Opinion of the Committee of the Regions on the 'Proposal for a Council Regulation (EC) laying down general provisions on the Structural Funds'
Date: 1998-09-17
Institutions: European Committee of the Regions
Subjects: EU financial instrument, European Investment Bank, Structural Funds, economic and social cohesion, regional aid

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II

(Preparatory Acts)

COMMITTEE OF THE REGIONS

Opinion of the Committee of the Regions on the ‘Proposal for a Council Regulation (EC)
laying down general provisions on the Structural Funds’

THE COMMITTEE OF THE REGIONS,

(98/C 373/01)

having regard to the proposal for a Council Regulation (EC) of 18 March 1998 laying down
general provisions on the Structural Funds [COM(98) 131 final — 98/0090 (AVC)] (1);

having regard to the decision of the Council of 19 May 1998 to consult the Committee, under
Articles 130d and 198c of the Treaty establishing the European Community;

having regard to the decision of the bureau of 13 May 1998 to instruct Commission 1 for
Regional Policy, Structural Funds, Economic and Social Cohesion, Cross-Border and
Inter-Regional Cooperation to prepare the opinion;

having regard to the draft opinion (CdR 167/98 rev.) adopted by Commission 1 on 8 July 1998
(rapporteurs: Mr Behrendt and Mr Fraga Iribarne);

having regard to Article B of the EU Treaty and Article 2 of the EC Treaty, making the
promotion of economic and social progress which is balanced and sustainable and the
strengthening of economic and social cohesion and solidarity among the Member States
objectives and tasks of the European Union and the European Community respectively;

having regard to the Community policy, formulated in Article 130a of the EC Treaty, of
strengthening economic and social cohesion and of reducing disparities between the levels of
development of the various regions and the backwardness of the least-favoured regions,
including rural areas;

having regard to the task of the Community, defined in Article 130b of the Treaty, of
supporting the efforts of the Member States to strengthen economic and social cohesion by
means of the Structural Funds, the European Investment Bank and the other existing financial
instruments;

having regard to the task of the European Regional Development Fund, defined in Article 130c
of the Treaty, of helping to redress the main regional imbalances in the Community, the task
of the European Social Fund, defined in Article 123 of the Treaty, of improving employment
opportunities for workers in the internal market, and the task of the European Agricultural
Guidance and Guarantee Fund, Guidance Section, defined in Article 40 of the Treaty, of
achieving the objectives of the common agricultural policy;

(1) OJ C 176, 9.6.1998, p. 1.

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having regard to the Committee’s right, set out in Articles 130d and 130e of the Treaty, to
participate in the definition of the tasks, priority objectives, organization, general rules,
implementing provisions and reports on progress on achievement of economic and social
cohesion;

having regard to its opinions on the Commission’s Communication: Agenda 2000: For a
stronger and wider Union, and on the Future of European structural policy, and in particular:

— Views of the regions and local authorities on arrangements for European Structural Policy

after 1999 (CdR 131/97 fin) (1),

— First report on economic and social cohesion (CdR 76/97 fin) (2),

— Agenda 2000: the financing of the European Union after 1999 taking account of enlargement

prospects and the challenges of the 21st century (CdR 303/97 fin) (3),

— The role of the regional and local authorities in the partnership principle of the Structural

Funds (CdR 234/95 fin) (4),

— The CAP and eastward enlargement (CdR 239/96 fin) (5),

— The effects of the Union’s policies of enlargement to the applicant countries of central and

eastern Europe (Impact Study) (CdR 280/97 fin) (6);

— Towards an urban agenda in the European Union (CdR 316/97 fin) (7),

at its 25th plenary session of 16/17 September 1998 (meeting of 17 September) adopted the
following opinion.

1. Part A: General assessment

The Commission proposal for a new framework
1.1.
regulation for the Structural Funds falls within the
general ambit of the Agenda 2000 legislative proposals.
The aim is both to secure the Community’s future
viability in a number of important fields and to create
the conditions for eastward enlargement of the European
Union. The Committee of the Regions particularly
stresses the close linkage between the various aspects of
Agenda 2000, its legislative proposals and the political
decisions to be taken. The prospect of eastward enlarge-
ment requires a willingness to change, even within the
existing European Union. International changes require
a reorientation of agricultural and structural policy. The
focus of structural assistance must be on overcoming
development deficits and on securing structural adap-
tation which combats unemployment and leads to a
durable economy through promoting regional competi-
tiveness, with special attention to regions with specific
characteristics, such as mountainous areas, islands and
remote areas.

1.2.
The Community can rise to the challenges facing
it only through solidarity. The principle of solidarity

(1) OJ C 64, 27.2.1998, p. 5.
(2) OJ C 379, 15.12.1997, p. 34.
(3) OJ C 64, 27.2.1998, p. 40.
(4) OJ C 100, 2.4.1996, p. 72.
(5) OJ C 116, 14.4.1997, p. 39.
(6) OJ C 64, 27.2.1998, p. 48.
(7) OJ C 251, 10.8.1998, p. 11.

was established because the balanced development of
the Community is a basic objective of the Union and
because we are required to work for economic and social
progress, which is essential if regional imbalances are to
be reduced.

1.3.
For these reasons, reform of European structural
policy will play a key role in the forthcoming decisions
on Agenda 2000. The draft framework regulation is the
focus for the future use of the Funds, as it encapsulates
all the general provisions of European structural policy.
The Committee of the Regions regards the draft submit-
ted as a suitable basis for further discussions and
negotiations. The Committee feels that in its proposals
the Commission has in principle done justice to the aim
of reducing the number of Objectives and Community
initiatives and concentrating the areas eligible for as-
sistance.

