Hungary and the dark side of European funds

Nuno Palma argues in his book that EU funds can be detrimental to economies, particularly in Southern Europe, by reducing incentives for prudent fiscal policies and structural reforms. He highlights that these funds often lead to inefficient resource allocation and corruption, as governments prioritize quick absorption over impactful investments. While some countries like Poland and Estonia have benefited, Hungary serves as a cautionary example where EU funds have been mismanaged under Viktor Orbán's regime, leading to stagnation and corruption. The case illustrates how EU funding can entrench poor institutional practices rather than foster genuine economic development.