s indication of the envisaged timeframe for measures not yet taken) by the

168 measures taken in Milestone report of the Task response on the 2023 government on the basis of the proposals of the Anti-corruption Task Force,

Hungary to prevent, Force first report of the

Q2 and the detailed reasons of the government for each of those proposals of the

detect, prosecute Task Force Task Force it decided not to implement, are made publicly available on both

und sanction the government portal and the website of the Integrity Authority. Appropriate corruption procedures shall be in place ensuring that annual reports for the subsequent years are examined and the government’s comments are made publicly available in line with the above.

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Before the submission of the first payment request under the recovery and resilience plan, an amendment of Act XC of 2017 on the Code of Criminal Procedure shall enter into force which shall be applicable as of 1 January 2023, also to (non time-barred) criminal offences committed before that date, following an ex ante review by the Constitutional Court, that shall: - establish a procedure concerning corruption and corruption-related practices as defined in Article 4(2) of Directive (EU) 2017/1371 and in Chapter III of the United Nations Convention Against Corruption (i.e. all cases of bribery involving public officials as well as other cases of bribery with the exception of petty crimes, abuse of office with the exception of petty crimes, the aggravated cases of budget fraud, failure to comply with the supervisory or control obligation related to budget fraud, agreement restricting competition in a public procurement and concession procedure, more serious crimes against property – provided that the criminal offence is committed concerning national assets or assets managed by a public interest asset management

C9.R3 Introduction of Introduction of a foundation performing public duty or damages such assets. It shall be available a specific procedure specific procedure Provision in the for participation in a criminal organisation and money laundering if committed in the case of special in the case of amendment of Act in relation to the above-mentioned crimes);

crimes related to the special crimes XC of 2017 on the - establish judicial review of the decision of the prosecution service or the Code of Criminal investigating authority to dismiss a crime report or terminate the criminal

169 exercise of public related to the authority or the Milestone exercise of public Procedure Q4 2022 proceedings by the investigating judge of the Buda Central District Court who

management of authority or the indicating entry shall have the authority to order the commencement or the continuation of public management of into force and start criminal proceedings. Eventually following the motion for revision, if the property (‘judicial public property of application decision to dismiss a crime report or terminate the criminal proceedings was

review’) set aside by the investigating judge, in case of a repeated termination of the procedure the possibility to file an indictment to the court of law shall be

provided. The motion for revision shall have suspensory effect on coercive measures affecting assets. Following a repeated motion for revision, the investigating judge shall establish whether there is a person who can reasonably be suspected of having committed a crime. In that case, the procedure shall open the right to file an indictment to the competent court which shall decide on the merits of the case after having heard evidence. In cases where a motion for prosecution may be filed, a preliminary examination of the ground for the motion for prosecution by the trial court shall not be envisaged. The procedure may be triggered by anyone; natural persons and legal persons can file motions under this procedure with the exception of public authorities, however, the Integrity Authority (see milestone 160) shall have the right to file a motion for revision and a repeated motion for revision. The aggrieved party and the party reporting a crime shall have a privileged procedural position, with other parties having the possibility to trigger the procedure, following the publication of the pseudonymised decision not to

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open or to terminate the investigation, if the aggrieved party or the party reporting a crime has not done so. Legal representation shall be mandatory for all parties. The legal representative shall communicate by electronic means and the signature of the party shall not be required for acts within the procedure. The party filing a motion for prosecution shall not be obliged to appear in court in person. The Prosecutor General shall not have the possibility to lodge with the Kúria an extraordinary legal remedy on the ground of legality against judicial decisions handed down under the new procedure. The existence of a decision dismissing a crime report or a decision terminating the proceedings, adopted before 1 January 2023 (related to crimes which are not time-barred due to the statute of limitations) shall not remove the obligation of the investigating authority or the prosecution service to adopt a new decision on the crime report under Section 379 of the Criminal Procedure Code, which decision may be subject to a motion for revision under the new procedure. All courts in Hungary hearing civil, administrative and criminal cases, including those relevant for the protection of the financial interests of the Union, shall comply with the requirements of independence, impartiality and being established by law in accordance with Article 19(1) of the Treaty on European Union and the relevant EU acquis. In addition, by 31 December 2022 a) the implementing regulations necessary for the application of the amendment shall enter into force, and b) the Buda Central District Court shall be allocated additional posts for at least two judges and two legal secretaries.

C9.R3 Introduction of The Government shall carry out a comprehensive review of the functioning of

a specific procedure Review of the the specific procedure set out in milestone 169 and present its findings in a in the case of special specific procedure crimes related to the in the case of The Government

report, including an assessment and specific statistical data on cases and

exercise of public special crimes adopts its report on

reviews conducted compared to other high-level cases investigated where no

170 authority or the Milestone related to the the review of the

review took place. The review shall also indicate explicitly if legislative changes

management of exercise of public functioning of the

Q4 2023 to the procedure are considered necessary and indicate the envisaged

public authority or the special procedure

timeframe for these.

property (‘judicial management of review’) public property

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Before the submission of the first payment request under the recovery and resilience plan, legislative amendments shall enter into force and start being

Entry into force of applied ensuring that (i) persons entrusted with senior political functions under legislative Sections 183 and 184 of Act CXXV of 2018 on government administration and amendments Provision in the their relatives living in the same household with the persons concerned, as

C9.R4 Strengthening extending the legislative

well as members of the National Assembly and their relatives living in the same

171 rules related to asset Milestone personal and amendments

household as the members concerned shall submit asset declarations for the

declarations material scope of indicating their

Q4 2022 first time under the new asset declaration rules by 31 January 2023 relating to

asset declarations, entry into force and the state on 31 December 2022; (ii) all individuals falling under the personal while ensuring start of application scope in point (i) shall be obliged to declare: revenues, real estate properties, frequent other valuable properties (such as vehicles, vessels, valuable antiques, work of

disclosure art, etc.), savings in bank deposits and cash, assets in stocks, securities and private equity funds, life insurance policies, trusts, and beneficial ownership of

enterprises; (iii) that asset declarations shall be filed upon taking up duties, then annually thereafter and at the time of leaving the duties concerned.

Setting up of a A new system shall be fully functional and operational, where asset

new system for Full functionality, declarations shall be filed electronically in a digital format. The government the electronic start of operation shall also set up and make available to the public, free-of-charge and without

C9.R4 Strengthening submission of and complete registration, a searchable database of asset declarations filed by persons

172 rules related to asset Milestone asset declarations scope of asset declarations in digital format declarations made

Q1 2023 entrusted with senior political functions under Sections 183 and 184 of Act

CXXV of 2018 on government administration and members of the National

and a public available in a new Assembly. database for asset electronic asset declarations declaration system

Introduction of The specific action in the National Anti-corruption Strategy and Action Plan effective Start of application (milestone 178) on introducing an effective, proportionate and sufficiently administrative and of the new dissuasive sanctioning regime (including both criminal and administrative

C9.R4 Strengthening criminal sanctions sanctions regime sanctions) concerning serious violations related to the obligations of persons

173 rules related to asset Milestone concerning the concerning serious declarations serious violations violations of asset Q3 2023 subject to the rules on asset declarations shall be completed and the related sanctions regime shall start being applied.

of asset declaration declaration obligations obligations

C9.R5 Ensuring the Entry into force of Entry into force before the submission of the first payment request under the transparency of the an act ensuring recovery and resilience plan of dedicated legislative amendments that shall:

use of public effective oversight Provision in the (i) explicitly designate public interest asset management foundations

174 resources by public Milestone on how public legislative act Q4 2022 performing public interest activity and the legal persons established or interest asset interest asset indicating the entry management management into force

maintained by them as contracting authorities within the meaning of Section 5 of Act CXLIII of 2005 on public procurement; (ii) ensure that public interest

foundations foundations asset management foundations performing public interest activity and legal

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performing public persons established or maintained by them as well as their staff, including the interest activity chairs and members of their boards and their supervisory boards, involved in and legal persons the implementation of Union support in any capacity (either as final recipients, established or beneficiaries or intermediaries) shall be subject to the same requirements as maintained by those applicable for public entities and the legal entities managed by them in them make use of the Hungarian legislation concerning access to public information and audit Union support and controls – including related to conflict of interest rules – in relation to their involvement in Union support; and (iii) ensure the full compliance of rules applicable to all individuals holding office or being employed by public interest asset management foundations performing public interest activity and the legal persons established or maintained by them with the provisions of Article 61 of Regulation (EU, Euratom) 2018/1046 and the instructions and practice set out in the Commission Notice on Guidance on the avoidance and management of conflict of interest under the Financial Regulation (2021/C 121/01) irrespective of their other activities and functions, including in the Hungarian government. Entry into force before the submission of the first payment request under the recovery and resilience plan of a legislative act setting out an obligation for all public bodies to proactively publish a pre-defined set of information on the use of public funds into a central register. The information shall be made available in a central register, which shall also provide information on sub-contractors, in line with the relevant methodology provided under milestone 197. The central register shall include unique identifiers of contracts in the Electronic Public Procurement System (EPS) (milestone 197) to allow data requesters to find related information on public procurement procedures in the EPS.

Entry into force of The legislative act shall also establish clear procedures and rules for the Entry into force of a publication of such data, including the deadline for and the form of

C9.R6 Enhancing the a legislative act legislative act publication.

175 transparency of Milestone ensuring ensuring enhanced Q4 2022 The sets of data to be uploaded shall be relevant, correct and defined on the

public spending enhanced transparency of transparency of basis of the principles of transparency and proportionality, and in accordance

public spending public spending with applicable Union law. The minimum set of data to be uploaded in the central register shall include: (i)

all data for which publication is already compulsory for transparency purposes, including the data published in the State aid transparency register; (ii) the form of public spending including its legal basis; (iii) the recipient’s full legal name (for a legal person) or the recipient’s first and last name (for natural persons); (iv) the value of the public spending; (v) whether the recipient is a natural or a legal person; (vi) a unique identifier for legal persons (VAT identification number or tax identification number where available or another unique identifier established at national level); (vii) contract details relating to the spending of public funds, including their nature and purpose (type of contract

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used, type of tender procedure used, contract value, date of signature, duration of contract, objective to be achieved, deliverable to be delivered under the contract); (viii) tender documentation relating to the spending of public funds, including their nature and purpose (estimated value, type of public procurement procedure, date of tendering, number of offers submitted, name of tenderers); (ix) the name of service providers, including the name of subcontractors, suppliers, and capacity providers, in a free text format for historical data, and in a format processable by machine means for future public procurements; (x) the intended share of subcontractors if available, both for past and future public procurements; (xi) the public body responsible; (xii) the date when the funds were disbursed. The legislative act shall indicate that, in addition to the above, information indicating if the public funds involve (fully or partially) Union support above the national public procurement threshold shall also be made available in the central register. The legislative act shall also indicate that for procurement procedures started after 31 March 2023, such information shall be included in the register also for procedures involving Union support not exceeding the national public procurement thresholds. The legislative act shall ensure that data sets published in the central register shall be published in an open, interoperable and machine-readable format, which allows bulk download and data to be sorted, searched, extracted, compared and reused. It shall also indicate that access to the data shall be provided free of any charge and without the need to register. The legislative act shall include an obligation that public bodies update the data in the central register at least every two months (except for data directly available in the EPS which shall be updated in line with the frequency applicable to the EPS contract award notice database). Information concerning proof of performance and invoices shall continue to be made available upon requests for access to public information. The legislative framework shall ensure that the Government supervises the compliance with and enforces the obligations set out in the above legislative act and ensure that public bodies comply with their obligation to upload all relevant data in full and in a timely manner in the register.

The central Relevant public The central register, with the features described under milestone 175 shall be register set up authorities have fully operational, and the full set of information under milestone 175 shall be

C9.R6 Enhancing the under the uploaded all uploaded (including for information indicating if the public funds involve (fully

176 transparency of Milestone remedial required data in public spending measures in the the central register

Q1 2023 or partially) Union support for procurements below and above national public procurement thresholds) and it is ensured that it shall continue to be

conditionality and the central uploaded. procedure is fully register is available To meet this requirement, the relevant public bodies shall be provided with operational and to the public the development of the application required for data provision and the

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the full set of applicable template for data provision, the public bodies concerned shall be information provided with information on the data to disclose. The first provision of data required is shall take place continuously from the start of operation of the application. available in it The milestone shall be considered fulfilled when the public authorities have uploaded all relevant data as provided in milestone 175 in full in the central register, and the central register is accessible to the public with all the functionalities described in milestone 175. Strengthening the The Government shall fully implement actions no. 1, 2, 3, 4, 6a, 6b, 7a, 7b, 10, anti-corruption 12, 13, 14, 15, 16, 17 and 18 stemming from the Government Decision framework in 1328/2020 (VI. 19.).

Hungary by Implementation of

C9.R7 Development implementing specific actions

and implementation concrete actions under the National

177 of a National Anti Milestone under the Anti-Corruption

corruption strategy National Anti Strategy and

Q1 2023

and action plan Corruption related Action plan

Strategy and a covering 2020-2022

related Action by the Government

plan covering the period 2020-2022 The Government shall adopt a new National Anti-Corruption Strategy and a related Action plan including actions which shall be implemented in the period between 1 July 2023 and 31 December 2025 and which shall be prepared in dialogue with relevant stakeholders. The Strategy and the Action plan shall be prepared with the involvement of the Anti-Corruption Task Force, established

Strengthening the in accordance with milestone 166, on the basis of policy advice from the OECD,

anti-corruption following extensive consultations with national and international stakeholders, including the Commission and GRECO and in dialogue with stakeholders on the

C9.R7 Development framework in

Adoption and start of implementation incorporation of their recommendations.

and implementation Hungary by of the new National The National Anti-Corruption Strategy shall build on and be consistent with the

178 of a National Anti Milestone putting in place a Anti-Corruption Q2 2023 strategy under milestone 220. Its main priority shall be to effectively improve corruption strategy new National Anti Strategy and the mechanisms ensuring the prevention, detection and correction of fraud

and action plan Corruption Strategy and a related Action plan and corruption (including in the public procurement system) and to strengthen

related Action by the Government the system of how the risks of conflicts of interest are addressed. It shall give

plan particular attention to strengthening the institutional and normative framework for the fight against high-level corruption through enhancing the

transparency of the work of public bodies (including on senior political level). It shall ensure a coherent implementation of anti-fraud and anti-corruption measures for both national and Union financial support. The Action plan shall include at least the following dedicated actions: (i) strengthening the repression of corruption; (ii) strengthening administrative

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control procedures independent from investigations by law enforcement authorities (including the verification, control and sanctioning mechanisms) related to asset declarations; (iii) developing efficient internal mechanisms to promote and raise awareness of integrity matters in the government (including by general training for all staff and confidential counselling for senior executive and political level; (iv) reviewing the application of the Code of Professional Ethics by the Hungarian Government Official Corps as well as practices of local governments to identify and promote best practices regarding contacts with lobbyists and preventing conflict of interest; (v) adopting, making publicly available and start applying a code of conduct for persons with top executive functions (as defined by GRECO), providing clear guidance on integrity matters (including in relation to a) contact with lobbyists, b) post-employment restrictions [addressing the practice of “revolving doors” between positions in the public and private sectors] and c) relatives’ employment and the promotion for employment [nepotism]); (vi) with an immediate deadline for implementation of any residual actions stemming from the Government Decision 1328/2020 (VI. 19.) not implemented by 30 June 2023. Point (ii) above shall include specific actions to introduce an effective, proportionate and sufficiently dissuasive sanctioning regime (including both criminal and administrative sanctions) concerning serious violations related to the obligations of persons subject to the rules on asset declarations. The milestone shall be considered fulfilled once the Government adopts and makes publicly available the strategy and the action plan following the consideration of the recommendations of the Anti-Corruption Task Force on Corruption Prevention (milestone 166) based on a draft made available to it in advance.

Strengthening the The Government shall adopt and make publicly available a report assessing the anti-corruption implementation of the new National Anti-Corruption Strategy and the actions framework in envisaged under the Action plan. Hungary through assessing the

C9.R7 Development effective Adoption and and implementation implementation of publication of a

179 of a National Anti Milestone the report on the corruption strategy implementation of implementation of

Q1 2026

and action plan the actions of the the actions in the

new National Anti Action plan

Corruption Strategy and the related Action plan

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The new IT system Based on a detailed system description, a new IT system for the handling of for the handling of sensitive documents supporting and facilitating the administrative work and

Setting up of a sensitive information exchange of at least seven organisational units involved in C9.R8 Upgrading the new IT system for documents, in line prosecutorial investigations shall be set up. cooperation systems the handling of with the The milestone shall be considered fulfilled once, following the necessary trial 180 of the prosecution Milestone sensitive descriptions of the Q2 2024 runs of the IT system and the training for the necessary staff, the system is fully

service to tackle documents of the system, is fully functional and operational and it is activated (i.e. the seven organisational

corruption practices. prosecution functional and units involved in prosecutorial investigations have started using it).

service operational and the

prosecution service

has started using it

The new IT system Based on detailed system description, a new IT system for the handling of case

for the handling of files supporting and facilitating the administrative work and information

C9.R8 Upgrading the Setting up of a case files, in line exchange of at least seven organisational units involved in prosecutorial cooperation systems new IT system for with the investigations shall be set up.

181 of the prosecution Milestone the handling of descriptions of the The milestone shall be considered fulfilled once, following the necessary trial service to tackle case files of the system, is fully

Q4 2025 runs of the IT system and the training for the necessary staff, the system is fully

corruption practices. prosecution functional and functional and operational and it is activated (i.e. the seven organisational service operational and the units involved in prosecutorial investigations have started using it).

prosecution service has started using it

The contract with A detailed campaign programme shall be drawn up to ensure that the

C9.R9 Awareness Launch of an the contractor

awareness-raising campaign on the acceptability of gratuity payments in

raising for the awareness-raising implementing

healthcare is effective and reaches the majority of the citizens.

the public awarene The detailed campaign programme shall be adopted and the contract for the

182 eradication of gratuity payments in Milestone campaign on the acceptability of ss-raising campaign Q4 2022 implementation of that campaign programme with the implementing

contractor shall be signed by the National Protective Service.

the healthcare gratuity payments is signed and the The National Protective Service officially shall announce the launch of the

sector in healthcare campaign has started awareness-raising campaign.

