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BUDG European Parliament
Follow its sittingsSpeaker 3
The single gateway portal aims to reduce complexity and increase traceability, as it will merge over 30 portals and dashboards into just one. However, we underline that its creation will be complex and will require substantial efforts in terms of funding and resources. Now, moving to the performance framework. The proposed framework does not provide a clear link between funding and results. Performance in terms of results will not be a condition for payment because payments are based on the achievement of milestones and targets, which are defined as output by output indicators.
The performance framework should go beyond specific payment conditions, such as milestones and targets, and include all the necessary elements to assess effectiveness, efficiency, and economy. The proposal does not include provisions to collect information on public expenditure for interventions supported by the EU budget. Although this information is important for assessing efficiency and economy. We have pointed this out repeatedly already in our reports on the Recovery and Resilience Facility. The proposal creates conditions to improve the process for performance reporting and the integration of EU horizontal priority policies.
However, we have found that the intervention fields are broadly defined and sometimes overlap. In certain cases, the output indicators reflect procedural steps rather than clearly defined outputs. Finally, the methodologies for setting targets, milestones, and baselines, as well as estimated values for result indicators, are not established by this proposal nor by the Commission's proposal for the specific programs. Around 25% of proposed intervention fields do not have result indicators, and we identify weaknesses in a number of indicators. For example, we consider this for 7% of the output indicators.
We believe that indicators defined as output indicators are closer to input indicators, according to the definition in the Better Regulation guidelines. The proposal focuses on the risk measuring process in implementation rather than on whether EU objectives have been achieved. There are also no impact indicators defined, and this will complicate subsequent evaluations. Moreover, discontinuation of course performers' indicators can complicate the aggregation of performance information because different indicators can be used to record performance for the same types of activities. The proposal centrally defines the EU coefficients for all intervention fields to be applied when calculating the expenditure contribution to horizontal environment and social priorities.
We see a risk of overstatement since the program's contribution to horizontal policy priorities is based on estimates and not on actual spending. In our view, some proposed EU coefficients are incorrect. In some cases, the proposed EU coefficients' values to track climate and environment expenditure are overstated, as observed in our audits. As an example, the integration of field energy infrastructure and cross-border relevance, in line with the tenth-year regulation, contributes 100% to climate change mitigation according to the commission. However, according to the ECA assessment, it contributes only 40%.
This is because we assess the contribution of electricity transport projects to climate action as moderate. Transparency, accountability, and transferability of spending. The proposal does not contain a sufficiently clear control and accountability framework for the reliability of the reported performance information. It does not specify how the real reliability and the equality of the performance data in the single gateway will be ensured. For example, in the past, we have identified time-related issues in the commission's performance reporting when the details behind the numbers reported were available only for the reporting date itself.
After that, the data changed because of new entries. My last point concerns the publication date of the annual management and performance report. We previously reported that the publication date of the AMPR by 30 June of the following year restricts our coverage in our annual report. Maintaining the 30th June deadline will significantly constrain the ECA's ability to provide a comprehensive assessment of AMPR in time for the discharge. So, as you see, we identified quite a few weaknesses in the legislative proposal, and I hope that through the debate, we can bring some improvements.
Thank you very much, dear Chair. Back to you.
Andreas Schwab
Thank you, Mr. Petrovic. Thanks to the European Court of Auditors. That has been very enlightening. And I would now like to give the floor to the commission for further enlightenment from their side.
Speaker 5
Thank you, dear chairs, and honorable members. Thank you, first, for inviting the commission to provide its position here. I would also like to thank the European Court of Auditors for its opinion. This performance regulation for the commission is a key element of the MFF package of proposals for the 2028 to 2034 period. We, first of all, acknowledge and welcome the acknowledgment by the Court of Auditors that this proposed regulation creates the conditions to improve performance reporting and the integration of EU horizontal policy objectives, and that it has the potential to reduce administrative burden.
Speaker 6
The commission, however, believes that the court's opinion does not fully acknowledge the benefits that the performance regulation proposal will bring to our ability to monitor the performance of the EU budget or to the reinforcement of support for horizontal policy objectives, including climate, environmental, social policies, and gender equality. I would like to first underline that what is here on the table is, for the first time ever, a single horizontal performance framework to apply across the entire EU budget, all management modes, to replace rules and provisions that are currently scattered across many different program regulations and which are, in addition, not always consistent. Having this regulation, the performance regulation adopted would allow us to look at EU budget actions as a whole with much greater transparency and accountability, also towards this House and towards citizens. We do believe that this not only, as found by the Court of Auditors, reduces the administrative burden for the Commission. We really think that this proposal, if adopted, would massively reduce the administrative burden for member state administrations, reducing indicators from currently 5,000 that member states must report on to 900.
