Financial regulation: agreement on a mandate to start negotiations on EU budget rules

Member states’ EU ambassadors endorsed a mandate for negotiations with the European Parliament on a targeted revision of the financial regulation which lays down the financial rules applicable to the EU budget.

The main reason for this targeted revision proposed by the Commission is the need to align the financial regulation with the multiannual financial framework (MFF) package. The proposal builds on the lessons learned from the COVID-19 pandemic putting forward changes for a more efficient crisis management, focuses on the protection of EU financial interests and strives for further simplification.

In its mandate, the Council keeps a focus on ensuring proportionality as regards the additional administrative burden for national administrations, resulting from the proposed use of the single integrated IT system for data mining and risk scoring and of the early detection and exclusion system (EDES), while safeguarding data protection. The fundamental budgetary principles and the interinstitutional balance are maintained. Also, in its mandate the Council supports the Commission’s efforts to further simplify rules and procedures, with an interest in legal certainty and clarity.

The negotiations with the European Parliament to agree on a final version of the text are expected to start before the end of June.

Background

On 16 May 2022, the Commission presented a proposal for a recast regulation on the financial rules applicable to the general budget of the Union, with the focus on:

• aligning the financial regulation with the multiannual financial framework package, including the declarations made by the EU institutions in the context of the MFF, and to maintain a single rulebook governing the expenditure of the Union
• including targeted improvements and simplifications, notably to address the green transition, facilitate crisis management, reduce the administrative burden for grant applicants, simplify tenders through use of electronic invoicing for procurement and facilitate digital audits and reporting
• enhancing the protection of the EU financial interests through an update of the data mining tool and of the early detection and exclusion system, while improving financial transparency across the budget