Draft EU law says member states jeopardising the rule of law will risk losing EU funds

Written by on December 13, 2018 in Europe - Comments Off on Draft EU law says member states jeopardising the rule of law will risk losing EU funds

Governments of EU countries interfering with courts or going easy on fraud and corruption will risk being stripped of EU funds, according to a draft law endorsed by a committee of the European Parliament on December 13.

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 ultimately only be implemented once approved by the European Parliament and Council.

Once the member state remedies the deficits identified by the EU Commission, the European 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 Prosecutors 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 annually assess the situation in all member states and make a public summary of its findings.

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

Along with deciding on the measures, the Commission would submit a proposal to the Parliament and the Council to transfer an amount matching the value of the proposed measures to the budgetary reserve.

The decision would take effect after four weeks, unless the European Parliament, acting by majority of votes cast, or Council, acting by qualified majority, amend or reject it.

Once the Commission establishes that the deficits have been lifted, the locked amount would be unfrozen using the same procedure.

(Photo: EC Audiovisual Service)

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