The landmark compromise between the European Union, Poland and Hungary on December 10 may have unlocked a 1.8 trillion euro ($2.14 trillion) budget but the dispute over the rule of law is far from over. 

EU members Poland and Hungary, who largely depend on funding, promised to veto the coronavirus recovery fund and seven-year budget over a clause on democratic backsliding as the remaining 25 members threatened to continue with a separate budget. 

German Chancellor , who currently holds the bloc’s rotating presidency, said the deal was a “huge weight” off her mind. While French President said the summit “was a test for Europe and we have passed that test.”

The scheme needs to be ratified by national parliaments. 

But under the plan, the EU will not be able to implement sanctions nor withhold funding before 2022 and that’s only if the bloc’s highest court, the European Court of Justice, also rules against Poland or Hungary. 

It leaves enough time for Hungary’s Prime Minister Viktor Orbán to flex his political muscle as the country faces a parliamentary election in 2022.

“We have defended the interests of Hungary. D-Day was a success!” he said.

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Breaking EU Values

Hungary and Poland’s right-wing governments have been accused by the EU of democratic backsliding, especially when it comes to judicial independence civil society and media freedoms. 

The EU summit coincided with the news that Poland’s state-run refiner, PKN Orlen, was buying local media group Polska Press from Germany’s Verlagsgruppe.

But both Hungary and Poland argue the EU’s concerns were an attack on political differences. 

By watering down the rules, the EU avoided delaying the recovery package, which could have further devastated the effects of coronavirus on economies. 

Avoiding a ‘Polexit’

The bloc also managed to avoid further isolating Poland especially, as the EU negotiates Britain’s exit terms.

Although Prime Minister Jaroslaw Kaczynski’s ruling Law and Justice party has denied ever wanting to leave the bloc and support for EU membership is high in Poland, ombudsman Adam Bodnar has indicated for a while that a “legal Polexit” could occur. 

“It’s sad to see that Poland and Hungary apparently are overplaying their power and maybe even opening the Pandora’s box to the offer of putting their country on the road to talk about their national versions of Brexit,” said Pawel Zerka, a policy fellow at the European Council on Foreign Relations think tank. 

 While he does not think the two countries would leave the bloc, he says their political games is introducing the debate to the public sphere and that the challenge is not just about the rule of law, but how the region can easily be stigmatized. 

Zerka argues if countries do not share the same values as more liberal EU members and receive less funding it could give ground “for some feeling of abandonment”. 

Europe’s fight for a geopolitical future

 The sentiment of being left behind in the EU, of course, does not just apply to the rule of law debate. 

 In discussing the multiannual financial framework and 750-billion-euro COVID recovery fund earlier this year, the so-called frugal countries (the Netherlands, Denmark, Sweden and Austria) were opposed to the European commission raising debt to fund grants to member states, arguing Southern countries are fiscally irresponsible and should rein in their spending.

But the Southern members are the hardest hit by the pandemic and need EU support. The tourist reliant economies of Greece, Spain and Italy are projected to contract by close to 10% in 2020.

 For all their differences, EU governments are feeling a need to step up and unite to build a geopolitical Europe, argues Zerka, adding especially as “Russia and China continue to be the largest threats.”

“Europe was very happy to promote its values externally. But now we see that there is a moment where Europeans increasingly realize that they need to defend those internally,” he said. 

“I think that we are observing a moment whereby Europe is being redefined.”

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