A total of €7 million is foreseen in the EU 2008 budget for the new political foundations. European political parties receive total EU funding of about €10 million per year.
The existing legislation on the financing of European political parties needs to be amended to enhance the European nature of Parliament's elections, and European political parties should enjoy more flexibility in managing their funds and financing their electoral activities, says the House in a report by Jo Leinen (PES, DE) adopted with 538 votes in favour, 74 against and 10 abstentions.
No funding of national parties permitted
To enhance political debate at EU level with a view to the European Parliament's 2009 elections, the European Parliament welcomes a Commission proposal to allow European political parties to use their money to finance campaign activities for European elections.
Such use of public funds is currently forbidden under EU law. The report as approved by the European Parliament also endorses the general principle that in no circumstances should these funds constitute direct or indirect financing of other parties and particularly of national parties and candidates.
The 2007 budget set out the money allocated to the EU parties. It is the EP who controls and manages the funds. In fact, the budget line for them is in the Parliament's section of the EU budget (line 402, chapter 40, title IV section I (Parliament, see link below) Ten parties were eligible for funds for 2007.
More financial stability
In an effort to strengthen the European dimension of political parties, MEPs also support the aim of improving financial stability of European parties, so as to facilitate long-term planning. This financial stability is currently lacking, said MEPs, because the grants given to European political parties are subject to change every year, discouraging any proper financial self-management.
The Commission proposes to allow political parties to carry over, by way of derogation from the no-profit rule, 25% of annual total income from one year to the first quarter of the following year. Moreover, the new legislation would introduce the possibility of accumulating reserves, over several years as own resources, of up to 100% of parties' average annual income. These resources would consist of donations, contributions from member parties and individual members.
It is also proposed that the EU general budget may finance up to 85% of the expenditure of a European political party or foundation, compared with 75% now.
MEPs clarify that the election of the members of the European Parliament by direct universal suffrage, the funding of and limitation of election expenses for all parties and candidates at European Parliament elections is governed in each Member State by national provision.
Foundations
If approved by the Council and the Parliament, the Commission proposal for amending the 2003 Regulation on the statute and financing of European political parties would also introduce a new legal basis for establishing European political foundations.
According to the proposal, endorsed by the House, foundations would have to be formally associated with an already established European party in order to access funding - a foundation may receive funds only by applying through the political party with which is affiliated.
Finally, the proposed regulation leaves to European political parties the task of defining their relations with associated foundations, including an "appropriate degree of separation".
