Proposal for a Council Regulation amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)
Date: 2006-05-24
Institutions: European Commission
Subjects: EU aid, aid to agriculture, economic and social cohesion, financial aid, fund (EU), rural development, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.5.2006 
COM(2006) 237 final 

2006/0082 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1698/2005 on support for rural development  
by the European Agricultural Fund for Rural Development (EAFRD) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Article  69(6)  of  Regulation  (EC)  No  1698/2005  fixes  the  ceiling  of  annual 
appropriations  of  Community  structural  spending  in  the  regions  eligible  under  the 
Convergence Objective (the so-called “capping provision”) and Article 70(3) and (4) 
of that Regulation sets down the EAFRD contribution rates. 

In  the  agreement  of  the  European  Council  on  the  Financial  Perspective  2007–2013 
the  ceilings  of  annual  appropriations  of  Community  structural  spending  in  the 
regions eligible under the Convergence Objective which shall be applicable to each 
individual  Member  State  concerned  were  fixed,  these  ceilings  being  different  from 
the ceiling fixed in Article 69(6) of Regulation (EC) No 1698/2005. 

According  also  to  this  agreement,  an  amount  of  EUR  320  million  was  allocated  to 
the  Republic  of  Portugal,  which  may  not  be  subject  to  the  national  co-financing 
requirement  as  provided  for  in  Article  70(3)  and  (4)  of  Regulation  (EC) 
No 1698/2005. 

In  order  to  bring  the  “capping  provision”  in  line  with  the  European  Council 
agreement  and  also  with  the  relevant  provision  in  the  Community  legislation 
governing  the  Structural  Funds  and  the  Cohesion  Fund  for  the  period  2007–2013, 
and to exempt Portugal from the application of the co-financing requirement for the 
amount  of  EUR  320  million, 
to  amend  Regulation  (EC) 
No 1698/2005. 

is  necessary 

it 

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2006/0082 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1698/2005 on support for rural development  
by the European Agricultural Fund for Rural Development (EAFRD) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 37 and 299(2) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Having regard to the opinion of the Committee of the Regions3, 

Whereas: 

(1) 

(2) 

(3) 

Article  69(6)  of  Council  Regulation  (EC)  No  1698/2005  of  20  September  2005  on 
support  for  rural  development  by  the  European  Agricultural  Fund  for  Rural 
Development  (EAFRD)4  fixes  the  ceiling  of  annual  appropriations  of  Community 
structural  spending  in  the  regions  eligible  under  the  Convergence  Objective  and 
Article 70(3) and (4) of that Regulation sets out the EAFRD contribution rates. 

In  the  Financial  Perspective  2007–20135  agreed  upon  by  the  European  Council  in 
December  2005,  the  ceilings  of  annual  appropriations  of  Community  structural 
spending  in  the  regions  eligible  under  the  Convergence  Objective,  which  are  to  be 
applicable to each individual Member State concerned, were fixed at a different level 
than that of the ceiling fixed in Article 69(6) of Regulation (EC) No 1698/2005.  

In  accordance  with 
the  Financial  Perspective  2007–2013,  an  amount  of 
EUR 320 million was allocated to  Portugal, which may not be subject to the national 
co-financing  requirement  as  provided  for  in  Article 70(3)  and  (4)  of  Regulation  (EC) 
No 1698/205. 

(4) 

Regulation (EC) No 1698/2005 should be amended accordingly, 

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4 
5 

OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ L 277, 21.10.2005, p. 1. 
15915/05. 

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HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1698/2005 is amended as follows:  

(1) 

Paragraph 6 of Article 69 is replaced by the following: 

“6.  The  Commission  shall  ensure  that  total  annual  allocations  from  the  EAFRD 
originating from the EAGGF Guidance Section for any Member State pursuant 
to this Regulation, and from the ERDF, the ESF and the CF, according to the 
Community legislation laying  down general provisions  governing  these  Funds 
for  the  period  from  1  January  2007  to  31  December  2013,  including  the 
contribution  of  ERDF  according  to  the  Community  legislation  governing  the 
European  Neighbourhood  Instrument,  from  the  Instrument  for  Pre-Accession, 
according to the Community legislation governing that instrument, and from the 
part  of  the  FIFG  contributing  to  the  Convergence  Objective,  shall  not  exceed 
the following limits: 

