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IP/07/424

Brussels, 28th March 2007

New financial rules facilitate use of EU funds

Two years of intensive work finally bear fruit: the European Union has a new set of financial rules to better use EU funds in the 2007-2013 financial framework. The new rules simplify access to funding and reduce administrative procedures to a strict minimum. For the first time the names of the beneficiaries of all EU funds will be made public.

Dalia Grybauskaitė, European Commissioner for Budget and Financial Programming, said: "Simpler, more practical solutions in the modernised financial rules give the opportunity to better use EU funds. Greater transparency and accountability will increase the effectiveness of spending and protect EU taxpayers' interest".

Simplification of the procedures

The New Financial Regulation (and its Implementing Rules, adopted today by the College), will accompany a new generation of EU programmes worth € 975 billion over a seven year period. Cutting red tape will facilitate access to these funds. Practical improvements for both grants and public contracts will be most important for SMEs (small and medium-sized enterprises), schools, universities, researchers, development agencies and municipalities:

  • Grants of up to €25,000 require less documentation.
  • Work done by staff may replace cash co-financing for grants.
  • The financial guarantees required for grants below €60,000 prior to initial payment may be waived, after having assessed the financial risk.
  • Purchases of up to €60 000 using grant money may be made with the minimum of rules to be respected, only the principle of sound financial management and the absence of conflict of interests will be required.
  • Higher threshold (€60,000 instead of €50,000) for award of public contracts with simplified purchasing procedures.
  • Higher threshold to allow organisations competing for low-value EU contracts to make a simple declaration on their honour, replacing complex evidence showing no previous malpractice convictions.
  • Simplifications for award of public contracts in the field of external aid with much higher thresholds (up to €5,000,000 for works).

The Commission will gain more flexibility in budget management to react in end-of-year humanitarian or crisis management situations by immediately using unspent funds without asking prior consent of the Council and the Parliament.

Better public control

The full transparency and improved control will help to protect the EU’s financial interests. The names of beneficiaries of structural funds and external aid programmes (as of 2008) and agricultural subsidies (as of 2009) will have to be disclosed to public view in all Member States.

The Commission will a have an expanded tool to prevent fraud and corruption: the central database of organisations excluded from EU funding will be shared between all EU Institutions and Member States authorities. This database will contain all relevant information on entities condemned for fraud or corruption in the Member States and third countries involved in the implementation of EU programmes.

The new financial rules will improve Member States' reporting on the implementation of the part of the EU budget managed by them (three-quarters of the total EU budget).

Background

The Financial Regulation provides general principles and rules for all transactions entered into by the European Institutions. The detailed step-by-step rules are laid down in the Implementing Rules, adopted today by the Commission.

The previous Financial Regulation entered into force in January 2003. A review in the light of experience was required after three years, the Commission made its first proposal for revision on 3rd May 2005, aiming at increased simplification, transparency and accountability. The Court of Auditors delivered a broadly favourable opinion in December 2005, the European Parliament and the Council completed their first examination in March 2006 which resulted in an amended proposal by the Commission on 18th May 2006.

The revised Financial Regulation was finally agreed by the European Parliament and Member States on 29th of November and adopted unanimously by the Council on 13th of December 2006. Now that the Implementing Rules have been adopted, translating the revised Financial Regulation into practice, the new rules will apply as of 1st May 2007.

For more information :

http://ec.europa.eu/budget/other_main/funds_rules_en.htm


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