Poland and Hungary say rule-of-law link needs treaty change

The statement said any currently-discussed mechanism should be reduced in scope to "the protection of the financial interests" of the EU.

The rule-of-law link, agreed by 25 member states and the European Parliament, says that any breaches of the principles of the rule of law that affects or risks affecting the financial interests of the EU can be considered for sanctions.

Treaty change has been seen as a no-go area by member states because it risks opening a political 'Pandora's Box'.

The two leaders accused the German EU presidency and the parliament of overstepping the agreement reached by EU leaders in July. In Budapest and Warsaw's view, those summit conclusions do not establish a link between EU funds and the rule of law.

Several EU governments and MEPs want to tie the distribution of EU funds to the respect of the rule of law, with both Hungary and Poland currently under scrutiny for breaching EU rules and values.

Poland and Hungary argue that it is a political instrument, and claim it could be used to force policies onto the two countries.

Both leaders reiterated that the current rule-of-law link is unacceptable, and they will maintain their veto over the €1.8 trillion budget and recovery package which they say is their right based in the EU treaties.

"What is today on the table is not the rule of law but the rule of the majority," Orban said, after the Budapest meeting, in a statement.

"Since we have fundamental debates [with the EU] primarily over migration and national sovereignty, but also on gender issues, I cannot expose Hungary to the risk of being forced by a simple majority to take positions that the Hungarian people cannot accept," he added.

Morawiecki said the mechanism is arbitrary and politically-motivated and could be used against any country. He warned that can lead to the "disintegration of the EU".

He said the Hungarian-Polish blockade serves the integrity of the EU and protects the sovereignty of member states.

Hints

The two leaders offered little in terms of a possible compromise, but they hinted at what would be satisfactory for them.

Orban suggested to de-link the budget and recovery fund from the rule-of-law mechanism, and deal with that later.

The Hungarian premier said connecting the economic crisis management to a political issue like the rule-of-law conditionality as a package was "irresponsible".

He also warned against those who think Hungary and Poland will budge because the two countries also need subsidies from the pandemic recovery fund.

"This debate cannot be resolved with money," Orban said, claiming Hungary will not suffer financial losses if it is left out of the recovery fund because it will be financed by loans the EU Commission takes on.

Morawiecki, for his part, insisted that the rule-of-law conditionality needs to be based in the EU treaty.

Both leaders also confirmed that they will not accept any proposal that is deemed unacceptable by the other.