Brussels, 10/06/2002 (Agence Europe) - On Wednesday the European Parliament will approve the report by Gianfranco Dell'Alba (Lista Bonino) on the Council's common position on the rehashing of the Financial Regulation, slightly amended following consultation on the fringes of the ECOFIN Council on 4 June, thereby ending 12 months of negotiations over a complex issue that the Spanish Presidency had made one of its priorities.
The report notes the outcome of consultation with the Council, highlighting the concessions won by the EP, namely: 1) the EP retains its right to amend standard Supplementary and Amending Budgets (apart from those concerning balances to be repaid to Member States from one year to the next) and the Council will refrain from blocking this procedure. The EP won the maintenance of its prerogatives here in exchange for the creation of specific Amending Budgets whereby at the beginning of the year, the European Commission will propose to reimburse to Member States unused balances from the previous tax year (this option already existed in practice but has now been formalised, noting that the EP may not amend this type of Amending Budget); 2) in the budget procedure, the EP can use the transfer to reserve for any expenditure once it finds problems with a budget line (the EP granted itself this as a general right during the first reading of a draft budget in order to have an influence on the vote in Council on second reading); 3) it implemented the notion of "flexibility" of budget management, giving EP and Council equal rights to investigate bank transfers that the Commission can make during the budget year up to 10% of the credit amounts on the relevant budget line; 4) the EP can amend any expenditure for Community Agencies through a full right to monitor their organigrammes and operations; 5) the Council agreed to the ban, that will also apply to Agencies, on contracting loans for new buildings; and 6) concerning the submission of internal audits, it was agreed that EU institutions must now submit to the discharge authority each year a report detailing how many of each type of internal audit have been carried out and the recommendations made in them.
The two main issues that gave rise to debate in COREPER were keeping negative agricultural spending (the balance of unpaid sums automatically brought forward to the next financial year) where it was agreed that at the time of reviewing the Financial Perspectives for 2007-2013, the Council will decide whether this negative expenditure should remain under agricultural expenditure or be transferred to the general budget; and decentralising the management of EU grants to national public bodies, including grants for foreign aid. Italy has incorporated a statement to limit this opinion, taking account of a particular national situation.
The new Financial Regulation incorporates the following: Member States will be more involved in the shared management of EU expenditure in terms of the Court of Auditors' monitoring procedures and the European Parliament discharge procedure; incorporating the calendar and the action for accounts will be brought forward by a month (accounts to be handed in from 31 March of the following financial year rather than 1 May as at present) to cut the time it takes to submit the report to the Court of Auditors (31 October rather than 30 November) and allow the Discharge Authority to start work earlier leading up to the European Parliament's decision to grant discharge (30 April of Y + 2); to cut "dormant credits", including "balances to be cleared", foreseeing the clearance of commitment appropriations that have not been paid for three years; and the internal control of the authorising departments will be stepped up to compensate for the scrapping of centralised ex ante controls by the Financial Controller.
The Financial Regulation is the main legal instruments encompassing the budget in all its forms - presentation, implementation, control by the Court of Auditors and the Discharge Authority and definition of the role and responsibly of the various stakeholders. The current Financial Regulation was adopted on 21 December 1977 and has been amended dozens of times, but the full rehash has become a political necessity following the abuse that came to light in the events that led to the fall of the Santer Commission in 1999.
Following the consultation exercise, the rapporteur Dell'Alba said that with one or two exceptions, all the areas under dispute between European Parliament and Council have been resolved on the basis of European Parliament proposals and that the rehash of the Financial Regulation confirmed and strengthened the EP's role as EU Budget Authority and guaranteed greater transparency of EU finances. Hailing the determination of the Spanish Presidency, the President of the Budget Control Committee, Diemut Theato (EPP-ED), was at pains to point out that the final outcome had been achieved quickly.
European Parliament Plenary Session