On the proposal for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, and amending Regulations (EU) 2021/696, (EU) 2023/588, (EU) [EDIP]
CONT-PA-784350
Committee on Budgetary Control · Rapporteur: Ondřej Knotek
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The Committee on Budgetary Control's draft opinion responds to the proposed regulation establishing the European Competitiveness Fund (ECF), which would fund competitiveness, defence research and innovation. The rapporteur supports the objective but proposes amendments to strengthen transparency, accountability and sound financial management.¶¶ The amendments require that OLAF, the European Court of Auditors and the European Public Prosecutor's Office can investigate and audit all ECF implementation modes, including implementing partners, intermediaries, final recipients and third-country counterparts.¶ They set conditions and annual reporting duties for derogations from the Financial Regulation, require adequate geographical balance, safeguards against double funding, traceability to final beneficiaries, and justification and auditability for financing not linked to costs.¶¶¶ Governance safeguards are reinforced so that advisory boards and stakeholder consultations follow rules on conflict of interest, transparency and integrity.¶
Committee position. The Committee on Budgetary Control supports the ECF's objective but proposes amendments to strengthen transparency, accountability and sound financial management, protect the Union's financial interests across all implementation modes, and reinforce reporting and control safeguards.¶¶¶
Key points
- The rapporteur supports the ECF's aim to boost competitiveness through public and private investment but flags reliance on financial instruments, guarantees, accelerated procedures and Commission discretion.¶
- The amendments aim to strengthen transparency, accountability and sound financial management while keeping flexibility and speed.¶
- OLAF, the European Court of Auditors and the European Public Prosecutor's Office must be able to investigate and audit all ECF implementation modes, with equivalent obligations for partners, intermediaries, recipients and third-country counterparts.¶
- Derogations from the Financial Regulation must meet clear conditions and be reported annually to Parliament and the Council, covering legal basis, justification, financial impact and beneficiaries.¶
- The amendments require adequate geographical balance, technical assistance focused on less experienced entities, and reporting on the geographical distribution of ECF support by Member State, policy window and funding instrument.¶
- Safeguards against double funding and traceability of Union funds down to final beneficiaries, including subcontractors, are reinforced, and the single gateway must ensure public access to information under data protection rules.¶
- Financing not linked to costs must be justified, use clear methodologies for milestones and targets, prevent overcompensation and double funding, and be effectively auditable.¶
- Advisory boards and stakeholder consultations must comply with rules on conflict of interest, transparency and integrity.¶
- The amendments add new articles on protection of the Union's financial interests and on annual Commission reporting to Parliament and the Council by 30 June each year.¶¶
Who is affected
- The Commission, which must apply the new transparency, reporting and control obligations.¶¶¶
- Implementing partners, financial intermediaries and final recipients, who must cooperate with audits and provide ownership information.¶¶
- Member States, which are involved in work programmes and must ensure geographical balance.¶¶
- Advisory boards and stakeholder bodies, which must follow conflict-of-interest and transparency rules.¶¶¶