Showing teeth

EU considers financial penalties for rogue states

eu commission juncker and poland
Juncker, keeping Poland at arm's length. Source: AP

The EU Commission is looking for more effective ways to punish member states that undermine the rule of law — namely Hungary and Poland, whose archconservative governments have raised the EU’s hackles by tightening control over the judiciary and media.

The currently available punishment, Article 7, under which a member state’s EU voting rights can be suspended, isn’t working. “It’s been shown to be a toothless tiger so far,” said Franz Mayer, an expert on European law who has advised the German government. “Decisions require unanimity minus the affected member.” And that unanimity is virtually impossible to attain if problem countries have each other’s backs, as Hungary and Poland presumably would.

EU Commission President Jean-Claude Juncker has responded to the dilemma by proposing new rules that would make it easier for the EU to cut off funding from recalcitrant members.

Current EU rules require member states to ensure effective mechanisms to prevent fraud and abuse involving payments from the EU. Mr. Juncker said adhering to the rule of law is “a basic condition for viable budgeting and effective EU financing.”

Independent judges are essential for ensuring that the abuse of EU monies is punished and that the funds are repaid. The commission now plans to introduce additional criteria for determining whether a country is observing the rule of law, including the independence of courts, a functioning public administration and cooperation with the new European Public Prosecutor’s Office.

Mr. Juncker said adhering to the rule of law is “a basic condition for viable budgeting and effective EU financing.”

The changes would give the EU Commission the right to trigger a review if it decides that a country has breached those criteria. The government in question would get a maximum of one month to respond, after which the commission could demand the repayment of funds. The Council of Ministers would only be able to override the commission’s decision if a qualified majority of member states — 16 of 28 countries that represent 65 percent of the population — were to demand it.

“The commission is constructing a way of avoiding the shortcomings of the Article 7 procedure that sounds promising,” Mr. Mayer said.

But it’s unclear whether the commission’s proposals will ever become law. It’s likely to get the necessary majority in the European Parliament but could fail to get the blessing of the European Council, which is comprised of member states’ leaders.

Important net contributors such as Germany and France are strongly in favor of the new rules. But there will likely be considerable resistance from eastern and central European countries.

Till Hoppe writes about foreign policy for Handelsblatt. Heike Anger is a correspondent in the parliamentary editorial office of Handelsblatt in Berlin. To contact the authors: hoppe@handelsblatt.comanger@handelsblatt.com

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