“We have reached an agreement of a kind that, let me stress it, has accepted all of our preconditions that we have made,” said Prime Minister Mateusz Morawiecki after the EU leader approved the EUR 1,8 trillion budget and Covid recovery plan. “We have a budget, together with the reconstruction fund, which means big funds for investment, big funds for supporting the development of Poland’s economy, for new technologies, for many goals that need to be implemented, especially now that we want to quickly come out of the pandemic. That’s important to us,” he added.
The new agreement still ties disbursements from the fiscal package to democratic and rule of law standards but such sanctions cannot be triggered before the Court of Justice of the EU has ruled on the legality of any nationally introduced measures. The Commission will refrain from implementing the legally binding rule of law mechanism while a member state challenges its legality at the CJEU. This is a process that can take years.
The new mechanism will also not come into effect until next year (after elections in Hungary).
Poland and Hungary vetoed the EU’s historic EUR 1,8 trillion budget and Covid-19 recovery plan over attempts to link funding to respect for the rule of law and democratic norms. The Rule of Law Mechanism would give the European Union a tool for sanctioning violations of stated democratic principles by limiting financial instruments more quickly than is currently possible. Both countries are currently under EU investigations for undermining the independence of courts, media and NGOs. In other words, if the mechanism was approved, they would risk losing tens of billions in aid. Without agreement among all member states, projects financed by the seven-year budget will go without funds and the EUR 750 billion agenda to rebuild European economy will not be activated.
This Thursday and Friday, EU leaders will meet once again in Brussels for a European Council summit. The agenda is packed: COVID-19 pandemic, climate change, security, external relations and, on Friday afternoon, a EURO summit focusing on the capital market and banking union. The major and minor questions of the European Union’s fate are assembled on this agenda under a magnifying glass. Always present are those that are not at the table but have an influence on the menu: Russia, Turkey, the United Kingdom, China and the USA. So there is more to it than just the day-to-day business.And once again the question to the EU is: Hang in there or restart?
Besides Belgium, France has been hit particularly hard by the second wave of the corona pandemic. As a result, the government has imposed a strict curfew for the second time. All “non-essential” shops are closed until 1 December, with a high likelihood of extension. This concerns companies especially in the pre-Christmas period, which in some industries defines the annual revenu. Updates to the 2020 forecasts have shown that the second lockdown is expected to reduce France’s GDP by 11 instead of 10 percentage points. By way of comparison, the forecast for GDP decline in Germany is 5.5 percentage points for the entire year of 2020.
In these days of skyrocketing COVID-19 infection rates, the image of the wave is rhetorically booming. Waves roll in, are supposed to break and the tsunami like ones sometimes even swallow any kind of defence efforts. Just like in March/April, there is no question that Europe remains under the influence of emergency response measures. Spain is imposing a state of emergency for several months, France is closing down completely, Germany is imposing a so-called lock-down light. And Brussels? What is happening in political Europe? The Commission, led by Ursula von der Leyen, is working to improve coordination of national measures during the pandemic. In the short term, this means cross-border optimisation of intensive care bed capacities, in the medium term, the procurement and roll-out of vaccine doses, and in the long term, improving the statistical basis for better decisions in the event of similar hazards in the future. In cooperation with the European Parliament, the German Council Presidency is endeavouring to implement the post-COVID development programme NextGenerationEU as quickly as possible. With difficulty, but with progress in sight, we hear from the Brussels engine room.
The European institutions are working. It is the Member States, and within them the provinces, federal states, departments, counties, municipalities and whatever the name of the local authorities, that impose and implement measures. These measures are often more differentiated than in the spring, but also more controversial in the national discourse than at the beginning of the crisis. This makes the picture of pandemic control more diffuse and the public opinion more diverse. This does, however, not have to be a disadvantage. In Europe, we live by diversity and public debate, the dispute about the better concept, the better solution. We are not a society that marches in silence behind the flag of a one-party government to wherever the Politburo has planted the target flag. But our openness can also become our open flank: The success of the test that Europe must now pass can be measured not only, but also in falling infection rates. The test result says something about whether our European and Western culture of the unique combination of individual freedom and public capacity for action will find effective answers to the pandemic. For Liberals, the matter is clear: it is not because we want to be free, but because we are free that we have the better ideas, the more powerful concept, the greater resources. This includes the tough political battles as well as the obvious cross-border cooperation in the small and big issues of the pandemic. In the spring, Europe began to shake and the first wave rolled over the European Union. Now the Member States, the European Parliament and the European Commission must ride the second wave. To do this, we need to be able to argue, to compromise, to act together and to be at home with each and every one of us.
Thomas Ilka is Regional Director of the FNF European Dialogue