Twenty-five EU governments intend to adopt the rule of law conditionality mechanism by majority vote. In return, the Hungarian and Polish governments, which oppose conditionality, will veto the EU's next seven-year budget, and the EU's economic package to help countries recover from the pandemic.
Why are Fidesz and PiS so opposed to conditionality?
Because they can't afford to lose EU funding, and they refuse to stop dismantling the rule of law. Since taking power, the ruling parties in Hungary and Poland have been unravelling the laws and institutions that make democracy function. Their goal is to stay in power and make it difficult for anyone to unseat them.
For Hungary's Fidesz, being in power is a means to steal public funds. The government awards fat public contracts to friends, family and allies in the business world in return for kickbacks and their loyalty. For Poland's PiS, being in power seems to be a means to enact ultra-conservative social policies.
To maintain and consolidate power, both governments have adopted a similar game-plan: control public opinion and eliminate legal barriers to their agenda. They have achieved this by, to different extents, take-overs of the media and judiciary and strangling rights and democracy groups. This has allowed them to skew public opinion; silence public criticism; and reduce the ability of the public to organise to voice dissent. It has also allowed the governments to manufacture bogeymen (like migrants, LGBTQI persons and feminists) that only they can battle.
The EU's intention to link access to EU funding to respect for the rule of law blows the wheels off Fidesz's and PiS's bus. Because key to their agenda is having the courts under their control. While key to the rule of law is independent courts that uphold the rights and institutions that Fidesz and PiS want to dissolve.
Fidesz and PiS know that they are likely to fall foul of a future conditionality mechanism given that they're currently under the Article 7 procedure. They cannot afford this economically or politically.
Billions in EU funding is at stake. This is key to their economies, and especially to Fidesz's corruption racket. If the conditionality mechanism is activated, it means EU funding stops flowing - in part or in full. The government is obliged to keep funding agreed-upon projects by itself. To avoid causing hardship to ordinary citizens, the EU can also pay funds directly to end beneficiaries, rather than via the government, which is the normal channel. To Fidesz and PiS, conditionality means taking an economic hit that could upset their voters, losing money that funds corruption, and/or losing control over how money is spent in their backyard.
PiS and Fidesz's opposition to the conditionality mechanism shows that their main concern is to maintain and consolidate their power. They are not concerned with governing in the interests of their citizens, or they wouldn't be so keen to manipulate public opinion and take over the courts. Their stated intention to veto the pandemic recovery package shows that they are so desperate to hold on to power that they would block funding to support ordinary people all over Europe.
Germany, which holds the EU presidency, is responsible for getting the deal through. Merkel may have some sway over Hungary's Orban, but in the past she has been reluctant to use it. Perhaps because of the German car lobby's interest in not making trouble for its factories in Hungary. It's the influence of her party that has helped keep Fidesz in the EPP - the largest of the EU's political families. Which in turn has helped to shield Orban from criticism. And even if Merkel could get Orban to change his mind, she's unlikely to have luck with the Polish government, which is not a political ally.
Three routes remain open to the German presidency to move ahead with adopting the conditionality mechanism and getting the new budget and recovery package adopted. First, move ahead with the budget vote and count on PiS and Fidesz to back down. The latter may relent due to their reliance on EU money and may be optimistic of finding ways to stop the conditionality mechanism ever being activated. Second, not vote on the new budget and allow the EU's existing 7-year budget to carry over until a change in Polish or Hungarian policy or leadership makes it possible to adopt. And then the other 25 EU countries could come up with a pandemic recovery package among themselves through a separate international treaty. Third, accelerate the Article 7 procedure simultaneously for Poland and Hungary and vote to suspend their voting rights, to allow the budget and recovery package to pass without their votes.
Whatever Merkel decides, it's important to move forward soon because millions of Europeans are counting on the economic recovery package for the pandemic. Merkel has proven herself to be an unstoppable force. PiS and Fidesz's fear of conditionality suggests they are not immovable objects.
More on Hungary, Poland and the rule of law:
'Undrinkable Cocktails' and a Soft Bartender: A Review of the First EU Rule of Law Report
EU Governments Use Pandemic Measures to Restrict Civic Space and Freedoms: Liberties & Greenpeace Report