European Parliament resolution of 8 July 2021 on the creation of guidelines for the application of the general regime of conditionality for the protection of the Union budget (2021/2071(INI))
Date: 2021-07-08
Institutions: Committee on Budgetary Control, Committee on Budgets, Committee on Civil Liberties, Justice and Home Affairs, Committee on Constitutional Affairs, European Parliament
Subjects: EU Member State, EU budget, budget policy, budgetary resources, distribution of EU funding, eligibility criteria, financial management, implementation of the budget, rule of law








C_2022099EN.01014601.xml










1.3.2022   


EN


Official Journal of the European Union


C 99/146






P9_TA(2021)0348
The creation of guidelines for the application of the general regime of conditionality for the protection of the Union budget
European Parliament resolution of 8 July 2021 on the creation of guidelines for the application of the general regime of conditionality for the protection of the Union budget (2021/2071(INI))
(2022/C 99/14)

The European Parliament,






—


having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (1) (‘the Regulation’),










—


having regard to Articles 2 and 7 of the Treaty on European Union (TEU),










—


having regard to its resolution of 10 June 2021 on the rule of law situation in the European Union and the application of the Conditionality Regulation (EU, Euratom) 2020/2092 (2),










—


having regard to its resolution of 17 December 2020 on the Multiannual Financial Framework 2021-2027, the Interinstitutional Agreement, the EU Recovery Instrument and the Rule of Law Regulation (3),










—


having regard to its resolution of 25 March 2021 on the application of Regulation (EU, Euratom) 2020/2092, the rule-of-law conditionality mechanism (4),










—


having regard to the Commission communication of 30 September 2020 on the 2020 Rule of Law Report — The rule of law situation in the European Union (COM(2020)0580),










—


having regard to the Commission’s reasoned proposal for a Council decision of 20 December 2017 on the determination of a clear risk of a serious breach by the Republic of Poland of the rule of law, issued in accordance with Article 7(1) ΤEU (COM(2017)0835),










—


having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (5) (the Financial Regulation),










—


having regard to Rule 54 of its Rules of Procedure,










—


having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 58 of the Rules of Procedure,










—


having regard to the opinion of the Committee on Civil Liberties, Justice and Home Affairs,










—


having regard to the letter of the Committee on Constitutional Affairs,










—


having regard to the report of the Committee on Budgets and the Committee on Budgetary Control (A9-0226/2021),










A.


whereas the conditionality mechanism set out by the Regulation was part of the overall political agreement on the multiannual financial framework (MFF) for 2021-2027, the Next Generation EU recovery plan and the Own Resources Decision (6), and should not be delayed in its application, in particular with regard to the application of the aforementioned instruments;










B.


whereas the volume of the 2021-2027 MFF and Next Generation EU represents an unprecedented budget for the EU in historical terms which aims to support the EU’s economic and social recovery following the consequences of the COVID-19 pandemic and therefore requires, more than ever, the timely and proper application of the principles of sound financial management, as well as the protection of the EU’s financial interests;










C.


whereas according to the Regulation, respect for the rule of law is an essential precondition for compliance with the principles of sound financial management;










D.


whereas the Regulation entered into force on 1 January 2021 and has been binding in its entirety and directly applicable in all Member States since that date on all payments made since the entry into force of the Regulation;










E.


whereas the Commission decided to abide by the non-binding European Council conclusions of 10 and 11 December 2020 and declared that it would develop guidelines for the application of the Regulation;










F.


whereas in its resolution of 25 March 2021 on the application of the Regulation, Parliament requested that the Commission adopt the guidelines no later than 1 June 2021 and after having consulted Parliament;










G.


whereas the topic ‘Values and rights, rule of law, security’ will be discussed at the Conference on the Future of Europe, allowing for a thorough reflection on the Union’s tools to monitor, prevent and tackle violations of EU values including the rule of law;





1.   

Regrets the fact that the Commission decided to develop guidelines for the application of the Regulation; reiterates once again its view that the text of the Regulation is clear and does not require any additional interpretation in order to be applied, and that the co-legislators have not delegated to the Commission any powers to this effect; takes note of the draft text of the guidelines that the Commission has shared with Parliament and the Member States;



2.   