1.4.
The Committee is pleased to note that the
Commission has continued to place the overcoming of
development deficits and structural adjustment prob-
lems, the combating of structural unemployment and
the creation of new jobs at the centre of European
structural policy. These priorities also include the need
to combat the ever widening development gaps in Europe
between the centre and the outlying regions, as described
in the cohesion report and the work on the European
Spatial Development Perspective. In view of the danger
of dispersion of the Structural Funds among a multi-
plicity of themes, these central priorities are needed to

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guarantee the concentration of funds on the achievement
of common objectives. Above all, the priorities are in
harmony with the EU’s acknowledged political priorities
of strengthening economic and social cohesion and
combating unemployment.

timetable not be met, special measures should be adopted
and the gap between the two funding periods should be
minimized. In addition the COR urges the Commission
to review the SEM 2000 data sheets urgently.

1.5.
The Committee of the Regions feels urban
areas and their surroundings are underexposed in the
Commission proposals. Europe is the most urbanized
continent: 80 % of its inhabitants live in urban agglomer-
ations. The importance of urban areas is not reflected
in the Commission proposals. The relation between
rural and urban areas is changing. This requires a better
integration of urban policies, agricultural policies and
structural policies.

1.6.
The Committee of the Regions welcomes with
interest the integrated approach advocated by the new
Objective 2. The implementation of global regional
strategies should indeed serve to boost the effectiveness
of the Structural Funds. However, the Committee
emphasizes the need to ensure that such an integrated
approach does not make procedures more cumbersome
and complicated. The COR also feels that more of its
proposals for simplifying European structural policy
contained in the opinions referred to above should have
been incorporated into the draft regulation. Generally,
the COR hopes that the reduction in the number of
priority objectives and the streamlining of Structural
Fund procedures at Community level will have tangible
implications both for the local partners responsible for
implementing programmes on the spot and for citizens.

1.7.
The Committee of the Regions is disappointed
that there is no reference to culture in the proposed
regulations and would call, as it has done in previous
opinions, for an explicit reference to culture. This
would help strengthen the contribution culture and its
associated activities can make to social cohesion and the
positive impact it has in promoting growth, competi-
tiveness and employment in many cities and regions.

1.8.
In order to facilitate project funding and secure
private sector cooperation in projects, the Committee
of the Regions feels that it should be possible, during
the forthcoming period, to consider private co-financing
alongside public co-financing (public-private partner-
ship).

1.9.
The Committee of the Regions considers it
important that, after careful programming, the new
Structural Funds’ period begin immediately, in full, at
the beginning of 2000. This requires that the final
decisions on the Structural Funds be taken as soon as
possible, in the first half of 1999 at the latest. The COR
urges the European Commission to take all steps to
meet the timetable set out and requests that should this

1.10.
The Committee of the Regions reiterates the
views on the detailed arrangements for structural policy
set out in the opinions referred to above, and therefore
comments below only on the proposals of the draft
regulation to which the Committee would like to suggest
changes or additions.

1.11.
The Commission proposals need further clarifi-
cation. The Committee urges the Commission to provide
further information as soon as possible, so that sub-
sequent negotiations can proceed smoothly.

2. Part B: Proposed changes and additions to the draft

regulation

2.1. Title I: General principles

2.1.1. C h a p t e r s 1 a n d 2 : O b j e c t i v e s a n d
g e o g r a p h i c a l e l i g i b i l i t y ( A r t i c l e s
1 - 6 )

The Committee of the Regions backs the
2.1.1.1.
Commission’s proposal to concentrate on promoting
the development and structural adjustment of regions
whose development is lagging behind (Objective 1). The
Committee also supports the proposal that the criteria
for Objective 1 eligibility be NUTS level II and per capita
GDP of less than 75 % of the three-year Community
average. As transitional arrangements are provided for
regions which, because of their development progress,
will no longer satisfy this criterion in the new funding
period, the Committee of the Regions joins the Com-
mission in calling for strict application of this criterion.
This will ensure the necessary concentration of structural
assistance under Objective 1 up to the end of the funding
period. It also recognizes the need for the transitional
arrangements to take account of regions that are no
longer covered by Objective 1 in the implementation
phase for current rules, but which are not eligible for
support under any other Community objectives. The
Committee of the Regions also endorses the Com-
mission’s proposal to support the most remote regions,
as defined in the new Article 299(2) of the Amsterdam
Treaty, and the areas currently covered by Objective 6
under Objective 1. The COR proposes that the automatic
inclusion of the current Objective 6 should be defined
on the basis of population sparsity.

2.1.1.2.
The Committee of the Regions is pleased to
note that the European Commission proposes assistance
under Objective 2 for areas undergoing socio-economic

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change in the industrial and service sectors, declining
rural areas, urban areas in difficulty and depressed areas
dependent on fisheries. The Committee points out that
this is a highly complex Objective, which will (a) need
to be broken down into sub-objectives tailored to the
specific problems of the areas concerned, and (b)
coordinated at programme level; the eligibility and
assistance criteria for these sub-objectives must take
account of the specifics of the structural problems
involved at the appropriate territorial
level and of
remoteness criteria. The European Commission should
also specify in particular
for
implementing the EAGGF Guarantee Section assistance
provided for in the new regional development pro-
grammes and dovetailing it with the other Structural
Funds.

the arrangements

2.1.1.3.
The Committee of the Regions recognizes
that, in the interests of the concentration of assistance
on the worst affected areas of the Community, the
proportion of the population living in the new Objec-
tive 2 areas must gradually be reduced. But in accordance
with the principle of smooth adjustment, properly
coordinated with the transitional mechanisms, the Com-
mittee of the Regions feels it is vital that the percentage
of the population covered by Objective 2, previously
25 %, should be reduced gradually and equitably to
18 %.

2.1.1.4.
The method proposed by the European Com-
mission for allocating this population ceiling among the
Member States needs further explanation however. This
is true in particular of the consideration of the severity
of regional structural problems in the areas falling under
the new Objective 2 at the appropriate territorial level,
which should be distinguished from the severity of
structural problems at national level.

The COR would note that, in individual
2.1.1.5.
cases, concentration may however also mean a dispro-
portionate reduction in Objective 2 assistance for some
Member States. The Committee therefore welcomes the
Commission’s proposal that the maximum reduction in
the population covered by Objective 2 not exceed one
third of the existing Objective 2 and 5b areas with
the exception of areas in the phasing-out stage of
Objective 1, which are eligible for the new Objective 2.
This safety net will help to prevent excessively radical
cuts, which might otherwise compromise the success of
past assistance.

