EN Official Journal of the European Union C 225/58

Opinion of the Committee of the Regions on ‘Proposal for a general regulation on the funds covered by the Common Strategic Framework’

2012/C 225/07

THE COMMITTEE OF THE REGIONS

— calls for an ambitious budget for the future cohesion policy (2014-2020) in order to fulfil the ambitions of the Treaty and of the Europe 2020 Strategy; also calls for criteria other than GDP to be taken into account in the evaluation of levels of development and the distribution of resources;

— supports the structure proposed by the Commission, i.e. the identification of two major goals (‘investment in growth and jobs’ and ‘territorial cooperation’), keeping the ESF within the sphere of cohesion policy, and the creation of a new category of ‘transition regions’ providing the safety net for regions no longer eligible for full convergence support;

— calls for greater flexibility in the distribution of the Structural Funds, adapting more realistically to territories' needs, through the direct involvement of local and regional authorities; this flexibility should apply to the distribution between the ERDF and the ESF and the thematic concentration of the Funds on certain Europe 2020 goals; in this regard, calls for the minimum thresholds laid down in the specific regulations be significantly lowered or made more flexible;

— supports the strategic approach of the Common Strategic Framework, integrating all funds intended for regional purposes, which will mean better coordination with the EAFRD and the EMFF; also wishes greater account to be taken of the principle of territorial cohesion, through urban actions, local development actions, ITIs and Joint Action Plans, but would like more attention to be paid to regions undergoing industrial conversion or with demographic handicaps;

— calls for the possibility of multi-fund programmes (ERDF, ESF, CF, EAFRD and EMFF) to be encouraged and that the European Commission adopts any measure for the setting-up and implementation of these programmes with due respect of the proportionality principle;

— rejects macroeconomic conditionality, as well as the performance reserve, considering them to be contrary to the primary objective of cohesion policy; conversely, supports the creation of a flexibility reserve, made up of automatic decommitment resources and funding experimental initiatives; also backs the principle of ex ante conditionality, which is streamlined and preventive rather than repressive;

— insists on genuine simplification of the management rules, particularly with regard to control and audit authorities, revenue-generating activities and flat-rate costs.

Rapporteur Ms MARINI (IT/PES), President of the Region of Umbria Reference document Proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1083/2006 COM(2011) 615 final

I. POLICY RECOMMENDATIONS

A. Community budget and allocation of the funds

THE COMMITTEE OF THE REGIONS

For an appropriate, balanced Community budget

1. points out that the European Union needs a budget capable of guaranteeing an effective cohesion policy and fulfilling the ambitions of the Europe 2020 strategy;

2. calls for the EU contribution to remain at least at the same level for each category of regions as under the current planning period;

3. emphasises that the current situation of serious economic, financial and social crisis is establishing a settled balance of underemployment across the EU, with a strong, albeit uneven, impact on all regions of the EU. In this context, the Structural Funds are a crucial source of funding for combating the crisis and supporting the development of European regions;

Limiting problems of absorption

4. calls on the Commission to undertake suitable initiatives in order to mitigate the problems of absorption encountered by some Member States, namely by improving the management of the EU funds (particularly in terms of simplified and innovative management and control systems) and encouraging a results-oriented approach;

Towards fairer, more balanced distribution criteria

5. believes that the economic and financial crisis underscores the need for timely, comparable GDP figures and other complementary indicators, in order to establish more accurately the real level of development of European regions (1), without prejudice to the appropriate concentration of resources in regions that are lagging behind in their development;

6. considers that, with a view to the distribution of resources, proper attention must be paid to the specific features of Member States with significant internal economic disparities; is concerned, in particular, about the criteria for distributing resources allocated to the Common Agricultural Policy – with reference to the multiannual financial framework – as social, economic and structural differences are not taken into account;

B. Cohesion policy structure

Simplified structure

7. supports the identification of two major goals (investment for growth and jobs, and territorial cooperation), which simplify the structure of cohesion policy;

8. endorses the creation of a category of transition regions, to be funded principally by resources released by regions and Member States which are no longer covered by the convergence objective and the Cohesion Fund, without reducing the level of support provided for the other two categories of region, and also welcomes the proposed safety net for regions no longer eligible for full convergence support. The new region will make it possible to provide better support both for regions moving out of the convergence objective and for other regions whose per capita GDP is between 75 % and 90 % of the EU average. This new category will allow EU support to be adjusted in line with the different levels of development and mitigate the threshold effects observed during the current programming period. These arrangements should apply to all CSF funds;

9. considers that the arrangements relating to the regional aid guidelines for 2014-2020 should also be compatible with the structure of future cohesion policy and that there must be no conflict between cohesion policy and competition law when it comes to the designation of assisted areas;

Towards an appropriate role for the European Social Fund in cohesion policy

10. is pleased that the ESF will remain in the sphere of cohesion policy as a key instrument for jobs, for improving people's skills and for social inclusion;

11. insists however that in accordance with the subsidiarity principle regional and competent local authorities should be responsible for choosing investment priorities and distributing the Structural Funds between the ERDF and the ESF;

C. Principles common to all the funds

For stronger partnership and multilevel governance

12. insists that, in accordance with the principle of multilevel governance and with the division of competences within each country, the local and regional authorities in every Member State should be fully involved in preparing, negotiating and implementing the various strategy documents, i.e. the Common Strategic Framework and in particular the Partnership Contract; Territorial Pacts between local, regional, and national authorities, should also be an option available to formalise partnership arrangements in conjunction with national governments;

13. considers it unfair that local and regional authorities should be placed on the same footing as the economic and social partners with regard to partnership, when as representatives of the general interests of the municipalities which they administer, the authorities co-manage – taking into consideration the institutional framework of the Member States – and co-fund the Cohesion policy projects;

For a co-financing rate tailored to the regions' level of development

14. reiterates its support for the principle of European co-financing, which guarantees that local and regional actors are aware of their responsibilities;

15. believes that VAT should be eligible, if this is not recoverable;

16. believes that there should be a distinction between stakeholders from the civil society and the public sector partners. The competent local and regional authorities, or their representatives, should be an integral part of the negotiation process for the preparation of the Partnership Contract or Agreement at Member State level and not just at regional level;

D. Link between cohesion policy and the europe 2020 strategy

For harmonious, flexible thematic concentration

17. takes note of the principle of thematic concentration on key Europe 2020 goals and the objectives stated in Article 174 TFEU as set out in a table of EU areas of interest, but expresses concern regarding the lack of flexibility in the choice of thematic objectives, which should be determined on the basis of territorial analysis;

18. therefore calls for real flexibility for all funds under the Common Strategic Framework, so that each managing authority has the widest margin possible to identify the thematic objectives on which its funds will be concentrated; more generally, calls for the minimum thresholds laid down in the specific regulations to be significantly lowered or made more flexible;

E. Strategic approach and governance of cohesion policy

Common Strategic Framework: towards better integration of the funds intended for regional purposes

19. supports improved integration of the funds, and is pleased that the EAFRD and the EMFF are being included in the Common Strategic Framework, with the specific nature of each fund being preserved;

20. agrees that the Common Strategic Framework should be approved by the Parliament and the European Council, and argues that it should be approved by the broadest possible range of EU institutions; accordingly is in favour of appending the Common Strategic Framework to the General Regulation;

21. highlights the need for the mechanisms set out in the Common Strategic Framework to be sufficiently flexible to allow real integration with regional policies and local development policies;

22. considers that the CSF should facilitate primarily a bottom-up territorial approach and integration of funding. CSF recommendations shall not be over prescriptive, in order to allow enough flexibility in choosing the means by which one can achieve thematic objectives and investment priorities as defined in the structural and cohesion funds regulations;

23. stresses that the Common Strategic Framework should properly link the thematic objectives of Article 9 of the General Regulation with the investment priorities listed in the ERDF, ESF, CF, EAFRD and EMFF regulations, providing legal certainty on whether priorities can match and while avoiding gaps and overlaps between them so that multi-fund, but also multi-thematic, priority projects will be deliverable in an integrated and seamless fashion;

Partnership Contract: more contract than partnership

24. calls for regional and competent local authorities, as the bodies responsible for funding and implementing cohesion policy, and in line with their respective institutional systems, to be fully involved in preparing, negotiating, implementing and amending partnership contracts (Article 13(2));

25. insists specifically that in the context of the contract, and in line with their respective institutional systems, the regional authorities should be directly involved in setting the internal conditionalities and the resulting penalties (Article 14);

