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Bruxinfo described results similar to what the Portfolio wrote:
1. Substantial or face-saving discount for Budapest and Warsaw
Given the near adoption of the rule of law regulation, it does not seem realistic that Merkel can make substantial concessions to the two governments. All the more so because, as several MEPs categorically stated on Monday in the EP’s Committee on Budgets, the European Parliament would not reopen the file and would soften the mechanism, and if it did, it might be willing to reject the entire MFF.
In Brussels, there were rumors (mentioned by Guy Verhofstadt, among others) that the Hungarian Prime Minister would reach an informal political agreement with Merkel and the President of the Commission not to apply the withdrawal legislation before the 2022 elections. At the same time, according to analysts, it is difficult to imagine that von der Leyen can assume such responsibility, and the confidence of the Hungarian government in Brussels is minimal.
It is also important to hear about a rescue solution so that the European Commission attaches an interpretative statement to the legislation. It is more than questionable that the board can give any guarantee to Budapest and Warsaw beyond strengthening objectivity and impartiality.
Finally, it cannot be ruled out that the two countries will eventually succumb to the pressure on them and eventually move away from the blockade and, as a kind of Plan B, will focus more on obstructing the mechanism in the future.
2. The “no deal” scenario
If political negotiations behind the scenes fail to find a solution that lifts the blockade, the EU will, in principle, have alternatives.
Silvia Merler, a former expert at the Bruegel Institute, points out that if the equity system cannot be unanimously modified, the current MFF (2014-2020) will be the starting point, which does not have the largest 672.5 billion euros. Recovery Fund (RRF). However, the rule of law will continue to come into force and will apply to EU funds from Hungary and Poland. And the RRF, according to the renowned researcher, could be moved to an ad hoc intergovernmental agreement similar to the ESM, except within the framework of the EU budget. Therefore, the Hungarians and the Poles would not be able to fire the FRR for the other countries, while they would not receive a penny, while the rule of law system would come into force through the MFP.
“So it’s really about calling out the fans of Hungary and Poland: the veto is not credible if the rest of the EU makes it clear that the next immediate step will be to turn the FRR into an intergovernmental agreement,” Silvia Merler wrote in a Twitter post.
By the way, the researcher is not the first to mention this alternative, since a few weeks ago the Hungarian Prime Minister outlined a similar idea. However, since the MFF and the Recovery Instrument (New EU Generation) form a single package, the MFF can only be interpreted as a continuation of the current one (automatic carry-over of spending appropriations from 2020 to 2021), which would not be an ideal solution for anyone. .
However, another prominent EU expert, Lucas Guttenberg from Berlin, considers outsourcing the EU budget recovery tool a “horrible and not at all necessary” idea for several reasons. where the participants would have to unanimously decide on each transfer, that is, there would only be one situation that was carefully avoided in the summer.
On the other hand, if a special financial instrument were established to implement the intergovernmental agreement to issue debt, it would statistically appear as debt on the books of the member states. In other words, it is precisely the greatest achievement of the recovery instrument, that there will be no non-reimbursable aid that does not increase public debt.
With such a solution, the most politically prospective element of the new instrument would also be the “safe asset”, while, according to the researcher, there would be uncertainty about who should repay the debt. And last but not least, “This is an EU project. You shouldn’t restart the game just a few months after Brexit by creating spending structures away from home just to make some people like their home environment. “
Lucas Guttenberg points out that there is still enough time until next summer to adopt and ratify the Council’s decision on own resources. The expert believes that, contrary to popular belief, not only the main beneficiaries of the package will lose the veto, but also those countries (the Netherlands, Sweden, Austria, Denmark and Germany) that can expect a large budget return from the next MFF.
Cover image: Getty Images
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