COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS First Simplification Scoreboard for the MFF 2014-2020
Date: 2012-09-20
Institutions: European Commission
Subjects: EU control, administrative formalities, administrative reform, financial regulation, simplification of legislation

EUROPEAN COMMISSION 

Brussels, 20.9.2012  
COM(2012) 531 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

First Simplification Scoreboard for the MFF 2014-2020 

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1. 

BACKGROUND  

The  Commission  is  committed  to  simplifying  and  improving  delivery  of  EU  policies. 
Following  the  announcement  in  the  Communication  a  Budget  for  Europe  20201,  on  8 
February 2012 the Commission launched the Simplification Agenda for the MFF 2014-20202. 
The aim of the Simplification Agenda was to take stock of the main measures proposed by the 
Commission in order to simplify and improve the delivery of European Union (EU) spending 
for  the  next  Multiannual  Financial  Framework  (MFF)  and  track  progress  made  until  final 
adoption  of  the  legislative  proposals.  The  Agenda  identified  two  building  blocks  of 
simplification: the review of the Financial Regulation (FR)3 and 57 sector specific legislative 
proposals underlying spending programmes and instruments for the next MFF. 

the 

throughout 

legislative  process  via  a  dedicated  Scoreboard, 

The Commission has made a commitment to monitor progress of the Simplification Agenda 
regularly 
tracking 
simplification  measures  proposed  by  the  Commission,  as  well  as  those  proposed  by  the 
legislator. The Commission has also committed to make the Scoreboard regularly available to 
the European Parliament and the Council. The aim of this First Simplification Scoreboard is 
to report on progress on simplification throughout the legislative process with a view to well 
informed and transparent decision making.  

2. 

GENERAL ASSESSMENT 

The  Commission  welcomes  the  substantial  progress  that  has  been  made  in  relation  to  the 
proposal  for  a  new  Financial  Regulation,  which  includes  a  wide  range  of  simplification 
measures. The European Parliament and the Council have reached political agreement in June 
2012  following  an  extensive  negotiation  process.  The  proposal  is  expected  to  be  formally 
adopted  in  first  reading  in  autumn  2012,  opening  the  way  for  the  Commission  to  adopt  the 
Rules of Application of the Financial Regulation. The new Financial Regulation and its Rules 
of Application should be applicable as from January 2013, with the notable exception notably 
of  the  new  provisions  relating  to  shared  management,  which  would  be  postponed  until  1 
January 2014. 

The Commission also welcomes progress made in relation to sector-specific proposals but at 
the same time has to raise serious concerns on some particular developments described in 
this Communication.  

Regarding  the  state  of  negotiations  in  the  European  Parliament,  the  responsible  rapporteurs 
and  Committees  have  presented  their  reports  and  opinions  on  most  Commission  proposals, 
thus providing a basis for negotiations with the Council. No formal decisions on amendments 
have been taken as yet by the European Parliament. Substantial work has been carried out in 
the  Council  under  the  leadership  of  the  Polish  and  Danish  Presidencies.  This  has  led  to  the 
endorsement  by  the  Council  of  a  partial  general  approach  on  some  elements  of  the 
Commission proposals, leaving out mainly the issues which are directly linked to the outcome 
of the negotiations on the MFF and the revision of the FR.  

1 
2 
3 

COM (2011) 500 of 29.06. 2011 
COM (2012) 42 final) 
COM (2010) 815 final) 

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At  this  stage  of  the  legislative  process,  a  provisional  assessment  should  be  made.  Work 
carried  out  in  the  European  Parliament  and  in  the  Council  shows  a  positive  approach  to 
simplification which is largely considered as a key horizontal issue for the next programming 
period.  With  a  few  notable  exceptions  (see  the  case  of  FISCUS  programme  below),  the 
legislative  proposals  have  received  broad  political  support  as  regards  their  simplification 
objectives  in  both  Institutions  and  many  of  the  core  elements  of  simplification  have  been 
upheld and new ones have been introduced.  

However,  there  are  some  important  issues  where  simplification  has  been  undermined  in 
substance by proposing solutions oriented at particular geographic regions of the EU, aiming 
at  specific  actions  or  actors,  or  through  procedural  complications  in  the  decision–making 
process. Such  deviations from the initial Commission proposals, if they  become law,  would 
significantly reduce the scope and effect of simplification (see point 3 and the Annex).  

The European Commission has strong concerns on the following developments:  

More  burdensome  decision  making  procedures  for  the  implementation  of  the 
programmes causing substantial delays in the implementation of the EU programmes.- 

Over-specification of the modalities for the implementation of the budget; (sub-ceilings, 
fixed amounts for specific actions) restricting the necessary operational flexibility of the 
Commission  that  is  required  for  the  smooth  and  effective  implementation  of  the 
programmes. 

Too detailed modalities for the use of the financial instruments at the level of the basic 
act  reducing  the  necessary  flexibility  for  their  implementation  and  in  some  instances 
affecting their effectiveness by notably limiting the reuse of reflows. 

A  common  feature  of  these  undesirable  developments  is  that  they  restrict  the  operational 
flexibility  of  the  Commission's  action  as  a  manager  of  the  EU  budget.  In  contrast,  more 
simplification  has  been  proposed  by  the  Council  in  the  area  of  shared  management  to  the 
benefit of the administrations of the Member States. In particular, many positions expressed 
by  the  Council,  such  as  those  concerning  the  Commission  proposal  laying  down  common 
provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund,  the 
Cohesion  Fund,  the  European  Agricultural  Fund  for  Rural  development  and  the  European 
Maritime  and  Fisheries  Fund  covered  by  the  Common  Strategic  Framework  (hereinafter 
called the "CSF" Funds)4, provide for more flexibility in the action of Member States (such as 
lighter procedures for programming and reporting, more flexible eligibility rules, and lighter 
control and audit procedures).  

The  Commission  opposes  those  elements  introduced  by  the  Council  which:  a)  risk 
undermining the economy, efficiency and effectiveness of budgetary spending and may 
lead to increased error rates and b) introduce changes in reporting arrangements which 

4 

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

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do not facilitate continuous monitoring and timely management decisions and affect the 
Commission's assurance. 

This  is  especially  the  case  where  the  monitoring  and  audit  responsibilities  of  the 
Commission  are  being  limited  in  an  ad  hoc  manner,  affecting  its  capacity  to  effectively 
monitor, evaluate and report on the use of EU money while it remains accountable for it and 
where  audit  methods  are  proposed  that  do  not  necessarily  provide  reliable  and  comparable 
information  across  Member  States  and  thus  undermine  assurance  at  EU  level  (e.g.  the 
introduction of non-statistical sampling under Cohesion Policy). 

Moreover,  the  approach  to  simplification  followed  in  the  Council  and  in  various  European 
Parliament Committee reports is not always consistent, as in certain cases the status quo is 
preferred  to  clear  simplification.  For  example,  the  Commission's  proposals  in  the  CAP 
horizontal Regulation5 to limit the number of paying agencies to one per Member State or one 
per  region  or  the  mandatory  combination  of  managing  and  certifying  functions  for 
comparative small programmes under European Territorial Cooperation6 have been opposed 
by the Council. In the Commission's view such an approach runs counter any real attempts at 
simplification  of  administrative  structures  and  procedures,  at  both  European  and  national 
levels. 

The Commission takes the view that particular attention of the Institutions will be required to 
avoid inconsistencies in the final legislative acts. 

