# EUR-Lex - 52011PC0614 - EN

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# 52011PC0614

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on specific provisions concerning the European Regional Development Fund and the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 /* COM/2011/0614 final - 2011/0275 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a
proposal for the next multi-annual financial framework for the period 2014-2020:
A Budget for Europe 2020[1].
. In its proposal, the Commission decided that cohesion policy should remain an
essential element of the next financial package and underlined its pivotal role
in delivering the Europe 2020 strategy[2].

The Commission therefore proposed a number
of important changes to the way cohesion policy is designed and implemented.
Concentrating funding on a smaller number of priorities better linked to the
Europe 2020 Strategy, focusing on results, monitoring progress towards agreed
objectives, increasing the use of conditionalities and simplifying the delivery
are among the major hallmarks of the proposal.

This Regulation sets out the provisions
governing the European Regional Development Fund, and repealing Regulation (EC)
No 1083/2006. It draws on the work undertaken since the publication of the
Fourth Cohesion Report in May 2007 which outlined the main challenges facing
regions in the next decades and launched the debate on the future cohesion
policy. On 9 November 2010, the Commission adopted the Fifth Cohesion Report
which provided an analysis of social and economic trends and outlined
orientations for the future cohesion policy.

Cohesion policy is the main investment
instrument for supporting the key priorities of the Union as enshrined in the
Europe 2020 strategy. It does so by focusing on the countries and regions where
needs are greater.  One of the greatest successes of the EU has been its
capacity to raise living standards for all its citizens. It does this not only
by helping poorer Member States and regions to develop and grow but also
through its role in the integration of the Single Market whose size delivers
markets and economies of scale to all parts of the EU, rich and poor, big and
small. The Commission's evaluation of past cohesion policy spending has shown
many examples of added value and of growth- and job- creating investment that
could not have happened without the support of the EU budget. However, the
results also show the effects of dispersion and lack of prioritisation. At a
time when public money is scarce and when growth enhancing investment is more
needed than ever, the Commission has decided to propose important changes to
cohesion policy.

The ERDF aims to strengthen economic and
social cohesion in the European Union by correcting imbalances between its
regions. The ERDF supports regional and local development by co-financing
investments in R&D and innovation; climate change and environment; business
support to SMEs; services of common economic interest; telecommunication,
energy and transport infrastructures; health, education and social infrastructures;
and sustainable urban development.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

2.1.      Consultation and expert advice

The results of the public consultations of Fifth
Progress Report on Economic and Social Cohesion, the EU Budget Review[3], the proposals for the
multi-annual financial framework[4],
the Fifth Cohesion Report[5]
and consultations following the adoption of the report have all been considered
when making the proposals.

The public consultation on the Conclusions of
the Fifth Cohesion Report was held between 12 November 2010 and 31 January
2011. A total of 444 contributions were received. Respondents included Member
States, regional and local authorities, social partners, European interest
organisations, non-governmental organisations, citizens and other stakeholders.
The public consultation asked a series of questions about the future of
cohesion policy. A summary of the results was published on 13 May 2011[6].

The results of the ex-post evaluations
carried out on the 2000-2006 programmes, and a broad range of studies and
expert advice, were used as input. Expert advice was also provided through the
High Level Group reflecting on future Cohesion Policy, composed of experts from
national administrations, with 10 meetings held between 2009 and 2011.

The results of the public consultation on the
Fifth Cohesion report show that there is general agreement with the notion of
concentration of funding. There is, however a concern about decisions on
concentration not being taken at the right level. In particular, many
contributions emphasise the need for flexibility and the need not to overlook
territorial specificities. Moreover, several expressed concern that limiting
priorities too much at EU level would not allow the flexibility necessary to
define appropriate regional development strategies.

2.2.      Impact assessment

Options were assessed in particular in
relation to the ERDF contribution to two public goods:

–
contribution to employment, R&D and
innovation through enterprise support;

–
investing in basic infrastructure (e.g.
transport, energy, environment, social and health infrastructure).

Other areas where the ERDF makes an important
contribution to the provision of EU public goods were not addressed, as
successive evaluations and academic research have not identified particular
problems in these areas as regards the scope of intervention of the ERDF.

