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Procedure : 2005/0090(CNS)
Document stages in plenary
Document selected : A6-0057/2006

Texts tabled :

A6-0057/2006

Debates :

PV 14/03/2006 - 21
CRE 14/03/2006 - 21

Votes :

PV 15/03/2006 - 4.5
CRE 15/03/2006 - 4.5
Explanations of votes
PV 13/06/2006 - 7.9
CRE 13/06/2006 - 7.9
PV 06/07/2006 - 6.10
Explanations of votes

Texts adopted :

P6_TA(2006)0085
P6_TA(2006)0312

Debates
Tuesday, 14 March 2006 - Strasbourg OJ edition

21. Financial Regulation applicable to the general budget of the European Communities (debate)
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  President. The next item is the report by Ingeborg Gräßle, on behalf of the Committee on Budgets, on the proposal for a Council regulation amending Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (COM(2005)0181 – C6-0234/2005 – 2005/0090(CNS)) (A6-0057/2006).

 
  
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  Dalia Grybauskaitė, Member of the Commission. Mr President, today I would like to congratulate Parliament on a very important day that finalises our discussions on the Financial Regulation. It is an important week because Parliament’s opinion will be put to the vote in this House. I wish to congratulate both rapporteurs on the job they have done. I acknowledge the huge job done by them in tabling these amendments. I would like to confirm that the Commission will include the vast majority of Parliament’s proposals in its new revised proposal.

I would also like to confirm that the objectives of Parliament and the Commission are more or less the same.

In light of these shared objectives regarding the simplified rules and the reduction of red tape, I am pleased to announce that we will, very soon after Parliament’s vote, put forward our new revised proposal. We know that the Council is ready to give us a final decision and final opinion very soon.

I would like to give you a few examples of the many amendments we are very eager to include in our new proposal: an explicit reference to the principle of proportionality – this will help to define a lighter procedure for smaller projects; information for grant applicants and standardised application forms for the same policy areas; and reinforcing the division of procurement contracts into specialist and/or partial lots. The fourth element that we are positively evaluating is the two-step procedure in the grant application process, which will avoid unnecessary costs in the initial phase.

The Commission and Parliament are not the only two players in the current legislative process. The European Economic and Social Committee and the Court of Auditors delivered their opinions between October and December 2005. The Council is about to complete its first reading.

I should like to stress that the legislative process of revision of the Community financial rules has now made substantial progress. Our common goal is to have new, simpler and more modern financial rules, better adapted to the new generation of spending programmes, hopefully applying from January 2007. That is why the timing is so important and why we cannot miss our deadlines.

I am committed to working hard in the forthcoming interinstitutional negotiations and encouraging a conciliation process aimed at achieving an effective consensus between Parliament and the Council.

 
  
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  Ingeborg Gräßle (PPE-DE), rapporteur. – (DE) Mr President, Commissioner Grybauskaitė, ladies and gentlemen, today I am tabling 135 amendments to the Financial Regulation in this House. I was delighted at the Commissioner’s announcement today that she intends to incorporate some of the quite fundamental points of this report in the Commission’s revision.

Parliament is using this initial rolling revision of the text – a text so important to the administration – as a means to eliminate fundamental problems. We have heard some very fundamental, harsh criticism of the bureaucratic procedures. Numerous organisations applying for grants, companies participating in supply and service tenders, and indeed those in the Commission and other institutions who apply the Financial Regulation, have contributed to our reform and to Parliament’s amendments. I am very much obliged to you all. Your professional advice will enable the improvement of the procedures.

Those in this House to whom I am particularly obliged include President Borrell and of course my colleagues in the Committee on Budgets and the Committee on Budgetary Control, primarily Mr Pahor and everyone who has worked on the proposals in the intergroup over a period of months. It was not only thanks to the constructive cooperation, but also to the general sense of the pressure to reform, that the two committees adopted the report either by a vast majority or unanimously. My personal assistant, Mr Sichel, has accomplished a great deal in this regard; I should also like to thank him most sincerely for this. In addition, those in the Commission to whom I am obliged include Commissioner Grybauskaitė, Director-General Mr Romero, and Mr Taverne and his staff for the numerous fruitful discussions, which I sincerely hope will continue, and really look forward to.

