COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the establishment of the Reform Support Programme
Date: 2018-05-31
Institutions: European Commission, Secretariat-General
Subjects: EU Member State, EU aid, EU financial instrument, EU programme, administrative reform, economic convergence, institutional reform, non-participating country (euro area), structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 31.5.2018  SWD(2018) 310 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the establishment of the Reform Support Programme {COM(2018) 391 final} - {SEC(2018) 280 final} - {SWD(2018) 311 final}  
 
 
Contents 

1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ........................................... 3 

1.1.  Scope and context ......................................................................................................... 3 
1.2.  Lessons learned from previous programmes ................................................................ 8 

2.  THE OBJECTIVES ............................................................................................................ 19 

2.1.  Baseline  -  existing  Commission's  instruments  to  support  implementation  of 

reforms ........................................................................................................................ 19 
2.2.  Challenges for the Programme of the next MFF - problem definition ....................... 23 
2.3.  Drivers of the problem ................................................................................................ 26 
2.4.  Main conclusions on the challenges ........................................................................... 28 
2.5.  Objectives of the programmes of the next MFF ......................................................... 29 

3.  PROGRAMME STRUCTURE AND PRIORITIES ........................................................ 32 

3.1.  Legal basis, subsidiarity and proportionality .............................................................. 33 
3.2.  Underlying principles behind the objectives of the new MFF proposal ..................... 34 
3.3.  Complementarity with other Union programmes ....................................................... 36 
3.4.  Critical mass ............................................................................................................... 37 

4.  DELIVERY MECHANISMS OF THE INTENDED FUNDING .................................... 39 

4.1.  Possible delivery mechanisms .................................................................................... 39 
4.2.  Detailed structure of the instruments .......................................................................... 42 
4.3.  Moral hazard ............................................................................................................... 59 
4.4.  Governance arrangements ........................................................................................... 60 
4.5.  Possible impacts of the preferred delivery mechanism ............................................... 60 

5.  HOW THE PERFORMANCE WILL BE MONITORED AND EVALUATED? ......... 63 

5.1.  Monitoring .................................................................................................................. 63 
5.2. 
Impact indicators of the Programme ........................................................................... 64 
5.3.  Evaluation ................................................................................................................... 66 

ANNEX I ....................................................................................................................................... 79 

6.  LEAD DG(S), DECIDE PLANNING/CWP REFERENCES ............................................... 69 

7.  ORGANISATION AND TIMING ........................................................................................ 69 

8.  CONSULTATION OF THE RSB ......................................................................................... 69 

9.  EVIDENCE, SOURCES AND QUALITY ........................................................................... 70 

10.  RESULTS OF THE OPEN PUBLIC CONSULTATION ..................................................... 74 

11.  FEEDBACK FROM THE MEMBER STATES ON THE CURRENT SRSP ...................... 75 

12.  FEEDBACK FROM THE WORKSHOPS IN MEMBER STATES ON THE REFORM 

DELIVERY TOOL ................................................................................................................ 76 

ANNEX II ...................................................................................................................................... 79 

ANNEX III .................................................................................................................................... 86 

1 

 
 
Glossary 

Term or acronym 

Meaning or definition 

Annual Growth Survey 

Annual Work Programme 

Common Provisions Regulation 

Cooperation and Support Plan 

Country-Specific Recommendations 

European Court of Auditors 

European Central Bank 

European Financial Stabilisation Mechanism 

Economic and Monetary Union 

European Regional Development Fund 

European Social Fund 

European Stability Mechanism 

European Structural and Investment Funds 

European Union 

Gross Domestic Product 

Gross National Income 

Impact Assessment 

Multiannual Financial Framework 

Macro-economic Imbalances Procedure 

Member State 

National Reform Programme 

Regulatory Scrutiny Board 

Support Group for Cyprus 

Stability and Growth Pact 

Structural Reform Support Service 

Structural Reform Support Programme 

Technical Assistance 

Treaty on the Functioning of the EU 

Task Force for Greece 

Thematic Objective 

AGS 

AWP 

CPR 

CSP 

CSRs 

ECA 

ECB 

EFSM 

EMU 

ERDF 

ESF 

ESM 

ESIF 

EU 

GDP 

GNI 

IA 

MFF 

MIP 

MS 

NRP 

RSB 

SGCY 

SGP 

SRSS 

SRSP 

TA 

TFEU 

TFGR 

TO 

2 

 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

1.1.  Scope and context 

On  2  May  2018,  the  European  Commission  adopted  its  proposals  for  a  new  Multiannual 
Financial  Framework  (MFF)  for  2021-20271.  Under  these  proposals,  the  Reform  Support 
Programme (the Programme) will have a budget of EUR 25 billion over this period. The proposal 
to establish the Reform Support Programme includes three instruments: a reform delivery tool, a 
technical support instrument (the successor of the existing 2017-2020 Structural Reform Support 
Programme (SRSP); and a convergence facility (technical and financial support for non-euro-area 
Member States, to help them prepare for euro-area membership). This impact assessment report 
is  in  line  with  the  MFF  proposals  and  focuses  on  the  changes  and  policy  choices,  which  are 
specific to this Programme. 

Structural  reforms  are  defined  as  changes  that  modify  in  a  lasting  way  the  structure  of 
economy  and  the  institutional  and  regulatory  framework  in  which  businesses  and  people 
operate. Structural reforms aim to tackle obstacles to the operation of the drivers of growth by, 
for  example,  reorganising  labour,  products,  services  and  financial  markets,  and  thereby 
encouraging  job  creation,  investment  and  productivity.  They  can  also  aim  to  improve  the 
efficiency and quality of the public administration and of the services and benefits offered by the 
State to its citizens.  

Structural  reforms  can  accelerate  the  process  of  economic  and  social  convergence  among 
the Member States, both inside and outside the euro area, and strengthen the resilience of their 
economies. This will lead to greater prosperity and ensure smooth functioning of the Economic 
and Monetary Union  (EMU) as a  whole. Effective implementation of structural reforms is also 
necessary  to  enhance  cohesion  and  competitiveness,  raise  productivity,  and  encourage  growth 
and employment.  

Available research on the impact of reforms on growth suggests important potential gains 
from  the  implementation  of  structural  reforms.  Under  certain  assumptions,  quantitative 
model-based  assessments  of the potential impacts of structural reforms show,  for example,  that 
euro-area  Gross  Domestic  Product  (GDP)  could  increase  by  up  to  6%  in  ten  years  if  Member 
States were to adopt measures to halve the gap vis-à-vis the average of the three best-performing 
Member States in each of the reform areas assessed (labour and product markets).2 There would 
also be positive cross-country spillovers from structural reforms, adding up to 10% to the gains in 
output  in  the  long  run  –  by  boosting  imports,  supporting  trade  partners'  growth,  or  leading  to 
significant improvements in fiscal positions.3 Moreover, again under certain assumptions, overall 
GDP could increase by up to 1.8% if all Member States implemented and enforced Single Market 
legislation in line with the best-performing Member States.4 

1 European Commission, Communication from the Commission to the European Parliament, the European Council, the Council, the 
European Economic and Social Committee and the Committee of the Regions "A modern for a Union that protects, empowers and 
defends, The Multiannual Financial Framework for 2021-2027", 2018, COM(2018) 321 final. 

2 European Commission, "The growth impact of structural reforms, Quarterly report on the euro area", 2013, Vol. 12, Issue 4., p.17: 

http://ec.europa.eu/economy_finance/publications/qr_euro_area/2013/pdf/qrea4_section_2_en.pdf  

3 Varga, J. and in't Veld, J., 2014. "The potential growth impact of structural reforms in the EU. A benchmarking exercise", European 

Economy Economic Papers, No 541. 

4 European Commission, "Single Market Integration and Competitiveness in the EU and its Member States", 2015.   

3 

 
                                                            
Implementation  of  reforms  enables  Member  States  to  acquire  resilient  economic  and  social 
structures.  The  economic  and  financial  crises  exposed  the  vulnerabilities  of  Member  States' 
economic and social structures5, which were not sufficiently resilient to absorb shocks smoothly or 
to  reallocate  resources  effectively.  As  argued  in  the  Commission's  Reflection  paper  on  the 
deepening  of  the  Economic  and  Monetary  Union  (EMU),  after  the  years  of  crisis,  the  euro  area 
economies  need  to  get  on  a  stronger  path  of  growth  and  prosperity,  which  requires  structural 
reforms to modernise economies and make them more resilient to shocks. This should go together 
with  —  and  will  benefit  from  —  a  sustained  re-convergence  across  countries,  to  amplify  the 
benefits of the euro for all citizens and businesses6. 

The  crisis  showed  that  having  resilient  economic  and  social  structures  is  particularly 
important for euro-area Member States, which cannot use exchange rate and monetary policies 
as a way of adjusting to country-specific shocks. Thus, the implementation of structural reforms is 
important not only for the euro area, but also for Member States whose currency is not the euro and 
which  are  taking  effective  steps  towards  adopting  the  single  currency  within a  given  time-frame. 
Structural reforms will help them to further foster resilience in their economies and to prepare well 
for a successful transition to and participation in the euro area. 

Due  to  the  strong  interconnections  between  the  economies  of  the  EU,  insufficient  reform 
efforts  outside  the  euro  area  cannot be  seen  as  a  purely  national  problem.  During  the  crisis, 
macroeconomic issues arising in one Member State had economic and social repercussions in other 
Member  States.  This  is  particularly  true  for  those  Member  States  that  are  sharing  or  about  to  be 
sharing  the  common  currency.  Therefore,  implementation  of  reforms  by  non-euro-area  Member 
States aspiring to adopt the euro within a specific time-frame deserves particular attention7.  

The  implementation  of  reforms  has  been  advancing  slowly  and  unevenly  across  Member 
States, and it has not been satisfactory across all policy areas8, leading to negative impacts on 
cohesion, convergence and resilience of the economies of the EU Member States and therefore of 
the  Union  as  a  whole  (the  problem  is  detailed  in  section  2.2).  One  of  the  reasons  for  the  slow 
implementation  of  reforms  is  uneven  administrative  capacity.  Another  reason  is  that  the  benefits 
often materialise only over the long term, while their economic, social and political costs are often 
incurred  in  the  short  term.  National  governments  might  therefore  refrain  from  embarking  on  the 
implementation  of  some  reforms  for  different  reasons  such  as  the  insufficient  administrative 
capacity to conduct reforms, high political costs in the short term (e.g. pensions reforms) and/or to 
adverse effects on some segments of the population (e.g. adverse effects on employment in the coal 
mining  sector as a consequence of transition to a low-carbon  economy).9  10 Governments that do 

5 The underlying causes of the 2008 financial crisis and the euro-area crisis have been analysed in detail by a number of researchers and 
institutions, and both structural rigidities and the incomplete structure of the EMU have been listed as important factors in explaining 
those crises. Authors differ about the relative importance of these factors, but structural reforms have long been advocated by many as an 
important element in helping economies to withstand asymmetric shocks and minimise the costs of adjustments to such shocks. Recent 
publications by the European Commission show that differences in economic structures contributed to the length and depth of the euro-
area  crisis  and  that  structural  reforms  are  essential  to  strengthen  the  economic  resilience  of  EU  Member  States  by  lowering  the 
vulnerability and exposure to shocks and by fostering their capacity to adjust to them. 
6 Reflection paper on the deepening of the Economic and Monetary Union, 2017, p.13. 
7 Communication  from the Commission to the European Parliament, the European Council and the Council on "A new, modern 

Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020", 2018, COM(2018) 98 final. 

8 ECFIN database on structural reforms: https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases_en   
9 European Central Bank, "The short-term fiscal implications of structural reforms", 2015, ECB Economic Bulletin, issue 7: 

https://www.ecb.europa.eu/pub/pdf/other/eb201507_article02.en.pdf?728f2325a9269245f5f8b3d956c1ab20 

10  Banerji,  A.,  Barkbu,  J.,  John,  J.,  Kinda,  T.,  Saksonovs,  S.,  Schoelermann,  H.  and  Wu,  T.,  "Building  a  better  Union:  incentivizing 

structural reforms in the euro area", 2015, IMF Working Paper, WP/15/201. 

4 

 
                                                            
embark  on  reforms  sometimes  find  it  difficult  to  see  the  reforms  through  to  the  end  because  the 
duration  of  an  electoral  cycle  is  often  shorter  than  the  time  needed  for  the  implementation  of 
"major" reforms. As a consequence, necessary reform efforts may be delayed, abandoned or even 
reversed (drivers of the low rate of implementation of reforms is further analysed in section 2.3). 

The  EU  institutions  have  pressed  on  numerous  occasions  for  faster  implementation  of 
reforms.  In  its  conclusions  of  January  2018  on  macroeconomic  and  fiscal  guidance  for  the 
Member States, the Council of the EU stated that reform implementation remains uneven across 
the EU and that pressing economic and social priorities require decisive progress in implementing 
reforms  to  tackle  the  EU's  structural  challenge.11  Better  coordination  of  the  implementation  of 
structural  reforms  (in  the  euro  area),  in  particular  those  prescribed  in  the  country-specific 
recommendations,  can  create  positive  spillovers  in  Member  States  and  strengthen  their  positive 
effects.12  Also,  the  European  Parliament  acknowledges 
the 
implementation of structural reform is  needed to deliver on growth and jobs, and to carry on the 
fight  against  those  inequalities  that  hamper  economic  growth13.  Implementation  of  growth-
enhancing  structural  reforms  is  essential  to  cope  with  macroeconomic  shocks  and  to  increase the 
competitiveness and stability of Member-State economies14.  

that  further  progress  on 

The  Juncker  Commission,  building  upon  the  vision  set  out  in  the  Five  Presidents'  Report, 
focussed the Commission's priorities in the European Semester process of economic governance on 
the  "virtuous  triangle"  of  boosting  investment,  pursuing  structural  reforms,  and  ensuring 
responsible fiscal policies.  

