Part I — Situation overview

On 28 August 2026 the Romanian presidential office confirmed that parliament had not adopted by the 31 August deadline the public service wage reform tied to the recovery and resilience plan (with the Romanian abbreviation: PNRR). The consequence of the omission is numerical: some 770 million euros of EU funds are lost. According to Dragoș Pîslaru, minister for EU funds, Romania will nonetheless draw down more than 90 per cent of the available support — the part now being lost is therefore not the failure of the whole plan but one element of the last milestone package.

The real problem is not the missing revenue but the fact that it has already been spent. According to Euractiv’s report the government built the money into the budget and into ongoing projects, so the omission appears not as lost revenue but as an immediate fiscal deficit in the already tight Romanian public finances. And the reason for the omission was not a professional dispute but governmental stalemate: since the motion of no confidence in May Romania has had no government with full powers, and president Nicușor Dan postponed to September the continuation of the nomination of a prime minister.

The other side of the same coin is the Romanian integrity act of two days earlier. On 26 August parliament adopted by a large majority the legislation tightening the sanctions for abuses by holders of public office — also as a condition of the 770 million euro package. Caretaker prime minister Ilie Bolojan voted for it while himself calling one of its provisions immoral. An amendment entered the act which would terminate within thirty days the mandate of those office holders who were previously found liable in a conflict-of-interest case and for whom the three-year period of disqualification has not yet expired. According to the criticisms the provision targets by name Dominic Fritz, mayor of Timișoara, on account of an administrative conflict of interest from 2020 which has since been settled. The European People’s Party and Renew Europe both asked the European Commission to withhold the payment on this account; according to the Commission’s statement it will evaluate the integrity package as part of Romania’s sixth payment request, but that request has not yet been submitted.

MIAK’s reading: the two events together show that conditional EU funding carries two risks running in opposite directions. If the reform fails to materialise, the money is lost — and if it has already been budgeted for, it immediately punches a hole. If, on the other hand, it is born under the pressure of a deadline, regulation which is bad in substance can also pass parliament. From the point of view of the Hungarian situation both are practical questions, because the domestic recovery deadline expires next week.

Part II — Foundations in the literature

Three conceptual reference points help to place the Romanian case. The database of Carmen Reinhart and Kenneth Rogoff (Harvard economists, researchers who processed eight centuries of the history of financial crises) shows that the turning points of the debt path typically arise not from a single shock but from recurring small omissions and from the ever-returning illusion that “this time is different” — revenue which is budgeted for but does not arrive is the budgetary form of that illusion. Joseph E. Stiglitz (American economist, former chief economist of the World Bank, holder of the Nobel memorial prize in economics), in his analysis of the working of international systems of conditions, concludes that conditionality in itself does not produce good policy, because a rule born under external pressure is not politically durable. And the rule-of-law principle of Joseph Raz (Israeli-British legal philosopher) provides the yardstick needed for judging the contested provision of the Romanian integrity act: a retroactive rule is conceptually incapable of guiding conduct. The detailed treatment of the literature — author 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, all three relating to Hungarian budget planning. The proposals are not commentaries on the Romanian situation but domestic applications of the lesson to be drawn from it.

3.1 Conditional EU revenue on a separate, public budget line (in the 2027 budget act)

The act on the central budget should show every EU revenue whose disbursement is tied to a condition or milestone to be fulfilled on a separate, segregated and marked line — not among the ordinary revenue appropriations. The line should show the amount of the revenue, a short designation of the condition to be fulfilled, the deadline for fulfilment and the responsible ministry. This distinction is not a formality: the difference between an item of 500 billion forints appearing as certain revenue or as conditional revenue determines how much risk the expenditure built on it carries. The proposal is the direct application of MIAK’s G1 data-driven budget programme point, and technically it requires no new system — it is a matter of modifying the structure of the budget lines. Segregation is also supported by what Reinhart and Rogoff demonstrate on eight centuries of data (see 6.4.1): trouble rarely comes from a single great error, far more often from uncertain revenue being treated as certain for years.

3.2 A publicly available milestone tracker updated monthly

The Government should publish monthly a one-page, machine-readable statement on the state of every EU milestone in progress: what the undertaking is, what the deadline is, which ministry is responsible, what legislative or implementing step remains, and how much revenue depends on it. The publication should be placed on the public money page proposed by MIAK (A1) and should fit the data structure of the cohesion accountability programme point (A8). This is precisely the most important lesson of the Romanian case: there the omission became obvious after the expiry of the deadline, when there was no longer any room for correction. A monthly tracker does not guarantee fulfilment, but it makes slippage visible months earlier — and thereby gives a hold to parliamentary scrutiny as well, because a member of parliament can then ask not about the fact of fulfilment but about the process of fulfilment.

