COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the Common position of the Council on the adoption of an European Parliament and Council Regulation on the granting of Community financial assistance to improve the environmental performance of the freight transport system ("Marco Polo Programme")

2002/0038 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the Common position of the Council on the adoption of an European Parliament and Council Regulation on the granting of Community financial assistance to improve the environmental performance of the freight transport system ("Marco Polo Programme")

1- BACKGROUND

Date of transmission of the proposal to the EP and the Council (document COM(2002)54 final - 2002/0038(COD)) // 4.2.2002

Date of the opinion of the European Economic and Social Committee: // 17.7.2002

Date of the opinion of the European Parliament, first reading: // 25.9.2002

Date of transmission of the amended proposal: // Amended proposal was not tabled

Date of adoption of the common position: // 25.4.2003

2- OBJECTIVE OF THE COMMISSION PROPOSAL

The Community should dispose of a practical and market-oriented instrument, which supports its fight against congestion in the road freight sector and its ambitious goals to improve the environmental performance of the transport system as a whole. The Commission proposal intends to set up such an instrument to shift road freight transport to maritime, rail and inland waterway modes.

The Proposal intends to support commercial actions in the market for freight transport services, which shift freight from road transport to other, more environmentally friendly modes The programme will also be able to fund actions involving countries, which are candidates to accession to the European Union. However, taking into account the principle of subsidiarity, it will focus in international projects.

The main objective of the Proposal is to help shift an amount of cargo corresponding to the anticipated growth of international road haulage, to other modes. The programme will support the major policy initiatives in the freight sector foreseen for the horizon 2010, and should therefore be in place until that date.

3- COMMENTS ON THE COMMON POSITION

3.1. General comments

The Commission accepted totally, in part or in principle, 17 of the 25 amendments proposed by the European Parliament in the first reading. Out of these 17 amendments, 10 have now been incorporated, either verbatim or in spirit, in the Common Position. The Council has rejected the other amendments.

Three further amendments of Parliament regarding the contract thresholds, rejected by the Commission, are reflected in the Common Position.

The Common Position changes the financial framework from 115 million EUR for the period 2003 - 2007, which is equivalent to 85 million EUR for the period 2003 - 2006 as proposed by the Commission, to 75 million EUR for the period 2003 - 2006.

Since neither approach nor aims of the Proposal are fundamentally altered the Commission can support the Common Position adopted unanimously on 25.4.2003.

3.2. Detailed comments

3.2.1. Parliamentary amendments accepted by the Commission and incorporated in full or in part in the Common Position.

Amendment 1 proposes, in Recital 4, to stress that the Marco Polo programme enhances inter-modality. Further, in line with the objectives and the title of the programme, the amendment requires that the programme should contribute to reducing congestion in freight transport by road. The first part of amendment 1 is incorporated in full; the second part is incorporated by the phrase "to reduce road congestion".

Amendment 5 proposes to add in Art. 1, par. 1 of the Regulation, the notion that the programme should enhance intermodal transport. Incorporated in full.

Amendment 7 proposes to ensure that the optimisation of intermodal transport chains is included in the definition of the term "action" within the meaning of Art. 2(a) of the Regulation. Incorporated in full.

Amendment 11 proposes to rephrase Art. 3, par. 3 of the Regulation to clearly encompass all applicant States negotiating for accession to the Treaty. The Common Position reflects this amendment by the term "countries which are candidates for accession".

Amendment 13 proposes to better define the notion of "unacceptable distortions of competition" in Art. 5, par. 1, point (c) and suggests the term "distortions of competition... which conflict with the Community interest". The Common position incorporates and rephrases this amendment as follows: "distortions of competition... to an extent which damages the common interest".

The first part of amendment 17 proposes to clarify, in Art. 6, para.1 point (c), that shifts in traffic should not occur between the alternative modes, but just from road. This has been incorporated in the Common Position.

Amendment 19 proposes to better define the notion of "unacceptable distortions of competition" in Art. 6, par. 1, point (e) and suggests the term "distortions of competition... which are contrary to the common interest". The Common position incorporates and rephrases this amendment as follows: "distortions of competition... to an extent which damages the common interest".

