<EntPE>EUROPEAN PARLIAMENT</EntPE>
2004
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![](565763_image001.gif)
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2009
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<Commission>{CONT}Committee on Budgetary Control</Commission>
<Date>{8/04/2008}8.4.2008</Date>
<TitreType>WORKING DOCUMENT
No 1</TitreType>
<Titre>on the budget review
"No policy without full accountability"</Titre>
<Commission>{CONT}Committee on
Budgetary Control</Commission>
Rapporteur: <Depute>Herbert Bösch</Depute>
Introduction
- On 12
September 2007, the Commission approved a Communication aimed at
launching a broad consultation process on the review of the EU budget.
- By doing so,
the Commission responded to the invitation in the Interinstitutional
Agreement of May 2006 "to undertake a full, wide ranging review
covering all aspects of EU spending, including the CAP, and of resources,
including the UK rebate, and to report in 2008/2009).
- The first
phase of the consultation process ended on 15 April 2008. Later in 2008 it
is expected that the Commission - on the basis of the consultation process
- will present proposals for reform.
- In this
Communication the Commission stresses that it will not "propose a new
multi-annual financial framework for the period from 2014 - this task will
be for the next Commission - nor the overall size and detailed breakdown
of the EU budget." (SEC(2007) 1188 final, page 2).
Procedure
- At the
coordinators' meeting of 12 November 2007, the coordinators agreed
that the Committee should follow the consultation process on the review of
the budget.
- At the meeting
of 22 January 2008 the Committee - on a proposal from the coordinators
- invited the Chairman to present proposals for future activities at the
coordinators meeting in February 2008.
- At the
coordinators' meeting of 26 February 2008 the Chairman suggested
that external experts should be invited to make a presentation on issues
which from the budgetary control committee point of view would be
pertinent to consider when reforming of the budget and on that basis have
a debate in Committee.
- As the first
expert to be invited the Chairman proposed Mr Gabriele Cipriani, official
of the Court of Auditors and author of the very inspiring book "Rethinking
of the EU budget. Three unavoidable reforms", published in
November 2007. Other experts could be invited to future meetings.
- The
coordinators agreed to the Chairman's proposals and invited him to take
the rapporteurship due to the horizontal and general character of the
matter.
- The
coordinators further invited the rapporteur to evaluate whether an opinion
from the Committee submitted to an own initiative report from the Committee
on Budget would be useful at this stage.
- The Committee
confirmed these proposals at its meeting on 25 March 2008.
The consultation paper
- The Commission
claims that its approach is "one of openness and no taboos" and
that it will "prepare this review with no preconceptions"
(SEC(2007) 1188 final, page 3).
- This means,
according to your rapporteur's understanding of "openness and no
taboos", that the "review" is not limited to the points and
issues mentioned in the consultation paper. Issues not mentioned but
relevant for the future reform can - and should - also be dealt with.
- The 2008/2009
"review" is leading up to the future "reform"
of the budget.
"Review" means "to examine, consider and judge a situation
or process carefully". "Reform" means "to change a
system, law, organisation etc so that it operates in a fairer or more
effective way".
The budget review and the Committee
on Budgetary Control
- For many years the budget discussion has mainly
been about the size of the budget and the matter of allocation of
resources. Other aspects - such as effects, results, responsibility,
accountability, transparency - have had a secondary position in the
debate.
- One of the problems concerning the control of the
implementation of Budget - for which this Committee is responsible - is
that in the design of programmes and the procedure for adopting the budget
hardly any attention is paid to issues concerning the delivery of policies
and the monitoring and control thereof.
- It is very unlikely that a mere "reallocation"
of resources from one policy area to another, or the question of applying
an EU tax or not will change taxpayers' perception - correct or incorrect
- that Brussels is not very good at handling public funds;
- European taxpayers have a right to know whether
their money is being well spent, whether procedures are efficient and whether
results are satisfactory.
- These kinds of questions should be on top of the
review agenda because they will play an extremely important role in
reaching an agreement for the next budgetary period.
