EU governments approved the recovery fund last year to help member states bounce back from the economic damage caused by the coronavirus pandemic. However, all countries must ratify a decision to raise the upper limit for national contributions to the EU budget in order for the plan to go ahead. The Constitutional Committee in Finland’s Parliament announced at the end of April that two-thirds of the house must support the EU legal changes, throwing the plans into disarray.
Things got more complicated last week.
Finland’s parliament held a fourth day of debate on the stimulus package, as a Finns Party filibuster continued and parliamentary authorities scrambled to deal with procedural obstructions.
The start of the day’s session was delayed twice as the parliament’s speaker and deputy speakers convened to decide what to vote on: a Finns Party motion to adjourn the debate until June, or a Finns Party motion to have the constitutional law committee rule on the speaker’s actions.
In the end the motion to adjourn until June was defeated by 68 votes to 38.
At the same time, the constitutional law committee’s chair Antti Rinne (SDP) said his committee would consider the question of whether the speaker had acted appropriately in ending Thursday’s debate.
Finns Party gambits have included filibustering the debate to avoid a vote, while the second deputy speaker Juho Eerola has been relieved of his duties in leading the debate after he said he opposed the package and would work to prevent it being approved.
In a recent report, head of Oxford-based think-tank Euro Intelligence, Wolfgang Munchau, shed light on how serious the latest scrambling in Finland is for Europe.
He wrote: “Is the recovery fund hanging by a thread?
“All parliaments have to approve it and the Finnish one seems to be the most determined to resist.
“First the approval threshold was increased to a two-thirds majority. Then in the plenary, the Finns Party delivered a 20-hour filibuster to delay or even suspend a vote on the recovery fund in the first session. The second one is ongoing.”
He added: “The discussions will continue until there is no further request for comment. This could easily drag on until next week!
“Finland’s parliament still needs a two thirds majority to approve the recovery fund. The coalition parties alone will not be enough to secure this majority. Opposition parties intended to vote against the package. Only the pro-Europe National Coalition Party (NCP) leadership has given its MPs free rein to vote as they wish. The party is known to have both supporters and opponents of the package, according to YLE.
“If even one EU member state does not accept the package, the recovery plan will not be rolled out.
“The recovery fund does indeed hang on a thread, though not one that turns from hay into gold, like in Rumpelstiltskin.”
According to German lawyer and politician Dr Peter Gauweiler, Brussels’ recovery fund should run into trouble, as it is “absolutely illegal”.
In an exclusive interview with Express.co.uk, the lawyer harshly criticised the package and explained: “In the end, it is contrary to the structures of the European treaties.
“Fiscal law should not be Europeanised because of the bigger legitimisation basis of the national parliaments.
“It’s absolutely illegal.”
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German MEP Gunnar Beck echoed Dr Gauweiler in another interview with Express.co.uk, in which he questioned the legality of the fund.
Mr Beck said: “The recovery fund is so expensive and unlawful.
“It is clearly against the wording of the articles 310 and 311 of the Treaty of the Functioning of the EU.
“They clearly state that the EU is not allowed to take debt on the financial market.
“It is a breach of treaty.
“It is a breach of the EU constitution.”
The Treaty on the Functioning of the European Union is one of two treaties forming the constitutional basis of the EU, the other being the Treaty on the European Union.
Article 310 reads: “With a view to maintaining budgetary discipline, the Union shall not adopt any act which is likely to have appreciable implications for the budget without providing an assurance that the expenditure arising from such an act is capable of being financed within the limit of the Union’s own resources and in compliance with the multiannual financial framework referred to in Article 312.”
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Caroline Heber, senior research fellow at the Max Planck Institute for Tax Law and Public Finance, put forward similar claims in a recent entry for a blog from the University of Oxford.
She wrote: “According to the principle of conferral, which underpins the EU, the EU acts only within the limits of the competences conferred upon it by the member states in the Treaties to attain the objectives.
“Consequently, any action by the EU must be based on a sufficient authorisation to act granted within the EU Treaties.
“This also applies to the issuing of bonds on the financial markets by the Commission on behalf of the EU.
“The EU Treaties do not confer a general power to borrow on the EU.”
At times, the lack of a general power to borrow has not prevented the EU from issuing bonds on the financial markets.
The EU has usually used the flexibility clause to overcome its lack of a fundamental borrowing competence.
However, Ms Heber noted, the flexibility clause cannot provide a sufficient legal ground for the issuing of bonds for the recovery fund.
She added: “Unlike past examples, the funds are not limited to passing on the benefits of the EU’s credit rating to the member states.
“The borrowed funds are intended to finance transfers via economic policy measures and, although they may be covered by EU policy areas, there can be no doubt that this massive redistribution has an impact on the overall structure of the EU. Such a momentous borrowing and use of funds via the recovery fund cannot be based on Article 352 TFEU.
“As a result, the EU does not have sufficient competence to issue €750billion (£668billion) bonds to finance the recovery fund.”