July 21, 2020 / 9:05 AM / 23 days ago

EU delays strict rule-of-law conditions for recovery fund

BRUSSELS/AMSTERDAM (Reuters) - Hungary, Poland and the Netherlands all claimed victory on Tuesday after a European Union summit left open how to tie a new coronavirus recovery fund to democratic values, raising doubts about whether compliance would be possible or meaningful.

Netherlands' Prime Minister Mark Rutte (L), European Council President Charles Michel and Germany' Chancellor Angela Merkel attend a last roundtable discussion following a four-day European summit at the European Council in Brussels, Belgium, July 21, 2020. Stephanie Lecocq/Pool via REUTERS

EU leaders negotiated a 750 billion euro ($859.05 billion) post-pandemic fund and 1.1 trillion euro budget after almost five days of talks in Brussels, but conditions for payouts on rule-of-law were not detailed in the final statement.

EU leaders agreed to “a regime of conditionality to protect the budget”, leaving it up to the European Commission, the EU executive, to propose measures. However, all 27 EU states would have to agree to a new mechanism.

EU rules already allow for ways to sanction democratic breaches, but they are hard to implement and many EU leaders want something more direct, concerned by the increasing authoritarianism of Hungarian Prime Minister Viktor Orban.

The vague language paled in comparison to earlier promises of tough conditions. The EU prides itself on media freedom and human rights. The European Commission, lawmakers, experts and activists say freedoms are under threat in Poland and Hungary.

“The core of what was proposed in the drafts is still there, and that’s crucial,” Dutch Prime Minister Mark Rutte said of the final summit communique.

German Chancellor Angela Merkel also said that: “In our conclusions we are committed to accept and protect ... the principles of respect for the rule of law.”

But Orban told reporters he had “thwarted and repelled” efforts to tie disbursement of funds to democratic values. Polish Prime Minister Mateusz Morawiecki hailed the “whole architecture of supervision” as a success.

Daniel Hegedus at the German Marshall Fund think-tank said the situation was more nuanced.

The summit “did not agree on a specific rule of law conditionality mechanism ... but Morawiecki and Orban’s claim that they ward of the introduction of conditionality in the new budget is not in accordance with the facts,” Hegedus told Reuters.

Additional reporting by Thomas Escritt in Berlin, Gergely Szakacs in Budapest and Marcin Goclowski in Warsaw; Editing by Nick Macfie

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