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EU rescue fund’s rule of law conditionality watered down

October 1st, 2020

A centrist economic analyst contends that the German proposal eases the rule of law conditionality of access to the EU coronavirus EU recovery funds. He finds it unlikely that Hungary and Poland can be punished with the suspension of their EU funding.

On Portfolio Attila Weinhardt, in a comment on the EU rescue fund proposal tabled by Germany (as current holder of the rotating Presidency of the EU) deems Hungary and Poland correct in assuming that extraordinary Covid rescue funding from the EU will not be tied to broad rule of law compliance. The centrist economic analyst recalls that the deal on the coronavirus recovery fund brokered at July’s EU Summit was interpreted in two very different ways by the government and the opposition. Most importantly, the opposition claimed that participation in the EU rescue program will be conditional on compliance with rule of law norms (see BudaPost July 27). In the new German proposal, however, the rule of law conditionality is watered down, Weinhardt suggests. The draft stipulates that EU funding can be suspended only if defects in the rule of law jeopardize proper spending of EU money. On the other hand, Weinhardt admits that the proposal would still make it possible for the EU to withhold funding despite opposition by Hungary and Poland, although only after a long and difficult procedure.

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