COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council on a general regime of conditionality for the protection of the Union budget
Date: 2020-12-14
Institutions: Directorate-General for Budget, European Commission
Subjects: EU Member State, budget policy, budgetary resources, democracy, distribution of EU funding, financial management, general budget (EU), implementation of the budget, rule of law

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   EUROPEAN COMMISSION  Brussels, 14.12.2020  COM(2020) 843 final 2018/0136 (COD)  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT  pursuant to Article 294(6) of the Treaty on the Functioning of the European Union  concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council on a general regime of conditionality for the protection of the Union budget    
 
2018/0136 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council on the adoption of a Regulation of the European Parliament and 
of the Council on a general regime of conditionality for the protection of the Union 
budget 

1. 

BACKGROUND 

Date of transmission of the proposal to the European Parliament and 
to the Council 
(document COM(2018) 324 final – 2018/0136 COD): 

2 May 2018. 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

18 September 2018. 

Date of the position of the European Parliament, first reading: 

4 April 2019. 

Date of transmission of the amended proposal: 

N/A 

Date of adoption of the position of the Council: 

14 December 2020. 

2. 

OBJECTIVE OF THE PROPOSAL FROM THE COMMISSION 

The aim of this proposal is to establish the rules necessary for the protection of the Union’s 
budget in case of generalised deficiencies as regards the rule of law in the Member States. 

The European Union should have the possibility to adopt appropriate measures in such cases, 
in full respect of the principles of transparency and proportionality.  

3. 

COMMENTS ON THE POSITION OF THE COUNCIL 

The  position  of  the Council  as  adopted  at  first  reading  fully  reflects  the  political  agreement 
reached  between  the  European  Parliament  and  the  Council  on  5  November  2020.  The 
Commission supports this agreement. The main points of this agreement are the following: 

 

Change in  terminology  from “generalised deficiencies as regards the rule of law in 
the Member States” to “breaches of the principles of the rule of law”: Language has 
been  added  clarifying  that  the  mechanism  may  also  be  used  to  address  systemic 
breaches  (that  are  widespread  or  due  to  recurrent  practices  or  omissions  by  public 
authorities,  or  to  general  measures).  In  addition,  the  complementarity  with  the 
applicable sector-specific and financial rules is emphasised. 

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 

 

 

 

Preventive dimension for the mechanism: it is clarified that measures could also be 
taken  in  case  of  breaches  that  “seriously  risk  affecting”  the  sound  financial 
management or the financial interests of the Union. The qualification “seriously” was 
not in the Commission proposal, but it is acceptable as the preventive dimension of 
the mechanism is preserved. 

Reinforcement  of  the  protection  of  final  beneficiaries  through  obligations  for  the 
Commission  to  provide  information  and  guidance.  The  Commission  will  do  its 
utmost  to  ensure  that  amounts  due  are  effectively  paid  by  the  Member  State 
concerned  (using  existing  mechanisms).  This  strengthens  the  protection  of  final 
beneficiaries and recipients, in line with the proposal. 

Procedure to adopt and to lift measures and change of the applicable majority in the 
Council:  The  procedure  was  streamlined  to  ensure  an  effective  and  speedy 
mechanism while preserving the right of the Member States concerned to be heard. 
The  Council  will  decide  by  qualified  majority  voting  (the  Commission  proposed 
reverse  qualified  majority).  A  recital  and  an  article  recall  that  the  Commission  can 
make  use  of  its  institutional  prerogatives  with  a  view  to  ensuring  that  the  Council 
complies  with  its  obligation  to  take  a  decision.  The  modifications  maintain  the 
overall effectiveness of the mechanism and preserve the institutional autonomy of the 
Commission. 

“Emergency  brake”:  A  recital  explains  that  exceptionally  the  Member  State 
concerned may request the President of the European Council to refer the matter to 
the  European  Council.  In  the  event  this  political  step  is  triggered,  in  principle  no 
decision would be taken by the Council until the European Council has discussed the 
matter.  This  discussion  should  take  place  within  a  maximum  of  three  months.  The 
Commission  accepts  this  compromise  as  it  provides  for  a  political  discussion  that 
does  not  entail  a  formal  step  in  the  procedure  or  an  involvement  of  the  European 
Council in budget implementation, and should not render the mechanism ineffective, 
as  the  decision-making  power  of  the  Council  and  the  Commission’s  role  are  not 
affected. 

 

Addition  of  a  ‘structured  dialogue’:  The  possibility  for  the  Parliament  to  invite  the 
Commission to a structured dialogue on its findings is acceptable.   

4. 

CONCLUSION 

The Commission supports the results of the inter-institutional negotiations and can therefore 
accept the Council's position at first reading. 

5. 

DECLARATIONS FROM THE COMMISSION  

The Commission has made one unilateral declaration and one joint declaration, which can be 
found in the appendix. 

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APPENDIX 

Declarations from the Commission 

Commission  declaration  on  the  report  to  the  European  Parliament  and  the  Council  on  the 
application of the Regulation:  

"The  Commission  agrees  to  consider  accompanying  the  report  to  the  European 
Parliament  and  the  Council  on  the  application  of  this  Regulation  by  appropriate 
proposals where necessary." 

Joint declaration on the potential inclusion of the content of this Regulation into the Financial 
Regulation:  

"Without prejudice to the Commission's right of initiative, the European Parliament, 
the  Council  and  Commission  agree  to  consider  including  the  content  of  this 
Regulation  into  Regulation  (EU,  Euratom)  2018/1046  of  the  European  Parliament 
and  of  the  Council  of  18  July  2018  (the  "Financial  Regulation")  upon  its  next 
revision." 

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