As EU leaders start descending on Brussels for a Special European Council meeting convened following disagreements over the EU’s long-term budget last December, everyone is wondering whether the European Commission will call Hungary’s bluff.
Pressure on Hungary to cave in on the multiannual financial framework (MFF) has been mounting, culminating in a story on how the EU planned to capitalise on Hungary’s economic situation should the decision be made to suspend EU funds. While that story was later admitted to having been some scenario planning, the reality is that this Council will be difficult unless both sides are willing to compromise.
Compromising with Hungary opens a Pandora’s box that would weaken the EU at a time when it needs to show strength on the global stage to fend off the various threats to its security, appear credible, and regain the confidence it lost due to its response to war in the Middle East.
The focus of the EU leaders during this special Summit will be the mid-term revision of the Multiannual Financial Framework (MFF) that includes €50 billion to Ukraine in assistance funds, divided into €17 billion in grants and €33 billion in loans. This is where the main bone of contention is, as Hungary does not want to provide financial assistance to Ukraine in any way, as stated this week by Prime Minister Orbán in an interview with the French newspaper Le Point. Yet, even if Hungary decides to contribute to this funding, it wants to retain the ability to decide on this assistance on a yearly basis. This might be difficult given that the MFF is underpinned by a legal basis that grants the Commission the right of initiative.
However, the rumour mill is in full swing, as some are already pointing to the eventuality that 26 leaders may decide to go at it alone. Should that happen, it is unclear how Hungary will be allowed not to contribute while receiving EU funds. Such an eventuality also opens a Pandora’s box for other Member States that may be tempted to adopt a position similar to Hungary’s in the future. The EU is between a rock and a hard place, and this issue also threatens the long-term EU project on defence and the painful reforms required to welcome Ukraine into its fold.
EU leaders will also address the situation in the Middle East as the situation is highly volatile following the decision by Biden to retaliate against Yemeni Houthis. The complex situation in the Middle East requires compromise, yet due to its early response, the EU does not have the credibility to negotiate between parties. In fact, these negotiations are being led by the US, together with France, the UK, and the Qataris.
Meanwhile, the situation in Gaza is deteriorating further, with 50% of the buildings having been destroyed and the lack of basic goods such as food and water further compounding the humanitarian situation. The issue in the Middle East is how to release the hostages, provide assistance to the Palestinians, and weaken Hamas at the same time. Israel’s dismissive narrative of the Palestinian political horizon is not beneficial either, as there cannot be peace in the Middle East without compromise.
In all these issues, the EU is at a crossroads. It needs to ensure it remains credible and relevant in an ever-contested and conflictual international order and to rein in its Trojan horses, as this will greatly affect its relevance and credibility in the future.
Photo: Laszlo Balogh/Reuters