The EU is simplifying the rules on using money from the EU budget. On 19 April 2018, the Council’s Permanent Representatives Committee (Coreper) endorsed an agreement reached with the European Parliament on the so-called Omnibus regulation on EU financial rules. The regulation will amend the existing financial regulation which sets out a general framework for budget management, as well as a series of acts governing EU multiannual programmes in specific fields, including cohesion policy.

There will be simpler rules on using different types of funds, whether these are managed directly by the Commission, indirectly by various organisations and bodies, or jointly with national authorities.

The main driver behind this reform was our wish to make life easier for those benefitting from and managing EU funds. This has been a clear request to EU lawmakers in recent years. But other benefits can be expected as well. We expect quicker implementation, with fewer costs, greater impact of policies on the ground and easier access for small beneficiaries. Marinela Petrova, Deputy Finance Minister of Bulgaria

Reimbursement of costs made easier

The new rules will extend the possibility of basing EU payments on the achievement of results or on pre-defined method rather than tracing every euro of expenditure. Where no statistical or historical data is available, expert judgements can be used for assessing costs.

This will reduce paperwork for both beneficiaries and authorities, who will be able to focus on policy achievements rather than collecting and checking financial documents. The risk of error will also decrease and it will become easier for small beneficiaries with limited resources to access EU funds.

Small organisations will also benefit from the fact that volunteer work will be recognised as part of their contribution towards the co-financing requirement.

Single checks and assessments

In order to avoid multiple controls of the same activities and entities, the Commission will be able to rely more on audits and assessments carried out by its international partners and member states.

The new rules also make it clear that the Commission will not be able to ask for the same information twice.

These measures will further cut red tape and allow beneficiaries such as NGOs which receive money from several donors to focus on their work on the ground.

Simpler rules for the combination of funding sources

Several amendments are aimed at facilitating the use of different programmes and instruments for the funding of projects, applying a single set of rules where possible.

For example, it will become easier to combine financing from EU structural funds with financial instruments and the European Fund for Strategic Investments through so-called 'blending'. It will also be possible to blend grants and financial instruments under the Connecting Europe Facility to finance projects in the fields of transport, energy, and information and communication technology.

This will encourage the use of a wide mix of contributions from national budgets and private investors in order to make the best use of EU resources.

Single rulebook

EU financial rules are also reorganised to make them more concise and easier to read.

The financial regulation and the most important provisions of its ’rules of application’ have been merged into a so-called ’single rulebook’. Emphasis is also put on commonalities between the different management modes and types of budget implementation by consolidating the respective rules, which have been spread over the existing financial regulation, into dedicated chapters.

Other changes

Finally, some of the changes are geared towards achieving more specific objectives.

Under the new rules, it will become easier to use EU structural funds for the integration of migrants and refugees. The fight against tax avoidance and shell companies is also strengthened.

A more comprehensive framework has been created for the use of financial instruments and budgetary guarantees to boost investments.

In order to ensure that the EU budget focuses more on results, the measurement of the performance of EU funded projects has been also been reinforced.

Next steps

The Parliament is now expected to approve the regulation at first reading. The text will then be submitted to the Council for final adoption.

It is expected to enter into force in July 2018 and apply in most parts immediately. Some additional time is provided to the EU institutions to adapt to the new rules as regards their administrative expenditure. They will apply the new rules from 1 January 2019.

Background

The Commission presented its proposal on the Omnibus regulation in September 2016. In November 2017, four legislative acts in the field of agriculture were separated from the main regulation to allow them to enter into force on 1 January 2018. A provisional agreement on the main elements of the Omnibus regulation was reached in December 2017. Final details and the application dates for the rules were agreed with the Parliament on 27 March 2018.

The current package of measures is part of a longer-term effort to simplify the implementation of the EU budget while ensuring that EU funds continue to be managed prudently.