‘Unruly’ EU countries face threat of frozen subsidies

MEMBER states that fail to live up to the European Union’s democratic values could find their EU subsidies being “frozen” until they mend their ways.

Under proposals to be unveiled in Brussels this week by Guenther Oettinger, the EU’s budget commissioner, eastern EU states such as Poland and Hungary could feel a financial squeeze if they were deemed to have failed to live up to the founding values of the EU.

The move comes after pressure from liberal groups in the European Parliament and leading powers such as France and Germany, who want to find a mechanism to put pressure on recalcitrant member states.

“The precise details are still to be worked out, but the proposal will include the temporary freezing of funds in order to motivate a change of behaviour among states,” said an EU source.

Poland and Hungary are both major recipients of EU “structural funds”, which are designed to narrow the gap between rich and poor states, receiving €5.5bn and €2.7bn respectively a year. Sources said the threat to freeze funding could also include agricultural subsidies, but would not include student programmes.

Reports also suggest that new formulas for calculating payments will mean that southern EU states, which tend to adhere more closely to liberal values, will receive higher payments when the next seven-year budget cycle begins in 2021. The decision to link EU payments to “good behaviour” is highly controversial and risks deepening the stand-off between western Europe and populist governments in Warsaw and Budapest.

Tensions deepened after eastern EU countries refused to accept refugee resettlement quotas following the 2015 migrant crisis, and Poland introduced judicial reforms judged anti-democratic by the EU. The recent re-election of Viktor Orban (inset), the Hungarian prime minister, was marred by anti-Semitic rhetoric and corruption scandals.

Guy Verhofstadt, the leader of the liberal ALDE group in the European Parliament, said: “It is grotesque for EU taxpayers’ money to be spent propping up the vanity projects of illiberal ruling elites who politicise their own judiciaries, erode democratic safeguards and systematically attempt to undermine NGOs and the free press.” (© Daily Telegraph, London)