The proposals adopted yesterday are intended to be consistent with the economic governance framework introduced in April 2024 while reducing burdens and streamlining funding arrangements for assisting non-euro area member states facing balance of payments difficulties.

They will simplify EU law, remove redundant administrative requirements, and make financial assistance more efficient. They will directly benefit national administrations by easing their administrative workload, making it easier to implement EU law, and enabling them to refocus resources on other tasks.

The changes will streamline certain elements of the EU economic governance framework related to fiscal surveillance.

In particular, the Commission proposes to amend the sanctions regulation (Regulation (EU) No 1173/2011), and the Draft Budgetary Plan (DBP) regulation (Regulation (EU) No 473/2013).

These amendments will:

• align the rules for the imposition of financial sanctions with the reformed Stability and Growth Pact by updating or removing obsolete provisions and by ensuring a graduated approach compatible with the amended corrective arm regulation;
• fully align the Draft Budgetary Plan regulation with the reformed EU economic governance framework, addressing and eliminating inconsistencies and simplifying procedures and reporting obligations to improve the efficiency of fiscal surveillance; and
• reduce the reporting burden on Member States, generating savings in administrative costs while maintaining effective fiscal oversight. 

The proposals also amend the regulation on enhanced and post-programme surveillance for euro area member states facing, or at risk of, serious financial difficulties (Regulation (EU) No 472/2013).

Under this amendment, the Regulation will:

• clarify that enhanced surveillance applies when precautionary financial assistance requires new measures, ensuring a more targeted use of this surveillance;
• refine post-programme surveillance so that its intensity can be better adjusted to the level of repayment risk and the need for corrective measures.

The Commission says these changes will ensure that post-programme surveillance becomes better aligned with the Union economic governance framework, avoiding the overlap with other surveillance processes while maintaining its effectiveness in assessing repayment risks. 

For non-euro area member states, the Commission proposes to simplify the funding arrangements of the balance of payments facility (Council Regulation (EC) No 332/2002).

This applies when non-euro area member states encounter significant challenges in managing their international transactions, or are at risk of encountering such challenges, and the EU’s support mechanism are used to assist them.

The current ‘back-to-back’ funding method — where each borrowing by the Commission is directly linked to a corresponding disbursement — will be replaced by a ‘diversified’ funding strategy, which is a more cost-effective and efficient way of supporting Member States.

This approach is already being used successfully in other EU funding programmes, such as the Macro-Financial Assistance (MFA)+ for Ukraine, and NextGenerationEU, the Commission says.

Valdis Dombrovskis, the European commissioner for economy and productivity, implementation and simplification, said: “This initiative reflects the Commission’s ongoing commitment to tackle red tape, increase efficiency, and eliminate unnecessary reporting requirements, while supporting competitiveness and economic growth across the European Union.

“By removing outdated requirements and reducing administrative complexity, the EU can support member states in focusing resources where they are most needed: on delivering sound public finances, fostering growth and ensuring financial stability.”