Friday

21st Sep 2018

Auditors call for stricter rules on donations to EU parties

  • The Court of Auditors wants potentially unlimited fines for 'irregular' loans and donations (Photo: www.gotcredit.com)

Rules on donations and loans linked to the funding of European Parliament's political parties and foundations should be strengthened, the European Court of Auditors have said.

In an opinion issued on Wednesday (20 December), the guardians of EU finances analysed a proposal tabled by the European Commission on 13 September to address loopholes in the funding of European political parties and foundations, following a series of scandals over the past two years.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The auditors noted that the commission's proposal do not regulate donations for EU institutions or authorities "involved in the management of EU funds."

They also noted that the commission did not propose rules on donations to entities related, directly or indirectly, to groups and foundations, nor rules concerning the terms and conditions of loans.

All these issues were included as part of several 2013 court of auditors' recommendations to improve the previous legislation on funding of European parties and foundations.

Loans and donations were at the heart of several scandals concerning fraud allegations against MEPs, and the illegal spending of public money by anti-EU parties and foundations, and other scandals concerning lucrative contracts obtained in exchange of donations by people.

These practices were used for example by the Institute for Direct Democracy in Europe (IDDE), a think tank linked to the UKIP-dominated Alliance for Direct Democracy in Europe.

According to the commission and parliamentary services, the auditors report, loans, donations and related "questionable practices" are generally boosted by difficulties encountered by political parties and foundations in finding contributions needed to meet the co-financing threshold.

The co-financing threshold is where EU parties and foundations are required to raise at least 15 percent of their own money before they can access EU funding.

To overcome this issue, the commission proposed to make it easier for parties and foundations to get EU grants, cutting the co-financing threshold to 10 percent for political parties and to five percent for foundations.

Auditors agree with this proposal in order to to "mitigate the risk of using questionable practices".

Other suggestions by the court include that financial sanctions due to any illegal financial activity by political entities "should be raised" and be more severe.

No 'maximum ceiling' on fines

Fines are currently limited to 10 percent of the annual budget of the party or foundation, whereas the court of auditors stated in 2013 that "the amount of a fine should be a multiple of the irregular amounts involved, without a maximum ceiling."

Similarly, auditors considers the ruling of the parliament on imposing fines as too "discretionary".

The auditors recommend that all the provisions concerning the funding of political parties and foundations should be grouped under a single rule book to avoid overlaps and simplify the legislative framework.

Lastly, the auditors warns that "revising legislation early after entering into force and only to address a limited number of issues should, in general, be avoided."

The commission's proposal is part of a 'democracy package' presented by vice president Frans Timmermans, ahead of the 2019 European elections.

The text was approved by the European parliament's constitutional affairs committee on 21 November.

By lowering the threshold for distribution of funds, said S&D MEP Mercedes Bresso on 21 November "we have enhanced the democratic representation of political parties and foundations."

Anti-EU parties face funding cuts

Reforms proposed by Commission would reduce EU funding for nationalist and ultra-right European political parties by up to 66 percent.

MEPs crack down on funding for far right

Four eurosceptic and far-right parties will receive less money up front and will have to present bank guarantees, in a crackdown on misuse of funds after several scandals.

National Front in EU fraud allegation

The National Front is facing allegations of fraud for having the EU parliament pay salaries to MEP assistants who perform tasks unrelated to the assembly.

EU parliament will not budge on office expenses

Hungarian centre-right MEP Livia Jaroka sticks to earlier decision: documents related to the minor reform of the expenses system, requested by EUobserver, should remain secret.

Sefcovic launches bid to be EU Commission president

Europe must have a robust foreign policy and nurture high-tech industries, Slovak EU commissioner Maros Sefcovic has said in his bid to succeed Jean-Claude Juncker as the next EU commission president.

Sefcovic launches bid to be EU Commission president

Europe must have a robust foreign policy and nurture high-tech industries, Slovak EU commissioner Maros Sefcovic has said in his bid to succeed Jean-Claude Juncker as the next EU commission president.

'Every group split' ahead of EU copyright vote

Political groups in the European Parliament are split about how to vote for a directive that would reform the EU's copyright regime - amid warnings that freedom of expression and creators' rights are at risk.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  2. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  3. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  4. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  5. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  6. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  7. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  8. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  9. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  10. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  11. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  12. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  2. Mission of China to the EUChina: Work Together for a Better Globalisation
  3. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  4. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  5. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  6. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  7. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  8. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  9. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  10. FIFAGreen Stadiums at the 2018 Fifa World Cup
  11. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  12. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank

Join EUobserver

Support quality EU news

Join us