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EU leaders deadlocked over Polish, Hungarian veto of recovery plan

20 November 2020 06:23 (UTC +04:00)

European Union leaders clashed briefly on Thursday over a veto by Poland and Hungary of the bloc’s 1.8 trillion euro plan to recover from the recession caused by the COVID-19 pandemic, but agreed in a virtual summit to allow more time for an agreement, APA reports citing Reuters.

The veto is likely to delay hundreds of billions in EU funds at a time when the 27-nation bloc is grappling with a second wave of the coronavirus and its economy is likely to shrink in the last three months of the year in a double-dip recession.

Governments are desperate to get jointly borrowed EU money - the first-ever attempt by the bloc to borrow and spend together - to save businesses and jobs.

But Warsaw and Budapest have refused to back the financial plan for the whole EU, even though they are beneficiaries, because the money is conditional on respecting the rule of law.

Both countries are under EU investigation for undermining the independence of courts, media and non-governmental organisations, and with the condition in place they risk losing access to tens of billions of euros.

EU leaders meeting by video-conference on Thursday evening discussed the stand-off for less than half an hour, and - with no easy solution at hand - agreed that the dispute should be parked and handed to experts to find a way forward.

“A video teleconference is not the appropriate format to discuss such a complicated issue,” an EU official said. “We do not underestimate the seriousness of the situation and believe we need ... an agreement.”

While Poland and Hungary refuse to support the financial plan with the rule of law condition, others, including the Netherlands and the European Parliament, refuse to accept it without it.

Both sides appeared to be digging in.

“There is zero chance for the EU budget or the rescue package to take effect in its present form,” Gergely Gulyas, the Hungarian prime minister’s chief of staff, told a briefing.

Poland’s lower house of parliament voted through a resolution supporting the government’s veto.

But a government spokesman left the door open for striking a deal, given that Poland alone would get more than 130 billion euros from the financial package.

“We are convinced that a compromise will be reached in the negotiation process that will enable the Polish government to accept a solution,” he told Reuters by text message.