The available fiscal space for additional government expenses is clearly outlined in the Budget 2026 report, with the financial staff outlining a concrete framework of moves for the coming years, either for additional relief measures or in the direction of increasing investments.
Following the submission of the Budget to the Parliament yesterday (20.11.2025), during a press conference, the officials of the Ministry of Finance (Ministry of Finance) clarified that for 2026 the fiscal space is considered exhausted based on the European expenditure index, while for 2027 a margin of up to 800-900 million euros is calculated. Government spending over this period is not exclusively earmarked for new measures, but will be split between investment increases and targeted interventions, given that around €2bn of measures have already been announced for that year. For 2028, there is talk of an additional margin of around 300 million euros, always under the condition that there will be no negative surprises in the course of the economy.
The mark given by the Ministry of Finance for 2026 is clear, clarifying that the available fiscal space has been “locked” based on the decisions so far and the measures incorporated after the TIF. Any change in the policy mix could only come about if there were additional active revenue measures or cuts in other spending categories to create new space within the European Union’s (EU) fiscal rules. In practice this means that any new interventions for 2026 – whether tax relief or targeted support for vulnerable groups – will need an equivalent on another side of the Budget.
The European net expenditure index does not count expenditure financed by EU programs and corresponding to revenues from Community funds, as well as national co-financing. In this way, European funds do not burden the index and leave room for national policies. However, if payments are made without the corresponding European revenues being collected, then these expenditures are counted as purely national and automatically limit the available fiscal space for other priorities.
The “piggy bank” for 2026 is closed
On the revenue front, the message is that most of it is already “written” in the report numbers. All measures against tax evasion and other interventions that permanently affect revenues have been quantified up to the October figures and have been agreed with the European institutions. Consequently, no significant extra permanent revenue base is expected for 2025 that could automatically translate into additional fiscal space for subsequent years. For 2026 and beyond, any new active measures could open up the margin a bit, but that remains at scenario level.
Within this context, the dialogue on what will happen after 2026 acquires particular importance. The Recovery Fund is gradually completing its cycle, while the fiscal space remains limited and strictly monitored. The question that remains open is whether the margin in the coming years will be used mainly to support public investment, so as not to open an investment gap, or whether it will be largely absorbed by pressures for new social interventions and reliefs.