BRUSSELS – European Union leaders made no progress Thursday toward resolving a dispute to unlock a 1.8 trillion-euro ($2.1 trillion) budget and pandemic recovery package which is held up by Poland's and Hungary's rejection of a linkage between rule of law standards and budget disbursements.
Instead, they were happy to hand the work over to veteran powerbroker Chancellor Angela Merkel of Germany and likely push it toward another summit next month, only weeks before the new 7-year budget is to come into force on Jan. 1.
Merkel said plenty of work was left to reconcile the veto-wielding recalcitrant couple with the rest of the bloc which is eager to start spending its way out of the worst economic downturn in the bloc's history.
“We have a duty to try and find a way," Merkel said, but added that even though time was pressing, “we are still very much at the beginning."
During a carefully choreographed 20-minute session at the start of their video summit, the leaders from the opposing sides stuck closely to their positions but did not acerbate the existing tensions.
European Council president Charles Michel, who chaired the meeting, acknowledged it will be a tall order to break the stalemate, adding he will join Merkel in looking for solutions with all the parties involved before next month's EU summit.
“The European Union's magic is its ability to find solutions even when one believes it's impossible," Michel said.
The deal for the budget and recovery fund looked well on track to enter into force in January — until Hungary and Poland vetoed it this week. They objected to a new “rule-of-law mechanism” that would allow the bloc to deny funds to countries that violate democratic norms — something that both Poland and Hungary have been accused of doing.