Hungary plans to veto the European Union's 2021-27 budget and its post-COVID recovery scheme, and Poland could follow suit as both object to a proposal to make funding conditional on member states' adherence to the rule of law.
Nationalist governments in Budapest and Warsaw have been at odds with European partners for years over a perceived erosion of democratic standards, and this has sidelined Hungarian Prime Minister Viktor Orban and his Polish allies in the bloc.
The permanent representatives of EU member states will convene in Brussels on Monday afternoon to discuss the budget. According to a Hungarian news outlet, the German EU presidency will ask governments to express their stance on the proposed funding conditionality.
Orban previously sent a letter to EU institutions threatening to veto the budget, and Polish Prime Minister Mateusz Morawiecki wrote a similar letter last week.
Hungarian government spokesman Zoltan Kovacs said Hungary was attending that meeting with a clear mandate from its parliament, which said in July that it should not accept such conditions in the talks.
Asked whether that meant Hungary would veto the 1.1 trillion euro ($1.3 trillion) budget and the 750 billion euro Own Resources Decision unless the rule of law conditions were reconsidered, Kovacs said:
"Your deduction is correct."
In Warsaw, Zbigniew Ziobro, Poland's Justice Minister and the head of the junior coalition United Poland party, said this was "the decisive moment for what will happen in Europe... when Poland can declare a veto."
He said the move would be useful "to block this political project designed to limit Poland's sovereignty... I am convinced that, similarly to Prime Minister Orban, Prime Minister Morawiecki will use this right."
The EU's top forum decided over the summer that it would tie any future fund disbursement to respecting the democratic standards incorporated in the EU's founding treaty, such as the freedom of courts, the media and education, all of which have come under attack by Orban and his Polish ally Jaroslaw Kaczynski in recent years.
Orban's Fidesz party has been suspended by the European People's Party, the bloc's conservative umbrella group for right-wing politicians, and the European Parliament has started a procedure to suspend Hungary's voting rights in the bloc in response to its democratic shortcomings.
The Hungarian leader, who is building a self-styled "illiberal democracy", has rejected accusations that he is undermining the rule of law, and says Brussels is guilty of double standards.
($1 = 0.8446 euros)