Amended proposal for a Regulation of the European Parliament and of the Council on the European Social Fund (presented by the Commission pursuant to Article 250 (2) of the EC-Treaty)
Date: 2005-10-17
Institutions: European Commission
Subjects: EU regional policy, European Social Fund, economic and social cohesion, employment policy, equal treatment, operation of the Institutions, regional development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.10.2005 
COM (2005) 523 final 

2004/0165 (COD) 

Amended proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the European Social Fund 

(presented by the Commission pursuant to Article 250 (2) 
of the EC-Treaty) 

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EXPLANATORY MEMORANDUM 

1. 

(1) 

(2) 

(3) 

(4) 

INTRODUCTION 

On  14  July  2004,  the  Commission  adopted  a  proposal  for  a  new  Regulation  of  the 
European Parliament and of the Council on the European Social Fund1. This proposal 
was forwarded to the European Parliament and the Council on 15 July 2004. 

On  9  March  2005,  the  Economic  and  Social  Committee  gave  its  opinion  on  the 
Commission proposal2.  

The Committee of the Regions gave its opinion on the 23 February 20053. 

The European Parliament gave its opinion at first reading on 6 July 20054. 

2. 

OBJECTIVE OF THE PROPOSAL 

The European Social Fund (ESF) contributes to the economic and social cohesion objective 
set in article 158 of the EC Treaty, by supporting policies and priorities aiming to achieve full 
employment,  improve  quality  and  productivity  at  work,  and  promote  social  inclusion  and 
cohesion,  in  line  with  the  guidelines  and  recommendations  of  the  European  Employment 
Strategy (EES). 

In  order  to  achieve  this  objective,  the  ESF  needs  to  address  three  major  challenges: 
employment  disparities,  social  inequalities,  skills  gaps  and  labour  shortages  in  an  enlarged 
Union;  economic  and  social  restructuring  due  to  globalisation  and  the  development  of  the 
knowledge-based economy; and demographic changes which have resulted in a shrinking and 
ageing workforce.  

The  Commission  has  proposed  a  simplified  delivery  mechanism  for  cohesion  policy  while 
maintaining  the  key principles of programming, partnership, co-financing and evaluation. A 
fundamental  element  of  this  reform  is  to  encourage  a  more  strategic  approach  to 
programming,  aiming  to  enhance  concentration  and  focus  of  European  Social  Fund 
interventions in the context of the Lisbon agenda and the European Employment Strategy. 

3. 

COMMISSION OPINION ON THE ADOPTED AMENDMENTS 

On  6  July  2005  the  European  Parliament  adopted  85  amendments.  The  Commission  is 
prepared to accept, in part or in full, the amendments set out below. 

•  Amendment n° 3 (lists policy areas); see recital 7; 

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COM (2004) 493 final 
OJ C […], […], p. […] 
OJ C […], […], p. […] 
OJ C […], […], p. […] 

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•  Amendment  n°  4:  (stresses  the  importance  of  present  and  future  challenges  for  the 

European Union); see new recital 4; 

•  Amendment  n°  5:  (stresses  the  importance  and  modernisation  of  the  European  social 

model); see new recital 4; 

•  Amendment n° 6: (stresses the importance of mainstreaming the different principles of the 

EQUAL community initiative); see new recital 6; 

•  Amendment n° 7: (lists actions with a view to better anticipating and managing change); 

see recital 9; 

•  Amendment  n°  8:  (preventive  approach  for  tackling  the  relevant  dimensions  of 

demographic change); see new recital 8; 

•  Amendment n° 9: (reference to economically inactive persons); see recital 9; 

•  Amendment n° 10: (reference to outermost regions); see article 4 paragraph 2. 

•  Amendment n° 11: (actions in favour of innovative activities); see recital 12; 

•  Amendment n° 12: (stresses the importance of integrating trans-national co-operation as a 

fundamental dimension in the scope of the ESF); see recital 12;  

•  Amendment n° 84: (concentration of the limited resources available so that expenditure is 

coherent with other funds and policies); see recital 13; 

•  Amendment n° 16: (ESF support for disadvantaged groups); see recital 15;  

•  Amendment  n°  17:  (exchange  of  experience  in  the  domain  of  social  exclusion  and 

discrimination); see recital 16; 

•  Amendment n° 87: (clarification of the mission of the Fund); see article 2, paragraph 1; 

•  Amendment n° 19: (social inclusion); see article 2 paragraph 2; 

•  Amendment  n°  21:  (reinforces  the  importance  of  ESF  support  to  innovative  actions  in 

Member States and trans-national co-operation); see article 3, paragraph 4 

•  Amendment  n°  23:  (includes  additional  elements  such  as  lifelong  learning  and  business 

start-ups); see article 3, paragraph 1, point (a) (i); 

•  Amendment n° 24 and 93: (clarification of the text ); see article 3, paragraph 1, point (a) 