The  Commission  currently  disposes  of  a  number  of 
instruments  to  support  the 
implementation  of  structural  reforms  (see  Box  1).  However,  for  the  moment,  the  Commission 
does not have at its disposal a tool to provide direct financial contributions for the implementation 
of reforms, nor does it have a tool to provide targeted support for reforms in non-euro-area Member 
States, which have taken demonstrable steps towards adopting the single currency within a given 
time-frame. Moreover, in the absence of a new proposal, the technical support provided under the 
Structural Reform Support Programme will end in 2020. 

Box 1: Instruments supporting the implementation of structural reforms available at EU level  

Several  instruments  are  available  at  EU  level,  which  support  the  implementation  of  structural 
reforms:  

  The  European  Semester  provides  a  framework  for  the  coordination  of  economic 
policies  across  the  European  Union.  Policy  recommendations  provided  by  the  Union 
under the European Semester help to identify reform priorities and to reach agreement on 
these with Member States; 

  Flexibility  rules  within  the  Stability  and  Growth  Pact  (SGP)  allow  for  the  direct 

11 Council conclusions on macroeconomic and fiscal guidance to the member states (annual growth survey), 2018:  

https://www.consilium.europa.eu/en/press/press-releases/2018/01/23/council-conclusions-on-macroeconomic-and-fiscal-guidance-
to-the-member-states-annual-growth-survey/  

12 Council recommendation on the economic policy of the euro area, 2018: http://www.consilium.europa.eu/en/press/press-

releases/2018/01/23/council-recommendation-on-the-economic-policy-of-the-euro-area/  

13 European Parliament, ''Report on the European Semester for economic policy coordination: Annual Growth Survey 2018'', 2018, 

2017/2226(INI). 

14 European Parliament, "Resolution of 16 February 2017 on budgetary capacity for the euro area", 2017, 2015/2344(INI).  

5 

 
 
                                                            
short-term  fiscal  costs  of  reforms  to  be  taken  into  account,  enabling  European  Union 
(EU)  Member  States  implementing  structural  reforms  to  delay  fiscal  adjustment 
compared with the SGP benchmark requirement; 

  EU  support  has  also  increasingly  taken  the  form  of  technical  support.  With  the 
establishment  in  2015  of  the  Structural  Reform  Support  Service  (SRSS)  and  the 
adoption  of  the  Structural  Reform  Support  Programme  (SRSP)  in  2017,  the 
Commission expanded its technical support by creating a dedicated tool, the SRSP, and 
is helping Member States, upon their request, to carry out reforms in key policy areas and 
to strengthen their public administrations and administrative capacities; 

  European  Structural  and  Investment  Funds  (ESIF)  can  finance  investment  project-
related  components  of  structural  reforms  in  the  ESIF  policy  areas  and  thereby  provide 
accompanying measures for the implementation of reforms. 
A  greater  link  between  the  priorities  of  the  European  Semester  and  the  ESIF  was 
established by introducing ex-ante and macroeconomic conditionalities; 

o  Ex-ante  conditionalities  ensure  that  the  necessary  conditions  for  the  effective 

and efficient use of the ESIF are in place.  
These conditions are linked to:  

  policy and strategic frameworks, to ensure that the  strategic documents 
at national and regional levels, which underpin ESIF investments are of 
high  quality  and  in  line  with  standards  commonly  agreed  by  Member 
States at EU level;  
regulatory frameworks, to ensure that  implementation of operations co-
financed by ESIF complies with the EU acquis; 
sufficient  administrative  and 
administration and stakeholders implementing the ESIF.  

institutional  capacities  of  public 

 

 

o  Macroeconomic  conditionality  under  ESIF  allows  the  Commission  to  invite 
countries  facing  economic  difficulties,  or  facing  certain  challenges  under 
relevant economic governance procedures, to revise their national ESIF strategic 
and  operational  documents.  The  European  Commission  would  subsequently  be 
able to suspend ESIF payments if a Member State does not sufficiently modify 
its national ESIF strategic and operational documents. 

However, the existing instruments at EU level have not managed to provide sufficient incentives 
to substantially accelerate the undertaking and pace of implementation of structural reforms and 
accordingly have not managed to reduce the vulnerability to shocks. Section 2.1 discusses this in 
more detail.  

The Commission's Reflection paper on the deepening of the Economic and Monetary Union 
highlighted  the  mismatch  in  terms  of  instruments  at  the  Commission's  disposal  for 
achieving its goal: strong fiscal rules leading to possible sanctions on one hand and, on the other 
hand, soft economic guidance provided through  a process of coordination of economic policies 
under  the  European  Semester.  It  concluded  that  "such  a  governance  construct  has  too  often 
contributed to a lack of progress in very much needed structural reforms and investment''15. 

The  Commission's  Reflection  papers  on  the  deepening  of  the  EMU  and  the  future  of  EU 
finances suggested a dedicated instrument to provide further incentives to Member States 
to  carry  out  reforms.  Achieving  more  convergence  towards  resilient  economic  structures  was 
also highlighted as being equally important for those Member States on their way to joining the 
euro  area.  These  political  orientations  materialised  in  a  Commission  Communication  on  new 

15

 Reflection paper on the deepening of the Economic and Monetary Union, 2017, p. 16. 

6 

 
 
 
                                                            
budgetary  instruments  for  a  stable  euro  area  within  the  Union  framework  (6  December 
2017), which proposed to: 

1.  Amend the SRSP Regulation to increase its budget for the period 2019-2020 by EUR 
80 million and create a dedicated work stream for Member States that intend to adopt the 
euro  to  help  them  acquire  resilient  economic  structures  and  prepare  them  for  euro-area 
membership (under negotiation at present);  

2.  Amend  the  Common  Provisions  Regulation  (CPR)  to  introduce  a  possibility  for 
Member  States  to  use  all  or  part  of  the  performance  reserve  in  the  current  European 
Structural  and  Investment  Funds  (ESIF)  to  provide  financial  incentives  for  the 
implementation  of  agreed  reform  commitments  –  a  pilot  of  the  future  reform  delivery 
tool (under negotiation at present); and 

3.  Create  a  follow-up  programme  to  the  SRSP  under  the  post-2020  Multiannual 
Financial  Framework  (MFF),  also  integrating  a  dedicated  convergence  facility  to 
support preparation for euro-area membership and a new reform delivery tool to support 
the  implementation  of  reforms  identified  in  the  context  of  the  European  Semester 
(present proposal).  

In  the  Communication  on  new  budgetary  instruments  for  a  stable  euro  area  within  the 
Union  framework,  the  Commission  also  committed  to  continue  strengthening  the  link 
between investment, structural reforms and fiscal responsibility by making the best use of the 
flexibility  built  into  the  existing  rules  of  the  Stability  and  Growth  Pact16.The  Commission's 
communication  on  a  new,  modern  MFF  post-202017,  prepared  ahead  of  the  Informal  Leaders' 
meeting  of  23  February  2018,  confirmed  the  announcement  in  the  Communication  on  new 
budgetary instruments by announcing that the reform delivery tool and the convergence facility 
would need to provide strong support and incentives for a broad range of reforms across Member 
States, and indicating a budget line for all instruments in the order of at least EUR 25 billion over 
a seven-year period. 

The  proposal  for  a  Reform  Support  Programme  post-2020  thus  integrates  three 
instruments  into  one  Programme:  the  technical  support  instrument  (the  former  SRSP),  a 
reform  delivery  tool  and  a  convergence  facility  for  non-euro-area  Member  States.  The 
Reform Support Programme aims to support Member States' authorities in their efforts to design 
and  implement  growth-sustaining  structural  reforms  by  providing  both  technical  and  financial 
support.  The  Programme  aims  to  contribute  to  the  overall  objective  of  enhancing  cohesion, 
competitiveness,  productivity,  growth  and  employment.  For  that  purpose,  it  provides  financial 
incentives to Member States to overcome political hesitation to undertake reforms (which could 
be  partly  related  to  financial  or  political  short-term  costs),  and  technical  support  to  Member 
States to strengthen their administrative capacities in relation to challenges faced by institutions, 
governance,  public  administration,  and  economic  and  social  sectors.  Additional  financial  and 
technical support will be made available through the convergence facility to those Member States 

16 Communication from the Commission to the European Parliament, the European Council and the Council on "A new, modern 

Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020", 2018, COM(2018) 98 
final, p.6. 

17  Communication    from  the  Commission  to  the  European  Parliament,  the  European  Council  and  the  Council  on  "A  new,  modern 
Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020", 2018, COM(2018) 98 
https://ec.europa.eu/commission/sites/beta-political/files/communication-new-modern-multiannual-financial-
final, 
framework_en.pdf  

p.10: 

7 

 
                                                            
whose  currency  is  not  the  euro  and  which  have  taken  demonstrable  steps  towards  adopting  the 
single  currency  within  a  given  time-frame.  Participation  in  the  programme  is  purely  voluntary: 
technical  support  will  only  be  provided  at  the  request  of  a  Member  State;  and  the  basis  for 
financial  contributions  through  the  Reform  Delivery  Tool  is  a  voluntary  reform  proposals  put 
forward by a Member State. While participation in the Programme is voluntary, Member States 
experiencing excessive imbalances will be particularly encouraged to come forward with reform 
proposals under the Reform Delivery Tool. 

This  impact  assessment  examines  the  proposal  for  the  Reform  Support  Programme  post-
2020. It presents the objectives and the structure of the Programme, considers different delivery 
mechanisms  and  assesses  the  impacts  of  the  new  instrument.  This  impact  assessment  also 
satisfies the requirements set in Financial Regulation currently in force18 and the provisions of the 
revised Regulation, which will enter in force in July 2018. 

1.2.  Lessons learned from previous programmes 

The Regulation setting up the Reform Support Programme for the period 2021 to 2027 proposes 
to continue with the provision of technical support as defined by the SRSP Regulation 2017/825 
without  substantive  changes,  and  to  add  two  new  instruments  to  the  Commission's  toolbox  to 
support the implementation of reform – a reform delivery tool and a convergence facility. 

1.2.1 Lessons learned on technical support provision 

The Commission has a long experience in the provision of technical support to developing 
countries and to accession countries. The fundamental lesson from this experience (as well as 
experience from other institutions) is the importance of ownership, dialogue, results orientation, 
and  sound  implementation  arrangements19.  Experience  has  shown  time  and  again  that,  if  the 
reforms are not "owned" by the recipient, the technical support is unlikely to lead to sustainable 
reforms. For this reason, it is of paramount importance that technical support is demand driven 
and tailored to the need of the recipient. This important lesson has already been incorporated in 
the SRSP and will continue to be the guiding principle under the new programme.  

Experience with technical support for structural and administrative reforms within the EU 
is more recent. The Commission gained important experience through the provision of technical 
support  through  the  Taskforce  for  Greece  (TFGR)  and  the  Support  Group  for Cyprus  (SGCY). 
Both  (ad-hoc)  structures  were  integrated  in  the  SRSS.  The  technical  support  for  structural 
reforms  provided  to  Greece  by  the  Commission  services  and  coordinated  by  the  TFGR  was 
subject to both internal and external evaluations, which provided useful lessons for the design of 
the  future  Reform  Support  Programme.  The  SRSS  is  currently  also  carrying  out  an  ex-post 
external evaluation of the technical support delivered to Greece by the TFGR. 20  

18 Regulation (EU, EURATOM) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules 
applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002, OJ L 298, 26.10.2012, 
p. 1. 

19 European Commission, "Making Technical Cooperation More Effective", Guidelines no 3, 2009. 
20 See https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-5585177_en 

8 

 
                                                            
An  evaluation  was  carried  out  by  an  independent  consultancy  in  July  2014.21  Overall,  it 
concluded  that,  in  the  areas  covered  by  the  evaluation,  the  technical  assistance  delivered  and 
coordinated  by  the  TFGR  contributed  significantly  to  the  implementation  of  the  reform 
programme  in  Greece.  This  conclusion  was  based  on  an  assessment  of  the  effectiveness, 
efficiency, relevance and sustainability of the assistance delivered and was largely confirmed by 
the  responses  of  most  of  the  stakeholders  involved.  They  indicated  that,  in  the  absence  of 
technical assistance delivered by the TFGR, the reforms undertaken would not have materialised. 

Other important conclusions of the evaluation included: 

  Continuity of technical assistance is an essential factor if a reform is to be sustainable;  
  Clear leadership, structure and funding models are required for the future; 
  Technical  assistance  should  be  provided  not  only  when  an  EU  country  is  in  crisis  -  it 

should be a normal activity within the EU; 

  The  European  Commission  can  work  with  Member  States  to  establish  a  permanent 
structure  with  a  dedicated  budget  to  enable  co-operation  and  exchange  of  expertise 
between  Member  States  and  co-ordinate  the  provision  of  technical  assistance  to  all 
Member States to enable sharing and adoption of best practices; 

  Exchanging  best  practice,  not  just  ideas  but  also  implementation  of  those  ideas,  was 

highlighted as being important; and 

  Provision of technical support should be based on the commitment from the authorities 

concerned to use the technical support to implement reforms. 

