Cian O'Callaghan (Dublin Bay North, Social Democrats)
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228. To ask the Minister for Foreign Affairs and Trade the position of Ireland on the rule of law mechanism included in the proposed EU budget framework; and if he will make a statement on the matter. [35978/20]

Simon Coveney (Cork South Central, Fine Gael)
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Ireland firmly supports the rule of law as a core value of the European Union. The rule of law is and should remain a fundamental principle that all EU Member States respect, protect and promote.

Agreement was reached with the European Parliament on 5 November on a Regulation for a general regime 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, that the Commission will propose measures in case of breaches for adoption by the Council by qualified majority, and that the European Council will revert rapidly to the matter.

The Presidency tabled a compromise proposal for a Regulation in September which led to difficult discussions as a number of Member States strongly support the use of protective measures, while others oppose such measures or wish to limit them to very specific breaches as they affect the EU budget.

The mechanism agreed with the European Parliament will require Member States allocated funding from the EU’s budget, including the Recovery Fund and grants or loans, 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. It sets out examples of what constitutes breaches of rule of law, including endangering the independence of the judiciary, and the procedure that will apply and possible measures to be taken against a Member State found in breach, including suspension of funding, a requirement for early repayment of loans and a reduction of funding to it under existing commitments.

I welcome the agreement reached with the European Parliament, as Rule of Law conditionality has been an important issue for Ireland in the wider MFF negotiations. The agreement means that there will be consequences for Member States for breaches of rule of law and it signals that rule of law issues are important for the EU. It also paves the way for overall agreement on the MFF, on which negotiations are still ongoing.