Financial Regulation: Council and Parliament reach an agreement

The Council and the European Parliament yesterday evening reached a provisional agreement on the EU’s financial regulation.

The main reason for this targeted revision is the need to align the financial regulation with the current multiannual financial framework (MFF) 2021-2027. In addition, targeted improvements and simplifications are introduced, such as better protecting the Union’s financial interests, provisions for crisis procurement and simplification of rules.

Alignment with multiannual financial framework

Certain derogations from the budgetary principles set out in the sectoral basic acts will be reflected in the financial regulation in line with the ‘single rulebook’ approach.

Better protected EU financial interests

The provisional agreement ensures that any additional administrative burden remains limited for national administrations, and safeguards data protection in the process of digitalisation.

Crisis management

Building on the lessons learnt from the COVID-19 pandemic, the provisional agreement implements changes for a more efficient crisis management, by enabling EU institutions or bodies to procure on behalf of member states or to act as a central purchasing body, to donate or resell supplies and services.

EU budget

The provisional agreement provides a solution for the financing of negative interests until the end of the current MFF.

Simpler rules for recipients

Rules and procedures are simplified, to improve legal certainty and clarity for recipients, while reducing administrative burden for applicants.

Background and next steps

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.

The provisional agreement needs to be formally adopted by the Council and the European Parliament, before being published in the Official Journal and entering into force.