1999R1260 — EN — 22.02.2005 — 004.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

Amended by:





Amended by:









▼B

COUNCIL REGULATION (EC) No 1260/1999

of 21 June 1999

laying down general provisions on the Structural Funds







THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 161 thereof, Having regard to the proposal from the Commission ( 1 ), Having regard to the assent of the European Parliament ( 2 ), Having regard to the opinion of the Economic and Social Committee ( 3 ), Having regard to the opinion of the Committee of the Regions ( 4 ), (1) Whereas Article 158 of the Treaty states that, in order to strenghten its economic and social cohesion, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions or islands, including rural areas; whereas Article 159 provides for that action to be supported through the Structural Funds, the European Investment Bank (EIB) and the other existing financial instruments; (2) Whereas Article 19 of Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments ( 5 ), requires the Council to re-examine that Regulation on the basis of a Commission proposal before 31 December 1999; whereas, in order to improve the transparency of Community legislation, it is desirable to bring together all the provisions concerning the Structural Funds into a single Regulation and to repeal Regulation (EEC) No 2052/88 and Council Regulation (EEC) No 4253/88 of 19 December 1988 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the coordination of the activities of the different Structural Funds, on the one hand, between themselves and with the operations of the European Investment Bank and the other existing financial instruments, on the other hand ( 6 ); (3) Whereas, by virtue of Article 5 of Protocol 6 on special provisions for Objective 6 in the framework of the Structural Funds in Finland and Sweden, attached to the Act of Accession of Austria, Finland and Sweden, the provisions of that Protocol should be re-examined before the end of 1999, simultaneously with Regulation (EEC) No 2052/88; (4) Whereas in order to increase the concentration and simplify the operation of the Structural Funds the number of priority objectives should be reduced as compared with Regulation (EEC) No 2052/88; whereas those objectives should be redefined as promoting the development and structural adjustment of regions whose development is lagging behind, economic and social conversion of areas facing structural difficulties and adapting and modernising policies and systems of education, training and employment; (5) Whereas in its efforts to strengthen economic and social cohesion the Community also seeks to promote the harmonious, balanced and sustainable development of economic activities, a high level of employment, equality between men and women and a high level of protection and improvement of the environment; whereas those efforts should in particular integrate the requirements of environmental protection into the design and implementation of the operations of the Structural Funds and help to eliminate inequalities and promote equality between men and women; whereas the Funds' operations may also make it possible to combat any discrimination on the grounds of race, ethnic origin, disability or age by means in particular of an evaluation of needs, financial incentives and an enlarged partnership; (6) Whereas cultural development, the quality of the natural and the man-made environment, the qualitative and cultural dimension of life and the development of tourism contribute to making regions economically and socially more attractive in so far as they encourage the creation of sustainable employment; (7) Whereas the European Regional Development Fund (ERDF) is the primary contributor to attaining the objective of promoting the development and structural adjustment of the regions whose development is lagging behind and economic and social conversion of areas facing structural difficulties; (8) Whereas the tasks of the European Social Fund (ESF) should be adjusted in order to take account of and to implement the European employment strategy; (9) Whereas the structural aspects of the common fisheries policy have been integrated as a full structural policy under the rules governing the Structural Funds since 1993; whereas implementation should continue under the Structural Funds through the Financial Instrument for Fisheries Guidance (FIFG); whereas assistance from FIFG in Objective 1 shall form part of the programming of this Objective and the assistance outside Objective 1 shall be subject to a single programme in each Member State concerned; (10) Whereas the Community has undertaken a reform of the common agricultural policy which includes structural and accompanying measures for promoting rural development; whereas in this context the Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) should continue to contribute to attaining the priority objective of the development and structural adjustment of the regions whose development is lagging behind, by improving the efficiency of the structures of production, processing and marketing of agricultural and forest products and developing local potential in rural areas; whereas the EAGGF Guarantee Section contributes to attaining the priority objective of economic and social conversion of areas facing structural difficulties, in accordance with Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations ( 7 ); (11) Whereas the specific rules applicable to each Fund are to be set out in the implementing Decisions adopted pursuant to Articles 37, 148 and 162 of the Treaty; (12) Whereas the criteria for designating eligible regions and areas should be specified; whereas, to this end, it is appropriate that the identification of the priority regions and areas at Community level should be based on the common system of classification of the regions, referred to as the ‘Nomenclature of Territorial Statistical Units (NUTS)’ established by the Statistical Office of the European Communities in cooperation with the national institutes for statistics; (13) Whereas regions whose development is lagging behind should be defined as those whose per capita GDP is less than 75 % of the Community average; whereas, in order to ensure an effective concentration of assistance, the Commission should apply this criterion strictly, using objective statistical data; whereas the outermost regions and areas with a very low population density covered by Objective 6 as set out in Protocol 6 attached to the Act of Accession of Austria, Finland and Sweden for the period 1995 to 1999 should also be covered by Objective 1 under this Regulation; (14) Whereas the areas undergoing economic and social conversion should be defined as those which include areas undergoing socio-economic change in the industrial and service sectors, declining rural areas, urban areas in difficulty and depressed areas dependent on fisheries; whereas this assistance should be properly concentrated on the most seriously affected parts of the Community; whereas these areas should be designated by the Commission acting on a proposal from the Member States and in close concertation with them; (15) Whereas, to ensure the Community nature of the operations of the Funds, the areas undergoing socio-economic change in the industrial sector and the declining rural areas should, as far as possible, be designated on the basis of objective indicators defined at Community level; whereas, furthermore, the population covered by this priority objective taken over the Community as a whole, for guidance, should constitute about 10 % of the population of the Community in the case of the industrial areas, 5 % in the case of the rural areas, 2 % in the case of the urban areas and 1 % in the case of the fisheries areas; whereas, in order to ensure that each Member State makes a fair contribution to the overall effort towards concentration, the maximum possible reduction in population covered by Obejctive 2 in 2006, set out in this Regulation, must not exceed one third compared to the coverage under Objectives 2 and 5b in 1999, set out in Regulation (EEC) No 2052/88; (16) Whereas, in the interests of efficient programming, the regions whose development is lagging behind where per capita GDP is less than 75 % of the Community average should be the same as the areas assisted by the Member States pursuant to Article 87(3)(a) of the Treaty and, taking account of any specific measures adopted pursuant to Article 299(2) of that Treaty in favour of the outermost regions (the French overseas departments, the Azores, Madeira and the Canary Islands); whereas, similarly, the areas undergoing economic and social change should correspond to a large extent to the areas assisted by the Member States pursuant to Article 87(3)(c) of the Treaty; whereas the objective of the Community should be to increase consistency at the end of the period 2000 to 2006 by an appropriate effort by Member States with regard to their current situation; (17) Whereas the objective of adapting and modernising policies and systems of education, training and employment is to provide financial assistance in the regions and areas not covered by Objective 1; whereas Objective 3 should also provide a frame of reference to ensure consistency with all operations for human resources in a given Member State; (18) Whereas the ESF assistance within Objective 2 should be the regional and local actions which respond to the specific situation in an Objective 2 area and which are coordinated with the interventions of the other Structural Funds; whereas any ESF contribution to an Objective 2 single programming document must be of sufficient size to justify its separate management, and should therefore not amount to less than 5 % of the total Structural Funds contribution; (19) Whereas the regions covered by a priority objective in 1999 which no longer satisfy the eligibility criteria should receive a gradually declining level of transitional support; whereas this support should be lower in 2000 than in 1999; (20) Whereas there should be provision for allocating shares of the available resources; whereas these resources should be allocated annually, being significantly concentrated on regions whose development is lagging behind, including those receiving transitional support; (21) Whereas total annual receipts in any Member State from Structural Funds under this Regulation — in combination with assistance provided under the Cohesion Fund — should be limited under this general capping dependent on the national absorption capacity; (22) Whereas the Commission should work out indicative allocations of the available commitment appropriations under each of the priority objectives, basing itself on appropriate objective criteria; whereas 4 % of appropriations allocated in this way to the Member States should be allocated by the Commission at the mid-term point; whereas, in recognition of the special efforts for the peace process in Northern Ireland, the PEACE programme should continue up to 2004; whereas a special programme of assistance for the period 2000 to 2006 shall be established for the Swedish NUTS-II regions which are not covered by the list referred to in Article 3(2) and which meet the criteria laid down in Article 2 of Protocol 6 to the Act of Accession for Austria, Sweden and Finland; (23) Whereas 5,35 % of the total commitment appropriations available should be devoted to the Community initatives and 0,65 % to innovative schemes and to technical assistance; (24) Whereas the appropriations available to the Structural Funds should be indexed on a flat-rate basis for programming purposes and, if necessary, a technical adjustment to that indexation should be made before 31 December 2003; (25) Whereas the main principles of the 1988 reform of the Structural Funds should continue to govern the Funds until 2006; whereas, however, experience to date has demonstrated the need for improvements to make these principles simpler and more transparent; whereas effectiveness should in particular be regarded as a fundamental principle; (26) Whereas, if the operations of the Structural Funds are to be effective and transparent, the responsibilities of the Member States and of the Community should be precisely defined; whereas those responsibilities should be specified for each stage of programming, monitoring, evaluation and supervision; whereas, in accordance with the principle of subsidiarity, and without prejudice to the powers vested in the Commission, implementing and monitoring assistance should be primarily the responsibility of the Member States; (27) Whereas the action of the Community should be complementary to, or intended to contribute to, the action of Member States; whereas, in order to ensure significant added value, partnership should be strengthened; whereas this concerns the regional and local authorities, the other competent authorities, including those responsible for the environment and