From the 2026 budget audit
The state lends to firms an administrator approves. Who bears the risk?
344 billion Ft of revolving loan and equity facilities allocate credit by eligibility rubric, not by competing lenders pricing their own capital at risk.
344 billion Ft cycles through the facility — matched forint-for-forint by repayments on paper, but the allocation cost is invisible: credit extended to firms a market would not have funded, at rates projects cannot sustain without a subsidy.
What you see — and what you don't
The seen: firms receiving subsidised loans and equity through a state facility with a favourable rate. The unseen: the commercial lender or private investor priced out by the same money, and the firms that would have earned that capital in a market but lost it to a programme's eligibility rubric.
Objection
"But these are repayable loans — the money comes back, and it funds firms that can't access private credit."
Answer
That a firm cannot access private credit at the subsidy rate is not evidence the project is sound — it is evidence the market prices the risk higher than the state does. When a state facility extends credit a commercial lender declined, the loss surface in written-off facilities years later, after the management fee has long been paid. Holding the facility at nominal level — no real-terms growth — is the minimum discipline; at period close, the renewal decision should weigh the convergence record, not the programme template.
Share if you think credit should be allocated by owners who bear the loss, not by administrators who score a rubric.
The analyst's verdict
Fund-of-funds financial instruments
Rationale
The "Alapok alapja" (fund of funds) lines are revolving financial instruments — repayable loans, guarantees, and equity provided to firms — rather than grants. Expenditure and revenue match exactly because the budget books both the deployment of the facility and the recycling of repayments. This is structurally the least objectionable form EU money can take: a repayable instrument imposes a return discipline that a grant does not, and the recycling means the same capital can be redeployed rather than consumed once. The classical-liberal reservation is not about the repayable form but about the allocation. A state fund-of-funds still decides which firms and which sectors receive credit and equity, and it makes that decision without the price signal a private lender or venture investor reads from its own capital being at risk. The €8,940.0 + 250.0 + 18.7 millió Ft of management fees paid to the fund-of-funds executing organisations (booked separately, see below) are the visible cost of that allocation; the invisible cost is the credit that a state facility extends to a politically legible borrower and that a commercial lender, pricing the same risk, would not have extended — or would have extended at a rate the borrower's project could not in fact sustain. Capital routed by administrative decision toward firms that clear a programme's eligibility criteria is not the same as capital routed by competing lenders toward firms that clear a solvency test. The first misallocates quietly; the failures surface years later as written-off facilities, by which time the management fee has long been paid. A Nominal Freeze rather than a phase-out reflects two facts. First, the instruments are co-governed by EU regulation for the 2021-2027 period and cannot be unilaterally wound down mid-period. Second, of all the forms EU money takes in this chapter, the revolving instrument is the one whose discipline is closest to a market test — the borrower must repay. Holding the facility at nominal level lets real-terms erosion shrink its relative weight while the period runs out, at which point the question of whether to renew it at all is open and should be answered against the convergence record, not the programme template.
Transition mechanism
Hold nominal through the 2021-2027 period. At period close, do not renew automatically: assess whether the facilities financed projects a commercial lender would not have, and whether those projects converged or merely consumed capital. The recycling feature means the existing stock of repayments can wind down naturally as loans are repaid.
Affected groups
Firms holding outstanding facilities (protected — their loan contracts run to term); the fund-of-funds executing organisations; future applicants, who would face a commercial credit market rather than a subsidised one.
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