Funding of European political parties
Regulation 2004/2003 provided the first official definition of European political parties and created a framework for their public funding.
Should parties fail to raise sufficient own resources, their final public grant would be lowered in order to respect the co-financing rate.
The modalities of the implementation of the Regulation were later updated by the Decision of the Bureau of the European Parliament of 1 July 2019.
[12] In June 2021, in line with Article 38 of Regulation 1141/2014, MEPs Charles Goerens (ALDE) and Rainer Wieland (EPP) of the European Parliament's Committee on Constitutional Affairs (AFCO) presented a draft report on the implementation of the Regulation.
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.
[15] 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.
In March 2022, the Council of the European Union adopted a political agreement (its own negotiating position).
[17] In July 2022, the European Parliament's AFCO Committee adopted its own position, which was endorsed by the Plenary in September 2022.
In the first step, the European Parliament determines the maximum allocation that each party is entitled to, based on its application and number of MEPs.
In the second step, the final amount of public funding is determined, based on each party's maximum allocation and on its actual reimbursable expenditure.
As indicated in Article 19 of Regulation 1141/2014, amended in 2019:[25] These ratios determine the maximum contribution according to the distribution key.
[27] The maximum allocation calculation was as follows:[28] Article 226(4) of the Financial Regulation allows public funding to European parties to be paid out in full through a single pre-financing payment, unless in duly justified cases.
Between 2004 and 2024, the amount allocated for the public funding of European parties has increased close to eight-fold — from €6.5M to €50M.
Similarly, amounts actually received by European parties have increased close to eleven-fold between 2004 and 2020 — from €3.22M to €34.1.
As all political parties, European political parties have many ways to raise private funds: contributions from members, donations, participation fees for events, sales of goods, commercial operations (such as renting property), financial income (such as interest in savings or investments), etc.
[33] The following limits apply to contributions from members:[22] Contributions raised by the current ten European political parties between 2004 and 2022 were as follows:[33][24] Donations are payments or donations in kind provided by non-members of a European political party.
Formally, Regulation 1141/2014 defines them as:[34] any cash offering, any offering in kind, the provision below market value of any goods, services (including loans) or works, and/or any other transaction which constitutes an economic advantage for the European political party or the European political foundation concerned, with the exception of contributions from members and of usual political activities carried out on a voluntary basis by individuals;The following limits apply to contributions from members:[22] Donations raised by the current ten European political parties between 2004 and 2022 were as follows:[33][24]
The preceding provisions leave unclear the legal requirement for European parties to also transmit information on contributions made by individual members as part of their regular reporting.
[30][36] European parties are required to report on donations on an expedited basis in two cases:[22] Additionally, European political parties are required to provide any information requested by the independent bodies or experts mandated to audit their accounts.
This 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.
[13] 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.
[43] The current framework for public funding was criticised for failing to create a level playing field between parties and 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.
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.
[24] European parties themselves have continuously called for the decrease of their co-financing rate, stating that private funds were difficult to raise.
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;[47] other MEPs proposed to intensify scrutiny for donations under €500 per year and per donor.
