Compromise taking shape over rule of law conditionality

A compromise consisting of a protocol of interpretation is possible in the discussions over the rule of law conditionality mechanism in the EU budget and recovery fund. The European Council meets on Thursday to discuss the matter.

According to commercial radio RMF FM the shape of such a compromise has already been hammered out and diplomats are increasingly hopeful that it will avert the threat of Poland and Hungary using their veto to block the EU budget and recovery fund. VIktor Orban flew into Warsaw on Tuesday evening to discuss progress being made on the issue with PM Mateusz Morawiecki and the leader of the Polish ruling party Jarosław Kaczyński.

The compromise taking shape consists of an agreement to keep the mechanism with the proviso that at the summit a detailed set of instructions on its use is adopted. That protocol of interpretation would include a timetable for its introduction and a safety break mechanism.

The protocol would include guidance in what situations the mechanism may be used and which member state competencies are totally excluded from it. This would be done to allay Polish and Hungarian fears about the mechanism being used to force either country to change their family laws and/or accept compulsory re-allocation of migrants and refugees. The text is to make clear that the mechanism is reserved for use in cases such as fraud and corruption, and not to put political pressure on member states to alter their domestic policies or legislation.

The agreement would also include a timetable for the introduction of the mechanism which will mandate the EC to ensure that it is not used in advance of a ruling by the ECJ on the mechanism’s compatibility with European law. Effectively this would delay the introduction of the mechanism until 2022.

The safety brake was a proposal which had been proposed by the President of the European Council back in July. It would mean that should the EC want to proceed with a suspension of funding from a member state, that country will have the right to have the matter tabled at an EU summit. It would not mean a power of veto, but would create a buffer of time which may be needed for reflection and delay.

All the member states have to accept the protocol. It may well be resisted by Holland and Scandinavian states who want to see the mechanism have teeth which could be used to stop misappropriation of spending. These countries originally had the greatest misgivings about setting up a recovery fund that was based effectively on debt mutualisation via the back door.

Allowing the mechanism to stay, even if limited by a protocol of interpretation, will also not be to the liking of politicians such as Zbigniew Ziobro, the justice minister leader of the junior partner Solidarity Poland in the ruling Law and Justice (PiS) block. He has argued consistently that a rule of law conditionality mechanism is in contravention of EU treaties and a danger to Poland’s sovereignty. He and his party have even threatened to leave the government should the government refuse to veto the budget with the mechanism being allowed to stay in place.

However, another of the junior partners of PiS, the “Agreement” party led by Deputy PM Jarosław Gowin are far more amicable to a compromise. Indeed, Mr Gowin visited Brussels last week and discussed ways of making the mechanism palatable via a protocol of interpretation. Mr Gowin feels that Poland would put itself in an awkward position politically if it should block the budget and recovery fund and could lose out financially too.

PM Morawiecki and party leader Jarosław Kaczyński have thus far maintained the position that the mechanism should be scrapped as it is bad for Poland and the EU as a whole, a hostage to fortune. So far Mr Orban has been firmly with them on this matter. And there was no sign on Tuesday night that he was shifting his position.