Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

This is a very relevant question given the broader multi-annual financial framework, MFF, considerations generally, and the fact that very significant funds could be held up, which Ireland may well need to access, in particular in the context of the Brexit adjustment fund.

As the Deputy will be aware, agreement was reached in the European Parliament on 5 November for a general scheme of conditionality for the protection of the EU's budget. This follows the July European Council conclusions on the MFF-Next Generation EU package, which stated that a regime of conditionality to protect the budget and Next Generation EU will be introduced. The Presidency tabled a compromise proposal for a regulation in September, which led to difficult discussions since, while a number of member states strongly support the use of protective measures, others oppose such measures or want to limit them to very specific breaches as they affect the EU budget.

The mechanism agreed with the European Parliament would require member states allocated funding from the EU's budget, including the recovery fund, to respect the rule of law, which is an essential precondition to comply with the principles of sound financial management enshrined in Article 317 of the Treaty on the Functioning of the European Union. Approval of the own-resources decision as soon as possible is critical to allow the recovery fund to support member states, through grants and loans, to deal with the impact of the Covid-19 crisis and to recover from it. I regret that Hungary and Poland are not yet in a position to support the MFF agreement and own-resource decision due to their opposition to the rule of law mechanism. However, I am hopeful that a compromise solution can be found and it is my understanding that the German Presidency will continue to work towards a reasonable solution.

While member states are entitled to use their veto on such matters, this is not the spirit in which we would have hoped to see the matter approached. It is in the interests of all member states to agree the MFF-Next Generation EU package so that moneys from the recovery fund can start flowing as soon as possible in 2021 but it is also an expectation from Ireland and many other countries that the legitimately held concerns on the application of the rule of law across the European Union would be respected as well. 

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