(ii); 

•  Amendment  n°  25:  (ESF  support  for  disadvantaged  groups);  see  article  3,  paragraph  1, 

point (b); 

•  Amendment  n°  26:  (strengthens  the  link  to  the  European  Employment  Strategy);  see 

article 3, paragraph 1, point (b) (i); 

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•  Amendment n° 27: (clarification of the  text);  see article 3, paragraph 1, point (a)(i) and 

article 3, paragraph 1, point (b)(ii); 

•  Amendment n° 28: (gender mainstreaming); see article 3, paragraph 1, point (b) (iii); 

•  Amendment  n°  29:  (specific  measures  to  reconcile  work  and  private  life);  see  article  3, 

paragraph 1, point (b) (ii); 

•  Amendment  n°  32:  (reinforces  the  need  for  combating social  exclusion  and  all  kinds  of 

discrimination); see article 3, paragraph 1, point (c); 

•  Amendment  n°  33:  (ESF  support  for  disadvantaged  groups);  see  article  3,  paragraph  1, 

point (c) (i);  

•  Amendment n° 34: (specific measures to improve social inclusion of migrants); see article 

3, paragraph 1, point (b) (iv); 

•  Amendment  n° 35: (measures to combat discrimination in the workplace); see article 3, 

paragraph 1, point (c) (ii); 

•  Amendment  n°  38:  (actions  to  facilitate  the  re-entry  to  the  labour  market  of  those  from 
disadvantaged  groups,  persons  with  disabilities  and  those  providing  care  for  dependent 
persons); see article 3, paragraph 1, point (c) (i); 

•  Amendment  n°  40:  (visibility  for  the  role  of  social  partners  and  non-governmental 

organisations); see article 3, paragraph 1, point (e); 

•  Amendment n° 88: (makes design and introduction of reforms in education and training 
systems eligible under the regional competitiveness and employment objective); see article 
3, paragraph 1, point (d)(i); 

•  Amendment  n°  89:  (scope  of  assistance  applies  to  territory  of  Cohesion  Countries);  see 

article 3, paragraph 3; 

•  Amendment  n°  41:  (includes  additional  elements  such  as  lifelong  learning  and  business 
start-ups); see article 3, paragraph 1, point (a) (i) and article 3, paragraph 2, point (a) (i); 

•  Amendment n° 42: (prevention of segregation); see article 3, paragraph 2, point (a) (ii); 

•  Amendment  n°  46:  (reference  to  ongoing  training  and  representative  professional 

organisations); see article 3, paragraph 2, point (b) (ii); 

•  Amendment  n°  48:  (information  and  awareness  raising  measures);  provisions  regarding 
information and awareness raising actions will be part of the Implementing Regulation;  

•  Amendment n° 49: (technical correction); see article 3, paragraph 5; 

•  Amendment n° 50: (link to the European Employment Strategy and to social inclusion); 

see article 4, paragraph 1; 

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•  Amendment n° 51: (clarification of the type of geographic areas to be taken into account 

in the operational programmes); see article 4, paragraph 2; 

•  Amendment  n°  52:  (adds  the  dimension  "non-discrimination"  and  "equality  between 

women and men" to quantified objectives and indicators); see article 4, paragraph 4; 

•  Amendment  n°  53:  (adds  the  dimension  "non-discrimination"  and  "equality  between 

women and men" to the evaluation analysis); see article 4, paragraph 5; 

•  Amendment  n°  54:  (gives  visibility  to  the  role  of  social  partners  and  non  governmental 

organisations); see article 5, paragraph 2; 

•  Amendment  n°  55:  (information  and  awareness  raising  measures);  provisions  regarding 
information and awareness raising actions will be part of the Implementing Regulation;  

•  Amendment n° 56: (technical correction); see article 5, paragraph 3, subparagraph 1; 

•  Amendment n° 62: (expanded title – Gender equality and equal opportunities); article 6, 

title; 

•  Amendment  n°  63:  (strengthens  gender  mainstreaming,  including  in  the  ex  ante 

evaluation); see article 6;  

•  Amendment n° 64: (strengthens gender mainstreaming); see article 6;  

•  Amendment n° 65: (gender balanced participation); see article 6; 

•  Amendment n° 66: (provisions against discrimination); see article 6 and recital 15;  

•  Amendment n° 71: (title – Progress and implementation reports); see article 10, title; 

•  Amendment n° 73: (provisions for annual reports); see article 10 overall and in particular 

article 10, paragraph (d); 

•  Amendment n° 74: (reporting on migrants and their access to employment); see article 10, 

paragraph (b); 

•  Amendment  n°  75:  (reporting  on  support  for  disadvantaged  groups);  see  article  10, 

paragraph (c) and (d); 

•  Amendment n° 76: (reporting on social integration); see article 10, paragraph (d); 

•  Amendment  n°  81:  (creation  of  self-employment  and  business  start-ups);  see  article  3, 

paragraph 1, point (a); 

•  Amendment n° 82: (coordination of European Social Fund and the Lisbon strategy); see 

article 4 paragraph 3; 

•  Amendment n° 83: (social exclusion); see article 10 paragraph (d); 

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•  Amendment  n°  92:  (European  Union  laws  as  transposed  into  national  legislation  are 

applicable); see article 11, paragraph 1;  

4. 

