Sweden and Finland want to tie EU farm subsidies to rule of law

Access to the EU budget should be tied to countries respecting the rule of law and fundamental rights without exception, ministers from Sweden and Finland have said.

The call comes after Brussels blocked billions in funds to Poland and Hungary due to concerns over judicial reforms and democratic backsliding.

“All member states must adhere to our common values, notably rule of law, democracy, and fundamental rights,” Sweden’s Jessica Rosencrantz and Finland’s Joakim Strand, both ministers for European affairs, wrote in a joint letter to the European Commission ahead of a ministerial meeting due Tuesday (24 September).

“All member states have of their own free will signed up to these values. However, unfortunately, reality has shown the need for an active rule of law policy,” they added.

Contentiously, they say the overhaul should also cover billions in subsidies given out each year under the EU’s Common Agricultural Policy (CAP), which are jealously protected by farmers, especially in big producers like France, Italy and Spain.

The CAP allocates €264 billion for the 2023-2027 period, including €189bn in direct income support and €66bn for development of impoverished rural areas, but without the oversight afforded to other EU spending.

Access to other EU funding programmes such as cohesion funding is subject to meeting common “enabling conditions”, such as a member state respecting the EU Charter of Fundamental Rights, without which funds can be frozen or suspended.

After a controversial judicial reform in Poland, those provisions were previously used to paralyse €76.5 billion in EU funds, an impasse which was solved earlier this year. In Hungary, a series of legal breaches immobilised almost €22 billion under the same Common Provisions Regulation, half of which still remains frozen.

Now Rosencrantz and Strand argue this system should be further expanded as a “general feature in all areas of the EU budget.”

Their letter also calls on the Commission to make “full use” of a conditionality mechanism which can freeze cash in cases where the bloc’s financial integrity is at risk, and which has so far been used just once, to deal with concerns over corruption in Hungary.

“Instead of listening to calls to weaken conditionality for administrative reasons, rule of law conditionality should be made stronger. Our taxpayers need to trust that the EU’s common funds are used appropriately and responsibly,” the ministers wrote.

Their call comes as the Commission is reportedly preparing to take action against Slovakia in reaction to legislative changes brought in by Prime Minister Robert Fico, including the abolition of the Special Prosecutor’s Office that deals with corruption-related crimes.

In political guidelines for her second term published in July, Commission President Ursula von der Leyen promised to build a “closer link” between EU funds and respect for the rule of law.

The latest edition of the EU’s report on the rule of law, published later in July, showed that Hungary and Slovakia had made little to no progress on the previous year’s recommendations.

Von der Leyen also pledged radical overhaul of the EU budget, with programmes adapted to country circumstances and dependent on reforms.