Interim C9.R9 Awarenessassessment of the

raising for the first results of the Finalisation of an Drawing up and adoption of an interim assessment report of the first results of

183 eradication of awareness-raising

interim assessment the awareness-raising campaign identifying the lessons learnt, the number of

gratuity payments in Milestone campaign on the of the first results Q3 2023 citizens reached, the change in citizens’ perception on the acceptability of the healthcare acceptability of of the awarenessgratuity payments in healthcare compared to the situation before the launch sector gratuity payments raising campaign of the awareness-raising campaign.

in healthcare C9.R9 Awareness Number of citizens The target shall be considered fulfilled when the final campaign report is 184 raising for the Target reached by Number 0 5 000 000 Q4 2024 accepted by the National Protective Service and its main results are made

eradication of the completed aw publicly available, including the number of citizens reached (at least 5 000 000)

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(for milestones) Unit of

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gratuity payments in arenessby the campaign as validated by an independent survey and set out in the healthcare raising campaign the accepted campaign report, which shall also describe the campaign tools sector used, the target groups reached and an analysis of the change of attitude among citizens as a result of the awareness-raising campaign on the eradication of bribery in the field of health. The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid EU public procurement thresholds – closed between 1 January 2022 and at

185 public procurement Target

for procurements

financed from % 16 15 Q1 2023 least 31 December 2022 with single bids, for procurements financed at least

procedures Union support partially from Union support is below 15%, measured in accordance with the

shall not exceed Single Market Scoreboard methodology. A final audit report with an

15 % unqualified audit opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid EU public procurement thresholds – closed between 1 January 2022 and at

186 public procurement Target

for procurements

financed from % 36 32 Q1 2023 least 31 December 2022 with single bids for procurements financed exclusively

procedures national resources from national resources is below 32%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

32% opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 32%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid for procurements EU public procurement thresholds – closed between 1 January 2023 and 31

187 public procurement Target financed from % 15 15 Q1 2024 December 2023 with single bids for procurements, at least partially financed

procedures Union support from Union support is below 15%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

15% opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid for procurements EU public procurement thresholds – closed between 1 January 2023 and 31

188 public procurement Target financed from % 32 24 Q1 2024 December 2023 with single bids for procurements financed exclusively from

procedures national resources national resources is below 24%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

24% opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 24%.

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(for milestones) Unit of

measure Baseline Goal Quarter Year

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid for procurements EU public procurement thresholds – closed between 1 January 2024 and 31

189 public procurement Target financed from % 15 15 Q1 2025 December 2024 with single bids for procurements at least partially financed

procedures Union support from Union support is below 15%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

15 % opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures both above and below the EU public procurement

share of single-bid for procurements thresholds – closed between 1 January 2024 and 31 December 2024 with

190 public procurement Target financed from % 24 15 Q1 2025 single bids for procurements financed exclusively from national resources is

procedures national resources below 15%, measured in accordance with the Single Market Scoreboard

shall not exceed methodology. A final audit report with an unqualified audit opinion by EUTAF

15% shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid EU public procurement thresholds – closed between 1 January 2025 and 31

191 public procurement Target

for procurements

financed from % 15 15 Q1 2026 December 2025 with single bids for procurements at least partially financed

procedures Union support from Union support is below 15%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

15 % opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid for procurements EU public procurement thresholds – closed between 1 January 2025 and 31

192 public procurement Target financed from % 15 15 Q1 2026 December 2025 with single bids for procurements financed exclusively from

procedures national resources national resources is below 15%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

15% opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

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(for milestones) Unit of

measure Baseline Goal Quarter Year

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid for procurements EU public procurement thresholds – closed between 1 January 2026 and 31

193 public procurement Target financed from % 15 15 Q2 2026 March 2026 with single bids for procurements at least partially financed from

procedures Union support Union support is below 15%, measured in accordance with the Single Market

shall not exceed Scoreboard methodology. An unqualified audit report by EUTAF shall confirm

15 % that the share of single bids – calculated in line with the above methodology – is below 15%.

The share of

tender procedures The share of public procurement tender procedures – covering public

C9.R10 Reducing the with single bids procurement procedures with an estimated value both above and below the

share of single-bid EU public procurement thresholds – closed between 1 January 2026 and 31

194 public procurement Target

for procurements

financed from % 15 15 Q2 2026 March 2026 with single bids for procurements financed exclusively from

procedures national resources national resources is below 15%, measured in accordance with the Single

shall not exceed Market Scoreboard methodology. A final audit report with an unqualified audit

15% opinion by EUTAF shall confirm that the share of single bids – calculated in line with the above methodology – is below 15%.

Setting up of a Before the submission of the first payment request under the Recovery and monitoring and Resilience Plan, the ministry responsible for the public procurement system reporting tool shall develop a new monitoring and reporting tool (“single-bid reporting tool”) (“single-bid

reporting tool”) to The monitoring and

for separately measuring the share of procurement tender procedures closed

monitor and reporting tool is

with single bids – with an estimated value both above and below the EU public

fully functional and procurement thresholds – financed either from Union support or from national

C9.R10 Reducing the report on public operational and its resources, or both, in accordance with the Single Market Scoreboard

share of single-bid procurements functionalities are methodology.

195 public procurement Milestone closed with singleverified to be in Q3 2022 The milestone shall be considered fulfilled when a final audit report with an

procedures bids financed from Union support or accordance with unqualified audit opinion by the audit authority (EUTAF) confirms that the

from national the methodology of

monitoring and reporting tool is fully functional and operational, its functionalities are in accordance with the methodology of the Single Market

resources in the Single Market Scoreboard and that data (with the exception of geographical indications) in accordance with Scoreboard the system used for the purposes of monitoring and reporting is accurate and

the Single Market complete, including for baseline values. Scoreboard methodology

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The first written report based on information from the single reporting tool (set up and operated in accordance with milestone 195), including absolute

The first report figures and shares, geographical indications and identification of services and C9.R10 Reducing the First report based based on products, shall be prepared by the ministry responsible for public procurement share of single-bid information from

196 public procurement Milestone

on the “single-bid

reporting tool” is the single reporting Q1 2023

and shall be made publicly available on the EPS website. The report shall also confirm that the single reporting tool was updated to include also data on

procedures made available tool is made geographical indications and those functionalities are fully functional and publicly available operational and available to the public. Appropriate procedures shall be in place ensuring that annual reports for the subsequent years based on

information from the single reporting tool are prepared and made publicly available. The functions of the Electronic Public Procurement System (EPS) allowing the structured, machine-readable search (including by Boolean search operators) and bulk export of all contract award notice data with company identification numbers (including the names of each individual member of consortia and – in a free text format – also the names of sub-contractors) shall be made fully functional and operational before the submission of the first payment request under the recovery and resilience plan.

The EPS functions Those search and export functions of the EPS shall allow for the gathering, C9.R11 Development allowing the The EPS upgraded filtering and comparison of data across contract award notices and related to of the Electronic structured search with the new different public procurement subject matters covering information from Public Procurement functionalities is different types of contract award notices.

197 System (EPS) to Milestone

and bulk export of contract award fully operational Q3 2022 A regularly updated (at least quarterly) database shall be created and

increase notice data are and accessible by published in the EPS, containing information on all contract award notices of transparency available to the the public. public procurement procedures in a structured form, which shall be fit to be public processed by machine means. All economic operators in the database, including members of consortia, shall be identifiable by a unique identifier (tax number). The database shall be made available to the public. The published database shall be accessible and downloadable by anyone from the EPS homepage without registration and free of charge. The milestone shall be considered fulfilled when, following a trial run, the new functions are activated and the data is available and accessible to the public through the new functions on the EPS homepage. C9.R11 Development The EPS functions The EPS upgraded The functions of the EPS allowing the bulk export and search possibility of all of the Electronic allowing the with the new information related to sub-contractors is fully functioning and operational Public Procurement functionality before the submission of the first payment request under the recovery and

198 System (EPS) to Milestone

structured search and bulk export of allowing the bulk Q4 2022 resilience plan.

increase all data related to export of all The milestone is reached once, following a trial run, the new function is transparency subcontractors is information related activated and the data is available and accessible to the public through the available to the to subcontractors is new functions on the EPS homepage.

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(for milestones) Unit of

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public fully operational and accessible by the public.

The EPS functions All data referred to in milestone 197 related to contract award notices

C9.R11 Development allowing the

All data related to retroactively from 1 January 2014 shall be made available for search and bulk

of the Electronic structured search

contract award export, and accessible to the public, in the EPS, in line with the criteria set out

Public Procurement and bulk export of

notices from 1 in milestone 197 and 198.

199 System (EPS) to Milestone contract award

January 2014 are

increase notice data from 1

made available for Q1 2023 The milestone shall be considered fulfilled when the related data is available and accessible to the public on the EPS homepage.

transparency January 2014 are

search and bulk

available to the export in the EPS public system

Adoption of a Adoption of a Government Decision before the submission of the first payment Government request under the recovery and resilience plan setting up a performance Decision on the measurement framework to assess the efficiency and cost-effectiveness of setting up of a public procurements with the effective involvement of independent nonperformance governmental organisations and independent public procurement experts.

Setting up of a measurement The Decision shall establish at least (i) the selection criteria for the involvement framework of independent non-governmental organisations, which shall be the same as

C9.R12 Performance performance measurement assessing the the ones set out under milestone 201; (ii) the selection criteria for independent

200 measurement framework for public Milestone framework of efficiency and cost Q3 2022 public procurement experts; (iii) the respective tasks and roles of the selected

procurements public

effectiveness of non-governmental organisations and of the independent public procurement

procurements public experts; (iv) a commitment for the annual publication of the results of the procurements and performance measurement framework; (v) minimum requirements concerning

the reasons for the content of the performance measurement framework. limited competition in the sectors most affected by low level of competition Entry into Entry into operation before the submission of the first payment request under

Entry into operation of a the recovery and resilience plan of a performance measurement framework

C9.R12 Performance operation of a performance that shall be developed with the purpose to be used regularly, with the performance measurement involvement of independent non-governmental organisations and

201 measurement framework for public Milestone measurement framework Q4 2022 independent public procurement experts to assess the efficiency, cost procurements framework of assessing the effectiveness of public procurements and the possible reasons for and effects public efficiency and cost of public procurement procedures resulting in single bids.

procurements effectiveness of The performance measurement framework shall enable in particular the public annual analysis of (i) the level of unsuccessful public procurement processes

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procurements and and their reasons, (ii) the share (measured by reference to both number and the reasons for value) of contracts that are entirely cancelled during contract execution, (iii) limited competition the share of occurrence of delays in contract completion, (iv) the share of in the sectors most occurrence of cost overruns (including their proportion and volume), (v) the affected by low share of awarded procurement contracts in which the whole life-cycle or lifelevel of cycle costing is explicitly taken into consideration, (vi) the share of successful competition participation of micro- and small enterprises in public procurements, considered across sectors and per sector concerned (based on CPV divisions and groups), (vii) the value of public procurement procedures with single bids financed from national resources and from Union support separately and/or both and how that value compares to the total value of public procurement procedures financed from national resources and Union support separately and/or both. The analysis shall be carried out by the responsible department of the ministry in charge of public procurement with the full and effective involvement of selected independent non-governmental organisations and independent public procurement experts. The result of that analysis shall be made publicly available by 28 February each year on the Electronic Public Procurement System (EPS) website. For the analysis of this and other matters of significance to the public procurement market, such as the type of public procurement procedure used, the performance measurement framework shall include the definition of relevant indicators and rely, to the extent relevant, on the data available in the single-bid reporting tool (milestone 195) and specifically analyse the services and products concerned, the sectors and contracting authorities concerned. The selection of independent non-governmental organisations shall be based on an open, transparent and non-discriminatory selection process based on objective criteria related to expertise and merit. Selection criteria shall relate to proven expertise, professional reputation and sufficiently long verifiable activity relevant to the field of public procurement, as well as independence from the influence of political parties. The milestone shall be considered fulfilled when the detailed documentation of the performance measurement framework and its annual use – in line with the above description – is accepted by the government, the related government decision entered into force and the performance measurement framework has been developed with the involvement of the selected independent non-governmental organisations and independent public procurement experts, and is fully operational.

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Publication of the The responsible department of the ministry in charge of public procurement first annual analysis shall carry out the first annual analysis in accordance with milestone 201 for assessing the the year 2022 with the effective and full involvement of selected independent

First annual efficiency and costnon-governmental organisations and independent public procurement experts, analysis carried effectiveness of and the results of that assessment shall be made publicly available on the

C9.R12 Performance out under the public Electronic Public Procurement System (EPS) website.

202 measurement performance procurements and Appropriate procedures shall be in place ensuring that annual analyses for the framework for public Milestone measurement the reasons for Q1 2023 subsequent years are prepared and made publicly available.

procurements framework of limited competition public in the sectors most procurements affected by the low level of

competition for the year 2022 The Government shall adopt and make publicly available a comprehensive action plan to improve the level of competition in public procurement. Actions in the action plan shall be based on the following: (i) an assessment of good practices to facilitate competition in the field of public procurements (taking into account any information resulting from relevant remedial measures under Regulation (EU, Euratom) 2020/2092 and the enforcement of Government Decree 63/2022 (II. 28.)); (ii) first results of the performance measurement framework (milestone 201) and proposals drawn up based on it to facilitate competition in public procurement; and (iii) available findings, decisions and recommendations of the “Public procurement integrity reports” of the Integrity Authority (milestone 161) relevant for competition in public

C9.R13 Action plan Adoption of an procurement. Actions based on point (iii) shall promote and render effective for increasing the action plan to Publication of the the integrity checks in public procurement.

203 level of competition Milestone increase the level action plan 2023 The action plan shall: (i) set out specific and measurable objectives to be in public of competition in adopted by the

Q1 achieved each year; (ii) define measures relevant to achieve the related

procurement public government procurements objectives; (iii) set precise deadlines for the implementation of the measures

and assign relevant indicators for each measure to monitor the progress of its implementation; (iv) identify the relevant authority or institution responsible for implementing each measure; (v) establish a monitoring mechanism to assess progress towards the achievement of the objectives in the action plan; (vi) include a specific provision to annually review the action plan and revise it as necessary; (vii) ensure that an annual state of play on the implementation of actions in the action plan or its revisions are made publicly available without delay. The content of the actions may change the legal environment and introduce changes to public procurement practices, such as standard conditions applied or contract clauses.

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Revision of the The Government shall adopt and make publicly available the revised action

C9.R13 Action plan action plan to plan following the first annual review, the results of the review as well as a for increasing the increase the level First annual document setting out the state of play of the implementation of each of the

204 level of competition Milestone of competition in

revision of the

in public public

action plan is Q1 2024 measures in the action plan. The revised action plan shall indicate clearly and in detail what measures are to be taken (and by which authority) to implement

procurement procurements

adopted and made the actions that have not been implemented and take into account the

following its first publicly available findings, decisions and recommendations of the Integrity Authority (where

annual review relevant to increase competition in public procurement). Launching of a training scheme with the capacity to provide free-of-charge training to at least 2 200 micro-, small and medium-sized enterprises (with a particular focus on micro- and small enterprises) based on newly developed trainings and e-learning materials. The development of the training scheme shall be coordinated by the Ministry responsible for public procurement. The trainings shall provide the most important theoretical and practical

C9.R14 Training information on how micro-, small and medium-sized enterprises may

scheme, and support Launch of a successfully prepare and participate in public procurement procedures.

scheme, on training scheme Training materials shall cover in particular, the effective use of remedies and

procurement for for facilitating the the specificities arising in the performance of a public contract.

micro-, small and participation of It shall be ensured that the number of participants in trainings from a single

205 medium-sized Milestone micro-, small and Launch of the enterprise is limited.

enterprises to medium-sized scheme

Q2 2023 An online registration mechanism shall be set up for the training sessions and

facilitate their enterprises in to access e-learning courses. It shall be ensured that participation is monitored

participation in public public using login data from the online system and test questions to be answered

procurement procurement during the sessions. The Ministry responsible for public procurement shall also

procedures procedures ensure that interested micro-, small- and medium-sized enterprises shall also be able to register for e-mail notifications about upcoming training sessions

with details about the course content and registration process. It shall be ensured that (i) the participation of micro-, small and medium-sized enterprises is continuously monitored, (ii) a database on participants is kept, (iii) a follow-up mechanism is established allowing all participants to provide feedback on the efficiency and usefulness of the trainings and training materials.

C9.R14 Training The target shall be considered fulfilled when representatives from at least

scheme, and support Number of micro-, scheme, on small and

1 000 micro-, small and medium-sized enterprises have successfully

procurement for medium-sized

completed at least one of any of the trainings or e-learning courses, as verified

206 micro-, small and Target enterprises having

by the training or e-learning course logs under the training scheme in

medium-sized received

Number 0 1 000 Q1 2024 accordance with the requirements set out in milestone 205.

enterprises to training on public facilitate their procurement prac participation in public tices

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procurement procedures

C9.R14 Training Cumulative The target shall be considered fulfilled when representatives from at least an scheme, and support number of micro-, additional 1 200 micro-, small and medium-sized enterprises (i.e. 2 200 micro-, scheme, on small and small and medium-sized enterprises in total) have successfully completed at procurement for medium-sized least one of any of the trainings or e-learning courses, as verified by the micro-, small and enterprises having training or e-learning course logs under the training scheme in accordance with

207 medium-sized Target received Number 1 000 2 200 Q2 2026 the requirements set out in milestone 205. enterprises to training on public

facilitate their procurement participation in public practices procurement procedures C9.R14 Training Evaluation of the A final evaluation report shall be made publicly available evaluating the scheme, and support training scheme to effectiveness and efficiency of the training measure, in particular through (i) scheme, on facilitate the assessing the results of the training scheme, (ii) assessing the lessons learnt procurement for participation of and how future training schemes could be improved, and (iii) evaluating the micro-, small and micro-, small and Final evaluation longer-term effects of the scheme on the participation in particular of micro-,

208 medium-sized Milestone medium-sized report is made Q2 2026 and small enterprises respectively in public procurement procedures. The enterprises to enterprises in publicly available evaluation shall also take into account the feedback of participants of the facilitate their public trainings gathered through the follow-up mechanism.

participation in public procurement procurement procedures procedures C9.R14 Training Setting up a A support scheme providing a lump-sum compensation – based on objective, scheme, and support support scheme non-discriminatory and transparent selection criteria – to be paid directly to scheme, on for compensating micro-, small and medium-sized enterprises (with a particular focus on microprocurement for the costs and small enterprises) for their costs associated with their participation in micro-, small and associated with public procurement procedures to facilitate their participation in public medium-sized participating in procurements and reduce their entry barriers shall be launched. Financial

209 enterprises to public Launch of the support under the support scheme shall cover, in particular, the cost of using facilitate their Milestone procurements of scheme Q1 2023 an accredited public procurement consultant, but shall not cover all the costs

participation in public micro-, small and of participation in a public procurement procedure borne by the respective procurement medium-sized enterprise. procedures enterprises Only those micro-, small and medium-sized enterprises shall be eligible for the support who (i) submitted a valid bid in a public procurement procedure (i.e. tenderers that have submitted a complete tender documentation for a tender procedure, meeting both the exclusion and selection criteria) and (ii) that have

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not participated in another public procurement procedure in the twelve months prior to submitting the bid in the public procurement procedure. The number of applications for support from an individual enterprise shall be limited.

A mid-term evaluation report on the added value and effectiveness of the

C9.R14 Training support scheme shall be made publicly available. scheme, and support The evaluation shall be based in particular on: (i) interest in the financial scheme, on Carrying out of a support (participation in the programme), (ii) the winning rate of micro-, small procurement for mid-term The final evaluation and medium-sized enterprises having participated in the programme in the micro-, small and evaluation on the report for the midpublic procurement procedures and (iii) feedback provided by micro-, small

210 medium-sized Milestone added value and term evaluation is Q3 2024 and medium-sized enterprises having received support. The evaluation shall enterprises to effectiveness of made publicly also analyse in which sectors the participating enterprises are active and facilitate their the support available whether those correspond to the sectors where participation of micro-, small participation in public scheme and medium-sized enterprises is generally low. procurement The mid-term evaluation shall analyse whether enterprises in other sectors

procedures shall be specifically targeted with dedicated communication activities to raise awareness of the programme and whether the delivery of the programme shall

be changed in view of the results of the analysis. C9.R14 Training The target is reached when at least 1 800 enterprises participating in public scheme, and support Number of micro-, procurements as bidders have received compensation for their associated scheme, on small and costs in the support scheme in accordance with the requirements set out in procurement for medium-sized milestone 209 as proven by the official payments and accounting records of micro-, small and enterprises having the authority managing the support scheme.

