Hungary and Poland blocked the EU's historic €1.82 trillion budget-and-recovery package on Monday, setting off what top officials and diplomats branded an institutional crisis with no evident path out of the stalemate.
Even for Brussels, which often sees itself as never better than when managing an emergency, the crisis over the carefully-negotiated response to the coronavirus crisis seemed to confront the bloc with one crisis too many.
The standoff will now be the top item on the agenda when EU heads of state and government meet via videoconference on Thursday, but senior officials warned that they did not expect any resolution by then. Officials were left contemplating an open-ended delay even as EU countries are being battered by a second wave of the pandemic, with many countries in various forms of lockdown, partially paralyzing their economies.
While both Budapest and Warsaw blocked progress, many diplomats and officials placed most of the blame on Hungarian Prime Minister Viktor Orbán, who has often railed against the EU and its institutions.
"Everybody knows that this is a deadlock," a senior official said. "We are at a crossroads and nobody knows where this is leading. We only know that the whole package cannot be approved as long as we don't have the Hungarians on our side."
"We will continue with consultations, but at a certain point in time, the Hungarians will have to show their cards on the table," the official said. "Otherwise we are in deep shit."
Hungary and Poland blocked the package during a meeting of EU ambassadors on Monday, citing opposition to a new mechanism that would allow the EU to cut off funds to a country found to be violating the rule of law in certain circumstances tied to the budget. The ambassadors were able to approve the rule-of-law mechanism itself despite those objections because it required only a qualified majority. But Hungary and Poland then used their veto power to block a step toward finalizing the so-called Own Resources Decision, a prerequisite for the bloc to borrow money for its new €750 billion recovery fund.
The two countries also signaled that they are withholding political support for the bloc's €1.074 trillion seven-year budget, which is due to start on January 1. Officials were quick to point out that the budget-and-recovery package includes tens of billions for Hungary and Poland, essentially accusing Budapest and Warsaw of harming their own citizens.
Poland and Hungary are both major recipients of EU funds — and have been very heavily hit by the second wave of the coronavirus. Officials and diplomats said that Orbán had refused to budge even after a series of meetings and personal entreaties, including from German Chancellor Angela Merkel, Council President Charles Michel, and top officials from France, Italy, Spain and Portugal — some of the countries worst affected by the coronavirus.
"Even after having had discussions with the German chancellor and the pressure from the southern countries," the senior official said. "Even after all that, and even with all the money that is at stake ... there is no movement. They are just fully entrenched."
"Even in tête-à-têtes or very private conversations, nobody sees how this can be solved. If you are confronted with one partner who doesn't understand what's at stake, how urgently this is needed, there is no sense of logic," the official said.
Fudge found wanting
Some diplomats said the EU was paying the inevitable price for not fully resolving the rule-of-law dispute during the July summit when the budget-and-recovery package was approved. To clinch a deal after long negotiations, leaders agreed there would be a link in the budget to rule-of-law standards, but left the wording open to interpretation.
“It’s not the end of the story, we are now entering a political phase," one senior EU diplomat said. "But if the paralysis goes on, we risk finding ourselves with a very reduced budget and only mandatory spending, and no commitment on structural funds, foreign policy etc."
In fact, the options are quite limited.
Even if the 25 other heads of state and government on the European Council were willing to surrender, the seven-year budget requires agreement of the European Parliament, which fought hard in protracted negotiations to fashion the rule-of-law mechanism. Some MEPs had only reluctantly accepted the deal, saying the provision was not tough enough.
And while, theoretically, the recovery plan could be adopted outside the EU's budget — as an "intergovernmental agreement" between countries — European Commission officials had carefully considered that route last spring, and dismissed it as overly complicated and time-consuming, potentially causing a repeat of many difficulties faced in managing the eurozone debt crisis.
The EU institutions and many EU national governments have complained for years about what they view as backsliding by Warsaw and Budapest when it comes to rule of law and other fundamental principles of democracy. But Hungarian and Polish officials said they were being blackmailed by Brussels, and refusing to surrender after years of being held to unfair double standards.
"There is no clear objective criteria or clear definition of principles of rule of law, so you cannot use it as a tool for [a] concrete sanctioning mechanism," Hungarian Justice Minister Judit Varga told reporters.
"The political blackmailing is a very bad and irresponsible tactic from the European Parliament and some member states," the minister said. "It is not our task to find [a] solution to the problem."
Polish officials were equally defiant.
“This is an issue that will determine if Poland is a sovereign subject in the EU community, or it will be politically and institutionally enslaved," Poland's justice minister, Zbigniew Ziobro, told reporters. “It’s not about a rule of law … but about political and institutional slavery."
More obstacles ahead
There is still a long road ahead — and multiple potential hurdles — for the bloc's €1.8 trillion package to become a reality. The seven-year budget will need to win support in the European Parliament and garner unanimous support in the Council before it can come into effect. The Own Resources Decision also needs unanimous support in the Council, before being ratified by member states' national parliaments.
Even if a temporary political fudge could be found in the Council with Poland and Hungary, national parliaments in Budapest and Warsaw will have the opportunity to in effect veto the funding arrangements for the €750 billion recovery fund, if they so choose — adding extra pressure on negotiators. The national parliaments' ratification is, however, a double-edged sword. Some parliaments in countries such as Finland are unlikely to ratify the Own Resources Decision if legislators feel that Hungary and Poland were given too many concessions on the rule-of-law front.
While the decision to block progress did not come as a surprise, there was still an explosion of outrage at Hungary and Poland for standing in the way of what many view as a landmark funding plan.
Germany's Europe minister, Michael Roth, said no country had any reason to oppose the rule-of-law provision unless it intended to violate EU principles. "If you adhere to the principles of the rule of law, then you have nothing to fear," he said.
France's Europe minister, Clément Beaune, insisted a compromise would be found but said Paris was not backing down from its support for the rule-of-law mechanism. "The blocking by Hungary and Poland of the European budget does not call into question our determination on recovery and on the rule of law," Beaune tweeted.
Manfred Weber, the German leader of the center-right European People's Party (EPP) group in the European Parliament, insisted that the rule of law provision did not unfairly target Hungary, Poland or any country. "The peoples of Europe have one single enemy at the moment, and that is the coronavirus, and they expect us to deliver now," he said.
Iratxe García, the leader of the socialist group in the Parliament, said: "Blocking the EU budget is unfair to all Europeans and it only hurts citizens, also Polish and Hungarians."
Still, the senior EU official said it appeared that Orbán was enjoying his spot at the center of the storm.
"This drama is part of the negotiations and he knows that," the senior official said. "The more we talk about him the more he likes it."
Jacopo Barigazzi, Maia de La Baume, Hans von der Burchard and Zosia Wanat contributed reporting.
https://www.politico.eu/article/eu-in-c ... t-hold-up/
So Poland and Hungary (whom a lot of people either love or hate) have gone full serious and have decided to block the entire help package over their petty drama internally and with the EU and so on. Whatever happened before or was the issue before, now it will get very serious from now on, and more political drama and fallout are likely to follow as consequence. Everything might be on the table, and the final showdown may no longer be able to be delayed.
It's like two trains on the same track on collision course. The game is on. I believe this will end in a complete clusterfuck. Or maybe Hungary and Poland get slided out by a multilateral treaty outside of EU institutions. Which would leave them without cash and likely set a precendant for the further course of events.
