Documents considered by the Committee on 20 October 2010 - European Scrutiny Committee Contents

14 European External Action Service: personnel and financial management






Draft Regulation amending the Staff Regulations of officials of the European Communities and the conditions of employment of other servants of those Communities

Draft Regulation amending Council regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities, as regards the European External Action Service

Legal base(a) Article 336 TFEU; co-decision; QMV

(b) Article 322 TFEU and Article 106a Euratom Treaty; co-decision; QMV

Deposited in Parliament(a) —

(b) 20 October 2010

DepartmentForeign and Commonwealth Office
Basis of considerationMinister's letter of 19 October 2010
Previous Committee ReportHC 5-xvii (2009-10), chapter 2 (7 April 2010)
To be discussed in CouncilLate October/early November 2010
Committee's assessmentPolitically important
Committee's decisionCleared


14.1 Management of the EU's staff and financial resources is governed by the Staff Regulations and the Financial Regulation.

14.2 Amongst matters covered by the Financial Regulation are budgetary principles, establishment, structure and implementation of the budget, procurement, accounts, external audit and discharge by the European Parliament. The Financial Regulation is complemented by detailed Implementing Rules adopted by the Commission.[53]

14.3 The Council Decision on the organisation and functioning of the European External Action Service[54] (EEAS) requires amendments to the Staff and Financial Regulations before it can become operational.

Previous scrutiny

14.4 In April of this year[55] the previous Committee recommended that the proposed amendments to the Staff and Financial Regulations, although not finalised, be debated on the Floor of the House. The debate took place on 14 July, and both amending Regulations were subsequently cleared from scrutiny.

The Minister's letter of 19 October

14.5 Further negotiations on the two proposals have now taken place in Brussels and the Minister for Europe (David Lidington) writes to update the Committee on progress made. He says that both proposals remain largely unchanged from the ones scrutinised earlier this year; and whilst there is not yet a final position, he expects the proposals to be adopted by the European Parliament during this week's plenary in Strasbourg (18-20 October). The Presidency and High Representative are then likely to seek adoption by the Council, possibly as early as 25 October at the General Affairs Committee/Foreign Affairs Committee (or otherwise as an "A" Point at a Council in early November). The Minister says he will make every effort to delay the Council decision for as long as possible, but asks for our early response to the proposals in case adoption is scheduled for 25 October.

14.6 The Minister explains that the High Representative, Baroness Ashton, is keen to see the Regulations adopted quickly. She wants to appoint her top team by early November to help her manage the growing number of foreign policy challenges on her plate (e.g. Western Balkans, Pakistan, Iran) but is reluctant to do this until the proposed amendments to the Staff Regulations have been adopted.

14.7 The Government agrees that prolonged internal wrangling over structures and appointments risks distracting attention from the larger challenge of increasing the EU's impact on external policy issues of shared concern. Serious discussion and agreement of EEAS policy priorities is overdue, but remains difficult without the top team in place.

14.8 The Government is concerned that a credible plan to achieve cost efficiencies in the short-term, and budget neutrality in the longer term, must be put in place as quickly as possible. Baroness Ashton wants this work to be led by the EEAS' Chief Operating Officer (COO), who will be appointed along with the rest of the top team. Until the proposed amendments to the Financial Regulation are adopted, the EEAS does not have the authority to spend EU budget funds and the Commission and Council are therefore making disbursements on the EEAS' behalf. The Government would like to see the amendments finalised, and the COO appointed, to enable rapid progress to be made on a plan for cost savings and eliminating duplication.


14.9 A compromise text has now been reached following trilogue negotiations between the European Parliament (EP), Commission and Council. There were three particular points of contention.

Gender balance and geographical balance

14.10 The EEAS Decision states that candidates should be appointed 'on merit, while ensuring adequate gender and geographical balance'. MEPs had tabled amendments stating that: 'candidates from the less represented Member States and the less represented gender may be given priority, provided they have substantially similar qualifications'. The Government agreed with the Presidency that this demand should be resisted firmly. The revised text does not include provision for positive discrimination, but does include two Statements by the High Representative, (Addenda 1 and 2) undertaking to seek opportunities to improve representation, within the provisions of the Regulations.

