Orbán: There is a good chance of winning the fight over the EU budget

Hungary and Poland have a good chance of winning the fight over the EU's next seven-year budget and unlinking the rule of law conditionality from EU funds, if things proceed as they should, Viktor Orbán said in Warsaw after a surprise visit to the Polish capital where he had talks with Mateusz Morawiecki, the Polish Prime Minister. According to Hungarian state newswire MTI, Orbán told Polish television Polsat News that Poland and Hungary are in full agreement in all the crucial questions as the interests of the two countries are aligned.

He stressed: They believe that it is important to protect the contents of the Treaties, the national interests, and the EU funds to which Poland and Hungary are entitled. Orbán also said that the positions of Poland, Hungary, and the 25 other EU member states are getting closer than they were some weeks, or even days ago.

On Tuesday afternoon, PM Viktor Orbán travelled to Poland to meet his Polish counterpart with whom they announced to veto the European Union's upcoming multi-annual financial framework, the NextGen EU coronavirus recovery package, and the rule of law conditionality attached to these two drafts. The European Union is expecting an answer from the two vetoing countries, as the coronavirus recovery package will likely go through either with or without them. Earlier on Tuesday, Morawiecki said he thinks another EU Leaders' Summit may become necessary on the budget, as they are sticking to their earlier agreement made with PM Orbán:

"We are preparing for long months of talks and negotiations."

The Polish PM added that Warsaw is also calculating with the possibility of a temporary EU budget solution. Orbán, upon his arrival to a Warsaw military airport, went directly to a meeting with PM Morawiecki and Jarosław Kaczyński, the President of PiS.

After the meeting, Polish government spokesperson Piotr Miller said Poland and Hungary will insist on unlinking budgetary questions from the rule of law:

“We want the criteria concerning the European Union's budget to be of budgetary nature only, (…) so that suspending funds is only possible over matters of the budget's implementation.”

Müller was convinced that support is growing behind the Polish-Hungarian position among other member states as well, and this is the position that the Polish government will be representing at the EU Leaders' Summit that begins on Thursday. Responding to a reporter, he said there is a chance that an agreement could be reached at the summit. He said that during the last phase of negotiations, certain criteria appeared in the regulation that need to be cleared up; “We would not want to work within an ambiguous legal framework that would cause political tensions.”

Decision likely at the end of the week

The EU summit to be held in Brussels on Thursday and Friday is shaping up to be even more tense than usual after at the COREPER meeting three weeks ago, Hungary and Poland announced to block the EU budget, the coronavirus recovery package, and the rule of law conditionality. After the two countries' permanent representatives voted against the proposals at that meeting, the European Council and Parliament are supposed to adopt the final draft of these texts, and member states would need to ratify them individually for the legislative process to finish.

Subsequently, the same procedure would need to happen for the so-called “own resources regulation” which would allow the European Commission to take a loan from the financial market to cover the costs of the Next Generation EU recovery package which serves as a €750 billion extension to the 7-year budget.

The budget and the recovery package require an unanimous decision in the Council, however, a supermajority would suffice for the rule of law regulation – which means 15 out of the 27 member states.

But all in all, 25 member states have pledged their support for the rule of law conditionality, therefore it has much wider support than required for it to pass.

Exactly for this reason, this topic was barely mentioned at the previous EU summit in November when member states tasked German Chancellor Angela Merkel with finding a solution. The latest news on the matter were that the EU expects an answer by this Tuesday, as they need to know if they should put the recovery package together with or without Poland and Hungary. Sources in Brussels confirmed to Telex that based on the Commission's suggestion, the Council can ultimately sidestep the Polish and Hungarian governments, as based on Section 122 of the Treaty of the EU, they are allowed to take the necessary steps to proceed without them.

Germany: Negotiations cannot be reopened

However, Michael Roth, the EU Affairs Minister of Germany told the press at a news conference after the meeting of the General Affairs Council that despites rumours to the contrary, the German Presidency still counts on 27 member states, implying that Germany wants to find a way to compromise with the two renitent member states while still keeping an eye on the interests of the 25 other countries and the European Parliament.

But Roth has let down the hopes of Warsaw and Budapest by firmly stating:

The negotiations on the rule of law conditionality cannot be reopened, and its application cannot be delayed.

Roth stated that the new regulation must be implemented as soon as possible, noting that it is also impossible to separate the EU's 7-year budget, the NextGen EU package, and the rule of law mechanism, the vote on these must take place jointly.

Based on that, it's a good question what Viktor Orbán would consider a victory. The final word on these budgetary questions is supposed to be said on the EU Leaders' Summit at the end of this week. But considering statements made by the Hungarian and Polish Prime Ministers who expect “long months” of battles with the EU, it seems like their intention is to drag the matter on as long as possible.

For more on the Polish-Hungarian veto, read our earlier piece here>>>