EU budget simplification

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 Financial Regulation applies from 2 August 2018. It introduces a simplification of the existing rules that will bring significant improvements and will particularly benefit citizens, small and medium size enterprises, and non-governmental organizations.

Simpler access to EU funding and improved cooperation between administrations

• Recipients asking for EU funding need to provide less and more targeted information. The same information will not be asked for twice.
• When applying for funding, volunteer work will be taken into account;
• Checks and audits will no longer be duplicated thanks to increased reliance on previous controls by national authorities or international partners;
• Payment for results and lump-sums can be more widely used. For instance, payments would be based on a fixed amount upon demonstration that a certain action has been made (such as training or provision of humanitarian assistance) rather than checking hundreds of bills and receipts for costs incurred.

Increased focus on achieving better results with less bureaucracy and improved controls at a lower cost

• The use of lumps-sum will not only reduce the cost of controls of hundreds of receipts but also decrease the level of potential errors linked to the number of checks;
• The new framework will improve cooperation between the European Commission and national authorities implementing EU programmes - such as the Common Agricultural Policy or structural funds;
• The new rules will also improve cooperation with partner organisations across the world, like the European Investment Bank, the United Nations and the World Bank.

A more modern EU budget

The revised framework results in more leverage for EU funding and more flexibility to the EU budget via:

• New instruments, such as budgetary guarantees (like the one underpinning the European Fund for Strategic Investment), which will be efficiently managed in the future through a common provisioning fund;
• Simpler rules for the combination of national funds and the EU funds (e.g. Structural Funds and the European Fund for Strategic Investment) and the possibility to combine grants and financial instruments (e.g. Connecting Europe Facility).

Better protection of the EU budget

Simplification of the rules allows for a more efficient protection of EU funding:

• The use of lump sums leads to fewer errors and reliance on assessments and audits of the authorities on the ground leads to more efficient controls;
• Moreover, the new rules reinforce the fight against shell companies and the use of tax havens by intermediaries managing EU funds. Voluntary disclosure of shareholders is foreseen;
• There will be increased transparency, streamlined reporting and reinforced accountability for public expenditure, with existing rules on conflict of interest explicitly extended to Member State authorities.

For information on the Commission proposal for targeted adjustments to the Financial Regulation of 16 May 2022, see also EU Financial Regulation

• Regulation
• 29 September 2024

EU Financial Regulation

The Financial Regulation is the main point of reference for principles and procedures governing establishment, implementation and control of the EU budget.

• 11 December 2018

Proposal for a Regulation of the European Parliament and of the Council (14 September 2016)

The proposal for a revision of the Financial Regulation, which was presented in 2016