Part I — Situation overview

On 9 October 2026, citing 12 EU diplomats, Politico wrote that in the negotiating document to be sent out on Saturday, 10 October, the Irish presidency will cut the proposal of nearly 2,000 billion euros for the 2028–2034 multiannual financial framework by 100–200 billion euros. The multiannual financial framework is the European Union’s long-term budget. The cut is a gesture to the “frugal” group led by Germany, which demands a smaller budget. Dublin largely shields agriculture and regional spending, a concession to the Friends of Cohesion group of 17 southern and eastern European member states. Governments are therefore preparing for significant reductions in the 200 billion euro Global Europe external action instrument and the 410 billion euro European Competitiveness Fund. According to the paper, the presidency is keeping the five new EU revenue sources, among them the corporate levy referred to in EU jargon as CORE. Small and medium-sized enterprises could be exempted. In EU practice the negotiating document is called the “nego-box”. The heads of state and government will respond to it at next week’s summit; António Costa, President of the European Council, would like an agreement by Christmas.

On 27 August MIAK proposed a public Hungarian negotiating mandate, on 17 September measurable rule-of-law conditions, and on 30 September a performance commitment in the Friends of Cohesion declaration. Now there are two new facts. The first is inflation. Rapporteur, the Brussels trade publication operating as the successor to Euractiv, saw a Commission document dated 2 October. According to it, the proposal has shrunk from 1.15 per cent of gross national income (GNI) to 1.11 per cent, because of the gap between the 2 per cent price index used for the calculation, the deflator, and EU inflation expected at 3.1 per cent. This is less than the 1.13 per cent of the current framework at the time of its adoption. The second is the joint debt. According to the European Court of Auditors’ annual report of 8 October, about 20 per cent of the proposal depends on new revenues not yet adopted, and EU debt could reach 1,000 billion euros by 2027.

MIAK’s reading: shielding the cohesion and agricultural envelopes looks like a Hungarian success at first glance. The real questions, however, will be decided in the less visible parts of the package: how much the protected amount is worth in real terms, and who pays for repaying the joint debt.

Part II — Foundations in the literature

Three sources provide the interpretive framework. Under Article 312 of the Treaty on the Functioning of the European Union (TFEU), the multiannual financial framework is adopted by the Council unanimously, and under Article 311 a new system of own resources enters into force only after approval by the member states. Article 312(4) also states that if there is no new framework, the ceilings of the last year of the previous one remain in force. Adam Smith, Scottish philosopher and economist and founder of classical economics, describes in the chapter on public debt in The Wealth of Nations how governments slide from repayment within a fixed term into perpetual debt on which only interest is paid. They serve the needs of the present and leave the liberation of revenue to their successors. The chapter on Kissinger in Diplomatic Theory from Machiavelli to Kissinger, edited by G. R. Berridge, Maurice Keens-Soper and Thomas G. Otte, presents the principle of linking issues. According to it, the negotiating party does well if it handles seemingly separate questions as a single package. Taken together, the three sources say: Hungary has a veto, but the veto ties it to the old framework. The real bargaining position is therefore given by handling spending, revenue and debt simultaneously and in numbers. The detailed discussion of the literature — 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. The first is a quick and public assessment of Saturday’s package, the second is warding off the hidden cut caused by inflation, and the third is a Hungarian position on repaying the joint debt.

3.1 A Hungarian impact sheet on the nego-box within 48 hours, and a hearing in the National Assembly’s committee responsible for EU affairs before the summit (by 12 October and 14 October respectively)

