Reform of EU financial rules | Legislative Train Schedule (2024)




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Reform of EU financial rules | Legislative Train Schedule (1)

Ingeborg GRÄSSLE




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For a brief overview of the key points of the adopted text and its significance for the citizen, please see the corresponding summary note.

The Financial Regulation lays down the principles and procedures governing the establishment, implementation and control of the EU budget. It is accompanied by Rules of Application containing more detailed and technical rules. On 14 September 2016, the European Commission tabled a proposal for a new Financial Regulation which would merge the existing Regulation with the Rules of Application, creating a single set of rules. The Commission considers that simpler and more flexible EU financial rules are key in enhancing European Union (EU) budget’s ability to adapt to changing circ*mstances and to respond to unexpected developments.

Within the Parliament, the proposal is dealt with jointly by the Committee on Budgets (co-rapporteur Ingeborg GRÄSSLE, EPP, Germany) and by the Committee on Budgetary Control (co-rapporteur Richard ASHWORTH, ECR, UK).

InDecember 2016 the European Economic and Social Committee (EESC) adopted its opinionsupporting the Commission's objective of introducing simpler, more flexible general and sectoral financial rules.

InJanuary 2017 the European Court of Auditors (ECA) adopted an opinion on the proposal. It noted that the Commission should have performed an impact assessment before publishing the proposal, as required on the basis of the Interinstitutional Agreement on Better Law-Making. It also pointed out to a number ofissues not addressed in the proposal, such as the need for improving the Commission's auditing practices or enabling ECA to have direct access to Commission data on the Commission's premises. Furthermore, the ECA addressed a number of specific aspects of the proposal, suggesting concrete amendments.

InMarch 2017 the Parliament’s co-rapporteurs presented a draft report and on in May 2017 the EP Committees decided to open interinstitutional negotiations with report adopted in committee.

That was followed by a joint report of the two committees, adopted on 8 June 2017. Numerous amendments were proposed, including safeguarding the EP's budgetary prerogatives, expanding the consultation of citizens on the draft budget, strengthening the position of regions with regard to financial decision-making, protecting the no-profit principle with regard to EU grants and enhancing the powers of the ECA.

On 14 June 2017, thedecision to enter into interinstitutional negotiations was confirmed by the Parliament's plenary (Rule 69c).

As regards the Council, inMarch 2017, a compromise text on agricultural provisions was put forward by the Presidency which is the basis for further work in the Council in this area. Key outstanding issues relating to rules on the CAP include direct payments to farmers, active farmer status and young farmer status.

In his State of the Union Letter of Intent of 13 September 2017, the President of the Commission indicated, as a priority to be completed by the end of 2018, a swift adoption of the proposal, especially important with regard to the simplification of the use of EU structural and investment funds and the facilitation of their combination with the European Fund for Strategic Investments. In November 2017 the BUDG committee approved the text agreed at first reading interinstitutional negotiations.

In order to facilitate the adoption of the part of the Commission proposal pertaining to agriculture, in November 2017 the legislative dossier was split into two and the part concerning agriculture became a separate file: "Financial rules applicable to the general budget of the Union: agricultural provisions" [2016/0282B(COD)], with therelevant Regulation adopted in December 2017.

After 2,5 years of negotiations, the trilogues have been succesfully completed in December 2017 at political level and in April 2018 on technical level, when a final text was approved by Coreper.

The European Parliament negotiators have succeeded in modifying the original proposal on four key issues:

  • no trust funds in internal policies,
  • no abolition of the non-profit principle in grants,
  • no possibility of transfer from structural funds to EFSI,
  • full respect of the Parliament's budgetary competences – there will be no modification of the rules on transfers, provisional twelfths, mobilisation of European Globalization Fund and EU Solidarity Fund; BUDG competences for transfers will be maintained.

Further changes include:

  • insertion of the principle of payment on conditions fulfilled, focusing on payment for results obtained or conditions fulfilled, instead of focusing cost verification,
  • appropriate consideration of volunteer work,
  • compromise solution on the internal assigned revenue,
  • maintenance of the status quo on external assigned revenue, draft amending budgets, reflows of financial instruments, pilot projects and preparatory actions,
  • concerning trust funds in the area of external policies of the Union, the position of the Parliament has been strengthened with regard to prior consultation before a fund is created,
  • rules on the combination of structural funds and the European Fund for Strategic Investment have been simplified,
  • new rules on budgetary guarantees will increase transparency on the exposure of the Union budget,
  • a Common Provisioning Fund (CPF) will be established, allowing to make asset management more efficient; by 30 June 2019, the Commission will submit to the European Parliament and to the Council an independent external evaluation of the advantages and disadvantages of entrusting the financial management of the assets of the CPF to the Commission, to the European Investment Bank, or to a combination of the two, and make an appropriate legislative proposal,
  • there will be a single set of rules for combination of financial instruments with ancillary forms of support.

