A new Conciliation Committee will be established and both arms of the budgetary authority will have an equal say on all components of the budget. This implies a modification of procedure as well as a modified negotiating culture due to the single reading process. In accordance with the Commission’s role as an honest broker as confirmed by the Lisbon Treaty, I will take all the necessary initiatives in order to secure a timely and sensible agreement on the annual budget of the EU.

The new Commission will examine whether there is a need to adjust the current MFF in its report on the functioning of the Inter-institutional Agreement (IIA). Margins, in particular of Headings 1a and 4, under all ceilings of the MFF, are very tight. These margins and the flexibility foreseen in the IIA may make it difficult to meet future challenges, such as international public financial support to developing countries to help them tackle climate change. The outcome of the Copenhagen negotiations might require specific adjustment to the current MFF in order to enable the EU's prompt, adequate and coordinated action, still within the current programming period.

The difficult post-crisis fiscal situation of the Member States makes it even more necessary to focus the EU budget on key priorities to help the Union meet our well-identified challenges: strengthening EU competitiveness in a global economy, climate change and securing safe energy supply sources. These political choices will need to be translated into a balanced package that makes it possible to simultaneously consolidate the traditional policies, such as cohesion policy and CAP and to respond to future challenges, while maintaining sound budgetary discipline.

The main priorities are simplification, efficiency and flexibility of rules, notably clearer grants and delivery mechanisms; the use of modern and efficient instruments, in particular in relation with the European Investment Bank and the use of public-private partnerships; the highest protection of the EU budget (sound financial management) and a wider use of the concept of Tolerable Risk of Error. Finally, it will also be necessary to ensure that the financial and accounting systems remain at the adequate level, necessary to support the above mentioned institutional modifications, so that the Commission will continue to be able to receive a clean audit opinion on its accounts.