MIAK proposes that the Ministry of Finance and the Ministry of Foreign Affairs publish a short impact sheet on Saturday’s document by 12 October. It should have four parts. First: the Hungarian cohesion and agricultural envelope measured against the Commission’s 2025 proposal, the June negotiating box and the 2021–2027 framework, both in nominal terms and at constant prices. Second: the composition of the cut. The Competitiveness Fund, the research programmes and the external action instrument are not pre-allocated money but competitive funding, so the Hungarian loss here depends on the expected success rate of domestic applicants. The impact sheet should show what the protected envelope and the shrinking competitive funding mean together. Third: the revenue side. How large would the burden on Hungarian companies and on the budget be from the five new own resources, with the SME exemption and the amendment of the tobacco levy. Fourth: the Court of Auditors’ scenario. What happens to the Hungarian national contribution if the new revenues do not materialise and the shortfall has to be covered by member state contributions. The Government should present the impact sheet to the National Assembly’s committee responsible for EU affairs by 14 October. This is also a precondition of KP17 issue-based coalition building: within the Friends of Cohesion group, the one who arrives with numbers gets a say. Under the TE2 principle of data-based allocation, the impact sheet is also the starting point for planning the territorial use of the funds at home.

3.2 Initiating an inflation-correction clause in the Friends of Cohesion group (at the summit of 15–16 October, built into the final agreement)

According to the document seen by Rapporteur, the real value of the proposal fell because inflation exceeded the framework’s 2 per cent deflator. This is a hidden cut for every cohesion country: the nominally protected envelope buys fewer roads, schools and machines. In an opinion piece published by EUobserver, the European Parliament’s two budget rapporteurs, Siegfried Mureşan and Carla Tavares, wrote that the current framework has lost about 10 per cent of its purchasing power since its adoption. MIAK proposes that at the summit the Hungarian government, together with the Friends of Cohesion group, initiate a narrow, rule-based inflation-correction clause. For example: if EU inflation exceeds the deflator by more than 1 percentage point in two consecutive years, the ceilings of the framework are adjusted to the actual price level at the mid-term review. The cost of the clause falls on the net contributors, so the Hungarian offer must also include a counterpart. This could be the performance commitment proposed on 30 September or a tightening of A8 cohesion accountability. According to the Kissinger chapter of Berridge’s volume (see 6.4.3), it is precisely such linkage that makes the request negotiable.

3.3 A public Hungarian position on repaying the joint debt, with a generational calculation (before the summit, and updated in President Costa’s negotiating phase)

According to the Court of Auditors, the Commission plans a fixed 24 billion euros a year for interest and principal repayment on the borrowing of NextGenerationEU, the recovery fund set up after the coronavirus pandemic. This amounts to 168 billion euros over the 2028–2034 period. The interest on the non-repayable grants alone could be about 93 billion euros. The proposal would also allow new borrowing: up to 100 billion euros to support Ukraine and 395 billion euros for a crisis instrument. The Friends of Cohesion are open to slower repayment and new joint borrowing, while the frugal group opposes both. MIAK proposes that before the summit the Hungarian government publish the size of the Hungarian burden in three cases: with the fixed repayment planned by the Commission, with a stretched-out repayment, and if the new loans are taken out. The position should also set out the condition under which Hungary supports slower repayment. Such a condition could be that stretching may only come with a binding repayment schedule and a new own resource earmarked for repayment. According to Smith (see 6.4.2), postponed repayment is always more attractive to the decision-maker of the present, but it leaves the burden to successors. The principle of the G23 debt sustainability framework applies not only to national debt but also to EU obligations.

The three proposals are linked by a single principle: Hungary’s bargaining position is strongest where it handles spending, revenue and debt as one package. Because of Article 312(4) TFEU (see 6.4.1), a veto would mean extending the old framework. A package offer backed by numbers, however, can shape the content of the agreement.

Part IV — Expected impacts and risks

Dimension Expected impact Risk
Budget and development policy The real value of the protected envelope becomes visible, and the inflation loss can be warded off The frugal group may reject the clause and demand cuts elsewhere in return
Competitive funding The impact sheet shows how much Hungarian research and industry lose from the cut to the Competitiveness Fund If domestic applicant capacity is weak, protecting competitive funding brings little benefit
Companies The Hungarian burden of the new own resources is known in advance, and the value of the SME exemption is quantified The corporate levy also affects the Hungarian tax base and may cause a dispute with domestic tax policy
Debt and generations The Hungarian burden of repaying the joint debt is public, and stretching is made conditional Slower repayment leaves more programme funding in the short term, but means a longer-term burden
Negotiating position The party arriving with numbers is stronger in the Friends of Cohesion coalition Public numbers also show negotiating partners where Hungary’s limits are

