France pushes for rule of law sanctions as part of EU recovery plan

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EU governments that undermine fundamental rights such as equality and media freedom should face financial sanctions under the € 750 billion European coronavirus recovery fund, the French minister warned from Europe.

Clément Beaune, the new French minister for European affairs, said his government would push for a strong rule of law mechanism that would make access to billions in EU stimulus aid conditional on respect for core values in the light of developments in Poland. and Hungary this month.

“It is not possible to explain to French, Polish, Hungarian and European citizens that we can have financial solidarity in Europe without worrying about respecting the basic rules of democracy, freedom of the media and equal rights, ”Beaune told the Financial Times.

During a four-day marathon summit on the EU’s stimulus package this month, leaders kept open the precise nature of a rule of law mechanism following resistance from Warsaw and Budapest that said their governments were unfairly targeted by the measure. Member states, along with the Commission and the European Parliament, must now agree on how conditionality will work with the aim of sealing the full package by the end of the year.

France has joined forces with the Nordic countries and the Netherlands to lobby for recovery funds to be withheld for member states that flout fundamental principles. Mr Beaune said financial sanctions were “something we need to develop as legal and financial measures are the most powerful tools” against rule of law violations.

“If there is any doubt about the strength of the EU on its core values, then there will be doubt in the minds of every citizen about the relevance of the project,” said the minister, who was previously the adviser Emmanuel Macron’s Europe. “Europe is not just a market but a cultural and political project.”

The EU’s clash with recalcitrant eastern member states has intensified after the Polish government pledged to pull out this month from an international treaty on the protection of women from domestic violence. Poland’s designation of “LGBTI-free zones” in six cities has also been criticized by the European Commission, which this week decided to withhold funds for cities under the EU’s town-twinning program.

Mr Beaune said respect for the rule of law was an “existential issue” for the EU. “This is not about west against east or teaching countries a lesson. If you have a rule of law mechanism, it should not ex ante target a single country, but if a government violates the rule of law, there should be elements of sanctions – financial and legal. ”

As European adviser, Mr Beaune has played a key role in shaping Mr Macron’s European policy since his election three years ago, overshadowing the president at all European summits. The 38-year-old political novice was one of Mr. Macron’s advisers at the Ministry of the Economy under the previous presidency of François Hollande. Mr Beaune was appointed Minister of European Affairs in a government reshuffle this month.

Mr Beaune hailed the decision by EU leaders to fund an emergency pandemic response of 750 billion euros with supranational debt issued by the commission. He said the landmark deal – which had been pushed by France and Germany as early as May – meant that Europe had “crossed a Rubicon” by handing out hundreds of billions in subsidies to struggling economies.

So-called “frugal” countries like the Netherlands, Austria, Denmark and Sweden have insisted that the borrowing mechanism is temporary and will not extend beyond the pandemic emergency during the next three years. But Mr Beaune said the decision to issue a common debt showed that a ‘taboo’ was broken on Europe’s willingness to pool its fiscal firepower and that it could be used again. during future slowdowns.

France will take the rotating EU presidency for six months in early 2022 – coinciding with Mr Macron’s likely re-election campaign. Mr Beaune said his government would prioritize a ‘Conference on the Future of Europe’, where citizens would be encouraged to set their priorities for health, migration and the future of the EU .

Mr Macron is also pushing for the creation of a series of new EU-wide levies – such as a European digital tax and a levy on carbon imports – to finance the costs of borrowing from 750 billion euros. Mr Beaune said the debate over these revenue streams “will be the next crucial battle” in the stimulus package negotiations. Mr Beaune pledged that French taxpayers would not be levied to fund the EU initiative, which he said should fund 40% of France’s economic bailout after the pandemic – or 40 billion euros .

“We do not want to increase the financial pressure on European citizens and European companies, so we will have to find new ways [to generate money]Said Mr. Beaune.

Brussels has been tasked with drawing up a plan for a digital tax and a carbon border mechanism early next year. However, political resistance to the two levies will likely be strongest in northern capitals which fiercely protect their national fiscal powers.

“We will keep the pressure on the commission because we believe it is necessary from an economic and political point of view. It’s about how we finance our political affairs to make them fairer, more efficient and more powerful, ”said Beaune.

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