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Courtesy of the Telegraph
In March 2017, after three years, the European Commission gave Hungary the go-ahead to expand its Soviet-era nuclear power station at Paks, 75 miles from its capital, Budapest. The deal with Russia was worth €12.5bn (£11bn), for which the Kremlin offered 100pc of the financing required. Hungarian Prime Minister Viktor Orban and Russian President Vladimir Putin settled the deal in person.
This deal – a tactical defeat in the long-running battle between the EC to make its member states less dependent on Russian energy – is not the “nuclear option” that dominates the headlines. Instead, eyes have turned to Poland as the schism between the harder-Right governments of central and eastern European nations and western Europe’s more liberally governed France and Germany grows deeper.
judicial reform bill threatens the independence of the judiciary, and goes against the principles of separation of powers required by EU membership, according to Brussels. Donald Tusk, president of the EU Council, even suggested the bill was devised to follow a “Kremlin plan”. It made for an uncomfortable state visit for Theresa May, as she sought to balance building relationships with the Polish regime, with maintaining positive momentum in Brexit negotiations. This tale of two nuclear moments - Hungary’s power station and the triggering of Article 7 of the EU Treaty, which could ultimately strip Poland of its voting rights in Brussels - represent more significant threats to the integrity of the European project than Brexit, some economists argue.
“The risk of fissures in the EU, particularly on its eastern flank, are a bigger worry than Brexit. There’s a growing sense that Brexit is an issue that’s manageable. The far bigger issue in the EU is if they try to come down too hard on Poland,” says Chris Beauchamp, chief market analyst at IG Group.
These splits, Beauchamp argues, are worrying signs that should occupy the attention of EU leaders “quite a lot [more]” than the UK’s imminent departure. Trade alone will not solve these EU east-v-west rows and neither will the healthy levels of economic growth, it seems. The central and eastern states of the EU have been particularly strong performers among the EU28 this year. Swiss bank UBS estimates that in 2017 GDP grew by 4.2pc in Poland and 3.7pc in Hungary, but that shared economic prosperity has not translated into political unity. It’s difficult to say how far it might spiral out of control – whether a bigger spat will develop and Poland will dig in or fall in line. They feel very backed into a corner by the rest of the EU,” Beauchamp says.
Migration and asylum have been the greatest issues straining relationships between new EU member states and the western old-guard. “Politics has raped European law and values,” Peter Szijjarto, Hungary’s foreign minister, told a news conference in September, after the European Court of Justice dismissed Hungary and Slovakia’s legal challenge to the asylum seeker quota system. However, these existing cracks may come to a head in 2018, not because of migration, or even elections, but because of EU spending plans.