With respect to enterprise support it can be
argued that such support, in particular in the form of grants, is most needed
for small enterprises, for innovative activities, and in areas in industrial
decline undergoing structural change. The case for investing in large
enterprises, less innovative areas, and regions which are attractive to
investors without support is much weaker. The case for funding infrastructure
is strongest in less developed regions where public authorities do not have
sufficient funds for investment, and where the investment costs cannot be
recovered as the population is low income. The case for investing in basic
infrastructure in more developed regions is much weaker.

The options examined included the status quo,
changes to make funding more targeted, and an option which would be
significantly more restrictive in scope compared with current funding options.
The option of increased targeting was chosen, which increases the efficiency,
effectiveness and EU added value of funding, but at the same time leaves
regions sufficient flexibility regarding investment, and minimises the risk
that activities requiring funding fall outside the scope of intervention.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

European regional policy has an important
role to play in mobilising local assets and focusing on the development of
endogenous potential.

Article 174 of the Treaty on the Functioning
of the European Union (TFEU) calls for action by the European Union to
strengthen its economic, social and territorial cohesion and promote overall
harmonious development by reducing disparities between the levels of
development of regions and promoting development in least favoured regions.

The goal of economic, social and territorial
cohesion is promoted through three EU funds. As stipulated in Article 176 of
the TFEU, the aim of the ERDF is to promote the development and structural
adjustment of lagging regions and of declining industrial regions.

Article 174 of the TFEU states that
particular attention shall be paid to rural areas, areas affected by industrial
transition, and regions which suffer from severe and permanent natural or
demographic handicaps such as the northernmost regions with very low population
density and island, cross-border and mountain regions.

Article 349 of the TFEU states that specific
measures shall be adopted to take account of the structural social and economic
situation of the outermost regions, which is compounded by certain specific
features which severely restrain their development. The specific measures shall
include conditions of access to the Structural Funds.

The timing of the review of EU funding to
promote cohesion is linked to the proposal for a new Multiannual Financial
Framework, as contained in the Commission Work Programme.

As the EU Budget
Review has highlighted, the "EU budget should be used to finance EU public
goods, actions that Member States and regions cannot finance themselves, or
where it can secure better results".[7]
The legal proposal will respect the principle of subsidiarity as the tasks of
the ERDF are set out in the Treaty and the policy is implemented in accordance
with the principle of shared management and respecting the institutional
competencies of Member States and regions.

The legislative instrument, and the type of
measure (i.e. funding) are both defined in the TFEU, which has provided the
legal basis for the Structural Funds, and states that the tasks, priority
objectives and the organisation of the Structural Funds shall be defined in
regulations.

4.           BUDGETARY IMPLICATION

The Commission's proposal for a Multi-Annual
Financial Framework foresees an amount of EUR 376 billion for economic, social
and territorial cohesion for the period 2014-2020.

Proposed budget 2014-2020 || EUR billion

Convergence regions Transition regions Competitiveness regions Territorial cooperation Cohesion Fund Extra allocation for outermost and sparsely populated regions || 162,6 39 53,1 11,7 68,7 0,926

Connecting Europe Facility for transport, energy and information and communication technologies (ICT) || 40 (with an additional EUR 10 billion ring fenced inside the Cohesion Fund)

*All figures in
constant 2011 prices

The Commission's proposal has established,
with the aim of enhancing the contribution of the funds in delivering on the
headline targets of the Europe 2020 strategy, minimum shares for the European
Social Fund (ESF) for each category of regions. The application of the shares
result in a minimum overall share for the ESF of 25% of the budget allocated to
cohesion policy, i.e. EUR 84 billion. This implies that a maximum of EUR 183,3
billion remains available for the ERDF for the period 2014-2020.

5.           SUMMARY OF CONTENT OF THE
PROPOSED REGULATION

The proposed Regulation determines the scope
of intervention of the ERDF, and also defines a negative list of activities
which will not be eligible for support. It defines investment priorities for
each of the thematic objectives.

Transition regions and more developed regions
will be required to focus the largest part of their allocation (except for the
ESF) on energy efficiency and renewable energy, competitiveness of SMEs, and
innovation. Less developed regions will be able to devote their allocation to a
wider range of objectives reflecting the broader range of development needs.
The mechanism proposed provides that:

–
at least 80% of resources are focused on energy
efficiency and renewables, research and innovation and SME support in more
developed and transition regions of which 20% for energy efficiency and
renewables. Given the ongoing restructuring needs in those regions phasing out
from the Convergence objective, the minimum percentage shall be reduced to 60%.

