Leaked: The European Commission is considering bypassing Hungary and Poland!

Although the article does not detail the specific solution, but the newspaper is a journalist on Twitter indicatesthat, in their opinion, the Commission could consider establishing a special purpose vehicle (SPV) for emergencies under Article 122 of the EU Treaty. That is exactly what we wrote in our news feed this morning, based on a leading EU expert who points out that instead of enhanced cooperation and the legal pitfalls of an intergovernmental agreement, there is a truly possible third way, the creation of the SPV.

The competent EU authority of France Télécom has stated that

Currently, this bridge solution is planned to reproduce the effects of the original package.

In practice, they plan Member States would provide guarantees to this SPV so it could borrow on the market in the form of a bond issue and then distribute the proceeds among the Member States. Therefore, however, the SPV was unable to reproduce the leverage effect, which would have been one of the main advantages of the original scheme, as it was based on a generous seven-year EU budget of 1 billion euros. and it covered their coverage (and the increased payment obligations of Member States). raise funds for international bond markets.

The guarantee granted by the Member States to the SPV and the source of the capital market thus obtained are essentially the current eurozone would be based on a permanent crisis management fund (ESM), whose path was already considered by the Commission during the spring epidemic, but then the recovery fund chose the path through their joint issuance of bonds (with a strong Franco-German impulse).

It is still not entirely certain that the SPV will only distribute loans or grants, as the MEDE will only distribute loans. However, the answer above suggests (they want to copy the effect) that would also provide supportas this would allow Member States with high indebtedness ratios to access funds to recover from the viral crisis without further immediate indebtedness (and then use the appropriate parts of the guarantees provided by Member States so that the SPV can repay the underlying bond issue to investors).

Active thinking in creating an SPV a very strong message for the Hungarian-Polish couple who are considering a veto, because this way the veto power on this front is considerably weakened: the intention to soften the rule of law would be defeated. However, the launch of the 7-year framework budget requires the support of the governments of Hungary and Poland, but there are also indications that the community is thinking about avoiding the Hungarian-Polish veto for the time being. As we wrote in our news feed: at today’s meeting of the EU commissioners, Ursula von der Leyen said that if the Hungarian-Polish veto position does not change by Monday, December 7, they will move to the emergency budget. This means that the EU programs (quite a few) for which there is / will be an EU regulation coming into force in January will operate at one twelfth of the 2020 budget per month. As we wrote earlier, this would mean that the EU could spend on its own staff and probably on direct agricultural payments, but not on cohesion policy and EU external spending in the absence of a new cohesion regulation.

The above also suggests that the EU community does not want to give in to the Hungarian-Polish claims (to soften the rule of law) and speaking today in the European Parliament, the future president-in-office of the EU, Portuguese Prime Minister Antonio Costa (see above right), declared that the question of the rule of law would not be reopened the last week and the next An agreement must be reached at the EU summit, otherwise the European economy will be paralyzed. This also suggests that, following his more permissive statements in recent days, Costa has toughened up in the EP and no longer publicly supports the Hungarian-Polish couple.

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