EU considers blocking Slovakia's funds due to its democratic shift

The European Union is working on a proposal to condemn Slovakia for the erosion of democratic norms. This could lead to the bloc withholding funds allocated for Bratislava.

This is reported by RBC-Ukraine with reference to Bloomberg.

The European Commission has prepared a decision to launch a procedure in connection with the decision of populist Slovak Prime Minister Robert Fico to abolish the special prosecutor's office that was dealing with some corruption cases related to EU funds, sources familiar with the matter told the agency.

The process is at an early stage and will require the approval of Commission President Ursula von der Leyen.

About 80% of all public investment in Slovakia is financed by EU funds. Any potential problems with funding would be a serious blow to this EU member state and the eurozone, which is already facing problems with excessive public finance deficits.

One suggestion is that the commission uses its so-called conditionality mechanism, which allows the EU to freeze funding when it sees its money at risk. In this way, the EU could withhold some of the 12.8 billion euros ($14.2 billion) in cohesion funds allocated to Slovakia in the bloc's budget, the sources said.

The Commission is also studying the possibility of withdrawing all or part of the 2.7 billion euros in anti-COVID grants that Slovakia received as part of EU spending to help it fight the pandemic, one of the sources said. The special prosecutor's office was a condition included in the distribution of these funds.

Slovakia will become the second country to be subject to the EU's conditionality mechanism after the bloc froze €6.3 billion from Hungary's unity funds due to Budapest's violation of the rule of law.

Author - Olena Madiak, 09/09/2024