3.3 Expenditure built on conditional revenue only for postponable items (from the next budget planning round)

Budget planning should record the principle that only expenditure which can be postponed or phased if the revenue fails to arrive may be built on conditional EU revenue. Conditional revenue cannot be the cover for wage-type, pension-type or other expenditure creating a lasting obligation. This rule alone would have prevented the gravest consequence of the Romanian situation: the main problem is not the loss of the 770 million euros but the fact that the expenditure built on it is running. The principle carries further the logic of the G23 debt sustainability framework, and in the use of territorial funds it is in line with programme point TE2, and in the absorption of cohesion funds with programme point SZ14. One addition is important: the rule does not argue against the absorption of funds. On the contrary — the aim is that the effort to draw down funds as fully as possible should not create expenditure obligations which cannot be withdrawn if the milestone fails.

The three proposals run out into a single principle: conditional revenue should be visible as conditional. Not out of caution, but because this is the only way to handle the consequence of an omission in time. To this belongs MIAK’s fourth, principled claim as well: an EU deadline does not justify legislation which is bad in substance. A retroactive provision tailored to an individual person — whatever funding depends on it — is a circumvention of the rule-of-law system of conditions, not its fulfilment.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy The risk structure of the budget becomes visible; the share of expenditure built on conditional revenue is measurable and can be limited In the short term the segregated statement worsens the optics of the budget, because the “certain” revenue side looks smaller
Public administration Milestone responsibility is fixed ministry by ministry, slippage becomes visible months earlier The monthly report may become an administrative routine without substantive content
Territorial development The phaseability of projects becomes a planning criterion, hence fewer half-finished investments The requirement of phasing may exclude projects which are by their nature indivisible
Legislation Deadline pressure and the quality of legislation are separated, because slippage is known earlier If the tracker becomes a surface for political attack, ministries will be inclined towards optimistic status reports

The most important question for deliberation is the relation between publicity and bargaining position. A monthly statement on the fulfilment of milestones is also information for the negotiating partner: the European Commission sees where the member state stands, and this worsens the member state’s bargaining position in requests to modify deadlines. In MIAK’s position this price is worth paying, because in the present system the informational advantage belongs not to the member state but to the executive apparatus vis-à-vis its own parliament — the EU side knows the state of play in any case through the official reporting channels.

The second risk is the hollowing out of the report. If the monthly tracker communicates status colours without reasoning, it becomes meaningless within a few months. Only one instrument works against this: the report has to contain the concrete remaining step (preparation of legislation, submission, adoption, implementing decree, data provision), not a general percentage of readiness.

Part V — Measurability and summary

5.1 What is worth following? (proposed KPIs)

On the basis of the performance indicators (KPIs, Key Performance Indicators) below it will be possible in 12–24 months to judge whether the proposals work. These are proposed indicators, not government undertakings.

  • Segregation of conditional revenue: the amount and share, within total EU revenue, of items marked in the budget act as conditional EU revenue. Proposed target: comprehensive marking from the 2027 budget.
  • Coverage and freshness of the tracker: how many milestones the monthly statement covers, and how much time has passed since the latest update. Proposed target: every milestone in progress, with data no older than thirty days.
  • Forecasting accuracy: for how many milestones the tracker flagged the risk of slippage at least sixty days before the deadline. This indicator measures whether the system really gives early warning or merely documents.
  • Non-postponable expenditure on conditional revenue: how many forints of expenditure creating a lasting obligation are covered by conditional EU revenue. Proposed target: zero.

5.2 Summary

MIAK’s request in one sentence: in the draft of the 2027 budget act conditional EU revenue should be placed on a separate, marked line, and the Government should get started with publishing the monthly milestone tracker. The Romanian case deserves attention because there every actor proceeded in good faith according to their own logic — the government budgeted for the funding, parliament debated the reform, the presidential office signalled the omission — and yet the system lost 770 million euros. What was missing was not intention but the public statement from which it would have been visible in time that the tempo of the two processes did not match.

Two MIAK foundational values move together here. Data-drivenness, because the distinction between conditional and certain revenue is a purely technical question, yet it decides how much risk the budget takes on. And transparency, because the fulfilment of milestones is today hard to follow for Parliament too, even though it is Parliament that votes on the expenditure built on it. Whoever decides on the expenditure has to see the conditionality of the revenue as well — this is not an additional requirement but the meaningful condition of a budgetary decision.

Part VI — Justifications and further sources

6.1 The framing of the press, spectrum by spectrum

The Hungarian press segments published no analysis of their own on the Romanian case on that day, so the examination of framing can be carried out on the international sources — and the difference is significant there too.