Everyone – including myself, with my years of experience of dealing with the Financial Regulation – is wondering what kind of Europe this is that requires such complicated, costly application procedures. Up to one third of the amount of each grant is lost on the cost of the application procedure. Year after year, organisations throw away substantial sums on participation in European policy tenders, even though they have no prospect of success. Forty pages of forms and an additional 500 pages of manuals is not the exception but the rule. Only 5–25% of applications are successful. At costs of up to EUR 200 000 per application, you can imagine the money that is being squandered in Europe every time an organisation participates in an EU tender.

What kind of Europe is it in which companies no longer wish to participate in tenders because they have to submit two annual balance sheets, even for routine applications? Indeed, the Commission has already worked very intensively on this, and it will continue to work on it and to make changes to the important implementing rules. I should also like to encourage Commissioner Grybauskaitė in this, and would be most obliged to her if she were to take up all of Parliament’s proposals, as we do not want the Commission to be equated throughout Europe with ponderousness, red tape and money-wasting; we want it to be seen as a service provider for all those wishing to implement and support European policies.

Our most important amendments will be put to a roll-call vote tomorrow. As Commissioner Grybauskaitė has already announced, some are to be incorporated. I should also like to present a few more. One concerns a database for the notification of applicants, avoiding the submission of multiple copies of documents and thus saving time and money at the application stage. We should also like to see Commission decisions rather than voluminous contracts. This could make procedures less protracted and – particularly in the case of small grants – less burdensome.

Our main point is that, in future, the Commission should assist applicants with the procedures. This is a cultural revolution, but it will be beneficial all round, particularly to the reputation of the EU. Our objectives are improvements in predictability, reliability and legal certainty, and, for the purposes of improving flexibility, an amendment has been tabled regarding the limited transferability of commitments, which would otherwise lapse. I shall be tabling another oral amendment tomorrow, which, whilst refraining from specifying an amount, nevertheless refers to a maximum sum. The negotiations on this will depend on the Financial Perspective.

I would appeal to the Council not to leave the situation as it stands. What kind of procedures are they that block outflows of funds whilst Member State organisations are losing so much money? This Parliament has recognised that we cannot go on as we are doing, especially as the complex bureaucratic procedures are not even particularly successful at achieving the objective of protecting Community funds.

That is the reason for my final request: let us strive for a new version of the Financial Regulation in the medium term. In the Member States, financial regulations are simple documents for administrations, because they have to be used daily. The EU’s Financial Regulation must not count as the most complicated the administration could have conceived for its self-management. This item, too, remains on Parliament’s agenda.

I should like to thank you all once more for your cooperation, and I hope to be able to count on your support tomorrow.

(Applause)

 
  
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  Borut Pahor (PSE), draftsman of the opinion of the Committee on Budgetary Control.(SL) First, two expressions of thanks; the first is to rapporteur Mrs Grässle, who has been a great inspiration to all of us who worked with her throughout the preparation of this report. Then also to the Chairman of the Committee on Budgetary Control, Mr Fazakas, who under this great pressure of time did everything to see that the two committees enjoyed excellent cooperation in bringing this report before Parliament.

As co-rapporteur and draftsman of the opinion regarding the Financial Regulation, I would stress that the main purpose of the report was to make the Financial Regulation and its rules of implementation less bureaucratic, easier to understand, simpler and, most importantly, more user-friendly. In this way we might also ensure a more effective use of budget funds. As the rapporteur has stated, the report devotes special attention to the area of public procurement and donations. Indeed at a number of meetings we heard, particularly from non-governmental organisations, that they no longer wished to cooperate with the European Union, since the bureaucratic procedures were too long and above all too expensive.

No one, myself included, would wish to change anything in the Regulation in such a way as to render the use of taxpayers’ money less transparent. In drafting the report, we were attempting to find some kind of new, more successful balance between the effective use of money on the one hand and democratic control over such use on the other hand. In particular, the committee chaired by Mr Fazakas, the Committee on Budgetary Control, is extremely sensitive with regard to this issue. That is why the opinions of the Court of Auditors have frequently been of decisive importance for both rapporteurs and especially for the Committee on Budgetary Control, and why they have also been accommodated in this report.

