REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the financial year 2016 (Summary)
Date: 2018-07-17
Institutions: Directorate-General for Budget, European Commission
Subjects: EU control, EU expenditure, audit, budgetary control, budgetary discharge, budgetary resources, financial year, general budget (EU), management audit, multiannual financial framework

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.7.2018  COM(2018) 545 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the financial year 2016 (Summary)  
 
 
REPORT ON THE FOLLOW-UP TO THE REQUESTS MADE BY THE EUROPEAN PARLIAMENT IN 
ITS DISCHARGE RESOLUTIONS AND THE COUNCIL IN ITS DISCHARGE RECOMMENDATION FOR 
THE FINANCIAL YEAR 2016 

INTRODUCTION 

Continuous  efforts  by  the  Commission,  Member  States  and  other  partners 
involved  in  managing  the  EU  budget  have  led  to  a  sustained  improvement  in 
financial management over the last years. This was confirmed by the fact that the 
European  Court  of  Auditors  in  its  2016  Annual  report  -  for  the  first  time  since  it 
began to provide an annual statement of assurance in 1994  - issued a qualified and 
not an adverse opinion on the legality and regularity of the payments. About half of 
the  EU  spending  audited  was  below  the  2%  threshold  for  a  material  level  of  error. 
The level of error dropped within all policy domains.  

The  European  Parliament  and  the  Council  examined  the  Annual  report  and  other 
relevant  reports  from  the  European  Court  of  Auditors  as  well  as  the  Commission's 
Integrated  Financial  Reporting  Package.  In  addition,  the  European  Parliament 
exchanged  views  with  selected  Commissioners,  the  Secretary-General  of  the 
Commission and Directors-General, and it received replies to more than 450 written 
questions.  

On  18  April  2018,  the  European  Parliament  –  on  a  recommendation  by  the 
Council – granted the Commission discharge for the financial year 2016.  

Discharge  is  the  process  by  which  the  European  Parliament  and  Council  scrutinise 
the  implementation  of  the  EU  budget  and  hold  the  Commission  accountable  for its 
financial management. It also offers an opportunity for all stakeholders to reflect on 
past developments and identify weaknesses to be addressed as well as good practices 
to be spread with the aim of further improving financial management and achieving 
even better results with the EU budget in the future.  

The  2016  discharge  offered  a  particularly  good  opportunity  to  learn  from  the 
past to improve the future as it took place in parallel with the reflection process for 
the next Multiannual Financial Framework.  

On  the  basis  of  the  reports  of  the  European  Court  of  Auditors,  the  Commission's 
reports  on  the  management  and  performance  of  the  EU  budget,  and  exchanges  of 
views  with  Commissioners,  the  European  Parliament  set  out  political  priorities 
which  were  very  much  forward-looking.  These  priorities  are  to  a  quite  large 
extent  reflected  in  the  Commission's  proposal  for  the  Multiannual  Financial 
Framework for 2021-2027 which is based on the following principles: 

  A stronger focus on European added value; 

  A more streamlined and transparent budget; 

  Less red tape for beneficiaries; 

  A more flexible, agile budget; 

  A budget that performs. 

The Commission's proposals for the future Multiannual Financial Framework and the 
underlying  financial  programmes  focus  on  delivering  results  (performance)  while 
ensuring strong financial management (compliance).  

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The performance framework for the EU budget was already improved in the 2014-
2020 programmes but more needs to be done. For this reason, in its proposals for the 
2021-2027  programmes,  the  Commission  proposes  to  strengthen  the  focus  on 
performance  across  all  programmes,  including  by  setting  clearer  objectives  and 
focusing  on  a  smaller  number  of  higher  quality  performance  indicators.  This  will 
make it easier to monitor and measure results and to make changes when necessary. 

The Commission will do its utmost to ensure that rules are continuously simplified, 
financial  risks  addressed  in  a  proactive  manner,  and  the  EU  budget  ultimately 
protected.  This  commitment  has  led  to  a  further  reduction  in  the  Commission's 
overall  amount  at  risk,  which  for  the  2017  reporting  year  is  estimated  to  be 
below 2%1 - it is also reflected in the proposals for the future financial programmes. 

