Brexit and the funding veto take away sleep in Brussels at the end of 2020

The coronavirus it envelops everything and in the EU the tension is maximum. There is little more than a month left until this unfortunate 2020 is over and in Brussels they continue to have important problems to solve. Coordination in the face of the second wave of the pandemic is compounded by the fact that two fronts remain open that, if not closed, could end up doing a lot of damage to European institutions and to the Member States as a whole. They are Brexit and recovery funds (and the Multiannual Financial Framework). The first is the never ending story and the veto on the second is the example that, for the moment, Hungary and Poland have the upper hand.

Starting there, this Thursday the Hungarian and Polish Prime Ministers Viktor Orbán and Mateusz Morawieck signed a joint letter in which they reiterated their blockade of the EU Budget 2021-2027 and therefore also to the anti-crisis funds. All because both parties would be linked to a defense mechanism of the rule of law that neither country seems willing to comply with. So much so that in the case of Poland, the European Parliament has already condemned the “decline in sexual and reproductive rights” of Polish women following a ruling handed down by the Polish Constitutional Court on abortion and has stressed that its “de facto ban puts women’s lives at risk. ” To this must be added the constant attacks on the LGTBI community.

The European Parliament has already condemned the “setback of the sexual and reproductive rights” of Polish women due to the ban on abortion in the country

“Our objective is to prevent a mechanism that will not reinforce but undermine the rule of law in the European Union by reducing it to a political instrument,” says the joint statement published by these two countries after a bilateral summit. This agreement poses problems from the legal point of view because it ignores other instruments that They already exist in the EU Treaties to act in matters of the rule of law, such as Articles 2 and 7.

For now, both countries continue to tighten the rope and Orbán has insisted endlessly that “Hungary does not need” the money from the funds. The Polish government will surely think differently, as Poland would be the third largest beneficiary of recovery funds after Italy and Spain. Not even in this scenario do those involved lift the veto, and alternatives are already being sought in Brussels. The option of an intergovernmental agreement or enhanced cooperation is on the table, according to sources consulted by 20minutos.

The first idea would be to include the Recovery and Resilience Fund (672.5 billion), which is the main program of the NexGenerationEU plan, in an intergovernmental agreement (as was done with the ESM) outside the EU Budget. This would make Hungary and Poland stay out of the distribution but remain subject to the mechanism of the rule of law, as this is contemplated both in the extended MFF and in the rest of the elements. The intergovernmental pact, on the other hand, would have some risks. Among them, that the debt would have to be issued by the Member States themselves.

On the other hand, enhanced cooperation is a procedure somewhat less associated with economic issues. It allows a minimum of nine EU countries to establish an integration or advanced cooperation in a field of European structures without the participation of other countries of the Union. “In this way, they can progress according to rhythms or objectives different from those established for those who do not participate in the enhanced cooperation.”

This process, in fact, “is designed to overcome paralysis, when a proposal is blocked by a single country or by a small group of countries that do not want to participate in the initiative.” It is always open for other states to join. But nevertheless, does not allow an extension of powers beyond those contained in the European treaties. Authorization to proceed with enhanced cooperation is granted by the Council, on a proposal from the Commission and after obtaining the consent of the European Parliament.

“Substantial differences” around Brexit

And what about Brexit? On December 31 the transition period ends and between Brussels and London there are “substantial differences”, according to the UW negotiator, Michel Barnier. There is a possibility of extending the deadline, but for the moment the Union does not want to hear about that. The governance of the agreement, a level playing field and fishing are the elements that make the agreement difficult. The EU has already relented on the first two and awaits a reciprocal response from Boris Johnson. If it arrives, Brussels will make concessions on fisheries.

From Downing Street they have assured that reaching an agreement with the Union would contribute to mitigating the economic difficulties created by the pandemic, but he warned that London will not sign a pact “at any price.” And it is that the Tory Executive has relaxed its position after the victory of Joe Biden in the US elections.Johnson has run out of the Trump route. A large-scale trade agreement with the United States meant that there would be no pact with the EU. But that possibility no longer exists.

All in all, the European Union has only a few weeks to tackle two crucial questions for the future in the short, medium and long term. In both cases, the EU is gambling not to enter into an institutional and credibility crisis. In the midst of the health crisis, Brussels must avoid two others and at the same time be able to alleviate the economic crisis, which has been heavily affected by the pandemic. And here there is no luck to cast. What you have to take is the rest.

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