Friday

21st Sep 2018

Poland, Hungary push back at EU budget 'conditionality'

Poland's EU affairs minister accused the European Commission of a "massive power grab" over the executive's plans to link some funds to respect for the rule of law - highlighting the concerns of those countries that feel targeted by the proposal.

EU affairs ministers on Monday (14 May) had their first chance to discuss the commission's proposal for the next seven-year EU budget, which for the first time involves the idea of tying the disbursement of EU funds to member states' record on upholding the rule of law.

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 debate revealed deep divisions, just as the EU gears up for an uncertain period with the US becoming an unpredictable partner, and China developing into a more assertive global player.

Poland, which is under scrutiny by the commission for breaking EU rules on the independence of the judiciary, and Hungary which has had its own run-in with the EU executive, both feel particularly targeted by the commission's proposal.

Poland's minister Konrad Szymanski pushed back hard on the proposal saying it is an attempt to override legally binding rulings from the European Court of Justice (ECJ).

"The proposal seems like a massive power grab with too high a discretion in the commission's hand," Szymanski told the other ministers.

"We are ready to support all the instruments to better control EU money, but we need something more intelligent and treaty-based," he added.

Hungary's ambassador for the EU, Oliver Varhelyi, filling in for the minister, backed up Poland's position.

"One would have to be very careful when introducing such an instrument, one has to follow the law verbatim here," he said, adding that there are serious concerns with the proposal's legal base and the criteria's for the measure are vague.

The so-called 'conditionality' instrument would be triggered if the commission detects "generalised deficiencies" in the functioning of a member states' judiciary that impacts on the the proper use of EU funds.

"Generalised deficiencies" could mean national authorities not following up damning reports by the EU's anti-fraud agency, Olaf, or that judges are systematically biased, or that judgement are not enforced in practice, EU officials say.

The commission would have the power to suspend EU funds if the member state does not address these problems, and the council - the body of member states - could only stop it with a qualified majority.

Several member states, including Belgium, Germany, France, Sweden, however expressed support for the new instrument.

"It is very reasonable to ask to respect the rule of law as a prerequisite for EU funds," Sweden's minister for EU affairs and trade Ann Linde said.

Old vs New

Several member states also pushed back on the commission's proposal to include new indicators when calculating the allocation of cohesion funds, other than the GDP-per-capita figure that has been the centre of the equation so far.

The commission plans to introduce migration, unemployment, climate and other figures to calculate who much countries and regions get. However, its detailed plans are only going to be unveiled at the end of May, making specific calculations for now very difficult.

Central and eastern European member states fear the new indicators will drive cohesion funds away from them, to southern European countries.

Some central and eastern states heavily criticised the commission's plans to cut the fund that they said could result in a 30-40 percent loss for some of the poorest regions. Poland fears the national cuts could be also as high as 30 percent.

"Should it stay as it proposed, politically we will not be able to explain or justify this approach that makes the least developed regions the losers [of the EU budget]," Ivan Korcok, Slovakia's state secretary for EU affairs said, arguing the cohesion cuts were too high.

Net payers, particularly the Netherlands, Austria, Sweden, Denmark and Finland that do not want to see an increase in the overall figure of the EU budget.

They argue that European investment should be turned away from 'traditional' areas such as cohesion and agriculture, and invested instead in innovation and climate, and used to address new challenges, such as defence and migration.

"More ambition and less tradition," Dutch foreign minister Stef Blok said.

Some ministers argued, however, that drastically cutting cohesion funds, a tool to help the economic converges of poor regions, could harm the overall competitiveness of the EU, and weaken the internal market.

Another major faultline is emerging among member states over the rebates, a complicated correction mechanism that was originally designed to keep the UK's budget contribution in some sort of equilibrium.

In a complex mechanism Germany, the Netherlands, Austria and Sweden also get rebates, which the commission plans to phase out in five years as Brexit scraps the rationale for the original rebate.

This is unacceptable to the Netherlands, as it fears its budget contribution will be disproportionate to its size. Yet France, for instance, is arguing that rebates should be cut fully, as with Brexit there is no reason any longer for their existence.

The key budget issues on EU leaders' table

As EU leaders gather on Friday to start discussing the future of the EU's spending after the UK leaves, major battle lines are already emerging among member states. Here is a look at the key issues.

Juncker seeks budget whip on unruly states

EU officials want discretionary powers to suspend funds from states that violate treaty values, in a bold power grab amid likely clashes with Hungary and Poland.

Commission 'playing tricks' with EU budget figures

The EU parliament's budget rapporteur complained the Commission is using numbers with a "desire to confuse". According to parliament estimates, the cohesion fund could suffer as much as a 45 percent cut.

Visegrad Four 'nothing to hide' on rule of law issue

Central European countries say they have "nothing to hide" on rule of law issues - while justice commissioner Vera Jourova said they should agree to the Commission's controversial budget plans on rule of law conditionality.

News in Brief

  1. UK's Brexit plan 'won't work', says EU's Tusk
  2. Austria ex-chancellor hints at running for Juncker's job
  3. Greece to move asylum-seekers from overcrowded Lesbos camp
  4. Transatlantic soya trade soars due to trade wars
  5. EU tables strategy for connecting Europe and Asia
  6. Bulgaria backs Hungary in dispute with EU
  7. Trump urged Spain to build Sahara wall to stop migrants
  8. EU-Arab League summit proposed for February in Egypt

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