In  addition,  an  audit  of  the  TFGR  was  conducted  in  2015  by  the  European  Court  of 
Auditors (ECA)22 to assess how effectively the assistance to Greece had been managed and 
whether  it  had  contributed  positively  to  the  process  of  reform  implementation  in  Greece 
(limited to the economic adjustment programme). The contribution of technical support to the 
implementation  of  reforms  was  confirmed  by  the  ECA  evaluation  of  the  TFGR.  The  ECA 
concluded  that,  overall,  the  TFGR  had  been  successful  in  achieving  its  mandate  –  providing 
relevant technical assistance in areas covering almost the entire spectrum of public policy, which 
was  largely  in  line  with  the  conditions  of  the  economic  adjustment  programme.  Some 
shortcomings  identified  by  the  ECA,  notably  the  lack  of  a  dedicated  budget,  the  lack  of  a 
comprehensive strategy and the lack of systematic monitoring of the results, were subsequently 
addressed within the SRSS and in the design of the 2017-2020 SRSP. 

The Structural Reform Support Programme (SRSP) entered into force on 20 May 2017. It 
incorporated a number of important lessons from the experience with technical support inside and 
outside  of  the  EU.  The  SRSP  is  fully  demand  driven;  it  is  accessible  for  all  Member  States, 
whether they are in crisis or not; and it focuses on results/implementation. The implementation of 
the  SRSP  began  following  the  adoption  of  the  2017  Annual  Work  Programme  (AWP)23  of 

21 Alvarez & Marsal Taxand, Adam Smith International, "VC/2014/0002 "Preliminary Evaluation of the Technical Assistance provided 

to Greece in 2011-2013 in the areas of Tax Administration and Central Administration Reform", 2014.  
22  European  Court of  Auditors, "More attention  to  results  needed  to  improve  the  delivery  of technical  assistance  to  Greece",  2015: 

http://www.eca.europa.eu/Lists/ECADocuments/SR15_19/SR_TFGR_EN.pdf 

23 Annex to Commission Implementing Decision on the adoption of the work programme for 2017 and on the financing of Structural 
final: 

Reform 
https://ec.europa.eu/info/sites/info/files/srsp2017_annual_work_programme.pdf  

C(2017)3093, 

Programme 

repealing 

Decision 

C(2017) 

Support 

2017, 

5780 

and 

9 

 
                                                            
September  2017  and  has  continued  with  the  adoption  of  the  2018  AWP24  in  March  2018.  In 
accordance with Article 16 of the SRSP Regulation, the Commission will provide the European 
Parliament  and  the  Council  with  an  annual  monitoring  report  on  the  implementation  of  the 
Programme and an independent evaluation report by mid-2019.  

So far, the SRSS has completed two selection rounds of SRSP requests.25 In the 2017 cycle, 
271 requests for support were submitted by 16 Member States for an estimated amount equal to 4 
times the available annual SRSP 2017 budget of EUR 22.5 million. In the 2018 cycle, despite the 
close  proximity  of  the  two  rounds  (due  to  the  late  adoption  of  the  SRSP),  444  requests  were 
submitted  by  24  Member  States  for  an  estimated  amount  equal  to  5  times  the  available  annual 
SRSP 2018 budget of EUR 30.5 million. It can thus be observed that, since the SRSP entered into 
force, there has been a very high take-up of the Programme by Member States, with requests for 
support significantly exceeding the amount of funding available for its annual cycles.  

Box 2: Added value of the technical support provided by the SRSS to date 

Since the SRSP has been in operation only since May 2017 and as structural reforms take 
time to be completed, it is not yet possible to evaluate the impact of the SRSP on reform 
implementation;  however,  some  useful  lessons  can  still  be  drawn  from  the  experience  so 
far. The proposal to continue with technical support is based on the overall positive experience 
gained since 2011 with the provision of technical support, first in the context of the Task Force 
for Greece (TFGR) and Support Group for Cyprus (SGCY) and later by the SRSS (section 1.2). 
Even though the technical support provided by the TFGR and the SGCY to Greece and Cyprus 
was linked to their economic adjustment programmes, which constitute a different context than 
for  the  new  tool,  very  relevant  lessons  and  conclusions  can  be  drawn  from  these  two 
experiences,  notably  in  relation  to  the  impact  of  technical  support  and  on  its  operational 
modalities. In addition, while several requests for support to TFGR and SGCY were linked to 
conditionalities  of  the  macroeconomic  adjustment  programme,  technical  support  was  also 
provided outside of the scope of the adjustment programme. Furthermore, Cyprus, for example, 
has  continued  to  request  a  substantial  amount  of  technical  support  even  though  it  exited  the 
economic adjustment programme. Cyprus is in fact one of the Member States that has submitted 
the highest number of requests under the SRSP. In addition, the very high demand for support 
under the two  selection rounds of the SRSP  implies that there is a clear demand  for technical 
support, even in the absence of a macroeconomic adjustment programme.  

Since  2015,  the  SRSS  has  been  handling  around  500  projects  (SRSP,  Preparatory  Action  and 
projects coordinated by the TFGR and the SGCY), out of which: around 20% have already been 
completed; 65% are currently being implemented on the ground; and the remainder are still in 
the preparation phase (projects selected only recently through the SRSP 2018 selection round). 

24 Annex to Commission Implementing Decision on the adoption of the work programme for 2018 and on the financing of Structural 

Reform Support Programme, 2018, C(2018) 1358 final. 
https://ec.europa.eu/info/sites/info/files/srsp2018_annual_work_programme.pdf  

25  Before  the  SRSP  Regulation  entered  into  force  in  2017,  some  countries  had  already  benefitted  from  support  provided  under  the 

Preparatory Action. 

10 

 
 
                                                            
The distribution across the policy areas covered is as follows: 

  35% business environment and growth;  
  22% labour market, health, education and social services; 
  14% governance and public administration; 
  18% revenue administration and public financial management; and 
  11% financial services and access to finance. 

Results of projects completed so far show that the support delivered by the SRSS is crucial for 
achieving the objectives set in the different intervention areas due to the specific expertise that 
the support provides, the exchange of the existing good practices across the Member States and 
the centralised coordination of the various support activities. 

The feedback received from Member States benefiting from SRSS support or from participants 
in the workshops organised to present the proposal for a pilot phase of the reform delivery tool, 
which took place in spring 2018 (see Annex 2), confirmed the added value of the support that 
the SRSS technical support may bring and the high appreciation  by the Member States of the 
support provided. 

Projects are currently ongoing in 24 Member States in all policy areas of the economy. While 
the SRSP can address individual stages of the reforms, the experience so far shows that Member 
States  are  asking  for  a  more  comprehensive  approach,  addressing  preparation,  design  and 
implementation of reforms. 

Reforms  supported  by  the  SRSS  through  the  technical  support  projects  cover  a  wide  range  of 
areas:  reforms  in  tax  administrations,  education,  healthcare,  judicial  systems,  labour  market, 
pension systems, reforms in the field of climate action and energy, reforms in the customs law, 
restructuring  of  state-owned  enterprises,  enforcement  of  competition  legislation,  review  of 
transport 
internal  audit 
procedures,  improvement  of  regulatory  frameworks  (e.g.  regulated  professions),  strengthening 
of insolvency frameworks, financial supervision, digital transformation, medical assistance for 
disability,  development  of  capital  markets,  fight  against  corruption  and  money  laundering, 
management of non-performing loans, or reforms of statistical and budgetary systems. 

infrastructure,  human-resources  management,  development  of 

Examples of support provided by the SRSS (SRSP and pre-SRSP) 

The  Cypriot  authorities  received  support  to  enhance  the  entrepreneurial  ecosystem.  A 
governance  body  of  representatives  from  the  public  and  private  sectors  was  created  to  help 
implement the national strategy on entrepreneurship (National Policy Statement on Enhancing 
the  Entrepreneurial  Ecosystem)  and  over  50%  of  all  actions  in  this  statement  have  been 
implemented.  The  provision  of  technical  support  contributed  to  preparing  a  law  on  social 
entrepreneurship.  In  the  last  few  years,  the  number  of  new  business  and  employees  in  the 
SME sector has increased substantially. 

The SRSS supports national authorities in  Latvia and Slovenia in their efforts to develop and 
implement  frameworks  for  assessing  the  performance  of  their  health  systems.  The  project  is 
ongoing,  with  the  aim  of  improving  the  quality  and  effectiveness  of  health  care  and, 
therefore, the well-being of the population. 

11 

 
The  SRSS  provided  technical  support  to  the  Bulgarian  authorities  by  carrying  out  an 
independent  analysis  of  the  structure  and  independence  of  the  Public  Prosecutors'  Office  with 
the objective of contributing to the implementation of a strategy for judicial reform. In response 
to the recommendations prepared through the support from the SRSS, the authorities  set out a 
joint  roadmap  covering  both  organisational  and  potential  legislative  measures.  The 
roadmap is currently being implemented. 

For  several  years,  the  Greek  authorities  received  support  to  establish  an  independent  agency 
for  public  revenue,  which  was  created  in  January  2017.  A  variety  of  work  streams  came  as  a 
follow-up to the creation of this agency and support was provided for the core functions of the 
tax  administration:  debt  collection,  taxpayer  audit,  dispute  resolution,  customs  reorganisation, 
fuel and tobacco smuggling, IT, property revaluation and taxpayer services. Additional support 
measures helped the authorities to establish new processes to improve the national tax collection 
system. In the last few years, the rate of tax and debt collection increased markedly. 

The  SRSS  is  supporting  Estonia,  Latvia  and  Lithuania  in  their  efforts  to  improve  regional 
capital  markets  in  the  Baltic  States  with  the  introduction  of  a  pan-Baltic  covered  bond 
framework.  The  support  measures  are  ongoing  and  the  projects  are  expected  to  contribute 
towards  well-functioning  and  larger  capital  markets  in  the  region;  open  up  long-term  funding 
options  for  banks,  allowing  them  to  increase  lending  to  regional  economies  and  ultimately, 
increase  the  resilience  and  competitiveness  of  the  Baltic  economies  in  the  face  of  external 
shocks. 

Besides  the  oversubscription  for  the  amounts  available  under  the  SRSP,  based  on  the  feedback 
received from the Member States and preliminary observations from the implementation of initial 
SRSP projects on the ground, the European added value of the SRSP can so far be described 
as follows: 

  The Programme fills a gap in the implementation of structural reforms by supporting the 
the  reform  process:  preparation,  design, 

Member  States  at  various  stages  of 
implementation, and monitoring of reforms; 

  Member States appreciate the fact that support is provided without any co-financing from 

national budgets; 

  Participation  entails  a  rather  low  administrative  burden  compared  to  other  Union 

programmes, and the support can be delivered relatively rapidly; 

  The SRSP contributes strongly to consistent implementation of strategic Union priorities. 
Around 90% of the projects selected for funding in 2017 and 2018 directly contribute to 
either  EU  economic  governance,  Union  priorities,  Union  law,  or  the  economic 
adjustment programme; and around 10% contribute to Member States' own priorities;26 
  The SRSP actions often contribute to the development and implementation of solutions 

 

that address cross-border issues and Union-wide challenges; 
In  some  cases,  the  support  has  also  enabled  funding  to  be  leveraged  from  other  Union 
programmes, e.g. by helping to better prepare or integrate projects under the ESIF; 

26 Internal SRSS assessment.  

12 

 
                                                            
  Member States seem to especially appreciate the sharing of expertise with other Member 

States or experts; 

  The voluntary character of the participation in the Programme and the consensual nature 
of the cooperation throughout the entire support process help to develop mutual trust and 
promote cooperation. 

The  first  internal  assessment  and  the  results  of  the  relevant  parts  of  the  stakeholder 
consultation27 allow a number of key conclusions from the first two rounds to be drawn:  

1.  The  high  number  of  requests  for  support  submitted  by  the  Member  States  in  the  two 
rounds  indicates  that  there  is  a  high  demand  for  the  specific  support  provided  by  the 
SRSP and thus a need for support for reform design and implementation. The importance 
of  the  implementation  of  structural  reforms  was  also  highlighted  in  the  open  public 
consultation  –  a  total  of  63%  respondents  consider  sound  economic  governance  and 
implementation of reforms to be very important;28  

2.  The quality of the requests submitted by the Member States has been increasing over the 
years  as  a  consequence  of  the  learning  process  and  thanks  to  the  interaction  and 
discussions  between  the  SRSS  and  the  Member  States  prior  to  the  submission  of 
requests.  It  can  thus  be  assumed  that  submission  of  relevant  requests  for  support  will 
continue to grow in the coming years;  

3.  A  number  of  good  quality  requests,  which  had  met  the  criteria  defined  by  the  SRSP 
Regulation (worth almost EUR 100 million), could not be selected due to the budgetary 
constraints.  Only  13%  of  the  requests  submitted  were  considered  to  be  not  mature 
enough to be financed by the SRSP immediately in 2018; 

4.  The  experience  on  the  ground  so  far  has  shown  that  tailor-made  support,  which  may 
consist  of  analysis  of  the  problems,  development  of  action  plans,  guidance  and  other 
outputs  to  be  used  for  the  successful  implementation  of  the  reform,  is  effective  in 
delivering the expected results;  

5.  During  the  first  two  SRSP  rounds,  Member  States,  whose  currency  is  not  the  euro  and 
which  have  publicly  announced  their  wish  to  adopt  the  single  currency  (Bulgaria, 
Croatia,  and  Romania),  submitted  requests  for  support,  of  which  around  50%  could  be 
considered  relevant  for  preparation  for  future  accession  to  the  euro  area.  Due  to  the 
budgetary  constraints,  the  current  SRSP  has  not  been  able  to  adequately  satisfy  all  of 
these requests. 