With  this  in  mind,  and  in  order  to  keep  the  focus  of  the  institutions  on  simplification,  the 
Commission presents this Scoreboard. A consolidated short table giving a global overview of 
the  main  elements  affecting  simplification  is  annexed  to  this  Communication.  Detailed 
information  on  simplification  progress  concerning  each  policy  area  will  be  available  during 
the discussions with the European Parliament and Council. 

3. 

RATIONALISATION OF PROGRAMMES 

3.1 

Reducing the number of programmes 

The  proposed  reduction  of  the  number  of  programmes  (by  22  as  from  2014)  through  the 
creation of integrated programmes has been welcomed by the co-legislators. One noticeable 
exception concerns the integrated programme proposed by the Commission for taxation and 
customs  (the  "FISCUS"  programme)7  ,  which  both  legislators  have  requested  to  split  and 
revert to status quo in order mainly to preserve the prerogatives of the distinct administrative 
structures in the Member States and of the competent Committees in the European Parliament 
dealing with customs and taxation. .  

5 

6 

7 

Proposal for a Regulation of the European Parliament and the Council on the financing, management 
and monitoring of the Common Agricultural Policy (COM(2011) 628 final) 
Proposal  for  a  Regulation  of  the  European  Parliament  and  the  Council  amending  Regulation  (EC) 
No1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European Grouping of 
Territorial  Cooperation  (EGTC)  as  regards  the  clarification,  simplification  and  improvement  of  the 
establishment and implementation of such groupings.(COM(2011) 610 final) 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  an  action 
programme  for  customs  and  taxation  systems  in  the  EU  for  the  period  2014-2020,  (Fiscus  2020)  and 
repealing Decisions No 1482/2007/EC and 624/2007/EC, (COM (2011) 706 final) 

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The Commission believes that the integration of separate and distinct programmes into 
a  single  framework  is  a  powerful  means  of  simplification,  ensuring  synergies  and 
common implementation rules and procedures. 

In  particular,  the  Commission  considers  that  a  single  programme  for  customs  and  taxation 
would  enhance  simplification  and  coherence  due  to  the  structural  similarities  of  its  two 
components, whilst preserving the distinctive features of the customs and taxation elements. 
These benefits would accrue not only to the beneficiaries of EU funding but would also help 
to  streamline  the  administrative  procedures  for  implementing  EU  programmes.  However, 
given the European Parliament's and the Council's positions, the Commission adopted on 29 
August8two separate legislative proposals. 

3.2 

Enhancing coherence and clarity of rules 

- 

Financial Regulation 

The  revision  of  the  FR  includes  important  measures  of  simplification  which  will  bring 
about direct benefits to the stakeholders, as they will apply to the implementation of all 
programmes  with  the  exception  of  programmes  in  shared  management.  The  main 
benefits  concern  shorter  payment  deadlines,  enhanced  predictability  of  EU  spending 
through multi-annual work programmes, the abolition of the obligation of beneficiaries 
of  grants  to  return  interest  earned  on  pre-financing,  simplified  cost  forms  of  grants 
low-value  contracts  and  grants,  electronic 
cutting  administrative  burden 
communication with beneficiaries and authorities. 

for 

- 

Sector specific rules  

The  Commission  welcomes  efforts  made  by  the  European  Parliament  and  the  Council  to 
ensure  consistency  between  sector-specific  proposals  and  the  revision  of  the  Financial 
Regulation.  The  financial  rules  inserted  in  sector-specific  acts  have  generally  been  upheld, 
while waiting for the outcome of that revision. This is of crucial importance, as the new FR 
reinforces the requirement of coherence of the sector specific rules with the FR (Article 2 of 
the  FR),  as  it  allows  no  exceptions  from  the  common  principles  and  stipulates  that  any 
proposals  for  derogation  from  the  FR  (including  its  Rules  of  Application)  have  to  be 
specifically justified and indicated. Nevertheless, the Commission notes that  in  some policy 
areas,  attempts  are  being  made  to  introduce  in  the  basic  acts  too  detailed  rules  which,  if 
adopted,  will  hinder  smooth  implementation  and  undermine  the  coherence  of  the  overall 
legislative  framework.  In  particular,  the  Commission  is  concerned  about  indications  to 
introduce  special  or  too  detailed  provisions  in  the  Rules  of  Participation  and  Dissemination 
applicable to the "Horizon 2020" programme9 (hereinafter called the Rules for Participation in 

8 

9 

Amended  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  an 
action  programme  for  customs  in  the  European  Union  for  the  period  2014-2020  (Customs  2020)  and 
repealing Decision N°624/2007/EC, COM (2012) 464 final and Amended Proposal for a Regulation of 
the  European  Parliament  and  of  the  Council  establishing  an  action  programme  for  taxation  in  the 
European  Union  for  the  period  2014-2020  (Fiscalis  2020)  and  repealing  Decision  N°482/2007/EC, 
COM (2012) 465 final 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  council  laying  down  the  rules  for 
participation  and  dissemination  in  Horizon  2020-the  framework  Programme  for  Research  and 
Innovation 2014-2020 (COM (2011) 810 final) 

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"Horizon  2020")  and  in  the  proposed  "LIFE"  Programme10,  whereas  in  these  policy  areas, 
serious simplification is needed and has been proposed by the Commission.  

- 

Bringing the different instruments under a single framework 

The  introduction  of  single  sector  frameworks  has  been  generally  welcomed,  by  both  the 
European  Parliament  and  the  Council  (notably  as  regards  the  "CSF"  Funds,  the  CAP 
horizontal  Regulation  on  financing  and  monitoring  of  the  CAP,  the  "Horizon  2020"11, 
"Erasmus  for  all"12,  "Creative  Europe"13,  and  the  common  implementing  rules  in  "External 
Relations  Instruments14).  This  orientation  should  be  preserved  throughout  the  legislative 
process. 

The  Parliament  and  the  Council  also  welcomed  the  exploitation  of  cross-sector  approaches 
leading  to  simplification  of  the  EU  legal  framework  (notably  as  regards  the  Connecting 
Europe  Facility15,  ensuring  a  coherent  and  transparent  approach  to  EU  project  financing 
across energy, transport and telecommunication infrastructure). This would offer certainty and 
would thus have a huge potential to attract more private sector financing, as well as drawing 
on  lessons  learnt  and  best  practice  sharing  across  sectors,  enabling  thus  an  enhanced 
effectiveness and efficiency of EU financing in all sectors.  

- 

Mainstreaming 

The  Commission  welcomes  the  commitment  from  Member  States  and  the  European 
Institutions to facilitate the achievement of the Europe 2020 Strategy objectives, which is of 
utmost importance in the current economic context. The proposed mainstreaming of priorities, 
such as resource efficiency, climate change, environment and delivering energy security and 
efficiency,  into  different  programmes  aims  at  promoting  synergies  in  the  use  of  EU  funds. 
This  approach  should  ensure  greater  consistency,  simplification  and  cost-efficiency  in 
spending, from which the final beneficiaries (such as SMEs) will benefit. 

As regards Cohesion Policy, the Commission has noted a widespread political will to allow 
for more flexibility in the proposed thematic concentration framework ("CSF" Funds). Under 
the CAP, the Member States are pushing for a less stringent application of the Union priorities 
and  objectives  to  the  rural  development  programming.  While  understanding  the  reasons  for 
such calls to take better account of specific situations and needs, it should be recalled that a 
"menu à la carte" approach, rather than uniform and simple rules for all Member States, could 
result  in  the  dilution  of  EU  spending  and  could  even  endanger  the  focus  on  Europe  2020 
Strategy objectives.  

