Poland and Hungary have blocked the EU’s ‘green recovery’ deal, casting doubt over the financing of the transition to a low-carbon economy.
Hungary and Poland have plunged the EU into a deep crisis by blocking its £1.65 trillion ‘recovery budget.
On Monday, the two countries blocked the EU’s 2021-2027 budget and the green recovery plan, worth a combined 1.85 trillion euros (£1.65 trillion), because access to the funds would be conditional on respecting the rule of EU law.
In July EU leaders proposed a European Green Deal and a climate budget of €550 billion (£500 billion), half a trillion of green handouts to be doled out to ‘climate’ projects and green subsidy farmers over the next seven years – the largest single climate pledge ever made.
As a result of the current crisis, however, EU leaders may have to delay a final decision on its climate budget and a stricter 2030 climate goal.
The European Union may have to delay a decision on a stricter 2030 climate goal as a quarrel over strings attached to a jointly financed stimulus package risks spilling over into other policy areas.
Leaders of the bloc are supposed to discuss the draft European Climate Law, which would commit their countries to climate neutrality by 2050, at a Dec. 10-11 summit. But one key plank in the so-called European Green Deal, the target of reducing emissions by 55% compared to 1990 levels by the end of this decade, has yet to garner the required unanimous backing, according to an official familiar with the deliberations.
Reaching an agreement on the target, which looked challenging to begin with, appears trickier following a spat over the bloc’s budget for the next seven years and its economic recovery package funded by jointly backed borrowing. Poland and Hungary have blocked a deal, casting doubt over the financing of the transition to a low-carbon economy. Their move is likely to dominate next month’s summit, leaving little room for discussion on climate goals, the official said.
A potential delay could keep businesses from gaining clarity as they prepare for unprecedented changes under the European Green Deal. It could also shake trust in Europe’s ability to realize major initiatives, and have knock-on effects on secondary legislation expected in coming months in areas ranging from transportation to environmental levies.