The European People's Party (EPP) and Renew Europe, the two largest centrist groups in the European Parliament, have jointly urged the European Commission to consider freezing €770 million in EU recovery funds earmarked for Romania. In a letter addressed to Commission President Ursula von der Leyen, the group leaders, Manfred Weber and Valérie Hayer, warned that the disbursement could "inadvertently contribute to undermining Romanian democracy."
The dispute centres on a recently adopted Romanian law on integrity in public office, which the two groups say could be used to remove Dominic Fritz, the liberal mayor of Timișoara and leader of the Save Romania Union (USR). The law, which was passed by Romania's Parliament, includes a provision introduced by the Social Democratic Party (PSD) that would terminate the mandates of officials with a final conflict-of-interest ruling, provided the three-year sanction period has not expired. The termination would take effect within 30 days of the law's entry into force.
Fritz, a German national who has served as mayor since 2016, was found by Romania's High Court of Cassation and Justice last June to have been in an administrative conflict of interest. The case relates to an urban planning document he approved in 2020, which had been prepared by a company owned by an architect and USR local councillor who had supported Fritz's election campaign.
In their letter, Weber and Hayer argue that applying the amendment retroactively would violate both Romanian and EU law. They accuse the PSD and the far-right Alliance for the Union of Romanians (AUR) of instrumentalising the legislation for political purposes. "Public statements by senior PSD and AUR leaders leave no doubt that the amendment was specifically designed to target a single individual," the letter states.
The two political leaders are calling on the Commission to make it "unequivocally clear" that the release of EU funds is conditional on respect for the rule of law. They also urge the Romanian Parliament to reconsider the legislation. The Senate, which is the decision-making chamber, is scheduled to vote on the bill on Wednesday. If it is definitively approved, the law could be promulgated quickly, as it is among the remaining reforms Romania must complete by the end of August to access the post-pandemic funds.
Funds at stake
Romania stands to lose up to €770 million from the Recovery and Resilience Facility (RRF) if the reforms are deemed insufficient to meet the milestones agreed with the European Commission. The amount at risk depends on which targets are not met. A Commission spokesperson confirmed on Tuesday that the letter had been received and that "the integrity law will be assessed as part of the last payment request" to be submitted by Romania.
The political context is tense. Romania is currently governed by an interim government, and the political landscape is increasingly fragmented. The PSD, which previously brought down the centre-right coalition led by Prime Minister Ilie Bolojan through a no-confidence vote supported by AUR, is now in talks with the far-right and ultra-nationalist parties to form a new government. An unusual alliance between the left-leaning PSD and the far-right AUR and SOS parties would hold a majority in Parliament.
This is not the first time that EU funds have been linked to rule-of-law concerns in the region. In a similar vein, Hungary is on track to unlock €10bn in EU funds before an August deadline, after making concessions on judicial independence. The situation in Romania, however, raises questions about the EU's ability to enforce its values when member states adopt legislation that appears to target political opponents.
The outcome of the Senate vote will be closely watched in Brussels and Bucharest. If the law is passed, the Commission will have to decide whether to trigger the rule-of-law mechanism, which could delay or reduce the payment of funds. The EPP and Renew Europe have made clear that they expect the Commission to act decisively.
For now, the ball is in Romania's court. The government must balance its need for EU money with the political pressures from the PSD and AUR, who appear determined to push the legislation through. The coming days will reveal whether the rule of law prevails over political expediency.
