During the plenary session (5-8 July 2021), MEPs debate on the Guidelines for the application of conditionality for the protection of the Union budget: opening statements by Eider GARDIAZABAL RUBIAL (S&D, ES), Petri SARVAMAA (EPP, FI), rapporteurs,Terry REINTKE (Greens/EFA) and by Johannes HAHN, European Commissioner for Budget. This transcription is the result of an automatic process. Please check against delivery.

statement

Strasbourg

debate

plenary session

REINTKE, Terry (Greens/EFA, DE)

fight against tax fraud and evasion (T)

financial supervision (T)

EU mechanism on democracy, the rule of law and fundamental rights (T)

SARVAMAA, Petri (EPP, FI)

GARDIAZABAL RUBIAL, Eider (S&D, ES)

Multiannual financial framework 2021-2027 (T)

HAHN, Henrike (Greens/EFA, DE)

Guidelines for the application of conditionality for the protection of the Union budget: opening statements by Eider GARDIAZABAL RUBIAL (S&D, ES), Petri SARVAMAA (EPP, FI), rapporteurs,Terry REINTKE (Greens/EFA) and by Johannes HAHN, EU Commissioner

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&amp;D, ES), thank you very much, President, Commissioner. Well, once again, we're here to talk about the mechanism of conditionality to protect the union's budget. And our question is, when exactly is action going to be taken? Because his came into effect on the 1st of January and we've still not seen its impact.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), We were very clear from the outset these guidelines weren't needed. An agreement had just been reached and a no point where we informed that things weren't clear enough. So we really don't understand what exactly these guidelines are supposed to achieve.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), But as I've already said on a number of occasions, the parliament is always open to working with the commission in order to guarantee the full implementation of the regulation. And there have been a few key messages coming out of the parliament.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), Firstly, the message that sets the context in which we're working. The guidelines are not legally binding. What's more, they can in no way alter, expand or limit the regulations text. Secondly, the commission has not kept its word.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), It's not stuck to the timeline set up by the parliament, which of course we regret. But this isn't really very understandable because there was enough time, more than enough time to set out draught guidelines in March, including the Parliament's contributions as well as the council's contributions.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), And we would have managed to get this done by the 1st of July. Third message. We need more information. It's all well and good to the commission saying that they are working to study the different cases, but we need more information about that.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), Now onto the guidelines themselves. Only a report does is reiterate the regulation that was negotiated on. In fact, the commission's spokesperson simply reiterates what we set out in the regulation, which only serves to reinforce the total lack of a need to put together these guidelines.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), But we're going to make the most of the occasion to set out our position. And there are four different sets of information on this. This is about upholding the rule of law. We need to look at breaches of that rule of law. Now, this can happen in individual cases and there is also these systemic breaches of rule of law.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), And let me remind you of an Article three of the regulation. We set out a non exhaustive list on indicators of breaching the principles of the rule of law. And the European Commission, of course, should and must use any information that's available coming from a recognised institution.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), And we believe that we ought to give the opportunity to NGOs and civil society to facilitate that information to the commission. Secondly, protecting the European Union's budget as institutions, we are responsible for sound financial management of that budget effective and efficient management as set out in the financial regulation.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), And there's a clear relationship between sound financial management and respecting the rule of law. And this rule of law ought to be understood as being connected to other principles set out in Article two, which also was included in the regulation discrimination against minorities, attacks on freedom of the press, freedom of association, the proper functioning of the institutions in order to combat fraud and corruption.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), All of this may have a direct impact on the union's budget, and so it needs to be taken into account. Having clarified what we mean by breaching the rule of law and the impact it may have on the budget, we talked about possible measures this year and the regulation is absolutely clear on this. Article six and seven set out the different steps and a precise timeline for taking action.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), We need to respect the criteria of objectivity, non-discrimination and equality of treatment. And the measures adopted need to be proportionate to the nature, the duration and the severity of the breach. And lastly, there is the issue of protecting the final beneficiaries, the first idea that we set out.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), And I would like to thank my corapporteur as well as the groups in this house. The first idea that we put on the table was protecting the final beneficiaries because the mechanism is not about harming those beneficiaries. And member states have the obligation of respecting all agreements that have been set out in the agreement reached with the council and with the Commission.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), At the end of last year, the Commission committed to setting out a system in which beneficiaries would be able to access all information available, a system that would enable them, if necessary, to report irregularities. And I hope that the Commission is working on how to make use of all the instruments available in order to ensure that the funds are going to reach their final beneficiaries.