2.1.1.6.
The Committee of the Regions points out
that the criteria proposed by the Commission for the
selection of areas eligible for assistance under the new
Objective 2 require further discussion.

As a matter of principle it is welcome that special weight
will continue to be assigned to labour market criteria
in establishing eligibility and in relation to support
measures. In this context it should be pointed out,
however, that the unemployment rates calculated by
Eurostat give an inaccurate and incomplete picture of
the situation in the individual European regions and

that efforts should be made to achieve suitable harmon-
ization with Eurostat.

There is a danger that insufficient account will be taken
of the specific problems of rural or industrial areas.

The COR believes there is a continuing need to support
deindustrialized urban areas which have suffered sub-
stantial job losses. Within national assistance ceilings it
should be possible to include additional criteria for
industrial areas, such as indices of poverty, household
income relative to regional costs of living and dependence
on income support, and indicators of competitiveness,
such as poor labour productivity and poor record of
SME survival.

Within the population ceiling, the Objective 2 industrial
strand core criteria should not be applied strictly and
must allow for borderline cases to be taken into account,
thereby recognising the difficulty of comparing some
data sets. The regulations should specify that the
Member States shall have flexibility in defining economic
and social
indicators to determine eligible areas of
greatest need. These indicators should be drawn up by
the Member State in consultation with local and regional
partners. Given that the services sector is also one of the
areas of activity to be included in Objective 2, this sector
should also be mentioned in demarcating eligible areas.

For rural areas, other criteria, in addition to per capita
GDP in the region, such as income level, population
density, the proportion of the workforce engaged in
agriculture and ageing of the population should also be
taken into consideration. Further evaluation is required
as to whether the criteria for support for rural areas are
broad enough to take account of the particular situation
in such areas.

The fact that, in future, EAGGF guidance will apply
only to regions eligible under Objective 1 and that the
EAGGF guarantee will be applied in Objective 2 regions
must not be allowed to disadvantage the rural regions
thus affected.

In the case of fishery-dependent areas, a broad inter-
pretation of
fishery-dependence should be applied,
taking account of the conditions for regional develop-
ment. The deciding factors could be the size and age of
the fleet and the level of employment in the sector.

In addition, the likely restrictions on assisted urban
areas — linked with the limited funds allocated — are
not consistent with the problems of conurbations in
Europe. These restrictions reflect the absence of Com-
munity prioritization of urban problems; the selection
of criteria for determining whether urban areas are
eligible under Objective 2 indicates a wish to assist ailing
urban districts rather than to implement a genuine urban
structural policy.

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Moreover many current Community initiatives have
fully proved their worth, e.g. the Urban programme and
the four industrial initiatives. The current proposals fail
to adequately reflect these experiences in future policy.

COR feels there is a danger that the Commission’s
moves to achieve coherence between support criteria
will unduly restrict the scope needed by the regions to
conduct their own regional policy.

The COR agrees with the Commission that bordering
on an Objective 1 area may be a criterion for a region
to be classified as an Objective 2 area as otherwise there
is a too big a discrepancy in the level of support. It
would also point out the inconsistency of not applying
the same reasoning to areas bordering on accession
countries, as these countries are already receiving pre-
accession aid and will eventually have Objective 1 status,
while their wage levels and social and environmental
standards are far lower. The COR therefore feels that
special study should be devoted to the situation of these
regions in the light of the future accessions.

2.1.1.7.
The selection of new Objective 2 areas could
be made in accordance with similar principles to those
applied in the allocation of national assistance ceilings
under the guideline for regional aid (Art. 92(3)(c) of the
EC Treaty). To this end the framework regulation
should set the support area population ceiling for the
new Objective 2 at EU level as well as for each Member
State. The demarcation criteria for the new Objective 2
areas should be laid down by the Member States with
the involvement of local and regional authorities, and
confirmation by the Commission of an area’s eligibility
for national regional aid should be sufficient to qualify
it for selection as an Objective 2 area.

If the Commission wants greater consistency in future
between regions eligible for Structural Fund aid and
regions receiving regional aid, Community competition
policy [Treaty Article 92(3)(c)] must not be the de
facto determinant of zoning for future Structural Fund
programmes. It is essential that local and regional
authorities be closely involved in drawing up not only
the map of areas eligible for Structural Fund aid but
also the map of areas covered by regional aid.

2.1.1.8.
The Committee of the Regions sees its pro-
posal for a specific objective for the development
of human resources essentially fulfilled in the new
Objective 3. The broad assistance criteria will on the
one hand give the regional and local authorities room
for manoeuvre in combating unemployment and mod-
ernizing employment systems. They do however carry
with them the danger of fragmentation of assistance.
This would reduce the intended efficiency gains in the
fight against unemployment in Europe. The Committee
of the Regions argues therefore that the use of the
European Social Fund must in future continue to focus
on all the fund’s tasks, as laid down in the Amsterdam
Treaty. Closer attention must therefore be paid to social
exclusion, this being an action area mentioned in Agenda
2000 but not included in the regulations now being
proposed. In particular, it must be left up to the regional
and local authorities to select from the opportunities
offered by Objective 3 and the European Social Fund
priorities and measures which best take account of their
specific conditions for the development of human
resources. A proportion of Objective 3 funds could also
be earmarked for accompanying measures under the
territorial employment pacts.

The Committee of the Regions also suggests
2.1.1.9.
that in future it should be made possible for Objective 3
measures under the European Social Fund to be used in
Objective 2 areas as well. Objective 2 assistance only
partially exploits the potential of the European Social
Fund for the development of human resources. The
target group-specific approach of Objective 3 runs the
risk of not being taken into consideration sufficiently in
Objective 2 programmes. The coherent, horizontal use
of Objective 3 in the Member States would then not be
guaranteed.