for the promotion of equality between men and women, the economic and social partners and other competent bodies; whereas the relevant partners shall be associated in the preparation, monitoring and evaluation of assistance; (28) Whereas the programming process should be laid down from original conception to final beneficiary, and should be facilitated in the Member States by broad indicative guidelines drawn up by the Commission on relevant and agreed Community policies in relation to the Structural Funds; (29) Whereas programming should ensure the coordination of the Structural Funds with one another and with the other existing financial instruments and the EIB; whereas that coordination extends to combining grants and loans; (30) Whereas the activities of the Funds and the operations which they help to finance must be compatible with other Community policies and comply with Community legislation, and specific provisions should be laid down; whereas in this field operations to disseminate and exploit the results of research and technological development conducted in the context of the Structural Funds must ensure the protection of rights relating to the obtaining and exploitation of knowledge and be carried out in accordance with Community rules on competition; (31) Whereas simpler criteria and detailed rules for the verification and implementation of the principle of additionality should be laid down; (32) Whereas the system of programming should be simplified by fixing a uniform lifetime for programming of seven years; whereas to that end the forms and number of assistance schemes should be limited and should normally consist of a single integrated assistance for each region, by making single programming documents the norm for the priority objectives and by including major projects and global grants in the other forms of assistance; (33) Whereas, in order to reinforce the integrated approach to development, steps should be taken — with due regard to the specific features of the regions concerned — to ensure consistency between the operations of the various Funds and the Community policies, the strategy for employment, the economic and social policies of the Member States and the regional policies of the Member States; (34) Whereas, in order to speed up and simplify programming procedures, the responsibilities of the Commission should be distinguished from those of the Member States; whereas, therefore, provisions should be made for the Commission, acting on a proposal from the Member States, to adopt the strategies and development priorities that are to govern the programming as well as the size of the financial contribution from the Community, and the implementing arrangements linked to them, while the Member States are to decide on their application; whereas the content of the various forms of assistance should also be specified; (35) Whereas such decentralised implementation of the operations of the Structural Funds by the Member States should provide sufficient guarantees as to the details and quality of implementation, the results of operations and their evaluation and sound financial management and its supervision; (36) Whereas the Commission, in association with the EIB where appropriate, should approve major investment projects whose financial volume exceeds a specified sum with a view to evaluating their impact and the proposed use of Community resources; (37) Whereas there should be provision for operations of Community interest carried out at the initiative of the Commission to supplement those implemented under the priority objectives; (38) Whereas these Community initiatives should concentrate on promoting cross-border, transnational and inter-regional cooperation (Interreg), economic and social regeneration of cities and urban neighbourhoods in crisis (URBAN), both to be financed by the ERDF, rural development (Leader), to be financed by the EAGGF Guidance Section, and the development of human resources in the context of equal opportunities (EQUAL), to be financed by the ESF; whereas the promotion of cross-border cooperation — in particular in the perspective of enlargement, transnational and inter-regional cooperation — takes on particular significance in this context; whereas due attention should be given to cooperation with the outermost regions; whereas it is necessary to reinforce the coordination of cross-border, transnational and inter-regional cooperation with the measures enacted in the context of Council Regulation (EEC) No 3906/89 ( 8 ), Council Regulation (Euratom, EC) No 1279/96 ( 9 ) and Council Regulation (EC) No 1488/96 ( 10 ), especially in view of the enlargement of the European Union and taking account of the Europe-Mediterranean partnership; whereas due account should be taken of the social and vocational integration of asylum seekers in the framework of EQUAL; (39) Whereas the Structural Funds should provide support for studies, pilot projects and exchanges of experience in order to promote innovative approaches and practices through simple and transparent implementation; (40) Whereas, in order to strengthen the leverage effect of Community resources by favouring as far as possible recourse to private sources of financing and to take better account of the profitability of the projects, the forms of assistance available from the Structural Funds should be diversified and the rates of assistance differentiated with a view to promoting the Community interest, encouraging the use of a wide range of financial resources and limiting the contribution of the Funds by encouraging the use of appropriate forms of assistance; whereas, to that end, reduced rates of intervention should be established in the case of investments in forms and infrastructure projects which generate substantial revenue; whereas for the purpose of this Regulation, substantial net revenue should be tentatively defined as revenue higher than at least 25 % of the total cost of the investment concerned; (41) Whereas, in accordance with the principle of subsidiarity, the rules on eligible expenditure should be the relevant national rules where there are no Community rules, although they may be laid down by the Commission where they are clearly needed for the uniform and equitable implementation of the Structural Funds across the Community; whereas, however, the starting and closing dates for the eligibility of expenditure should be defined and it should be stipulated that investment projects may not undergo major modification; whereas consequently, in order to ensure the efficiency and durable impact of the Funds' assistance, all or part of the assistance from a Fund should remain attached to an operation only where its nature or its implementation conditions do not undergo a substantial modification which would result in diverting the assisted operation from its original objectives; (42) Whereas the rules and procedures for making commitments and payments should be simplified; whereas to that end budget commitments should be made once a year in accordance with the multiannual financial perspective and with the financing plan for assistance, whilst payments should be made in the form of an advance followed by the reimbursement of actual expenditure incurred; whereas, in accordance with established case law, any interest earned on the advance payment should be regarded as resources for the Member State concerned, and in order to strengthen the impact of the Funds, it should be allocated to the same purpose as the advance payment itself; (43) Whereas sound financial management should be assured by providing that expenditure is to be duly justified and certified, and by linking payments to compliance with essential responsibilities as to the monitoring of programming, financial controls and the application of Community law; (44) Whereas, to ensure sound management of Community resources, improvements should be made to the forecasting and implementing of expenditure; whereas to that end the Member States should regularly send the Commission their forecasts of the use of Community resources, and any delays in financial implementation should give rise to repayment of advances and to automatic decommitments; (45) Whereas, throughout the transitional period from 1 January 1999 to 31 December 2001, all references to the euro should normally be read as references to the euro as a monetary unit as referred to in the second sentence of Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro ( 11 ); (46) Whereas one way of ensuring that the operations of the Structural Funds are effective is efficient monitoring; whereas monitoring should be improved and responsibilities in this field better defined; whereas, in particular, management functions should be distinguished from monitoring functions; (47) Whereas there should be a single managing authority for each assistance, with defined responsibilities; whereas these responsibilities should primarily include collecting data on outcomes and reporting this data to the Commission, ensuring sound financial implementation, organising evaluations and complying with obligations relating to publicity and Community law; whereas accordingly there should be provision for regular meetings between the Commission and the managing authority to monitor the assistance; (48) Whereas it should be stipulated that the Monitoring Committees are bodies appointed by the Member State supervising assistance, checking on how it is being managed by the managing authority, ensuring compliance with its own guidelines and implementing rules and reviewing evaluations; (49) Whereas indicators and annual reports on implementation are essential for monitoring and should be better defined so as to reflect reliably the progress of assistance schemes and the quality of programming; (50) Whereas, in order to guarantee efficient and correct implementation, the obligations of the Member States should be laid down with regard to management and supervision systems, the certification of expenditure and the prevention, detection and correction of irregularities and of infringements of Community law; (51) Whereas, without prejudice to the Commission's responsibilities for financial control, cooperation between the Member States and the Commission in this regard should be improved, in particular through provision for regular consultations between the Member States and the Commission to consider the measures taken by the Member States and to permit the Commission to request corrective measures where necessary; (52) Whereas the responsibility of the Member States for the pursuit and correction of irregularities and infringements, and that of the Commission where the Member States do not comply with their obligations, should be specified; (53) Whereas the effectiveness and impact of the operations of the Structural Funds also depend on improved and more thorough evaluation; whereas the responsibilities of the Member States and the Commission in this regard and arrangements to ensure the reliability of evaluation should be laid down; (54) Whereas assistance schemes should be evaluated with a view to their preparation, mid-term review and assessment of their impact, and the evaluation process should be incorporated into the monitoring of assistance; whereas to that end the aims and content of each stage of evaluation should be defined, and the evaluation of the situation as regards the social and economic situation, the environment and equality between men and women should be improved; (55) Whereas the mid-term evaluation and the withholding of part of the original appropriations as a reserve enable supplementary funding to be allocated within each Member State on a performance-related basis; whereas such allocations should be based on objective, simple and transparent criteria which reflect efficiency and the quality of management and financial execution; (56) Whereas a report is to be presented every three years on the progress made towards economic and social cohesion, which should include an analysis of the situation of the regions of the Community and their economic and social development; (57) Whereas, in the interests of a good working partnership and the proper promotion of Community assistance, the broadest possible information and publicity about it should be provided; whereas the authorities responsible for managing assistance should be responsible for this aspect and for keeping the Commission informed of measures taken; (58) Whereas rules should be laid down for the operation of the committees called upon to assist the Commission in implementing this Regulation; (59) Whereas detailed transitional provisions should be laid down to allow preparation of new programming immediately on entry into force of this Regulation and to ensure that assistance to Member States is not interrupted pending the production of regional development plans and assistance schemes in accordance with the new system, HAS ADOPTED THIS REGULATION:







