Council greenlights simpler rules for executing EU budget

The Council adopted a revision of the EU’s financial regulation, which lays down the financial rules applicable to the EU budget.

The main reason for this targeted revision is the need to align the financial regulation with the current multiannual financial framework (MFF) 2021-2027. Additional targeted improvements and simplifications are introduced, such as a better protection of the Union’s financial interests, provisions for procurement in times of crisis and simplified rules and procedures for beneficiaries.

Main changes introduced by the new regulation

The new regulation simplifies rules and procedures, to improve legal certainty and clarity for recipients while reducing administrative burden for applicants.

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.

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

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

The regulation also introduces the concept of negative revenues as  a solution until the end of the current MFF for the financing of negative interests stemming from the reduction or annulment of competition fines.

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.

A provisional political agreement was found between the Council and the European Parliament at the trilogue on 7 December 2023.

The regulation has now been formally adopted by the European Parliament on 17 September and by the Council today. The regulation is expected to enter into force and apply on the third day following that of its publication in the Official Journal of the European Union.