28. 5. 84 Official Journal of the European Communities NoC 140/17 
1. The Committee endorses the proposal for a 
Decision authorizing a further tranche of borrow­
ings of 1 400 million ECU within the framework of 
NCI III. 
2. In keeping with its opinions on the first tranche 
of borrowings (CES 551/83) and on the promotion 
of innovation in small and medium-sized enter­
prises (CES 975/83), the Committee welcomes the 
guidelines and priorities laid down by the Commis­
sion, particulary the priority for investment projects 
— mainly of small and medium-sized enterprises — 
in industry and directly allied services. Investments 
in small and medium-sized enterprises in the craft, 
commercial and tourism sectors should also be 
included in the list of eligible investments. 
3. In its earlier opinions the Committee called for 
support to be given primarily to investment projects that would increase employment. In this connection 
the Committee approves the Commission proposal 
to promote investment projects that contribute 
directly to the creation of jobs. The Commission 
says 'contribute directly or indirectly', but the latter 
term is open to the objection that it is too vague to 
enable an assessment to be made of whether an 
investment project is entitled to support. It is there­
fore urged that 'indirectly' be deleted. 
4.4. In addition, investments that further the ^in­
dustrialization of regions with structural problems 
should receive special consideration, as should pro­
jects designed to employ or re-employ labour which 
is temporarily without work and which even in some 
cases been without work for a long time in sectors or 
firms with structural difficulties. 
Done at Brussels, 29 March 1984. 
The Chairmann 
of the Economic and Social Committee 
Francis CEYRAC 
Opinion on the proposal for a Council Regulation amending Regulation (EEC) No 
724/75 establishing a European Regional Development Fund 
(84/C 140/08) 
The text referred to the Committee has been published in Official Journal of the Euro­
pean Communities No C 360 of 31 December 1983, page 1. 
A. LEGAL BASIS FOR THE OPINION 
On 30 November 1983, acting under Article 198 of the Treaty establishing the Euro­
pean Communities, the Council asked the Economic and Social Committee for an 
opinion on the abovementioned proposal. 
Procedure: 
The Section for Regional Development was instructed to draw up an opinion on the 
subject, with Mr Giacomo Regaldo as rapporteur. The Section opinion was adopted 
on 17 February 1984. 
NoC 140/18 Official Journal of the European Communities 28. 5. 84 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee adopted the opinion by 60 votes to 8, with 
4 abstentions on 29 March during its 216th plenary session. 
The Committee broadly approves the proposed 
changes to the ERDF. 
1.1. Introduction: the proposed ERDF reform 
1.1.1. The major improvements proposed give 
good reason to hope that the Fund will in future 
play a more dynamic role in reducing the regional 
imbalances between the rich and poor areas. These 
imbalances remain acute and the serious internal 
strains which they generate are one of the main 
obstacles to Community cohesion. 
1.1.2. The Committee particularly welcomes: 
— the gradual shift from the current system of 
financing by project to programme financing, 
for programmes initiated by both the Com­
munity and the Member States, 
— the increased emphasis on productive measures; 
this involves stepping up aid for small firms in 
the context of action to increase internally 
generated development, 
— replacement of the rigid quota system by a more 
flexible system using indicative ranges, increas­
ing the flexibility of fund administration; the 
long-term objective would be the total abolition 
of quotas, 
— the increased aid for particularly depressed 
areas; this involves broadening measures and 
more especially stepping up the integrated 
development operations; 
— the greater operating efficiency which will be 
achieved by the higher participation rate, the 
introduction of advances, and the launching of 
new measures; 
— introduction of the prerequisites for the achieve­
ment of the highly desired and vital 'additional­
ly' of Community aid. 
1.2.1. The Commission proposal is undoubtedly a 
step in the right direction. However, the Committee feels that a few more changes are necessary to 
ensure that the new measures and procedures run as 
smoothly as is desired. 
1.2.2. The Committee's recommendations take 
account of (a) the previous Committee opinion^), 
(b) the guidelines issued by the European Council 
of Stuttgart which led to the Commission report on 
'Ways of increasing the effectiveness of the Com­
munity's structural funds' and (c) the favourable 
opinion issued by the European Parliament on the 
first proposed changes. 
2. GENERAL COMMENTS 
2.1. The new proposal is a modified version of the 
1981 proposal which has not yet been adopted 
because of differences on such basic points as: the 
greater geographical concentration of resources, the 
increase in the Fund participation rate, and the 
quota system. 
2.2. Extension of the tasks of the Fund 
2.2.1. The need to face up to the structural changes 
taking place in the European economy and the ser­
ious economic recession have led the Commission 
to propose that the Fund's tasks be extended. 
2.2.2. The tasks, in line with the basic aims of 
Community structural measures, are: 
(a) development and structural adjustments in 
backward areas; 
(b) reconversion of declining industrial areas. 
2.2.3. The major changes which are affecting many 
fields of activity are disrupting the economy of areas 
which have until now depended on these activities. 
(•) OJ NoC 178, 15. 7. 1982. 
28. 5. 84 Official Journal of the European Communities No C 140/19 
This brings a need for strong regional policy action 
to stem the decline of entire regions and facilitate 
production plant modernization. 
2.2.4. The Committee supports this approach, but 
feels that clear priorities have to be maintained. 
Thus, while recent socio-economic problems must 
not be ignored, the Committee feels that the Fund 
should continue to give priority to the less-favoured 
areas. 
2.2.5. The extension of the Fund's tasks will 
require additional funds on top of those going to the 
traditional areas whose socio-economic conditions 
still lag unacceptably behind those of the better-off 
regions. 
2.3. Additionality/complementarity 
2.3.1. The Committee opinion of 29 April 1981 
endorsed the principle that ERDF aid should sup­
plement national aids (Article 13 (e)). Much has 
been written on this subject, but it is felt that the 
comments made in the opinion of 29 April 1982 
remain fully valid. 
2.3.2. The Commission does not, moreover, do 
anything to clarify this issue, since Article 20 (4) of 
the proposal confirms the earlier practice for ERDF 
aid whereby the Fund's contribution may either sup­
plement aid granted to the relevant investment by 
public authorities, or remain credited to those auth­
orities, or remain credited to those authorities and 
be considered as a partial refund of such aid. 
2.3.3. In effect, the Committee is concerned that 
Member States are to have the right to choose the 
arrangements which they think best serve their inter­
ests. This situation is not entirely mitigated (a) by 
Article 42, which provides that the amounts allo­
cated from the Fund should be clearly indentified in 
national budgets, or (b) by Article 13 (l)(e), which 
refers to national programmes of Community 
interest and states categorically that 'Fund assist­
ance takes the form of a supplementary financial 
contribution in favour of the regions or areas con­
cerned.' 
2.3.4. The trend towards Community programmes 
will presumably remove certain ambiguities as 
regards complementarity. 2.3.5. The Committee feels that overall comple­
mentarity could be facilitated by allowing pro­
grammes to cater for certain types of investment 
projects which do not qualify for national aid but do 
attract other sources of finance (private, local or 
regional), in so far as such investment contributes to 
indigenous development, and, in particular, to the 
development of SMEs. The Community should be 
at liberty to support such projects even if the Mem­
ber State concerned did not give them priority. 
2.4. Information 
2.4.1. The Committee stresses the need to ensure 
that the potential beneficiaries and coordinating 
bodies are provided with adequate information 
about the new measures. 
2.5. The local and regional authorities 
2.5.1. As stated in the previous opinion, the Com­
mittee confirms its unqualified support for the 
increasingly important role which the Commission 
wishes to assign local and regional authorities at all 
stages of the Fund's activity. Precisely because they 
are responsible for day-to-day administration and 
policies in the fields covered by the Fund and are 
therefore in a position to contribute ideas, experi­
ence and proposals, they must work closely with the 
Community authorities, more especially in the draft­
ing of programmes. During the transitional period 
before projects are phased out, the central auth­
orities should take account of the views of local and 
regional authorities and the representative socio­
economic organizations. 
2.5.2. In this connection, it is suggested that the 
Commission always refer to the 'local and regional 
authorities'. 
2.6. Representative socio-economic interest groups 
2.6.1. The Committee reiterates the need for repre­
sentatives of socio-economic interest groups to be 
actively involved in the formulation and implemen­
tation of Community regional policy. Consultation 
of these groups by the Regional Policy Committee 
must be stepped up. 
No C 140/20 Official Journal of the European Communities 28. 5. 84 
3. SPECIFIC COMMENTS AND PROPOSED 
AMENDMENTS 
3.1. Article 2 (3) (a) 
3.1.1. In the light of the above comments (see 
Point 2.5) the penultimate subparagraph of Article 2 
(3) (a) should be amended inter alia by deleting the 
words 'as much as possible'. In view of the pro­
posed broadening of Commission aid through the 
Community programmes, provision should be made 
for Community-level consultations with the repre­
sentatives of local and regional authorities. 
3.2. Indicative ranges (Article 4) 
3.2.1. Subject to the reservations listed below, the 
Committee welcomes one of the major innovations 
of the Commission proposal. 
3.2.2. The 'quota and non-quota' sections are to be 
axed and replaced by a system of indicative ranges 
for the minimum and maximum contributions for 
which each Member State is eligible. 
3.2.3. The deviation from the mid-point is around 
17 %, and is thus wide enough to allow room for 
manoeuvre and administrative flexibility. 
3.2.4. Some comments should however be made: 
1. Steps must be taken to ensure that Fund action 
will continue to be concentrated in the less-
favoured regions and that action to assist 
declining industrial areas must under no circum­
stances jeopardize the objective of achiev­
ing geographical balance. Moreover, the princi­
ple of geographical and financing concentration 
espoused repeatedly by the ESC must be prop­
erly implemented along with an increase in 
intervention rates, if the new arrangements are 
to have a real impact on structural programmes. 
2. Under the proposed system, Member States will 
have to rationalize their measures, introducing a 
healthy principle of competition for the best 
possible use of the limited resources available. 
However, the Commission must still provide the 
less-favoured areas with maximum assistance 
on project submission techniques. 3. The Community programmes are likely to 
become major planning instruments. The Fund 
is also to broaden its activity in regions which it 
has not traditionally helped. Clear priorities 
must therefore be set for fund allocations which 
will not penalize the less-favoured areas, and 
resources must be adjusted to the new tasks of 
the Fund in areas of industrial decline. 
3.3. Programme financing 
3.3.1. The proposal reiterates the concept of pro­
gramme financing contained in the previous Regula­
tion, as a way of clarifying procedural agreements 
between the Commission and the Member State(s). 
The Committee approves this (as defined in 
Article 14). The Committee's stance is moreover 
consistent with Point 3 of opinion CES 389/82 
which stated inter alia: 
'The contractual nature of the programmes is an 
important new element. It will enable the Com­
munity to have a more effective influence over the 
use made of Fund assistance and to vary the rate of 
contribution. It is also important that the Commis­
sion should undertake with Member States and 
other public authorities studies which will allow a 
portfolio of schemes which would benefit from 
Fund financing to be built up'. 
The Committee reiterates this proposal, und urges 
that greater use be made of these studies, which are 
an essential instrument for drawing up the pro­
grammes. The need for this is borne out by the fact 
that, as the latest ERDF report (COM(83) 566 final) 
showed, there are few calls on the 'Studies' section 
and little money is paid out under this heading. 
3.3.2. The Committee also welcomes the proposed 
subdivision of programmes into two types : 
(a) Community programmes; 
(b) National programmes of Community interest. 
3.3.3. Community programmes 
The Community programmes have priority over the 
others. They should usher in a genuine regional 
policy with the stated aim of achieving the goals of 
Community policies. However, in the light of exper­
ience, the financing rate and percentage of overall 
28. 5. 84 Official Journal of the European Communities NoC 140/21 
Fund resources allocated to Community pro­
grammes should be specified in order to strike a fair 
balance between the two types of programme. 
3.3.3.1. Article 7 
The definition of 'Community programmes' given in 
Article 7 should be clarified. Community pro­
grammes should be designed to: 
— promote the geographical development condi­
tions which would pave the way for the imple­
mentation of Community policies, 
— eliminate the difficulties pinpointed by Com­
munity policies in regional socio-economic situ­
ations. 