Date of opening-up of vacancies to other institutions

14.11 The EEAS Decision states that 'before 1 July 2013, the EAS will recruit exclusively officials originating from the General Secretariat of the Council and the Commission, as well as staff coming from the diplomatic services of the Member States'. The EP wanted to bring this date forward, as that would allow its own staff to apply for EAS vacancies, but was not successful

14.12 A related point was on the transitional period during which priority may be given to candidates from Member States in case of substantially equal qualifications (in order to meet the one-third target). Here the EP was unsuccessful in shortening this period from 1 July 2013 to 1 January 2012.

Modalities of application of Article 29 of the Staff Regulations

14.13 The EP successfully effected a change to Article 29, to allow its own staff (and those from other institutions) to be treated as internal candidates from the date of their eligibility to apply for EEAS vacancies. The Government did not favour this, but agreed that a concession on this point was acceptable in order to defend our position on the points mentioned above.


14.14 The EEAS requires a revision to the Financial Regulation in order to be able to spend EU budget funds, and to ensure that the correct financial management arrangements are in place. The negotiations on this in Council were relatively straightforward, technical in nature and largely followed the steer laid down in the EEAS Decision. The Presidency was given a strong mandate by COREPER to defend the original proposal against further amendments by the EP. On 12 October, the Presidency circulated the compromise text for agreement by COREPER. The Government is satisfied that the Presidency followed the mandate from the Council and successfully held their ground on three of the four outstanding points, as set out below.

Liability of temporary staff coming from diplomatic services

14.15 The EP wanted controls on seconded national experts (SNEs) to be tighter. The Presidency believed this was unnecessary. It was agreed that Article 66 of the Financial Regulation covers all eventualities, and more controls were therefore not required.

Member State expenditure under CFSP 

14.16 The EP wanted more detailed information on how CFSP funds are spent. The Presidency argued that the EP had no right to be involved in cooperation that occurs under CFSP between Member States (under the 'Athena' mechanism). The Government strongly disagreed that the EP should have any such role, and fully supported the Presidency's firm stance on this point. There are some changes to the final compromise text, which reflect the way information on CFSP spending is presented, but the Government does not consider them to be substantive.

The Discharge Procedure 

14.17 The EP wanted Heads of Delegation to be accountable to the EP under the annual discharge procedure. The Presidency believed this breached the Financial Regulation: the line of accountability lies with Director Generals, and ultimately the High Representative, not with Heads of Delegation. The Council fought consistently against attempts by the EP to have specific rights of control over Heads of Delegation. This point was successfully defended by the Presidency.

EAS Internal Auditor

14.18 The Council wanted an independent EEAS internal auditor, on the grounds that all other Institutions have one, and that they consider it to be generally good financial management. The EP (and the Commission) wanted the EEAS to use the Commission auditors, which would be more cost effective — especially as the Commissioner auditors will still need to audit most of the operational expenditure flowing through EU Delegations around world. An EEAS auditor would, in effect, only be auditing administrative spend, which is low risk.

14.19 The Government did not consider this a priority: provided that there is a transparent and effective audit process it would prefer to see the best value for money solution implemented, and was content for the Presidency to cede to the EP on this point.

14.20 A final outstanding point is that the Commission has adopted a declaration as part of the trilogue agreement stating that it will address the issue of integrating the European Development Fund into the EU Budget. Such a budgetisation of the Fund would require unanimity in the Council. We and many other Member States would oppose.


14.21 We thank the Minister for this update on the inter-institutional negotiations on the revision to the Staff and Financial Regulations, which is necessary for the operation of the European External Action Service (EEAS). And we are grateful to have been able to consider the amendments before final political agreement in the Council.

14.22 It would appear that the European Parliament exercised its co-decision rights to increase its influence over the operation of the EEAS; but, on balance, we think the compromise text is one which is rational, financially sound, and which preserves the sui generis nature of the EEAS and the CFSP.

14.23 We clear both proposals from scrutiny, and ask for the final versions of both proposals to be deposited when they become available.

53   Commission Regulation (EC, EURATOM) No 2342/2002: see  Back

54   Reported at chapter 11 of this Report. Back

55   See headnote. Back

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