Dalia Grybauskaité, European Commissioner for Budget and Financial Programming, said: “Simpler, transparent procedures coupled with tight control are essential for the success of the new generation of programmes starting in 2007. The goal of this proposal is to find a better balance between the protection of the taxpayer’s money and more user-friendly procedures”.
Simplification of access to EU funds
In light of the principle of proportionality, which is now clearly mentioned, paperwork for Small and Medium Enterprises (SMEs), schools, universities, development agencies and small municipalities will be reduced. These are the usual beneficiaries of small grants and contracts – for them access to EU funding will be easier. For example, various obligations such as the supply of evidence of clean financial health, clean criminal or professional records, or guarantees for up-front payments will be adjusted so as to be ‘appropriate and proportionate’.
Flexible and effective management mechanisms
Managers will be given more flexibility to run their activities. For example, EU institutions and Member States will be able to publish joint calls for tender when this is more appropriate. It will be easier for the European Commission to delegate tasks to the European Investment Bank and the European Investment Fund to benefit from their expertise.
For actions involving many beneficiaries, such as exchange grants for students, deadlines will be shortened by allowing the Commission to simply notify the beneficiary of the award without signing a formal agreement.
In end-of-year humanitarian or crisis management situations, the Commission will be able to react immediately and commit funds foreseen for the following year. Similarly, legal constraints before the launch of pilot and preparatory actions in the field of the Common Foreign and Security Policy will be adjusted to increase responsiveness. Finally, a possibility to delegate the management of the funds to duly recognised national organisations will be given to third countries receiving EU aid.
Tighter controls and transparency hand-in-hand
The new proposals include an explicit principle of effective and efficient internal control, to which all EU institutions and Member States will adhere. Levels of risk on the legality and regularity of financial transactions and related control measures will have to be fixed before launching new policies. In addition, control resources will be optimised as the Commission and Member States will cooperate and exchange information on their audits and controls.
The obligation to annually publish the list of all beneficiaries of EU funds will be extended to those policies managed by the Commission in partnership with Member States (agricultural policy, structural funds, etc.).
For the purpose of better protection of the EU’s financial interests, the Commission’s system of identification of beneficiaries of grants and contracts with a proven record of professional malpractice or fraud will be extended to Member States managing the EU budget. This will ensure consistent exclusion from further EU funding for these beneficiaries.
Background
The current Financial Regulation, adopted in 2002, governs all transactions entered into by the European institutions. A review of the rules is required at least every three years.
The Commission presented its first review proposal on the 3rd of May 2005. The Court of Auditors delivered a broadly favourable opinion in December 2005. The European Parliament and the Council completed their first examination in March 2006; it served as a basis for the current Commission proposal.
The Commission’s amendments proposed today must be adopted by unanimity in the Council after a conciliation procedure with the European Parliament. The Commission will then decide on the necessary amendments to the Implementing Rules, which further specify the provisions of the Financial Regulation.
