France Says EU Could Cut Hungary and Poland Out of Recovery Fund

European Union leaders could push ahead with a post-Covid recovery fund without Poland and Hungary as a last resort if they refuse to drop their veto, a French official said.

France’s priority remains finding an agreement that includes the two eastern European members while protecting the rule of law, said the official, who works in President Emmanuel Macron’s office, asking not to be identified in line with French government practice.

One solution might be to clarify to Hungarian leader Viktor Orban that countries will have a right to defend themselves if their payments are in jeopardy because of questions about their respect for the rule of law, the official said. As a very last resort, the fund could be agreed on without countries that oppose it.

Hungary and Poland as well Slovenia are blocking the recovery plan and the EU budget because they oppose a new mechanism that would make payment of the funds conditional on respect for the rule of law.

Read More: Hungary, Poland Block EU Debt Plan, Delaying Recovery Fund

Earlier Wednesday, French junior minister for EU affairs Clement Beaune told Senators that the EU was looking into “concrete solutions” to settle the dispute but would “move forward” without Hungary and Poland if no solution was found.

“Circumventing Poland and Hungary would split the EU,” advisory company Teneo wrote in a note Tuesday. “This will be anathema to many, and especially to Germany, now that Berlin has turned substantially to allow greater EU spending.”

Poland and Hungary stand to receive at least 180 billion euros in grants between them over the next seven years from the budget and recovery fund, according to Bloomberg calculations.

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