MNI POLICY: EU Officials Ignore Legal Warning On Defence Loans

European Union states have decided to ignore the European Parliament’s legal objections to the European Commission's proposed method for legislating a EUR150 billion lending facility for defence, MNI understands, though parliamentarians warn that this could open the way to an EP court challenge against the loan scheme.

At a meeting this week of the EFC committee, which prepares meetings for EU finance ministers, senior officials agreed only to "take note" and "move on" after EP President Roberta Metsola wrote to the European Commission and the Council of Ministers to relay objections that the basis of the legislation in Article 122 of the Treaty on the Functioning of the European Union was "not appropriate.”

Article 122 would bypass the need for EP approval of the SAFE legislation, allowing it to be implemented by the Commission and member states alone.  

An EP official warned that the parliament would not be easily brushed off, even if activation of the loan scheme might not be delayed, and pointed to the European Court of Justice.

ECJ OPTION

"We would prefer not to go as far as Court, but it is a possibility,” the official said. "The point here is that there is no need for 122 - the EP is strongly in favour on substance [of SAFE] and we can work really fast with our new rules." 

Commission Chief Spokesperson Paula Pinho defended the Commission's choice of 122, saying the legal advice it received was justified on the basis of the "exceptional circumstances" faced by EU states and their need to urgently boost defence spending. (See MNI: EU Escape Clauses Linked To Trade, NATO Talks - Officials)

The text of the SAFE legislation is currently still being drafted by EU diplomats where the issue of participation by third country defence industries, like the UK's and Canada's, also remains contentious. EU officials are looking to the EU-UK summit of May 19 to provide a solution via agreement on an EU-UK security pact. 

The Polish presidency of the EU is keen to get SAFE up and running as soon as June and strongly favours an approach inclusive of the UK, while France backs an "EU solutions first" approach.