Private donations play a limited role in EU politics, but isn’t such a marginal role a symptom of the irrelevance of European Political Parties?
A quick look at public disclosures of European Political Parties’ funding suggests that private donations to Europarties are scarce and minor 1Data made available by the Authority for European Political Parties and Foundations. In the past 15 years, the two leading Europarties – the EPP (European People’s Party) and PES (Party of European Socialists) – have raised a whopping €2,280 in private donations 2Aggregate private donations amount to €0 with the exception of 2016, when PES raised €2,280 . And while other Europarties such as ALDE or the ECR are more accepting towards donations, generally speaking, donations to European Political Parties are insignificant compared to political spending in the US 3For instance, political spending in a US election cycle surpassed $14 billion in 2020. The question arises: why are Europarties so donation-averse? And is this a symptom of the malfunctioning of the EU’s system of political parties?
The financing of Europarties
The best way to imagine how Europarties’ finances are structured is to divide sources of income into public and private funding. Public funding are revenue flows derived from the EU budget , whereas private funding refers to everything else: from contributions from member parties, private donations from individuals/organisations, or funds raised by the Europarties through their own resources.
Public funding from the EU budget makes up the vast majority of the financing of Europarties. Last year, for instance, the average Europarty had at least 80% of the funding originate from the EU budget 4Data from 2021, made available by the Authority for European Political Parties and Foundations. The remaining 20% of funding is overwhelmingly made up from contributions from member parties – not private donations. With the exception of ALDE, ECR, and ECPM, contributions from member parties make up at least 80% of the private funding of all Europarties 5Latest available data from the European Party Funding Observatory. Moreover, as member parties also receive public funds (from the Member State level), this means that at least indirectly, a significant portion of contributions from member parties are also provided by public funding.
So what’s the role of private donations? Most Europarties simply do not accept private donations. This is the case in recent years of the two largest Europarties, that is the EPP and PES. Instead, ALDE and the ECR do accept those and are the two parties that raise the most from private donations, €159,000, and €224,200, respectively 6Figures from 2023.
Why are Europarties so donation-averse
It is important to note that, under current rules, Europarties must raise at least 10% of their funds from outside the EU budget. This provision had originally been introduced as a way to ensure that Europarties do not exclusively depend on the state 7Morlok, M., ‘Constitutional Framework’, in Johansson, K. M. and Zervakis, P. (eds), European Political Parties between Cooperation and Integration, Nomos, Baden-Baden, 2002, p. 39, and in an effort to encourage Europarties to strengthen links with society. As such, most Europarties are only raising the bare minimum amount of private funding required in order to access the full amount of public funds earmarked for them. In other words, generally speaking, private funding is pursued as a means to access public funding.
Europarties’ apathy towards private donations reflects the constraints imposed by the current legal framework on campaign financing. Europarties are forbidden from directly or indirectly funding their national member parties. While the rationale behind this ban can be intuitive, the overly strict interpretation of indirect funding that has been emerging seriously curtails the activities of Europarties. Indeed, fearing legal repercussions, Europarties must be careful that their political campaigning is not in breach of current rules governing indirect funding.
On the other hand, current funding rules overwhelmingly benefit the small (10) group of existing Europarties registered by the APPF 8Authority for European Political Parties and European Political Foundations. For starters, Europarties are awarded public funding based on the number of votes they receive in EU elections. This creates an important disadvantage for new Europarties, who can hardly compete on equal footing.
A revision of the legal framework governing the funding of Europarties was supposed to have taken place before the 2024 EU elections, though negotiations have reportedly reached an impasse during trilogue discussions. It appears that the major point of contention is the status of member parties from non-EU countries in Europarties (i.e. can non-EU member parties benefit from full rights within a Europarty?). Interestingly, the Parliament had successfully proposed that the “co-financing” requirement be reduced to 5%, indicating that MEPs want to double down on their dependence on public funding.
Are Europarties fulfilling their treaty-bound objectives?
Some may welcome the limited role private donations play in EU politics, as donations to political candidates often raise question marks over the integrity of electoral processes (for instance, political spending in a US election cycle surpassed $14 billion in 2020). Yet the extent to which most Europarties seem completely unconcerned about raising funds from donations is troubling.
A cynical reading of the status-quo is that registered Europarties enjoy a privileged position which places them at a significant advantage relative to potential – unregistered – competitors (VOLT Europa or DiEM25, for example). Europarties benefit from generous funding from the EU budget, and are not all that bothered by raising private donations, given that their ability to spend money on campaigns is severely limited.
Europarties are tasked by the Treaty on the European Union to “contribute to forming European political awareness and to expressing the will of citizens of the Union.” At this point, it is worth asking: are Europarties fulfilling their treaty-bound objectives? Is the current funding framework enabling them to do so? Isn’t there a risk that established European Political Parties do protect their privileged position in Brussels and in Strasbourg against new entrants?
Background Readings