211 medium-sized Target received lump Number 0 1 800 Q2 2026 enterprises to sum support for

facilitate their public participation in public procurement cost procurement compensation procedures C9.R14 Training

scheme, and support A final evaluation report on the added value and effectiveness of the support scheme, on scheme shall be made publicly available. procurement for Completion of the The evaluation shall be based in particular on (i) interest in the financial micro-, small and final evaluation on Final evaluation support (participation in the programme), (ii) the winning rate of micro-, small

212 medium-sized Milestone the added value report is made Q2 2026 and medium-sized enterprises having participated in the support scheme in enterprises to and effectiveness public procurement procedures and (iii) feedback provided by micro-, small facilitate their of the support

publicly available and medium-sized enterprises having received support. The evaluation shall

participation in public scheme also analyse in which sectors the participating enterprises are active and

procurement whether those correspond to the sectors where participation of micro-, small

procedures and medium-sized enterprises is generally low.

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213 C9.R15 Strengthening Milestone Entry into force of Provision in the Q1 2023 Before the submission of the first payment request under the recovery and the role and powers legislative legislative resilience plan, legislative amendments shall enter into force and start being of the National amendments to amendments applied ensuring the strengthening of the role and powers of the National Judicial Council to strengthen the indicating their Judicial Council (NJC) to effectively counterbalance the powers of the President counterbalance the role of the entry into force of the National Office for the Judiciary (NOJ).

powers of the National Judicial President of the Council while The legislative amendments shall: National Office for safeguarding its a) establish stronger powers for the NJC so that it can effectively exercise its the Judiciary independence constitutional role in supervising the central administration of courts, while maintaining the Council’s independence based on its members being elected by judges.

Regarding individual decisions, the legislative amendments shall ensure that the NJC shall give a motivated binding opinion on the following matters: (i) the annulment, by the President of the NOJ, of appointment procedures for judicial and court executive positions where there is at least one eligible candidate who has been supported by the judges of the given court; (ii) the transfer of judges, including secondments, to another court by the President of the NOJ referred to in Sections 27, 27/A, 31 and 32 of Act CLXII of 2011, except for secondments to the NOJ; (iii) the removal, by the President of the NOJ, of judges without their consent from the pool of judges that hear special cases, including administrative cases; (iv) the suitability of candidates for the post of President and Vice President of the NOJ, that can be proposed by the President of the Republic or the President of the NOJ, respectively; the suitability criteria, including independence, impartiality, probity and integrity, shall be determined by the law. The legislative amendments shall ensure that the candidates found unsuitable by the NJC shall have access to an accelerated judicial review before the competent court.

Regarding regulations, the legislative amendments shall ensure that the NJC shall give a motivated binding opinion on the following matters: (i) the points system for the assessment of applications for judicial posts within the legislative framework; (ii) the detailed conditions for the award of bonuses and other benefits to judges and court executives;

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(iii) the rules relating to the training system for judges; (iv) the data sheet and methods for the assessment of the workload of judges, as well as the determination of the ‘national workload for contentious and non-contentious proceedings broken down according to judicial level and case types’, (v) the number of judicial posts in each court within the framework determined in the annual budget, including the Kúria, and their departments;

• b) 

  establish the right of the NJC to have access to all documents, information and data (including personal data) related to the administration of the

  courts. In addition, the legislative amendments shall provide that the NJC shall determine the structure of the biannual report of the President of the NOJ;

• c) 

  endow the NJC with legal capacity and autonomy in disbursement of its budget, and ensure that the NJC has adequate resources, including staff and offices, to carry out its tasks in an effective manner. The legislative amendments shall also provide that, in order to carry out their tasks in the NJC, judges-members shall be entitled to be relieved from their

  adjudicating duties to the extent regional court (törvényszék) presidents are relieved from their adjudicating duties. The legislative amendments shall provide that judges-members of the NJC cannot be re-elected except for the next term of office, that judges-members of the NJC shall elect from among themselves the chairperson of the NJC, and that court presidents and vice-presidents as members of the NJC shall not participate in the deliberation and vote on matters relating to their administrative activities;

• d) 

  establish the right for the NJC to seize the competent court and the Constitutional Court to defend its prerogatives and enforce its rights;

• e) 

  establish an obligation to consult the NJC on legislative proposals affecting the justice system and the right to propose to the Government to initiate new legislation on the same matters;

• f) 

  establish in the law non-discretionary rules on the designation of ad interim court presidents through a pre-set order of positions within a court as follows: (i) in the absence of a court president, the president’s competences are exercised by the vice-president; (ii) in the absence of a

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vice-president, the president’s competences are exercised by the head of a department of judges with the longest tenure as a judge; (iii) in the absence of a head of department, the president’s competences are exercised by the presiding judge with the longest tenure as a judge;

• g) 

  prohibit the reintegration, by the President of the NOJ, of judges, following their secondment, to a court instance higher than the court in which they adjudicated before their secondment.

214 C9.R16 Strengthening Milestone Entry into force of Adopted and Q1 2023 Before the submission of the first payment request under the recovery and judicial independence amendments to effective resilience plan:

of the Supreme Court strengthen judicial amendments to the a) legislative amendments shall enter into force and start being applied, (Kúria) independence of rules on the which shall amend the rules on the election of the Kúria President in order the Supreme election of the to ensure that: (i) the candidates have at least five years’ experience as a

Court Kúria President, the judge; (ii) the Kúria President cannot be re-elected; (iii) the NJC gives a

case allocation motivated binding opinion on the suitability of the candidates for the post

scheme, and the

functioning of the of Kúria President that can be proposed by the President of the Republic.

Kúria The suitability criteria, including independence, impartiality, probity and integrity, shall be determined by the law. The legislative amendments

shall ensure that the candidates found unsuitable by the NJC shall have access to an accelerated judicial review before the competent court;

• b) 

  legislative amendments, and other amendments, to the rules on the case allocation scheme of the Kúria shall enter into force and start being

  applied, which shall ensure that: (i) electronically filed cases be given a case number without human intervention; (ii) cases be allocated to chambers following pre-established, objective criteria; (iii) the bench hearing the case be composed following an algorithm prescribed in advance; (iv) the parties to proceedings be able to verify on the basis of the case file whether the rules on case allocation have been duly applied; (v) the judicial council of the Kúria and the departments of judges (‘kollégium’) concerned give a binding opinion on the case allocation scheme;

• c) 

  legislative amendments shall enter into force and start being applied, which shall amend the rules on the functioning of the Kúria by

  (i) establishing stronger powers for the judicial council of the Kúria and the departments of judges (‘kollégium’) concerned, ensuring, in particular, that they shall give a binding opinion on (a) candidates for the post of chairs and vice-chairs of

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departments of judges, presiding judges and the Secretary General of the Kúria;

(b) secondments to the Kúria; (ii) removing the possibility for members of the Constitutional

Court to become judges and then be appointed to the Kúria without following the normal application procedure,

(iii) ensuring that the NJC gives a motivated binding opinion on the suitability of candidates for the post of Vice President of the

Kúria that can be proposed by the Kúria President. The suitability criteria, including independence, impartiality, probity and integrity, shall be determined by the law. The legislative amendments shall ensure that candidates found unsuitable by the NJC shall have access to an accelerated judicial review before the competent court.

(iv) ensuring that the strengthened powers of the NJC referred to in milestone 213 also apply in relation to the Kúria President when acting as appointing authority (in line with Act CLXII of 2011).

215 C9.R17 Removing Milestone Entry into force of Provision in the Q1 2023 Before the submission of the first payment request under the recovery and obstacles to legislative legislative resilience plan, legislative amendments shall enter into force and start being references for amendments to amendments applied ensuring that:

preliminary rulings to remove obstacles indicating their (i) Sections 666 et seq. of the Criminal Procedure Code are amended in order to

the Court of Justice of to references for entry into force remove the possibility for the Kúria to review the legality of the decision of a

the European Union preliminary rulings judge to make a preliminary reference to the Court of Justice of the European

to the Court of

Justice of the Union, and (ii) Section 490 of the Criminal Procedure Code on staying the

European Union proceedings is amended in order to remove any obstacle to a court to make a

preliminary reference in line with Article 267 TFEU.

216 C9.R18 Reform Milestone Entry into force of Provision in the Q1 2023 Before the submission of the first payment request under the recovery and

regarding the review legislative legislative resilience plan, legislative amendments shall enter into force and start being

of final judgments by amendments to amendments applied ensuring that the possibility, introduced in 2019 by amending Section

the Constitutional remove the indicating their

Court possibility for entry into force 27 of Act CLI of 2011, for public authorities to challenge before the

public authorities Constitutional Court final judicial decisions, is removed.

to challenge final decisions before the Constitutional Court

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Entry into force of the Government Decree establishing the legal mandate for the bodies involved in the implementation, audit and control of the implementation of the recovery and resilience plan in Hungary before the submission of the first payment request under the recovery and resilience plan. The decree shall at least set out the roles and responsibilities of those bodies ensuring (a) the collection and reliability of data linked to and monitoring of the achievement of milestones and targets; (b) that detailed procedures are in place for the drawing up and reliability of management declarations, audit summaries and payment requests; (c) that the necessary procedures to collect and store data on final recipients, contractors, subcontractors, and beneficial owners in accordance with Article 22 of Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility are in place; (d) that rules on conflict of

Entry into force of interest apply to all staff involved in the implementation, including acts

C9.R19 Reinforced the Government preparatory thereto, control (including to internal and external evaluators in

legal provisions public procurement procedures) and audit of the Recovery and Resilience Plan

setting out Legal mandate for

Decree on the roles and to all final recipients, contracting authorities, contractors, sub-contractors,

implementation, the

and responsibilities

of bodies involved as well as consultancy firms involved in project preparation and

217 monitoring, and audit Milestone implementation, in the Q3 2022 implementation; (e) that conflict of interest rules explicitly address situations

and control audit and control implementation, involving family, emotional life, political or national affinity, economic interest

arrangements to of the recovery audit and control of or any other direct or indirect personal interest that may be perceived as a

guarantee the sound and resilience plan the Hungarian conflict of interest in line with Article 61 of Regulation (EU, Euratom)

use of Union support recovery and 2018/1046 and the related Commission Notice (‘Guidance on the avoidance

resilience plan and management of conflicts of interest under the Financial Regulation’ [C 121/01]); (f) that all persons under point (d) shall be obliged to issue a

declaration of their absence of conflict of interest on a case by case basis if they are involved in the decision making concerning individual projects (in particular decisions on eligibility, risk assessment, selection of projects, interim and final control procedures, irregularity management, and audit-related decisions), which shall be stored for at least 5 years; (g) that the veracity of conflict of interest declarations is regularly and effectively controlled and the results of those controls are stored for at least five years; (h) that regular and effective oversight of staff in sensitive positions (such as dealing with irregularity management, controls and risk-assessment) is set out and that the regular rotation of staff in those positions is ensured based on a methodology that shall start to be applied no later than 31 March 2023; (i) that bidders shall not participate in tenders in public procurement procedures in case conflict of interest relevant to them in that specific tender is established.

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Entry into force of the amendment of the Government Decrees regulating the implementation, monitoring, control and audit of the European Structural and Investment Funds under Regulation (EU) 1303/2013 and the funds under Regulation (EU) 2021/1060 in Hungary before the submission of the first payment request under the recovery and resilience plan. The amendments shall ensure at least the following: (a) introduction of rules and procedures making the prevention, detection and correction of conflict of interest more efficient; (b) that rules on conflict of interest apply to all staff involved in the implementation, including acts preparatory thereto, control (including to

Amendment of Provision in the internal and external evaluators in public procurement procedures) and audit the legal Government of the above mentioned funds and to all beneficiaries and final recipients,

C9.R19 Reinforced provisions relating Decrees on the

contracting authorities, contractors, sub-contractors, as well as consultancy

legal provisions to the implementation,

firms involved in project preparation and implementation; (c) that conflict of

setting out implementation, monitoring, control

interest rules explicitly address situations involving family, emotional life,

implementation, monitoring, and audit of the

political or national affinity, economic interest or any other direct or indirect

218 monitoring, and audit Milestone control and audit European

personal interest that may be perceived as a conflict of interest in line with

and control of the European Structural and

Q3 2022 Article 61 of Regulation (EU, Euratom) 2018/1046 and the related Commission

arrangements to Structural and Investment Funds

Notice (‘Guidance on the avoidance and management of conflicts of interest

guarantee the sound Investment Funds and the funds

under the Financial Regulation’ [C 121/01]); (d) that all persons under point (b)

use of Union support and the funds under Regulation

shall be obliged to issue a declaration of their absence of conflict of interest on

under Regulation (EU) 2021/1060 in a case by case basis if they are involved in the decision making concerning (EU) 2021/1060 in Hungary indicating individual projects (in particular decisions on eligibility, risk assessment,

Hungary entry into force selection of projects, interim and final control procedures, irregularity management, and audit-related decisions), which shall be stored for at least

five years; (e) that the veracity of conflict of interest declarations is regularly and effectively controlled and the results of those controls are stored for at least five years; (f) that regular and effective oversight of staff in sensitive positions (such as dealing with irregularity management, controls and riskassessment) is set out and that the regular rotation of staff in those positions is ensured based on a methodology that shall start to be applied no later than 31 March 2023; (g) that bidders shall not participate in tenders in public procurement procedures in case conflict of interest relevant to them in that specific tender is established.

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Adoption and start Before the submission of the first payment request under the recovery and of application of resilience plan comprehensive guidelines ensuring the effective prevention, guidelines to detection and correction of conflict of interest situations in line with Article 61

C9.R19 Reinforced ensure the of Regulation (EU, Euratom) 2018/1046 and the related Commission Notice legal provisions effective the (‘Guidance on the avoidance and management of conflicts of interest under setting out prevention, the Financial Regulation’ [C 121/01]) shall be adopted and start being applied. implementation, detection and Start of application The guidelines shall set out detailed tasks and obligations for each of the

219 monitoring, and audit Milestone correction of of detailed and control conflict of interest guidelines on

Q4 2022 bodies involved in the implementation, management and control of Union support ensuring the effective prevention, detection, control and correction of

arrangements to for the staff of all conflict of interest conflict of interest situations. guarantee the sound bodies involved in

use of Union support the implementation,

control and audit of Union support in Hungary Ensuring effective The government shall adopt and bring into force before the submission of the prevention, first payment request under the recovery and resilience plan an anti-fraud and detection and anti-corruption strategy for all Union support setting out the (i) detailed roles correction of fraud and responsibilities of the different entities involved in the implementation of

C9.R20 An effective and corruption in any Union financial support in Hungary regarding the prevention, detection anti-fraud and antithe Entry into force of and correction of fraud, conflict of interest and corruption; (ii) the assessment corruption strategy implementation of an anti-fraud and of the main risks, factors and practices of fraud, conflict of interest and

220 for the Milestone Union support by anti-corruption Q3 2022 corruption; and ensuring that fraud and corruption is effectively prevented, implementation, drawing up and strategy for Union detected and corrected.

audit and control of implementing an support Union support effective antifraud and anticorruption strategy for Union support Ensuring effective The government shall adopt and bring into force before the submission of the

C9.R20 An effective prevention, first payment request under the recovery and resilience plan an action plan

anti-fraud and antidetection and Entry into force of related to the anti-fraud and anti-corruption strategy for all Union support

corruption strategy correction of fraud an action plan setting out the detailed roles and responsibilities of the different entities

221 for the Milestone and corruption in related to the antiinvolved in the implementation of any Union financial support in Hungary

implementation, the fraud and anti

Q4 2022 regarding the prevention, detection and correction of fraud or corruption.

audit and control of implementation of corruption strategy The action plan shall: (i) define clear and comprehensive actions assigned to

Union support Union support by for Union support each of the objectives set out in the anti-fraud and anti-corruption strategy; (ii) drawing up and define clear deadlines for the implementation of each of the actions; (iii) assign

implementing an each of the actions to a body responsible for effectively carrying it out; (iv)

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effective action define specific, measurable and related indicators to measure progress in plan related to the implementing each of the actions; (v) set out appropriate arrangements for the anti-fraud and regular review of the actions in light of evidence. anti-corruption strategy for Union support Before the submission of the first payment request under the recovery and resilience plan the Government shall approve and start applying procedures setting out the conditions for the systematic and extended use of all the functionalities of the Arachne risk-scoring tool in the implementation of the Hungarian recovery and resilience plan and any other support from the Union budget (including for Union support from the 2014-2020 budgetary period) to effectively prevent and detect conflict of interest, fraud, corruption, double funding and other irregularities. The procedures shall ensure that:

Ensuring effective (i) the relevant national authorities upload every two months into the Arachne prevention, system all data for the data fields set out in the applicable EU regulations detection and Start applying related to the implementation of any Union support under any budgetary correction of fraud procedures period. As regards the European Structural and Investment Funds of the 2014- and corruption in ensuring the 2020 budgetary period, all data sets (including contract data on final recipients,

C9.R21 Full and the systematic use of

detailed contractors/sub-contractors and expenses) that have been collected

implementation of the Arachne riskin the relevant period shall be uploaded into the Arachne system (with the

222 effective use of the Arachne system for Milestone Union support scoring tool to Q3 2022 exception that the upload of data concerning contract amendments and

all Union support through effectively prevent

additions, information on experts involved in the performance of contracts and

appropriate and detect fraud, information on consortium partners shall start as of 31 January 2023); arrangements corruption, conflict (ii) the relevant national authorities provide systematic, regular and effective ensuring the of interest and follow-up to the risk-scoring generated by the Arachne system – including for effective use of other irregularities the ex-ante verification of applicants – to effectively prevent and detect the Arachne riskconflict of interest, fraud, corruption, double funding and other irregularities

scoring tool and those bodies shall be bound to take into account those risk-scoring results and ensuring that this is set out in the applicable national legislative acts and

reflected in the applicable workflows, guidelines (to be issued and introduced by 30 November 2022) and decision-making process of those bodies; and (iii) the respective audit bodies in Hungary and in the relevant Commission services and control bodies have full access to the functionalities of the Arachne system for the purposes of their risk-assessment and to the data sets in the system. The milestone shall be considered fulfilled once the procedures – in line with the above requirements – are in place, binding on all authorities set out above and subject to their application in practice by those authorities.

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prevention, Before the submission of the first payment request under the recovery and detection and Unqualified final resilience plan: correction of fraud audit report of a) detailed and binding procedural guidelines shall be developed and start to and corruption in EUTAF confirming be applied by all bodies listed in milestone 222 that set out the steps to be

C9.R21 Full and the

the adequacy of taken in case the Arachne system indicates risk;

implementation of procedures on the b) a final audit report with an unqualified audit opinion from the audit

223 effective use of the Arachne system for Milestone Union support by systematic and authority (EUTAF) shall confirm the appropriateness of the procedures set out

all Union support confirming the

effective use of the Q4 2022 in milestone 222 by verifying that (i) the procedures ensure the uploading of a

adequacy of the Arachne riskcomplete set of information every two months; (ii) the data set out in the

procedures on the scoring tool and applicable Union law has actually been uploaded in its entirety in Arachne, and

systematic and the completeness (iii) the National Authority, implementing bodies/managing authorities and

effective use of of data uploaded to intermediate bodies put in place appropriate arrangements to ensure the

the Arachne risk Arachne systematic, regular and effective follow-up of risk-scoring generated by the

scoring tool Arachne system (based on detailed procedural guidelines available to them).