May I close by saying that no one, especially in politics, wants any financial scandals. And no matter how well written they are, there is of course no set of rules that can entirely prevent them, yet they may facilitate the more or less successful management of budget funds and the more or less general confidence of the public in its legality and effectiveness. Finally I would make so bold as to claim that this report is headed in the right direction, that the proposed solutions enable a kind of new, successful balance, and I look forward to the report being adopted tomorrow.

 
  
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  Simon Busuttil, on behalf of the PPE-DE Group. – Mr President, I congratulate the rapporteur on her splendid and bold work.

This report sends a clear and strong message to citizens that the European Parliament wants them to have easier access to EU funding. A lot of importance is given to the debate on the Financial Perspective, which is about how much money will be in the EU budget. That is fine, but we should not neglect the equally important issue of how that money should be spent and how we can make it easier for citizens to benefit from it. What is the use of speaking of large sums of EU money when people on the ground are feeling increasingly frustrated about excessive bureaucracy in accessing funding, long and incomprehensible applications and officials who do little or nothing to explain them? No wonder many people simply give up before even trying. That is wrong and we should change it. We should change it by reforming the Financial Regulation and making sure we make things easier and more accessible.

That is what the rapporteur's report does: it introduces several measures to make access to funding easier and, in that sense, it turns virtual EU money that one may get into real EU money that one can actually access. That is good news for citizens, but it is also good news for NGOs and small businesses. I therefore call upon the Commission to be our ally in this reform.

Our message is clear: if we truly want to reconnect to the people, we should make things simpler.

 
  
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  Paulo Casaca, on behalf of the PSE Group. – (PT) Praise in this case is no mere formality, but an acknowledgement of the rapporteur’s extraordinarily coherent, committed work aimed at achieving two clear objectives, namely the simplification and proportionality of the scope of the rules. From this perspective, this is an extremely good report, for which we should not be sparing in our praise.

I should like to say at this point that it is vital, in my view, to analyse the next steps in this process of reform of the financial regulation. We must ensure that, throughout the next financial perspective, we in Parliament continue to exercise the power of codecision, as we did in the past, so that we can accomplish four key tasks in the near future.

The first such task is to update the budgetary guidelines in certain areas, for example the annuality principle and budgetary flexibility mechanisms; secondly, to reduce exceptions to the absolutely essential minimum – in so doing, we would confirm the overriding importance of the financial regulation on sectoral legislation, and put an end to duplications and discrepancies between on the one hand, the basic regulation, on the other, the implementing regulation and, between the two, the sectoral regulations; thirdly, to clarify the duties, powers and responsibilities of the various budgetary actors and ensuring that these duly reflect budgetary accounting standards. The fourth and last task will be to incorporate the financial regulation and the financial framework agreed upon in the Interinstitutional Agreement and to make them consistent.

These tasks may seem simple, but are in fact complex and require very careful attention.

 
  
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  Kyösti Virrankoski, on behalf of the ALDE Group. (FI) Mr President, firstly I wish to thank you, rapporteurs Mrs Gräßle and Mr Pahor, for the enormous task you have undertaken in preparing this topic. The amendment to the Financial Regulation has been an immense job of preparation, and one that is very technical and tough-going. It has taken a lot of time and concentration. Mrs Gräßle has untiringly chaired many meetings of work groups. The very fact that Parliament’s opinion is clear to everyone is precisely due to this excellent preparatory work. My warmest thanks go to them for that.

The Commission’s proposal aimed to revise the Regulation that had been in force for three years. The main objective has been to eliminate and simplify bureaucracy and increase flexibility, while at the same wishing to guarantee financial security.

The background to this is the development of a new administrative culture. In 1999, after the crisis which ended with the Commission’s resignation, a work group of experts proposed that the administration of the EU be organised in such a way that personal accountability would be clarified and at the same time financial administration simplified, this legislative package included reform of the budget structure to make it activity-based and a revision of the Financial Regulation and the implementation acts relating to it. Now is the period of interim evaluation.

