The European Council president has warned that the EU faces serious obstacles to approving a €1.8tn budget package after Hungary and Poland vowed to veto the measures over concerns on conditions attached to the funding.
Charles Michel told a news conference on Thursday that the EU would start intensive negotiations to resolve the impasse as Budapest and Warsaw oppose the inclusion of a “rule of law” mechanism tying payments of EU money to adherence to European values.
“Nobody underestimates the difficulty of the situation,” said Mr Michel following a video conference of EU leaders including Hungary’s Viktor Orban and Poland’s Mateusz Morawiecki. “There is a determination in coming days to work in an intensive way to overcome difficulties, make progress, so we can get beyond this.”
Mr Michel spoke after a video conference on Thursday evening, where EU leaders discussed the budget crisis for the first time since the vetoes were exercised on Monday. Diplomats said the perfunctory 15-minute discussion was an attempt to de-escalate tensions rather than seeking any immediate breakthrough.
Speaking after the meeting, Angela Merkel, the German chancellor, said talks to break the impasse had begun and she rebuffed the idea that the EU was beholden to “threats” from Warsaw and Budapest.
“For me the word ‘threaten’ is not the right word in this context. We are obliged to try to find a way [out]. It’s a serious problem that we have to solve and we will work hard and earnestly on it,” said Ms Merkel.
Ursula von der Leyen, the commission president, said: “Now we sit down, we negotiate, we listen to what the issues are and we try to solve them.” Leaders are due to meet in a critical summit on December 10 and 11.
EU governments and MEPs struck a deal this month to link access to funds to respect for the bloc’s principles, including the independence of the judiciary, in a move proponents say would give the EU a powerful tool to resist the slide towards illiberalism in some member states.
However, Poland and Hungary, which are both subject to EU disciplinary procedures over the rule of law, opposed the ratification of the budget on Monday in protest at the mechanism, leaving officials scrambling to find ways to revive the measures that are designed to heal the bloc’s battered economies. The European Parliament has made it clear it has no intention of amending the draft mechanism.
Ahead of the summit, Poland’s parliament issued a resolution backing the government’s stance in negotiations. The parliament agreed not to accept “any solution which does not guarantee EU member states respect for their rights which are enshrined in the [EU’s] treaties”.
The resolution reiterated the Polish government’s criticism that the mechanism would pave the way for politically motivated attacks on Warsaw if it were approved by a majority of member states.
In an impassioned speech on Wednesday night, Poland’s prime minister, Mr Morawiecki, accused the EU of using the rule of law as a “propaganda stick” against his country, comparing the bloc’s actions to Poland’s former communist dictatorship.
Failure to settle the disagreement and ratify the EU’s forthcoming seven-year budget within the coming weeks would have damaging consequences for EU member states — including Poland and Hungary themselves.
Without a budget deal in early December, the EU would have to resort to an emergency spending programme for 2021. This so-called provisional twelfths annual budget would extend the bloc’s 2020 spending ceilings but allow money to flow only to some ringfenced areas. Cohesion payments would continue for existing projects but new ones would not be started, hitting poorer EU member states in particular.
The squeeze would be exacerbated by delays to the EU’s €750bn recovery fund, which includes Poland and Hungary among its main beneficiaries.