In order to strengthen the effectiveness of audit and control arrangements related to Union support and the effective implementation of the anti-fraud and anti-corruption strategy set out in milestone 220, a new Directorate of Internal Audit and Integrity (DIAI) shall be established by means of a law that shall enter into force, and the DIAI shall be fully staffed and shall be fully functional in the ministry responsible for the implementation of Union support

Ensuring effective A new Directorate before the submission of the first payment request under the recovery and prevention, of Internal Audit resilience plan. detection and and Integrity (DIAI) The law shall ensure: (i) the full independence of the DIAI through appropriate

C9.R22 Establishment correction of fraud set up in the guarantees (including concerning the nomination of its high-ranking staff, of a Directorate of and corruption in ministry duration of their mandate without a possibility to dismiss them etc.); (ii) that Internal Audit and the responsible for the the selection of staff of the DIAI shall be based on objective criteria developed

224 Integrity to reinforce implementation of implementation of in cooperation with the Integrity Authority (milestone 160) and that the the control of Milestone Union support Union support, is Q4 2022 Integrity Authority supervises the recruitment process; (iii) that the DIAI has

conflicts of interest through the fully staffed, its appropriate competences to act in relation to any national authority or body when implementing setting up and full rules of procedures involved in any manner in the implementation of Union support in Hungary; Union support functioning of a and internal (iv) that upon request, the DIAI shall provide without delay full access to all new Directorate of processes are in conflict of interest declarations and to all its files to the Integrity Authority; (v) Internal Audit and place and it is fully that appropriate rules of procedures and guidelines (including on the allocation Integrity (DIAI) operational and sequencing of cases in the DIAI) shall be put in place by 30 November 2022 regulating the institutional setup, working methods and procedures of the DIAI and the Integrity Authority is provided with sufficient guarantees that it can supervise the compliance with those rules of procedures and guidelines; (vi) that sufficient resources are allocated to the tasks necessary to be carried out by the DIAI; (vii) that the DIAI regularly controls (based on sampling and upon suspicion reports) the validity of conflict of interest declarations of all relevant

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staff involved in the implementation, including acts preparatory thereto, control (including to internal and external evaluators in public procurement procedures) of any Union support in Hungary as well as those of all final recipients, beneficiaries, recipients, contracting authorities, contractors, subcontractors, as well as consultancy firms involved in project preparation and implementation (based on biennial control plans) and that information on those controls are stored for at least five years; (viii) that a page is created on the main page of the palyazat.gov.hu portal to allow for the anonymous reporting of any suspicion regarding conflict of interest in relation to persons involved in the implementation and control of Union support in Hungary; (ix) that the DIAI shall investigate the reported suspicions in a timely manner; (x) that the DIAI shall annually prepare a detailed report of its work to the Integrity Authority. The milestone shall be considered fulfilled when the law establishing the DIAI with at least the above requirements has entered into force, all positions of the DIAI have been filled and the Integrity Authority has not raised concerns with regard to the recruitment process, the necessary rules of procedures of the DIAI as well as the guidelines regulating its work have entered into force and the DIAI is fully operational and started its work. Before the submission of the first payment request under the recovery and resilience plan, legislative amendments shall enter into force ensuring the necessary financial and human resources for the EUTAF to safeguard its independence and enable it to carry out its tasks in an effective and timely

Ensuring effective manner. prevention, The legislative amendments shall ensure that: detection and Entry into force of - The annual budget of the EUTAF shall be established on the basis of an initial correction of fraud legislative proposal by the EUTAF and shall only be modified if publicly justified and shall

C9.R23 Ensuring the and corruption in amendments to not undermine the EUTAF’s capacity to carry out its tasks in an effective and

225 capacity for the Milestone the provide the Q4 2022 timely manner.

EUTAF to effectively implementation of necessary financial - The remuneration of the head and staff of the EUTAF shall be set at 70% of carry out its tasks Union support and human the remuneration of the president and staff of the State Audit Office, through resources to the respectively. appropriate EUTAF - The head of the EUTAF shall have the same or similar powers to decide on the

capacity for EUTAF basic principles of salary policy and benefits, and working conditions as those applicable to the president of the State Audit Office. Any arrangement

deviating from those applicable to the State Audit Office shall only be possible upon a written and duly justified proposal from the head of EUTAF. - The functional and professional independence of the EUTAF shall be maintained and the staff of EUTAF shall continue not to seek or accept instructions regarding its audit work.

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Entry into force before the submission of the first payment request under the recovery and resilience plan: (i) of an amendment to Act CXXII of 2010 on Nemzeti Adó- és Vámhivatal designating the National Tax and Customs Administration (Nemzeti Adó- és Vámhivatal, NAV) as the competent national authority to assist OLAF when carrying out on-the-spot checks in Hungary and when an economic operator subject to those checks refuses to cooperate. The amendment shall include a

Designation of a Entry into force of a description of the procedure to follow. It shall also introduce the possibility of national authority legislative the presence of a finance guard at the request of OLAF. The finance guard shall in charge with amendment enable OLAF to carry out its on-the-spot checks and inspections, in particular

C9.R24 Strengthening assisting OLAF designating the by ensuring enforcement in order to safeguard evidence as envisaged in

cooperation with with its on-thecompetent Regulation (EU, Euratom) No 883/2013 and Regulation (Euratom, EC) No

OLAF to reinforce the spot checks in authority and of a 2185/96. This shall include the following types of intervention: (a) taking things

226 detection of fraud Milestone Hungary and the legislative away on the spot [Section 36/L of Act CXXII of 2010 on Nemzeti Adó- és

related to the introduction of amendment

Q4 2022 Vámhivatal (hereinafter NAVtv.)], (b) request information [Section 36 of

implementation of the possibility to introducing the NAVtv.], (c) identity checking [Section 36/A of NAVtv.], (d) entering a place that Union support levy financial possibility to levy does not qualify as a private residence [Section 36/G of NAVtv.], (e) protection sanctions on nondissuasive financial of the scene [Section 36/I (1) of NAVtv.]. The amendment shall set out that if cooperating sanctions on nonthis assistance requires authorisation from a judicial authority, such

economic actors cooperating economic actors authorisation shall be applied for by the national AFCOS (national anti-fraud

coordination service) at least 72 hours in advance. Based on such authorisation, OLAF may request the presence of the finance guard in advance, if there is a risk of resistance to a planned on-the-spot check and inspection. (ii) of an amendment to Act XXIX of 2004 to introduce a dissuasive financial type of sanction to be imposed in case an economic operator refuses to cooperate with OLAF for the purposes of the on-the-spot checks and inspections. A repository system for monitoring the implementation of the recovery and resilience plan shall be set up before the submission of the first payment request under the recovery and resilience plan.

C9.R25 Effective The system shall include at least the following functionalities:

implementation, Monitoring Audit report (a) collection of data and monitoring of the achievement of milestones and

control and audit of system for the confirming the functionalities and targets;

227 the Recovery and Resilience Plan and Milestone implementation of the Hungarian operation of the Q4 2022 (b) collect, store and ensure access to the data required by Article 22(2)(d)(i) to (iii) of the RRF Regulation.

the protection of the recovery and repository system The access to this data shall be granted to all relevant national and European financial interests of resilience plan for the recovery bodies for the purpose of audit and control. Data available in the repository the Union and resilience plan system shall be made available in the Arachne system every two months to

access the complete list of the RRF risk indicators. A final audit report from the audit authority (EUTAF) with an unqualified audit opinion shall confirm the functionalities of the repository system and that the

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system is fully functional and is in operation.

Adoption and entry into force of an audit strategy for the audit authority C9.R25 Effective (EUTAF), ensuring the effective audit of the implementation of the Recovery implementation, Ensuring effective and Resilience Plan in accordance with internationally accepted audit

control and audit of audit of the Entry into force of an audit strategy by standards before the submission of the first payment request under the

228 the Recovery and Resilience Plan and Milestone implementation of the Hungarian EUTAF for the Q4 2022 recovery and resilience plan. The strategy shall at least set out the methodology and approach to risk assessment, the frequency and type of

the protection of the recovery and recovery and audits (such as systems- and project audits, desk-based and on-the-spot) to be financial interests of resilience plan resilience plan carried out in the different implementation stages of the reforms and

the Union investment implemented under the recovery and resilience plan as well as the reliability of data supporting the achievement of milestones and targets.

Entry into force of Entry into force of a legislation providing for an exceptional procedure for

C9.R26 Improving a legislative act requests for access to public information. ensuring legal Provision in the That exceptional procedure shall establish the same procedural steps and

229 transparency and access to public Milestone predictability in legislative act deadlines as applied in the case of press rectification cases as set out in Act

information access to public

indicating the entry Q4 2022 CXXX of 2016 on civil procedures (Sections 495-501), with the sole exception

information cases into force that the deadline for the summons period in Section 497(1) of Act CXXX of

in court 2016 shall be at least three working days. Entry into force of amendments to Act CXII of 2011 on Freedom of Information and Government Decree No. 301/2016 (IX. 30.) in order to establish the main rule that public information shall be provided free of charge and fees for access to such public information may only be applied under exceptional and clearly defined circumstances. In this respect the amendments shall: (i) Abolish the possibility to charge labour costs associated with the fulfilment of access to public information requests; (ii) Define publicly available unit costs related to the costs of copying and the

Entry into force of delivery of the information requested;

C9.R26 Improving legislative Provisions in the (iii) Establish the rule that fees charged shall not exceed the actual cost legislative incurred by the holder of the public information requested when fulfilling that

230 transparency and amendments access to public Milestone ensuring increased amendments Q4 2022 information request related to the cost categories under point (ii) and only if

information transparency of indicating their those costs exceed HUF 10 000;

public information entry into force (iv) Introduce a reasonably low overall ceiling of maximum HUF 190 000 for associated cost that can be taken into account by a public body when fulfilling

an individual access to public information request; and (v) Ensure that any information made available upon an access to information request shall be made available simultaneously in the central register mentioned in milestone 175. (Where possible this shall be carried out in the format applicable to the central register referred to in milestone 175. In cases, where the information cannot be structured in that format, it shall be made publicly available on the central register website in a searchable format that allows the download, extraction and reuse of the data.)

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The amendments concerning the unit costs under point (ii) and the calculation method of the fees that may be chargeable for access to information requests shall be based on a proposal by the National Authority for Data Protection and Freedom of Information (NAIH). Entry into force of a legislative amendment repealing the application of the provisions in Government Decree 521/2020 (IX. 25.) on deviating from certain rules on access to information during the state of danger and ensuring that no further legislative constraints on access to public information are introduced. The Government Control Office (KEHI) shall carry out comprehensive and

Publication of detailed checks on all public bodies at least twice per year and upon complaint the report of the to assess whether they comply with their respective requirements on

Report of the Government transparency of public data and providing access to data of public interest.

C9.R26 Improving Government Control Office on The findings of the checks shall be set out in a comprehensive report

231 transparency and the compliance of

identifying the shortcomings per public body concerned (at least identifying

access to public Milestone

Control

Office on access to public bodies with Q4 2022 the number of request for access to public data received, the number of

information public their respective complaints related to the sharing of public data, the number of

information (1) obligations requests fulfilled and the number of days it took to fulfil them), how

regarding access to shortcomings shall be remedied and followed up as well as recommendations

public information how access to public data may be improved. The milestone shall be considered fulfilled when the biannual report covering

the second half of 2022 is made publicly available in its entirety. The Government Control Office (KEHI) shall carry out comprehensive and detailed checks on all public bodies at least twice per year and upon complaint

Publication of to assess whether they comply with their respective requirements on the report of the transparency of public data and providing access to data of public interest.

Report of the Government The findings of the checks shall be set out in a comprehensive report C9.R26 Improving Government Control Office on identifying the shortcomings per public body concerned (at least identifying

232 transparency and the compliance of the number of request for access to public data received, the number of access to public Milestone Control Office on access to public bodies with Q2 2024 complaints related to the sharing of public data, the number of

information public their respective requests fulfilled and the number of days it took to fulfil them), how information (2) obligations shortcomings shall be remedied and followed up as well as recommendations regarding access to how access to public data may be improved.

public information The milestone shall be considered fulfilled when the biannual report covering the first half of 2024 is made publicly available in its entirety and a total of four reports are publicly available.

Publication of the The Government Control Office (KEHI) shall carry out comprehensive and

C9.R26 Improving Report of the Government reports of the detailed checks on all public bodies at least twice per year and upon complaint

233 transparency and access to public Milestone Control Office on Government Q2 2026 to assess whether they comply with their respective requirements on

information access to public

Control Office on transparency of public data and providing access to data of public interest.

information (3) the compliance of The findings of the checks shall be set out in a comprehensive report public bodies with identifying the shortcomings per public body concerned (at least identifying

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their respective the number of request for access to public data received, the number of obligations complaints related to the sharing of public data, the number of requests regarding access to fulfilled and the number of days it took to fulfil them), how shortcomings shall public information be remedied and followed up as well as recommendations how access to public data may be improved. The milestone shall be considered fulfilled when the biannual report covering the first half of 2026 is made publicly available in its entirety and a total of eight reports are publicly available. Entry into force of a legislative act laying down the framework for consulting the relevant stakeholders during the implementation of the Hungarian recovery and resilience plan. That legislative act shall: (1) Set out a binding strategy defining tasks and responsibilities on how the main stakeholders shall be involved in the implementation of the measures of the recovery and resilience plan; (2) Establish a monitoring committee, consisting of the stakeholders and social partners relevant for the implementation of the components of the recovery and resilience plan. The monitoring committee shall be tasked to continuously monitor the effective implementation of the recovery and resilience plan. All

Entry into force of members of the monitoring committee shall have the same rights and a legislative act obligations. At least 50% of the members of the monitoring committee shall laying down the represent civil society organisations independent from the government and

C9.R27 Improving the framework for public bodies which are active in the field of one or more of the following quality of law-making effectively areas: social policy; education; labour market; healthcare; environment; fight

and effective involving all Provision in the against climate change; energy; sustainable development; sustainable

234 involvement of Milestone relevant legislative act transport; promoting fundamental rights, equal treatment and nonstakeholders and stakeholders in indicating entry

Q3 2022 discrimination; anti-corruption; and transparency. Members of the monitoring

social partners in the into force committee representing civil society shall be selected through an open,

decision-making implementation of transparent, and non-discriminatory selection process based on objective the Hungarian criteria related to expertise and merit. Each of those members shall have recovery and proven expertise in one or more of the above mentioned areas proven by a resilience plan sufficiently long verifiable and relevant activity in those areas.

The monitoring committee shall meet at least twice per year and receive all relevant information related to the implementation of the measures in the recovery and resilience plan. The monitoring committee may issue recommendations to the National Authority of the recovery and resilience plan to be adopted with a simple majority of its members. The National Authority shall follow-up on those recommendations and report on the progress of this follow-up to the monitoring committee; (3) Establish an obligation to regularly and effectively consult social partners and stakeholders during the implementation of the recovery and resilience plan.

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Entry into force of amendments to the Act CXXXI of 2010 ensuring that for all legislative acts adopted by the Government (i.e. government decrees and ministerial decrees) or tabled for adoption to the Parliament by the Government (i.e. bills) effective public consultation shall be carried out and impact assessment shall be prepared and summaries thereof shall be systematically made publicly available by: (i) establishing a minimum consultation period of eight days (meaning that the draft legislative act shall be made available for public consultation at the same time as it is sent for intra-governmental consultation); (ii) establishing a minimum period of five days following the expiry of the public consultation period to consider the inputs received during the public consultation period, during which the legislative act of the government shall not be adopted by the government, or the draft bill shall not be submitted to the Parliament; (iii) that the share of legislative acts which may fall under the exceptions in

Entry into force of Section 5 of Act CXXXI of 2010 shall be maximum 10% and that it shall be amendments to ensured that the use of these exceptions are duly justified;

C9.R27 Improving the the relevant (iv) that a summary of the preliminary impact assessment shall be made

quality of law-making legislative acts to Provisions in the available publicly together with the draft legislative act in all cases;

and effective enhance the use legislative (v) that the scope of exceptions shall be narrowed down by abolishing Section

235 involvement of Milestone of public amendments Q4 2022 5(5) of Act CXXXI of 2010.

stakeholders and consultations and indicating their Relevant rules of procedures shall also ensure that the scope and content of

social partners in impact entry into force impact assessments shall be in line with the methodology prepared under the

decision-making assessments in the project “ÁROP-1.1.10 - A jogszabály előkészítési folyamat racionalizálása” colaw-making

financed by the European Union;

process Entry into force of amendments to the rules of procedure of the Government

or other relevant legislations shall ensure that:

(vi) the Government Control Office (KEHI) shall annually check compliance with

the public consultation requirements of Act CXXXI of 2010, including the

implementation of points (i) to (v). The findings of the above checks shall be

published annually by 31 January in a report on the website of the Office.

(vii) the Government Control Office shall consistently impose a sufficiently high

fine on the ministry led by the minister responsible for the preparations of

legislation concerned in the event of non-compliance with any of the

provisions of CXXXI of 2010. The reasons for imposing the fine shall be made

publicly available.

