With 315 billion euros disbursed out of 723 billion allocated, Europe is discovering the concrete limits of its capacity for budgetary integration. Absorption gaps vary from 8.8% for Hungary to over 76% for France, revealing persistent national logics that resist supranational mechanisms. With 18 months remaining until the August 2026 deadline, 408 billion euros remain to be disbursed and more than 4,300 milestones still need to be validated.
The flagship instrument of Next Generation EU has been testing since 2021 Europe’s capacity to pool risks and coordinate economic policies. But the initial results reveal that economic urgency is not enough to transcend national institutional reflexes, questioning the viability of a budgetary union in the face of structural resistance.
National performances reveal incompatible administrative models
France displays an absorption rate of 84.7%, followed by Denmark and Estonia at 65.8%, then Germany at 65.2% and Italy at 62.8%. At the opposite end, Ireland caps out at 28.1%, Bulgaria at 24.1%, and Luxembourg at 13.4%. These variations reflect unequal administrative capacities more than different economic needs.
Only 10 member states exceed the 50% absorption threshold, a concerning performance as the August 2026 deadline approaches. Hungary and Sweden remain the only countries to receive no regular payments, the former having failed to submit its first payment request.
Administrative complexity weighs heavily: member states view the Council’s implementation decisions as overly detailed, generating implementation delays. While 66 billion euros had been disbursed in the second half of 2024, only 9.5 billion were disbursed in the first five months of 2025.
Hungary, a textbook case of the failure of democratic conditioning
The Hungarian government has apparently abandoned the task of carrying out the infrastructure investments and legal amendments necessary to unlock RRF funds, according to several anonymous sources following the matter. The main reason cited: corruption, lack of transparency, and the fact that changes required by the rule of law would considerably weaken the kleptocracy of the Orbán regime.
If Hungary does not comply with the rule of law conditionality mechanism by the end of 2025, it will lose an additional 1 billion euros from the Cohesion Fund and will have to repay approximately 1 billion euros in RRF pre-financing. Added to this are a daily fine of 1 million euros on its asylum policy and a flat penalty of 200 million euros, deducted from ongoing EU payments.
This blockade reveals the limits of European conditionality in the face of national non-cooperation strategies. In the Hungarian political context, the unlocking of RRF funds seems unlikely before the April 2026 parliamentary elections, where Orbán will face a unified opposition for the first time.
The gap between federal ambitions and intergovernmental reflexes
Budgetary integration develops a shared rule with ultimate control by member states and leaves fundamental questions unresolved. Crisis pressure has pushed the Commission to react in concert with national governments, which has increased its administrative importance but not its real political decision-making powers.
The scale of the challenge was predictable: RRF funds are in addition to other EU financing, and RRF allocation represents a significant share of GDP in many member states, reaching 16% for Greece, 13% for Croatia, and 11% for Spain.
The Recovery and Resilience Facility approach may not be the most suitable for regional policy and should be used with caution. Agricultural spending remains dominated by direct payments that do not effectively protect incomes and employment.
The 2026 deadline forces an unprecedented administrative acceleration
Member states must complete all reforms and investments financed by the RRF before August 31, 2026, with final payment requests no later than September 30, 2026. The European Commission must make all disbursements before December 31, 2026, with no possible extension.
More than half of the 359 billion euros in budgeted grants and an even larger share of the 291 billion euros in loans remain to be spent before 2026, implying a significant acceleration of expenditures. Most member states are revising or in the process of revising their recovery and resilience plans to simplify them.
Member states are advised to rationalize administrative processes and revise their plans before the end of 2025 to preserve their complete financial allocations. The temporary nature of the RRF, supported by joint EU borrowing, means that no flexibility will be offered beyond 2026.
This race against time reveals the inadequacy between the rhythms of national politics and European technocratic deadlines.
Prospects for budgetary union called into question
The end of the NGEU budget makes budgetary integration inevitable on the EU agenda. To meet additional spending on strategic priorities, including European public goods and defense spending, EU countries could decide to increase EU own resources or establish a common budgetary capacity.
The 530 billion euros proposed by the European Commission to finance strategic investments for 2028-2034 seem rather modest, their additional share compared to the previous budget equivalent to only 4% of the total gap estimated by the ECB. Without adjustments, the aggregate public deficit of the EU could reach 5% of GDP within 10 years and the public debt ratio approach 100% of GDP.
The European budgetary framework risks deteriorating in the face of increased geopolitical tensions since Russia’s invasion of Ukraine. The activation of an exemption clause almost as soon as the new budgetary rules begin to apply raises the understandable concern that the rules might not be enforced at all in the coming years.
Europe is discovering that financial pooling is not enough to create integrated budgetary governance. The differential absorption of the RRF reveals the persistence of national reflexes that question the feasibility of a true budgetary union, even in times of crisis. The upcoming negotiations on the multiannual financial framework 2028-2034 will determine whether the Union can move beyond this institutional fragmentation or whether it will remain trapped by its intergovernmental logic.
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