The European Union plummeted into political crisis Monday when two member states blocked its coronavirus recovery plan after objections over a provision conditioning economic aid on a country's respect for democratic norms.
The historic €750 billion (or $888 billion) relief package, part of the EU's overall $2.1 trillion budget, would disperse funds to the organization's 27 member states.
The vetoes issued by Hungary and Poland will prevent, at least for the time being, an infusion of economic stimulus into a continent struggling to contain the coronavirus amid its worst recession since World War II.
"We have already lost a lot of time in view of the second pandemic wave and the severe economic damage," said Germany's ambassador to the EU, Michael Clauss, who chaired Monday's meeting where Hungary and Poland vetoed the budget agreement, the BBC reported.
"It is crucial that the entire package is now adopted quickly, otherwise the EU will face a serious crisis," he added.
Over the past decade, Hungary and Poland have faced international scrutiny for political encroachment into their media and judiciary systems. Both countries remain under investigation by the EU for violating its established democratic norms.
Melissa Hooper, director of human rights and the civil society program at Human Rights First, told ABC News that it is not surprising that Poland and Hungary blocked a budget tied to a provision enshrining respect for rule of law.
"It's a messaging tool that they are trying to communicate to the EU, that they don't want the EU interfering with their internal proceedings or internal policymaking with respect to their judiciaries, in respect to the way they're treating media -- essentially their treatment of their own democratic institutions," she said.
Both member states set their clear opposition to the plan before Monday's vote on the budget with the spokesman to Hungarian Prime Minister Viktor Orban, tweeting, "We cannot support the plan in its present form to tie rule of law criteria to budget decisions."
Poland called the democratic norms provision "an excuse" to give EU authorities more power over the country's affairs. "It is really about institutional, political enslavement. For a radical limitation of sovereignty," Polish Justice Minister Zbigniew Ziobro said Monday at a press conference.
Despite Hungary's and Poland's vetoing of the EU budget, both countries significantly depend on the bloc's economic resources. In 2018, the EU spent nearly $7.5 billion in Hungary, the equivalent of almost 5% of the nation's GDP. That same year, Poland received over $19 billion from the EU, or nearly 3.5% of its GDP.
While EU member states are desperately in need of the organization's money to fund their COVID-19 recovery, many national leaders have stressed the importance of tying a respect for rule-of-law provision to the budget.
"Upholding the principles of the rule of law is an absolute necessity," Austrian Chancellor Sebastian Kurz said in a press conference following the vote.
Hooper also applauded the EU for conditioning economic aid on a rule-of-law provision to the budget, saying the organization has "lagged" in confronting Hungary and Poland over their alleged undermining of democratic norms.
"I think they should have done it a long time ago. I think that the way they're doing it is actually really smart because the way that it's supposed to function is that every country will have a rule of law review. This isn't supposed to be a punishment for those countries that are acting badly. It's supposed to be kind of like a health check," she told ABC News.
However, Hooper said that the United States and the outgoing Trump administration carried some responsibility in encouraging the current EU impasse.
"Essentially, what [Hungary and Poland] are saying with this veto is, 'We don't like the rule of law. If you're going to make sure that rule of law operates in our countries, we don't want to play,'" Hooper said.
"And I think that the U.S. government under the Trump administration has encouraged that stance, unfortunately, with personal relationships between the president and Orban and the president and the [Polish] government. And so unfortunately I think the U.S. can take some blame in encouraging this internal strife within the EU," she added.