Speaker 5
We think this is really a big effort to massively reduce the work on national administrations, and where the reporting obligation entails input from a company, a small enterprise, or a farmer, it will, of course, also reduce the reporting obligations for them and consequently reduce administrative burden and simplify at this level as well. The proposal builds on the requirements set out in the 2024 financial regulation, which was, of course, agreed and adopted, not least looking at simplification and transparency with the support of the European Parliament, and also addresses prior recommendations from the Court of Auditors, for example, in relation to consistency across programs, aggregability, and focus on results. I would like to recall that there is a change to the financial regulation that entered into force on September 24, which requires all indicators to be used, wherever possible, in a way that they can be aggregated. This is a short sentence in the financial regulation, which we now deliver on with this proposal, including the do no significant harm principle. It was first done following a suggestion and a request from the Court of Auditors in the financial regulation, and now we deliver here with a consistent approach to be applied for all EU funding where this is relevant.
On gender equality, it's the same thing. The proposal establishes a single set of rules for the entire EU budget, as also requested by the Parliament in the framework of the financial regulation. Now, we put this into music. I have already mentioned the massive reduction of indicators that is proposed, from currently 5,000 to 900. And instead of program-specific indicators, this performance regulation proposes a harmonized set of performance indicators that really allow for aggregation across programs and provide a clear and comprehensive picture of what the EU budget delivers.
Today, under the current multi-annual financial framework, such aggregation is at minimum complex and at times impossible because the legislature has decided on different definitions, etc., which then make it possible to actually aggregate. The regulation, if approved, would also allow tracking of climate, environmental, and social spending through a common list of intervention fields and coefficients. This system is already used in several programs, such as the European Regional Development Fund and the Cohesion Fund. So, we're taking experience—something that works—defining an intervention field, and we propose to streamline this with a harmonized definition across all EU spending. And for each intervention field, you would actually define an output indicator and a result indicator, at least one and normally only one.
Now, on the single gateway, the Commission and reporting, the Commission will continue to inform the Parliament and the Council annually on the implementation and performance of the EU budget. This will continue to be done through a single annual report. This is the annual management and performance report. It's set out in the financial regulations. This is why you don't see the content list in this regulation.
Why propose it twice? It is regulated by the financial regulation. The Parliament and the Council have agreed on the content list as recently as 2024. And also, the date of delivery, 30 June, has been confirmed by the legislature very recently. So, this is what the commission will continue to report on and deliver.
And I stop here. Thank you.
Andreas Schwab
Thank you so much for the commission. You were referring to music. The real music is now coming with our colleagues, and the first one is Jean-Marc Sherman.
Speaker 8
Thank you, Chair, and I take the opportunity to congratulate you on becoming the Chair of Cont. I'm happy to have Nicolas Erps as a Co-Rapporteur on this file. Maybe the first thing that I would like to say is that when you listen to the Court of Auditors and then to the Commission, you say, "Us as a Parliament, we would like to know where the truth is." And to know the truth, we would like to have more precise answers from the commission because the Court of Auditors, for example, says the EU added value is not defined. I'm not sure you answered this first remark from the Court of Auditors. But of course, it's really important because the whole purpose of the thing is to measure the added value.
Speaker 7
So, what's the first question for the commission? Would you precisely refer to that? Second, it is about simplifications. The commission says it's simply a lot of simplification. If I take your numbers divided by five, from 5,000 to 900. And the Court of Auditors says, "Oh, it's simplification for the Commission and maybe for the member states at the national level."
But for local authorities and final users, it is a complication. So we need to know where the truth is, and we need to go a little bit into the data and the details. Sorry. Then, performance. So we also need to have a clear answer on why there are no results indicators for 25% of the program because it's a reality. So, in many cases, we should look one by one; we don't see exactly why.
We also need an answer. I'm not saying that the commission is right or the court of auditors, but since there are no contradictory procedures with an answer from the commission, which would be the case in a real audit, we need to have two days, or if you cannot, provide a written answer to that question. Then, as far as the risk of overstatement, there was an example given where the 100% would seem to be overstated by the Court of Auditors. Maybe you can also answer that precise example. And on behalf of the Court of Auditors, we would need, if it exists, a whole bunch of examples that you have because we will, of course, ask parliaments to have a statement on that.
And last but not least, I would add a couple of things even if I'm short of time. Sorry for that. But first, I think we didn't have an agreement with my cohort that the whole exercise has to be useful for decision-making, not only to check if we are late on such and such objective, but also to understand the consequence of being late on the target. And my question here would be for the Court of Auditors. Do you think that the process would be useful to correct any imbalance?
And I would end with one other question, which has not been raised so far. But for us, it would be important to follow some objectives like the European affordable housing plans or the Ocean Pact. And there is no tool in the performance framework to track if those objectives are fulfilled. So, do you think tools that we have in France, like Jean Bugeterre, or a dedicated annex for those objectives, should be relevant? Thank you very much again for your present, which is very important today.
Andreas Schwab
Our next speaker is the co-rapporteur of the EPP Group, my predecessor, Nicolas Helms.
Speaker 9
Yes. Thank you, chairs. Thank you, Commission. Thank you, above all, to the Court of Auditors. I think that this opinion on the proposed regulation is extremely important.
This is highly relevant to our legislative work. And also, I think that the court offers effective guidance. So that is precisely what we expect from the European Court of Auditors. So the court rightly identifies several substantive weaknesses of the commission's proposal, asks the right questions, and also addresses some of the issues. So, what is your opinion of the Court of Auditors on the overlaps with the financial regulation that the performance framework regulation proposes, particularly regarding the horizontal principles, since these principles are already enshrined in the financial regulation as well?
So, what does the European Court of Auditors also think of the flexibility left to the member states in selecting the indicators for each intervention field? How can we ensure, let's say, comparability if every member state chooses different indicators for the same intervention field? The commission also claims that the reduction of the indicator is a positive thing. And, in theory, it probably is. But we are already receiving input from colleagues from specialized committees that, compared to the current programming period, some important indicators are missing.
So, would you say that this lower number of indicators might lead to a situation in which we will not actually capture the performance of the Union financing instruments? And in terms of the governance of the regulation, the Commission proposes guidelines for the "do no significant harm" principle. So, what is your opinion of the ECA? You mentioned it, but maybe you can elaborate on what your opinion is on this. Would it be better to enshrine, for example, this principle or a significant number of provisions in the basic act, or have a delegated act?
And according to our understanding, the reporting on the single gateway will be done based on the implementation of commitment appropriations and not on payments. In this case, what actual relevance will the reporting have as long as we don't know how much funds actually reached the final beneficiaries? The final beneficiaries are very important to the budgetary control committee, as you know. So, how do you evaluate some inconsistencies between the proposal and other proposals from the MFF package? For example, the NRPPs regulation, more precisely the climate spending target, is included in this regulation also as regards the NRPPs, while other spending targets such as social spending are included in the NRPPs regulation. So, would you say that, for the sake of legal certainty, such targets should have been included in the sectoral regulations?
So, these are some of my questions, and I'm happy to hear the answers.
Andreas Schwab
Thank you so much, Niklas Helbst. We now have a short opportunity for the European Court of Auditors and the Commission to respond to these first requests, and then all our shareholders will have the floor. So, I give the floor first to the European Court of Auditors for the response to our two colleagues, the reporters.
Speaker 3
Thank you very much, Chair. I think that the first question was about delays as a problem in the reporting. Delays, of course, are a problem because later on, it brings changes. So, the result that you get at the beginning, of course, is not the one that you can get later on. As I mentioned already, the time frame that is now proposed also presents a challenge because it puts us under a time constraint for our annual report.
So we would appreciate it if we can do anything in this direction. To answer the questions of our immediate previous share, Nicholas, concerning the overlaps reflecting multiple aggregation risks, the proposal, and core performance indicators. No predetermined indicators. All member states must report. Member states may add non-Annex I indicators, which can complicate aggregation, and implementing partners, in the case of indirect management, can use their own indicators.
This, of course, poses the risk of mixed information. So, we underline that this may hinder comparability at the EU level of aggregation. So we would appreciate clearer guidance in this direction. Concerning the do no significant harm, yes, we pointed it out. The commission tried to take it on board as much as possible.
Speaking about the last one, what was it? What was the...
Speaker 3
It now needs to check what was the last one at the moment. Thank you very much.
Andreas Schwab
Thank you very much. Now, back to the commission. Also, a short comment, Mr. Ehat?
Speaker 5
Thank you, Chair. I'll pick up on the "do no significant harm" principle to build a bridge there. Why has the commission proposed the use of guidance? Because experience has shown that it is easiest for member states to apply it if you have a text that notably includes concrete examples that can be more descriptive, etc. If you go for a delegated act, you have to stick to legal language, etc.
And we simply do not think that for the purpose of explaining how to handle the implementation and application of do no significant harm. A guidance approach is the best technical solution to help and clarify this. Simplification for final beneficiaries was, against all odds. We really want to go there, and, of course, much will depend on how much member states and national administrations will still decide to impose on final recipients like a small company when we are in shared management. But much is not necessary because if the national administration decides to ensure their reporting on the indicators at their level, they can minimize the reporting obligation and the administrative burden for final recipients.
And I would just like to recall that in the plan regulation, the commission has proposed that wherever one does not work with milestones and targets in the first place, but still as a member state goes for cost-based solutions, there is an obligation for measures up to €400,000 to always work with simplified cost options, etc., which again, if properly used, has been acknowledged by everyone to reduce the administrative burden on the final beneficiary. Why are performance indicators missing for certain intervention fields? So this reason is simply that, after reflection, at the level of the commission, we have not been able to formulate a good result indicator. Output indicators are still there, and this is notably where we're talking about reforms in which a result indicator was considered not appropriate to formulate in their proposal. But, of course, if in the legislative process good ideas come up, they will be looked at by the commission.
