Crucially, the agreement only covers the architecture, with leaders expected to negotiate the figures and other sensitive issues until the end of the year.
Applying pressure
Northern European countries have been pushing to increase pressure on countries violating the rule of law by strengthening the link to EU payments. In the next budget cycle, all EU payments — including farmers’ subsidies — will be tied to countries’ compliance with rule-of-law requirements.
In a win for the Northern camp, governments deleted a clause that allowed countries violating rule-of-law principles to claw back up to 30 percent of their suspended funds, according to two EU diplomats.
Another contentious issue in the negotiations was the criteria for determining when a country was in breach of the EU’s rule-of-law framework.
Countries agreed to downsize the weight of the rule-of-law report — an annual assessment by the Commission on each country’s respect for democratic values — in defining whether to suspend EU payouts amid strong pressure from Italy.
Italian Prime Minister Giorgia Meloni criticized this mechanism in a parliamentary hearing last week.
“It is inconceivable that an informal document, the annual Rule of Law Report, drafted by Commission officials on the basis of newspaper articles rather than legal evidence, could be given binding force capable of blocking, without a debate, the disbursement of funds to a Member State,” she said.
Meloni’s critics jumped on the Commission’s rule-of-law report from 2024, which raised concerns about freedom of the press in Italy.
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