This  report  provides  a  summary  of  the  Commission's  follow  up  on  the  key 
requests  made  by  the  European  Parliament  and  the  Council  in  the  2016 
discharge  and  is  part  of  the  Integrated  Financial  Reporting  Package  for  the 
financial year 2017. It focusses in particular on: 1) Political priorities, 2) Budgetary 
and  financial  management,  3)  Performance,  4)  Revenue,  5)  The  inclusion  of  the 
European Development Fund in the general budget and 6) Speeding up the discharge 
procedure. 

More  detailed  replies  to  the  specific  discharge  requests  made  by  the  European 
Parliament and Council, including requests made in relation to special reports of the 
European Court  of Auditors  also  covered by the 2016 discharge procedure, will be 
published at a later stage. 

1. 

POLITICAL PRIORITIES  

In  the  general  discharge  resolution  for  the  2016  discharge  year,  the  European 
Parliament highlights its political priorities. They were extensively discussed during 
the  discharge  procedure,  in  particular  with  the  rapporteur  and  the  Members  of  the 
Budgetary  control  committee.  In  the  letter  by  Commissioner  Oettinger  on  28 
February  2018,  evidence  was  given  of  the  Commission’s  formal  commitment  to 
implement fully and timely a series of actions and measures. A large part of them are 
linked  to  the  next  Multiannual  Financial  Framework  and  the  legislative 
proposals presented by the Commission in May and June 2018.  

These proposals are based on the results of a comprehensive spending review which 
helped the Commission to identify what has worked well in the past and what should 
be preserved, but also revealed where reform is needed to unlock the full potential of 
the EU budget.  

As  for  the  requests  linked  to  the  next  Multiannual  Financial  Framework,  the 
Commission has addressed in its proposals the following issues: 

As regards the alignment of policy objectives, financial cycles with the duration 
of the mandates of the European Parliament and the Commission, the proposed 
Financial  Framework  will  run  for  seven  years,  from  2021  to  2027,  with  a  midterm 
review in 2023, which will give the opportunity to make any necessary adaptations. 
Whilst  the  Commission  recognises  the  merit  of  progressively  synchronising  the 
duration of the Multiannual Financial Framework with the five-year political cycle of 

1 COM(2018) 457 final 

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the  European  institutions,  moving  to  a  five-year  cycle  in  2021  would  not  offer  an 
optimal alignment. The proposed seven-year cycle will give the Commission taking 
office  following  the  European  elections  of  2024  the  opportunity  to  present  a  new 
framework with a duration of five years, starting in 2028. 

The  European  Parliament  also  stressed  that  the  EU  budget  should  be  a  true 
European  added  value  budget,  aiming  for  common  European  Union  objectives 
promoting sustainable economic and social development of the whole Union, which 
cannot be achieved by individual Member States on their own. By pooling resources 
at European level, Member States can achieve more than they could by acting alone. 
The  EU  budget  complements  national  budgets  and  a  wide  array  of  legislative  and 
regulatory  instruments  to  support  shared  objectives,  to  help  tackle  common 
challenges and to implement European policies. European action will be taken when 
it is more effective and efficient than national, regional or local action.  

European added value is thus about achieving the objectives set out in the Treaty and 
helping  to  uphold  fundamental  values,  rights  and  freedoms.  It  is  also  one  of  the 
building blocks of the Commission’s Better Regulation framework. The assessment 
of EU added value, following the criteria set out in the Reflection Paper on the future 
of the EU finances2 was an integral part of the impact assessment process for future 
financial programmes, as well as one of the main guiding principles while designing 
the  next  Multiannual  Financial  Framework.  The  communication  accompanying  the 
Multiannual  Financial  Framework  proposal  describes  each  new  programme 
including its European added value. 

