Discharge procedure for the EU budget: Political scrutiny of budget implementation

The European Commission is ultimately responsible for the execution of the European Union’s budget. However, this involves a range of actors, including Member States, to which the Commission delegates implementing tasks related to a significant share of the budget.
Each year, the discharge procedure ensures ex-post democratic oversight at political level of how the EU’s annual budget has been used. It aims to verify whether implementation was in accordance with relevant rules (compliance), including the principles of sound financial management (performance).
The decision on whether to grant discharge for the execution of the EU budget is made by the European Parliament, which acts on a non-binding recommendation by the Council, the other arm of the EU budgetary authority. Another key institution is the European Court of Auditors, the EU’s independent external auditor, whose reports are a fundamental part of the procedure.
The discharge procedure has proved to be a powerful tool, which has had an impact on the evolution of the EU’s budgetary system, while contributing to increasing the Parliament’s political leverage. The Treaty of Lisbon has provided the procedure with a new tool – an evaluation report on the results achieved with the EU’s finances – which could increase the focus on monitoring the achievement of policy objectives. In the wake of the euro crisis, another development being debated concerns how to ensure democratic scrutiny of the financial tools that have been created outside the EU’s institutional framework and as such are not subject to the discharge procedure.

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