EU budget

Hungary's Orban threatens to veto EU budget over rule of law conditions

Hungarian prime minister Viktor Orban.
Hungarian prime minister Viktor Orban. LUDOVIC MARIN / AFP

Hungarian Prime Minister Viktor Orban has sent a letter to European Union leaders threatening to veto the bloc's long-term budget accord over a payment mechanism that requires countries to uphold EU democracy rules. The move could jeopardise the seven-year 1.1-trillion-euro budget as well as a €750-billion virus relief package.


Orban is unhappy about a deal reached last Thursday which would introduce a mechanism to make the delivery of budget money to EU countries conditional on their respect for EU values, including the independence of courts.

The provisional deal, agreed between Germany, which currently holds the bloc’s 6-month rotating presidency, and the European Parliament, was praised by several MEPs on Thursday.

'Europe is not a cash machine'

Dacian Ciolos, leader of the centrist Renew Europe group, hailed a “major achievement” on twitter declaring that “Europe is not a cash machine”.

But a Facebook post from Hungarian justice minister Judit Varga called the accord a “reckless and mistaken move”.

On Sunday, the right-wing Hungarian news site reported that Orban had sent a letter to EU bosses saying that “in the light of developments,” he would not be able to “provide the unanimity required for the package adopted in July,” suggesting that, in order to prevent the new mechanism being introduced, he intended to veto the entire upcoming budget of 1.1 trillion euros along with a 750 billion euro package to deal with the impact of Covid.

EU sources told the French AFP news agency that the letter was received on Monday by EU Commission president Ursula von der Leyen and EU council president Charles Michel.

In July, EU leaders, including Orban, had managed to agree a looser principle of rule-of-law conditionality.

However, the European Parliament wanted tougher wording, complaining that the July agreement was too vague to ensure that EU countries receiving bloc cash would really abide by rules on democracy.

The apparent erosion of judicial independence in both Hungary and Poland has been a worry for MEPs and the idea of the new deal was to bring the two countries into line by allowing the suspension of budget money due to them.

Covid money still blocked

If Orban goes ahead with his veto, then the 1.1 trillion euro EU long-term budget for the next 7 years cannot be unblocked; nor can the accompanying 750 billion euro Covid-19 relief package be released.

EU countries struggling to cope with the virus are particularly keen to access the money.

Douglas Webber, EU specialist at the European business administration institute, INSEAD, and author of European Disintegration? The Politics of Crisis in the European Union, points out that if Orban vetoes the new budget, Hungary will continue to benefit from the existing one, while the prime minister retains his “tight grip on power” at home.


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