Part I — Situation overview

Two days before the European Council meeting of 15–16 October, the EU’s chief external auditor raised his voice. In an interview with Politico on 14 October, Tony Murphy, President of the European Court of Auditors, said that the Commission’s 2028–2034 budget plan makes it harder to “follow the money”. The European Court of Auditors is the Union’s independent financial audit institution. It is not the same as the Hungarian State Audit Office (ÁSZ), which audits domestic public finances. Under the plan, roughly half of the long-term budget, the multiannual financial framework — close to 1,000 billion euros over seven years — would be merged into a single envelope. These are the national and regional partnership plans, which would also absorb the common agricultural policy. According to Murphy, this shifts a larger share of control onto the Member States’ audit authorities. His head of cabinet, Wolfgang Stolz, added that, in the Court’s experience, their work is not fully reliable year after year. The Court’s latest annual report estimated erroneous payments at around 5 billion euros. According to Murphy, in the new structure this figure might not be estimable at all. The Commission defended the plan in a statement. According to it, the principles of the current control system remain in place, and the Commission can request amendments to the plans or the introduction of a corrective mechanism.

The other fronts moved in the same week as well. On 10 October the Irish presidency tabled a compromise of 1,825 billion euros, 141 billion euros less than the Commission’s proposal. On 13 October Benjamin Haddad, France’s Minister for European Affairs, called new EU revenue sources and European preference — that is, giving priority to European-made products — red lines. According to Rapporteur, a Brussels trade publication linked to Euractiv, the eastern-flank Member States are criticising the Irish package’s defence cuts. The package would also reduce the Competitiveness Fund and the EU instrument for transport connections. On 9 October MIAK discussed the Hungarian impact sheet of the negotiating box, the inflation adjustment and the repayment of joint debt. MIAK wrote about yesterday’s closure of the conditionality procedure and the remaining freezes in a separate analysis.

MIAK’s reading: greater Member State room for manoeuvre could be an advantage for Hungary, but only if its control also looks credible from the outside. If not, the country will pay for flexibility in the coming years with further withheld funds.

Part II — Grounding in the literature

Three sources provide the interpretive framework. Under Article 287 of the Treaty on the Functioning of the European Union (TFEU), the European Court of Auditors may also carry out audits in the Member States, even on the premises of the beneficiary, in liaison with the national audit bodies. Article 317, in turn, also makes the Member States responsible for the proper use of the budget. The legal basis therefore exists; the question is whether control actually works in practice in the new structure. In her book Corruption and Government, Susan Rose-Ackerman, a Yale University professor and corruption researcher, describes how, when a higher level of government gives money to a lower one, it typically also requires it to build an accountability system. At the same time, the legitimacy of intervention by the higher level is not self-evident. In Governing the Commons, Elinor Ostrom, an American political scientist and recipient of the 2009 Nobel Memorial Prize in Economic Sciences, collected the design principles of long-enduring common-pool resource systems. Two of them matter here. Monitors should be accountable to the community whose common property they monitor. And in larger systems, monitoring should be organised in nested levels, with rules that fit one another. Together the three sources say: a flexible envelope is not a problem, but control at the lower level must itself be verifiable by the higher level. The detailed treatment of the literature — author by author, with quotations — is in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures. The first two proposals concern EU rules; the third concerns two open questions of the Hungarian negotiating position.

3.1 A uniform EU control minimum and project-level data disclosure in the partnership plans (initiated at the summit, fixed in the Council negotiations on the rules for partnership plans by the end of 2026)

MIAK proposes that the Hungarian government support the flexible national envelope at the summit and in the subsequent negotiations, but tie it to a uniform control minimum. This should have four elements. First: a common methodology for estimating the error rate in every Member State, so that the Court of Auditors can continue to calculate an EU-level error rate. Second: common conditions for the independence of the audit authorities, for example fixed rules on the appointment and dismissal of their head and their own budget. Third: explicit confirmation of the Court of Auditors’ right to on-the-spot audits in the partnership plans as well. Fourth: project-level data disclosure. According to Murphy, for the post-pandemic recovery fund the Union publishes only the 100 largest beneficiaries each year, and the new plans were modelled on it. MIAK asks that every beneficiary, amount, project objective and performance data point be public in machine-readable form, quarterly. This raises the cohesion accountability of A8 to EU level. According to Ostrom’s principle of nested levels (see 6.4.3), a rule adopted at one level without rules at the other levels yields an incomplete system.