In  summary,  the  experience  with  the  provision  of  technical  support  to  Member  States  is 
positive. In Member States where the SRSS has been active for a longer period of time, notably 
Greece and Cyprus, some very important and tangible results have been achieved. In addition to 
the lessons from this experience, the SRSP had already incorporated some very important lessons 
from the Commission’s experience in providing technical support to non-EU countries. The key 
lesson from this experience is the importance of country ownership of reforms. This is a central 
element  in  the  design  of  SRSP,  which  will  be  retained  in  the  new  programme.  The  main 
bottleneck at present appears to be the limited size of the available amounts within the SRSP. In 

27 See Annex 2. 
28 See Annex 2. 

13 

 
 
                                                            
addition,  it  is  important  to  ensure  that  Member  States  follow  up  on  the  technical  support  and 
carry on with implementation of the reforms. This underlines once again the importance of full 
ownership of reforms.  

1.2.2.  Relevant lessons for the future provision of financial support 

While  technical  support  provides  crucial  support  to  Member  States  for  the  preparation, 
design and implementation of reforms, it does not always offer sufficient incentives to start 
and/or  accelerate  and/or  complete  the  reforms.  Effectiveness  of  the  support  depends  on  the 
Member State's commitment to actually use the support provided, as well as the Member State's 
ownership of the reforms. Some challenges identified by the previous evaluations and the ECA 
still  remain.  Therefore,  having  an  additional  tool  to  strengthen  the  ownership  of  and  the 
commitment  by  the  Member  States  to  implement  reforms  to  use  the  outputs  of  the  technical 
support could help to make this programme more effective and even more result-oriented. 

The  Commission  has  significant  experience  with  budget  support  to  countries  outside  the 
EU29.  Evaluations30  have  pointed  to  significant  developmental  results  of  budget  support 
arrangements.  These  include  important  contributions  to  economic  growth,  improved  financial 
management  and  expansion  of  service  delivery  to  the  population31.  Positive  aspects  of  budget 
support  include  that:  it  is  results-based;  it  is  non-distortive  since  it  is  an  integral  part  of  a 
country's  policy-making,  planning,  budgeting  and  execution  cycle;  and  it  is  a  relatively  cost-
effective  way  of  delivering  support.  Budget  support  has  also  proven  to  be  an  effective  way  to 
deepen  the  policy  dialogue.  As  it  is  directly  linked  to  reforms,  it  implies  the  existence  or  the 
building  of  effective  country  systems  to  collect  information  and  statistics  on  results  in  order  to 
monitor  progress  and  evaluate  impact.  Clarity  on  the  choices  of  indicators,  realistic  targets, 
resource requirements and institutional set-up are all important elements for the effectiveness and 
reliability of the system.  

Evaluations  of  budget  support  instruments  also  point  to  the  fact  that  the  impacts  of  this 
instrument are positively correlated with the administrative capacity of the recipient and indicate 
that the combination of financial and non-financial (technical support) inputs is expected to have 
reciprocal effects, increasing the effectiveness of both financial and non-financial elements32.  

Given  that  on  average  the  administrative  capacity  in  the  EU  is  higher  than  that  of  the  typical 
recipient of budget support outside of the EU, this bodes well for the future reform delivery tool. 
It also means that, in case of administrative shortcomings, it would be important to complement 
the provision of financial support with technical support.  

Despite important differences in the type of support, some lessons can also be learned from 
the  Commission's  experience  with  macroeconomic  adjustment  programmes  in  the  EU. 
Under  a  macroeconomic  adjustment  programme,  Member  States  receive  financing  from  either 

29 European Commission, Budget Support Guidelines no 7, 2017. 
30 All relevant European Commission evaluations can be found at https://ec.europa.eu/europeaid/node/80199  
31 European Commission, "Analysis of the findings, conclusions and recommendations of seven country evaluations of budget 

support", Synthesis of budget support evaluations, 2014. 

32 German Institute for Development Evaluation (Deval), "What we know about the effectiveness of budget support", Evaluation 

synthesis, 2017. 

14 

 
                                                            
 
the ESM or the Balance of Payments (BoP) assistance or the EFSM, conditional on implementing 
reforms. A clear difference is that under the proposed reform delivery tool, the initiative for the 
reform proposal lies with the Member State. However, in terms of the definition of the planned 
reforms,  the  formulation  of  targets,  milestones  and  the  arrangements  for  monitoring,  a  similar 
level of detail will be required.  

The  European  Structural  and  Investment  Funds  (ESIF)  provide  limited  incentives  for 
reforms.  Under  the  current  MFF,  the  link  between  the  ESIF  and  structural  reforms  has  been 
strengthened.  The  main  instrument  to  incentivise  reforms  through  the  ESIF  is  the  so-called  ex-
ante  conditionalities  (now  called  enabling  conditions).  The  ex-ante  conditionalities  specify  the 
conditions  that  must  be  fulfilled  before  the  programme  implementation  is  launched.  The 
European  Court  of  Auditors  (ECA)33  concluded  that  whereas  the  ex-ante  conditionalities 
provided  a  consistent  framework  for  assessing  the  Member  States  readiness  to  implement  EU 
funds, the extent to which it has effectively led to changes on the ground is still unclear.  

A number of shortcomings of the ESIF were identified by ECA, some of which are inherent 
to the ESIF instruments. It was noted that the Commission has not made use of the possibility 
to  stop  ESIF payments  even  though  some  Member  States  failed  to  fulfil  the  applicable  ex-ante 
conditionalities. In addition, it was noted that the monitoring framework did not extend beyond 
2016.  Lastly,  it  was  highlighted  that  the  scope  of  the  ex-ante  conditionalities  is  by  definition 
rather limited. In addition, the Court pointed to  a number of issues that are also highly relevant 
for the design of the reform delivery tool. This applies in particular to the need for specific and 
clear  assessment  criteria  for  instruments  such  as  the  ex-ante  conditionalities  and  to  the  need  to 
ensure consistency with the analysis in the European Semester.  

Macroeconomic conditionality under ESIF allows the Commission to invite countries facing 
economic  difficulties,  or  facing  certain  challenges  under  relevant  economic  governance 
procedures,  to  revise  their  national  ESIF  strategic  and  operational  documents.  The 
European Commission would subsequently be able to suspend ESIF payments if a Member State 
does  not  sufficiently  modify  its  national  ESIF  strategic  and  operational  documents.  However, 
given that macroeconomic conditionality is an instrument of last resort, it is by its very nature not 
well-suited to promote reforms in good times. 

Studies and evaluations34 show that the ESIF can finance actions and can provide support 
to  the  investment  components  of  some  structural  challenges  (implementation  costs  and 
related  investment  measures).  On  the  other  hand,  in  the  case  of  reforms  that  are  mostly 
regulatory, with no implementation or investment costs that could be eligible for ESIF financing, 
the  relevance  of  the  ESIF  is  very  limited.  Whereas  the  ESIF  can  help  to  finance  some  actions 
related to reforms, they have not been very effective in promoting the design and implementation 
of structural reforms in their entirety.35  

33 European Court of Auditors, Special Report, ex-ante conditionalities and performance reserve in cohesion: innovative but not yet 

effective instruments, 2017. 

34 European Commission, study on "Support of ESI Funds to the implementation of the Country Specific Recommendations and to 

structural reforms in Member States", 2018, under finalisation. 

35 Kersan-Skabic, I., Tijanic, L. "Regional absorption capacity of EU funds", 2017, Economic research-Ekonomska Istrazivanja, Vol. 
30, No. 1, 1191-1208. 

15 

 
                                                            
To gather ideas on the design of the future reform delivery tool, the Commission organised 
a  number  of  technical  workshops  in  each  Member  State.  The  main  feedback  from  Member 
States can be summarised as follows:36 

  There  is  a  need  to  clearly  define  potentially  eligible  reforms  and  how  these  would  be 

assessed, evaluated and monitored; 

  All EU Member States should be able to benefit from the tool; 
  Concentration of funds on a limited number of Member States should be avoided; 
  Complementarity with the other instruments (especially the ESIF and the SRSP) must be 

ensured; 

  The tool should be designed so as to avoid "strategic delays" (moral hazard);  
  The  scope  of  reforms  covered  by  the  future  instrument  should  be  broader  than  the 

Country-Specific Recommendations; and 

  The  European  Semester  should  be  the  right  vehicle  to  monitor  the  implementation  of 
reform  commitments  under  the  future  reform  delivery  tool,  even  though  some  Member 
States  were  concerned  that  the  European  Semester  process  could  become  too  complex 
and burdensome after integrating the future reform delivery tool. 

In summary, the Commission's experience with budget support to countries outside of the 
EU  and  experience  with  ESIF  funds  suggest  that  a  reform  delivery  tool  can  be  a  very 
valuable  additional  tool  to  promote  the  necessary  reforms  in  Member  States.  Whereas  the 
ESIF can finance some of the investment-related costs of reforms, the ESIF have only a limited 
relevance  for  structural  reforms.  This  is  not  surprising  given  that  the  mission  and  goals  of  the 
ESIF  are  defined  in  terms  of  investment.  As  is  well  known  from  the  field  of  economics, 
promoting  two  objectives  with  a  single  instrument  is  unlikely  to  be  effective,  because 
inconsistencies between the objectives may and typically do arise. This phenomenon is captured 
by the Tinbergen rule. The possibility of suspending payments under ESIF  – for example if ex-
ante  conditionalities  are  not  met  –  is  a  case  in  point.  The  possibility  to  suspend  may  have  a 
positive  impact  on  the  prospects  for  reform  implementation.  At  the  same  time,  it  risks  to 
undermine  –  at  least  in  the  short  run  –  the  investment  agenda.  By  adding  a  dedicated  policy 
instrument – i.e. the reform delivery tool – this tension is resolved. In the design and application 
of  the  instrument,  a  number  of  important  lessons  will  need  to  be  heeded.  These  include  the 
importance  of  country  ownership,  and  the  need  for  clear  assessment  criteria  and  appropriate 
monitoring arrangements.  

1.2.3.  Lessons  learned  from  past  experience  related  to  euro-area  membership  and 

convergence 

According to a Commission internal study37, the majority of non-euro-area Member States, 
which entered the EU in 2004 and 2007, achieved significant real convergence vis-à-vis the 
original euro area members after 2004, but a convergence gap remains. Average real GDP 
growth  in  these  Member  States  was  strong  prior  to  the  global  financial  crisis;  it  declined 
considerably in the post-crisis period, and picked up recently. A sizeable real convergence gap, in 
terms  of  average  GDP  per  capita  in  purchasing  power  standards  thus  still  exists  between  the 

36 See Annex 2 for more details. 
37 European Commission, internal study, 2017. 

16 

 
 
                                                            
majority  of  the  non-euro-area  Member  States  that  joined  EU  in  2004-2007  and  the  rest  of  the 
euro area. In addition, dispersion of real GDP per capita of the countries that were members of 
the  euro  area  before  2007  shows  a  broadly  stable  path  in  the  first  ten  years  of  EMU,  but  the 
dispersion increased over 2009-2012, when the crisis hit, and has broadly stabilised at a higher 
level thereafter. Membership in a monetary area is therefore not a sufficient condition to ensure 
real conversion amongst the countries. 

Figure  1:  Dispersion  of  real  GDP  per  capita  (coefficient  of  variation,  in  2010  purchasing 
power standards), 1960-2018 

As  multiple  euro-area  experiences  and  available  data  suggest,38  fulfilling  the  formal 
convergence  criteria  does  not  necessarily  lead  to  the  long-term  sustainable  economic 
performance  needed  for  a  well-functioning  monetary  union.  Factors  such  as  lack  of 
competitiveness, poorly performing labour market, inefficient public administration or weaknesses 
of  banking  sector,  which  are  not  tackled  before  membership,  can  impede  and  complicate 
adjustment in crisis situations and their effects spill over rapidly once a country joins the euro area. 
Therefore, as already emphasised by the European Central Bank and European Commission in their 
Convergence Reports,39 in addition to the formal convergence criteria, it is also important to look at 
non-euro-area Member States in terms of their overall competitiveness and institutional capacities.  