As for the long-term budget for the Union’s priorities, the new proposals bring 
the structure and the programmes of the EU budget fully into line with the positive 
agenda of the Union post-2020 as agreed by the Leaders of the 27 Member States in 
Bratislava and Rome. In this context performance is put at the core of the EU budget. 

The  new  architecture  of  the  future  Multiannual  Financial  Framework  provides 
greater transparency on what the EU budget is for and how the different parts of the 
budget  will  contribute.  It  also  provides  the  flexibility  necessary  to  respond  to 
evolving  needs.  Programmes  are  arranged  around  the  main  thematic  spending 
priorities.  Within  each  priority,  programmes  are  grouped  in  policy  clusters,  which 
will  be  reflected  in  the  titles  of  the  annual  budget.  This  provides  greater  clarity  on 
how they will contribute to policy goals. 

The EU budget will invest even more in areas where one single Member State cannot 
act  alone  or  where  it  is  more  efficient  to  act  together  such  as  research,  migration, 
border  control  or  defence,  whilst  continuing  to  finance  traditional,  but  modernised 
policies, such as Common Agricultural Policy and Cohesion Policy. 

In  order  to  further  simplify  rules,  the  Commission  proposes  to  make  rules  more 
coherent  on  the  basis  of  a  common  rulebook.  This  will  reduce  the  administrative 
burden for beneficiaries and managing authorities while maintaining a high level of 
assurance of legality and regularity. It will facilitate participation in EU programmes 
and  accelerate  implementation.  It  will  make  it  easier  for  different  programmes  and 
instruments to work together to boost the impact of the EU budget. In addition, the 
Commission proposes to simplify and streamline State aid rules to make it easier to 
link up instruments from the EU budget with national funding. The new Multiannual 

2

 Available at : https://ec.europa.eu/commission/sites/beta-political/files/reflection-paper-eu-finances_en.pdf 

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Financial  Framework  offers  as  well  complementarity  and  flexibility  between 
programmes and streamlining the use of financial instruments. 

The  European  Parliament  called  on  the  Commission  to  speed  up  the  delivery  of 
Cohesion policy with a view to reducing the length of the implementation period 
to  year  n+2  (as  opposed  to  the  n+3  rule  applicable  in  2014-2020).  The 
Commission’s  proposal  will  lead  to  tighter  financial  management  and,  combined 
with the possibility of phasing 2014-2020 projects, a quick start of the programming 
period. Taking into account the importance of commitments remaining to be paid out 
from the 2014-2020 period, the pre-financing rate will be lowered. 

The  new  Multiannual  Financial  Framework  as  proposed  by  the  Commission  gives 
support to the work of national authorities to provide reception to asylum seekers and 
migrants  in  the  period  immediately  after  arrival  on  EU  territory,  as  well  as 
developing  a  common  asylum  and  migration  policy  and  ensuring  effective  returns. 
The  Asylum  and  Migration  Fund  will  be  complemented  by  the  European  Social 
Fund Plus, which will provide support for the long-term integration of migrants. The 
monitoring  and  evaluation  framework  will  be  improved  to  track  delays  in  the 
implementation  of  national  programmes,  take  remedial  actions  and  adjust  future 
policy interventions where necessary. Ways to strengthen monitoring and evaluation 
include  improving  the  indicators,  managing  the  Fund  in  closer  cooperation  with 
partners and performing a mid-term performance review. 

A  modernised  Common  Agricultural  Policy  is  proposed  for  2021-2027.  The 
Commission's proposal allows a fully integrated Single Market for agricultural goods 
in the EU, access to high quality, affordable, nutritious and diverse food with greater 
emphasis  on  the  environment  and  climate.  It  will  support  the  transition  towards  a 
fully sustainable agricultural sector and the development of vibrant rural areas.   

The reformed policy will continue to be built around two pillars: direct payments to 
farmers and rural development funding with flexibility between them. 

However, the Commission proposes to introduce a new delivery model, shifting from 
today’s  compliance-based  policy  to  a  result-oriented  policy  to  deliver  on  common 
objectives set at EU level but more flexibly implemented at national level. 