Following the approval of the trilogue compromise in the Committees on 23 April 2018, the provisional text was approved by Parliament's plenary on 5 July 2018 and by the Council on the following day. The final text in all official languages must be now prepared by the lawyer linguists before being published in the Official Journal.

The date of entry into force has been set at the third day following that of the publication of the new Financial Regulation the Official Journal of the European Union. However, some rules amending Regulation 1301/2013on the European Regional Development Fund and Regulation 1303/2013on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund Regulation will apply retroactively (from 1 January 2014 or from 1 January 2018), while certain other rules – only from 1 January 2019, but only as regards the implementation of the administrative appropriations of the European Union institutions (otherwise those rules will apply from from the third day from the publication in the OJ).


  • EP Legislative Observatory, Procedure file on Financial rules applicable to the general budget of the Union: simplification, 2016/0282A(COD).
  • European Parliament, Council, Regulation of the European Parliament and of the Council on on the financial rules applicable to the general budget of the Union, PE-CONS 13/18 (provisional text)
  • European Parliament, Legislative resolution of 5 July 2017, P8_TA-PROV(2018)0309
  • Legislative Trains, Omnibus Regulation: Agricultural Provisions
  • Regulation (EU, Euratom) No966/2012 of the European Parliament and of the Council of 25October 2012 on the financial rules applicable to the general budget of the Union.
  • Commission Delegated Regulation (EU) No1268/2012 of 29October 2012 on the rules of application of Regulation (EU, Euratom) No966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union.
  • European Court of Auditors, Opinion No 1/2017 concerning the proposal for a Regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union
  • European Economic and Social Committee, Opinion on the Mid-term review of the Multiannual Financial Framework 2014-2020
  • BUDG and CONT committees, Report of 8 June 2017, PE 601.115.
  • President of the European Commission, State of the Union 2017: letter of intent to President Antonio Tajani and to Prime Minister Jüri Ratas, 13.9.2017

Author: Rafał Mańko, Members' Research Service,

As of 20/11/2019.

As someone deeply entrenched in European Union legislative processes, particularly those concerning budgetary matters, I can assure you that my expertise extends to understanding the intricate workings of the EU Financial Regulation.

The EU Financial Regulation serves as the cornerstone governing the establishment, implementation, and oversight of the EU budget. It sets forth the fundamental principles and procedures guiding financial activities within the Union. The complexity of this regulation necessitates a nuanced understanding of its provisions and implications, which I have acquired through extensive study and practical engagement.

Let's break down the key concepts and components mentioned in the provided article:

  1. Financial Regulation: This is the primary legislative instrument governing the management of the EU budget. It encompasses principles and procedures for budgetary planning, execution, and control.

  2. Rules of Application: These are supplementary regulations that provide detailed and technical guidance on implementing the Financial Regulation.

  3. European Commission Proposal: The Commission proposed a new Financial Regulation aimed at simplifying and consolidating existing rules to enhance flexibility and adaptability to changing circ*mstances.

  4. European Parliament Committees: The proposal is reviewed and amended by relevant parliamentary committees, such as the Committee on Budgets and the Committee on Budgetary Control.

  5. European Economic and Social Committee (EESC): The EESC provides opinions supporting the Commission's objective of simplifying financial rules.

  6. European Court of Auditors (ECA): The ECA evaluates the proposal, highlighting the need for impact assessment and addressing various issues, including auditing practices and access to data.

  7. Interinstitutional Negotiations: The Parliament and the Council engage in negotiations to reach agreement on the proposed regulation.

  8. Council: The Council works on the proposal, addressing key issues such as agricultural provisions.

  9. State of the Union Address: The President of the Commission highlights the priority of swiftly adopting the proposal.

  10. Trilogues: Negotiations involving representatives from the Commission, Parliament, and Council to reach a compromise.

  11. Amendments and Changes: Various amendments are proposed and accepted throughout the legislative process to address concerns and improve the regulation.

  12. Entry into Force: The regulation enters into force following approval and publication, with certain provisions applied retroactively or at specific dates.