26. expresses concern regarding the potential delays triggered by the obligation to submit the Partnership Contract and the operational programmes at the same time, and so again asks that the programmes be submitted within six months of the submission of the contract;

Operational programmes: for regionalised, integrated management

27. recommends that regional and local authorities, in accordance with their respective institutional systems should be closely involved in managing the European funds and is strongly in favour of multi-fund programmes;

28. points out that improved harmonisation of common provisions for the implementation of the funds would promote integration and boost their effectiveness and impact, as well as reduce the administrative burden to the final recipient;

29. calls on the Commission to issue an evaluation of the functioning, impact and added value of current macroregional strategies;

F. Planning geared towards results and evaluation

Macroeconomic conditionality: a double penalty for Member States

30. firmly rejects the proposals aiming to establish a link between cohesion policy and compliance with the stability pact (macroeconomic conditionality); the Committee of the Regions believes that macroeconomic conditionality and cohesion policy pursue different goals;

31. therefore considers that regional authorities must not be penalised as a result of certain Member States' failure to comply with their obligations, particularly as regards the national deficit (Article 21);

For streamlined ex ante conditionality which is preventive rather than repressive

32. backs the principle of ex ante conditionality, in order to ensure that the fundamental prerequisites are in place for making effective investments, based on the evaluation of previous experience. It is important to avoid burdening cohesion policy with responsibilities that do not belong to it and increasing red tape;

33. nonetheless, is concerned that conditionality relating to a third party (such as the failure to transpose EU directives) might prejudice the preparation and implementation of programmes and projects at regional and local level. The CoR therefore considers that ex-ante conditionalities should be restricted to areas that are directly related to the implementation of cohesion policy;

34. calls on the Commission to ensure that this ex ante conditionality does not lead to the suspension of payments or to financial corrections, with the exception of conditionalities with which the Member State has undertaken to comply;

Performance reserve

35. is concerned about the creation of a performance reserve since this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, which could encourage the development of unambitious projects and discourage innovation; draws attention to the Court of Auditor's opinion 7/2011 which noted that a ‘performance reserve existed in the 2000-2006 period but had limited success due to the very limited amount of expenditure that had been completed in time for the mid-term review and the lack of an appropriate methodology for assessing progress achieved by programmes’;

36. conversely, supports the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis;

Performance framework as steering mechanism

37. points out that the framework for performance review establishes interim objectives for each priority for the years 2016 and 2018. In the Committee's view, this mechanism must steer and monitor the objectives pursued throughout the planning period and not trigger the application of financial corrections to the priority axes concerned in the event of failure to achieve the objectives set on the basis of the final progress report, as this failure may be due to socio-economic circumstances and the resultant necessary policy changes made by national and regional authorities;

38. considers that no purpose is served by adding this new provision to the (macroeconomic, ex ante and ex post) conditionalities proposed by the Commission, to the ex ante, in itinere and ex post review system, and to the specific targets and performance indicators. The Committee calls for a stronger link with the evaluation measures set out in Articles 48, 49 and 50;

For an increase in advance payments

39. welcomes the proposal requiring managing authorities to disburse money to beneficiaries before applying to the Commission for reimbursement, and calls for a more flexible and generous advance payment system with a view to boosting managing authorities' liquidity levels;

Penalties and financial corrections: towards an approach which is preventive rather than repressive

40. asks that, if a Member State in the grip of deep financial crisis receives EU aid, the Commission should be able to amend the Partnership Contract and the operational programmes in the course of constructive dialogue with the Member State and the local authorities concerned. The Committee hopes that the Commission's experts will assist national and regional authorities and boost their capacity to manage the European funds effectively;

G. Reinforcing the principle of cohesion

Promotion of local urban development and integrated territorial investments

41. strongly agrees with the focus on integrated urban development and, more particularly, welcomes the Commission's proposals on local development and integrated territorial investments which should be key delivery instruments of the next programming period; requests further information on the implementation of these new provisions;

42. hopes that these provisions will be applied particularly carefully to guarantee that integrated local development is carried out efficiently, such as coordinating the contribution of the various funds – specifically, the ERDF and EAFRD in peri-urban and functional areas – integrating them, identifying project areas and drawing up a coherent strategy;

43. strongly welcomes the fact that Community Led Local Development incentives are provided with an additional co-financing rate of 10 % and requests that this also be extended to the Integrated Territorial Investments, and considers that the organisation and functioning of the Local Action Groups must be agreed between the Managing Authorities and the local partners at the national level;

44. demands that the rule whereby public authorities cannot hold more than 49 % of voting rights be reviewed in those cases where institutionalised local development partnerships are already in place;

45. stresses the need for Local Development to be seen as a holistic concept whereby Integrated Territorial Investments, urban actions, Joint Action Plans, can be delivered;

For appropriate intervention in support of regions with specific geographic and demographic features

46. urges that particular attention be paid to regions undergoing industrial conversion and regions with serious permanent natural or demographic handicaps that make them comparatively lag behind in economic and territorial cohesion terms, as well as outermost regions (Articles 174 and 349 TFEU);

Continued support for the establishment of links between regions through infrastructure funding

47. is concerned that no provision has been made for financing infrastructure, particularly high-speed ICT networks, in developed regions;

H. Simplifying the rules for management, control and audit

For further simplification in management and shared responsibility for controls

48. insists on genuine simplification of the provisions for implementing the funds, which will help managing, control and audit authorities and facilitate access to financing for beneficiaries;

49. is concerned about the fact that the support for administrative capacity is limited for the ESF to Member States with less developed regions or eligible to the Cohesion Fund while this is not the case for ERDF although national systems for the two Funds are subject to similar requirements;

50. hopes that a more results-oriented approach will lead to stronger emphasis on delivery, quality and efficiency in the use of the funds, rather than focusing on rules and total expenditure;

51. believes that the Commission's excessive use of delegated acts (there are some fifty references to this instrument in the regulation) may lead to delays in the use of the funds and therefore proposes that a Commission implementing regulation be used initially to establish all the implementing rules;

For greater coordination and proportionality of controls

52. expresses doubts concerning the designation of an accrediting body at ministerial level which is an additional unnecessary layer of control that would be responsible for accrediting managing authorities and for certification based on a preliminary control, believing that accreditation should focus on the systems rather than on the managing authorities;

53. highlights the risk that improper application of the proportionality principle may result in unequal treatment of the Member States. Checks and audits are liable to present much more of a burden for those Member States which receive the most funding; furthermore, a level of control proportionate to the programmes' financial dimension might steer authorities away from adopting multi-fund programmes;

54. believes that the proposed annual clearance of accounts should be optional to enable only those managing authorities who so wish to simplify the closure procedure at the end of the period and reduce the duration for conserving accounting documents (Articles 67, 76, 77, 131);

55. wishes to avoid the proliferation of controls by national or regional audit authorities, the Commission, the Court of Auditors and the operators themselves, and proposes that joint local audit missions be organised in order to avoid overlaps and promote a common analysis (Article 65(2));

Towards genuinely simplified, business-friendly financial engineering

56. considers that further clarification is needed in relation to the use of financial instruments with regard to their accounting in the use of EU funds, their supervision and their ownership. Supports however the use of financial engineering instruments to enhance the funds' impact provided that it is an addition to and not at the expense of the grant element of Cohesion policy and that support is limited to conventional forms of financial instruments (equity participations, loans, guarantees), and not to opaque financial instruments such as derivatives or structured financial instruments;

57. considers too restrictive the requirement that financial instruments – in accordance with the aims of the programme – be used within two years of their activation and for a period of at least ten years after the closure of the programme;

Joint action plan: an innovation to be trialled

58. welcomes the Commission's proposal that joint action plans be drawn up, including a group of projects carried out under the responsibility of the beneficiary in the context of one or more operational programmes, in exchange for a substantial reduction in the rules on management and control; regrets, however, that infrastructure projects are excluded;

59. calls for the Commission, the Member State and the local authorities associated with the programme to be party to drawing up the joint action plan, in view of the scale of the resources involved, and calls for the threshold to be lowered to EUR 5 million;

Revenue-generating operations: need for greater flexibility

60. calls for the reinstatement of the 2000-2006 rules setting a single specific (reduced) intervention rate for revenue-generating operations;

Flat-rate costs: a simplification measure which has yet to be introduced

61. welcomes the Commission's proposal regarding the various types of simplified grants and urges managing authorities and beneficiaries to make extensive use of standard scales of unit costs, flat-rate amounts and flat-rate financing;

62. calls on the Commission and the Member States to adopt as swiftly as possible a fair, equitable and verifiable calculation method and methods and scales of unit costs to enable project operators to use them when planning begins, taking due account of previous experience in the current planning period.