Amendment 20 proposes to clarify that expenditure incurred as of the date of the submission of an application under Art. 6 is only reimbursable, if final approval for Community funding is given. Incorporated in full under Art. 6, par. 4.

Amendment 22 proposes to better define the notion of "unacceptable distortions of competition" in Art. 7, par. 1, point (c) and suggests the term "distortions of competition... which are contrary to the common interest". The Common position incorporates and rephrases this amendment as follows: "distortions of competition... to an extent which damages the common interest".

Amendment 23 proposes to clarify that expenditure, incurred as of the date of the submission of an application under Art. 7, par. 3, is only reimbursable, if final approval for Community funding is given. Incorporated in full.

3.2.2. Parliamentary amendments accepted by the Commission and not incorporated in the Common Position

The amendments under 3.2.2. are a clarification introduced by the European Parliament. Their incorporation or omission does not change the substance of the Commission Proposal.

The first and second parts of amendment 2 propose, in Recital 5, to clarify that the actions funded under the Marco Polo programme should not lead to traffic flows between the alternative modes. The Commission accepted this part of the amendment.

Amendment 3 proposes, in Recital 9 (now renumbered to Recital 13), to bring forward the date, by which the Commission should produce its report on the implementation of the Regulation, by one year, and requested that the budgetary authority should assess the compatibility of the financial amounts beyond 2006 with the new financial perspective. It also included the possibility of topping up the budget. The Commission accepted this amendment in principle.

Amendment 4 proposes to clarify, in Recital 12 (now renumbered to Recital 16), that funding beyond 2006 would be subject to the approval of the budgetary authority. The Commission accepted this amendment.

Amendment 6 proposes to insert, in Art. 1, par. 2 (now par. 1 and par. 2 were redrafted into one paragraph), the clarification that the programme should reduce the environmental impact of road freight transport and not freight transport in general. The Commission accepted this amendment.

Amendment 12 proposes to clarify, in Art. 5, par. 1, point (a), that a modal shift action should not lead to shift of traffic between the alternative modes. The Commission accepted this amendment.

Amendment 26 proposes to clarify, in Art. 12 (now renumbered to Art. 13), that funding beyond 2006 shall be subject to the approval of the budgetary authority, and annual appropriations shall be authorised within the annual budgetary procedure. The Commission accepted this amendment.

Amendment 27 proposes, in Art. 14 (now renumbered to Art. 15), to bring forward the date of the report of the Commission on the implementation of the programme to 31 December 2005. It also requests the Commission to bring forward annual evaluations of the programme. The Commission accepted the first part in principle, as it suggested to bring forward the date of the report to 30 June 2006, instead of 31 December 2006. Further, amendment 27 foresees the possibility of topping up the budget, which the Commission accepted.

3.2.3. Parliamentary amendments rejected by the Commission and not incorporated in the Common Position

Amendment 9 proposes to limit catalyst actions within the meaning of Art. 2 point (c) to intermodal transport.

Part 2 of amendment 15 proposes, in Art. 5, to further lower the funding thresholds for support to existing services to EUR 250.000.

Amendment 16 proposes to give, in Art. 6, par.1, point (b), special attention to maritime transport.

The second part of amendment 17 proposes to support, in Art. 6, par. 1, point(c), also catalyst actions which just "lead to a reduction of congestion in road transport" without a modal shift.

Amendment 18 proposes to alter the Commission's steering activities according to Art. 6, par. 1, point (d) to advice functions.

Amendment 25 proposes, in Art. 8, detailed rules with respect to withdrawing financial assistance in case of non-compliance.

Amendment 26 proposes, in Art. 12 (now renumbered to Art. 13), specific procedures for take-up and implementation of the programme.

3.2.4. Parliamentary amendments rejected by the Commission, but incorporated in the Common Position

The amendments under 3.2.4. can be accepted because they form part of the compromise negotiated at the informal trilog meeting of 27.11.2002.

Amendment 14 proposes to reduce the minimum subsidy threshold according to Art. 5, par. 5, from 1 million EUR to 0.5 million EUR. Incorporated in full.

