Part I — Situation overview

On Monday 17 August 2026 the European Commission adopted the detailed guidance that opens the so-called national escape clause to energy-security expenditure. The clause was originally created for increasing defence spending; the Commission signalled the extension in June, in the spring package of the European Semester, invoking the increased risks on the energy market. The essence of the rule is that a member state may temporarily deviate from the net expenditure path approved by the Council — from that indicator which, in the EU budgetary framework adopted in 2024, took the place of the earlier several target figures, and adherence to which is the single reference basis of compliance.

The limits of the envelope are narrow, and it is worth reading this precisely. Under the national escape clause all deviation together may amount to at most 1.5 per cent of gross domestic product (GDP), and the energy-security easing does not raise this upper limit: energy fits inside this envelope, not above it. A separate, lower limit applies to energy-security items — at most 0.3 per cent of GDP a year, 0.6 per cent in total for the whole period — and the easing can be applied between 2026 and 2028. Only a measure can be accounted for that was decided after 28 February 2026, that the member state finances from its own resources, and that has a direct effect on public finances. The Commission examines every single measure separately: existing items cannot be given an energy-security label. According to Portfolio’s analysis the Hungarian utility-price cut falls out for two reasons — on the one hand it is a general subsidy independent of income position, on the other hand it has been in force continuously since 2014, so it is not a new measure. Telex adds to this the conclusion most important from the Hungarian point of view: if defence spending on its own fills up the one and a half per cent — as happened most recently — then there is nothing to be done with the energy-security easing.

The Hungarian budgetary situation runs in parallel with two clocks. One is the excessive deficit procedure (EDP — Excessive Deficit Procedure), the European Union’s procedure that is started if a member state’s deficit is persistently high. It was started against Hungary in 2024; in June the Commission proposed that the member states should not take further steps, while warning separately that the procedure can be moved on to a later stage. The other clock is shorter: out of the roughly 16.4 billion euros of previously frozen EU funds released following the agreement at the end of spring, about 10 billion euros are tied to the recovery fund, where the reforms and investments committed to have to be implemented by 31 August, and the remaining payment requests can be submitted by the end of September. The constitutional court motion attacking the domestic legal pillar of the package was dismissed by the panel in mid-August — that is, the legal obstacle has been removed, and what remains is purely a question of implementation and timing.

MIAK’s reading is that Monday’s Commission decision is easy to misunderstand, and the misunderstanding is expensive. This is not a “lifebelt” and not an extra resource: it is a temporary possibility of deviation, capped from above, within an envelope shared with other purposes, the price of which appears after the clause expires. Where the Hungarian policy question is really decided is not how large an exception can be asked for, but whether the available room for manoeuvre is planned — and how much of what the country has already won is actually fulfilled by the end-of-September deadline.

Part II — Foundations in the literature

The framework of principle of the question has two layers. One layer is technical: the OECD’s open-access report Economic Surveys — European Union and Euro Area 2025 describes in detail the new budgetary rule system adopted in April 2024, which replaced the earlier several target figures with a single indicator, the growth of medium-term net expenditure. The report highlights separately that compliance with the rules has so far been only partial, and that the use of cohesion funds is slow. The European Commission’s institutional publication 2026 European Macroeconomic Report adds to this that the use of the escape clause is not free: in the period after the clause expires it requires an average of 0.4 percentage points (pp) of additional correction. The other layer is behavioural, and this is the more important one from the point of view of the Hungarian decision: János Kornai (economist of Hungarian origin, the developer of the theory of the soft budget constraint; Harvard professor between 1986 and 2002) described in his 1980 work A hiány (Economics of Shortage) that the hardness of the budget constraint depends not on the text of the rule but on the expectations of the actors. If bail-out events repeat themselves densely enough, the general conviction develops that the constraint is soft. A time-limited exception therefore becomes dangerous not from being used once, but from becoming routine. The detailed treatment of the literature — author by author, with quotations — can be found in the 6.4 Literature in detail section.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures. What they have in common is that none of them is about whether Hungary should make use of the possibility — that is a matter of government judgement. All three are about the decision being public, quantified and time-limited.

