Financial Regulation: Council greenlights simpler rules for executing EU budget
On 19 September, the European Council adopted a revision of the EU’s financial regulation, which lays down the financial rules applicable to the EU budget. The financial regulation was revised to align it with the current multiannual financial framework (MFF) 2021-2027 and to introduce additional targeted improvements such as better protection of the Union’s financial interest, provisions for procurement in times of crisis and simplified rules and procedures for beneficiaries.
The exemptions in the budgetary principles will be reflected in the financial regulation according to the ‘single rulebook approach’. The new regulation ensures that any additional administrative burden remains limited for national administration and safeguards data protection in the process of digitalisation. Moreover, it implements some changes to make crisis management more efficient 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 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 its publication in the Official Journal of the European Union.
MEPs criticized the position of the European Council during the first plenary of the new European Parliament
Strasbourg, France. On 18 September, some MEPs especially from the S&D group criticized the European Council led by the Hungarian Presidency for its conservative approach to the EU budget. It is the first budget after the midterm revision of the MFF 2021-2027 and also the first time that the EU will have to pay the interest costs on funds borrowed under the European Union Recovery Instrument (EURI).
The proposals from the MEPs include:
1) leaving no one behind with the green and digital transitions and
2) ensuring that the EU budget works for all generations, with a focus on the youngest and oldest generations and vulnerable citizens such as through securing funding for Erasmus+ and the European Solidarity Corps, the Union Civil Protection Mechanisms and the Citizens, Equality, Rights and Values Programme.
The EP’s Committee on Budgets will vote on the budgetary amendments on 7 October 2024 and the final position of the EP on the 2025 budget is expected to be voted on by the plenary on 21-24 October in Strasbourg.
The Parliament will meet with the Council and Commission representatives on 5 November to negotiate the final 2025 budget. It is expected that there will be intense discussions about paying interest rates incurred by the Recovery and Resilience Facility that have increased way beyond original forecasts. The Council on the other has taken the prudent approach, which some MEPs have termed as austerity measures, raising the issue of “source of additional financing” and indebtedness. The Parliament’s chief budget negotiator MEP Victor Negrescu (S&D/Romania) stressed that by cutting the budget, the European Union will not be able to deliver on citizens’ needs.
Sources:
(1) Euronews (By Paula Soler & Video by Aida Sanchez Alonso), “EU Parliament and Council clash over €1.52bn ‘austerity’ cuts to 2025 budget” 23 October 2024 and
(2) Think tank European Parliament, “Parliament’s reading of the 2025 EU budget”, 17 October 2024
