Brussels Edition: The Battle for Europe's Money

Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

The fight over Europe's money is about to get even uglier. Hungary has already rejected a proposal to tie the disbursement of 1.8 trillion euros from the bloc's new budget and jointly-financed recovery fund to rule-of-law standards. It's also demanding that the EU official charged with upholding those norms be sacked for calling the country a "sick democracy." To add fuel to the fire, the Commission will today release a damning report about judicial independence. The document alleges that "prosecution of high-level corruption" is "very limited" in Hungary, further exacerbating fears among richer governments that they risk bankrolling Viktor Orban's cronies. If there's no solution to the spat, the threat of delays in the flow of much-needed EU funds to countries such as Italy and Greece will become very real. Unless someone is bluffing.