May 13, 2021

The EU works on a plan B to circumvent the veto of Hungary and Poland and start the recovery fund without Orbán and his allies


A plan B. A formula for a recovery plan bypassing the veto and blockade of Hungary and Poland, which have taken hostage the reconstruction funds and the EU budgets for 2021-2027 on account of the mechanism that conditions the money community to compliance with the rule of law.

EU leaders set out to negotiate face-to-face with Hungary and Poland to resolve the veto of the recovery fund

EU leaders set out to negotiate face-to-face with Hungary and Poland to resolve the veto of the recovery fund

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The situation is stagnant, the Government of Angela Merkel, EU president in turn, is negotiating with Viktor Orbán and Mateusz Morawiecki but, for the moment, no solution is in sight to unblock the problem at the next EU leaders’ summit on December 10 and 11.

Against this background, the Community Executive is working on an alternative proposal, which allows to enable recovery funds from the second half of 2021 through an agreement between governments that leaves Hungary and Poland on the sidelines given the tight deadlines.

According to the pre-established calendars, next Monday there should be a closed agreement for the budgets, sanctioned in the European Council of December 10-11 and, later in the plenary session of the European Parliament for its entry into force on January 1. In that 2021-2027 budget, the recovery fund of 750,000 million is embedded, the new taxes for the repayment of the debt issued to finance the recovery plan and the increase in the spending ceilings of an operation of 1.8 billion euros .

But all that house of cards held with pins is about to collapse, and the scenario in which the community Executive is already working has two tracks.

One, regulatory, which involves presenting a budget proposal based on the one for 2016-2020, with one less taxpayer – United Kingdom – and a fall in GDP in 2020 in the EU close to 10%, which would lead to to a budget no longer without the extraordinary spending ceiling planned for the 2021-2027 period, but still lower than in the previous period by around 30,000 million euros. And, as the money is prioritized for past committed items and new items are not planned, there will be social programs that are greatly diminished or that will not even exist – cohesion, Erasmus, just transition, compensation or rebates for rich countries that contribute more …–. The last time the budget was extended was in 1988, a formula that practically passes through a rule of three of the previous multi-year budget applied to a fiscal year. “It is essentially a continuation in services”, explain sources from the European Commission: “With regard to Erasmus, the problem is that it is usually a program that is paid during the year in which the student travels. And if not there is agreement, in a budget for 2021, we cannot commit funds for students and Erasmus would stop immediately “.

However, new disbursements could be adopted under the first pillar of the CAP (direct aid for farmers and ranchers), the humanitarian aid program, the Common Foreign and Security policy or the RescUE civil protection mechanism.

And, on the other hand, the European Commission is working on a plan B – by means of a reinforced cooperation agreement or the contribution of national guarantees through an intergovernmental agreement such as the ESM – for the recovery fund “at 25 or 24 “Explain sources in the Community Executive who still doubt the position of Slovenia, which showed its solidarity with the positions of Hungary and Poland. “The fund would have to be redesigned”, they say in Brussels: “The option of the intergovernmental agreement would imply reinventing everything, which takes time, and in the absence of the EU’s own resources, the debt would expand the debt of the States, which could be unattractive. There are several suggestions and solutions, we believe that they can be sought, but the central scenario is to solve the problem at 27 in the next week. In any case, it would be a question of devising a kind of bridge until the agreement is finalized to 27 “.

“Some colleagues have suggested a solution of reinforced cooperation in which the States provide guarantees that in the future would be returned when there is an agreement to 27”, they explain in the European Commission: “There may also be other solutions. But what I am saying today is that we are pretty confident that these solutions can be found and implemented quickly. We have not made a final decision on which one should go forward, and our central scenario is that we resolve this issue at 27 over the next week or so. ”

The president of the European Parliament, David Sassoli, however, on Wednesday was reluctant to the idea of ​​plan B and has asked Merkel for more efforts to convince Orbán.

The European Commission warns that, even if an agreement is reached with Poland and Hungary to lift their veto, “it is pending that the decision on own resources [nuevos impuestos] be ratified by national parliaments. That will take a while. And the channel under which we will disburse the money is the recovery and resilience mechanism for which national plans must be approved by the Council. [los gobiernos]. So in the priority scenario, we are looking, realistically, at significant disbursements starting in June. And in the alternative scenario, I think we could stay largely within that timeline, but obviously it depends on the exact formulation and decision-making process of next year, and here we enter a period of considerable uncertainty. ” .

Hungary and Poland insist on the veto

This Monday Prime Ministers Mateusz Morawiecki and Viktor Orbán met in Warsaw to ratify their blackmail ten days before the European summit on December 10 and 11, and reiterated their intention to veto European budgets if the clause that links the award is maintained. of funds to respect the principles of the rule of law.

The Polish Government spokesman, Pitro Müller, said after the meeting between Morawiecki and Orban that the proposal on the table is “incompatible with the European treaties”, and assured that “there is more and more understanding of other countries regarding the position of Warsaw and Budapest “and that” are awaiting new proposals in line with the treaties. ”

EU Member States failed to reach unanimity on the EU’s multi-annual budget for 2021-2027 and decisions on the recovery fund.

Poland and Hungary raised objections to the regulation linking access to EU funds with the rule of law. At a meeting of EU ambassadors, the regulation was adopted by a qualified majority of Member States.

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