One could say that the original ambitious objective has been partially achieved. Currently we are obtaining a clearer picture of the costs and results of the EU’s various policy areas. There is still a great deal of bureaucracy, however, and there are considerable controls and checks in place.

The Commission’s proposal to amend the Financial Regulation is along the right lines, I believe, although modest in its aims. The delegation of power and responsibility still lacks boldness, and activity-based administration is still a long way off.

In our opinion, the rapporteurs adopted just the right approach in endeavouring to relate necessary administration to a manageable sum of money. At present the procedures are sometimes so complicated and expensive that action does not result in the achievement of the objectives we aspire to, such as cooperation with the private sector.

The report adopted by the committees is, we believe, too cautious. We would have liked a bolder, more liberal approach. In our view, Parliament is still involved in ‘microadministration’. The main issue in administration is results, and not the procedures involved in its implementation. Complicated administrative processes only serve as protection for ineffectual civil servants, freeing them from having to make decisions. Financial administration must be based on rational decisions and personal accountability.

These comments aside, we are nevertheless prepared to support the report in its entirety, and we await the forthcoming debate on the implementation acts.

 
  
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  Kathalijne Maria Buitenweg, on behalf of the Verts/ALE Group. (NL) Mr President, I too should like to extend warm thanks to Mrs Gräßle for her work, for even sacrificing her Christmas break, as I understand, and for the many fruitful meetings we have had together. Reform of the Financial Regulation really is desperately needed.

The dismissal of the Santer Commission brought about stricter rules and a review of the control mechanisms, something to which my group has always been committed. We have also had to conclude, though, that this clean-up process has overshot the mark somewhat. It has led to excessive bureaucracy for subsidy applications, and it is mainly the NGOs, the non-governmental organisations and small and medium-sized enterprises that have borne the brunt of this. There is now such fear of inappropriate spending that European officials, where possible, will pass the buck to the subsidy applicants. As a result, we still have not got what we set out to achieve, namely a Commission in which officials are really responsible and can also shoulder that responsibility.

I am, then, very much in favour of the amendments that are before us, the majority of which aim to simplify procedures. The principle of proportionality is being mooted and I am also delighted with Amendments 110 and 101 which deal with the percentage rule. The situation at the moment is that when beneficiaries raise own resources, it is likely that they will need to pay back much of the grant, with the counterproductive effect of giving a disincentive to raise own resources in future.

The Commission has pledged that it will adopt a number of basic points from those amendments, but, as ever, the devil is in the detail, of course. As you saw with the proposals that are before us, it is this House’s intention to simplify procedures. This is not only dependent on the Financial Regulation; much will also depend on the implementing provisions which the Commission will be drafting. I therefore hope that you will adopt the principle that simplification must be introduced, which will really lighten the load.

There is much talk at present of reducing the pressure of rules imposed by Europe, and people immediately think of the large enterprises which would otherwise be obstructed in their competitiveness. It is also just as important, though, for the small enterprises and non-profit organisations to start to benefit from a reduction in administrative costs. While it is important that the Commission should bear this in mind when it drafts the implementing rules, I hope, too, that the Council will accept that this is not just about large enterprises, and that smaller businesses and NGOs should also benefit from a reduction in the administrative burden imposed by Europe.

 
  
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  Zbigniew Krzysztof Kuźmiuk, on behalf of the UEN Group. (PL) Mr President, as I take the floor in the debate on Mrs Gräßle’s report on the Financial Regulation applicable to the general budget of the European Community, I should like to draw the attention of the House to the following issues.

Firstly, the European Commission believes that after three years’ operation of the Financial Regulation there is no need to change its structure or the fundamental principles and concepts it contains. Secondly, the Commission does, however, propose a whole series of changes affecting fundamental budget principles and the validation of claims amongst other issues. According to the proposal, the Community’s claims are to be dealt with by the Member States in the same way as national financial claims. In addition, the proposal sets a five-year period for them to extinguish. This is to apply to both public procurement and contracts. These provisions incorporate the changes required to adjust to the new Community directive adopted in 2004 concerning public procurement and grants. The aim is to simplify provisions on controls and guarantees.