II. RECOMMENDATIONS FOR AMENDMENTS

Amendment 1

Recital 14

Text proposed by the Commission CoR amendment The Commission should adopt by delegated act a Common Strategic Framework which translates the objectives of the Union into key actions for the CSF Funds, in order to provide clearer strategic direction to the programming process at the level of Member States and regions. The Common Strategic Framework should facilitate sectoral and territorial coordination of Union intervention under the CSF Funds and with other relevant Union policies and instruments. a Common Strategic Framework which translates the objectives of the Union into key actions for the CSF Funds, in order to provide clearer strategic direction to the programming process at the level of Member States and regions. The Common Strategic Framework should facilitate sectoral and territorial coordination of Union intervention under the CSF Funds and with other relevant Union policies and instruments.

Reason

Delegated acts enable the legislator to delegate to the Commission the power to adopt non-legislative acts of general scope which supplement or amend non-essential aspects of a legislative act. The Common Strategic Framework aims to establish common guidelines and rules for all jointly managed funds; it therefore contains essential aspects which should be submitted to all the EU institutions and amended as necessary.

Amendment 2

Recital 16

Text proposed by the Commission CoR amendment On the basis of the Common Strategic Framework adopted by the Commission, each Member State should prepare, in cooperation with its partners and in dialogue with the Commission, a Partnership Contract. The Partnership Contract should translate the elements set out in the Common Strategic Framework into the national context and set out firm commitments to the achievement of Union objectives through the programming of the CSF Funds. On the basis of the Common Strategic Framework adopted by the Commission, each Member State, should prepare, in cooperation with its partners and in dialogue with the Commission, a Partnership Contract. The Partnership Contract should translate the elements set out in the Common Strategic Framework into the national context and set out commitments to the achievement of Union objectives through the programming of the CSF Funds.

Reason

In their capacity of institutions responsible for funding and implementing cohesion policy, regional and local authorities should be fully involved in drawing up, negotiating, implementing and amending it.

Amendment 3

Recital 18

Text proposed by the Commission CoR amendment A performance framework should be defined for each programme with a view to monitoring progress towards the objectives and targets set for each programme over the course of the programming period. The Commission should undertake a performance review in cooperation with the Member States in 2017 and 2019. A performance reserve should be foreseen and allocated in 2019 where milestones set in the performance framework have been attained. Due to their diversity and multi-country character, there should be no performance reserve for ‘European Territorial Cooperation’ programmes. In cases where the shortfall in the achievement of milestones or targets is significant, the Commission should be able to suspend payments to the programme or, at the end of the programming period, apply financial corrections, in order to ensure that the Union budget is not used in a wasteful or inefficient way. A performance framework should be defined for each programme with a view to monitoring progress towards the objectives and targets set for each programme over the course of the programming period. The Commission should undertake a performance review in cooperation with the Member States in 2017 and 2019.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

The Committee would however support the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis.

Amendment 4

Recital 19

Text proposed by the Commission CoR amendment Establishing a closer link between cohesion policy and the economic governance of the Union will ensure that the effectiveness of expenditure under the CSF Funds is underpinned by sound economic policies and that the CSF Funds can, if necessary, be redirected to addressing the economic problems a country is facing. This process has to be gradual, starting with amendments to the Partnership Contract and to the programmes in support of Council recommendations to address macroeconomic imbalances and social and economic difficulties. Where, despite the enhanced use of CSF funds, a Member State fails to take effective action in the context of the economic governance process, the Commission should have the right to suspend all or part of the payments and commitments. Decisions on suspensions should be proportionate and effective, taking into account the impact of the individual programmes for addressing the economic and social situation in the relevant Member State and previous amendments to the Partnership Contract. When deciding on suspensions, the Commission should also respect equality of treatment between Member States, taking into account in particular the impact of the suspension on the economy of the Member State concerned. The suspensions should be lifted and funds be made available again to the Member State concerned as soon as the Member State takes the necessary action. Establishing a closer link between cohesion policy and the economic governance of the Union will ensure that the effectiveness of expenditure under the CSF Funds is underpinned by sound economic policies and that the CSF Funds can, if necessary, be redirected to addressing the economic problems a country is facing. This process has to be gradual, starting with amendments to the Partnership Contract and to the programmes in support of Council recommendations to address macroeconomic imbalances and social and economic difficulties.

Reason

The Committee of the Regions is staunchly opposed to the macroeconomic conditionality provisions. Applying penalties or financial incentives linked to the growth and stability pact with the aim of guaranteeing compliance with macroeconomic conditions risks penalising heavily regional and local authorities which are not responsible for the Member States' failure to comply with these requirements.

Amendment 5

Recital 29

Text proposed by the Commission CoR amendment Alignment of the monitoring and reporting arrangements of the CSF Funds is necessary to simplify management arrangements at all levels. It is important to ensure proportionate reporting requirements but also the availability of comprehensive information on progress made at key review points. Therefore it is necessary that reporting requirements reflect information needs in given years and are aligned with the timing of the performance reviews. Alignment of the monitoring and reporting arrangements of the CSF Funds is necessary to simplify management arrangements at all levels. It is important to ensure proportionate reporting requirements but also the availability of comprehensive information on progress made at key review points. Therefore it is necessary that reporting requirements reflect information needs in given years .

Reason

As regards the framework for performance review, a mechanism for steering and monitoring the objectives pursued throughout the programming period should be established.

Amendment 6

Recital 43

Text proposed by the Commission CoR amendment In accordance with the principles of shared management, Member States should have the primary responsibility, through their management and control systems, for the implementation and control of the operations in programmes. In order to strengthen the effectiveness of the control over the selection and implementation of operations and the functioning of the management and control system, the functions of the managing authority should be specified. In accordance with the principles of shared management, Member States should have the primary responsibility, through their management and control systems, for the implementation and control of the operations in programmes. In order to strengthen the effectiveness of the control over the selection and implementation of operations and the functioning of the management and control system, the functions of the managing authority should be specified.

Reason

The funds covered by the Common Strategic Framework fall within the scope of regional policy: consequently, no mention of the participating authorities under the regulation governing the funds must overlook those principally involved, who are the regional and local authorities.

Amendment 7

Recital 44

Text proposed by the Commission CoR amendment In order to provide assurance ex ante on the set up and design of the main systems of management and control, Member States should designate an accrediting body that is responsible for the accreditation and withdrawal of accreditation of managing and control bodies.

Reason

The aim is to avoid the proliferation of bodies and actors which would make the management and control system still more complex.

Amendment 8

New recital after recital 55

Text proposed by the Commission CoR amendment

Reason

Up until now, the concern for establishing common provisions for the various funds has not been implemented as regards the establishment of transitional arrangements and the associated EU participation (co-financing rates). Whilst transitional arrangements are being introduced for the ERDF and the ESF (including a safety net), there are none for the EAFRD. This would result in significantly different funding conditions for the implementation of the funds. This runs counter to the harmonisation that is being sought. It is therefore essential for these transitional arrangements to apply also to the EAFRD

Amendment 9

Recital 58

Text proposed by the Commission CoR amendment In order to strengthen the focus on results and achievement of the Europe 2020 objectives and targets, five per cent of the resources for the ‘Investment for growth and jobs’ goal should be set aside as a performance reserve for each Fund, and category of region in each Member State.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

The Committee would however support the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis; this reserve would be linked to the Globalisation Adjustment Fund and the European Union Solidarity Fund.

Amendment 10

Recital 84

Text proposed by the Commission CoR amendment The process of annual clearance of accounts should be accompanied by an annual closure of completed operations (for the ERDF and the CF) or expenditure (for the ESF). In order to reduce the costs associated with the final closure of operational programmes, to reduce the administrative burden for beneficiaries and to provide legal certainty, annual closure should be obligatory thereby limiting the period during which the supporting documents need to be maintained and during which operations can be audited and financial corrections imposed. The process of annual clearance of accounts be accompanied by an annual closure of completed operations (for the ERDF and the CF) or expenditure (for the ESF). In order to reduce the costs associated with the final closure of operational programmes, to reduce the administrative burden for beneficiaries and to provide legal certainty, annual closure thereby limiting the period during which the supporting documents need to be maintained and during which operations can be audited and financial corrections imposed.

