Hungary's leader eyes "victory" but gives no ground in EU budget row

WARSAW/BUDAPEST (Reuters) -Hungary and Poland gave no ground on Tuesday in a row that has blocked the European Union’s budget and economic recovery fund, but the Hungarian prime minister said he hoped the dispute could be resolved at an EU summit this week.

FILE PHOTO: Hungarian Prime Minister Viktor Orban and Polish Prime Minister Mateusz Morawiecki talk during a meeting in Budapest, Hungary, November 26, 2020. Zoltan Fischer/Hungarian Prime Minister's Press Office/Handout via REUTERS/File Photo

Poland and Hungary are blocking 1.8 trillion euros ($2.18 trillion) in funding because they oppose a clause linking the release of funds to the rule of law.

EU leaders will try to reach an agreement to unblock the funding at a summit that starts on Thursday, but have given no sign of backing down over the rule-of-law condition.

Polish Prime Minister Mateusz Morawiecki said another summit might be needed to end the row. But after talks with Morawiecki, Hungarian Prime Minister Viktor Orban said he hoped for a breakthrough this week and a “victory” for their two countries.

“I think we have a good chance to close this whole issue this week, during the summit. There is no guarantee, but a good chance, we’re just an inch from that,” Orban said in an interview with private TV Polsat News and Interia website.

“I think other member states have already presented their positions and it is now time to make a deal with Poland and Hungary,” he said. “We stand a chance to get a Polish-Hungarian victory.”

The European Commission, the EU executive, has criticised the two countries over policies which it says limit media freedoms and the independence of the judiciary.

Signalling no change in the stance of the other 25 EU member states, Germany’s Europe minister, Michael Roth, said efforts were being made to reach a solution but that “there can be no change to the rule-of-law mechanism.”

Acknowledging that differences remain, Morawiecki told a news conference in Warsaw before meeting Orban: “It may happen that another summit will be necessary.”

He added that “maybe there will be more long months of negotiations and a possible provisional budget. No scenarios should be ruled out at this stage.”


If the EU receives no signal that Poland and Hungary will drop their vetoes, it will have to go ahead without them, an EU diplomat said.

Under this scenario, the EU’s 750 billion euro recovery fund of grants and loans would be set up for just 25 member states,without Poland and Hungary, so that others get the cash neededto help lift their economies out of the 2020 coronavirus slump.

This would mean the EU’s next long-term budget of 1.1trillion euros would remain blocked, and the EU would finance itself through a provisional budget in 2021 that would stop spending on new projects and cut funds even for existing ones.

This would hit Poland and Hungary hard as they are large netbeneficiaries of EU funds, but their nationalist leaders have presented the issue domestically as a matter of sovereignty.

Many religious conservatives in Poland see tying funds to the rule of law as a first step to forcing the country to accept liberal policies in other areas.

Orban’s government has linked the issue to immigration, stepping up its anti-immigration rhetoric and saying Brussels wanted to force Hungary to accept migrants.

According to a statement on the website of the European Commission in Budapest, Hungary’s budget would receive at least a net 4 billion euros under the coronavirus recovery fund.

A European Commission source said the net benefit to Poland would be around 286 billion zlotys (64.24 billion euros).

(1 euro = 4.4521 zlotys)

($1 = 0.8259 euros)

Reporting by Alan Charlish, Pawel Florkiewicz, Anna Wlodarczak-Semczuk and Joanna Plucinska in Warsaw, Krisztina Than in Budapest, Andreas Rinke in Berlin; Editing by Chizu Nomiyama and Timothy Heritage