The rapporteur proposes a whole series of amendments to the regulation amended by the European Commission. The changes are intended to make implementation of the Union’s budget easier and to facilitate access to budget funds by the beneficiaries. I support most of these amendments and earnestly hope that the Financial Regulation, as amended by the European Commission and Parliament, will enable funds set aside in the 2007-2013 Financial Perspective to be distributed in a more efficient and transparent manner than has been the case to date. This will be particularly important for the new Member States who are due to receive several times more funding for 2007-2013 than they have in the past.

As I conclude, I should like to thank Mrs Gräßle for a good report.

 
  
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  Salvador Garriga Polledo (PPE-DE). – (ES) Mr President, Commissioner, like the last time we reviewed it, we are debating the financial Regulation today during a night sitting. I hope that, like last time, the Presidency-in-Office of the Council will be receptive to our proposals and not be a wary Presidency which wants to maintain the status quo, ignoring the fact that circumstances have changed and that the operating rules must be improved in order to improve budgetary execution.

Like last time, we again need the Commission to be understanding towards Parliament and demanding towards the Council. The rapporteur has obtained the support of a large majority for her proposal, both in the Committee on Budgetary Control and in the Committee on Budgets, and has included valuable contributions aimed at eliminating bureaucratic obstacles and protecting the taxpayers’ financial interests from fraud.

With regard to the amendments presented, I would like to draw attention to the rapporteur’s compromise proposal. The proposal of other political groups to authorise carry-over for all of the unused commitment appropriations is unrealistic and may affect the principle of annuality and, above all, it does not favour our position on the recycling of unspent funds, which is part of the negotiating strategy in the financial perspective. Restricting the sum, as the rapporteur does in her compromise amendment, seems more reasonable and, above all, more effective in terms of defending this strategy.

Furthermore, Mr President, I believe that the strategy should clearly separate the vote on the legislative proposal from the final adoption when we have a definitive wording from the Council.

 
  
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  Catherine Guy-Quint (PSE). – (FR) Mr President, Commissioner, ladies and gentlemen, I should like to begin by paying tribute to the work of both the rapporteur, Mrs Gräßle, and the draftsman, Mr Pahor, and by congratulating them on the quality of their report.

As MEPs, we had a duty, in fact, to review the financial regulation, and this for several reasons. It was becoming urgent to reform it. To prove this, I only need mention the various problems that we have had to tackle as representatives of the people of Europe, especially where providing Europeans with information was concerned. We need to be better at communicating with people and to communicate with them more often. Reviewing the financial regulation is one way of doing this. The lump-sum payments with regard to procurement procedures and to the award of grants are to be welcomed as a step in the direction of better financial management. The same goes, moreover, for the protection of the Communities’ financial interests, to be achieved, inter alia, by the amendment tabled in relation to the recovery, suspension and implementation of contracts and penalties. I am thinking, in particular, of the amendments concerning the simplification measures.

The challenge for us is to strike a balance between simplification and sound financial management. I welcome the approach of the rapporteur and the draftsman, aimed at making the rules simpler for the beneficiaries, thanks in particular to the simplification of administrative procedures and the simultaneous tightening of controls on the way in which our budget is spent. We must provide the resources for an ongoing dialogue with civil society and not discriminate between organisations – between those that have the resources to respond to Community programmes and those that do not. The report will in fact make it possible to safeguard Parliament’s rights in the future, whether in terms of its power of control or of its right to information in its capacity as a branch of the budgetary authority.

Similarly, I should like to point out that the provisions concerning the funding of political groups or political parties are of the utmost importance. We are concerned here, in actual fact, with the formation of European citizenship, a citizenship to which Parliament must contribute in order to ensure the development of the European public space.

 
  
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  José Javier Pomés Ruiz (PPE-DE). – (ES) Mr President, I am addressing the twenty practically heroic Members who are here during this night sitting. It is shameful that we have to discuss such important issues at night. Our fellow Members decided that there was no need for Friday sittings, and here we are, at an inappropriate time, which is not worthy of the quality and dignity of our parliamentary work.

I will say secondly that we must congratulate Mrs Gräßle on her good work and say that this Parliament is obliged to ensure that the money that the citizens give us is not wasted on administrative costs and that it arrives on time and effectively, and that is the intention of Mrs Gräßle’s report.

