Hungary, Poland block 2021-2027 EU budget, recovery package

BRUSSELS (Reuters) – Hungary and Poland blocked on Monday the adoption of the 2021-2027 budget and recovery fund by European Union governments because the budget law included a clause which makes access to money conditional on respecting the rule of law.

Ambassadors of EU governments at a meeting in Brussels were to endorse a compromise reached on the 1.8 trillion package with the European Parliament, but could not do that because of the veto from Warsaw and Budapest.

The German EU presidency said ambassadors did vote through the link between EU money and the respect for the rule of law, because this vote required only a qualified majority and the opposition of Warsaw and Budapest could not stop it.

But when it came to voting on the 1.1 trillion euro budget itself and the 750 billion euro recovery package, which require unanimous support, “two EU member states expressed reservations” the presidency said.

The Polish and Hungarian veto will now be discussed at a meeting of EU European affairs ministers on Tuesday and then at a video-conference of EU leaders on Thursday. But finding a solution might take longer than that, officials said.

Austrian Chancellor Sebastian Kurz said it was an absolute necessity to link the distribution of European funds to rule of law standards in member states, especially when the sums to be handed out were so vast.

The nationalist governments in Budapest and Warsaw are against linking EU money and respect for the rule of law because they are under a formal EU process investigating them for undermining the independence of courts, media and non-governmental organisations.

If the link, introduced by EU leaders in July and strengthened by the European Parliament, remains, both countries risk losing access to tens of billions of euros in EU funds.

“Poland is counting on a rational approach of our partners and on working out rules which would allow to reach an agreement,” a Polish government spokesman said.

“We are open to constructive solutions, as long as they are in line with the European Council conclusions and EU treaties.”

Since without unanimous consent on the 1.8 trillion euro package no EU country can get its money, Warsaw and Budapest have strong leverage to pressure others to remove the link.

But a group of countries led by the Netherlands as well as the European Parliament wanted an even stronger link and have said they would not approve the budget without it.

The blockage means money for economic recovery for all EU countries from the recession brought on by the COVID-19 pandemic is likely to be delayed. It was originally planned to start flowing from mid-2021.

“Denying the whole of Europe crisis funding in the worst crisis since decades is irresponsible,” Manfred Weber, who heads the biggest group in the European Parliament said on Twitter.

Hungary and Poland threaten EU crisis by vetoing funds

Europe Correspondent

                                                    <p class="no_name"><a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Hungary" rel="nofollow">Hungary</a> and <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Poland" rel="nofollow">Poland</a> blocked the European Union’s landmark recovery package and seven-year budget on Monday in a rebellion over an attempt to withhold funds from countries that breach the rule of law, threatening a crisis in the bloc.</p>
                                                    <p class="no_name">The two states exercised their veto as the EU capitals prepared to sign off on the €750 billion stimulus fund designed to counteract the economic damage of the Covid-19 pandemic, and the €1.1 trillion budget which is due to kick in in January. </p>
                                                    <p class="no_name">Unanimous agreement is required to release the funding for EU projects in just over seven weeks’ time and to start the flow of recovery funds to hard-hit member states and maintain economic stability in the bloc.</p>
                                                    <p class="no_name">“I think we have a crisis again,” a senior EU diplomat said. “We are back in crisis.”</p>
                                                                                                                                                                                        <p class="no_name">A separate EU diplomat said the move threatened to undermine confidence in the bloc’s ability to reach agreements, as Poland and Hungary had previously agreed to the budget and recovery plan in July, which contain billions of euro in funds for each country.</p>
                                                    <p class="no_name">“It’s quite exceptional, it’s a very exceptional situation we are in,” the diplomat said. “When we reached the agreement in July, it was a moment of optimism that the <a class="search" href="/topics/topics-7.1213540?article=true&tag_organisation=European+Union" rel="nofollow">European Union</a> can take important steps in times of crisis. And now, you give a signal that even if something is agreed by political leaders there can still be a blockage. This is not something that gives a good signal from the European Union’s decision-making process.”</p>
                                                    <h4 class="crosshead">Budget objection</h4><p class="no_name">The two countries announced they would not sign off on the 2021-2027 budget or recovery fund in objection to the introduction of a new system whereby funds could be withheld from countries that are found to be failing to uphold democratic standards, interfering with judicial independence or breaching the rule of law.</p>

