(Bloomberg) -- The European Union is finalizing a decision to release as much as €1 billion ($1.1 billion) in EU funds for Hungary just as Prime Minister Viktor Orban is stepping up his attacks against the bloc and threatens to derail aid to Ukraine.
The European Commission, the EU's executive arm, is concluding its assessment of Budapest's amended post-pandemic recovery plan to address the energy crunch triggered by Russia's invasion of Ukraine, according to people familiar with the matter.
Once the expected decision is approved by EU finance ministers, the Hungarian government could access as much as 20% of the additional €3.9 billion in loans and €0.7 billion in grants requested to finance its REPowerEU chapter, the people said. They declined to be named because the talks are private.
Spokesperson for the EU's executive didn't immediately respond to a request for comment.
The non-conditional pre-payment would come as Orban has launched a billboard campaign portraying European Commission President Ursula von der Leyen as a puppet of Alex Soros, the son of Hungarian-born US financier George Soros. Hungary's prime minister is also seeking sweeping powers to root out what his proposed legislation describes as foreign efforts to influence politics.
The commission is assessing the scope, competences and implications of the proposed Sovereign Protection Agency, the people said.
Orban also continues to question some of the bloc's decisions on migration and has called for a comprehensive discussion about the effectiveness and sustainability of the EU's existing strategy toward Ukraine, which he has described as ineffective, they said.
The commission's approval would come against the backdrop of a long-running legal battle over Hungary's democratic backsliding. The EU last year suspended more than $30 billion of Budapest's funding due to rule of law and graft concerns, the money that Orban is seeking to access after a prolonged recession and a budget crunch.
Around €13 billion euros of the funds suspended over concerns about the independence of judges may still be unlocked by the end of the year, the people said. The EU's executive and the government in Brussels are discussing the details and the implementation of a judicial reform approved early this year.
--With assistance from Zoltan Simon.
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