24/06/2025
On 17 June 2025, the European Parliament and Council reached a provisional agreement on new rules aimed at enhancing transparency and democratic integrity for European political parties and foundations. The reform package is a welcome step towards modernising the EU’s political system, but it comes at a time when civil society organisations are facing mounting political pressure, particularly following the European Parliament’s decision to create a new oversight body to investigate EU-funded NGOs.
These two developments—stricter standards for parties on the one hand, and intensified political scrutiny of civil society on the other—signal a pivotal moment for European democracy. They reflect a rebalancing of the EU’s democratic infrastructure. On one side, reforms to political party regulation improve transparency and accountability at the institutional level. On the other hand, increased scrutiny of civil society risks creating a climate of suspicion, limiting its ability to represent its views vis-à-vis the EU institutions.
For CSOs, the landscape is increasingly precarious. The creation of an investigatory body with vague terms of reference introduces an institutionalised suspicion that could be politically weaponised.
More transparent EU Political Parties
The new rules on European political parties and foundations aim to strengthen democratic safeguards and reinforce transparency across the EU’s political landscape. The reforms are designed to address long-standing gaps in governance, funding clarity, and accountability, ultimately making the system more resilient to external interference and increasing the alignment with EU fundamental values.
- EU values and internal reform
To be formally recognised and granted funding, European political parties and foundations will have to submit a declaration stating that member parties or organisations from outside the EU subscribe to values that align with Article 2 TEU. This will be reviewed if their membership changes. They also must adopt internal rules promoting gender balance, implement anti-harassment protocols, and produce annual reports on representation gaps. - Real-time donor transparency
Any donation above €3,000 must now be fully traceable to an individual, with contributions published in a common online registry managed by the newly empowered Authority for European Political Parties and European Political Foundations (APPF). A step forward for accessible and consistent transparency across EU institutions. - Combatting foreign interference
Associated member parties and foundations from neighbouring or candidate countries will continue to participate in the work of their pan-European umbrella organisations. However, their votes can never be used to secure a majority, and they cannot pay membership fees. This strikes a balance between inclusion and safeguarding democratic integrity. - Simplifying funding and diversifying income
The co-financing rate of the EU parties (i.e., the percentage of their budget that the EU can finance) has been harmonised at 95%, a five-point increase. Furthermore, self-generated resources (e.g., conference fees and publication sales) have been introduced as a new category of income, capped at 3% for parties and 5% for foundations, providing them with some room to diversify their revenues without jeopardizing oversight. - Additional clarity on engagement with member parties
While maintaining the ban on the direct or indirect funding of national parties and candidates by European political parties and foundations, the new rules provide additional clarity on how European political parties can publicly support and engage with their member parties and organisations, including through joint activities.
Civil Society Under Scrutiny
While political parties are being equipped with clearer rules, with a set of reforms that share the common aim of greater transparency, civil society is facing a very different kind of attention. Just two days after the party reform agreement was reached, the European Parliament approved the creation of a new body to investigate the funding of NGOs receiving EU support. This decision follows a months-long campaign driven largely by far-right forces and some members of the European People’s Party (EPP), who have increasingly questioned the influence and financial transparency of NGOs. The EPP’s alignment with the far right on this issue raises serious concerns about the political intent behind the new mechanism, part of a pattern of growing cooperation between mainstream conservatives and far-right groups in the EU Parliament.
Civil Society and Political Groups React
Civil society groups have issued strong warnings.
Civil Society Europe described the initiative as a potential “NGO hunt”, warning that it could be used to intimidate watchdogs and advocacy organisations under the pretext of transparency. They stressed that NGOs already undergo extensive financial scrutiny and that the move risks silencing democratic voices through fear and uncertainty.
The European Environmental Bureau (EEB) shares these concerns, condemning the “campaign of misinformation” targeting public interest organisations. They emphasised that NGOs are being “attacked for doing their job”, and cautioned that undermining them threatens the foundations of participatory democracy.
Progressive political forces have also sounded the alarm.
Renew Europe urged restraint, warning against “the stigmatisation of NGOs” and insisting that any oversight mechanism must be rooted in fairness, proportionality, and non-discrimination. “Transparency must not become a weapon,” the group stated.
The Socialists & Democrats (S&D) group echoed this view, highlighting the political motivations behind the measure: “The EPP and far right are joining forces to create a narrative that NGOs are suspicious actors. This is a slippery slope. We cannot allow this to turn into a witch hunt.”
What Comes Next?
The party reform package now awaits formal endorsement by both Parliament and Council. Key provisions—such as real-time donor transparency and the new co-financing rules—are scheduled to come into force on 1 January 2026.
Meanwhile, the design and mandate of the new NGO oversight body remain to be fully defined. According to Euronews, this body will be part of the Committee on Budgetary Control (CONT) and will aim to scrutinise how the European Commission funds non-governmental organisations. “The group will include 13 MEPs chaired by German lawmaker Niclas Herbst with two co-rapporteurs, from the centre-right European People’s Party and the right-wing European Conservatives and Reformists”.
Civil society organisations and progressive allies are mobilising to ensure that the new working group respects fundamental principles of democracy, due process, and fairness.