European Union agrees on $2 trillion package — but fudges deal on rule of law

The leaders of the European Union’s 27 member states have reached a final agreement on the $2 trillion package designed to rebuild the bloc’s faltering economies in the wake of the coronavirus recession.

The package comprises the EU’s €1.1 trillion ($1.3 trillion) Multi-annual Financial Framework, which is paid into by every member state and distributed across the bloc over a seven-year period, and a special Covid recovery fund of €750 billion ($858 billion), for which the EU will centrally raise money on financial markets and hand out as both loans and grants to member states.

The EU reached an agreement on the package back in July, but member states had since struggled to unanimously agree on the conditions attached to receiving funds.

Two member states, Poland and Hungary, had vetoed the agreement at previous meetings of member states in protest at EU demands that funds would be withheld from member states deemed to be in violation of the rule of law. Both countries are currently under investigation for exactly this, with charges ranging from suppression of political opposition to undermining the independence of judges.

However, at a meeting in Brussels, a compromise was found which satisfied the two delinquent states. If enough member states believe that Poland or Hungary, for example, are not meeting the EU’s agreed rules and standards, they can trigger a vote which can be secured by a qualified majority. However, the latest agreement provides the country in question with the option to challenge that decision at the European Court of Justice.

Vera Jourova, vice president of the European Commission, said she was “satisfied that the legal text of the Regulation on Rule of Law conditionality remains untouched and that there is “qualified majority voting in the decision of the Council.”

She also said she believes that “some Member States might want to seek full legal certainty on this important matter before the European Court of Justice. This is their right. I expect the proceeding to go fast. In my view, we are talking about months rather than years.”

However, that might not satisfy critics of Hungary or Poland. Viktor Orban, the Prime Minister of Hungary, was quick to claim victory soon after the agreement was reached. “We’ve won. In a difficult period of pandemic, economic crisis, there’s no time to continue political and ideological debates that prevent us from acting,” Orban said.

And Poland’s Prime Minister, Mateusz Morawiecki, has already said he intends to take the EU to the ECJ, according to Reuters.

“There is a concern that the padding added to the rule of law conditionality mechanism will delay its effective use,” Jakub Jaraczewski, legal officer at Democracy Reporting International, told CNN. “If Member States will be able to challenge the proposed regulation before the European Court of Justice, it might take a lot of time before the conditionality mechanism could be effectively implemented.”

The agreement will be a huge relief to European citizens, who have suffered badly over the course of the Covid-19 pandemic. Indeed, Brussels’ top brass was in celebratory mood.

“Now we can start with the implementation and build back our economies,” Charles Michel, president of the EU Council, tweeted soon after the deal was reached. “Our landmark recovery package will drive forward our green & digital transitions.”

However, over the coming days, it’s likely that critics of the European Union will accuse the bloc of blinking on the rule of law, a fundamental cornerstone to the integrity of the bloc.