Assistance provided under this Article has narrower
objectives than those of the Structural Funds, especially
given the proposed new strands to Objective 2. The
question is whether this approach can adequately antici-
pate the rapid changes on the economic front in Europe’s
regions. For this reason, there should also be scope for
assistance for regions outside the national support areas,
this within the framework of the development of a
sub-regional economic policy. Derogations should be
provided for in the case of regions whose ability to meet
aid criteria has hitherto varied more than the average.

The COR doubts whether the ceiling proposed by the
Commission, 2 % of the population, is sufficient. The

2.1.1.10.
The national level should not be the sole
reference framework for all Objective 3 actions in favour
of human resources. It is absolutely essential to adopt a
regional or local approach for Objective 3 programmes,
in addition to national schemes, so that local and regional
characteristics are not neglected in the development of
human resources, nor the fact that regional authorities
are often the main co-financers of the ESF. Regional
innovation strategies must be able to offer points of
contact for this as advocated in a recent Commission
decision. The level for the development and implemen-
tation of Objective 3 programmes should therefore be
defined in negotiations between the Commission and
the Member State with due regard to the views of the
partners.

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2.1.1.11.
The Committee of the Regions suggests that
the definition of Objective 3 in Article 5 of the framework
regulation be clarified by making direct reference to all
the fields of the policy remit of the European Social
Fund in accordance with the Amsterdam Treaty and to
the scope of the Member States and regional and
local authorities in selecting measures for assistance in
conjunction with national employment action plans.
The Committee would reiterate the need for close
consultation with local and regional authorities when
drawing up the national employment plans which will
be an important reference point for future Objective 3
programmes.

2.1.2.2.
The Committee of the Regions asks the
Commission to explain the procedure laid down for
the allocation of funds to the Member States under
Article 7(3) of the draft regulation, in particular the
weightings assigned to the objective criteria (population,
regional and national prosperity, relative severity of
structural problems, unemployment). Equal treatment
of all regions can only be guaranteed by an objective
and transparent procedure based primarily on the
establishment of a Community-wide criterion for defin-
ing remote areas and on the extent of regional structural
problems.

2.1.1.12.
The Committee of the Regions notes that its
call for transitional arrangements for former Objective 1,
2 and 5b areas, which because of their development are
no longer eligible for assistance, has been taken up by
the Commission in Article 6 of the draft framework
regulation. Transitional arrangements will be needed to
cushion the impact of the withdrawal of Structural Fund
assistance so as not to undo what has already been
achieved. This requirement is essentially met by the
Commission proposals. However, the Committee of the
Regions would ask that, in the interests of achieving a
balanced compromise, the Commission make known its
views on the length of the transitional periods and the
shape of the transitional arrangements before a decision
is adopted by the Council.

2.1.2. C h a p t e r I I I : F i n a n c i a l p r o v i s i o n s

( A r t i c l e 7 )

2.1.2.1.
The Committee of the Regions reiterates the
view expressed in its opinions on Agenda 2000 and
the Future of European Structural Policy of 19 and
20 November 1997 (1) that the EU’s future structural
policy in the existing and new Member States should be
financed within the existing ceiling on own resources
and the limitation of structural spending to 0,46 %
of the Union’s GNP. The Commission’s proposal of
funding of Euro 218.4 billion at 1999 prices for eligible
areas in the existing Member States for the period
2000-2006 makes it clear that, with appropriate concen-
tration, average assistance for the future beneficiary
regions over the period 2000-2006 can be continued at
the high level reached during the current period. In the
interests of concentration of assistance on the neediest
regions, the Committee of the Regions assumes that two
thirds of the available funds are to be concentrated on
the Objective 1 regions. The Committee of the Regions
suggests that the funds earmarked for Objective 1
be exactly quantified, as in the existing framework
regulation.

(1) CdR131/97 fin — OJ C 64, 27.2.1998, p. 5; CdR 303/97

fin — OJ C 64, 27.2.1998, p. 40.

The Committee of the Regions reiterates the
2.1.2.3.
view expressed in the above mentioned opinions of 19
and 20 November 1997, and continues to have a number
of questions about the performance reserve of 10 % of
total resources proposed by the Commission. The
submission of the draft regulation has not answered the
question as to whether it will be possible to use these
funds at mid-term in accordance with a procedure
which genuinely encourages high-quality programme
implementation. Rather, it is to be feared that priority
will be given to the rapid deployment of resources rather
than to high-quality and therefore possibly longer-term
projects. It seems better to look into whether the figures
of the European Court of Justice which talk about
under-spending are not lagging behind what goes on in
practice in the regions, and also whether under-spending
is not due above all to making much too late a start
to programmes and to potential operators’
lack of
information.

The Committee of the Regions considers that
2.1.2.4.
the reasons behind the ‘performance-linked reserve’ of
encouraging project quality and efficient management
of resources over a long programming period to be
sound.The 10 % performance reserve is however incom-
patible with the principles of planning, programming
and proper implementation, as it effectively freezes an
amount equivalent to one year’s funding until after
the mid-term evaluation. Moreover, it creates major
uncertainties, as there is no guarantee that its application
will generate positive effects additional to those already
implicit in the responsible control and monitoring of
assistance. The Committee is therefore opposed to a
reserve of this kind.

The Committee of the Regions supports the
2.1.2.5.
earmarking of 5 % of total Structural Fund resources
for the financing of Community initiatives and the use
of 1 % of funds to finance innovative and technical
assistance measures. It must be ensured however that
implementing structures built up, including regional
structures, and the system for the necessary monitoring

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and assessment of programmes are continued in full.
The Committee points out however that in these two
areas in particular the Commission should pay greater
attention to transparent procedures for the allocation
of resources and the evaluation of the efficiency of the
measures undertaken.

2.1.3. C h a p t e r

I V : O r g a n i z a t i o n

( A r -

t i c l e s 8 - 1 1 )

2.1.3.1.
The COR is pleased to see that, on several
points, the draft regulation implements the expressed
intention to enhance the role and influence of partner-
ship. The Committee would point to the need to involve
the regional and local authorities more closely in the
programming and implementation of the Structural
Funds. It also stresses that the provisions of the draft
regulation on complementarity and partnership must
leave the national, regional and local authorities scope
legal and financial
appropriate to the institutional,
system of the Member State in question in the selection
of the most representative partners and in the manner,
extent and level of their involvement in Structural Fund
assistance. This will promote the effective pursuit of
regional policy in Member States and the role of
regional government as the basis for programming in
the individual Member States in accordance with their
internal structure of responsibilities.

