11 April 2022

How the regulatory framework for EU parties is failing European democracy

By Wouter Wolfs and Ludvig Norman.
Figures in different colours (red, green, yellow, blue) representing MEPs from different parties in the Parlamentarium in Brussels
“Subsidies for European political parties aspired to strengthen European party democracy. But the current funding rules hamper the development of a competitive and responsive party system.”

The European Union lacks genuine political parties and a proper system of party politics: this analysis has been put forward by academics and observers of European decision-making to describe how the EU suffers from a democratic deficit. This has also been an important concern of the EU institutions themselves, and they have made several attempts over the years to tackle this deficit.

One of such measures has been the introduction of direct subsidies for political parties at the European level. By granting these European political parties public funding, it was argued, they would be able to fulfil their ‘constitutional mission’. Article 10(4) of the EU Treaty indeed states that these Europarties contribute to forming European political awareness and to expressing the will of citizens of the Union. As is the case in most member states, state support for political parties should help to make this possible. Since the start of the public funding in 2003, more than €550 million has been allocated by the EU institutions to these European political parties and corresponding political foundations.

A regulatory framework in need of reform

Together with the availability of EU public funding, rules were put in place to regulate the use of these state subsidies. Such a regulatory framework provides a set of incentives and constraints on how the money can be used, and consequently can affect the relations between the various European political parties and how they organize internally. In 2021, the EU institutions started debating a revision of these funding rules. A new regulatory framework should be in place before the next elections of the European Parliament in 2024.

And indeed, the rules are in need of reform. In particular, there are two aspects in which the current regulatory framework fails to contribute to strengthening EU party democracy. First, it hampers the contestability of the European party system, because it makes it very difficult for new parties to enter. Secondly, it doesn’t provide any incentives for stronger participation of citizens in the Europarties, which helps to solidify their status as mere umbrella organizations of their national member parties.

Contestability of the Europarty system

Regarding contestability, if a party system wants to be substantially representative, it is important that the rules find a balance between favouring existing parties and create reasonable conditions for new political parties to enter. A governance system that mainly benefits the established (larger) parties and is not open to new political competitors reduces the contestability and the responsiveness of the party system and consequently has a negative effect on its democratic value. The funding rules for European political parties allow for limited responsiveness of the European party system because they favour existing parties and set unreasonably high thresholds for new political forces, both in terms of registration, funding and administrative requirements.

The threshold to become officially registered as a European political party is very high. Some of the conditions are rather straightforward: a Europarty must be a non-profit organization, have its headquarters in one of the EU member states, participate in the European elections, and respect the EU’s fundamental values. Although the latter criterion can be difficult to verify, it should not pose a problem for most new political forces. However, other requirements represent considerable obstacles for new parties to establish themselves at the European level.

Parliamentary representation as a registration requirement

In order to gain registration, a European political party must be sufficiently represented in order to be considered “truly transnational”. It therefore needs to have representation in a quarter of the member states (currently, that means 7 of 27). This condition has been part of the finance regime since its origins and was mainly put in place to refrain radical right parties from getting access to EU funding. Although it was unsuccessful in this regard, it effectively prevented several new transnational organisations – such as Volt Europe, DiEM25 or the European Pirate Party – from being officially recognised as European parties.

The main problem is how this condition is operationalized: it is stipulated as parliamentary representation. Only a European party that has won seats in the European, national or regional elections – or won at least 3 per cent of the vote – in seven member states can be officially registered. In other words, European parties can only be registered after they participated in elections. Consequently, even the funding rules consider the European party system as a mere sum of the national parties, without any added value in its own right. This criterion poses a substantial threshold for new political forces to even become officially registered as a European party.

Funding rules favour larger parties

Similarly, the rules on the access and distribution of funding favour the larger established parties over the smaller parties and political newcomers. The requirements to receive European subsidies are identical to registration conditions, with the one addition that a Europarty also needs to have at least one Member of the European Parliament (MEP). Consequently, the threshold to get state support is very high for new parties and extra-parliamentary parties are de facto denied funding.

The distribution key for funding is also primarily beneficial for the larger parties: each year, a total sum is determined for the purpose of financing Europarties. This total sum is subsequently distributed among the eligible parties, with only 10 per cent of the sum allocated in equal terms and 90 per cent in proportion to the number of affiliated MEPs. This clearly favours the bigger parties.