SOUNDBITE (Spanish), Eider GARDIAZABAL RUBIAL (S&D, ES), So, Commissioner, we've got this debate and it's an excellent time to hear about how you're working on that particular portal for reports for you to explain your viewpoint on this need for the guidelines and their content. But it's my point of view that this is, in particular a great opportunity for you to tell us exactly what the Commission is doing and to reply to that first question, when exactly is action going to be taken? Thank you.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Honourable chair, Commissioner Hahn and the Council. So here we are once again in this hemicycle, this plenary hall discussing about the future of the rule of law in Europe. Once again, we as the Parliament will reiterate our position that the Commission has to act and they have to act. That has to happen quickly.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Once again, we will state our worry about the degeneration and regression of the state of the rule of law in some member states, especially Hungary and Poland. And once again, we deliver the messages we have heard from our voters and the citizens that people are worried about their liberties, minorities being repressed, free media being shut down or bought by government oligarchs.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Judicial systems being party politicised and independent judges being replaced by party loyalists, or this done with EU money with the money distributed from the Union's budget to the member states. With taxpayers money. And it makes me not only sad, but it makes me outraged. This should not be happening in Europe in 2021.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Yet once again, here we are in this plenary hall stating the same sentences, even though we have we have heard them multiple times and we all know the reality behind them. So here we are today because someone has to act. But who is that someone? The Parliament? Well, the Parliament has multiple times stated its readiness and has done everything it can within its powers.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), However, the Parliament lacks implementing powers. Well, why won't the Council Act? Finding unanimity is very difficult when it comes to actions under Article seven of the treaty and even more, the Council and the member states seem to be blackmailed by the same group that posed a threat to the MFF and next generation EU negotiations last autumn.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Ultmately, it is the member states. Hence it's in the member states' hands how to respond to the growing deterioration of rule of law in Europe. And this brings us back to the, once again, we appeal to the Commission to act. The Parliament has launched the Article 265 of the Treaty of the Functioning of the European Union that also legally calls on the Commission to act.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), I truly hope that we will finally see something concrete when we come back from summer recess. Despite the holidays of the institutions, the violators of the rule of law will not rest. This is why autumn is the latest moment to concretely initiate the process of rule of law conditionality, regulation by sending written notifications to member states concerned.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), There is no need to wait for the European Court of Justice ruling, and there is nothing that binds us to that. To facilitate the process, we as the Parliament have draughted these guidelines for the application of the regulation for c-Commission's use.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), This is our contribution, the European Council demanded these guidelines. We did not consider them necessary to begin with. Yet here we are once again delivering faster than the Council in delivering our part. If the commission wishes it can use these guidelines as such and start implementing the regulations right away.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Now the final obstacle and this is the political one, of course, we all know Voldemort can be considered to be out of the way. It's cleared. We have the guidelines. There can be no more delay, no more excuses.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), Dear Commissioner. We need to work as allies, fixing the rule of law in the union demands a lot of hard work from all of us, and I know it's not always easy. We have our differences sometimes, but I believe that more than that, we all value. I know you value, I know the Commission values. We all value the rule of law as our basic principle.

SOUNDBITE (English), Petri SARVAMAA (EPP, FI), The Parliament has been relatively patient. But we also think we also like to think of ourselves as pacesetters helping the Commission and the Council to reach higher goals. We have met multiple times either in this room in Brussels or via video conference. And we have a common understanding. All we need, is the final will to act. We need action and the time has come. We are ready. Thank you.

SOUNDBITE (English), Terry REINTKE (Greens/EFA, DE), Thank you, Mr. Chadiha. Commissioner, dear colleagues, the parliament has again and again been pretty clear. First of all, the development of these guidelines for the regulation is actually not necessary as it is sufficiently clear as it stands.

SOUNDBITE (English), Terry REINTKE (Greens/EFA, DE), Secondly, the guidelines presented by the commission unfortunately have little or very little additional value to clarifications. And thirdly, and I must say this, Mr. Commissioner, that suspicion is actually high, that the Commission is fully aware of this, but presented these guidelines anyway, also to buy some time.

SOUNDBITE (English), Terry REINTKE (Greens/EFA, DE), And Commissioner, I must say that I think we really need to end this theatre plays. We don't need more delaying tactics. We don't need statements of commissioners being very concerned about the situation of rule of law in the European Union. We need action. And it is not me who is saying it.

