EU countries that disrespect the rule of law will risk losing access to EU funds, under a provisional deal struck by between the EU Parliament and EU Council.

The news will send warning signs to Maltese authorities with the county’s battle with rule of law regularly under the microscope in the EU and other international bodies.

According to documents, the new law will not only apply when  EU funds are misused directly, such as cases of corruption or fraud, but will also be used to address systemic shortcomings in the areas of freedom, democracy, equality, and respect for human rights including the rights of minorities.

Parliament’s negotiators also insisted that tax fraud and tax evasion are considered possible breaches, by including both individual cases and widespread and recurrent issues.

EU institutions will be able to trigger the mechanism within a relatively short space of time with the new law insisting that the adoption of such measures should happen within the latest nine months. The mechanism can be triggered when a breach is clear or when there is a serious risk that a nation might do so.

The agreed compromise will now need to be adopted formally by the Parliament and EU ministers.

“For us, it was crucial that final beneficiaries won’t be punished for wrongdoings of their governments and that they continue receiving funds that have been promised to them and that they rely on, even after the conditionality mechanism has been triggered. We can proudly say that we achieved a strong system that will guarantee their protection”, said co-rapporteur Eider Gardiazabal Rubial.

Malta, who has backed the agreement, has faced significant pressure over rule of law, particularly following the assassination of journalist Daphne Caruana Galizia. The government has also been forced to introduce reforms to judiciary while several major corruption cases are yet to be resolved.

Malta is not the only country to face criticism within the EU, with Poland, Hungary, and Bulgaria raising concerns about the state of rule of law in the European block.

The new agreement will hope to address the issues.

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