CONCLUSION 

Having  regard  to  Article  250(2)  of  the  Treaty,  the  Commission  modifies  its  proposal  as 
follows. 

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2004/0165 (COD) 

Amended pProposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

on the European Social Fund 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
148 thereof, 

Having regard to the proposal from the Commission5, 

Having regard to the opinion of the European Economic and Social Committee6, 

Having regard to the opinion of the Committee of the Regions7, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty8, 

Whereas: 

(1) 

Regulation (EC) No […] laying down general provisions on the European Regional 
Development Fund,  the  European Social Fund Structural Funds and the Cohesion 
Fund9 establishes the framework for action by the Structural Funds and the Cohesion 
Fund  and  lays  down,  in  particular,  the  objectives,  principles  and  rules  concerning 
partnership,  programming,  evaluation  and  management.  It  is  therefore  necessary  to 
define the missiontasks of the European Social Fund (hereinafter "ESF") in relation to 
the tasks prescribed underlaid down in Article 146 of the Treaty, and in the context of 
the  Member  States  and  the  Community's  work  towards  seeking  to  developing  a  co-
ordinated strategy for employment, as provided for underin accordance with Article 
125  of  the  Treaty.  In  the  interest  of  clarity,  Regulation  (EC)  No  1784/1999  of  the 
European  Parliament  and  of  the  Council  of  12  July  1999  on  the  European  Social 
Fund10 should be replaced. 

(2) 

Specific  provisions  concerning  the  type  of  activities  which  may  be  financed  by  the 
ESF  under  the  objectives  defined  in  Regulation  (EC)  No  […]  [laying  down  general 
provisions  on  the  European  Regional  Development  Fund,  the  European  Social 
Fund Structural Funds and the Cohesion Fund] need to be laid down. 

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OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 213, 13.8.1999, p. 5. 

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(3) 

(4) 

(5) 

(6) 

The  ESF  should  strengthen  economic  and  social  cohesion  by  improving 
employment  opportunities  within  the  framework  of  the  tasks  entrusted  to  it  by 
Article  146  and  Article  159  of  the  Treaty,  in  accordance  with  the  provisions  of 
Regulation  (EC)  No  […]  [laying  down  general  provisions  on  the  European 
Regional Development Fund, the European Social Fund and the Cohesion Fund]. 

This  approach  is  all  the  more  significant  in  the  light  of  the  challenges  arising 
from  the  enlargement  of  the  Union  and  the  phenomenon  of  economic 
globalisation.  In  this  connection,  the  importance  of  the  European  social  model 
and its modernisation must be acknowledged. 

In  accordance  with  Article  99  and  128  of  the  Treaty,  and  with  a  view  to 
refocusing  the  Lisbon  strategy  on  growth  and  jobs,  the  Council  has  adopted  an 
integrated  package  comprising  Broad  Economic  Policy  Guidelines  and 
Employment Guidelines; the latter set out employment objectives, priorities and 
targets. In this regard, the European Council [of 22nd and 23rd March 2005] has 
called for the mobilisation of all appropriate national and Community resources 
including cohesion policy. 

New lessons have been learnt from the Community initiative programme known 
as  EQUAL,  especially  in  respect  to  the  combination  of  local,  regional,  national 
and European action. These lessons should be integrated into all European Social 
Fund  support.  Particular  attention  should  be  paid  to  the  participation  of  target 
groups,  the  identification  of  policy  issues  and  their  subsequent  mainstreaming, 
innovation and experimentation techniques, methodologies for trans-national co-
operation, outreach to groups marginalised from the labour market, the impact 
of social issues on the internal market, and access to and management of projects 
taken on by non-governmental organisations.  

(3)(7)  The ESF should support the policies of Member States which are closely in line with 
the guidelines and recommendations made under the European Employment Strategy 
and  the  agreed  objectives  of  the  Community  in  relation  to  social  inclusion,  non-
discrimination,  the  promotion  of  equality  between  men  and  women,  and 
education  and  training.  In  this  respect,  the  Education  and  Training  2010  work 
programme  which  is  based  on  comprehensive  and  coherent  national  lifelong 
learning strategies and applies the concept of lifelong learning both within and 
outside  the  place  of  work  with  special  attention  to  initial  training,  should  be 
taken  into  account.  Further,  the  ESF  should  to  better  contribute  to  the 
implementation  of  the  objectives  and  targets  agreed  at  the  Lisbon  and  Gothenburg 
European  Councils,  with  a  view  to  establishing  conditions  which  will  enable 
higher levels of productivity and competitiveness to be achieved, greater social 
cohesion to be generated and better jobs to be created. 