2.1.3.2.
The COR agrees that action must be based
on a broad partnership which also involves the relevant
economic and social players in the preparation, monitor-
ing and evaluation of assistance. However, local and
regional authorities should continue to play a key role
by virtue of their political responsibility, local knowledge
and major contribution to co-funding and democratic
legitimacy, including when it comes to deciding on the
involvement of other partners. The regulation should
set out framework provisions rather than detailed rules
for how partnerships should be formed in practice. Such
rules should be defined in the various programming
documents in consultation with local and regional
authorities so that account can be taken of the particular
circumstances in each region or Member State.

2.1.3.4.
The Commission proposes that it should in
future be able to lay down the Community priorities
for assistance in the form of guidelines. While fully
recognizing the Commission’s role of Community guid-
ance, and the usefulness of such guidelines as a basis for
discussions on the programmes between the Com-
mission, Member States and regional and local auth-
orities, the Committee of the Regions feels that the
‘bottom-up’ approach must be guaranteed, and that the
programme documents must retain their binding and
reliable nature for the implementation of Structural
Fund assistance. In no cases should these guidelines
mean that the Commission has the right unilaterally to
interpret regulations adopted by the Council.

2.1.3.5.
The situation is different however at the
mid-point of a programming period. Changes in circum-
stances and accumulated experience of management in
mid-stream make it advisable to publish guidelines and
priorities for the adjustment of regional policy, without
however resorting to legislative changes to the general
regulation. The Committee of the Regions should be
the EU body charged with assessing the redefinition and
reorientation of the priorities and guidelines for the
Commission’s management.

As assistance will be programme-based, the
2.1.3.6.
Committee of the Regions also points out that the
information needed at this level must be more clearly
defined. The degree of detailed information to be
contained in a programme must be determined. The
regulation speaks of measures and operations. The
Committee considers it undesirable that detailed infor-
mation on measures and operations should come within
the ambit of partnership between Commission and
Member State, as this could result in considerable delays
in making changes to programmes.

In this article the Commission once again
2.1.3.7.
advocates a combination of loans and grants in the
application of the European funds. The Committee of
the Regions feels that the participation of the EIB or the
other Community bodies should not be made a binding
condition. The choice of the most suitable forms of
assistance should be guided by the requirements of
programme content and specific local conditions.

2.1.3.3.
The Committee regrets that the Commission
has not defined its own role in partnership more clearly
and developed this, although this is a contribution
which complements national and regional efforts on the
application of the European Structural Funds, in which
European, national, regional and local funds are used in
a coordinated way. The Committee draws attention to
its proposals for the development of a genuinely equal
partnership which could be encapsulated in a treaty.

2.1.3.8.
The Committee of the Regions points out
that, as in the previous programme period, account must
be taken of overall economic conditions and specific
economic situations, including local and regional contri-
butions, in determining the additionality of Structural
Fund resources. Otherwise unusually high national
structural expenditure, cyclical trends in individual
economies and the national and regional bases for
financial planning might not be properly considered.
The Committee of the Regions proposes that the detailed

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arrangements for determining additionality be agreed in
the programme planning documents in the framework
of partnership. Because of the laws governing national
budgets and the necessary involvement of national
parliaments,
it is not possible to set the level of
expenditure for national labour market policy in advance
for the whole six-year support period, as the Commission
proposes.

2.2. Title II: Programming

2.2.1. C h a p t e r

I :

G e n e r a l

p r o v i s i o n s

( A r t i c l e s 1 2 - 1 4 )

2.2.1.1.
The COR welcomes the requirement that the
partners give an opinion on the plans before they are
submitted to the Commission, and that the Commission
take account of these opinions. These plans should be
submitted to the partners in due time for them to give
their opinion. The COR expects these provisions to be
taken seriously so that local and regional authorities
really are given greater influence in organizing action.
The COR regrets the fact that it is still not guaranteed
that local and regional authorities will be involved in
— or even informed about — the Member States’
negotiations with the Commission to approve the plans.
The Committee of the Regions draws the Commission’s
attention to the burden which programme preparation,
particularly with regard to the deadline for approval,
could place on the regional and local authorities and the
Member States.

2.2.1.2. Whilst the Member States and regions are
allowed three months for drawing up regional develop-
ment plans, the Commission allows itself six months for
the decisions on Community support frameworks, the
single programme documents and the operational pro-
grammes. There are objective reasons for reversing these
deadlines. Six months should be allowed for the drawing
up of plans and programmes, which is the more
demanding part of the job, whilst with proper coordi-
nation three months should suffice for making a decision.
The COR calls on the Commission to ensure that the
Structural Funds operating principles are applied to all
funds and in particular the rural development measures
established by the EAGGF Guarantee Fund.

The Commission proposal for the introduc-
2.2.1.3.
tion of a programming supplement introduces a further
step into the programming procedure. The Committee
of the Regions rejects this as being unnecessary and
unjustified. Article 14(1) already provides for the opinion
of the partners on the regional development plan. The
involvement of the partners in the programming process

is therefore already guaranteed. Moreover, the monitor-
ing committees could be set up as soon as the eligible
areas have been determined so that they could give their
opinion on the draft operational programme.

2.2.1.4.
The operational programme provides, as
hitherto, for financial planning for the individual pri-
orities and a qualitative description of measures within
the individual priorities. The supplementary document
will now refer financial planning to individual measures.
Detailed financial plans of this kind cannot be accurately
forecast for a seven-year funding period. This merely
complicates the programming procedure and makes
programme changes more cumbersome. As the Com-
mission previously did not require this information at
all, the fact that this document is to be submitted to the
Commission purely for information rather than for
approval is no compensation. Moreover, Article 31 of
the draft regulation requires that the programming
supplement be submitted to the Commission before
interim payments are made. The programming sup-
plement could therefore impede the flow of assistance
funds.

