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As we indicated in our morning article, today there was “only” one political veto by the two Member States. The formal veto, interpreted as a legal act, could not come before the regulation of own resources on Wednesday and not before next week in the budget. However, it is more likely that the two regulations will be dealt with simultaneously by the German Presidency, that is, they will want to vote on them legally in the Council no later than next week or in the future.
Our most important news on the subject:
Before clarifying the possible scenarios, it is a good idea to record:
This situation represents a serious political crisis in the EU, while the economic and social crisis caused by the coronavirus is already raging, so today’s development reinforces this already acute situation.
And then the possible scenarios, or some combination of them:
After a serious crisis, a classic Brussels compromise. In the end, a political veto is not followed by a legal veto, because to avoid the latter, the leaders of the Member States and the European Parliament reach an agreement (some high-level agreement is already underway). Thus, in a winter vote, with a softened system of sanctions for the rule of law, all Member States will finally be able to adopt the two regulations (which require unanimity). Hungarian Prime Minister Viktor Orbán’s letter to EU leaders on November 8 revealed that he would completely soften the draft rule of law, and that is the only way he would be willing to enter into the adoption of the budget of 7 years (MFP) and the recovery fund. This scenario, which appears to be a classic Brussels compromise, therefore requires both the EP and the stingy northern states to be flexible to soften the rule of law. This is a limited scenario in view of its difficult position so far, but if it did, Hungary and Poland could expect to shell out new EU money from 2021, while also participating in the recovery fund and joint bond issuance behind. of the.
Salami. After the two political vetoes, the debate finally moves towards a formal veto on a single issue. This means that the Hungarian (and Polish) government will legally veto the own resources regulation, but to avoid wasting the recovery fund, the other Member States will start to work out the legal framework for its creation on an intergovernmental basis (early October) . Viktor Orbán has already started to encourage other Member States, which, in a nutshell, would mean that the government would prefer to give up some € 16 billion from the recovery fund due to too strict conditions of the rule of law). In the case of the MFF, substantive negotiations on the ground and the possible weakening of the rule of law (the classic Brussels compromise) will eventually lead to the two Member States voting in favor of the MFF.
A full lock version. After the two political vetoes, there will be two formal vetoes, so the recovery fund will move in the direction of an intergovernmental structure. And the new MFF will not be able to start either, so from 2021 to one twelfth of the EU budget by 2020, the EU and the Member States are going through terrible upheavals. In principle, this could be the case for years, until the regulation for the 2014-2020 cycle is replaced by a framework financial regulation supported unanimously by all Member States. For the year 2020, Hungary was initially allocated approximately € 4.5 billion, so theoretically a twelfth of this could be expected each month from 2021. This is not a low probability scenario to the best of our knowledge. .
Another version of full lock. Given the depth of the debate on the rule of law and the resulting budgetary confusion, the vast majority of Member States may decide to advance the Article 7 procedure of the rule of law against Hungary and Poland. This would mean that the German Presidency (or successive Presidents) would put the case against the two countries to a vote in the Council, and if the other 25 were to vote at the same time on the case against the two countries, it could theoretically be prevented that Hungarians and Poles they defend each other in the vote (because there is also a unanimity requirement for sanctions). If the other 25 Member States were really unanimous in their support for the joint sanctions against Hungary and Poland, it could, on the one hand, stop / reduce the disbursement of money for the 2014-2020 cycle and, on the other hand, suspend the rights of vote of the two Member States in the Council. The former would mean that Hungary would continue to count on the 11 billion euros (or the decisive part) already paid to applicants here in Hungary, as they would not come, thus placing an even greater burden on Hungarian public finances, it would not end in the following figure. the wide area between the orange and light blue lines is HUF 3 billion. The latter would mean that a possible suspension of the voting rights of Hungary and Poland would pave the way for the current rotating presidency to put back to the vote the issue of the EU budget and the recovery fund for 2021-2027, where it could win. unanimously based on the above. (Approval of 25 Member States). Even in this case, Hungary could block the establishment of the recovery fund, because the Hungarian parliament must also approve the EU’s own resources regulation.
We have written in detail in the following articles about what led to the veto (what exactly is contained in the draft of the rule of law that has strictly triumphed) and what debates surround it:
Cover Image Source: Omar Marques / Getty Images
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