Poland, Hungary veto EU budget over new rules linking funding to the rule of law

On Monday, Poland and Hungary vetoed the European Union’s next seven-year budget and a massive coronavirus recovery plan over a new mechanism linking EU funding to the rule of law, throwing the 27-nation bloc into a political crisis.

The budget of 1.8 trillion euros (2.1 trillion USD) for 2021-2027 was agreed in principle last week after months of tough negotiations and is expected to enter into force within a few weeks.

This has given rise to fierce opposition in Warsaw and Budapest, where right-wing governments are strongly opposed to a tool that could cause them to lose EU money if they continue with policies that are seen as weakening democratic standards.

But EU ambassadors voted by a qualified majority – about two-thirds – in favor of the rule of law, despite their objections. Thereafter, the envoy “could not reach the necessary unanimity” to proceed with the budget and recovery plan “due to reservations from two member states”, tweeted German spokesman in Brussels Sebastian Fischer.

Hungarian Prime Minister Viktor Orban’s press officer Bertalan Havasi said on Monday that Orban had written a letter to German Chancellor Angela Merkel, European Commission President Ursula von der Leyen and European Council President Charles Michel vetoing the budget and post-pandemic package.

“There is no agreement on anything until there is an agreement on everything,” Orban wrote.

In Warsaw, Polish Justice Minister Zbigniew Ziobro declared at a press conference on Monday that “there will be no consent to this mechanism” and that such a mechanism would “radically limit Poland’s sovereignty.”

EU officials insisted on the new mechanism linking the rule of law to funding for a tool to use against the governments of Prime Ministers Mateusz Morawiecki in Poland and Orban in Hungary, both accused by the EU of undermining legal independence and media freedoms.

In addition, the Orban government is criticized for stigmatizing NGOs that promote civil liberties and for alleged misuse of EU funds to enrich their political allies.

EU European ministers will discuss the suspension on Tuesday, and if it remains unresolved, bloc leaders could raise it at a videoconferencing meeting on Thursday night.

Some political observers believe that the threats are a hoax, because by vetoing the entire budget they would abolish much-needed funds for their own countries, former communist states in Central Europe that get more money from the EU pot than they pay for it.

Funding will be particularly critical as Europe struggles to recover from the economic downturn caused by the coronavirus pandemic. The budget is due to enter into force on January 1, and officials are desperate to stamp the deal within a few weeks.

Ziobro, the Polish Minister of Justice, described the rule of law mechanism as an attempt by the German EU Presidency to control Poland – a claim that seemed to be directed at older Poles who remember Germany’s World War II occupation of Poland.

“It is not about the rule of law, which is just a pretext, a beautiful word that goes nicely in the ear, but it is really about institutional, political enslavement, (and) a radical restriction of sovereignty,” says Ziobro.

In a weekly radio interview on Friday, Orban said the conditions for the rule of law were similar to “ideological blackmail” perpetrated by the Soviet Union.

“If they really approve of this (rule of law) regulation, we will have created a Soviet Union out of the European Union,” he said.