The most important dilemma is the relationship between publicity and negotiating room. A public impact sheet reveals where the cut hurts, and partners can exploit this. In MIAK’s view this risk is smaller than that of secrecy. The other member states will prepare their own numbers anyway, while the Hungarian public can only judge what the result achieved is worth in this way. The second dilemma is the joint debt. Stretched-out repayment is a common interest of the Friends of Cohesion, because it leaves more money for programmes. At the same time, it pushes the burden into the coming decades, and together with new loans EU debt may remain persistently high. MIAK therefore does not reject stretching, but makes it conditional.

Part V — Measurability and summary

5.1 What is worth tracking? (proposed KPIs)

MIAK proposes the following key performance indicators (KPIs). These are proposed indicators, not government commitments.

  • The impact sheet. Target: public by 12 October, with a comparison in nominal terms and at constant prices, with the revenue side and the Court of Auditors’ scenario; committee hearing by 14 October.
  • The inflation correction. Worth tracking whether the summit conclusions and the final agreement contain a review rule on the deflator.
  • The real value of the Hungarian envelope. Worth tracking whether in the final agreement the Hungarian cohesion and agricultural envelope reaches the 2021–2027 level at constant prices.
  • The position on the joint debt. Target: the Hungarian burden calculation with three scenarios is public before the summit, and is updated when President Costa takes over the negotiations.

5.2 Summary

MIAK’s request is addressed to the Government, in three steps. By Monday: a Hungarian impact sheet on Saturday’s negotiating box, and on Tuesday its presentation in the parliamentary committee responsible for EU affairs. At the summit: initiating an inflation-correction clause with the Friends of Cohesion, with a measurable performance commitment as a counterpart. Before the summit: a public Hungarian position on repaying the joint debt, with three scenarios and conditions. The protected agricultural and cohesion money is only a success if it also holds its real value, and if its price is not a later, hidden repayment burden.

Of MIAK’s foundational values, transparency and data-drivenness are affected here. Transparency, because the EU budget is the largest external source of Hungarian development, yet today the public only learns the negotiating figures after the fact, from the press. Data-drivenness, because nominal success and real-terms loss can only be separated by calculation, and the generational burden of the joint debt can also only be weighed in numbers.

Part VI — Justifications and further sources

6.1 Press framing across the spectrum

In the Brussels trade press, Politico published a factual preview based on diplomatic sources. Its framing is the balance of power between the two camps: the cut is a gesture to the frugals, and the protection of cohesion is a concession to the Friends of Cohesion. It also quoted an anonymous diplomat who fears the “smashing” of research and external action funding. Euractiv’s successor, Rapporteur, gave voice to the institutional players. According to Thomas Byrne, Irish Minister of State for European Affairs, “you cannot satisfy everyone”, while budget commissioner Piotr Serafin criticised the net contributors’ “accountant” approach. The publication framed the Court of Auditors’ report as the “black hole” of the revenue side. The full articles are behind a paywall; the blog relies on their public parts.

The European Parliament perspective was represented by an EUobserver opinion piece: according to Mureşan and Tavares, the wrong question is what can be cut, and the right question is how much an insufficient budget costs. According to the authors, the economic benefit of EU membership is two to six times the contribution. From a Central European perspective, Visegrad Insight criticised the Polish government’s silence in the debates on the budget and the security strategy. According to the article, Warsaw is missing the chance of a leading role. The full text of the article is behind a paywall; the blog relies on the public introduction. The EU budget was not among the ten main topics of MIAK’s Hungarian press monitor that day.