TITLE I

GENERAL PRINCIPLES







CHAPTER I

OBJECTIVES AND TASKS

Article 1

Objectives

Community action through the Structural Funds, the Cohesion Fund, the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, the European Investment Bank (EIB) and the other existing financial instruments shall support the achievement of the general objectives set out in Articles 158 and 160 of the Treaty. The Structural Funds, the EIB and the other existing financial instruments shall each contribute in appropriate fashion to the attainment of the following three priority objectives:

1. promoting the development and structural adjustment of regions whose development is lagging behind, hereinafter referred to as ‘Objective 1’;

2. supporting the economic and social conversion of areas facing structural difficulties, hereinafter referred to as ‘Objective 2’;

3. supporting the adaptation and modernisation of policies and systems of education, training and employment, hereinafter referred to as ‘Objective 3’. This objective shall provide financial assistance outside the regions covered by Objective 1 and provide a policy frame of reference for all measures to promote human resources in a national territory without prejudice to the specific features of each region.

In pursuing these objectives, the Community shall contribute to the harmonious, balanced and sustainable development of economic activities, the development of employment and human resources, the protection and improvement of the environment, and the elimination of inequalities, and the promotion of equality between men and women.

Article 2

Means and tasks

1. For the purposes of this Regulation, ‘Structural Funds’ shall mean the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Guidance and Guarantee Fund (EAGGF), Guidance Section, and the Financial Instrument for Fisheries Guidance (FIFG), hereinafter referred to as ‘the Funds’.

2. In accordance with Articles 33, 146 and 160 of the Treaty, the Funds shall contribute, each according to the specific provisions governing its operations, to the attainment of Objectives 1, 2 and 3, as follows:

Objective 1 : ERDF, ESF, EAGGF Guidance Section and FIFG;

Objective 2 : ERDF and ESF;

Objective 3 : ESF.

3. The FIFG shall contribute to structural actions in the fisheries sector outside Objective 1 regions in accordance with Council Regulation (EC) No 1263/1999 of 21 June 1999 on the financial instrument for fisheries guidance ( 12 ).

The EAGGF Guarantee Section shall contribute to the attainment of Objective 2 in accordance with Regulation (EC) No 1257/1999.

4. The Funds shall contribute to financing Community initiatives and to supporting innovative measures and technical assistance.

Technical assistance measures shall be carried out within the framework of the programming defined in Articles 13 to 27 or at the initiative of the Commission under Article 23.

5. The other resources of the Community budget which may be used to attain the Objectives referred to in Article 1 are in particular those allocated to other structural measures and to the Cohesion Fund.

The Commission and the Member States shall ensure that the operations of the Funds are consistent with other Community policies and operations, in particular in the areas of employment, equality between men and women, social policy and vocational training, the common agricultural policy, the common fisheries policy, transport, energy and the trans-European networks and the incorporation of the requirements of environmental protection into the definition and implementation of the operations of the Funds.

6. The EIB shall cooperate in attaining the objectives set out in Article 1, in accordance with the procedures laid down in its Statute.

The other existing financial instruments which may contribute, each according to the specific provisions governing its operations, to attaining the Objectives referred to in Article 1 include the European Investment Fund and the European Atomic Energy Community (Euratom) (loans, guarantees), hereinafter ‘the other financial instruments’.







CHAPTER II

GEOGRAPHICAL ELIGIBILITY FOR THE PRIORITY OBJECTIVES

Article 3

Objective 1

1. The regions covered by Objective 1 shall be regions corresponding to level II of the Nomenclature of Territorial Statistical Units (NUTS level II) whose per capita GDP, measured in purchasing power parities and calculated on the basis of Community figures for the last three years available on 26 March 1999, is less than 75 % of the Community average.

▼A1

For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, the regions covered by Objective 1 shall be regions corresponding to NUTS level II whose per capita GDP, measured in purchasing power parities and calculated on the basis of Community figures for the years 1997-1998-1999, is less than 75 % of the Community average at the time of conclusion of the accession negotiations.

▼B

The outermost regions (the French overseas departments, the Azores, the Canary Islands and Madeira), which are all below the 75 % threshold, and the areas eligible under Objective 6 for the period 1995 to 1999 pursuant to Protocol 6 to the Act of Accession of Austria, Finland and Sweden shall also be covered by this Objective.

▼A1

2. The Commission shall draw up the list of regions covered by Objective 1 strictly in accordance with the first and second subparagraphs of paragraph 1, without prejudice to Article 6(1) and Article 7(4), second subparagraph.

This list shall be valid for seven years from 1 January 2000. For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia this list shall be valid from the date of accession until 31 December 2006.

▼B

Article 4

Objective 2

1. The regions covered by Objective 2 shall be those with structural problems whose socio-economic conversion is to be supported in accordance with Article 1(2) and whose population or area is sufficiently substantial. They shall include in particular areas undergoing socio-economic change in the industrial and service sectors, declining rural areas, urban areas in difficulty and depressed areas dependent on fisheries.

2. The Commission and the Member States shall seek to ensure that assistance is genuinely concentrated on the areas most seriously affected and at the most appropriate geographical level. The population of the areas referred to in paragraph 1 shall not exceed 18 % of the total population of the Community. Accordingly, the Commission shall lay down a population ceiling for each Member State on the basis of the following factors:

(a) the total population in the NUTS III areas of each Member State which meet the criteria referred to in paragraphs 5 and 6;

(b) the severity of the structural problems at national level in each Member State as compared with the other Member States concerned. Such severity shall be assessed on the basis of total unemployment and long-term unemployment outside the regions eligible under Objective 1;

(c) the need to ensure that each Member State makes a fair contribution to the overall concentration effort as defined in this subparagraph; the maximum reduction in the population covered by Objective 2 shall not exceed one third compared to the population covered by Objectives 2 and 5b as set out in Regulation (EEC) No 2052/88, in 1999. ►A1 For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, the population ceiling for Objective 2 support shall be 31 % of the population of all NUTS II regions covered by Objective 2 in each of these countries. ◄

The Commission shall provide the Member States with all the information it has available about the criteria set out in paragraphs 5 and 6.

3. Subject to the ceilings referred to in paragraph 2, the Member States shall propose to the Commission a list of significant areas representing:

(a) the NUTS level III regions, or the most seriously affected areas within those regions, which satisfy either the criteria set out in paragraph 5 or those set out in paragraph 6;

(b) the areas satisfying the criteria referred to in paragraph 7 or paragraph 8 or Member States' specific criteria referred to in paragraph 9.

The Member States shall provide the statistics and other information, at the most appropriate geographical level, which the Commission requires to evaluate these proposals.

4. On the basis of the information referred to in paragraph 3, the Commission, in close concertation with the Member State concerned, shall draw up the list of areas eligible under Objective 2 with due regard to national priorities, without prejudice to Article 6(2).

The areas meeting the criteria in paragraphs 5 and 6 must contain at least 50 % of the population covered by Objective 2 in each Member State, except where duly justified by objective circumstances.

5. The areas undergoing socio-economic change referred to in paragraph 1 shall represent or belong to a NUTS level III territorial unit which satisfies the following criteria:

(a) an average rate of unemployment over the last three years above the Community average;

(b) a percentage share of industrial employment in total employment equal to or greater than the Community average in any reference year from 1985 onwards;

(c) an observable fall in industrial employment compared with the reference year chosen in accordance with (b).

6. The rural areas referred to in paragraph 1 must represent or belong to a NUTS level III territorial unit which satisfies the following criteria:

(a) either a population density of less than 100 people per km2, or a percentage share of agricultural employment in total employment which is equal to, or higher than, twice the Community average in any reference year from 1985;

(b) either an average unemployment rate over the last three years above the Community average, or a decline in population since 1985.

7. The urban areas referred to in paragraph 1 shall mean densely populated areas which also meet at least one of the following criteria:

(a) a rate of long-term unemployment higher than the Community average;

(b) a high level of poverty, including precarious housing conditions;

(c) a particularly damaged environment;

(d) a high crime and delinquency rate;

(e) a low level of education among the population.

8. The areas dependent on fisheries referred to in paragraph 1 shall mean coastal areas in which the number of jobs in the fisheries industry as a percentage of total employment is significant and which are facing structural socio-economic problems relating to the restructuring of the fisheries sector which result in a significant reduction in the number of jobs in that sector.

