EU mulls freezing Slovakia’s funds for rule of law violations

The EU is developing a proposal to sanction Slovakia for its deteriorating democratic standards, which could lead to the suspension of EU funds allocated to Bratislava, according to a report from Bloomberg and Czech News Agency (ČTK).

On Sunday (8 September), Bloomberg reported that the European Commission is preparing to initiate proceedings in response to Slovak PM Robert Fico's decision to abolish the Special Prosecutor’s Office, responsible for investigating corruption.

According to Bloomberg sources, the process is in its early stages and would require approval from Commission President Ursula von der Leyen. If true, Slovakia could ultimately become only the second EU member state to face such penalties, following Hungary.

Two proposals are reportedly being considered by the Commission.

The first option involves the use of the EU’s conditionality mechanism, which could lead to the freezing of part of the nearly €13 billion in cohesion funds that Slovakia is set to receive.

This mechanism allows the Commission to withhold funds if it believes that the rule of law or EU financial interests are at risk.

The second proposal could reportedly see Slovakia losing all or a part of the €2.7 billion from Slovakia’s Recovery and Resilience Plan.

About 80 % of Slovakia’s public investments are financed by EU funds, so any funding cuts would severely impact the country’s economy, already strained by a high public deficit.

Repeated warnings

The Commission has repeatedly warned the Slovak government of potential consequences during discussions on the controversial reform of its penal code, which came fully into force in August this year.

This reform, passed in a fast-track legislative procedure, abolished the Special Prosecutor’s Office and significantly reduced penalties and statutes of limitations for serious crimes, including corruption. Bratislava has had to repeatedly amend it.

Back in February, when the reform was passed, Commisioner for Justice Didier Reynders warned Bratislava that the new laws appear to have a direct and significant negative impact on EU law and the Union’s financial interests.

“The Commission is committed to protecting these interests as necessary,” Reynders wrote in the letter, “including by infringement proceedings and proceedings under the Conditionality Regulation and the Recovery and Resilience Facility Regulation”.

Fico's government has faced further criticism from the EU institutions, including over the overhaul of public broadcaster RTVS, a draft law on NGOs which would introduce the labelling of “organisations with foreign support”, and the dismantling of Slovakia’s National Crime Agency (NAKA).

Opposition: Fico driving Slovakia to the EU’s periphery

Richard Raši, Deputy Prime Minister for Investments (Hlas-SD/NI), stated on Monday (9 September) that "we currently have no indications of delays or problems in the disbursement of EU funds”.

Regarding the Recovery Plan, he mentioned that Peter Kmec, Deputy Prime Minister for the Recovery and Resilience Plan (Hlas-SD/NI), "is engaged in communication” with Brussels.

An opposition liberal party, Freedom and Solidarity (SaS), reacted to the news by saying that Fico's government had "sacrificed Slovakia to protect its close allies from justice" as its "shameful amendments to the penal code are a blow to the fight against corruption and the EU Commission could not and cannot remain indifferent."

"Robert Fico once declared that he wanted to be at the heart of the EU, but today he has pushed us to the edge. Our only remaining partner will be Viktor Orbán. No one in the Union will take Slovakia's voice seriously," concluded SaS chairman Branislav Gröhling.

[Edited by Owen Morgan]