Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 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 and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 as regards support to structural reforms in Member States
Date: 2017-12-06
Institutions: European Commission, Secretariat-General
Subjects: Cohesion Fund, EAFRD, European Regional Development Fund, European Social Fund, European fisheries fund, distribution of EU funding, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.12.2017 COM(2017) 826 final 2017/0336 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 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 and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 as regards support to structural reforms in Member States  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Appropriate  national  policies  are  essential  for  the  smooth  functioning  of  a  more 
integrated Economic and Monetary Union. Since many critical policy areas that are 
decisive remain primarily in the hands of the Member States, their coordination and 
the  sequencing  of  reforms  is  essential  to  maximise  their  effectiveness,  not  only  at 
national level, but also at EU level. 

Under the post-2020 Multiannual Financial Framework, the Commission intends to 
propose  a  new  reform  delivery  tool  for  Member  States  committing  to  reforms 
discussed at EU level and agreed in so-called 'reform commitments'. It would have 
its  own  budgetary  endowment,  separate  from  and  in  addition  to  the  European 
Structural  and  Investment  Funds,  which  would  retain  their  own  set  of  rules  and 
conditionalities.   

The  European  Semester  should  remain  the  core  vehicle  for  further  steps  towards 
stronger convergence and more effective coordination of such policies. This new tool 
should  be  set  up  with  a  view  to  support  Member  States  in  implementing  structural 
reforms  identified  in  the  European  Semester  process,  and  ensure  Member  State 
ownership of these reforms.   

This new reform delivery tool would seek to support a broad range of reforms. The 
focus  should  be  on  those  reforms  which  can  contribute  most  to  the  resilience  of 
domestic  economies  and  have  positive  spill-over  effects  on  other  Member  States. 
These include reforms in product and labour markets, tax reforms, the development 
of  capital  markets,  reforms  to  improve  the  business  environment  as  well  as 
investment in human capital and public administration reforms.  

The  Commission  intends  to  test  the  main  features  of  this  reform  delivery  tool  in  a 
pilot phase for the period 2018-2020, by offering the possibility to Member States to 
use  all  or  part  of  the  performance  reserve  in  the  current  European  Structural  and 
Investment (ESI) Funds to support reforms instead of specific projects. To this end, 
the Commission proposes amendments to the Regulation (EU) 1303/2013 (Common 
Provisions Regulation) accordingly. 

It  should  be  recalled  that  a  link  between  the  European  Semester  priorities  and  the 
Union budget has already been  established for the programming period 2014-2020, 
notably  by  introducing  ex-ante  and  macro-economic  conditionalities  for  the 
European Structural and Investment Funds.  

Under  today's  proposal,  such  a  link  is  further  strengthened  by  allowing  Member 
States to use all or part of the performance reserve set up in Articles 20 – 22 of the 
Common Provisions Regulation for cohesion policy to support structural reforms.  

The reforms to be supported would be identified in multiannual reform commitment 
packages  presented  and  monitored  through  the  National  Reform  Programmes.  The 
reform commitments would be defined by the Member States themselves and would 
include a set of reform measures with clear milestones and targets.  

EN 

1 

  EN 

The  Commission  would  then  adopt  a  decision,  by  means  of  an  implementing  act, 
setting  out  these  reform  commitments  and  the  amount  allocated  from  the 
performance  reserve  for  their  support.  This  amount  would  be  proportionate  to  the 
nature  and  importance  of  the  reform.  The  monitoring  and  reporting  on  the 
implementation of its different milestones would be part of the European Semester. 
National  Reform  Programmes  would  be  the  source  of  information  on  progress  and 
should provide information on steps towards reform completion.  

The  annual  Country  Reports  produced  by  the  Commission's  services  as  part  of  the 
European Semester would provide an updated assessment of the reform progress, on 
the  basis  of  which  the  award  of  support  under  this  tool  will  be  decided  by  the 
Commission.  Support  would  be  paid  in  full  once  the  Member  State  has  fully 
implemented the reform commitment.  

• 

Consistency with existing policy provisions in the policy area 

The  proposal  is  consistent  with  the  overall  legal  framework  established  for  the 
European Structural and Investment Funds and is limited to a targeted amendment of 
the Common Provisions Regulation.  