9. Community assistance may extend to areas whose population or area is significant which fall into one of the following categories:

(a) areas meeting the criteria set out in paragraph 5 which are adjacent to an industrial area, areas meeting the criteria set out in paragraph 6 which are adjacent to a rural area, areas which meet either the criteria set out in paragraph 5 or those set out in paragraph 6 which are adjacent to a region covered by Objective 1;

(b) rural areas with socio-economic problems arising either from the ageing or decline of the agricultural working population;

(c) areas facing or threatened by serious structural problems on account of relevant, verifiable characteristics, or a high level of unemployment arising from an ongoing or planned restructuring of one or more activities in the agricultural, industrial or service sector.

10. Any one area may be eligible for assistance under only one of Objectives 1 or 2.

11. The list of areas shall be valid for seven years from 1 January 2000.

Where there is a serious crisis in a region, the Commission, acting on a proposal from a Member State, may amend the list of areas during 2003 in accordance with paragraphs 1 to 10 without increasing the proportion of the population within each region referred to in Article 13(2).

▼A1

For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia the list of areas shall be valid from the date of accession until 31 December 2006.

▼B

Article 5

Objective 3

The areas eligible for financing under Objective 3 shall be those not covered by Objective 1.

Article 6

Transitional support

1. Notwithstanding Article 3, the regions covered by Objective 1 in 1999 pursuant to Regulation (EEC) No 2052/88 which are not referred to in the second subparagraph of Article 3(1) and (2) of this Regulation shall continue to receive support from the Funds under Objective 1 on a transitional basis from 1 January 2000 to 31 December 2005.

At the time of adoption of the list referred to in Article 3(2), the Commission shall draw up in accordance with Article 4(5) and (6) the list of the NUTS level III areas belonging to those regions which are to receive support from the Funds under Objective 1 on a transitional basis in 2006.

However, within the limit of the population of the areas referred to in the second subparagraph and in conformity with the provisions of Article 4(4), second subparagraph, the Commission may on a proposal from a Member State, substitute these areas by areas at or smaller than NUTS level III belonging to those regions which satisfy the criteria of Article 4(5) to (9).

The areas of the regions not on the list referred to in the second and third subparagraphs shall continue to receive support in 2006 from the ESF, FIFG and the EAGGF Guidance Section only, within the same form of assistance.

2. Notwithstanding Article 4, the regions covered by Objectives 2 and 5(b) in 1999 pursuant to Regulation (EEC) No 2052/88 which are not on the list referred to in Article 4(4) of this Regulation shall receive support from the ERDF, from 1 January 2000 to 31 December 2005, under Objective 2 pursuant to this Regulation, on a transitional basis.

Such areas shall receive support from 1 January 2000 to 31 December 2006 from the ESF under Objective 3 on the same basis as Objective 3 areas, the EAGGF Guarantee Section under its support to rural development and from the FIFG under its structural measures in the fisheries sector outside of Objective 1.







CHAPTER III

FINANCIAL PROVISIONS

Article 7

Resources and concentration

▼A1

1. The resources available for commitment from the Funds for Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Sweden and the United Kingdom for the period 2000 to 2006 shall be EUR 195 billion at 1999 prices.

The annual breakdown of those resources is shown in Annex I.

For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia the resources available for commitment from the Funds for the period from the date of accession to 2006 shall be EUR 14,1559 billion at 1999 prices.

The annual breakdown of those resources is shown in Annex II.

▼B

2. The breakdown of budgetary resources between objectives shall be such as to achieve a significant concentration on Objective 1 regions.

69,7 % of the Structural Funds will be allocated to Objective 1, including 4,3 % for transitional support (i.e. a total of EUR 135,9 billion).

11,5 % of the Structural Funds will be allocated to Objective 2, including 1,4 % for transitional support (i.e. a total of EUR 22,5 billion).

12,3 % of the Structural Funds will be allocated to Objective 3 (i.e. a total of EUR 24,05 billion).

▼A1

By way of derogation from the second, third and fourth subparagraphs, for the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia the breakdown of budgetary resources between objectives shall be as follows:

— 93,49 % of the Structural Funds will be allocated to Objective 1 (i.e. a total of EUR 13,2343 billion);

— 0,86 % of the Structural Funds will be allocated to Objective 2 (i.e. a total of EUR 0,1212 billion);

— 0,79 % of the Structural Funds will be allocated to Objective 3 (i.e. a total of EUR 0,1116 billion).

▼B

The figures stated for Objectives 1, 2 and 3 do not include the financial resources referred to in paragraph 6 nor the financing for FIFG outside Objective 1.

3. Using transparent procedures, the Commission shall make indicative breakdowns by Member State of the commitment appropriations available for the programming referred to in Articles 13 to 19, taking full account, for Objectives 1 and 2, of one or more objective criteria similar to those covered by Regulation (EEC) No 2052/88, namely: eligible population, regional prosperity, national prosperity and the relative severity of the structural problems, especially the level of unemployment.

▼A1

For Objective 3, the breakdown by Member State shall be based principally on the eligible population, the employment situation and the severity of the problems, such as social exclusion (insofar as data are available for the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia), education and training levels, and participation of women in the labour market.

▼B

For Objectives 1 and 2, these breakdowns shall distinguish allocations of appropriations to regions and areas benefiting from transitional support. These allocations shall be determined in accordance with the criteria referred to in the first subparagraph. The annual breakdown of these appropriations shall be degressive from 1 January 2000 and shall be lower in 2000 than in 1999. The profile of transitional support may be tailored to the specific needs of individual regions, in agreement with the Commission, provided the financial allocation for each region is respected.

Using transparent procedures, the Commission shall also make indicative breakdowns by Member State of the commitment appropriations available for the structural actions in the fisheries sector outside Objective 1 regions, as referred to in Article 2(3), first subparagraph.

▼M3

4. Under Objective 1, a PEACE programme in support of the peace process in Northern Ireland shall be established for the years 2000 to 2006 for the benefit of Northern Ireland and the border areas in Ireland.

▼B

Under Objective 1, a special programme of assistance for the period 2000 to 2006 shall be established for the Swedish NUTS-II regions which are not covered by the list referred to in Article 3(2) and which meet the criteria laid down in Article 2 of Protocol 6 to the Act of Accession for Austria, Sweden and Finland.

5. 4 % of commitment appropriations under each national indicative breakdown referred to in paragraph 3 shall be allocated in accordance with Article 44.

▼A1

6. For the period referred to in paragraph 1, first subparagraph, 5,35 % of the commitment appropriations for the Structural Funds referred to in paragraph 1, first and second subparagraphs, shall be devoted to funding the Community initiatives.

0,65 % of the commitment appropriations referred to in paragraph 1, first and second subparagraphs, shall be devoted to funding innovative measures and technical assistance as defined in Articles 22 and 23.

For the period referred to in paragraph 1, third subparagraph, 4,58 % of the commitment appropriations for the Structural Funds referred to in paragraph 1, third and fourth subparagraphs, shall be devoted to funding the Community initiatives Interreg and EQUAL. The Community initiatives Leader+ and URBAN shall not be implemented in the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia during this period.

0,27 % of the commitment appropriations referred to in paragraph 1, third and fourth subparagraphs, shall be devoted to funding technical assistance as defined in Article 23. Innovative actions, as defined in Article 22, shall not be implemented in the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia during this period.

▼B

7. For the purpose of their programming and subsequent inclusion in the general budget of the European Communities, the sums referred to in paragraph 1 shall be indexed as from 1 January 2000 at 2 % per year.

Indexation of the allocations for 2004 to 2006 shall be reviewed, if necessary, by 31 December 2003 at the latest for technical adjustment by the Commission on the basis of the latest economic information available. The difference relative to the initial programming shall be reallocated for inclusion in the sum referred to in paragraph 5.

8. Total annual receipts in any Member State from the Structural Funds pursuant to this Regulation — in combination with assistance provided under the Cohesion Fund — should not exceed 4 % of national GDP.







CHAPTER IV

ORGANISATION

Article 8

Complementarity and partnership

1. Community actions shall complement or contribute to corresponding national operations. They shall be drawn up in close consultation, hereinafter referred to as the ‘partnership’, between the Commission and the Member State, together with the authorities and bodies designated by the Member State within the framework of its national rules and current practices, namely:

— the regional and local authorities and other competent public authorities,

— the economic and social partners,

— any other relevant competent bodies within this framework.

The partnership shall be conducted in full compliance with the respective institutional, legal and financial powers of each of the partners as defined in the first subparagraph.

In designating the most representative partnership at national, regional, local or other level, the Member State shall create a wide and effective association of all the relevant bodies, according to national rules and practice, taking account of the need to promote equality between men and women and sustainable development through the integration of environmental protection and improvement requirements.

All the designated parties, hereinafter referred to as the ‘partners’, shall be partners pursuing a common goal.

2. Partnership shall cover the preparation, financing, monitoring and evaluation of assistance. Member States shall ensure the association of the relevant partners at the different stages of programming, taking account of the time limit for each stage.

