- Revision of EU’s financial regulation should bolster the protection of EU’s financial interests and ensure respect for the rule of law
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More transparency through a public EU database with information on ultimate beneficiaries of EU funds
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Better gender and climate mainstreaming
For the upcoming revision of the EU’s Financial Regulation, MEPs want a stronger role in the budgetary scrutiny, respect for the rule of law and more transparency.
In a resolution adopted on Monday with 56 against 11 votes and 1 abstention, Members of the Budgets and Budgetary Control committees say they believe that the planned revision of the EU’s Financial Regulation (FR) should “seek to modernise the rules applicable to the EU budget in line with its latest evolutions and in line with the budgetary principles and the respect of EU values, and to increase parliamentary oversight, democratic accountability, transparency, civic engagement and the ability to respond to citizens’ needs quickly and effectively, particularly in crises.”
Democratic accountability for a modern budget
The “NextGenerationEU” (NGEU) recovery plan has greatly increased the EU budget. However, the bulk of these additional funds enter the EU budget under provisions which exclude Parliament from the decision-making process. MEPs underline that, while crisis management requires swift actions, this “may never be an excuse to bypass Parliament, undermining democratic accountability”. They note with concern the increasing use of such “off-budget instruments” and insist on an appropriate role of the Parliament in the budgetary scrutiny of such initiatives. The principle of democratic accountability and oversight in decision-making “needs to be reflected in the Financial Regulation”, they add.
They furthermore emphasise the “clear relationship between respect for the rule of law and the efficient implementation of the Union budget” and call on the Commission to include the content of the Conditionality Regulation into the FR.
Detecting fraud, corruption and conflicts of interest
In order overcome the lack of transparency and to know how EU funds are spent, and who truly benefits from them, MEPs propose a “compulsory centralisation of information in a single, interoperable reporting and monitoring system and a user friendly public EU database with information on direct and ultimate beneficiaries”.
MEPs furthermore insist that gender mainstreaming be better reflected in the drafting and implementation of the budget. Hence, gender mainstreaming and gender budgeting should be integrated in the relevant provisions of the FR. Also, for climate mainstreaming, they expect the Commission to develop a “robust and clear methodology for tracking climate spending and its performance”, and underline “the importance of an accurate monitoring of expenditure contributing to halting and reversing the decline of biodiversity”.
The draft report by co-rapporteurs Monika Hohlmeier (EPP, DE) and Nils Ušakovs (S&D, LV) and the amendments are available under this link. A consolidated version reflecting the vote will be available soon. The vote results will appear here. The vote in plenary is foreseen for 22 November.
Background
The Financial Regulation (FR) is the main point of reference for the principles and procedures governing the establishment, implementation and control of the EU budget. The current version of the FR applies from 2 August 2018.
The Commission announced in March 2021 a revision of the FR to align it with the legal acts adopted in the context of the 2021-2027 Multiannual Financial Framework (MFF) package. The FR is reviewed whenever it proves necessary to do so and in any case at the latest two years before the end of each multiannual financial framework.