MNI INTERVIEW: EU Recovery Fund Faces Parliament Battle

The European Parliament will push for significant changes to the deal on the budget and EUR750 billion pandemic recovery fund agreed by EU leaders in July, including making the rule of law a condition for disbursement of funds, a prominent member of the European Parliament's ECON Committee told MNI.

With countries like Hungary and Poland previously clashing with the European Commission and the parliament on issues ranging from independence of the judiciary, freedom of expression and minority rights, legislators' insistence that rule of law be part of the package may herald tough negotiations.

"I think there are still serious issues and one is about rule of law," said Sven Giegold, a German Green, "There has to be movement to create a credible rule of law regime."

The politically difficult issue was kicked into the long grass by leaders at their July summit, prompting Hungarian Prime Minister Viktor Orban to declare a "huge victory."

The parliament is also concerned about the decision to use EU budget money for the Recovery and Resilience Fund, and by whether member states' post-Covid recovery plans reflect the bloc's common priorities of digitalisation, climate change and the green agenda, Giegold said, although he added that member states and the parliament will have to reach "a common decision" eventually.

GERMAN PRESIDENCY

But EU sources told MNI they were doubtful much ground could be conceded to the European Parliament, beyond a commitment to share information on the Recovery and Resilience Fund.

"Info sharing on recovery plans and implementation yes – co-deciding on approval no," one official said.

German Chancellor Angela Merkel and Finance Minister Olaf Scholz have both indicated that they see "little space" for the European Union's current German presidency to address the European Parliament's concerns. But Giegold dismissed this posture as "the usual haggling."

"They have signalled they will talk," he said. "In these three dimensions there has to be a major movement towards the EP position".

Calling Orban "a major threat" he noted that Hungary is a significant recipient of EU funds.

"We have sticks we can use," he said.