EU countries that widely undermine the rule of law should face financial penalties, say MEPs

Parliament has endorsed a new law giving the European Commission the power to assess, whether a member state is failing to uphold the principles of the rule of law, tackle tax fraud and corruption or implement the EU budget correctly. It would be assisted by independent experts in constitutional law and financial matters.

In cases of shortcomings in a member state’s management of the budget, the Commission could, for example, reduce pre-financing and suspend payments once Parliament and Council approve the measures. The new rules would come into effect under the terms of the EU’s next long-term budget for 2021-2027.

In a debate with Günther Oettinger, the commissioner responsible for the budget, on 16 January, many MEPs emphasised the need to defend the rule of law in order to safeguard democracy.

Spanish S&D member Eider Gardiazabal, one of the MEPs responsible for steering the plans through Parliament, said: “This isn’t a Europe à la carte where we can just hang on to the rights and not the duties.”

She noted that if a state wants to join the EU, it has to fulfil a set of economic, political, tax and judicial criteria, which is why the process is long. “And then what happens when you join? Does it mean that just because you passed the test, you can do whatever you like? Obviously not. This test has to be a constant one.”

Oettinger said the EU would be better off under the system for the next long-term budget “because we will have an instrument that we can apply to protect Europe, its budget and therefore its citizens against abuse and fraud and any sort of misuse of funding."

“If there are issues with the users, member states, regions and local authorities, that need to be resolved, sometimes they end up in court. In this case in every member state we need to be sure that all the courts are impartial, that the rule of law holds sway and that there are guarantees of impartial rulings by impartial judges,” the commissioner continued.

German EPP member Ingeborg Grässle, chair of the budgetary control committee, pointed to problems where government representatives use their position to enrich themselves, their friends and relations. “They are illicitly obtaining EU money and illicitly using it. This will enable us to tackle these issues.”

Not freezing funds for final beneficiaries

The draft law text says that even if a decision is taken to, for example, halt payments, a government would still have to implement the respective EU programme. The Commission would have to try to ensure that the final beneficiaries still receive funding.

Both Bulgarian ALDE member Iskra Mihaylova, chair of the regional development committee, and Finnish EPP member Petri Sarvamaa, one of the MEPs responsible for steering the plans through Parliament, underlined the need to ensure that researchers, civic organisations and ordinary people do not suffer if funds are cut or frozen.

However, Polish ECR member Ryszard Czarnecki said that Europe needs to be protected from those who want to destroy it. “But the question is: who is it who wants to destroy Europe? Is it those who have triggered the wave of euroscepticism in the member states, or is it those who are interfering with the internal affairs in member states?”

Next steps

Parliament is ready to enter negotiations on the final wording of the regulation with EU ministers. They have not adopted their position yet.

© European Parliament, 2019