MNI POLITICAL RISK: EU Budget In Peril Ahead Of Council Summit

Key Takeaways:

• The 19 November European Council summit ostensibly focused on COVID-19 likely to include discussions of EU long-term budget, effectively vetoed by Hungary and Poland earlier this week.
• EU and liberal countries slightly more likely to water-down controversial 'rule of law' mechanism than Poland and Hungary are to back down and drop their veto.
• The issue is unlikely to be resolved today, with weeks of talks likely before a deal is reached. Pushback likely from MEPs, many of whom have been vocal in their demand for the mechanism.
• Any sustained delay to the multiannual financial framework and COVID-19 recovery fund likely to be of more concern to those countries hit hard by COVID-19, as they require immediate economic support, than countries like Poland and Hungary, who are the largest net recipients of EU funds but will be able to rely on payments matching those of 2020 should the new budget not be in place by 2021.

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MNI POLITICAL RISK ANALYSIS - EU Budget In Peril Ahead Of Council Summit.pdf