The EU has a hard time trying to use its existing legal and political powers to persuade governments like those in Hungary and Poland to stop their retrogressive policies. It is time for the EU to use its biggest tool of persuasion: its economic power. The upcoming Multiannual Financial Framework may be the last opportunity for the EU to take effective measures to preserve its values, given the continued rising popularity of far-right parties, which will limit the EU's room for manoeuvre in the future.
The European Commission, Parliament and national governments are firing up talks on the next MFF. This agreement will fix how much money the EU has available and how it will spend it for five to seven years from 2020. The MFF for 2014-2020 amounted to around 1 trillion EUR, which gave the EU an annual budget of around 155 billion EUR.
Liberties has published a paper that outlines two proposals for how the EU could use the new MFF to protect and promote democracy, the rule of law and fundamental rights.
Download the full paper here
Download the executive summary here
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First, a model that would allow the EU to cut off European Structural and Investment Funds (ESIFs) when a Member State violates the rule of law. All EU governments receive ESIFs to help them improve their economies. From 2014-2020 the ESIFs amounted to 450 billion EUR. The ultimate goal of the EU is to ‘promote peace, its values and the well-being of its peoples’. So allowing governments to benefit from billions of Euros in European money while at the same time undermining the EU’s values contradicts the very purpose of the EU. Liberties explains how very small changes to legislation, that would just implement existing case law from the EU's Court of Justice, would allow the EU to cut off funds to governments that are destroying the rule of law. If some of these cuts would hurt the general public, the Commission could allow money to continue to flow for certain projects, and just take over management of these funds from national governments.
The second model put forward by Liberties is a new EU fund that would support non-governmental organisations (NGOs) to promote and protect European values. We refer to this as the European Values Instrument. NGOs, like an independent judiciary and free media, are vital to promoting and protecting European values. Because of this, NGOs working on European values are increasingly facing restrictions, including smear campaigns and funding cuts. By supporting NGOs, the EU would help to strengthen participatory democracy, government accountability to the law, and the legal standards that NGOs uphold. More importantly, funding NGOs would help to create grassroots support among the public for European values. This would make it more difficult for authoritarian populists to attract support while undermining protections for democracy, the rule of law and fundamental rights.
Currently, the EU provides no funding for NGOs in the Member States for the purposes of promoting and protecting European values. In contrast, the EU spends several billion EUR to support these activities in countries outside the EU. The main sources of funding for NGOs to promote and protect European values inside the EU are the governments of Norway, Iceland and Liechtenstein (160 million EUR from 2009-2014 in Central and Eastern EU) and several philanthropic foundations (235 million EUR for 2015 in Western EU). Liberties suggests that the new EU fund should be worth 2 billion EUR over seven years to match the EU’s support for NGOs outside the EU.
The European Values Instrument should aim to build a healthy NGO sector that is strong enough to hold governments accountable to their legal obligations and help the public get involved with law and policy making. Importantly, the new fund should help NGOs to build their capacity to communicate effectively with the public so that they can create grassroots support for European values.
The European Values Instrument should be run through independent fund operators. These would be organisations that are independent of governments and religious or political groups. Because fund operators are independent of the EU, they should not be obliged to apply restrictive EU financial rules, which prevent or deter smaller NGOs from applying for grants.
Authoritarian populists continue to grow in strength and pursue policies to unravel pluralist democracy, the rule of law and fundamental rights. The European Values Instrument is a singular opportunity for the EU to make a strategic intervention that would rally public opinion around European values. Political pressure from the EU is less likely to be effective, and EU tools to apply such pressure are less likely to be used, unless there is grassroots support for European values. Just as the EU should dedicate funds to support NGOs to promote and protect democracy, the rule of law and fundamental rights, it should remove ESIFs from authoritarian governments that take EU money while destroying the basic principles upon which the Union is founded.
