European political parties are foreseen in the Treaty on European Union (Article 10(4) TEU) and Article 12(2) of the Charter of Fundamental Rights of the European Union stipulating that they 'contribute to forming European political awareness and to expressing the will of citizens of the Union'. By having a truly European dimension, they can contribute to forming a European awareness and facilitate the greater legitimacy of the European Union.

With the objective to increase visibility, recognition, effectiveness, transparency and accountability of European political parties and foundations, European Commission introduced Regulation No 1141/2014, replacing Regulation (EC) No 2004/2003. Political parties and foundations that meet a number of conditions were offered the opportunity to become European legal entities and as a result, increase access to funding from the budget of the European Union.

However, even before the regulation started to apply in January 2017, European Parliament and a number of European political parties pointed out and that the existing rules require improvement and certain loopholes need to be addressed.
In January 2017, on behalf of the Committee on Constitutional Affairs, Danuta Hübner (EPP, Poland) in a parliamentary question invited the Commission to address a number of issues and consider presenting new legislative proposal.

In March 2017, Parliament held a plenary debate as a follow-up to the parliamentary question, where the Commission took notice of concerns and suggestions expressed by the Parliament and confirmed its willingness to engage with the Parliament and the Council in monitoring implementing of the new rules. Main concerns expressed in the parliamentary question and during the debate that would require revision of the legal framework were:

• level of co-financing,
• possibility of multi-party membership of Parliament’s Members,
• number of members required for funding,
• financing of referendum campaigns,
• introduction of a financial capacity criterion
• strengthening control over the respect by European political parties of the fundamental values of the EU
• building of financial reserves.

On 15 June 2017, Parliament adopted the resolution on the funding of political parties and political foundations at European level, regretting numerous shortcomings of Regulation No 1141/2014, particularly in respect of the level of co-financing (own resources), and of the possibility of multi-party membership of Members of the European Parliament. Parliament called on the Commission take a closer look at all the shortcomings and to propose a revision of the regulation as soon as possible.

As a consequence of mentioned requests from the European Parliament and following dialogue with different stakeholders (including representatives of European political parties, political groups in the European Parliament, MEPs, services of the European Parliament, the Authority for European political parties and European political foundations and national experts), the Commission has drafted targeted amendments to the Regulation No 1141/2014.

In the State of the Union Address of September 2017, President Juncker announced that Commission is proposing new rules on the financing of political parties and foundations and the proposal for the amended regulation was published the same day. The proposed amendments focus on providing for more transparency, improvement of democratic legitimacy and strengthening enforcement.

Specific issues proposed by the Commission are:

• only political parties and no longer individuals are to be considered when calculating the representation requirements for forming a party
• 95% of the overall budget shall be distributed between European political parties according to their share of elected members of the European Parliament among the beneficiary European political parties. In that way financing of European political parties will better reflect actual share of each party’s vote in European elections
• European political parties should report on publishing their logo and programme as well as information on gender balance, on their member parties’ websites. Making this link between national and European political parties provides for greater transparency and strengthen citizens’ rights to be informed.

The new proposal should come into force before the 2019 European elections.

In the Parliament’s Committee on Constitutional Affairs, Rainer Wieland (EPP, Germany) and Mercedes Bresso (S&D, Italy) were appointed rapporteurs on 28 September 2017. Draft report was introduced at an extraordinary meeting of the Committee on 23 October and voted in the Committee on 21 November 2017. During the same Committee meeting, the decision to enter into negotiations and the composition of the negotiating team were approved and the President announced the Committee’s decision in the plenary session on 29 November 2017.

European Economic and Social Committee and European Court of Auditors provided their opinions in December 2017, both generally welcome the Commission’s proposal.

In the Council, Commission presented its proposal during meeting of Working Party on General Affairs (GAG) on 28 September 2017. The proposal was further examined on four GAG meetings in 2017. The Presidency suggestions for redrafting were discussed from December 2017 to February 2018. On 21 February 2018, Permanent Representatives Committee (Coreper II) agreed to the text of Council’s position and decided to enter into negotiations with European Parliament.

The positions of the two co-legislators were very close together which allowed for a swift agreement to be reached on 27 February 2018, after only one trilogue meeting. Coreper II indorsed the compromise text on its meeting of 7 March 2018. The European Parliament has adopted its position at first reading on 17 April 2018 by 561 votes to 89, with 36 abstentions. The Council approved the new regulation on 26 April and it entered into force on 4 May 2018, the day it was published in the Official Journal.

References: 

• EP Legislative Observatory, Procedure file on statute and funding of European political parties and European political foundations, 2017/0219(COD)
• Regulation 114/2014 on the statute and funding of European political parties and European political foundations
• Regulation 2004/2003 on the regulations governing political parties at European level and the rules regarding their funding
• European Parliament, Question for oral answer to the Commission, Danuta Maria Hübner, on behalf of the Committee on Constitutional Affairs, O-000007/2017/rev.1
• European Parliament, Plenary debate of 15 March 2017 in Strasbourg on Review of the regulation on the statute and funding of European political parties and foundations
• European Parliament, Resolution of 15 June 2017 on the funding of political parties and political foundations at European level
• European Commission, Proposal for a regulation amending Regulation (EU, Euratom) No. 1141/2014 of 22 October 2014 on the statute and funding of European political parties and European political foundations, COM(2017)481
• European Parliament, Report on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) No. 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations, (COM(2017)0481 – C8-0307/2017 – 2017/0219(COD))
• European Economic and Social Committee, Opinion on the proposal for a Regulation of the European Parliament and the Council amending Regulation (EU, Euratom) No 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations, 7 December 2017
• Court of Auditors, Opinion on the proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) No. 1141/2014 of the European Parliament and the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations, 14 December 2017

 Further reading:

• European Parliament, IPOL, Feasibility of a future European statute of European political parties : legal framework and desirable provisions, Study, June 2007
• European Parliamnt, EPRS, European political parties and political foundations – Statute and funding, Briefing, March 2018
• European Parliamnt, EPRS, Statute and funding of European political parties and European political foundations, At a glance, April 2018

Author: Kristina Grošek, Members' Research Service, legislative-train@europarl.europa.eu