Anti-EU parties face funding cuts

"These proposed amendments in the existing regulation in no way, I want to stress that, in no way dictate what programmes European parties should follow," he said.

The move is part of a so-called democracy package presented by Timmermans, ahead of the 2019 European elections.

It follows a series of scandals over the past two years that have seen top-ranking MEPs embroiled in fraud allegations, as well as virulent anti-EU parties and foundations accused of siphoning off and illegally spending public money.

It also follows public uproar amid revelations that the far-right Alliance for Peace and Freedom (APF), which includes neo-nazis among its ranks, received €400,000 from the EU parliament.

The plan now is to reduce the EU parliament's budget for European political parties, in what Timmermans said would then increase the share of the total funding distributed in proportion to the number of MEPs elected.

"The budget for European political parties is distributed equally among of all them, no matter how big or small. This in our view is not proportionate to true democratic representation in parliament," he said.

European political parties were granted over €30 million for 2017. Fifteen percent of that was distributed equally, with the remaining 85 percent distributed in proportion to each party's share of elected MEPs. The plan now is to reduce the 15 percent share to five percent.

But such a system would cut EU money to the APF by over 44 percent.

The ultra-nationalist Alliance of European National Movements (AENM), the right-wing European Alliance for Freedom (EAF), and the European Christian Political Movement (ECPM) would all also register a 44-percent cut.

The biggest loser, at over 66 percent, is the anti-abortion and catholic nationalist party, Coalition for Life and Family (CVF), which has received almost €300,000 this year alone.

Meanwhile, the more mainstream parties like the centre-right EPP, centre-left S&D, and liberal Alde would see little to no reduction and even some gains.

The Greens would drop by 0.8 percent, Alde increase by 1.5 percent, and no change for EPP and S&D.

Money blues

Pan-European parties and their political foundations are also required to raise at least 15 percent of their own money before they can access EU funding.

Many are finding it difficult to reach the minimum threshold and have instead inflated their figures by using "contributions in kind", a practice that is nearly impossible to audit.

"We also uncovered a number of very questionable practices, blatant conflicts of interest, retrospectively paid commissions," said Didier Klethi, the EU parliament's director of finance, over the summer during a discussion in the constitutional affairs committee.

Other dubious methods include getting people to donate money in exchange for lucrative contracts.

Such tactics were used by the Institute for Direct Democracy in Europe (IDDE), a think tank linked to the Ukip-dominated Alliance for Direct Democracy in Europe.

One Swedish organisation donated €12,000 to IDDE in return for a €20,000 contract. Another from Iceland gave €10,000 and ended up a with €36,000 contract, according to internal EU parliament documents seen by EUobserver.

The EU commission's solution "to reduce incentives for questionable practices" is simply to make it much easier to get EU grants.

In practice, that means cutting the co-financing threshold from 15 percent to 10 percent for European political parties and to 5 percent for European political foundations.

2019 election deadline

Given the slow pace of the EU legislative process, it is not clear if such reforms will be ready for the 2019 elections.

German centre-right MEP Rainer Wieland, who is steering the reforms at the EU parliament, expressed some doubts over it in July.

"We should do everything that we can to ensure that by 2019, the year of the elections, these rules can be applied," he said.

A more realistic scenario, he added, would be to have the rules in place in early 2020.