The European Union is no stranger to protracted fights, but a confrontation over the bloc’s multiyear budget and conditions attached to the disbursement of a coronavirus recovery fund look set to play out for most of the rest of this year, deepening the rift between the western and eastern halves of the continent.
Hungary and Poland, with the backing of Slovenia, remain adamant in their refusal to approve the bloc’s $2.1 trillion budget while rule-of-law conditions remain in place for countries to receive money from a separate $750 million coronavirus recovery fund.
Brussels and western Europeans seem equally determined to leverage coronavirus relief money to force compliance with the standards they say are necessary to block democratic backsliding by Hungary and Poland.
After days of intensive negotiations, Budapest and Warsaw are showing no signs of backing down or rolling back contentious reforms that according to Brussels, threaten to curtail the independence of their judiciaries.
Hungary’s populist nationalist leader, Viktor Orban, and Poland’s ruling Law and Justice Party (PiS) are both accused by their liberal Western counterparts, rights groups and domestic opponents of straying from the fundamental rule-of-law tenets undergirding the bloc. Orban has been accused of seeking to undermine not only the independence of judges but of curbing civil society and silencing the press.
Both countries have been formally investigated by the European Commission for being in breach of EU values. But the bloc drew back from the nuclear option of trying to suspend their member voting rights, which would unlikely have drawn the necessary unanimous backing of the other 25 member states.
Shaping a mechanism to withhold money from the recovery fund for democratic backsliding was seen as a way to bring Hungary and Poland to heel. But now, Brussels finds itself in a standoff, with Budapest and Warsaw retaliating by declining to approve the bloc’s overall multiyear budget, which requires the unanimous approval of all member states.
After a videoconference last week of EU national leaders, German Chancellor Angela Merkel sought to avoid the confrontation being played out angrily in public and said the dispute is “a serious problem that we have to solve, and we will work hard and earnestly on it.”
The day before in Warsaw, Polish Prime Minister Mateusz Morawiecki delivered a speech many analysts agreed was the most euroskeptic address ever made by a Polish politician.
Morawiecki said while he did not want to see his country leave the EU, he painted a picture of the bloc as one that discriminates against eastern member states like Hungary and Poland.
Which side will blink?
“Both sides are digging in for prolonged trench warfare,” a senior EU official told VOA, saying Brussels had hoped Budapest and Warsaw would back down in the wake of the presidential election outcome in the United States, where projected winner Joe Biden and his foreign policy team have not disguised in the past their disapproval of Europe’s populist nationalists. The Obama administration, in which Biden was vice president, largely ostracized Orban.
The rhetoric since Thursday’s videoconference has hardly been dialed down. Officials from Poland and Hungary have remained strident in opposition to the mechanism that would cut off EU funds to countries deemed in violation of the bloc’s rule-of-law standards. They remain hopeful that the rule-of-law mechanism will eventually be dropped or altered.
Orban has said he believes the standoff will be resolved.
“The talks should be continued, and in the end, we will come to an agreement. That’s how this usually goes,” Orban told Hungarian state-owned radio.
But some analysts and diplomats say there still appears to be a calculation by some in Brussels that both Poland and Hungary will have to blink, predicting that domestic pressure on Orban and the PiS will increase.
In a European Parliament survey, 44% of Hungarians polled said they experienced income loss since the beginning of the crisis, the highest proportion of any other EU country. Both Hungary and Poland need relief funds.
István Szent-Iványi, a liberal European lawmaker and former Polish diplomat, said in the end, it cannot be in the interests of the Hungarian and Polish governments to anger southern European countries such as Italy, which desperately needs EU recovery money and has been allied to the central Europeans on migration issues.
Others say this current standoff highlights the direction of travel between the nationalist-minded eastern half of the bloc and a more liberal western half that wants greater European integration. A resolution will only delay an eventual showdown, they argue.
In an opinion article for the Hungarian news outlet Index, Tibor Navracsics, a former European commissioner and onetime justice minister in the Orban government, said the dispute has reached a point “where there is no common ground to settle the disagreements. If Hungary and Poland veto the common budget, they will push the EU into an unprecedented fiscal crisis.”
He added, “The present conflict is no longer about money, but about identity and national sovereignty.”