The Heads of State or Government of the EU Member States finally gave the go-ahead, on Thursday 10 December, for the adoption of the EU’s Multiannual Financial Framework (MFF) for 2021-2027, the Recovery Plan and the Regulation establishing a link between the disbursement of European funds and respect of the Rule of law (see EUROPE 12619/1).
“There is an agreement on the MFF and the Next Generation EU Recovery Plan”, welcomed the President of the European Council, Charles Michel, via Twitter. The Portuguese Prime Minister, António Costa, said that one of the priorities of the Portuguese Presidency of the EU Council in the first half of 2021 would be “the implementation of national recovery plans”.
The ‘white smoke’ was made possible thanks to the adoption by the European Council of an interpretative declaration on this ‘Rule of law mechanism’, allowing Poland and Hungary to lift their veto.
The procedures for adopting the texts will therefore be able to take place within the EU Council (MFF, ‘Rule of law’ conditionality) and the Member States (ratification by national parliaments of the Own Resources Decision, which allows the Commission to borrow on the markets under the €750-billion Recovery Plan). The European Parliament will vote next week on the MFF and the Rule of law Regulation.
The conclusions of the EU leaders contain interpretative guarantees on the Rule of law cross-compliance Regulation. The so-called ‘frugal’ countries, which wanted to keep a strong mechanism, were thus able to agree to the European Council conclusions, as the text that arduously negotiated with the European Parliament on this mechanism remains unchanged.
Above all, the interpretative declaration allows Hungary and Poland to bring an action before the EU Court of Justice for annulment of the regulation without the risk of sanctions (suspension of EU funds) during the legal proceedings.
The conclusions of the European Council make it possible to “separate the issue of protecting the budget against fraud and corruption from the question of the Rule of law”, said Polish Prime Minister Mateusz Morawiecki on his arrival at the European Council. According to him, the Rule of law is dealt with in treaties, and secondary legislation, such as the regulation in question, “cannot prevail over treaties”. He also said that the conclusions of the European Council had a higher legal value than the regulation on the Rule of law.
The Chair of the EPP group in the European Parliament, Manfred Weber from Germany, does not agree. In his view, a political declaration by the European Council is not legally binding, unlike the Rule of law Regulation. For his part, Petri Sarvamaa (EPP, Finland), rapporteur on this dossier, assured that the retroactivity of the mechanism from 1 January 2021 was a guarantee in the event of proceedings before the Court.
German Chancellor Angela Merkel recalled, at the start of the summit, that the German Presidency of the EU Council had “tried to find a solution to the concerns of Hungary and Poland while keeping the mechanism as negotiated with the European Parliament”.
Concerns expressed. The Dutch Prime Minister, Mark Rutte, asked for guarantees before giving his consent. “I want to know if the European Parliament agrees, to make sure that the scope of the Regulation is not limited, and I want the mechanism to be able to be applied retroactively”, he insisted.
“We regret that the EU has to wait for the European Court of Justice's ruling on the imposition of sanctions and that the rule of law mechanism will not apply as early as next year. Breaches of the Rule of law are going on as we speak.”, stressed the co-president of the Greens/EFA group in the European Parliament, Ska Keller (Germany).
And Sophie in 't Veld (Renew Europe, the Netherlands) asked, “What legal base gives the Commission the discretion to postpone the entry into force of an EU law?”
See European Council conclusions: https://bit.ly/39VXkPs (Original version in French by Lionel Changeur, with the editorial staff)