Box 3: Convergence criteria 

In order to adopt the euro and join the euro area, Member States must meet certain conditions 
known as 'convergence criteria' and they have a duty to align their legal framework concerning 
their  national  banks.  Agreed  in  Maastricht  by  the  Member  States  in  1991  as  part  of  the 

38 European Commission, op.cit. 
39 I.e. European Central Bank, "Convergence Report", 2016. 

17 

 
 
 
 
                                                            
preparations for introducing the euro, the convergence criteria are formally defined in terms of a 
set of macroeconomic indicators which measure: 

  Price stability, to show that inflation is under control; 
  Soundness  and  sustainability  of  public  finances,  through  limits  on  government 

borrowing and national debt to avoid excessive deficits; 

  Exchange-rate stability, through participation in the Exchange Rate Mechanism (ERM 
II)  for  at  least  two  years  without  strong  deviations  from  the  ERM  II  central  rate. 
Currently, only Denmark participates in ERM II; and 

  Long-term  interest  rates,  to  assess  the  durability  of  the  convergence  achieved  by 

fulfilling the other criteria. 

The  European  Semester  plays  an  important  role  in  identifying  necessary  reforms  and  in 
following  up  on  their  implementation.  On  top  of  that,  there  is  a  lot  of  know-how  in  the 
Commission  services  and  in  other  Member  States,  which  can  be  offered  to  non-euro-area 
Member  States  in  designing  their  national  reforms,  which  may  help  foster  economic  and  legal 
convergence, thus helping them on their way to adopting the single currency.  

A  targeted  instrument  to  facilitate  practical  preparation  and  convergence,  without 
interfering  with  the  convergence  criteria  in  place  for  accession  to  the  euro,  could  prove 
particularly  beneficial.  Such  an  instrument  would  provide  additional  technical  and  financial 
support for reforms that are of particular relevance for Member States, which will relinquish the 
exchange rate instrument.  

In summary, experience related to previous examples of accession of Member States to the 
euro area and to the convergence with euro-area standards achieved so far by prospective 
euro-area  members  has  shown  that  implementation  of  structural  reforms  is  especially 
important  for  Member  States  on  their  way  to  adopting  the  euro.  For  this  reason  there  is  a 
strong argument for providing additional technical and financial support to those Member States 
that confirm that they want to adopt the euro within a specific time-frame. This support should be 
targeted to reforms that are most relevant for their economies to function successfully within the 
euro area. 

1.2.4.  Conclusions on lessons learned 

Based on the lessons described above, there appears to be a need not only to continue, but 
also  to  complement  the  technical  support  for  the  completion  of  reforms  with  a  dedicated 
tool,40  which  provides  financial  incentives  for  the  implementation  of  reforms  in  all  Member 
States and helps to strengthen the national ownership of reforms. Given the importance of reform 
implementation  prior  to  euro  adoption,  special  support  is  warranted  to  encourage  the 
implementation  of  reforms  in  Member  States  that  would  like  to  adopt  the  euro  within  a  given 
time-frame.  

Technical support can help Member States with the design and implementation of reforms 
but  cannot  replace  the  ownership  of  their  implementation  itself.  Providing  additional 

40 This conclusion is also in line with the results of the open public consultation, where respondents identified lack of funding to be the 

main obstacle towards the implementation of reforms. 

18 

 
                                                            
incentives  for  the  completion  of  reforms  would  complement  investments  under  the  ESIF, 
which  can  finance  the  implementation  of  certain  investments  accompanying  reforms.  A  well-
designed  tool  incentivising  needed  structural  reforms  in  EU  Member  States  would  have  the 
potential  not  only  to  significantly  boost  economic  growth  in  the  Member  States  concerned  but 
also to deliver significant positive spillover effects within the EMU.  

This new instrument should help bridge the gap between the need for and the willingness to 
complete  structural  reforms,  focusing  on  those  reforms  that  enhance  cohesion  and 
competitiveness,  raise  productivity,  encourage  growth  and  employment  and  improve  the 
resilience of the EU economies. As highlighted in the evaluation of technical assistance provided 
by  the  TFGR,  the  new  Reform  Support  Programme  should  be  based  on  a  commitment  coming 
from  the  national  authorities  concerned  and  its  goal  should  be  to  further  stimulate  the 
implementation of structural reforms in the EU Member States by providing financial incentives 
and offering complementary technical support to help in the implementation of the reforms. As 
acknowledged in the Reflection paper on the deepening of the EMU and other studies, structural 
reforms may have economic, financial or political costs in the short term  (some of them due to 
the need to implement flanking measures), which can create political hesitation to undertake the 
reforms  and  therefore  prevent  or  slowdown  their  implementation.  The  provision  of  a  financial 
incentive  can  help  overcome  such  barriers.  Those  incentives  would  have  to  be  offered  in 
conjunction  with  the  possibility  for  Member  States  to  follow  up  on  the  technical  support  and 
carry out the full implementation of the reforms. 

Given the specific needs of those non-euro-area Member States that wish to join the single 
currency  within  a  given  time-frame,  a  targeted  instrument  appears  to  be  needed  also  for 
non-euro-area Member States to help them better prepare for euro-area membership. For 
example,  such  targeted  instrument  would  help  strengthen  competitiveness,  labour  markets, 
administration or tackle weaknesses in the banking sector. This would strengthen the resilience of 
their  economies,  help  them  to  withstand  shocks  during  crisis  periods  and  quickly  recover  from 
such  shocks,  and  thereby,  ultimately,  better  protecting  the  euro  area  as  a  whole  from  external 
shocks.  

2.  THE OBJECTIVES 

2.1.  Baseline  -  existing  Commission's  instruments  to  support  implementation  of 

reforms 

Under an unchanged SRSP and with the current instruments at EU's disposal described in Box 1 
–  the  baseline  –  the  EU  would  continue  to  have  a  limited  capacity  to  incentivise  the 
implementation  of  structural  reforms  and  improve  the  uneven  reform  implementation  across 
Member States and policy areas – the main challenge to be addressed by this policy proposal. 

2.1.1.  European  Semester  continues  to  be  the  main  vehicle  for  monitoring  reform 

implementation 

The  European  Semester  is  an  effective  soft  law  tool  for  outlining  challenges  and  reform  needs 
and for keeping track of responses from Member States to meet those needs.  

19 

 
 
It provides a framework for the coordination of economic policies across the European Union and 
allows Member States to discuss their economic and budgetary plans with the Commission and 
the  Council.  The  Commission  monitors  progress  made  by  the  Member  States  at  specific  times 
throughout the year. The European Semester process identifies, inter alia, the need for structural 
reform  in  Member  States.  The  adoption  of  country-specific  recommendations  by  the  Council 
promotes ownership and peer pressure. 

However, the European Semester mechanism itself has no enforcement arm and no tool to 
provide an actual incentive for reform. The nature of CSRs is such that while they are a very 
good tool for outlining challenges and reform needs and keeping track of responses from Member 
States  for  meeting  those  needs,  they  do  not  provide  an  actual  incentive  for  reform.  Apart  from 
this  framework  and  peer  pressure,  there  is  no  specific  governance  mechanism  in  the  European 
Semester  process  to  ensure  compliance  with  recommendations  related  to  structural  reforms; 
therefore,  non-implementation  of  CSRs  or  lack  of  sufficient  progress  towards  reform 
implementation in principle has no direct implication for the Member States concerned. Evidence 
from the CeSaR database41 confirms that reform implementation remains uneven and takes longer 
than expected given, inter alia, that the CSRs are proposed and repeated across the years (section 
2.2.1). In addition, results of the post-mortem exercise in the Economic and Financial Committee 
(EFC)  testify  that  peer  pressure  seems  to  be  lacking  among  the  Member  States42,  despite  an 
increase in thematic discussions on reform implementation at the EU level. 

The  Stability  and  Growth  Pact  and  the  Macro-economic  Imbalance  Procedure43  contain 
provisions  that  allows  for  the  imposition  of  sanctions  on  non-compliant  Member  States. 
Whereas  these  provisions  could  be  useful  as  a  last  resort  option,  there  are  clear  limits  to  their 
effectiveness,  in  particular  when  it  comes  to  the  promotion  of  implementation  of  structural 
reforms.  A  major  problem  is  effectively  distinguishing  between  "bad  policy"  and  "bad  luck". 
Given the punitive nature  of sanctions,  there is a natural inclination  to give Member States the 
benefit of the doubt. As a result, the barrier to imposing sanctions is very high and, in practice, 
sanctions have never been imposed. In addition, the concept of sanctions is diametrically opposed 
to  the  concept  of  ownership.  Whereas  a  (real)  threat  of  sanctions  may  lead  to  a  temporary 
adjustment in behaviour, it is unlikely to result in sustainable reforms.  

2.1.2.  The SRSP continues in its present form 

In the absence of a new legislative proposal, the SRSP would end in 2020. This would lead to 
an immediate gap in the provision of technical support to Member States for the identification, 
design and implementation of structural and administrative reforms. Nevertheless, the baseline of 
the current proposal assumes that the ongoing programme will continue in the post-2020 period 
in its current form. The SRSP would continue to provide technical support to the Member States 
under  the  current  limited  financial  resources.  By  extrapolating  the  financial  envelope  of  EUR 
142.8  million  available  for  the  SRSP  for  the  period  2017-2020,  the  SRSP  under  the  post-2020 
MFF would reach EUR 250 million over a 7-year period.  

41 ECFIN database on structural reforms:  https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases_en   
42 Economic and Financial Committee (EFC) meeting discussion on the 2017 European semester post-mortem, 2017. 
43 In the framework of the Macroeconomic Imbalance Procedure (MIP), the Commission takes macroeconomic imbalances into account 
when formulating CSRs. Countries found to have severe imbalances can be put under the corrective arm—the Excessive Imbalance 
Procedure  (EIP),  which  requires  submission  of  a  corrective  action  plan  with  a  clear  roadmap  and  deadlines  for  implementing 
structural reforms. For euro-area countries, failure to deliver a sufficient corrective action plan or comply with commitments can lead 
to financial sanctions of up to 0.1 percent of GDP per year. 

20 

 
                                                            
Already  during  the  first  two  years  of  operation,  the  SRSP  was  faced  with  an  important 
excess demand. The available budget for SRSP was four times oversubscribed in 2017 and five 
times  oversubscribed  in  2018.  Given  that  the  quality  and  quantity  of  requests  submitted  by  the 
Member States is increasing as Member State become more familiar with the SRSP, it is assumed 
that  a  large  majority  of  the  excess  in  demand  in  the  coming  years  will  qualify  for  the  support 
from the SRSS. At the time of the preparation of this impact assessment, an amendment to the 
SRSP Regulation was being negotiated in the European Parliament and the Council.44 Successful 
adoption of the proposed amendment – an increase of EUR 80 million – would enable the excess 
demand to be partially addressed in the current MFF. However, based on the projections of future 
demand  under  current  trends45,  future  demand  might  well  exceed  even  this  increased  amount. 
With no further budgetary increase, the selection for funding would need to be highly selective 
and it might not be sufficient to provide all the support required for important structural reforms 
in the Member States requesting technical support, including reforms relevant for the European 
Semester and the Union priorities.  

Preliminary  indications  from  the  first  two  rounds  of  selection  of  requests  thus  show  that 
under the baseline, the budgetary capacity of the instrument is likely to be insufficient.46 At 
the same time, while the SRSP provides technical support to Member States for the preparation, 
design and implementation of reforms, it does not have sufficient capacity to ensure that technical 
support will be used further – it does not always generate sufficient incentives to start, accelerate 
and/or complete the reforms. 

The challenge that remains in respect to the current SRSP is the need to ensure commitments 
by  Member  States  to  use  technical  support  to  implement  reforms.  This  applies  not  only  to  the 
euro-area Member States, but also to non-euro-area Member States seeking to adopt the euro. 

2.1.3.  ESIF investments continue in their present form 

In the absence of targeted financial support for Member States, the ESIFs would continue 
to provide financing for the investment components of some structural reforms. In addition, 
the  ESIF  would  continue  to  provide  encouragement  to  some  reforms,  notably  through  the 
application of ex-ante conditionalities. Whilst progress has been made in establishing a closer 
link  between  the  European  Semester  and  the  ESIF  through  ex-ante  conditionalities  and 
macroeconomic  governance,  in  practice,  the  impact  on  the  framework  conditions  under 
which  economic  agents  operate  has  been  rather  limited  and  it  is  also  highly  likely  that 
important limitations will persist under the next MFF:  

  The  ESIF  can  finance  the  investment  project-related  components  of  structural 
reforms  in  the  ESIF  policy  areas  and  thereby  provide  accompanying  measures  for  the 
implementation of reforms. However, while those actions are instrumental for achieving 

44 Proposal of a Regulation to the European Parliament and the Council amending Regulation (EU) 2017/825  to increase the financial 

envelope of the Structural Reform Support Programme and adapt its general objective, 2017, COM(2017) 825 final. 

45 Internal SRSS assessment. 
46  For  the  2017  cycle,  despite  the  late  adoption  of  the  SRSP,  271  requests  for  support  were  submitted  by  16  Member  States  for  an 
estimated  amount  4  times  the  available  annual  SRSP  2017  budget  of  EUR  22.5  million.  For  the  2018  cycle,  444  requests  were 
submitted by 24 Member States for an estimated amount 5 times the available annual SRSP 2018 budget of EUR 30.5 million. Given 
that the maturity of requests submitted by the Member States increases over the years and most of the requests are discussed with the 
SRSS  prior  to  the  official  submission,  it  is  assumed  that  a  majority  of  the  requests  submitted  and  not  selected  were  mature  and 
relevant enough to apply for the support from the SRSS. 