3.1 A public summary of the application for use of the escape clause (simultaneously with the submission of the application)

If the government submits an application for the application of the energy-security exemption, let it publish the non-confidential summary of the application, and do so simultaneously with the submission — not after the Council’s decision. The summary should contain, item by item, which measures the government designates, with what sum, with what energy-security output indicator (for example installed storage capacity, cross-border capacity, reduced import dependence), and for which year. This is the direct application of the G1 data-driven budget and the G19 radical transparency in economic decision-making programme points. The reason is practical: the Commission examines every measure separately, and publicly expects the greatest energy-security result alongside the smallest budgetary burden. An application whose reasoning is public in advance receives professional criticism before the assessment — which improves the chance of acceptance, it does not worsen it.

3.2 A compulsory expiry date for every expenditure item notified under the clause (by the fourth quarter of 2026)

Every expenditure item that the government notifies under the escape clause should be given, in the domestic legal or budgetary decision, an expiry date — that is, a point in time fixed in advance at which the measure ceases automatically unless the legislator amends it before then. The date should be the end of 2028 at the latest, in line with the period of application of the clause. This proposal is not against the expenditure but against its getting stuck. According to the Commission’s institutional analysis, the use of the clause entails an average of 0.4 percentage points of additional correction from 2029. If, however, the items launched under the clause carry on without a deadline, the correction burden will not be 0.4 but larger, and the withdrawal will affect not the investments launched now but the operating expenditure of that time. According to the logic of the G23 public-debt sustainability framework, such an automatic expiry is the cheapest disciplining instrument available, because it requires no later political decision for termination — only for maintenance.

3.3 A public, month-by-month fulfilment schedule for the remaining commitments of the recovery fund (immediately, with weekly updates until the end-of-September deadline)

According to MIAK the most urgent item of today is not the fiscal room for manoeuvre but the calendar. The fate of the roughly 10-billion-euro item tied to the recovery fund depends on commitments to be fulfilled by 31 August and on payment requests to be submitted by the end of September. The government should publish a statement by commitment and by status — fulfilled, in progress, at risk — and update it weekly until the deadline, and then until the payment requests are submitted. This is the intersection of the SZ14 Cohesion Pillar 2.0 and the A8 cohesion policy accountability programme points: both prescribe a public project-level data sheet, and the present deadline situation is the moment when this has the greatest use. If a commitment slips, it is better to know it two weeks earlier than after the deadline.

The three proposals are bound together by a single principle: temporary easing remains temporary only if its expiry is written in in advance. According to Kornai’s proposition it is not the individual bail-out that softens the constraint but the expectation that develops out of the frequency of bail-outs (see 6.4.3); the expiry date and the public application are precisely what keep this expectation in order. The same is true in the other direction: fulfilling the September deadline is not a question of money but a question of implementation capacity — and implementation capacity can be managed only if it is visible where it stands.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy Energy-security investments get temporary room for manoeuvre within the expenditure path; the correction after 2029 can be calculated in advance The room for manoeuvre is narrow and shared with defence spending; if the defence items fill up the envelope, the easing is practically empty
Budget The expiry date prevents temporary items from becoming a permanent expenditure level If termination is politically expensive in the months before expiry, the legislator will simply extend it — the date on its own is not enough, publicity is needed too
EU funds The weekly updated fulfilment statement makes slippages still correctable before the September deadline The public status report gives a surface for political attack; this risk is real, but missing the deadline is more expensive
Transparency The publicity of the application brings professional criticism before the assessment A formal summary without figures is worse than nothing, because it creates the appearance of accountability

The most important question of judgement in the package is how far the government is bound by its own publicity. The price of proposal 3.1 is real: a summary of the application published in advance reduces the room for the government to rearrange the items along the way following the Commission’s observations. In MIAK’s position it is worth taking on this cost, because in the present Hungarian situation — with an ongoing excessive deficit procedure, in the first months of a renewed relationship of trust — predictability is worth more than tactical flexibility. The proposal tips over to the risk side if the energy-security labelling takes place without real content: in that case publicity does not improve but worsens the position, because it makes the gap visible. This is why MIAK proposes items tied to an output indicator — installed capacity, import-dependence ratio — and not merely a list expressed in forints. The risk of proposal 3.3 is simpler: if the weekly updated statement brings bad news, that is politically unpleasant. Its only alternative is that the bad news comes to light after the deadline — and then it can no longer be corrected.

