MEPs tell Brussels to punish errant member states by cutting off EU cash

The European Commission must immediately trigger the ‘rule of law conditionality mechanism’ to stop member states that violate rule of law from receiving EU funds.

MEPs said it was long overdue that the Commission take swift action and notify in writing the member states that are failing to comply with the rule of law that their access to EU funds will be revoked.

The budget conditionality regulation entered into force on 1 January 2021, but the Commission has so far failed to apply it.

On 11 March 2021, Poland and Hungary challenged the regulation in the EU Court of Justice. The Court ruled on 16 February, dismissing both appeals.

The budget conditionality regulation aims to protect EU funds from being misused by national governments that breach the rule of law.

In a resolution adopted on Thursday by 478 votes for to 155 against and 29 abstentions, MEPs welcomed the European Court of Justice’s recent judgment dismissing the actions by Hungary and Poland against the Rule of Law Conditionality Regulation, as well as the Court’s conclusions that the regulation is in line with EU law and its powers as regards rule of law.

A majority MEPs said they want to send a clear message to ‘rebel member states’ that the rules must be obeyed and that it was “high time” the Commission takes serious action on these issues.

MEPs stressed that this denial of EU funds should take place regardless of electoral timetables in member states and it should also apply to the NextGenerationEU funds.

The ‘rule of law conditionality mechanism’ will work on the basis of the Commission identifying that rule of law has been breached and propose to trigger the mechanism. The Council will then have one month to vote on the proposed measures, or three months in exceptional cases, by a qualified majority.

What will happen is either a cutting or freezing of payments to that member state from the EU budget and now also the NextGenerationEU funds.

The new law will apply to individual or systemic breaches, besides direct cases of corruption or fraud it will also apply to systemic breaches of fundamental values that all member states must respect. Examples of which are democracy or the independence of the judiciary, when those breaches affect – or risk affecting – the management of EU funds.

MEPs secured a specific provision that clarifies the possible scope of the breaches by listing examples of cases, such as threats to the independence of the judiciary, failure to correct arbitrary and unlawful decisions, and limiting legal remedies.

Despite this new measure to cut off or freeze funds to non-compliant member states, students, farmers, or NGOs will not be punished for the actions of their governments, and will be able to file a complaint to the Commission via a web platform, which will assist them in ensuring they receive the due amounts. The Commission will also be able to make a financial correction by reducing the next installment of EU support to the respective country in question.