21 

 
                                                            
the cohesion policy objectives, they are however not sufficient to address the obstacles to 
a more rapid implementation of structural reforms;  

  The  ESIF  are  not  well-suited  for  incentivising  reforms,  notably  those  that  are 
largely regulatory (legislative) in nature, reforms that require a complex mix of policy 
actions and legislation, improvements in the governance of institutions and systems, and 
reforms that entail high short-term political costs; 

  The annual character of the European Semester process is not easily applicable to the 

ESIF given their scope and multi-annual implementation cycle; 

  Some  reform  areas  are  not  covered  by  the  ESIF's  ex-ante  conditionalities.  These 
include,  in  particular,  reforms  of  a  regulatory/legislative  nature, which  may or  may not 
have a direct link to ESIF investments but are covered by CSRs. Among such reforms, 
many may have important spillover effects within the EMU; 

  The  process  inherent  to  the  definition  of  applicable  ex-ante  conditionalities  in  the 
context of the ESIF operational programmes is limited in terms of efficiency, due to 
a lack of measurable targets and the limitations of the ESIF legal framework in terms of 
securing implementation over time; 47 48 49 

  Macroeconomic  conditionalities  are  difficult  to  use  as  they  can  lead  to  a  halt  in 

investment if the suspension mechanism is triggered. 

More  fundamentally,  the  objectives  of  the  ESIF  are  very  different  from  those  of  the 
proposed  Reform  Support  Programme.  Article  4  (2)  of  the  new  Common  Provisions 
Regulation defines the goals of the ESIF as follows: 

The ERDF, the ESF+ and the Cohesion Fund shall contribute to the actions of the Union leading 
to strengthening of its economic, social and territorial cohesion in accordance with Article 174 
TFEU by pursuing the following goals: 

i) Investment for growth and jobs in Member States and regions, to be supported by the ERDF, 
the ESF+ and the Cohesion Fund; and 

ii) European territorial cooperation (Interreg), to be supported by the ERDF. 

The proposed Reform Support Programme will be fully complementary to the goals of the 
ESIF. Whereas the Reform Support Programme is concerned with support for the creation of the 
right  regulatory  and  institutional  framework  conditions,  the  primary  goal  of  the  ESIF  is 
investments.  In  support  of  its  primary  objective,  the  ESIF  can  provide  support  for  capacity 
building and some sectoral reforms, but only to the extent that those reforms are necessary for the 
fulfilment of the objectives of the Funds. Such support should always be complementary to and 
well-coordinated  with  technical  and  financial  support  provided  under  the  Reform  Support 
Programme.  To  this  end,  the  Commission  will  further  strengthen  the  coordination  mechanism 
that was created at the time of the launch of the Structural Reform Support Programme.  

47  European  Commission,  "The  Value  Added  of  ex-ante  conditionalities  in  the  European  Structural  and  Investment  Funds",  2017, 

SWD(2017) 127. 

48 This aspect related to the ex-ante conditionalities under the ESIF as such will be addressed as part of the proposals for the future 

ESIF regulations and thus is discussed in the relevant Impact Assessments underlying those proposals. 

49 Working Group on support to Structural Reforms, "Link between the EU budget and the European Semester.", non-paper, Issues 

and Options for the next MFF.  

22 

 
 
 
                                                            
Figure 2: The EU budget and the Economic and Monetary Union50 

2.1.4.  No targeted support for non-euro-area Member States 

Under  the  baseline,  ongoing  Commission's  programmes  would  continue  in  the  post-2020 
period  in  its  current  form.  There  would  be  no  instrument  to  provide  specific  and  targeted 
support to non-euro-area Member States wishing to join the euro area, which could accelerate the 
process of convergence in those countries and have positive spillovers on the euro area. 

2.1.5.  Conclusions as regards the no-policy-change scenario 

In  the  absence  of  a  Reform  Support  Programme,  the  Commission  would  have  insufficient 
instruments to facilitate and promote the needed structural and administrative reforms in 
the  EU  Member  States.  Without  this  proposal,  the  SRSP  would  stop  at  the  end  of  this  MFF 
period,  leaving  a  gap  in  the  provision  of  technical  support  for  the  identification,  design  and 
implementation of structural reforms. Even a continuation of the technical support at the current 
level  would  fall  far  short of  actual  needs.  Whereas  the  ESIF  could  provide  some  incentives  for 
reforms, it should be acknowledged that the goals and intervention logic of the  ESIF are geared 
toward  investment  rather  than  reform.  The  reform  delivery  tool  would  provide  additional 
financial incentives for Member States to pursue reforms and ensure that tensions that may arise 
as a result of conflicting policy goals within one instrument are avoided (see also the comment in 
section 1.2.2. on the so-called Tinbergen rule).  

The  experience  of  the  euro-area  crisis  has  demonstrated  that  it  is  of  paramount  importance  that 
Member States  make the  necessary reforms before adopting the euro. Whereas this is primarily 
the responsibility of the Member States concerned, the additional support is warranted given the 
common interest throughout the EU in a well-functioning Economic and Monetary Union.  

2.2.  Challenges for the Programme of the next MFF - problem definition  

Structural reforms are needed to enhance cohesion and competitiveness, raise productivity, 
and encourage growth and employment. Europe’s economy is growing at its fastest pace in a 
decade,  supported  by  record  high  employment,  recovering  investment  and  improved  public 
finances. The current favourable EU-wide economic situation provides a window of opportunity 
to put in place much needed reforms. However, even with the instruments at the disposal of the 
European Commission, the implementation of reforms has been advancing slowly and unevenly 
across  Member  States  both  inside  and  outside  the  euro  area,  leading  to  negative  impacts  on 

50 European Commission, Factsheet, "EU Budget and the Economic and Monetary Union", Communication on the MFF for 2021-

2027, 2018, https://ec.europa.eu/commission/sites/beta-political/files/budget-proposals-economic-monetary-union-may2018_en.pdf  

23 

 
 
                                                            
cohesion, convergence and resilience of the economies of the EU Member States and therefore of 
the Union as a whole.  

2.2.1.  Slow and uneven implementation of structural reforms  

Even  with  the  European  Semester  process  and  support  through  the  ESIF  and  the  SRSP, 
progress  towards  more  competitive  economic  structures  and  improved  institutional 
capacity has slowed down in the recent years. This could potentially have adverse effects on 
growth  and  competitiveness  in  the  euro  area  and  the  EU  as  a  whole.5152  Experience  with  the 
European  Semester53  has  confirmed  that  the  implementation  of  reforms  needed  to  address  the 
CSRs  has  so  far  been  uneven  across  Member  States.  Even  though  reform  implementation  has 
increased  slightly  overall  compared  to  May  2017,  reforms  often  take  longer  to  implement  than 
anticipated.  

From  a  multiannual  perspective,  the  latest  Commission  assessment  of  the  progress  in  the 
implementation  of  structural  reforms54  indicates  that  Member  States  have  made  most 
progress in financial services, fiscal policy and fiscal governance. This continues to reflect the 
priority that was given to the stabilisation of public finances and of the financial sector, following 
the economic and financial crises. Significant progress has also been made in addressing access 
to  finance,  employment  protection  legislation  and  frameworks  for  labour  contracts.  However, 
more  modest  progress  has  been  made  in  areas  like  broadening  tax  bases  or  in  the  field  of 
transport. In many Member States, progress has been slow in addressing the important challenges 
related to the long-term sustainability of public finances, including pension systems. Regulatory 
reforms have improved the business environment especially in those Member States that needed 
them most. These reforms have reduced administrative barriers to the creation of new business. 
However,  entrepreneurship  remains  weak  in  many  Member  States.  Access  to  bank  credit  and 
loans have improved for SMEs but availability of venture capital is still insufficient in many parts 
of the Union. Significant progress can also be reported in public procurement. The pace of reform 
in  services  markets  is  slow,  in  particular  in  business  services,  construction  and  real  estate. 
Analyses based on CeSaR database55 confirm that reform implementation often takes longer than 
expected given that the CSRs are proposed and repeated across the years (see Figure 2 below).  

Overall,  the  implementation  of  structural  reforms  has  decelerated  following  the  reform 
impetus at the peak of the financial crisis56 as the aftermath of the economic and financial 
crisis  may  be  characterised  by  a  certain  quest  for  stability  and  reform  fatigue.57  Possible 
specific drivers of the problem of low/suboptimal implementation of reforms are discussed in the 
following section. 

51 For an overview of reform efforts during the economic and financial crisis, see ECB "Progress with structural reforms across the euro 

area and their possible impacts", 2015, Economic Bulletin, Issue 2/2015.  

52  The  existing  gaps  between  EU Member States  and  best  performers  in  terms  of  institutional  quality  and  labour and  product  market 
functioning  is  illustrated  in  ECB,  "Increasing  resilience  and  long-term  growth:  the  importance  of  sound  institutions  and  economic 
structures for euro-area countries and EMU", 2016, Economic Bulletin, Issue 5/2016. 

53 ECFIN database on structural reforms:  http://intragate.ec.europa.eu/scopax/csr/. 
54 Communication from the Commission to the European Parliament, the European Council and the Council on "2018 European 

Semester: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances, and results of in-
depth reviews under Regulation (EU) No 1176/2011", 2018, COM(2018) 120 final. 

55 ECFIN database on structural reforms:  http://intragate.ec.europa.eu/scopax/csr/  
56  Gros,  D.,  Alcidi.  C,  "Is  debt deflation  a risk? The  trade-off  between  fiscal and competitiveness adjustments",  2013: 

http://www.europarl.europa.eu/thinktank/en/document.html?reference=IPOL-ECON_NT(2013)497725   

57 Claeys, P., "On Measuring Structural Reform", 2015, Romanian Journal of Fiscal Policy 6 (1), 17. 

24 

 
                                                            
Figure 3: CSR implementation comparing the annual and multiannual perspectives 

Source: Commission internal data source 

2.2.2.  Slow  and  uneven  implementation  of  structural  reforms  in  non-euro-area 
Member  States,  which  have  taken  demonstrable  steps  towards  adopting  the 
single currency within a given time-frame 

Limited  progress  with  the  implementation  of  structural  reforms  can  undermine  the 
efficient and smooth adjustment of economies to shocks, weaken the economic resilience of 
Member  States  in  the  face  of  shocks  and  delay  economic  and  social  convergence  among 
Member  States.  This  applies  to  both  euro-area  and  non-euro-area  Member  States.  Analyses 
based  on  the  CeSaR  database58  confirm  that  reform  implementation  often  takes  longer  than 
expected also for non-euro-area Member States, which are obliged by the Treaties to join the euro 
area  (Bulgaria,  Croatia,  Czech  Republic,  Hungary,  Poland,  Romania,  Sweden)  (see  Figure  3 
below). On the basis of the latest available data (2017), it seems that implementation of reforms 
in these 7 non-euro-area Member States is even slower than in the EU as a whole. 

Figure 4: CSR implementation comparing the annual and multiannual perspectives for 7 non-
euro-area Member States  

58 ECFIN database on structural reforms: http://intragate.ec.europa.eu/scopax/csr/    

25 

 
 
 
                                                            
Implementation of reforms in prospective euro-area members deserves particular attention. 
The  financial  crisis  has  shown  that  within  the  euro  area,  having  resilient  economic  and  social 
structures, meaning structures that are sufficiently responsive in case of shocks in order to limit 
economic or social distress, is of particular importance because euro-area Member States cannot 
use exchange rate and monetary policies as a way of adjusting to country-specific shocks. Due to 
the  strong  interconnections  between  the  economies  of  the  EU,  insufficient  reform  efforts 
outside  the  euro  area  cannot  be  seen  as  a  purely  national  problem.  During  the  crisis, 
macroeconomic issues occurring in one Member State had economic and social repercussions in 
other Member States. Failure to address reform before euro adoption may have an adverse effects 
on the smooth functioning of the euro area as a whole.  

2.3.  Drivers of the problem  

Lack  of  administrative  capacity,  short-term  political  cost  of  reforms,  and  lack  of  political 
ownership have been identified as the main drivers of the suboptimal implementation of structural 
reforms.  These  drivers  apply  to  both  euro-area  and  non-euro-area  Member  States  and  they 
constitute challenges for action at EU level. 

2.3.1.  Uneven  administrative  and  institutional  capacity  for  implementing  structural 

reforms  

Effective  reforms  require  more  than  just  passing  legislation.  Reforms  need  to  be  well-
designed  and  carefully  planned  and  they  also  require  effective  and  efficient  implementation. 
Having well-functioning and competent administrations is crucial for Member States to be able to 
implement reforms. Institutions and well-functioning administrations play a fundamental role in 
setting  the  right  incentives,  lowering  uncertainty  and  paving  the  way  for  prosperity  in  the long 

26 

 
 
run.59  Weaknesses  in  the  functioning  of  public  administration  can  create  obstacles  for  the 
functioning  of  the  internal  market,  for  investment  at  regional  and  local  levels,60  and  for 
innovation.61 Finally, some recent reports62 demonstrate that a weak government can undermine 
the wider human capital through waste of public resources, stimulation of emigration, and limited 
investments in education and innovation. 

