No sign of progress at yesterday's meeting of the prime ministers of Hungary and Poland

HUNGARY - In Brief 27 Nov 2020 by Istvan Racz

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PM Orbán and Polish PM Morawieczki met in Budapest yesterday, to discuss the situation around the two governments' veto on the EU's fiscal package. A statement with an explicit proposal was issued after the meeting, but in our view the latter did not take the issue any closer to a positive outcome of the debate. If agreement between the two countries and the rest of the EU is reached eventually, which we believe is likely, it will fall probably quite far away from the current view publicly communicated by Messrs. Orbán and Morawieczki.The specific proposal revealed yesterday was to introduce only a reduced version of the contentious rule-of-law mechanism for the time being, one which would narrowly focus on the protection of EU funds from any misuse. Then the European Council should discuss a more broadly based version of the mechanism at the summit level, i.e. requiring a unanimous vote for approval. Finally, if an agreement is reached the Council, an extraordinary conference should be held to amend EU's basic treaty, with a view to incorporating the resulting rule-of-law mechanism into it.Needless to say that such a solution would almost endlessly postpone the effective introduction of the rule-of-law clause, and so it is very unlikely to be acceptable for donor countries. On the other side, Hungary and Poland are opposing the current version of the conditionality clause on the grounds that it fails to give an exact definition of the rule of law, and so it could be used subjectively, influenced by the political considerations of decision-makers. More directly, a specific fear shared by both governments is that based on the existing rule-of-law mechanism that has been...