European political party
[12] The new paragraph stated that "the Council, acting in accordance with the procedure referred to in Article 251, shall lay down the regulations governing political parties at European level and in particular the rules regarding their funding."
Regulation 2004/2003 provided the first official definition of European political parties and created a framework for their public funding.
Additionally, public funding could not exceed 75% of a European party's reimbursable expenditure (referred to as the "co-financing rate"); this means that European parties were required to raise 25% of their budget from specific private sources ("own resources"), such as donations or member contributions.
Regulation 2004/2003 also introduced transparency obligations, limitations on donations, and prohibitions on spending, including a ban on the direct or indirect funding of national parties and candidates.
Regulation 1141/2014 applied as of 1 January 2017, and covered the activities of European parties and foundations starting with the financial year 2018.
It also included a new category of "own resources", allowing European parties to raise private funding from specific economic activities, such as seminar fees or publication sales; funding from this new category would be capped at 5% of European parties' budget.
[25] The European Parliament's AFCO Committee criticised the decision of the European Commission to opt for the recast method, which effectively limits discussions to the provisions of the Regulation which the Commission has decided to modify and prevents a wider review of the Regulation.
[26] In March 2022, the Council of the European Union adopted a political agreement (its own negotiating position).
[27] In July 2022, the European Parliament's AFCO Committee adopted its own position, which was endorsed by the Plenary in September 2022.
[33] In its guidance, the APPF that European parties "are free to cooperate with parties or organisations by means of ancillary forms of association (e.g., observers, partners, associates, affiliates)", but only a member can be claimed to meet the registration criteria, and only they can provide member contributions.
[34] There is no legal definition of what constitutes individual membership, leading European parties to define them differently.
For "quantifiable infringements", the financial sanction ranges from 100 to 300% of the irregular sums received or not reported, up to a maximum of 10% of the party's annual budget.
In October 2023, the APPF sanctioned the Identity and Democracy Party for "intentionally providing incorrect information about its board composition to the public".
This high reliance on MEPs directly disadvantages smaller parties failing to meet national electoral thresholds for European elections.
In their draft report on the implementation of Regulation 1141/2014, rapporteurs Charles Goerens and Rainer Wieland called for the distribution of public funding to be based on the number of votes received in the last European elections.
[23] The implementation report adopted by the European Parliament's AFCO Committee called on the Commission to assess whether vote-based funding schemes could be used, and noted that this change could increase turnout and promote pluralism.
[76] The European Free Alliance also proposed to reduce the share of public funding distributed in proportion to parties' number of MEPs from 90 to 85%.
[77] This would increase the share of public funding distributed equally among European parties (the lump sum).
While this reliance on public funding means that European parties are not beholden to private interests or wealthy donors, this extremely high percentage means that European parties only have a limited incentive to reach out to citizens for support.
[78] European parties themselves have continuously called for the decrease of their co-financing rate, stating that private funds were difficult to raise.
[79] More generally, the current public funding framework was criticised for failing to reward other important aspects of political parties than electoral performance, such as the enrollment of individual members or the raising of private donations from citizens.
In their draft report on the implementation of Regulation 1141/2014, rapporteurs Charles Goerens and Rainer Wieland called for an obligation to report publicly on all donations, regardless of their value;[82] other MEPs proposed to intensify scrutiny for donations under €500 per year and per donor.
"[84] This conclusion was uphelp by the European Parliament in its implementation report of Regulation 1141/2014, which recalled the requirement to "display the logo, political programme and website link of their European party of affiliation on their websites 'in a clearly visible and user-friendly manner'", and expressed its concern that "according to European Democracy Consulting’s Logos project, national member parties overwhelmingly fail to properly implement the Regulation's display requirement, as only 15 % of them display the logo in a clear and user-friendly manner".