3. In application of the principle of subsidiarity, the implementation of assistance shall be the responsibility of the Member States, at the appropriate territorial level according to the arrangements specific to each Member State, and without prejudice to the powers vested in the Commission, notably for implementing the general budget of the European Communities.

4. Member States shall cooperate with the Commission to ensure that Community Funds are used in accordance with the principles of sound financial management.

5. Each year, the Commission shall consult the European-level organisations representing the social partners about the structural policy of the Community.

Article 9

Definitions

For the purposes of this Regulation:

(a) programming: means the organising, decision-making and financing process carried out in a number of stages to implement on a multiannual basis the joint action of the Community and the Member States to attain the Objectives referred to in Article 1;

(b) development plan (hereinafter referred to as ‘the plan’: means the analysis of the situation prepared by a Member State in the light of the objectives referred to in Article 1 and the priority needs for attaining those objectives, together with the strategy, the planned action priorities, their specific goals and the related indicative financial resources;

(c) Objective 3 policy frame of reference: means a document which sets the context for assistance concerning employment and human-resource development throughout the territory of each Member State, and which identifies the relationship with the priorities set out in the National Action Plan for Employment;

(d) Community support framework: means the document approved by the Commission, in agreement with the Member State concerned, following appraisal of the plan submitted by a Member State and containing the strategy and priorities for action of the Funds and the Member State, their specific objectives, the contribution of the Funds and the other financial resources. This document shall be divided into priorities and implemented by means of one or more operational programmes;

(e) assistance: means the forms of assistance provided by the Funds, i.e.: (i) operational programmes or single programming documents; (ii) Community initiative programmes; (iii) support for technical assistance and innovative measures;

(f) operational programme: means the document approved by the Commission to implement a Community support framework and comprising a consistent set of priorities comprising multiannual measures and which may be implemented through recourse to one or more Funds, to one or more of the other existing financial instruments and to the EIB. An integrated operational programme means an operational programme financed by more than one Fund;

(g) single programming document: means a single document approved by the Commission and containing the same information to be found in a Community support framework and operational programme;

(h) priority: means one of the priorities of the strategy adopted in a Community support framework or assistance; to it is assigned a contribution from the Funds and other financial instruments and the relevant financial resources of the Member State and a set of specified targets;

(i) global grant: means that part of assistance the implementation and management of which may be entrusted to one or more approved intermediaries in accordance with Article 27(1), including local authorities, regional development bodies or non-governmental organisations, used preferably to assist local development initiatives. The decision to employ a global grant shall be taken in agreement with the Commission by the Member State or, in agreement with the Member State, by the managing authority. In the case of Community initiative programmes and innovative measures, the Commission may decide to employ a global grant for all or part of the assistance. In the case of Community initiatives, this decision may only be taken with the prior agreement of the Member States concerned.

(j) measure: means the means by which a priority is implemented over several years which enable operations to be financed. Any aid scheme pursuant to Article 87 of the Treaty or any aid granted by bodies designated by the Member States, or any group of aid schemes or aid grants of this type or any combination thereof which have the same purpose and are defined as a measure;

(k) operation: means any project or action carried out by the final beneficiaries of assistance;

(l) final beneficiaries: means the bodies and public or private firms responsible for commissioning operations. In the case of aid schemes pursuant to Article 87 of the Treaty and in the case of aid granted by bodies designated by the Member States, the final beneficiaries are the bodies which grant the aid;

(m) programme complement: means the document implementing the assistance strategy and priorities and containing detailed elements at measure level, as set out in Article 18(3), drawn up by the Member State or managing authority and revised as necessary in accordance with Article 34(3). It is sent to the Commission for information;

(n) managing authority: means any public or private authority or body at national, regional or local level designated by the Member State, or the Member State when it is itself carrying out this function, to manage assistance for the purposes of this Regulation. If the Member State designates a managing authority other than itself, it shall determine all the modalities of its relationship with the managing authority and of the latter's relationship with the Commission. If the Member State so decides, the managing authority may be the same body as the paying authority for the assistance concerned;

o) paying authority: means one or more national, regional or local authorities or bodies designated by the Member States for the purposes of drawing up and submitting payment applications and receiving payments from the Commission. The Member State shall determine all the modalities of its relationship with the paying authority and of the latter's relationship with the Commission.

Article 10

Coordination

1. Coordination between the various Funds shall be carried out in particular through:

(a) the plans, the Community support frameworks, the operational programmes and the single programming documents (as defined in Article 9) including the frame of reference where relevant in accordance with Article 9(1)(c);

(b) the monitoring and evaluation of assistance under an Objective;

(c) the guidelines referred to in paragraph 3.

2. The Commission and Member State shall, in a manner consistent with the principle of partnership, ensure coordination of assistance from the different Funds between the Funds and with assistance from the EIB and other existing financial instruments.

In order to maximise the stimulus provided by the budget resources deployed, making use of appropriate financial instruments, the Community assistance provided in the form of grants may be combined in an appropriate way with loans and guarantees. This combination may be determined in conjunction with the EIB when the Community support framework or single programming document is being drawn up. It may take account of the balance in the proposed financing plan, the contribution from the Funds and the development goals pursued.

3. No later than one month from the entry into force of this Regulation and subsequently before the mid-term review referred to in Article 42, and on each occasion after consulting all Member States, the Commission shall publish broad, indicative guidelines on relevant and agreed Community policies in relation to the objectives referred to in Article 1, to help the competent national and regional authorities to draw up development plans and to carry out any revision of the assistance. This guidance shall be published in the Official Journal of the European Communities.

Article 11

Additionality

1. In order to achieve a genuine economic impact, the appropriations of the Funds may not replace public or other equivalent structural expenditure by the Member State.

2. For this purpose, the Commission and the Member State concerned shall determine the level of public or equivalent structural expenditure that the Member State is to maintain in the sum of its regions covered by Objective 1 during the programming period.

For Objectives 2 and 3 taken together, the Commission and the Member State concerned shall determine the level of expenditure on the active labour-market policy and, where justified, other actions designed to make it possible to achieve the goals of those two Objectives which the Member State is to maintain at national level during the programming period.

Such expenditure shall be determined by the Member State and the Commission, taking account of the provisions of the fourth subparagraph, in advance of the Commission decision approving any Community support framework or single programming documents relating to the Member State concerned and shall be integrated into those documents.

As a general rule, the level of expenditure referred to in the first and second subparagraphs shall be at least equal to the amount of average annual expenditure in real terms achieved in the previous programming period and shall be determined in the light of the general macroeconomic circumstances in which the funding takes place, although account should be taken of certain specific economic situations, namely privatisations, an exceptional level of public structural effort or equivalent effort on the part of the Member State during the previous programming period and national economic trends.

▼A1

For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, as a general rule, the level of expenditure referred to in the first and second subparagraphs shall be at least equal to the amount of average annual expenditure in real terms achieved in the reference period established in close cooperation with the Commission and shall be determined in the light of the general macroeconomic circumstances in which the funding takes place, although account should be taken of certain specific economic situations, namely privatisations, an exceptional level of public structural effort or equivalent effort on the part of the Member State during the previous period and national economic trends.

▼B

Account shall also be taken of any reduction in Structural Fund expenditure when compared to the period 1994 to 1999.

3. Additionality shall be verified at the territorial level set out in paragraph 2 at three points during the programming period:

(a) an ex-ante verification as described in the third subparagraph of paragraph 2, to provide a frame of reference for the whole programming period;

(b) a mid-term verification no later than three years after approval of the Community support framework or the single programming documents and as a general rule no later than 31 December 2003, following which the Commission and the Member State may agree to revise the level of structural expenditure to be attained if the economic situation has resulted in developments in public revenue or employment in the Member State concerned significantly different from those expected at the time of the ex-ante verification;

(c) a verification by 31 December 2005.

To that end, the Member State shall provide the Commission with appropriate information at the time when the plans are submitted and when the mid-term verification and the verification before 31 December 2005 are made. Where necessary, methods of statistical estimation shall be used.

Independently of these verifications, the Member State shall inform the Commission at any point during the programming period of developments likely to call into question its ability to maintain the level of expenditure referred to in paragraph 2.

Article 12

Compatibility

Operations financed by the Funds or receiving assistance from the EIB or from another financial instrument shall be in conformity with the provisions of the Treaty, with instruments adopted under it and with Community policies and actions, including the rules on competition, on the award of public contracts, on environmental protection and improvement and on the elimination of inequalities and the promotion of equality between men and women.







TITLE II

PROGRAMMING







CHAPTER I

GENERAL PROVISIONS CONCERNING OBJECTIVES 1, 2 AND 3

Article 13

Geographical coverage

1. Plans submitted under Objective 1 shall be drawn up at the geographical level deemed by the Member State concerned to be most appropriate but shall, as a general rule, cover a single region at NUTS level II. However, Member States may submit a general development plan covering some or all of their regions included in the list referred to in Article 3(2), Article 6(1) and Article 7(4), provided that such plan contains the features listed in Article 16.

