COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposals for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Regional Development Fund and on the Cohesion Fund on a mechanism to resolve legal and administrative obstacles in a cross-border context on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments
Date: 2018-05-29
Institutions: Directorate-General for Regional and Urban Policy, European Commission
Subjects: Cohesion Fund, European Regional Development Fund, European territorial cooperation, administrative cooperation, cross-border cooperation, legal cooperation, regional aid, regional cooperation, regional development, regional disparity

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  EN 

   EUROPEAN COMMISSION  Strasbourg, 29.5.2018 SWD(2018) 283 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposals for a  REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Regional Development Fund and on the Cohesion Fund  on a mechanism to resolve legal and administrative obstacles in a cross-border context  on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments   {COM(2018) 372 final} - {SEC(2018) 268 final} - {SWD(2018) 282 final}  
 
 
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  

1.  SCOPE AND MISSION  

The mission of the European Regional Development Fund (ERDF) and Cohesion Fund (CF) 
is  laid  down  in  the  Treaties:  economic,  social and  territorial  cohesion.  This  means  reducing 
regional and national disparities across a broad range of themes: innovation, competitiveness, 
jobs,  environment,  transport,  education  and  health  infrastructure  and  sustainable  urban 
development. 

A crosscutting priority is cross-border co-operation under European Territorial Co-operation 
('ETC' or 'Interreg') and the European Cross Border Commitment (ECBC). 

To enable consistency with other EU policies under shared management, the rules on delivery 
and implementation of the ERDF and the Cohesion Fund are governed as far as possible by 
the  Common  Provisions  Regulation  ('CPR').  This  sets  out  common  provisions  for  seven 
shared management funds at the EU level: 

 
 
 
 
 
 
 

CF: 
EMFF:  
ERDF:  
ESF+:   
AMIF:  
ISF: 
BMI: 

Cohesion Fund 
European Maritime and Fisheries Fund 
European Regional Development Fund 
European Social Fund Plus 
Asylum and Migration Fund 
Internal Security Fund  
Border Management Instrument 

2.  LESSONS LEARNED FROM PREVIOUS PROGRAMMES 

In  terms  of  the  strategy,  priorities  and  impact  of  the  policy,  the  ex  post  evaluation 
differentiated between themes: 

 

 

Of high added value and impact: support to SMEs, smart specialisation strategies 
and facilitating regions to move up the economic chain, the low carbon economy, 
sustainable urban development and regional co-operation 
Of  lower  impact,  such  as  support  to  large  enterprises  and  airport  investments 
(except in the outermost regions). 

Simplification: the need to reduce the administrative burden. The ex post evaluations of 
the  ERDF  and  the  Cohesion  Fund  found  that  management,  control  and  audit  systems  were 
over-complex. This was a source of administrative uncertainty and delays in implementation. 
Complexity  was  a  particular  issue  in  EU-15  countries  where  the  funding  was  relatively 
smaller, suggesting a need for proportionality. 

The need for flexibility to respond to emerging needs: The ex post evaluation of the ERDF 
and the Cohesion Fund found that the adaptation of programmes in the economic crisis was 
one of the success stories in the 2007-2013 period and should be built upon. 

The potential of financial instruments (FIs):  The ex post evaluation of the ERDF and the 
Cohesion  Fund  found  that  FIs  have  the  potential  to  be  a  more  efficient  means  of  funding 
investment in some policy areas, but there are delays in implementation and it is a challenge 
to spread their use. 

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The Commission carried a public consultation on "EU funds in the area of cohesion policy" 
(10  January  2018  to  9  March  2018).  The  key  conclusions  is  the  need  for  simplification: 
stakeholders found complex procedures to be by far the main obstacle to success, followed by 
heavy  audit  and  control  requirements,  lack  of  flexibility,  difficulty  to  ensure  financial 
sustainability and delays in payments. 

In addition respondents on balance strongly supported: 

 

 

 
 
 

Cohesion  policy  for  all  regions  (though  with  a  continued  focus  on  the  less 
developed). 
Policy 
innovation, 
investment more generally. 
The continuation and development of thematic concentration. 
A focus on local challenges (especially sustainable urban development). 
Interregional cooperation, both cross-border and across Europe. 

including  smart  specialisation  strategies  and  smart 

3.  POLICY OPTIONS 

The options outline alternatives for dealing with the reduction in the budget: 

 
 
 

Option 1: A cut across the board. 
Option 2: Reducing the contribution to the more developed regions. 
Option  3:  Maintaining  support  in  key  areas  (thematic  concentration)  and 
reduction in other themes. 

