Rule of law: MEPs demand protection of EU budget and values 

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Rule of law is laid down in the EU treaties as one of the values on which the Union is based ©Helmutvogler /Adobe Stock  

Rule of law deficiencies in member states mean EU funds may be used to undermine European values. MEPs are demanding new tools to tackle the problem.

MEPs warned in two plenary debates on 5 October 2020 that European values are in danger and said EU funds from the long-term budget and the recovery plan should not be put into the hands of those working against democracy and fundamental rights in Europe.


In a report adopted on 7 October, MEPs called for reinforcement of the rule of law across Europe through a new mechanism as well as effective sanctions on EU countries found to be in violation. They also called on the EU institutions to agree on clear rules linking receipt of EU funds by a member state to respect for the rule of law.


What is rule of law?


Rule of law is laid down in the EU treaties as one of the values on which the Union is based. It means that governments should be bound by law, that they should not take arbitrary decisions and that citizens should be able to challenge their actions in independent courts.


It also enshrines the fight against corruption, which unfairly favours some to the detriment of others, and the safeguarding of media freedom, thus ensuring the public is properly informed about the work of government.


Rule of law is a common concern among Europeans. In a 2019 Eurobarometer survey, at least 85% of respondents across the EU considered each of the different aspects of the rule of law as essential or important. Another survey, from October 2020, found that 77% of Europeans support the concept that the EU should only provide funds to EU countries if they are in compliance with the rule of law and democratic principles.


EU mechanisms for the protection of rule of law


The EU has existing tools at its disposal to protect the rule of law. On 30 September 2020, the European Commission published the first annual rule of law report that monitors both positive and negative developments relating to the rule of law in all member states. It has been monitoring Romania and Bulgaria since they joined the EU in 2007.


There is also dialogue on the rule of law in the Council and the current German presidency plans to have country-specific discussions in November starting with five EU countries.


If the Commission is of the view that a member state is violating EU law, it can start infringement proceedings that may lead to financial sanctions determined by the European Court of Justice. Another procedure, under Article 7 of the Treaty on European Union, allows the Council to make recommendations or decide by unanimity on sanctions against a member state, including the suspension of membership rights.


The case for further measures


MEPs argue that existing tools are insufficient. While there are ongoing hearings in the Council under Article 7 regarding Poland and Hungary, Parliament has expressed its regret about the lack of significant progress by the two member states in addressing the issues.


In the 5 October plenary debate, MEPs welcomed the annual rule of law report launched by the Commission, but called for more action on enforcement. “Monitoring alone will not bring back judicial independence in Poland, nor will it save the Index media [outlet] in Hungary,” said Michal Šimečka (Renew Europe, Slovakia).


Mr Šimečka drafted a report adopted on 7 October, calling for a mechanism that consolidates existing instruments and establishes an Annual Monitoring Cycle, with country-specific recommendations, timelines and targets for implementation. The cycle should serve as the basis for triggering Article 7 or suspending budget funds for a member state.


Protecting EU financial interests


Corruption or dependent courts may mean there is no protection against misuse of EU money allocated to a member state. The Commission put forward a legislative proposal in 2018 that aims to defend the Union’s financial interests, should deficiencies in the rule of law be detected.


The proposal envisages that the Commission may suspend or reduce payments from the EU budget to a member state in breach of the rule of law. The Council would be able to veto the Commission's ruling by a qualified majority.


Parliament adopted its position on the proposal in early 2019, demanding that it be placed on equal footing with the Council in terms of the decision-making. The file is linked to the outcome of the negotiations on the EU long-term budget and Parliament has insisted that an agreement on the 2021-2027 budget is only possible if there is sufficient progress on this legislation.


EU leaders agreed in July 2020 to introduce rule of law conditionality, i.e. to make receipt of EU funds by a member state dependent on its respect for the rule of law. The German Council presidency has put forward a compromise proposal, which MEPs criticised as weak during the 5 October plenary debate.


“A mechanism that cannot ever be triggered in practice due to backdoors or indecisive processes serves only the interests of those who do not wish to see any measures taken,” said Petri Sarvamaa (EPP, Finland).


Daniel Freund (Greens/EFA, Germany) said: “The barrier is so high for this mechanism that we know that there will never be consequences. Say you have a member state where a government gets rid of the judges it doesn’t like - it has happened in Poland - then the Commission has to prove how this is costing taxpayers before this can be imposed.”


Many MEPs underlined that more is at stake than just EU money. S&D leader Iratxe García Pérez (Spain) said: “Rule of law is about more than tackling corruption - it is about our shared values. Our values are the cornerstone of the EU. We need those values to make progress, to move forward and we will not budge an inch in our defence of those values.”

Negotiations with the Council


Parliament entered negotiations with the Council in October on the establishment of a mechanism that would allow the suspension or reduction of EU budget payments to a country that breaches the rule of law. The MEPs responsible for the file are Petri Sarvamaa and Eider Gardiazabal Rubial (S&D, Spain).


After the second round of negotiations on 20 October, Petri Sarvamaa said in a live interview on Facebook: “We are engaged in real, meaningful negotiations on the details”. Referring to the link with the negotiations on the EU budget and recovery plan that are running in parallel, Mr Sarvamaa added: “The rule of law [issue] has taken centre stage. All eyes are on us. Failure in the negotiations is out of the question”.