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11 

12 

13 

14 

15 

Proposal  for  a  regulation  of  the  European  Parliament  and  the  Council  on  the  establishment  of  a 
Programme for the Environment and Climate Action (LIFE), (COM (2011) 874 final) 
Proposal for a Regulation of the European Parliament and of the Council establishing Horizon 2020 the 
Framework Programme for Research and Innovation (2014-2020) COM (2011) 809 final) 
Proposal for a Regulation of the European Parliament and of the Council establishing "Erasmus for all" 
the EU Programme for Education, Training, Youth and Sport COM (2011) 788 final) 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the  Creative 
Europe Programme, (COM (2011) 785 final) 
Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  common  rules 
and procedures for the implementation of the Union's Instruments for external action (COM(2011) 842 
final) 
Proposal for a Regulation of the European Parliament and of the Council establishing the Connecting 
Europe Facility, (COM(2011) 665 final2) 

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As regards the CAP and the Direct Payments Regulation16 the "greening" objectives of the 
CAP  reform,  which  constitute  one  of  the  main  priorities  of  the  post  2013  Common 
Agricultural  Policy,  are  widely  supported  by  the  European  institutions,  Member  States  and 
other  partners.  However,  the  Commission's  proposals  on  concrete  measures  to  attain  the 
greening objectives have received mixed support in the Council, as Member States consider 
the  technical  modalities  of  greening  to  be  too  complex.  It  was  requested  by  some  Member 
States  to  redefine  the  greening  measures  and  to  extend  derogations  to  the  three  proposed 
greening requirements (crop diversification, permanent grassland and ecological focus areas) 
in  order  to  take  better  account  of  Member  States'  specific  situations  and  needs.  Both  the 
Danish  Council  Presidency  and  the  rapporteur  of  the  European  Parliament  have  suggested 
amendments aiming at limiting the scope of the greening requirements, by for example raising 
thresholds  and  widening  definitions.  They  have  also  suggested  additional  possibilities  for 
considering  farms  as  being  "green"  by  definition.  Moreover,  several  Member  States  raised 
concerns about the proposed increase of the baseline for calculation of support under pillar II 
(Rural  Development),  as  well  as  the  possibility  to  apply  administrative  penalties  for  non-
compliance  with  greening  requirements  that  would  go  beyond  the  "green"  payment. 
According to the amendments suggested by the rapporteur of the European Parliament to the 
proposal  for  a  horizontal  CAP  Regulation,  the  non-respect  of  the  greening  requirements 
should  not  affect  the  basic  direct  payment.  This  would  de  facto  render  the  greening 
voluntary for farmers.  

The  Commission  remains  open  to  discuss  possible  readjustments  of  its  technical 
proposals,  but  stresses  the  need  for  designing  an  efficient,  homogeneous  and  credible 
mechanism for greening that safeguards the objective of linking 30% of direct payments 
to environment and climate friendly practices. 

3.3 

Focusing on clear priority objectives and indicators 

The  Commission  aims  at  facilitating  the  assessment  of  the  impact  of  EU  interventions, 
following  repeated  calls  from  Member  States  and  the  European  Institutions.  In  a  context  of 
scarce public resources, the responsible approach to policy priorities, where EU added value 
can be optimised, is necessary. The Commission has thus proposed a limited number of clear 
priority  objectives,  associated  with  relevant  lists  of  indicators  and  targets  and  a  specific 
performance  framework  in  several  policies,  accompanied  by  positive  incentives  and 
preventive means to ensure delivery of results ("CSF" Funds, external action instruments).  

This approach has received broad support in the European Parliament and in the Council.  

The Commission points out that in several cases, the prioritisation of objectives is being 
watered  down  by  adding  more  objectives  (for  example  the  "Health  and  Growth" 
programme) and the indicators are being weakened by making them less directly related 
to the output of the programme, thus reducing the focus on results and the visible added 

16 

Proposal for a Regulation of the European Parliament and of the Council establishing rules for direct 
payments to farmers under support schemes within the framework of the common agricultural policy, 
(COM(2011) 625 final) 

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value  of  the  EU  budget  (for  example,  in  the  "Consumer"17,  and  "COSME"  18  or  the 
external  action  instruments).  Moreover,  some  indicators  were  added,  the  collection  of 
which would be very costly, and some targets were raised to unrealistic levels.  

The  Commission  has  also  noted  some  positive  elements  in  the  mechanism  of  thematic 
concentration  in  the  CSF  Funds,  but  disagrees  with  the  weakening  of  some  important 
elements  under  the  Cohesion  Policy,  such  as  the  proposal  of  the  Council  to  delete  the 
minimum allocation to the European Social Fund (ESF) (especially in view of the need to 
tackle levels of unemployment and to support people), to empty of its substance the focus to 
reducing  poverty  and  stimulating  social  inclusion,  and  the  opening  to  finance  basic 
infrastructure in more developed regions.  

The  Commission  has  noted  a  widespread  political  will  to  allow  for  more  flexibility  in  the 
proposed thematic concentration framework ("CSF" Funds).  

The Commission is against a significant dilution of thematic concentration requirements 
in the Cohesion Policy, as this could seriously undermine the performance of the policy.  

The  Commission  has  also  noted  a  general  will  from  the  co-legislators  to  rationalise  and 
simplify reporting requirements imposed on national authorities (annual implementation 
reports, progress reports, collection and transmission of financial data, date for transmission 
of  annual  management  declarations)  which  are  used  in  the  assessment  of  performance.  The 
Commission in general has been supportive of these efforts in order to ensure that essential 
data  on  progress  and  performance  can  be  made  available  without  undue  delay  to  allow 
monitoring of progress and to underpin management decisions. However, the Commission has 
observed a tendency in the Council, to extend deadlines for submission of reports, despite the 
simplification achieved. This reduces the utility of reporting for monitoring and management 
purposes as by the time reports reach the Commission, the information included has become 
outdated.  

Given  the  importance  attached  by  all  of  the  institutions  to  improved  performance-
measurement  and  reporting  under  Article  318  TFEU  on  the  evaluation  of  the  Union's 
finances,  it  is  essential  that  the  new  financial  programmes  have  sound,  coherent  and 
comparable  monitoring,  evaluation  and  reporting  mechanisms.  Weakening  of  objectives, 
indicators or reporting requirements in the specific legislative proposals risk undermining the 
quality of reporting under Article 318. 

The Commission hopes that these issues will be reconsidered in the negotiations with the two 
arms  of  the  legislative  authority  and  that  an  efficient  and  more  balanced  approach  can  be 
reached through constructive dialogue between the EU institutions. 

The  proposed  introduction  of  a  performance  reserve  for  the  "CSF"  funds  (5%  of  the 
resources allocated to each CSF Fund and Member State) has been extensively discussed in 
the Council as many Member States continue to express scepticism towards the arrangements 
proposed.  The  performance  reserve  has  been  rejected  by  the  European  Parliament's  lead 

17 

18 

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  creating  the  "consumers" 
programme for the period 2014-2020 (COM (2011) 707 final 
Proposal for a Regulation of the European Parliament and of the Council establishing a programme for 
the  Competitiveness  of  Enterprises  and  small  and  medium-sized  enterprises  2014-2020,  (COM(2011) 
834 final) 

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Committee (REGI), on the grounds that the performance reserve could lead policy-makers to 
set more easily achievable objectives in order to safeguard resources. The Commission does 
not  share  this  view.  Moreover,  this  approach  is  inconsistent  with  the  position  taken  by 
Parliament and Council in relation to IPA II, where both support the introduction of a 5% (or 
higher) performance reserve to reward best performing countries. 

