Analysts note the presidency could serve Orban as a PR tool to portray himself at home as an influential leader, but at an EU level his reputation has been irretrievably tainted by the way he has torpedoed common EU policy with his blackmailing tactics in the past few years, notably over Ukraine and Russia. Hungary’s leader is often accused of being the Trojan horse of Vladimir Putin for fostering strong political and economic relations with the Russian president despite the war.

Orban was also the only leader to vote against an extension of Commission President Ursula von der Leyen's mandate, something which is unlikely to endear him to the EU's most powerful executive. The composition of the European Commission will not be influenced by the Hungarian presidency as the decision had been made to split up the jobs between the top three EP factions, much to the dislike of the Hungarian premier. Hungary’s illiberal leader called the deal by the three leading factions shameful. The EPP, the socialists, and the liberals had formed a coalition, "of lies and deception" to name the next leaders of EU institutions, he said.

He has also been in a longstanding conflict with the European Parliament, which opened Article 7 procedure in 2018 against Hungary for its breaches of the EU's rule of law values. The EP had even attempted to block Hungary from taking up the rotating presidency on the grounds that it was unfit to hold the role.

There is a fear, however, that at the helm of the European Council, Hungary could slow down accession talks with Ukraine and the ongoing Article 7 procedure against his own country, but according to diplomats, his room for maneuver will be limited. 

Orban also received a sobering message ahead of assuming the presidency from Belgian Prime Minister Alexander De Croo. "The presidency does not mean you are the boss of Europe but that you are the one who has to make a compromise. That it is an interesting position to be in at least once in your lifetime, so I can recommend it to Mr. Orban," he said at his farewell press conference on June 28.

The political constellations are also unfavourable for the 60-year-old veteran, who is taking on the baton from Belgium after a string of setbacks at home and on the international stage. He campaigned with the slogan of "capturing" Brussels, referring to a potential breakthrough of radical right-wing forces in the EP election but this failed to materialise and his own party won fewer seats than five years ago.

Following the disappointing election result, Orban singled out EPP leader Manfred Weber as an old-new nemesis, calling him a 'Hungarophobe' a few days after Weber's trip to Budapest to welcome Orban’s new rival, Peter Magyar's Tisza Party and its seven new members to the EPP.

The future of the 11 MEPs of Fidesz hangs in the balance. Orban was hoping for a resurgence of right-wing parties and that Marine Le Pen’s ID party and the ECR led by Giorgia Meloni would cooperate. Instead, after Meloni turned down his request to join the ECR, Orban began to seek partners to set up his alliance with the support of his political allies in the V4 countries of Central Europe. Orban has reportedly tried to lure former Polish prime minister Mateus Morawiecki to leave Meloni's party,  but it remains unknown whether he will succeed.

In the meantime after a diplomatic marathon over the past few days, Hungary's nationalist leader on June 30, just a day before Hungary takes over at the helm of the Council, announced the formation of a new EU parliamentary alliance with Austria's far-right party FPO and the Czech populist group of ex-prime minister  Andrej Babis. In the manifesto presented on Sunday, the Patriots for Europe outlined the vision for a Europe consisting of strong, independent nations that reject further centralisation of power in Brussels and upholds national sovereignty.

Goals of the presidency

Permanent Representative of Hungary to the EU Balint Odor said the country’s presidency will be like any other. "We will be honest mediators, we will try to cooperate sincerely with EU countries and institutions", he said.

EU Affairs Minister Janos Boka in mid-June presented seven priorities for the next six months: improving competitiveness, common defence, and the defence of external borders, as well as advancing enlargement and promoting cohesion policies, agriculture, and addressing demographic problems.

Hungary, which itself ranks at the bottom end of the EU in competitiveness, aims to draft a new European competitiveness pact before the end of 2024, which would include giving incentives to the spread of EVs. It includes the development of a technology-neutral industrial strategy, support for SMEs, and promotion of green and digital transitions. Budapest could evaluate the need for targeted, European-level intervention to strengthen the common EU defence system.

The Hungarian presidency will likely oversee the adoption of the "VAT in the Digital Age" proposal package of the European Commission. Hungary has made headway in the fight against the black economy, bringing the VAT gap down significantly and introducing tools such as invoicing or cash registers, or electronic reporting of transport goods to combat fraud.