                                                    <p class="no_name">The rule of law mechanism did not need the unanimous support of all member states to be approved, so Hungary and Poland blocked the two financial agreements instead.</p>
                                                    <p class="no_name">The nationalist governments of Budapest and Warsaw have both been subject to formal EU proceedings in recent years on suspicion of interfering with the independence of the judiciary, but have used their vetoes to protect each other from sanctions.</p>
                                                    <p class="no_name">Negotiations on how to resolve the crisis are expected to continue as national leaders prepare to meet via video conference later this week. A spokesman for the Polish government said it was “open to constructive solutions, as long as they are in line with the <a class="search" href="/topics/topics-7.1213540?article=true&tag_organisation=European+Council" rel="nofollow">European Council</a> conclusions and EU treaties”.</p>
                                                    <p class="no_name">The last-minute obstacle is likely to delay the issuance of the recovery funds, which had been scheduled to start being rolled out in mid-2021, while the budget money is needed for EU programmes from January 1st.</p>
                                                    <p class="no_name">“Everybody who respects the rule of law has nothing to fear of this mechanism,” said <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Manfred+Weber" rel="nofollow">Manfred Weber</a>, heads of the biggest group in the <a class="search" href="/topics/topics-7.1213540?article=true&tag_organisation=European+Parliament" rel="nofollow">European Parliament</a> the European People’s Party. “Denying the whole of <a class="wpil_keyword_link " href="https://www.europeantimes.news"  title="Europe" data-wpil-keyword-link="linked">Europe</a> crisis funding in the worst crisis since decades is irresponsible.” </p>

Time running out for trade deal with UK, warns EU

Time is running out for a deal to be struck between the UK and the European Union that must be in place by the end of the year, EU diplomats have warned as negotiators make a final effort to avoid deep upheaval to trade in seven weeks’ time.

There are expectations that the next 10 days will make or break the talks, deciding whether punishing tariffs will be levied on imports and exports between the EU and its former member state from January 1st, alongside wide-ranging disruption as prior agreements cease.

“It’s already getting extremely late and may be too late already,” a senior diplomat said, if an agreement can be found “at all”.

“This will be tight, and as the negotiations drag on we may have to see if we find some creative solution but it’s too early to discuss that at this stage,” the diplomat added.

Negotiations moved to Brussels on Monday after a week of talks in London failed to reach a breakthrough, with pressure mounting from businesses to provide certainty over trade and logistical arrangements in the new year.

Crash exit

Minister for Foreign Affairs Simon Coveney said preparations for a crash exit would become the priority if nothing had moved by the end of next week.

“We really are in the last week to 10 days of this, if there is not a major breakthrough over the next week to 10 days then I think we really are in trouble and the focus will shift to preparing for a no-trade deal and all the disruption that that brings,” said Mr Coveney. 

“The British government understand only too well what’s required for a deal this week, the real question is whether the political appetite is there to do it. I think we will, that’s been my prediction for a while, but I won’t be shocked if it all falls apart.”

A buffer of time is needed between the reaching of any agreement and the date it is due to start because it must go through a ratification process in the EU. Certain to run to hundreds of pages, the deal must be translated into the EU’s official languages so it can be scrutinised by national governments and members of the European Parliament.

Any agreement requires a vote in favour in the parliament to come into force, and a vote has been provisionally pencilled in for December 16th. It’s possible that national parliaments may also have to vote on some aspects of the deal.

A European Commission spokesman said disagreement persisted over the rights to fish in Britain’s economic waters, which the British negotiators have pushed to claim back entirely while granting allowances in yearly negotiations. The EU is negotiating for continued access for its fishing communities, arguing that Britain needs to sell the fish in its markets.

“Fisheries is still one of the topics on which there is still quite a lot of divergence on the positions of the European Union and the United Kingdom, ” said the spokesman.

“We remain determined and we’ll show a lot of patience and respect in trying to strike an agreement.”

What’s the state of play in post-Brexit trade talks with the EU?

Time is fast running out for Downing Street to get a post-Brexit trade deal with the EU, but Boris Johnson has entered isolation over a coronavirus contact and No 10 has been in turmoil.

Here is a look at the state of play in negotiations between No 10 and Brussels.

– Didn’t Johnson already ‘get Brexit done’?

Well, technically the UK did leave the EU on January 31st, but for most practical reasons it has not felt like it yet.

That is because the transition period has kept the UK a member of the single market and continuing to follow EU law, but that all comes to an end on December 31st.

The British prime minister’s “oven ready” deal still appears to be on defrost, and there are growing concerns that the UK could crash out of the bloc without a trade deal in place.

– Where do things stand?

