# EUR-Lex - 52015PC0015 - EN

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# 52015PC0015

**Proposal for a COUNCIL REGULATION amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 /* COM/2015/015 final - 2015/0010 (APP) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

Article 19 of Council Regulation No 1311/2013
of 2 December laying down the multiannual financial framework for the years
2014-2020[1]
(MFF Regulation) provides for a revision of the multiannual financial framework
(MFF) in case of late adoption of rules or programmes under shared management:

1. In the event of the adoption after 1
January 2014 of new rules or programmes under shared management for the
Structural Funds, the Cohesion Fund, the European Agricultural Fund for Rural
Development, the European Maritime and Fisheries Fund, the Asylum and Migration
Fund and the Internal Security Fund, the MFF shall be revised in order to
transfer to subsequent years, in excess of the corresponding expenditure ceilings,
allocations not used in 2014.

2. The revision concerning the transfer
of unused allocation for the year 2014 shall be adopted before 1 May 2015.

As a consequence of the late agreement on
the MFF 2014-2020, the various legal acts laying down provisions for
implementing the funds were adopted in December 2013 for the European Regional
Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF)
and the European Agricultural Fund for Rural Development (EAFRD), and as late
as May 2014 for the European Maritime and Fisheries Fund (EMFF), the Asylum,
Migration and Integration Fund (AMIF) and the Internal Security Fund (ISF). A
range of Implementing Acts and Delegated Acts were subsequently adopted in the
course of 2014 for each Fund.

The Commission’s strategy to launch an
informal dialogue on the programming documents for the European Structural and
Investment Funds (ESI Funds, i.e. ERDF, ESF, CF, EAFRD and EMFF) as from 2012
has achieved important results. The adoption of Partnership Agreements with
Member States took about four month less than in the previous programming
period.

Nevertheless, as
a result of the late agreement on legal acts, a significant amount of
programmes could not be adopted in 2014 and were not advanced enough either to
benefit from the procedure for carry-over of appropriations under Article 13 of
the Financial Regulation[2]:
Programmes which are "ready for adoption" at
the end of 2014, but cannot be adopted formally due to lack of time, can
benefit from the "carry-over" procedure under Article 13(2)(a) of the
Financial Regulation as regards the 2014 commitment. In this context
"ready for adoption" means that the preparatory stages have been
completed and no further actions are required before launching the procedure for
the Commission decision to adopt the programme. In such cases, the carry-over
procedure allows for the 2014 commitment to be carried over to 2015 provided
that 2014 amounts are committed up to 31 March 2015.

Allocations not used in 2014 nor carried
over need to be transferred to subsequent years by means of a revision of the
MFF in accordance with Article 19 of the MFF Regulation.

The revision of the MFF ceilings will have
to be accompanied by an Amending Budget as far as 2015 commitment appropriations
are concerned. Both the revision and the Amending Budget will be a prerequisite
for the adoption of programmes which trigger the budgetary commitment and the
payment of the initial pre-financing.

2.           LEGAL ELEMENTS OF THE
PROPOSAL

2.1.        Scope of the revision

The revision under Article 19 of the MFF
Regulation applies to the adoption after 1 January 2014 of new rules or
programmes under shared management for the ESI Funds, the AMIF and the ISF. It
thus applies to programmes adopted after 1 January 2014 even when the relevant
legal act was adopted by that time. Moreover, ‘rules’ covers not only the basic
legislative acts laying down the provisions for implementing the funds
concerned, but also implementing and delegated acts, to the extent to which
they are a prerequisite for preparing or finalising the programmes.

Consequently, this provision also applies to
funds from the specific allocation for the Youth Employment Initiative as the
legal basis is the same as for programmes.

It also applies to the Fund for European Aid
to the most Deprived (FEAD) as its commitments originate from the Structural
Funds and are implemented under shared management.

Finally, Article 19 also covers contributions
from the ERDF to the cross-border and sea-basin programmes established under
the European Neighbourhood Instrument and the Instrument for Pre-Accession
Assistance as those amounts are part of national allocations defined in Article
91(2) of the ESI Funds’ Common Provisions Regulation (CPR)[3].

Conversely, the provision does neither apply
to amounts transferred from the Cohesion Fund to the Connecting Europe
Facility, nor to technical assistance at the initiative of the Commission, nor
to innovative actions, as these are not part of  programmes and are managed by
the Commission under direct management. It does not apply either to
contributions from Heading 4 of the MFF even when transferred to the ERDF and
the European Territorial Cooperation objective.

Article 19 does not impose any constraints as
to the profile of the transfer of allocations to subsequent years.