SOUNDBITE (English), Terry REINTKE (Greens/EFA, DE), Really check the committee votes apart, apart from the far right in this Parliament, all groups agree. So, Commissioner, I take this as a strong appeal and I can only support my colleagues saying come back from the summer break with a strong case on the basis of this regulation. Thank you very much.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, When they will chair honourable members, I think it's always good to continue our. Already traditional exchange on the rule of law conditionality, a mechanism today on the occasion of the own initiative report on the guidelines.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, Today's our first discussion of this format since we shared our draught for these guidelines, which you went with member states as it was done in June.This regulation is an historic achievement for the union, and it applies since 1st of January 2021 and has been followed up from that date and I merely recall t was the commission proposal in 2018 to have such an instrument.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, Again, grateful for all the support at least we received in this house before the European Parliament elections, but also afterwards. Having said this again, I can only recall that all relevant reaches that effect or risk to affect the sound financial management of the union budget and the financial interests of the union after that date will be Covid.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, As said already in the past, no case will be lost. The Commission has been actively working to assess information from all sources in view of building up robust cases and initiating the procedure under Article six of the regulation notification letters will be sent without any delay. As soon as we have gathered concrete evidence that the conditions required by the regulation are fulfilled.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, The regulation requires the Commission to provide guidance for the benefit of final recipients and beneficiaries whose rights have to be ensured. And on this, we very much agree. As you know, our draught guidelines include such guidance. The guidelines also explain the procedure and the way the commission will assessing cases under the regulation.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, I fully agree with your report that the guidelines cannot and will not change. The law is set by the regulation, but only clarify how the commission will apply to the regulation requires a sufficiently direct link between any rule of law breach and the risks for the sound financial management of the union budget or the financial interests of the Union.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, Thus, a sober assessment of the following is therefore needed. The Commission should assess whether a rule of law breach affects or seriously risks affecting the principles of sound financial management or the financial interests of the union in a sufficiently targeted way.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, It may also need to assess whether the non-compliance with sound financial management principles arise from rule of law breaches in a sufficiently direct manner. If a sufficiently direct link with the budget cannot be established, the regulation will not apply.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, However, other tools of the union law may apply instead, for example, infringement procedures or the famous Article seven procedures. I would like to recall in particular that systematic or serious breaches are covered by the regulation. But the general, indirect or merely theoretical effect on the budget is not enough to trigger the regulation.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, The Commission must be able to demonstrate and identified or identifiable effect or risk for the budget. The regulation also requires the Commission to apply the regulation in a complementary way. Thus the procedure under the regulation will be opened when the substantive conditions described before omit.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, Unless the Commission finds that other procedures provided by the Union's financial sectorial regulation allow it to protect the budget more effectively than the general conditionality regulation. For instance, existing procedures to protect the Union's financial interests, including those involving investigations by all of EPPO, as well as measures provided under the sector specific financial rules may be more effective and should be used instead.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, The regulation finally requires the Commission to define the most appropriate and proportionate measures to be proposed to the Council by evaluating the impact of the rule of law on the budget, taking into account all relevant factors.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, Honourable members, the Commission has received your letter calling for a full and immediate application of the regulation. You choose to pursue this path and of course the Commission will appropriately react within the timeframe foreseen by the treaties. I will already state here that the Commission has ensured proper application of the regulation since the day it entered into force.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, We have done so along two main strands. Firstly, the guidance on which you are consulted and that we are discussing today. Secondly, and most importantly, the building up of the cases, which requires a well-formed, so methodical and analytical assessment of the available information.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, For example, one of our sources in this context, the Commission's annual Rule of Law Report will be presented later this month. All this analytical work may soon materialise, demonstrating further the determination of the Commission to apply the regulation in order to ensure an effective protection of the budget against breaches of the rule of law.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, In doing so, the Commission will, of course, continue to take into account the views of the Parliament, and this is also the reason why we are waiting for the parliament's comments on the guidelines, on the consultation and be reassured once again.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, I think we are strong allies and I think we are also allies in the way that we wat this instrument becomes a success, a success story in a way that indeed it can help to address successfully and sustainably rule of law breaches and correct different and several developments in some of our member states in a way which we intend to see, at least here in the hemicycle, by huge majority.

SOUNDBITE (English), Johannes HAHN,  European Commissioner for Budget and Administration, So be reassured. We will act, but we will act in a way that finally we are successful. I think this is in all our interests. Thank you very much.