Highlights that guidelines are not legally binding; expresses its disappointment that the Commission is deviating from its usual practice of drafting guidelines for the application of a legal act only in cases where the actual implementation of the act over a certain period of time shows the need for guidance; underlines that the process of developing guidelines must in no event cause further delay to the application of the Regulation;



3.   

Recalls that the guidelines cannot alter, expand or narrow the text of the Regulation; emphasises that in order to add any value, the guidelines must clarify how the legislative provisions of the Regulation will be applied in practice and therefore outline in a timely manner the procedure, definitions and methodology that the Commission will apply;



4.   

Deeply regrets the fact that the Commission failed to meet the deadline set by Parliament to fulfil its obligations under the Regulation by 1 June 2021, including as regards the development of the guidelines; welcomes the fact that on 23 June 2021, the President of Parliament called on the Commission to take action, on the basis of Article 265 of the Treaty on the Functioning of the European Union (TFEU), in order to fulfil its obligations and ensure the full and immediate application of the Regulation;



5.   

Believes that the Commission has not used the time since the entry into force of the Regulation efficiently; urges the Commission to avoid any further delay in the application of the Regulation and to investigate swiftly and thoroughly any potential breaches of the principles of the rule of law in the Member States that affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way; reiterates that the situation in some Member States already warrants immediate action under Article 6(1) of the Regulation by means of a written notification to those Member States and informing Parliament thereof;



6.   

Recalls that the Commission’s political guidelines for 2019-2024 stated that ‘there can be no compromise when it comes to defending our core values’ and that the full Union toolbox would be guaranteed to be used at EU level; recalls that the Commission ‘shall be completely independent’ and its members ‘shall neither seek nor take instructions from any Government’ in accordance with Article 17(3) TEU and Article 245 TFEU; recalls, furthermore, that in accordance with Article 17(8) TEU, the Commission ‘shall be responsible to the European Parliament’;



7.   

Requests that the Commission report to Parliament regularly and proactively at least twice a year on new and ongoing cases under investigation, starting with the first cases as soon as possible;



8.   

Commits to closely scrutinising the implementation of the Regulation whenever concerns arise regarding potential breaches of the principles of the rule of law in the Member States that fall within its scope; endeavours to organise regular sessions to monitor the implementation of the Regulation in the lead committees under the guidance of the rapporteurs; calls on the Commission to respond to the scrutiny of the lead committees in a timely manner by providing thorough information;




Breaches of the principles of the rule of law










9.


Underlines that the Regulation applies both to individual breaches of the principles of the rule of law and to ‘systemic’ breaches that are widespread or are a result of recurrent practices or omissions by public authorities, or general measures adopted by such authorities;












10.


Calls on the Commission to clarify in the guidelines that breaches of the rule of law in a Member State which result from decisions or events that took place prior to 1 January 2021 still fall within the scope of the Regulation as long as their effect is still ongoing;












11.


Draws particular attention to the list of indicative breaches of the principles of the rule of law laid down in Article 3 of the Regulation; urges the Commission to investigate potential occurrences of the breaches included in that list in the Member States, while pointing out that other practices or omissions by public authorities may also be relevant; notes that the Commission’s 2020 rule of law report already contains indications of breaches in several Member States that may be relevant for triggering the Regulation;












12.


Points out that the types of conduct by Member State entities relevant to the application of the conditionality regime laid down in Article 4 of the Regulation does not exclude the potential relevance of other situations or conduct by authorities that are relevant to the sound financial management of the Union budget or the protection of the financial interests of the Union;












13.


Stresses the importance of cooperation between the EU institutions, the Member States, the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office (EPPO); recalls that ineffective or untimely cooperation with the EPPO and OLAF may provide grounds for action under the Regulation; stresses that in the case of the EPPO, effective and timely cooperation entails not only the obligation for national authorities to actively assist and support the EPPO’s criminal investigations and prosecutions, but also for the national government to ensure that its European and Delegated Prosecutors are appointed in a timely and impartial manner; is also of the opinion that the systematic lack of follow-up to OLAF recommendations may constitute an omission pursuant to the Regulation;












14.


