52000PC0898

Proposal for a COUNCIL REGULATION on the statute and financing of European political parties

(presented by the Commission)

EXPLANATORY MEMORANDUM

Article 191 of the EC Treaty provides:

"Political parties at European level are important as a factor for integration within the Union. They contribute to forming a European awareness and to expressing the political will of the citizens of the Union."

The Treaty thus gives the political parties functions that contribute in a substantial manner to the development of European construction and, by contributing to the expression of the political will of the citizens, to the democratic operation of the institutional system. The exercise of these functions clearly entails operational and personnel expenditure.

However, the Article contains no operational clause. In a contribution to the IGC on 13 June 2000 the Commission accordingly proposed adding an operational clause to Article 191 of the Treaty, providing for its implementation. The amendments adopted in the Nice Treaty underline even further the role and importance of European political parties as factors for integration within the Union. They also underline that financing from the budget of the Community cannot be used to finance, directly or indirectly, national political parties.

The European Parliament's political groups give subsidies to the corresponding parties and provide staff charged to their budget, ultimately therefore to the European Parliament budget. The Court of Auditors considers this to be illegal in the absence of a legal basis (Special Report 13/2000, OJ C 81, 28.6.2000). Moreover, the accession of new Member States is becoming imminent and the European political parties will play a major role in preparing citizens of those countries for European elections and for participating in the Union's political life.

Since Article 191 does not supply an adequate operational legal basis, a specific legal basis must be added so that the relevant expenditure can be charged to the general budget of the European Communities.

The most appropriate legal basis for this expenditure would without doubt be Article 308, in conjunction with Article 191. It is obvious that a better organised political debate with influences on the elections, on the voters' decision to turn out and on the policies to be implemented would contribute to the functioning of the institutions in the areas covered by the Treaty, as for example the four freedoms mentioned in Article 14(2) of the Treaty. There is thus every justification for a measure in this respect.

The measure must fully respect the subsidiarity principle; it must not impinge on national systems for financing parties. In particular, it must not have the effect of financing national parties, which would be incompatible with Article 191, or their national or European election campaigns.

The first question to be answered concerns the definition of a European party. This will depend very much on the party's founders: they may consider their organisation to be a European one, whatever its size or the geographical distribution of its members. But there must be a basis for assessment.

First, the party's European objectives must be clear; the party must address questions of European integration, on the basis of its own perspective, favourable or unfavourable; as a matter of principle, if the electorate gives it a mandate, it must establish or intend to establish or join a European Parliament political group.

Secondly, the party must have a statute providing for a democratic method of designating its leaders.

Thirdly, respecting the letter and the spirit of the Treaties, it must be attached to the principles of democracy, respect for fundamental rights and the state based on the rule of law. It would not be acceptable for a party that preaches restrictions on rights, intolerance or xenophobia, whether it is for or against European integration, to enjoy public financial support. The European Parliament will register, on request, statutes filed by European political parties satisfying these conditions. In the event of a conflict, the European Parliament could be assisted by a "committee of wise men" designated from time to time; this, of course, would not prejudge the redress procedures available in Community law.

Thus, the procedure laid down in Article 1 represents a first, necessary but not sufficient step to obtain financing. A party must first register its statute and then meet the specific additional conditions set out in Article 3 before it can obtain financing.

The award of Community financing must be reserved for parties that are reasonably representative, either in the European Parliament or in a number of Member States. In this context, the reference in Article 3 of the Regulation to regional parliaments should be interpreted in each Member State in the light of its internal constitutional principles. The following criteria are proposed: elected members in the European Parliament or national or regional Parliaments in at least five Member States, or to have obtained at least five percent of the votes at the most recent European elections in at least five of the Member States of the Community.

Parties would then be eligible for financing from the Union budget in compliance with Article 191 and at the same time with the subsidiarity principle. This financing is not to replace the autonomous financing of European parties which must represent at least 25% of the budget of each party.

The distribution between parties eligible for financing is based on objective factors. Within the 75% threshold mentioned above, each party would receive a flat-rate basic grant plus a second component based on the number of elected representatives in the European Parliament. The two components would account for 15% and 85% of the appropriations respectively.

Obviously, the finances of a political party which obtains financing from the Community budget must be transparent. European political parties are required to publish their accounts and declare their sources of finance, including donations from whatever source, to the Court of Auditors. Standard reporting, accounting and audit procedures are laid down. The Commission will examine the necessity of adopting specific modalities for the control of this expenditure.

