During recent Renew Europe group meetings, there was a clear consensus that we should put our true European values at the heart of the EU budget by introducing a rule of law mechanism clause applied to the whole 2021-2027 MFF. However, we also agreed it was necessary to find ways to invoke this clause while limiting the impact it would have on the member state’s beneficiaries. More specifically, just because a government is baffling fundamental rights or not respecting the rule of law does not mean the country’s local authorities, NGOs, civil society organisations, or SMEs should suffer as a result of freezing EU funding going to that member state. This paper aims to provide solutions to this problem; it demonstrates that having such a provision in place could work as a prevention mechanism that will discourage Member States violating the rule of law; it explains the possibility for the European Commission to directly - or indirectly - manage funds with recipients without the involvement of the national government. This is already the case for several EU funds, and could become a blueprint for management of all EU funds in the future.
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