From 1 January 2013 the delivery of EU funds to businesses, NGOs, researchers, students, municipalities and other beneficiaries will be improved thanks to simplified procedures. The new legislation enables increased transparency and introduces higher accountability of all involved in dealing with EU finances. It moves the protection of EU financial interests to a higher level.
Following the agreement on the revision of the Financial Regulation between the Council, the European parliament and the Commission, Janusz Lewandowski, European Commissioner for budget and financial programming, said: “We have finally moved forward in making the life of many beneficiaries of EU funds easier by simplifying the rules, cutting the unnecessary red tape and speeding up the time to grant the money. Clearer transparency will give a possibility to exercise better public control on how the European taxpayers' money is distributed. Today's agreement paves the way for a more effective use of EU funding and will facilitate the adoption of post-2014 generation of programmes. In times of crisis EU funds play an essential role, making them more accessible and accountable was absolutely necessary.”
The 2010 Commission's proposal on the review of the Financial Regulation addressed the main complaints from beneficiaries of EU funds; the new rules will focus on simpler and faster access to funds while strengthening accountability in the manner in which taxpayers' money is spent.
New rules include the scrapping of the obligation to open separate bank accounts, shortening the time for payments to beneficiaries (30, 60 or 90 days depending on the complexity of the deliverables), more use of lump sums and flat rates for smaller amounts, no need to fill in the same details every time one applies for EU funds, on-line applications and other measures in order to focus more on results and less on paper work…
Some 80% of EU funds are under "share management", in other words projects are picked and managed by Member States themselves. The new rules will increase the accountability of Member States especially in regional policy. National authorities in charge of EU funding will have to sign and submit to the Commission annual declarations certifying that EU funds have been used correctly.
Mechanisms for financial corrections in cases of irregularities committed by beneficiaries and discovered by audit have been strengthened: as a deterrent, the Commission will publish decisions imposing sanctions for misuse of EU funds.
In future, various financial instruments, such as loans, equity or guarantees will be used to multiply the financial impact of EU funds. New possibilities are created for a more flexible implementation of public-private partnerships ('PPPs') which reflects the calls of European industry who are the partners in such PPPs.
In the area of external action, the EU will be able to create EU trust funds pooling its own resources with its Member States and other donors in order to better coordinate and deliver external aid and increase its visibility.
The Financial Regulation is the core of EU financial rules. It sets the principles of the EU budget and governs the way the EU budget is spent. The present version was adopted in 2002 and most recently amended in 2010 only to cover the creation of the European External Action Service. The legislative procedure of this more substantial update was initiated by the Commission in December 2010.
Following today´s political agreement the Financial Regulation will be formally adopted after the summer break. In parallel, the Commission will adopt the Rules of Application which will provide further necessary implementing details. The new financial rules will then apply as from 1 January 2013.
For more info, go to our Financial Regulation page.