There was a reference: why are we not defining EU added value in this proposal here? The commission considers that identifying the added value of a policy is to be checked upfront in our process, and that's set out in our better regulation guidelines, which are considered world-class by the OECD and are not normally criticized. And it is in our better regulation rules and guidance where we define how to identify EU added value, notably to be reported on in ex-post evaluations that the Commission is obliged to do, based notably also on the financial regulation. And finally, to react to the comment that the ECA has found that attributing an environmental value or greenhouse value, sorry if I misquote here, to energy efficiency infrastructures, where the court has found that 40% is the appropriate value while the commission has considered 100%. We take note of this, but where we propose such values, where we pick up from past experience and mostly reuse what is already in place, this is again part of the legislative process.
If, for a given measure, the commission has proposed, in the view of the legislator, too low or too high a value, the 0%, 40%, or 100% will be discussed in the legislative process. Thank you.
Andreas Schwab
Thank you so much to the Commission. We come now to the shadows. Depending on their presence, I give the floor first to Yana Nagoyauba.
Speaker 11
Thank you, chairs. Thank you, Commission. Thank you, ECA. First of all, I'd like to say that I really appreciate the Commission's effort to propose a single performance regulation because, obviously, it's a good idea at first sight. But at the same time, it needs to be added that due to implementation in 27 different countries with different systems, different mindsets, and different conditions, it's really a challenge to have one for all.
Anyway, it means that we have to listen carefully now and be very careful about what we will approve at the end, and listen well to ECA because their contribution has been invaluable in many cases. So we have to be careful that the problems which might arise from the implementation of this regulation will not outweigh the advantages and benefits. So, I do have some questions, but they are more directed to ECA in order to use their presence here. So first of all, maybe I will mention something which was already mentioned here, but from a slightly different perspective. Some of the things were tried to be answered, but I didn't hear an answer to my question, so maybe it will be the same.
So first, that ECA highlights vague intervention fields, which you already mentioned, and missing result indicators in 25% of cases, which is really a lot. And the question towards ECA is: would ECA recommend addressing this by adding impact indicators or clear rules in the regulation itself? And the question to the commission is then: do I understand correctly from your previous answer that we are supposed to create part of the regulation in the legislative process? The second, I will skip the second. I will go directly to the third, which is "do not significant harm," because ECA flags the risk, like our stated EU coefficients, no data on public spending for efficiency, plus late DNSH guidance by 2027.
Would ECA recommend amending these exact rules, clear coefficient spending data requirements, and DNSH details directly in the basic act to limit Commission discreditation? And I think it also relates to what other colleagues said, because the NSH is a very important part of the funding for the next financial period. And then we need to know how it will look, how the criteria will precisely look before we approve the legislation. So, we cannot approve just Bianco Shek or agree with Bianco Shek for the commission, and then we will come up with the guidance later on. Thank you.
Andreas Schwab
Thank you so much. And just to explain to you, there is a list of speakers that has been pre-drafted. We come now to Mr. Sanchez.
Thank you.
Speaker 12
You, chair, colleagues, members of the court. We're looking at the proposal for tracking. The objective is to simplify and standardize the rules. But by closely reading 10.26 of the court, it looks like this simplification may have an impact on rigor and performance. Nearly 25% of fields do not have any result indicators.
Speaker 13
This is a significant proportion of the budget that could be executed without measuring the effects. And so, we may not be able to follow what we've achieved and the efficiency of the financial policies. There's no impact indicator planned, but without this, if we're bound to be weakened in the future, how can we prove that European funds produce lasting change if we don't have the tools to measure them? When it comes to climate, the court has alerted us to the overestimation of the indicators. This was mentioned previously in the previous MFF.
If it doesn't truly reflect the reality of expenditure, we may not have a real guarantee of the actual contribution. We've also heard about the absence of a clear framework for performance data and responsibilities. It's not that there's not enough. If there are not enough guide structures, we risk losing our legitimacy and the credibility of the union. There's also the FRR, and there are an increasing number of weaknesses that are still not being resolved.
And so we need to work and focus on the results. And so, first question: why give up on these indicators, these impact indicators that are essential to really measure the achievements that are made? How can we ensure the comparability of data in the absence of clear accountability and control? And final question: when we're coming to resilience and recovery, how can we avoid reproducing a model that only looks at implementation rather than actual efficiency? And this may lead to a weakening of our standards.
Thank you.
Andreas Schwab
Sanchez, now we come to the rapporteurs, the shadow rapporteurs from the ECR. From the badge, I don't see anyone. Is it okay? Can I give the floor to you? Yes.
I am. Yes. Perfect. I'm sorry that your name is not on this list. I'm so sorry.
Speaker 15
Well then. Thank you very much. Thank you very much to the European Court of Auditors. I have been watching you for years, and you are doing excellent work. You are being very objective.
I wish other institutions were as objective as well, and I wish other institutions worked as well as you. That would make our EU better. The budget is as it is. That is my second comment. We keep saying we do not have enough money, but the key is to be efficient.
