Europe's economic turbulence in recent years has led many citizens to question the powers of the European Union and the legitimacy of its politicians. There is much talk of a "democratic deficit" in Strasbourg and Brussels, while issues of accountability and sovereignty are high on the public agenda. The elections to the European parliament on 22-25 May 2014 give these concerns a current political edge. Yet scant attention is paid to the financial rules (or lack of them) that play an important role in the election of MEPs.
This omission is important, for the role of money in European (as in member-state) politics has grave implications at several levels: the integrity of the members elected to the European parliament, the competitiveness of the European political process, the resulting quality of the parliament’s policymaking, and citizens’ perception of all these.
Why regulation matters
The regulation of money in politics in general, and in election campaigns in particular, has a clear bearing on who is elected and whose interests they serve. Well-designed and properly implemented regulations strengthen democracy by increasing transparency of funds and thereby bolstering the integrity of politicians. They also help to level the playing-field among parties and candidates so that elections are competitive, and establishes a healthy distance between donors and politicians so that policymaking is not subject to undue influence. (A forthcoming handbook on political finance around the world, published by International IDEA, examines these topics in detail).
European elections are similar to national in that in both cases citizens are best served by parliamentary campaigns that are conducted in a transparent manner with appropriate regulations on political finance. In this respect, EU elections are currently governed by twenty-nine separate sets of financial regulations: twenty-eight for the individual member-states and one for the political parties that operate at the European level. There is nothing wrong with this state of affairs per se: the EU’s member-states should be able to craft political-finance frameworks that suit their particular contexts. (Indeed, a key finding of International IDEA’s research is that any regulatory framework should be tailored to its context and political system). But since the EU parliament passes laws that affect all member-states, it is arguable that some standards of financial regulation should apply on an EU-wide basis. Without this, there is a risk that national shortcoming are scaled up to the European level.
There are, however, also differences between EU member-states on certain key aspects of political-finance regulation. These raise questions over the opportunities to become a candidate and the interests candidates are representing once they are chosen. The data in International IDEA’s database on political finance allows for some revealing comparisons. In over half the EU countries - among them Germany, Italy, Spain and the UK - there is no limit on the amount a candidate can receive from any donor. The danger here is twofold: unregulated large donations can skew the electoral contest, making it harder for those without access to such funds to compete; and if candidates depend on large individual donations for most of their funding, they may feel beholden to these donors when elected. International IDEA’s research highlights that limits on donations can be an effective way to counter such tendencies. European-wide donation limits would help protect the EU parliament from the influence of special interests and facilitate a broader range of candidates.
To avoid elections being determined by whoever can raise and spend the most money, a strong case can also be made to limit expenditure. Notably, one third of countries in the European parliament elections of 2014 place no limit whatsoever on the amount that a candidate can spend (that translates into 240 out of the 766 parliamentary seats). Moreover, several member-states do not require candidates to disclose their campaign finances. Such discrepancies emphasise the need for robust and well-designed financial regulations to serve the interests of European citizens, and (equally important, as International IDEA's research highlights) for these to be effectively monitored and enforced.
There are, though, two signs of progress. First, the past few years have seen a trend towards common standards on political finance, even if these are voluntary and have yet to be taken up by all countries. The Council of Europe’s recommendations, and monitoring work by its anti-corruption body - the Group of States Against Corruption (GRECO) - have been instrumental in this process of harmonisation.
Second, an agreement was reached in March 2014 regarding the financial regulation of European-level political parties. This establishes a new set of rules covering donations and providing for more transparency and independent oversight, which will come into effect in 2017. This, of course, will not apply to individual political parties at the national level, which is where almost all campaigning for the EU elections currently takes place.
Towards common standards
The quality and integrity of EU elections would be improved by the implementation of common financial standards across all member-states. These should be comprehensive to avoid loopholes (thus covering both parties and candidates), explicit to avoid any ambiguity, and realistically implementable and enforceable. A healthy balance between private and public funding can help make the electoral playing-field more even, as well as begin to address the financial barriers often faced by women candidates in particular. And in the interests of transparency and building public trust, financial reports should be made available to the public in a clear, accessible and timely fashion.
The European parliament is an important body that wields real power. It is in citizens’ interests to understand how and by whom candidates are funded, as well as to see further standardisation and implementation of political-finance regulations. High shared standards will help ensure that good candidates are nominated and elected, and that can only be positive for democracy.
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