EU negotiators clinch deal tying rule of law to fund access

The budget is meant to take effect on January 1

European Union negotiators clinched an agreement Thursday that could tie the use of EU funds to democratic standards in the bloc’s member countries and unlock hundreds of billions of euros in emergency coronavirus support by the start of next year.

Hungary and Poland are mired in EU proceedings over concerns that their right-wing populist governments are violating European standards with laws and practices that threaten the independence of judges and the rights of journalists.

The two countries, whose economies have benefited significantly from EU funds since they joined the bloc in 2004, have vehemently opposed any attempt to condition their access to the money to the state of their rule of law.

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But under the lead of Germany, which holds the EU’s rotating presidency, negotiations with the European Parliament have reached a provisional agreement on a new general regime of conditionality to protect the Union budget.

The terms of the agreement would enter into play when breaches of the principles of the rule of law in a member state 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.

Today’s agreement is a milestone for protecting EU values. For the first time, we have established a mechanism that enables the EU to stop funding governments that disrespect our values such as the rule of law, said Finnish EU lawmaker Petri Sarvamaa, who helped lead the process.

The agreement, which must still be officially endorsed by the 27 member nations and the full EU parliament, is expected to end a deadlock over the bloc’s next seven-year budget and a massive coronavirus recovery plan, all worth a total of around 1.8 trillion euros (USD 2.1 trillion).

The budget is meant to take effect on January 1. Germany’s EU envoy, Michael Clauss, described the deal as an important milestone.

It is time now to find agreement on the rest of the package as well. We have a historic 1.8 trillion euro financial package on the table. With the second wave of the pandemic hitting member states hard, there is no time to lose, he said.

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