Our money needs to be spent in an effective manner. And here comes the question. In my opinion, all political groups here have some misgivings about what the European Commission is doing. The European Commission is not informing the Parliament and is not acting under the control of the Parliament. It is doing what it likes.
And I think, sorry, commission. I have to say it, but you are undermining the good atmosphere. You are undermining the European project. Why am I saying this? There has been a lot of unfairness when it comes to the assessment of the funds spent under the RRF.
I'm on the petitions committee. We are bombarded by a huge number of Spanish petitions about a dodgy prime minister and dodgy ministers, and they have a rule of law with all those petitions, while Poland has no rule of law. Please do not disturb me when I am trying to speak. Please, you will have an opportunity to speak. Now it's my turn.
So, I don't think it is very elegant if the European Commission does not guarantee that everyone will be treated fairly and justly, including when it comes to the money spent. What has recently happened in Poland? With the money from the RRF, sailing yachts were being bought, and other stupid purchases were made. Poland was being harassed and persecuted.
Speaker 15
It was Hungary. Other countries do not. So, my question to the court is as follows. What is the source of your information on efficiency, effectiveness, and indicators? Are you working based on information from the European Commission, or do you have your own independent sources of information?
Do you have information on the money spent by the member states? I think the member states provide the European Commission with whatever they like, then we complain it's not efficient. But no one really knows, in the end, where the money goes. Thank you.
Andreas Schwab
Now the rapporteur, the shadow rapporteur of the ECR in Kont, Mr. Riesen. Two minutes, but I know that you are always perfectly on time.
Thank you.
Bert-Jan Ruissen
You. I'd like to thank the UCA and the European Commission. This is an important subject to follow the performance for the coming years. There are many questions being raised. There is one article on horizontal principles because here, we are talking about climate.
We're talking about biodiversity, the environment, social issues, and gender equality as if these were the fundamental principles of the European Union: competitiveness, strategic autonomy, security, and defense. But we're not talking about these things; these are the horizontal principles that are enshrined, and this is where we're seeing the error. This isn't the only question I wanted to ask regarding this performance framework. I wanted to say that the principle we're evoking here is something we largely agreed on, but it's quite vague. It's not detailed.
And who will carry the burden? Because we're being cautious, this could lead to court cases when we're talking about uncertainty. We're talking about doing no significant harm. But basically, who will be in charge of applying this principle? This will lead to much more complexity.
So, who is going to be accountable for that? For the ECA, they rightly observe that for many fields of intervention, there are insufficient indicators. These are indicators that are so inefficient that we're not actually seeing any achievements. So, what are we going to do about that? Because it is very difficult to know what is actually being measured.
And then, there are completely useless indicators. 418, for example, is a representation of women. Is this the only thing the commission has examined? What are we doing with this money? What services are being achieved?
We have no idea. 427 support the inclusion of gender equality policies. All we have are a number of actions, but no actual measures. What are we supposed to do with that? It's difficult to force people to take accountability when we don't have any indicators.
Speaker 1
To renew. For the budget, I think Olivia Chastel is not visible in the room. Ah, madam, please, boss.
Stine Bosse
Thank you very much, and thank you to both the Court of Auditors and the Commission. First of all, we acknowledge your sincere attempt to simplify and also to make harmonization, something that we really need to do. So, hopefully, and that's why I would like a comment on the simplification: give us some examples where you really see that this is simpler, easier, and also easier for the end users. And here, you said earlier that it would probably be up to the countries also to implement, but could there be implementing guidelines? Could there be some kind of support, help, and a slight push to make it easier for the countries to do it simply?
Then I am completely, or we are completely, aligned with the criticism from the Court of Auditors; we need clearer and more precise definitions. The proposed climate and environment spending definitions are filled with loopholes. Let me give you a couple of examples. Investments in military mobility count as contributing to climate mitigation, climate adaptation, and the environment. Investments in increasing airport terminal capacity or new runways count as contributions to climate adaptation and the environment.
Investments in road infrastructure count as contributing towards climate adaptation and the environment. This just cannot be correct, or at least it should be specified more. There might be situations where that's the case, but it should be precise. An actual impact has to be measurable. This is spending public funding, and we're actually promising something to our citizens.
And then secondly, we do think that we need more ambition on the climate and environment spending targets. I mean, now when we talk about climate, it is also about our security. So please also think there. Yes. And I can see you now in five seconds.
Will you wait five seconds? Okay. I want all of us to think about reading the full Draghi report because it clearly talks about the transition of our economies and our energy systems. Thank you.
Gerben-Jan Gerbrandy
Yes. Thank you, Chair. Sometimes, it's wise to zoom out a bit and to focus on the essence. And I think the essential question is: why do we have a European budget? What is the essence of it?
Well, for me, it's very simple. We have objectives that we define democratically, and then we need the means to achieve results. And now, if I look at the opening statement of the Court of Auditors, which I believe is an institute that has cautiousness in its DNA, it says there is no clear link between funding and results, which is the essence of having a budget. You want results, and you need money to achieve them. And then the Court of Auditors, our main institution to look into this to see if we're doing the right thing, is saying that there is no clear link.
