Conflicts of interest involving members of national governments raise a distinct legal problem when European Union funds are concerned. Domestic conflict-of-interest law may determine whether a minister, head of government, or other public office-holder complies with national rules. EU financial law, however, asks a different question: whether expenditure submitted to the Union budget has been implemented, controlled, audited, certified, and reimbursed under conditions compatible with the impartial and objective performance of public functions. This paper argues that domestic compliance alone is not always sufficient where EU-funded expenditure may benefit undertakings economically connected to a member of government. Article 61 of the EU Financial Regulation applies to national authorities involved in budget implementation, including preparatory acts, audit, and control, and requires measures to prevent and address situations that may objectively be perceived as conflicts of interest. Where the alleged conflict concerns a member of government, especially the head of government, ordinary executive self-verification may lack institutional credibility. The paper identifies governmental self-verification as a specific structural weakness in EU financial governance. It distinguishesdomestic compliance from EU financial eligibility and political eligibility from financial eligibility. The paper proposes that, in structurally sensitive cases, EU-funded expenditure connected to members of national governments should be subject to an independent verification mechanism outside the ordinary governmental chain of command. Such a mechanism would not determine who may hold political office. It would determine whether expenditure connected to such office-holders may be charged to the Union budget with sufficient legal and institutional assurance. Recent Czech controversiesconcerning undertakings economically linked to a head of government are used only as an illustration of a broader structural problem in the management of Union funds. The central distinction is that national democracy determines who may govern, while EU financial law determines under what conditions expenditure connected to that government may be charged to the Union budget.
Miloslav Grundmann (Mon,) studied this question.