Reason

It is considered that the proposed annual clearance of accounts is, in reality, introducing annual closure that will increase the administration burden, introduce mandatory financial corrections for irregularities detected by the European Commission and/or European Court of Auditors and reduce the flexibility of declaring and substituting ‘overbooking’ expenditure that currently exists in the 2007-2013 period.

Amendment 11

Recital 87

Text proposed by the Commission CoR amendment The frequency of audits on operations should be proportionate to the extent of the Union's support from the Funds. In particular, the number of audits carried out should be reduced where the total eligible expenditure for an operation does not exceed EUR 100 000. Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or, following closure of a completed operation, as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on. The frequency of audits on operations should be proportionate to the extent of the Union's support from the Funds. In particular, where the total eligible expenditure for an operation does not exceed EUR . Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or, following closure of a completed operation, as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on.

Reason

In order to ensure real proportionality in the monitoring of operational programmes, the Committee proposes that where the total eligible expenditure does not exceed EUR 250 000 operations should be subject to no more than one audit.

Amendment 12

Recital 88

Text proposed by the Commission CoR amendment In order to supplement and amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of a code of conduct on the objectives and criteria to support the implementation of partnership, the adoption of a Common Strategic Framework, additional rules on the allocation of the growth and competitiveness reserve, the definition of the area and population covered by the local development strategies, detailed rules on financial instruments (ex ante assessment, eligibility of expenses, types of activities not supported, combination of support, transfer and management of assets, payment requests, and capitalisation of annual instalments), the definition of the flat rate for revenue generating operations, the responsibilities of Member States concerning the procedure for reporting irregularities and recovery of sums unduly paid, the model of management declaration of assurance on the functioning of the management and control system, the conditions of national audits, the accreditation criteria for managing authorities and certifying authorities, the identification of commonly accepted data carriers, the level of financial correction to be applied, the amendment of annexes and the specific measures necessary for the facilitation of transition from Regulation (EC) No 1083/2006. The Commission should also be empowered to amend Annexes I and IV in order to address future adaptation needs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. In order to supplement and amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of a code of conduct on the objectives and criteria to support the implementation of partnership, detailed rules on financial instruments (ex ante assessment, eligibility of expenses, types of activities not supported, combination of support, transfer and management of assets, payment requests, and capitalisation of annual instalments), the definition of the flat rate for revenue generating operations, the responsibilities of Member States concerning the procedure for reporting irregularities and recovery of sums unduly paid, the model of management declaration of assurance on the functioning of the management and control system, the conditions of national audits, the accreditation criteria for managing authorities and certifying authorities, the identification of commonly accepted data carriers, the level of financial correction to be applied, the amendment of annexes and the specific measures necessary for the facilitation of transition from Regulation (EC) No 1083/2006. The Commission should also be empowered to amend Annexes I and IV in order to address future adaptation needs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

Reason

By means of delegated acts, the legislator delegates to the European Commission the power to adopt non-legislative acts which supplement or amend various aspects of a legislative act. The proposal to delete part of the recital is consistent with the positions set out in the opinion, with particular reference to Article 12 (Common Strategic Framework), Article 18 (Performance reserve) and Article 29 (Local development strategies).

Amendment 13

Recital 90

Text proposed by the Commission CoR amendment The Commission should be empowered to adopt, by means of implementing acts, as regards all CSF Funds, decisions approving the Partnership Contracts, decisions allocating the performance reserve and decisions suspending payments linked to Member States' economic policies; and as regards the Funds, decisions adopting operational programmes, decisions approving major projects, decisions suspending payments and decisions on financial corrections. The Commission should be empowered to adopt, by means of implementing acts, as regards all CSF Funds, decisions approving the Partnership Contracts, decisions adopting operational programmes, decisions approving major projects, decisions suspending payments and decisions on financial corrections.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

Amendment 14

Article 5(1)

Text proposed by the Commission CoR amendment Partnership and multi-level governance 1. For the Partnership Contract and each programme respectively, a Member State shall organise a partnership with the following partners: (a) competent regional, local, urban and other public authorities; (b) economic and social partners; and (c) bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting equality and non-discrimination. Partnership and multi-level governance 1. For the Partnership Contract and each programme respectively, Member State shall organise a partnership with the following partners: (a) other public authorities; (b) economic and social partners; and (c) bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting equality and non-discrimination.

Reason

The amendment aims to point out that, in accordance with the principle of multilevel governance, local and regional authorities in every Member State should be fully involved in drawing up, negotiating and implementing the various strategic documents, i.e. the Common Strategic Framework, the Partnership Contract and the operational programmes. It is considered to be unfair that local and regional authorities should be placed on the same footing as the economic and social partners with regard to partnership, when as representatives of the general interests of the citizens and territories that they administer, they are responsible for co-managing and co-funding the Structural Funds.

Amendment 15

Article 9(6) and (11)

Text proposed by the Commission CoR amendment Thematic objectives […] 6) protecting the environment and promoting resource efficiency; […] 11) enhancing institutional capacity and an efficient public administration. Thematic objectives […] 6) protecting the environment and promoting resource efficiency; […] 11) enhancing institutional capacity and an efficient public administration .

Reason

Article 9(6):

It is crucial to include protection of cultural heritage among the thematic objectives of Common Strategic Framework funds. What is more, this proposal is consistent with Article 5(6)(c) of the proposal for a Regulation for the European Regional Development Fund.

Article 9(11):

Technical assistance should also facilitate strategic bottom-up intervention. Territorial Agenda 2020 endorsed by the Member States in 2011 provides very useful recommendations as regards territorial development in the EU.

Amendment 16

Article 11

Text proposed by the Commission CoR amendment The Common Strategic Framework shall establish: (a) for each thematic objective, the key actions to be supported by each CSF Fund; (b) the key territorial challenges for urban, rural, coastal and fisheries areas, as well as for areas with particular territorial features referred to in Articles 174 and 349 of the Treaty, to be addressed by the CSF Funds; (c) horizontal principles and policy objectives for the implementation of the CSF Funds; (d) priority areas for cooperation activities for each of the CSF Funds, where appropriate, taking account of macro-regional and sea basin strategies; (e) coordination mechanisms among the CSF Funds, and with other relevant Union policies and instruments, including external instruments for cooperation; (f) mechanisms for ensuring the coherence and consistency of the programming of the CSF Funds with the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty. The Common Strategic Framework shall establish: (a) for each thematic objective, the key actions to be supported by each CSF Fund; () horizontal principles and policy objectives for the implementation of the CSF Funds; () coordination mechanisms among the CSF Funds, and with other relevant Union policies and instruments, including external instruments for cooperation; () mechanisms for ensuring the coherence and consistency of the programming of the CSF Funds with the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty.

Reason

The key actions proposed by the Commission within the Common Strategic Framework constitute a new form of concentration. Furthermore, the territorial features should be addressed by means of operational programmes. The same applies to interaction between the regional strategies included in the programmes and the macroregional strategies, where present.

Amendment 17

Article 12

Text proposed by the Commission CoR amendment The Commission shall be empowered to adopt a delegated act in accordance with Article 142 on the Common Strategic Framework within 3 months of the adoption of this Regulation. Where there are major changes in the Union strategy for smart, sustainable and inclusive growth, the Commission shall review and, where appropriate, adopt, by delegated act in accordance with Article 142, a revised Common Strategic Framework. Within 6 months of adoption of a revised Common Strategic Framework, Member States shall propose amendments, where necessary, to their Partnership Contract and programmes to ensure their consistency with the revised Common Strategic Framework. Common Strategic Framework . Where there are major changes in the Union strategy for smart, sustainable and inclusive growth, the Commission shall review and, where appropriate, adopt, by delegated act in accordance with Article 142, a revised Common Strategic Framework. Within 6 months of adoption of a revised Common Strategic Framework, Member States shall propose amendments, where necessary, to their Partnership Contract and programmes to ensure their consistency with the revised Common Strategic Framework.

Reason

Delegated acts enable the legislator to delegate to the Commission the power to adopt non-legislative acts of general scope which supplement or amend non-essential aspects of a legislative act. The Common Strategic Framework aims to establish common guidelines and rules for all jointly managed funds; it therefore contains essential aspects which should be submitted to all the EU institutions and amended as necessary.

