The European Court of Auditors (ECA) issued on Wednesday an opinion on new funding rules for European political parties.
The Treaty on the European Union (article 10) states that the functioning of the Union shall be founded on representative democracy. Citizens are directly represented at Union level in the European Parliament. Political parties at European level contribute to forming European political awareness and to expressing the political will of citizens of the Union.
There are currently ten registered European political parties and affiliated foundations. The total amount of EU funding available for them has increased over time, from an initial €6.5 million in 2004 to €46 million in 2021. The funding to European political foundations increased from €5 million in 2008 to €23 million in 2021.
The current regulation provides that 10 % of the annual budget is distributed to eligible parties equally, while the remaining 90 % is distributed in proportion to the number of Members of the European Parliament affiliated to a party. The funding is distributed as pre-financing.
In November last year, the European Commission published a proposal for changes (recast) in the regulation on the statute and funding of European political parties and European political foundations, in particular as regards funding. The proposal, made before Russia’s invasion of Ukraine, is already outdated, according to the auditors.
In its proposal for a recast regulation on the statute and funding of the European political parties and foundations, the European Commission has broadly managed to address its main objectives such as making the parties and foundations financially more viable and cutting red tape, according to a new Opinion by the European Court of Auditors.
While ECA welcomes the provisions aimed at bolstering the transparency of funding, such as provisions on due diligence for donations, they point out shortcomings on issues including EU co-financing, funding national referendum campaigns, contributions and the risk of foreign interference.
The proposal includes the lowering of the co-financing rate for European political parties from their own resources from the current 10 % to 5 %. Furthermore, the proposal introduces a new 0 % financing rate from their own resources for the year of elections to the European Parliament.
The auditors do not accept the Commission explanation that the proposed changes are due to the difficulties that small parties in particular have in raising finance. In its opinion, ECA states that the financing of 100 % proposed in the year of elections to the European Parliament is not coherent with the concept of co-financing, which means that resources shall not be provided entirely from the EU budget.
Furthermore, the proposal does not contain measures to adequately mitigate the risk of foreign interference in European political parties by members providing contributions and having their seat in the countries belonging to the Council of Europe and outside the EU.
On contributions from outside the EU, the proposal would allow European political parties and foundations to collect contributions from member parties or organisations located in countries belonging to the Council of Europe. According to the Commission, the objective of this proposal is to enhance cooperation with long-standing members sharing EU values.
According to the auditors, allowing contributions from outside the EU is not consistent with another rule that forbids donations from entities based in third countries or from individuals from a third country who are not entitled to vote in elections to the European Parliament.
On other contributions, the auditors are of the opinion that information on contributions received from individual members (physical persons) of a European political party or foundation should be made public in the same way as contributions received from member parties or organisations are public. They also warn against the misuse of the funding in national referendum campaigns.
A spokesperson of the European Commission told The Brussels that it has taken note of the ECA opinion and is currently assessing the specific comments made by the ECA. “We will consider them in view of the upcoming interinstitutional negotiations. Some of the comments made in the opinion are precisely points for discussion with the co-legislators.”
The latest plenary session of the Conference on the Future of Europe took place on 8-9 April and debated concrete proposals, among others on European Democracy (panel 2). The Commission declined to comment on specific recommendations while the process is ongoing.
One of the most endorsed ideas on European Democracy was about transnational EU-wide electoral lists. European citizens should have the right to vote for different transnational parties that each consists of candidates from multiple member states. This would strengthen a sense of unity in the EU and focus the election campaign on shared European topics.
The Brussels Times