Why campaign?

What is the Financial Regulation?

The Financial Regulation is the rules by which all European grants and contracts are governed. So if we want to reform European Funding and make it work better for both civil society and the European institutions themselves, the Financial Regulation is the place to start.

Why now?

There are three main factors why Euclid Network began the campaign in 2008 to reform European funding, starting with the review of the Financial regulation:

1. 1. The recession has meant that funding for civil society, especially European funding, is even more vital than ever before
2. 2. Yet funding from the EU, one of the world's largest civil society donors, remains notoriously difficult to access and manage and in many cases, undermines the sustainability of the sector. There is a need for a more efficient and effective role of the European Commission (EC) and the urgency of a more transparent and accountable system, closer to organizations and citizens, and more respondent to their needs.
3. 3. The review of the financial regulation - the rules by which all grants and contracts are governened - happens every three years thus providing a rare window of opportunity to get the voice of civil society included in the new text and making European funding work better for both the sector and the EU.

The new Financial Regulation document was approved in October 2012.

***European Parliament approves reform the European Financial Regulation, 23 Oct 2012***

The European Parliament approved the European Financial Regulation on 23 Oct 2012,following over 10 months of discussion between the European Institutions. The move will have a huge impact on civil society organisations and social enterprises as it increases European Institutions effectiveness, improves transparency, cuts red tape and introduces innovative financial mechanisms. Click here for the final text or here for more information about news

Presentation by Luisa De Amicis - Given by EN's Luisa on the 21st nov during the structured dialogue group hosted by DG com.

The process:

Step one: gathering evidence from members

In 2009, Euclid Network tried to meet with DG Budget, but faced an initial reluctance. In August 2009, we launched an independent consultation involving all our members, collecting examples and case studies. These were collected and compiled in to ten key recommendations on how to improve the financial regulation. Read the consultation here
In the recommendations, the following areas were raised:

• Administrative burden
• Application procedure
• Co-financing and contributions in kind
• Non-profit constraints
• Language
• Indirect costs
• Bank guarantees
• Auditing
• Exchange rates
• Transparency

This report was submitted to the public consultation on the review of the financial regulation. The results were also included in the Civil Society Working Group on EU Financial Support's (DG Education and Culture) response to the consultation.

Download the findings from the Euclid Network consultation

Step two: Working with the European Commission and other NGOs

The findings of Euclid Network's inspired the set up of the Civil Society Working Group on EU financial support within DG Education and Culture (Now DG Communication). The group is chaired by Euclid Network and consists of the most influential NGOs and NGO umbrella organisations in Brussels.

After months of pressure, DG Budget launched the public consultation.

The working group produced a response to the consultation, heavily involving EN's outcomes from the internal consultation.

Download the response from the Civil Society Working Group

Around this time, Euclid Network also wrote letters to the UK Prime Minister and President of the European Commission, Jose Manuel Barroso, asking them to support our recommendations for the new text. The letter to Barroso received 46 signatories from civil society organisations across Europe.

Step three: Policy briefing and approaching the Parliament

The European Commission launched a first draft of the text in May 2010 for the European Parliament to review and make amendments.

Broadly speaking, the financial regulation review partially took on board the working group's recommendations, aiming at cutting red tape, improving effectiveness and introducing innovative financial mechanism. One the other side, Euclid Network were still concerned about some key issues like the non-profit rule, co-financing and in kind contributions, contribution to indirect costs, operating grants and exchange rates, that have not be properly addressed by the Commission proposal.

In Summer 2010 Euclid Network and its partners completed a comprehensive policy briefing on civil society and the Financial Regulation. All interested parties have been meeting with MEPs to ensure that the sector's recommendations are included.

The campaign to reform European funding for civil society took a big step November 2009 with the European Parliament Committee of Budgetary Control meeting to discuss the financing of NGOs by the European Commission for the very first time.

The Committee were presented with the findings of an in-depth report on ‘NGO financing and the EU Budget' which raised many of the points that Euclid Network have been advocating for in the past year to be included in the new text of the financial regulation (the rules by which all European grants and contracts are governed) and specifically references Euclid Network's campaign for improve European funding procedures for civil society. Download the press release

A campaign update was presented to the European Active Citizenship Group in DG Communications on 24 November 2010.

Step four: the roundtable

On the 31st of January 2011, Euclid Network, supported by the civil society working group, has organised the first roundtable on the third Financial Regulation Review.

The event was hosted by Dr. Inge Graessle MEP, Rapporteur on the Financial Regulation for the Committee on Budgets (BUDG). About forty delegates including European third sector leaders, MEPs and European officials gathered together to discuss the text. Civil society leaders had the opportunity to express their concerns about the elements of the Commission’s proposal for the Third Review of the Financial Regulation and called for amendments to integrate a more effective partnership between EU and civil society. Read the report of the roundtable here.

Step five: the trialogue

As the legislation had not been finalised by the EP in the plenary meeting on the 26th October 2011 it went back to the Budgets committee. Following this the three European institutions - European Commission, Parliament and the Council - entered an "informal trialogue" in late 2011 to finalise the text of the legislation of the Financial Regulation before it went to the vote on the 23rd October 2012. The trialogue agreed on a concerted text and it will then start the second reading that will go smoothly as all the partners have already basically agreed “behind the curtains”. The final text is ready, the Implementing Rules (IR) are key as they clarify all the details and the procedures connected to the principles stated in the financial regulation.”

If you have any questions, contact Luisa De Amicis at luisa.deamicis@euclidnetwork.eu