EU Mulls Freeing Up Money to Poland and Hungary – With Strings
EU Mulls Freeing Up Money to Poland and Hungary – With Strings
(Bloomberg) --
The European Union is discussing signing off on Hungary and Poland’s delayed recovery proposals in the coming weeks, which would free up billions of euros in stimulus money for the eastern countries. But there will likely be strings attached.
The European Commission, the EU’s executive arm, has been delaying the approval of Hungary and Poland’s recovery plans, which would give them access to 7.2 billion euros ($8 billion) and 23.9 billion euros respectively, of grant money from the bloc. More than 50 billion euros has been disbursed to member states so far.
The EU may approve the plans as soon as November, but payments will likely come with conditions requiring the countries to meet certain rule-of-law standards before any money would be paid, according to officials familiar with the plans.
Even then, Hungary and Poland won’t be in the clear. The EU is also considering triggering a so-called conditionality mechanism, which withholds payments from the budget -- as well as its 750 billion-euro recovery package -- to member states accused of democratic backsliding, said the officials, who asked not to be identified because the talks are private.
ECJ Ruling
The commission gained this budgetary power this year in the face of resistance from the governments in Poland and Hungary. The European Court of Justice is currently assessing the legality of the new tool.
The moves come as the two countries face criticism for anti-democratic laws, such as a controversial regime to discipline judges in Poland and anti-LGBTQ legislation in Hungary.
The commission is seeking financial penalties against Poland for ignoring a binding court order in July to “immediately suspend” its judicial discipline system, seen by critics as a way to silence judges who don’t support nation’s ruling Law and Justice party.
The EU also separately threatened to halt as much as 126 million euros of pandemic aid to parts of Poland that declared themselves LGBTQ-free zones in defiance of the bloc’s diversity policies. At least one province, the eastern Swietokrzyskie region, voted to revoke the declaration.
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