Part 1 of amendment 15 proposes to include the possibility of funding the expansion of existing services in Art. 5, par. 1. Council has incorporated this with the phrase "where appropriate, the additional modal shift brought about by the development of an existing service"

Amendment 21 proposes to reduce the minimum subsidy threshold according to Art. 6, par. 6 (now renumbered to par. 7), from 3 million EUR to 1.5 million EUR. Incorporated in full.

Amendment 24 proposes to reduce the minimum subsidy threshold according to Art. 7, par. 6 from 500.000 EUR to 250.000 EUR. Incorporated in full.

3.2.5 Other changes made by Council

In recital 4, a reference to maintaining the distribution of freight transport split at 1998 levels was added.

A new Recital 7 was added, encouraging co-operation in submitting projects.

Recital 7 (now renumbered to Recital 8), was modified to include language concerning existing services and to suggest a certain flexibility concerning minimum contract thresholds.

A new Recital 9 was added to explain the expected benefits from supporting existing services.

A new Recital 10 was added to explain that the basis for subsidies to modal shift actions is the environmental performance of the alternatives to road modes.

A new Recital 11 was added to give flexibility, taking into account further developments in external costing, for the subsidy to modal shift actions.

Recital 8 was renumbered to Recital 12.

Recital 9 was renumbered to Recital 13.

Recital 10 was renumbered to Recital 14.

In Recital 11 (now renumbered to Recital 15), the reference to an advisory committee was deleted.

Recital 12 was renumbered to Recital 16.

Recital 13 was renumbered to Recital 17.

Art. 1 was redrafted into one paragraph.

In Art. 2, point (a), the following text was added: "in the territories of the Member States".

In Art. 2, point (b), the following text was added "or a combination of modes of transport in which road journeys are as short as possible"

In Art. 2, point (d), the word "structurally" was added.

In Art. 2, the following new points were added: point (f), point (j) and point (k).

Art. 2, point (f) was renumbered to point (g).

Art. 2, point (g) was renumbered to point (h).

Art. 2, point (h) was renumbered to point (i).

In Art. 3, par. 1, point (b), the word "close" was added.

In Art. 4, par. 1, the terms "As a general rule" and "in at least one Member State and one close third country" were put in.

In Art. 5, par. 1, point (a), the words "or a combination of modes of transport in which road journeys are as short as possible" were added.

In Art. 5, par. 1, point (d), the wording was changed as follows: "a transparent, objective and non-discriminatory procedure for selection of the relevant services".

In Art. 5, par. 2, first sentence, the wording "of, and caused by" were replaced by "of the action and incurred as a result of".

In Art. 5, par. 2, third sentence, the wording was changed as follows: "as long as it remains marginal".

In Art. 5, par. 2, fourth sentence, the wording "as of" were replaced by "on or after".

In Art. 5, par. 2, fifth sentence, the wording "for the action only" was changed into "principally for the action".

Art. 5, par. 3, was redrafted to indicate that the Community financial assistance shall be set at "EUR 1 for each shift of 500 tonne-kilometres of road freight. This indicative amount could be adjusted, in particular, in accordance with the quality of the project or the real environmental benefit obtained."

In Art. 5, par. 3, second subparagraph, the wording "In accordance with the procedure referred to in Article 12(2)" and "and, if necessary, adapt the amount of Community financial assistance accordingly." was added.

In Art. 5, par. 4, the following was added: "Community financial assistance shall not be renewable beyond the stipulated maximum period of 38 months."

In Art. 6, par. 1, point (b), the sentence "In this context, catalyst actions enforcing the concept of "motorways of the sea" deserve special attention", was dropped.

In Art. 6, par. 1, point (c), the wording "or a combination of modes of transport in which road journeys are as short as possible" was added.

In Art. 6, par. 1, point (d), the wording "with concrete milestones towards its objectives" was changed to "setting out the specific stages by which it seeks to achieve its objectives".

A new Art. 6, par. 2, was added, stating that "catalyst actions implementing new concepts, such as that of "motorways of the seas", deserve special attention."

The new Art. 6, par. 2, also incorporates the original Art. 6, par. 1, point (g), with the addition "or the pan-European transport corridors and areas." Additionally a footnote was added to provide a reference to "the last amendment to Commission Decision 1692/96/EC".

