17de Jaarlijkse vergadering van de Europese financiële controle autoriteit(en)

Danuta HÜBNER

European Commissioner responsible for Regional Policy

The Homologues' Group meeting

Cardiff, Wales 20 October 2008

Prif Weinidog,

Boneddigion a Boneddigesau,

It is a great pleasure for me to be here today in Cardiff. This is the second time I have participated in the Homologues Group meetings. My first was in my own home country of Poland in September 2006. On that occasion I was able to sign the first contract of confidence which was, appropriately, with Wales. I can also inform you that I will be signing the 7th contract of confidence in two weeks time with Cyprus (other contracts signed with: Austria, Denmark, Portugal, Slovenia and Estonia). This gives a very positive message as to how we have increased Commission’s reliance on the work which you are doing.

It is good to see here the representatives from all 27 Member States, as well as OLAF and the European Court of Auditors. I am certain you will all enjoy your stay here in Cardiff, and go back enriched and stimulated by the good discussions. I would also like to take the opportunity to thank our hosts, Prif Weinidog Rhodri Morgan, Mr David McNeill and their team at the Welsh Assembly for having taken on the task of organising this year's event.

To make shared management work, strong and effective cooperation between the Commission and the Member States in audit matters is essential. For the new programming period, you, the audit authorities, have been given a greatly enhanced role in providing assurance on EU funds.

For the 2006 budget discharge, it was hard to convince the European Parliament that we were on the right track to achieve a reduction in the error rate in the expenditure reimbursed from cohesion policy funds. In order to give a strong political message of its commitment, the Commission adopted in February this year the Action Plan to strengthen the supervisory role of the Commission. This plan brings together all the Commission's activities aimed at preventing errors occurring, and at detecting and correcting them if they do, in one single framework. The Commission is reporting on a quarterly basis to the Parliament on progress. On 5 November the College will adopt an interim progress report. This will be highly relevant to the discharge procedure for the 2007 budget which also starts at the beginning of November. I believe that we will be able to show in the report that the measures that the Commission has taken are having an impact.

Later this morning, Nicholas Martyn (Director of audit - DG Regio) will go into more detail about the progress on the individual actions. I want to highlight three key points about the Action Plan.

Firstly, the burden of proof that our policy is well-managed is on us, Commission and Member States. One of the objectives of the Action Plan is precisely to provide a wider range of indicators for judging the effectiveness of management, such as levels of financial corrections, numbers of suspension decisions and completion of remedial action plans. Ultimately, however, the level of error in reimbursements by the Commission will always be the key signal. That is why your work both in the closure of the 2000-2006 programmes and as audit authorities for the new programmes is so critical. If the methodology and work performed is reliable, then we will be able to produce an accurate overall picture of the risk of error for the whole policy.

Secondly, although the Action Plan is a Commission document, you, the Member States make an essential contribution to its successful implementation. For example, the outcome we want from the follow up of remedial action plans where problems have been detected is that all actions have been satisfactorily completed. As the audit authorities, you can contribute to making sure this happens.

You are also involved in the compliance assessment and audit strategy procedures for the new programmes which are also part of the Action Plan. The new programmes were approved in record time. It would be a pity if implementation were now to be delayed by failure to complete the compliance assessment process in the timescale envisaged by the regulations. I urge you all to contribute to keep these processes on track.

Thirdly, I want to mention the Annual Summaries. The Commission's effective treatment of the summaries submitted in February this year under the Financial Regulation was also built into the Action Plan. It was not an easy first exercise because of the discussion on the scope of the summaries. The Commission has spared no effort to ensure that minimum requirements at least were respected. But the European Parliament expects more effort by the Member States to ensure the quality of the submissions and their value to the assurance process. The Commission has revised it guidance to Member States on the preparation of Annual Summaries. This will be finalised on Wednesday this week in the meeting of the Committee on the Coordination of the Funds (Cocof). I appreciate that many Member States are not yet ready to follow the example of a few toward the provision of voluntary national declarations. However, I believe that this should not mean that they have to take a minimalist approach on the Annual Summaries. By going beyond the minimum information requirements and providing at least an analysis and conclusions on the data, if not an overall assurance, there is greater benefit from the investment. It is also a contribution to the evidence of a well-managed policy which I mentioned earlier.

Let me say a few words on the reflection on the future cohesion policy already underway. We need both continuity and change.

On the continuity side I see two policy assets - partnership and multi-level governance. In an increasingly globalizing world, regional and local levels are best placed to exploit the advantages of global processes.

The new policy should better incorporate territorial cohesion. We have just launched the consultation on the Green Paper on territorial cohesion. The impact of globalization cuts across borders and administrative boundaries. Therefore, we should reflect on how to better involve levels both above and below the regional level in the making of cohesion policy. This approach should be accompanied by efforts to better involve citizens in our policy.

It is also becoming increasingly evident that we have to move towards a policy which is even more performance-based and result-oriented. We need to put in place mechanisms which can better demonstrate the results, impact and value-added of our policy.

This brings me to the issue of "simplification". I know that there are already concerns that the control requirements in the new programme period are too complicated and onerous, for both administrations and beneficiaries.

It is certainly the case that there has been a tightening up of some aspects of the control requirements. Given the findings of the European Court of Auditors and our own auditors, I think it would be difficult to argue that this was not necessary.

I can understand that there is some "pain" caused by putting in place stringent requirements. But it is also important to see that these are balanced by new elements which give Member States more flexibility. Examples include the right to establish most eligibility rules, the option of partial closure, provisions for proportionate controls for small programmes and the possibility of adjusting the intensity of controls in line with risk determined by error rates.

What is essential over the next few years is to make sure that at national level, data is maintained on the cost of controls and the impact of controls. This will be relevant for the debate on tolerable risk which will soon be re-launched by the Commission. It will also give a solid basis for the debate on the post-2013 delivery system.

I want to ensure that as part of the process of reflection on the future policy, we give ourselves time to examine possible changes to the delivery system including the way in which the funds are controlled. That is why I have asked Dirk Ahner (Director General DG Regio) to set up an informal working group with experts from Member States to start this process before the end of the year. I hope therefore that if you will be willing to play an active and constructive role in this process.

To conclude let me share with you more observations. We meet in a moment of extreme financial and economic insecurity in the global world and in Europe. The challenge is to stabilise market conditions and introduce badly needed reforms. Since the beginning of the crisis we in the European Union have acted together - the Member States, Commission and European financial institutions. Further concerted actions will take place because there is a commitment to act together in a decisive and comprehensive way.

In this context let me say that cohesion policy brings a badly needed stability in terms of guaranteed stream of investment financing and it contributes to stable investment environment. It can help European SMEs maintaining their investment capacities and facilitate their access to new forms of financing. Our duty is to see that all the potential this policy can offer in turbulent time is fully used.

May I wish you a very successful and enjoyable meeting.