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“Deal” is what President of the European Council Charles Michel posted at 5.30 am, after nearly 50 hours of negotiation finally brought agreement on the EU’s coronavirus recovery package and new budget. The rule of law criteria that the Hungarian government sought to leave out eventually stayed in dilutedly, however, the Hungarian Prime Minister was still glad.

The EU’s recovery fund, the originally planned 750 billion euros is composed of €390 billion in grants and €360 billion in loans. This is a result of a hard-fought compromise after the Frugal Four (comprised of the Netherlands, Denmark, Sweden, and Hungary’s neighbor Austria) pushed for a tight-handed solution.

The recovery package adds to the new 1.074 trillion euro seven-year budget, called the Multiannual Financial Framework (MFF), on which heads of state and government also reached unanimous agreement.

The leaders were apparently happy with the agreement. According to French president Emmanuel Macron, this is a “historic day for Europe.” Charles Michel called it a “good deal,” claiming that “Europe is solid.” Dutch PM Mark Rutte, however, seemed reticent and refused to use the word “historical.”

The debated rule of law criteria, stayed, however, in a diluted way. According to Euractiv, although there is a reference to Article 2 of the treaties where the principles of the EU are embedded, it does so in reference to “the protection of the EU’s financial interest.” And the wording is also significantly vaguer than the “already watered-down” Michel proposal, as the final compromise simply “underlines the importance of the protection of the EU’s financial interests” and the rule of law, and proposes a regime of conditionality “to protect the budget and Next Generation EU” to be introduced. Under the agreement, the European Commission would propose punitive measures to the EU Council, which represents member states. Any cuts would have to be approved by a qualified majority of those member states.

EC President Ursula von der Leyen was positive; in her view, the agreement “has a sound footing.” While Michel commented that

“it is the first time that the respect for rule of law is a decisive criteria for budget spending.”

Similarly to all participants, the Hungarian PM was happy and claimed victory. “We fought it out,” he wrote on his Facebook page. At the press conference, held together with Polish MP Mateusz Morawiecki, Viktor Orbán commented that “Hungary and Poland have succeeded in ensuring substantial funds and in protecting their national pride.” In addition, in Orbán’s view, attempts to link EU funding to the rule of law had been “successfully thwarted.”

In another aspect, Justice Minister Judit Varga stated that Hungary will get 3 billion euros more in the upcoming period than what the original draft contained.

Opposition parties, however, see it otherwise. Liberal opposition Momentum’s MEP Anna Donáth argued that the EU sent a clear signal yesterday: “it sees that money is being stolen in Hungary. And that’s enough. The decision has been made: a strong Europe needs a system of rule of law that prevents corrupt governments, such as the Hungarian government, from stealing EU funds countlessly.”

Left-wing opposition Democratic Coalition MEP Klára Dobrev commented that the agreement is a huge victory for Hungary and Europe, but a huge defeat for Orbán. In her view, Orbán didn’t manage to reach even one of his four conditions set before the talks (that he previously “pushed through” the Hungarian Parliament): Hungary won’t get more money, rule of law criteria stayed in place, and he also didn’t manage to prevent NGOs to get funding.

Right-wing opposition Jobbik’s MEP Márton Gyöngyösi, however, criticized certain aspects of the deal, just like Orbán, who in his view, will sell this as a victory at home thanks to his “servant media.” According to Gyöngyösi, once again, multinationals and oligarchs will benefit, as there is no guarantee that there would be a positive change in the distribution of money. There will be no increase in direct tendering, and the Cohesion Fund and the amount earmarked for rural development will make up a smaller share of the money. Gyöngyösi also noted that the “credit bomb is ticking: the southern states that the Frugal Four was reluctant to give aid to are already brutally indebted, and the current package does not help but worsen this.”

featured image via Orbán- Facebook

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