Hungary and Poland drop opposition to EU coronavirus budget at summit

Hungarian Prime Minister Viktor Orban called the deal 'a victory for common sense'

Credit: Anadolu Agency /Anadolu

Hungary and Poland dropped their veto over the EU’s 1.8 trillion euro budget and coronavirus recovery package to kickstart the bloc’s pandemic-ravaged countries. 

Budapest and Warsaw blocked the package, which was painstakingly negotiated in marathon summit talks in July, over provisions linking it to the respect for the rule of law.

Both countries are major recipients of EU funding and both governments have faced accusations from Brussels of rolling back democratic freedoms. 

Concerns have been raised over judicial independence in Poland and press and civil society freedoms in Hungary, which lead to the rule of law clauses being introduced. 

Germany, which holds the rotating Presidency of the EU, brokered a compromise by offering a legal declaration on how the rule of law mechanism would work ahead of a two day EU summit in Brussels. 

Poland and Hungary said they could support the offer, which needed to be backed by all leaders at the European Council. The compromise gained impetus after the other 25 EU member states planned to use a rule allowing them to press ahead as a smaller bloc to release the €750 billion coronavirus rescue fund. 

Deal on the #MFF and Recovery Package #NGEU

Now we can start with the implementation and build back our economies.

Our landmark recovery package will drive forward our green & digital transitions. #EUCO

— Charles Michel (@eucopresident) December 10, 2020

The compromise proposal still ties cash to democratic standards but sanctions cannot be applied before the European Court of Justice has ruled on whether the new rules are legal, which could take more than a year. It reiterates that only breaches that affect the EU’s financial interests, such as failure to prosecute government corruption, will be pursued. 

It got the unanimous support it needed after just 25 minutes of discussion. 

Charles Michel, the European Council President, announced the deal on Twitter. “Now we can start with the implementation and build back our economies,” he said. 

Hungary’s authoritarian leader Viktor Orban said the compromise was “a victory for common sense” as he arrived in Brussels for a two-day summit. 

Polish Prime Minister Mateusz Morawiecki said: "We have to avoid any arbitrary and politically motivated decisions," he said. "Today, we fear that we might be attacked in (an) unjustified way, but of course in the future (it can be) any country."

Hungary’s budget would receive at least a net €4 billion under the coronavirus recovery fund. A European Commission source said the net benefit to Poland would be around €65 billion.

If the compromise had not been successful, the EU would have had to function on limited resources, with a maximum of one-twelfth of the budget for the previous financial year to be spent each month.