Hungary Poland Might Delay Post Pandemic Recovery: Hungary and Poland are jointly vetoing the accord of the jointly financed economic recovery package for the European Union. Strangely, they are the biggest beneficiaries of the post Covid package.
Both the nations have never seen eye-to-eye with the EU on anything. Earlier, there was a tiff over abortion ban that was strongly opposed by the EU bloc on the condition that it amounts to violation of human rights.
A seven-year budget support was decided upon in July this year. EU leaders also agreed to support the more needing nations with a robust stimulus program funded by joint debt. However, parts of this accord does need unanimous backing by member states. Therefore, with Hungry and Poland raising up some kind of red flags, this is only going to hurt other needing nations like Italy or Spain for example.
The pandemic situation had hit the economy of many EU member countries in bad ways. Most have lost their economic standing and are now finding ways to ensure their people can keep their jobs. Unemployment is a direct result of lack of trade in these countries. Italy and Spain for example, who depend heavily on their tourism related trade have been adversely affected due to second and third wave of the Covid-19 virus infection.
This week, the EU member state leaders went ahead to sign off on a deal linking funds to the rule of law. Hungary and Poland have opposed the rule of the law from the very beginning. However, this part of the accord only needs an enhanced majority of member states. Further, debt issuance needs unanimity. This necessary money push to fund EU’s budget payments is being curtailed by Hungry and Poland’s resistance. Therefore, this sure shot chance to block the entire package remains a big possibility.
Polish economists feel this kind of resistance could mean investors would look for greener pastures elsewhere in Europe. The so-called ‘rule of the law’ principle is what has been the bone of contention for Hungary and Poland, which feel they are being pulled into autocratic function. But this political mishmash is a dangerous one to be in, because it will only delay the economic recovery help that most of the EU nations are in desperate need of. The result could be catastrophic- with only bureaucrats receiving salaries, some farm subsidies and humanitarian aid flowing into the various economies by the end of 2020.