Growing administrative burden

In addition, the subsequent changes to the funding rules have substantially increased the administrative burden on the European parties, with higher reporting and accounting requirements, longer and more intense procedures to be followed, and more documentation to be submitted.

Although these new measures have improved the scrutiny and – to a lesser extent – transparency of the finance regime, they require substantially more administrative capacity of the parties, to the extent that they have to function like a small or medium-sized company and/or must outsource certain tasks to specialized companies. These new administrative requirements have posed challenges for even the larger parties, but certainly pose an important practical hurdle for smaller parties and newcomers.

Lack of citizen participation

Regulatory systems also shape the internal organization of political parties and can thus provide incentives or even obligations for the active involvement of party members or other individual citizens in their internal functioning. This is especially important for European political parties, since they are expected to bridge the gap between the EU institutions and European citizens. Yet the funding rules include barely any provisions that could steer Europarties to strengthen their participatory links with citizens.

As already mentioned, in order to get registered, a European political party must be “represented” in a quarter of the member states. However, this representation only relates to its member parties; the number of individual members is in no respect relevant. Even a European political party without any individual members beyond its MEPs could be eligible for EU funding.

The funding conditions on the other hand do include an incentive for Europarties to strengthen their financial ties to society: they can only receive European subsidies if they are able to generate at least 10 per cent of own resources through donations, membership fees or other income. While this could be used to connect individual citizens to the European party organizations, in practice most of these own resources are contributed from the various member parties.

No binding provisions on internal democracy

Finally, while the regulatory framework contains detailed provisions on the required administrative and financial organization and the responsibilities of the governing bodies, the rules are far more ambiguous regarding individual membership rights. The rules basically leave a high level of freedom to the parties themselves: there are no binding provisions on internal democratic decision-making or the involvement of individual citizens.

It is therefore not surprising that European political parties remain, to a large extent, umbrella organizations of their national member parties: most of these Europarties even have a higher number of member parties than they have individual members. Only the liberal ALDE Party has a substantial membership base, with over 1000 members. Yet, this is far less than more recently established transnational movements like Volt Europe or DiEM25, although these two organizations are far from fulfilling the minimal conditions to even be registered as a European political party.

The current reform proposals are not enough

In sum, it is clear that while the introduction of European subsidies for European political parties had the aspiration to strengthen party democracy at European level, the design of the funding rules hampers the development of a competitive and responsive party system, and fails to provide any incentives for a stronger involvement of European citizens in EU party life.

The ongoing debates in the EU institutions on the reform of the funding rules do not include any objectives to mitigate this situation: there have been no attempts to substantially alter the registration criteria or the funding provisions in order to improve the competitiveness of the party system or stimulate parties to involve citizens more strongly. The proposal of the European Commission even increased the administrative requirements by obligating Europarties to introduce provisions on gender representation, logos and political programmes, and political advertising in their statutes. The involvement of citizens currently falls totally outside of the scope of the discussions.

Incentives for bottom-up party politics

Yet, targeted changes to the regulatory framework could provide an important incentive for more bottom-up initiatives. For example, instead of only focussing on the parliamentary representation of the member parties, Europarties could also be registered if they have sufficient individual members or collect signatures from citizens – in analogy to the European Citizens’ Initiative – in a quarter of the member states.

Furthermore, Europarties could be given an additional subsidy in proportion to their individual membership base, or grants for projects that are specifically aimed at involving citizens in their internal decision-making. Although limited in scope, such measures could at least provide a starting point for a stronger public engagement in party politics at European level.

Portrait Wouter Wolfs

Wouter Wolfs is Lecturer at the Public Governance Institute of the University of Leuven and Senior Researcher of the Research Foundation Flanders. He is a Re:constitution Fellow working on the regulation of European political parties and EU elections.

Portrait Ludvig Norman

Ludvig Norman is Associate Professor of Political Science at Stockholm University and Senior Fellow at the UC Berkeley Institute of European Studies.

This contribution is based on our recent article “Is the Governance of Europe’s Transnational Party System Contributing to EU Democracy?” (Journal of Common Market Studies 60.2, 2022, p. 463-479).

Pictures: MEP figures in different colours (in the Parlamentarium in Brussels): Ulkoministeriön Eurooppatiedotus, CC BY-NC 2.0, via Flickr; Portraits Wouter Wolfs, Ludvig Norman: private [all rights reserved].

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