European Union Threatens Slovakia with Funding Suspension Over Democratic Backsliding

The European Union is considering a proposal to condemn Slovakia for violating democratic norms by threatening to suspend funding to the country. About 80% of all public investment in Slovakia is financed by EU funds. Any potential funding problems would be a serious blow to this EU member state and the eurozone, which is already facing problems due to an excessive public finance deficit.

This is reported by Bloomberg.

According to sources, the European Commission, the EU's executive body, is considering launching a funding suspension procedure after Slovak Prime Minister Robert Fico abolished a special prosecutor's office that had been investigating corruption cases involving the use of EU funds.

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

According to one proposal, the European Commission could use the so-called conditionality mechanism, which allows the EU to freeze funding when it sees its money at risk, to withhold part of the €12.8 billion allocated to Slovakia in the bloc's cohesion budget.

The commission is also exploring the possibility of returning all or part of the €2.7 billion in Covid grants Slovakia received as part of the EU's pandemic rescue spending, one source said. A condition for the allocation of these funds was a special prosecutor's office.

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

Since returning to office after an assassination attempt in October, Prime Minister Fico has attracted scrutiny from the EU for his move to revise the criminal code and abandon the special prosecutor's office that focuses on high-profile bribery cases, including some against his allies.