EU to make getting funds conditional on respecting democracy - draft

BRUSSELS (Reuters) - The 27 national leaders of the European Union will make access to funding in the EU's budget for 2021-27 conditional on respecting the rule of law, according to a draft joint decision prepared for their summit in Brussels on Thursday.

"A general regime of conditionality will be introduced to tackle manifest generalised deficiencies in the good governance of Member State authorities as regards respect for the rule of law," said the draft, seen by Reuters.

It would be up to the bloc's executive European Commission to recommend how to remedy any such problems and EU states would then decide by majority whether to back them, the draft said.

That, however, marks a change from an earlier proposal that only a majority of EU countries could stop any such proposal from the Commission.

Net-payers to the budget like Germany have already denounced this change as weakening the rule of law pressure mechanism, now applied to Poland and Hungary - formerly-communist countries on the bloc's eastern flank where nationalist and eurosceptic governments stand accused of violating basic democratic principles like the freedom of courts, media and academia.

The 27 EU leaders will lock horns over the bloc's next budget on Thursday, with the proposal capping it at 1.094 trillion euros (£911.41 billion) or 1.074% of EU gross national income.

Few are pleased with the proposal, which needs unanimous backing, and expectations for a deal later this week are low.

(Reporting by Gabriela Baczynska)