Poland & Hungary Accept German Proposal On $2.2 Trillion EU Stimulus 

Germany has mediated a way through the blocked 1.8 trillion euros ($2.18 trillion) EU budget and coronavirus relief package proposal that Poland and Hungary were jointly blocking due to clauses linking the funds with rule of law and conditioned but vaguely defined democratic standards.

While some member states remain skeptical, the two countries are said to have preliminarily accepted it. Thursday’s European Council summit is set to take up the matter.

One official with knowledge of the negotiations told Reuters that “We are preliminarily in agreement but there is some pressure…the aim is to have this done before the EU summit (on Thursday).”

And Polish Deputy Prime Minister Jaroslaw Gowin confirmed an agreement had been reached with Germany – enough to drop the veto threat, saying, “For now we have agreement between Warsaw, Budapest and Berlin.” He further told reporters in Warsaw on Wednesday, “I believe this agreement will also include the 24 remaining European capitals.”

Gowin further said in reference to Poland’s ruling United Right coalition: “I cast aside the choice, veto or death…The alternative for the United Right government would be early elections which would not serve Poland well during a pandemic.” Hungarian Prime Minister Viktor Orban also indicated there was a “good chance” a deal will be firmed up by end of this week.

While precise details as to where the compromise came to facilitate the breakthrough remain unknown, Warsaw is hinting it’s willing to allow conditionality language that is precise enough to not be used as political weapon for Brussels to impose its will from afar. According to Reuters:

Poland’s government spokesman Piotr Muller said on Wednesday that Warsaw wanted any mention of the mechanism in the EU budget deal to be “clear”. He did not specify the demands further.

“I don’t want to divulge our negotiation strategy, but the mechanism on conditionality has to be included in such a way that is clear,” Muller told Polish state television TVP. “If it’s not clear, we won’t have a compromise.”

A European Commission source was cited in Reuters further as saying Poland is likely to see around 65 billion euros from the package.

Early this week EU leaders doubled down on their threats to go it alone without member states Hungary and Poland. One EU diplomat conveyed the message of apparent willingness for the bloc to risk a major hit to unity: “We need to have an agreement by Hungary and Poland by today or tomorrow at the latest. If we don’t, we will have to move to scenario B.”