International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Russian opposition activist Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
COVID-19 and Trump’s indifference helped human rights abusers in 2020
Russian opposition activist Navalny calls for supporters to take to the streets this weekend
One of Russia’s biggest wood product companies, Segezha could be Sistema’s next IPO
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
New Ukrainian VC firm QPDigital aims to invest up to $100 million in digital startups
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Estonian premier quits after Tallinn development scandal
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
OUTLOOK 2021 Czechia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
OUTLOOK 2021 Hungary
Hungarian government remains silent after Capitol riots
World Bank expects modest recovery for Europe and Central Asia in 2021
OUTLOOK 2021 Slovakia
FDI inflows to CEE down 58% in 1H20 but rebound expected
Slovakia to invest €1.2bn in digitisation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
BALKAN BLOG: The controversial recipe for building up Albania
Heavy flooding causes chaos in parts of Southeast Europe
Vodafone Albania plans €100mn infrastructure investments after AbCom merger
Turnover rose on Bosnia's two stock exchanges in 2020 while prices fell
Storming parliaments: New Europe's greatest hits
Kyiv accuses Bosnian President Dodik of lying about icon gifted to Russian foreign minister
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING THINK: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Zagreb Stock Exchange's Crobex10 index at highest level since March 5
OUTLOOK 2021 Kosovo
Arrera Automobili aims to launch Albania’s first supercar
Transparency International warns of high corruption risk in CEE defence sectors
OUTLOOK 2021 Moldova
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Moldova’s PM resigns to prepare the ground for early elections
Montenegrins say state administration is most corrupt institution
75% of Montenegrins want EU membership
Montenegro’s new ruling coalition carves up top state jobs
OUTLOOK 2021 Montenegro
North Macedonia's manufacturing confidence indicator down by 8.5 pp y/y in December
OUTLOOK 2021 North Macedonia
OUTLOOK 2021 Romania
Romania’s central bank cuts monetary policy rate by 25bp to 1.25%
Romanian construction companies' activity slows in November after intense 2020
OUTLOOK 2021 Serbia
Serbia to launch talks with IMF on new reform programme
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Slovenia’s dire COVID-19 situation in 4Q20 caused second economic dip
Turkcell denies any affiliation with $1.6bn loan in default extended by Ziraat Bank to Virgin Islands company
BEYOND THE BOSPORUS: Let’s tentatively pencil in a date for Turkey’s hot money outflow
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
Armenia’s PM cautions conflict with Azerbaijan “still not settled” after trilateral meeting with Putin
OUTLOOK 2021 Georgia
Georgia’s political kingpin Bidzina Ivanishvili quits politics
Modern-day “Robin Hood” inspires Georgians drowning in debt
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Iran’s navy conducts missile drill while analyst argues Trump even capable of nuclear strike in final days
TEHRAN BLOG: Who’s more credible? Johnson backing Trump’s Nobel chances or Iran applauding arrest warrant for US president?
Central Asia vaccination plans underwhelm, but governments look unruffled
Sole lowcost Kazakh airline FlyArystan makes 2020 gains
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
OUTLOOK 2021 Kyrgyzstan
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
China business briefing: Not happy with Kyrgyzstan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
Turkmenistan: The dammed united
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
OUTLOOK 2021 Uzbekistan
Download the pdf version
Poland and Hungary blocked the adoption of European Union’s budget for 2021-2027 and the coronavirus (COVID-19) recovery fund on November 16 over a provision linking the disbursement of the funds to respecting the rule of law.
Warsaw and Budapest have long been at odds with the EU and some of the bloc’s governments over policies undermining the independence of the judiciary and attacking media, minorities and NGOs.
They also are subject to official EU investigations over some of those policies. Both countries deny any wrongdoing and say that the EU’s attempt to link payouts from the budget and the recovery fund to rule of law is an unfounded intervention in their internal affairs.
The €1.8 trillion EU budget and the €750mn recovery fund must be adopted unanimously by all member states in a complicated process involving a positive vote in the European Parliament and unanimous backing in the European Council, a gathering of member states’ leaders.
The recovery fund – specifically the so-called Own Resources Decision, which lays legal framework for the EU to borrow money that will feed the fund – also must go through the Council in another unanimous decision. Member states’ parliaments will then have to ratify it.
The unanimity required during the process gives Poland and Hungary some leverage in negotiations but is also risky in case Brussels finds a way of circumventing the defiant duo – which, some experts claim, is technically possible although problematic from a political point of view.
The EU could also enter next year with only a provisional budget that would be severely diminished in comparison to the proposal just blocked by Warsaw and Budapest.
In either case, Warsaw and Budapest could face losing billions of euros in EU funding over the next seven years, weakening growth, stalling infrastructural developments or – especially in Poland case – hindering the transition to a low-carbon economy.
That could, in turn, weaken the populist governments in both countries, where most people are strongly in favour of EU membership.
For the Polish government, the battle over money also means opening a new political front in addition to the widely criticised response to the second wave of the coronavirus pandemic and infuriating Polish women over the near-total ban on abortion, dictated by the country’s Catholic circles.
Spokesman for the Hungarian Prime Minister Viktor Orban said that the PM had repeatedly warned against tying the EU’s budget and the recovery package to conditions where “the nature of the alleged law violation is not precisely defined, leading to politically motivated financial sanctions by employing double standards”.
Such measures would threaten the trust between member states as well as Hungary’s interests, Orban wrote in the letter addressed to EU leaders.
Orban’s Polish peer Mateusz Morawiecki expressed a similar sentiment.
"Poland cannot accept the mechanism [of linking EU funding to the rule of law] which would lead to the primacy of political and arbitrary criteria over a substantive assessment," Morawiecki wrote on Facebook last week about his objections, which, like Orban, he also detailed in a letter sent to top EU decision-makers and institutions.
Both countries’ justice ministers went even further than their PMs. Hungarian Justice Minister Judit Varga said linking the budget and the recovery fund to rule of law was "political blackmailing".
"This is an issue that will determine if Poland is a sovereign subject in the EU community, or it will be politically and institutionally enslaved," Poland’s Justice Minister Zbigniew Ziobro said.
A country of 10mn people, Hungary’s total funding during the next EU budget cycle could come to around €61bn, which is 43% of the country's annual GDP over the next seven years.
Poland, where 38mn people live, stands to be the biggest beneficiary of the EU funds, expecting over €170bn in 2021-2027 or around a third of the GDP in that period.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: