EUROPEAN COMMISSION: CHANGES TO SPENDING RULES TO CUT RED TAPE.

EU Budget Commissioner Dalia Grybauskaite said the Commission was "making the rules more user friendly and streamlining requirements that were excessively burdensome while maintaining strict controls on the use of taxpayers' money".

A Commission statement said that, under the current system, the level of paperwork required was "not proportional" to the sums of money involved. It insists, however, that the new legislation will "still provide a robust framework to guard against fraud" and to ensure fairness and competition when grants or contracts are awarded.

The new rules are intended to come into effect in time for the start of the new medium-term financial framework running from 2007 until 2013.

The main changes are to reduce information requirements imposed on recipients of grants and funding from the Commission and raising the thresholds for payments at which firms or organisations must respect certain rules.

For example, there will be more use of lump-sum payments for small grants. The ceiling for such payments will be raised to euro 10,000 from euro 5,000 to allow funds to be paid out more quickly. This change is designed to benefit schools, universities, development agencies and small municipalities. There would also be a reduction in the amount of information such companies would have to provide.

Paperwork for small and medium-sized enterprises will also be cut. In future, for contracts under euro 50,000 there will be a lower burden of proof of a company's trustworthiness. At the moment, all companies must supply evidence to show they have no previous convictions for malpractice, that they are not bankrupt and that they are making correct tax and social security contributions. In future, a simple declaration of propriety will suffice. The obligation to...