Amendment 18

Article 13

Text proposed by the Commission CoR amendment Preparation of the Partnership Contract 1. Each Member State shall prepare a Partnership Contract for the period from 1 January 2014 to 31 December 2020. 2. The Partnership Contract shall be drawn up by Member States in cooperation with the partners referred to in Article 5. The Partnership Contract shall be prepared in dialogue with the Commission. 3. The Partnership Contract shall cover all support from the CSF Funds in the Member State concerned. 4. Each Member State shall transmit its Partnership Contract to the Commission within 3 months of the adoption of the Common Strategic Framework. Preparation of the Partnership Contract 1. Each Member State shall prepare a Partnership Contract for the period from 1 January 2014 to 31 December 2020. The Partnership Contract shall be drawn up by Member States in cooperation with the partners referred to in Article 5. The Partnership Contract shall be prepared in dialogue with the Commission. The Partnership Contract shall cover all support from the CSF Funds in the Member State concerned. Each Member State shall transmit its Partnership Contract to the Commission within months of the adoption of the Common Strategic Framework.

Reason

In their capacity of institutions responsible for funding and implementing cohesion policy, local and regional authorities should be fully involved in drawing up, negotiating, implementing and amending it. In view of the quantity and sheer detail of the information requested, the fact that the programmes must be submitted at the same time as the contract (as stipulated in Article 23(3)) and the need to ensure that the partnership operates effectively, a longer period of time is necessary.

Amendment 19

Article 14

Text proposed by the Commission CoR amendment Content of the Partnership Contract The Partnership Contract shall set out: (a) arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth, including: (i) an analysis of disparities and development needs with reference to the thematic objectives and key actions defined in the Common Strategic Framework and the targets set in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under Article 148(4) of the Treaty; (ii) a summary analysis of the ex ante evaluations of the programmes justifying the selection of the thematic objectives and the indicative allocations of the CSF Funds; (iii) for each thematic objective, a summary of the main results expected for each of the CSF Funds; (iv) the indicative allocation of support by the Union by thematic objective at national level for each of the CSF Funds, as well as the total indicative amount of support foreseen for climate change objectives; (v) the main priority areas for cooperation, taking account, where appropriate, of macro-regional and sea basin strategies; (vi) horizontal principles and policy objectives for the implementation of the CSF Funds; (vii) the list of the programmes under the ERDF, the ESF and the CF, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by CSF Fund and by year; b) an integrated approach to territorial development supported by the CSF Funds setting out: i) the mechanisms at national and regional level that ensure coordination between the CSF Funds and other Union and national funding instruments and with the EIB; ii) the arrangements to ensure an integrated approach to the use of the CSF Funds for the territorial development of urban, rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28, 29 and 99 accompanied, where appropriate, by a list of the cities to participate in the urban development platform referred to in Article 7 of the ERDF Regulation; [….] e) arrangements to ensure efficient implementation of the CSF Funds, including: i) an assessment of whether there is a need to reinforce the administrative capacity of the authorities and, where appropriate, beneficiaries, and actions to be taken for this purpose; ii) a summary of the actions planned and corresponding targets in the programmes to achieve a reduction in the administrative burden for beneficiaries; iii) an assessment of the existing systems for electronic data exchange, and the actions planned to permit all exchanges of information between beneficiaries and authorities responsible for management and control of programmes to be carried out solely by electronic data exchange. Content of the Partnership Contract The Partnership Contract shall set out: (a) arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth, including: (i) an analysis of disparities and development needs with reference to the thematic objectives and key actions defined in the Common Strategic Framework and the targets set in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under Article 148(4) of the Treaty; (ii) for each thematic objective, a summary of the main results expected for each of the CSF Funds; () horizontal principles and policy objectives for the implementation of the CSF Funds; (v) the list of the programmes under the ERDF, the ESF and the CF, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by CSF Fund and by year; b) an integrated approach to territorial development supported by the CSF Funds setting out: i) the mechanisms at national and regional level that ensure coordination between the CSF Funds and other Union and national funding instruments and with the EIB; ii) the arrangements to ensure an integrated approach to the use of the CSF Funds for the territorial development of urban, , rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28, 29 and 99 accompanied, where appropriate, by a list of the cities to participate in the urban development platform referred to in Article 7 of the ERDF Regulation; [….] e) arrangements to ensure efficient implementation of the CSF Funds, including: i) a summary of the actions planned and corresponding targets in the programmes to achieve a reduction in the administrative burden for beneficiaries; ii) an assessment of the existing systems for electronic data exchange, and the actions planned to permit all exchanges of information between beneficiaries and authorities responsible for management and control of programmes to be carried out solely by electronic data exchange.

Reason

There is no need to include in the Partnership Contract data already provided and negotiated in the operational programmes; these provisions are redundant and run counter to simplification. Furthermore, the Member States cannot assume responsibility for commitments made previously at regional and local level.

As far as the integrated approach to the use of the CSF Funds is concerned, this is also vital in peri-urban areas, otherwise there is a risk that the latter will be deprived of both the funding allocated for rural areas and the funding allocated to cities, just when the number of peri-urban areas in the EU is increasing.

Finally, in relation to European Territorial Cooperation (ETC), because of its multilateral nature this cannot be controlled via the Partnership Contract instrument. It should therefore explicitly be left outside of the latter's scope.

Amendment 20

Article 16

Text proposed by the Commission CoR amendment Thematic concentration Member States shall concentrate support, in accordance with the Fund-specific rules, on actions bringing the greatest added value in relation to the Union strategy for smart, sustainable and inclusive growth, addressing the challenges identified in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty, and taking into account national and regional needs. Thematic concentration Member States shall concentrate support, in accordance with the Fund-specific rules, on actions bringing the greatest added value in relation to the Union strategy for smart, sustainable and inclusive growth, addressing the challenges identified in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty, and taking into account national and regional needs.

Reason

The Committee endorses the principle of concentrating the bulk of resources on a limited number of thematic objectives/investment priorities, but considers that the choice of objectives and priorities should be left to the managing authorities which will adapt the goals of the Europe 2020 strategy and the Common Strategic Framework to local conditions.

Amendment 21

Article 17

Text proposed by the Commission CoR amendment Ex ante conditionalities 1. Ex ante conditionalities shall be defined for each CSF Fund in the Fund-specific rules. 2. Member States shall assess whether the applicable ex ante conditionalities are fulfilled. 3. Where ex ante conditionalities are not fulfilled at the date of transmission of the Partnership Contract, Member States shall set out in the Partnership Contract a summary of the actions to be taken at national or regional level and the timetable for their implementation, to ensure their fulfilment not later than two years after the adoption of the Partnership Contract or by 31 December 2016, whichever is earlier. 4. Member States shall set out the detailed actions relating to the fulfilment of ex ante conditionalities, including the timetable for their implementation, in the relevant programmes. 5. The Commission shall assess the information provided on the fulfilment of ex ante conditionalities in the framework of its assessment of the Partnership Contract and programmes. It may decide, when adopting a programme, to suspend all or part of interim payments to the programme pending the satisfactory completion of actions to fulfil an ex ante conditionality. The failure to complete actions to fulfil an ex ante conditionality by the deadline set out in the programme shall constitute a basis for suspending payments by the Commission. 6. Paragraphs 1 to 5 shall not apply to programmes under the European territorial cooperation goal. Ex ante conditionalities 1. Ex ante conditionalities shall be defined for each CSF Fund in the Fund-specific rules. 2. Member States shall assess whether the applicable ex ante conditionalities are fulfilled . 3. Where ex ante conditionalities are not fulfilled at the date of transmission of the Partnership Contract, Member States shall set out in the Partnership Contract a summary of the actions to be taken at national or regional level and the timetable for their implementation, to ensure their fulfilment not later than years after the adoption of the Partnership Contract or by 31 December 2016, whichever is earlier. 4. Member States, shall set out the actions relating to the fulfilment of ex ante conditionalities, including the timetable for their implementation, in the relevant programmes. 5. The Commission shall assess the information provided on the fulfilment of ex ante conditionalities in the framework of its assessment of the Partnership Contract and programmes. The failure to complete actions to fulfil an ex ante conditionality by the deadline set out in the programme constitute a basis for suspending payments by the Commission. 6. Paragraphs 1 to 5 shall not apply to programmes under the European territorial cooperation goal.