2.2.2. C h a p t e r I I : C o n t e n t o f

t h e p r o -

g r a m m i n g ( A r t i c l e s 1 5 - 1 8 )

2.2.2.1.
The Committee of the Regions sees the
usefulness of an integrated programme for each region.
On this question too, it would be preferable for a
level and number of programmes appropriate to the
administrative structure and practice of the Member
State in question to be agreed on the basis of the
cooperation procedure.

The Committee of the Regions feels that it
2.2.2.2.
would be appropriate for regional conversion plans
submitted under Objective 2 to cover all areas of the
same NUTS II-level region, as well as one or more
NUTS III or sub-NUTS III-level areas at the appropriate
territorial level, as happens at present, depending on
which option is more suited to the internal structure of
each Member State. The thrust of point 5.1.4 of the
COR Opinion of 14 May 1998 (1) should also be borne
in mind.

2.2.2.3.
The Committee of the Regions considers that
there is no reason why a revision of the operational
programmes and the single programming documents
should necessarily be carried out after the mid-term
review; rather; it should be an option in the event of
major changes in the economic and social situation.
Moreover, this revision should be carried out in the
framework of consultation.

2.2.3. C h a p t e r I I I : C o m m u n i t y
i v e s ( A r t i c l e s 1 9 - 2 0 )

i n i t i a t -

2.2.3.1.
The Committee of the Regions notes that its
call for the number of Community initiatives to be
reduced and for thematic concentration has been heard.

(1) CdR 316/97 fin — OJ C 251, 10.8.1998, p. 11.

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the areas

the absence of

As in the previous period, it is important that the
Community initiative formula should be applicable
throughout the Community, regardless of Objective
such status. The
area status or
Committee welcomes
for Community
initiatives proposed by the Commission. However,
with regard to the Community initiative programme
the
on human resources and equal opportunities,
Committee reiterates the need to step up the drive
against all forms of discrimination and inequality in
access to the labour market,
in particular those
resulting from exclusion or the threat of exclusion in
urban areas. It also reiterates the need for an additional
instrument to flank industrial and sectoral structural
change and military conversion.

i.e.

transfrontier,

As a continuation of the Interreg Community
2.2.3.2.
initiative, all instruments of cross-border, trans-national
and inter-regional cooperation should be packaged
together so as to constitute a back-up instrument for
regions confronted with internationalization in several
areas. The COR endorses the proposed strengthening
of inter-regional cooperation. The COR thinks that
the clear focal point within the Interreg Community
initiative should be cross-border cooperation — as it
has been to date. The broad range of cooperation
transnational and inter-
forms,
regional, would continue. This cooperation should
also cover a coherent group of regions,
including
non-neighbouring regions, with a view to boosting the
region and promoting balanced, harmonious planning
of the EU area; for example, cooperation could be
between regions which include a major urban
agglomeration. The COR refers to the good experiences
with cooperation across the EU’s internal and external
borders. Special efforts should be made to use the
good experiences with the current Interreg IIA and
Interreg IIC Programmes, where responsibility is largely
regionalized.

2.2.3.3.
The Committee of the Regions calls for
greater consistency and coordination between Interreg,
the Instrument for Structural Policies for Pre-Accession
(ISPA) and cooperation programmes with the Central
and Eastern European accession candidates and Cyprus
on the one hand, and with third countries in the

Mediterranean and Russia, Norway and Switzerland
on the other. It also urges that an appropriate role be
assigned to local and regional cooperation and that
experience with ECOS/Ouverture, Recite and similar
programmes be used to organize and implement the
new initiatives for local and regional cooperation. It
has been found, among other things, that the objectives
the programmes make a valuable
and thrust of
contribution to exchanges of experience between
decentralized authorities in areas of importance for
regional development. On the other hand,
the
mechanisms for granting funds and disbursement
arrangements have sometimes been lacking in trans-
parency. Meanwhile, it welcomes the fact that the new
initiative will provide general financial support, within
a single mechanism,
for interregional cooperation
initiatives which previously either were supported
sporadically, i.e. per project included in a programme,
or were eligible for no support at all.

2.2.3.4.
Finally, the Committee of the Regions reiter-
ates its proposal that Community initiative projects be
coordinated with eligible area assistance programmes.
Implementation of the Community initiatives should tie
in with the regional operational programmes and should
be integrated into the regional operational programmes,
where the local and regional authorities concerned so
wish.

2.2.3.5.
In this context, however, it is worth pointing
out that the Leader initiative, which has achieved
success to date in the development of rural areas, must
not lose its positive effect as a stimulus to small
regions because of the planned horizontal orientation.
The Committee therefore calls upon the Commission,
in preparing the Community initiative,
further to
strengthen the position of the local action groups in
the planning and implementation of programmes, so
as to give a clear signal of acknowledgement of
these groups’ competence for autonomous regional
development. Thus what is needed is not a bureaucratic
integration into the horizontal rural development
programme, but rather cooperation and coordination.
The implementation of the new rural development
Community Initiative must be based on the principles
of programming and partnership.
If Local Action
Groups are adopted, they should work closely with
locally and regionally led partnerships, operating
according to principles of accountability and trans-
parency. With particular reference to the Community
rural development initiative, the Committee welcomes
the importance given to this sector. This sector needs
to be strengthened, as is shown in part by the positive
results of the Leader experiment. In this regard, it is
stressed that the principle of ‘bottom-up’ planning —
essential to effective rural development action — must
be preserved and reinforced.
In the interests of
consistency and compatibility, it should also be ensured
that the initiative is built into the planning documents.

