New financial rules applicable to the general budget of the European Union. Impact on local and regional authorities

In December 2016, the European Commission launched the mid-term review/revision (MTR) of the EU budget, which resulted in a large number of proposed amendments to the Regulation on the financial rules applicable to the general budget of the Union and other related EU regulations. These aimed to improve the implementation of the EU budget during the current Multiannual Financial Framework (MFF) period (2014-2020), in response to the numerous extraordinary challenges that had emerged since the latest budget was adopted.

Contrary to expectations, however, the proposals did not present fundamental changes to the current budget structure. The proposals have placed considerable pressure on lawmakers given the sheer number of reforms called for, many of which attempt to improve delivery through a process of simplification.

It is difficult to understand the implications of the proposals for local and regional authorities (LRAs), because many authorities have not yet been able to adopt and/or adapt all of the existing rules. This report first explores the causes that have undermined the ability of the EU budget to address modern challenges. It then attempts to identify the main impact of the proposals on LRAs, through an in-depth review and analysis of the latest documentation, supplemented by personal interviews with key local, national and regional authorities.

A main finding is that past reforms have made the implementation of programmes and the achievement of goals excessively complex for managing authorities (MAs) and beneficiaries.

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