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Difficult negotiations at the summit of heads of state and government are imminent in the EU’s budget dispute with Hungary and Poland. The German EU Presidency on Wednesday presented a compromise proposal drawn up with Warsaw and Poland to the other member states. According to information from AFP, it could significantly delay the use of the controversial option to cut EU funds, possibly until after the parliamentary elections in Hungary in 2022.
Due to the rule of law plans, Hungary and Poland vetoed a financial package of 1.8 trillion euros from the EU budget for the next seven years and the Corona aid fund in mid-November. Without a solution, the EU faces an emergency budget with drastic cuts starting in January. The € 750 billion aid fund against the economic consequences of the Crown crisis could not start as planned.
The German EU Presidency has been looking for a solution for weeks. Changes to the rule of law mechanism that had already been negotiated were considered scrapped due to opposition from the European Parliament and several member states. Germany has now agreed with Hungary and Poland to add an “interpretative declaration” to the rule of law mechanism.
This pledge was presented to the EU ambassadors of all member states in Brussels on Wednesday afternoon. An EU diplomat spoke after a “first positive debate”. There were “a series of constructive questions.” The commitment would now be subjected to an “in-depth analysis” in the capitals before the heads of state and government decided on Thursday at their summit.
The text states, on the one hand, that the rule of law mechanism must be applied “in a fair, impartial and fact-based manner” and only serves to protect the EU budget and the financial interests of the Union, that is, in generally, it cannot be used to punish deficits in the rule of law due to them. Hungary and Poland have been ridiculed in the EU for years.
The main concession to Warsaw and Budapest is that the application could be delayed. This would be the case if a country filed an action for annulment of the entire mechanism before the Court of Justice of the European Communities. In this case, the Commission should not take the decision to cut EU funds until a judgment has been rendered, and only then finalize the specific guidelines for the application of the regulation.
Proceedings before the Court of Justice of the European Communities can last from one to two years. This could mean that Hungarian Prime Minister Viktor Orban does not have to fear that EU funds in his country will be cut in a corresponding lawsuit ahead of the 2022 parliamentary elections.
It is unclear whether the other EU states will agree to the compromise proposal. Dutch Foreign Minister Stef Blok confirmed on Wednesday that the agreed mechanism is “the minimum.” “We are not ready to dilute the text.”
By contrast, southern EU countries, such as Italy or Spain in particular, have a keen interest in ensuring that urgently needed Corona aid flows quickly. Another EU diplomat on Wednesday certified the German Council Presidency as a “very good job”.
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