– 

– 

– 

– 

– 

– 

– 

– 

3.7893%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is under 40% of the EU-25 average, 

3.7135%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 40% and below 50% of the EU-25 average, 

3.6188%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 50% and below 55% of the EU-25 average, 

3.5240%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 55% and below 60% of the EU-25 average, 

3.4293%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 60% and below 65% of the EU-25 average, 

3.3346%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 65% and below 70% of the EU-25 average, 

3.2398%  of  the  GDP  of  Member  States  whose  average  2001–2003  per 
capita GNI is equal or above 70% and below 75% of the EU-25 average, 

thereafter,  the  maximum  level  of  transfer  is  reduced  by  0.09  percentage 
points  of  GDP  for  each  increment  of  5  percentage  points  of  average 
2001–2003 per capita GNI as compared to the EU-25 average. 

Calculations  of  GDP  by  the  Commission  shall  be  based  on  the  statistics 
published  in  April  2005.  Individual  national  growth  rates  of  GDP  for  2007–
2013, as projected by the Commission in April 2005, shall be applied for each 
Member State separately. 

If  it  is  established  in  2010  that  any  Member  State's  cumulated  GDP  for  the 
years  2007–2009  has  diverged  by  more  than  ±5%  from  the  cumulated  GDP 
estimated  according  to  paragraph 3,  including  as  a  consequence  of  exchange 
rate  changes,  the  amounts  allocated  for  that  period  to  that  Member  State 
pursuant  to  paragraph 1  will  be  adjusted  accordingly.  The  total  net  effect, 
whether  positive  or  negative,  of 
these  adjustments  may  not  exceed 
EUR 3 000 million.  In  any  event,  if  the  net  effect  is  positive,  total  additional 

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resources shall be limited to the level of under-spending against the maximum 
resources  available  for  commitments  from  the  Structural  Funds  and  the 
Cohesion  Fund  for  the  years  2007–2010.  Final  adjustments  will  be  spread  in 
equal proportions over the years 2011–2013. 

In order to reflect the value of the Polish zloty in the reference period, the result 
of  the  application  of  the  percentages  referred  to  in  the  first  subparagraph  for 
Poland  shall  be  multiplied  by  a  coefficient  of  1.04  for  the  period  up  to  the 
review referred to in the third subparagraph.” 

(2) 

In Article 70, the following paragraph is inserted: 

“4a.  Paragraphs  3  and  4  may  not  apply 

in  Portugal  for  an  amount  of 

EUR 320 million.” 

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

Article 2 

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

Done at Brussels,  

For the Council 
The President 

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FINANCIAL STATEMENT 

BUDGET HEADING: 
05 04 05 01  

APPROPRIATIONS (PDB 2007):

EUR 12 343 028 111  

TITLE: 
Council Regulation amending Regulation (EC) No 1698/2005 on support for rural development bye the 
European Agricultural Fund for Rural Development (EAFRD) 

LEGAL BASIS: 
Article 37 and 299(2) of the Treaty 

AIMS: 
It is necessary to amend Regulation (EC) No 1698/2005: 
(1) 

in  order  to  bring  the  "capping  provision"  in  line  with  the  European  Council  agreement  and  also 
with  the  relevant  provision  in  the  Community  legislation  governing  the  Structural  Funds  and  the 
Cohesion Fund for the period 2007–2013, 
to  exempt  Portugal  from  the  application  of  the  co-financing  requirement  for  the  amount  of 
EUR 320 million. 

(2) 

5. 

FINANCIAL IMPLICATIONS 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS/INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

OWN RESOURCES OF THE EC  

– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

– 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 2006 
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR 2007 
(EUR million) 

– 

– 

– 

– 

– 

– 

2008 

2009 

2010 

2011 

2012 

2013 

– 
– 

– 
– 

– 
– 

(1) 
– 

(1) 
– 

(1) 
– 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES NO 

YES NO 

YES NO 

YES NO 

OBSERVATIONS: 
(1)  The  proposed  amendments  will  not  lead  to  any  over-spending  against  the  total  envelope  for  Structural 

Funds. 

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