Euractiv chose the EU institutional point of view: it framed the omission primarily as a fiscal consequence, highlighting that the money had already been budgeted for, so the cost falls on the Romanian public finances. The article quoted the Romanian government position too with striking balance — minister Pîslaru’s claim about a drawdown rate above 90 per cent — and treated the European Parliament criticism around the Fritz amendment as a separate thread. This is the frame in which the omission is not a scandal but an operational risk.

Balkan Insight, by contrast, placed the rule-of-law thread at the centre. The paper presented the integrity act not as the fulfilment of the 770 million euro package but primarily as a political instrument, and set out in detail the criticism that the amendment may run into the prohibition of retroactivity, or may qualify as the use of law against a political opponent. The article also highlights the point that the act replaces detailed asset declarations with declaration-of-interest forms containing less information — this detail is entirely absent from the EU institutional framing.

The two framings concern the same 770 million euros, yet give opposite readings. In one the money was lost because the reform failed to materialise; in the other the money is risky because the reform which was born is attackable in substance. In MIAK’s position both are true, and it is precisely their coexistence that shows that a deadline in itself is not a guarantee of quality.

6.2 Facts and data

Datum Value Source
The order of magnitude of the lost EU funding some 770 million euros Romanian presidential office, Euractiv, 28 August 2026
The deadline of the missed milestone 31 August 2026 Euractiv
Romania’s expected drawdown rate from the recovery fund above 90 per cent Dragoș Pîslaru, minister for EU funds
The adoption of the Romanian integrity act 26 August 2026 Balkan Insight
The scope of the contested provision termination of the mandate within 30 days of entry into force Balkan Insight
The weight of EU funds in the Romanian economy about a third of GDP Balkan Insight
The estimated order of magnitude of the forgone infrastructure support a further 9 billion euros Florin Cîțu, former prime minister, Euractiv
The beginning of the Romanian governmental stalemate May 2026 (motion of no confidence) Euractiv

Two of the data deserve particular attention. One is the proportion: the 770 million euros is a small fraction of Romania’s total recovery envelope, yet it causes an immediate budgetary problem — precisely because on the revenue side it figured as certain and on the expenditure side as already spent. The other is former prime minister Cîțu’s estimate of 9 billion euros of forgone infrastructure support: this is the claim of a political actor, not an official calculation, so MIAK treats the order of magnitude as indicative, not as a factual datum.

Part of the Hungarian context is that the domestic recovery deadline expires next week, and the EU revenue items of the Hungarian budget are not at present separated according to whether they are tied to a condition to be fulfilled. This is the structural difference which proposal 3.1 aims to eliminate.

6.3 Policy dimensions

  • Economy (programme points) — the segregated statement of conditional revenue is the planning side of the data-driven budget (programme point ID: G1); limiting the expenditure built on it belongs to the debt sustainability framework (programme point ID: G23); the subsequent evaluation of programmes tied to milestones falls within the scope of the Drucker audit (programme point ID: G20).
  • Transparency and anti-corruption policy (programme points) — the publication surface of the milestone tracker is the public money dashboard (programme point ID: A1), and its data structure builds on the project data sheets under the cohesion accountability programme point (programme point ID: A8).
  • Territorial inequality and rural policy (programme points) — the data-based allocation of cohesion funds (programme point ID: TE2) is connected because a missed milestone lands unevenly across territories: in the most disadvantaged regions the chance of making up the shortfall from own resources is smallest.
  • Social policy (programme points) — the maximal absorption of the cohesion allocation (programme point ID: SZ14) names precisely the risk which appeared here in reverse: the logic of “drawing down at any price” finances badly planned projects, while the logic of “revenue taken as certain” finances uncovered expenditure.

6.4 Literature in detail

6.4.1 Carmen M. Reinhart – Kenneth S. Rogoff: This Time Is Different

On the basis of their database covering eight centuries and sixty-six countries the authors conclude that sovereign debt crises are not exceptional events but recurring patterns, and that the common element leading to them is not bad intent but recurring self-deception:

“Major default episodes are typically spaced some years (or decades) apart, creating an illusion that »this time is different« among policymakers and investors.”

According to the volume the “this time is different” illusion feeds on the fact that decision-makers see their own situation as structurally different from previous ones — while the mechanism is the same. The Romanian case is a scaled-down, budget-level version of this: the government took the fulfilment of the milestone as certain because it had been fulfilled before, and treated the uncertainty not on the revenue side but at the level of political intention. MIAK’s proposal 3.1 therefore does not seek to eliminate the uncertainty of the revenue — that is not possible — but to make the uncertainty visible in the budget document as well. The same thought stands behind MIAK’s G23 programme point, which proposes an early warning system for the debt path.

