The Hungarian government insists linking the rule of law and access to EU cash is unacceptable. The European Commission has said Budapest falls short on rule of law commitments, and warned it won't "surrender" to a veto.
Hungary will still reject any attempt to link the rule of law to the European Union's budget and its coronavirus recovery fund, Prime Minister Viktor Orban said Friday.
The Hungarian and Polish governments have been at loggerheads with other EU governments for more than a month after they refused to sign off on a €1.8 trillion ($2.1 trillion) seven-year spending plan.
Both countries are under EU investigations for undermining the independence of courts, media and non-governmental organizations, and risk losing tens of billions in EU funds.
Orban also downplayed speculation that a declaration attached to the regulations that the issues must be kept completely separate would be enough to satisfy Budapest.
But European Commission officials have been working on a plan to sidestep the threats of a veto from Warsaw and Budapest.
EU Economy Commissioner Paolo Gentiloni warned on Friday that the bloc would "not surrender to a veto."
Poland's Deputy Prime Minister Jaroslaw Gowin said EU officials made clear they would bypass them through a deal on the recovery fund made among the 25 other countries. He told reporters that a veto would force the EU to look for a "Plan B ... which is some form of cooperation between the 25 other countries."
Failure to agree on the recovery fund among the 27 EU member states means the bloc's seven-year spending cycle also cannot be approved. It would see an emergency budget kick in that would scupper several long-term EU projects and see billions slashed in infrastructure spending.
Gowin said Poland would be among the worst hit countries, if that came to pass.
"The Polish economy is doing very well and of course next year we can survive without the part of the funds that would be slashed by the provisional budget, but why survive without EU funds if there is still room for agreement," he said.
The deputy prime minister said a binding declaration stating that money would not be used as leverage might be enough.
But government spokesman Piotr Muller wrote on Twitter on Friday that Warsaw's stance has not changed.
Polish Deputy Foreign Minister Pawel Jablonski told DW that his government will never accept any proposal that "would effectively leave us at the mercy of the European Commission."
Speaking to the European Parliament last week, Commission President Ursula von der Leyen suggested that Poland and Hungary should sue the EU executive at the European Court of Justice if they felt that the bloc was acting illegally.
jf/rt (dpa, Reuters)