Brussels, 25/10/2012 (Agence Europe) - On Thursday 25 October, the EU Council of Ministers adopted new rules aimed at equipping the EU budget with simpler financial rules while securing sound treatment of European taxpayers' money. The Dutch delegation abstained during the vote. Adoption of the rules by member states comes further to a first reading agreement with the European Parliament. In order to take effect, the rules must be published in the EU Official Journal, for application on 1 January 2013. The same thing is true for the implementation arrangements that the European Commission is due to adopt in the coming days.
The financial regulation may be considered as the cornerstone of the EU legislation as it contains all the principles and rules for the implementation of the EU budget and is applicable to all areas of expenditure and all revenue.
Adoption of the financial regulation paves the way for the adoption of around 70 proposals for sector specific legislative acts covering areas such as expenditure, cohesion policy, research, environment, transport, energy and external aid.
The new rules enhance transparency concerning the use of European taxpayers' money. Where member states are entrusted by the Commission with execution of the budget (“shared management”), they will have to designate and supervise bodies responsible for the management and control of EU funds. Those bodies will have to set up and ensure the functioning of an effective internal control system. Once a year, they will have to provide the Commission with their accounts and with a management declaration confirming that the money has been spent for the intended purpose and that the control systems work property.
The revised financial regulation also aims to reduce administrative formalities and increase the multiplier effect of limited EU resources. Beneficiaries of EU funds, for example, will no longer be under an obligation to open a separate bank account to receive an upfront payment at the start of a project and to return to the Commission any interest yielded by this money while it says on this account. The grants regime will be shifted from a real-cost based management (inputs) towards a performance-based scheme (outputs), in order to achieve significant simplification of the procedural and documentary requirements for the benefit of beneficiaries.
In order to improve the leverage of the limited EU resources in support of job creation and growth, the revised financial regulation includes provisions to facilitate the use of novel financial instruments such as loans, guarantees, equity investments or other risk-sharing instruments. These instruments will have to comply with the principle of sound financial management.
The new rules authorise the Commission to create and manage multi-donor EU trust funds for external actions, which would intervene in emergency, post-emergency crisis operations or for thematic actions. The funds would pool the contribution from the EU budget with funds from other donors and are expected to improve the delivery and visibility of EU aid.
The revised financial regulation also facilitates the pooling of EU resources and private funds through public and private partnerships, especially in the field of research. (LC/transl.jl)