Part V — Measurability and summary

5.1 What is worth following? (proposed KPIs)

MIAK proposes the public following of the following performance indicators (KPIs — Key Performance Indicator):

  • The fulfilment rate of the remaining commitments of the recovery fund by the end-of-September deadline for submitting requests — proposed target value: 100 per cent of the submittable payment requests submitted on time.
  • The proportion of expenditure items notified under the escape clause that have an expiry date attached — proposed target value: 100 per cent from 2027.
  • The energy-security deviation actually used as a proportion of GDP, annually — the upper limit is 0.3 per cent a year and 0.6 per cent in total; a proposed point of following is how much output result the envelope used has produced.
  • The Hungarian general government deficit as a proportion of GDP, measured against the net expenditure path, in quarterly breakdown — proposed target value: a return to the path approved by the Council by the expiry of the clause.
  • The proportion of projects financed from EU funds that have a public project-level data sheet — the 100 per cent target for 2027 under the A8 programme point.

These are proposed indicators, not government commitments; MIAK as a shadow government considers these worth following.

5.2 Summary

MIAK’s key message in a single sentence: the energy-security easing is not a new resource but a loan from the future Hungarian budget — it may therefore be used only for items that are publicly justified, tied to an output indicator and provided with an expiry date. MIAK asks the decision-maker to publish the summary of the application simultaneously with its submission, to assign to every notified item an expiry date running to the end of 2028, and to give a weekly updated status report by commitment on the remaining commitments of the recovery fund. And it asks of the public that in the coming weeks it should watch not the size of the sum won, but the proportion of commitments fulfilled by the end of September.

Two MIAK foundational values are in play here. Data-drivenness, because an exemption that has no output indicator is impossible to judge afterwards: the use of the envelope is not in itself a result, only the capacity built out of it is. And accountability, because the consequence of the expenditure under the clause appears with a time lag, from 2029 — that is, it will burden a government that has not yet been elected today. A decision whose bill arrives in the next parliamentary term is fair only if the amount of the bill is visible today as well.

Part VI — Reasoning and further sources

6.1 The press framing by spectrum

The economic band carried the topic in the most detail, and at the same time in the most restrained way. Portfolio unpacked the technical content of the Commission guidance: the eligibility conditions, the 28 February 2026 decision threshold date, the Commission’s examination measure by measure, and the emphatic distinction that the easing does not mean that the expenditure “does not count” towards the deficit — only that one can deviate from the net expenditure path within defined limits. The paper also went into why the utility-price cut falls outside the eligible measures.

The liberal-left band framed the same material with a political assessment: Telex already indicated in its headline that the easing “may not help” the Hungarian budgetary situation, and the article’s main claim is exactly what is the starting point of the present analysis too — energy-security items count towards the same one and a half per cent envelope as defence ones, so the room for manoeuvre is smaller than it appears at first. The paper also recalled the Hungarian antecedents of the excessive deficit procedure. HVG embedded the topic in a broader analysis about EU funds.

The conservative band on this day carried not the budgetary clause but the institutional set of conditions attached to EU funds: both Magyar Nemzet and Mandiner dealt with the debate around Dávid Vitézy’s statement, that is, with the question out of what consideration Hungary joined the European Public Prosecutor’s Office. From MIAK’s point of view this is the other side of the same matter: the linking of EU funds and the anti-corruption institutional set of conditions. This point is substantive, and it is so precisely because it is the quality of the fulfilment of the set of conditions — not the motivation for joining — that decides whether the funds now released can actually be drawn down.

