Under pressure, Commission delays foreign funding disclosure plan

In the fight against foreign interference, the European Commission is making a tactical retreat.

Rather than debut its “defense of democracy” package next week as planned, the Commission will instead conduct an internal analysis to game out possible effects of the proposal, Věra Jourová, Commission vice president for values and transparency, told MEPs on Thursday.

The retreat is, in part, from foes — specifically the Chinese and Russian hackers and bots that could poison the next election. But it’s also from NGOs — the Commission’s usual allies in the fight against malign influence — who have railed against a plan to make interest groups disclose foreign funding.

The delay calls into question whether the file — promised by Commission President Ursula von der Leyen in last year’s State of the Union speech — will be ready ahead of the European Parliament election, just over a year away.

At issue was a potential directive that would require all interest groups to disclose their non-EU funding. That move, intended to unmask state interests, would also ensnare civil society groups with backing from donors in the U.S., U.K., Switzerland and other friendly countries — while doing little to reveal sketchy funding from inside of the bloc.

Groups who share the Commission’s mission of improving transparency and democracy — including Open Society, Transparency International EU, and the European Partnership for Democracy — started mobilizing their networks against the plan, blasting the measure as rushed and ill-advised. They warned that such a measure was akin to Russia’s foreign agents law and could be used by illiberal governments to stigmatize civil society and block the opposition in places like Hungary.

“Instead of addressing foreign interference in European democracy, the package could potentially undermine democratic civic space, compromise the EU’s moral authority and gift autocrats around the world with the license to silence their critics,” said Petros Fassoulas, secretary-general of the European Movement International, an NGO whose work on European integration predates the EU.

Speaking to MEPs Thursday, Jourová downplayed the possibility of abuse, saying that the “aim, scope, supervision and sanctions” are different from Moscow’s law.

Nonetheless, she said, “we cannot be naïve, and actors that receive this type of funding, irrespective of what they are, should be transparent about it.”

As MEPs also started questioning the plan, Jourová said Thursday, she and von der Leyen decided to hit pause and conduct a full impact assessment, a Commission analysis of the possible economic, social and political outcomes of a measure.

MEPs were generally supportive of the slowdown on Thursday — even as they’re anxious to show the EU taking action on Chinese and Russian interference ahead of the election. That includes lawmakers from von der Leyen’s political home, the center-right European People’s Party, which has generally been more critical of NGOs.

“We have to dissipate this idea that this is rushed,” Sandra Kalniete, a Latvian EPP MEP who led the Parliament’s freshly adopted call to protect the elections from foreign interference, told reporters.

Civil society groups acknowledge that tackling foreign interference, especially from Russia and China, is both a political and practical imperative for the EU. Yet Fassoulas — using a sports metaphor — said the foreign funding disclosure would have been tantamount to an “own goal” by the Commission in its bid to shore up the public sphere.

“We are happy to see that our warnings haven’t gone on deaf ears in the corridors of the Berlaymont,” Fassoulas added, in a statement.

Those warnings, along with “internal pushback,” likely worked in combination to drive the decision to carry out an impact assessment, said Ken Godfrey, executive director of the European Partnership for Democracy.

Yet there is clearly frustration with the NGOs’ stance inside the Berlaymont, where the irony of groups that push for transparency balking at more disclosure is not lost.

Speaking at a separate event Thursday morning about Commission proposals to eliminate nefarious foreign influence and propaganda in the news media, a top Jourová aide invoked the defense of democracy package and complaints from civil society.

“It is all about foreign interference,” said Álvaro de Elera, responsible for transparency and anti-corruption issues. “What everybody needs to realize, especially civil society, is that we need to act. This has nothing to do with going against freedom of expression. This is actually about protecting freedom of expression and our democratic debate.”