Poland threatens to veto EU 2021-2027 budget over rule of law condition

By Jan Strupczewski

BRUSSELS (Reuters) - Polish Prime Minister Mateusz Morawiecki has sent a letter to European Union institutions threatening to veto its 2021-2027 budget if access to EU funds is made conditional on governments respecting the rule of law.

The letter, similar to one sent earlier by Hungarian Prime Minister Viktor Orban, was sent to European Commission President Ursula von der Leyen, the chairman of EU leaders Charles Michel and the German presidency of the EU.

A Commission spokesman confirmed receipt of the letter and the gist of its contents.

Morawiecki wrote on Facebook that in the letter he explained Poland could not accept the link between access to EU funds and respecting the rule of law because the mechanism was based on arbitrary and politically motivated criteria.

Accepting them would lead to agreeing to double standards in treating EU members and that finally such a clear link was not part of the agreement EU leaders reached in July, he said.

"Therefore Poland cannot accept this version of the mechanism (linking the rule of law and EU funds) which would lead to the primacy of political and arbitrary criteria over a substantive assessment," Morawiecki wrote.

Both Poland and Hungary are under EU investigation for undermining the independence of courts, media and non-governmental organisations and therefore run the risk of losing billions of euros in EU funding if the link is there.

The conditionality was a key concern for the European Parliament and several north European countries such as the Netherlands, which had even stricter conditions.

Poland and Hungary have the power to veto the long-term budget and prevent any member state getting EU funding.

But this would also harm both countries, which are big net beneficiaries of the budget where many supporters of the ruling nationalist parties depend heavily on direct EU subsidies.

The regulation linking EU payouts to respect for the rule of law to is likely to be voted on by ambassadors of EU countries next week, and can be passed by a so-called qualified majority.

But the budget and the attendant enabling law -- the Own Resources Decision -- do require unanimity. Both are likely to be voted on in the next few weeks, perhaps even next week.

(Additional reporting by Alicja Ptak in Warsaw; Reporting by Jan Strupczewski; Editing by Kevin Liffey)