–
at least 50% of resources are focused on energy
efficiency and renewables, research and innovation and SME support in less
developed regions of which 6% for energy efficiency and renewables.

The proposed Regulation provides for an
increased focus on sustainable urban development. The increased focus is to be
achieved through the earmarking of a minimum of 5% of ERDF resources for
sustainable urban development, the establishment of an urban development
platform to promote capacity building and exchange of experience, and the
adoption of a list of cities where integrated actions for sustainable urban
development will be implemented.

The proposed Regulation aims to contribute to
an increased orientation on results of funding by defining common indicators
related to physical outputs as well as results relating to the final objective
of funding.

The proposed Regulation mentions the need to
pay special attention in operational programmes to specific difficulties of
regions with severe and permanent natural or demographic handicaps.

Finally, the proposed Regulation contains
specific provisions for the use of the specific additional allocation for the
outermost regions.

2011/0275 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on specific provisions concerning the
European Regional Development Fund and the Investment for growth and jobs goal
and repealing Regulation (EC) No 1080/2006

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 178 and 349
thereof,

Having regard to the proposal from the
European Commission,

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

Having regard to the opinion of the
European Economic and Social Committee[8],

Having regard to the opinion of the
Committee of the Regions[9],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
Article 176 of the Treaty provides that the
European Regional Development Fund (ERDF) is intended to help to redress the
main regional imbalances in the Union. The ERDF therefore contributes to
reducing the gap between the levels of development of the various regions and
the extent to which the least favoured regions, including rural and urban
areas, declining industrial regions, areas with severe and permanent natural
and demographic handicaps, such as islands, mountainous areas, sparsely
populated areas and border regions, are lagging behind.

(2)
The provisions common to the ERDF, the European
Social Fund (ESF) (hereinafter referred to as 'the Structural Funds') and the
Cohesion Fund are set out in Regulation (EU) No [...]/2012 of [...] 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 covered by the Common
Strategic Framework and laying down general provisions on the European Regional
Development Fund, the European Social Fund and the Cohesion Fund and repealing
Regulation (EC) No 1083/2006[10]
[Common Provisions Regulation - CPR].

(3)
Specific provisions concerning the type of
activities which may be supported by the ERDF under the thematic objectives
defined in Regulation (EU) No [...]/2012 [CPR] should be laid down. At the same
time, expenditure outside the scope of the ERDF should be defined and
clarified, including as regards the reduction of greenhouse gas emissions in
installations falling under Directive 2003/87/EC of the European Parliament and
of the Council of 13 October 2003 establishing a scheme for greenhouse gas
emission allowance trading within the Community and amending Council Directive
96/61/EC[11].

(4)
In order to address the specific needs of the
ERDF, and in line with the Europe 2020 strategy[12] that cohesion policy should
support the need to deliver smart, sustainable and inclusive growth, it is
necessary to set out within each thematic objective laid down in Article 9 of Regulation
(EU) No [...]/2012 [CPR] the ERDF-specific actions as 'investment priorities'.

(5)
The ERDF should contribute to the Europe 2020
strategy, thus ensuring greater concentration of ERDF support on the priorities
of the Union. According to the category of regions supported, the support from
the ERDF should be concentrated on research and innovation, small and medium-sized
enterprises and climate change mitigation. The degree of concentration should
take into account the level of development of the region as well as the
specific needs of regions whose GDP per capita for the 2007-13 period was less
than 75% of the average GDP of the EU-25 for the reference period.

(6)
A common set of indicators to assess progress of
programme implementation should be set out before the Member States draft their
operational programmes. These indicators should be complemented by programme-specific
indicators.

(7)
Within the framework of sustainable urban
development, it is considered necessary to support integrated actions to tackle
the economic, environmental, climate and social challenges affecting urban
areas and to define a procedure to establish the list of cities covered by such
actions and the financial allocation set aside for such actions.

(8)
Building on the experience and strengths of the
integration of measures in the field of sustainable urban development into
operational programmes supported by the ERDF during the 2007-2013 period, a
further step should be taken at Union level by establishing an urban
development platform.