• 

Consistency with other Union policies 

The  proposal  is  limited  to  a  targeted  amendment  of  the  Common  Provisions 
Regulation and maintains consistency with other Union policies. The new structural 
support  instrument  would  be  complementary  to  the  voluntary  technical  support 
provided  via  the  Structural  Reform  Support  Programme  (SRSP).  The  reform 
commitments  could  also  include  areas  for  which  technical  support  from  the  SRSP 
would be requested from the Commission. Request for such technical support would 
remain voluntary. 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  Common  Provisions  Regulation  defines  the  common  rules  applicable  to  the 
European  Structural  and  Investment  Funds  .  Based  on  the  principle  of  shared 
management  between  the  Commission  and  the  Member  States,  this  Regulation 
includes  provisions  for  the  programming  process  as  well  as  arrangements  for 
programme  (including  financial)  management,  monitoring,  financial  control  and 
evaluation of projects. 

The  proposal    creates  an  option  for  Member  States  to  allocate  the  performance 
reserve  referred  to  in  Articles  20  to  22  to  structural  reform  support  on  the  basis  of 
reform  commitments,  and  defines  the  mechanisms  for  implementing  reform 
commitments.   

Subsidiarity (for non-exclusive competence)  

The proposal complies within the subsidiarity principle to the extent that it provides 
continued  increased  support  through  cohesion  policy  for  certain  Member  States 
which opt for the use of the performance reserve for structural reform support. This 
mechanisms needs to be established at European level.  

EN 

2 

  EN 

 
 
Proportionality 

The proposal is a limited and targeted change not going beyond what is necessary to 
achieve the objective of providing support to reforms in Member States. 

Choice of the instrument 

Proposed instrument: amendment of the current regulation. 

The  Commission  has  explored  the  scope  for  manoeuvre  provided  by  the  legal 
framework  and  considers  it  necessary,  in  the  light  of  experience,  to  propose 
modifications to Regulation (EU) 1303/2013. 

3. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

There was no ex-post evaluation/or fitness checks of the existing legislation. 

Stakeholder consultations 

There was no consultation of external stakeholders 

Collection and use of expertise 

Use of external expertise has not been necessary. 

Impact assessment 

n/a 

Regulatory fitness and simplification 

This is not an initiative within the Regulatory Fitness Programme (REFIT). 

Fundamental rights 

The proposal has no consequences for the protection of fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

There is no impact on commitment appropriations since no modification is proposed 
to  the  maximum  amounts  of  European  Structural  and  Investment  Funds  financing 
provided for in the operational programmes for the programming period 2014-2020. 
It should be noted that the proposed modification does not imply any changes in the 
Multiannual  Financial  Framework  annual  ceilings  for  commitments  and  payments, 
which are set out in Annex I of Regulation (EU) No 1311/2013. 

5. 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Not applicable. The existing delivery systems for direct management of the European 
Structural and Investment Funds can be used to monitor the implementation of this 
proposal. 

Explanatory documents (for directives) 

Not applicable 

EN 

3 

  EN 

 
 
 
 
 
 
 
 
 
 
 
Detailed explanation of the specific provisions of the proposal 

Article  1  will  be  modified  to  explain  that  the  Common  Provisions  Regulation  also 
covers support to structural reforms identified in the European Semester process. The 
term 'structural reform' is clarified in a dedicated definition included in Article 2.   

Article  4(7)  is  modified  to  clarify  that  the  structural  reform  support  will  not  fall 
under shared management, but under direct management (financing not linked to cost 
as  set  out  in Article 121(1)(e) of the revised  Financial  Regulation), and not  require 
national co-financing.  

In  Article  15,  a  new  point  is  added  to  explain  that  the  partnership  agreements  also 
need  to  contain  information  on  the  re-allocation  of  the  performance  reserve  to 
structural reform support.  

Article 22 of Regulation (EU) No 1303/2013 is proposed to be be modified to allow 
Member  States  to  allocate  the  performance  reserve  partially  or  fully  to  any  of  the 
following:  

a. 

to  programmes  and  priorities  which  have  achieved  their  milestones  in 
accordance  with  paragraphs  two  to  seven  under  the  existing  performance 
framework, 

b. 

to support for structural reforms  

The  modalities  for  requesting  structural  reform  support  are  included  in  a  new 
paragraph 8 in Article 22.  

A new funding mechanism for support to structural reforms  in the form of financing 
not linked to cost is proposed in Article 23a of this Regulation. It contains the rules 
for establishing reform commitments and the conditions for the disbursement of the 
support to Member States once  the agreed  reform commitments are met.  

The  amendment  to  Article  91  clarifies  that  all  or  part  of  the  performance  reserve 
which  is  included  in  the  overall  amounts  for  the  European  Regional  Development 
Fund  (ERDF),  the  European  Social  Fund  (ESF),  and  the  Cohesion  Fund  may  be 
allocated to support for structural reforms as referred to in Article 23a. 