3.3.3.2. Article 8 
Article 8 (second sentence, first paragraph) should 
be amended to provide for consultation of the 
Economic and Social Committee, in addition to the 
European Parliament, on the drafting of outline 
Community programmes. The Committee also wel­
comes the insertion of the qualified Council major­
ity rule in Article 8 and the proposal to give the 
Commission responsibility under Articles 14 and 39 
for the detailed drafting of the individual pro­
grammes. 
3.3.3.3. Article 10(2) 
The Committee also suggests extending from three 
to six months the time-scale for drawing up a 
regional development programme where the target 
area is not already covered by one. 
3.3.4. The national programmes of Community 
interest are a useful innovation which deserves sup­
port. Member States can thus propose coordinated 
measures in line with their own planning goals, tran­
slating the guidelines set out in regional develop­
ment programmes into concrete commitments. 
3.3.4.1. Article 12(1) 
The Committee feels it should be clearly stated that 
representative socio-economic interest groups 
should be involved in drafting these programmes 
too. Article 12 (1) of the Commission proposal 
should be redrafted accordingly. 3.3.5. Comments on the two types of programme 
3.3.5.1. The Committee also feels that in order to 
make planning effective and better tailored to the 
needs of the disadvantaged areas, an 'on-the-spot' 
administrative base for planning and financing is 
needed. This is indispensable at both the planning 
and operational phases of any development pro­
gramme. 
3.3.5.2. All too often, important Community mea­
sures have ground to a halt at the doorstep of the 
regions they were seeking to help because this was 
precisely where the most serious shortcomings 
occured in organization and planing. Lack of inter­
nal funds was a further factor. 
3.3.5.3. The Committee thus feels that when imple­
menting the Fund reform, the Commission must 
take steps to introduce all the organizational and 
financial norms needed to make the measures swift 
and effective. 
3.3.5.4. Article 15(1) 
The Committee therefore approves the Commission 
proposal, which underlines this need. 
3.4. Regional development bodies 
3.4.1. In line with its comments in 3.2.4., subpara­
graph 2, the Committee feels that where necessary, 
appropriate support must be given to the establish­
ment of development bodies with the task of draw­
ing up the internally-generated development pro­
grammes, in close contact with local, regional, 
national and Community authorities. 
3.4.2. Depending on the characteristics and needs 
of the areas involved, regional development agen­
cies should preferably comprise representative 
socio-economic bodies, and technical or financial 
bodies operating in the areas concerned. Their role, 
which may be institutional and/or consultative, 
depending on the Member State they are located in, 
could facilitate the implementation of development 
programmes, through their direct contact with com­
panies. 
3.4.3. A grant should be given for setting up these 
agencies and they should also be recognized by 
national and Community authorities. 
No C 140/22 Official Journal of the European Communities 28. 5. 84 
3.5. Criteria for programme eligibility 
3.5.1. In order to ensure that programme financ­
ing, particularly as regards Community programmes, 
is not granted solely at the discretion of the auth­
orities involved, the Commission should issue 
clearly defined criteria when the proposal enters 
into force. Specific criteria for services 
— possible setting-up of development agencies, 
— provision of financing, credit (leasing, factor­
ing), insurance and accounting services for com­
panies, 
— creation of basic services essential to the exten­
sion of production and to socio-economic 
development. 
3.5.2. Certain priority criteria are suggested below. 
We do not go into details of procedure or methodol­
ogy. 3.6. The potential for internally generated develop­
ment (Articles 16 and 17) 
General criteria (for the various types of programme) 
— areas particularly depressed socio-economically, 
— pre-existence of national development legisla­
tion, 
— better prospects for spin-off development due to 
the local situation, 
— better prospects for job creation. 3.6.1. The Committee supports the Commission 
proposal to incorporate these aid arrangements in 
the programme framework — which undoubtedly 
seeks to make the planned measures more effective 
— provided that the term 'programmes' refers not 
only to Community and/or national programmes, 
but also to the coordination of two or more mea­
sures as stated in Article 16 (1). 
The Committee would however make the following 
comments: 
Specific criteria for structural measures 
— advanced technology production sectors, 
— the energy sector, in particular for the develop­
ment of renewable energy sources; 
— production sectors with better market prospects, 
— restructuring or reconversion programmes 
linked to new market requirements and technol­
ogical changes. 
