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Financial rules governing the EU budget

This summary has been archived and will not be updated. See 'New financial rules governing the EU budget (Financial Regulation)' for an updated information about the subject.

Financial rules governing the EU budget

SUMMARY OF:

Regulation (EU, Euratom) No 966/2012 — financial rules governing the EU budget

SUMMARY

WHAT DOES THIS REGULATION DO?

  • The financial regulation sets out the operating principles and basic rules governing the EU budget.
  • The technical details are laid down in the rules of application adopted by the European Commission.

KEY POINTS

The financial regulation which, together with the rules of application, has applied since 1 January 2013, revises earlier rules in order to make EU funds simpler, more accountable and more effective for beneficiaries such as businesses, NGOs, researchers and others.

Overall, the changes focus on 3 areas:

  • 1.

    Simplification: cutting red tape, speeding up procedures and shifting the focus from paperwork to performance, for example, shorter payment deadlines for beneficiaries, clearer timelines and indicative deadlines for funding applications, and multiannual rather than annual work programmes on how future EU funds will be spent.

  • 2.

    Accountability: ensuring enhanced sound financial management and the protection of the EU’s financial interests, for example, ensuring that EU countries take greater responsibility for their management of EU funds, and streamlining and harmonising the implementation of EU funds by, among others, EU countries’ national agencies, non-EU countries and international organisations.

  • 3.

    Innovation: using various financial mechanisms such as loans, equity, and guarantees which will help multiply the impact of EU funds. Other innovations include more prizes awarded by the European Commission for innovative solutions to problems, and facilitating the establishment of trust funds from both EU and non-EU donors.

The Rules of application are set out in Commission Delegated Regulation (EU) No 1268/2012 and cover a range of aspects of the implementation of the Financial Regulation including budgetary principles and the establishment and structure of the budget.

Regulation (EU, Euratom) 2015/1929 amends Regulation (EU, Euratom) No 966/2012 to align the EU institutions’ procurement procedures with the new rules applicable to EU countries that are set out in Directives 2014/23/EU and 2014/24/EU. Among other things, the regulation requires:

  • EU institutions must meet certain obligations in regard to environmental, social and labour law by making these part of their minimum requirements in the contracts that they sign,
  • the Commission to set up a single early detection and exclusion system to protect the EU’s financial interests.

FROM WHEN DOES THE REGULATION APPLY?

It applies from 1 January 2013.

BACKGROUND

Financial regulation and rules of application

ACT

Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, pp. 1–96)

Successive amendments to Regulation (EU, Euratom) No 966/2012 have been incorporated in the original text. This consolidated version is of documentary value only.

RELATED ACTS

Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ L 362, 31.12.2012, pp. 1–111). See consolidated version.

last update 24.02.2016

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