Recalls that the identification of breaches of the principles of the rule of law requires an objective, impartial, fair and thorough qualitative assessment by the Commission, which should take into account relevant information from available sources and recognised institutions, including judgments of the Court of Justice of the European Union and relevant national and international courts such as the European Court of Human Rights, reports of the Court of Auditors, the Commission’s annual rule of law report and EU Justice Scoreboard, the reports of OLAF and the EPPO as relevant, and conclusions and recommendations of relevant international organisations and networks, including Council of Europe bodies such as the Council of Europe Group of States against Corruption (GRECO) and the Venice Commission, in particular its rule of law checklist, and the European networks of supreme courts and councils for the judiciary; calls on the Commission to provide information on how it will collect, analyse and evaluate this information when building cases;












15.


Considers, in particular, that the Commission’s annual rule of law report, as an objective, impartial, fair and qualitative assessment of breaches of the principles of rule of law, is a crucial source of information for the Commission’s assessment under the Regulation; calls on the Commission to include in its annual rule of law report a section dedicated to cases where breaches of the rule of law in a Member State could affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way and to clarify in the guidelines how the annual report will be used systematically for the Commission’s assessment under the Regulation;












16.


Calls on the Commission to set out a clear, precise and user-friendly system for the submission of complaints and to set deadlines for the Commission’s responses to complaints; highlights that civil society, including independent NGOs and citizens, and fact-based investigative journalism and media, are at the forefront of identifying potential breaches of the rule of law at local and national level, and should therefore be involved in reporting them; recalls the need to apply the Regulation in a manner that ensures the protection of persons reporting on breaches of Union law, in line with the principles set out in Directive (EU) 2019/1937 (7);












17.


Recalls that measures under the Regulation are taken where breaches of the principles of the rule of law in a Member State affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way; underlines that this implies a comprehensive, proactive, risk-based approach on the part of the Commission to safeguard Union spending even before actual payments are made;












18.


Recalls that the scope of the Regulation covers the activities of all government entities, including Member State organisations established as a public law body or as a body governed by private law entrusted with a public service mission, as laid down in the Financial Regulation; points out that any changes in the type of governance of an entity that is entrusted with a public service mission in a Member State cannot exempt that entity from the duty to comply with the Regulation;






Protecting the Union budget










19.


Emphasises the clear link between respect for the rule of law and the efficient implementation of the Union budget in accordance with the principles of sound financial management: economy, efficiency and effectiveness, as laid down in the Financial Regulation; recalls that according to Article 5 of the Regulation, ‘the Commission shall verify whether applicable law has been complied with and, where necessary, take all appropriate measures to protect the Union budget’;












20.


Recalls that the Regulation provides a clear definition of the rule of law, which must be understood having regard to other Union values and principles, including fundamental rights and non-discrimination; is of the opinion that persistent violations of democracy and fundamental rights, including state-sponsored discrimination against minorities and attacks against media freedom and freedom of association and assembly, have an impact on the projects Member States decide to fund with Union funds, and may therefore have a sufficiently direct effect on the protection of the financial interests of the Union; calls on the Commission to take this into account in its guidelines;












21.


Recalls that measures under the Regulation are necessary in particular, but not only, in cases where other procedures set out in the Financial Regulation, the Common Provisions Regulation and other sector-specific legislation would not allow the Union budget to be protected more effectively; stresses that this does not mean that the Regulation is to be considered as a ‘last resort’, but rather that the Commission can use a wide range of procedures to protect the Union’s financial interests, including the Regulation, to be chosen on a case-by-case basis and used in parallel if needed, depending on their efficiency and effectiveness; calls on the Commission to lay down the modus operandi and the procedural and technical standards it will use to choose the instruments to apply;












22.


Points out that the Regulation covers all Union funds and applies to ‘systemic’ breaches as well as to cases of serious risk to the sound financial management of the Union budget or the protection of the financial interests of the Union, which may be difficult to address by other Union procedures that only apply to specific spending programmes and relate to effects on the budget that have already occurred; underlines that the Regulation is the only EU legislation linking respect for the rule of law to the EU budget; considers, therefore, that its unique provisions should be fully applied to ensure complementary protection for the rule of law in addition to EU finances;












23.


Underlines that ‘systemic’ breaches, for instance those affecting the functioning of the justice system, the independence of judges and of the judiciary or the neutrality of public authorities, or the proper functioning of entities with a mandate to prevent and fight corruption, fraud, tax evasion and conflicts of interest, or violating the principle of non-regression (8), have in general a sufficiently direct impact on the proper management, spending and monitoring of Union funds; calls on the Commission to clarify the criteria for determining measures in the case of systemic breaches;






Adoption of measures










24.