(9)
In order to identify or test new solutions to
issues relating to sustainable urban development which are of relevance at
Union level, the ERDF should support innovative actions in the field of
sustainable urban development.

(10)
The ERDF should address the problems of
accessibility to, and remoteness from, large markets facing areas with an
extremely low population density, as referred to in Protocol No 6 on special
provisions for Objective 6 in the framework of the Structural Funds in Finland
and Sweden to the 1994 Act of Accession. The ERDF should also address the specific
difficulties encountered by certain islands, mountainous areas, border regions
and sparsely populated areas whose geographical situation slows down their
development, with a view to supporting their sustainable development.

(11)
Specific attention should be paid to the
outermost regions, namely by extending, on an exceptional basis, the scope of
the ERDF to the financing of operating aid linked to the offsetting of the
additional costs resulting from their specific economic and social situation,
which is compounded by the handicaps resulting from the factors referred to in
Article 349 of the Treaty, namely their remoteness, insularity, small size,
difficult topography and climate and their economic dependence on a few
products, the permanence and combination of which severely restrain their
development. In order to support the development of existing and new economic
activities, at least 50% of the specific additional allocation should be
allocated to actions contributing to the diversification and modernisation of
the economies of the outermost regions.

(12)
In order to define procedures for the selection
and implementation of innovative actions, the power to adopt acts in accordance
with Article 290 of the Treaty should be delegated to the Commission in respect
of the content and scope set out in Article 9. It is of particular importance
that the Commission carries out appropriate consultations during its
preparatory work, including at expert level. The Commission, when preparing and
drawing-up delegated acts, should ensure a simultaneous, timely and appropriate
transmission of relevant documents to the European Parliament and to the
Council.

(13)
In order to ensure uniform conditions for the
implementation of this Regulation, implementing powers
should be conferred on the Commission in respect of the list of cities to
participate in the urban development platform. Those
powers should be exercised in accordance with Regulation (EU) No 182/2011 of
the European Parliament and of the Council of 16 February 2011 laying down the
rules and general principles concerning mechanisms for control, by Member
States, of the Commission’s exercise of implementing powers[13].

(14)
This Regulation replaces Regulation (EC) No
1080/2006 of the European Parliament and the Council of 5 July 2006 on the
European Regional Development Fund and repealing Regulation (EC) No 1783/1999[14]. In the interests of clarity,
Regulation (EC) No 1080/2006 should therefore be repealed,

HAVE ADOPTED THIS REGULATION:

Chapter I
Common provisions

Article 1
Subject-matter

This Regulation establishes the tasks of
the European Regional Development Fund (ERDF), the scope of its support with
regard to the Investment for growth and jobs and the European territorial
cooperation goals and specific provisions concerning ERDF support for the
Investment for growth and jobs goal.

Article 2
Tasks of the ERDF

The ERDF shall contribute to the financing
of support which aims to reinforce economic, social and territorial cohesion by
redressing the main regional imbalances through support for the development and
structural adjustment of regional economies, including the conversion of
declining industrial regions and regions lagging behind.

Article 3
Scope of support from the ERDF

1.
The ERDF shall support:

(a)
productive investment, which contributes to
creating and safeguarding sustainable jobs, through direct aid to investment in
small and medium-sized enterprises (SMEs);

(b)
investments in infrastructure providing basic
services to citizens in the areas of energy, environment, transport, and information
and communication technologies (ICT);

(c)
investments in social, health and educational
infrastructure;

(d)
development of endogenous potential by
supporting regional and local development and research and innovation. These
measures shall include:

(i)      fixed investment in equipment and
small-scale infrastructure;

(ii)      support for and services to
enterprises, in particular SMEs;

(iii)     support to public research and
innovation bodies and investment in technology and applied research in
enterprises;

(iv)     networking, cooperation and exchange
of experience between regions, towns, and relevant social, economic and
environmental actors;

(e)
technical assistance.

In more developed regions, the ERDF shall not
support investments in infrastructure providing basic services to citizens in
the areas of environment, transport, and ICT.

2.
The ERDF shall not support:

(a)
the decommissioning of nuclear power stations;

(b)
the reduction of greenhouse gas emissions in
installations falling under Directive 2003/87/EC;

(c)
the manufacturing, processing and marketing of
tobacco and tobacco products;

(d)
undertakings in difficulties as defined under Union
State aid rules.

