Poland and Hungary have blocked the EU's 1.8 trillion euro (1.60 trillion pounds) plan to recover from the recession caused by the COVID-19 pandemic because the money is conditional on respecting the rule of law.

The planned meeting between Morawiecki and Orban was announced on Twitter by Polish government spokesman Piotr Muller, who added that the main topic will be "ongoing budget negotiations in the European Union".

The veto decision by Poland and Hungary, both beneficiaries of the recovery plan, is likely to delay hundreds of billions of euros in funds at a time when the 27-nation bloc is facing a second wave of COVID-19 and a double-dip recession.

Both countries are under EU investigation for undermining the independence of courts, media and non-governmental organisations. With the recovery fund conditions in place, the two nations risk losing access to tens of billions of euros.

On Thursday EU leaders agreed in a virtual summit to allow more time for an agreement.

(1 British pound = 1.1241 euros)

(Reporting by Alan Charlish; Editing by David Goodman)