Hungary ‘not the cause’ of EU budget veto

Budapest and Warsaw used their veto, saying new rules making the receipt of EU funding contingent on upholding the rule of law breached the EU’s founding treaty as well as a deal in July not to tie funding to “political conditions”.

Prime Minister Viktor Orban approved the July agreement with “a mandate” from the Hungarian parliament, Kovacs said.

“The European Parliament and current EU president Germany have overturned that July agreement,” he said, adding that introducing any sort of new mechanism would require an amendment to the EU’s founding treaty.

Kovacs said the EU’s current institutional framework guaranteed the proper use of funding by member states, and linking payment to “ideological conditions” was unnecessary.

Budapest and Warsaw reportedly blocked the next seven-year budget and the recovery package because they view them as being in violation of the bloc’s founding treaty as well as an agreement reached by EU leaders in July on not tying receipt of EU funds to political conditions.

With member states failing to reach a unanimous agreement, the issue of the budget and the recovery fund could go back before the European Council, sources said.

Sebastian Fischer, the spokesman for the German EU presidency, said on Twitter on Monday that EU ambassadors in Brussels had failed to reach unanimity on the EU’s next budget and the coronavirus recovery fund due to reservations expressed by two member states.

Fischer said the ambassadors had approved the so-called rule-of-law conditionality mechanism with a qualified majority.