Hungary and Poland put brakes on EU rescue budget over ‘rule of law’ clause

EU officials say they are facing a crisis as two of its members withhold approval for the organisation’s budget for the next seven years, which includes funds for the coronavirus pandemic recovery.

Poland and Hungary object to a stipulation tied to the disbursement of funds, which requires member states to abide by the EU’s understanding of ‘democratic norms’. Violation of the clause would result in sanctions against the offending states.

The two former Soviet bloc states have previously clashed with the EU over what the latter  describes as attempts to undermine the independence of their judicial systems.

Judicial reforms by right-wing governments in Poland in 2017 and Hungary in 2018 were seen by EU officials as violations of its laws and constituted attempts to make the judiciary in each country more pliable to the whims of the ruling government.

The EU was unable to take punitive measures as each state held veto power to enforce sanctions. Clauses attached to the planned EU budget, which were introduced by German diplomats, would cancel this veto making it easier for the bloc to ensure states abide by its rules.

The package is worth 1.8 trillion euros ($2.08 trillion), with 750 billion euros of that sum (or $857 billion) earmarked for the continent-wide bloc’s response to the deadly coronavirus pandemic.

Covid-19 has claimed the lives of more than 267,000 people across the EU, European Economic Area, and the UK, and forecasts suggest the EU economy will have contracted 7.4 percent in 2020.

However, seeing as though the budget itself requires unanimous agreement, the EU has had a hard time getting Poland and Hungary on board. 

Poland’s Justice Minister Zbigniew Ziobro said the clause would “radically limit Poland’s sovereignty” and Hungary’s government said there would be no agreement at all until there was “agreement on everything”.

Hungarian Justice Minister Judit Varga has described the clause as an example of “political blackmailing.”

The standoff is what one EU diplomat quotes in the Guardian described as a “crisis”.

One EU source cited by Politico said: “We are at a crossroads and nobody knows where this is leading. We only know that the whole package cannot be approved as long as we don't have the Hungarians on our side.”

Tensions with right-wing governments

EU members have voiced increasing unease at developments in Hungary and Poland in the last few years, as populist governments with populist right platforms assert themselves more strongly both domestically and on the continent.

Under the Fidesz government of Prime Minister Viktor Orban, power has become increasingly centralised under the office of prime minister, with parliament repeatedly granting the leader the right to rule by decree, citing the coronavirus pandemic.

The EU has struggled to convince Hungary and other Eastern European states to join its attempts to deal with the migrant crisis and Budapest has also caused a stir among officials in Brussels by rejecting gay marriage and introducing amendments that prevent LGBT couples from adopting children.

In 2018, EU officials strongly rebuked both Hungary and Poland for their government’s purported straying from liberal democratic values, cautioning them against returning to authoritarianism.

Without naming leaders from either country, former Polish prime minister and president of the European Council, Donald Tusk, said: “If you want to replace the western model of liberal democracy with [an] eastern model of authoritarian democracy, you are not a Christian Democrat.”