Slow progress on funding rules

FINANCIAL QUESTIONS

What is the financial regulation?

The EU's financial regulation sets the rules on how funds from the EU budget are handed out. It also sets guidelines on how these funds should be administered and controlled by the European Commission, the European Parliament and member states.

How important is it to the EU budget?

The regulation is vital for Commission officials and national administrations as they are responsible for ensuring that projects agreed to under, for example, the Common Agricultural Policy or cohesion policy, are properly funded and carried out.

What are these negotiations about?

Under treaty rules, the financial regulation must be updated every three years. The current revision also takes account of changes introduced by the Lisbon treaty, which came into force in December 2009. For the first time, the Parliament will have an equal say in approving changes to the regulation, alongside member states.

What is the main sticking-point?

MEPs want more rigorous controls of how EU funds are spent to avoid mismanagement and fraud. They are proposing that member states agree to provide the Commission with an annual statement of “national management declarations”, taking responsibility to ensure EU funds are spent properly. Member states oppose this, fearing that MEPs will have too much say over the way they spend EU funds.