(8) 

The ESF should also act in a preventive way by tackling the relevant dimensions 
and  consequences  of  demographic  changes  in  the  active  population  of  the 
Community, in particular through lifelong vocational training. 

(4)(9)  With  a  view  to  better  anticipating  and  managing  change  under  the  regional 
competitiveness  and  employment  objective,  assistance  by  the  ESF  should  focus,  in 
particular,  on  increasing  the  adaptability  of  workers,  and  enterprises,  and 
entrepreneurs  to  the  effects  of  globalisation  and  business  restructuring,  it 

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should  concern  itself  with  extending  workers'  qualifications,  encouraging 
economically inactive persons to re-enter the labour market, improving working 
conditions,  taking  proactive  measures,  such  as  outplacement  and  personalised 
career  counselling  tailored  to  the  individual's  qualifications,  to  prevent 
redundancies  from  resulting  in  long-term  unemployment,  enhancing  access  to 
employment and participation in the labour market with the goal of achieving full 
employment, reinforcing the social inclusion of people at a disadvantage and their 
access  to  employment,  combating  the  forms  of  discrimination  enumerated  by 
Article 13 of the Treaty, and promoting partnerships for reform. 

(5)(10)  In  addition  to  these  priorities,  in  the  least  developed  regions  and  Member  States 
under the 'Cconvergence' objective and with a view to increasing economic growth, 
employment opportunities for women and men and quality and productivity at work, 
it  is  necessary  to  expand  and  improve  investment  in  human  capital  and  to  improve 
institutional,  administrative  and  judicial  capacity,  in  particular  to  prepare  and 
implement reforms and enforce the acquis Community legislation. 

(11)  Within the range of these priorities, the selection of ESF interventions should be 
flexible in order to address the specific challenges in each Member State and the 
types of priority action financed by the ESF should allow a margin of flexibility 
to respond to those challenges. 

(6)(12)  The promotion of innovative activities and trans-national co-operation is should be 
integrated  as a fundamental dimension which should  be  integrated in the  scope of 
the  ESF  as  regards  both  the  'Convergence'  objective  and  the  'Regional 
Competitiveness  and  Employment'  objective.  Innovative  ideas  should  be 
promoted and tried out in accordance with the guidelines and recommendations 
of the European Employment Strategy, and with the Community's objectives in 
the field of social inclusion.  

(7)(13)  It  is  necessary  to  ensure  the  coherence  of  the  action  of  the  ESF  with  the  policies 
provided  for  under  the  European  Employment  Strategy  and  to  concentrate  ESF 
support  on  the  implementation  of  the  guidelines  and  recommendations  on 
employment, the National Reform Programmes and the Community's objectives 
and  the  Member  States'  national  action  plans  on  social  inclusion.  The  ESF 
should also aim at achieving synergies with assistance from the other Funds, in 
favour of sustainable local, regional and national development. ESF support is 
also  of  key  importance  to  achieving  the  targets  regarding  social  inclusion  and 
education and training. 

(8)(14)  An efficient and effective implementation of the action supported by the ESF relies 
on  good  governance  and  partnership  between  all  relevant  territorial  and  socio-
economic actors and in particular the social partners and other stakeholders including 
those at regional and local level. 

(9)(15)  The Member States and the Commission must ensure that the implementation of the 
priorities financed by the ESF under the Convergence and Regional Competitiveness 
and Employment Objectives contribute to the promotion of equality and elimination 
of  inequalities  between  men  and  women;  using  a  gender  mainstreaming  approach 
should be combined with specific action to improve access to employment and to 
increase  sustainable  participation  and  progress  of  women  in  employment.  It  must 

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also  contribute  to  the  promotion  of  equality  and  prevention  of  discrimination 
particularly  that  faced  by  disadvantaged  groups  including  people  with 
disabilities, migrants and minorities. 

(10)(16) The  ESF  should  also  support  technical  assistance,  with  a  particular  focus  on 
encouraging  mutual  learning  through  exchanges  of  experiences,  dissemination, 
transfer  of  good  practices,  and  trans-national  and  inter-regional  co-operation  , 
and  on  highlighting  thus  enhancing  the  contribution  of  the  ESF  to  the  policy 
objectives  and  priorities  of  the  Community  in  relation  to  employment  and  social 
inclusion and combating social exclusion and discrimination. 

(11)(17) Regulation  (EC)  No  […]  [laying  down  general  provisions  on  the  European 
Regional Development Fund, the European Social Fund Structural Funds and the 
Cohesion  Fund]  provides  that  eligibility  of  expenditure  is  to  be  established  at 
national level, with certain exceptions, for which it is necessary to lay down specific 
provisions. The exceptions relating to the ESF should therefore be laid down. 