2. Plans submitted under Objective 2 shall be drawn up at the geographical level deemed by the Member State concerned to be most appropriate, but shall as a general rule comprise all the areas covered by a single NUTS level II region, included in the list referred to in Article 4(4) and Article 6(2). However, the Member States may submit a plan covering certain or all of their regions included in the list referred to in Article 4(4) and in Article 6(2), provided that such plan contains the features listed in Article 16. Where plans cover regions other than those eligible under Objective 2, they shall distinguish between operations in regions or areas covered by Objective 2 and operations elsewhere.

3. Plans submitted under Objective 3 shall cover the territory of a Member State in respect of assistance outside the regions covered by Objective 1 and, taking into account the general needs of areas facing structural problems of socio-economic conversion, shall provide, for the whole of the national territory, a framework of reference for developing human resources.

Article 14

Duration and revision

1. Each plan, Community support framework, operational programme and single programming document shall cover a period of seven years, without prejudice to Article 6 and Article 7(4), first subparagraph.

The programming period shall begin on 1 January 2000. ►A1 For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, the programming period shall begin on the date of accession and shall cover the period from the date of accession until 31 December 2006. ◄

2. Community support frameworks, operational programmes and single programming documents shall be re-examined and, if necessary, adapted at the initiative of the Member State or the Commission in agreement with the Member State, in accordance with this Title following the mid-term evaluation referred to in Article 42 and the allocation of the performance reserve referred to in Article 44.

They may also be revised in the event of significant changes in the socio-economic situation and the labour market.

Article 15

Preparation and approval

1. In respect of Objectives 1, 2 and 3, Member States shall submit a plan to the Commission. That plan shall be drawn up by the competent authorities designated by the Member State at national, regional and other level. In cases where assistance is to take the form of a single programming document, the plan shall be dealt with as a draft single programming document.

In respect of Objective 1, Community support frameworks shall be employed for all regions covered by Objective 1; however, where the Community allocation is less than or does not substantially exceed EUR 1 000 million, the Member States shall, as a general rule, submit a draft single programming document.

In respect of Objectives 2 and 3, single programming documents shall as a general rule be employed; however, Member States may elect to have a Community support framework drawn up.

2. The plans shall be submitted by the Member State to the Commission after consultation with the partners, who shall express their views within a period of time consistent with the deadline set in the second subparagraph.

Unless otherwise agreed with the Member State concerned, plans shall be submitted not later than four months after the list of eligible regions referred to in Article 3(2) and Article 4(4) have been drawn up.

3. The Commission shall appraise these plans to determine whether they are consistent with the aims of this Regulation, taking account of the framework of reference referred to in Article 9(1)(c), other Community policies and Article 41(2).

The Commission shall also appraise each Objective 3 plan proposed in the light of the consistency of the measures envisaged with the national plan for implementing the European employment strategy in accordance with Article 16(1)(b) and having regard to the manner in which and the degree to which the general needs of areas facing structural problems of socio-economic conversion are taken into account.

4. Where applicable as provided in paragraph 1, the Commission shall draw up the Community support frameworks in agreement with the Member State concerned and following the procedures laid down in Articles 48 to 51. The EIB may be involved in the preparation of the Community support frameworks. The Commission shall take a decision on the contribution from the Funds not later than five months after receiving the relevant plan or plans provided they contain all the features listed in Article 16.

The Commission shall appraise the proposed operational programmes submitted by the Member State to determine whether they are consistent with the aims of the corresponding Community support framework and compatible with other Community policies. It shall adopt a decision on the contribution of the Funds in accordance with Article 28(1) and in agreement with the Member State concerned, provided that the proposals contain all the features listed in Article 18(2).

In order to expedite the examination of applications and the implementation of programmes, the Member States may submit, at the same time as their plans, draft operational programmes. When adopting its decision on a Community support framework, the Commission shall also approve, in accordance with Article 28(1), the operational programmes submitted at the same time as the plans provided they include all the features listed in Article 18(2).

5. Where applicable as provided in paragraph 1 on the basis of the plans, the Commission shall take a decision on the single programming documents in agreement with the Member State concerned, following the procedures laid down in Articles 48 to 51. The EIB may be involved in the preparation of the single programming documents. The Commission shall take a single decision on the single programming document and the contribution of the Funds pursuant to Article 28(1) not later than five months after having received the relevant plan, provided that it contains all the features listed in Article 19(3).

6. The Member State or the managing authority shall adopt the programme complement defined in Article 9(m) after the agreement of the Monitoring Committee if the programme complement is drawn up after the Commission decision on the contribution of the Funds, or after consulting the relevant partners if it is drawn up before the decision on the contribution of the Funds. In the latter case, the Monitoring Committee shall either confirm the programme complement or request an adjustment in accordance with Article 34(3).

Within three months of the Commission decision approving an operational programme or single programming document, the Member State shall send the programme complement to the Commission in a single document for information.

7. The Commission decisions on a Community support framework or single programming document shall be published in the Official Journal of the European Communities. At the request of the European Parliament, the Commission shall transmit to it, for information, these decisions and the Community support framework and single programming documents it has approved.







CHAPTER II

CONTENT OF THE PROGRAMMING FOR OBJECTIVES 1, 2 AND 3

Article 16

Plans

1. The plans submitted under Objectives 1, 2 and 3 shall be based on appropriate national and regional priorities and shall take account of the indicative guidance referred to in Article 10(3) and shall include:

(a) a description, quantified where it lends itself to quantification, of the current situation either with regard to disparities, gaps and potential for development in the regions covered by Objective 1, or in terms of conversion in the areas covered by Objective 2, or in terms of developing human resources and employment policy in the Member State and the areas covered by Objective 3; also, a description of the financial resources deployed and the main results of operations undertaken in the previous programming period with regard to the evaluation results available;

(b) a description of an appropriate strategy to attain the objectives referred to in Article 1 and the priorities selected for the sustainable development and conversion of regions and areas, including rural areas, and the related development of human resources and the adaptation and modernisation of policies and systems for education, training and employment. In addition to the other items listed in this point, Member States shall demonstrate in each Objective 3 plan that the priorities planned are consistent with the prevailing national employment plan, by reference to a description of the main aims of the strategy and the main means of attaining them. Similarly, Member States shall demonstrate that the activities provided for in each Objective 2 plan on human resources and employment to be assisted by the ESF are integrated into the conversion strategy, coordinated with the other Funds and consistent with the ex-ante evaluation relating to human resources and employment as referred to in Article 41(2). If these needs do not amount to a significant sum, they shall be covered by Objective 3;

(c) an indication of the planned use and form of the financial contribution from the Funds and, where appropriate, the EIB and the other financial instruments including, for information, the total amount from the EAGGF Guarantee Section for the measures referred to in Article 33 of Regulation (EC) No 1257/1999; the expected requirement for technical assistance; an indication as regards additionality in accordance with Article 11(2), whereby for Objective 1 this should take the form of an indicative overall financing table summarising the public or equivalent and, where appropriate, estimated private resources and the Community structural resources allocated corresponding to each priority proposed in the plan. In any case, the plans shall distinguish between the financial envelopes allocated to areas receiving transitional support and those allocated to other areas covered by Objective 1 or 2. In the case of ESF assistance under Objective 2 or 3, the percentage contribution may be higher in Objective 2 areas than in others. In the case of Objective 3, this financing plan shows the concentration of appropriations planned for the areas facing structural problems of economic and social conversion;

(d) an account of arrangements made to consult partners.

2. For regions covered by Objective 1, the plans shall include all relevant measures for economic and social conversion, the development of human resources, having regard to the frame of reference referred to in Article 9(1)(c), and rural development and fisheries structures.

Where a Member State is covered in its entirety by Objective 1, the plan shall cover the points in the second subparagraph of paragraph (1)(b).

3. Member States shall indicate the particulars relating to each Fund, including the amount of the financial contribution requested and an outline of the operational programmes planned with particular regard to their specific aims and the main types of actions planned.

Article 17

Community support frameworks

1. The Community support framework shall provide coordination of all Community structural assistance in the regions concerned, including, in accordance with Article 1(3), assistance for the development of human resources.

2. Each Community support framework shall include:

(a) a statement of the strategy and priorities for joint Community and national action; their specific objectives, quantified where they lend themselves to quantification; evaluation of the expected impact in accordance with Article 41(2); an indication of how this strategy and these priorities have taken account of the indicative guidance referred to in Article 10(3), the economic policies, the strategy for developing employment through improving the adaptability and skills of people and, where appropriate, the regional policies of the Member State concerned;

(b) an indication of the nature and the duration of the operational programmes not decided at the same time as the Community support framework, including their specific aims and the priorities selected;

(c) an indicative financing plan specifying, in accordance with Articles 28 and 29, for each priority and each year, the financial allocation envisaged for the contribution of each Fund, where appropriate the EIB, the other financial instruments — including, for information, the total amount from the EAGGF Guarantee Section for the measures referred to in Article 33 of Regulation (EC) No 1257/1999 — where they contribute directly to the financing plan concerned and the total amount of eligible public and estimated private funding relating to the contribution of each Fund. In the case of Objective 3, that financing plan shall show the concentration of appropriations planned for the areas facing structural problems of economic and social conversion. This financing plan shall distinguish the funding planned for the regions receiving transitional support. The total contribution of the Funds planned for each year for each Community support framework shall be compatible with the relevant financial perspective, taking account of the degressivity referred to in the third subparagraph of Article 7(3);

(d) the provisions for implementing a Community support framework including: — designation by the Member State of a managing authority within the meaning of Article 9(n) responsible for managing the Community support framework in accordance with Article 34, — arrangements for involving the partners in the Monitoring Committees described in Article 35;

(e) where appropriate, information on the appropriations required for preparing, monitoring and evaluating assistance.