I'm really very disappointed listening to the commission, and I know the budget is also a political exercise, but it cannot be so political that there is no clear link anymore between the money and the results. So, this is an opinion from the Court of Auditors. And with opinions, we never get an official response or reply from the commission. Can we ask for a written official reply from the Commission on this? Because this is so essential.
This is really what the budget should be about. Are we able to achieve results with the money that we're asking from our citizens? So that's what I'm asking you, chairs: if it's possible to ask the commission to come with a formal written explanation and response to this Court of Auditors report. Thank you.
Speaker 1
Thank you. The Commission is to respond now orally, but perhaps also in writing later. Now I am moving to Greens, and here is the full presence.
Speaker 26
Mister Nordtwist. Thank you very much, Chair, and thank you to ECA for the report. I have a dish of view, and it's only my first term here in this Parliament. We had a discussion on an ECA report regarding the RFF, specifically on the question of output versus impact. And there, we didn't really get any replies of any content from the commission, and now we don't really hear anything again.
Speaker 24
I mean, the essential critique is: how are we measuring this? So, I think it would be nice this time around, so I don't need a third and fourth déjà vu in these discussions, but actually that we move on and become better and better. And I think there are also good things in this performance regulations that we should work on. So, I would like to hear some kind of feedback from the commission specifically on this point. I don't think you really touched on it when we had the discussion, when you had to reply first.
Then, I also mean my colleague Bozzi from Renew was touching upon it. I mean, how do some of these indicators come? I mean airport terminals and motorways. I mean, we know from the IPCC that they should be the ones we rely on when it comes to how we measure this. When I looked through all the annexes, I was a bit puzzled, to say it really mightily.
And I would actually, it could be nice to have some real explanations on some of these points, and I don't expect the commission to do that orally now, in a few minutes, but we need an explanation. And then my last question would be that, I mean, it's with both the green spending target and the do no significant harm, which is really good. But then we exclude all of security, but security is also understood quite broadly in other parts of the MFF. I mean, energy efficiency and energy security—that is, security. Okay.
Speaker 25
Are we then excluding "do no significant harm" here or others? So, I think we need some kind of explanation and also a clear line in these performance regulations, and at least that's what we're going to push for when we have the legislative part of the work to be done. Thank you.
Thank you. Mister Freund.
Daniel Freund
Thanks, cheers. Well, I guess ECA assessed the performance of the proposed regulation as not very performant. I think this release still needs some work. So from the con perspective, what particularly struck me in the opinion, if I read paragraph 56, the proposed framework, and I quote, does not include audit arrangements for the rights of ECA, Olaf, and EPO. In the executive summary, you also say that the proposal does not contain a sufficiently clear control and accountability framework for the reliability of the reported performance information.
For instance, under the proposed system, the commission would not make mandatory checks of regularity before payment, in contrast to the RF. I would like to ask Erica if you could elaborate a bit more on what this actually means in practice for your work, for the work of EPEL, of Olaf, under these new proposed rules, and also for the information that you can then provide to us as the discharge authority, in comparison to the current arrangements we have now. And I have one comment to make: this name of a single gateway, I find it not very good. Between the global gateway and the single gateway, I mean, there are so many gateways. Now it gets a bit confusing, so maybe we can reflect on how this transparency portal will actually be named in the next MFF. Thanks.
Speaker 1
Thank you. Now I am looking for the candidates from the left. Full absence. And now, the second stage of looking for candidates with this ESN. Anybody?
Again, this is the end of this part on shadows. Therefore, time for replies starting with Eka. Five minutes, more or less, allocated. Okay.
Speaker 3
Lots of questions, so I will try to summarize some of them, for example, the "do no significant harm" principle. There was a question from Miss. You mentioned it. We, in Annex One of our report, if you go to the page. Just a second.
On page 30, we state that it does not significantly harm the objectives. Streamline the application of significant current principles as a reference to all the articles. The commission should provide this technical guidance by 01/01/2027. So if your question was whether we would like to see some enhancement, improvement, or strengthening, this is already mentioned in our report. So our suggestion has already been communicated to the commission, and I believe that the commission will do what we have advised it to do.
The same goes for the missing indicators. Of course, we would like to see the missing indicators. Otherwise, we are afraid that it will not be possible to follow the performance. Speaking of performance, you mentioned that you were very critical about not having the results. I agree, the budget is a key instrument to achieve the results.
We mentioned it many times already when we were critical of the RF that we have the output approach. Sometimes it's not even about the outputs, but just about the inputs. But actually, we would like to lift it to the other level, which is the level of the results or even the level of the inputs. Don't get me wrong. We are not critical of or against the results-based budgeting or performance-based budgeting.