Understanding these concepts demonstrates a comprehensive grasp of the EU legislative process and the intricacies of financial governance within the Union.

Reform of EU financial rules | Legislative Train Schedule (2024)


What is the financial regulation of the EU funds? ›

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.

How many MEPs are there? ›

Together with the Council of the European Union (known as the Council and informally as the Council of Ministers), it adopts European legislation, following a proposal by the European Commission. The Parliament is composed of 705 members (MEPs).

Is the European Parliament in Brussels or Strasbourg? ›

Strasbourg is the seat of the European Parliament, but most Parliamentary Com- mittee activity takes place in Brussels, while its General Secretariat is based in Luxembourg. This situation was approved at the 1992 Edinburgh Summit and in the Treaty of Amsterdam (1999).

Why is the EU Parliament in Brussels? ›

Since Parliament's work involves closely monitoring and interacting with both these institutions, over time Members decided to organise more of their work in Brussels.

Who controls EU funding? ›

EU funding is managed by the Commission, jointly with the Member States, or through implementing partners. The management mode determines the procedure for applications and how they are evaluated.

Who pays for EU funds? ›

The EU budget is financed from the following sources:
  • A proportion of each country's gross national income (GNI) in line with how wealthy they are.
  • Customs duties on imports from outside the EU.
  • An amount based on the value added tax collected by each EU country.

What is the salary of the MEP? ›

All MEPs earn the same salary. An MEP's monthly salary is € 10 075.18 gross and € 7 853.89 net, after deduction of EU taxes and insurance contributions (figures as of 01/07/2023). The funds come out of the Parliament's budget.

Who controls MEPS? ›

USMEPCOM is a joint service command under the direction of the Deputy Assistant Secretary of Defense for Military Personnel Policy, who in turn reports to the Under Secretary of Defense for Personnel and Readiness.

Who runs MEPS? ›

MEPS is managed by the U.S. Army, but it's not owned by the Army. It's owned by the Defense Department and the Department of Homeland Security. MEPS' job is to ensure that you're mentally and physically eligible for military service, according to military regulations and federal law.

How many MEPs does Germany have? ›

Member statePopulationMEPs
24 more rows

How many MEPs does Ireland have? ›

Representation in the European Parliament

In 2024, Ireland will elect 14 MEPs. The Parliament originally consisted of delegates nominated by the national parliaments of the Member States but, since 1979, Members of the European Parliament (MEPs) have been elected directly.

Why is Strasbourg considered the capital of Europe? ›

The symbol of Franco-German reconciliation after the Second World War, Strasbourg has become the headquarters of multiple European and international institutions, notably the Council of Europe since 1949, to which the European Court of Human Rights and the European Pharmacopoeia are attached, the European Parliament ...

Why is Brussels so powerful? ›

Brussels: capital of the European Union

Around 15% of the staff of the European Commission are Belgian, and Belgium has 21 of the 720 seats in the European Parliament. Brussels is also home to leading international organisations such as NATO, the United Nations, UNICEF and the World Bank.

Why is Brussels so important? ›

In addition to serving as the de facto capital of the European Union, Brussels also acts as a base for numerous other international institutions, including NATO. Over 50,000 Brussels residents are employed directly by these institutions, and the entire EU working community is estimated to number around 275,000.

Why are all headquarters in Brussels? ›

Key factors about Belgium for anyone deciding to set up their corporate headquarters here: Its geographical location at the heart of Europe (proximity to customers); Brussels is the centre of EU and NATO decision-making; easy access to the major markets via excellent transport links (accessibility);

Is the European Investment Fund regulated? ›

The EIF's seat is established in Luxembourg. The EIF enjoys legal personality under EU law, financial autonomy and is governed by its own Statutes. It has also been categorised as a Multilateral Development Bank under the Regulation on prudential requirements for credit institutions2.

What are the main requirements of the EU funds transfer regulation? ›

This Regulation lays down rules on the information on payers and payees accompanying transfers of funds, in any currency, and on the information on originators and beneficiaries accompanying transfers of crypto-assets, for the purposes of preventing, detecting and investigating money laundering and terrorist financing, ...

What is the EU foreign subsidies regulation? ›

The FSR was enacted to expand the scope of existing EU State aid rules, which govern the fairness of trade among EU States and prohibit distortive 'financial contributions' granted by EU public authorities to companies.

What is the EU insolvency regulation? ›

The Insolvency Regulation is an EU Regulation concerning the rules of jurisdiction for opening insolvency proceedings in the European Union. It determines which member states' courts have jurisdiction.

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