6.2 Facts and data

Datum Value
The total deviation envelope of the national escape clause at most 1.5 per cent of GDP
Of this, the annual limit for energy-security items 0.3 per cent of GDP
The whole-period limit for energy-security items 0.6 per cent of GDP
The period of application of the easing 2026–2028
The decision threshold date for eligibility 28 February 2026
The average additional correction requirement after the clause expires (Commission estimate) 0.4 percentage points (pp), from 2029
The number of member states using the defence-purpose clause 16
The launching of the Hungarian excessive deficit procedure 2024
The previously frozen EU funds being released approx. 16.4 billion euros
Of this, the part tied to the recovery fund approx. 10 billion euros
The deadline for fulfilling the recovery fund’s commitments 31 August 2026
The deadline for submitting payment requests end of September 2026

Two rows of the table pull against each other, and the Hungarian planning task is composed out of this. One is the room for manoeuvre: 0.3 per cent of GDP for one year is not a negligible sum, but it is not one that changes the order of magnitude either — roughly as much as a single medium-sized energy infrastructure programme costs. The other is the calendar: the additional correction due from 2029 sets in even if the country actually drew down less of the room for manoeuvre. It is this asymmetry that justifies MIAK’s proposal 3.2 — the expiry date is needed so that by the time of the correction no expenditure item opened up by the clause remains in the system.

6.3 Policy dimensions

  • Economy (programme points) — adherence to the net expenditure path, the data-driven budget and the public-debt sustainability framework; this is the centre of gravity of the topic.
  • Foreign policy (programme points) — the Commission and Council assessment procedure, and the predictability of the Hungarian position in the course of the European Semester.
  • Social policy (programme points) — the drawdown capacity of the cohesion allocation and monitoring under Cohesion Pillar 2.0.
  • Transparency and anti-corruption policy (programme points) — public project-level data sheets and cohesion accountability.

6.4 Literature in detail

6.4.1 OECD: Economic Surveys — European Union and Euro Area 2025

The OECD report highlights as the most important innovation of the rule system adopted in April 2024 that a single indicator, the growth of medium-term net expenditure, took the place of the several earlier operational target figures, and that after the Council’s approval “the net expenditure path becomes the single reference basis for assessing compliance with the EU budgetary rules”. At the same time the report makes two findings that relate directly to the Hungarian situation. One is that compliance with the rules has so far been only partial, and that several member states’ medium-term plans contain a less strict adjustment than the earlier Commission guidance, in some cases by pushing the correction back. The other is that the use of cohesion funds is slow — the report presents this in a separate figure — and that the effectiveness of cohesion policy is limited primarily by the lack of administrative capacity and by corruption risk, not by the size of the funds.

From MIAK’s point of view this second finding is the more important, because it describes the present Hungarian bottleneck. When the end-of-September deadline for submitting requests is at stake, the question is not how much money is available, but whether the implementing apparatus is able to fulfil and document in time. The A8 programme point quotes this same report as a source, and draws the same conclusion: the solution is not fewer funds but better control and better capacity.

📖 Source: OECD: Economic Surveys — European Union and Euro Area 2025

6.4.2 European Commission: 2026 European Macroeconomic Report (Institutional Paper 328)

The Commission’s institutional report describes the national escape clause with the following structure: the clause allows member states to exceed the highest rate of net expenditure growth set by the Council, provided that the excess derives from the increase of defence spending and that budgetary sustainability is preserved. The flexibility — as the report puts it — is limited in time (until 2028), in subject matter (exclusively for defence spending) and in size (capped at 1.5 per cent of GDP), precisely so that it should not endanger sustainability. The document also records that sixteen member states currently make use of the flexibility given by the clause.