Specific criteria for infrastructure measures 
— completion of current vital infrastructure work, 
— implementation of schemes closely linked to 
production development, 
— schemes designed to decongest metropolitan 
areas. Measures to help small firms, whatever their 
legal status, must cover the industrial, commer­
cial, craft, tourism and services sectors. This is 
in line with the findings of the Strasbourg con­
ference closing the 1983 Year of Small and 
Medium-Sized Enterprises. 
Apart from risk capital, provision should be 
made in Article 16 (1) (h) for encouraging 'joint 
ventures' between SMEs. 
3.6.2. The Committee suggests that, when the 
internal potential of a region is being weighed up, 
the 'human factor', the use of natural resources and 
the historical or cultural tradition must be basic 
components in project assessment. Accordingly, 
programmes must pay appropriate attention to the 
local aspect, with ERDF support for the occupa­
tional training needed. 
Closer cooperation is needed between Commission 
departments and the bodies set up to consider inter­
nal development measures. 
28. 5. 84 Official Journal of the European Communities No C 140/23 
3.6.3. The Committee endorses the proposal to 
boost the Fund contribution to up to 65 % of public 
financing and to increase the maximum contribu­
tion for studies to 70 000 ECU. The Committee also 
hopes that, when deciding which measures to 
finance, the Commission will implement the goal of 
allocating 15 % of overall resources to internally 
generated development. The Committee also trusts 
that the Member States will make maximum use of 
the opportunities provided (Article 16). 
3.7. Financial aid for investment projects 
(Article 18) 
3.7.1. Assuming that, as urged above, 'small and 
medium-sized enterprises' is understood in its 
broadest sense, the Committee cannot but point out 
the need to regulate the break-down of investment 
between infrastructure and production schemes 
more carefully, giving priority to SMEs in the latter 
area. 
3.7.2. The Committee thus cannot accept that the 
funds allocated to projects covering small firms 
should be lower than those for programmes. It there­
fore asks that they be raised to the level of the latter. 
This is necessary in order to encourage the growth of 
investment in SMEs. 
3.7.3. The Committee suggests encouragement of 
economically viable SME initiatives with genuine 
market prospects. 
3.7.4. At all events, investment in new sectors and 
activities must be encouraged, in order to mop up 
manpower which has been made redundant by 
industrial and agricultural reorganization and res­
tructuring. 
3.7.5. Tourism, the tertiary sector and services in 
general hold out considerable potential for econo­
mic growth and new jobs. They should therefore be 
encouraged by policies designed to stimulate invest­
ment. 
Done at Brussels, 29 March 1984. 3.7.6. The Committee points out that interest 
rebates (Article 35) deserve greater encouragement, 
as they have a multiplier effect on investments. At 
least 10% of resources should be earmarked for 
them. 
3.8. Studies (Article 25) 
The Committee notes that the Fund participation 
rate in the financing of studies is not specified. It 
feels that this should be at least 50 %. The Com­
mittee also asks to be consulted when studies are 
being defined, and to be informed of their findings. 
3.9. Accelerated payments and advances (Articles 29 
to 31) 
The Committee endorses the proposals on acceler­
ated payments and advances, but points out that 
rules should also be laid down for possible readjust­
ment of the amount of previously allocated aid, par­
ticularly when it is proposed to implement it 12 
months or more after the start of payment by Mem­
ber States. This is necessary because in some coun­
tries, cost increases combined with high inflation 
may significantly erode the effectiveness of the aid. 
3.10. Provisions on checks (Article 32) 
The Committee welcomes the innovations here, 
which are designed to enable the Community to 
reduce or revoke aid or ask for it to be refunded. 
3.11. Integrated operations (Article 34) 
While approving the integrated operations and 
referring to the ESC Study which defines a number 
of priority targets, the Committee feels that IDOs 
must be restricted in number if they are to retain 
their effectiveness. The Commission must commit 
itself to mitigate the worst aspects of the lack of 
organizational and planning capacity which is wide­
spread in precisely the most depressed areas. 
The Chairman 
of the Economic and Social Committee 
Francois CEYRAC