Exclusive: EU chair Germany proposes rule of law scheme for getting bloc’s cash – document

Economy
© Reuters. FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels © Reuters. FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels

By Gabriela Baczynska

BRUSSELS (Reuters) – European Union chair Germany has proposed a rule of law conditionality scheme for accessing the bloc’s funds, including the new 750 billion euro coronavirus economic recovery fund, according to a document seen by Reuters.

The proposal is a basis for negotiations between the 27 EU member states – which in July agreed to such a mechanism but left it watered down to avoid a veto from Poland or Hungary – and the European Parliament.

EU lawmakers want to beef up the mechanism, meaning that the German proposal – sticking closely to the July agreement reached at a leaders’ summit after four days of tortuous talks – is all but certain to cause an outcry.

According to the German document, punishments for rule of law breaches would include suspending EU funding and be decided by a majority vote of EU member states acting on a recommendation by the executive European Commission.

Those seeking a more solid mechanism, however, argue that the Commission should recommend suspending or withdrawing funds from a country flouting the rule of law, with a majority of EU states needed to block, rather than approve, any such penalty.

That system would make it harder for Warsaw, Budapest or any other perceived offender to avoid forfeiture, compared to the plan proposed by Germany and seen by Reuters on Monday, under which a majority vote in favour is needed for any sanction to be enacted.

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