Direct payments to farmers will be streamlined and better targeted. A more balanced 
distribution  will  be  promoted  and  a  compulsory  cap  on  amounts  received  or 
degressive payments will be introduced at farm level. This will mean that support is 
redistributed  towards  medium-sized  and  smaller  farms,  and  possibly  to  rural 
development.  

To  meet  this  challenge  the  Common  Agriculture  Policy  will  be  simplified  with  a 
minimum  of  administrative  burden,  and  made  even  more  coherent  with  other  EU 
policies to maximise its contribution. 

More  broadly, in  line  with  the Paris Agreement  and  the commitment to  the United 
Nations  Sustainable  Development  Goals,  the  Commission  proposes  to  set  a  more 
ambitious  goal  for  climate  mainstreaming  across  all  EU  programmes,  with  a 
target of 25% of EU expenditure contributing to climate objectives.  

The  European  Fund  for  Regional  Development  and  the  Cohesion  Fund  will 
contribute  to  reducing  disparities  between  Member  States  and  regions.  The 
Commission  proposes  to  focus  on  the  five  key  policy  objectives  of  a  Smarter, 
Greener, more Connected, more Social and closer to citizens Europe. The proposals 
allow  for  more  flexibility  in  the  design  of  individual  EU  funded  programmes,  in 

4 

 
 
order to better tailor them to specific regional needs but also respond to unforeseen 
events. 

The  European  Social  Fund  Plus  aims  to  create  a  more  performing  and  resilient 
‘Social Europe’ and implement the European Pillar of Social  Rights, as well as the 
social  and  employment  priorities  endorsed  by  the  European  economic  governance 
process.  This  fund  will  merge  the  European  Social  Fund,  the  Youth  Employment 
Initiative,  the  Fund  for  European  Aid  to  the  Most  Deprived,  the  Employment  and 
Social Innovation Programme and the Programme for the Union’s action in the field 
of  health.  The  concentration  of  available  resources  within  this  new  single, 
comprehensive  instrument  allows  for  an  enhancement  of  the  synergies  between 
complementary  EU  instruments,  and  for  a  simplification  of  fund  programming  and 
management, 
the  administrative  burden  for  authorities  and 
beneficiaries.   

thus  reducing 

The objectives of the European Fund for Regional Development, the Cohesion Fund 
and the European Social Fund Plus will be more closely aligned with the European 
Semester of economic policy coordination. The detailed analysis of Member States' 
challenges  in  the  context  of  the  European  Semester  will  serve  as  a  basis  for  the 
programming of the funds at the start and at mid-term of the next period. This will 
serve as the roadmap for the short, mid- and long-term planning and monitoring of 
the  funds.  A  system  of  ex-ante  conditionalities  and  macro-economic  conditionality 
will be maintained, but made simpler. Through the European Semester process, the 
Commission  and  the  Member  States  will  ensure  coordination  and  complementarity 
of  financing  from  cohesion  policy  funds  and  the  new  Reform  Support  Programme 
with regard to the support to structural reforms. 

A  simplified  and  more  effective  approach  to  delivery  is  a  key  element  of  the 
proposals  including:  a  common  rulebook  covering  7  EU  funds  implemented  in 
shared  management3  facilitating  synergies,  reduction  of  administrative  burden 
(increased  availability  of  simplified  cost  options  for  beneficiaries),  more 
proportionate  audits  and  controls  (lighter  system  of  control  for  programmes  with 
good track records, extension of the single audit principle) flexibility in the form of 
an  in-depth  mid-term  review  to  adjust  investment  decisions,  if  necessary,  and 
increased  use  of  financial  instruments  including  trough  a  voluntary  participation  in 
the new centrally managed InvestEU Fund. 

For the European Structural  and Investment Funds, new reporting  requirements for 
Member States will allow citizens to follow the progress of implementation almost 
in real time on the Open Data Platform launched in the 2014-2020 period.  

