Part I — Situation overview

In June 2026 the leaders of the European Union opened the negotiation on the next seven-year budget, starting from 2028 — in the jargon the multiannual financial framework, abbreviated MFF (Multiannual Financial Framework) — and the debate immediately drew a front line between the member states. The European Commission tabled a framework of some €2 trillion, which the thrifty (“frugal”) states — Germany, the Netherlands, the Scandinavians — called unrealistic. German Chancellor Friedrich Merz publicly stated that in his view not even a level of €1.6–1.7 trillion could be justified for seven years. The Cypriot Council presidency’s “negotiating box” meanwhile moderated the proposal from €1.76 to €1.73 trillion — the Netherlands deemed even this “wholly unacceptable” (MIAK foreign press monitor, 26 June 2026 — EUobserver, Euractiv).

Beside the size of the money, the second — and in public-law terms weightier — axis of the debate is where the revenue should come from. Today the EU budget is largely covered by member-state contributions: the balancing, gross national income (GNI) based resource alone provides roughly 59 percent of EU revenues. The Commission proposes new, direct EU revenues — “own resources”: a part of the revenue from the emissions trading system (ETS), the carbon border levy (CBAM), as well as large-corporate and environmental deductions, together some €58–66 billion a year. According to Euractiv, in the absence of new own resources the budget could shrink by as much as 40 percent, because from 2028 the repayment of the recovery loans jointly taken up during the pandemic (NGEU) begins. The amendment of own resources, however, requires unanimous Council approval and national ratification — that is, even a single member state can stall it.

The Hungarian stake here is twofold. The cohesion and recovery resources form the backbone of the domestic development budget, and Hungary is an excellent resource-user (its absorption rate is around 95 percent). The risk, however, is that the debate shifts towards resource cuts and political conditionality — while the real trouble is not the size of the resources, but the weakness of territorial targeting and the lack of accountability. MIAK’s reading: defending the cohesion envelope is a legitimate national interest, but it is credible only if Hungary represents at once the high framework and the data-based, verifiable quality of its use.

Part II — Literature foundation

Before turning to MIAK’s concrete proposals, it is worth fixing the scientific frame. The OECD’s 2025 EU economic report (EU Economic Survey 2025) shows with data that the main weakness of EU cohesion policy is not a shortage of resources, but a “not sufficiently targeted” distribution and slow absorption — roughly a third of the resources flows into regions developed above the EU average. The Nobel laureate economist Joseph Stiglitz, in his work Globalization and Its Discontents, warns that market catch-up is not automatic: the benefit of nineteenth-century American growth was made broadly shared precisely by active federal involvement (infrastructure, education, land distribution) — that is, convergence presupposes institutional and redistributive intervention. Paul Krugman’s book The Return of Depression Economics warns from the other side: the example of the persistently depressed region (East Germany, the Italian Mezzogiorno) shows that a pure transfer in itself does not guarantee catch-up, while the austerity reflex may push into recession. The detailed literature treatment — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures that shift the Hungarian negotiating position from pure resource defence to the terrain of resource quality and coalition strength.

3.1 Data-based, targeted cohesion distribution (part of the negotiating mandate)

The Hungarian position should not be about the size of the framework in itself, but about the quality of its use. Building on the A8 (cohesion-policy accountability) and the TE2 (data-based distribution of EU cohesion resources) programme points, MIAK proposes that for every EU resource there be a mandatory, public, machine-readable project data sheet, a mandatory cost-benefit analysis above 500 million forints, and a clawback mechanism in case of irregularity. Targeting should be a concrete commitment: the share of the most disadvantaged (LHH) districts in the resources should rise from the current 12–15 percent to above 25 percent by 2030, on the model of the Polish system, where the regional (voivodeship) level receives substantive decision-making power. This is at once an answer to the OECD’s targeting critique and the key to releasing rule-of-law conditionality: credible, measurable accountability takes away the justification for a freeze.

3.2 Conditional support for the new own resources

MIAK considers the new own resources — a part of the ETS revenue, the CBAM and the large-corporate deductions — supportable, because they loosen the “juste retour” (member-state contribution-counting) logic, and cover the 2028 peak of NGEU repayment without having to cut the cohesion envelope. The support, however, is tied to three conditions: (a) at the carbon-dioxide pricing that disproportionately burdens Eastern European households (ETS2) the regional concession and the compensation of the Social Climate Fund should be preserved; (b) the new revenues should flow in transparently, by the logic of G1 (data-driven budgeting), tied to target indicators; (c) the raising of own resources should not become a hollowing-out of member-state budgetary sovereignty. This deliberative position avoids reflexive rejection, while protecting Hungarian households.

