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  • EU leaders on Thursday will consider a last-minute compromise to save the bloc's landmark recovery fund that is threatened by a row with Hungary and Poland. Last month, Warsaw and Budapest blocked the EU's 1.8-trillion-euro ($2.1-trillion) budget and recovery package because of provisions, agreed by the other 25 EU members, linking funds to respect for the rule of law. Both governments have been accused by Brussels of rolling back democratic freedoms, notably judicial independence in Poland and press freedom in Hungary. Hungary and Poland are major recipients of EU budget cash, and the new mechanism was seen as a way by critics to slow a steady slippage into authoritarianism in those countries. The face-off was an embarrassing development for Germany, which holds the EU's rotating presidency and saw the post-virus recovery fund, approved in July, as a historic EU breakthrough. Berlin worked furiously for weeks to break the logjam and on Wednesday Polish President Andrzej Duda said a provisional deal had been accepted by Poland and Hungary. In Budapest, Hungarian Foreign Minister Peter Szijjarto said his country had "won", while falsely alleging that, without the fight, Hungary would have been forced by the EU to accept illegal immigrants. The solution being put to EU leaders is a legal "declaration" drawn up by Germany that would provide both countries further clarity on how the rule-of-law mechanism would work. It also stipulates that, should the scheme be legally challenged, it would not go into action before the EU's highest court has ruled. According to sources, this could significantly delay any application of the plan -- possibly until after the parliamentary elections in Hungary in 2022. In order to work, the compromise will need to get past sceptical, mainly northern EU countries, which insist the overall rescue package include a strong rule-of-law safeguard. Dutch Foreign Minister Stef Blok said that what was agreed before Hungary and Poland's veto was "the minimum". "We are not prepared to water down the text," he said. In contrast, southern EU countries such as Italy or Spain, have a strong interest in ensuring that urgently needed recovery funds flow quickly. A source said the compromise will undergo "in-depth analysis" in the capitals before the EU leaders give their decision on Thursday. bur-mas-mt-arp/dc/spm
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  • EU leaders consider plan to woo budget holdouts
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