(18) 

In  the  interests  of  clarity,  Regulation  (EC)  No  1784/1999  of  the  European 
Parliament  and  of  the  Council  of  12  July  1999  on  the  European  Social  Fund11 
should be replaced. 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Subject  

This Regulation establishes the tasks of the European Social Fund ("ESF") and the scope of 
its  assistance  with  regard  to  the  "Convergence"  and  the  "Regional  competitiveness  and 
employment" objectives as defined in Article 3 of Regulation (EC) N° […] and the types of 
expenditure eligible for assistance. 

Article 2 

MissionTasks 

1. 

The  ESF  shall  contribute  to  the  priorities  of  the  Community  as  regards 
strengthening economic and social cohesion, a high level of employment and more 
and  better  jobs  by  improving  employment  opportunities.  It  shall  do  so  by 
supporting  Member  States'  policies  aiming  to  achieve  full  employment,  improve 
including 
quality  and  productivity  at  work  and  promote  social 
disadvantaged  people’s  access  to  employment,  and  the  reduction  of  national, 
regional and local employment disparities. 

inclusion, 

In  particular,  the  ESF  shall  support  action  in  line  with  the  guidelines  and 
recommendations adopted under the European Employment Strategy.  

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OJ L 213, 13.8.1999, p. 5. 

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2. 

In  carrying  out  the  tasks  referred  to  in  paragraph  1,  the  ESF  shall  support  the 
priorities  of  the  Community  as  regards  the  need  to  reinforce  social  cohesion, 
strengthen competitiveness and promote environmentally sound economic growth. 

In particular, it so doing, the ESF shall take into account the relevant priorities and 
objectives of the Community in the fields of social inclusion, education and training, 
increasing  the  participation  of  economically  inactive  people  in  the  labour 
market,  combating  social  exclusion  -  especially  the  exclusion  of  disadvantaged 
groups  -  and  promoting  equality  between  women  and  men  and  non-
discrimination.  

Article 3 

Scope of assistance 

1. 

Within the framework of the 'Cconvergence' and the 'Rregional competitiveness and 
employment' objectives, the ESF shall support actions under the following priorities: 

(a) 

increasing adaptability of workers, and enterprises and entrepreneurs, with a 
view to improving the anticipation and positive management of economic 
change, in particular by promoting: 

(i) 

(ii) 

lifelong  learning  and  increased  investment  in  human  resources  by 
enterprises, especially SMEs, and workers, through the development and 
implementation  of  lifelong  learning  systems  and  strategies,  including 
apprenticeships,  which  ensure  improved  access  to  training  of,  in 
particular, low skilled and older workers, transparency development of 
qualifications  and  competences,  dissemination  of  ICT,  e-learning  and 
management  skills  and 
the  promotion  of  entrepreneurship,  and 
innovation and business start ups; 

the  anticipation  and  positive  management  of  economic  change,  notably 
through the design and dissemination of innovative and more productive 
forms of work organisation, including better health and safety at  work, 
the identification of future occupational and skills requirements, and the 
development  of  specific  employment,  training  and  support  services,  as 
well  as  outplacement,  for  to  workers  in  the  context  of  company  and 
sector restructuring. 

(b) 

enhancing access to employment and the sustainable inclusion in the labour 
market  of  job  seekers  and  inactive  people,  preventing  unemployment,  in 
particular long-term and youth unemployment, encouraging active ageing 
and prolonging working lives and increasing participation in the labour market 
of women and migrants, in particular by promoting: 

(i) 

the  modernisation  and  strengthening  of  labour  market  institutions,  in 
particular  employment  services  and  other  relevant  initiatives  in  the 
context  of  the  Community’s  and  the  Member  States’  strategies  for 
full employment; 

(ii) 

the  implementation  of  active  and  preventive  measures  ensuring  early 
identification  of  needs  with  individual  action  plans  and  personalised 

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co-operative 

support, job search, and mobility, self-employment and business creation 
encourage 
including 
participation  in  the  labour  market,  flexible  mechanisms  to  retain 
older workers longer in employment and measures to reconcile work 
and private life, such as facilitating access to childcare and care for 
dependent persons; 

enterprises, 

incentives 

to 

(iii)  mainstreaming  and  specific  action  to  improve  access  to  employment 
and  increase  sustainable  participation  and  progress  of  women  in 
employment,  to  reduce  and  to  eliminate  direct  and  indirect  gender-
based segregation in the labour market inter aliaincluding by addressing 
the  roots  causes  of  the  gender  pay  gaps,  and  to  reconcile  work  and 
private  life  including  by  facilitating  access  to  childcare  and  care  for 
dependent persons; 

(iv)  specific action to strengthen the social integration of increase migrants’ 
and  increase  their  participation  in  employment  thereby  strengthening 
their  social  integration,  to  facilitate  geographic  and  occupational 
mobility of workers and integration of cross-border labour markets, 
including  through  guidance  and  language  training  and  validation  of 
competences and acquired abroad skills. 