3.2 A credibility programme for the Hungarian audit authority as a condition of funding (at the same time as the submission of the Hungarian partnership plan, by the end of 2027 at the latest)

The credibility of Member State control is not an abstract question for Hungary. If the Commission does not trust domestic control, it can withhold funds, and Hungarian development policy has experienced this in recent years. The Court of Auditors’ reports strongly influence this trust, but it has no power to withhold funds. MIAK therefore proposes that the government not wait for the EU rule, but make a voluntary commitment together with the Hungarian partnership plan. This should have three elements. First: every two years, the work of the Hungarian EU audit authority should be reviewed by the audit authority of another Member State, and the report should be public. Second: every year, the authority should publicly report the error rate found in Hungarian programmes and how far it differs from the estimates of the Commission and the Court of Auditors. Third: the authority’s annual report should be debated in a public session by the competent committee of the National Assembly. According to Rose-Ackerman (see 6.4.2), the level providing the funds typically asks the recipient for an accountability system. MIAK’s proposal turns this condition into Hungary’s own initiative before it is imposed from outside. The domestic publication of project data could be part of the A1 public-money database and of the TE2 data-driven allocation.

3.3 A case-by-case position on the French revenue proposals and on protecting transport connections (at the 15–16 October summit and in the final phase in December)

The French red lines concern two different questions, so the Hungarian answer should also be twofold. For new EU revenue sources, including the levy targeting large digital companies proposed by the European Parliament, MIAK’s yardstick is simple. Hungary should support any source for which a public calculation shows that it reduces Hungary’s national contribution and that the burden on Hungarian companies does not exceed the saving. For European preference, the Hungarian interest depends on the definition: what matters is that products made in Hungary fit into the “European” category. As for transport connections, according to Rapporteur the Irish package would also cut the Connecting Europe Facility (CEF). Here MIAK proposes that Hungary join the Member States opposing the cut. The condition should be that domestic projects financed from the protected funds are prepared on the basis of a public cost-benefit ranking, in line with the principle of KO4. This is the practice of the case-by-case coalition building of KP17: one partner on control, another on revenues, and yet another on connections.

The three proposals are linked by one principle: flexibility only with credible control. The TFEU (see 6.4.1) already provides the legal tools. The negotiations will decide whether these also work in the flexible national plans. Hungary comes out ahead if it sees its own interest not in lax control but in measurably credible control.

Part IV — Expected effects and risks

Dimension Expected effect Risk
EU funds The uniform minimum reduces the likelihood of later withholdings Stronger control may slow down payments
Transparency Every beneficiary and project is public; the press and civil society can also check Data without interpretation can be misleading; the administrative burden on small beneficiaries grows
Hungarian institutions External review makes the credibility of the Hungarian audit authority measurable A critical review would weaken the negotiating position in the short term
Budget Weighing own resources case by case may reduce the national contribution New levies may also burden Hungarian companies
Negotiating position Allies can be won in three different coalitions Alliances that change from issue to issue may look unpredictable to partners

The main dilemma is the relationship between flexibility and verifiability. The members of the Friends of Cohesion group, including Hungary, want greater Member State room for manoeuvre, while the net contributors want stricter conditions. If Hungary itself proposes a uniform control minimum, it can act as a bridge between the two camps. This works if the minimum is genuinely uniform and not a special strictness tailored to certain Member States. The second dilemma is administration. Programme point A8 also signals that overly strict accounting can deter smaller applicants. The minimum should therefore be strict for large projects, while allowing simplified accounting for small grants.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

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

  • The uniform control minimum. It is worth following whether the European Council conclusions and the final rules on partnership plans contain a common error-rate methodology and common conditions for the independence of the audit authorities.
  • Project-level data disclosure. Target: 100 per cent of the beneficiaries of the Hungarian partnership plan public in machine-readable form, with quarterly updates, from the first payment.
  • The Hungarian error rate. It is worth following whether the error rate estimated by the Court of Auditors and the Commission for Hungarian programmes stays below the materiality threshold in the first years of the 2028–2034 period, and how far it differs from the Hungarian audit authority’s own estimate.
  • Connectivity funds. It is worth following whether, in the final agreement, the transport part of the Connecting Europe Facility reaches the level of the Commission’s proposal.

5.2 Summary

MIAK’s request is addressed to the Government. At the summit: support for the flexible national envelope, tied to a uniform EU control minimum and full project-level data disclosure. Together with the Hungarian partnership plan: a voluntary credibility programme for the Hungarian audit authority, with external review and a public error rate. On the French proposals and the transport cuts: a case-by-case position based on calculation. Flexibility is a Hungarian success only if its price is not further withheld funds.