- National finance ministers and the Commission can
continue to underplay or even neglect the findings of the European Court
of Auditors and Parliament's comments on these findings in its discharge
reports but in so doing they will not be demonstrating a very European
attitude and it will certainly not be helpful in achieving an agreement
for the next budget period.
- The budget review is very much about the
credibility of the EU institutions and the way in which they handle public
money. That is the reason why your rapporteur invites all decision-making
bodies in the House to consider carefully how the current problems
concerning the implementation of the EU-budget best can be dealt with
during the budget review process.
- It is in any case clear that questions concerning
the delivery of policies and the monitoring and control thereof -Â
effects, results, responsibility, accountability, transparency - falls
entirely under the mandate of this committee which consequently must have
the final say on these matters in the process leading up to the plenary
decision.
Strong leadership
- A consultation
paper is a paper intended to stimulate debate and discussion in order to
find ideas for new solutions. It would be unreasonable to already expect
solutions in the consultation process.
- But later
proposals have to be drawn up. Your rapporteur would like to invite the
Commission to show strong leadership and push for change as regards
the quality of EU spending, the management of the budget (the balance
between centralised management and shared management), the role of the
Commission and the Member States, accountability, governance, control of
eligibility and co-financing, clarity of objectives, simplification, audit
ability, transparency, etc.
- Some of these
issues are hard to tackle because of Member States' resistance and
satisfaction with status quo but improved EU policy delivery depends on
sufficient radical reform in the mentioned areas. Your rapporteur would
like to invite the full Committee to support the Commission's efforts for
change against the powers of the many actors satisfied with the present
set up.
Full, clear, efficient and effective
accountability
- By taking a very pro-active line on the budget
review and reform your rapporteur hopes that the Committee can promote
greater understanding of the serious problems on the control side of the
budget. Full responsibility and accountability for the use of EU funds
does not exist today. This is unacceptable and must change. The Commission
wants the budget to be "managed to the highest standards" (page
5). Whatever standards the Commission is referring to your rapporteur
takes it for granted that "full, clear, efficient and effective
responsibility and accountability" is included.
- In its recent
discharge reports Parliament has drawn attention to the problems with shared
management and the need for improved national accountability.
Stressing that according to Article 274 of the Treaty "the Commission
shall implement the budget (...) on its own responsibility" the
Parliament has at the same time invited the Member States to fulfil their
part of the responsibilities in as far as about 80% of the budget is
implemented by national administrations.
- The
consultation paper only briefly touches upon this problem by stating
"With the policies evolving, a fresh look needs to be taken to
determine how different types of management can offer sound financial
management and whether the existing balance represents the right answer."
(page 10).
- As regards
improved national accountability Parliament has launched the idea of
"national management declarations" as a tool with which to
achieve this objective.
- Also on this
point the Commission's consultation paper is rather sparse. It just
mentions that "Ensuring full transparency, visibility and
accountability in the management of the budget, to ensure legitimacy, and
citizens' confidence in the European Union" is "a key
issue" (page 10).
Legitimacy and efficiency
- Â Your rapporteur attaches
great importance to the budget review. It should not only be a discussion
on 're-distribution', but also a discussion on ways of improving
efficiency and effectiveness of policy delivery in the EU and on
maximising accountability of responsible politicians and managers.
- European
taxpayers expect the EU delivery system to be efficient, effective
and legitimate. Therefore, the reform of the budget should include
a reasoned establishment of the balance between 'legitimacy' (a sufficient
degree of control) and 'efficiency' (timely delivery of results).
- Only by
establishing this balance will the Commission and the Member States have a chance to end the annual embarrassment following the publication of the
Court of Auditors' Annual Report. It is not too much to ask for this as a
necessary first step to raise taxpayers' confidence in EU financial
management.
- The budget
reform must draw up new overall principles and rules on how a
supranational instrument like the EU budget should be implemented,
controlled and audited and how discharge could be granted - or not - in a
more meaningful way.
- One of these
new principles could be the introduction of a "tolerable risk of
error" as proposed by the Court and the
Commission.