In  relation  to  the  possibility  for  authorities  designated  or  accredited  to  fulfil 
management,  certification  and  audit  functions  during  the  period  2014-2020,  the 
Commission has proposed to roll-over the current management and control systems 
which proved to function well.  

Concerning  Research  and  Innovation,  the  new  European  research  programme, 
Horizon  Europe  will  continue  to  promote  research  excellence  and  strengthen  the 
focus  on  innovation,  through  the  development  of  prototypes,  intangible  assets, 
knowledge  and  technology  transfer.  A  new  European  Innovation  Council  will 

3 Including the Cohesion Fund, European Social Fund Plus, European Maritime and Fisheries Fund, European Regional Development Fund, 
Asylum and Migration Fund, Border Management and Visa Instrument, Internal Security Fund 

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provide a one-stop shop for high potential and disruptive innovators, aiming to make 
Europe a front-runner in market creating innovation. 

Building on the success of the European Fund for Strategic Investments in catalysing 
private  investments  throughout  Europe,  the  Commission  proposes  to  set  up  a  new, 
fully  integrated  investment  fund,  InvestEU.  With  the  European  Investment  Bank 
Group  as  the  main  implementing  partner  and  other  partners  such  as  National 
Promotional Banks contributing to the delivery, InvestEU will anchor all centrally 
managed  budgetary  guarantee  and  financial  instruments  inside  the  EU  in  a 
single, streamlined structure.  

This  new  approach  will  reduce  overlaps,  simplify  access  to  funding  and  reduce 
administrative burden.  

2. 

BUDGETARY AND FINANCIAL MANAGEMENT  

Two  requests  made  by  the  European  Parliament  and  already  covered  by  the 
Communication on the next Multiannual Financial Framework relate to the issue of 
whether or not special instruments are counted within the ceilings for payment 
appropriations  in  the  Multiannual  Financial  Framework  and  a  better  balance 
between predictability and responsiveness of the EU budget. 

On  the  first  issue,  the  proposed  Regulation  laying  down  the  Multiannual  Financial 
Framework for the years 2021 to 2027 specifies clearly that both commitments and 
payments  appropriations  mobilised  for  special  instruments  shall  be  entered  in  the 
budget  over  and  above  the  relevant  MFF  ceilings.  Also,  the  Commission  has 
reviewed the scope of special instruments such as the Emergency Aid Reserve, the 
European Union Solidarity Fund and the European Globalisation Adjustment Fund. 
The Commission proposes, where appropriate, to widen the scope of the instruments, 
for  instance  by  allowing  the  activation  of  the  Emergency  Aid  Reserve  for 
emergencies  inside  the  EU.  The  Commission  also  proposes  to  streamline  the 
procedures for mobilising these instruments. 

On the second issue, and in  order  to respond  quickly  and effectively  to unforeseen 
demands, the Commission is proposing to make the budget more agile by removing 
the constraints on built-in Multiannual Financial Framework flexibility as well as to 
increase the size of the flexibility instrument to EUR 1 billion (in 2018 prices) per 
year.  

This  includes  increasing  flexibility  within  and  between  programmes,  strengthening 
tools such as the Global Margin for Payments and the Contingency Margin as well as 
creating  a  new  “Union  Reserve”  to  tackle  unforeseen  events  and  to  respond  to 
emergencies in areas such as security and migration. 

The European Parliament also requested the Commission to provide it with a report 
about  the  indirectly  managed  and  implemented  EU  budget  by  the  European 
Investment  Bank  group  and  to  establish  annually  an  updated  long-term  cash-
flow forecasts.  

The  Commission  already  produces  a  comprehensive  annual  report  to  the  European 
Parliament  and  the  Council  on  all  financial  instruments.  It  covers  the  financial 
instruments under the 2007-2013 and 2014-2020 Multiannual Financial Frameworks, 
including  (but  not  restricted  to)  those  subject  to  implementation  via  the  European 
Investment Bank Group (European Investment Bank or European Investment Fund). 

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The report was annexed as a working document4 to the EU Draft Budget submitted 
to the budgetary authority in June 2018. 

