Council, Parliament Reach Deal On Rule Of Law To Allow Progress On LT Budget

The European Parliament and European Council have reached an agreement on rule of law provisions relating to the EU's long-term budget (multiannual financial framework, MFF) that should allow some progress to the MFF, and its associated COVID-19 recovery package's, approval.

• The rule of law provisions are set to link the distribution of funds through the MFF to the upholding of 'EU values'. This has been a bugbear for countries such as Hungary and Poland, where their governments do not subscribe to the same set of social values as EU leaders in Brussels.
• The main provisions agreed are that there can be no EU money without an independent judiciary, and the vaguer restriction that that funds can be cut also when governmental decisions risk affecting rule of law.
• It should be noted that even with the rule of law mechanism resolved, there are still a number of issues holding up the full approval of the MFF:
  • Top-ups to the MFF amounting to EUR39bn are being demanded by the Parliament. Germany has tried to broker a compromise of EUR10bn, but this has been rejected.
  • Conditionality attached to the Recovery and Resilience Facility (the COVID-19 support package).