EU considering ways how to bypass budget impasse caused by Poland and Hungary

The EU is considering ways of pushing ahead with the creation of the EU’s Covid-19 recovery fund without the participation of Hungary and Poland, a senior European Commission official has warned, piling pressure on the two countries to drop their veto over the union’s budget.

Financial Times quotes an official saying that the 25 EU member states could proceed with setting up a planned €750bn pandemic recovery fund next year to act as a “bridge” until Hungary and Poland reversed their veto over the bloc’s overall €1.8tn budget and recovery package. The fact that the commission is contemplating such an extreme fallback option highlights the severity of the stand-off with Warsaw and Budapest, which governments fear will derail the EU’s recovery from the pandemic by freezing billions of euros of aid for struggling economies. EU leaders are due to meet in Brussels next week to discuss the budget crisis after Hungary and Poland doubled down on their objections to a rule-of-law mechanism they say targets their countries.

FT