6.2 Facts and data

The 2028–2034 multiannual financial framework before the summit (according to the sources):

Item Value Source
The Commission’s proposal nearly 2,000 billion euros Politico, Rapporteur
Expected cut in Saturday’s package 100–200 billion euros Politico (12 diplomats)
Cut in the June Cypriot package 32 billion euros Politico
Global Europe instrument 200 billion euros Politico
European Competitiveness Fund 410 billion euros Politico
Administrative expenditure 118 billion euros Politico
Five new own resources 66 billion euros a year Politico, Rapporteur
Further resources proposed by the EP digital levy 25.2, online gambling 3.9, crypto-assets 3 billion euros a year EUobserver
Size of the proposal as a share of GNI 1.15% when proposed, 1.11% now; the 2021–2027 framework 1.13% at adoption; the EP asks for 1.27% Rapporteur
EU inflation 2026 (forecast) 3.1%, against the 2% deflator Rapporteur
Share dependent on new revenues about 20% of the proposal European Court of Auditors, Rapporteur
EU debt 2025: 738.9 billion euros; could reach 1,000 billion by 2027 European Court of Auditors, Rapporteur
Repayment of the joint debt a fixed 24 billion euros a year, 168 billion in 2028–2034; interest on the grants about 93 billion European Court of Auditors, Rapporteur
New borrowing option Ukraine: up to 100 billion; crisis instrument: up to 395 billion euros European Court of Auditors, Rapporteur
Purchasing power loss of the current framework about 10% Mureşan–Tavares, EUobserver

Timetable: 10 October: the Irish presidency’s negotiating package; 15–16 October: meeting of the European Council; after that António Costa takes over the negotiations, with the aim of an agreement by Christmas. According to Politico, the haste is also justified by the 2027 French, Polish and Italian elections.

6.3 Policy dimensions

  • Foreign policy (programme points) — the Hungarian package offer and the initiative within the Friends of Cohesion coalition are the practice of issue-based coalition building (KP17);
  • Economy (programme points) — the Hungarian burden of repaying the joint debt is part of the debt sustainability framework (G23);
  • Agriculture (affected policy area) — the real value of the agricultural envelope depends on the deflator question;
  • Territorial inequality and rural policy (programme points) — the domestic allocation of the cohesion envelope follows the principle of data-based allocation (TE2);
  • Transparency and anti-corruption policy (programme points) — the counterpart of the inflation correction could be a tightening of cohesion accountability (A8);
  • Social policy and Defence (programme points) — making full use of Hungary’s allocation of cohesion funds (SZ14) and the defence component of the Competitiveness Fund (HV4) are the two areas affected by the cut to competitive funding.

6.4 Literature in detail

6.4.1 The Treaty on the Functioning of the European Union: Articles 311 and 312

Two articles of the Treaty provide the legal framework of the negotiation. Under Article 312(2), the Council decides on the multiannual financial framework unanimously after obtaining the consent of the European Parliament. Under Article 311, the Council also adopts the decision on the system of own resources unanimously, and it enters into force only after approval by the member states in accordance with their respective constitutional requirements. The most important provision from the point of view of Hungary’s room for manoeuvre is Article 312(4):

“Where no Council regulation determining a new financial framework has been adopted by the end of the previous financial framework, the ceilings and other provisions corresponding to the last year of that framework shall be extended until such time as that act is adopted.”

It follows that a veto does not annul the budget, but extends the old framework. Moreover, the old framework is fixed in nominal terms, so inflation erodes it as well. Hungary’s veto is thus a strong tool for delaying the agreement, but a weak tool for improving its content. The content can be shaped by the package offer backed by numbers described in proposals 3.2 and 3.3.

📖 Source: Consolidated version of the Treaty on the Functioning of the European Union (Official Journal of the European Union, C 326, 26 October 2012), Articles 311 and 312

6.4.2 Adam Smith: The Wealth of Nations

In the chapter on public debt in Book V, Smith distinguishes two modes of financing. One is anticipation for a fixed term: the government mortgages a future revenue for a few years and repays from it. The other is perpetual debt, when only the interest is paid. According to Smith, governments regularly overburdened the mortgaged revenue with ever new anticipations. In the end, the revenue sufficed only for paying the interest instead of repaying the principal. He sums up the reason as follows:

“To relieve the present exigency, is always the object which principally interests those immediately concerned in the administration of public affairs. The future liberation of the public revenue they leave to the care of posterity.”