EN 

4 

  EN 

 
 
 
2017/0336 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 1303/2013 of the European Parliament and of the Council 
of 17 December 2013 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 and laying down general provisions on the European Regional Development Fund, 
the European Social Fund, the Cohesion Fund and the European Maritime and 
Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 as regards support 
to structural reforms in Member States 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
third paragraph of Article 175 and Article 177 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
After consulting the European Economic and Social Committee1,  
After consulting the Committee of the Regions2,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Since  the  economic  governance  of  the  Union  contributes  to  economic,  social  and 
territorial cohesion, it should be possible to support reform commitments undertaken 
by Member States to implement relevant Council recommendations or to maximise the 
growth and competitiveness impact of the cohesion policy funds as a specific form of 
support implemented in direct management.  

In  order  to  facilitate  reforms  conducted  by  the  Member  States  in  the  context  of  the 
economic  governance  process,  it  is  necessary  to  open  the  possibility  to  partially  or 
fully  allocate  the  performance  reserve  set  up  by  Article  20  of  the  Regulation  (EU) 
1303/20133 to support reform commitments undertaken by the Member States. 

Any reallocation from the performance reserve should be subject to the fulfilment of 
commitments  with  respect  to  implementing  reforms  identified  in  the  European 
Semester  process.  Priority  should  be  given  for  the  implementation  of  structural 
reforms which are expected to contribute most to the resilience of domestic economies 
and have positive spill-over effects on other Member States. These include reforms in 
product and labour markets, tax reforms, the development of capital markets, reforms 
to  improve  the  business  environment  as  well  as  investment  in  human  capital  and 
public administration reforms.  

1 
2 
3 

OJ C, , p. . 
OJ C , , p. . 
OJ L 347, 20.12.2013, p.320 

EN 

5 

  EN 

                                                 
(4) 

(5) 

(6) 

(7) 

It  is  appropriate  that  Member  States  propose  a  detailed  set  of  measures  for  the 
implementation of the structural reforms which should contain milestones and targets 
and a timetable of not more than three years  

Support to reform commitments should take the form  of financing not linked to cost 
referred to in Article 121(1)(e) of Regulation (EU) … [Revised Financial Regulation] 
under  direct  management.  The  amount  allocated  to  the  implementation  of  the 
structural reforms should be proportionate to the nature and importance of the reform 
and should complement existing Union support to national reforms.   

The  procedure  for  the  establishment  of  such  commitments,  their  content  and  the 
provisions applicable to this specific form of support should be defined.    

In  order  to  allow  for  the  prompt  application  of  the  measures  provided  for  in  this 
Regulation,  this  Regulation  should  enter  into  force  on  the  day  following  that  of  its 
publication in the Official Journal of the European Union. 

(8) 

Therefore, Regulation (EU) No 1303/2013 should be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Regulation (EU) No 1303/2013 is amended as follows: 

Article 1 

1. 

In Article 1 the first paragraph is replaced by the following: 

“This Regulation lays down the common rules applicable to the European Regional 
Development  Fund  (ERDF),  the  European  Social  Fund  (ESF),  the  Cohesion  Fund, 
the European Agricultural Fund for Rural Development (EAFRD) and the European 
Maritime  and  Fisheries  Fund  (EMFF),  which  operate  under  a  common  framework 
(the 'European Structural and Investment Funds' - 'ESI Funds'). It also lays down the 
provisions  necessary  to  ensure  the  effectiveness  of  the  European  Structural  and 
Investment  Funds  and  their  coordination  with  one  another  and  with  other  Union 
instruments,  and  the  rules  for  the  use  of  the  performance  reserve  to  support 
structural  reforms  identified  in  the  European  Semester  process.  The  common 
rules  applying  to  the  European  Structural  and  Investment  Funds  are  set  out  in  Part 
Two. The rules applying to the partial or full use of the performance reserve to 
support structural reforms are laid down in Article 23a.” 

2. 

3. 

In Article 2, point 40 is inserted: 
"'structural reforms' mean reforms identified in the European Semester process 
in accordance with Article 2-a of Council Regulation (EC) No 1466/97 of 7 July 
1997  on  the  strengthening  of  the  surveillance  of  budgetary  positions  and  the 
surveillance and coordination of economic policies." 

In Article 4, paragraph (7) shall be replaced by the following:  
“7.  The  part  of  the  budget  of  the  Union  allocated  to  the  European  Structural  and 
Investment Funds shall be implemented within the framework of shared management 
between  the  Member  States  and  the  Commission,  in  accordance  with  Article  62  of 
the  Financial  Regulation,  with  the  exception  of  the  amount  of  support  from  the 

EN 

6 

  EN 

 
 
 
4. 

