amending Decision 2003/76/EC establishing the measures necessary for the implementation of the Protocol, annexed to the Treaty establishing the European Community, on the financial consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal and Steel

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

In the context of the quantitative-easing-policy led by the European Central Bank combined with the security principle that governs the management of the assets of the European Coal and Steel Community in liquidation (ECSC i.l.), the revenues assigned to the funding of research projects for Coal and Steel are decreasing at a substantial rate from one year to the other, leading to a situation where the critical level of funding for organising an annual call for proposals may not be met. The budgetary envelope of the RFCS programme has decreased from EUR 46 m in 2017 based on 2015 ECSC i.l.'s revenues to EUR 27 m in 2018 based on 2016 ECSC i.l.'s revenues and the amount is expected to be even lower for 2019 (between EUR 14 m and EUR 18 m). A bridging solution which would maintain for a certain period an acceptable level of funding of Coal and Steel research projects while waiting for a change in monetary policy and an increase of asset returns on public bonds markets can be found in the recycling of unused appropriations put at the disposal of the research programme of the Research Fund for Coal and Steel (RFCS) and in particular the amounts corresponding to cancellations of commitments made under this programme.

The adoption of the proposed revision will authorise the recycling of all the de-commitments (including the amounts recovered) made in the RFCS research programme since 2003 which have been returned to the assets of the ECSC in liquidation and represent a possible complementary funding for the RFCS research programme of EUR 40.3 m. It will also provide an extra funding of about EUR 5 m per year (average flow of annual de-commitments over the three past years in RFCS research programme).

•Consistency with existing policy provisions in the policy area

The RFCS programme is complementary to other Union instruments that can be used to support the adaptation of the industry at several levels. These include the European Fund for Strategic Investments, the European Structural and Investment Funds, Horizon 2020 with the Public-Private Partnership 'SPIRE' (Sustainable Process Industry through Resource and Energy Efficiency) and the European Social Fund. This proposal is in line with the 4th priority of Juncker Commission "A Deeper and Fairer Internal Market with a Strengthened Industrial Base". It is also consistent with the Union support to the competitiveness of the Steel industry and to the reconversion of the Coal industry, which are among the objectives of the RFCS research programme.

•Consistency with other Union policies

The proposal is fully consistent with initiatives taken at Union level in the context of the industrial policy. In particular, it is consistent with the 2014 Communication "For a European Industrial Renaissance" which sets out the Union’s priorities for industrial policy and the 2016 Communication "Steel: Preserving sustainable jobs and growth in Europe".

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The rules concerning de-commitments are enshrined in Article 4 of the Council Decision 2003/76/EC which establishes the measures necessary for the implementation of the Protocol.

The proposed revision is limited to two paragraphs of Article 4 of the Council Decision 2003/76/EC and aims at applying the same treatment (automatic carry-over to the next year) for both categories of unused funds: appropriations not committed at year-end and cancellations of commitments.

•Subsidiarity (for non-exclusive competence)

The measures implementing the Protocol are established in a Council decision the revision of which belongs to the Commission exclusive right of initiative for legislative proposals.

•Proportionality