As  for  the  request  for  long-term  cash-flow  forecasts,  Article  247(1)  of  the  new 
Financial  Regulation  sets  out  an  obligation  for  the  Commission  to  communicate 
annually  to  the  European  Parliament  and  the  Council  an  integrated  set  of  financial 
and  accountability  reports,  including  a  long  term  forecast  of  future  inflows  and 
outflows covering the next five years. In October 2017, the Commission provided its 
medium-term  forecasts  of  the  payment  requirements  resulting  from  the  2014-2020 
Multiannual Financial Framework together with the forecasted level  of outstanding 
commitments (“RAL”) at the end of 20205. 

Finally,  on  the  call  to  assist  Member  States,  which  encounter  difficulties  with 
timely  and  smooth  absorption  of  available  EU  funding,  the  Commission  has 
already taken a number of initiatives to assist Member States with timely absorption.  

Inter  alia  due  to  the  follow-up  of  the  2016  related  recommendations  from  the 
European  Court  of  Auditors  and/or  the  Discharge  Authority,  the  Commission  has 
further enhanced its management reporting. 

The Commission has further improved its segmented assurance building, especially 
in External Relations. It has also further enhanced its reporting on EU Trust Funds, 
increased  the  consistency  in  the  calculations  of  the  relevant  expenditure  and  the 
estimation  of  the  related  amounts  at  risk,  in  particular  Cohesion’s  10%  retention 
mechanism  and  annual  clearance  of  accounts,  which  are  fully  and  consistently 
embedded in the common methodology. 

As a result, for the 2017 reporting year, the main achievement is that - for the first 
time - the estimated overall amount at risk at payment is below 2%. 

Furthermore, the financial impact from the management reservations has  decreased 
as well, both in expenditure (from EUR 1.6 billion for 2016 to EUR  1.1 billion for 
2017) and in revenue (from EUR 0.5 billion to EUR 0.4 billion)6. 

3. 

PERFORMANCE 

In its Annual Report of 2016 the European Court of Auditors recommended  that the 
Commission  make  further  efforts  to  ensure  that  performance  reports  provide  a 
balanced  picture,  covering  both  programme  achievements  and  challenges 
encountered. The Commission is committed to producing balanced reports and has, 
for  example,  provided  extensive  coverage  in  its  2017  Annual  Management  and 
Performance Report on the lessons drawn from the mid-term evaluations of financial 
programmes. 

In the Commission’s proposal for the next Multiannual Financial Framework, the 
performance framework for the future programmes is significantly streamlined. 
In  particular,  the  number  of  indicators  embedded  in  spending  programmes  will  be 
drastically  reduced  and  their  quality  improved  to  ensure  consistency  (relevance  at 
programme and policy level) to be able to provide meaningful information primarily 
for  communication  and  reporting  purposes  all  along  the  programme  execution. 

4 http://ec.europa.eu/budget/library/biblio/documents/2018/DB2018_WD10_en.pdf 

5  Note  of  16  October  2017  “Forecast  of  payment  appropriations  after  2020  presented  in  accordance  with  point  9  of  the  Interinstitutional 
Agreement of 2 December 2013ˮ 

6 Available at the following address: http://www.europarl.europa.eu/cmsdata/149400/COM_COM(2018)0457_EN.pdf 

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Furthermore, the Commission proposals include provisions to set-up monitoring and 
evaluation  frameworks,  including  indicators  for  the  purpose  of  evaluations. 
Evaluations will be carried out in a timely manner to feed into the decision making 
process.  More  meaningful  performance  information  will  also  allow  programme 
managers to take better decisions on programme implementation and on the design 
of future programmes.  

In the European Parliament resolution, the Commission is requested to take political 
responsibility  in  the  Annual  Management  and  Performance  Report  for  the 
information on performance. 

In  order  to  improve  transparency  the  Commission  will  provide  information  on  the 
source  and  quality  of  data  where  available.  Given  that  a  significant  amount  of 
performance  data  is  provided  by  Member  States,  the  Commission  will  analyse  to 
what extent they provide information on the quality of performance data. 