(c) 

reinforcing  social  inclusion  of  people  at  a  disadvantage  with  a  view  to  their 
sustainable  integration  in  employment  and  combating  all  forms  of 
discrimination in the labour market, in particular by promoting: 

(i) 

pathways to integration and re-entry into employment for disadvantaged 
people  such  as,  people  experiencing  social  exclusion,  early  school 
leavers,  minorities,  and  people  with  disabilities  and  people  providing 
care for dependent persons, through employability measures, including 
in the field of the social economy, access to vocational education and 
training,  and  accompanying  actions  and  relevant  social  support, 
community and care services that improve employment opportunities; 

(ii)  acceptance  of  diversity  in  the  workplace  and  the  combating  against 
discrimination  in  accessing  to,  and  promotion  within,  the  labour 
market,  which  may  be  achieved  inter  alia  through  awareness-raising 
and  the  involvement  of  local  communities  and  enterprises  and  the 
promotion of local employment initiatives. 

(d) 

enhancing human capital, in particular by promoting: 

(i) 

the  design  and  introduction  of  reforms  in  education  and  training 
systems  in  order  to  develop  employability,  improve  the  labour 
market  relevance  of  initial  and  vocational  education  and  training 
and continual updating of skills of training personnel with a view to 
a knowledge based economy; 

(ii)  networking activities between higher education institutions, research 

and technological centres and enterprises. 

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(d)(e) mobilising for reforms in the fields of employment and inclusion, in particular 
the  further  development  and 
by  promoting  business  start-ups  and 
implementation of partnerships, and pacts and initiatives through networking 
of  relevant  stakeholders  such  as  social  partners  and  non-governmental 
organisations at national, regional, and local and trans-national level. 

2. 

Within  the  framework  of  the  'Cconvergence'  objective  the  ESF  shall  also  support 
action under the following priorities: 

(a) 

expanding  and  improving  investment  in  human  capital,  in  particular  by 
promoting: 

(i) 

(ii) 

(iii) 

the  implementation  of  reforms  in  education  and  training  systems, 
especially  with  a  view  to  raising  their  responsiveness  to  the  needs  of  a 
knowledge-based  society  and  lifelong  learning  improving  the  labour 
market  relevance  of  initial  education  and  training  and  continually 
updating the skills of teaching and other personnel; 

increased  participation  in  education  and  training  throughout  the  life-
cycle, including through action to achieve a significant declinereduction 
in  early  school  leaving  and  segregation,  and  increased  access  to  and 
quality of initial, vocational and tertiary education and training; 

the development of human potential in research and innovation, notably 
through  post-graduate  studies  and  training  of  researchers  and  related 
networking  activities  between  universities, 
research  centres  and 
enterprises. 

(b) 

strengthening institutional capacity and the efficiency of public administrations 
and public services at national, regional and local level and, where relevant, 
the  social  partners  and  non-governmental  organisations  with  a  view  to 
embrace  reforms,  and  good  governance,  and  better  regulation,  especially  in 
the  economic,  employment,  social,  environmental  and  judicial  fields,  in 
particular by promoting: 

(i)  mechanisms to improve good policy and programme design, monitoring 
and evaluation, through studies, statistics and expertise advice, support to 
interdepartmental coordination and dialogue between relevant public and 
private bodies; 

(ii) 

capacity  building  in  the  delivery  of  policies  and  programmes  in  the 
relevant fields, including with regard to the enforcement of legislation, 
especially through continuous managerial and staff training and specific 
support  to  key  services,  inspectorates  and  socio-economic  actors 
including  social  partners,  relevant  non-governmental  organisations  and 
representative professional organisations. 

3. 

The ESF may support the actions set out in Article 3(2) throughout the territory 
of the Member States eligible for financial assistance under the Cohesion Fund, 
as defined in Article 5 (3) of [Regulation N° […] [laying down general provisions 

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on  the  European  Regional  Development  Fund,  the  European  Social  Fund  and 
the Cohesion Fund]. 

3.4. 

In implementing the objectives and priorities referred to in paragraphs 1 and 2, the 
ESF  shall  support  the  promotion  and  mainstreaming  of  innovative  activities  in 
Member States as well as trans-national and inter-regional co-operation in particular 
through sharing of information, experiences, results and good practices, and through 
developing complementary approaches and coordinated or joint action. 

4.5. 

In implementing the social inclusion priority referred to in paragraph 21 (c) (i), the 
financing  by  the  ESF  of  actions  within  the  scope  of  the  Regulation  (EC)  N°  […] 
[ERDF] may amount to a maximum of 10% of the priority axis concerned.  

1. 

2. 

3. 

4. 

