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The EU’s record seven-year budget of 1.8 trillion euros (£ 1.6 trillion) and the coronavirus recovery fund were unlocked after Hungary and Poland raised their objections to a link between payments and the maintenance of the rule of law.
At a summit in Brussels, Hungarian Prime Minister Viktor Orbán and his Polish counterpart, Mateusz Morawiecki, backed a compromise put forward by Berlin after months of destabilizing tensions and disputes.
“Now we can start implementation and rebuild our economies,” European Council President Charles Michel tweeted. “Our historic recovery package will drive our green and digital transitions.”
Hungary and Poland had refused to allow the disbursement of the budget – known as the multiannual financial framework – or the pandemic recovery fund, known as Next Generation EU.
They had claimed that a rule of law condition on the payment of funds, designed to block corruption, was legally vague and could be used to punish Warsaw and Budapest for political differences ranging from attitudes to migration to the treatment of LGBTQI +. . communities.
The two leaders eventually endorsed the bloc’s plans on the basis of text that assured them that the conditions would only relate to future spending.
The European court of justice will also rule on the legality of the tool, if it is contested. The EU’s supreme court would issue a ruling before the European commission publishes guidelines on how to activate the mechanism, delaying the implementation of the clause beyond 2022, when Orbán faces national elections.
The two governments were warned that the other 25 member states could act alone by agreeing to a recovery bailout fund if they continued to obstruct payment.
Countries like the Netherlands and Sweden have insisted on maintaining the condition on the grounds that they can no longer turn a blind eye to poor governance.
Both Poland and Hungary have been accused of undermining the independence of their judicial powers.
The European Parliament, which negotiated the draft of the rule of law mechanism with the German presidency of the EU, a position it has held for the past six months, backed the compromise sealed at the summit.
Rasmus Andresen, one of the MEPs who had negotiated the mechanics of the rule of law condition, said Orbán had failed.
He said: “Fundamentally, the legislative text on the rule of law mechanism remains unchanged. Thanks to pressure from the European Parliament, the legal text remains unchanged. Viktor Orban has failed.
“The political declaration of the heads of state and government has no meaning for the European Parliament. It remains a non-binding political statement. A unilateral political declaration of intent must not and cannot prevent legislation.
“It will be crucial that the president of the commission [Ursula] von der Leyen stands firm and is not guided by lazy and non-binding statements from member states ”.
