EU Holds Covid Funds for Hungary, Poland in Rule-of-Law Dispute - Bloomberg

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European affairs ministers will be briefed today about “significant developments” on the rule of law in Poland and Hungary. Ministers will discuss next steps in two procedures targeting the two member states which could lead to the suspension of their EU voting rights. The standoff means the disbursement of pandemic aid is unlikely this year, and French President Emmanuel Macron signaled in Budapest yesterday that Hungary may not see the money before April. Still, he left the door open, saying that a path of dialog and respect was needed to push forward the “existential” issue of adhering to the bloc’s democratic values. Poland’s government has tried to walk back warnings from Justice Minister Zbigniew Ziobro that his country could stop paying into the EU budget, but he’s refusing to meet conditions that would get the money flowing. His intransigence already led to a record 1 million-euro daily fine from the EU’s top court.

What’s Happening

Gas Stop | In a setback to Russia, the EU is planning a hard deadline to end long-term contracts to import natural gas as part of its green shift. The bloc’s executive arm wants to prevent such contracts from being extended beyond 2049 in a sweeping overhaul of its energy markets, according to documents we’ve seen. The Commission will also propose measures to strengthen supply security.

Eastern Summit | The European Council will meet tomorrow with leaders of the Eastern Partnership (Armenia, Azerbaijan, Georgia, Moldova and Ukraine). The EU is ready to offer tailor-made cooperation to them depending on how far they’re willing to go to bring their countries closer to the bloc’s standards, a senior EU official said. The Commission has offered 2.3 billion euros to help mobilize 17 billion euros in investments.

Booster Needed | The omicron variant dented the protection afforded by two doses of BioNTech/Pfizer and AstraZeneca vaccines, researchers from the University of Oxford said yesterday. The new strain showed a substantial drop in neutralizing antibodies in blood samples of fully-vaccinated people. On Thursday, EU leaders are expected to discuss the need to speed up booster campaigns.

Tech Crunch | The European Parliament’s lead committee for writing new tech rules passed measures last night that would curtail targeting ads to minors and completely ban so-called “dark patterns,” where platforms push people to consent to being tracked online. The rules still face challenges in the plenary from MEPs who want to push harder especially against targeted ads — a move similar to what we’ll see today during a plenary vote on the Digital Markets Act.

In Case You Missed It

Island United | Northern Ireland and the Republic of Ireland see themselves as a united country within the next 10 years, according to polls conducted in both parts of the island. South of the border, 62% of people favor Irish unity, though the majority view it as a long-term project, according to a poll for the Irish Times/Ipsos MRBI. A separate poll by Lord Ashcroft in Northern Ireland showed a majority think there should be a referendum on unification some time in the future, and two thirds thought it would win.

Minister Guilty | Inger Stojberg, former Danish immigration minister, was sentenced yesterday to 60 days of unconditional imprisonment after she was found guilty of breaching her ministerial duties by illegally separating refugee couples. Denmark separated 23 refugee couples upon arrival on her order, later deemed unlawful by the parliament’s ombudsman. It was the country’s first impeachment trial in almost three decades.

New Government | Bulgarian lawmakers yesterday supported a new government led by a Harvard-educated, anti-corruption advocate Kiril Petkov. The 41-year-old entrepreneur’s party won after two inconclusive elections in April and July failed to end a political standoff. Petkov teamed up with other anti-sleaze factions to form a four-party coalition to take the reins of the member state ranked as the EU’s most corrupt country.

Sanctions Approved | EU foreign affairs ministers yesterday adopted sanctions against Russia-based private military firm Wagner Group. The EU imposed restrictive measures on the company, eight individuals and three entities connected to the firm in response to their actions in conflict zones. The bloc accuses the group of fueling violence, looting natural resources and intimidating civilians in violation of international law.

Hawk Remains | Werner Gatzer, Germany’s most powerful civil servant, was retained as a deputy finance minister, a title that underplays his role in deciding how much the German government spends. For some 15 years, he orchestrated Germany’s balanced-budget policy — known as the “black zero”— and even told Olaf Scholz that he wouldn’t get billions of euros in federal funds for a bid to host the Olympics, when the chancellor was mayor of Hamburg.

Chart of the Day

The ECB’s biggest decision this week is to decide if it can still call the current inflation spike “transitory.” A wrong call would have grave consequences, as the euro-area economy struggles to deal with resurgent Covid-19 infections, record energy prices and supply-chain bottlenecks. Federal Reserve Chair Jerome Powell has already dumped the transitory description, and many others have disputed the term’s validity. The ECB may have reasons to keep it — beyond fear that a change could lead to a damaging market reaction. In its Thursday decision, the Governing Council will be able to lean on new forecasts through 2024.

Today’s Agenda

All times CET

• 8:30 a.m. Arrivals of the European affairs ministers meet in Brussels
• 3:30 p.m. Briefing following the European Commission college meeting in Strasbourg, with Vice President Frans Timmermans and commissioners Nicolas Schmit and Adina Valean.

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— With assistance by Jillian Deutsch

source: https://www.bloomberg.com/news/newsletters/2021-12-14/eu-holds-covid-funds-for-hungary-poland-in-rule-of-law-dispute

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