Poland ready to drop EU budget veto for EU summit declaration on rule of law

By Jan Strupczewski

BRUSSELS (Reuters) - Poland would be ready to drop its veto to the EU's 1.8 trillion euro financial package if EU leaders endorse an explanatory declaration on the link between EU funds and the rule of law, Poland's deputy Prime Minister Jaroslaw Gowin said on Thursday.

Speaking to reporters after meeting several top EU Commission officials Gowin said Poland realised that a veto to the EU budget for 2021-2027 and the fund would hurt Poland and other EU countries financially.

Poland and Hungary are holding up the 1.1 trillion euro ($1.3 trillion) long-term budget and a special 750 billion euro coronavirus recovery fund for all 27 EU countries because they do not want access to the money to be conditional on them respecting the rule of law.

Both countries are under EU investigations for undermining the independence of courts, media and non-governmental organisations, so they risk losing tens of billions in funds.

"We all realise that in case of a Polish or Hungarian veto, there would be a provisional budget which, contrary to some voices in the Polish public debate, would not be good for Poland and not good for every other 26 member states," Gowin said.

"Therefore I believe that it is in the interest of all ... to find a good compromise. Such a compromise is possible ... through a binding declaration interpreting (the rule of law regulation)," he said, adding such a declaration would have to be adopted by EU leaders.

"The interpretative declaration could be ... a clear statement from the European Council that the conditionality rule would not be used to exert unjustified pressure on individual member states in areas other than the proper use of EU funds," Gowin said.

Gowin said that top Commission officials he spoke to on Thursday made clear that if Poland and Hungary stuck to their veto, the EU would have no choice but to bypass them through a deal on the recovery fund made among the 25 other countries.

"A possible veto would not only trigger the provisional budget, but also something that my interlocutors called Plan B ... which is some form of cooperation between the 25 other countries," Gowin said.

"The Polish economy is doing very well and of course next year we can survive without the part of the funds that would be slashed by the provisional budget, but why survive without EU funds if there is still room for agreement and I believe this agreement will be reached," Gowin said.

(Reporting by Jan Strupczewski. Editing by Jane Merriman)