EU cuts red tape for awarding EU funds

New implementing rules for EU funds, set up today by the European Commission, will simplify access to EU funding and cut associated administrative burdens, particularly for smaller businesses.

For the first time, the new set of financial rules – to better use EU funds for the period 2007-2013 financial framework – also stipulate that the names of the beneficiaries of all EU funds should be made public.

The New Financial Regulation accompanies a new generation of EU funding programmes worth EUR 975 billion over a seven year period. The Commission says that cutting red tape will facilitate access to these funds.

Small and medium-sized enterprises (SMEs), as well as schools, universities, development agencies and local authorities, stand to reap the most benefit from the changes. These offer practical improvements for both grants and public contracts, and include:

• Grants of up to EUR 25,000 require less documentation.
• Work done by staff may replace cash co-financing for grants.
• The financial guarantees required for grants below EUR 60,000 prior to initial payment may be waived, after having assessed the financial risk.
• Purchases of up to EUR 60,000 using grant money may be made with the minimum of rules to be respected, only the principle of sound financial management and the absence of conflict of interests will be required.
• Higher threshold (EUR 60,000 instead of EUR 50,000) for award of public contracts with simplified purchasing procedures.
• Higher threshold to allow organisations competing for low-value EU contracts to make a simple declaration on their honour, replacing complex evidence showing no previous malpractice convictions.
• Simplifications for award of public contracts in the field of external aid with much higher thresholds (up to EUR 5,000,000 for works).

Parallel with the easing of rules come more “transparency and improved control”, in order to help protect the EU’s financial interests. In future, the names of all beneficiaries of structural funds and external aid programmes (as of 2008) and agricultural subsidies (as of 2009) will have to be disclosed to public view in all EU Member States.

To prevent fraud and corruption, the Commission says it will also share an expanded central database of organisations excluded from EU funding between all EU Institutions and Member States authorities. This database will contain all relevant information on entities condemned for fraud or corruption in the Member States and third countries involved in the implementation of EU programmes.

The new rules will apply as of 1 May 2007.