Poland and Hungary block EU budget

Krzysztof Bastian and Leonie Kijewski
·2-min read

Hungary and Poland have vetoed a key EU budget decision over perceived EU interference in their domestic rule of law, diplomats say.

The bloc wants to have the power to raise its own money - through, for example, taxes on plastic goods - but two countries blocked the move, EU Council Presidency spokesman Sebastian Fischer tweeted.

Diplomats confirmed the countries are Hungary and Poland.

Unanimous support for this instrument among the 27-member EU is a requirement to pass a 1.8 trillion euro ($A2.91 trillion) long-term spending plan and coronavirus economic recovery fund.

Officials in both Budapest and Warsaw have repeatedly threatened to block the spending package because they object to a plan that could halt the disbursement of EU funds to countries violating certain rule-of-law standards.

Monday's vetoes at a meeting of EU ambassadors will almost certainly delay the delivery of much-needed cash, with the seven-year budget set to begin on January 1 - prompting a senior EU official to say the countries held the long-term budget "hostage".

In particular countries that have been hit hard by the coronavirus pandemic, such as Spain and Italy, need the funds to kick their economies back on track.

"Poland hopes for a sensible approach from our partners and working out rules which will allow to reach an agreement. We are open to constructive solutions, as long as they are consistent with the conclusions of the European Council and EU treaties in place," government spokesperson Piotr Mueller wrote on Twitter on Monday, after the two vetoes were disclosed.

Earlier in the day, a high-ranking Polish government official justified the impending veto by citing concerns about the legality of the proposed rule-of-law mechanism.

"If the EU will want to break treaties, if the decisions made during the meeting of EU leaders are not respected, Poland will not agree to adopting the EU budget," the head of the prime minister's chancellery, Michal Dworczyk, said during an interview with radio broadcaster RMF FM radio.