The European budget and the funds for the recovery plan are blocked

Poland and Hungary have vetoed the European Union’s draft budget for the period 2021-2027, and the stimulus plan that is backed by it.

Warsaw and Budapest are contesting the conditioning of the payment of European funds to respect for the rule of law, a mechanism that the Hungarian Prime Minister describes as “occasions for political abuse”.

Viktor Orban had also announced the color a week ago, in a letter addressed to Ursula von der Leyen, the President of the European Commission, Charles Michel, the President of the European Council, as well as to Germany, who currently holds the rotating EU presidency. He wrote in particular that “the proposed sanction mechanism is based on vague legal definitions” and threatened in the wake of opposing his veto.

Stimulus plans

It’s been done since Monday. Joined by Poland, Hungary is blocking a budget of 1090 billion euros which demands the unanimity of member states to be accepted, and therefore, at the same time, the 750 billion euros of the European recovery plan.

For France, this means that in the current state of affairs, the 40 billion for Europe provided for in the economic recovery plan are just as blocked.

If the blockage continues, the two “rebellious” states should also give up their subsidies planned for the post-covid recovery, ie 25 billion for Poland and 7 for Hungary. This aid should tip in the balance of the negotiations, which are continuing.

On Tuesday afternoon, the German Foreign Minister said he was convinced that a solution would be found quickly.

At what price ?

Poland and Hungary are subject to a sanctions procedure (known as Article 7) for “violation of the founding values ​​of Europe“. Procedure which has very little chance of success when the sanction, namely a suspension of voting rights, must be approved unanimously minus one member.

Failing to completely renounce respect for the rule of law, the other members, Germany in the lead, risk having to make concessions.

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