Tamás Sulyok was sworn in as Hungary's new prime minister today, marking the official end of Viktor Orbán's 14-year leadership. Sulyok, a former constitutional court judge, inherits an economy heavily reliant on—and currently deprived of—€22 billion in European Union recovery and cohesion funds. Brussels froze these funds over concerns about judicial independence, public procurement transparency and anti-corruption measures within the previous government.
The absence of these funds has severely hampered public investment and strained the national budget. Hungary's public debt stood at 73.5 percent of GDP in 2025, according to the Hungarian Central Bank. Construction companies and infrastructure developers, many with direct financial ties to Fidesz party officials through government contracts, have seen project pipelines shrink, leading to a four percent contraction in the construction sector during the first quarter this year. Small and medium-sized enterprises awaiting EU grants for development also face delays.
While Sulyok holds the prime ministerial office, Orbán remains the chairman of the ruling Fidesz party, maintaining control over the legislative agenda and party machinery. This dual power structure creates uncertainty for foreign investors seeking a stable policy environment. Major German automotive manufacturers, including Mercedes-Benz and Audi, which collectively account for over 25 percent of Hungary's industrial output, have privately urged Budapest to resolve the EU dispute. Their operations generate over 150,000 direct and indirect jobs, making their influence substantial.
Sulyok's initial statements suggest a more conciliatory tone toward Brussels, a departure from Orbán's often confrontational stance. Any progress on rule-of-law reforms could unlock the stalled funds and strengthen the Hungarian forint, which has weakened 3.2 percent against the euro since Jan. The Budapest Stock Exchange's BUX index rose 0.8 percent today, reflecting cautious optimism about the transition. Investors are looking for concrete legislative actions, not just rhetoric.
The shift in leadership comes as the United States and European allies seek stronger unity against Russian influence in Central Europe. U.S. companies invested $2.1 billion in Hungary last year, primarily in tech and advanced manufacturing, and they watch for sustained political and economic stability. Sulyok's ability to balance domestic political pressures from Orbán with the imperative of meeting EU demands will shape Hungary's investment attractiveness for the next decade.