3.3 Case-based coalition-building instead of veto threats

MIAK’s KP17 (case-based coalition-building in the EU) programme point is the core of the negotiating strategy: since the own-resources issue requires unanimity, the threat of a blanket veto has diminishing returns — the position of the “boy who cried wolf” leads to real-political isolation. Instead, Hungary must build alliances that vary case by case: with the “Friends of Cohesion” group (Poland, Romania, the Czech Republic, Slovakia, Portugal, Greece, Croatia, Bulgaria) in defence of the cohesion envelope, and with the thrifty states on the question of strict spending control and accountability. This two-directional coalition-forming at once maximises Hungarian bargaining power and builds the image of a reliable partner.

These three proposals are bound together by a single principle: the Hungarian interest is not the demonstrative exercise of the veto right, but a high, but data-based and accountable, cohesion envelope — by the OECD’s diagnosis, efficiency is decided by targeting and control, not by the quantity of resources.

Part IV — Expected impacts and risks

Dimension Expected impact Risk
Economy A preserved cohesion envelope + better targeting for the lagging districts; the new own resources cover the NGEU repayment If there is no agreement, the budget shrinks by as much as 40%; the backbone of the Hungarian development budget is damaged
Society Targeted distribution reduces territorial inequality; the Social Climate Fund protects against the carbon burden Losing the ETS2 concession would raise the energy bill of Eastern European households
Public administration The data-based data sheet + clawback dissolves the justification for rule-of-law conditionality The clawback and the mandatory CBA require administrative capacity; in the weak-absorption districts this is a bottleneck

The main trade-off is that the higher framework and the stricter control pull against each other: the thrifty camp would tie its support to a resource cut, the cohesion camp to a loosening of control. MIAK’s proposal dissolves precisely this — increasing targeting and accountability takes away the justification for a resource cut, because the efficiency argument thus stands beside the high framework. The proposal tips to the risk side if the Hungarian negotiating position hardens into an ideological veto: then the resource and the coalition strength are lost at once. The proposal, by contrast, works if Hungary steps to the negotiating table with a credible, quantified accountability commitment.

Part V — Measurability and summary

5.1 What is worth tracking? (suggested KPIs)

A few suggested performance indicators (KPIs) from which, in 12–24 months, it will be visible whether the direction is good:

  • Whether the MFF agreement is reached by the end of 2026 (the target deadline of the Council presidency).
  • Whether the 2028–2034 cohesion envelope, in real terms, does not fall below the 2021–2027 level of ~€376 billion.
  • Whether the resource share of the LHH districts moves from the 12–15 percent level towards the 25 percent target.
  • Whether the Eastern European ETS2 concession and the compensation of the Social Climate Fund are preserved.
  • Whether the irregularity rate of the Hungarian cohesion resources falls (target: below 0.5 percent, on the Estonian model).

5.2 Summary

MIAK’s message to decision-makers and to the public alike: in the EU budget battle the Hungarian interest is not the demonstrative exercise of the veto right, but the keeping of a high, but data-based and accountable, cohesion envelope, won through case-based coalitions. MIAK asks the government to bring a measurable accountability commitment to the negotiating table, not a threat. This approach moves two MIAK foundational values: data-drivenness — because targeting and the clawback decide on resources by measurement, not by political bargaining — and accountability — because it is precisely credible, public control that takes away the justification for a rule-of-law freeze, and is thus also the key to releasing the Hungarian resources. The two are not abstract labels here: the development money of the Hungarian regions hangs on them.

Part VI — Justifications and further sources

6.1 Press framing by spectrum

The topic ran primarily in the international specialist press, while the Hungarian papers focused on the domestic angle. The economic-professional band (Portfolio, and internationally Euractiv, EUobserver) framed the debate objectively, with figures: the emphasis was on the size of the framework, the new own resources and the risk of the 40 percent shrinkage, relatively free of political emotion. The international public-affairs band (AP, BBC, Deutsche Welle) highlighted the conflict of the member-state camps — “frugals vs. spenders” — and treated the Eastern European cohesion interest as a separate thread. The Hungarian liberal-left and public-affairs papers (HVG, Telex, 24.hu) typically approached from the side of the Hungarian resource release and rule-of-law conditionality — that is, from the domestic political stake, not from the whole MFF architecture. The conservative band (Magyar Nemzet, Mandiner) tended to bring the news about the resources in the frame of the EU–Hungary conflict. Looking at the spectrum as a whole, it is striking that the structural question — targeting, own resources, NGEU repayment — was treated substantively almost exclusively by the professional-international band; the domestic framing mostly narrowed to the question of “how much money comes to Hungary”.

