This research has the purpose of analysing different models of allocation of state subsidies across the EU member states and some other European states and to provide a more in-depth analysis of the Romanian model and its issues. The structure of the report aims to answer key questions regarding the approval, allocation, expenditure, management, transparency and oversight of these funds. The final section provides recommendations drawn from international standards and good practice, as well as from the models provided by other countries.
The allocation of state funding for political parties has become common in most EU member states in recent decades and in many cases, subsidies have become the main source of party income. Positively, this increase could reduce the high dependency on major private or commercial donors; increase political competition; increase the transparency of the political scene and could boost the capacity of political parties to develop policies and communicate with the public. On the other hand, bigger political parties could receive even more resources to boost their influence, while smaller and newer parties remain vulnerable and the already weak connection with political parties’ members could be reduced even more.
There are significant differences when it comes to the amount of funds provided, regulations, oversight and transparency. The use of subsidies is not extensively defined by international standards and the different legal and practical arrangements are rather determined by the internal decision of the states. However, international standards and good practice underline the need of ensuring balance between private and public resources, and ensuring fair grounds for political competition and underline the need for proper oversight and transparency of these funds.
In Europe, there are different criteria in place related to eligibility, value, allocation of funds, timing of distribution, level of funding or ear-marking of funds. Furthermore, the funds can be managed and distributed by different types of institutions, including election authorities, ministries or other departments within the Government or the Parliament.
Regulations differ when it comes to the allowed expenditure of state subsidies. 16 countries do not have regulations regarding the use of funds. However, the practical experiences show that funds are used mainly for campaigning (many countries allow the use of subsidies for election campaigns), propaganda and staff.
Specifically, in Romania, the value of subsidies has increased significantly after 2018 and is one of the highest in Europe, generally considered too high for the financial landscape in the country. Furthermore, the Permanent Electoral Authority (PEA) which acts as the oversight body for political finance has an outsized discretion to set the budget compared to many other countries within the established very generous limits and lacks transparency in its budget design, having a potential politicized behavior.
Additionally, the particular case of Romania shows that the high value of subsidies has allowed political parties to use these funds for massive media buying campaigns outside the electoral periods with no transparency mechanisms. The issue of transparency, together with the manner in which these funds reduce the independence of the media, have also been underscored in several international monitoring reports. Although the parliament drafted a bill to regulate some of these issues, the context indicates that there may not be sufficient political support to fully improve transparency.
In short, the major issues in Romania, detailed in the report, are that:
- The value of subsidies has constantly increased in recent years
- The PEA is increasing the annual value of public subsidies with little to no transparency or public justification
- The PEA acted in the recent years more in the interest of the political parties than an independent oversight body
- Parties are continuing to receive heightened funding from the state, and some of them are amassing these resources which are not returned to the government if they are unused;
- Public subsidies are increasingly being used to influence media coverage or political parties, even between elections; and
- The general public cannot clearly understand if the news or other media productions are genuine or paid materials which reflect political goals.
Report published within the Effective Combat Against Corruption (ECAC) project funded by the Bureau of International Narcotics and Law Enforcement Affairs (INL), implemented by the Expert Forum in partnership with the International Foundation for Electoral Systems (IFES) and CEELI Institute. The opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of the INL.