In other words: those administering public affairs are always most interested in relieving the needs of the present, and leave the future liberation of public revenue to posterity. The situation of the EU joint debt today is similar. Stretching the repayment and taking out new loans increases the funding of current programmes, but pushes the burden out into the 2050s. MIAK therefore does not prohibit stretching, but ties it in proposal 3.3 to a binding schedule and earmarked revenue. In Smith’s distinction, this keeps the joint debt on the side of anticipation for a fixed term.

📖 Source: Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Book V, chapter 3

6.4.3 G. R. Berridge and co-authors: Diplomatic Theory from Machiavelli to Kissinger

The volume’s chapter on Kissinger presents the principle of negotiating linkage. Kissinger deliberately linked seemingly separate questions in order to achieve progress on a broad front. His reasoning was that if the questions are locked into separate compartments, the other party can use cooperation shown in one area as a safety valve while seeking unilateral advantage elsewhere. A web of linked mutual interests, on the other hand, produces a more stable agreement. Translated to the EU budget negotiation: the Friends of Cohesion have so far concentrated mainly on the spending side, on protecting cohesion and agricultural money. The frugal group can therefore ask for a counterpart on the revenue and debt side without renegotiating the spending concession. If the Hungarian offer handles the deflator question, own resources and the repayment of the joint debt together, requests and concessions can be weighed against each other in one package.

📖 Source: G. R. Berridge, Maurice Keens-Soper, Thomas G. Otte: Diplomatic Theory from Machiavelli to Kissinger (Palgrave, 2001)

6.5 International comparison

The most recent parallel is the Polish situation. According to Visegrad Insight, Poland, the largest member of the Friends of Cohesion, is conspicuously quiet in the current budget debate, and for domestic political reasons is missing the chance of a leading role. According to Politico, among the cohesion countries Italy and Spain are the group’s defining members. For the Hungarian government it follows that within the group there is room for a member state that arrives with numbers and makes a concrete proposal.

On the joint debt, according to Rapporteur, the Commission had already warned that if member states agree neither on new own resources nor on increasing national contributions, the budget could shrink by as much as 40 per cent. This scenario shows why the revenue side and the question of repayment cannot be separated from the spending side.

Foreign policy

  • KP17 — Issue-based coalition building in the EU

Economy

  • G23 — Public debt sustainability framework

Territorial inequality and rural policy

  • TE2 — Data-based allocation of EU cohesion funds

Transparency and anti-corruption policy

  • A8 — Cohesion policy accountability

Social policy

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

Defence

  • HV4 — EU defence industrial base and joint procurement

Proposed new programme point: An impact-sheet obligation for the EU budget and a generational calculation on joint EU borrowing — for the Foreign policy area.

6.7 List of sources

Press sources (MIAK foreign press monitor, 9 October 2026 — topic 1):

Knowledge base references (literature):

  • 📖 Treaty on the Functioning of the European Union (TFEU), Articles 311 and 312
  • 📖 Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations
  • 📖 G. R. Berridge, Maurice Keens-Soper, Thomas G. Otte: Diplomatic Theory from Machiavelli to Kissinger

MIAK internal materials:

  • MIAK policy area: Foreign policy (programme points; programme point ID: KP17)
  • MIAK policy area: Economy (programme points; programme point ID: G23)
  • MIAK policy area: Agriculture (affected policy area)
  • MIAK policy area: Territorial inequality and rural policy (programme points; programme point ID: TE2)
  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A8)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ14)
  • MIAK policy area: Defence (programme points; programme point ID: HV4)
  • MIAK foreign press monitor, 9 October 2026 — topic 1, score: 97/100

Supplementary public data sources (if used):

  • Proposed data sources for tracking: the Irish presidency’s negotiating document (10 October), the conclusions of the European Council of 15–16 October, the European Court of Auditors’ 2025 annual report, the Ministry of Finance’s data on EU transfers

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