The EU Budget deal – a pyrrhic victory for Poland and Hungary

Here is how Hungary and Poland were forced into a deal that could spell trouble for both countries in the near future

editor: REMIX NEWS
author: Daniel Deme
via:

The past two days had seen three events that have ended in a flaming disaster despite being described by their participants as a great success.
At first we have saw Elon Musk’s Starship rocket going up in flames, which was followed by a celebratory tweet from its owner saying, “Congrats SpaceX team hell yeah!!… Mars, here we come!!”
Then, we saw optimistic articles in the British press hailing a significant progress in Brexit negotiations, and signposting from politicians such as Michael Gove that a deal was near. When two days ago Boris Johnson had landed in Brussels though, this was proven to be based more on wishful thinking than facts.
Now a third development, again from Brussels, threatens to add to the list of mishaps given a healthy dose of spin.
The looming crisis over the EU budget being tied to a rule-of-law mechanism – which could have resulted in funds being cut to so-called violators of democratic principles – was averted by a preliminary deal reached between Poland, Hungary and the rest of the 27 member states. The two countries have been strongly opposed to such a conditioning of the budget and recovery funds, and given the numerous precedents in which they have found themselves in fundamental opposition to migration or gender policies championed by European Institutions, their fears that the mechanism will be specifically calibrated against them is not entirely unfounded.
On Thursday night, some media outlets in Hungary have hailed a major victory for Viktor Orbán and Mateusz Morawiecki when news of a deal were starting to trickle in from Brussels. Unusually, even opposition news-sites, usually strongly critical of the Hungarian government, have not evaluated the deal as a defeat or climb-down from the Hungarian prime minister’s side. Hungarian MEP for Fidesz, Tamás Deutsch, posted on his social media platform saying: “We have won! Hungary has won, the Polish-Hungarian friendship has won, Europe has won! It is worth standing up for our country”.
Despite such claims of victory, the fact of the matter is that the rule-of-law condition remains firmly in the text as a condition for receiving resources from the European budget, something that had prompted the two countries’ original veto. The only addition is a clause which allows the two countries to challenge the legality of the rule-of-law mechanism in front of the European Court of Justice (ECJ). This criterium cannot be applied until the official verdict of the court. Hungary and Poland have already signaled that they will mount such a legal challenge at the ECJ.
Another concession is the agreement that the new mechanism will not apply to ongoing projects being drawn from the the EU’s last budget, but will only be applicable to the new one. This is important since Hungary still has not used up its full share of the European cohesion funds, over €10 billion are still at their disposal from the old budget.
Furthermore, according to the new clause, the European Commission must create directives for the interpretation of the new mechanism. This should make it clear that the EU can only apply this mechanism in the interest of the protection of its financial stability, and only in cases that are within its legal competences. Before funds can be withheld from a member state, a dialogue must be conducted to find a remedy. This, according to the new addition, may involve the European Council as well, should the relevant parties require it.
Thus, the key element in the compromise is the future ruling of the Court of Justice, however, during the debate preceding Thursday’s compromise agreement, European diplomats were adamant that the rule-of-law mechanism is entirely compatible with European legislation and treaties. The ruling on the matter can take many months, or even years, but if the decision goes against Hungary and Poland, the mechanism will move ahead with full force. Furthermore, if there was a change of government in either countries, a left-leaning coalition would almost certainly withdraw its challenge from the Court.
One obviously cannot pre-empt the ruling of the court, especially in such a complex matter, yet there are certain precedents that can help in weighing up the possible outcomes of this challenge, such as the fact that the ECJ interprets European legislation in the spirit of the ruling European ethos – the same ethos which often prompted accusations of political bias from the supposedly unbiased institution.
All things considered then, the only certain thing that has been achieved on Thursday night was a delay in the implementation of the rule-of-law mechanism. In case Europe will not change direction in its migration and progressive social policies, this fact will hang as Damocles’ sword over the two Central-Eastern European nations.
Opinions differ on just how much time Poland and Hungary have won with this amendment, given that the ECJ’s rulings can take anything from a few months to many years. The crucial date, however, as far the Viktor Orbán’s government is concerned, is 2022, when Hungarian parliamentary election are scheduled. In case that Hungary, if Hungary were to be hit by financial sanctions under the new European budget distribution mechanism, this could seriously impact the present government’s chances to retain its power, especially during a time of double-digit recession as a result of the coronavirus crisis.
Věra Jourová, the European Commission’s Vice President, has also already indicated that the decision will be fast-tracked at the court.
“I expect the proceeding to go fast. In my view, we are talking about months rather than years,” she stated. Although such predictions from high-ranking EU officials do raise further questions about the procedural independence of the ECJ, this will put more pressure on the Hungarian and Polish government’s ability to create the necessary alliances shielding their countries against a possible blocking of European funds.
If this interpretation is indeed correct, then the obvious question arises: Why did Poland and Hungary sign such a compromise despite their earlier strong opposition instead of sticking to their guns? The give-away is Orbán’s sudden trip to Poland on Tuesday.
The unexpected will to compromise can, to a large extent, be traced back to Polish internal politics, more precisely, to tensions within the ruling coalition government. The ruling PiS party’s position has become precarious since the ruling of Poland’s Constitutional Court in the matter of abortion laws. According to some analysts, the ruling coalition may have lost as much as 10 percentage points in the polls over their support for the Court’s decision, which made them more reliant on their two smaller coalition parties. The recent vote of confidence against party leader Jaroslaw Kaczynski did not help in strengthening the government’s position either. Yet ,it was the behind-the-scenes negotiations between Deputy Prime Minister Jaroslaw Gowin and some European officials that had prompted a preemptive action on the part of Viktor Orbán and Mateusz Morawiecki.
If Gowin’s Porozumienie party were to leave the coalition, this would lead to the fall of the government and to early elections. Because of PiS’ precarious current electoral position, this is a development that not only Morawiecki, but also Viktor Orbán, was trying to prevent at all costs, even at the expense of their veto against the rule-of-law mechanism. This will, of course, leave the Polish government exposed from the side of their other coalition party, the conservative Solidarna Polska , that was very adamant on maintaining the veto.
The current compromise, be it favorable or damaging for either of the sides involved, was absolutely necessary. From the point of view of the EU leadership, the continued blocking of the EU’s budget and emergency funds was untenable. From the Polish-Hungarian side, the gathering dark clouds over Warsaw have given them no other choice but to give up their hard-stance towards the rule-of-law mechanism and to shake hands with their European partners.
As far as the two countries are concerned, given the circumstances, the compromise is the best possible option currently available on the table. It is certainly more than “more than nothing”. There is something they can bring home from Brussels and present it to their voters as a solution to the European impasse. Whether this is a “victory” or not, their voters will decide. The imminent budgetary crisis has, in effect, been traded for an uncertain future outcome. Whatever the ruling of the ECJ may be, and however EU member state will choose to interpret or implement it, this will without doubt define Poland and Hungary’s future EU membership.

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