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2.2.4. C h a p t e r I V :

I n n o v a t i v e m e a s u r e s
a n d t e c h n i c a l a s s i s t a n c e ( A r t i c l e s
2 1 - 2 3 )

2.2.4.1.
The Committee of the Regions proposes that
the close link between the innovative measures and the
eligible area programmes and other regional strategy
formation programmes be enshrined in the Treaty.
The tender and selection procedure for the innovative
measures should retain a strong Community dimension
in order to safeguard the granting to local players and
representatives of civil society of access to the Structural
Funds. The abovementioned procedure should, how-
ever, be framed in such way that expectations are not
aroused which cannot be fulfilled because of the limited
amount of actual assistance. Before funding is allocated
for innovative measures and pilot projects in Objective 1
and 2 areas the Commission should consult the bodies
entrusted with administration of the programmes in
order to ensure that the activities are coherent.

The Committee of the Regions points out
2.2.4.2.
that the innovative actions and pilot projects must be
available to all regions, possibly in partnership with
those regions which are entitled to assistance under the
Objectives. As part of the efforts to simplify and
streamline these instruments, steps should be taken in
the future to ensure transparent criteria, unbureaucratic
management, decentralized administration and con-
tinued scope for assistance to small pilot projects.

2.2.5. C h a p t e r V : M a j o r p r o j e c t s

( A r -

t i c l e s 2 4 - 2 5 )

The Committee of the Regions is pleased that
2.2.5.1.
the Commission intends to raise the threshold for major
projects to a total cost of Euro 50 million. However, the
approvals for major projects should continue to be
granted, as hitherto, in the framework of the approved
programmes, rather than on a separate basis to be
defined by the Commission. The planning uncertainty
associated with the Commission proposal and the
time-consuming approval and administration pro-
cedures give rise to fears that in future major projects
will rarely be financed from the European Funds, if at
all.

2.2.5.2.
It does not seem appropriate for the Com-
mission to be able subsequently to confirm or amend
the level of the Community contribution, if the project
is part of a priority, in respect of which the co-financing
proportion has been negotiated under the Community
support framework.

2.2.6. C h a p t e r V I : G l o b a l

g r a n t s

( A r -

t i c l e 2 6 )

The Committee of the Regions considers it
2.2.6.1.
necessary to maintain global grants as a form of
assistance independent of the operational programmes,
as the global grants were originally designed to provide
a more dynamic instrument, more attuned to economic
reality, than the operational programmes. Moreover,
the removal of the global grants as a form of assistance

would make their use slower and more cumbersome than
that of the operational programmes. The Committee of
the Regions endorses the possibility provided for in the
framework regulation for an intermediate body to reach
an agreement with the Commission on the use of global
grants in Community initiatives, within the framework
of the partnership with the regions, local authorities and
Member States concerned. The COR considers that
bodies should be designated to mediate between the
competent local and regional authorities.

2.3. Title III: Contributions and financial manage-

ment by the Funds

2.3.1. C h a p t e r

I :
b u t i o n s b y
2 7 - 2 9 )

F i n a n c i a l
t h e F u n d s

c o n t r i -
( A r t i c l e s

2.3.1.1. With a view to greater flexibility in the
implementation of operational programmes, the Com-
mittee of the Regions feels that the decision as to whether
programmes should be financed from a single fund or
from several should be taken in partnership with the
managing authorities.

2.3.1.2.
The Committee of the Regions considers that
the financial participation of the Funds should continue
to take the traditional form of subsidies. Recourse to
other forms, such as those mooted for the first time in
the draft regulation (repayable assistance, interest-rate
subsidy, guarantee etc.) could perhaps be contemplated
as complementary approaches but under no circum-
stances as substitutes for subsidies.

The Committee of the Regions advocates the
2.3.1.3.
retention of the existing limits on fund participation in
eligible costs and eligible public expenditure. There is
perceived to be no need for further differentiation of the
participation rates in the framework of the regulation.
If necessary the participation limits for Community
funding could be eased, e.g. in the case of peripheral or
ultra-peripheral regions, to take account of specific
situations and difficulties. This could be agreed on the
basis of partnership under the Community support
frameworks or the programme planning documents
with due regard to the provisions of Community law on
the monitoring of aid.

The Committee of the Regions suggests that
2.3.1.4.
a clear definition of the eligibility of expenditure
on operations and innovative measures is needed in
consultation with the Member States before the new
programmes begin. To simplify operation as far as
possible, the relevant framework regulation should refer
to the SEM work sheets (work sheets on the eligibility
for assistance of expenditure under the Structural Funds).

2.3.2. C h a p t e r I I : F i n a n c i a l m a n a g e m e n t

( A r t i c l e s 3 0 - 3 2 )

2.3.2.1.
The Commission proposes that any commit-
ments for which no acceptable payment application has
been received within two years be automatically

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decommitted and the contribution of the Funds reduced
by that amount. While recognizing the need for Com-
munity credits to be managed strictly, the Committee of
the Regions is concerned as to the consequences of
this type of proposal, as it would increase planning
uncertainty in the beneficiary regions and would hinder
efforts to carry out high-quality, and thus in some cases
longer-term, projects. The regional and local authorities
must make binding payment commitments to the final
beneficiaries during the funding period. If, because of
external problems, the funds are not available, this could
pose intractable problems for regional and local budgets.
The flexibility of the Structural Funds to span financial
years must therefore be retained. This also applies to
the requirement that the European Parliament carry
over Structural Fund resources in the budget.

2.3.2.2.
The Committee of the Regions considers that
the four-month deadline (until 30 April) which the
Commission proposes in the draft regulation for the
adoption of budget agreements for the proposed funding
is too long and should be reduced.

2.3.2.3.
The Committee of the Regions feels that the
period of ‘two months from receipt of an acceptable
application’ within which payment is to be made by the
Commission should be mandatory rather than a ‘general
rule’

2.3.2.4.
The Committee notes with interest that in
the coming funding period the Commission plans to put
management of the Funds on a reimbursement basis
whereby, apart from a single advance of 10 % of
total costs, all payments by the Commission to Fund
administrators will take the form of reimbursement of
expenditure actually made, supported by receipted
invoices. However, the Committee fears that this would,
at the latest during the second half of the programme
period, place an unacceptable burden on the budgets of
the regional and local authorities, from which these
costs would have to be pre-financed. In the light of
current budget constraints, this would be an excessive
burden which could only result in complications in the
deployment of Structural Fund resources.

