BRUSSELS — A win by Prime Minister Viktor Orbán in the upcoming Hungarian election risks shattering the EU’s hopes of striking a deal on its next budget by the end of 2026.

The Hungarian leader has threatened to veto any budget that links EU payments to democratic requirements. Brussels, meanwhile, is keen to approve a proposed text that includes such guarantees ahead of a crucial 2027 presidential election in France. The fear is that the French vote could usher in a far-right government that sides with Budapest and threatens to hold the €1.8 trillion cash pot hostage.

But before he can play spoiler, Orbán faces the toughest challenge yet to his 16-year rule from conservative opposition leader Péter Magyar. And a loss for the Hungarian PM next month would give Brussels a window of opportunity to pass its next Multiannual Financial Framework, as the bloc’s long-term budget is known.

Given the Hungarian leader’s success in remaining in power, 10 EU officials and diplomats, all granted anonymity to speak freely with POLITICO, outlined what they see as the worst-case scenario: Orbán securing a fourth term and derailing budget negotiations.

“We are not in a rush, so if we win the elections, then we certainly don’t see the need to rush the agreement on the MFF through by the end of 2026,” said Hungarian Minister for European Affairs János Bóka.

During negotiations to date, the Hungarian government has called for the links between EU payments and respect for democratic standards to be dismantled. Those standards, however, are a key priority for wealthy Northern European countries, whose contributions to the EU budget largely exceed the payouts they receive in return.

“One can easily imagine how a discussion on the rule of law will be more difficult if a government [led by Viktor Orbán] that has had the most difficulties and recorded breaks of the rule of law stays in power,” said Jan Szyszko, Poland’s deputy minister for EU funds. “That’s clearly a risk.”

German Chancellor Friedrich Merz also expressed doubts on Wednesday, telling lawmakers in the Bundestag that it was unlikely the bloc’s budget would be finalized this year.

Most EU countries are dreading that scenario, given that the upcoming French presidential elections, slated for April 2027, could hand power to the far-right National Rally party and potentially further delay approval of the EU budget — a decision that requires unanimity and must take effect before the end of 2027.

The European Commission and EU governments are trying desperately to avoid a last-minute deal on the budget, as it would leave little time for final recipients to plan and adapt to the new rules.

“The Hungarian election will be more important than the French vote” in determining the course of budget negotiations, said one EU diplomat.

Why the Hungarian vote matters

Most European governments and Commission officials are privately rooting for Magyar to win. According to POLITICO’s Poll of Polls, his Tisza party currently holds a nine-point lead over the incumbent Fidesz.

Over the years, Orbán has acquired a bogeyman reputation in Brussels for dismantling the rule of law at home and impeding EU efforts to sanction Russia after it invaded Ukraine.

Hungary has played hardball during the first nine months of budget negotiations, saying it won’t agree to anything unless other countries accept the dilution of the proposed link between payouts and democratic standards.

“We are looking at this from a Hungarian perspective. And the Hungarian perspective is that we will not agree to a new MFF unless some of our main political points are accepted,” Bóka told POLITICO.

Budapest’s gripe is that if funds are linked to the fulfillment of democratic standards, the Commission would end up suspending a large part of the €37.7 billion Hungary is entitled to from 2028 to 2034.

In a major setback for Orbán, the Commission has already suspended €17 billion in EU funds earmarked for Hungary under the current budget due to its rule-of-law shortcomings.

And in an attempt to tighten the screws on Budapest, the EU executive has proposed extending the link between democratic standards and payments in the new budget to the whole cash pot rather than limiting it to specific policy areas — as is currently the case.

“With the current MFF, at least we have access to some EU funds. Under the new MFF, if there is a realistic possibility that we will not have access to EU funds at all, then why would we be interested in accepting such an MFF?” Bóka asked.

In light of the looming impasse, if Orbán is defeated it will remove a major hurdle to the EU’s efforts to strike a budget deal by the end of the year — record timing compared to previous budget negotiations.

Hopes are high in Brussels that a Magyar-led government would restore Hungary’s democratic standards, allowing Budapest to unlock the frozen funds. As part of its election manifesto, Tisza has pledged to introduce anti-corruption measures and to restore judicial and academic independence.

Zsolt Darvas from the Bruegel think tank suggested that Magyar’s pledge to join the European Public Prosecutor’s Office — the bloc’s anti-crime agency — could potentially unblock billions.

“[Tisza] will not be fearful of losing money due to the rule-of-law conditionality … And in that case, I think the negotiations will be much smoother,” he said.

CORRECTION: This article has been updated to correct the timing of Friedrich Merz’s comments to the Bundestag.