Only seven out of 27 EU countries
require political parties to reveal the identity of all their private donors, with Spain and France among the most opaque when it comes to the influence of money over politics.
As the European parliament prepares for crucial elections next week, with polls predicting a surge in the number of hard-right MEPs, the Guardian and another 25 European media partners, coordinated by the investigative platform Follow the Money, are publishing Transparency Gap, the most extensive analysis yet of party financing in bloc.
The annual reports of more than 200 parties, most of which are fielding candidates in next week’s elections, have been gathered and analysed for the project.
The group also undertook a country-by-country comparison of the rules that governed transparency around political donations from corporations, wealthy backers, foundations, thinktanks and grassroots supporters.
The research shows only Bulgaria, Czech Republic, Estonia, Greece, Latvia, Poland and Croatia – a quarter of member states – require the source of all donations to be identified.
In Europe, each country has its own rules, creating a complex landscape of widely diverging legislation. Sometimes every single euro is accounted for and all the donors are named. But more often than not, it is unclear who is financing – and potentially influencing – political movements.
“If you look at the numbers that are available and the transparency of the finances of political parties and their candidates, the overall picture is very disappointing,” said Dr Wouter Wolfs, a Belgian political scientist. “It is just not sufficient … In an atmosphere in which politics in general and certain institutions in particular are already under pressure, this is fundamentally problematic.”
Transparency in some of the EU’s most established democracies falls far short of standards in eastern Europe, where countries that transitioned from communist one-party states in the early 1990s embraced the best practices available.
Latvia is held up as a gold standard. It bans foreign donors, anonymous donations, corporate funders and trade unions with a requirement to disclose names of all donors to the country’s anti-corruption bureau, KNAB, which will check whether any violations of rules have taken place.
The names are subsequently published in a national gazette database.
“In terms of oversight, Latvia is one of the best. There is even a system for whistleblowers to report donations that have not been declared,” said Dr Fernando Casal Bértoa, an expert on European political parties and systems and associate professor in comparative politics at the University of Nottingham.
For the countries on the western side of the iron curtain that came down 35 years ago, there can be big gaps in accountability.
“It is the first-mover disadvantage,” Wolfs said. “In the old democracies the thinking stopped and no effort was made to update or modernise. When it concerns the transparency of political funding they are really not doing well.”
In France, an EU founding member, the transparency gap is 100%. Donations take place entirely behind closed doors and the public has no right to know who is financing French politics.
The reason, according to the country’s political financing auditor, is privacy.
“Information relating to the identity of a person making a financial donation for the benefit of a political party is likely to reveal their political opinions,” the Commission Nationale des Comptes de Campagne et des Financements Politiques said in an email. “Therefore, subject to the confidentiality of their private life.”
Anonymity can protect those who support a party from persecution, for example in authoritarian states or countries where political violence is a danger. In Northern Ireland, after decades of sectarian conflict, the identity of donors was hidden until 2018.
There are strict rules in France, policed by the auditor, with bans on foreign donors and anonymous donors of more than €150 (£128). Individual donations to parties are capped at €7,500 and anything above €150 has to be by bank transfer, cheque, direct debit or bank card, to leave a paper trail that can be investigated by the oversight authority.
However the only way to discover the identity of donors is through leaks, sometimes obtained by journalists, or if donors choose to make the information public, which they typically do not.
The analysis shows private backers – a mix of individuals, corporations and other institutions – contributed almost €46m to 15 French parties between 2019 and 2022.
In Spain parties are also obliged to declare the identity of donors to an oversight body, the court of auditors, but there is no obligation for the court to publish this information. Parties are obliged to make public the identity of donors giving more than €25,000 but it appears no donation above that threshold has been made since 2016.
Sixteen members of the EU allow all or some donors to remain unknown to the wider public or the press, and the thresholds for disclosing the identity of donors vary widely.
Germany has the second highest cap – after Spain – above which names must be disclosed. Everything up to €10,000 is allowed to remain anonymous. Immediate notification to the Bundestag (parliament) president is required for anything above €35,000.
It means that while the far-right Alternative für Deutschland reported €6.4m in private donations in 2022 (the figure includes mandatory contributions from its own candidates and private donations from companies and individuals), just €1.3m was from an identifiable, named source, leaving a transparency gap of €5.1m or 80%.
In 2022, the seven parties sitting in the German parliament gathered an estimated €130m between them from private benefactors and mandatory contributions from the politicians to their parties. However, the source of more than three-quarters of these funds was unknown.
In Cyprus, by contrast, all donations of more than €500 must be declared.
The European parliament does not impose any explicit standards on political financing.
For example there is no one rule when it comes to the influence of business interests over politics.
More than a dozen countries, including Greece, Poland and Spain allow companies with significant public sector and government contracts to donate, according to a 2021 report commissioned by the parliament, Financing of Political Structures in EU Member States.
It found the average threshold above which parties had to reveal the identity of their donors was €2,400. It said in many countries, the threshold was so high it carried “potential corruption risks”, and recommended setting it at the level of monthly average income. Other suggestions included making party bank account statements accessible to the public online.
In the three years since that report, concern about foreign interference has heightened. Yet, according to the European parliament report, five countries within the bloc – Belgium, Denmark, Sweden and Luxembourg and the Netherlands – do not have an outright ban on foreign donations, while Germany allows them up to €1,000.
“Foreign interests should not have an interest in the funding of national politics or elections,” said Casal Bértoa. “People need to understand that funding is another way of participation, so if you legally cannot participate in an election you should not be allowed fund, it is very straightforward.”
The five-yearly European parliament elections, the first since the UK’s departure from the EU and the invasion of Ukraine, will involve parties fielding thousands of candidates hoping to win one of the 720 seats.
Amid unrest over the fall in living standards caused by the inflation crisis, disinformation and fears over migration, many expect a rise in support for far-right and pro-Russia parties, with Germany and France regarded as particularly liable to swing to the right.
Italy requires disclosure of donations of more than €500. However, many donations do not go directly to parties but to related organisations, such as foundations or electoral commissions, which then contribute funds or help in kind to political parties.
A change in the Italian law in 2019 imposed the same rules for transparency to foundations as political parties, forcing them to identify donors. However, many of these foundations responded by changing their status to non-profit organisations in order to avoid the stricter transparency rules.
In Portugal, the identity of donors is theoretically public – but their names can only be found by physically going to the office of the Entity of Political Accounts and Financing (ECFP). The public can access the files, but visitors can only make handwritten notes – with no photos, printouts or photocopying allowed – and digital files can only be viewed on a computer not connected to the internet.
Casal Bértoa said in a modern era where funds were transferred and tracked in nanoseconds by banking systems there was simply no justification for lack of transparency of political funding over certain limits.
“There has to be transparency,” he added. “The donors should be named on the website of the oversight authorities at a minimum and I would even go further than this. I think that political parties should publicise the income and outgoings of their finances, because at the end of the day, nowadays, with the technology that we have, you cannot say that is impossible.”