IP/09/551 Brussels, 8 April 2009Commission sets harder targets for faster payments of EU grants and contractsAn initiative introducing new and tougher targets for the payment of EU funds managed directly by the European Commission was adopted today. The proposals aim to step up ongoing efforts and speed up cash flow to beneficiaries – often small businesses and local managing authorities. They will apply to €15 billion of funds that have specific payment times covering areas like research, education and youth, energy and transport. One of the key targets is to cut the times for initial pre-financing of EU grants and contracts from 30 to 20 days. The proposals complement recent decisions to speed up payments for Structural Funds projects as announced in the European Economic Recovery Plan (IP/08/1983), as well as proposals to combat late payments in commercial transactions (IP/09/552). Dalia Grybauskaitė, EU Commissioner for Financial Programming and Budget said "the aim of today's proposal is to squeeze as much as possible out of the current financial rules to speed up the 415,000 or so direct payments the Commission makes each year”. She underlined the timely nature of the proposal adding "the current economic climate requires immediate measures to help ease the situation for cash beneficiaries. This initiative will also pave the way for future changes to EU financial rules planned in 2010". The main focus of the communication is to reduce the time limits for pre-financing, or initial payments from 30 to 20 days. These payments are the most straightforward as they do not require any complex paperwork or bureaucracy and represent around €9.5bn. For other centrally managed payments (representing roughly €5.5bn), the target is to cut payment times from 45 to 30 days, bringing European Commission payments into line with the directive on combating late payments in commercial transactions. The Commission will also encourage its services to increase the use of flat rates and lump sums for centrally managed grants and contracts. Simplifying general procedures before projects get off the ground can contribute to faster payments so measures offering the Commission services the possibility to publish calls for proposals covering two years rather than individual ones and to use standardised calls will be introduced. Sharing knowledge and experience is an important aspect in accelerating payments and the Commission’s budget Directorate-General (DG BUDG) will play a more active role in assisting other services meet the various conditions required to commit their own budgets quickly. The introduction of accelerated procedures for procurement and grants will be encouraged wherever possible. The Commission services will be required to report formally in their annual activity reports on the achievement of these targets.