The foundational Treaties outline the role of European political parties (Europarties) in Article 10(4) TEU and Article 12(2) of the Charter of Fundamental Rights of the European Union. According to these provisions, political parties at the EU level contribute to forming European political awareness and expressing the will of citizens of the Union. Article 224 TFEU further prescribes that the ordinary legislative procedure should be used to regulate them and particularly their funding. The European political parties and foundations are governed by Regulation 1141/2014 of the European Parliament and of the Council on the statute and funding of European political parties and European political foundations of 22 October 2014, amended by Regulation 2018/673 of the European Parliament and of the Council of 3 May 2018 and Regulation 2019/493 of the European Parliament and of the Council of 25 March 2019 ('Regulation 1141/2014').

Following Parliament's calls and delivering on the commitments made in its European democracy action plan (2020), the European Commission announced the revision of Regulation 1141/2014 as one of the key initiatives in 2021.

Article 38 of Regulation 1141/2014 foresees the evaluation of its application by the European Parliament by the end of 2021. The Commission was required to present a report on the same matter and a legislative proposal to amend this regulation if appropriate. The Commission proposed a new legislative package on 25 November 2021 to reinforce democracy and ensure the integrity of the elections. The package included the submission to recast Regulation 1141/2014.

The Commission's proposal is part of a broader initiative on democratic life and electoral processes in the EU. It seeks to facilitate interactions of the European political parties with their national counterparts, increase transparency (especially regarding political advertisement and donations), cut excessive administrative burden and enhance the financial viability of European political parties and foundations. Furthermore, the proposal introduces lowering the cofinancing rate for Europarties from 10 % to 5 %. It allows the Europarties and foundations to collect contributions from members located in countries outside the EU. Finally, the proposal authorises the European parties to use the funds from the EU budget in EU-focused national referendum campaigns. The goal is to adopt the new rules before the European Parliament elections in 2024.

The European Parliament referred the proposal to the Constitutional Affairs Committee (AFCO). The Committee for Budget (BUDG) was assigned as the Committee for opinion. The AFCO Committee rapporteurs WIELAND Rainer (EPP, Germany) and GOERENS Charles (Renew, Luxembourg), presented the draft report on 22 March 2022. 307 amendments were tabled in total in the AFCO Committee. The rapporteur for the BUDG Committee, Nils UŠAKOVS, presented his legislative report on 18 May 2022. In the BUDG Committee, 79 amendments were tabled in total. During the plenary session on 15 September 2022, the Parliament endorsed the position of the AFCO Committee. The proposal was referred back to the AFCO Committee responsible for interinstitutional negotiations (Rule 59(4)).

The Parliament's negotiating mandate aims to streamline communication between European parties and their national counterparts, bolster transparency and financial stability within political parties, and ensure that non-EU members adhere to values equivalent to those in the EU. Additionally, it includes provisions on promoting gender equality, maintaining gender balance in the governing bodies of European political parties, and the requirement for implementation of protocols to combat sexual and gender-based harassment.

On the side of the Council, on 22 March 2022, the General Affairs Council reached a political agreement (a partial general approach) on the proposal. The political agreement inter alia restricts the participation and contributions of European political parties and European political foundations to members from EU countries. It upholds the co-financing model, requiring European political parties to contribute 10% and political foundations 5% to qualify for European subsidies. Additionally, it mandates that these entities annually declare their adherence to EU values. Furthermore, it caps self-generated resources at 2% of the European political party's annual budget and delineates permissible joint activities with member parties, excluding referendum campaigns. Moreover, it aims to bolster transparency in donation processes by reducing the annual donor threshold from EUR 3,000 to EUR 1,500, requiring donors to provide necessary information for identification. In addition, it aims to promote gender equality within parties and on candidate lists for European Parliament elections.

Under Article 287(4) TFEU, in Opinion 01/2022, the European Court of Auditors appreciated the aim to increase funding transparency. However, it warned that the proposal contained several deficiencies, including matters dealing with co-financing, contributions from outside the EU, and financing the national referendum campaigns.

Trilogue meetings occurred on 29 September, 25 October and 24 November 2022. The representatives of co-legislators did not reach an agreement. Consequently, the Council adopted a revised mandate on 17 March 2023. While the Council’s original political agreement prohibited political parties from outside the EU from participating in a European political party, the renewed mandate extended the scope of the text to parties from EFTA countries, EU candidate countries and Kosovo, countries using the euro as their official currency, and former EU Member States. The last trilogue occurred on 29 March 2023, but the negotiators could not reach an agreement. Currently, the Council is abstaining from engaging in additional negotiations with the Parliament.

References:

• EP Legislative Observatory, Statute and funding of European political parties and foundations, 2021/0375(COD), 25 November 2021
• European Commission, Commission work programme 2024, October 2023
• Regulation 1114/2014 on the statute and funding of European political parties and European political foundations
• Regulation 2018/673 of the European Parliament and of the Council of 3 May 2018
• Regulation (EU, Euratom) 2019/493 of the European Parliament and the Council of 25 March 2019
• EP Legislative Observatory, European political parties – report 2021, 2021/2018(INI)  
• European Commission, Communication from the Commission on the European democracy action plan, 2020
• European Parliament, Resolution of 11 November 2021 on the application of Regulation (EU, Euratom) No 1141/2014 on the statute and funding of European political parties and European political foundations, 2021
• European Court of Auditors, Opinion 01/2022 (pursuant to Article 287(4), TFEU) concerning the Commission’s proposal for a Regulation on the statute and funding of European political parties and European political foundations, 2022

Further Reading:

• European Parliament, EPRS, Recasting the rules applicable to European political parties and foundations, At a glance, 2022
• European Parliament, EPRS, Amending the rules governing the statute and funding of European political parties (recast), Briefing, March, 2022
• European Parliament, IPOL, Towards a revision of the Regulation on the statute and funding of European political parties and foundations, Study, March 2022
• European Parliament, EPRS, European political parties: Statute and funding, At a glance, November 2021
• European Parliament, EPRS, Statute and funding of European political parties under Regulation 1141/2014 : ex-post evaluation, Study, June 2021
• European Parliament, EPRS, European political parties and political foundations – Statute and funding, Briefing, March 2018
• European Parliament, EPRS, Statute and funding of European political parties and European political foundations, At a glance, April 2018

Related legislative train files:

• Revision of Regulation on statute and funding of European political parties and European political foundations, 2019
• Regulation amending Regulation (EU, Euratom) no 1141/2014 as regards a verification procedure related to infringements of personal data in the context of the European Parliament elections, 2019
• European democracy action plan, 2020

Author: Kamil Baraník, Members' Research Service, legislative-train@europarl.europa.eu