Hungary has missed the first deadline to pay the €200 million fine imposed by the European Court of Justice (ECJ), prompting Brussels to send a second payment request and setting the stage for an impending head-on clash.

The new deadline is 17 September.

If Budapest does not wire the lump sum by then, the European Commission, which is compelled to ensure member states abide by ECJ rulings, will launch the so-called "offsetting procedure" and deduct the €200 million from Hungary's allocated share of the EU budget, parts of which remain frozen over rule-of-law decline.

"There is no wiggle room here. We have to follow the applicable procedures," a Commission spokesperson said on Monday. 

In a ruling issued in June, the ECJ found Hungary had committed an "unprecedented and exceptionally serious breach of EU law" due to the country's long-standing restrictions on the right to asylum.

The dispute dates back to December 2020, when the court first said that Hungary, under Prime Minister Viktor Orbán, had limited access to asylum procedures for those seeking international protection, making it "virtually impossible" to file applications. The Hungarian authorities were chastised for unlawfully keeping asylum seekers in so-called "transit zones" under detention-like conditions and violating their right to appeal. (The controversial "transit zones" has since closed.)

This "systematic" practice, the court said then, also involved Hungarian police forcibly escorting third-country nationals who had arrived irregularly in Hungary to a "strip of land devoid of any infrastructure," leaving them no choice but to go to Serbia.

Budapest had vigorously contested the charges and argued migratory pressure across the EU justified derogations, but the tribunal dismissed this point.

Because Hungary ignored the 2020 verdict, the European Commission filed new legal action, resulting in June's ruling. The judges concluded that Hungary was "disregarding the principle of sincere cooperation" and "deliberately evading" the application of the bloc's asylum legislation, with ripple effects for neighbouring member states.

"That conduct constitutes a serious threat to the unity of EU law, which has an extraordinarily serious impact both on private interests, particularly the interests of asylum seekers, and on the public interest," the judges said.

As a result of the wrongdoing, the ECJ imposed a €200 million fine as a lump sum. Viktor Orbán described the court's decision as "outrageous and unacceptable."

"It seems that illegal migrants are more important to the Brussels bureaucrats than their own European citizens," he said. (The ECJ is based in Luxembourg)

The Commission sent the first payment request on 16 July, allowing Hungary 45 calendar days to conduct the transaction. The deadline ended last Friday and no money was transferred. This prompted the Commission to send a second payment request on Monday, with an additional 15 days to reply.

If Budapest does not budge, the Commission will trigger the "offsetting procedure" and "identify upcoming payments towards Hungary from the EU budget and we deduct the amount concerned from that," a spokesperson explained.

Separately, the executive is looking into the €1 million daily fine that the ECJ also slapped on Hungary, which grows with each day that the government continues to ignore the June ruling. Budapest has until 31 September to explain what kind of measures, if any, it has introduced to lift the restrictions on the right to asylum.

"Depending on the content of that reply, we will proceed or we will not proceed with the payment request for the daily fine of €1 million," the spokesperson added.

It is unlikely that Hungary will relent any time soon – in fact, it seems more than willing to turn the issue into a full-blown political showdown.

Last month, Gergely Gulyás, minister for the prime minister's office, doubled down on his government's refusal to abide by the ECJ ruling and threatened to bus migrants to the Belgian capitals as retaliation for the eye-watering fine.

"If Brussels wants migrants, they will get them," Gulyás said. "We will give everyone a one-way ticket if the EU makes it impossible to stop migration at the external border."