EU pushes link between cash and rules, signals progress with Poland

BRUSSELS (Reuters) - The European Commission said on Wednesday that member states’ access to EU funds should be conditional on their respect for democratic values, but gave no details on how it planned to tackle the politically sensitive issue.

European Commission President Jean-Claude Juncker poses with Poland's Prime Minister Mateusz Morawiecki ahead of talks at the EU Commission headquarters in Brussels, Belgium, January 9, 2018. REUTERS/Francois Lenoir

Announcing proposals for the bloc’s next budget for 2021-27, the EU executive also signaled tentative progress toward resolving a bitter dispute with Poland over the rule of law.

While the EU’s joint budget only represents about one percent of the bloc’s economic output, the funds it earmarks for infrastructure and other uses are especially valued by poorer, ex-communist nations like Poland.

But the Commission is concerned about what it sees as an erosion of democratic checks and balances - especially reforms of the judiciary and media - in Poland, Hungary and elsewhere.

“It is... the moment to consider how the link between EU funding and the respect for the EU’s fundamental values can be strengthened,” the Commission said in a statement.

Commission President Jean-Claude Juncker provided no detail, and his budget chief, Commissioner Guenther Oettinger, said Brussels was still in talks with member states on the matter and would come up with more a detailed plan in May.

EU leaders will discuss the next multi-year budget next week in Brussels. It will be the first spending plan since Britain, a net donor to the budget, voted to leave the EU, a departure that means funds will be tighter.

The east Europeans have warned against cuts to their funding in the disputes over democracy, saying that would erode support for the EU among their voters.

Some EU officials have also warned of legal and practical difficulties of designing a workable mechanism.

“Any financial conditionality would need to be precise, proportionate,” the Commission said.

“This debate will also need to consider the impact of possible breaches of fundamental values or the rule of law at national level on the individual beneficiaries of EU funding.... who are not responsible for such breaches.”


The EU’s Justice Commissioner, Vera Jourova, said Brussels was still working on definitions and stressed the need for every member state to have a “functional, independent judiciary system, which could deal in an impartial way with disputes”.

She said sound auditing and control systems were also important, as member states’ trust in each other’s courts underpins cooperation and doing business inside the bloc’s single market.

Italy, exasperated with Poland’s refusal to help manage the influx of refugees in Europe, has led calls to curb EU funding for states that do not honor fundamental rules of the bloc.

After two years of bruising rows over the Polish government’s efforts to tighten its control over the courts, Warsaw brought in a new premier who has adopted a less hostile tone in his dealings with Brussels.

While Prime Minister Mateusz Morawiecki has offered little change in terms of actual policies, his strategy may already be bringing first tentative results as EU diplomats say the Commission’s unprecedented legal case against Warsaw on the rule of law issue has seemingly lost steam.

Morawiecki and his ministers have held multiple top-level meetings with EU officials and brought legal experts to work with the Commission on the Polish courts overhaul, which critics say weaken democratic checks and balances.

“I think there is a good chance to see the Polish positions move towards ours and to see our positions move a bit more timidly towards the Polish position,” Juncker said on Wednesday.

Editing by Gareth Jones