A very short, minor modifying decision was quietly eased out by the European Commission on Wednesday. Nothing so unusual about that, you might think. Happens all the time. However, this decision was unusual, by anyone's standards.
The decision increased the amount of closure flexibility for 2000-2006 Structural Funds programmes from 2% to 10%. To explain a little: Structural Fund programmes are divided into priorities and the amount of money available in each priority is fixed. It could be modified up to 2006 but not after. The closure flexibility allows programmes which have slightly overspent in one priority to be able to claim that overspend from the Commission, provided it is balanced with an underspend in another priority.
Of course, the word "slightly" was only appropriate when the flexibility was 2%. With the new decision allowing five times that amount, the correct adverb is now " massively". The 2% flexibility was fair - projects inside priorities often underspend, and well managed programmes will budget for this by slightly (that word again) overcommitting funds per priority. A 10% flexibility basically allows extremely poorly managed programmes to cover huge spending gaps in their finances and drives a coach and horses through any kind of attempt to ensure sound financial management.
More worryingly, the whole saga seems to suggest that the Commission has lost a degree of its independence vis-a-vis the Member States. The Commission is supposed to be the guardian of the treaties - not the bender of rules to assist incompetent Member States to recover funds. It fits into a wider pattern, with the current comprehensive revision exercise on the Structural Funds regulations being carried out in the name of the world financial crisis when it has nothing to do with that at all - as can be seen by some of the proposed changes being pushed by the Member States. Someone, somewhere needs to lift their head up from the short-term and look at the medium- and long-term damage being done to cohesion policy through incessant tinkering with rules and kow-towing to Member State demands.
The decision increased the amount of closure flexibility for 2000-2006 Structural Funds programmes from 2% to 10%. To explain a little: Structural Fund programmes are divided into priorities and the amount of money available in each priority is fixed. It could be modified up to 2006 but not after. The closure flexibility allows programmes which have slightly overspent in one priority to be able to claim that overspend from the Commission, provided it is balanced with an underspend in another priority.
Of course, the word "slightly" was only appropriate when the flexibility was 2%. With the new decision allowing five times that amount, the correct adverb is now " massively". The 2% flexibility was fair - projects inside priorities often underspend, and well managed programmes will budget for this by slightly (that word again) overcommitting funds per priority. A 10% flexibility basically allows extremely poorly managed programmes to cover huge spending gaps in their finances and drives a coach and horses through any kind of attempt to ensure sound financial management.
More worryingly, the whole saga seems to suggest that the Commission has lost a degree of its independence vis-a-vis the Member States. The Commission is supposed to be the guardian of the treaties - not the bender of rules to assist incompetent Member States to recover funds. It fits into a wider pattern, with the current comprehensive revision exercise on the Structural Funds regulations being carried out in the name of the world financial crisis when it has nothing to do with that at all - as can be seen by some of the proposed changes being pushed by the Member States. Someone, somewhere needs to lift their head up from the short-term and look at the medium- and long-term damage being done to cohesion policy through incessant tinkering with rules and kow-towing to Member State demands.
