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Financial Corrections Applied to Agricultural and Cohesion Expenditures: Effective Instrument to Improve the Accountability in the EU?

Justyna Lacny

Financial correction comprises legal instruments established in the framework of the Common Agricultural Policy (CAP) and cohesion policy to ensure the Member States respect EU law while spending EU budgetary resources. Their purpose is to restore a situation where 100% of the expenditures declared by the Member State for financing from the EU budget is in line with the applicable EU rules. They are imposed on Member State by the Commission, after the mediation procedure, in the form of a decision challenged under Article 263 TFUE. Imposition of the financial correction consists of the withdrawal of EU funds granted to the Member State within the multiannual financial framework. For a Member State, a financial correction involves a reduction of EU funding. Analyses of financial corrections must include institutional aspect of relations between the Commission and the Member States and roles played in the EU policies' implementation processes. As we know, implementation of the CAP and the cohesion policy is decentralized (so-called shared management). It is thus the Member States who perform the majority of implementation tasks (eg. selection of projects, making payments to beneficiaries, etc.) The Commission's role differs considerably. It ensures compliance of the EU law, with the judicial assistance of Court of Justice (Article 17 (1) of TEU) as well as it manages EU program and implements the Union budget (Article 317 TFUE). To that end the Member State are the "EU policies' implementators" and the Commission - "the guardian of the Treaty", while also responsible for the EU budget. Financial corrections are thus a legal enforcement mechanism which enables the Commission to take responsibility for supervision of the EU law as well as for the EU budget implementation, as required by Article 17 (1) TFUE and Article 317 TFUE. The question is whether it is effective?



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