Hungarian Prime Minister Viktor Orban arrives for the EU summit on a coronavirus recovery package in july
Credit: JOHN THYS /AFP
Hungary and Poland blocked the approval of the European Union’s €1.8 trillion package to reboot the economy after the coronavirus pandemic late Monday.
Warsaw and Budapest plunged plans for the seven-year EU Budget and rescue package into disarray because they oppose making EU funding conditional on respect for the rule of law.
Ambassadors were unable to sign off on the €1.1 trillion budget and €750 billion coronavirus fund at a meeting in Brussels because of the vetoes.
EU officials insisted on the new mechanism linking rule of law to funding in order to have a tool to use against Warsaw and Budapest, both of which stand accused by the EU of eroding judicial independence and media freedoms.
The rule-of-law clauses were endorsed because they only required a qualified majority vote to pass, but the overall budget needs the the unanimous support of all 27 member states.
EU leaders thought they had resolved disputes over the budget and stimulus plan at a marathon four-day-and-night summit in July. They had also worked hard to smooth over differences with the European Parliament over spending priorities.
Apparently it was not enough, however.
Germany warned that the clock is now ticking.
"We have already lost a lot of time in view of the second pandemic wave and the severe economic damage," said German ambassador Michael Clauss, who chaired the meeting.
"It is crucial that the entire package is now adopted quickly, otherwise the EU will face a serious crisis."
Germany holds the EU’s rotating presidency and wants to resolve the battle over the budget and recovery before its six months are up at the end of the year.
Brussels has repeatedly criticised Hungary and Poland, both of which are heavily dependent on EU funding, for ignoring democratic norms.
Hungarian Prime Minister Viktor Orban’s government also faces criticism for stigmatising non-governmental organizations promoting civil liberties and for allegedly misusing EU funds to enrich his political allies.
He wrote to German Chancellor Angela Merkel, European Commission President Ursula von der Leyen and European Council President Charles Michel saying he would veto the budget and post-pandemic relief package.
"There’s no agreement on anything until there’s an agreement on everything," Mr Orban wrote.
Poland’s Prime Minister Mateusz Morawiecki threatened a veto last week, and on Monday his hardline justice minister, Zbigniew Ziobro, joined the fray.
"The question is whether Poland … will be subject to political and institutionalised enslavement," Ziobro said.
"Because this is not rule of law, which is just a pretext, but it is really an institutional, political enslavement, a radical limitation of sovereignty," he asserted.
EU Europe affairs ministers meet on Tuesday in Brussels and will discuss how to bridge the impasse ahead of a video conference summit of EU leaders on Thursday, where the issue is also likely to be discussed.
"We’ll see if Budapest and Warsaw are looking for guarantees and if these are acceptable," one senior diplomat said, warning otherwise of a "serious political crisis".
Another suggested that Mr Orban was perhaps looking for more money and might be persuadable.
Austrian Chancellor Sebastian Kurz said that the rule-of-law conditionality was “an absolute necessity” because the sums handed out were so large.
Manfred Weber, leader of the centre-right group in the European Parliament, added: "If you respect the rule of law there is nothing to fear."
"Denying the whole of Europe … funding in the worst crisis [in] decades is irresponsible."
Spanish Economy Minister Nadia Calvino said Spain also supported the clauses.
"It is urgent that the budget agreement and the various normative documents are approved," she said. "We hope the situation is resolved in the coming days."
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