Do or die time for the Hungarian presidency

Listen to this article


It is no secret that in the waning days of their European Union presidency, the Hungarians are going for broke trying to broker a deal on the “six pack” – the sprawling legislative package that would provide new tools, including fines, to force member states to rein in excessive spending and reform their economies.

The six pack is one of the bloc’s chief responses to the debt crisis, and pushing it over the finish line would surely rank as the high point of Hungary’s first ever turn in the EU’s big chair. (Depending on whom you ask, it could also mark an historic moment in the march toward an ever-closer European union.)

While the chances of finding common ground between member states, the European commission and a muscle-flexing parliament seemed remote just a few weeks ago, the Hungarians are not ready to give up just yet. The next hurdle comes Tuesday, when Hungarian diplomats will present a possible compromise to EU finance ministers at a dinner in Brussels.

“No one can be sure, of course, because we have important questions which are still open. [But] I am optimistic, to some extent, that we have a very good chance to have an agreement,” Andras Karman, Hungary’s chief negotiator told Brussels Blog after a final bargaining session with the parties on Thursday.

Interpret that glass-half-empty statement as you will. Karman attributed the progress to a few key concessions granted by the member states this week. One is to support fines for countries that falsify their economic statistics – a penalty that might henceforth be called the “Athens clause.”

Member states also agreed that those that fail to institute economic reforms should be required to deposit money in an interest-bearing account as a first penalty before they are hit with a formal fine. Those fines would become automatic unless there was a qualified majority vote by member states to overturn it.

“This is a very substantial move by the council toward the parliament,” Karman said.

But big divisions remain: Member states are still insisting that an over-spending government have more wiggle room before a disciplinary process is set in motion. Under the parliament’s voting scheme, diplomats fear that such a procedure could be set in motion with the approval of just Germany and a few other countries. They would prefer an overwhelming majority, instead.

They are also dead-set against parliament’s desire to force non-complying governments to appear before a parliamentary committee to explain themselves. That last point is a reminder of the habitual over-reaching by newly-empowered MEPs that has so irked the other Brussels’ institutions over the last 18 months.

Still, in spite of fears that MEPs like Guy Verhofstadt, the leader of the centrist Liberals, would dig in their heels and blow the whole thing up, Karman is still sanguine. “They are tough partners in the consultation,” he said. “But on the other hand, I see that they are aware of the fact that it is very important for Europe to have the implementation of these regulations.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from and redistribute by email or post to the web.