Agreement reached on mechanism tying EU funding to rule of law

EU countries that disrespect the rule of law are set to risk losing access to EU funds after European Parliament and Council negotiators struck a provisional deal on Thursday.

MEPs strove to ensure that the mechanism’s provisions would not be weakened during negotiations with member states, and co-rapporteurs Petri Sarvamaa and Eider Gardiazabal Rubial argued that this aim was achieved.

“We did not compromise on the values: we made sure that the rule of law is seen in the context of all the EU values enshrined in the treaties, such as independence of judiciary,” Sarvamaa, a Finnish MEP aligned with the European People’s Party, said. “Every breach of the rule of law will be covered by the mechanism: from individual breaches to systemic or recurrent breaches for which no mechanism existed so far.”

“European citizens expect us to condition the disbursement of EU funds to the respect of rule of law. The mechanism agreed today does exactly that,” Gardiazabal Rubial, a Spanish MEP aligned with the S&D group maintained.

Broader concept of rule of law breaches

MEPs ensured that the new law would not only apply to the direct misuse of EU funds, but also to systemic aspects linked to EU fundamental values such as freedom, democracy, equality and respect for human rights – including the rights of minorities. They also insisted that tax fraud and tax evasion should be considered possible breaches and secured the inclusion of a specific article clarifying the possible scope by listing examples such as threatening the independence of the judiciary, failing to correct arbitrary or unlawful decisions and limiting legal remedies.

The EP’s negotiators also emphasised the need to retain a strong preventive aspect for the mechanism. They succeeded in securing the Council’s approval that it should not only be triggered when a breach is shown to directly affect the budget, but also when there is a serious risk that it may do so.

Protecting final beneficiaries

However, MEPs also sought to ensure that those dependent on EU support – such as students, farmers or NGOs – were not punished for the actions of their government. They thus insisted that they can file a complaint to the European Commission which would assist them in ensuring that they receive the EU funding due.

“For us it was crucial that final beneficiaries won’t be punished for wrongdoings of their governments and that they continue receiving funds that have been promised to them and that they rely on, even after the conditionality mechanism has been triggered. We can proudly say that we achieved a strong system that will guarantee their protection,” Gardiazabal Rubial explained.

Faster mechanism

While the Council initially requested that EU institutions had 12-13 months to adopt measures against a member states, MEPs succeeded in bringing this period  down to a maximum of 7-9 months.

It will be up to the Commission to propose to trigger the conditionality mechanism against an EU government. The Council then will have one month to adopt the proposed measures – increased to 3 months in exceptional cases – by a qualified majority.

To ensure deadlines are respected, the Commission will use its rights to convene the Council.