The enlargement of the EU will also be a top priority, with a focus on West Balkan countries and not Ukraine or Moldova.

According to Budapest, integrating Western Balkan countries is a vital economic interest as well as a political and security need. Hungary’s diplomacy has slammed the EU for the delay in talks with these countries. The Hungarian presidency plans to organise an EU-Western Balkans Summit in the region and to hold intergovernmental conferences with candidate countries when appropriate.

Hungary, however, will not promote Ukraine's and Moldova's accession negotiations.

The decision to give Ukraine candidate status hence was brought forward by the Belgian presidency and the next aid package has also been cleared as EU members feared that Budapest, which has obstructed the disbursement of EU funds to help arm Ukraine, would block Kyiv’s accession talks.

Intergovernmental conferences with all five Western Balkan candidates are on the table, including opening new chapters with Serbia, closing at least seven chapters with Montenegro, opening initial chapters with Albania, establishing a negotiation framework with Bosnia and Herzegovina, and starting talks with North Macedonia’s new pro-integration government.

In preparation for the presidency, Viktor Orban signalled that he wanted to make the issue of migration a focal point of the forthcoming presidency and seek to increase funding for this purpose.

The fight against illegal migration has been a cornerstone of Orban’s policy since the 2015 migration crisis and a recurring theme of his campaigns against his opponents at home and in the EU.

To improve the resilience of the Common European Asylum System, the Hungarian Presidency will encourage member states to exchange views on innovative solutions in the field of asylum, the detailed plan of the presidency reads. 

Demography has been an important talking point of Hungary's ruling nationalist-conservative government, but it is unclear how this problem affecting most European countries could be addressed at a supranational level.

The Orban government has mainly used the issue as an argument against migration, while it is now facing an insurmountable challenge in addressing labour shortage at home which requires the inflow of foreign workers.

Promoting sustainable agriculture is a key priority to finding a rational balance regarding the strategic objectives of the European Green Deal, the stabilisation of agricultural markets, and a decent standard of living for farmers, according to the programme.

Hungary, which has been one of the biggest beneficiaries of the EU’s cohesion policy, will aim for a high-level strategic debate on the future of the policy, which plays a key role in promoting competitiveness and employment, as well as in addressing demographic challenges.

According to comments by Hungarian government officials over the past few months, economic development and GDP per capita should remain an important criterion in the allocation of resources.

The reinforcement of the European Defence Policy is one of the few areas where the Hungarian government’s actions have aligned smoothly with the EU’s goals and targets. Budapest has embarked on massive development of its armed forces and increased its GDP spending to over 2% of the GDP.

The European Union must play a greater role in guaranteeing its security by strengthening its resilience and capacity to act, the detailed document reads.

Hungarian-China ties

Hungary's EU presidency will also be a critical period for China's influence in Europe, according to observers.

Beijing views this period as a strategic window to reinforce its economic and political ties. Budapest has increasingly aligned itself with Beijing, raising questions about the future of EU-China relations.

The Orban government’s inclination to support China is not solely based on ideological alignment but has major economic foundations as the country has become the top trading and investment partner of the Asian superpower in recent years.

Bilateral trade had exceeded $17bn last year, while China accounted for the largest volume of FDI in the country. In 2023, Hungary received 44% of all Chinese FDI in Europe, overtaking the "big three", France, Germany, and Italy, benefitting from the surge in electric vehicle (EV) investments. Over two-thirds (69%) of Chinese FDI was made in the EV sector in 2023, up from 41% in 2022.

The upsurge in Chinese economic activity in Hungary has coincided with the freezing of EU funds to Hungary. 

The two countries elevated their strategic partnership during Chinese President Xi Jinping's visit to Budapest in May.

In a recent phone conversation, Hungarian Foreign Minister Peter Szijjarto assured his Chinese counterpart, Wang Yi, that Budapest would leverage its EU presidency to foster mutual understanding and cooperation between Europe and China. One of the immediate economic concerns is the EU’s planned tariffs on Chinese electric vehicles, set to go into effect next month. Hungary as a key supplier of EV batteries to Western Europe has vehemently opposed the move, saying the protection measure could trigger a trade war.

Hungarian diplomacy has sought dialogue-based solutions to trade conflicts, but this stance is expected to conflict with efforts by Washington to build a united Western front.