The  Commission  welcomes  the  fact  that  the  Council  has  acknowledged  the  need  for 
reinforced  result  orientation  and  has  agreed,  upon  introduction  of  certain  safeguards  as 
regards suspension of payments and financial corrections, to the set-up of a clear performance 
framework  for  the  "CSF"  Funds.  The  Commission  emphasises  that  the  performance 
framework should be established in dialogue between the Member State and the Commission 
taking account of past experience in order to ensure that milestones and targets are realistic. 
The  Commission  maintains  that  both  positive  incentives  and  preventive  measures  (a 
possibility to suspend payments and to apply financial corrections) are necessary to underpin 
a  performance  oriented  approach  to  the  implementation  of  the  CSF  Funds.  The  proposed 
introduction  of  macroeconomic  conditionality  in  the  "CSF"  Funds  has  been  put  into 
question by both some Member States in the Council and in the European Parliament.  

The  Commission  considers  that  macroeconomic  conditionality  is  indeed  a  strong 
instrument  to  keep  cohesion  policy  focused  on  growth  and  economic  development,  in 
line with the objectives of the Europe 2020 Strategy, and that it will enhance the impact 
of the expenditure when it is linked more closely to sound macro-economic conditions in 
the recipient Member States. 

It  also  recalls  that  the  Commission  will  take  full  account  of  the  need  to  respect  the 
proportionality principle at each step of the process, and that the proposed mechanism is built 
on incentives rather than sanctions. 

However,  the  decisions  of  principle  on  these  two  issues  (performance  reserve  and  macro-
economic  conditionality)  are  expected  to  be  taken in  the  context  of  the  MFF  negotiations 
and will subsequently have to be reflected in the CSF Funds Regulation. 

3.4 

Using simplified instruments for decision making 

In  designing  the  sector  specific  rules,  the  Commission  has  proposed  to  set  new  legislative 
provisions through Regulation rather than by a Decision. A Regulation provides a higher level 
of  legal  certainty  by  defining  uniform  sets  of  rights  and  obligations  for  European  citizens. 
This is a shared concern, in both the European Parliament and the Council.  

With the view of the hierarchy of rules and the simplification of EU legislation, Article 290 of 
the TFEU provides for the possibility of delegation of powers by the legislative authority to 
the Commission to adopt delegated acts to supplement or amend non-essential elements of 
legislative  acts.  Article  291  of  the  TFEU  requires  implementing  acts  to  be  adopted  where 
uniform  conditions  of  implementation  are  needed.  On  this  basis,  the  Commission  has 
proposed the use of delegated acts as the most efficient means to complement or modify non-
essential  elements  of  the  basic  acts,  since  they  provide  the  flexibility  necessary  to  take 
account  of  operational  needs,  whilst  at  the  same  time  ensuring  appropriate  control  by  both 
arms of the legislative authority. The Commission calls for a common approach based on 
the Treaty and the objective nature of the legislation concerned to determine the most 
appropriate legal form for provisions concerned.  

EN 

9 

   EN 

 
The Commission is concerned about the diverging views which have been expressed by the 
Council  and  the  European  Parliament  on  the  use  of  delegated  and  implementing  acts  and 
urges the European Parliament and the Council to adopt a more balanced approach on the 
above horizontal issues, in the full respect of the Treaty and of each institution's prerogatives. 
The Commission stresses the need to: i) limit legal provisions of the basic acts to the essential 
elements  of  the  legislation,  ii)  ensure  the  minimum  level  of  flexibility  required  to  adapt  to 
unforeseen  events  and  developments  in  the  light  of  practical  experience,  iii)  avoid 
unnecessary complications and micro-management of the decision making process. 

The Commission will remain particularly vigilant and insist on the need to:  

Use  implementing  acts  for  the  adoption  of  the  annual  work  programmes  and  in 
indicative programming documents under external aid instruments  

Avoid the insertion in the legislative act of budget micro-management elements, such as 
detailed sub-ceilings or fixed amounts for specific actions 

Avoid the application of Committee procedures ("Comitology")19 to individual selection 
and grant award decisions. 

Delegated  acts,  which  have  been  generally  proposed  by  the  European  Parliament,  are  very 
inappropriate  for  the  adoption  of  the  annual  work  programmes...  Annual  work 
programmes are regulated in the FR and need to be adopted swiftly to allow for the budget 
implementation  stage  to  commence  and  for  calls  for  proposals  to  be  published.  They  are 
currently  adopted  by  the  Commission,  usually  following  "Comitology".  Imposing  the 
application  of  the  heavier  procedure  of  the  delegated  acts  would  cause  unjustifiably  long 
delays  in  the  implementation  of  the  programmes,  which  is  a  frequent  complaint  of 
beneficiaries.  Moreover,  imposing  ex  ante  consultation  with  stakeholders  for  the  annual 
work programmes, as envisaged in some cases by the rapporteurs in the European Parliament 
("Cosme"  programme, 
further  delay 
implementation.  A  difference  of  approach  between  the  co-legislators  concerning  the  use  of 
implementing  acts  should  not  be  resolved  by  including  the  relevant  provisions  in  the  basic 
legislative  act,  as  this  would  complicate  the  legislative  procedure.  This  would  deprive  the 
Commission of the necessary flexibility in day-to-day management, delay disproportionately 
the  implementation  of  the  programmes  and  would  clearly  infringe  on  the  Commission's 
institutional responsibility for the implementation of the budget 

for  Growth"  programme),  would 

"Health 

The need to use implementing acts for the adoption of indicative programming documents is 
a  key  element  under  the  external  action  instruments.  Programming  documents  setting  out 
priority areas or sectors of intervention per country, expected results and indicative financial 
allocations are implementing decisions. It is important to allow for a lean and timely decision 
and  making  when  adopting  and  revising  these  documents.  Adopting  and  amending  them  as 
delegated  acts,  as  proposed  by  the  European  Parliament,  would  defeat  the  important 
objectives  of  efficiency,  flexibility  and  simplification.  Adjusting  timely  the  financial 
assistance to the (changing) needs and capacities in each beneficiary country would become 
impossible.  

19 

Regulation (EU) No 182/2011 of the European Parliament and the Council of 16 February 2011 laying 
down  the  rules  and  general  principles  concerning  mechanisms  for  control  by  Member  States  of  the 
Commission's exercise of implementing powers.  

EN 

10 

   EN 

 
                                                 
The  proposed  introduction  into  the  basic  act  itself  of  more  detailed  sub-ceilings  or 
amounts of the financial envelopes complicates and delays financial management. 

Defining such amounts for specific objectives or actions, especially in programmes managed 
by  the  Commission,  constitutes  a  form  of  "micro-management"  not  geared  to  the  needs  of 
day-to-day  management  of  the  budget  (e.g.  Council  positions  on  the  "Connecting  Europe 
Facility"  programme,  the  "Europe  for  Citizens"20  programme,  "Erasmus  for  all"  programme 
and  in  some  Committee  reports  in  the  European  Parliament  for  instance  in  the  Consumers 
programme).  It  is  even  more  cumbersome  when  such  a  detailed  breakdown  of  budget 
allocations  is  foreseen  on  an  annual  basis  (e.g.  rapporteur  in  the  "FISCUS"  programme). 
Such  a  detailed  breakdown  should  be  left  in  the  Commission's  financial  statement 
accompanying  the  legislative  proposal,  as  the  Commission  proposed.  The  use  of  separate 
budget lines per specific objectives, especially for small programmes, would have a similarly 
very negative effect on the practical implementation of those programmes. 