Option 3 is the preferred option, for reasons including: 

 

To  maintain  a  focus  on  the  themes  of  highest  EU  added  value,  where 
evaluation evidence suggests the policy has had the highest impact. 

  Many  of  the  greatest  challenges  (globalisation  and  economic  transformation, 
transition  to  the  low  carbon  and  circular  economy,  environmental  challenges, 
migration  and  pockets  of  urban  poverty)  increasingly  affect  many  regions 
across  the  EU,  including  more  developed  ones.  EU  investment  is  both 
necessary and a sign of solidarity. 

  Maintaining  critical  mass  -  investments  in  the  more  developed  regions  are 

 

already small in per capita terms. 
A vast majority of stakeholders in the public consultation support ERDF in all 
regions. This scenario ensures also better visibility of cohesion policy funds in 
all Member States. 

4.  PRIORITY OBJECTIVES, THEMATIC CONCENTRATION 

Eleven  thematic  objectives  used  in  2014-2020  have  been  simplified  to  five  clear  policy 
objectives in this regulation: 

1. 
2. 
3. 
4. 
5. 

A smarter Europe - innovative and smart industrial transformation. 
A greener, low-carbon Europe. 
A more connected Europe - mobility and regional ICT connectivity. 
A more social Europe - implementing the European Pillar of Social Rights. 
Europe  closer  to  citizens  –  sustainable  and  integrated  development  of  urban,  rural 
and coastal areas through local initiatives. 

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This  simplification  enables  synergies  and  flexibility  between  various  strands  within  a  given 
objective, removing artificial distinctions between different policies contributing to the same 
objective. It also lays the basis for thematic concentration. 

In  order  to  ensure  that,  in  a  context  of  budget  reduction,  there  is  still  a  critical  mass  of 
investment, the ERDF and the Cohesion Fund Regulation maintains requirements for thematic 
concentration. The majority (65% to 85%) of resources will be concentrated on contributing 
to  the  policy  objectives  which  evaluation  evidence  and  the  impact  assessment  suggest  have 
the highest added value, as well as the greatest contribution to EU priorities:  

 

 

PO1:"a  smarter  Europe  by  promoting  innovative  and  smart  economic 
transformation"; 

PO2:  "a  greener,  low-carbon  Europe  by  promoting  clean  and  fair  energy 
transition, green and blue investment, the circular economy, climate adaptation 
and risk prevention and management". 

In order to enable flexibility, thematic concentration criteria will apply at national level. 

For countries with:   minimum % "PO1"  minimum % "PO2" 

GNI below 75% 

GNI 75-100% 

GNI above 100% 

35% 

45% 

60% 

30% 

30% 

PO1 + PO2 = minimum 85% 

5.  COHERENCE WITH EU PRIORITIES AND WITH OTHER EU POLICIES 

Ex ante conditionalities will continue, but as  'enabling conditions'. They will be fewer and 
tightly focussed on areas that have the most impact on the effectiveness of the ERDF and CF 
support. In addition, they will be revisited across the period. 

There will be greater alignment with the European Semester process. At the programming 
stage, Member States will identify relevant CSRs from the latest two years (2019 and 2020), 
to include in the programmes. CSRs will then be discussed between Commission and Member 
State (and at monitoring committee meetings) as part of the annual policy dialogue. 

The Common Provisions Regulation leads to greater coherence and alignment of rules across 
the 7 shared management funds concerned. 

Given  thematic  concentration  on  PO1,  an  important  question  is  coherence  with  Horizon 
Europe. Horizon Europe will focus on 'European excellence' (the generation and exploitation 
of  new  knowledge,  leading  edge  research),  the  ERDF  on  'regional  relevance'  (diffusion  of 
existing  knowledge  and  technology  to  places  that  need  it,  embedding  it  locally  via  smart 
specialization strategies, building local innovation systems). 

To  enable  consistency  with  the  Connecting  Europe  Facility  (CEF),  there  is  enhanced 
synergy and complementarity where the CEF  will focus in particular on the  "core network" 
while the  the ERDF and the Cohesion Fund will also provide support for the "comprehensive 
network",  including  ensuring  regional  and  local  access  thereto  as  well  as  transport 
connections within urban areas. 