Assessments63 show that serious differences in quality and capacity of public administration 
remain,  with  many  Southern  and  Eastern  European  countries  still  demonstrating 
important weaknesses. New divergent trends are expected to emerge due to slow adaptation to 
technological change, low civic engagement and limited evidence-based policy-making practices. 
Lagging compliance with Single Market legislation in some countries is also a cause for concern. 
In many Member States, prolonged and intensive administrative restructuring has led to general 
reform fatigue; for example, Member States that joined the EU after 2004 carried out substantial 
administrative  reforms  as  part  of  their  preparation  for  EU  membership.  Several  years  after 
accession, however, the reform momentum was lost.64 To date, despite the significant investment 
provided through EU funding under the ESIF and the support provided under the current SRSP, 
many  aspects  of  administrative  adjustment  remain  fragile  and  fragmented.  Sustainability  can 
often be compromised by a lack of political consensus, a failure to tackle political divisions, or 
weak,  unstable  core  government  institutions.  Member  States  often  lack  practical  advice  on  the 
implementation of reforms, which is often available in other Member States having faced similar 
reform challenges.  

2.3.2.  Short-term economic, social and political costs of reforms 

While  structural  reforms  are  designed  to  boost  an  economy's  competitiveness,  potential 
growth  and  economic  and  social  resilience,  their  benefits  often  materialise  only  over  the 
long  term,  while  their  economic,  social  and  political  costs  are  often  incurred  in  the  short 
term. In particular, the redistributive effect of a number of reforms and their impact on certain 
economic  or  social  actors  can  increase  the  difficulty  of  implementing  reforms  and  lead  to  the 
need for transitional and/or compensatory measures. These measures have a cost, which can be a 
barrier  to  reforms.65  National  governments  might  therefore  refrain  from  embarking  on  the 
implementation of some reforms. For example, in the case of skill-enhancing reforms in general, 
and  for  education  and  training  reforms  in particular,  reform  implementation  is  characterised by 
short-term reform costs,  while  most  benefits and outcomes  will  materialize  over the long term; 
this is not well-aligned with the political cycle. While the EU is able to provide technical support 
to  kick  start  the  process  of  reform  and  contribute  to  investment  costs  through  the  ESIF,  in  the 

59 Commission Staff Working Document, Ex-ante Evaluation accompanying the proposal for a Regulation of the European Parliament 
and of the Council on the establishment of the Structural Reform Support Programme for the period 2017 to 2020 and amending 
Regulations (EU) No 1303/2013 and (EU) No 1305/2013, SWD(2015) 750 final. 

60  Committee  of  the  Regions,  "Results  of  the  CoR  online  consultation  on  obstacles  to  investments  at  local  and  regional  level", 

Secretariat of the Commission for Economic Policy (ECON), Brussels, September 2016. 

61 European Commission, European Semester thematic factsheet, Quality of Public Administration: 

https://ec.europa.eu/info/sites/info/files/file_import/european-semester_thematic-factsheet_quality-public-administration_en.pdf  
62 See IMF, Emigration and Its Economic Impact on Eastern Europe; https://www.imf.org/external/pubs/ft/sdn/2016/sdn1607.pdf and 
ERCAS, Public Integrity and Trust in Europe: http://www.againstcorruption.eu/publications/public-integrity-and-trust-in-europe/   
63 See for example Sustainable Governance Indicators http://www.sgi-network.org/2016/ or Public sector achievement in 36 countries 

https://www.scp.nl/Publicaties/Alle_publicaties/Publicaties_2015/Public_sector_achievement_in_36_countries   

64 European Commission, European Semester thematic factsheet, Quality of Public Administration: 

https://ec.europa.eu/info/sites/info/files/file_import/european-semester_thematic-factsheet_quality-public-administration_en.pdf 
65  European  Central  Bank,  "  The  short-term  fiscal  implications  of  structural  reforms",  2015,  ECB  Economic  Bulletin,  issue  7: 

https://www.ecb.europa.eu/pub/pdf/other/eb201507_article02.en.pdf?728f2325a9269245f5f8b3d956c1ab20  

27 

 
                                                            
current  setting,  there  are  no  instruments  which  provide  incentives  for  the  implementation  of 
structural reforms.  

2.3.3.  Lack of ownership and commitment of national governments 

Implementation of structural reform can be also hindered by the lack political commitment 
to reforms at national level. This can be linked to the time horizon of governments (i.e. linked 
to the electoral cycle), which is often too short to be able capitalise politically on the long-term 
benefits  of  reforms.66  In  this  context,  the  short-term  economic  or  political  costs  of  structural 
reforms can be considered too high.67 Delays in reform implementation can also be related to 
changing  political  priorities  and/or  change  of  government,  with  both  outgoing  and  new 
governments  taking  more  time  to  execute  or  initiate  recommended  reforms,  and  also  with 
changes in government sometimes leading to reform reversals.  

Peer  pressure  seems  to  be  lacking  between  Member  States,  despite  increased  thematic 
discussions on reform implementation  at the EU level and despite the recent acknowledgement 
that  insufficient  attention  is  given  to  positive  spillovers  between  Member  States.68  Political-
economic trade-offs may have tilted the balance against initiating new reforms as the economic 
recovery continued to gather momentum. 

Far-reaching reforms require time to prepare, to implement, and to involve stakeholders in 
line  with  national  practices.  Therefore,  they  often  take  place  more  incrementally  and  over  a 
longer period of time. In this respect, better incentives could accelerate reform implementation, 
including  by  enabling  suitable  reform  packaging  and  reform  sequencing  and  by  supporting 
flanking measures if necessary. This would allow for the creation of short-term political benefits 
to counterbalance the long-term character of economic benefits. 

2.4.  Main conclusions on the challenges  

Results of evaluations have shown that even though the ESIF can finance some actions related to 
the reforms (investments accompanying reforms), they do not cover all types of reforms, nor do 
they promote the design and implementation of structural reforms in their entirety. 

While  the  evaluation  of  provision  of  technical  support  prior  to  the  adoption  of  the  SRSP  has 
confirmed the need for a permanent structure with a dedicated budget to support the preparation, 
design and implementation of reforms in EU Member States, the analysis of instruments for the 
implementation  of  reforms  currently  at  Commission's  disposal  has  shown  that  the  current 
framework  is  not  sufficient  to  tackle  the  drivers  of  the  slow  and  uneven  reform 
implementation outlined above. The challenge that remains in respect to the current SRSP is the 
need to ensure the commitment of Member States to use technical support to implement reforms. 
This applies not only to the euro-area Member States, but also to non-euro-area Member States on 
their  way  to  joining  the  euro.  To  tackle  these  challenges,  on  2  May  2018,  the  Commission 
confirmed  its  intention  to  propose  a  targeted  instrument  providing  financial  support  for  the 
implementation of reforms and a targeted instrument to support the implementation of reforms in 
non-euro-area  Member  States.  This  would  enable  incentives  to  be  provided  to  overcome 

66 Terzi, A., "No coordination without representation", 2015, Bruegel Blog Post. 
67 European Central Bank, op.cit. 
68 Economic and Financial Committee (EFC) meeting discussion on the 2017 European semester post-mortem, 28-29/09/2017. 

28 

 
                                                            
political hesitation towards undertaking reforms, which has multiple causes, some of which are 
closely related to economic and social, but also political, costs of these reforms.  

Table 1: Addressing challenges related to the slow/uneven implementation of reforms 

Challenge 

Ensure Member 
States' commitment 
to use technical 
support to 
implement reforms 
Uneven 
administrative 
capacity to 
implement reforms 
Short-term 
economic, social and 
political costs  

Lack of ownership 
and commitment of 
national 
governments  

Targeted support to 
non-euro-area 
Member States  

The current SRSP Regulation 
2017/825 
Not sufficiently addressed 

The establishment of the SRSP 
Regulation as a dedicated 
programme for technical 
support 
Not sufficiently addressed 

Not sufficiently addressed 

Amendment of the SRSP 
Regulation 2017/825 
establishing a dedicated work 
stream providing targeted 
technical support to non-euro-
area Member States  

Post-2020 MFF 

Establishment of a 
reform delivery tool to 
provide incentives to 
Member States to 
implement reforms 
Continuation of the 
SRSP Regulation 

Establishment of a 
reform delivery tool 
(and financial support 
component of the 
convergence facility) 
to provide incentives to 
Member States to 
implement reforms 
Establishment of a 
reform delivery tool 
(and financial support 
component of the 
convergence facility) 
to provide incentives to 
Member States to 
implement reforms 
Permanent 
convergence facility 
providing targeted 
financial and technical 
support to non-euro-
area Member States 

The future reform delivery tool will also need to address a number of challenges identified by 
the Member States during the workshops on the reform delivery tool (moral hazard, identification 
of  the  appropriate  reforms,  involvement  of  the  European  Semester  process,  etc.).  These  are 
detailed in section 4.2 (structure of the Programme) and 4.3 (moral hazard). 

2.5.  Objectives of the programmes of the next MFF 

The  objectives  of  the  proposed  instrument  (the  Reform  Support  Programme)  are  designed  to 
tackle  the  underlying  drivers  of  the  main  challenge,  the  slow  and  uneven  implementation  of 
structural reforms.  

29 

 
 
2.5.1.  General objectives 

A  continued  effort  is  needed  to  ensure  that  the  EU  and  its  Member  States  implement 
structural  reforms.  Such  reforms  are  needed  to  remove  structural  weaknesses  and  to  enable 
Member States to cope with future challenges facing their economies. The proposal for the post-
2020 Reform Support Programme aims to address the factors that hinder the implementation of 
structural reforms in EU Member States, as identified in the problem definition, while taking into 
account the lessons learned from previous programmes. In light of this, the general objectives of 
the programme will be the following: 

a)  contribute to addressing national reform challenges of a structural nature, aiming at 
improving  the  performance  of  the  national  economies  and  at  promoting  resilient 
economic and social structures in the Member States, thereby contributing to cohesion, 
competitiveness, productivity, growth and employment; and 

b)  contribute  to  strengthening  the  administrative  capacity  of  the  Member  States  in 
relation  to  challenges  faced  by  institutions,  governance,  public  administration,  and 
economic and social sectors.  

2.5.2.  Specific objectives 

To achieve the general objective, the new Programme will be composed of three separate but 
complementary instruments. The Programme  will aim to ensure the highest efficiency of EU 
action in supporting the implementation of structural reforms and help to address the drivers of 
the related challenges facing Member States through the following specific objectives: 

As regards the technical support instrument (ex-SRSP): 

 

the  Programme  shall  support  the  efforts  of  the  national  authorities  in  improving  their 
administrative  capacity  to  design,  develop  and  implement  reforms,  including  through 
exchange  of  good  practices,  appropriate  processes  and  methodologies  and  a  more 
effective and efficient human resources management. 

The instrument will address the lack of administrative capacity by assisting national authorities in 
their  endeavours  to  design  and  implement  reforms  on  the  ground,  and  by  taking  into  account 
good practices and lessons learned from peers. The objective is to strengthen the administrative 
and  institutional  capacity  for  implementing  structural  reforms,  which  is  one  of  the  underlying 
drivers of the slow implementation of reforms. 

As regards the reform delivery tool: 

 

the  Programme  shall  provide  Member  States  with  financial  incentives  with  a  view  to 
achieving  the milestones and targets of the structural reforms as set out in the Member 
State reform commitments entered into with the Commission. 

The completion of reform commitments will trigger the release of the financial incentives, which 
will  help  overcome  political  hesitation  or  reluctance  to  undertake  the  reform  per  se.  Financial 
rewards  could  be  considered  by  some  Member  States  sufficient  for  undertaking  the  reform.  In 
addition,  the  competition  for  funds,  which  the  instrument  would  generate,  and  the  fact  that  the 

30 

 
 
 
instrument  could  help  mitigate  some  of  the  short-term  economic,  social  and/or  political  costs 
associated with the reforms may provide additional incentives and help to stimulate the drivers of 
reforms. 

These specific objectives should be pursued in all Member States, including  – in the context of 
the  convergence  facility  –  those  whose  currency  is  not  the  euro  and  which  have  taken 
demonstrable steps towards adopting the single currency within a given time-frame. 

As  regards  the  convergence  facility  for  euro-area  membership  preparation,  the  specific 
objectives are:  

 

 

to  provide  financial  incentives  to  eligible  Member  States  to  help  them  achieve  the 
milestones  and  targets  of  reforms,  which  are  relevant  for  preparation  for  euro-area 
participation, as set out in the Member States reform commitments entered into with the 
Commission, and 
to support the efforts of national authorities of eligible Member States in improving their 
administrative  capacity  to  design,  develop  and  implement  reforms  relevant  for 
preparation  for  euro-area  participation,  including  through  exchange  of  good  practices, 
appropriate  processes  and  methodologies  and  more  effective  and  efficient  human 
resources management.  

Figure 5: Intervention logic of the Reform Support Programme 

  Technical support instrument addressing the lack of administrative capacity; 
  Reform  delivery  tool  addressing  short-term  costs  political  costs  of  reforms  and  lack  of 

ownership by national governments; 

31 

 
 
  
 
  Convergence  facility  addressing  all  three  drivers  with  a  specific  focus  on  the 
implementation  of  reforms  in  non-euro-area  Member  States  on  their  way  to  joining  the 
euro area. 