Entry into force of amendments to the relevant legislative acts shall ensure

that:

(i) additional resources are dedicated to the Office of the National Assembly to

develop the capacity of the Office to help Members and Committees of the

National Assembly to prepare effective impact assessments and conduct

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effective stakeholder consultations for the bills proposed by them. The Members and Committees of the National Assembly shall have the possibility to request the Office to prepare impact assessments and carry out effective stakeholder consultations on bills or amendments initiated by them. (ii) the Hungarian Central Statistical Office shall provide data to the Office of the National Assembly necessary to carry out the impact assessments. The government shall adopt and start applying a new methodology for the systematic impact assessment of all legislative proposals that shall be based on

Start of (i) a comprehensive assessment of the experience with the methodology C9.R27 Improving the application of a prepared under the project “ÁROP-1.1.10 - A jogszabály előkészítési folyamat quality of law-making new methodology racionalizálása” co-financed by the European Union, identifying the strengths and effective for the Adoption and start and weaknesses of that methodology; (ii) an identification of the best practices 236 involvement of Milestone preparation of of application of a Q4 2023 of international institutions and Member States concerning regulatory impact

stakeholders and impact new methodology assessments; (iii) an outline of a revised impact assessment methodology social partners in assessments of which shall be prepared with the involvement of international organisations decision-making legislative with widely recognised expertise in the field of regulatory impact assessment. proposals All the above documents shall be made publicly available and shall be subject to effective consultation with social partners and non-governmental stakeholders. Strengthening the At least 90 % of all government decrees, ministerial decrees adopted by the effective government and all bills submitted by the government to the Parliament application of between 1 November 2022 and 31 December 2022 were subject to public C9.R27 Improving the rules concerning consultation, and all of the summary impact assessments needed to be quality of law-making obligatory public published in accordance with the provisions of Act CXXXI of 2010 – as amended and effective consultation of in accordance with milestone 235 – were published. All this shall be confirmed

237 involvement of Target legislative acts and % 0 90 Q1 2023 by a final audit report with an unqualified audit opinion by EUTAF. stakeholders and the systematic

social partners in publication of decision-making preliminary impact assessment summaries (1) Strengthening the C9.R27 Improving the effective At least 90% of all government decrees, ministerial decrees adopted by the quality of law-making application of government and all bills submitted by the government to the Parliament from and effective rules concerning 1 January 2023 to 31 December 2023 were subject to public consultation, and

238 involvement of Target obligatory public % 0 90 Q1 2024 all of the summary impact assessments needed to be published in accordance stakeholders and consultation of with the provisions of Act CXXXI of 2010 – as amended in accordance with

social partners in legislative acts and milestone 235 – were published. All this shall be confirmed by a final audit decision-making the systematic report with an unqualified audit opinion by EUTAF. publication of

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preliminary impact assessment summaries (2)

Strengthening the At least 90% of all government decrees, ministerial decrees adopted by the effective government and all bills submitted by the government to the Parliament from application of 1 January 2024 to 31 December 2024 were subject to public consultation, and

C9.R25 Improving the rules concerning all of the summary impact assessments needed to be published in accordance quality of law-making obligatory public with the provisions of Act CXXXI of 2010 – as amended in accordance with and effective consultation of milestone 235 – were prepared in accordance with the methodology

239 involvement of Target legislative acts and % 0 90 Q1 2025 developed in line with milestone 236 and were published. All this shall be stakeholders and the systematic confirmed by a final audit report with an unqualified audit opinion by EUTAF. social partners in publication of

decision-making preliminary impact

assessment summaries (3) Strengthening the At least 90% of all government decrees, ministerial decrees adopted by the effective government and all bills submitted by the government to the Parliament from application of 1 January 2025 to 31 December 2025 were subject to public consultation, and

C9.R27 Improving the rules concerning all of the summary impact assessments needed to be published in accordance quality of law-making obligatory public with the provisions of Act CXXXI of 2010 – as amended in accordance with and effective consultation of milestone 235 – were prepared in accordance with the methodology

240 involvement of Target legislative acts and % 0 90 Q1 2026 developed in line with milestone 236 and were published. All this shall be stakeholders and the systematic confirmed by a final audit report with an unqualified audit opinion by EUTAF. social partners in publication of

decision-making preliminary impact

assessment summaries (4)

C9.R28 Support to A data platform the data-based connecting data Based on a detailed system description prepared under the coordination of the decision-making and bases and a data Ministry of Justice a data platform and a data modelling tool shall be set up to legislative Setting up of a modelling tool are ensure the connection of data bases and developing the capacities for data

241 process with a view set up in line with to increasing Milestone data platform and data modelling the description of Q2 2024 modelling based on these data for the purposes of allowing the better visualisation and explanation of the effects of regulation to the public.

efficiency, system the system and the The milestone shall be considered fulfilled once, following a trial run, the data transparency and data platform, the platform and data modelling tool are fully functional and operational and they reducing risks of system and the are activated (namely, the public administration has started using it). irregularities data platform are

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fully functional and operational and the public administration has started using them

C9.R28 Support to Training courses for the staff of line ministries, government the data-based institutions and representatives of social partners involved in strategic decision-making and Number of planning and legislative preparatory work on data visualisation tools and legislative persons having practices (related to milestone 241) have taken place and at

242 process with a view to increasing Target completed training courses Number 0 200 Q1 2025 least 200 participants having completed the training in full receiving their certificate.

efficiency, on data transparency and visualisation reducing risks of irregularities Three types of new cases with fully operational functionalities shall be

C9.R29 Extension of introduced in the automatic administrative decision-making the automatic Additional system (AKD) allowing their fully automated processing (without human administrative automated types interaction) to reduce the risk of corruption. These case types shall concern the decision-making of cases following areas:

243 system with a view to Target introduced in the Q4 2024 - vehicle administration; increasing efficiency, automatic

Number 0 3 - simplified naturalisation (obtaining citizenship); and

transparency and administrative - land registry.

reducing risks of decision-making The milestone shall be considered fulfilled once, following a trial

irregularities system (AKD) run, the modules for the three case types in the AKD are fully functional and operational and they are activated (namely, the public has started

using them). A central IT equipment management and software licensing system shall be set up to provide a comprehensive register and life-cycle monitoring of IT

C9.R30 Strengthening equipment and a flexible and client-friendly central service to ensure

the national Setting up of a The IT equipment the supply, upgrade, repair, change, scrapping, installation and related services IT equipment manage central IT management and for IT equipment for at least 3 000 public bodies in the field of health, public

244 ment system to Milestone equipment software licensing increase the management and register and system

Q4 2025 education and social care (such as nursery schools, primary schools, secondary

efficiency of software licensing is fully functioning

schools, social homes and childcare facilities).

public services system and operational

The milestone shall be considered fulfilled when following a trial run (with the involvement of end-users and business decision makers) the new system is fully functioning and operational in line with the adopted system design and its functions are activated (i.e. the end-users have started using it).

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An independent international expert review of the domestic anti-tax avoidance

C9.R31 Introduction Independent rules shall be carried out by an independent provider of widely recognised of minimum international expertise on the topic of aggressive tax planning. The study shall analyse the

245 substance Publication of the

state of play of domestic anti-tax avoidance rules and provide concrete

requirements for Milestone

expert review of

the domestic antireview Q3 2023 proposals and recommendations to improve the effectiveness of the tax rules

corporate income tax tax avoidance in relation to shell entities, focusing on minimum substance requirements for

purposes rules corporate income tax purposes and the tax consequences in case of failure to meet the minimum substance requirements. The review, including the

recommendations, shall be published on the Ministry of Finance’s website. Legislation establishing minimum substance requirements for corporate income tax purposes shall enter into force. The legislation shall be prepared based on the findings and recommendations of the independent expert review referred to in milestone 245 and shall mitigate the risks identified in the said review. Prior to the adoption of the legislation by the government, the concept

Entry into force of of minimum substance requirements shall be published on the Ministry of C9.R31 Introduction legislation Finance’s website and the Ministry of Finance shall organise public of minimum establishing consultations (including with stakeholders such as tax practitioners and

246 substance minimum

Provision in the law

requirements for Milestone substance indicating its entry Q4 2023

business chambers) on the introduction of new minimum substance requirements.

corporate income tax requirements for into force

purposes corporate income The adopted legislation shall include at least the following elements: tax purposes i) identifying the scope of companies with large exposure of cross-border passive income (gateway criteria);

• ii) 

  identifying minimum substance requirements (including – but not limited to - bank account and venue); and

• iii) 

  establishing tax consequences in the case of failure to meet the minimum

  substance requirements.

Entry into force of Legislative amendments introducing new transfer pricing reporting obligations Provisions in the shall enter into force. The legislative amendments shall take into account the

C9.R32 Strengthening legislative legislative findings of public consultations organised by the Ministry of Finance. The

247 of transfer pricing Milestone amendments to 2023 adopted legislation shall include detailed requirements for the new transfer regulations strengthen

amendments Q4

transfer pricing indicating their pricing data reporting (such as scope, reportable data, method). The scope of

rules entry into force the legislative provisions shall cover transactions between associated enterprises reaching at least HUF 100 million.

Entry into force of Legislative amendments broadening the non-deductibility rules for outbound

C9.R33 Broadening legislative Provisions in the payments shall enter into force. The adopted legislation shall extend the scope amendments to legislative of non-deductibility rules so as to cover all transactions of outbound royalty

248 the scope of nondeductibility rules for Milestone broaden the nonamendments Q4 2023 and interest payments in jurisdictions that are either listed on the EU list of outbound payments deductibility rules indicating their non-cooperative jurisdictions or considered to be zero-tax or low-tax for outbound entry into force jurisdictions (which include any jurisdiction with a statutory corporate income

payments tax rate below the Hungarian statutory corporate income tax rate). The

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legislation shall identify criteria when a tax consequence would be applied taking into account the business reasons behind the transaction and the tax treatment of the transaction in order to cover double non-taxation cases. It shall also identify appropriate tax consequences to mitigate the targeted risk.

Prior to the adoption of the legislation by the government, the Ministry of Finance shall organise public consultations (including with stakeholders such as tax practitioners and business chambers). An independent evaluation shall be carried out regarding the effectiveness of the overall set of domestic rules addressing shell companies and outbound interest and royalty payments between companies established in Hungary and

Independent companies established in jurisdictions that either form part of the EU list of evaluation of the non-cooperative jurisdictions or that are considered to be zero-tax or low-tax

C9.R33 Broadening effectiveness of jurisdictions. The evaluation shall be conducted by an independent provider of

249 the scope of non Publication of the widely recognised expertise on the topic of aggressive tax planning. The deductibility rules for Milestone the overall set of domestic rules evaluation Q4 2025 evaluation shall assess the Hungarian tax framework holistically, including all

outbound payments related to measures adopted by then. The evaluation shall put forward recommendations aggressive tax for policy action to be undertaken by Hungary, including in the form of planning legislative changes to address the shortcomings identified, particularly in the area of outbound payments of royalties, interest and dividend. The evaluation, including the recommendations, shall be published on the Ministry of Finance’s website.

Entry into force of Legislative amendments to improve the effectiveness of measures to tackle legislative aggressive tax planning shall enter into force. The legislation shall be introduced

C9.R33 Broadening amendments to Provisions in the to address the findings and recommendations of the independent evaluation improve the legislative referred to in milestone 249.

250 the scope of nondeductibility rules for Milestone effectiveness amendments Q2 2026 outbound payments of measures indicating their related to entry into force

aggressive tax planning The new ePayroll (Employment Data Provision Platform) solution shall be developed and legislative changes necessary for its rollout shall enter into force. The legislation shall modify the procedures of employment data

C9.R34 Digital Entry into force of Provision in the provision forms to enable the use of the new services by taxpayers

251 transformation of tax legislation for legislation (employers). compliance Milestone introducing the indicating its entry Q2 2025

procedures ePayroll solution into force Prior to the adoption of the legislation, the authorities shall:

• 1) 

  Approve the initial development proposal on ePayroll by means of a government decision; 2) Establish an inter-ministerial consortium management structure and appoint

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a dedicated government commissioner responsible for the successful implementation of the reform; and 3) Carry out a public consultation on the proposed version of the solution before the IT development phase commences.

C9.R34 Digital The pilot phase of the implementation of the ePayroll solution, with the Multi-phase roll Completion of the voluntary involvement of a minimum of 50 companies (including employers of

252 transformation of tax compliance Milestone out of the ePayroll pilot phase of the Q2 2026 all size categories), shall be completed. The core functionalities of the new procedures system new system system shall be tested, identifying in a cost-efficient manner any potential flaws in due time.

The new eReceipt solution shall be developed and legislative changes necessary for its rollout shall enter into force. The legislation shall modify the

C9.R34 Digital Entry into force of Provision in the procedures of documentation on B2C transactions to enable the use of the

253 transformation of tax legislation for legislation

new services by taxpayers.

compliance Milestone introducing the indicating its entry Q4 2024

procedures eReceipt system into force Prior to the adoption of the legislation, the authorities shall: 1) Approve the initial development proposal for eReceipt by means of a

government decision; and 2) Carry out a public consultation on the proposed solution.

C9.R34 Digital The eReceipt solution shall be implemented and shall be offered as a service to Multi-phase rollinterested clients. The already functioning Online Cash Registers shall be

254 transformation of tax compliance Milestone out of the Launch of the new 2026 permitted to operate in parallel until the expiry of a sunset clause. The

procedures eReceipt system

eReceipt system Q1 eReceipt solution shall reach a penetration equal to 40% of the total B2C

transaction value by 31 March 2026.

Entry into force of The new eVAT solution shall be developed and legislative changes necessary legislation for the for its rollout shall enter into force. The legislation shall simplify VAT

C9.R34 Digital simplification of Provision in the compliance procedures by modifying the procedures of VAT returns to enable

255 transformation of tax VAT compliance legislation

the use of the new services by taxpayers.

compliance Milestone procedures indicating its entry Q4 2024 procedures through the into force Prior to the adoption of the legislation, the authorities shall: introduction of 1) Approve the initial development proposal for eVAT by means of a

the eVAT system government decision; and 2) Carry out a public consultation on the proposed solution.

C9.R34 Digital The new eVAT solution shall be implemented and be offered as a service to Multi-phase roll

256 transformation of tax Launch of the new

interested clients. The new eVAT system shall reach a penetration of at least

compliance Milestone out of the eVAT 2026 40% of all VAT taxpayers using at least one service offered by the system by 31 procedures system

eVAT system Q1 March 2026.

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The temporary tax measures introduced in the context of the economic disruption caused by the COVID-19 and the energy crisis shall be phased out, in line with their existing sunset clauses. Those temporary tax measures include: (1) the extra tax on the banking sector (Paragraph 1 of Government Decree

Provisions in the 197/2022)

C9.R35 Simplifying legislation (2) the special tax on the insurance sector (Paragraph 16 of Government

257 the tax system by

Phasing-out of Decree 197/2022)

reducing the number Milestone temporary tax

indicating the Q4 2023 (3) the special taxes on the energy sector (Paragraphs 2, 3 and 8 of

of taxes measures

expiration of

temporary tax Government Decree 197/2022)

measures (4) the surtax on the retail sector (Paragraphs 20-21 of Government Decree 197/2022)

• (5) 

  the surtax on the telecommunication sector (Paragraph 14 of Government Decree 197/2022) (6) the surtax on the pharmaceutical sector (Paragraph 7 of Government Decree 197/2022). A working group shall be set up to evaluate possibilities of reducing the number of taxes. The working group shall include representatives of the Ministry of Finance, tax authority, commercial chambers (Hungarian Chamber of Commerce and Industry, German-Hungarian Chamber of Industry and Commerce, American Chamber of Commerce in Hungary), representatives of the tax advisors and academic experts. The working group shall prepare a report recommending options for a reduction in the number of taxes. The working group shall evaluate at least the following topics:

• consolidation of local property taxation (building tax, land parcel tax,

communal tax);

C9.R35 Simplifying Report by the • consolidation of the taxation of vehicles (vehicle tax, company car tax,

258 the tax system by working group on Publication of the registration duty, duties on transfer of property); reducing the number Milestone reducing the report Q4 2023 • merging rehabilitation contribution (fixed amount) into employers' tax;

of taxes number of taxes • merging the taxation of gifts/inheritance into the personal income tax; • abolishment of minor taxes with minimal revenue raising capacity

(except for those required by EU law and those serving environmental goals); and

• abolishment/consolidation of sick pay contribution.

The report of the working group shall recommend a reduction by 10% of the number of taxes compared to the number being in effect on 1 January 2023. The reduction shall be achieved by the abolishment of existing taxes or consolidation of two or more of them into a single one. The temporary tax measures set to expire by 31 December 2023 and referred to in milestone 257, as well as the tax on utility pipelines referred to in milestone 262, shall neither be counted as part of the taxes being in effect on 1 January 2023 nor

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contribute to the proposed reduction in the number of taxes. The report of the working group shall be made public.

Entry into force of legislative amendments for reducing the number of taxes, based on the report of the dedicated working group referred to in milestone

C9.R35 Simplifying Entry into force of Provisions in the

• 258. 

  The adopted legislation shall achieve a reduction by 10% in the number of

legislative legislative taxes compared to the number being in effect on 1 January 2023. The

259 the tax system by reducing the number Milestone amendments for amendments Q2 2024 reduction shall be achieved by the abolishment of existing taxes or

of taxes reducing the indicating their

consolidation of two or more of them into a single one. The temporary tax

number of taxes entry into force measures set to expire by 31 December 2023 and referred to in milestone 257, as well as the tax on utility pipelines referred to in milestone 262, shall neither

be counted as part of the taxes being in effect on 1 January 2023 nor contribute to the reduction in the number of taxes. A working group shall be tasked with the preparation of a report on how rules

Report by the on personal income taxation could be simplified and consolidated, with a view

working group for to eliminating inefficient tax expenditures, making tax rule choices easier for the taxpayers and reducing distorted or unwarranted incentives thereby

C9.R35 Simplifying simplification and consolidation making the tax system fairer. The working group shall include representatives

260 the tax system by Publication of the of the Ministry of Finance, tax authority, commercial chambers (Hungarian reducing the number Milestone possibilities of report Q3 2023 Chamber of Commerce and Industry, German-Hungarian Chamber of Industry

of taxes alternative set of rules regarding and Commerce, American Chamber of Commerce in Hungary), representatives

personal income of the tax advisors and academic experts. taxation The working group shall submit its report on reform proposals to the

Government. The report shall be made public. Entry into force of Entry into force of legislative amendments for simplification and consolidation

C9.R35 Simplifying legislative Provisions in the of personal income taxation, based on the report of the dedicated working amendments for legislative group referred to in milestone 260.

261 the tax system by reducing the number Milestone the simplification amendments Q4 2023 of taxes and consolidation indicating their of personal entry into force

income taxation

Entry into force of An Act on the simplification of public utility taxation shall enter into force to

C9.R36 Reforming the the Act repealing Provisions in the either i) repeal Act number CLXVIII of 2012 on the tax on utility pipelines, or ii) legislative amend Act number CLXVIII of 2012 on the tax on utility pipelines to introduce a

262 tax on public utility pipelines Milestone or amending Act number CLXVIII of amendments Q4 2024 tax rule allowing the owners of utilities to discharge or credit the itemised tax

2012 on the tax on indicating their payable on their lines (water and sewage, power lines, natural gas pipes and

utility pipelines entry into force telecommunication cables) located in public areas for the amount they invest in the maintenance or upgrade of those lines.

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The National Tax Collection Authority (NTCA) shall prepare a report on the C9.R37 components and the results of its “plain communication programme”. The Mainstreaming the Improvement of

use of communication Report is submitted

report shall promote the mainstreaming of the client-oriented and easy-toto

the Government understand communication approaches in other client-facing organisations of

263 communication campaigns and Milestone practices of public administration and new “step-by Q3 2024 the public administration through actual experiences gathered and methods pioneered by the NTCA. The report shall be submitted to the government and

behavioural insights bodies towards step” guidance are made public. Based on the report, new “step-by-step” guidance on specific

by the tax their clients launched topics, including assisting private entrepreneurs’ choice among optional tax

administration regimes, applications for payment relief, taxation and stamp duties of real estate transactions shall be published on the NTCA’s digital platforms.

A report shall be prepared by the NTCA and submitted to the Government on how behavioural insights (BI) approaches can improve the conduct of public

C9.R37 Report on administration functions, based on the evidence gathered in the BI pilots of the Mainstreaming the applications of NTCA and the experience gathered through their mainstreaming in regular use of Applications of behavioural procedures.

264 communication campaigns and Milestone behavioural insights in NTCA insights in NTCA procedures and Q4 2024 At least three new RCT-based BI pilot projects shall be carried out in

behavioural insights procedures publication of the cooperation between the NTCA and the Ministry of Finance. Topics shall

by the tax results of BI pilot include at least fine-tuning messaging, providing tools for voluntary

administration projects compliance, improving mentoring services, finding the right balance between

behavioural interventions and enforcement in fighting tax evasion. The results

of these projects shall be evaluated and published.