Reason

The Committee considers that such ex ante conditionalities should not lead to any suspension of payments or to financial corrections, with the exception of those conditionalities with which the Member State has undertaken to comply. In the event of failure to comply with ex ante conditionalities at the start of the programming period, the respective investments cannot be programmed, and so there would be no need to inflict penalties after the fact. It is also crucial that the Commission take into consideration the institutional context and distribution of competences of each Member State. It is inconceivable that a Member State should take on commitments for competences belonging to local and regional authorities, and vice versa.

Amendment 22

Article 18

Text proposed by the Commission CoR amendment Performance reserve 5 % of the resources allocated to each CSF Fund and Member State, with the exception of resources allocated to the European territorial cooperation goal and to Title V of the EMFF Regulation, shall constitute a performance reserve to be allocated in accordance with Article 20.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

The Committee would however support the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis; this reserve would remain within the appropriations allocated to each Member State.

Amendment 23

Article 19

Text proposed by the Commission CoR amendment Performance review 1. The Commission, in cooperation with the Member States, shall undertake a review of the performance of the programmes in each Member State in 2017 and 2019, with reference to the performance framework set out in the respective Partnership Contract and programmes. The method for establishing the performance framework is set out in Annex I. 2. The review shall examine the achievement of the milestones of the programmes at the level of priorities, on the basis of the information and the assessments presented in the progress reports submitted by the Member States in the years 2017 and 2019. Performance review 1. The Commission, in cooperation with the Member States, shall undertake a review of the performance of the programmes in each Member State in 2017 and 2019, with reference to the performance framework set out in the respective Partnership Contract and programmes. The method for establishing the performance framework is set out in Annex I. 2. The review shall examine the achievement of the milestones of the programmes at the level of priorities, on the basis of the information and the assessments presented in the progress reports submitted by the Member States in the years 2017 and 2019.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

As regards the framework for performance review, a mechanism for steering and monitoring the objectives pursued throughout the programming period should be established. In the event of failure to achieve the objectives, this mechanism would initiate technical support by the Commission, rather than the application of financial corrections.

Amendment 24

Article 20

Text proposed by the Commission CoR amendment Allocation of performance reserve 1. Where the review of performance undertaken in 2017 reveals that a priority within a programme has not attained its milestones set for the year 2016, the Commission shall make recommendations to the Member State concerned. 2. On the basis of the review undertaken in 2019, the Commission shall adopt a decision, by means of implementing acts, to determine for each CSF Fund and Member State the programmes and priorities which have attained their milestones. The Member State shall propose the attribution of the performance reserve for the programmes and priorities set out in that Commission decision. The Commission shall approve the amendment of the programmes concerned in accordance with Article 26. Where a Member State fails to submit the information in accordance with Article 46(2) and (3), the performance reserve for the programmes or the priorities concerned shall not be allocated. 3. Where there is evidence resulting from a performance review that a priority has failed to achieve the milestones set out in the performance framework, the Commission may suspend all or part of an interim payment of a priority of a programme in accordance with the procedure laid down in Fund-specific rules. 4. Where the Commission, based on the examination of the final implementation report of the programme, establishes a serious failure to achieve the targets set out in the performance framework, it may apply financial corrections in respect of the priorities concerned in accordance with Fund-specific rules. The Commission shall be empowered to adopt delegated acts in accordance with Article 142 to establish criteria and the methodology for determining the level of financial correction to be applied. 5. Paragraph 2 shall not apply to programmes under the European territorial cooperation goal and to Title V of the EMFF Regulation”.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

Amendment 25

Article 21

Text proposed by the Commission CoR amendment Conditionality linked to the coordination of Member States' economic policies […] 4. By derogation to paragraph 1, where financial assistance is made available to a Member State in accordance with paragraph 1(d) and is linked to an adjustment programme, the Commission may without any proposal from the Member State amend the Partnership Contract and the programmes with a view to maximising the growth and competitiveness impact of the available CSF Funds. To ensure effective implementation of the Partnership Contract and the relevant programmes, the Commission shall become involved in their management as detailed in the adjustment programme or the Memorandum of Understanding signed with the Member State concerned. 5. Where the Member State fails to respond to the Commission's request referred to in paragraph 1 or does not reply satisfactorily within one month to the observations of the Commission referred to in paragraph 2, the Commission may, within three months following its observations, adopt a decision, by means of implementing acts, suspending part or all of the payments for the programmes concerned. 6. The Commission shall suspend, by means of implementing acts, part or all of the payments and commitments for the programmes concerned where: a) the Council decides that the Member State does not comply with the specific measures set out by the Council in accordance with Article 136(1) of the Treaty; b) the Council decides in accordance with Article 126(8) or Article 126(11) of the Treaty that the Member State concerned has not taken effective action to correct its excessive deficit; c) the Council concludes in accordance with Article 8(3) of Regulation (EU) No […]/2011 [on the prevention and correction of macroeconomic imbalances] that, on two successive instances, the Member State has not submitted a sufficient corrective action plan or the Council adopts a decision declaring non-compliance in accordance with Article 10(4) of that Regulation; d) the Commission concludes that the Member State has not taken measures to implement the adjustment programme referred to in Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and as a consequence decides not to authorise the disbursement of the financial assistance granted to this Member State; or e) the Board of Directors of the European stability mechanism concludes that the conditionality attached to an ESM financial assistance in the form of an ESM loan to the concerned Member State was not met and as a consequence decides not to disburse the stability support granted to it. 7. When deciding to suspend part or all of the payments or commitments in accordance with paragraphs 5 and 6 respectively, the Commission shall ensure that the suspension is proportionate and effective, taking into account the economic and social circumstances of the Member State concerned, and respects equality of treatment between Member States, in particular with regard to the impact of the suspension on the economy of the Member State concerned. 8. The Commission shall without delay lift the suspension of payments and commitments where the Member State has proposed amendments to the Partnership Contract and the relevant programmes as requested by the Commission, which the Commission has approved and, where applicable: a) the Council has decided that the Member State complies with the specific measures set out by the Council in accordance with Article 136(1) of the Treaty; b) the excessive deficit procedure is held in abeyance in accordance with Article 9 of Regulation (EC) No 1467/97 or the Council has decided in accordance with Article 126(12) of the Treaty to abrogate the decision on the existence of an excessive deficit: c) the Council has endorsed the corrective action plan submitted by the concerned Member State in accordance with Article 8(2) of Regulation (EU) No […] [EIP Regulation] or the excessive imbalance procedure is placed in a position of abeyance in accordance with Article 10(5) of that Regulation or the Council has closed the excessive imbalance procedure in accordance with Article 11 of that Regulation; d) the Commission has concluded that the Member State has taken measures to implement the adjustment programme referred to in Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and as a consequence has authorised the disbursement of the financial assistance granted to this Member State; or e) the Board of Directors of the European stability mechanism has concluded that the conditionality attached to a financial assistance in the form of an ESM loan to the concerned Member State is met and as a consequence has decided to disburse the stability support granted to it. At the same time, the Council shall decide, on a proposal from the Commission, to re-budget the suspended commitments in accordance with Article 8 of Council Regulation (EU) No […] laying down the multiannual financial framework for the years 2014 to 2020. Conditionality linked to the coordination of Member States' economic policies […]

Reason

The Committee firmly rejects the proposals aiming to establish a link between cohesion policy and compliance with the stability pact (macroeconomic conditionality); the Committee of the Regions believes that macroeconomic conditionality and cohesion policy pursue different goals. It therefore considers that regional authorities must not be penalised as a result of certain Member States' failure to comply with their obligations, particularly as regards the national deficit. The Committee acknowledges that it may sometimes be necessary to amend the contract and operational programmes, but rejects the hypothesis of partial or total suspension of payments.

Amendment 26

Article 23

Text proposed by the Commission CoR amendment Preparation of programmes 1. The CSF Funds shall be implemented through programmes in accordance with the Partnership Contract. Each programme shall cover the period from 1 January 2014 to 31 December 2020. 2. Programmes shall be drawn up by Member States or any authority designated by them, in cooperation with the partners. 3. Programmes shall be submitted by the Member States at the same time as the Partnership Contract, with the exception of European territorial cooperation programmes, which shall be submitted within six months of the approval of the Common Strategic Framework. All programmes shall be accompanied by the ex ante evaluation as set out in Article 48. Preparation of programmes 1. The CSF Funds shall be implemented through programmes in accordance with the Partnership Contract. Each programme shall cover the period from 1 January 2014 to 31 December 2020. 2. Programmes shall be drawn up by Member States or any authority designated by them, in cooperation with the partners. Programmes shall be submitted by the Member States the Partnership Contract, with the exception of European territorial cooperation programmes, which shall be submitted within six months of the approval of the Common Strategic Framework. All programmes shall be accompanied by the ex ante evaluation as set out in Article 48.