The  application  of  "Comitology"  to  individual  selection  and  grant  award  decisions  is 
inappropriate.  These  decisions  are  mere  administrative  decisions  currently  adopted  by  the 
authorising officers by delegation of the Commission resulting directly from the application 
of  annual  work  programmes;  the  latter  are  adopted  by  the  College  of  Commissioners 
following "Comitology". Moreover, practice shows that such decisions are not controversial. 
Subjecting  them  to  "Comitology"  would  be  unworkable,  excessively  disproportionate  and 
bureaucratic (especially for small value grants), deprived of any value added whilst generating 
additional  administrative  cost.  Equally,  the  Commission  guards  against  the  application  of 
"Comitology"  to  Commission  guidelines  (example:  ''Creative  Europe").  The  latter  is  not  in 
line  with  the  Treaty,  as  Article  291  requires,  for  the  use  of  implementing  acts,  the  use  of 
uniform conditions for implementing legally binding acts. Guidelines cannot ensure uniform 
conditions as they are not legally binding. 

4. 

SIMPLIFIED IMPLEMENTATION MECHANISMS AND PROCEDURES 

4.1 

Cost eligibility rules that are clear and coherent  

The  Commission  has  noted  repeated  demands  from  Member  States  for  a  greater  degree  of 
flexibility  in  accessing,  using  or  implementing  EU  programmes.  In  other  words,  a  "tailor-
made" or "menu à la carte" approach is generally preferred in shared management to a "one-
size-fits-all"  approach.  This  demand  has  also  been  echoed  in  the  European  Parliament  as  a 
way to take into account national, regional, local or sector-specific needs. This is also the case 
for  direct  centralised  management  in  the  "Horizon  2020"  programme  (example:  one  draft 
amendment introduces different funding rates per type of beneficiary and type of activity in 
the  Rules  for  Participation  in  "Horizon  2020").  The  Commission  stresses  that  the 
generalisation  of  such  an  approach  would  significantly  water  down  simplification  gains  for 
involved partners, whether at national, local or final users' level.  

In this context, the VAT eligibility rule agreed in the revision of the FR foresees it as eligible 
cost, if it is not recoverable under national law and has been paid by a beneficiary other than a 
non-taxable person as defined in Article 13(1) of Directive 2006/112/EC.  

20 

Proposal  for  a  Council  Regulation  establishing  for  the  period  2014-2020  the  programme  Europe  for 
Citizens (COM(2011) 884 final) 

EN 

11 

   EN 

 
                                                 
The Commission is concerned about requests to apply this rule to all beneficiaries and in 
all  programmes  and  in  particular  to  public  bodies  that  are  beneficiaries  of  major 
infrastructure  projects  (Connecting  Europe  Facility  programme,  CSF  Funds).  This 
would reduce the effectiveness of the EU budget by using substantial amounts of the EU 
budget to compensate some fiscal choices of Member States with a risk to over-finance 
operations.  

This  is  why  the  Commission  has  proposed  restrictions  in  the  eligibility  of  VAT  in  its 
proposals  on  the  Connecting  Europe  Facility  programme  and  in  the  CPR,  which  are 
nevertheless being questioned. 

4.2 

Simplified forms of grants 

The Council  and the European Parliament have fully supported the Commission's proposals 
on simplified forms of funding as well as the introduction of a lighter regime for low value 
grants in the Financial Regulation, which have been defined as those below EUR 60.000. The 
new  regime  for  prizes,  including  inducement  prizes,  with  a  potentially  leverage  effect,  has 
also been finally accepted in the FR, provided the budgetary authority is duly kept informed 
of prizes the value of which is above EUR 1 million.  

The Commission's proposals to facilitate the use of simplified cost forms of grants in shared 
management  have  received  general  support  in  the  Council  and  the  European  Parliament 
However, in some cases, eligibility thresholds and ceilings have been increased, both in the 
Council and the European Parliament (examples: flat rate for indirect costs in "CSF" Funds) 
and  new  options  for  the  simplified  calculation  of  costs  have  been  introduced  (examples: 
standard calculation of staff costs in "CSF" Funds), without due analysis of all underpinning 
data or practical consequences.  

The  Commission  disagrees  with  the  real  cost  option  which  has  been  envisaged  as  an 
alternative to simplified calculation of cost, thus weakening the effect of simplification, 
and insists on the mandatory use of simplified forms of grants only (examples: Rules for 
Participation in "Horizon 2020", small grants under the ESF).  

As regards the CAP, the proposed basic payment scheme was welcomed in the Council as a 
major  simplification,  but  some  concerns  were  raised  on  the  need  for  a  smooth  transition 
between  the  current  and  future  systems.  Several  derogations  were  thus  suggested  to  the 
Commission's  proposals  (possibility  of  keeping  current  payment  entitlements,  possibility  to 
move from a regional to a national model notably). These issues are under examination by the 
Commission.  

4.3 

Streamlining of procurement procedures 

The procurement rules applicable for EU programmes are aligned with the corresponding EU 
in  Member  States.  However,  some 
procurement  Directives  which  are  applicable 
improvements have been made possible. For instance, guarantees will only be required after a 
risk assessment and the procedures for tenders below the thresholds set up by the Directives 
have been simplified.  

EN 

12 

   EN 

 
4.4 

A move towards e-governance 

The  new  FR  allows  Member  States,  EU  institutions  and  partners  to  take  concrete  steps 
towards  e-governance,  through  extended  possibilities  (grants  submission  and  management, 
including e-signature of grant agreements, e-tendering) and strengthened objectives.  

The  Commission  does  not  support  the  Council  proposal  to  postpone  the  deadline  for 
implementation  of  e-cohesion  by  Member  States  from  31  December  2014  to  31 
December  2016  ("CSF"  Funds).  E-cohesion  is  a  major  element  of  the  Simplification 
Agenda and such a delay would diminish the benefits of e-cohesion in terms of reduction 
in  the  administrative  burden  of  beneficiaries.  Furthermore,  the  deadline  of  2014  is 
consistent with the Digital Agenda. The same applies to the Council plans to delete the 
requirement to set up an electronic information system for monitoring and evaluation of 
rural development programmes. 

4.5 

More proportionate and cost effective control 

A  risk-based  approach  was  also  put  forward  in  the  Commission's  proposals  with  regard  to 
audit  and  control  procedures.  The  Commission  has  noted  a  general  request  for  more 
proportionality at all levels and a tendency to limit the scope of Commission's competences 
on  monitoring  and  auditing  in  shared  management  (agricultural  and  cohesion  policies 
notably).  

The Commission is opposed to restrictions introduced by Council on audit and control 
that put the assurance of the Commission at risk (examples: "CSF" Funds and CAP). 

The Commission has consistently opposed such changes to its proposals, as these would lead 
to  undermining  the  level  of  assurance  that  might  be  provided  by  national  authorities  and 
jeopardise  the  progress  that  has  been  achieved  under  previous  multiannual  financial 
frameworks.  The  Commission  recalls  that  there  is  a  considerable  reputational  risk  to  the 
European  Union  as  a  whole  if  the  Commission  together  with  the  Member  States  and  the 
European Parliament are not in a position to take the necessary measures to reduce error rates 
and improve audit and control mechanisms. 

5. 

