The European Union is set to scrutinize its multiannual financial framework during a high-stakes summit that could ride on unsettled economic pressures. Observers suggest Hungary may face a tough decision: back the reform or risk losing its voting rights, according to Bogdan Rzońca, a member of the European Parliament from the PiS group, in remarks reported by PAP.
The call for reform largely centers on the costs tied to NextGenerationEU loan programs, a Covid-19 response fund that remains a major funding obligation. The European Commission currently puts the total loan burden at roughly 220 billion euros, more than a quarter of the plan. Poland is anticipated to pay about 3.3 billion euros in interest next year. Additional resources are also viewed as necessary to drive energy transition and advance the development of new technologies.
Rzońca, who serves on the European Parliament’s Budget Committee, emphasizes the need to address these financial pressures. He notes that delaying the review could deprive the Union of the resources needed to sustain long-standing commitments such as cohesion policy.
New resources to assist Ukraine
Rzońca also highlights the importance of fresh funding to support Ukraine. The Ukraine Support Mechanism, sometimes called the Ukraine Facility, is designed to mitigate the economic and social impacts of the war and to gradually integrate Ukraine into the EU economy. On costs and debt implications, the instrument plans for 2.5 billion euros per year in grants over four years. The remaining 50 billion euros would be provided as loans. Given concerns about Ukraine’s ability to repay on time, the loan portion is likely to be converted into grants, which would affect the EU’s overall debt level.
Rzońca predicts this outcome as a probable scenario. He explains that the aim is to create “financial space” within a restructured MFF to cover higher interest costs and to support Ukraine.
According to him, new expenses could be financed more easily through increased net contributions, though there is hesitation among major donors to discuss that option openly.
What remains is the search for so-called new own resources. The latest plan approved by Parliament includes measures such as channeling as much as 30% of revenue from the sale of EU Emissions Trading System licenses to Brussels. There is dissatisfaction with this idea because the money is seen as funds that should stay in Poland to aid the Green Transformation.
Rzońca voices clear objections to the arrangement.
No grounds for optimism
Taking into account all factors and the latest signals from member states regarding a substantive reform of the IFF, there are few reasons for optimism. Reluctance among net contributors to increase contributions and the absence of a final agreement on own resources suggest that any conclusion reached would be modest at best. The dedicated support mechanism for Ukraine, amounting to 50 billion, appears unlikely to be cut.
Rzońca notes that a pivotal moment could come at the highest levels of decision-making. It seems plausible that Hungary will face intense pressure and be offered a stark choice: approve the reform—potentially including the 50 billion euros for Ukraine—or lose its voting rights. This approach aligns with provisions in the European Parliament resolution adopted at the last Strasbourg session, which references Article 7, section 2 of the Treaty on European Union and signals a possible first step toward disenfranchisement in extreme scenarios.
If a final confrontation occurs, Hungary’s fate would hinge on whether at least one other member state would back the country during the early stages of the dispute with the EU. At present, Slovakia appears to be the most likely candidate for that support. Should Hungary yield to pressure or push the Commission to release another tranche of frozen funds, an agreement might emerge, but it would likely take a modest form.
These are the core developments summarized by Rzońca. [citation: PAP]