6.2 Facts and data

Indicator Value Source
Commission MFF proposal ~€2,000 bn (7 years) European Commission, 2025
Council “negotiating box” €1.76 → €1.73 bn (−2%) EUobserver, 06/2026
Target revenue of new own resources ~€58–66 bn/year Euractiv / EUobserver
Share of the GNI-based resource ~59% of EU revenues OECD EU Survey 2025
Cohesion envelope 2021–2027 €375.9 bn OECD EU Survey 2025
Cohesion going to above-average regions ~30% OECD EU Survey 2025
Peak of NGEU repayment €26 bn (2028) OECD EU Survey 2025
Hungarian absorption rate ~95% KSH / EU data

6.3 Policy aspects

  • Economy (programme points) — data-driven budgeting (G1) and the Hungarian position on global economic governance (G27) give the frame of own resources and transparency;
  • Transparency and anti-corruption policy (programme points) — cohesion accountability (A8) is the key to dissolving conditionality;
  • Foreign policy (programme points) — case-based coalition-building (KP17) is the core of the negotiating strategy;
  • Territorial inequality and rural policy (programme points) — the data-based distribution of cohesion resources (TE2) and the micro-regional development index (TE1) provide the tools of targeting.

6.4 Literature in detail

6.4.1 OECD: EU Economic Survey 2025

The OECD report refutes with data the assumption that the problem of cohesion policy is a shortage of resources. According to the document the policy is “complex and not sufficiently targeted”, and many regions struggle to spend the resources precisely because of missing administrative capacity. On the question of own resources the report states that designating new own resources “would better align the budget with the EU’s objectives, and would reduce the member states’ net-balance (juste retour) considerations”. In the Hungarian reading this means: not the reduction of the framework, but the improvement of targeting and control is the right answer — which is precisely why MIAK builds the A8 and TE2 programme points on this diagnosis.

“Cohesion policy is complex and insufficiently targeted. Many regions struggle to spend the cohesion funds, due to insufficient administrative capacities…”

📖 Source: OECD: EU Economic Survey 2025

6.4.2 Joseph Stiglitz: Globalization and Its Discontents

The Nobel laureate American economist Joseph Stiglitz questions the automatism of market convergence. By his argument the benefit of growth does not spread broadly of its own accord: in the nineteenth-century United States it was precisely active state involvement — infrastructure, public education, land distribution — that made development inclusive. Translated to the cohesion debate, this means that the catch-up of lagging regions does not occur purely from the working of the internal market; it requires targeted, institutional redistribution. This gives the principled argument for a high, but well-targeted, cohesion envelope — as against the assumption that holding back resources can be substituted by a “the market will sort it out” logic.

📖 Source: Joseph Stiglitz: Globalization and Its Discontents

6.4.3 Paul Krugman: The Return of Depression Economics

The Nobel laureate American economist Paul Krugman warns of the risk on the other side. The phenomenon of the persistently depressed region — the former East Germany or the Italian Mezzogiorno — illustrates that a pure money transfer in itself does not create catch-up, if it is not accompanied by the development of local productive capacity and institutional quality. At the same time Krugman also criticises the austerity reflex: too-early fiscal tightening (its classic example is the 1997 Japanese tax rise) can turn into recession. The twofold lesson for the Hungarian position: the cohesion resource is worth something if it is targeted and paired with capacity-building — but the austerity logic of the “frugal” camp is not risk-free either, because a too-low framework can conserve the lagging-behind.

📖 Source: Paul Krugman: The Return of Depression Economics

6.5 International comparison

For improving targeting, the most instructive is the Polish model, where the regional (voivodeship) level receives substantive decision-making power in the distribution of resources, bringing the resource closer to local need. On accountability, the Estonian practice is the reference: through digital, real-time public-money tracking, the irregularity rate can be kept durably below 0.5 percent. Both models can be built into the Hungarian negotiating position — not as an abstract principle, but as a concrete, accountable commitment.

Economy

  • G1 — Data-driven budgeting
  • G27 — Reform of global economic governance, Hungarian position

Transparency and anti-corruption policy

  • A8 — Cohesion-policy accountability

Foreign policy

  • KP17 — Case-based coalition-building in the EU

Territorial inequality and rural policy

  • TE1 — Micro-regional development index
  • TE2 — Data-based distribution of EU cohesion resources

6.7 Source register

Press sources (MIAK foreign press monitor, 26 June 2026 — top-10 topics, ranked 2nd):

Knowledge-base references (literature):

  • 📖 OECD: EU Economic Survey 2025
  • 📖 Joseph Stiglitz: Globalization and Its Discontents
  • 📖 Paul Krugman: The Return of Depression Economics

Note: the local file path of the books does not appear in the blog’s visible text — only the author and the title. The file path is an internal matter of the generation process.

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G1, G27)
  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A8)
  • MIAK policy area: Foreign policy (programme points; programme point ID: KP17)
  • MIAK policy area: Territorial inequality and rural policy (programme points; programme point ID: TE2)
  • MIAK foreign press monitor, 26 June 2026 — topic 2, score: 90/100

Additional public data sources:

  • European Commission MFF 2028–2034 proposal; EU own-resources decision; KSH regional GDP; EU cohesion report

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