I would like to congratulate you for the excellent initiative of sending regular reports on progress (?) of current negociations about the “rule of law mechanism".
However, it is doubtful that this mecanism will produce - by itself - significant improvements in the actual protection of "EU financial interests” - that is protection against irregularities (fraud, corruption, conflict of interests, …) in the use of EU public funds.
A more straightforward and efficient protection could be achieved through a more active and incisive monitoring of EU appropriations by the Commission itself.
Instead of relying on ex post and paperwork controls, the Commission could track down national appropriations channels and circuits (both for commitments and payments) in continuum and at each stage of the process.
Such a permanent and real time tracking and control is possible through modern digital data flows and screenings as well as by earmarking of EU funds all along the chain of national/local budgetary operations - that is from the disbursement of EU credits by the Commission down to the final beneficiary.
If any serious doubt would arise - at one stage or another - about the regularity of specific national operations, the Commission could immediately require clarifications/justifications from the MS concerned. If those are not provided, the Commission could upheld the transfer of funds until the situation is clarified or until remedies are provided.
Such a re-enforced monitoring of the use of EU funds do not require the adoption of new legal instruments. It is perfectly possible under current legislation. One might even say that it falls under present Commission duties and responsibilities (1).
At present, the different DG responsible for the disbursement of EU funds (CAP/Regional and Social Funds) do not exercise any systematic monitoring of this kind. Actually, they do not seem concerned by such a control. - nor even favorable to it. And no other (horizontal) organ of the Commission appear to be in charge of it.
Relying on ex post reports of the EU Audit Court or on ex post special inquiries led by OLAF or EPO is not good enough.
Ideally, what is sourly needed is some form of “sanctuarisation” of EU funds - which would necessitate the creation of some sort of "EU Inspection des Finances” within the Commission (2):
Lastly, two recent EU developments make such direct and permanent EU budgetary control even more necessary :
the huge amount of new EU funds alloted to MS through the COVID 750 billions program,
the increasing margin of autonomy given to MS in the management/disbursement of EU structural funds (regional, social) - and of CAP funds (see pending revision).
Of course, the “rule of law" approach is obviously legitimate - but it is bound to take time and it will have to override strong political obstacles. And, in any case, the final responsibility of a regular use of EU money falls within EU duties and prerogatives and cannot be delegated to member states.
I hope these suggestions (mainly directed to EP Budget and Budgetary Control Commitees) will be helpful.
Sincerely, Jean-Guy Giraud
(1) Article 317 TFEU : "The Commission shall implement the budget in cooperation with the Member States, in accordance with the provisions of the regulations made pursuant to Article 322, on its own responsibility”
Article 325 TFUE : "The Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States”