MNI SOURCES: Hungary Next Sticking Point In EU Summit Endgame

By David Thomas

     BRUSSELS(MNI) - European officials are hopeful a leaders' summit has

finally reached agreement on the size of a coronavirus recovery fund, but

Hungary is threatening to veto any deal over proposals to attach human and civil

rights conditions to the disbursement of money, officials told MNI.

     One source said it looked as if the new 'negotiation box' to be presented

by EU Council President Charles Michel ahead of this evening's plenary talks

would not be challenged any further on its numbers. The compromise is expected

to include a EUR390bn proposal for recovery fund grants, following concessions

made to the so-called Frugal Four group of countries, which groups the

Netherlands, Austria, Denmark and Sweden.

     A Dutch official told MNI that governance issues around the recovery fund

were no longer an outstanding point for them. While the Dutch - alone among the

Frugal Four - had demanded the right for any one country to veto any other

country's recovery fund disbursement plan, they now seem content with a

compromise which falls short of an outright veto.

     "Should agreement on the headline figures be achieved, expect discussions

today to centre on own resources, climate action, migration, defence,

agriculture and rule of law," a diplomat said ahead of tonight's new plenary

session. "Lengthy discussions await with rule of law and climate as main

stumbling blocks."

     After a delay France has also accepted the EUR390-billion compromise,

following pressure from the German presidency, the diplomat said.

     Rule of Law threatens to be a major final sticking point to an agreement

with Hungary still threatening to veto the whole package over the proposals

which would attach human and civil rights conditions to the disbursement of

money from the recovery fund.

     Michel said ahead of tonight's talks that he would soon be circulating the

new negotiation box, adding "the last steps are always the most difficult", but

that he was confident agreement remained possible.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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