A4-0268/98

Resolution on the interest earned on funds from the Community budget

The European Parliament,

- having regard to its resolution of 10 April 1997 containing the comments which form part of the decision giving discharge to the Commission in respect of the implementation of the general budget of the European Union for the financial year 1995 ((OJ C 132, 10.4.1997, p. 137.)),

- having regard to Rule 148 of its Rules of Procedure,

- having regard to the report of the Committee on Budgetary Control (A4-0268/98),

A. whereas what are often enormous sums of money are transferred from the Union budget to economic areas, public authorities and economic and social groups,

B. whereas such transfers often result in monies being left in the hands of third parties and not being used for the purposes of the measures being funded, owing to two main factors:

- delays on the part of the intermediaries in making funds available to the final recipients,

- irregularities in the implementation of the measures being funded, as a result of which the amounts unduly paid must be returned,

C. whereas the possession of monies which may be used for purposes other than those of the measures being funded constitutes improper enrichment of the third party concerned and is damaging to the Community's financial interests in terms of lost interest earnings,

D. whereas this unwarranted situation is brought about by the piecemeal nature of the existing legislation; whereas it is therefore necessary to lay down, in respect of the main budget sectors, comprehensive provisions governing:

a) the ownership of interest earned on the sums transferred between the moment of payment and the moment of use or repayment into the Community budget,

b) the allocation of such interest,

Common agricultural policy

1. Notes that, in cases where undue payments need to be recovered following the clearance of accounts, huge sums remain in the hands of the recipients up to the due date specified in the recovery order, leading to the loss of interest earnings which can run into hundreds of millions of ecus;

2. Calls therefore on the Commission to submit proposals for the amendment of the Financial Regulation, the implementing provisions and the sectoral legislation, with a view to providing for the reimbursement of interest earned by beneficiaries from the date on which undue payment was made;

Structural policies

3. Notes that the problem of recovering interest earned from the date of payment also arises in connection with net financial corrections regarding Structural Fund assistance;

4. Points out, furthermore, that in this sector there is the additional problem of delays on the part of the designated authorities in making funds available to the final beneficiaries, which enable them to earn interest which may be used for non-structural purposes (to cover an authority's own administrative costs, etc.);

5. Calls therefore for the new Structural Fund and Cohesion Fund regulations to provide for:

a) the repayment into the Union budget of interest accruing, as of the date of payment of the initial advance, on monies which are the subject of net financial corrections;

b) the compulsory use of interest earned as a result of late payment to final beneficiaries for the same purposes as the assistance measure, together with the requirement that a final report be made to the Commission;

Internal policies

6. Points out that, when undue payments are made, the recovery order should cover both the principal and any interest unduly earned thereon prior to the due date specified in the recovery order, and calls on the Commission to take appropriate action towards that end;

7. Reiterates its full support for the provision contained in the proposal for the amendment of the Financial Regulation, which the Commission redrafted at Parliament's behest, under which intermediaries are obliged to open interest-bearing accounts and the interest thus generated is owned by the Commission, which shall use it for the same purposes as the principal; calls for that provision to be included, where appropriate, in the sectoral regulations on the various internal policies;

External policies

8. Draws attention to the fact that Article 111 of the Financial Regulation requires that interest on the deposits in external aid accounts be used exclusively for the projects concerned;

9. Notes however that, with a view to ensuring the proper use of the interest generated, all financing agreements should be based on the principles of interest-bearing accounts, compulsory reporting to the Commission and prior Commission authorization for the use of such interest;

Loans

10. Calls on the Commission to include explicit clauses on the opening of ad hoc interest-bearing accounts and Commission ownership of such interest in all agreements concluded with public or private financial institutions, applying to both operational and administrative expenditure;

11. Points out that the ownership and proper use of interest earned on Community funds are not merely technical issues but are of the utmost relevance to the principle of sound management and the protection of the Union's financial interests;

12. Calls therefore on those in charge of the SEM 2000 programme to consider how best to give concrete expression to the legislative and administrative measures called for by Parliament;

13. Instructs its President to forward this resolution to the Commission, the Council and the group of personal representatives of finance ministers responsible for monitoring the progress of the SEM 2000 programme.