Article 4
Thematic concentration

The thematic objectives set out in Article 9
of Regulation (EU) No [...]/2012 [CPR] and corresponding
investment priorities set out in Article 5 of this Regulation to which the ERDF may contribute shall be concentrated as follows:

(a)
in more developed regions and transition regions:

(i)      at least 80% of the total ERDF
resources at national level shall be allocated to the thematic objectives set
out in points 1, 3 and 4 of Article 9 of Regulation (EU) No [...]/2012 [CPR] ;
and

(ii)     at least 20% of the total ERDF
resources at national level shall be allocated to the thematic objective set
out in point 4 of Article 9 of Regulation (EU) No [...]/2012 [CPR] ;

(b)
in less developed regions:

(i)      at least 50% of the total ERDF
resources at national level shall be allocated to the thematic objectives set
in out in point 1, 3 and 4 of Article 9 of Regulation (EU) No [...]/2012 [CPR] .

(ii)     at least 6% of the total ERDF
resources at national level shall be allocated to the thematic objective set
out in point 4 of Article 9 of Regulation (EU) No [...]/2012 [CPR].

By derogation from point (a) (i), in those
regions whose GDP per capita for the 2007-13 period was less than 75% of the
average GDP of the EU-25 for the reference period but which are eligible under
the category of transition or more developed regions as defined in Article 82(2)(b)
and (c) of Regulation (EU) No [ ]/2012 [CPR] in the 2014-2020 period, at least 60%
of the total ERDF resources at national level shall be allocated to each of the
thematic objectives set in out in points 1, 3 and 4 of Article 9 of Regulation
(EU) No [...]/2012 [CPR].

Article 5
Investment priorities

The ERDF shall support the following
investment priorities within the thematic objectives set out in Article 9 of
Regulation (EU) No [...]/2012 [CPR]:

(1)
strengthening research, technological
development and innovation:

(a)
enhancing research and innovation infrastructure
(R&I) and capacities to develop R&I excellence and promoting centres of
competence, in particular those of European interest;

(b)
promoting business R&I investment, product
and service development, technology transfer, social innovation and public
service applications, demand stimulation, networking, clusters and open
innovation through smart specialisation;

(c)
supporting technological and applied research,
pilot lines, early product validation actions, advanced manufacturing
capabilities and first production in Key Enabling Technologies and diffusion of
general purpose technologies;

(2)
enhancing access to and use and quality of ICT:

(a)
extending broadband deployment and the roll-out
of high-speed networks;

(b)
developing ICT products and services, e-commerce
and enhancing demand for ICT;

(c)
strengthening ICT applications for e-government,
e-learning, e-inclusion and e-health;

(3)
enhancing the competitiveness of SMEs:

(a)
promoting entrepreneurship, in particular by
facilitating the economic exploitation of new ideas and fostering the creation
of new firms;

(b)
developing new business models for SMEs, in
particular for internationalisation;

(4)
supporting the shift towards a low-carbon
economy in all sectors:

(a)
promoting the production and distribution of renewable
energy sources;

(b)
promoting energy efficiency and renewable energy
use in SMEs;

(c)
supporting energy efficiency and renewable
energy use in public infrastructures and in the housing sector;

(d)
developing smart distribution systems at low
voltage levels;

(e)
promoting low-carbon strategies for urban areas;

(5)
promoting climate change adaptation, risk
prevention and management:

(a)
supporting dedicated investment for adaptation
to climate change;

(b)
promoting investment to address specific risks,
ensuring disaster resilience and developing disaster management systems;

(6)
protecting the environment and promoting resource
efficiency:

(a)
addressing the significant needs for investment
in the waste sector to meet the requirements of the environmental acquis;

(b)
addressing the significant needs for investment
in the water sector to meet the requirements of the environmental acquis;

(c)
protecting, promoting and developing cultural
heritage;

(d)
protecting biodiversity, soil protection and
promoting ecosystem services including NATURA 2000[15] and green infrastructures;

(e)
action to improve the urban environment,
including regeneration of brownfield sites and reduction of air pollution;

(7)
promoting sustainable transport and removing
bottlenecks in key network infrastructures:

