Belgium will gain €5.1 billion from the EU’s Covid recovery plan, after a veto from Poland and Hungary was lifted at the EU summit.
The recovery plan, worth a total of €750 billion, forms part of the multi-year budget proposed by the European Commission agreed in July.
But some time after, the governments of Poland and Hungary announced they would veto the budget as long as it contained a proviso on the rule of law. In concrete terms, payments of EU money could be suspended if the member state in question was found to be in violation of basic rights.
The two countries have been criticised recently over their position on LGBT+ rights and the free press, up to and including condemnation by the European Court of Justice (ECJ). Since the Polish and Hungarian government predicted their positions could lead them to lose out on EU funding, they decided to hold the entire budget to ransom – including the Covid recovery plan.
The effect was to put a freeze on some €1,100 billion.
In the run-up to Thursday and Friday’s summit, Germany stepped in to help negotiate a solution to the impasse. For the time being, the details are not known, but the broad lines are.
Firstly, a member state may only be sanctioned if the decision has been ratified by the ECJ, and not merely on the say-so of the Commission.
Secondly, the definition of a violation of rights is restricted, most likely in such a way that the two countries’ approach to LGBT+ rights is not curtailed. And the sanction can only apply if the financial interests of the EU are threatened.
Finally, the sanction – whatever remains of it – can only be applied to new spending agreed after 1 January 2021, and not to spending already approved.
As a result of the lifting of the veto, Hungary will receive €11 billion, and Poland €40 billion.
Hungary’s prime minister, Victor Orbán, called the result “a victory for common sense”. Hi Polish counterpart Mateusz Morawiecki said Europe badly needs the recovery funding, “But Europe also needs legally sound solutions,” he said.
“Now we can start implementing [the plan] and rebuilding our economies,” said European Council president Charles Michel.
Belgium comes out of the deal with €5.1 billion, which it will be up to the federal and regional governments to divide among themselves.