The  Annual  Management  and  Performance  Report  relies  on  the  performance  data 
from the Annual Activity Reports and as a consequence also relies on the assessment 
done by the Commission services on the source and quality of the performance data. 
Acknowledging  the  importance  of  data  quality,  the  Commission  services  paid 
particular  attention  to  the  quality  of  performance  data  when  preparing  their  2017 
Annual  Activity  Reports.  Data  sources  are  clearly  identified  and  any  concerns 
regarding data quality clearly flagged.  

The  European  Parliament  requested  the  Commission  to  make  performance 
information  more  easily  accessible  by  developing  a  dedicated  web  portal  and 
search engine. In this regard as indicated in the reply to the 2016 European Court of 
Auditors  Annual  Report7,  the  Commission  will  strive  to  make  performance 
information more easily accessible. It is committed to carrying out an assessment to 
appraise the feasibility, the costs and the potential benefits of such a web presence. 
The  action  as  recommended  would  be  implemented  subject  to  the  outcome  of  this 
assessment.  
Under the EU Budget Focused on Results initiative, a specific EU Results website8 
has  been  developed.  This  website  is  one  of  the  first  Commission  collaborative 
projects,  which  involves  all  the  Directorates-General  and  a  number  of  agencies 
running programmes on behalf of the partner Directorates-General. The ambition is 
to communicate concrete results of projects financed from the EU budget as well as 
their geographic location. The website is a single entry point harvesting data coming 
from  a  number  of  online  sources,  which  aims  to  inform  both  stakeholders  and 
citizens about the EU budget's contribution in their immediate neighbourhood.  

By the end of 2017, the website has hosted entries on more than 1 500 EU funded 
project entries in the EU and outside. This number of entries is expected to grow in 
the near future.  

This EU Results website has been shortlisted among the best four entries registered 
for the European Ombudsman Award for Good Administration 2017, in the category 
"Excellence in communications".  

4. 

REVENUE  

7 Official Journal of the European Union C 322/115 (28.9.2017) 

8 http://ec.europa.eu/budget/budget4results/index_en.cfm 

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The  European  Parliament  resolution  requests  the  Commission  to  take  all  the 
measures  to  ensure  the  recovery  of  EU  own  resources  that  have  failed  to  be 
collected  by  the  United  Kingdom  authorities  as  to  the  import  of  textiles  and 
shoes from China, and to consider launching a timely infringement procedure.  

The  Commission  is  following  up  this  issue  very  closely,  including  during  two 
traditional  own  resources  inspections  in  2017.  Since  the  inspection  findings 
corroborated  and  further  clarified  the  findings  of  the  relevant  OLAF  report,  the 
Commission decided on 8 March 2018 to send a letter of formal notice to the United 
Kingdom  authorities.  By  this  letter,  the  Commission  initiated  an  infringement 
procedure  against  the  United  Kingdom  because,  despite  repeated  requests,  it  had 
failed  to  implement  any  of  the  measures  requested  by  the  Commission  before  12 
October 2017 and refused to make available the estimated traditional own resources 
lost because of that failure. 

The  European  Parliament  also  calls  on  the  Commission  to  analyse  in  cooperation 
with Member States all the potential implications of multiannual activities on the 
estimation of GNI and to confirm during the GNI verification cycle that Research 
& Development assets have been correctly captured in Member States’ national 
accounts. This issue has a high priority and is currently being dealt with taking duly 
into  account  the  current  GNI  verification  cycle  and  the  upcoming  2019  national 
accounts  benchmark  revision  in  most  Member  States.  The  objective  for  this 
timeframe  is  to  contribute  to  a  reasonable  understanding  of  consistent  treatment  of 
globalisation  phenomena  across  Member  States.  An  ‘Early  warning’  procedure  is 
operational  where  national  authorities  inform  Eurostat  as  soon  as  an  important 
multinational enterprise restructuring case becomes known to them. 

