Merkel defends EU rule-of-law plan despite budget blockade

German Chancellor on Thursday defended a plan to link EU payouts to respect for the rule of law that prompted Hungary and Poland to block the European Union’s €1.8 trillion budget-and-recovery package.

But, speaking after a videoconference of EU heads of state and government, Merkel and other leaders said they would keep talking to Budapest and Warsaw to try to end the stalemate.

Hungary and Poland earlier this week blocked progress toward finalizing the package over their opposition to a new mechanism linking EU money to rule-of-law criteria, raising concerns across the Continent about possible delays to the disbursement of EU funds next year, when the new budget cycle begins.

In a videoconference focused on the coronavirus, the leaders spent less than 20 minutes discussing the stalemate. Merkel told reporters afterward that she emphasized the current rule-of-law plan — a compromise between the Council of the EU and the European Parliament — was a good solution.

“I also made it clear that I believe we found a very good and balanced compromise,” she told reporters.

But she said Berlin, which holds the presidency of the Council of the EU, will push forward with efforts to find a way out of the impasse: “The German Council presidency will continue to talk with Hungary and Poland.”

The chancellor declined to speculate on alternatives should the package remain blocked. “We want to work, we want to explore all the options that are possible, and we are still at the very beginning,” she said.

At a separate news conference, European Council President Charles Michel said, “We’ll continue the discussions to find an acceptable solution to all.”

Some leaders emphasized that a quick agreement is needed — but also said a deal can still be reached even this late in the negotiating process.

“People in Europe and the businesses, the companies in Europe, are urgently waiting for the funding in this unprecedented crisis and deep recession,” European Commission President Ursula von der Leyen said, standing alongside Michel. “Now we sit down, we negotiate, we listen to what the issues are, we try to solve them,” she said.

“Europe in many, many very critical situations in the very end has found solutions to move forward,” von der Leyen said.

Dutch Prime Minister Mark Rutte took a less conciliatory tone, placing the responsibility to fix the situation firmly with Hungary and Poland.

“If you were to ask me [about how to solve the problem] then I would say: Ask these two how they want to solve it,” Rutte told reporters.

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