In Art. 6, par. 2 (now renumbered to par. 3), the wording "in order to help achieve the objectives of this Regulation" was added, and the sentence "Articles 18 and 19 of Council Decision 1999/65/EC shall apply mutatis mutandis." was deleted.

In Art. 6, par. 3 (now renumbered to par. 4), first sentence, the following was added: "including preparatory measures".

In Art. 6 par. 3 (now renumbered to par. 4), third sentence, the wording was changed as follows: "as long as it remains marginal".

In Art. 6 par. 3 (now renumbered to par. 4), fourth sentence, the wording "as of" was replaced by "on or after".

In Art. 6, par. 3 (now renumbered to par. 4), fifth sentence, the wording "for the action only" was changed into "principally for the action".

In Art. 6, par. 4 (now renumbered to par. 5), the following was added: "Community financial assistance shall not be renewable beyond the stipulated maximum period of 50 months."

Art. 6, par. 5 (now renumbered to par. 6), was redrafted as follows: "The political priority targets which will be taken into consideration in the selection procedure for such actions shall be established in accordance with the procedure referred to in Article 12(2).

The Commission assisted by the Committee set up under Article 12(1) may review the political targets from time to time."

In Art. 7, par. 1, point (a), the wording "and lasts for a maximum of 24 months" was added.

In Art. 7, par. 1, point (c), the wording was further modified to "in particular between modes of transport alternative to road transport alone or within each mode, to an extend which damages the common interest;"

In Art. 7, par. 1, point (d), the wording "with concrete milestones towards its objectives" was changed to "setting out the specific stages by which it seeks to achieve its objectives".

In Art. 7, par. 2, the sentence "Articles 18 and 19 of Council Decision 1999/65/EC shall apply mutatis mutandis." was deleted.

In Art. 7, par. 3, first sentence was partly redrafted as follows: "to achieve the objectives of the action and incurred as a result of the action."

In Art. 7, par. 3, third sentence, the wording "as of" was replaced by "on or after".

In Art. 7, par. 3, fourth sentence, the wording "for the action only" was changed into "principally for the action".

In Art. 7, par. 3, third and fourth sentences were further modified to clarify which costs are eligible for Community financial assistance.

In Art. 7, par. 4, the following was added: "Community financial assistance shall not be renewable beyond the stipulated maximum period of 26 months."

Art. 7, par. 5, was redrafted as follows: "The political priority targets which will be taken into consideration in the selection procedure for such actions shall be established in accordance with the procedure referred to in Article 12(2).

The Commission, assisted by the Committee set up under Article 12(1), may review the political priority targets from time to time."

In Art. 8, the reference was adapted from "Article 11(2)" to "Article 12(2)".

A new Art. 9 was inserted with reference to the relationship between national State aid and Community financial assistance under the Marco Polo programme.

In Art. 9 (now renumbered to Art. 10), the reference to "Article 10" was adapted to "Article 11".

In Art. 10 (now renumbered to Art. 11), the reference to "Article 11(2)" was adapted to "Article 12(2)".

Art. 11 (now renumbered to Art. 12), par. 1 and par. 2, were redrafted to refer to the standard Council Decision implementing a management procedure.

In Art. 11 (now renumbered to Art. 12), a third paragraph was added as follows: "3. The Committee shall adopt its rules of procedure."

In Art. 12 (now renumbered to Art. 13), the wording "for the period 1 January 2003 to 31 December 2007, shall be EUR 115 million" was changed to "for the period 1 January 2003 to 31 December 2006, shall be EUR 75 million."

In Art. 13 (now renumbered to Art. 14), the wording "of the implementation of the Regulation" was changed to "of the implementation of Articles 5, 6 and 7."

In Art. 14 (now renumbered to Art. 15), the Council has added a new par. 1 concerning information obligations of the Commission. The original par. 1 has been renumbered to par. 2.

4- CONCLUSION

The Commission considers that the Common Position adopted on 25.4.2003 does not alter substantially the approach and aims of the Proposal and can thus support the Common Position.