5. 

6. 

Cohesion  Fund  transferred  to  the  Connecting  Europe  Facility  referred  to  in  Article 
92(6) of this Regulation, innovative actions at the initiative of the Commission under 
Article  8  of  the  ERDF  Regulation,  technical  assistance  at  the  initiative  of  the 
Commission,  the  support  for  direct  management  under  the  EMFF  Regulation  and 
the use of the performance reserve for the Funds to support structural reforms 
in accordance with Article 23a.” 

In Article 15, a point (viii) is added to paragraph (1) point (a):  
“(viii)  information  on  the  re-allocation  of  the  performance  reserve  used  in 
accordance with Article 22(1a) point b),”  

In Article 20 the first paragraph shall be replaced by the following:  
“6 % of the resources allocated to the ERDF, ESF and the Cohesion Fund under the 
Investment for Growth and Jobs goal referred to in point (a) of Article 89(2) of this 
Regulation,  as  well  as  to  the  EAFRD  and  to  measures  financed  under  shared 
management in accordance with the EMFF Regulation shall constitute a performance 
reserve which shall be established in the Partnership Agreement and programmes and 
either allocated to specific priorities or, for the ERDF, ESF and Cohesion Fund,  
support structural reforms in accordance with Article 22 of this Regulation.”  

In Article 22, the following paragraph (1a) is added: 
"1a.  A  Member  State  may  decide  to  partially  or  fully  use  the  performance 
reserve for either:  

(a)  programmes  and  priorities  which  have  achieved  their  milestones  in 

accordance with paragraphs 2 to 7; 

(b) 

support  for  structural  reforms,  on  the  basis  of  reform  commitments 
implemented in accordance with paragraph 8 and Article 23a. 

In Article 22, the following paragraph (8) is added: 
"8.  The  decision  of  a  Member  State  to  use  parts  of  or  the  full  performance 
reserve  to  support  structural  reforms  pursuant  to  paragraph  (1a)  shall  be 
accompanied  by  a  proposal  to  undertake  reform  commitments  pursuant  to 
Article 23a, and a proposal to re-allocate all or part of the performance reserve 
in submitting an amendment in accordance with Articles 16(4) and 30(3)." 

7.  

A new Article 23a is added: 

"Support to structural reforms on the basis of reform commitments in the 

European Semester process" 

1. A Member State which opts for a partial or full allocation of the performance 
reserve  under  point  (b)  of  Article  22(1a)  shall  propose  to  the  Commission  a  
detailed  set  of  measures  appropriate  for  the  implementation  of  structural 
reforms  in  accordance  with  Union  law.  This  proposal  shall  include  reform 
commitments which shall contain milestones and targets for the implementation 
of  the  reform  measures  and  a  timetable  which  shall  not  be  longer  than  three 
years.  

2. The Commission shall assess the proposal. It may make observations or seek 
additional  information.  The  Member  State  concerned  shall  provide  the 
requested  additional  information  and  revise  the  reform  commitments  if 
requested to do so.  

EN 

7 

  EN 

 
 
 
3.  The  Commission  shall  adopt  a  decision,  by  means  of  an  implementing  act, 
setting  out  the  reform  commitments  to  be  implemented  by  the  Member  State 
and the amount allocated from the performance reserve for their support. This 
amount shall be proportionate to the nature and importance of the reform and 
complement other measures or operations supported from Union funds.  

4. Support to structural reforms by Member States under this Article shall take 
the form of a financing not linked to cost referred to in Article 121 (1)(e) of the 
Financial  Regulation,  shall  be  managed  in  line  with  the  rules  for  direct 
management  set  out  in  that  Regulation,  and  shall  not  require  national  co-
financing.  Chapter  I  of  Title  II,  and  Titles    III  to  IX  of  Part  Two  of  this 
Regulation do not apply. 

5.  The  decision  referred  to  in  paragraph  3  shall  lay  down  that  the  support  is 
paid  in  full  once  the  Member  State  has  fully  implemented  the  reform 
commitment.  

6.  The  Member  State  shall  regularly  report  within  the  mechanisms  of  the 
European  Semester  on  the  progress  in  the  achievement  of  the  reform 
commitment. The modalities and timetable of the reporting shall be laid down 
in the decision referred to in paragraph 4.  

8. 

In Article 91, the following paragraph is added:  
"4. All or part of the performance reserve which is included in the amounts set 
out in Articles 91 and 92 may be allocated to support for structural reforms as 
referred to in Article 23a on request of a Member State under Article 22(8)." 

Article 2 

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

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 

EN 

8 

  EN