Negotiations, this week taking place in Brussels, have been going on intensively in recent weeks but despite some signs of progress the two sides remain a long way from an agreement.

1/4 Arriving once again in Brussels shortly for another round of negotiations with EU and @MichelBarnier this afternoon.

I and our British???????? team have been in talks almost every day since 22 October.

— David Frost (@DavidGHFrost) November 15, 2020

The sticking points continue to be fishing rights, how any deal would be governed and the “level playing field” measures to prevent unfair competition by cutting workers’ rights or environmental protections or by boosting state subsidies.

Mr Johnson’s official spokesman called for the EU to show more “realism” as he said “time is now very short” to bridge what he acknowledged are “significant differences”.

No 10’s chief negotiator, Lord Frost, insisted he would not be changing his position, saying that there is “only one” deal compatible with UK sovereignty and warning that “we may not succeed”.

His EU counterpart, Michel Barnier, said negotiators remain “determined” and “patient”.

– What’s the deadline for a deal?

Well,  Mr Johnson set one for October 15th, but that fell by the wayside as he failed to get a deal in place by then.

Deadlines in the Brexit saga have continually proved to be malleable, but the chance to extend the transition period past December 31st has been and gone, with Mr Johnson ruling that out.

???????????????? The @vonderleyen @EU_Commission negotiating team is continuing negotiations in Brussels this week w/ @DavidGHFrost & team.

With @Europarl_EN & all Member States, we remain determined, patient, respectful.

We want our future cooperation to be open but fair in all areas. pic.twitter.com/l54suVhY0I

— Michel Barnier (@MichelBarnier) November 16, 2020

But the European Council summit on Thursday, to be held by video because of the coronavirus pandemic, has been touted as a deadline for a draft deal.

Even if negotiators do manage to find a way to break the deadlock, time will still be tight, with ratification needed by EU member states and the Parliaments of Westminster and the EU.

– Will the upheaval in No 10 affect talks?

The departure of Vote Leave architect Dominic Cummings as the prime minister’s chief adviser during a period of acrimony in Downing Street came in a key phase for negotiations.

No 10 has insisted that there will be no softening of the UK’s position despite his exit.

And Mr Johnson has insisted he is “as fit as a butcher’s dog” after coming into contact with a Tory MP who later tested positive for Covid-19, and that he will continue to “lead” on the fight against coronavirus while isolating for 14 days.

Short break from intense ???????????????? negotiations in London.

Went looking for level playing fields… pic.twitter.com/2X4jbygorI

— Michel Barnier (@MichelBarnier) November 12, 2020

European Commission spokesman Eric Mamer also played down there being any impact from the isolation, saying that talks have been taking place between the Prime Minister and EU chief Ursula von der Leyen by phone.

– And what will happen if there is no trade deal?

Some areas, such as citizens’ rights, “divorce bill” payments and a protocol on Ireland, should be governed by the Withdrawal Agreement that Mr Johnson brokered with Brussels last year.

But businesses will face the high tariffs set by the Word Trade Organisation on goods travelling between the UK and the EU.

Firms already feared these could be crippling, and the ravages of the Covid-19 pandemic have only heightened those concerns.

The Government has insisted that it has backups in place to prevent any delay to the importation of a successful coronavirus vaccine from Europe.

Concerns remain of disruption to transport, delays for medicines at the border and of security threats, among many other areas.

But even if the UK does crash out of the bloc on December 31st, Brexit will be far from over as negotiations would likely continue with the EU and other nations.

EU hits Amazon with anti-trust charges 

According to The Washington Examiner, the European Commission has “opened a second antitrust investigation into Amazon’s business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon’s logistics and delivery services (the so-called ‘fulfilment by Amazon or FBA sellers’).”

In terms of the implications, The Wall Street Journal has reported that Amazon allegedly used data from third-party sellers to launch competing products.

Amazon has indicated that it disagrees with the European Commission’s assertions, adding, “no company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

The European Union’s decision comes after Google was hit with anti-trust fines totalling nearly $10 billion. In addition, an investigation has been opened into Apple.

Colin Constable, CTO of data privacy and new internet protocol, The @ Company, has told Digital Journal that “Amazon works as a flywheel, getting more and more powerful by offering independents access to its enormous network.”

This type of growth carries consequences, as Constable explains: “An unfortunate outcome of this and other companies like them that enable access to their network of services is that they start tracking these businesses. ”

In terms of the ramifications, Constable outlines the implication: “While initially, these services enable small businesses, these companies pay a data tax for being too successful. It’s a data fiefdom of sorts. We applaud the European Union for taking a first step toward breaking the flywheel and freeing small businesses from this damaging long-term outcome.”