CONCLUSIONS AND NEXT STEPS 

The Commission: 

- 
Welcomes that, as part of the political agreement on the revised rules of the FR, the 
European Parliament and the Council have taken on board a considerable bulk of its proposals 
aimed at simplifying financial rules for the benefit of stakeholders.  

- 
Notes  that,  at  this  stage  of  the  legislative  process  on  the  proposals  for  the  next 
multiannual  financial  framework,  work  carried  out  in  the  Council  and  the  European 
Parliament indicates broad support for most of its simplification proposals. However, serious 
concerns have to be addressed as some important elements on key issues have been weakened 
in the course of the discussions, with a potential negative impact on the operational flexibility 
needed  in  budget  and  financial  management  including  evaluating  and  reporting  on 
performance. 

EN 

13 

   EN 

 
- 
Stresses  the  need  to  ensure  coherence  between  sector-specific  rules  and  the  overall 
framework  of  the  FR  and  to  strike  a  balance  between  simplification  and  sound  financial 
management.  

Recalls  that  simplification is  a  common  challenge  and  a  shared  responsibility  for  all 

- 
the EU institutions and the Member States.  

- 
Confirms  its  determination  to  continue  to  defend  its  simplification  proposals  and 
monitor  progress  in  the  simplification  agenda  by  identifying  and  highlighting  any  measures 
introduced  during  the  legislative  process  which  increase  administrative  burden  for 
beneficiaries. 

The  Commission  hopes  that  the  present  progress  report  will  contribute  to  reconsidering 
certain alterations to elements of simplification which were central in its proposals, and that it 
will and maintain the momentum for simplification and efficiency of the rules and procedures 
for  spending  programmes.  In  this  way,  the  Union  will  live  up  to  the  high  expectations  of 
beneficiaries and the national administrations for a robust simplification, without reducing the 
quality  of  EU  expenditure.  The  Commission  will  make  available  the  updated  Scoreboard 
following  progress  of  negotiations,  in  due  time  bearing  in  mind  the  European  Council's 
objective of reaching an agreement on the MFF by the end of 2012.  

ANNEX 

MAIN POINTS OF THE SCORE BOARD IN ALL POLICY AREAS 

General 
comments  

Significant work has been accomplished in the Council and the European Parliament 
on most of the Commission proposals for the new spending programs designed for the 
new Multiannual Financial framework (MFF 2014-2020).  

The  importance  of  the  simplification  as  a  horizontal  objective  is  shared  by  the  co-
legislators. However, the ambitions in concrete terms differ. 

The  Council  proposes  more  simplification  particularly  in  the  areas  where  the  EU 
budget is managed by the Member States in cooperation with the Commission (shared 
management),  such  as  agriculture  and  cohesion  policy,  with  the  view  to  providing 
more  flexibility  to  national  administrations.  The  Commission  supports  additional 
simplification elements provided they do not undermine sound financial management 
and the ability for the Commission to discharge its responsibility to ensure compliance 
with the applicable legal framework.  

The  European  Parliament  is  open  to  more  simplification,  shares  the  member  States' 
objective  to  give  more  flexibility  for  national  administrations  in  shared  management 
but needs to define the concrete parameters.  

The  Council  and  EP  positions  concerning  the  decision  making  instruments  on 
budgetary  and  financial  management  matters  complicate  the  legislative  texts  by 
inserting  therein  too  many  technical  details,  render  the  adoption  of  purely  technical 
decisions more difficult and testify the different approaches of the co-legislators in the 
delegation  of  powers  to  the  Commission  (delegated  and  implementing  acts).  The 
Commission  insists  on  maintaining  the  necessary  operational  discretion  for  effective 
financial management in order to respond to the expectations of beneficiaries to speed 
up  the  implementation  of  programs  and  enhance  their  effectiveness  by  cutting  red 
tape. 

EN 

14 

   EN 

 
 
Other  points  where  a  more  balanced  approach  should  be  sought  concern  (a)  the 
effectiveness of the funds impact by keeping a more targeted and focused approach to 
deliver the 2020 strategic objectives, and (b) ensuring a sound financial management 
by proportionate and sound control and audit methodologies.  

The  Commission  will  work  closely  with  the  co-legislators  in  order  to  ensure  that  an 
acceptable outcome is reached in the above priorities.  

Reduction 
of  numbers 
of 
programm
es 

Coherence 
between the 
common rules 
and the sector 
specific rules  

(Article 1 of the 
"CSF" Funds – 
CPR Regulation) 
(COM 2011/615 
final)  

(COM 2011/615 
final) 

"FISCUS" 
programme 

(COM (2011)706 
final) 

The Council position concerning the CSF Funds Regulation (CPR) 
may give rise to multiple derogations in the sector specific rules. 

The Commission considers that derogations in the sector specific 
rules have to be authorized in the common rules; otherwise, there 
is  a  risk  to  undermine  the  designed  harmonization  by  inserting 
multiple derogations in the sector specific rules. In this respect, the 
Commission  supports  the  UK  Statement  to  seek  enhanced 
harmonization of the rules on the Funds covered by the Common 
Strategic Framework.  

The  Council  and  the  European  Parliament  proposed  to  split  the 
integrated  programme  proposed  by  the  Commission  for  customs 
and taxation.  

that  an 

The  Commission  maintains 
integrated  "FISCUS" 
programme  would  ensure  robust  simplification,  boost  synergies 
and  safeguard  coherence  in  implementing  modalities,  without 
affecting  the  distinctive  features  of  the  two  sectors.  Given 
however  the  positions  of  the  co-legislators,  the  Commission  has 
submitted proposals for two separate programmes. 

Single 
sector 
framework  

Common 
Strategic 
Framework  

The  use  of  a  delegated  act  for  the  definition  of  the  non-essential 
elements of the common strategic framework has been rejected by 
Council and Parliament; they propose to include these elements in 
the Annex to the legislative act. 

(Article 12 of the 
CPR) 

The Commission has accepted to follow this approach but insists 
to be empowered to adopt a delegated act to complete the Annex 
with  the  more  technical  non-essential  elements  of  the  common 
strategic framework and to amend the Annex. This is necessary in 
order  to  allow  for  some  flexibility  in  adjusting  the  relevant 
elements to take account of practical experience 

Common rules 
for External 
financial 
instruments  

(COM (2011) 
842 final) 

The  Council  and  the  European  Parliament  rapporteurs  want  to 
include into the sector specific external financial instruments parts 
of  the  Common  Implementing  Rules  Regulation  applicable  to  all 
external  financial  instruments.  The  Commission  will  work  to 
maintain  the  integrity  of  a  single  set  of  simplified  implementing 
rules  under  the  Implementing  Regulation,  ensuring  a  sound 
financial management and legal approach. 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
Single paying 
agency in CAP 

The  Council  Presidency  proposes  to  limit  the  number  of  paying 
agencies per Member State to "the minimum necessary".  

(Article 7 in 
horizontal CAP 
Regulation) 

(COM 2011/ 625 
final 2) 

Single 
coordinating 
national agency 
in "Erasmus for 
all" 

(Article 21) 

(COM (2011)788 
final) 

Three sector 
under one single 
instrument in the 
Connecting 
Europe Facility  

(COM(2011) 665 
final 2) 

The  reduction  to  one  paying  agency  per  Member  State  or  per 
region  has  been  proposed  by  the  Commission  in  order  to  ensure 
further harmonization and simplification of the CAP management 
notably  by  reducing  administrative  burden  and  improving  audit 
efficiency 

The  Commission  proposal  for  a  single  coordinating  national 
agency  per  Member  State  has  been  removed  by  Council  in  its 
partial  general  approach  and  is  questioned  in  the  European 
Parliament competent Committee.  

