Hungary and Poland have frequently clashed with the EU over the rule of law. But never have the stakes been higher, in financial terms at least, than following indications this week that they are prepared to block the EU’s €1.8tn budget and recovery package over the matter.
At the heart of the dispute is a mechanism that would allow the EU to suspend funding to member states where its values, including judicial independence, have been undermined or are under threat. Proponents see the mechanism as a way for the bloc to protect EU funds in recalcitrant member states, something it has long struggled to do via its existing tools.
But Hungary and Poland, both of which have been the subject of the bloc’s existing disciplinary proceedings over the rule of law, regard the new rules as a politically motivated attempt to target them.
“I think today ‘rule of law’ is everything and anything that you don’t like about Hungary,” Judit Varga, Hungary’s justice minister, said on a call with foreign journalists on Monday evening. She added that it was “unfair” to tie funding to the rule of law as each EU state had a different judicial system, and there was no common definition of the rule of law.
Pawel Jablonski, Poland’s deputy foreign minister, said that another problem from Warsaw’s perspective was the “very vague and very wide” nature of the regulation, which would allow sanctions to be triggered not only by breaches of the EU’s values, but by potential risks to them.
“‘Potential risk’ is something that could be triggered by literally anything. We’ve already had suggestions that issues as far from judicial reform as the issues of alleged LGBT discrimination or abortion regulation could trigger these sanctions,” he told the Financial Times.
“So the intentions of the authors of it are clear. After years of discussions and debates, we have no more trust in the integrity of the institutions that are behind it, so we simply can’t agree to it.”
Some analysts think that despite their threats, Budapest and Warsaw will ultimately back down, given that the recovery package offers them both billions of euros in support at a time when the coronavirus pandemic is threatening to ravage their economies.
Daniel Hegedüs, a fellow at the German Marshall Fund, said Warsaw and Budapest were searching for concessions from Brussels, or at least a “small and symbolic victory so that they can withdraw without a loss of face in the domestic arena”.
But finding a compromise is likely to be a complicated process. Not only are multiple players — ranging from the different EU institutions to national capitals — involved, but the two sides’ ideas on what would work are very different.
Officials in Brussels have considered proposing a political declaration that the new mechanism will not target specific countries and will respect member states’ sovereignty. But their counterparts in Warsaw and Budapest are looking for more substantive changes, such as requiring unanimity among member states, rather than a majority, for the sanctions to be triggered.
“In general we want a mechanism that would sufficiently guarantee that we would not be subject to politically motivated sanctions. The current situation leads us to believe that this would take place [with this mechanism],” said Mr Jablonski.
“Unanimity would be the most obvious scenario [for changing the mechanism] as this would simply be in accordance with the EU treaty.”
The chances of a compromise are further complicated by Poland’s febrile domestic politics, where the ruling coalition, led by Jaroslaw Kaczynski’s Law and Justice party (PiS), is under mounting strain.
Despite nominally being just a deputy prime minister, Mr Kaczynski remains Poland’s ultimate decision maker. But his government’s unity has been weakened by a simmering power struggle between Prime Minister Mateusz Morawiecki and hardline justice minister Zbigniew Ziobro, who heads United Poland, one of PiS’s two coalition partners.
The power struggle briefly threatened to topple the government in September and Mr Ziobro has used the latest battle over the rule of law as another opportunity to put pressure on Mr Morawiecki.
On Monday morning, shortly before EU ambassadors were due to discuss the EU’s finances, Mr Ziobro told a press conference that if Poland did not veto the budget, it would result in a complete loss of confidence in the prime minister “with all the consequences of that”.
“Basically what Zbigniew Ziobro told Kaczynski yesterday is that if you want to have me in coalition, you have to veto the budget,” said Wojciech Szacki, head of the political desk at Polityka Insight, adding that Mr Ziobro was positioning himself for a possible future independent of PiS. “I think Zbigniew Ziobro has concluded that he will not last until the end of the coalition and he is looking for a banner to rally people around him . . . If he manages to convince Kaczynski to veto, he will treat it as a political success.”
Even figures from the ruling camp concede that the power struggle makes it hard to predict how the debate over the veto will play out. “Ziobro is using this to weaken Morawiecki and oust him, but I don’t think he is using this to bring the government down,” said one.
“The question is whether they are playing poker or Russian roulette. The consequences are quite different.”