From the point of view of the Hungarian decision, however, the report’s most important claim relates to the period after the clause: according to the estimate, the expenditure raised in the active period of the clause (2025–2028) will require in the period beginning in 2029 an average of 0.4 percentage points of additional adjustment, which can be moderated to roughly 0.25 percentage points by extending the adjustment period to seven years. It is this figure that makes today’s decision a planning task: the clause does not remit, it defers. The Hungarian path under the G23 public-debt sustainability framework remains sustainable only if this deferred burden already appears in the medium-term plan today.

📖 Source: European Commission: 2026 European Macroeconomic Report (Institutional Paper 328)

6.4.3 János Kornai: A hiány (Economics of Shortage)

In the thirteenth chapter of A hiány Kornai introduces the concept of the soft budget constraint: that state in which the state regularly bails out the losing economic actor, so that the actor’s behaviour is no longer tied to its own solvency. The volume’s closing proposition on this is the following:

“In the end the soft budget constraint does not bind the firm’s action in the real sphere, in production, in buying and in selling. The soft budget constraint — in contrast with the hard one — is not able to act as an effective constraint on behaviour, but exists only as a mere accounting relation.”

From the point of view of the Hungarian decision, however, another observation of Kornai’s is the more important one, and it is this that underpins proposal 3.2. In Kornai’s description the hardness of the constraint depends not on the rule itself but on the expectations of the actors: if events of the type that create the impression of a soft constraint occur densely enough, and their frequency crosses a critical value, the general conviction develops that judges the constraint to be soft. Kornai described this for firms; the proposition, however, can be carried over precisely to the relation between the member state and the EU budgetary framework. A single, well-delimited and expiring exemption does not soften the framework. An exemption, however, that renews automatically or that has no end builds up the expectation that adherence to the path is negotiable. The expiry date is therefore not a bureaucratic formality: it is the element that keeps the exception an exception.

📖 Source: János Kornai: A hiány (Economics of Shortage, 1980)

6.5 International comparison

In the use of the clause member-state practice already varies today, and one can learn from this variation. According to the European Commission’s report sixteen member states make use of the defence-purpose flexibility — that is, the majority of member states, but not all of them. The OECD report adds to this that five member states — Finland, France, Italy, Romania and Spain — extended the adjustment period from four to seven years, because the Commission assessed their reform and investment commitments as supporting sustainability. This extension is the second possible source of Hungarian room for manoeuvre, and it works independently of today’s decision: it is not an exception but a longer path, in return for reforms committed to.

The lesson for Hungarian planning is twofold. On the one hand, flexibility is not obtainable through a single channel, and the longer adjustment period is typically cheaper, because it does not come with a deferred additional correction but with a stretched-out path. On the other hand, both routes are conditional: the extension on reforms committed to, the clause on demonstrating the energy-security output. The member state that does well is the one that knows in advance what it commits to — and this leads back to proposal 3.1.

Economy

  • G1 — Data-driven budget
  • G19 — Radical transparency in economic decision-making
  • G20 — Economic policy impact assessment system
  • G23 — Public-debt sustainability framework

Social policy

  • SZ14 — Cohesion Pillar 2.0: maximum use of the Hungarian allocation

Transparency and anti-corruption policy

  • A8 — Cohesion policy accountability

Foreign policy

  • KP17 — Issue-based coalition building in the EU

Proposed new programme point: Compulsory expiry date for expenditure items notified under the budgetary escape clause — for the Economy area.

6.7 List of sources

Press sources (MIAK press monitor, 18 August 2026 — topic 2):

Knowledge base references (literature):

  • 📖 OECD: Economic Surveys — European Union and Euro Area 2025
  • 📖 European Commission: 2026 European Macroeconomic Report (Institutional Paper 328)
  • 📖 János Kornai: A hiány (Economics of Shortage)

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G1, G19, G23)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ14)
  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A8)
  • MIAK press monitor, 18 August 2026 — topic 2, score: 89/100

Supplementary public data sources:

  • European Commission — the August 2026 guidance on the application of the national escape clause
  • Eurostat — general government data related to the excessive deficit procedure
  • EU Cohesion Open Data Platform — cohesion drawdown data
  • Hungarian Central Statistical Office (KSH) — Hungarian general government and GDP data

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