📖 Source: Carmen M. Reinhart – Kenneth S. Rogoff: This Time Is Different

6.4.2 Joseph E. Stiglitz: Globalization and Its Discontents

Analysing the system of conditions of the international financial institutions, Stiglitz concludes that conditionality in itself does not produce good policy:

“While conditionality did engender resentment, it did not succeed in engendering development. […] Good policies cannot be bought.”

The essence of the argument is not that conditions are superfluous, but that a rule adopted hastily under external pressure is not politically durable: Stiglitz highlights separately that conditions often did not work because new governments abandoned them, or because the manner of introduction made the rule politically unsustainable. The Romanian integrity act shows exactly this pattern: even the party which opposed it in substance voted for it, on the ground that fulfilling the milestone comes before the dispute, and immediately announced that it wishes to amend it in the near future. A rule which those adopting it already intend to amend on the day of the vote is not a reform but the meeting of a deadline. From this follows MIAK’s principled claim: in the fulfilment of the Hungarian milestones too the real yardstick is not the date but the durability of the rule — the same consideration which MIAK also represents in connection with the reversibility of domestic legislation.

📖 Source: Joseph E. Stiglitz: Globalization and Its Discontents

6.4.3 Joseph Raz: The Authority of Law

Judging the contested provision of the Romanian integrity act requires not a political but a legal-theoretical yardstick. Raz begins the enumeration of the basic principles of the rule of law with this:

“All laws should be prospective, open, and clear. One cannot be guided by a retroactive law. It does not exist at the time of action.”

Raz’s argument is formal and for that very reason strong: a retroactive rule is objectionable not because it may be unjust, but because it is conceptually incapable of what law is for — guiding conduct. Someone who decided in 2020 on a spatial planning document could not have been guided by a rule entering into force in 2026. This yardstick applies to Hungarian legislation in the same way, and for MIAK the conclusion of principle is twofold. On the one hand the risk of losing EU funding does not make acceptable a retroactive provision tailored to an individual addressee. On the other — and this is the harder part — the same yardstick is valid even when the provision is born in the service of an objective which MIAK too endorses. Holding to account can be carried out by rule-of-law instruments as well; retroactivity does not speed it up, it only makes it attackable.

📖 Source: Joseph Raz: The Authority of Law — Essays on Law and Morality

6.5 International comparison

There are several established European solutions for the budgetary treatment of conditional revenue, and they were developed not for EU funds but for uncertain revenue in general.

In the Netherlands the budgetary rule system sharply separates the revenue and the expenditure side: the expenditure ceiling is fixed at the beginning of the cycle, and an unexpected turn on the revenue side — whether positive or negative — cannot automatically modify expenditure. The consequence of this structure is that revenue failing to arrive does not force expenditure cuts during the year, because the expenditure was not built on that particular revenue in the first place.

In Sweden, alongside the multi-year expenditure ceiling and the balance target for the cycle, uncertain revenue items are accompanied by a planning safety reserve. The essence of the solution is not severity but publicity: the size and use of the reserve is visible, so parliament knows how much uncertainty it has accepted.

The mid-term evaluations of the European Commission on the recovery instrument identified in several member states the same pattern which has now culminated in Romania: the fulfilment of milestones is primarily a question not of policy but of governmental implementation capacity, and a shortage of capacity usually becomes visible close to the deadline. This observation is the most important international support for MIAK’s proposal 3.2: if the shortage of capacity is the problem, then early signalling is worth more than a stricter condition.

Economy

  • G1 — Data-driven budget
  • G20 — Economic policy impact assessment system (Drucker audit)
  • G23 — Public debt sustainability framework

Transparency and anti-corruption policy

  • A1 — Public money dashboard
  • A8 — Cohesion policy accountability

Territorial inequality and rural policy

  • TE2 — Data-based allocation of EU cohesion funds

Social policy

  • SZ14 — Cohesion Pillar 2.0 — maximal absorption of the Hungarian allocation

Proposed new programme point: Segregated budgetary statement of conditional EU revenue and a monthly milestone tracker — for the Economy area.

6.7 List of sources

Press sources (MIAK foreign press monitor, 29 August 2026 — topic 2):

Knowledge base references (literature):

  • 📖 Carmen M. Reinhart – Kenneth S. Rogoff: This Time Is Different
  • 📖 Joseph E. Stiglitz: Globalization and Its Discontents
  • 📖 Joseph Raz: The Authority of Law — Essays on Law and Morality

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G1, G20, G23)
  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A1, A8)
  • MIAK policy area: Territorial inequality and rural policy (programme points; programme point ID: TE2)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ14)
  • MIAK foreign press monitor, 29 August 2026 — topic 2, score: 88/100

Supplementary public data sources:

  • European Commission — Recovery and Resilience Scoreboard (Romania and Hungary)
  • Eurostat — government deficit and debt data
  • European Court of Auditors — reports on the recovery and resilience facility

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