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European Union chair Germany has proposed a rule of law scheme for accessing EU funds in negotiations between member states and the European parliament, Reuters reported on Monday, citing an internal document.

Additional takeaways

“Rule of law is essential, important to protect the EU’s financial interests, impartial courts.”

“Respect for the rule of law is essential precondition” to accessing funds from EU’s new 750 billion euros worth of COVID recovery fund”

“European Commission will assess any breaches of the rule of law.”

“Possible punishments to include suspension of EU payments.”

“European Council of 27 member states to decide on any punishment for rule of law breaches acting on the proposal by the European Commission.”

“Should EU member state under punishment considers it unjust, it can ask for a discussion of EU leader’s summit.”

Market reaction

The EUR/USD pair showed no immediate reaction to this report and was last seen gaining 0.26% on a daily basis at 1.1660.