(a)
supporting a multimodal Single European
Transport Area by investing in the Trans-European Transport Network (TEN-T)
network;

(b)
enhancing regional mobility through connecting
secondary and tertiary nodes to TEN-T infrastructure;

(c)
developing environment-friendly and low-carbon
transport systems and promoting sustainable urban mobility;

(d)
developing comprehensive, high quality and
interoperable railway system;

(8)
promoting employment and supporting labour
mobility:

(a)
development of business incubators and
investment support for self-employment and business creation;

(b)
local development initiatives and aid for
structures providing neighbourhood services to create new jobs, where such
actions are outside the scope of Regulation (EU) No [...]/2012 [ESF];

(c)
investing in infrastructure for public
employment services;

(9)
promoting social inclusion and combating
poverty:

(a)
investing in health and social infrastructure
which contribute to national, regional and local development, reducing
inequalities in terms of health status, and transition from institutional to
community-based services;

(b)
support for physical and economic regeneration
of deprived urban and rural communities;

(c)
support for social enterprises;

(10)
investing in education, skills and lifelong
learning by developing education and training infrastructure;

(11)
enhancing institutional capacity and an efficient
public administration by strengthening of institutional capacity and the
efficiency of public administrations and public services related to
implementation of the ERDF, and in support of actions in institutional capacity
and in the efficiency of public administration supported by the ESF.

Chapter II
Indicators for ERDF support for the
Investment for growth and jobs goal

Article 6
Indicators for the
Investment for growth and jobs goal

Common indicators, as set out in the Annex
to this Regulation, shall be used where relevant and in accordance with Article
24(3) of Regulation (EU) No [...]/2012 [CPR]. For common indicators, baselines
shall be set at zero and cumulative targets shall be fixed for 2022.

For programme-specific output indicators,
baselines shall be set at zero and cumulative targets shall be fixed for 2022.

For programme-specific result indicators,
baselines shall use the latest available data and targets shall be fixed for
2022, but may be expressed in quantitative or qualitative terms.

Chapter III

Specific provisions on the treatment of
particular territorial features

Article 7

Sustainable
urban development

1.
The ERDF shall support, within operational
programmes, sustainable urban development through strategies setting out
integrated actions to tackle the economic, environmental, climate and social
challenges affecting urban areas.

2.
Each Member State shall establish in its
Partnership Contract a list of cities where integrated actions for sustainable
urban development are to be implemented and an indicative annual allocation for
these actions at national level.

At least 5% of the ERDF resources allocated at
national level shall be allocated to integrated actions for sustainable urban
development delegated to cities for management through Integrated Territorial
Investments referred to in Article 99 of Regulation (EU) No [...]/2012 [CPR].

Article 8

Urban
development platform

1.
The Commission shall establish, in accordance
with Article 51 of Regulation (EU) No [...]/2012 [CPR], an urban development platform
to promote capacity-building and networking between cities and exchange of
experience on urban policy at Union level in areas related to the investment
priorities of the ERDF and to sustainable urban development.

2.
The Commission shall adopt a list of cities to
participate in the platform on the basis of the lists established in the
Partnership Contracts, by means of implementing acts. Those implementing acts
shall be adopted in accordance with the advisory procedure referred to in
Article 14(2).

The list shall contain a maximum number of 300
cities, with a maximum number of 20 per Member State. Cities shall be selected
based on the following criteria:

(a)
population, taking account of the specificities
of national urban systems;

(b)
the existence of a strategy for integrated
actions to tackle the economic, environmental, climate and social challenges
affecting urban areas.

3.
The platform shall also support networking
between all cities which undertake innovative actions at the initiative of the
Commission.

Article 9
Innovative Actions in the
field of Sustainable Urban Development

1.           At the initiative of the
Commission, the ERDF may support innovative actions in the field of sustainable
urban development, subject to a ceiling of 0,2% of the total annual ERDF allocation.
They shall include studies and pilot projects to identify or test new solutions
to issues relating to sustainable urban development which are of relevance at
Union level.

2.           By derogation to Article 4
above, innovative actions may support all activities necessary to achieve the
thematic objectives set out in Article 9 of Regulation (EU) No [...]/2012 [CPR]
and corresponding investment priorities.