In order to avoid an inappropriate confusion of functions, it is necessary to provide for an external and independent auditing of the accounts of the parties. The working procedures of the independent auditors will be fixed in concertation with Parliament.

The Commission will report on the implementation of the Regulation within eighteen months from its entry into force. This Regulation has a temporary character and will expire at the end of the second financial year following its entry into force. The Commission will, on the basis of the abovementioned report, make a proposal for the definitive regime.

2001/0011 (CNS)

Proposal for a COUNCIL REGULATION on the statute and financing of European political parties

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C

Having regard to the opinion of the European Parliament [2],

[2] OJ C

Whereas:

(1) Article 191 of the Treaty acknowledges that political parties at European level are important as a factor for integration within the European Union and that they contribute to forming a European awareness and to expressing the political will of the citizens.

(2) It is necessary to make provision for a statute for European political parties and to ensure that they respect fundamental rights and principles of democracy and the state based on the rule of law, in accordance with the Treaty, and that they have their own managing bodies.

(3) Provision should be made for the financing of European political parties so as to cover part of their operating costs and the cost of promoting democracy in the countries applying for accession.

(4) The conditions laid down by this Regulation should be applied on the same basis to all European political parties, but account should be taken of their actual representativeness in the European Parliament.

(5) In accordance with the principle of subsidiarity, financing should be given solely to parties that are sufficiently representative at European level so as to avoid financing purely national parties, or parties to which financing has been refused at national level on the grounds that they do not respect democratic principles. This financing should not replace autonomous financing of the parties.

(6) The nature of the expenditure that can be financed under this Regulation should be defined.

(7) The appropriations allocated to financing parties should be determined in the annual budgetary procedure.

(8) Implementation of the measures provided for by this Regulation contributes to the achievement of the objectives of the Union. The Treaty does not provide, for the adoption of this Regulation, powers other than those under Article 308.

(9) This Regulation should expire at the end of the second financial year following its entry into force,

HAS ADOPTED THIS REGULATION:

Article 1

Statute

Any European political party or union of such parties may register a statute of a European political party (hereinafter referred to as "statute") subject to the following conditions:

(a) it must be established in the European Union;

(b) it must have established itself as a political group in the European Parliament, or intend to establish one or to participate in an existing group;

(c) its programme and its activities must respect the fundamental principles of democracy, respect for fundamental rights and the state based on the rule of law, established by the Treaty on European Union.

The statute shall define in particular the bodies responsible for the party's political and financial management.

Article 2

Independent review by eminent persons

The European Parliament shall decide on any dispute concerning compliance with the conditions referred to in Article 1 in accordance with the opinion of an "independent committee of eminent persons" appointed every five years by agreement between the European Parliament, the Council and the Commission.

Article 3

Financing

Financing may be charged to the general budget of the European Communities for European political parties that have registered a statute and satisfy one of the following conditions:

(a) the party or its national components are represented by elected members in the European Parliament or the national Parliaments or regional Parliaments in at least five Member States; or

(b) the party or its national components received at least five per cent of the votes at the most recent European elections in at least five Member States.

Parties satisfying those conditions shall publish their budgets and their accounts annually.

Article 4

Nature of expenditure

1. Financing granted under this Regulation may only be used to meet expenditure that is intended to achieve an objective set out in the statute of the European political party concerned.

Expenditure may include, among other things, administrative expenditure, logistical support, meetings, studies, information and publications directly linked to the objectives set out in the statute.

2. The valuation of buildings, inventory and their depreciation shall be carried out in accordance with Commission Regulation (EC) No 2909/2000 [3].

[3] OJ L 336, 30.12.2000, p. 75.

Article 5

Implementation and control

Appropriations for financing parties shall be determined in accordance with the budgetary procedure and shall be implemented in accordance with the financial regulation applicable to the general budget of the European Communities.

Control of financing granted under this Regulation shall be excercised in accordance with the financial regulation and its implementing rules.

Control shall also be exercised on the basis of an annual certification by an external and independent audit. This certification shall be transmitted to the European Parliament and the Court of Auditors.

