Hungary and Poland block European anti-pandemic funds

Both countries block approval of recovery plan because it penalises violators of the rule of law

Despite months of negotiations between leaders, diplomats and the European Parliament, European anti-pandemic funds are once again at a standstill. Hungarian Prime Minister Viktor Orbán is blocking approval by the European Council of the mechanisms needed to activate the economic recovery plan that EU members (including himself) barely closed in July. The veto comes as no surprise. Orbán has long been exerting pressure, as he is against European funds (both budget and anti-pandemic) being linked to the obligation to respect fundamental principles of the rule of law, such as the separation of powers and freedom of the press. And because this mechanism was agreed a week ago between MEPs and Council negotiators, Orbán is blocking the rest of the elements of the recovery plan. He also has the support of Poland.

As diplomatic sources anticipated on Monday, this opens a "new crisis" in the negotiation of an injection of money considered urgent because the second wave of the pandemic has already put European economies back on standby due to new restrictions. The Hungarian representative has materialised the veto at the meeting of government ambassadors on Monday. "This is not our business, but that of the countries that carry a public debt of more than 100% of their annual GDP. They are the ones who need a boost. This is what needs to be managed. Politics, ideology and the rule of law are different categories and it is absolutely incomprehensible that serious people in Brussels would change these priorities," said Orbán in an interview with a Hungarian radio station last Friday.

Polish Justice Minister Zbigniew Ziobro also reiterated Warsaw's rejection of the mechanism that penalises the distribution of European funds to countries that do not respect the rule of law. "I am convinced that we all think the same and that the veto will be applied in this case," he said at a press conference on Monday.

The first question to be resolved is: why has the 750 billion euro fund still not been activated if it was agreed in July? Well, because the fact that the leaders agreed on it in a long summit of almost five days did not imply that it was approved. The heads of state and government drew up the architecture of a 750 billion euro recovery fund that implied that the European Commission would get into debt and that it would have to be distributed through the mechanisms of the European budget for the period 2021-2027. But after this first proposal, it was necessary for the EP to renegotiate between all parties. In addition, to activate the Commission's debt issue, unanimous ratification by all state governments is required.

Moreover, at the request of several governments and also the Parliament, since the authoritarian drift of countries like Hungary and Poland, the need to create a mechanism that would condition EU money on compliance with the basic principles of the EU and the rule of law has been debated for years. In July the details of this mechanism were left open enough for Hungary and Poland toaccept them and not go on summer holidays without the powerful political message that an agreement had been reached. However, this just meant leaving the problem to explode at a later date, as has now happened in the middle of the second wave.

These are all the pieces of the European fund structure that have been negotiated separately in the EP and which, after months, unravelled last week. The last remaining threat was from Hungary and Poland and this Monday it materialised. Even so, the same diplomatic sources mentioned above anticipate that "there are already talks behind the scenes" to resolve the "crisis" caused by Orbán.

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