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According to the daily „Financial Times” which interviewed the EU budget commissioner, the Commission’s lawyers have now found legal ways to sidestep Poland and Hungary who are threatening to veto EU’s upcoming seven-year budget and the €750bn pandemic recovery fund.

-I think the message starts to arrive that both countries would lose significant money next year, and risk to lose even more- Mr. Hahn said.

„The EU budget commissioner has warned Poland and Hungary that Brussels is ready to cut them out of the recovery fund and proceed with the project without them if they continue to block Europe’s upcoming budget”- reads the “FT” article.

25 member states will still benefit

The London-based newspaper points out that the recovery fund would provide Poland and Hungary with massive financial resources. According to estimates from the European Central Bank, grants received by both countries would amount to 3% of their respective GDP.

However, should the governments in Warsaw and Budapest stand by their decision to veto the EU budget over the rule of law mechanism, Polish and Hungarian citizens would effectively lose access to these funds – during the interview, Mr. Hahn revealed that an alternative solution, i.e. distributing the recovery fund among the remaining 25 EU member states, is already being discussed.

-Warsaw and Budapest cannot stop us from helping our citizens- the commissioner said. -We are fully aware of our responsibilities; that is why we have already started on alternatives- he added.

Mr. Hahn also pointed out that the potential exclusion of the two veto-wielding countries would still allow to proceed with implementing the recovery fund roughly along the originally planned timeline. It remains unclear, however, whether the remaining 25 member states will decide to stick to the initially agreed €750bn, or, given the two absent countries, agree on a reduced pool of money.

Less money, more problems

The article recalls that depriving the Polish economy of the recovery fund resources is only one of several negative consequences the country would have to face if it proceeds with blocking the EU budget. Should it happen, the Union would be forced to move to a restricted emergency budget for the first time since 1988.

„The emergency budget would result in the loss of billions of Euros for policies such as climate change, migration, and the Erasmus student exchange scheme. Brussels would not be able to pay out money for new cohesion projects- with an impact on countries including Poland and Hungary”, the article reads, mentioning that without an agreement, next year’s overall EU budget would fall between €25-€30bn.

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