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.
5 comments:
I do agree with you when you say those changes have barely anything to due with the current financial crisis. Nevertheless, I do think any extra-flexibility offered to handle and manage structural funds is welcome. Flexibility and simplification should be constant priorities and not just when the house is burning...
I am all for flexibility and simplification, but it has to be real and it has to be introduced at the start of a programming period, not at the last minute.
Also, I think it is a balance issue. Flexibility should not equal free-for-all. Without the programme framework, the Member States can just throw money at projects any old way. I just think 10% is way too generous.
Dear Border-Crosser,
c'mon on! We all know why the 10% rule came in instead of the 2% limit. Something to do with one of our southern European programmes! A few phone calls later, and hey presto, we change the rules. And as I think you might be a little closer to the centre of power than you let on (and have become even closer recently!) can we ensure that there are fewer 'surprises' in the 2007-2013 programmes please.
Well, anonymous, I don't think anything I wrote contradicts your comments. You are just a little bit more explicit about the cause than I was! In any case, it was not so much why it was done which upset me - more the fact that it was done at all. The Commission should just have said no.
The 10% issue, coupled with the "simplification" exercise for the current period, risk being seen as part of semi-permanent modification process. Again, genuine, clear simplification introduced at the beginning of a programming period - fine. However, neverending tinkering with regulations in the first half of programme period has simply created endless confusion for those implementing programmes and projects, and risks producing significant legal uncertainty for all.
So much for all the bullshit about "strategic projects" in the 2007-2013 programs. Has anybody ever seen one? Rarer than the Loch Ness sightings and less credible too (as a scot you should be familiar with that).
To date the States and the Commisison have only intervened to 'adjust' and in fact complexify regulations. For example the 438/2001 must have been to clear and simple so it had to be abandoned I suppose.
The fact is that practically nobody actually knows or understands what a cooperation program is and what it can actually achieve. In general State and Commission representatives are COMPLETELY OUT OF THEIR DEPTH and CLUELESS.
I only hope that the Irish will kill this new treaty and begin the dis-integration process so that we can get rid of the club med economic holes and the ultra liberal eastern nuts. Europe is dead, long live Europe.
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