11th Aug 2022

Tensions foreseen over push to link climate funds to rule of law

  • Linking the climate fund to the rule of law would especially affect Hungary and coal-dependent Poland (Photo: Kris Duda)
Listen to article

Leading MEPs want to make access to the EU's climate funds conditional on member states' adherence to democracy and the rule of law - as part of the fightback against democratic backsliding.

The proposal, however, is likely to aggravate existing tensions with Hungary and Poland over judicial independence, potentially harming vulnerable citizens and small businesses.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The €72bn new climate fund aims to help tackle energy poverty in the EU and overcome some member states' reluctance to expand carbon-pricing policies to the building and road transport sectors.

And it could also counteract a possible public backlash against climate measures.

But EU member states that do not adhere to the principles of the rule of law and fundamental values should not be beneficiaries, Esther de Lange and another conservative lawmaker, David Casa from Malta, said in a draft report.

"Certain countries, of course, won't like it but the rule of law is so fundamental that it should be a condition sine qua non," de Lange told a news conference on Thursday (10 February)

The proposal would especially affect Hungary and coal-dependent Poland, which have both already been put under the Article 7 sanctions procedure over corruption and judicial independence issues.

And it would likely become a controversial issue in final negotiations with the EU council, aggravating intra-EU tensions even further.

"Linking the fund with the rule of law may cause some controversy…[because] there is a risk that doing so could limit the ability to benefit those who need it the most," an EU diplomat told EUobserver.

The European Commission is currently holding up post-pandemic recovery funds to Hungary and Poland, sparking rows not only with Warsaw and Budapest but also with MEPs.

Next week, the European Court of Justice will rule on the legality of the novel conditionality mechanism, which allows the bloc to suspend EU funds if a member state does not respect the rule of law.

But linking climate transition funds to the rule of law could be another motivation for member states to comply with EU law, according to Zsolt Darvas from the Brussels-based think tank Breugel.

"This will provide further incentives to comply with EU rule of law standards. Not benefiting from the fund will not improve the social situation in these countries and then they will have to find resources from elsewhere, which could prove to be difficult," Darvas said.

The European Commission proposed the "social climate fund" last summer as part of its Fit-for-55 package to support the energy transition for poor households over the 2025-2032 period.

EU orders Poland to pay €70m in fines

The case is one of many disputes between the EU and Poland's ruling Law and Justice (PiS) party, which have started to cost money for Warsaw.

Macron gloomy on rule of law after meeting Orbán

French president Emmanuel Macron said Hungary does not intend to settle the rule-of-law concerns by its general election next April, and will not have EU funds available until then.


A German judge: my fears on rule of law in EU

As a German national, I see German history as a constant warning to defend the rule of law - and to be vigilant to detect even the slightest beginnings of its erosion.

Almost two-thirds of Europe in danger of drought

Data released by the European Drought Observatory show 60 percent of Europe and the United Kingdom is currently in a state of drought, with farming, homes and industry being affected. Drought conditions have also led to an increase in wildfires.

Droughts prompt calls to cut water use amid harvest fears

With the prolonged lack of rain and high temperatures, fears have emerged over water shortages and droughts decreasing crop yields — prompting calls to use less water and reuse urban wastewater for agricultural irrigation.

Brazil pitches itself as answer to Ukraine war food shortages

Brazilian president Jair Bolsonaro is pitching his Latin American country as the answer to the world food crisis following the war in Ukraine. The traditional wheat importer has now exported three million tonnes of the grain so far in 2022.


Exploiting the Ukraine crisis for Big Business

From food policy to climate change, corporate lobbyists are exploiting the Ukraine crisis to try to slash legislation that gets in the way of profit. But this is only making things worse.

Stakeholders' Highlights

  1. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  2. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  3. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  4. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  5. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  6. Council of the EUEU: new rules on corporate sustainability reporting

Join EUobserver

Support quality EU news

Join us