The Post-2020 EU Budget

Who will be at the table and who will be served for dinner?

Edit Zgut
10 July 2017

Although the infringement procedure launched by the European Commission against Hungary, Poland and the Czech Republic for their refusal to participate in the mandatory refugee relocation scheme could strengthen the voice of the V4, it is unlikely that this event will be able to patch up the cracks in the group’s unity in the long-term.

This article is part of a V4-Germany analytical series initiated after a conference ‘Visegrad Group and the future of European Union’ organised by the Visegrad Insight and the Foundation for Polish-German Cooperation, that took place in Warsaw on 15-16th March, 2017.

Read also articles by: Kai-Olaf Lang, Edit Inotai.

Even the seating arrangements had a symbolic significance on the first meeting of the V4 and Emmanuel Macron: the recently elected French president was followed by Slovakian Prime Minister Robert Fico and then his Czech counterpart Bohuslav Sobotka, while Viktor Orban and Polish Prime Minister Beata Szydlo were seated together on the other side of the table.

Macron’s win does not bode well for the Hungarian and Polish leaderships because, among other reasons, the new French premier believes Central European countries failing to comply with EU regulations should face political consequences, not to mention Macron’s plan on developing further the two-speed model of Europe by deepening cooperation within the eurozone.

The current V4 conundrum

It says a lot about the state the Visegrad Group is in that Fico later clearly declared that Slovakia’s interests coincide with those of the eurozone.

Similarly, the traditionally Eurosceptic Czech Republic is unlikely to miss the opportunity to join the Germany and France-led core Europe no matter what the composition of its new government will be in the autumn.

They obviously wish to have a say at the most important forums, unless, to paraphrase Viktor Orban, “they want to be served for dinner”.

In contrast, Orbán and Jaroslaw Kaczynski missed their window of opportunity for the “cultural revolution”. On the contrary, the recent measures taken by the EU’s executive body will give impetus for the Hungarian government’s anti-EU campaign, which shifted into high gear with the national consultation entitled “Let’s stop Brussels,” and even more so after the resolution approved by the European Parliament on the preparations for the Article 7 procedure against Hungary.

Viktor Orban said that the issue of migration is the main reason for the attacks on Hungary, and “everything else is irrelevant”. Regardless of the fact that even the leader of the European People’s Party, Manfred Weber considered the Hungarian “national consultation” as anti-European and the Hungarian government keeps promoting that the Hungarian people have consistently supported its efforts “to stop Brussels”.

Unfulfilled expectations of the not so young rebel

The most important source of the Hungarian prime minister’s political capital was that he looked like a successful representative of the new wave of right-wing populists. In fact, his political stunt failed with the new wave of energy for mainstream politics. When Angela Merkel was asked what she thought about Macron’s metaphor of the EU not being a supermarket for CEE to freely pick-and-chose what components it wishes to include in its policy shopping cart, the German chancellor said she generally agrees with the French president, and she is happy that Brussels is exerting pressure on reluctant member states.

This is in line with a German position paper published in May which suggests that there should be a connection between the compliance with the rule of law and projects financed through the EU budget. This definitely shows a shift from Merkel’s previous, more cautious approach. As a point in fact, in just this past spring, the chancellor did not support the idea that reluctant member states should be disciplined by measures involving fiscal tools.

The governments of the V4 need to keep this in mind as the European Commission’s discussion paper published on June 28th confirmed that the EU, partly due to Brexit, is getting ready for the most comprehensive European Union budget reform ever, potentially involving setting tougher requirements for the distribution of EU funding.

The German government came up with a number of proposals unlikely to be supported by the Visegrad Group: for example, the German administration suggests that more developed regions should be allocated funding to meet new challenges such as the integration of refugees and solving demographic problems. Additionally, it was suggested that the country-specific recommendations issued within the framework of the European Semester should be tied even more closely to structural funds, which has since been confirmed by German European Commissioner for Budget and Human Resources Gunter Oettinger.

Clearly Germany does not believe Hungary plays an important enough role on the European stage for Berlin to support the Article 7 procedure against the Orban regime, which was exemplified by the European Parliament’s vote on this issue where only two out of the 34 German EPP representatives voted for the resolution condemning Hungary, while five abstained.

Similarly, the EU is lacking the tools to manage the situation in Poland as well.

Berlin back in the game

The real question is whether Berlin will show more willingness to discipline noncompliant member states with economic tools, or to explain the economic necessity derived from Brexit and the migration crisis for considering the interests of net contributors even more seriously at the expense of reluctant members during the budget negotiations.

It is telling that despite Commission President Jean-Claude Juncker’s previous objections “enfant terrible” member states could for the first time feel the effect of their destructive approach on their pockets.

In the end, the V4 (currently more of a V2+2) will not be able to represent their interests in a unified manner around solidified position against the refugee quota system. The question is only when the cracks will be too obvious to ignore.

Photo (c) EU

Edit Zgut is foreign policy analyst at Political Capital.