Hungary threatens to collapse EU’s budget as massive rift ERUPTS

Hungary threatens to collapse EU’s budget as massive rift ERUPTS

The European Union has been plunged into crisis after Hungary threatened to collapse the bloc's huge seven-year budget, warning "there will not be an agreement" in its current form.

European Parliament President David Sassoli has lashed out at Poland and Hungary as they to veto the EU's £1.6tn (€1.8tn) seven-year budget, as well as the £671bn (€750bn) coronavirus recovery. The two countries are against plans to attach rule-of-law conditions to the disbursement of money. Gergely Gulyas, the chief of staff for Hunarian Prime Minister Viktor Orban, said the country is open to further negotiations on the issue.

Speaking at a weekly government briefing, he was asked if Mr Orban would veto both the the budget and coronavirus recovery fund at an EU summit scheduled for next week.

Mr Gulyas replied: "In its present form we cannot accept the EU budget, and every member state has the right of veto."

The two member states remain under EU investigation for undermining the independence of courts, media and non-governmental organisations and with the condition in place they risk losing access billions of pounds.

Speaking at a press conference, Mr Sassoli stated there is no plan B in place and warned the two countries could “jeopardise” the economic future of the entire bloc.

He said: “This is the agreement. “

The European Parliament President added: "If that’s not the case, there isn’t a Plan B.

“Work would have to again start from Square one… obviously this would compromise and jeopardise the ability of the EU to recover.”

Senior officials in Brussels fear if there is not a unanimous agreement then the EU budget could be slashed by up to £27million (€30m) at a time when most of Europe is still reeling from the COVID-19 pandemic.

With time running out, it is understood the bloc could take drastic action and bypass Poland and Hungary with a deal for the remaining 25 EU member states.

Dutch Prime Minister Mark Rutte previously described this as one of the “nuclear options”.

One EU diplomat said: “For the time being things seem to be deadlocked.

“If there is no agreement with Poland and Hungary at leaders’ level next week, and things don’t look like moving, the other 25 member states will have to consider other options.

“No one wants to go down that route, but they may be left with no choice if Poland and Hungary don’t move.”

Earlier this week, Mr Orban and Polish Prime Minister Mateusz Morawiecki held talks and reiterated both sides remained open to negotiate with the EU.

A Polish Government spokesman said: “We're open to new proposals and we are convinced an agreement can be reached.

“But we stress that it has to be compliant with EU treaties and conclusions from the European Council meeting in July.”