(1)

Regulation (EC) No 2004/2003 of the European Parliament and of the Council of 4 November 2003 on the regulations governing political parties at European level and the rules regarding their funding (1) lays down, inter alia, rules governing the financing of political parties at European level from the general budget of the European Union.

(2)

Article 12 of Regulation (EC) No 2004/2003 provides that the European Parliament is to publish a report on the application of that Regulation, including — where appropriate — possible amendments to be made to the funding system.

(3)

In its Resolution of 23 March 2006 on European political parties (2), the European Parliament considered that, in light of experience gained since its entry into force in 2004, Regulation (EC) No 2004/2003 should be improved as regards a number of points.

(4)

The rules governing the financing of political parties at European level should be adapted to take better account of the special conditions under which political parties operate, including shifting political challenges and agendas creating budgetary impacts that political parties cannot predict when drawing up their annual work programmes and budgets. To that end limited possibilities to carry over funding from one year to the first quarter of the following year should be introduced.

(5)

In order to enhance parties' long-term financial planning capabilities, to take account of funding needs that vary from one year to another, and to strengthen the incentives for parties not to rely on public funding alone, political parties at European level should be allowed to establish limited financial reserves based on own resources generated from sources other than the general budget of the European Union. The abovementioned derogations from the non-profit rule should be exceptional and should not constitute a precedent.

(6)

Council Regulation (EC, Euratom) No 1605/2002 (3) should be amended accordingly,