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The EU fails to find a solution to the budget dispute over the veto between Hungary and Poland. Even an evening video summit did not change the situation. Now, among other things, the payment of the crown aid remains blocked.
By Holger Beckmann, ARD-Studio Brussels
If the European Union is at a loss, it updates itself. It has been like this until now, and it has been like this again now. At their video summit, the 27 EU heads of state and government spoke only briefly about the huge conflict within their ranks with Poland and Hungary and, in the meantime, apparently also with Slovenia, according to the circles. negotiation.
They would show each other their currently irreconcilable differences and then turn to less explosive topics. The situation in the individual health systems of the Member States in particular. This should have been more or less problematic, because health policy in Europe is an exclusive issue of the Member States themselves, no one can talk about it with others.
The mechanism of the rule of law as a point of contention
Quite different from joint finances, which were agreed at an EU summit in Brussels in the summer and after a four-day negotiation marathon: namely the framework for the EU budget for the next seven years, the Fund of Corona bailout with a volume of 750 billion euros and connected to it: the so-called rule of law mechanism, which in the meantime has become so hated by Hungary and Poland.
In future, it will oblige EU Member States to respect minimum standards of independence from justice, research and freedom of the press if they want to get money from Brussels; and ensure that corruption is excluded in the distribution of these payments.
Slovenia takes the no-say side
The two Eastern European countries receive a significant amount of money from Brussels and would also benefit massively from the Corona fund. For years, however, they have been accused of trampling on the rule of law in their countries, such as that Hungary is chilling independent journalists or that the Polish government is appointing increasingly complacent judges. They deny it in Warsaw and Budapest, but they still don’t want the rule of law mechanism.
But the EU money. So one rejects this mechanism – and with it the entire financial package, which the others want to form a triad of budget frameworks, bailout funds and rule of law rules. Annoying for Brussels: small Slovenia has now sided with the two Eastern Europeans, even if so far it has not officially vetoed. Either way, it complicates things further.
Conflict is a real test
Many political scientists and economic researchers are confident that conflict has what it takes to tear the European Union apart at worst. The fact that the search for a way out has now been postponed is what some in Brussels describe as an admission of the 27’s inability to really pull the Corona crisis together with its far-reaching consequences, especially for businesses. and consumers. The consequences could actually be serious.
France and Germany jointly took the initiative for the Corona Fund in the summer. After it became clear how massive the economic collapse caused by the pandemic would be, at the time especially in Italy and Spain. It is now clear that other European countries are also being hit hard: France or the Czech Republic, Poland and Hungary are not only getting away with economic scratches. More importantly, despite promising news regarding one or more vaccines, it is still unclear when all of this will end.
Economic imbalance threatens the euro
One thing is clear: the fact that some EU countries are economically less affected by the pandemic than others is exacerbating economic imbalances in the European internal market and in the euro area. In the spring, the head of the ESM’s euro bailout fund, Klaus Regling, made it clear that this could lead to a new debt crisis and the breakup of the euro.
Now it was the European Commissioner for Economy Paolo Gentiloini who launched an urgent appeal to member states: they should finally take responsibility for the people in their countries and across Europe and get the financial package off the ground quickly to achieve this. To prevent the crisis of the century from worsening.
The Franco-German plan could fail
But apparently: you don’t. The ambitious Franco-German plan to bring the EU through the pandemic with a massive injection of money financed by European joint debts, to keep it together and, above all, to give it a boost for its economic modernization towards climate neutrality and digitalization Based on common binding legal values, this plan could actually fail.
Because there is a lack of unanimity in Europe for this. European Central Bank President Christine Lagarde also reminds EU states of their responsibility. But especially with Poland and Hungary, which don’t even have the euro as their currency, it doesn’t work.
The ECB does what Member States cannot do
Until the EU launches a financial package against the aftermath of the crisis, the ECB must ensure that southern European countries do not run out of money. So the central bank will likely continue to buy large-scale government bonds to prevent the monetary union from dissolving. In the long run, this may hide inflation risks, some economic researchers say – in the short term there is no other way: with its monetary policy, the ECB is doing what member states cannot manage in financial terms.
How to solve all this is perplexity. It is true that in Brussels there is speculation that the Crown Fund could be launched without Hungary and Poland or whether their voting rights could be withdrawn by them in the European Council of Member States – but that would all be boring and complicated, and Europe southern is now worth billions from educated Brussels, it is said from Rome and Madrid – and not at some point.
Germany still holds the rotating presidency of the Council of the EU. For Chancellor Angela Merkel, this situation is now a huge challenge. Here you are expected to seek and find compromises. While Hungary and Poland strictly reject the rule of law, the Netherlands and Scandinavians, for example, vehemently insist on it. In the summer, Chancellor and French President Emmanuel Macron managed to bring Europe together. How it will end this time is completely open.
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