Article 4 

Coherence and concentration 

The Member States and managing authorities shall ensure that the action supported 
by  the  ESF  is  consistent  with  and  underpins  the  implementation  contributes  to 
actions  undertaken  in  pursuance  of  the  European  Employment  Strategy.  In 
particular,  they  shall  ensure  that  the  action  set  out  in  the  National  Strategic 
Reference  Framework  strategic  frame  of  reference  and  in  the  operational 
programmes  promote  the  objectives,  priorities  and  targets  of  the  Strategy  in  each 
Member  State  within  the  framework  of  the  national  reform  programmes  and 
national  action  plans  for  social  inclusion.  Member  states  shall  also  and 
concentrate support in particular where the ESF can contribute to policies, on the 
implementation  of 
the  relevant  employment  recommendations  made  under 
Article 128(4)  of  the  Treaty  and  as  well  as  of  the  relevant  employment  related 
objectives  of  the  Community  in  the  field  of  social  inclusion,  education  and 
training. 

Within  operational  programmes,  resources  shall  be  directed  towards  the  most 
important  needs  and  focus  on  those  policy  areas  to  which  ESF  support  can  bring 
about  a  significant  effect  in  view  of  the  attainment  of  the  objectives  of  the 
programme.  To  maximise  the  efficiency  of  ESF  support,  operational  programmes 
shall, where appropriate, take particular account of the regions and localities facing 
most  serious  problems,  such  as  including  deprived  urban  areas,  outermost 
regions,and  declining  rural  areas,  areas  and  fisheries  dependent  on  fishingareas 
and those areas particularly adversely affected by business relocations.  

The relevant elements of the Member States' annual report referred to in Article 1966 
of  the  Regulation  (EC)  No  […]  [laying  down  general  provisions  on  the  Structural 
Funds European Regional Development Fund, the European Social Fund and the 
Cohesion Fund], shall be integrated respectively in the corresponding national action 
plans reform programmes and national action plans for social inclusion.  

The  quantified  objectives  and  indicators  selected  to  monitor  the  implementation  of 
the  nNational  sStrategic  frame  of  rReference  Framework  defined  in  Article  18  of 
Regulation  (EC)  No[…]  [laying  down  general  provisions  on  the  Structural  Funds 
European  Regional  Development  Fund,  the  European  Social  Fund  and  the 
Cohesion  Fund],  shall  be  those  used  in  the  implementation  of  the  European 
Employment  Strategy  and  in  the  context  of  the  relevant  agreed  objectives  of  the 

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5. 

1. 

2. 

3. 

4. 

5. 

Community in the fields of social inclusion, non-discrimination, and education and 
training and the promotion of equality between men and women. The monitoring 
indicators  of  operational  programmes  should  be  coherent  with  these  quantified 
objectives. 

Evaluations undertaken in relation to the action of the ESF shall coveralso assess the 
contribution  of  the  action  supported  by  the  ESF  to  the  implementation  of  the 
European Employment Strategy and to the objectives of the Community in the fields 
of  social  inclusion,  non-discrimination,  and  education  and  training  and  the 
promotion of equality between women and men in the Member State concerned. 

Article 5 

Good governance and partnership 

The  ESF  shall  promote  good  governance  and  partnership.  Its  support  shall  be 
designed  and  implemented  at  the  appropriate  territorial  level,  with  particular 
attention  being  paid  to  the  regional  and  local  level,  according  to  the  institutional 
arrangements specific to each Member State. 

The Member States and the managing authority of each operational programme shall 
ensure  the  involvement  and  adequate  access  of  the  social  partners  and  adequate 
consultation and participation of non-governmental stakeholders, at the appropriate 
territorial  level,  in  the  preparation,  programming,  implementation  and  monitoring 
of ESF support. 

The  managing  authorities  of  each  operational  programme  shall  encourage  adequate 
participation and access of social partners in the activities funded under Article 23 of 
this Regulation. 

Under  the  "Convergence"  objective,  at  least  2%  of  the  ESF  resources  shall  be 
allocated to capacity-building and activities jointly undertaken by the social partners, 
in particular as regards adaptability of workers and enterprises referred to in Article 2 
3 (1) (a). 

The  managing  authority  of  each  operational  programme  shall  encourage  adequate 
participation and access of non-governmental organisations to the funded activities, 
and  their  participation  therein,  notably  in  the  domain  of  social  inclusion  and 
equality between women and men and women. 

When responsibility for implementation is delegated, support in the framework of a 
programme may be providedpermitted through global grants.  

Article 6 

Gender equality and equal opportunities 

The  Member  States  and  the  managing  authorities  shall  ensure  that  operational  programmes 
include a description on as to how gender equality is and equal opportunities are promoted 
in  the  programming  preparation,  implementation,  and  monitoring  including  any  specific 
indicators, and in the evaluation of programmes. Member States shall promote a balanced 

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participation  of  women  and  men  in  the  management  and  implementation  of  the 
operational programmes at local, regional and national level. 