The requirement on the Member States to
2.3.2.5.
submit to the Commission by 30 April each year an
updated forecast of applications for payment for the
current and following budget years will entail a major
commitment for administrations. The Committee of the
Regions considers that it would be more appropriate to
require that the programme for the current and following
financial years be submitted to the Commission by
31 May of each year to allow time for any necessary
revision of the payment forecasts for the two years in
question.

2.4. Title IV: Effectiveness of assistance from the

funds

2.4.1. C h a p t e r I : M o n i t o r i n g

( A r t i c l e s

3 3 - 3 6 )

2.4.1.1. With regard to the annual review of the main
outcomes of the previous year to be carried out by the
Commission and the managing authorities, the draft
regulation does not make clear the weight to be assigned
to any comments or recommendations made by the
Commission in the light of this review, nor the status of
these in the event that they are rejected by a managing
authority. The Committee of the Regions feels that these
comments and recommendations should be made in the
framework of partnership and not unilaterally by the
Commission.

2.4.1.2.
The Committee of the Regions was expecting
the monitoring committees to be granted new powers,
as the Commission had itself suggested. The matter is
unfortunately not clearly resolved in the draft regulation.
The Committee feels that in particular the right of the
monitoring committee to make the final decision on
small and medium-sized programme changes — includ-
ing the limited transfer of funds between the priorities
of an operational programme — should be strengthened.
This would make use of the Structural Funds more
flexible and bring it more closely into line with practice,
as well as significantly strengthening the role of the
regional and local authorities and other partners. The
Committee of the Regions urges the Commission to play
an active and responsible role in the work of the
monitoring committees, as part of the cooperation
procedure

2.4.1.3.
The Committee of the Regions also welcomes
the proposed distinction between the partners rep-
resented on the committee on the basis of their financial
responsibility for assistance. This model should also be
used in relation to human resources.

2.4.1.4.
The number, level and size of the monitoring
committees to be established should be agreed in the
Community support framework or the programme
planning document with due regard to the specific
features of the Member State.

The Committee of the Regions draws atten-
2.4.1.5.
tion to its proposal that the material and financial
indicators for the monitoring of assistance be laid down
in partnership in the framework of the programme
planning decisions. The indicators should be established
after consultation and in line with the specific conditions
and needs of the regions responsible for the practical
implementation of the programmes.

2.4.2. C h a p t e r

I I :

F i n a n c i a l

c o n t r o l

( A r t i c l e s 3 7 - 3 8 )

2.4.2.1.
The Committee of the Regions proposes that
the activities of the various Community-level control
bodies, such as the financial control departments of

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DGs XVI and XX, checks by the Court of Auditors and
occasional checks by UCLAF be stepped up. These
controls should be standardized with a view to the
greatest possible effectiveness. In this respect, consider-
ation should be given to coordination between Com-
munity control bodies and the bodies responsible at
national, regional and local level. The procedure, accord-
ing to which the Member States are to take remedial
measures in line with the Commission’s recommen-
dations or requirements, is not clear. Nor is it clear in
what cases and in what way the Commission is entitled
to withhold payments in whole or in part in the event
of irregularities. There should be a more effective
partnership procedure for this eventuality too. In the
case of Community structural measures having modest
levels of funding, such as innovative measures, the
eligibility rules should be made more flexible and a
retrospective system of financial control should be
introduced; the latter system should be backed up by
machinery for the pooling of risks.

2.4.2.2.
The Committee of the Regions considers that
financial corrective measures should be carried out in
the framework of cooperation with suitable procedural
guarantees.

accepted method for the evaluation of operational
programmes to be established in accordance with the
principle of cooperation.

2.4.3.3.
Any evaluation should be based on the
principle of cooperation. The Committee would there-
fore like to see establishment of an arbitration body
which could, in cases of conflict, settle differences over
evaluations between the Member State and regions on
the one hand and the Commission’s departments on the
other.

2.4.3.4. With regard to the ex ante evaluation of
plans, the Committee of the Regions notes with concern
that the requirements are very extensive and ill-defined,
particularly the short deadlines for submission and the
requirements for preparation.

2.4.3.5.
The Committee of the Regions would like to
see the mid-term evaluation initiated and coordinated by
the managing authority and approved by the monitoring
committee, on which, if the COR’s recommendation in
this opinion is heeded, the Commission would be an
active, voting participant. In this way a subsequent
Commission pronouncement on the accuracy and quality
of the evaluation would be unnecessary.

2.4.3. C h a p t e r I I I : E v a l u a t i o n ( A r t i c l e s

3 9 - 4 2 )

2.5. Title VI: Committees

2.4.3.1.
The Commission’s proposal for a regulation
stresses the appropriateness of evaluations, and in the
view of the Committee of the Regions this is beyond
dispute. Such evaluations would bring clear added value
in terms of the transparency and effectiveness of Fund
activities.

2.4.3.2.
Regional policy has essentially been im-
plemented on the basis of operational programmes and
it is planned that this should continue in the new period.
The Committee of the Regions notes however that there
is no single accepted and viable method for the evaluation
of operational programmes. There are methods for the
evaluation of projects, but not for the multiplicity of
actions which an operational programme may comprise.
Consequently, without calling into question the principle
of evaluation, it would be a good thing for a generally

Brussels, 17 September 1998.

2.5.1.
The COR proposes that local and regional
authorities — as part of their national delegations — be
guaranteed a place on the advisory and management
committees which are to advise the Commission on
development and conversion of the regions, Treaty
Article 124, rural development, fisheries and aquaculture
and Community Initiatives.
It would be a logical
consequence of the Commission’s intention to enhance
partnership that involvement in these bodies should not
be limited to the Member States. The COR also proposes
that, as well as the European Parliament, the COR be
kept informed of the work of the committees.

3.
The Committee of the Regions calls on the Com-
mission to revise the proposal for a Council Regulation
laying down general provisions on the Structural Funds
and, in so doing, to take account of the Committee’s
suggestions.

The President

of the Committee of the Regions

Manfred DAMMEYER