Mateusz Morawiecki, prime minister of Poland, left, greets Hungary’s PM Viktor Orban in Budapest on Thursday. The leaders said the European Council ought to discuss whether the EU’s financial interests should be linked to the rule of law © Zoltan Fischer/Hungarian Prime Minister's press/AFO/Getty

The prime ministers of Poland and Hungary have hardened their opposition to a plan to tie EU funding to the rule of law, in a show of defiance that will seriously complicate the bloc’s efforts to enact a new seven-year budget.

Negotiators from the EU’s German presidency and the European Parliament agreed this month to link access to the bloc’s funds to respect for shared principles, including the independence of the judiciary. Proponents hope the move can slow or reverse the drift towards illiberalism in some member states.

Budapest and Warsaw oppose the idea, however. In a news conference on Thursday, Hungary’s premier Viktor Orban and Mateusz Morawiecki, prime minister of Poland, called on Brussels to separate the process of ratifying the €1.8tn EU budget and the coronavirus emergency relief package from the debate over the rule of law mechanism, which they said should be “substantially” modified.

Instead, they argued that the European Council should discuss whether or not the EU’s financial interests should be linked to the rule of law. They added that if this was to be the case, an intergovernmental conference should be convened to modify the EU treaties accordingly — a notion that is seen as a non-starter in Brussels.

“Hungary faces no financial loss if the European crisis management budget does not come together,” Mr Orban said. “That concerns member states where the public indebtedness is above 100 per cent.” 

Both premiers also released a joint declaration in which they argued that the proposed new mechanism would have the effect of “degrading rule of law within the union to a political instrument”.

The developments prompted alarm among other EU member states on Thursday afternoon, as they continued to seek a route towards a deal by a summit on December 10-11. The clash with Hungary and Poland over the rule of law is the most serious obstacle to the completion of legislation pushing through the EU’s upcoming seven-year Multiannual Financial Framework (MFF) and €750bn recovery fund.

A senior EU diplomat said: “It is clear that there is absolutely no support for reopening the conditionality mechanism in the European Parliament or in the Council. With their statement Poland and Hungary are moving deeper and deeper into isolation.”

The setback will rekindle talk among EU member states about alternative routes towards the release of the coronavirus recovery spending. One more radical suggestion has been to bypass the states blocking the budget and agree the recovery package as a deal among 25 member states.

Member states could also seek to push through the regulation enacting the rule of law mechanism against the opposition of Warsaw and Budapest via votes in the Council and European Parliament. However the seven-year budget and recovery fund borrowing require unanimous agreement among member states.

Both Mr Orban and Mr Morawiecki — whose countries are both already subject to EU disciplinary procedures over concerns that they are undermining the rule of law — pledged not to accept any solution to the budget impasse that was not acceptable to the other party.

Mr Orban stated that he could not “subject Hungary to a situation where a simple majority imposes issues upon the Hungarian people they do not want”. However, a recent poll showed that more than 70 per cent of Hungarians supporting tying EU funding to respect for the rule of law.

Mr Morawiecki reiterated his government’s previous criticism of the rule of law mechanism, claiming that it was “extremely dangerous for the cohesiveness of all of the EU”, and could in future lead to the bloc’s collapse.

“Today we face . . . a completely new mechanism that, through its arbitrariness, the political nature of its application, and through political motivated decisions could lead . . . lead to the fragmentation of the EU, and maybe even to its break-up,” he said.

“This mechanism is an arbitrarily interpreted regulation relating to the so-called rule of law. But in reality it is a regulation which is supposed to refer to the budget, but which under this pretext refers to other topics.”


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