Of MIAK’s foundational values, accountability and transparency are at stake here. Accountability, because the Court of Auditors’ warning is essentially about who is responsible for EU money in the new system, and who audits the auditor. Transparency, because the path of EU money can only be followed if the data of every beneficiary is public, not only that of the largest ones.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

In the Brussels trade press, Politico framed the topic as a corruption risk: according to the headline, corruption could become harder to catch in the new budget. As illustrations, the article cited agricultural subsidies paid in Greece for non-existent pastures and Slovak rural tourism money ending up in luxury villas. At the same time, it also quoted Murphy’s statement that he is not arguing for one model or the other. It also published the Commission’s response. Rapporteur, linked to Euractiv, emphasised the revenue and political side. Its article on the French red lines quoted Minister Haddad and highlighted Paris’s uncommitted negotiating position. Another article framed Marine Le Pen’s appearance in Brussels from the angle of the 2027 French presidential election. Le Pen would cut France’s net contribution to 5 billion euros a year. The Rapporteur article on the eastern flank’s criticism is behind a paywall, so the blog refers to it only on the basis of its headline and subheading (the article was not publicly downloadable).

The EU institutional and parliamentary perspective was represented by EUobserver. One of its articles asked whether the European Parliament will really stand up against the 141-billion-euro cut, and criticised the neglect of the new levies proposed by MEPs. Another, a weekly preview article, placed the budget debate within the summit’s competitiveness agenda. The full text of both articles is behind a paywall; the blog relies on the public introductions. Of these sources, only Politico carried the Court of Auditors’ warning on control. The EU budget was not among the ten main topics of MIAK’s Hungarian press monitor that day.

6.2 Facts and data

Control and negotiation data of the 2028–2034 multiannual financial framework (according to the sources):

Item Value Source
The Commission’s proposal almost 2,000 billion euros EUobserver
The Irish presidency’s compromise (10 October) 1,825 billion euros, 141 billion euros (8 per cent) below the proposal Rapporteur, EUobserver
The national and regional partnership plans roughly half of the framework, close to 1,000 billion euros over seven years Politico
Estimated erroneous payments in the EU budget around 5 billion euros (the Court of Auditors’ latest annual report) Politico
Published beneficiaries of the recovery fund only the 100 largest each year Politico (Murphy)
Five new EU revenue sources 66 billion euros of expected revenue Rapporteur
Three new levies proposed by the EP (digital, online gambling, crypto-assets) a further roughly 30 billion euros, on top of the 57.4 billion euros the Commission expects from other levies EUobserver
Le Pen’s pledge cutting the French net contribution to 5 billion euros a year Rapporteur

The two revenue estimates (66 and 57.4 billion euros respectively) reflect the sources’ different scopes, so they cannot be added together.

Timeline: 10 October: the Irish presidency’s compromise package; 13 October: statement by French minister Haddad in Luxembourg; 15–16 October: European Council meeting. António Costa, President of the European Council, would like an agreement on the revenue side in October, and on the full package by the end of the year.

Legal framework: the regulation on the multiannual financial framework is adopted by the Council unanimously, after obtaining the consent of the European Parliament (Article 312(2) TFEU). Hungary therefore has a veto.

6.3 Policy dimensions

  • Transparency and anti-corruption policy (programme points) — the uniform control minimum and project-level data disclosure are the EU-level and domestic extension of cohesion accountability (A8) and of the public-money database (A1);
  • Foreign policy (programme points) — alliances struck on three different issues are the practice of case-by-case coalition building (KP17);
  • Economy (affected area) — the Hungarian budgetary impact of own resources and of the French digital levy;
  • Territorial inequality and rural policy (programme points) — public data on the domestic allocation of the partnership plan are conditions of data-driven allocation (TE2);
  • Agriculture (affected area) — the common agricultural policy is folded into the common national framework, so the control of agricultural subsidies also moves into the new system;
  • Transport and infrastructure (programme points) — using the protected connectivity funds in line with the principle of the railway development priority ranking (KO4).

6.4 Literature in detail

6.4.1 Treaty on the Functioning of the European Union: Articles 285, 287, 317 and 325

Under Article 285 of the Treaty, the Union’s financial audit is carried out by the Court of Auditors, whose members are completely independent. Under Article 287, the Court of Auditors examines all EU revenue and expenditure. Where necessary, the audit is also carried out in the Member States, including on the premises of any natural or legal person in receipt of payments from the budget. On its relationship with Member State bodies, it provides:

“The Court of Auditors and the national audit bodies of the Member States shall cooperate in a spirit of trust while maintaining their independence.”

Under Article 317, the Commission implements the budget in cooperation with the Member States, and the Financial Regulation lays down the control obligations of the Member States. Article 325, in turn, requires Member States to take the same measures to counter fraud affecting the Union’s financial interests as they take to protect their own financial interests. The legal basis is therefore not lacking. The Court of Auditors’ right to audit in the Member States and the Member States’ control obligation are laid down in the Treaty. Murphy’s warning signals that in a merged national framework covering many policies these tools are harder to operate in practice. Proposal 3.1 therefore does not ask for a new competence, but for the existing rights to be actually exercisable in the partnership plans as well.

