Hungary, Poland Risk Exclusion From EU Recovery Fund

PARIS (Reuters) - The European Union will leave Poland and Hungary out of its economic recovery plan if the two countries continue to resist efforts to link the disbursement of 1.8 trillion euros of funds with rule-of-law provisions, a French cabinet minister said.

European Affairs Minister Clement Beaune said such a move was legally complex, but possible.

"Our position is clear: we will not sacrifice either the recovery or the rule of law," Beaune told the Journal du Dimanche. "There is no question of reviewing the mechanism which links the two."

Hungary and Poland have for weeks blocked the release of funds from the EU's seven-year budget and a post-COVID-19 development fund, cash sorely needed by member states trying to emerge from their coronavirus-induced recession.

Beaune said the two eastern members of the bloc stood to lose billions of euros in financing if they dug their heels in.

"It's not a threat but the direct consequence of the absence of a new budget if they maintain their veto on the package," he said.

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