Portugal's PM says we must unblock EU budget, recovery deal next week

The European Union's economy would be paralysed if neither the bloc's budget nor recovery fund to help countries battling the coronavirus pandemic are approved this month, Portuguese Prime Minister Antonio Costa said on Wednesday. The bloc is embroiled in a dispute with members Hungary and Poland over conditions over the rule of law that the bloc intends to attach to the recovery funds.

The European Union's economy would be paralysed if neither the bloc's budget nor recovery fund to help countries battling the coronavirus pandemic are approved this month, Portuguese Prime Minister Antonio Costa said on Wednesday.

The bloc is embroiled in a dispute with members Hungary and Poland over conditions over the rule of law that the bloc intends to attach to the recovery funds. "Next week we really have to have this agreement," Costa, whose country will hold the rotating presidency of the European Council from January to June 2021, told a joint news conference with the president of the European Parliament, David Sassoli.

"The next European Council must approve the needed mechanisms to have a budget, a recovery programme and a multiannual framework by Jan. 1 ... Otherwise EU activity will be paralysed," he said. The European Union is investigating the nationalist governments of Hungary and Poland for undermining the independence of their judiciaries and media, and had sought to attach conditions to the disbursement of EU cash.

In turn, they have dug their heels after vetoing the EU budget and rescue funds last month, arguing no such rule-of-law-conditions can be attached unless the bloc changes its founding treaty. "This is not the time to discuss institutional issues," said Costa, who has defended the clause. "Quick responses to the pandemic, to the economic crisis and to unemployment are needed and there is no time to lose nor new postponements to make."