MEP Olbrycht: Member states may thwart recovery fund over rule of law

MEP Jan Olbrycht. European Parliamentary Week 2020. European Semester Conference - Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the European Union. Committee on Budgets (BUDG). [© European Union 2020 - Source : EP/Dominique HOMMEL]

The European Parliament will fight to have a say in the oversight of the EU’s €750-billion stimulus package, alongside the Council, MEP Jan Olbrycht, co-rapporteur on the EU’s next seven-year budget (MFF), told EURACTIV Italy in an interview.

He also said there is a danger that member state parliaments may want to “influence” the rule of law conditionality before unanimously approving the new sources of EU funding.

*The interview has been edited for length.

At the Budget committee meeting, Germany’s Europe minister Michael Roth emphasised that the multi-annual financial framework (MFF), Next Generation fund and the rule of law conditionality come as a package and should not be split under any circumstances. Does the Parliament agree with this approach? Or do you believe it is a strategy to push the Parliament into a corner?

I think it’s not new because this is quite clear from 2019, when the Commission proposed the new regulation and linked the MFF and the rule of law, that it will be treated as a package. Even if these are two separate elements: the MFF is completely separate from the rule of law.

Probably the member states will try to put it as a package.  What is new is that the package now consists not only of two but of three elements, which are different from the methodological point of view. Because we have the MFF, which requires a unanimous decision and the consent procedure from the Parliament.

Secondly, we have the own resources, meaning the Recovery Fund, which requires an initiative from the Commission, next, the opinion from the Parliament, which will be given in the next session, and then the decision of the Council and the ratification by all the national Parliaments and some regional parliaments, meaning altogether 41 parliaments.

This will give the possibility for the headroom and for the Recovery Fund. We have nothing to say except the opinion. But this is a very special intergovernmental procedure and we will fight for a stronger role of the Parliament in the implementation of the Fund. And the third issue is the rule of law. We see now the interlink between the three.

The presidents of four of the main groups in the Parliament wrote a letter in which they say if the procedure on the rule of law is not finished we shouldn’t give the consent to the MFF.

On the contrary, there is a danger that some of the member states will use the ratification of the own resources to influence the rule of law, because ratification is unanimous while the rule of law requires qualified majority in the Council. So I think the German presidency found itself in a very difficult position because now they are facing real controversies inside the Council not only on the financial elements but also concerning the rule of law.

What is the position emerging in the Parliament on the Next Generation fund and ‘own resources’? 

The reactions are different because creating the New Generation EU is in fact to change the rules. We will have to pay it back to the financial markets.  It will be necessary either to increase the national contributions to the budget or to create new own resources. Creating the New Generation EU, the Recovery Fund will be a facilitator to make the decision on own resources. Some MEPs who are not especially pro-Europeans are not happy with this because they see that a consequence of the new own resources is that the EU will be stronger. But the majority of the Parliament welcomed the next generation fund.

But first of all, members states have to decide and the national parliaments should ratify it.  It would give the possibility to put more money to some of the policies which have been reduced in the MFF, as a sort of compensation. There are some elements which we don’t like: for example, it completely excludes the Parliament from the whole implementation.

We will try to change the financial regulation to have a say in each annual budget to see where the money goes and how it is implemented. Secondly, the Recovery and Resilience instruments will require the national recovery plans to be accepted not by the Commission but by the Council voting with qualified majority. This is new: that the program of one country will be accepted by other countries, which probably will open very complicated negotiations between the member states. It is going back to the intergovernmental method.

Is the Parliament trying to amend that part to get the approval of the national programs from the Commission rather than the Council?

Now the works are going on with regards to the regulation on the Recovery and Resilience Fund to prepare the legal basis. The Parliament will try to influence this procedure. Amendments are currently being made.  I think the Parliament will try to have a say on the national plans. Normally we prepare the general framework and then it goes to the Commission. But if the Council wants to enter into the implementation, then the Parliament will also try to be involved. If it’s European money, which all of us will be responsible for, then it should not be accepted just by the Council. So I don’t exclude that there will be the tendency to involve the Parliament more.

The deal at the council has been to strengthen the Next Generation EU and to weaken the MFF. The own resources will be used to pay back the money for the Next Generation EU. Are you going to ask for broader use of the own resources in order to strengthen the MFF?

I think we should say that the own resources should at least pay first the interest of the Next Generation EU, which is in the MFF for about €12.9 billion. The new own resources should be used at least to pay back money to the financial markets. Therefore we need new own resources very urgently. As they have not been approved yet, up to now we haven’t made steps for going much further.

[Edited by Benjamin Fox/Vlagyiszlav Makszimov]

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