Your rapporteur deals with this question in more detail in working
document No 2.
- It could be
recalled that the EU is above all an intergovernmental entity and that the
current discharge procedure does not allow holding national ministers
accountable, at the Union level, for actions or inactions in their
capacities as members of the EU Council.
- In an attempt
to remedy this situation, which from an accountability point of view is
most dissatisfactory, your rapporteur would like to invite the Commission
to consider sending a copy of any recovery letter together with any letter
announcing financial sanctions to the national parliament concerned. There
may also be good reasons to review the roles of national administrations
and the EU as regards auditing, control and discharge.
Objectives:
1) No policy without full accountability
- Accountability
is a fundamental democratic value and an essential matter for the budget review
as seen by this committee.
- Your
rapporteur's initial key message is that the budget reform should
create a situation in which there will be no policy without full
accountability.
- This means
that full acceptance of responsibility for the implementation by the body
charged with the implementation should be an indispensable part of the
policy design and decision just as the objectives, the amount of money and
the specific legal act. The correctness and effectiveness of the
"acceptance of responsibility" should further be verified by an
independent assessment.
- In order to
achieve this situation your rapporteur expects the Commission to analyse
the following questions:
1)
What has the Commission learned from past
experience about requirements to be set for regular budget implementation?
Which principles
should guide the development and adoption of future expenditure programmes?
2)
What has the Commission learned about
"efficient and effective management" of the budget?
Can shared
management be improved? If not what are the alternatives?
3)
Which accountability arrangements does the
multilayered Union need?
Member States
set to a very high degree the course of the Union. This gives the Union a multilayered governance structure but not a similar accountability structure.
Can the current
accountability arrangements be developed to match the multilayered governance
structure?
What role could
Member States' Supreme Audit Institutions play in this context?
2) Improved effectiveness and efficiency
of policy delivery
- As mentioned,
accountability is an essential issue in the budget review for this
committee, but 'accountability' is not an objective in itself. It is first
and foremost a tool to improved delivery, an analysis which allows for
changes in management and policy in order to make better use of scarce
resources.
- The legality
of spending should not override 'value for money' aspects of the spending.
The opposite should not be the case either. Therefore, another essential
element of the budget review is to assess the effectiveness and efficiency
of policy delivery.
- Your
rapporteur expects the Commission to present proposals on ways to improve
the effectiveness and the efficiency of the Union's policies. This would
probably imply a radical change in the current budgetary behaviour where
discussions on future financial perspectives normally begin with the
overall amount of resources to be put at the disposal of the EU budget
instead of an examination of the proposed policies, the 'delivery' costs
and the objectives to be achieved.
ANNEX
1
3. DECLARATION ON THE REVIEW OF THE
FINANCIAL FRAMEWORK
1. In accordance with the conclusions of
the European Council, the Commission has been invited to undertake a full,
wide-ranging review covering all aspects of EU spending, including the Common
Agricultural Policy, and of resources, including the United Kingdom rebate, and
to report in 2008/2009.
That review should be accompanied by an
assessment of the functioning of the Interinstitutional Agreement.
The European Parliament will be associated
with the review at all stages of the procedure on the basis of the following
provisions:
— during the examination phase following
the presentation of the review by the Commission, it will be ensured that
appropriate discussions take place with the European Parliament on the basis of
the normal political dialogue between the institutions and that the positions
of the European Parliament are duly taken into account,
— in accordance with its conclusions of
December 2005, the European Council ‘can take decisions on all the subjects
covered by the review’. The European Parliament will be part of any formal
follow-up steps, in accordance with the relevant procedures and in full respect
of its established rights.
2. The Commission undertakes, as part of
the process of consultation and reflection leading up to the establishment of
the review, to draw on the in-depth exchange of views it will conduct with
European Parliament when analysing the situation. The Commission also takes
note of the European Parliament's intention to call for a conference involving
the European Parliament and the national parliaments to review the own-resources
system. It will consider the outcome of any such conference as a contribution
in the framework of that consultation process. It is understood that the
Commission's proposals will be put forward entirely under its own
responsibility.