On Monday 16 May, the European Commission proposed adjustments to the provisions of the Financial Regulation.
The text, to be adopted by the EU Council and European Parliament, takes into account the rules of the 2021-2027 Multiannual Financial Framework (MFF) and the Next Generation EU Recovery Plan.
Increased transparency. The proposal aims to ensure that the public is better informed about how the EU budget is spent and who receives EU funds. To this end, those responsible for implementing the budget under shared or indirect management will have to send the European Commission information on the beneficiaries of EU funds at least once a year. The European Commission will combine them with information from the beneficiaries of the directly managed budget. Thus, complete information on all beneficiaries of EU funds will be publicly available online, regardless of the management mode.
The proposal introduces a single integrated IT system for data mining, which will make it possible to identify beneficiaries of EU funds who misuse these funds and provide an effective tool for dealing with irregularities and for preventing, detecting, investigating and correcting fraudulent behaviour.
In addition, Member State authorities will have to use a central European Commission IT system to feed and analyse data on beneficiaries of EU funds. This would make it easier to detect and identify risks of fraud, corruption, double funding, conflict of interest and other irregularities as early as possible in the process of granting EU funds to beneficiaries.
Enhanced protection. The European Commission already operates an early warning and exclusion system, which identifies and stops funding for beneficiaries who do not comply with EU rules. This system currently applies to directly managed funds. The European Commission proposes to extend this system to shared management.
A more agile European budget. To help the EU react more effectively in crisis situations, the proposal introduces: - rules reflecting current practice on non-financial donations in order to provide a clear legal framework for the EU institutions for donations of goods, services, supplies or works; - new rules in the field of public procurement in crisis situations which will allow EU institutions or bodies to award contracts on behalf of Member States or to act as a central purchasing body; - a new budget implementation instrument for the EU contribution to global initiatives covering operations in line with EU standards.
The changes are designed to ensure that the EU budget fully supports the implementation of the ‘European Green Deal’. To this end, an explicit reference to the principle of ‘do no significant harm’ is made, in line with the European Commission’s commitment to sustainable financing and the green transition.
Link to the proposal: https://aeur.eu/f/1nn (Original version in French by Lionel Changeur)