3.           The Commission shall adopt
delegated acts in accordance with Article 13 concerning procedures for the selection
and implementation of innovative actions.

Article 10
Areas with natural or
demographic handicaps

Operational programmes
co-financed by the ERDF covering areas with severe and permanent natural or
demographic handicaps referred to in Article 111(4) of Regulation (EU) No
[...]/2012 [CPR] shall pay particular attention to addressing the specific
difficulties of those areas.

Article 11
Outermost regions

1.
The specific additional allocation for the
outermost regions shall be used to offset the additional costs, linked to the
handicaps referred in Article 349 of the Treaty, incurred in the outermost
regions in supporting:

(a)
the thematic objectives set out in Article 9 of
Regulation (EU) No [...]/2012 [CPR];

(b)
freight transport services and start-up aid for
transport services;

(c)
operations linked to storage constraints, the
excessive size and maintenance of production tools, and lack of human capital
in the local market.

At least 50% of the specific additional
allocation shall be allocated to actions contributing to the diversification
and modernisation of the economies of the outermost regions, with a particular
focus on the thematic objectives set out in points 1, 2 and 3 of Article 9 of
Regulation (EU) No [...]/2012 [CPR].

2.
The specific additional allocation may also be
used to help finance operating aid and expenditure covering public service
obligations and contracts in the outermost regions.

3.
The amount to which the rate of co-financing
applies shall be proportionate to the additional costs referred to in
paragraph 1 incurred by the beneficiary in the case of operating aid and
expenditure covering public service obligations and contracts only, and may
cover the total eligible costs in the case of expenditure for investment.

4.
Financing under this Article shall not be used
to support:

(a)
operations involving products falling within
Annex I to the Treaty;

(b)
aids to transport of persons authorised under
Article 107(2)(a) of the Treaty;

(c)
tax exemptions and exemption of social charges.

Chapter IV
Final provisions

Article 12
Transitional provisions

1.           This Regulation shall not
affect either the continuation or modification, including the total or partial
cancellation, of assistance approved by the Commission on the basis of
Regulation (EC) No 1080/2006 or any other legislation applying to that
assistance on 31 December 2013, which shall consequently apply thereafter to
that assistance or the projects concerned until their closure.

2.           Applications to receive
assistance made under Regulation (EC) No 1080/2006 shall remain valid.

Article 13
Exercise of the delegation

1.
The power to adopt delegated acts is conferred
on the Commission subject to the conditions laid down in this Article.

2.
The power to adopt delegated acts referred to in
Article 9(3) shall be conferred on the Commission for an
indeterminate period of time from 1 January 2014.

3.
The delegation of power referred to in Article 9(3)
may be revoked at any time by the European Parliament or by the Council. A
decision to revoke shall put an end to the delegation of the power specified in
that decision. It shall take effect the day following the publication of the
decision in the Official Journal of the European Union or at a later
date specified therein. It shall not affect the validity of any delegated acts
already in force.

4.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and to the
Council.

5.
A delegated act adopted pursuant to Article 9(3)
shall enter into force only if no objection has been expressed either by the
European Parliament or the Council within a period of two months of
notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European
Parliament and the Council have both informed the Commission that they will not
object. That period shall be extended by two months at the initiative of
the European Parliament or the Council.

Article 14
Committee procedure

1.
The Commission shall be assisted by the
Coordination Committee of the Funds. That committee shall be a committee within
the meaning of Regulation (EU) No 182/2011.

2.
Where reference is made to this paragraph,
Article 4 of Regulation (EU) No 182/2011 shall apply.

Article 15
Repeal

Regulation (EC) No 1080/2006 is hereby
repealed.

References to the repealed Regulation shall
be construed as references to this Regulation.

Article 16
Review

The European Parliament and the Council
shall review this Regulation by 31 December 2022, in accordance with Article
177 of the Treaty.