The discussions about this approach were well known to go on for many years. It's true. We are now, for the first time, having a budget proposal that goes in this direction. We support it, of course; it is a step in the right direction, but we would really like to have clear rules of the game. Speaking of all those rules, of course, everything that is missing should be in the legislation.
Of course, since it's the first time, some parts will be added on later by the commission. But as we already stated in our report, there should be as much as possible in the legislation. Speaking about the question that the gentleman asked here, whether we rely on the data of the commission. The commission is ours. This is the start where we start to perform our audit, but we always go to the very last detail and we check the data in the field.
Audit-proof. So we really go deeply into the audit to make sure that what the commission states is true or not. As you will see through our annual report, many times it happens that despite all the involvement of the commission at some national and regional levels of control, we still come across some payments that had actually not been supported by the real truth in the field. Speaking of the climate. There was a question.
Just a second.
Speaker 3
Yeah. I'm almost at the end. I was just trying to give the answer to the previous chair who asked about performance and overlapping. Overlapping was the case. Overlapping is also something that actually does not add to the clear picture of the results.
And especially in this climate field, we have now joined some indicators together, which were separated before, and this will definitely add up to the clear picture in this part. It is definitely something that maybe we should reconsider if this simplification adds up to the quality of the indicators and, later on, the results. So much from my side. Thank you.
Speaker 1
Thank you. Now the challenging job for Mister Erhard from the commission is to be sharp in his replies. Thank you.
Speaker 5
You. I'll do my best, Chair. To pick up on the point, also on the link between the budget and what we get out of the budget, because notably, in the DG budget, we couldn't agree more on how important that is. Let me use a concrete example from the proposal to show how we suggest that this would work. I take intervention field number one, which is to promote generational renewal of farmers, where the commission proposes as an output indicator, first looking at the number of farmers in general.
You need a baseline to measure against. And the result indicator is the number of new young farmers and other new entrants. So this is how the commission proposes to work. You can concretely link the amount of money that has gone into promoting young farmers and new farmers entering with the result indicator, which is how many new farmers have actually started. Where would the impact indicator be on top of this?
Would there be more children born in rural areas, or what would it be? So we think it's enough to work with such result indicators, which are defined as monitoring the direct effect of the supported activities. So this is also the reply to why we work with what we call result indicators, which for some may already be the impact. We call them result indicators, and wherever possible in the proposal, we have spelled them out. Now, therefore, we do think that with this proposal, we establish a system that precisely allows us to monitor where the money goes, for what purpose, and what we get out of it in terms of result indicators.
Now it has been raised that, for some intervention fields, the result indicator is missing. Yes. Because this is mostly where we talk about supporting reforms where you have an output indicator, but the result indicator is very difficult to measure or would possibly be a negative one. Now, why has the commission proposed specific measuring targets in certain areas, like gender, as has been referred to, to do no significant harm, etc.? These are the areas that have been listed by the legislature in the financial regulation.
So, we deliver on what we think we have been expected to deliver. There was a call for transparency in the guidance on "do no significant harm." We fully agree that this should be worked on quickly. This should be worked on transparently, and I'm happy to inform you that yesterday, the commission published the call for evidence precisely to also have public input on the work on the do no significant harm. Why don't you find language on how to audit and control this in the performance regulation?
Because these rules are already set out elsewhere. For example, the rights of the Court of Auditors to audit wherever it considers necessary, to control wherever necessary, are already in the treaty. We are in the financial regulation. We don't have to repeat this in the performance regulations. The systems, how the controls are also on the reporting, shall be done as set out in the plan regulation.
They're set out in the financial regulation when we talk about direct management. There is no need to repeat this in the performance regulation. I have probably forgotten one or another point. I'm sorry for that. I've done my best to stick to the timeline.
Thank you, Chair.
Speaker 1
Thank you. With these replies, we are moving to the opinion-giving committees, starting with Devon. Mister, I have been waiting so long. So, please.
Speaker 29
I speak German, so please use your headphones. Thank you.
Thank you very much, Chair, for giving me the possibility to speak on behalf of the development committee. Now, we welcome the Commission's approach to simplifying things and focusing more on performance. If we have a clearer, more coherent framework, that is, of course, an improvement. Of course, a number of weaknesses were mentioned today in terms of the weaknesses of the indicators. It's not about how many projects are implemented, but the actual difference they make to people's lives on the ground.
What's difficult for us is that there are no specific intervention fields. So what's difficult for us is that we don't have development intervention fields specifically. We have, perhaps, groups of people in third countries. So, we would see things from a slightly different perspective. It's important that development cooperation can happen in quite difficult contexts, and so reporting and monitoring can be more difficult.
We don't think there should be a disproportionate administrative burden for our partners, particularly in cases where we have the USA, who have withdrawn from providing aid in these areas, because we want to help with investment, job creation, regional added value, and wealth rather than just burdening people with paperwork. There's also the issue of food security in developing countries. It's not enough just to monitor how many tons of food have been transported; we need to look at the long-term sustainability of the measures. So not just the provision of food, but the quality of the food and what actually is being improved by our intervention on the ground. So, if we look at the World Food Program, for example, there were a number of areas where they were able to produce around 50% of their food on the ground, and we'd like to see how that could be improved.
