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EU could trigger new rule-of-law budget weapon next month
Guidelines

EU could trigger new rule-of-law budget weapon next month

18.02.2022
Commission in process of publishing draft guidelines for how it plans to use the new tool in no more than three weeks, source says
Polish protesters took to the street in October in defence of the EU
Polish protesters took to the street in October in defence of the EU
Photo credit: AFP

The European Union could use its new budget powers to deny funds to countries accused of violating democratic standards in less than a month.

Once the European Commission, the bloc’s executive arm, triggers the so-called conditionality mechanism, it could then take as long as nine months for the procedure to run its course, according to a person familiar with the process. 

The EU Court of Justice this week backed the legality of the new budget rule, paving the way for the commission to withhold billions of euros of funding to countries accused of violating the bloc’s democratic standards. Hungary could miss out on more than €40 billion from the EU’s seven-year budget, Poland more than €130 billion.

The EU took an informal first step last year by sending letters to Poland and Hungary to address accusations that funds provided by the bloc could have been subjected to corruption or fraud, or that the EU’s financial interests are at risk. Hungary holds general elections on 3 April. 

Draft guidelines

The EU put in place the contested tool last year after growing weary of challenges to independence of judges, an erosion of minority rights to the primacy of EU law - a key premise of the bloc’s founding treaty.

The commission is in the process of tweaking draft guidelines for how it plans to use the new tool, and will publish those in no more than three weeks, said the person, who asked not to be identified because the plans are private. 

The commission will need to show that there’s a direct link between actions in the targeted country and actual damage or serious risk of damage to the EU’s finances.  

Orban’s ruling Fidesz called the EU court ruling this week “the latest step in a months-long political revenge campaign.” The party said that the EU wants to stigmatize Hungary for its child-protection law, which critics including the commission say restricts LGBTQ rights.


©2022 Bloomberg L.P.


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