Parliament demands rule of law mechanism before signing off on EU budget

German Chancellor Angela Merkel wears a face mask at the end of the press conference after a meeting with French president Emmanuel Macron (not pictured) at Fort de Bregancon, in Bormes-les-Mimosas, south-east of France, 20 August 2020. [EPA-EFE/CHRISTOPHE SIMON]

Leaders of the four major political groups in the European Parliament warned on Wednesday (26 August) that they would not sign off on the bloc’s next long-term budget unless there was a formal deal on linking EU funds to rule of law, in the latest signal that lawmakers would not back down on conditionality.

Party bosses published their threat in a letter sent to German Chancellor Angela Merkel, whose government currently chairs the Council of the EU, and Commission President Ursula von der Leyen.

“The time has come to accelerate the fight against the erosion of democracy, the rule of law and fundamental rights in the very heart of the EU and to underline that electoral victories do not constitute a mandate for heavy-handedness and departure from European values,” the letter said.

The compromise reached by European leaders in July on the budget and the accompanying stimulus package left some ambiguity about whether they have significantly watered down the Commission’s proposal on the conditionality of disbursing EU funds.

Council brokers historic stimulus pact as budget cuts, rule of law retreat plague deal

Leaders of the 27 EU countries finally compromised on a €1,074 billion long-term budget and recovery fund instrument early on Tuesday (21 July) morning, but it took one of the longest-lasting summits in European Council history and the final deal cut funding for some of the bloc’s key priorities.

The text originally proposed by the Commission envisioned a system that would “tackle manifest generalised deficiencies” in respect for the rule of law in member states.

But the Council text notes only that the “financial interests shall be protected in accordance with the general principles” of Article 2 of the treaties, and cites a ‘regime of conditionality’ in this regard.

In their letter, the chiefs of parliamentary parties voiced regret at this compromise and said that “without formal conclusion (closure)” of the legislation that would create the link between European cash and respect for the rule of law “it will be impossible for us to advance” on the seven-year budget.

The politicians reiterated their key demands, including preserving a procedural role for the Parliament, incorporating the Commission’s forthcoming annual report on EU values, and protecting the final recipients of the funds.

They also demanded the reintroduction of the “reverse qualified majority” rule, originally proposed by the Commission, whereby the Commission’s decision to halt disbursement of EU funds to countries with systemic rule of law issues could be blocked by a weighted majority of member states.

Instead, European leaders agreed that any measures proposed by the Commission to stop the flow of Union money would have to be adopted with a qualified majority in the Council, potentially making it harder for the EU to take action.

The letter is the latest in a series of signals that lawmakers are unwilling to retreat on the issue of conditionality, following a resolution after the July summit that threatened to withhold parliamentary consent.

Parliament threatens to withhold consent on budget cuts, potentially delaying recovery plans

The European Parliament will adopt a critical stance against the European Council’s recovery plans on Thursday (23 July), opposing cuts to EU-funded programmes in the bloc’s long-term budget while also hitting out at the alleged ‘weak’ nature of rule of law conditionality.


[Edited by Zoran Radosavljevic]

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