📖 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 285, 287, 317 and 325

6.4.2 Susan Rose-Ackerman: Corruption and Government

In the chapter on federalism, Rose-Ackerman examines when it is justified for a higher level of government to intervene in the anti-corruption affairs of a lower level. Her starting point is cautious. The higher level cannot take for granted that it represents the citizens concerned better than local government. In two cases, however, she considers intervention justified. One is when the lower level restricts trade. The other is when narrow local elites use public power for their own benefit. As an example, she mentions that when the federal government gives grants to lower-level governments, it often also requires them to build an accountability system. In the United Kingdom, a separate audit body examined the integrity of local authorities’ financial management. Elsewhere the book also stresses that the precondition of any external control is information, that is, publicly disclosed budget and expenditure data. Translated to the EU partnership plans: the Union, as the provider of funds, is right to ask for an accountability system. Because of the legitimacy caveat, however, this is acceptable if it applies equally to every Member State and if the data are also accessible to citizens.

📖 Source: Susan Rose-Ackerman: Corruption and Government — Causes, Consequences, and Reform (1999)

6.4.3 Elinor Ostrom: Governing the Commons

Ostrom studied the long-enduring self-governing institutions of common-pool resources, such as irrigation systems, pastures and fisheries, and identified eight design principles. The fourth principle concerns monitoring. In successful systems, those who monitor the condition of the resource and the behaviour of the users are themselves accountable to the community of users, or are users themselves. The eighth principle concerns larger, complex systems. In these, appropriation, monitoring, enforcement and conflict resolution are organised in multiple nested levels. Using the example of Spanish irrigation communities, Ostrom shows that if there are rules at only one level and not at the others, the system remains incomplete and is not durable in the long run. The EU budget is also a common property from which the Member States benefit. In the partnership plans, the Member State audit authority will be the first-level auditor. According to Ostrom’s principles, it is credible if it is also accountable to the community of Member States and if its rules fit those of the EU level. Proposals 3.1 and 3.2 translate these two conditions into a common minimum and an external review.

📖 Source: Elinor Ostrom: Governing the Commons — The Evolution of Institutions for Collective Action (Cambridge University Press, 1990)

6.5 International comparison

The closest model is the post-pandemic recovery fund itself. According to Murphy, there the Member States could more easily direct the money where it was needed, but spending became less transparent. In the current agricultural system, the Court of Auditors can physically visit a farm receiving EU support. For the recovery fund, however, only the 100 largest beneficiaries are public each year. The new national plans were modelled on the same pattern, so the recovery fund’s experience foreshadows the risk.

The French example shows the intertwining of domestic politics and the EU bargain. Paris is the second-largest contributor and, according to Rapporteur, is negotiating simultaneously with the frugal group and the Friends of Cohesion. Ahead of the 2027 presidential election, Le Pen promises to cut the French contribution, which also affects the timing of the negotiations. For Hungary, this means there is a common interest on the French revenue proposals, but only where the calculation bears it out.

Transparency and anti-corruption policy

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

Foreign policy

  • KP17 — Case-by-case coalition building in the EU

Territorial inequality and rural policy

  • TE2 — Data-driven allocation of EU cohesion funds

Transport and infrastructure

  • KO4 — Railway development with data-driven prioritisation

Proposed new programme point: External review of the EU audit authority and a public Hungarian error rate — for the Transparency and anti-corruption policy area.

6.7 List of sources

Press sources (MIAK foreign press monitor, 14 October 2026 — topic 1):

Knowledge-base references (books):

  • 📖 Treaty on the Functioning of the European Union (TFEU), Articles 285, 287, 317 and 325
  • 📖 Susan Rose-Ackerman: Corruption and Government — Causes, Consequences, and Reform
  • 📖 Elinor Ostrom: Governing the Commons — The Evolution of Institutions for Collective Action

MIAK internal materials:

  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A8, A1)
  • MIAK policy area: Foreign policy (programme points; programme point ID: KP17)
  • MIAK policy area: Economy (affected area)
  • MIAK policy area: Territorial inequality and rural policy (programme points; programme point ID: TE2)
  • MIAK policy area: Agriculture (affected area)
  • MIAK policy area: Transport and infrastructure (programme points; programme point ID: KO4)
  • MIAK foreign press monitor, 14 October 2026 — topic 1, score: 97/100

Supplementary public data sources (if used):

  • Suggested data sources for follow-up: the European Court of Auditors’ annual report on the 2025 budgetary year, the European Council conclusions of 15–16 October, the Irish presidency’s negotiating document (10 October)

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