The Funding of European political parties deals with public funding, political donations, and other forms of funding received by political parties operating transnationally in the European Union (EU) to pay for their activities. Parties operating transnationally in the EU are registered with the EU's Authority for European Political Parties and European Political Foundations (APPF). European political parties are publicly funded, both to actively support their operations and to limit the influence of private money on elections and on the shaping of public policy.
Each year, the European Parliament allocates a total amount of money to fund European political parties qualifying for European public funding. This amount is distributed via a lump sum, allocated equally to all qualifying European parties, and a proportional amount based on each party's share of Members of the European Parliament (MEPs). For instance, in 2023, European political parties were allocated a total of €46 million. Depending on their own application for European public funding and on their amount of "reimbursable expenses", European parties may in fine receive less than their maximum allocation. European public funding accounts for the vast majority of European parties' income.
At European level, the majority of private political funding comes from financial contributions from European parties' national member parties. Donations from legal persons and, especially, from individuals only play a limited role. The APPF monitors donations and contributions to European political parties, and publishes a yearly list of political donors.
History
2000-2003 In June 2000, the European Court of Auditors considered that the financing of European political parties should not be carried out using appropriations made for political groups in the European Parliament, as had long been the case. As a result of this decision, the 2001 Treaty of Nice added a new paragraph to Article 191 of the Treaty on the Functioning of the European Union (at the time, the "Treaty establishing the European Economic Community") to explicitly allow the funding of European political parties from the budget of the European Union. European funding for political parties therefore did not come about as a result of political corruption scandals or outsized influence of wealthy donors, but to actively support the development of a European party system.
In November 2003, the European Parliament and the Council of the European Union adopted Regulation 2004/2003 "on the regulations governing political parties at European level and 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.
This framework provided that the total appropriations for European parties would be distributed as follows among the parties qualifying for funding:
15% are distributed equally (the lump sum); and 85% are distributed in proportion to each party's number of member MEPs (MEP-based funding).
Unlike in many countries, European public funding was not designed as a simple amount of money provided to parties, but as a reimbursement of specific expenses, known as "reimbursable expenditure" (see #Structure). Under Regulation 2004/2003, European 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. Should parties fail to raise sufficient own resources, their final public grant would be lowered in order to respect the co-financing rate.
Regulation 2004/2003 also introduced some limitations on donations, prohibitions on spending, and transparency obligations.
2004-2007 The Regulation was later detailed by the Decision of the Bureau of the European Parliament of 29 March 2004 and amended by Regulation 1524/2007.
In particular, Regulation 1524/2007 clarified the funding framework and changed the co-financing rate, allowing public funding from the general budget of the European Union to reach 85% of European parties' reimbursable expenditure. This changes meant that European parties were only requested to provide 15% in private co-financing. Regulation 1524/2007 also explicitly allowed European parties to finance the campaigns they conduct for elections to the European Parliament.
2014
In October 2014, the European Parliament and the Council adopted Regulation 1141/2014, which replaced Regulation 2004/2003 and overhauled the framework for European political parties and foundations, including by giving them a European legal status. It also established the Authority for the European political parties and European political foundations (APPF), an standalone entity for the purpose of registering, controlling, and imposing sanctions on European parties and foundations. Regulation 1141/2014 entered into force in 2017, and was fully applied starting in 2018. Since the entry into force of the Regulation, applications for public funding are placed with the APPF, but decisions on funding remain with the European Parliament.
With regards to funding, Regulation 1141/2014 raised the maximum amount of private donations from natural or legal persons from €12,000 to €18,000 per year and per donor; that limit also applied to contributions from natural persons.
2018-2019 In May 2018, the European Parliament and the Council adopted Regulation 2018/673, which amended Regulation 1141/2014 by detailing provisions relating to the registration of political parties and foundations, and transparency regarding political programmes and party logos.
With regards to funding, Regulation 2018/673 introduced a number of changes, including the following: within the overall amount of public funding available, the shares of the lump sum and of the MEP-based funding were brought, respectively, to 10 and 90% (compared with 15 and 85% before); and European parties' co-financing rate was brought down to 10% (compared to 15% before).
In March 2019, the European Parliament and the Council adopted Regulation 2019/493, which further amended Regulation 1141/2014. Changes focused mostly on the use of personal data by European political parties and foundations. 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.
2020s 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. With regards to funding, the draft report called on the Commission and co-legislators to clarify the definition of indirect funding from European political parties and foundations to national member parties, remove the ban on financing referendum campaigns on European issues, allow the funding of European parties from non-EU national parties (which, following Brexit, meant that political parties in the UK could no longer finance European parties), broaden the categories of private funding, decrease European parties' co-financing rate, and simplify accounting procedures.
In November 2021, the European Commission proposed a text for a new regulation aimed at replacing Regulation 1141/2021, using the recast procedure. With regards to funding, this proposal retained the European Parliament's suggestion to lower European parties' co-financing rate (decreasing it from 10% down to 5%, and down to 0% in election years). 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. Finally, it proposed allowing European parties to receive contributions from national member parties located in non-EU members of the Council of Europe. 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.
Following the presentation of the Commission's recast proposal, the European Parliament and Council of the European Union must agree on a final text for the proposed Regulation. In March 2022, the Council of the European Union adopted a political agreement (its own negotiating position). Among others, the proposal of the Council opposed the Commission's proposals to decrease European parties' co-financing rate and to allow funding from political parties of specific non-EU countries. The Council also proposed capping funding from the new category of private funding at 2% of European parties' budgets, and lowering from €3,000 down to €1,500 the threshold at which individual donors must be identified. In July 2022, the European Parliament's AFCO Committee adopted its own position, which was endorsed by the Plenary in September 2022. Among others, the Parliament proposed capping funding under the new category of private funding at 10% of European parties' budget.
Trilogues between the European Parliament, Council of the European Union, and European Commission took place in September, October and November 2022, but did not lead to an agreement. In March 2023, the Council revised its political agreement to allow the funding of European parties by national parties from EFTA countries, EU candidate countries and Kosovo, countries using the Euro, and former EU Member States. Another trilogue took place in March 2023, but did not reach an agreement.
European public funding
European public funding for European political parties refers to funding from the general budget of the European Union, and European parties are explicitly forbidden from directly receiving funding from public authorities from a Member State or a third country, or from entities controlled by public authorities. Within the EU budget, appropriations for European parties are taken from the budget of the European Parliament.
Eligibility
In order to be eligible to European public funding, a European political party must satisfy the following conditions:
it must be registered by the APPF (definition of a European party);In order to be registered by the APPF, a party must have its seat in a Member State, observe the values on which the Union is founded, pursue only non-profit goals, and its member parties must not be members of another European party. Additionally, the European party or its members must have participated in European elections or publicly stated their intent to do so, and its member parties must be represented, in at least one quarter of the Member States, by members of the European Parliament, of national parliaments, of regional parliaments or of regional assemblies, or it or its member parties must have received, in at least one quarter of the Member States, at least 3% of the votes cast at the most recent European elections. it must be represented in the European Parliament by at least one MEP;According to Article 17.3, an MEP can only be considered as a member of a single European political party, which is the one to which their national or regional political party is affiliated to. This also applies to MEPs who are only direct members of a single European party, but whose national or regional party is a member party of another European political party; they will not be considered, for the purpose of public funding, as a member of the European party their directly belong to. it must be audited by an external auditor mandated by the European Parliament; and it must not be subject of sanctions imposed by the APPF.