3.           TRANSFER OF ALLOCATIONS

Commitment appropriations for programmes
under shared management within the meaning of Article 19 of the MFF Regulation
lapsed in 2014 for an amount of EUR 21,043,639,478 in current prices. This
corresponds to the 2014 tranches of programmes that could neither be committed
in 2014 nor carried over to 2015.

The below table shows the distribution by
Fund of the 2014 commitments, distinguishing those adopted in 2014 from those
carried-over as well as from those to be transferred under Article 19 of the
MFF Regulation:

The Commission proposes to transfer the bulk
of the allocations not used in 2014 to year 2015 in order to keep the pace of
investments for growth and jobs, minimise differences of treatment with
programmes adopted in 2014 and ensure equal treatment with programmes whose
2014 commitment tranche is carried-over in accordance with Article 13 of the
Financial Regulation[4].
Hence, all allocations not used in 2014 nor carried over will be transferred to
2015, except in the following cases:

The unused EAFRD allocations are proposed
to be transferred in equal parts to 2015 and 2016. This is justified by the
cumulative effect of, in particular, the following circumstances:

– 
The regulatory framework providing the essential
elements necessary to Member States for the preparation of their rural
development programmes was completed only in the second half of 2014.
Furthermore, the latest regulation amending the basic act following Member
States' decisions to transfer amounts between direct aids and rural
development, and thereby impacting the programming, came into force only at the
end of December 2014.

– 
Because of the transitional rules under
Regulation (EU) No 1310/2013 significant amounts spent under the new rural
development programmes are still paid under the budget line for the old
programmes during the transition between two periods. Therefore, doubling the
available commitments on the budget line for the new RDPs would result in
additional unused appropriations in 2015 as the total annual payments would not
consume all the available commitments in the budget line for the new RDPs.

– 
As opposed to the other ESI Funds, programmes
financed from the EAFRD will not benefit from annual pre-financing, resulting
in a higher amount of interim payments to be claimed within the decommitment
deadlines.

For contributions
from the ERDF to the cross-border and sea-basin programmes established under
the European Neighbourhood Instrument (ENI-CBC programmes) and the Instrument
for Pre-Accession Assistance (IPA-CBC programmes) it is
proposed to transfer the whole 2014 ERDF allocation to 2017. The set-up of
these programmes is more complex and takes longer. This is due to the specific
character of those programmes involving Member States and candidate or
neighbouring countries.

For programmes financed from the AMIF or
the ISF, allocations not used in 2014 shall be transferred to years 2015 to
2017 with a degressive profile. The basic acts for these funds were only
adopted in May 2014, with the adoption of a number of implementing and
delegated acts still pending. These funds are subject
to a stricter decommitment rule than for the ESI Funds i.e. n+2, as from the
second year of implementation, instead of n+3. Finally, the Member States’
experience in managing these funds under shared management is rather new. The
proposed transfer of the 2014 allocations over three years takes account of
these particular features.

Consequently, the allocations not used in
2014 are proposed to be transferred to subsequent years as shown in the below
table.

4.           IMPLICATIONS ON PAYMENTS

Concerning the implications on payments in
2015, they will be covered within the voted budget for 2015. The first initial
pre-financing that has not been paid in 2014 will have to be paid in 2015
together with the second pre-financing. However, the corresponding unused
appropriations in 2014 have been used by transfers to reduce the backlog of
unpaid bills from the previous period 2007-2013 and the reverse operation could
be done, if need be, in 2015 to cover the pre-financings.

The medium and longer term implications on
interim payments of the transfer are more difficult to predict.

The legislative acts laying down the
provisions for implementing the funds contain provisions for the automatic
decommitment of appropriations not used within a given deadline, which is of
n+3 years for the ESI Funds and of n+2 years for the AMIF and the ISF.

The year “n” corresponds to the year of the
budgetary commitment. As both in case of a carry-over and in case of a transfer
of commitment appropriations from 2014 to 2015 the budgetary commitment will be
made in 2015, the n+3 period will start from 2015, with
the deadline shifting accordingly from end 2017 to end 2018. In case of n+2,
the same applies: the period will start from 2015 and the deadline shift accordingly
by one year.

This could in principle result in a shift of
payments from one year to another without this lowering the overall needs over
the 2014-2020 period. On the other hand, the real pace of implementation will
not be pre-determined by the transfer. Under all programmes, regardless of
their date of adoption, expenditure is eligible as from 1 January 2014 (and as
from 1 September 2013 for the Youth Employment Initiative and 1 December 2013
for the Fund for European Aid to the Most Deprived). This means that
implementation could start before the formal adoption of the respective
programme and limit the impact of the delay on the submission of interim payment
claims.

