Jean-Marc Germain (S&D, French) and Monika Hohlmeier (EPP, German) presented their draft own-initiative report on the implementation of the Rule of law conditionality regime at a meeting of the European Parliament’s Committees on Budget and Budgetary Control on Monday 1 September.
Five years after the introduction of the conditionality mechanism and on the eve of negotiations on the 2028-2034 Multiannual Financial Framework (MFF), Parliament said that the time had come to “assess the application [of the Regulation] and draw lessons for the future”.
The first question raised by the co-rapporteurs was whether or not to revise the regulations, claiming that the time was not right. However, a number of aspects need to be reviewed to make it “more effective” and “more coherent”, said Jean-Marc Germain.
The co-rapporteurs want to focus on “the transparency of the process, areas of applicability, revision of the guidelines, deterrent effect, and the scrutiny role of the Parliament”.
The main criticisms levelled at the Commission concern the lack of measures taken, the time taken to react before proceedings are initiated and the extent of the suspension of European funding. The draft own-initiative report points out that in several Member States, budgetary risks have been highlighted by OLAF and the European Public Prosecutor’s Office, as well as in the European Commission’s annual reports on the Rule of law.
The other two criticisms concern Hungary, which was targeted by the ‘conditionality/Rule of law’ mechanism in 2022, even though the latter had already come into force in January 2021 and “serious breaches” had already been observed, according to the co-rapporteurs. According to Jean-Marc Germain and Monika Hohlmeier, the suspension of payments, which represented a suspension of “55% of budgetary commitments for three operational programmes under the cohesion policy for Hungary” (see EUROPE 13689/14), should have been “on a much larger scale”.
The co-rapporteurs also highlighted a potential lack of coherence in the application of the conditionality mechanism, due to the scattering of existing tools for enforcing the Rule of law. In their view, “the Rule of law measures required to unlock EU funding” (in the ‘Recovery and Resilience Facility’ regulation and the conditionality regulation) “should be seen as a single, comprehensive reform package”. In other words, progress in one or more areas should not allow for the release of funds “if shortcomings persist in another”.
The other major area for development hoped for by the co-rapporteurs concerns the transparency of the mechanism and the inclusion of the European Parliament in the process, which to date has mainly consisted of “ex post information”. To remedy this, the co-rapporteurs are calling for “a formal consultative role” to be assigned to the Commission prior to any communication.
In order to better inform the general public about these procedures, the co-rapporteurs propose the creation of an interactive portal containing all the information on cases linked to budgetary conditionality, “from the reporting stage to the eventual lifting of the measures”. In their view, the European Commission must also guarantee “adequate protection for whistleblowers” in order to encourage reporting through complaints procedures.
The MEPs from the Renew Europe, Greens/EFA and European People’s Party groups who took part in the discussion gave their support to the draft own-initiative report. Moritz Körner (Renew Europe, German) wanted the Parliament to insist on “safeguarding the final beneficiaries”, who, when deprived of European funding, are victims of their government’s actions. Monika Hohlmeier stressed that the discussion would be in-depth and Jean-Marc Germain said that the results of studies commissioned by the Commission on the subject were awaited. The political groups have until 12 September to table their amendments.
To see the draft own-initiative report (in French): https://aeur.eu/f/i81 (Original version in French by Florent Servia)