The EU is heading for a financial, economic and institutional debacle as Poland and Hungary persist in their refusal to link EU subsidies to respect for the rule of law. Warsaw and Budapest on Thursday anchored their veto even deeper, which means that the Union is expected to have to fall back on an emergency budget from 1 January in the worst economic crisis in its history.
Following a visit by the Polish prime minister, Mr Morawiecki, to his Hungarian colleague, Mr Orbán, the two declared their commitment to each other. ‘Neither Poland nor Hungary will accept any proposal deemed unacceptable by the other.’ This puts an end to the hope of EU President Germany that Poland would agree to the rule of law for reasons of financial interest (Poland is entitled to at least EUR 130 billion in EU subsidies in the coming years) and Orbán could be isolated.
In order for the Eu multi-annual budget (2021-2027; close to 1,100 billion us dollars), and the special aid fund (750 billion euro) on January 1, is available to all member states and the European Parliament agree to do so. However, Hungary and Poland do not want to know about the proposed link between a functioning rule of law and receiving EU money. For parliament and member states such as the Netherlands, Sweden, Finland and Denmark, this is an iron condition.
According to Orbán and Morawiecki, the proposed link undermines the rule of law because the mechanism would be ‘a political instrument’, full of ‘vague definitions’, intended solely to change the rule of law in Poland and Hungary in Brussels. Both countries have been under attack from Brussels for years because of the undermining of the judiciary and the freedom of the press.
As a gesture to the southern member states-which have been severely affected by corona and are longing for EU money – Orbán and Morawiecki are proposing to introduce the EU budget and Recovery Fund with a ‘limited’ and ‘substantially adapted’ rule of law by 1 January. This is not acceptable to parliamentarians but also to member states. Prime Minister Rutte called the key as it is ” the lower limit.” If that is mated, the Netherlands will use its veto, according to Rutte earlier this month in the Second Chamber.
According to Morawiecki and Orbán, if the EU wants to establish a serious link between EU money and an independent judiciary, it must do so through a long debate and amendment of the European treaty. This requires not only unanimity among heads of government but also the approval of all national parliaments, an uncertain and lengthy procedure.
Earlier this week, President Von der Leyen of the European Commission suggested that Poland and Hungary could go to the European Court if they do not agree with the rule of law test, but that suggestion was not taken up on Thursday. EU President Germany-including Chancellor Merkel – will make a final attempt to reach a settlement in the next few days, but EU officials and diplomats have a gloomy outlook.
Without agreement, the EU will fall back on an emergency budget of around 30% of the normal amount on 1 January. The Recovery Fund cannot start. This undermines relations between the member states, which leads to disputes on a variety of issues, such as the desire to reduce CO2 emissions by 55% by 2030. There, too, Poland is interfering. The next EU summit is scheduled for 10 December.