Although the deal is much more a result of the unswerving positions of the Netherlands and the European Parliament than of the German presidency's negotiation skills, the success is an extremely important face-saving measure for Berlin.

Jorge Domecq spent five years as the chief executive of the European Defence Agency before taking up a job as "Head of Public Affairs" at Airbus. He failed to properly notify the agency of his new job, breaching staff regulations.

One possibility for a compromise could be a declaration, attached to the rule-of-law conditionality, on how it will be used - that alleviates the concerns of Hungary and Poland.

A senior EU diplomat said Poland and Hungary should lift their veto or give a signal they are willing to do by Tuesday - otherwise there will be alternative plans for a recovery fund with the other 25 member states.

Poland is cracking, and Britain is flailing - if the EU presses its advantage at this week's summit, it has more political capital and leverage than might appear.

Disgraced former Hungarian MEP József Szájer tried to derail a European Parliament resolution against Hungary over rule of law in 2018, but an EU court official has said his case was likely "unfounded".

"We are confident a solution can be found," a senior commission official said, adding that money from the recovery fund could start flowing in June, as originally planned.

Italian multinational oil and gas company ENI has a board member advising the EU's foreign policy chief, Josep Borrell. The European Commission appears to have been kept in the dark over the affair until NGOs starting asking questions.

Poland and Hungary should ask the EU's top court to assess linking EU funds to the respect of the rule of law instead of blocking the budget and recovery package, the EU Commission chief said, most MEPs backed her up.

The European Ombudsman said the climate risks from gas projects included on the EU Commission's list of priority energy projects were not properly assessed, urging the commission to address the "shortcomings" of its methodology.

France's EU affairs state secretary Clement Beaune said his country and Germany are looking into "technical clarifications" on rule-of-law conditionality to resolve the issue, but floated the idea of doing the recovery fund without Poland and Hungary.

You hear voices already calling for the European Council to give in to the Hungarian and Polish demands, by coming up with supposedly 'technical' solutions allowing them to veto any corruption case or breaches of the rule of law .

The EU institutions and member states have hardly more than two fully-fledged and one half-baked strategic option to solve this institutional crisis - that may have more far reaching consequences for the EU than Brexit.

At the same meeting of EU ambassadors, a majority of member states adopted the rules on linking the distribution of EU funds to the respect of rule of law by member state governments.