Poland, Hungary Accept German EU Budget Offer as ‘D-Day’ Approaches

WARSAW/BUDAPEST (Reuters) -
The Polish Palace of Culture and Science is lit up in the blue color of the European Union’s flag ahead of an EU summit in Warsaw, Poland December 9, 2020. (REUTERS/Kacper Pempel)

Poland and Hungary have provisionally accepted a European Union budget proposal from the bloc’s German presidency and are now awaiting further approval from the Netherlands and other skeptical member states, a Polish official said on Wednesday.

Poland and Hungary have been blocking the 1.8 trillion euro ($2.18 trillion) 2021-2027 EU budget and coronavirus recovery fund because their nationalist governments oppose a clause linking the release of funds to rule of law standards.

The issue is to be discussed on Thursday at an EU summit.

“We are preliminarily in agreement but there is some pressure … the aim is to have this done before the EU summit [on Thursday],” the senior government official said, speaking on condition of anonymity, without giving further details.

Speaking in Prague at a joint press conference with his Czech counterpart Milos Zeman, Polish President Andrzej Duda said a “preliminary agreement” had been outlined, with work and discussions ongoing.

Polish government spokesman Piotr Muller told state-owned news agency PAP that there was a chance an agreement would be reached at the summit. Spokesmen for the Hungarian and Dutch governments did not immediately respond to requests for comment.

Hungarian President Viktor Orban said on Tuesday there was a “good chance” to work out a deal after a meeting in Warsaw with Poland’s Prime Minister Mateusz Morawiecki and ruling party leader Jaroslaw Kaczynski.

European Union ambassadors were reviewing the deal between Poland, Hungary and the German presidency of the EU on Wednesday, an EU diplomat said.

The deal would leave the link between EU money and the rule of law intact, but Poland and Hungary would get assurances in an explanatory declaration that the regulation would be applied objectively and that it could be tried by the EU’s top court before it can be applied, the diplomat said.

The 27 EU members would need to all agree on this proposal to unlock at 1.8 trillion euro EU budget and recovery package.

Poland’s Deputy Prime Minister Jaroslaw Gowin, who heads the more moderate junior coalition partner Accord, said that if Poland’s ruling United Right coalition fails to reach a compromise, early elections would have to be called.

United Right has been split on the issue of the veto, and there has been speculation that one of the junior coalition partners could leave government.

“I cast aside the choice, veto or death … The alternative for the United Right government would be early elections which would not serve Poland well during a pandemic,” Gowin told a news briefing on Wednesday.

Gowin said that Poland, one of the EU’s biggest budget beneficiaries, stands to lose if the veto continues.

The EU has long been at odds with the nationalist governments in Warsaw and Budapest, which Brussels accuses of flouting rule of law guidelines by imposing political control over the judiciary, media and other institutions.

Poland and Hungary deny their policies threaten the rule of law, and describe the issue as meddling in their internal affairs.

According to a statement on the website of the European Commission in Budapest, Hungary’s budget would receive at least a net 4 billion euros under the recovery fund.

A European Commission source said the net benefit to Poland would be around 65 billion euros.