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European Parliament votes draft bill providing that Member states jeopardising the rule of law will risk losing EU funds

Governments interfering with courts or failing to tackle fraud and corruption will risk suspension of EU funds, according to a draft law endorsed by MEPs on Thursday.

The Plenary endorsed the rules by 397 votes to 158, with 69 abstentions. MEPs are now ready to enter negotiations on the final wording of the regulation with the EU ministers, who have not adopted their position yet, a release posted on the European Parliament’s website reads.

Assisted by a panel of independent experts, the EU Commission would be tasked with establishing “generalised deficiencies as regards the rule of law” and decide on measures that could include suspending EU budget payments or reducing pre-financing. The decision would only be implemented once approved by Parliament and Council. Once the member state remedies the deficits identified by the EU Commission, Parliament and EU ministers could unlock the funds.

The European Commission may establish that the rule of law is under threat, if one or more of the following are undermined:

  • proper functioning of the authorities of the member state implementing the EU budget;
  • proper functioning of the authorities carrying out financial control;
  • proper investigation of fraud – including tax fraud -, corruption or other breaches affecting the implementation of the EU budget;
  • effective judicial review by independent courts;
  • recovery of funds unduly paid;
  • preventing and penalising tax evasion and tax competition;
  • cooperation with the European Anti-Fraud Office and, if applicable, the European Public Prosecutor’s Office.

To assist the Commission, a panel of independent experts in constitutional law and financial matters, comprising one expert appointed by the national parliament of each member state and five named by the European Parliament, would assess the situation in all member states on a yearly basis and make a public summary of its findings, the release further reads.

Depending on the scope of the shortcomings and the budget management procedure, the Commission can decide on one or several measures, including:

  • suspending commitments,
  • interrupting payment deadlines,
  • reducing pre-financing and
  • suspending payments.

Unless the decision states otherwise, the government would still have to implement the respective EU programme or fund and make payments to final beneficiaries, like researchers or civil society organisations. The Commission would have to assist the beneficiaries and strive to make sure they receive the due amounts.

The Commission would submit a proposal to Parliament and EU ministers to transfer an amount matching the value of the proposed measures to the budgetary reserve. The decision would take effect after four weeks, unless Parliament, acting by majority of votes cast, or Council, acting by qualified majority (so no single member state can block a decision), amend or reject it. Once the EU Commission establishes that the deficits have been lifted, the locked amount would be unfrozen using the same procedure, the release concludes.

First reactions of the Romanian MEPs

Social Democrat MEP Andi Cristea retorted that his group won’t accept turning the EU funds into a control tool against the fully-fledged member states. He argued the debate in the European Parliament today “has been just a piece of a puzzle”, as there will be less European money after the Brexit, considering that UK was the second largest contributor to the EU budget.

In his turn, PSD MEP Dan Nica slammed the EP draft bill, stating it is “an attempt to create a tool that might punish anyone when the EU leaders want that”.

On the other side, Liberal MEP Siegfried Mureşan hailed the draft bill of the EP, arguing it clearly shows that the European Union has given a very blunt message to the PSD-ALDE ruling majority in Bucharest, “which has showed obvious signs of continuing attacks against the justice, the rule of law until Liviu Dragnea will get rid or prison“. “The EU’ s message today is very clear: <you won’t get away with this, we know your agenda and we’ll stop you>“, Muresan said.

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