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6. 

INTERREG AND EUROPEAN CROSS BORDER MECHANISMS 

Building  on  the  success  of  previous  Interreg  programmes,  we  are  proposing  an  evolution 
along the following lines: 

• 

• 

Crossborder  programmes  should change  from primarily  managing and  distributing 
funds toward acting as institutions of exchange, facilitating cross-border activity and 
being a centre for strategic planning.  
The addition of co-operation outside the EU. This will take the form of (1) a specific 
strand  for  outermost  regions  (2)  the  incorporation  of  current  IPA/ENI  funding  to 
support enlargement and cooperation with neighbourhood countries. 

Interreg will continue to be able to draw on all of the priority objectives (where appropriate) 
and although funded by ERDF will be covered in an ETC regulation which will set specific 
rules for the Interreg context. 

In  many  cases  cross-border  barriers  (especially  in  relation  to  health  services,  labour 
regulation,  local  public  transport  and  business  development)  stem  from  differences  in 
administrative  practices  and  national  legal  frameworks.  These  administrative  obstacles  are 
difficult for programmes to address alone, requiring decisions beyond programme structures.  

The Commission proposes to facilitate solutions with an "off-the-shelf" legal instrument to 
allow  the  use  of  one  Member  State's  rules  in  a  neighbouring  Member  State.  Since  the 
action  is  voluntary  and  optional,  being  used  (or  not)  at  the  initiative  of  Member  States 
concerned, it respects subsidiarity and proportionality. It also has no cost incidence for the EU 
budget. 

The instrument offers two options: a European Cross-Border Commitment ("ECBC") (which 
itself enables derogation from normal rules) or a European Cross-Border Statement ("ECBS") 
(signatories  undertake  formally  to  legislate  to  amend  normal  rules).  The  mechanism  will 
cover joint projects for any item of infrastructure with impact in a cross-border region or any 
service of general economic interest provided in a cross-border region. 

7.  SIMPLER DELIVERY SYSTEM 

There  is  evidence  of  substantial  administrative  costs  associated  with  the  ERDF  and  the 
Cohesion Fund, estimated in a recent study1 at 3% of average programme costs for the ERDF 
and  2.2%  for  the  Cohesion  Fund.  The  administrative  burden  on  beneficiaries  (including 
SMEs) is higher. 

Most  of  the  measures  simplifying  ERDF  and  Cohesion  Fund  will  be  created  by  the  CPR. 
Many are difficult to quantify financially in advance, but the study estimated that: 

 

 

Greater use of simplified cost options (or payments based on conditions) for the 
ERDF and the Cohesion Fund could substantially reduce total administrative costs 
– by 20-25% if these options are applied across the board.  

A  more  proportionate  approach  to  control  and  audits  would  imply  a  major 
reduction  in  the  number  of  verifications  and  the  audit  burden  for  'low  risk' 
programmes.  This  would  reduce  total  administrative  costs  of  the  ERDF  and  the 

1 

Spatial  Foresight  &  t33,  New  assessment  of  administrative  costs  and  burden  in  ESI  Funds,  preliminary 
results. 

4 

 
 
                                                 
Cohesion  Fund  by  2-3%  and  costs  for  affected  programmes  by  a  much  greater 
amount. 

Further simplifications include: 

 

 

 

 

 

 

 

The combination of different funds – and of financial instruments and grants – 
is codified in simple rules; 

There will no longer be specific rules for revenue generating investments; 

There  will  be  no  major  project  process  (instead,  strategic  projects  will  be 
followed by the monitoring committee). 

Funding  will  be  simplified,  for  example  through  the  seal  of  excellence 
approach. 

Financial  instruments  will  be  better  integrated  into  the  programming  and 
implementation process from the outset and the ex-ante assessment streamlined 
accordingly  -  flexibility  is  proposed  for  the  combination  of  grants  with 
financial instruments;   

The  eligibility  rules  have  been  clarified,  and  rules  on  management  costs  and 
fees have been simplified while keeping them performance based to encourage 
efficient management; 

There will be no additional separate reporting on financial instruments as these 
are incorporated under the same reporting system as all other forms of finance; 

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