A concept paper prepared by the NTCA shall provide a detailed plan of how the

multiple IT platforms of the tax administration are to be consolidated into a

C9.R37 single-channel platform. The consolidation shall make a fully digital channel

Mainstreaming the Concept paper on available to taxpayers for use in their interactions with the tax authority. The use of general overhaul concept paper shall include a proposed timeline of the necessary development

265 communication of NTCA IT projects, including an estimate on the size and temporal distribution of

campaigns and Milestone platforms and

Publication of the resources necessary. It shall also provide a plan for the integration of all the

behavioural insights their integration

concept paper Q2 2024

on-going or planned IT developments of the NTCA on the platform, building on

by the tax into a singlethe communication innovations and BI approaches when designing services administration channel service and User Interface/User Experience design (UI/UX). This concept paper shall

serve as a basis for IT-development planning for the NTCA. The concept paper shall be published on the NTCA website.

C9.R37 Following the consolidation of separate platforms (such as ePIT, Online Form

Mainstreaming the Availability of new New functionalities Application site) and the provision of services not yet available through digital use of functionalities on are operational and channels (such as ePayroll connection, stamp duty, taxes related to vehicles), at

266 communication Milestone the NTCA available on the Q3 2025 least three new functionalities (not provided before 30 September 2022) shall campaigns and integrated integrated behavioural insights platforms platforms and the

become operational and available to the users on the integrated platform and

by the tax mobile application

the mobile application.

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Quantitative indicators Indicative timeline

Sequential Related Measure Milestone/ Qualitative (for targets) for completion

Number (Reform or Name indicators Description of each milestone and target Investment) Target (for milestones) Unit of

measure Baseline Goal Quarter Year

administration

The authorities shall designate the Ministry of Finance as the institution responsible for coordinating and carrying out spending reviews. The Ministry of Finance shall set up a unit in charge of coordination of spending reviews (‘coordination unit’). The coordination unit shall be supported in its work by a taskforce that shall include external experts (such as renowned specialists in the areas under review, academics, think-tankers) and representatives of relevant line ministries. The coordination unit shall conduct regular consultations and work closely with the members of the task force in drafting the legal and institutional rules for the conduct of spending reviews and subsequently in designing, implementing and following-up on the spending reviews. The Government shall issue a decision on the launch of a regular spending

Entry into force of review process, which shall be published in the Hungarian Official Gazette. an amendment of The decision (and/or accompanying documents) shall specify, in particular, the the organisational following: and operational i) the detailed objectives and targets;

C9.R38 Improving the Establishment of rules of the ii) methodology for the review; efficiency of public the legal and Ministry of Finance, iii) a medium-term work plan, including expenditure areas to be subjected

267 expenditure by Milestone institutional and entry into Q2 2023 to reviews and the deadlines for conducting the reviews; carrying out spending framework for force of a iv) the public entities concerned (if those entities are part of the central

reviews conducting annual government government); and spending reviews decision on the v) the time periods to be covered by the analysis.

methodology and

medium-term work The decision shall also specify the roles and responsibilities of the actors plan for spending involved, including at least the following elements:

reviews • Line ministries shall provide full access to data and information to the

coordination unit in the Ministry of Finance.

• The Ministry of Finance shall coordinate and carry out the spending

reviews and, after having consulted the taskforce, set out recommendations on possible follow-up actions.

• The Ministry of Finance shall present to the government regular

(quarterly) reports on the progress of spending reviews.

• In line with the principle of “comply or explain”, the government shall

present all the findings of the reviews to the Parliament and, in case it does not wish to follow up on some of the corresponding recommendations, explain why. The results of the spending reviews shall be ready by the predefined deadlines to feed into the preparation of the annual budgets and medium-term budgetary planning.

ECOFIN 1A EN

Quantitative indicators Indicative timeline

Sequential Related Measure Qualitative (for targets) for completion

Number (Reform or

Milestone/ indicators Description of each milestone and target

Investment) Target

Name

(for milestones) Unit of

measure Baseline Goal Quarter Year

• To achieve an effective follow-up, the Ministry of Finance, line ministries

and other public institutions who were given recommendations shall be given a deadline to reply to these recommendations in line with the principle of “comply or explain”.

• The coordination unit in the Ministry of Finance shall be tasked to

monitor the follow-up and prepare an annual report on the response to the recommendations.

The methodology of the reviews shall take into account OECD recommendations and similar practices in EU Member States. The objective of the spending reviews shall be to examine in detail the adequacy of public expenditure in the areas under review, in particular with regard to its positive social impact, its contribution to economic growth and its impact on the budgetary balance and medium-term sustainability of public expenditure. The methodology shall define concrete savings and efficiency targets for specific expenditure areas with an adequate level of ambition.

The areas for the review shall be selected based on criteria such as low-versushigh priority spending and efficiency. When selecting the areas for review, priority shall be given to large and rapidly increasing spending items. The 2023 and 2024 reviews shall cover at least 10% of the general government expenditure each year. The expenditure areas for the review shall include but not be limited to: i) Healthcare; ii) Education; iii) Public investment; and iv) Family and housing related support (including related tax advantages).

The Ministry of Finance shall coordinate and carry out spending reviews of the expenditure of at least two areas designated in the medium-term work plan, of which at least two areas from the list specified in milestone 267, in consultation with relevant professional organisations independent of the government. The

C9.R38 Improving the Publication of two reports on the coordination unit shall work closely with the members of the task force referred

efficiency of public Reports on the outcome of the to in milestone 267 on the design, implementation and follow-up of spending

268 expenditure by Milestone outcomes of the first two spending Q2 2024 reviews.

carrying out spending first and second spending reviews reviews on the The spending reviews shall identify measures and policy options for achieving

reviews Government’s

potential savings (expressed in terms of percentage of the scope of expenditure

website reviewed) and efficiency gains in the relevant expenditure areas. The proposed measures and options shall be available no later than Q4 2023.

Two dedicated reports shall present the concrete outcomes of the reviews in terms of potential savings (expressed in terms of % of the scope of expenditure reviewed) and efficiency gains, as reflected notably in the budgetary planning

ECOFIN 1A EN

Quantitative indicators Indicative timeline

Sequential Related Measure Qualitative (for targets) for completion

Number (Reform or

Milestone/ indicators Description of each milestone and target

Investment) Target

Name

(for milestones) Unit of

measure Baseline Goal Quarter Year

(i.e. in annual budgets and medium-term budgetary plans). The reports shall be discussed by the government and shall be published on the government’s website.

The Ministry of Finance shall coordinate and carry out spending reviews of the expenditure of at least two areas designated in the medium-term work plan, of which at least two areas from the list specified in milestone 267, in consultation with relevant professional organisations independent of the Government. The

Publication of two coordination unit shall work closely with the members of the task force referred to in milestone 267 on the design, implementation and follow-up of spending

C9.R38 Improving the reports on the reviews. efficiency of public Reports on the outcome of the The spending reviews shall identify measures and policy options for achieving

269 expenditure by Milestone outcomes of the additional two Q2 2025 potential savings (expressed in terms of % of the scope of expenditure carrying out spending third and fourth spending reviews reviews spending reviews on the

reviewed) and efficiency gains in the relevant expenditure areas. The proposed

Government’s measures and options shall be available no later than Q4 2024.

website Two dedicated reports shall present the concrete outcomes of the reviews in terms of potential savings (expressed in terms of % of the scope of expenditure

reviewed) and efficiency gains, as reflected notably in the budgetary planning (i.e. in annual budgets and medium-term budgetary plans). The reports shall be discussed by the government and shall be published on the government’s website.

C9.R38 Improving the Publication of the

efficiency of public Concluding report concluding report The concluding report shall demonstrate that at least 20% of general

270 expenditure by Milestone on the outcome of on the Q4 2025 government expenditure was successfully covered by the four spending reviews carrying out spending the spending reviews review exercise

Government’s conducted during 2023-2025. website

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• 2. 

  Estimated total cost of the recovery and resilience plan

The estimated total cost of the recovery and resilience plan of Hungary is HUF 2 299 592 927 602, which equals EUR 5 824 260 891 on the basis of the average EUR HUF ECB reference rate in the period from 1 April 2022 to 30 September 2022.

SECTION 2: FINANCIAL SUPPORT

• 1. 

  Financial contribution

The instalments referred to in Article 2(2) shall be organised in the following manner:

1.1. First Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C1.R1 Development of competitive

1 public education using 21st century Target Number of digital notebooks delivered for

technology pupil or teacher use

C1.R1 Development of competitive Development of a means-testing strategy

2 public education using 21st century Milestone for the allocation of digital notebooks to

technology pupils

Launch of a call for projects for energy

C2.I2 Modernisation of infrastructure efficiency refurbishment, construction of

35 and digitalisation in higher education Milestone new buildings, new digital equipment and

institutions capacity development activities in higher

education institutions

42 C2.I4 Vocational education and training

Selection of at least 16 vocational education

infrastructure for the 21st century Milestone and training centres to participate in a development programme

48 C2.I6 Establishment of national Setting up of additional national research and development laboratories Target laboratories in five thematic research areas

C3.R1 Creating framework conditions Transparent selection of the organisations

50 for an effective integrated support to the Milestone that shall implement the various elements of

most disadvantaged settlements the Catching-up Settlements Programme

C3.I1 Construction and renovation of Adoption of an intervention plan based on

52 social housing, improvement of housing Milestone housing diagnoses for the settlements

conditions involved

C4.I1 Construction of main water

70 replacement systems, development of Milestone Design of the project “Rábaköz-Tóköz

new networks and systems water supply development”

89 C5.I2 Rail network congestion

Signature of a contract for the

switching on TEN-T corridor Milestone refurbishment of the Békéscsaba-Lőkösháza railway line section

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C6.R3 Improving the permit granting

105 procedures for renewable energy Milestone Removal of feed-in limitations for

projects households PV

C6.R4 Improving transparency,

106 predictability and availability of the grid Milestone Increasing predictability of the grid

connection connection procedures

C6.R4 Improving transparency,

108 predictability and availability of the grid Milestone Information sharing forums

connection

C6.I1 Classic and smart grid Signature of grant agreements with all

113 development of transmission system operator and distribution system Milestone authorised on the implementation and support conditions of the development of

operators transmission and distribution grids

Launch of the call for proposals for projects

118 C6.I2 Support for the use of residential solar panels and heating modernisation Milestone regarding the use of residential solar panels

and heating modernisation

Launch of the call for proposals on the

C6.I3 Installation of energy storage implementation and support conditions of

122 facilities for distribution- and Milestone storage facilities - as fully integrated

transmission system operators network component - to be installed by the

TSO/DSOs

Launch of the call for proposals for the

126 C6.I4 Installation of grid energy storage implementation and support conditions of facilities for energy market participants Milestone storage facilities to be installed for market

participants

Launch of a call for priority projects

130 C6.I5 Dissemination of smart metering Milestone addressed to DSOs for the purchase and

installation of smart meters

139 C8.R1 Eradication of gratuity payments in the healthcare sector Milestone Entry into force of the Act on Healthcare Service Relationship

Entry into force of the Government Decree

141 C8.I1 Developing the conditions for healthcare in the 21st century Milestone on the tasks of the National Directorate

General for Hospitals

Launch of the dispatching service for the

154 C8.I3 Remote health monitoring programme for the elderly Milestone remote health monitoring programme for

the elderly

Entry into force

156 C8.I4 Development of primary health care Milestone of the Government Decree on Praxis

Communities

C9.R1 Establishment of an Integrity

Authority to reinforce the prevention,

detection and correction of fraud,

160 conflicts of interest and corruption as Milestone Setting up of an Integrity Authority

well as other illegalities and

irregularities concerning the

implementation of Union support

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R2 Establishment of an Anti Corruption Task Force to monitor and

166 review the measures taken in Hungary Milestone Establishment of an Anti-corruption Task

to prevent, detect, prosecute und Force

sanction corruption

C9.R3 Introduction of a specific

procedure in the case of special crimes Introduction of a specific procedure in the

169 related to the exercise of public Milestone case of special crimes related to the exercise

authority or the management of public of public authority or the management of

property (‘judicial review’) public property

Entry into force of legislative amendments

171 C9.R4 Strengthening rules related to extending the personal and material scope asset declarations Milestone of asset declarations, while ensuring

frequent disclosure

Entry into force of an act ensuring effective

C9.R5 Ensuring the transparency of the oversight on how public interest asset

174 use of public resources by public Milestone management foundations performing public

interest asset management foundations interest activity and legal persons established or maintained by them make use

of Union support

175 C9.R6 Enhancing the transparency of Entry into force of a legislative act ensuring public spending Milestone enhanced transparency of public spending

C9.R9 Awareness-raising for the Launch of an awareness-raising campaign

182 eradication of gratuity payments in the Milestone on the acceptability of gratuity payments in

healthcare sector healthcare

Setting up of a monitoring and reporting tool (“single-bid reporting tool”) to monitor and report on public procurements closed

195 C9.R10 Reducing the share of singlebid public procurement procedures Milestone with single-bids financed from Union

support or from national resources in accordance with the Single Market Scoreboard methodology

C9.R11 Development of the Electronic The EPS functions allowing the structured

197 Public Procurement System (EPS) to Milestone search and bulk export of contract award

increase transparency notice data are available to the public

C9.R11 Development of the Electronic The EPS functions allowing the structured

198 Public Procurement System (EPS) to Milestone search and bulk export of all data related to

increase transparency subcontractors is available to the public

200 C9.R12 Performance measurement framework for public procurements Milestone Setting up of a performance measurement framework of public procurements

Entry into operation of a performance

201 C9.R12 Performance measurement framework for public procurements Milestone measurement framework of public

procurements

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R15 Strengthening the role and

powers of the National Judicial Council Entry into force of legislative amendments

213 to counterbalance the powers of the Milestone to strengthen the role of the National

President of the National Office for the Judicial Council while safeguarding its

Judiciary independence

C9.R16 Strengthening judicial Entry into force of amendments to

214 independence of the Supreme Court Milestone strengthen judicial independence of the

(Kúria) Supreme Court

C9.R17 Removing obstacles to Entry into force of legislative amendments

215 references for preliminary rulings to the Milestone to remove obstacles to references for

Court of Justice of the European Union preliminary rulings to the Court of Justice of the European Union

C9.R18 Reform regarding the review of Entry into force of legislative amendments

216 final judgments by the Constitutional Milestone to remove the possibility for public

Court authorities to challenge final decisions before the Constitutional Court

C9.R19 Reinforced legal provisions setting out implementation, monitoring, Legal mandate for the implementation,

217 and audit and control arrangements to Milestone audit and control of the recovery and

guarantee the sound use of Union resilience plan

support

C9.R19 Reinforced legal provisions Amendment of the legal provisions relating setting out implementation, monitoring, to the implementation, monitoring, control

218 and audit and control arrangements to Milestone and audit of the European Structural and

guarantee the sound use of Union Investment Funds and the funds under

support Regulation (EU) 2021/1060 in Hungary

C9.R19 Reinforced legal provisions Adoption and start of application of setting out implementation, monitoring, guidelines to ensure the effective the

219 and audit and control arrangements to Milestone prevention, detection and correction of

guarantee the sound use of Union conflict of interest for the staff of all bodies

support involved in the implementation, control and audit of Union support in Hungary

Ensuring effective prevention, detection and

C9.R20 An effective anti-fraud and correction of fraud and corruption in the

220 anti-corruption strategy for the implementation, audit and control of Milestone implementation of Union support by drawing up and implementing an effective

Union support anti-fraud and anti-corruption strategy for

Union support

Ensuring effective prevention, detection and

C9.R20 An effective anti-fraud and correction of fraud and corruption in the

221 anti-corruption strategy for the implementation, audit and control of Milestone implementation of Union support by drawing up and implementing an effective

Union support action plan related to the anti-fraud and

anti-corruption strategy for Union support

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Ensuring effective prevention, detection and correction of fraud and corruption in the

222 C9.R21 Full and effective use of the implementation of Union support through Arachne system for all Union support Milestone appropriate arrangements ensuring the

effective use of the Arachne risk-scoring tool

Ensuring effective prevention, detection and correction of fraud and corruption in the

223 C9.R21 Full and effective use of the implementation of Union support by Arachne system for all Union support Milestone confirming the adequacy of the procedures

on the systematic and effective use of the Arachne risk-scoring tool

C9.R22 Establishment of a Directorate Ensuring effective prevention, detection and

of Internal Audit and Integrity to correction of fraud and corruption in the

224 reinforce the control of conflicts of Milestone implementation of Union support through

interest when implementing Union the setting up and full functioning of a new

support Directorate of Internal Audit and Integrity (DIAI)

Ensuring effective prevention, detection and

225 C9.R23 Ensuring the capacity for the correction of fraud and corruption in the EUTAF to effectively carry out its tasks Milestone implementation of Union support through

appropriate capacity for EUTAF

C9.R24 Strengthening cooperation with Designation of a national authority in charge with assisting OLAF with its on-the

226 OLAF to reinforce the detection of fraud related to the implementation of Milestone spot checks in Hungary and the introduction

Union support of the possibility to levy financial sanctions on non-cooperating economic actors

C9.R25 Effective implementation,

227 control and audit of the Recovery and

Monitoring system for the implementation

Resilience Plan and the protection of Milestone of the Hungarian recovery and resilience the financial interests of the Union plan

C9.R25 Effective implementation, Ensuring effective audit of the

228 control and audit of the Recovery and Resilience Plan and the protection of Milestone implementation of the Hungarian recovery

the financial interests of the Union and resilience plan

229 C9.R26 Improving transparency and

Entry into force of a legislative act ensuring

access to public information Milestone legal predictability in access to public information cases in court

Entry into force of legislative amendments

230 C9.R26 Improving transparency and access to public information Milestone ensuring increased transparency of public

information

231 C9.R26 Improving transparency and Report of the Government Control access to public information Milestone Office on access to public information (1)

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R27 Improving the quality of law Entry into force of a legislative act laying down the framework for effectively

234 making and effective involvement of stakeholders and social partners in Milestone involving all relevant stakeholders in the

decision-making implementation of the Hungarian recovery and resilience plan

C9.R27 Improving the quality of law Entry into force of amendments to the

235 making and effective involvement of stakeholders and social partners in Milestone relevant legislative acts to enhance the use of public consultations and impact

decision-making assessments in the law-making process

Instalment amount EUR 813 560 000

1.2 Second Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Mapping of the school network with a view

7 C1.I1 Improving access to quality education in lower secondary schools Milestone to selecting schools for integration of small lower secondary classes into larger schools

in the neighbouring settlements

10 C1.I2 Supporting the education of students with special education needs Milestone Mapping of needs for the education of pupils with special education needs

Entry into force of legislation providing for

14 C1.R2 Reduction of segregation risk in schools Milestone the reduction of State support for primary and lower secondary schools with a low

proportion of disadvantaged students

Entry into force of legislation to increase

16 C1.R3 Improving the attractiveness of the teaching profession Milestone wages of teachers in the public education system up to at least 80% of the average

wage of tertiary graduates

Average wage of teachers in the public

17 C1.R3 Improving the attractiveness of the teaching profession Target education system in 2023 relative to the

average wage of tertiary graduates

C2.I1 Institutional innovation and Launch of a call for the selection of the

30 strengthened activities in higher Milestone universities performing e-curriculum

education development

39 C2.I3 Development of digital curricula for vocational education and training Milestone Launch of a call for projects for developing digital curricula

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C3.R1 Creating framework conditions Establishment of a monitoring committee

51 for an effective integrated support to Milestone for the support for the most disadvantaged

the most disadvantaged settlements settlements

Amendment of Act CXIII/2019 on

63 C4.R1 Awareness-raising Milestone irrigation farming and of Government

Decree No 302/2020

C4.I1 Construction of main water Design of the project "Improving and

68 replacement systems, development of Milestone restoring the water deficit ecological status

new networks and systems of Homokhátság (Danube-Tisza) – Phase I”

Design of the project “Improving the

75 C4.I3 Nature protection Milestone security of ecological water supply in the

Hanság Natura 2000 site”

91 C5.I3 Development of zero-emission

Signature of grant agreements for the

bus transport Milestone purchase of new electric buses and installation of charging points

Signature of a contract for the

94 C5.I4 Deployment of central traffic management on TEN-T railways Milestone establishment of a central traffic

management system

C5.R1 Deployment of a single national tariff, ticketing and passenger Entry into force of legislation setting up the

96 information system for bus and rail by Milestone institutional framework, procedures and

the National Public Transport processes

Authority

C5.R1 Deployment of a single national tariff, ticketing and passenger

97 information system for bus and rail by Milestone Database server infrastructure and

the National Public Transport development of an information platform

Authority

Entry into force of legislative amendments

99 C6.R1 Transformation of electricity regulation Milestone to the Government Decree 273/2007.

(X.19.)