The  Commission  does  not  agree  with  the  approach,  of  the  EP 
Committee,  which  would  maintain  the  current  situation,  as  this 
would reduce the flexible use of the EU funds within the Member 
States and entail additional administrative work and costs.  

 The  integrated  approach  of  the  Connecting  Europe  Facility  was 
supported  by  the  Council  in  the  Partial  General  Approach  of  7 
June 2012. 

The Parliament, working under a joint TRAN-ITRE Committee on 
this file, shows signs of broad support to the instrument. 

Synergies/
Mainstrea
ming 

Greening of 
direct payments 
in CAP 

(Articles 29-33 
of the Direct 
Payments 
Regulation) 

(COM (2011)625 
final) 

Mainstreaming 
of horizontal 
principles  

(Articles 7, 8 ,48, 
87 of the "CSF" 
Funds) 

Tendencies in Council are emerging which risk watering down the 
Commission proposals. Both the Council and the rapporteur in the 
European  Parliament  have  suggested  amendments  aiming  at 
limiting  the  scope  of  the  greening  requirements  by  for  instance 
raising  thresholds  and  widening  definitions.  According  to  the 
amendments  suggested  by  the  rapporteur  of  the  European 
Parliament  to  the  proposal  to  the  horizontal  CAP  regulation,  the 
non-  respect  of  the  greening  requirements  should  not  affect  the 
basic  direct  payment.  This  would  de  facto  render  greening 
voluntary for farmers.  

Whilst certain adaptations of the Commission technical proposals 
may  be  negotiated,  the  mechanisms  for  greening  should  remain 
credible  in  order  to  safeguard  the  objective  of  linking  30%  of 
direct payments to environment and climate friendly practices. 

are 

supportive  of 

and  Parliament 

reinforced 
Council 
mainstreaming  of 
the  horizontal  principles  of  equality  of 
treatment,  non-discrimination,  sustainable  development  and 
climate change. However, Council's position to give the Member 
States  the  power  to  assess  their  relevance's  in  operational 
programmes would weaken the mainstreaming of these principles. 

EN 

16 

   EN 

 
Clear 
priority 
objectives 
and 
indicators 
(results 
oriented)  

Minimum 
allocation to the 
ESF  

Council  position  in  the  CPR  to  delete  the  minimum  allocation  to 
the  European  Social  Fund  (ESF)  would  weaken  the  focus  on 
Europe 2020 priorities for growth and jobs. 

(Article 4 of the 
ERDF (COM 
(2011) 611 final 
2) 

The  Commission  insists  on  the  need  for  the  ESF  to  have  a 
predictable  budget  through  a  minimum  share  in  cohesion  policy. 
This  is  a  key  to  guarantee  the  necessary  level  of  investments  in 
people  in  order  to  deliver  ambitious  employment  objectives, 
especially  in  view  of  the  need  to  tackle  levels  of  unemployment 
and to fight poverty and social exclusion. 

(Article 5 of the 
ERDF) 

The  Employment  Committee  in  European  Parliament  strongly 
supports all of the above Commission proposals. 

The Council proposes to open the financing of basic infrastructure 
to  more  developed  regions  in  the  areas  of  environment,  transport 
and ICT. The Commission considers that making use of the small 
amounts  available  under  the  European  Regional  Development 
Fund  (ERDF)  in  more  developed  regions  which  are  already  well 
endowed  would  provide  little  economic  benefit.  This  money  is 
much more effectively used to directly stimulate growth and jobs 
in the less developed regions in need.  

Thematic 
concentration in 
the ESF 

(Article 4 of the 
ESF) 

(COM (2011) 
607 final 2) 

Performance 
framework in 
"CSF" Funds 

(Article 20 and 
Annex I in "CSF" 
Funds) 

New objectives 
and indicators  

The  Council  proposes  to  change  the  concentration  mechanism  of 
the European Social Fund (ESF) "promoting social inclusion and 
combatting  poverty".  A  derogation  proposed  by  the  Council 
allowing to count ERDF amounts towards the objective of 20% of 
the  ESF  allocated  to  this  thematic  objective,  would  make  the 
concentration  mechanism  irrelevant.  The  ERDF  amounts  alone, 
especially  in  the  less  developed  regions  could  represent  by 
themselves 20% of the ESF resources. 

The  Employment  Committee  in  European  Parliament  strongly 
supports all of the above Commission proposals. 

The Council has introduced changes to provide more flexibility to 
the Member States and sufficient safeguards to alleviate fears with 
regard  to  negative  incentives  (suspension  of  payments  and 
financial corrections). The Commission can accept these changes, 
but it will not accept to delete or weaken the negative incentives in 
order  to  discourage  poor  performance  and  unrealistic  target 
setting. 

This  is  a  horizontal  issue.  In  many  Commission  proposals  the 
European  Parliament  rapporteurs  and  in  some  cases  the  Council 
suggest  adding  multiple  detailed  objectives  and  new  indicators, 
which  are  less  specific  or  less-relevant  thus  weakening  the  focus 
on results. 

Erasmus for All 

(articles 4,5 and 
11 COM (2011) 

In the Council partial general approach all indicators have been 
removed.  The  Council  proposes  to  define  the  indicators  in  an 
the  other 
implementing  act.  This 
the 
programmes.  Indicators  are  normally  a  component  of 

is  not  consistent  with 

EN 

17 

   EN 

 
 
 
 
788 final) 

legislative act, or should be defined through delegated acts. 

"Creative 
Europe" 
programme  

(Article 14 COM 
(2011) 785 final) 

Health 
programme 

(Articles 2 and 7 
COM (2011) 709 
final) 

Maritime and 
Fisheries Fund 
(EMFF) 

(Article 6 COM 
(2011) 804 final) 

The Council proposes to define the indicators in an implementing 
act.  This  is  not  consistent  with  the  other  programs.  General 
indicators  of  the  programme  as  a  whole  are  a  component  of  the 
legislative act. This is why the basic indicators are defined in the 
legislative text itself and they can be detailed in delegated acts.  

The objective of the programme and the indicators are made much 
broader  and  less  result-oriented  and  as  such  lacking  a  direct  link 
with  the  financial  and  operational  capacities  of  the  programme. 
The  decision  in  the  Council  general  approach  to  generalize  the 
cofinancing rate up to 80% for so-called 'joint actions' between the 
Member States (see below) and the contradictory extension of the 
objectives  covered  contribute  to  a  likely  dilution  of  the 
Programme's  impact  as  less  actions  will  be  able  to  be 
financed.  

The  Council  has  added  new  priorities;  In  particular  the  inclusion 
of  the  reference  to  processing  would  reduce  effectiveness,  given 
the  small  size  of  the  program  compared  to  other  structural 
instruments, the EMFF proposal should focus on core areas in the 
fisheries and aquaculture sectors. 

Flexible 
decision 
making 
procedures  

Delegation of 
powers to 
Commission is 
deleted or 
restricted 

Delegated acts 
versus 
implementing 
acts 

These  are  horizontal 
in  many  changes 
suggested  by  the  Council  and  the  European  Parliament  to  the 
Commission proposals.  

issues  encountered 

The  Council  and  in  some  cases  the  European  Parliament  have 
proposed  to  remove  or  restrict  the  scope  of  the  delegation  of 
powers  to  the  Commission  to  adopt  delegated  acts  for  non-
essential  elements  of  the  legislative  act;  they  have  suggested  to 
include  these  elements  into  the  legislative  act.  This  approach 
burdens the legislative texts with too many technical details which 
complicate the readability of the texts and affect the accessibility 
of stakeholders and curtails the operational management discretion 
necessary  for  a  sound  and  effective  financial  management  of  EU 
funds or imposes lengthy decision making. 