Article 7 

Innovation 

In  the  framework  of  each  operational  programme,  Member  States  and  managing  authorities 
shall  pay  particular  attention  to  the  promotion  and  mainstreaming  of  innovative  activities. 
After consulting the Monitoring Committee referred to in Article 4762 of Regulation (EC) N° 
[…]  [laying  down  general  provisions  on  the  Structural  Funds  European  Regional 
Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund],  the  managing 
authority shall choose the themes for the funding of innovation in the context of partnership 
and shall define the appropriate modalities ofarrangements for implementation.  

Article 8 

Trans-national co-operation 

1. 

2. 

The Member States and managing authorities shall ensure that programming of trans-
national and inter-regional co-operation activities takes the form of a specific priority 
axis within an operational programme or a specific operational programme. 

The Member States shall ensure coherence and complementarity between the action 
of  the  Fund  ESF  and  actions  supported  through  other  trans-national  Community 
trans-national  programmes,  in  particular  in  the  field  of  education  and  training, 
through  appropriate  co-ordination  mechanisms,  to  optimise  the  use  of  Community 
resources in support of education and lifelong learning. 

Article 9 

Technical assistance 

The  Commission  shall  promote  in  particular  exchanges  of  experiences,  awareness  raising 
activities,  seminars,  networking  and  peer  reviews  serving  to  identify  and  disseminate  good 
practices and to encourage mutual learning, trans-national and inter-regional co-operation 
with the aim of enhancing the policy dimension and contribution of the ESF to the objectives 
of the Community in relation to employment and social inclusion. 

Article 10 

Annual and final Progress and implementation reports 

The  annual  and  final  implementation  reports  referred  to  in  Article  4966  of  Regulation  (EC) 
No  […]  [laying  down  general  provisions  on  the  Structural  Funds  European  Regional 
Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund],  shall  contain  a 
synthesis of the implementation of the following: 

(a) 

(b) 

gender mainstreaming as well as of any gender specific action; 

action  to  strengthen  social  integration  and  employment  of  increase  migrants' 
participation in employment and thereby strengthen their social integration; 

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(c) 

(d) 

action  to  strengthen  social  integration  and  employment  of  increase  minorities' 
participation in employment with a view to their sustainable integration in the 
labour market; 

action  to  strengthen  social  integration  in  employment  and  social  inclusion  of 
other disadvantaged groups including accessibility of persons with disabilities;  

(d)(e) 

innovative activities, including a justification of the themes selected for innovation, a 
presentation of their results and of their dissemination and mainstreaming; 

(e)(f) 

trans-national and inter-regional co-operation activities. 

Article 11 

Eligibility 

1. 

The ESF shall provide support towards for public expenditure which takes the form 
of  non-reimbursable  individual  or  global  grants,  reimbursable  grants,  loan  interest 
rebates  and  micro-credits  and  the  purchase  of  goods  and  services  in  compliance 
with through public tenders procurement rules. 

2. 

The following expenditure shall not be eligible for ESF support: 

(a) 

reimbursable VAT; 

(b) 

interests on debt; 

(c) 

purchase of infrastructure, depreciable movables subject to depreciation, real 
estate and land. 

3. 

4. 

Notwithstanding paragraph 2 of this Article, the eligibility rules set out in Article 6 7 
of regulation (EC) N° […] [on the ERDF] shall apply to actions co-financed by the 
ESF which fall within the scope of Article [2] of [Regulation on the ERDF] 

Notwithstanding  national  eligibility  rules,  the  expenditure  declared  under  the 
operational programmes co-financed by the ESF can include: 

(a) 

(b) 

the  allowances  or  salaries  disbursed  by  a  third  party  to  the  benefit  of  the 
participants  in  an  operation  and  certified  to  the  beneficiary,  on  condition  that 
such disbursements constitute the national public co-financing to the operation, 
in conformity with national rules in force. 

the  indirect  costs  of  an  operation  fixed  on  a  flat-rate  basis  up  to  20%  of  the 
direct costs declared for this operation, according to the type of operation, the 
context in which it is implemented and its location. 

Article 12 

Transitional provisions 

This  Regulation  shall  not  affect  neither  the  continued  implementation  nor  the  modification, 
including  the  total  or  partial  cancellation,  of  measures  approved  by  the  Council  or  by  the 

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Commission on  the  basis of Regulation  (EC) No 1784/99, which applied prior to 1 January 
2007. 

Applications made under Regulation (EEC) No 1784/9499 shall remain valid. 

Article 13 

Repeal 

Regulation (EC) No 1784/99 is repealed with effect from 1 January 2007. 

References to Regulation (EC) No 1784/99 shall be construed as reference to this Regulation. 

Article 14 

Review clause 

Acting in accordance with the procedure laid down in Article 251 of the Treaty, the European 
Parliament and the Council shall review this Regulation by 31 December 2013 at the latest. 

Article 15 

Entry in force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

It shall apply from 1 January 2007. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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