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northFollowing the vote of the EU ambassadors on the various elements of the 1.8 trillion euro crown financial package, a senior diplomat warned on Monday: “We are facing a serious crisis.” A crisis with an announcement.
Thomas gutschker
Political correspondent for the European Union, NATO and the Benelux countries based in Brussels.
It was no surprise that Hungary and Poland blocked the package that member states agreed to in July. Hungarian Prime Minister Viktor Orbán announced his veto on November 5 in a letter to the President of the European Council, Charles Michel.
The Presidency of the Council of Germany and the European Parliament had just agreed on a mechanism that links the disbursement of funds from the Community fund to compliance with the rule of law. Orbán complained that what he had heard from “the media” did not meet Hungarian conditions. “I have to inform you that this situation leaves Hungary no choice but not to accept the other elements of the package for the next financial framework and the next generation of the EU (aid for the reconstruction of the Crown).”
Next round: Thursday
Since Monday afternoon there is certainty. With its veto, Hungary stopped a vote on the “Decision on own resources”. This is intended to raise the maximum limit with which the states are responsible for the budget with “their own resources”, a prerequisite for the EU to be able to assume the debts necessary to finance the reconstruction plan.
He also rejected the 2021-2027 budget, but at least accepted the agreement on the fund. Poland did the same. But diplomats believe that the Warsaw government’s position on the rule of law mechanism is less strict. They referred to a letter Prime Minister Mateusz Morawiecki sent to EU leaders last week. He declared that he did not see “the possibility of ratifying the budget in the Polish parliament”, but with the exception “without sufficient guarantees that the contractual rights of the member states will be preserved.”
Certainly, the other Member States could give Warsaw such guarantees, for example in the form of a protocol declaration. After all, when negotiating the compromise on the rule of law, the German Presidency of the Council of the EU meticulously ensured that financial sanctions remained linked to budgetary control, while the European Parliament wanted an instrument to be able to take action against them. deficits of the rule of law of any kind.
Indeed, that would have been problematic because Article 7 of the EU Treaty prescribes a different procedure for such cases. In order to appease Poland, it is more difficult with Hungary. Because Orbán only wants to get involved in the sanctions if they are decided unanimously. Therefore, the dispute should now take place at the level of the heads of government, probably in a videoconference already scheduled for Thursday due to the health crisis.
An emergency budget threatens
With the blocking of the general package, Hungary and Poland are cutting themselves into their own flesh, because that also affects the aid they are entitled to with the budget and the reconstruction plan. Therefore, EU diplomats are betting that the two states will eventually give in.
On the other hand, they have no other means of pressure to stop the rule of law mechanism that they do not like. The qualified majority of states that were filed on Monday is sufficient for adoption. Therefore, the German Presidency of the Council of the EU intends to push this process further.
In any case, it is considered impossible to change the mechanism because there is too strong resistance from the European Parliament and states like the Netherlands. However, in the case of budget and capital adequacy decisions, the decision must be made unanimously. The latter even has to be ratified by almost all national parliaments.
In the worst case, the EU would have to go through the next year on an emergency budget and aid from the reconstruction plan could not flow at all. That would particularly affect countries like Spain or Italy, which are particularly suffering from the crisis, and that is exactly what Hungary and Poland depend on for concessions.