There are two different philosophies here, and I am delighted that the majority of speakers share this new philosophy — which is different to the one in place when I came to this Parliament four terms in office ago — the philosophy of believing that we must get the best from the people who work on the administration of the budget and that we must establish responsibilities. The political position of imposing bureaucracy on spending is born of distrust in our civil servants, of we politicians not wanting to run any kind of risk.

The idea is to get rid of civil servants who make mistakes, and we therefore tell them that, each time they have to buy a pencil, they must follow a long procedure in order to assure us that the pencil has been purchased properly. We do not permit the tiniest error, and there have been cases of our getting rid of civil servants who have done things right many times, but who have made a mistake just once.

The philosophy of making the spending procedure less complicated is therefore going to allow Community money, which the Council rations more and more — it is only going to give us 1%, rather than 1.2% — to arrive more efficiently and on time, because there are plenty of examples of Community money reaching the taxpayer, the European citizen, late and inefficiently as a result of our Rules of Procedure and our lack of responsibility as politicians.

Thank you very much for this excellent report, Mrs Gräßle.

 
  
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  Vladimír Maňka (PSE). – (SK) The revision of the Community’s ‘financial bible’ affects not only the institutional framework of the European Union but also its citizens. The rapporteur, Mrs Grässle, has done an excellent job in dealing with the Commission’s draft, and we now have an excellent proposal before us. I am going to focus on those points that I find most substantive. We must clearly define the tasks and joint responsibilities of the Member States regarding management of the Community’s financial resources. In respect of structural funds, and in the interest of transparency, reliability, efficiency and the good reputation of the European Union in the eyes of its citizens, we must put in place transparent and expeditious administrative procedures with clearly defined responsibilities for the individual actors. The same applies to public procurement. Ambiguities and unnecessary procedural delays often occur in this area as well. As a former mayor, I have had negative personal experiences in this respect. I believe that by approving this document we will contribute to the better functioning of the financial system in the European Union and thus make the activities of the EU easier for its citizens to comprehend.

 
  
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  Herbert Bösch (PSE).(DE) Mr President, I should like to make three points. Firstly, I wish to express my sincere congratulations to the rapporteur, Mrs Gräßle, who has done a tremendous job, a great job. We can only congratulate her on this achievement.

Secondly, if there is any point to this work, then surely it is that it represents an attempt to improve the efficiency of the administration of our programmes and our funds. This also means, however, that the Commission’s work should be increasingly judged by its efficiency in future. The significance of this to future discharge procedures in this House is that we shall have to change our methods and start to move away from a know-it-all attitude towards the application of more efficient standards.

Thirdly, as a Member coming from a small Alpine region, I expect the Commission – including in the context of the oft-heralded transparency initiatives – to provide information on the average size of the companies participating in the European programmes, the average size of the small or medium-sized enterprises benefiting from European funds, for example, and the length of time, in the final reckoning, for which an enterprise has to provide pre-financing in order to receive European funds. That, too, is very important as regards the future assessment of the Commission’s work and of the implementation of European programmes.

 
  
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  Szabolcs Fazakas (PSE). – (HU) Mr President, at the close of this debate stretching into the night, I would like to say a few words as the President of the committee involved, COCOBU, and as a MEP of a new Member State.

MEPs of the new Member States have participated in the parliamentary preparations for the Financial Regulation with great joy and enthusiasm, not only because they have an enthusiastic commitment to parliamentary work, but also because they are convinced that we serve a better, simpler and more effective Europe.

This is because our experience of almost two years has shown us that the financial regulation of the European Union is often over-bureaucratised and anti-productive. Changing this situation is not only in the interest, but also the duty of all of us.

In awareness of this, all Members of Parliament involved in this process have cooperated with one another, showing a good example; the two committees reinforced their cooperation and appointed two excellent rapporteurs, and then, starting from the organisation of the public hearing to the voting, they did everything they could to achieve a result. We trust that the Commission and Council will follow this good example as soon as possible, in the interest of the common and good new Europe.

 
  
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  President. The debate is closed.

The vote will be tomorrow at 11.30 a.m.

 
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