“It will come as no surprise that at yesterday’s European Council summit, Hungary was forced to withdraw and stop blocking financial aid to Ukraine; “It is not entirely clear whether, in addition to the ‘stick’, some ‘carrots’ were also used,” said PiS MEP Bogdan Rzońca in an interview with PAP.
There were no surprises. As expected, Hungary was forced to withdraw and stop blocking financial aid to Ukraine. At this point it is not entirely clear whether, in addition to the ‘stick’ – the threat of disenfranchisement and the unofficial threat reported by the press to ‘destroy’ the Hungarian forint – a ‘carrot’ was also used.
— said Rzońca, member of the European Parliament’s Committee on Budgets.
““Hungary has been misled many times by the EC.”
What we do know is that the European Commission has agreed to emphasize in its final communication, recalling the text of the 2020 Summit Conclusions on the Conditionality Mechanism, that the assessment of the rule of law should be “objective, fair, impartial and ‘fact-based’ and guarantee ‘non-discrimination’ when activating the EU funding blocking mechanism for national capitals. It is difficult to say to what extent this addition will actually influence the Commission’s actions towards Hungary, but looking at current practice it is rather difficult to be optimistic. Hungary has been misled by the Commission many times, so it is more likely that adding this reservation is just a blink of an eye.
– said the Polish politician.
IFF increased by 64.6 billion euros
As he highlighted, the amounts finally agreed as part of the review of the Multiannual Budgetary Framework (MFF) are also no different from those expected. The following new expenditure was approved: €50 billion for the instrument for Ukraine (€17 billion in grants and €33 billion in loans), €2 billion for migration and border management, €7.6 billion for “neighbourhood and world” expenditure (including expenditure on Middle Eastern refugees, the Southern Partnership and assistance to the Western Balkans), €1.5 billion for the European Defense Fund (EDF) under the new STEP instrument, €2 billion for the Flexibility Instrument and 1.5 billion euros for the Solidarity Instrument and Extraordinary Aid Reserve.
In total, the IFF will be increased by 64.6 billion euros. Where will this money come from? The EU will have to borrow EUR 33 billion (out of EUR 50 billion) which will go to Ukraine as part of loans on the financial markets themselves. Ukraine should – in theory – return this money to us. The conclusions do not address the problem of how we will finance this loan if Ukraine cannot repay it, which is unfortunately very likely. So we have EUR 33 billion, which is not covered by revenues at all
– noted Rzońca.
€10.6 billion must be redistributed from existing funds.
Typically these will be “dead” amounts allocated to individual funds but which can no longer be used for their original purpose. Brexit reserves, or amounts already written off. To put it inelegantly, there is some “magic” and accounting tricks here. To put it more diplomatically, we should talk about ‘increasing flexibility’
– explained the MEP.
It is unclear how the missing 21 billion euros should be financed
He pointed out that the amount of EUR 21 billion, which is less than EUR 64.6 billion, is not mentioned at all in the summit conclusions.
In the table in question it only functions as “fresh money”. These are probably at least partly calculations and estimates of income: contributions and the so-called traditional own resources. We can only guess that these calculations were prepared so that the “result was good” and consistent with the needs. Unfortunately, there is a very wide margin of freedom and speculation in this area, as both GDP and VAT estimates are based on forecasts of the economic situation – and recent years have proven that it is extremely easy to make mistakes in such forecasts. to make. If the estimates are incorrect and the expenditure has been incurred, the 21 billion euros or part thereof will also have to be borrowed. And postpone the repayment problem until later
– predicts Rzońca.
What is particularly important, according to him, is that the “new money” will not come from new own resources.
The conclusions on new own resources very mysteriously state that “the Union will work towards their introduction”, and that these will be intended for the early repayment of existing loans to the Next Generation EU Fund. It is of course good that the EU wants to repay the loan as quickly as possible, but if we put it this way and use current revenues not to finance current needs, but to finance old claims, we may get used to having to pay for everything. finance. “backward”, that is, on credit. It would not be good if such a practice became a permanent part of EU spending rules
– concluded the Polish Member of the European Parliament.
READ ALSO:
– Rzońca: It is very likely that the Hungarians will get an offer they cannot refuse – accept the reform or deprive them of their voting rights
— The EU threatens Hungary with the destruction of its economy. Brussels wants to use blackmail to force permission for financial aid to Ukraine
PAP/rdm
Source: wPolityce