100 C6.R2 Encouraging the development of Amending legislation in favour of utilising onshore wind energy Milestone wind energy

101 C6.R2 Encouraging the development of onshore wind energy Milestone Creation of ‘go to areas’ for wind energy

C6.R3 Improving the permit granting

102 procedures for renewable energy Milestone Integrated procedure for RES permitting

projects

C6.R3 Improving the permit granting

103 procedures for renewable energy Milestone One-stop-shop for RES permitting

projects

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C6.R3 Improving the permit granting

104 procedures for renewable energy Milestone Simple grid connection of small PV plants

projects

C6.R4 Improving transparency,

107 predictability and availability of the Milestone Publication of information on grid

grid connection connection requests and capacities

Strengthening energy efficiency

112 C6.R5 Strengthening energy efficiency requirements Milestone requirements for building renovation

support schemes

Conclusion of all grant agreements on the

C6.I3 Installation of energy storage implementation and support conditions of

123 facilities for distribution- and Milestone storage facilities - as fully integrated

transmission system operators network component - to be installed by the

TSO/DSOs

C6.I4 Installation of grid energy Conclusion of all grant agreements on the

127 storage facilities for energy market Milestone implementation and support conditions of

participants storage facilities to be installed for market participants

131 C6.I5 Dissemination of smart metering Milestone Conclusion of all grant agreements on the purchase and installation of smart meters

Adoption of the National Circular Economy

135 C7.R1 Domestic regulation of the transition to a circular economy Milestone Strategy and Action Plan, and the National

Waste Management Plan

Completing a mapping process for creating

142 C8.I1 Developing the conditions for healthcare in the 21st century Milestone county hospital system with integrated

patient pathways

C9.R1 Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud,

161 conflicts of interest and corruption as Milestone Report on the Integrity Risk Assessment

well as other illegalities and Exercise

irregularities concerning the implementation of Union support

C9.R1 Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud, Start of application of the powers and

162 conflicts of interest and corruption as Milestone competences on the verification of asset

well as other illegalities and declarations by the Integrity Authority

irregularities concerning the

implementation of Union support

C9.R1 Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud,

163 conflicts of interest and corruption as Milestone The annual Integrity Report for the year

well as other illegalities and 2022 is made publicly available

irregularities concerning the implementation of Union support

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R2 Establishment of an Anti Corruption Task Force to monitor and The annual analysis of the Anti-corruption

167 review the measures taken in Hungary Milestone Task Force for the year 2022 is publicly

to prevent, detect, prosecute und available

sanction corruption

 C9.R2 Establishment of an Anti Corruption Task Force to monitor and

168 review the measures taken in Hungary Milestone The Government examines the first report

to prevent, detect, prosecute und of the Task Force

sanction corruption

Setting up of a new system for the

172 C9.R4 Strengthening rules related to electronic submission of asset declarations asset declarations Milestone in digital format and a public database for

asset declarations

The central register set up under the

176 C9.R6 Enhancing the transparency of remedial measures in the conditionality public spending Milestone procedure is fully operational and the full

set of information required is available in it

Strengthening the anti-corruption

C9.R7 Development and framework in Hungary by implementing

177 implementation of a National Anti Milestone concrete actions under the National Anticorruption

strategy and action plan Corruption Strategy and a related Action

plan covering the period 2020-2022

C9.R7 Development and Strengthening the anti-corruption

178 implementation of a National Anti Milestone framework in Hungary by putting in place a

corruption strategy and action plan new National Anti-Corruption Strategy and a related Action plan

The share of tender procedures with single

185 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from Union

support shall not exceed 15 %

The share of tender procedures with single

186 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from

national resources shall not exceed 32%

196 C9.R10 Reducing the share of singlebid public procurement procedures Milestone First report based on the “single-bid reporting tool” is made available

C9.R11 Development of the Electronic The EPS functions allowing the structured

199 Public Procurement System (EPS) to Milestone search and bulk export of contract award

increase transparency notice data from 1 January 2014 are available to the public

First annual analysis carried out under the

202 C9.R12 Performance measurement framework for public procurements Milestone performance measurement framework of

public procurements

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R13 Action plan for increasing the

203 level of competition in public Milestone Adoption of an action plan to increase the

procurement level of competition in public procurements

C9.R14 Training scheme, and support

scheme, on procurement for micro-, Launch of a training scheme for facilitating

205 small and medium-sized enterprises to Milestone the participation of micro-, small and

facilitate their participation in public medium-sized enterprises in public

procurement procedures procurement procedures

C9.R14 Training scheme, and support

scheme, on procurement for micro-, Setting up a support scheme for

209 small and medium-sized enterprises to Milestone compensating the costs associated with

facilitate their participation in public participating in public procurements of

procurement procedures micro-, small and medium-sized enterprises

C9.R27 Improving the quality of law Strengthening the effective application of

237 making and effective involvement of

rules concerning obligatory public

stakeholders and social partners in Target consultation of legislative acts and the

decision-making systematic publication of preliminary impact assessment summaries (1)

C9.R38 Improving the efficiency of Establishment of the legal and institutional

267 public expenditure by carrying out Milestone framework for conducting annual spending

spending reviews reviews

Instalment amount EUR 813 560 000

1.3 Third Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C1.R1 Development of competitive Share of teachers using Information and

3 public education using 21st century Target Communication Technologies in at least

technology 40% of their classes

Implementation of pilot institutional

8 C1.I1 Improving access to quality education in lower secondary schools Target reorganisations for the integration of small lower secondary classes into larger schools

in the neighbouring settlements

Independent international expert report on

26 C1.R4 Improving the sustainability of policy options to address long-term the pension system Milestone sustainability challenges of the Hungarian

pension system

29 C2.R1 Modernisation of higher education courses Target Number of modernised higher education study fields

Award of the public contract(s) for the

46 C2.I5 Development of the Central Examination Centre Milestone renovation and development of the Central

Examination Centre

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Installation of renewable energy production

57 C3.I2 Production and use of renewable energy in disadvantaged municipalities Target capacity in or for the benefit of

disadvantaged municipalities

C3.I3 Promoting employment and

59 skills development based on local Target Participation in labour socialisation

specificities programmes

Pedagogical development of public

61 C3.I4 Community-oriented pedagogy Target education and vocational training

institutions in the selected settlements

78 C4.R2 Accelerating climate adaptation measures in water management Milestone Report of the taskforce on sustainable water management

Signature of works contracts for the

80 C5.I1 Capacity building of suburban rail network Milestone renewal and extension of H5, H6 and H7

lines

87 C5.I2 Rail network congestion

Signature of a contract for the

switching on TEN-T corridor Milestone refurbishment of the railway line (Almásfüzitő-Komárom)

C6.I1 Classic and smart grid Capacity increase of power plants using

114 development of transmission system renewable energy sources that may be operator and distribution system Target integrated to the power grid as a result of

operators the improved grid (cumulated, MW)

Entry into force of the legislative acts

136 C7.R1 Domestic regulation of the transition to a circular economy Milestone necessary to operationalise waste

management practice

C7.I1 Strengthening a smart, Award of contracts for the construction of a chemical recycling and green hydrogen

137 innovative and sustainable waste management industry and secondary Milestone production plant (for chemical recycling of

raw materials market at least 40000 tonnes of plastic and at least 750 tonnes of green hydrogen)

Publication of independent study providing

140 C8.R1 Eradication of gratuity evidence on the impact of the implemented payments in the healthcare sector Milestone healthcare reforms on the practice of

gratuity payment

C9.R1 Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud, The Government examines the first annual

164 conflicts of interest and corruption as Milestone Integrity Report of the Integrity Authority

well as other illegalities and and provides its responses in writing

irregularities concerning the

implementation of Union support

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R1 Establishment of an Integrity Authority to reinforce the prevention, detection and correction of fraud,

165 conflicts of interest and corruption as Milestone Review of the asset declaration system by

well as other illegalities and the Integrity Authority

irregularities concerning the implementation of Union support

C9.R3 Introduction of a specific

procedure in the case of special crimes Review of the specific procedure in the

170 related to the exercise of public Milestone case of special crimes related to the

authority or the management of public exercise of public authority or the

property (‘judicial review’) management of public property

Introduction of effective administrative and

173 C9.R4 Strengthening rules related to asset declarations Milestone criminal sanctions concerning the serious

violations of asset declaration obligations

C9.R9 Awareness-raising for the Interim assessment of the first results of the

183 eradication of gratuity payments in the Milestone awareness-raising campaign on the

healthcare sector acceptability of gratuity payments in healthcare

C9.R27 Improving the quality of law Start of application of a new methodology

236 making and effective involvement of stakeholders and social partners in Milestone for the preparation of impact assessments of

decision-making legislative proposals

C9.R31 Introduction of minimum

245 substance requirements for corporate Milestone Independent international expert review of

income tax purposes the domestic anti-tax avoidance rules

C9.R31 Introduction of minimum Entry into force of legislation establishing

246 substance requirements for corporate Milestone minimum substance requirements for

income tax purposes corporate income tax purposes

247 C9.R32 Strengthening of transfer pricing regulations Milestone Entry into force of legislative amendments to strengthen transfer pricing rules

C9.R33 Broadening the scope of non Entry into force of legislative amendments

248 deductibility rules for outbound Milestone to broaden the non-deductibility rules for

payments outbound payments

257 C9.R35 Simplifying the tax system by reducing the number of taxes Milestone Phasing-out of temporary tax measures

258 C9.R35 Simplifying the tax system by Report by the working group on reducing reducing the number of taxes Milestone the number of taxes

Report by the working group for

260 C9.R35 Simplifying the tax system by simplification and consolidation reducing the number of taxes Milestone possibilities of alternative set of rules

regarding personal income taxation

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Entry into force of legislative amendments

261 C9.R35 Simplifying the tax system by reducing the number of taxes Milestone for the simplification and consolidation of

personal income taxation

Instalment amount EUR 639 230 000

1.4 Fourth Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Average wage of teachers in the public

18 C1.R3 Improving the attractiveness of the teaching profession Target education system in 2024 relative to the

average wage of tertiary graduates

27 C1.R4 Improving the sustainability of Preparation of a policy proposal for the pension system Milestone amending the pension system

143 C8.I1 Developing the conditions for Number of county-level hospital networks healthcare in the 21st century Target with integrated patient pathways

152 C8.I2 Supporting the digital transformation of health Milestone Launch of a central healthcare mobile application (myEESZT)

C9.R8 Upgrading the cooperation Setting up of a new IT system for the

180 systems of the prosecution service to Milestone handling of sensitive documents of the

tackle corruption practices. prosecution service

The share of tender procedures with single

187 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from Union

support shall not exceed 15%

The share of tender procedures with single

188 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from national

resources shall not exceed 24%

C9.R13 Action plan for increasing the Revision of the action plan to increase the

204 level of competition in public Milestone level of competition in public procurements

procurement following its first annual review

C9.R14 Training scheme, and support scheme, on procurement for micro-, Number of micro-, small and medium-sized

206 small and medium-sized enterprises to Target enterprises having received training on public

facilitate their participation in public procurement practices

procurement procedures

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

232 C9.R26 Improving transparency and Report of the Government Control access to public information Milestone Office on access to public information (2)

C9.R27 Improving the quality of law Strengthening the effective application of rules concerning obligatory public

238 making and effective involvement of stakeholders and social partners in Target consultation of legislative acts and the

decision-making systematic publication of preliminary impact assessment summaries (2)

C9.R28 Support to the data-based decision-making and legislative

241 process with a view to increasing Milestone Setting up of a data platform and data

efficiency, transparency and reducing modelling system

risks of irregularities

259 C9.R35 Simplifying the tax system by Entry into force of legislative amendments reducing the number of taxes Milestone for reducing the number of taxes

C9.R37 Mainstreaming the use of

265 communication campaigns and

Concept paper on general overhaul of NTCA

behavioural insights by the tax Milestone IT platforms and their integration into a administration single-channel service

C9.R38 Improving the efficiency of

268 public expenditure by carrying out Milestone Reports on the outcomes of the first and

spending reviews second spending reviews

Instalment amount EUR 464 890 000

1.5 Fifth Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C1.R1 Development of competitive Number of school education institutions

4 public education using 21st century Target equipped with modern display tools and

technology tools that develop student creativity and problem-solving skills

24 C1.I4 Creation of new crèche places Target Number of children enrolled in newly created crèche places

C2.I1 Institutional innovation and

31 strengthened activities in higher Target Number of courses offering micro

education credentials with digital content

C3.I1 Construction and renovation of

53 social housing, improvement of Target Refurbishment of dwellings

housing conditions

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C3.I1 Construction and renovation of

55 social housing, improvement of Target Construction of new social housing

housing conditions

64 C4.R1 Awareness-raising Target Establishment of sustainable water management communities

72 C4.I2 Establishment of a monitoring system Milestone Comprehensive monitoring system at local level

C5.R1 Deployment of a single national tariff, ticketing and passenger

98 information system for bus and rail by Milestone Introduction of an OpenData portal and of a

the National Public Transport real-time passenger information system

Authority

C6.R4 Improving transparency,

110 predictability and availability of the Target Grid connection authorisation for

grid connection renewable power plants capacity

C6.I1 Classic and smart grid Capacity increase of power plants using

115 development of transmission system renewable energy sources that may be operator and distribution system Target integrated to the power grid as a result of

operators the improved grid (cumulated, MW)

Number of households equipped with solar panels or equipped with solar panels,

119 C6.I2 Support for the use of residential solar panels and heating modernisation Target storage unit, electric heating system and

window replacement (cumulated, number of households)

C6.I3 Installation of energy storage Capacity of newly installed storage as fully

124 facilities for distribution- and Target integrated network component for the TSO

transmission system operators and DSOs

C6.I4 Installation of grid energy

128 storage facilities for energy market Target Capacity of newly installed energy storage

participants facilities

132 C6.I5 Dissemination of smart metering Target Newly installed smart meters

147 C8.I2 Supporting the digital transformation of health Target Number of hospitals with an upgraded IT security system

C9.R9 Awareness-raising for the

184 eradication of gratuity payments in the Target Number of citizens reached by

healthcare sector the completed awareness-raising campaign

C9.R14 Training scheme, and support scheme, on procurement for micro-, Carrying out of a mid-term evaluation on

210 small and medium-sized enterprises to Milestone the added value and effectiveness of the

facilitate their participation in public support scheme

procurement procedures

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C9.R29 Extension of the automatic administrative decision-making Additional automated types of cases

243 system with a view to increasing Target introduced in the automatic administrative

efficiency, transparency and reducing decision-making system (AKD)

risks of irregularities

253 C9.R34 Digital transformation of tax compliance procedures Milestone Entry into force of legislation for introducing the eReceipt system

Entry into force of legislation for the

255 C9.R34 Digital transformation of tax simplification of VAT compliance compliance procedures Milestone procedures through the introduction of the

eVAT system

Entry into force of the Act repealing

262 C9.R36 Reforming the tax on public utility pipelines Milestone or amending Act number CLXVIII of 2012

on the tax on utility pipelines

C9.R37 Mainstreaming the use of

263 communication campaigns and

Improvement of communication practices

behavioural insights by the tax Milestone of public administration bodies towards administration their clients

C9.R37 Mainstreaming the use of

264 communication campaigns and behavioural insights by the tax Milestone Applications of behavioural insights in NTCA procedures

administration

Instalment amount EUR 639 230 000

1.6 Sixth Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C1.R1 Development of competitive

5 public education using 21st century Target Number of additional digital notebooks

technology delivered for pupil or teacher use

Average wage of teachers in the public

19 C1.R3 Improving the attractiveness of the teaching profession Target education system in 2025 relative to the

average wage of tertiary graduates

20 C1.R3 Improving the attractiveness of

Entry into force of legislation setting out the

the teaching profession Milestone wage increase for the entry-level teachers for the year 2025

28 C1.R4 Improving the sustainability of the pension system Milestone Entry into force of the legislation amending the pension system

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C4.R2 Accelerating climate Implementation of an action plan building on

79 adaptation measures in water Milestone the recommendations developed by the task

management force

81 C5.I1 Capacity building of suburban rail network Milestone 50 % physical readiness for the extension of the suburban rail network

92 C5.I3 Development of zero-emission Putting into service of additional electric bus transport Target buses and associated recharging points

C6.I3 Installation of energy storage Additional capacity of newly installed

125 facilities for distribution- and Target storage as fully integrated network

transmission system operators component for the TSO and DSOs (cumulated, MWh)

C6.I4 Installation of grid energy

129 storage facilities for energy market Target Capacity of newly installed energy storage

participants facilities

The share of tender procedures with single

189 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from Union

support shall not exceed 15 %

190 C9.R10 Reducing the share of single

The share of tender procedures with single

bid public procurement procedures Target bids for procurements financed from national resources shall not exceed 15%

C9.R25 Improving the quality of law Strengthening the effective application of rules concerning obligatory public

239 making and effective involvement of stakeholders and social partners in Target consultation of legislative acts and the

decision-making systematic publication of preliminary impact assessment summaries (3)

C9.R28 Support to the data-based decision-making and legislative Number of persons having

242 process with a view to increasing Target completed training courses on

efficiency, transparency and reducing data visualisation

risks of irregularities

251 C9.R34 Digital transformation of tax compliance procedures Milestone Entry into force of legislation for introducing the ePayroll solution

C9.R38 Improving the efficiency of

269 public expenditure by carrying out Milestone Reports on the outcomes of the third and

spending reviews fourth spending reviews

Instalment amount EUR 464 890 000

1.7 Seventh Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone Name

Number Investment) / Target

Implementation of additional institutional

9 C1.I1 Improving access to quality education in lower secondary schools Target reorganisations for the integration of small lower secondary classes into larger schools in

the neighbouring settlements

Report on the application of the new

15 C1.R2 Reduction of segregation risk

legislation providing for the reduction of

in schools Milestone State support for primary and lower secondary schools with a low proportion of

disadvantaged students

25 C1.I4 Creation of new crèche places Target Number of additional children enrolled in newly created crèche places

C2.I3 Development of digital Number of digital learning materials

40 curricula for vocational education and Target developed for vocational education and

training training

C3.I2 Production and use of Installation of additional renewable energy

58 renewable energy in disadvantaged Target production capacity in or for the benefit of

municipalities disadvantaged municipalities

65 C4.R1 Awareness-raising Milestone Organisation of information sessions

Achieving good ecological status of the

67 C4.I1-3 Investments 1 and 3 – Water surface and groundwater bodies affected by management Milestone the investments under this component