In accordance with Article 11, the Community support frameworks shall include the ex-ante verification of additionality and the appropriate information concerning the transparency of financial flows, in particular from the Member State concerned to the beneficiary regions.

Article 18

Operational programmes

1. Assistance covered by a Community support framework shall as a general rule be provided in the form of an integrated operational programme by region, as defined in Article 9.

2. Each operational programme shall contain:

(a) the priorities of the programme, their consistency with the relevant Community support framework, their specific targets, quantified where they lend themselves to quantification, and an evaluation of the impact expected, in accordance with Article 41(2);

(b) a summary description of the measures planned to implement the priorities, including the information needed to check compliance with aid schemes pursuant to Article 87 of the Treaty; where appropriate, the nature of the measures required to prepare, monitor and evaluate the operational programme;

(c) an indicative financing plan specifying for each priority and each year, in accordance with Articles 28 and 29, the financial allocation envisaged for the contribution of each Fund, the EIB where appropriate, and the other financial instruments — including, for information, the total amount from the EAGGF Guarantee Section for the measures referred to in Article 33 of Regulation (EC) No 1257/1999 — in so far as they contribute directly to the financing plan, as well as the total amount of eligible public and estimated private funding relating to the contribution of each Fund. This financing plan shall distinguish in the total contribution of the various Funds the funding planned for the regions receiving transitional support. The total contribution of the Funds planned for each year shall be compatible with the relevant financial perspective, taking account of the degressivity referred to in the third subparagraph of Article 7(3);

(d) the provisions for implementing an operational programme shall include: (i) designation by the Member State of a managing authority within the meaning of Article 9(n) responsible for managing the operational programme in accordance with Article 34; (ii) a description of the arrangements for managing the operational programme; (iii) a description of the systems for monitoring and evaluation, including the role of the Monitoring Committee; (iv) a definition of the procedures concerning the mobilisation and circulation of financial flows to ensure their transparency; (v) a description of the specific arrangements and procedures for checking on the operational programme.

3. The programme complement shall contain:

(a) the measures implementing the corresponding priorities in the operational programme; ex-ante evaluation, in accordance with Article 41(3), of quantified measures, where they lend themselves to quantification; the relevant monitoring indicators in accordance with Article 36;

(b) the definition of the types of final beneficiary of measures;

(c) the financing plan specifying for each measure, in accordance with Articles 28 and 29, the financial allocation envisaged for the contribution of the Fund concerned, the EIB where appropriate, and the other existing financial instruments and the amount of eligible public or equivalent funding and estimated private funding relating to the contribution of the Funds; the percentage contribution of a Fund to a measure shall be determined in accordance with Article 29 and the total amount of Community funds allocated to the priority concerned. This financing plan shall distinguish the funding planned for the regions receiving transitional support. The financing plan shall be accompanied by a description of the arrangements for providing the co-financing for measures, taking account of the institutional, legal and financial systems of the Member State concerned;

(d) measures intended to publicise the operational programme in accordance with Article 46;

(e) a description of arrangements agreed between the Commission and the Member State concerned for the computerised exchange, where possible, of the data required to fulfil the management, monitoring and evaluation requirements of this Regulation.

Article 19

Single programming documents

1. Assistance under Objectives 2 and 3, and under Objective 1 as specified in Article 15(1), shall, as a general rule, take the form of single programming documents. In the case of Objectives 2 and 3, Article 15(1)(c) shall apply.

2. An Objective 1 single programming document shall include all relevant measures for economic and social conversion, the development of employment through improving adaptability and skills of people, having regard to the frame of reference referred to in Article 9(1)(c) and rural development and fisheries structures.

An Objective 2 single programming document shall provide coordination of all Community structural assistance including, in accordance with Article 41(2) of Regulation (EC) No 1257/1999, the coordination of rural development measures pursuant to Article 33 of that Regulation, but excluding assistance for developing human resources granted under Objective 3, in all the areas covered by Objective 2.

An Objective 3 single programming document shall provide coordination of all Community structural assistance for the development of human resources in the areas referred to in Article 5, excluding aid in this area granted under Objective 2.

3. Each single programming document shall contain the following elements:

(a) a statement of the strategy and priorities for joint Community and national action; their specific objectives, quantified where they lend themselves to quantification; an evaluation of the expected impact, including on the environmental situation, in accordance with Article 41(2); an indication of how this strategy and these priorities have taken account of the indicative guidelines referred to in Article 10(3), the economic policies, the strategy for developing employment through improving the adaptability and skills of people and, where appropriate, the regional policies of the Member State concerned;

(b) a summary description of the measures planned to implement the priorities, including the information needed to check the compliance with aid schemes pursuant to Article 87 of the Treaty; where appropriate, the nature of the measures required to prepare, monitor and evaluate the single programming document;

(c) an indicative financing plan specifying for each priority and each year, in accordance with Articles 28 and 29, the financial allocation envisaged for the contribution of each Fund, the EIB where appropriate, and the other financial instruments — including, for information, the total amount from the EAGGF Guarantee Section for the measures referred to in Article 33 of Regulation (EC) No 1257/1999 — in so far as they contribute directly to the financing plan, as well as the total amount of eligible public or equivalent and estimated private funding relating to the contribution of each Fund. This financing plan shall distinguish the funding planned for the regions receiving transitional support. The total contribution of the Funds planned for each year shall be compatible with the relevant financial perspective, taking account of the degressivity referred to in the third subparagraph of Article 7(3). In the case of Objective 3, the financing plan shall indicate the concentration of appropriations planned for the areas facing structural, economic and social reconversion problems;

(d) the provisions for implementing a single programming document shall include: (i) the designation by the Member State of a managing authority within the meaning of Article 9 responsible for managing the single programming document in accordance with Article 34; (ii) a description of the arrangements for managing the single programming document; (iii) a description of the systems for monitoring and evaluation, including the role of the Monitoring Committee; (iv) a definition of the procedures concerning the mobilisation and circulation of funding to ensure that flows are transparent; (v) a description of the specific arrangements and procedures for checking on the single programming document;

(e) where appropriate, information on the resources required for preparing, monitoring and evaluating assistance.

In accordance with Article 11, the single programming document shall include the ex-ante verification of additionality for the relevant objective or objectives agreed between the Member State and the Commission and appropriate information concerning the transparency of financial flows, in particular from the Member State concerned to the beneficiary regions.

4. Each single programming document shall be supplemented by a programme complement as defined in Article 9(m) and described in Article 18(3).







CHAPTER III

COMMUNITY INITIATIVES

Article 20

Content

1. ►A1 Without prejudice to the provisions of Article 7(6), the Community initiatives shall cover the following fields: ◄

(a) cross-border, transnational and interregional cooperation intended to encourage the harmonious, balanced and sustainable development of the whole of the Community area (‘Interreg’);

(b) economic and social regeneration of cities and of urban neighbourhoods in crisis with a view to promoting a sustainable urban development (‘URBAN’);

(c) rural development (‘Leader’);

(d) transnational cooperation to promote new means of combating all forms of discrimination and inequalities in connection with the labour market (‘EQUAL’).

2. At least 2,5 % of the Structural Funds commitment appropriations referred to in Article 7(1) shall be allocated to Interreg, under which due attention should be given to cross-border activities, in particular in the perspective of enlargement, and for Member States which have extensive frontiers with the applicant countries, as well as to improved coordination with the PHARE, TACIS and MEDA programmes. Due attention shall also be given to cooperation with the outermost regions.

Due account shall be taken of the social and vocational integration of asylum seekers in the framework of EQUAL.

3. Programmes approved within the framework of the Community initiatives may cover areas other than those referred to in Articles 3 and 4.

Article 21

Preparation, approval and implementation

1. In accordance with the procedures referred to in Articles 48 to 51 and after notifying them for information to the European Parliament, the Commission shall lay down guidelines describing, for each initiative, the aims, scope and the appropriate method of implementation. Those guidelines shall be published in the Official Journal of the European Communities.

2. Each area referred to in Article 20(1) shall be financed by a single Fund: the area referred to in paragraph 1(a) and (b) from the ERDF, the area referred to in paragraph 1(c) from the EAGGF Guidance Section and the area referred to in paragraph 1(d) from the ESF. The decision on the contribution of a Fund may amplify the scope of each Fund as defined in the Regulations specific to each Fund, but without broadening it, to include all measures required to implement the Community initiative programme concerned.