EU aviation stakeholders urge action to protect the industry and back calls for arrivals duty free

EUROPE. Over 20 associations have joined together to launch a series of proposals for the recovery and relaunch of the European aviation sector, with calls for the European Union (EU) and its Member States to take urgent action and offer financial and other support. Their proposals have been brought together in the European Aviation Round Table Report, published today.

The associations represent airlines, airports, air navigation service providers, aeronautical manufacturing, trade unions, non-governmental organisations for environmental and consumer action, service providers, ground handling services, the duty free & travel retail sector (via the ETRC), airport coordinators, general and business aviation, express carriers, travel agents, tour operators, travel distributors, and the tourism sector.

Key proposals include a European Aviation Relief Programme spanning the EU and its Member States, plus an EU Pact for Sustainable Aviation.

In a chapter on the EU internal market and reinforcing the strength of European aviation on the world stage, a key recommendation reads: “The EU should allow duty free on arrival at EU airports in order to increase airports’ international competitiveness.”

This supports recent calls from the ETRC and ACI Europe to introduce the channel to EU airports to help generate additional business and ‘level the playing field’ with non-EU markets in the post-COVID-era. It also reflects ETRC’s efforts to ensure the duty Free & travel retail sector was considered during the drafting of the report.

The Report notes the importance of “restoring the public’s confidence in aviation” as a priority in ensuring recovery. In addition, the report highlights vital elements such as maintaining connectivity, skills and employment and preserving the European internal market in ensuring aviation’s recovery from COVID-19 and making European aviation more resilient to future shocks.

The associations also announced a joint commitment to working with policy makers to achieve net zero CO2 emissions by 2050. This aims to build a greener, socially and economically robust future for aviation, while supporting the European Union’s Green Deal objectives.

EU leaders are urged to support an EU Pact for Sustainable Aviation by the end of 2021 “by contributing the policy and financial framework required to enable European aviation to deliver on its sustainability commitments”.

This will ensure that recovery efforts are compatible with European citizens’ expectations about cleaner transport, with aviation employees’ needs for a socially sustainable and responsible aviation sector balanced with aviation stakeholders’ desire for a robust, safe and coordinated recovery from the crisis, said the report.

To further reduce aviation’s environmental footprint and achieve decarbonisation, the Pact calls for, among others:

• – An EU legislative framework to promote the uptake, production and deployment of Sustainable Aviation Fuels (SAFs);
• – Funding and investments to enable the acceleration of low-carbon aircraft innovations, such as electric and hydrogen;
• –  An incentive scheme for fleet renewal, coupled with retirement;
• – Increased public co-funding rates for Civil Aviation Research & Innovation (Clean Aviation and SESAR) through EU recovery mechanisms;
• – The revision of the Single European Sky (SES) and continuation of the EU Emissions Trading Scheme/ CORSIA.

European Commission Executive Vice President Margrethe Vestager said: “The aviation sector has been hit hard by the coronavirus outbreak. Since March, we have worked closely with Member States in their efforts to support this industry, which plays an important role in terms of jobs and connectivity. Today’s industry report provides important food for thought both for immediate issues and forward-looking challenges.

“Because environmental sustainability and the role of digitisation is a prerequisite for the modernisation and decarbonisation of the EU aviation system. In this unprecedented situation, we will continue our close cooperation with Member States and the aviation sector, to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

European Commissioner for Transport Adina Vălean said: “I welcome today’s report from the aviation sector and civil society on what is needed to rebuild passengers’ trust, and for the recovery of this hard-hit sector, which remains critical for global supply chains and people’s mobility. It offers a vision of how to make the sector stronger, more sustainable and more forward-looking than it was before the COVID-19 pandemic. I applaud the commitment to reach net-zero CO2 emissions by 2050, and the proposal to create a pact for social sustainability. This is fully in line with our ambitions for the future growth of the EU.”

The report’s authors note that Europe’s aviation sector supports almost 10 million jobs and €672 billion in European Union economic activity, including 4.2% of all EU jobs and 4.2% of the EU’s GDP.

They highlight the fact that aviation is a key economic sector which has been “hit first and hit hardest” by the COVID-19 crisis, and that requires urgent action to “put it back on a path towards a sustainable recovery and future, operationally, financially, socially and environmentally”.

The report also recognises that the aviation sector “cannot merely wait for a resumption of business as usual and that urgent action is required so that aviation can continue to be a primary enabler of our global economy in the future”.

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