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The @Europarl_EN and @EUCouncil have just agreed on the rule of law conditionality regarding the EU budget.
Main elements of the deal:
Main elements of the deal:
1)Scope – the mechanism covers the rule of law as such, not democracy or fundamental rights, as the Parliament requested. However, it is specified that the rule of law should be understood in conjunction with other Union values.
2)To start the procedure, two preconditions should be met: there are breaches of the rule of law, and they affect or seriously risk affecting the sound financial management of the EU budget or the protection of the financial interests of the EU in a sufficiently direct way.
3)As regards the breaches, the unexhaustive list of examples is reinstated after the Council’s deletion: endangering the independence of judiciary, failing to prevent, correct and sanction arbitrary or unlawful decisions by public authorities,...
withholding financial and human resources affecting their proper functioning or failing to ensure the absence of conflicts of interests, limiting the availability and effectiveness of legal remedies, limiting the effective investigation, prosecution or sanctioning of breaches.
4)There is no panel of experts to assist the Commission in finding the breaches, as proposed by the Parliament, but the Commission, apart from relying on existing sources, could proactively seek the opinion of the @VeniceComm or @EURightsAgency.
5)The decision is taken by the Council by qualified majority (no reverse qualified majority). The decision shall be taken normally within one month. Emergency break (discussion in the European Council) is maintained; then decision-making in the Council is extended to 3 months.
6)The MS obligation to pay final beneficiaries is maintained; the MS concerned shall report regularly on this. There will be a special tool for final beneficiaries to complain. The Commission applies fund-specific financial rules or triggers infringement procedures, if needed.
7)The regulation will be applicable from 1 January 2021. There will be a report on the application in three years after the entry into force.
My assessment: the instrument will not be so ambitious as the Parliament wanted it to be – in terms of the breaches addressed and necessary links with EU budget. It also remains to be seen whether the decision-making in the Council will be effective.
Nevertheless, it gives more powers to the Commission to start procedures where up to now it was reluctant to qualify the breaches of the rule of law as mismanagement of funds under the current instruments. Let’s hope the Commission will use this opportunity soon.
