Why Poland and Hungary are vetoing the stimulus fund
Audio 03:48
The President of the European Commission, Ursula von der Leyen, December 5, 2020 © AFP / Julien Warnand
By: Dominique Baillard Follow
9 min
The European recovery fund of 750 billion euros should finally be validated today by the European Council.
Hungary and Poland, which opposed their veto, ended up accepting a compromise confirming respect for the rule of law.
Did these two countries have too much to lose in this standoff?
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This is the explanation given by official French sources close to the Elysee and it is the most obvious.
Because for these two countries, European funds, whatever their nature, are sources of funding that have become essential.
Last year
Poland and Hungary
were the two first net beneficiaries of the European budget.
For the 2014-2020 fiscal year, Poland is the first beneficiary: 80 billion euros have been allocated to it.
This represents on average 3.5% of its gross domestic product.
Poland knows perfectly well what it owes to Europe, the Minister of Finance estimates that a good quarter of the robust growth recorded over the past 5 years is fueled by these flows.
And this will continue for the fiscal year which starts in 2021, Warsaw relies heavily on these funds to finance its energy transition, again it is the country that will benefit the most from European redistribution.
As for the stimulus fund that the countries most affected by the pandemic, Italy and Spain, are feverishly awaiting, Warsaw is also struggling to resist this bait.
Poland, although relatively spared by the first wave of coronavirus will receive more than Germany in direct subsidy, and almost as much as France.
For Hungary, the Brussels windfall represents 5% of its GDP
This is also a major contribution to its economic development.
And for the prosperity of the entourage of Prime Minister Viktor Orban, his son-in-law, his childhood friend, are regularly cited in the investigations of NGOs and the courts on the embezzlement of European funds.
Very often calls for tenders financed by Europe are tailor-made
for those close to the Orban clan
.
The most glaring example: it is this tourist train of six kilometers built in the village of the Prime Minister to connect the city center to the brand new football stadium.
This train of almost no economic interest, given its low attendance rate, was financed by European taxpayers to the tune of two million euros.
It is in Hungary that the European Anti-Fraud Office carried out the most investigations between 2015 and 2019. With 43 identified cases of embezzlement out of 235 for all Member States.
But these investigations are rarely followed by prosecution at the level of the Hungarian justice.
The allocation of the European recovery fund and the next budget will be linked to respect for the rule of law, which is precisely what troubles Poland and Hungary.
Will this new condition prevent fraud
?
This new condition seeks above all to prevent authoritarian abuses.
If a state does not respect the independence of the judiciary or the freedom of the press, and if the commission considers that this violation is true, it will trigger the process of sanctions.
It will be up to the European Council to vote on them, by qualified majority.
Until now, unanimity was needed to deprive a state of subsidies from Brussels.
This device is beneficial in terms of European values, it will also make it possible to better fight against fraud since it can be activated if the justice of a country remains idle in the face of corruption cases.
If the fraudulent enrichment of a team in power is a real political issue, in terms of respect for democracy, at the level of European finances it remains anecdotal.
For the years 2015-2019, the embezzlement detected by Olaf, the European anti-fraud office, concerned 0.34% of all funds.
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Recovery plan: MEPs rebelled against the blackmail of Hungary and Poland