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Long-Term EU Budget Plan Would Punish 'Rule Of Law Deficiencies'

The governments of Polish Prime Minister Mateusz Morawiecki (left) and Hungarian Prime Minister Viktor Orban could face EU pressure.

BRUSSELS -- The European Commission has proposed a larger multiannual budget for the years 2021 to 2027, despite Brexit. But the plan has a new mechanism that could punish countries that fail to respect the rule of law.

The proposed budget of 1.28 trillion euros ($1.53 trillion) would be greater in real terms than the current 1.09 trillion euros for the years 2014 to 2020. The 2021-27 plan would constitute about 1.11 percent of the EU's economic output as supposed to the current 1.03 percent.

Despite next year's expected departure from the EU of Britain, which contributes about 10 billion euros to the budget annually, the European Commission hopes to boost spending on foreign aid, eurozone stability, unemployment compensation, joint defense, and frontier guards.

But the future budget plan proposes 5 percent cuts in two key areas -- agricultural subsidies and a cohesion policy for transferring funds from richer to poorer areas of the bloc.

It also foresees the possibility of new funds from taxes on digital services, plastic waste, and carbon emissions.

The European Commission hopes EU member states will reach unanimous agreement on the new long-term budget ahead of European elections in May 2019. But net contributors may oppose greater payments to Brussels.

Hungary and Poland could also object to the newly proposed mechanism that would reduce access to EU funds for what the commission calls "rule-of-law deficiencies."

Decisions on such cases would be proposed by the commission and adopted by the council by qualified majority instead of requiring a unanimous vote.

That would put pressure on Budapest and Warsaw, which have both been in disputes with Brussels over legislative changes to their national legislation.

For example, in the case of Poland, the disbursement of EU funds could be withheld over Warsaw's treatment of its judiciary.

Polish Deputy Foreign Minister Konrad Szymanski said in Warsaw on May 2 that Poland will oppose any EU budget plan that doesn't balance the needs of its various member states.

"The way to full compromise over the EU budget is still very long," Szymanski said.

With reporting by Rikard Jozwiak in Brussels, Reuters, and AFP
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