EU strikes deal on landmark budget, virus recovery fund

European Union leaders have sealed an agreement on a massive long-term budget and coronavirus recovery package, EU Council President Charles Michel has said, after they overcame objections from Hungary and Poland about a move to tie use of the bloc’s funds to upholding of the rule of law.

The $2.21 trillion (1.82 trillion-euro) seven-year budget and recovery package is considered vital for many European countries whose economies have been devastated by the virus. Poland and Hungary had agreed to the deal in July but later vetoed it, fearing the new mechanism could target them for breaches of Europe’s democratic standards.

“Now we can start with the implementation and build back our economies. Our landmark recovery package will drive forward our green and digital transitions,” Michel said in a tweet during an EU summit he was chairing in Brussels on Thursday.

No details of the agreement were immediately available.

READ MORE: EU and UK give each other until Sunday to save Brexit talks

The breakthrough came just days after it appeared that Poland and Hungary’s 25 EU partners might go it alone and create a new coronavirus recovery package without them.

Ahead of the two-day summit, EU diplomats and officials said the solution would take the form of a declaration clarifying that the rule of law mechanism would not be used against any country without a ruling from the EU’s top court, the European Court of Justice, first. That process could take a year.

Polish Prime Minister Mateusz Morawiecki had warned that it could be a case of us now, you tomorrow.

“We have to avoid any arbitrary and politically motivated decisions,” he said. “Today, we fear that we might be attacked in (an) unjustified way, but of course in the future (it can be) any country.”

Hungarian Prime Minister Viktor Orban said that all sides were fighting for ”a victory for common sense.”

“It is obvious that when our nations and so many millions of people are in real need because of (the) pandemic and the economic consequences of that, we have to behave reasonably,” said Orban, whose nationalist government, like Poland’s, has been accused of undermining judicial independence and media freedoms.

But Dutch Prime Minister Mark Rutte said he still had questions about the compromise, like his neighbours in Belgium and Luxembourg. He had planned to seek legal advice, particularly as to whether the compromise would violate the agreement previously reached between EU member countries and the European Parliament.

Rutte said he also wanted to be sure that any court ruling “can retroactively establish that violations have occurred.”

Tensions in the eastern Mediterranean

The summit will also weigh the sensitive issue of whether to impose sanctions on Turkey over its stand-off on energy resources with EU members Greece and Greek Cypriot administration in the eastern Mediterranean.

Tensions flared in August when Ankara sent a survey vessel to map out energy drilling prospects in waters also claimed by Greece. Ankara and Athens agreed to resume talks over their contested maritime claims in September, ending a 4-year hiatus.

But Greece has since said it would not begin talks as long as Turkish vessels were in contested waters. The vessel, Oruc Reis, returned to port again last week.

Greece and the Greek Cypriot administration have increased their pressure on other EU members to impose sanctions on Turkey.

Turkey, which has the longest continental coastline in the eastern Mediterranean, has rejected maritime boundary claims of Greece and the Greek Cypriot administration and stressed that these excessive claims violate the sovereign rights of both Turkey and the Turkish Cypriots.

France, Greece, and Greek Cypriot administration are pushing for strong action against Turkey, but other EU nations including Germany, Italy and Poland oppose slapping broad sanctions or an embargo on a fellow NATO member.

A draft conclusion of the summit envisioned a staggered approach, with new names of individuals and companies added to a blacklist and the threat of supplementary sanctions kept in reserve if Turkey does not change tack.

READ MORE: Turkey's door to diplomacy and negotiations is open

NATO head urges EU to take 'positive approach' towards Turkey

NATO Secretary General Jens Stoltenberg was not part of the summit, but met Portugal's Prime Minister Antonio Costa beforehand and used the opportunity to send a message of caution.

Ahead of a key EU leaders’ summit, the head of NATO urged EU countries not to forget Turkey's importance to the alliance and the West and to seek out “positive approaches.”

He said that Turkey was an "important ally" that had helped battle Daesh and hosts millions of refugees from Syria.

Acknowledging the existence of differences and disagreements between allies, Stoltenberg said, “But at the same time we need to make sure that we realise the importance of Turkey as part of NATO and also as part of the Western family.”

“NATO is a platform where also we can discuss an open way when there are differences, disagreements between allies as we see, for instance, in the eastern Mediterranean,” he said.

“At the same time, I think we all have to look for positive approaches, ways to address the differences,” he added.

He also said he is working to strengthen and expand a NATO deconfliction mechanism between Greece and Turkey to prevent any incidents or accidents between two NATO allies.

“I also believe that through these technical talks at NATO on deconfliction, we can also help to pave the way for political negotiations, addressing the underlying main issues, the main dispute,” he said.

The EU summit in Brussels — the first since the election of Joe Biden as the next US president — sees leaders meeting face-to-face after recent videoconferences were held as a coronavirus prevention measure.

The pandemic hammering the continent will remain a major issue as leaders look to coordinate attempts to avoid a third wave of infections and organise future vaccination campaigns.

Climate

Debate over climate is also expected to be heated, as the 27 EU members are looking to strike an agreement to increase the bloc's target to slash emissions.

The hope is for a 55-percent reduction of European emissions in 2030 from 1990 levels and carbon neutrality by 2050, but some countries such as Poland disagree over how to get there.

To avoid a veto from Warsaw, the bloc could agree to a collective commitment to cut emissions that would not place the burden on individual nations.

French President Emmanuel Macron will also present proposals aimed at re-enforcing security at the external frontiers of the Schengen free movement zone.

READ MORE: EU member states in paralysis over a common position on Turkey