Reason

The Committee considers that the choice (strongly supported by the Committee) to draw up multi-fund programmes should be encouraged and supported by all actors (European Commission, Member States, Local and Regional authorities). To this end, the Commission should abolish all procedural barriers and avoid further controls which, on the basis of the proportionality principle, could derive from the fact that a multi-fund programme has a larger financial dimension. The Committee is also concerned that the requirement to submit the contract at the same time as the programmes might delay the start of operations, and so proposes a deadline of six months.

Amendment 27

Article 25(1)

Text proposed by the Commission CoR amendment The procedure for adoption of programmes 1. The Commission shall assess the consistency of programmes with this Regulation, the Fund-specific rules, their effective contribution to the thematic objectives and the Union priorities specific to each CSF Fund, the Common Strategic Framework, the Partnership Contract, the country-specific recommendations under Article 121(2) of the Treaty and the Council recommendations adopted under 148(4) of the Treaty, taking account of the ex ante evaluation. The assessment shall address, in particular, the adequacy of the programme strategy, the corresponding objectives, indicators, targets and the allocation of budgetary resources. The procedure for adoption of programmes 1. The Commission shall assess the consistency of programmes with this Regulation, the Fund-specific rules, their effective contribution to the thematic objectives and the Union priorities specific to each CSF Fund, the Common Strategic Framework, the Partnership Contract, the country-specific recommendations under Article 121(2) of the Treaty and the Council recommendations adopted under 148(4) of the Treaty, taking account of the ex ante evaluation. The assessment shall address, in particular, the adequacy of the programme strategy, the corresponding objectives, indicators, targets and the allocation of budgetary resources.

Reason

It is crucial to emphasise that the evaluation must demonstrate that the strategy is not only adequate, but really can be implemented.

Amendment 28

Article 28(1)

Text proposed by the Commission CoR amendment Community-led local development 1. Community-led local development, which is designated as LEADER local development in relation to the EAFRD, shall be: (a) focused on specific sub-regional territories; (b) community-led, by local action groups composed of representatives of public and private local socio-economic interests, where at the decision-making level neither the public sector nor any single interest group shall represent more than 49 % of the voting rights; Community-led local development 1. Community-led local development, which is designated as LEADER local development in relation to the EAFRD, shall be: (a) focused on specific sub-regional territories; (b) community-led, by local action groups composed of representatives of public and private local socio-economic interests, where at the decision-making level neither the public sector nor any single interest group shall represent more than 49 % of the voting rights;

Reason

Whenever local partnerships already exist they should not be unfairly penalised because their internal voting arrangements do not exactly match those required by the draft Directive. The regulation should allow enough leeway to allow the partners to identify a workable solution during the preparation of the Partnership Contract.

Amendment 29

Article 29

Text proposed by the Commission CoR amendment Local development strategies 1. A local development strategy shall contain at least the following elements: a) the definition of the area and population covered by the strategy; b) an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats; c) a description of the strategy and its objectives, a description of the integrated and innovative character of the strategy and a hierarchy of objectives, including clear and measurable targets for outputs or results. The strategy shall be coherent with the relevant programmes of all the CSF Funds involved; d) a description of the process of community involvement in the development of the strategy; e) an action plan demonstrating how objectives are translated into actions; f) a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation; g) the financial plan of the strategy, including the planned allocation of each of the CSF Funds. 2. Member States shall define criteria for the selection of local development strategies. The Fund-specific rules may set out selection criteria. [….] 6. The Commission shall be empowered to adopt delegated acts in accordance with Article 142 concerning the definition of the area and population covered by the strategy referred in paragraph 1(a). Local development strategies 1. A local development strategy shall contain the following elements: a) the definition of the area and population covered by the strategy; b) an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats; c) a description of the strategy and its objectives, ; ; ) an action plan demonstrating how objectives are translated into actions; ) a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation; ) the financial plan of the strategy, including the planned allocation of each of the CSF Funds . 2. Member States shall define criteria for the selection of local development strategies. The Fund-specific rules may set out selection criteria. [….]

Reason

The Committee welcomes the Commission's proposals on local development and integrated territorial investments but at the same time calls for the arrangements and procedures for implementing the new provisions to be simplified to avoid discouraging local actors from using them. Using delegated acts for the definition of the area and population covered by the local development strategy is excessive; local and regional authorities are typically responsible for such tasks as detailed local knowledge is needed. Furthermore, it should be entirely possible to combine the Local Development Strategies with the delivery of Integrated Territorial Investments and Joint Action Plans.

It is also important for the local development strategies that are implemented to promote urban-rural relations and that local players in peri-urban zones can be fully involved in these local development strategies.

Amendment 30

Article 35

Text proposed by the Commission CoR amendment Requests for payment including expenditure for financial instruments 2. As regards financial instruments referred to in Article 33(1)(b) implemented in accordance with Article 33(4)(a) and (b), the total eligible expenditure presented in the request for payment shall include and separately disclose the total amount of support paid or expected to be paid to the financial instrument for investments in final recipients to be made over a pre-defined period of maximum two years, including management costs or fees. 3. The amount determined in accordance with paragraph 2 shall be adjusted in subsequent requests for payment, to take account of the difference between the amount of support previously paid to the financial instrument concerned, and the amounts effectively invested in final recipients, plus management costs and fees paid. These amounts shall be separately disclosed in the payment request. [….] Requests for payment including expenditure for financial instruments 2. As regards financial instruments referred to in Article 33(1)(b) implemented in accordance with Article 33(4)(a) and (b), the total eligible expenditure presented in the request for payment shall include and separately disclose the total amount of support paid or expected to be paid to the financial instrument final recipients to be made over a pre-defined period of maximum two years, including management costs or fees. 3. [….]

Reason

The proposal for a regulation promotes the use of the standard instruments established by the Commission, with the laudable aim of preventing excessive use of financial engineering instruments for the sole purpose of certifying expenditure. The Committee's amendments aim to redress the balance by further diversification of the terms and conditions and the introduction of a margin of tolerance as regards the ability to comply with forecasts.

Amendment 31

Article 39

Text proposed by the Commission CoR amendment Use of legacy resources after closure of the programme Member States shall adopt the necessary measures to ensure that the capital resources and gains and other earnings or yields attributable to the support from the CSF Funds to financial instruments are used in accordance with the aims of the programme for a period of at least 10 years after the closure of the programme. Use of legacy resources after closure of the programme Member States shall adopt the necessary measures to ensure that the capital resources and gains and other earnings or yields attributable to the support from the CSF Funds to financial instruments are used in accordance with the aims of the programme for a period of at least years after the closure of the programme.

Reason

Considers that the period during which financial engineering instruments and the resulting resources must be used should be shorter; a period of ten years after the closure of a programme constitutes long-term legal uncertainty.

Amendment 32

Article 40(2)

Text proposed by the Commission CoR amendment Report on Implementation of Financial Instruments 2. The report referred to in paragraph 1 shall include, for each financial instrument, the following information: a) identification of the programme and of the priority from which support from the CSF Funds is provided; [….] e) total amount of support paid or committed in guarantee contracts by the financial instrument to the final recipients by programme and priority or measure included in requests for payment submitted to the Commission; f) revenues of, and repayments to, the financial instrument; g) multiplier effect of investments made by the financial instrument and value of investments and participations; h) contribution of the financial instrument to the achievement of the indicators of the programme and of the priority concerned. [….] Report on Implementation of Financial Instruments 2. The report referred to in paragraph 1 shall include, for each financial instrument, the following information: a) identification of the programme and of the priority from which support from the CSF Funds is provided; [….] e) total amount of support paid or committed in guarantee contracts by the financial instrument to the final recipients by programme and priority or measure included in requests for payment submitted to the Commission; ) multiplier effect of investments made by the financial instrument and value of investments and participations; [….]

Reason

The aim here is to simplify annual reporting obligations for data requested by the Commission pertaining to the implementation of the financial instruments.

Amendment 33

Article 42(1)

Text proposed by the Commission CoR amendment Composition of the monitoring committee 1. The monitoring committee shall be composed of representatives of the managing authority and intermediate bodies and of representatives of the partners. Each member of the monitoring committee shall have a voting right. The monitoring committee of a programme under the European territorial cooperation goal shall also include representatives of any third country participating in that programme. Composition of the monitoring committee 1. The monitoring committee shall be composed of representatives of the managing authority and intermediate bodies and of representatives of the partners. Each member of the monitoring committee shall have a voting right. The monitoring committee of a programme under the European territorial cooperation goal shall also include representatives of any third country participating in that programme.