Council  has  proposed  in  many  cases,  especially  in  the  shared 
management areas (CAP, Cohesion Policy, Maritime and Fisheries 
Fund), the conversion of delegated acts into implementing acts in 
order to reinforce the right of control by Member States (through 
comitology  procedures)  and  to  curtail  the  monitoring  by  the  EP. 
This raises questions on the scope and the nature of acts covered 
by Articles 290 and 291 of the Treaty (TFEU) and has important 
institutional consequences. 

On the contrary, the European Parliament proposes systematically 
the  conversion  of  implementing  acts  into  delegated  acts  which 
place  it  on  equal  footing  with  the  Council.  Such  positions  are 
totally  inappropriate  with  regard  to  indicative  programming 
documents  and  annual  work  programmes  which  need  to  be 

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adopted  and  subsequently  be  adapted  swiftly  to  allow  for  timely 
reaction  to  changing  circumstances  and  effective  implementation 
of  the  programmes.  Such  delegated  acts  would  not  be  in 
compliance  with  the  Treaty  and  would  considerably  hamper 
operational  implementation  and  lengthen  "the  time  to  grant  and 
time  to  pay".  They  would  also  be  totally  inappropriate  for 
programming  documents  under  the  Relex  instruments,  which 
require  in  most  instances  to  be  discussed  and  accorded  with  the 
beneficiary third countries. It has to be recalled that programming 
documents are made for implementing, not regulating, the relevant 
legal instruments and thus lack all the legal characteristics (i.e. the 
setting  of  general  and  binding  rules  within  the  EU  legal  order) 
which are required for defining a "delegated act". 

Council  and  in  many  cases  the  European  Parliament  suggest 
further  breakdown  of  the  budget  in  sub-ceilings  for  the  different 
activities  and/or  actions  and  for  technical  assistance  of  the 
programmes  and to fix it on the level of the legislative act. Such 
positions  restrict  the  necessary  operational  financial  management 
discretion of the Commission as they deprive it of the operational 
flexibility  which 
the  proper  day-to  day 
management  of  budget.  They  are  totally  inappropriate  for 
programmes with small financial envelopes and disproportionately 
rigid for the annual work programmes.  

is  necessary  for 

In  the  case  of  European  Territorial  Cooperation  (ETC),  the 
Council  has  proposed  that  the  combination  of  managing  and 
certifying authority functions be made optional. 

The Commission has not agreed to it and has maintained that this 
should  be  mandatory,  to  ensure  proportionate  management 
structures  for  comparatively  small  programmes  under 
the 
European  Territorial  Cooperation,  and  avoid  a  waste  of  scarce 
human resources in the public sector. 

Following agreement on the Financial Regulation (FR), providing 
for  the  eligibility  of  VAT  cost,  on  condition  that  it  is  not 
recoverable and has been paid by a beneficiary other than a non-
taxable  person  within  the  meaning  of  Article  13(1)  of  Directive 
2006/112/EC,  the  sector  specific  proposals  contained  in  the 
Connecting  Europe  Facility  (CEF),  the  CPR  for  the  CSF  Funds, 
and  the  Life  programmes,  which  exclude  the  eligibility  of  VAT 
are being questioned in the Council and the European Parliament.  

The  Commission  believes  that  the  non-eligibility  of  VAT  in 
particular in infrastructure projects is appropriate and thus should 
be  maintained  in  the  relevant  sector  specific  legislative  acts. 
Otherwise, the European Union budget will be used to finance the 
national budgets, instead of financing more projects, which could 
be considered as in contradiction with the objectives and purpose 
of the financing instruments concerned. 

Restrictions of 
the budgetary 
powers of the 
Commission 

ETC  

(Article 20 COM 
(2011) 611 final) 

VAT in 
infrastructure 
projects:  

(Article 8 in 
"CEF" COM 
(2011) 665 
final),  

(Article 59 in the 
"CSF" Funds) 

(Article 20 in the 
"LIFE" 
programme)  

(COM (2011) 
874 final) 

Eligibility 
rules 

Marketing 

Council  suggests  the  deletion  of  the  reference  to  support  for 

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measures in 
(EMFF) 

(Article 71 in 
"EMFF") 

(COM (2011) 
804 final) 

"direct  marketing  of  fishery  products  for  small  scale  coastal 
fishermen" in the Commission proposal concerning the European 
Maritime  and  Fisheries  Fund  (EMFF).  The  European  Parliament 
has indicated its support to the Commission proposal.  

The  Commission  disagrees  with  the  Council  position  as  support 
for small-scale fishing vessels is important as they often lack the 
experience,  knowledge  or  financial  means  to  engage  in  direct 
marketing. 

Single 
reimbursement 
rate 

in "Horizon 
2020" 

(Articles 22 and 
24 of the Rules of 
Participation) 

(COM(2011) 810 
final) 

The  single  reimbursement  rate  for  all  activities  in  the  project  is 
questioned  by  the  European  Parliament  rapporteur  and  the  single 
flat rate for indirect cost is being questioned both by the Council 
and the European Parliament rapporteur. The Commission insists 
on its proposals contained in the Rules for participation in Horizon 
2020,  as  these  issues  are  two  cornerstones  of  the  simplified 
funding  rules  in  Horizon  2020;  they  represent  the  Commission's 
efforts to reduce administrative burden on beneficiaries and "error 
rates,  allow"  a  lighter  control  strategy  and  speed  up  the  time  to 
grant in the interest of beneficiaries. 

Simplified 
cost 
methods 

"CSF" Funds 

(Article 58) 

A  new  option  has  been  proposed  by  Council  for  the  simplified 
calculation of staff costs by dividing the annual gross employment 
cost by 1650 hours. 

Commission has remained reserved as regards this position in the 
absence of underlining method supporting it. 

ESF 

(Article 14 of the 
ESF Regulation) 
COM(2011)607 

In the case of the ESF Council has proposed that operations below 
50.000  Euros  could  also  use  flat  rates  in  addition  to  lump  sums 
and unit costs. 

The  Commission  would  prefer  the  mandatory  use  of  flat  rates 
instead of an option due to the greater potential for simplification.  

Proportion
ate control 

"CSF" Funds 

(Article 140)  

The  Council  has  proposed  amendments  which  limit  Commission 
audit  work  to  an  extent  that  cannot  be  accepted  as  it  risks 
undermining  the  Commission  capacity  to  monitor  the  use  of  EU 
budget and its capability to account for it.  

Audit methods in 
the "CSF" Funds 

(Article 116) 

The  Council  has  proposed  that  national  audit  bodies  in  Cohesion 
policy  may  use  non-statistical 
sampling  methods.  The 
Commission  has  not  accepted  this  position  as  it  does  not 
necessarily  provide  reliable  and  comparable  information  across 
Member States and thus undermines assurance at EU level. 

E-
governance 

"CSF" Funds  

(Article 112) 

The  Council  proposes 
the 
to  postpone 
implementation  of  the  E-cohesion  policy  from  2014  to  2016 
delaying  by  2  years  what  constitutes  a  major  simplification  for 
beneficiaries. The Commission cannot accept this delay. 

the  deadline  for 

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EN 

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