There are only four weeks until the end of the month, the year, the Brexit transition period and for the expiration Budget of the European Union for the period 2014-2020 and there is no replacement. The Recovery Fund is not running either of 750,000 million that it has to put steroids into the vein of the countries most affected by the pandemic and the confinements to try a vital reactivation. And all for him veto of Hungary and Poland, which have taken the pulse of years with Brussels to the highest level.
Germany seeks an agreement against the clock behind the scenes, a formula with which to satisfy Viktor Orban and Mateusz Morawieki, but while, and putting itself in the worst case, the European Commission presses with a substitute rescue fund that could replicate the essence of the agreement last July and start disbursing tens of billions of euros throughout 2021.
The European Parliament and the Council (the remaining 25 capitals in this case) have said that are not willing to renounce the Rule of Law Mechanism, a tool that would ultimately allow the EU to freeze the Community funds that correspond to Warsaw and Budapest if violations of the fundamental principles of democracy persist, such as the separation of powers, the independence of judges or basic rights. physics of citizens and associations. “There is no Plan B”, assured yesterday German Minister of Finance, Olaf Scholz.
The two governments of Visegrad cannot block this mechanism of the Rule of Law (which can be approved by a qualified majority), but they can block the Budget and the Rescue Fund, because although it was agreed unanimously in July for its approval there are procedures that require unanimity, such as increasing the so-called capital expenditure ceiling. It rose from 1.2 to 1.4%, and temporarily to 2%, and that margin is the key element, since it will allow the Commission to go to the markets and issue debt with which to finance the aid.
In recent weeks, different possibilities have been considered, such as trying an intergovernmental agreement at 25 that replicates the design of the Recovery Fund (Spain already proposed something similar in the pre-summer brainstorming to achieve something like Eurobonds). France has advocated for this as a last resort, but European analysts, lawyers and the Commission itself believe that it is not a good idea. Too difficult, mine-filled and slow, as was seen almost a decade ago when riding the embryo of the Mede, the Stability Mechanism, in Luxembourg in one night. In addition to that it would shoot up national debts a little more.
What the Commission has indicated today, after discussion in the College of Commissioners, would be something similar to aid programs that have been used in the past, but on an unprecedented scale. A “temporary bridge mechanism” would be made through the mechanisms contemplated in Article 122 of the treaties, and “technically it would be simple,” European sources explain. In practice it would allow the Commission to borrow as planned, with other types of guarantees and guarantees. And to give it to the 25 who require it. The technicians are confined and believe that the amount could be replicated (it remains to be seen if 750,000 million since the calendars and calculations have been made with the figure in mind, or less removing the provide part of the two rebels) and the deadlines.
Something that would work in parallel with a Budget extended to 2021. There, however, the drawbacks are clearer. That of the EU is not like that of a country, it is not extended under the same conditions. Payments of salaries, programs such as direct aid from the PAC and others are maintained. But not the Cohesion funds (basic, by the way, for Hungary and Poland) nor for example the Erasmus program, which would be frozen “immediately”. Up to 25,000 to 30,000 million euros would be lost, according to sources from the Commission explained today. The irony is that, if the rule of law mechanism were approved (the only thing left for the German presidency to set a date for the vote), that would affect any community resource, including this partial extension. So the Hungarians and Poles would lose twice.
The Commission wants to put pressure with its ideas. It is not an equivalent substitute, there are many buts and everyone knows them, but the 25 try to tell those who veto that they can hold out for a while and that, in the medium term, they may be the hardest hit. The delay of these weeks already has caused that, in any case, the disbursements of the Recovery Fund will take longer than expected, making it almost impossible before the second half of the year or fall.
The final fight is assumed to take place at the Summit that next week, on the 10th and 11th, the leaders of the EU will have in Brussels, probably in person. There is too much on the agenda and too serious to solve it by videoconference, explains Michel’s team. Although there are doubts about the logistics and fear of a boycott from somewhere precisely threatening with the virus.
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