(Investment 1 and Investment 3)

73 C4.I2 Establishment of a monitoring system Milestone Comprehensive monitoring system at national level

74 C4.I2 Establishment of a monitoring system Target Development of a comprehensive monitoring system at national level

Placing in service of the renovated railway

90 C5.I2 Rail network congestion switching on TEN-T corridor Target line (Békéscsaba-Lőkösháza railway line

section)

93 C5.I3 Development of zero-emission Putting into service of additional electric bus transport Target buses and associated recharging points

C6.I1 Classic and smart grid Additional capacity increase of power plants

116 development of transmission system operator and distribution system Target using renewable energy sources that may be integrated to the power grid as a result of the

operators improved grid (cumulated, MW)

Sequential Related Measure (Reform or Milestone Name

Number Investment) / Target

Number of additional households equipped

C6.I2 Support for the use of with solar panels or equipped with solar

120 residential solar panels and heating Target panels, storage unit, electric heating system

modernisation and window replacement (cumulated, number

of households)

133 C6.I5 Dissemination of smart Additional newly installed smart meters metering Target (cumulated)

149 C8.I2 Supporting the digital

Increase of the proportion of types of health

transformation of health Target authority procedures that can be initiated electronically

150 C8.I2 Supporting the digital transformation of health Target Number of telemedicine services provided via digital tools in a single year

New EESZT modules launched to support

151 C8.I2 Supporting the digital transformation of health Milestone supply management and digitised care

processes

153 C8.I2 Supporting the digital Number of unique users of the central transformation of health Target healthcare mobile application

155 C8.I3 Remote health monitoring programme for the elderly Target Number of participants in the remote health monitoring programme for the elderly

157 C8.I4 Development of primary health care Target Number of doctors participating in newly established and operational GP communities

158 C8.I4 Development of primary health care Target Number of patients enrolled in the Chronic Disease Management Programme

159 C8.I4 Development of primary health care Target Number of patients enrolled in prevention and health promotion programmes

C9.R8 Upgrading the cooperation Setting up of a new IT system for the

181 systems of the prosecution service to Milestone handling of case files of the prosecution

tackle corruption practices. service

C9.R30 Strengthening the national Setting up of a central IT

244 IT equipment management system to increase the efficiency of Milestone equipment management and

public services software licensing system

C9.R33 Broadening the scope of non Independent evaluation of the effectiveness

249 deductibility rules for outbound Milestone of the overall set of domestic rules related to

payments aggressive tax planning

Sequential Related Measure (Reform or Milestone Name

Number Investment) / Target

C9.R37 Mainstreaming the use of

266 communication campaigns and behavioural insights by the tax Milestone Availability of new functionalities on the NTCA integrated platforms

administration

C9.R38 Improving the efficiency of

270 public expenditure by carrying out Milestone Concluding report on the outcome of the

spending reviews spending review exercise

Instalment amount EUR 639 230 000

1.8 Eighth Instalment (non-repayable support):

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C1.R1 Development of competitive Share of teachers using Information and

6 public education using 21st century Target Communication Technologies in at least 40%

technology of their classes

Share of special education institutions having

11 C1.I2 Supporting the education of students with special education needs Target received support for the education of pupils

with special education needs

Number of pupils with special education

12 C1.I2 Supporting the education of pupils with special education needs Target needs having benefited from enhanced

services

13 C1.I2 Supporting the education of pupils with special education needs Target Number of special education teachers having received professional in-service training

Application of the wage increases for teachers working in disadvantaged

21 C1.R3 Improving the attractiveness of the teaching profession Milestone settlements, teachers working in schools with

a proportion of disadvantaged pupils of at least 10%, and entry-level teachers

C1.I3 Training of teachers and Number of heads and deputy heads of public

22 improving the management skills of Target education institutions having participated in

heads of institutions continuing professional development

C1.I3 Training of teachers and Number of teachers from public education

23 improving the management skills of Target institutions having participated in continuing

heads of institutions professional development

C2.I1 Institutional innovation and Number of students/persons having received

32 strengthened activities in higher Target a micro-credentials certificate in higher

education education institutions

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C2.I1 Institutional innovation and

33 strengthened activities in higher Target Number of developed digital learning content

education for higher education

C2.I1 Institutional innovation and Number of higher education students and

34 strengthened activities in higher Target staff having taken part in digital skills

education development programmes

C2.I2 Modernisation of infrastructure Energy efficiency refurbishment of building

36 and digitalisation in higher education Target infrastructure and construction of new

institutions buildings in higher education institutions

C2.I2 Modernisation of infrastructure

37 and digitalisation in higher education Target Installation of digital equipment in higher

institutions education buildings

C2.I2 Modernisation of infrastructure

38 and digitalisation in higher education Milestone Report on capacity development activities in

institutions higher education institutions

C2.I3 Development of digital Number of apprentices in vocational

41 curricula for vocational education and Target education and training having attended

training courses based on improved digital learning materials

C2.I4 Vocational education and

43 training infrastructure for the 21st Target Energy efficiency renovation of vocational

century education and training centres

C2.I4 Vocational education and

44 training infrastructure for the 21st Target Purchase of ICT equipment for vocational

century education and training centres

C2.I4 Vocational education and

45 training infrastructure for the 21st Target Number of vocational education and training

century centres with upgraded infrastructure

47 C2.I5 Development of the Central Examination Centre Milestone Completion of the Central Examination Centre

49 C2.I6 Establishment of national research and development laboratories Milestone Report on the performance of national laboratories

C3.I1 Construction and renovation of

54 social housing, improvement of Target Refurbishment of additional dwellings

housing conditions

C3.I1 Construction and renovation of

56 social housing, improvement of Target Construction of additional new social

housing conditions housing

C3.I3 Promoting employment and

60 skills development based on local Target Additional participation in labour

specificities socialisation programmes

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

Pedagogical development of additional public

62 C3.I4 Community-oriented pedagogy Target education and vocational training institutions

in the selected settlements

66 C4.R1 Awareness-raising Target Hectares of arable land having undergone changes to water saving agricultural practices

C4.I1 Construction of main water Finalisation of the project “Improving and

69 replacement systems, development of Milestone restoring the water deficit ecological status of

new networks and systems Homokhátság (Danube-Tisza) – Phase I”

C4.I1 Construction of main water

71 replacement systems, development of Milestone Finalization of the project “Rábaköz-Tóköz

new networks and systems water supply development”

Completion of the project “Improving the

76 C4.I3 Nature protection Milestone security of ecological water supply in the

Hanság Natura 2000 site”

Increase in the combined coverage of

77 C4.I3 Nature protection Target hectares of green infrastructure or protected or Natura 2000 sites targeted by restoration

of natural hydrology

82 C5.I1 Capacity building of suburban Refurbishment of non-TEN-T railway lines rail network Target (H5, H6 and H7)

83 C5.I1 Capacity building of suburban rail network Target Refurbishment of railway stations and stops

New current transformers or complete

84 C5.I1 Capacity building of suburban rail network Target modernisation of existing current

transformers

85 C5.I1 Capacity building of suburban New B+R bicycle storage facilities at HÉV rail network Target stops

86 C5.I1 Capacity building of suburban rail network Target New intermodal bus - HÉV hubs

88 C5.I2 Rail network congestion switching on TEN-T corridor Target Placing in service of the renovated railway line (Almásfüzitő-Komárom)

Installation of the Central Traffic

95 C5.I4 Deployment of central traffic management on TEN-T railways Target Management System operated on suburban

and other large railway lines

C6.R4 Improving transparency,

109 predictability and availability of the Milestone Creation of the IT infrastructure for the use of

grid connection data from smart meters

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

C6.R4 Improving transparency,

111 predictability and availability of the Target Grid connection authorisation for renewable

grid connection power plants

C6.I1 Classic and smart grid Additional capacity increase of power plants

117 development of transmission system operator and distribution system Target using renewable energy sources that may be integrated to the power grid as a result of the

operators improved grid (cumulated, MW)

Number of additional households equipped

C6.I2 Support for the use of with solar panels or equipped with solar

121 residential solar panels and heating Target panels, storage unit, electric heating system

modernisation and window replacement (cumulated, number

of households)

134 C6.I5 Dissemination of smart metering Target Additional newly installed smart meters (cumulated)

C7.I1 Strengthening a smart, Completion and entry into operation of the

138 innovative and sustainable waste management industry and secondary Milestone chemical recycling and green hydrogen

raw materials market production plant

144 C8.I1 Developing the conditions for Number of whole blood collection events on healthcare in the 21st century Target mobile collection sites in small settlements

Entry into operation of new or modernised

145 C8.I1 Developing the conditions for healthcare in the 21st century Target health infrastructure buildings equipped with

new and modern healthcare equipment

Floor area of health infrastructure buildings

146 C8.I1 Developing the conditions for healthcare in the 21st century Target having benefitted from energy efficiency

improvement

148 C8.I2 Supporting the digital transformation of health Target Number of new healthcare databases and disease registers available digitally

Strengthening the anti-corruption framework

C9.R7 Development and in Hungary through assessing the effective

179 implementation of a National Anti Milestone implementation of the implementation of the

corruption strategy and action plan actions of the new National Anti-Corruption

Strategy and the related Action plan

The share of tender procedures with single

191 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from Union

support shall not exceed 15 %

The share of tender procedures with single

192 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from national

resources shall not exceed 15%

The share of tender procedures with single

193 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from Union

support shall not exceed 15 %

Sequential Related Measure (Reform or Milestone

Number Investment) / Target Name

The share of tender procedures with single

194 C9.R10 Reducing the share of singlebid public procurement procedures Target bids for procurements financed from national

resources shall not exceed 15%

C9.R14 Training scheme, and support scheme, on procurement for micro-, Cumulative number of micro-, small and

207 small and medium-sized enterprises to Target medium-sized enterprises having received

facilitate their participation in public training on public procurement practices

procurement procedures

C9.R14 Training scheme, and support

scheme, on procurement for micro-, Evaluation of the training scheme to facilitate

208 small and medium-sized enterprises to Milestone the participation of micro-, small and

facilitate their participation in public medium-sized enterprises in public

procurement procedures procurement procedures

C9.R14 Training scheme, and support

scheme, on procurement for micro-, Number of micro-, small and medium-sized

211 small and medium-sized enterprises to Target enterprises having received lump-sum

facilitate their participation in public support for public procurement

procurement procedures cost compensation

C9.R14 Training scheme, and support scheme, on procurement for micro-, Completion of the final evaluation on the

212 small and medium-sized enterprises to Milestone added value and effectiveness of the support

facilitate their participation in public scheme

procurement procedures

233 C9.R26 Improving transparency and access to public information Milestone Report of the Government Control Office on access to public information (3)

C9.R27 Improving the quality of law Strengthening the effective application of rules concerning obligatory public

240 making and effective involvement of stakeholders and social partners in Target consultation of legislative acts and the

decision-making systematic publication of preliminary impact assessment summaries (4)

C9.R33 Broadening the scope of non Entry into force of legislative amendments to 250 deductibility rules for outbound Milestone improve the effectiveness of measures related

payments to aggressive tax planning

252 C9.R34 Digital transformation of tax compliance procedures Milestone Multi-phase roll-out of the ePayroll system

254 C9.R34 Digital transformation of tax compliance procedures Milestone Multi-phase roll-out of the eReceipt system

256 C9.R34 Digital transformation of tax compliance procedures Milestone Multi-phase roll-out of the eVAT system

Instalment amount EUR 1 336 557 717

SECTION 3: ADDITIONAL ARRANGEMENTS

• 1. 

  Arrangements for monitoring and implementation of the recovery and resilience plan

The arrangements defined below, together with the relevant measures specified in Component 9 (Governance and Public Administration) 10 , constitute the Hungarian control and audit system under the Recovery and Resilience Plan. Each of these elements is an integral part of the Hungarian control and audit system, whose implementation and continuous respect is necessary to ensure respect of Article 22 of Regulation (EU) 2021/241. Together, the implementation and continuous respect of these elements ensure that the arrangements for the monitoring and implementation of the recovery and resilience plan include the measures necessary to ensure the protection of the financial interests of the Union.

The monitoring and implementation of the recovery and resilience plan of Hungary shall take place in accordance with the following arrangements:

Government Decree 373/2022 (IX. 30.) establishes the roles and responsibilities of bodies involved in the implementation, audit and control of the Hungarian Recovery and Resilience Plan. The entry into force of this Government Decree, described in reform C9.R19, is reflected in a specific milestone, which shall be fulfilled before the submission of the first payment request under the

Recovery and Resilience Plan.

The implementation, monitoring and reporting process of the Hungarian Recovery and Resilience Plan shall be ensured by the National Authority (deputy state secretariat of the minister responsible for the implementation of Union support). This shall include the operation of the monitoring system

(including with the support of a monitoring IT system), the monitoring of the progress of implementation of the different measures and ensuring the reliability and veracity of data in the monitoring IT system. The National Authority shall also be the responsible body to verify that the milestones and targets set in the Recovery and Resilience Plan have been fulfilled. The National

Authority shall be responsible for drafting and submitting the payment requests under the Recovery and Resilience Plan as well as ensuring their veracity and the signature of the management declaration. It shall also act as the single liaison between the Hungarian authorities and the

Commission. The National Authority shall be responsible for establishing and operating an internal management and control system to effectively prevent and detect irregularities and take appropriate corrective actions while observing the principles of sound financial management and protecting the

Union’s financial interests, for putting in place effective anti-fraud and anti-corruption measures, taking into account the risks identified, and for carrying out (desk-based and on-the-spot) first level controls of implementation.

10 This is the case for milestones 160, 166, 169, 171, 174, 175, 195, 197, 198, 200, 201, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227 and 228 that shall be fulfilled before the submission of the first payment request. A number of the measures contained in component 9 are aligned with the commitments made by Hungary in the procedure under Article 6 of Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget.

The sectoral implementation of the specific measures 11 of the plan is supervised by the responsible line ministries, whose services shall support the monitoring of the progress of the measures and maintain close cooperation with the National Authority.

The National Authority shall be supported in the implementation and monitoring process of the plan by implementing bodies which shall operate through written contracts under the supervision and responsibility of the National Authority. Where implementation tasks of the National Authority are delegated to implementing bodies, the work of the implementing bodies shall be closely controlled by the National Authority, which shall provide methodological support and guidance to implementing bodies. In particular, it shall be ensured that implementing bodies have sufficient resources and adequate professional experience to effectively carry out the tasks assigned to them.

Implementing bodies shall have effective internal control arrangements in place. Implementing bodies shall carry out the control functions of the National Authority for the components and measures in their responsibility which they implement.

To ensure the effective prevention and detection of serious irregularities, such as fraud, corruption, conflict of interest and double funding, the National Authority and the implementing bodies shall systematically use all functions of the Arachne risk-scoring tool when implementing and controlling the implementation of the Recovery and Resilience Plan.

A new Directorate for Internal Audit and Integrity (DIAI) in the ministry responsible for the implementation of Union support shall be set up before the submission of the first payment request under the Recovery and Resilience Plan, to reinforce the effective prevention and detection of conflict of interest. The DIAI shall be responsible for carrying out regular controls of the veracity of conflict of interest declarations by staff at all levels involved in the implementation and control of the plan.

The Directorate General for the Audit of European Funds (EUTAF), in its role as audit authority, shall carry out the audit tasks related to the implementation of the plan. Hungary shall provide the necessary financial and human resources to the EUTAF to safeguard its independence and to enable it to carry out its tasks.

EUTAF shall draw up an audit strategy in line with internationally accepted audit standards. This strategy shall determine the method and frequency of audits. It shall be in place sufficiently early in time to carry out the audits that shall be included in the audit summary submitted together with the first payment request. The audit strategy shall prioritise audit work, starting with an audit on the setup of the systems focusing on the adequacy of processes (legal and institutional), the setup and operation of IT systems and the availability and quality of human capacities. This audit shall be carried out before the submission of the first payment request. Further system audits to be carried out at the start of implementation concern the application of Arachne for controls performed by the

National Authority and implementing bodies as well as a system audit on the DIAI.

11 Line ministries bear the sectoral responsibility for the implementation of all measures of the plan, except for those on governance and public administration, which fall under the responsibility of the National Authority.

EUTAF shall carry out system audits and substantive testing. System audits shall be implemented on the basis of a risk assessment, with appropriate frequency and shall examine the functioning of the system set up for the implementation of the recovery and resilience plan. Substantive testing shall focus on the progress towards the achievement of milestones and targets and encompass the testing of the fulfilment of sound financial management conditions. EUTAF shall provide an audit opinion for each payment request submitted to the Commission based on the results of its audit work both from its system audits and substantive testing.

In addition, a Monitoring Committee consisting of relevant stakeholders and social partners involved in the implementation of the recovery and resilience plan shall be established via a legislative act. The Monitoring Committee shall supervise the effective implementation of the recovery and resilience plan. The legislative act shall include a provision to make it a legal requirement to consult the Monitoring Committee during the implementation of the recovery and resilience plan.

• 2. 

  Arrangements for providing full access by the Commission to the underlying data

In order to provide full access of the Commission to the underlying relevant data, Hungary shall have in place the following arrangements:

• - 

  All information related to the implementation and monitoring of the plan shall be stored in a monitoring IT system that shall be developed for the implementation of the Recovery and

Resilience Plan.

• - 

  The National Authority shall be responsible for monitoring and assessing the implementation of

the plan and the fulfilment of milestones and targets, as well as providing the Commission with

the data collected upon request. It shall coordinate the reporting of milestones and targets,

relevant indicators, but also qualitative financial information and other data, such as on final

recipients. It shall also be responsible for operating the monitoring IT system, monitoring the

progress of implementation of the different measures, ensuring the reliability and veracity of

data in the monitoring system. Data encoding shall be conducted using an IT system called

FAIR-EUPR 12 through which all institutions responsible for the implementation of reforms and

investments are obliged to report to the National Authority.

• - 

  The Audit Authority (EUTAF) shall confirm in an audit report with an unqualified audit

opinion, before the submission of the first payment request, that the functionalities of the

monitoring IT system are available to fulfil data collection, storage and provision requirements

related to the implementation of the Recovery and Resilience Plan and that the system is fully

functional and in operation.

In accordance with Article 24(2) of Regulation (EU) 2021/241, upon completion of the relevant agreed milestones and targets in Section 2.1 of this Annex, Hungary shall submit to the

Commission a duly justified payment request of the financial contribution. Hungary shall ensure that, upon request, the Commission has full access to the underlying relevant data that supports the

12 This IT system is used to encode data on Cohesion funds for the periods 2014-2020 and 2021-2027 as well. Hungary has developed the system to ensure that it also fits the specific requirements of the Recovery and Resilience Plan.

due justification of the payment requests, both for the assessment of the payment request in accordance with Article 24(3) of Regulation (EU) 2021/241 and for audit and control purposes.

Where the milestones or targets refer to the production of reports, the underlying data, including any data used to underpin statements in such reports, shall be available to the Commission upon request, notably during the assessment of those milestones or targets.

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