Interinstitutional Agreement on Budgetary Discipline and Sound Financial Management (IIA):
The current agreement consists of three parts:
- The first one deals with the definition and implementing provisions for the financial framework.
- The second part relates to improvement of interinstitutional collaboration during the budgetary procedure. These rules relate to
- interinstitutional cooperation in general
- the establishment of the budget and to more specific matters (classification of expenditure, incorporation of financial provisions in legislative acts, maximum rate of increase, etc.).
- The third part contains provisions related to sound financial management of EU funds. This includes ensuring effective and integrated internal control of Community funds, financial programming, etc…
Budgetary discipline under the Interinstitutional agreement covers all expenditure. It is binding on all the institutions for as long as the Agreement is in force.
These agreements have no legal basis in the Treaty. However, their legal significance are considered more than only a simple political commitment. They have been concluded by institutions which can enter into legal obligations under the powers conferred on them by the Treaties. The agreements are therefore perfectly consistent with the provisions of the Treaties.
Developments regarding the current IIA
With the entry into force of the Lisbon Treaty changes are envisaged for the financial framework as well as for the current IIA.
On 3 March 2010, the Commission adopted the proposal for the Multiannual Financial Framework Regulation and a draft Interinstitutional agreement on budgetary discipline, which should replace the IIA on budgetary discipline and sound financial management. Until these new legal acts are adopted by the European Parliament and the Council the current IIA will remain valid.
The transposition of the provisions of the current IIA to relevant successive legal instruments is based on the following logic:
- Many of the existing provisions are rendered obsolete by the Lisbon Treaty
- The points directly related to the financial framework will be included in the Multiannual financial framework Regulation
- Some of the existing provisions should will be included in the Financial Regulation or its Implementing rules
The remaining provisions – mainly issues related to pure inter-institutional cooperation adjusted to the requirements of the Treaty - will be included in a new IIA. Proposals have been made by the Commission:
Proposals for a Council Regulation laying down the multiannual financial framework for the years 2007-2013 and proposal for an Interinstitutional Agreement between the European Parliament, the Council and the Commission on cooperation in budgetary matters