Both the fact that Member States have n+3
years to spend the funds (n+2 for AMIF and ISF), taking account of initial and
annual pre-financing, and the availability of the Global Margin for payments (Article
5 of the MFF Regulation) are expected to further mitigate the impact of the
transfer of commitments from 2014 on annual payment ceilings.

For these reasons, the Commission does not
propose to revise the payment ceilings. It will review the situation regularly
in the light of implementation and make proposals if appropriate in accordance
with the relevant provisions of the MFF Regulation.

5.           REVISED FINANCIAL
FRAMEWORK IN CURRENT PRICES

The proposed
transfer of allocations in the below MFF table is expressed in current prices
and incorporates the technical adjustment made for 2015[5].

The Council regulation amending the MFF Regulation
must refer to the basic table set out in its Annex, which is expressed in
constant 2011 prices. The amounts in current prices are thus to be converted
into 2011 prices.

2015/0010 (APP)

Proposal for a

COUNCIL REGULATION

amending Regulation (EU, Euratom) No
1311/2013 laying down the multiannual financial framework for the years
2014-2020

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 312 thereof,

Having regard to the Treaty establishing
the European Atomic Energy Community, and in particular Article 106a thereof,

Having regard to the proposal from the
European Commission,

Having regard to the consent of the
European Parliament,

After transmission of the draft legislative
act to the national Parliaments,

Acting in accordance with a special
legislative procedure,

Whereas:

(1)       Article 19 of Council
Regulation (EU, Euratom) No 1311/2013[6]
provides that in the event of the adoption after 1 January 2014 of new rules or
programmes under shared management for the Structural Funds, the Cohesion Fund,
the European Agricultural Fund for Rural Development, the European Maritime and
Fisheries Fund, the Asylum, Migration and Integration Fund and the Internal
Security Fund, the multiannual financial framework is to be revised in order to
transfer to subsequent years, in excess of the corresponding expenditure
ceilings, allocations not used in 2014. The revision concerning the transfer of
unused allocations for the year 2014 shall be adopted before 1 May 2015.

(2)       As a result of such late
adoption, EUR 11 216 187 326 in current prices of the allocation
provided for the Structural Funds and the Cohesion Fund, EUR 9 446 050 652
in current prices of the allocation provided for the European Agricultural Fund
for Rural Development and the European Maritime and Fisheries Fund, and EUR 442 319 096
of the allocation provided for the Asylum, Migration and Integration Fund and
the Internal Security Fund could not be committed in 2014 nor carried over to
2015.

(3)       Annex to Regulation (EU, Euratom)
No 1311/2013 should therefore be revised by transferring the commitment
appropriations not used in 2014 to subsequent years for sub-heading 1b, heading
2 and heading 3. For that purpose, the figures in current prices should be
converted into 2011 prices.

(4)       Regulation (EU, Euratom) No
1311/2013 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

Annex to Regulation (EU, Euratom) No
1311/2013is replaced by the text set out in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on
the third day following that of its publication in the Official Journal of
the European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For
the Council

The
President

[1]              OJ L 347, 20.12.2013, p. 884.

[2]              Regulation (EU, Euratom) No
966/2012 of the European Parliament and of the Council of 25 October 2012 on
the financial rules applicable to the general budget of the Union and repealing
Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).

[3]              Regulation (EU) No 1303/2013
of the European Parliament and of the Council of 17 December 2013 laying down
common provisions on the European regional Development Fund, the European
Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural
development and the European Maritime and Fisheries Fund and laying down
general provisions on the European Regional Development Fund, the European
Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and
repealing Council Regulation (EC) No 1081/2006 (OJ L 347, 20.12.2013, p. 320).

[4]               Both in case of a carry-over
and in case of a transfer of commitment appropriations from 2014 to 2015 the
budgetary commitment will be made in 2015. The n+3
deadline for ESI Funds will thus shift accordingly from end 2017 to end 2018.
The n+2 deadline for AMIF and ISF will shift accordingly from end 2016 to end
2017.

[5]               Communication from the Commission to the Council and
the European Parliament: Technical adjustment of the financial framework for
2015 in line with movements in GNI (Article 6 of Council Regulation No
1311/2013 laying down the multiannual financial framework for the years
2014-2020),  COM(2014) 307 final, 28.5.2014.

[6]               Council Regulation (EU, Euratom) No 1311/2013 of 2
December 2013 laying down the multiannual financial framework for the years 2014-2020
(OJ L 347, 20.12.2013, p. 884).

ANNEX

MULTIANNUAL FINANCIAL FRAMEWORK (EU-28)