Article 17

Entry
into force

This Regulation shall enter into force on
the 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 European Parliament                       For
the Council

The President                                                 The
President

ANNEX

Common
indicators for ERDF support under the Investment for growth and jobs goal
(Article 6)

|| UNIT || NAME

Productive investment || ||

|| enterprises || Number of enterprises receiving grants

|| enterprises || Number of enterprises receiving financial support other than grants

|| enterprises || Number of enterprises receiving non-financial support

|| enterprises || Number of new enterprises supported

|| EUR || Private investment matching public support to SMEs (grants)

|| EUR || Private investment matching public support to SMEs (non-grants)

|| full time equivalents || Number of jobs created in assisted SMEs

Tourism || visits || Number of visits to supported attractions

ICT Infrastructure || persons || Population covered by broadband access of at least 30 Mbps

Transport || ||

Railway || km || Total length of new railway line

||  of which: TEN-T

km || Total length of reconstructed or upgraded railway line

||  of which: TEN-T

Roads || km || Total length of newly built roads

|| of which: TEN-T

km || Total length of reconstructed or upgraded roads

|| of which: TEN-T

Urban transport || passenger trips || Increase of passenger trips using supported urban transport service

Inland waterways || tonne-km || Increase of cargo transported on improved inland waterways

Environment || ||

Solid waste || tonnes || Additional waste recycling capacity

Water supply || persons || Additional population served by improved water supply

|| m3 || Estimated reduction of leakage in water distribution network

Wastewater treatment || population equivalent || Additional population served by improved wastewater treatment

Risk prevention and management || persons || Population benefiting from flood protection measures

Persons || Population benefiting from forest fire protection and other protection measures

Land rehabilitation || Hectares || Total surface area of rehabilitated land

Soil sealing || hectares || Change in land sealed due to development

Nature and biodiversity || hectares || Surface area of habitats in better conservation status

Research, Innovation || ||

|| Persons || Number of R&D personnel/researchers working in newly built or equipped research infrastructures

|| Enterprises || Number of enterprises cooperating with assisted research institutions

|| Full time equivalents || Number of posts for R&D personnel/researchers created in assisted entities

|| EUR || Private investment matching public support in innovation or R&D projects

|| Enterprises || Number of enterprises that introduced new or significantly improved products, new to the market as a result of supported innovation or R&D projects

|| Enterprises || Number of enterprises that introduced new or significantly improved products, new to the firm as a result of supported innovation or R&D projects

Energy and Climate change || ||

Renewables || MW || Additional capacity of renewable energy production

Energy efficiency || Households || Number of households with improved energy consumption classification

|| kWh/year || Decrease of primary energy consumption of public buildings

|| Users || Number of additional energy users connected to smart grids

GHG reduction || tonnes of CO2eq || Estimated decrease of GHG in CO2 equivalents

Social infrastructure || ||

Childcare & education || Persons || Service capacity of supported childcare or education infrastructure

Health || Persons || Capacity of supported health services

Housing || Households || Number of households benefiting from improved housing conditions

Cultural heritage || Visits || Number of visits at supported sites

Urban Development || ||

|| Persons || Population living in areas with integrated urban development strategies

|| square metres || New open space in urban areas

|| square metres || New public or commercial buildings in urban areas

|| square metres || New housing in urban areas

[1]               COM(2011)500 final.

[2]               Communication from the Commission: Europe 2020 – A
strategy for smart, sustainable and inclusive growth, COM(2010)2020 final,
3.3.2010.

[3]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee, the
Committee of the Regions and the national parliaments: The EU Budget Review,
COM(2010) 700 final, 19.10.2010.

[4]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions: A Budget for Europe 2020, COM(2011) 500 final,
29.6.2011.

[5]               5th Report on Economic, Social and
Territorial Cohesion, November 2010.

[6]               Commission Staff Working Paper: Results of the public
consultation on the conclusions of the fifth report on economic, social and
territorial cohesion, SEC(2011) 590 final, 13.5.2011.

[7]               COM(2010) 700 final, 19.10.2010.

[8]               OJ C , , p. .

[9]               OJ C , , p. .

[10]             OJ L , , p. .

[11]             OJ L 275, 25.10.2003, p. 32.

[12]             Communication from the Commission: Europe 2020 - A
strategy for smart, sustainable and inclusive growth, COM(2010) 2020 final,
3.3.2010.

[13]             OJ L 55, 28.2.2011, p. 13.

[14]             OJ L 210, 31.7.2006, p. 1.

[15]             Set up as a coherent European ecological network of
special areas of conservation pursuant to Article 3(1) of Council
Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and
of wild fauna and flora, OJ L 206, 22.7.1992, p. 7.