Recalls that Articles 6 and 7 of the Regulation set out all steps and a precise timeline for the adoption and lifting of measures under the Regulation; underlines that the procedure for adopting and lifting measures respects the principles of objectivity, non-discrimination and equal treatment of Member States and is to be conducted using a non-partisan and evidence-based approach;












25.


Notes that Article 6(4) of the Regulation provides for the possibility for the Commission to request additional information for its assessment both before and after sending the written notification; stresses that such requests before the written notification should remain exceptional and one-off in nature, so as not to jeopardise the precise timeline for the adoption of measures provided for in the Regulation;












26.


Recalls that the Council is bound to act upon any proposal of the Commission to adopt appropriate measures under the Regulation within a period of one month, which may be extended by a maximum of two additional months in exceptional circumstances; considers that the Commission should ensure that these time limits are fully respected for a timely decision; calls on the Commission to provide information on how it will ensure a harmonised approach and consistent application of the budget conditionality across all its Directorates-General;












27.


Believes that transparency is essential to foster the confidence of Member States and citizens in the conditionality mechanism; highlights that the assessment of individual and systemic breaches of the principles of the rule of law requires an impartial, fair and objective treatment of Member States, including non-partisan and evidence-based investigations; points out that each step of the procedure set out in the Regulation should therefore be taken in a fully transparent way; calls on the Commission to draw up the transparency rules and principles that it will apply when triggering the conditionality mechanism;












28.


Recalls that measures taken under the Regulation should be proportionate, in the light of the actual or potential impact on the sound financial management of the Union budget or the financial interests of the Union, taking into account the nature, duration, gravity and scope of the breaches of the principles of the rule of law; considers that, in general, the seriousness of that impact will reflect the seriousness of the breaches;






Protection of final recipients and beneficiaries










29.


Recalls that under the Regulation, it is essential to properly safeguard the legitimate interest of final recipients and beneficiaries;












30.


Recalls that, unless the decision adopting the measures states otherwise, the imposition of appropriate measures under the Regulation does not affect the obligations of Member States towards legitimate final recipients or beneficiaries, including the obligation to make payments;












31.


Emphasises that in cases such as serious corruption, nepotism, systemic fraud, illegitimate ties with political parties and conflicts of interest, and in particular in cases detected by the Early Detection and Exclusion System (EDES) laid down in the Financial Regulation or under investigation by OLAF or the EPPO, the Commission should carefully evaluate on a case-by-case basis whether payments to final recipients and beneficiaries should be continued or not;












32.


Calls on the Commission to implement Article 5(4) of the Regulation and swiftly set up a website or internet portal with information and guidance for the benefit of final recipients or beneficiaries and with adequate tools for them to inform the Commission about any breach of the legal obligation to continue making payments after measures pursuant to this Regulation are adopted, such as a simple, easy-to-use and structured complaint form; calls on the Commission to explain how it will implement an efficient and effective compliant mechanism for applicants, recipients and beneficiaries;












33.


Stresses that, in shared management, measures under the Regulation cannot be considered to affect the availability of funding for payments of legitimate claims to beneficiaries; recalls also that Member States concerned by those measures must regularly report to the Commission on compliance with their obligations towards final recipients or beneficiaries;












34.


Calls on the Commission to analyse all information at its disposal, including via digital tracking tools, and to do its utmost to ensure that any amount legitimately due from government entities or Member States is in fact paid to final recipients or beneficiaries, which may entail making financial corrections by reducing Union support to programmes in line with applicable sector-specific and financial rules;












35.


Requests that the Commission include Parliament’s suggestions in the final version of the guidelines;




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36.


Instructs its President to forward this resolution to the Council and the Commission.






(1)  OJ L 433 I, 22.12.2020, p. 1.

(2)  Texts adopted, P9_TA(2021)0287.

(3)  Texts adopted, P9_TA(2020)0360.

(4)  Texts adopted, P9_TA(2021)0103.

(5)  OJ L 193, 30.7.2018, p. 1.

(6)  Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1).

(7)  Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17).

(8)  Judgment of the Court of Justice of 20 April 2021, Repubblika v Il-Prim Ministru, C-896/19, ECLI:EU:C:2021:311, paragraphs 59-64.