Reason

It is unclear how the involvement of third countries and territories neighbouring on the outermost regions is to be fitted into European territorial cooperation. In the case of programmes with funding under the ENI and IPA, as well as from the ERDF, referred to in Article 28 of the Territorial Cooperation Regulation, third countries of course need to be involved. However, in the case of the outermost regions, third countries and neighbouring regions (with the exception of the Canary Islands – Morocco) are not included in either the ENI or the IPA. These countries receive EDF funds and make no additional contribution to European Territorial Cooperation. Although there must be cooperation with third countries, the outermost regions' territorial cooperation programmes only include allocations from the ERDF, and although 30 % of these funds may be used outside EU territory, such third countries must not be members of the monitoring committees.

Amendment 34

Article 43(1)

Text proposed by the Commission CoR amendment Functions of the monitoring committee 1. The monitoring committee shall meet at least once a year and shall review implementation of the programme and progress towards achieving its objectives. In doing so, it shall have regard to the financial data, common and programme-specific indicators, including changes in result indicators and progress towards quantified target values, and the milestones defined in the performance framework. Functions of the monitoring committee 1. The monitoring committee shall meet at least once a year and shall review implementation of the programme and progress towards achieving its objectives. In doing so, it shall have regard to the financial data, common and programme-specific indicators, including changes in result indicators and progress towards quantified target values, and the milestones defined in the performance framework.

Reason

Considers that the in itinere evaluation exercises stipulated under Article 49 should also be taken into account when evaluating the programme's implementation.

Amendment 35

Article 47, new point 2

Text proposed by the Commission CoR amendment General Provisions 1. Evaluations shall be carried out to improve the quality of the design and implementation of programmes, as well as to assess their effectiveness, efficiency and impact. Impact of programmes shall be evaluated in accordance with the mission of the respective CSF Funds in relation to the targets for the Union strategy for smart, sustainable and inclusive growth (2) as well as in relation to Gross Domestic Product (GDP) and unemployment, where appropriate. 2. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to common and where appropriate programme-specific indicators. General Provisions 1. Evaluations shall be carried out to improve the quality of the design and implementation of programmes, as well as to assess their effectiveness, efficiency and impact. Impact of programmes shall be evaluated in accordance with the mission of the respective CSF Funds in relation to the targets for the Union strategy for smart, sustainable and inclusive growth (2) as well as in relation to Gross Domestic Product (GDP) and unemployment, where appropriate. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to common and where appropriate programme-specific indicators.

Reason

Impact evaluations should also have the option of exploring other, equally important aspects using the ‘beyond GDP’ approach described in the opinion of the Committee of the Regions on Measuring progress – GDP and beyond (cf. CoR 163/2010 fin).

Amendment 36

Article 48(3)

Text proposed by the Commission CoR amendment 3. Ex ante evaluations shall appraise: [….] g) whether the quantified target values for indicators are realistic, having regard to the support from the CSF Funds envisaged; h) the rationale for the form of support proposed; i) the adequacy of human resources and administrative capacity for management of the programme; j) the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations; k) the suitability of the milestones selected for the performance framework; l) the adequacy of planned measures to promote equal opportunities between men and women and to prevent discrimination; m) the adequacy of planned measures to promote sustainable development. 3. Ex ante evaluations shall appraise: [….] g) whether the quantified target values for indicators are realistic, having regard to the support from the CSF Funds envisaged; h) the rationale for the form of support proposed; i) the adequacy of human resources and administrative capacity for management of the programme; ) the adequacy of planned measures to promote equal opportunities between men and women and to prevent discrimination; ) the adequacy of planned measures to promote sustainable development.

Reason

The Committee considers that the ex ante evaluation should not contain aspects which cannot be adequately quantified before the programme is launched or which are already referred to in other documents (e.g. management and control system, Partnership Contract); therefore proposes to delete some information.

Amendment 37

Article 49, new point 4

Text proposed by the Commission CoR amendment Evaluation during the programming period 1. An evaluation plan shall be drawn up by the managing authority for each programme and submitted in accordance with the Fund-specific rules. 2. Member States shall ensure that appropriate evaluation capacity is available. 3. During the programming period, managing authorities shall carry out evaluations including evaluations to assess effectiveness, efficiency and impact, for each programme on the basis of the evaluation plan. At least once during the programming period, an evaluation shall assess how support from the CSF Funds has contributed to the objectives for each priority. All evaluations shall be examined by the monitoring committee and sent to the Commission. 4. The Commission may carry out, at its own initiative, evaluations of programmes. Evaluation during the programming period 1. An evaluation plan shall be drawn up by the managing authority for each programme and submitted in accordance with the Fund-specific rules. 2. Member States shall ensure that appropriate evaluation capacity is available. 3. During the programming period, managing authorities shall carry out evaluations including evaluations to assess effectiveness, efficiency and impact, for each programme on the basis of the evaluation plan. At least once during the programming period, an evaluation shall assess how support from the CSF Funds has contributed to the objectives for each priority. All evaluations shall be examined by the monitoring committee and sent to the Commission. . The Commission may carry out, at its own initiative, evaluations of programmes.

Reason

In order to ensure a more results-oriented approach, the findings of the in itinere evaluations must be used to improve the programmes' effectiveness.

Amendment 38

Article 54(1)

Text proposed by the Commission CoR amendment Revenue-generating operations 1. Net revenue generated after completion of an operation over a specific reference period shall be determined in advance by one of the following methods: a) application of a flat rate revenue percentage for the type of operation concerned; b) calculation of the current value of the net revenue of the operation, taking into account the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State concerned. The eligible expenditure of the operation to be co-financed shall not exceed the current value of the investment cost of the operation less the current value of the net revenue, determined according to one of these methods. The Commission shall be empowered to adopt delegated acts in accordance with Article 142 concerning the definition of the flat rate referred to in point (a) above. The Commission shall adopt the methodology under point (b) by means of implementing acts in accordance with the examination procedure referred to in Article 143(3). Revenue-generating operations 1. Net revenue generated after completion of an operation over a specific reference period shall be determined in advance by one of the following methods: a) application of a flat rate revenue percentage for the type of operation concerned; b) calculation of the current value of the net revenue of the operation, taking into account the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State concerned. The eligible expenditure of the operation to be co-financed shall not exceed the current value of the investment cost of the operation less the current value of the net revenue, determined according to one of these methods. oncerning the definition of the flat rate referred to in point (a) above The Commission shall adopt the methodology under point (b) by means of implementing acts in accordance with the examination procedure referred to in Article 143(3).

Reason

Calls for the reinstatement of the 2000-2006 rules setting a single specific (reduced) intervention rate for revenue-generating operations to avoid discouraging project promoters.

Amendment 39

Article 55

Text proposed by the Commission CoR amendment Eligibility 1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in or on the basis of this Regulation or the Fund-specific rules. […] 6. Net revenue directly generated by an operation during its implementation which has not been taken into account at the time of approval of the operation, shall be deducted from the eligible expenditure of the operation in the final payment claim submitted by the beneficiary. This rule shall not apply to financial instruments and prizes. […] Eligibility 1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in or on the basis of this Regulation or the Fund-specific rules. […] […]

Reason

Paragraph 6 should be deleted to ease the review process during the implementation of operations. A new paragraph (9) should be inserted, as territorial cooperation deserves a specific regime because the application or alignment of different national rules would represent a too high administrative obstacle to the proper implementation of the projects.

Amendment 40

Article 59(3)

Text proposed by the Commission CoR amendment Specific eligibility rules for grants 3. The following costs shall not be eligible for a contribution from the CSF Funds: a) interest on debt; b) the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. In exceptional and duly justified cases, a higher percentage may be permitted for operations concerning environmental conservation; c) value added tax. However, VAT amounts shall be eligible where they are not recoverable under national VAT legislation and are paid by a beneficiary other than non-taxable person as defined in the first subparagraph of Article 13(1) of Directive 2006/112/EC, provided that such VAT amounts are not incurred in relation to the provision of infrastructure. Specific eligibility rules for grants 3. The following costs shall not be eligible for a contribution from the CSF Funds: a) interest on debt; b) the purchase of land not bui