So, if we want to have a really effective performance system, we need to look at the individual realities of our partner companies and partner countries, and incorporate that. We need to look beyond just the European continent. We need to look at the qualitative effects, and it's important to have a certain flexibility in the budget because we have to take into account the individual needs. And I think that is something that needs to be clearer in the future. I think it'll be hard to respond to that in 30 seconds, so I'll be happy with the written response.
Speaker 1
Here is the perfect demonstration of self-sufficiency in our presidium because I have allocated a short voice to myself. And this is really short, as we are running out of time. We appreciate it. I'm speaking for Econ. I appreciate the effort to make the tracking of expenditure horizontal. Of course, our focus is Article Five, very famous, the "do no significant harm" principle, but our concern is how to make it really practical and good for implementation, as we are so often faced with well-intended regulations that are difficult to implement.
We welcome an exclusion of defense and security. We would go even further. Generally, we are not to die for Article Five in this committee of the Parliament, and reminding that if we align with the environmental, innovative, and social goals, we should go for a competitive Europe. This is the end of my story. Now I am asking whether anybody is available for employment.
No. If not, ask for Itra. Also not quite present, but probably for Reggie as well. But for Agri, we have, for sure, Missus Reich.
Speaker 30
Thank you very much. I am the rapporteur for the agri opinion on this file. So I think this report from the ECR has raised the issues, particularly if we want to meet our targets under the CAP. I think it is problematic that we don't have a clear link between the CAP targets in the different intervention areas. There is really no clear methodology here for the targets, the milestones, and the commission indicators.
It's looking more closely at the implementation of EU policies, but not at the targets. And following on from what my DEV colleague said, I think it is a similar situation. We need to look at, for example, water health. It's not just the specific hectares in these water conservation areas. So, I think a number of people have mentioned this.
If you really want to measure the impact, you need to make sure you have all of the information. So, I have some specific questions. Now you talk about the risk that not all the relevant information will be in the performance report at the end. So, I would be interested if you have some specific examples from the area of agriculture. What data do you think might be lost?
And then, secondly, you talk about missing indicators and intervention areas where these are missing. How do you feel these indicators are effective in the area of agriculture? So, apart from the lack of these performance indicators in these intervention areas, are there any further indicators that you think could be necessary? So, I would like to know that very specifically from an agri point of view, and I would again be happy to have that in writing from the Commission or the Court of Auditors. Now you want to try to simplify and streamline things, but if you don't get the results and the information at the end, you're just trying to get through the situation. You need to have something functional and sustainable for these inputs.
Thank you.
Speaker 1
I've always tried to catch the eye, Madam Fuhrer, but I should be reminded that the interpretation should stop at 1 PM sharp.
Thank you.
Speaker 4
Thank you very much. The union's financial regulation sets out a specific point. When the EU is spending that money, it has to be able to show that it brings added value compared to what the member states might have done alone. And so that is the so-called EU added value, as termed by Brussels. But when we read the European Court of Auditors' report, it's quite shocking, really.
The commission is talking about measuring performance without clearly defining what this European added value is. The result is that anyone could interpret this however they want. So, you want to measure performance without really knowing what you are measuring. We should be frank here. If the EU is incapable of defining its own added value, it is because it acts everywhere, even when it does not actually bring anything extra.
Perhaps it would be time for the EU to stop dealing with everything and to focus on the competencies bestowed on it by the treaties, rather than simply trying to take competencies from the member states. Thank you.
Speaker 1
Unfortunately, we cannot afford the oral rebounds now. Therefore, I am asking in the name of those present for a written response to the questions not answered. And my conclusion will be very simple for today. Home. Thank you.
I was informed that we should stop at 1 PM sharp.
But to be reminded that the interpretation should stop at one PM sharp.
Speaker 4
Thank you. Thank you very much. The union's financial regulation sets out a specific point: when the EU is spending that money, it has to be able to show that it brings added value compared to what the member states might have done alone. And so that is the so-called EU added value. As termed by Brussels.
But when we read the European Court of Auditors' report, it's quite shocking, really. The commission is talking about measuring performance without clearly defining what this European added value is. The result is that anyone could interpret this however they want. So, you want to measure performance without really knowing what you are measuring.
We should be frank here. If the EU is incapable of defining its own added value, it is because it acts everywhere, even when it does not actually bring anything extra. Perhaps it would be time for the EU to stop dealing with everything and to focus on the competencies bestowed on it by the treaties, rather than simply trying to take competences from the member states. Thank you.
Speaker 1
Unfortunately, we cannot afford the oral response now. Therefore, I am asking, in the name of those present, for a written response to the questions not yet answered. My conclusion will be very simple. For this day.
Bon voyage, home. Thank you.
I. I was informed that we should stop at 1 PM sharp.
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