Is Merkel surrendering to Poland and Hungary?

Angela Merkel has done it again: She’s “merkeled.” In German, that neologism means to hedge, delay, dilute and fudge — as the eponymous German chancellor is wont to do. There’s much to be said for this elastic style of politics, especially in the labyrinthine European Union. Merkel’s latest fudge, however, will weaken and undermine the bloc, and tarnish her legacy.
The compromise was struck between her government, which currently holds the EU’s rotating presidency, and two rogue member states, Hungary and Poland. They’ve been threatening to veto the bloc’s seven-year budget and a pandemic recovery fund, worth a combined 1.8 trillion euros ($2.2 trillion). Budapest and Warsaw were holding the package hostage because they wanted to remove a mechanism that ties EU funds to observance of the rule of law.
Here’s the fudge: The mechanism is still there in the text, unaltered, so the EU can say it stayed firm. But it’s been been neutered with additional “interpretations” so that it’ll almost certainly never be applied. That in turn allows Hungary and Poland to declare victory and let the EU’s money flow — not least, to them.
The background is that Hungary for a decade and Poland for half as long have been whittling away at fundamental principles of liberal democracy, to which they acceded when they joined the EU in 2004. Stealthily and cynically, their populist governments have been infringing on judicial independence and more — enough for Brussels to launch formal proceedings against them under Article 7 of the European treaties.
That process, however, is notoriously toothless, because sanctions against any member state would require a unanimous vote by the other 26, and Budapest and Warsaw have each other’s back. So the Netherlands and a few likeminded countries, as well as the European Parliament, insisted on an additional mechanism to be included in a historic budget-cum-stimulus deal struck in July. Almost as soon as that clause was written, the usual haggling broke out about what it could mean. Euro-hawks claimed it was straightforward: No rule-of-law, no money. Hungary and Poland threatened to sink the whole deal.
So the merkeling started. In a first round of compromise, the wording was diluted so that the mechanism became almost useless. It now applies only to those rule-of-law breaches that directly corrupt the use of money from Brussels. It no longer has any bearing on all other violations, from cherry-picking judges to harassing journalists, academics or opponents.
Even this gesture from Brussels, astonishingly, wasn’t enough to appease Budapest and Warsaw. Hence Merkel’s final fudge: On top of the mechanism’s previous dilution, there’s now also the prospect of indefinite delay. The clause won’t kick in until Hungary and Poland get a chance to take it to the European Court of Justice in Luxembourg. Those judges will take their sweet time, and a decision isn’t expected until mid-2022. Conveniently, this will come after Hungary’s parliamentary election, slated for early 2022.
Viktor Orban, Hungary’s prime minister, can therefore keep playing his cynical game of pocketing the European cash that buoys his submerging economy while running a quasi-autocracy. His country is a big net beneficiary of the EU budget, and stands to get another 6.2 billion euros from the pandemic stimulus fund he’s so graciously allowing now. Poland can expect even more: It’s the single biggest net recipient of European money, and would get 23.1 billion euros on top from the stimulus.
—Bloomberg