The services concerned may carry out any on-the-spot checks they may consider necessary to verify that the financing has been used in a lawful and regular manner. In carrying out their tasks, they may inspect all supporting and accounting documents and any other documents they consider relevant and may request any information they consider necessary to carry out their checks.

Any document or information required by the Court of Auditors in order to carry out its task shall be supplied to it at its request by the political parties receiving payments charged to the budget.

Article 6

Distribution

In application of Articles 1 and 3, financing shall be distributed annually as follows:

(a) 15% of the annual amount shall be distributed in equal shares among the parties that satisfy the conditions and make a duly substantiated request;

(b) 85% shall be distributed among European parties which have elected members in the European Parliament, in proportion to the number of elected members.

Financing charged to the general budget of the European Communities, including that provided for in this Regulation, may not be given to a European political party unless it can prove that it receives at least 25% of its budget from sources other than the general budget of the European Communities.

Article 7

Report

The Commission will report to the European Parliament and to the Council within eighteen months of the entry into force of this Regulation.

Article 8

Entry into force and expiry

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities.

It shall expire at the end of the second financial year following its entry into force.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, [...]

For the Council

The President

[...]

FINANCIAL STATEMENT

1. Title of operation

Financing of European Political Parties

2. Budget heading(s) involved

B3-500 or other line created for that purpose by the budgetary authority

3. Legal basis

Article 308 of the Treaty.

Regulation of the Council on the Statute and Financing of European political parties.

4. Description of operation

4.1 General objective

To provide partial financing for European political parties to enable them to fulfil the role assigned to them by Article 191 of the Treaty.

4.2 Period covered and arrangements for renewal

Indefinite. Annual setting of the appropriations.

5. Classification of expenditure or revenue

5.1 Non-compulsory expenditure

5.2 Differentiated appropriations

5.3 Type of revenue involved

6. Type of expenditure or revenue

- Subsidy allocated to qualifying European political parties, according to the provisions of the Regulation of the Council on the Statute and Financing of European political parties, which may not exceed 75% of the total annual budget of that European political party.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

EUR 7 million. This figure represents an estimate of the maximum amount that could be received by the European parties, having regard to their existing own resources and the need to respect the provisions of Article 6 of the Regulation which lays down that Community funding cannot exceed 75% of the total budget of any party.

7.2 Itemised breakdown of cost

Subsidies to each of the five existing European political parties. Each party will receive a subsidy that may not exceed 75% of the party's total budget. This subsidy can be made up of two parts:

(i) all qualifying parties can receive an equal part of 15% of the total budget;

(ii) the parties that are represented in the European Parliament can receive an amount based on the number of MEPs that this party has. This would be assessed by the formula:

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7.3 Operational expenditure for studies, experts, etc. included in Part B of the budget

Not applicable.

7.4 Schedule of commitment and payment appropriations

EUR million

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8. Fraud prevention measures

- The Regulation requires the European political parties to comply with the provisions of the Financial Regulation, to publish their accounts and submit them to the Commission and the Court of Auditors.

9. Elements of cost-effectiveness analysis

9.1 Specific and quantified objectives; target population

9.2 Grounds for the operation

- The action is essential to enable the European political parties to play the role assigned to them under Article 191 in an effective and transparent manner.

9.3 Monitoring and evaluation of the operation

- The Commission will evaluate the action on an ongoing basis in the course of the annual budgetary process. Assessment of the results obtained (where the operation is to be continued or renewed)

10. Administrative expenditure (Section III, Part A of the budget)

This section of the financial statement must be sent to DGs Personnel & Administration and Budget; DG Personnel & Administration will then forward it to DG Budget with its opinion.

Actual mobilisation of the necessary administrative resources will depend on the Commission's annual decision on the allocation of resources, taking into account the number of staff and additional amounts authorised by the budgetary authority.

- Requirements in terms of human and administrative resources are covered within the allocation granted to the managing service.

- Staff assigned to managing the action.

10.1 Effect on the number of posts

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If additional resources are required, indicate the pace at which they will have to be made available.

10.2 Overall financial impact of additional human resources

EUR

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The amounts given must express the total cost of additional posts for the entire duration of the operation, if this duration is predetermined, or for 12 months if it is indefinite.

10.3 Increase in other administrative expenditure as a result of the operation

EUR

>TABLE POSITION>

The amounts given must correspond to total expenditure arising from the operation if its duration is predetermined or expenditure for 12 months if it is indefinite.