3. On the basis of proposals drawn up in accordance with the guidelines referred to in paragraph 1 and with Article 41(2) and submitted by the Member State(s), the Commission shall decide on Community initiative programmes in accordance with Article 28.

4. The Community initiative programmes shall be re-examined following the mid-term evaluation referred to in Article 42 and amended where required on application by the Member State(s) concerned or by the Commission by agreement with the Member State(s).

5. The Community initiative programmes shall cover a period of seven years, beginning on 1 January 2000.







CHAPTER IV

INNOVATIVE ACTIONS AND TECHNICAL ASSISTANCE

Article 22

Innovative actions

1. ►A1 Without prejudice to the provisions of Article 7(6), at the initiative of the Commission and following consultation of the committees referred to in Articles 48 to 51 on the guidelines for the various types of innovative actions, subject to a ceiling of 0,40 % of their respective annual funding, the Funds may finance innovative actions at Community level. These shall include studies, pilot projects and exchanges of experience. ◄

Such innovative actions shall contribute to the preparation of innovative methods and practices designed to improve the quality of assistance under Objectives 1, 2 and 3. They shall be implemented in a simple, transparent fashion and in accordance with the principles of sound financial management.

2. Each field of action for pilot projects shall be financed by one fund only. The decision on the contribution of a fund may amplify the scope of each fund as defined in the Regulations specific to each fund, but without broadening it, to include all measures required to implement the pilot project concerned.

Article 23

Technical assistance

At the initiative or on behalf of the Commission and following consultation of the committees referred to in Articles 48 to 51 on the different types of measures, subject to a ceiling of 0,25 % of their respective annual allocation, the Funds may finance the preparatory, monitoring, evaluation and checking measures necessary for implementing this Regulation. ►A1 For the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, the ceiling for such measures is fixed at 0,27 % of the respective annual allocation of each Fund allocated to these ten Member States. ◄ These shall include:

(a) studies, including studies of a general nature, concerning the operations of the Funds;

(b) measures of technical assistance, the exchange of experience and information aimed at the partners, the final beneficiaries of assistance from the Funds and the general public;

(c) the installation, operation and interconnection of computerised systems for management, monitoring and evaluation;

(d) improvements in evaluation methods and exchange of information on practices in this field.

Article 24

Approval of innovative actions and technical assistance

1. Making use of information on innovative actions from the Member States concerned, the Commission shall appraise applications for a contribution from the Funds pursuant to Articles 22 and 23 on the basis of the following details:

(a) a description of the proposed assistance, its scope, including geographical coverage, and specific aims;

(b) the bodies to be responsible for implementing the assistance and the beneficiaries;

(c) the timetable and financing plan, including contributions from any other source of Community finance;

(d) provisions to ensure efficient and correct implementation;

(e) any other information necessary to verify compatibility with Community policies and with the guidelines referred to in Article 10(3).

The Commission shall approve the contribution of the Funds when this information enables it to appraise the application.

2. The Member States concerned shall be immediately notified by the Commission following approval of an application.

3. The financial liability of the Member States within the meaning of this Regulation shall not be engaged for the innovative actions referred to in Article 22 or the technical assistance measures referred to in Article 23, without prejudice to their obligations arising out of the institutional arrangements specific to each Member State.







CHAPTER V

MAJOR PROJECTS

Article 25

Definition

As part of any assistance, the Funds may finance expenditure in respect of major projects, i.e. those:

(a) which comprise an economically indivisible series of works fulfilling a precise technical function and which have clearly identified aims; and

(b) whose total cost taken into account in determining the contribution of the Funds exceeds EUR 50 million.

Article 26

Approval and implementation

1. During the implementation of assistance, where a Member State or managing authority envisages the Funds contributing to a major project, it shall inform the Commission in advance and provide the following information:

(a) the body to be responsible for implementation;

(b) the nature of the investment and a description of it, its financial volume and location;

(c) the timetable for implementing the project;

(d) a cost-benefit analysis, including financial costs and benefits, a risk assessment and information on the economic viability of the project;

(e) plus: — in the case of investment in infrastructure: the analysis of the costs and the socio-economic benefits of the project, including an indication of the anticipated rate of use, the foreseeable impact on the development or conversion of the region concerned, and the application of Community rules on public contracting, — in the case of investment in production facilities: the analysis of the market prospects in the sector concerned and the anticipated return on the project,

(f) the direct and indirect effects on the employment situation, as far as possible in the Community;

(g) information allowing an evaluation to be made of the environmental impact and the implementation of the precautionary principle and the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay and compliance with the Community rules on the environment;

(h) information needed to assess compliance with competition rules, inter alia rules on State aids;

(i) an indication of the influence of the contribution of the Funds on whether the project will be implemented;

(j) the financing plan and the total financial resources expected from the contribution of the Funds and any other source of Community finance.

2. The Commission shall appraise the project, consulting the EIB if necessary, in the light of the following factors:

(a) the type of investment planned and, where applicable, the revenue expected;

(b) the results of the cost-benefit analysis;

(c) the result of the evaluation of the impact on the environment;

(d) consistency with the priorities in the corresponding assistance;

(e) compliance with other Community policies;

(f) the expected economic and social benefits, particularly in terms of employment, having regard to the financial resources deployed;

(g) the coordination of the financial instruments and the combination of assistance and loans referred to in Article 10(2).

3. Within two months of receipt of the information referred to in paragraph 1 or three months where consultation of the EIB proves necessary, the Commission shall decide to confirm or amend the level of Community assistance. If it considers that the project appears not to justify either part or all of the contribution from the Funds, it may decide to withhold part or all of that contribution, stating the reasons for so doing.







CHAPTER VI

GLOBAL GRANTS

Article 27

Global grants

1. Where implementation or management of part of assistance has been entrusted to intermediaries in accordance with Article 9(i), such intermediaries must provide guarantees of their solvency and proven competence and experience in administrative and financial management. They must normally be established or represented in the region or regions concerned but may, in limited and justified circumstances, be established outside. They must have several years' experience in the relevant field, operate in the public interest and adequately involve the socio-economic interests directly affected by the implementation of the planned measures.

2. The choice of a global grant shall appear in the corresponding decision on the contribution of the Funds as a special implementing provision as defined in Article 18(2)(d) and Article 19(3)(d). The procedures for the use of global grants shall be the subject of an agreement between the Member State or managing authority and the intermediary body concerned.

In the case of Community initiative programmes and innovative measures, the procedures for the use of global grants shall be the subject of an agreement between the Commission and the intermediary body concerned. In the case of Community initiative programmes, these procedures must also be agreed with the Member States concerned. The programme complement referred to in Article 18 shall not relate to that part of the assistance bearing on the global grant.

3. The procedures for the use of the global grant shall detail in particular:

(a) the measures to be implemented;

(b) the criteria for choosing beneficiaries;

(c) the conditions and rates of assistance from the Funds, including the use of any interest accruing;

(d) the arrangements for monitoring, evaluating and ensuring the financial control of the global grant;

(e) where applicable, any use of a bank guarantee, in which case the Commission must be informed.







TITLE III

CONTRIBUTIONS AND FINANCIAL MANAGEMENT BY THE FUNDS







CHAPTER I

FINANCIAL CONTRIBUTIONS BY THE FUNDS

Article 28

Decision on the contributions from the Funds

1. Provided that all the requirements of this Regulation are fulfilled, the Commission shall adopt in a single decision the contributions of all the Funds within five months of receipt of the application for assistance. The decision shall distinguish clearly the regions and areas receiving transitional support, where applicable.

A maximum contribution from the Funds shall be set for each priority in the assistance.

For a given period, a measure may not receive a financial contribution from more than one fund at a time.

A measure or operation may benefit from a contribution from a Structural Fund under only one of the objectives referred to in Article 1 at a time.

No operation may benefit simultaneously from a contribution from a Fund under Objective 1, 2 or 3 and under a Community initiative.

No operation may benefit simultaneously from a contribution from a Fund under Objective 1, 2 or 3 and under the EAGGF Guarantee Section.

No operation may benefit simultaneously from a contribution from a Fund under a Community initiative and under the EAGGF Guarantee Section.

2. The contribution of the Funds to operational programmes undertaken in implementing a Community support framework shall be consistent with the financing plan laid down in the corresponding Community support framework, as set out in Article 17(2)(c).

3. In implementing measures, the contribution of the Funds shall principally take the form of non-repayable direct assistance (hereinafter referred to as ‘direct assistance’), as well as other forms, such as repayable assistance, an interest-rate subsidy, a guarantee, an equity holding, a venture-capital holding or another form of finance.

Assistance repaid to the managing authority or to another public authority shall be reallocated to the same purpose.

Article 29

Differentiation of the rates of contribution

1. The contribution of the Funds shall be differentiated in the light of the following:

(a) the gravity of the specific problems, in particular of a regional or social nature, to be tackled by the assistance;

(b) the financial capacity of the Member State concerned, taking into account in particular its relative prosperity and the need to avoid excessive increases in budget expenditure;

(c) within the framework of the objectives of the F