Thirty-ninth Report of Session 2012-13 - European Scrutiny Committee Contents

2   Financing European political parties



Opinion No 1/2013 concerning draft Commission Regulations on the statute and funding of European political parties and foundations and to amend the Financial Regulation (EU, Euratom No 966/2012) as regards the financing of European political parties

Legal baseOpinion provided pursuant to Articles 287 and 322 TFEU
DepartmentForeign and Commonwealth Office
Basis of considerationMinister's letter of 25 March 2013
Previous Committee ReportsHC 86-xxxv (2012-13) chapter 10 (13 March 2013); see also (34226) 13777/12 and (34259) 13842/12: HC 86-xix (2012-13), Chapter 2 (7 November 2012) and (34523) 17469/12: HC 86-xxvii Chapter 1(16 January 2013)
Discussion in CouncilNot applicable
Committee's assessmentPolitically important
Committee's decisionFor debate in European Committee B

Background and previous scrutiny

2.1  The background and detail of this Court of Auditors' (ECA) Opinion and its relevance to proposed Regulations to change funding arrangements and funding eligibility conditions for European political parties and foundations, including a proposal to amend the Financial Regulation, are set out in our previous Report on this document.[8]

2.2  In that Report, we voiced concerns about the current proposals to regulate funding arrangements for European political parties and their eligibility for funding, in the light of:

a)  the weaknesses in the proposed new funding arrangements for those parties highlighted in the ECA opinion; and

b)  recent attempts in the European Parliament to exclude certain European parties from funding, linked to the current proposal to leave such decisions to the European Parliament alone.

2.3  We asked for further information from the Government on these two issues, namely that it should let us know:

i)  In relation to (a) above, what action it proposed to take, both independently and collectively with other Member States, to ensure that the ECA's concerns were pursued at future negotiations of the current proposals. In particular, we said that we would like to see the definition of "donations" in the proposed Regulations appropriately broadened to capture a wider range of transactions which are financially advantageous to the donee political parties and minimise the potential for misuse of EU funds.

ii)  In relation to (b), its view on the recent European Parliament proposal to withdraw funding from two political parties, the European Alliance for Freedom and the European Alliance for National Movements and whether the Council, if it has been consulted, has come to a view.

2.4  In the meantime, we retained the current document under scrutiny.

Minister's Letter of 25 March 2013

2.5  In his letter of response, the Minister for Europe (Mr David Lidington) commits to keeping us up-to-date with progress on the proposed Regulations.

2.6  He also informs us in relation to issue (a) that:

"As the Committee is aware, negotiations are ongoing on these proposals. The Court of Auditors' opinion is, as I stated in my Explanatory Memorandum, a welcome contribution and will prove informative to the ongoing debate. We have already referenced the Court of Auditors' opinion during the course of negotiations, as have other Member States, and will continue actively to do so where relevant.

"With regard to the specific point you raise about the Court's opinion on the question of donations, I also have some concerns about the proposal as currently drafted. I agree that European political parties and European political foundations should be encouraged to obtain funding from sources other than the EU budget and that donations have an important role to play in this regard. However, it is important that this is not at the cost of current levels of accountability, financial propriety or transparency. I agree with the Court's suggestion, that extending the definition of donations in a logical fashion to ensure a wide range of transactions are caught within its remit could be a sensible means by which to serve both of these aims. I will ensure that this is taken account of in our negotiating position."

2.7  As regards issue (b), the Minister says that:

"We are aware that the European Parliament has initiated the process, as outlined in Rule 210 of its current Rules of Procedure, of verifying whether or not two political parties at European level continue to observe the principles upon which the EU is founded. The outcome of an eventual negative opinion in this regard would be exclusion from funding. The next stage in this process includes consideration by a committee of independent eminent persons, as provided for in Regulation (EC) No 2004/2003; one member of the committee will be appointed by the Council.

"I am conscious of the Scrutiny Committee's concern about this process. Council is being consulted as part of the wider negotiations on the Commission's proposals on the statute and funding of European political parties. Current provisions are being revisited as part of this process. The Committee references the envisaged role of the European Parliament within the Commission's proposals; I am keen to ensure that administrative and political decisions are clearly divided. The former should be dealt with in a neutral and apolitical way. I also think that the bar for challenging a political party's status should be high. We will continue to approach negotiations with these principles in mind."


2.8  We thank the Minister for his prompt and helpful response on the specific issues we raised in our Report in early March. We welcome the Minister's commitment to keeping us informed of progress in the negotiation of the proposed Regulations.

2.9  We also note the Minister's assurance that the Government will continue to reference the Court of Auditors' Opinion in the negotiations on the proposed Regulations. However, we consider that the concerns raised by the Court are of such importance to representative and transparent democracy that they warrant further discussion within the House.

2.10  We therefore recommend the Court's Opinion be debated in European Committee B.

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