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The rebel capitals refused to adhere to new rules that would link European budget donations to good behavior. The Budapest and Warsaw measure seriously leaves the EU’s 1.8 trillion euro financial package and member states are left to find a new deal before the end of the year. A senior European diplomat described it as a “crisis” for the bloc at such a late stage in the process.
The source said: “This will delay the implementation of all this and will make it impossible to pay the money as soon as possible.
“I think we are aware of the huge economic and social crisis, which will now be exacerbated by the second wave of coronavirus, time is really of the essence.
The Polish and Hungarian ambassadors blocked the so-called rule of law mechanism during a critical vote on the policy during a private meeting in Brussels.
A spokesman for the German presidency said: “The EU ambassadors were unable to reach the necessary unanimity to initiate the written procedure due to reservations expressed by two member states. “
EU states want to force eurosceptic governments to adhere to the bloc’s democratic values and principles before they can receive funding from its € 750 billion coronavirus bailout, for regions and economies ravaged by the pandemic.
The mechanism was largely seen as a crackdown on Budapest and Warsaw, which are often at odds with the European Commission for alleged breaches of the bloc’s rules.
The recovery fund was linked to the upcoming seven-year budget package, which must be agreed unanimously before it can take effect in 2021.
Arch Federalist Guy Verhofstadt, who has campaigned for strict stipulations of the rule of law, said: “The game of poker has begun. Time to call your bluff. “
EU leaders will now be forced to make a swift intervention in a bid to bail out the budget.
They are scheduled to hold a video conference on Thursday, but may require a physical meeting in Brussels to reach an agreement before the end of the year.
German Chancellor Angela Merkel, who holds the rotating EU presidency, is expected to play a vital role in convincing Hungary and Poland to back down.
The German leader already helped find a compromise with his Hungarian counterpart, Viktor Orban, during bitter disputes over the recovery fund and budget earlier this year.
If the bloc cannot reach an agreement before the end of the year, it will be forced to adopt an emergency budget in 2021 until the dispute is resolved.
It would also mean that the coronavirus recovery fund would not kick in, leaving Europe on the brink of disaster.
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