The  case  of  the  treatment  of  multinational  enterprises  not  restructuring,  is  being 
addressed  in  a  pilot  exercise  with  all  Member  States.  The  pilot  exercise  covers  a 
variety  of  globalisation  related  issues  relevant  for  national  accounts.  Guidance  to 
Member  States  will  be  provided.  Research  and  development  is  also  subject  to  a 
cross-country comparison review. 

5. 

THE INCLUSION OF THE EUROPEAN DEVELOPMENT FUND IN THE GENERAL BUDGET 

Following  the  reiterated  European  Parliament  request  to  include  the  European 
Development  Fund  in  the  general  EU  budget,  the  Commission  is  proposing  in  the 
Multiannual  Financial  Framework  for  2021-2027  a  strategic  simplification  of  the 
financing  instruments  in  EU  external  action,  including  the  integration  of  the 
European Development Fund in the Neighbourhood, Development and International 
Cooperation  Instrument.  This  will  lead  to  an  increase  of  the  overall  expenditure 
ceiling while preserving existing flexibilities. 

In accordance with the Treaty on the European Union, a new instrument to finance 
European  peace  keeping  operations  -  the  European  Peace  Facility  -  will  remain 
outside the Multiannual Financial Framework.  

6. 

SPEEDING UP THE DISCHARGE PROCEDURE 

In its 2016 discharge resolution, the European Parliament called on the Commission 
to  speed  up  the  preparation  of  the  Annual  accounts,  and  ensure  that  reliable 
information from Member States on shared management spending is obtained in 
a  more  timely  manner.  The  objective  is  to  adopt  a  discharge  decision  for  financial 

9 

 
 
year  N  in  year  N+1  while  ensuring  high  data  quality  and  sound  financial 
management.  

The  Commission  considers  the  discharge  as  a  continuous  process  allowing 
stakeholders  to  learn  from  the  past  to  improve  the  future.  In  order  to  keep  this 
continuity  there  is  a  need  for  the  political  debate  to  be  finalised  within  reasonable 
time  while  maintaining  reliable  high-quality  information  as  input.  Ultimately,  there 
will be a trade-off between doing things well and doing them faster so as to adopt a 
discharge decision in year N+1 (instead of in year N+2). 

The issue was also part of the negotiations on the new Financial Regulation. In that 
context, the Commission agreed that it would provide the 2017 Annual accounts by 
30 June 2018 and that it would be committed to providing its replies to the European 
Court of Auditors’ Annual report for the financial year 2017 by mid-August 2018. 

The  Annual  accounts  were  indeed  adopted  before  the  end  of  June,  and  the 
Commission will do its utmost to respect the commitment it took for provision of its 
replies  to  the  European  Court  of  Auditors'  Annual  report.  The  Commission  also 
adopted  the  Annual  Management  and  Performance  Report  in  June  and  the  current 
report on the follow-up of discharge requests in July,  making thus  available all the 
key documents from the Commission to the European Parliament and the Council by 
early July 2018. 

Member  States'  data  is  a  key  input  to  assurance  building  and  measurement  of 
performance and is provided to the Commission by March each year. Shortening the 
discharge in a considerable manner may thus require Member States to provide their 
data sooner than expected. 

Further progress in shortening significantly the discharge procedure will require the 
institutions  concerned  (European  Parliament,  Council,  European  Court of  Auditors, 
Commission)  to  work  closely  together.  The  Commission  is  committed  to  do  its 
utmost to find the best way forward towards a shorter discharge procedure. 

7. 

CONCLUSION 

The  Commission  takes  its  role  in  the  discharge  process  very  seriously.  It  is 
committed  to  implement  the  main  requests  made  by  the  European  Parliament,  the 
Council and the European Court of Auditors with  the aim of further improving the 
management of the EU funds. 

The Commission has taken into account lessons learned during the recent discharge 
procedures  in  its  proposals  for  the  next  Multiannual  Financial  Framework  2021-
2027. 

* * * 

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