3.  PROGRAMME STRUCTURE AND PRIORITIES 

The  post-2020  Reform  Support  Programme  will  provide  two  different  types  of  support  – 
technical  support  and  financial  support  in  the  form  of  incentives  through  three  coherent 
and  complementary  instruments.  The  support  is  voluntary  and  not  linked  to  costs  of  the 
reforms. 

The  technical  support  instrument  will  continue  to  provide  Member  States  with  on  demand, 
hands-on  technical  support  in  a  wide  range  of  areas  for  the  preparation,  design  and 
implementation  of  structural  reforms.  The  reform  delivery  tool  will  provide  an  additional 
financial  incentive  (financial  contributions)  to  Member  States  to  implement  key  structural 
reforms, which strengthen the resilience of their domestic economies and that of the Union as a 
whole. Participation in the instrument is voluntary. The technical support instrument and the new 
reform delivery tool will be complementary. Member States will also be able to request technical 
support  for  the  design  and  implementation  of  reforms  that  fall  under  the  reform  delivery  tool. 
While  participation  in  the  Programme  is  voluntary,  Member  States  experiencing  excessive 
imbalances  will  be  particularly  encouraged  to  come  forward  with  reform  proposals  under  the 
reform  delivery  tool.  The  dedicated  convergence  facility  combines  technical  and  financial 
support  to  support  the  implementation  of  reforms  that  will  help  non-euro-area  Member  States, 
which  wish  to  adopt  the  single  currency,  to  acquire  resilient  economic  and  social  structures  to 
better prepare for their participation in the euro area. 

The  scope  of  reforms  covered  under  the  Reform  Support  Programme  is  applicable  to  all 
three instruments. It covers a wide range of policy areas  (areas related to public financial and 
asset management, institutional and administrative reform, business environment, labour markets, 
education  and  training,  sustainable  development,  public  health,  social  welfare  and  the  financial 
sector). However, the definition of eligible reforms differs by instrument. The definition of an 
eligible reform is narrower for the reform delivery tool than for the technical support instrument. 
The reform delivery tool can only be requested for the implementation of reforms identified in 
the  context  of  the  European  Semester  (including  but  not  limited  to  those  challenges  raised  in 
country-specific recommendations), while the technical support instrument can provide support 
for reforms undertaken: 

a)  at Member States' own initiatives;  
b)  in the context of economic adjustment programmes for Member States that receive financial 

assistance under existing programmes; or  

c)  for  the  implementation  of  reforms  in  the  context  of  the  economic  governance  process,  in 
particular  CSRs  issued  under  the  European  Semester,  but  also  for  actions  related  to  the 
implementation of Union law. 

32 

 
 
 
The conditions for the eligibility of reforms under the  convergence facility are similar to those 
for the two other instruments, provided that the reform commitments and requests for technical 
support are relevant for the preparation for participation in the euro area.  

The  main  reason  for  this  difference  in  eligibility  is  the  fact  that  the  amounts  per  action 
under  the  reform  delivery  tool  are  far  bigger  than  the  amounts  per  action  under  the 
technical  support  instruments.  This  justifies  an  additional  safeguard  to  ensure  that  the  most 
pressing  reform  needs  are  addressed  with  the  reform  delivery  tool.  The  strong  link  with  the 
European Semester helps to ensure this. At the same time, a high degree of ownership on the part 
of  the  beneficiary  Member  State  will  be  ensured.  For  this  reason,  the  proposals  for  reform 
commitments will come from the Member States.  

3.1.  Legal basis, subsidiarity and proportionality 

The legal basis for the proposal establishing the Reform Support  Programme is the same as for 
the  current  SRSP,  namely  the  third  paragraph  of  Article  175  TFEU  and  Article  197(2)  TFEU. 
The  Programme  is  expected  to  strengthen  the  Union's  economic,  social  and  territorial  cohesion 
and  at  the  same  time  to  improve  Member  States’  institutional  and  administrative  capacity  in  a 
wider range of policy areas.69  

Subsidiarity 

In accordance with the principles of subsidiarity,70 the Union shall act only if and in so far as the 
objectives of the proposed action cannot be sufficiently achieved by the Member States, either at 
central level or at regional and local levels, but can rather be better achieved at Union level.  

The  principle  of  subsidiarity  is  fully  respected.  The  implementation  of  reforms  remains  a 
national  competence  and  the  Member  States  are  involved  throughout  the  whole  process  in  the 
reform delivery tool. Support under the Reform Support Programme is such that it is provided on 
a voluntary basis, which ensures that the Member State itself decides whether action at EU level 
is necessary, in light of the possibilities available at national, regional or local level.  

As  mentioned  in  section  1.1  of  the  report,  the  implementation  of  structural  reforms  is  a 
matter of common interest for the EU and the euro area, as reforms help to strengthen not 
only the resilience of the economies concerned but also that of the EU and the euro area as a 
whole. This is particularly true for the Economic and Monetary Union.  

The Reform Support Programme, including its three instruments, complies with  the principle of 
subsidiarity in the following way:  

a)  for  the  technical  support  instrument  (the  current  SRSP),  the  Commission  benefits  from 
disposing  of  an  EU-wide  database  of  expertise,  is  in  the  best  place  to  enable  sharing  of  best 
practices between Member State; it can create synergies in addressing reform efforts in various 

69 Art. 175 (3) : "If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the 
framework  of  the  other  Union  policies,  such  actions  may  be  adopted  by  the  European  Parliament  and  the  Council  acting  in 
accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of 
the Regions." 
Article 197 (2) :  

"2. The Union may support the efforts of Member States to improve their administrative capacity to implement Union law. Such  action 
may include facilitating the exchange of information and of civil servants as well as supporting training schemes. No Member State 
shall  be  obliged  to  avail  itself  of  such  support.  The  European  Parliament  and  the  Council,  acting  by  means  of  regulations  in 
accordance with the ordinary legislative procedure, shall establish the necessary measures to this end, excluding any harmonisation 
of the laws and regulations of the Member States." 
70 Article 5 of the Treaty of the European Union.  

33 

 
                                                            
Member States and address cross-country challenges. The coordination  of the support provided 
by the Commission ensures comprehensive provision of expertise, sharing of good practices and 
support at various stages of the reform process;  

b) for the reform delivery tool, the Commission benefits from comprehensive country-specific 
knowledge  about  reform  implementation  in  most  EU  Member  States  and  has  the  expertise  to 
determine, together with the Member States, the important reforms that need to be addressed. The 
agreement on reform packages between the Commission and the Member State (as endorsed in 
an appropriate implementing act) will enhance national ownership as the proposal will originate 
in  the  Member  State  concerned  and  will  be  a  "home-grown",  country-driven  product.  This 
instrument  also  implies  continuous  policy  dialogue  between  the  Commission  and  the  Member 
States.  The  creation  of  this  instrument  ensures  continuity  over  the  whole  of  the  next 
programming period, so that Member States can decide on the appropriate time for applying for 
the support instrument; and  

c) the convergence facility aims to increase resilience of non-euro-area economies and to foster 
real convergence. This is crucial for the prosperity of the Union and, in particular, for the smooth 
transition to and functioning of the euro area. Action at Union level is thus necessary to achieve 
the objective. 

Proportionality 

The proposal complies with the proportionality principle in that it does not go beyond the 
minimum  required  in  order  to  achieve  the  stated  objective  at  European  level  and  what  is 
necessary for that purpose. The assistance to be provided under the three instruments integrated 
in  the  Reform  Support  Programme  for  the  period  2021  to  2027  is  to  be  based  on  a  voluntary 
request stemming from the Member State itself. The voluntary character of the Programme and 
the consensual nature of the cooperation throughout the entire process constitute a guarantee of 
the respect of the proportionality principle.  

3.2.  Underlying principles behind the objectives of the new MFF proposal  

The  Reform  Support  Programme  post-2020  aims  to  address  the  slow,  sub-optimal, 
implementation  of  national  reforms  by  strengthening  the  administrative  and  institutional 
capacity  across  Member  States  and  by  providing  an  instrument,  which  could  help  short-term 
costs  to  be  mitigated  and  political  hesitation  to  be  overcome.  In  addition  to  the  challenges 
identified  above,  the  proposal  for  the  Reform  Support  Programme  post-2020  is  also  based  on 
some  overarching  principles,  common  to  a  modern  and  effective  EU  budget,  to  ensure  that 
procedures  are  simple,  that  every  euro  is  spent  in  the  most  efficient  way  and  that  results  are 
quickly  felt  on  the  ground.  These  principles  include  simplification,  European  added  value  and 
complementarity. 71 

Simplification 

The  proposal  for  the  Reform  Support  Programme  post-2020  subscribes  to  the  principle  of 
simplification  –  the  SRSP  (i.e.  technical  support  instrument)  will  continue  in  its  present  form 
with  a  rather  low  administrative  burden.  No  new  programme  will  be  created,  but  two  new 

71  European  Commission,  Reflection  paper  on  the  future  of  EU  finances,  2017,  p.  25:  https://ec.europa.eu/commission/sites/beta-

political/files/reflection-paper-eu-finances_en.pdf  

34 

 
                                                            
instruments  (financial  support  and  convergence  support)  will  be  integrated  with  an  existing 
programme, the SRSP (i.e. technical support) to form a new programme. This structure responds 
to the feedback received from Member States during the workshops on the pilot reform delivery 
tool, where Member States pointed to the need for simplification and low administrative burden.  

European Added Value  

The new Reform Support Programme will offer a unique combination of instruments to all EU 
Member  States,  thus  maximising  the  impact  at  EU  level.  Its  main  added  value  consists  of  its 
voluntary character and promotion of ownership of reforms by the Member States. 

The  reform  delivery  tool  is  a  direct  response  to  the  weak  implementation  of  the  structural 
reforms  at  national  level  and  to  a  gap  identified  in  the  current  system  of  EU  economic 
governance. While the implementation of structural reforms in Member States remains a national 
competence, action at EU level will provide an impetus to help to overcome political hesitation to 
undertake reforms (which could be partly related to financial or political short-term costs). The 
new  Programme  also  aims  to  provide  concrete  financial  support  for  the  implementation  of 
reforms  identified  in  the  European  Semester  process,  while  respecting  the  principles  of 
subsidiarity.  

The  new  post-2020  technical  support  instrument  (the  current  SRSP)  continues  to  ensure 
European added value. Many of the structural challenges that Member States are facing cannot be 
addressed solely through investments or strict technical implementation of a programme, but may 
require  a  complex  mix  of  policy  actions  and  legislation,  investments  and  improvements  in  the 
governance  of  institutions  and  systems.  In-depth  dialogue  between  the  Commission  and  the 
competent  national  authorities  (which  could  also  benefit  from  peer  review  and  external 
expertise), may help and encourage Member States in designing and implementing a complex set 
of reform requirements. 

The technical support instrument (the current SRSP) has so far proven capable of delivering high 
added value to Member States, going beyond the simple delivery of technical support at national 
level. For example, the SRSP:  

  Manages to provide rapid and a coherent solutions for Member-State challenges; 
  Provides  support  in  a  coordinated  manner  with  a  Member-State  focus,  across  different 

policy areas;  

  Delivers action at the EU level, which allows cross-border or Union-wide challenges to 

be addressed, and promotes sharing of good practices.  

The  technical  support  instrument  helps  to  address  national  reforms  challenges  of  a 
structural  nature,  which  may  have  positive  spillover  effects  on  other  Member  States  and 
may  be  conducive  to  growth  and  employment.  Member  States  often  face  similar  challenges 
and  need  to  address  similar  practical  challenges  related  to  the  implementation  of  reforms.  The 
technical support instrument will continue to strengthen the administrative capacities of Member 
States through a Union-wide network of expertise to the benefit of all Member States that request 
support  and will  promote  mutual  trust  and  further  cooperation  between  Member  States  and  the 
Commission. 

The reform delivery tool, open to all Member States, and a convergence Facility, targeted to 
Member States that have taken demonstrable steps towards adopting the single currency within a 

35 

 
given  time-frame,  will  aim  at  strengthening  resilience,  enabling  positive  cross-border  effects 
and/or  positive  spillover  effects  for  the  euro  area  and  Union  as  a  whole.  In  particular,  the 
convergence  facility  will  bring  additional  added  value  by  strengthening  the  resilience  of  non-
euro-area economies on their way to joining the euro area and the resilience of the euro area as a 
whole. 

3.3.  Complementarity with other Union programmes 

The Reform Support Programme provides for complementarity and synergies with other Union 
programmes  and  policies  at  regional,  national,  Union  and  international  levels,  notably  by 
complementing  the  policy  guidance  provided  under  the  European  Semester  and  by  helping  to 
leverage the use of the ESIF.  

As  mentioned  in  previous  sections  (1.2.2  and  2.1.3)  the  goals  and  mission  of  the  ESIF  are 
very different from those of the new Reform Support Programme. The mission and goals of 
the  ESIF  are  not  aimed  at  incentivising  structural  reforms  but  at  providing  financing  for 
investments needed to reach the objectives of the European Structural and Investment Funds.  

The  future  reform  delivery  tool  will  aim  at  incentivising  structural  reforms  and  thereby 
improving the framework conditions for investment. If managed well, the ESIF and the Reform 
Support  Programme  will  be  mutually  reinforcing.  The  impact  of  investments  can  be  greatly 
enhanced  by  creating  the  right  framework  conditions.  At  the  same  time,  investments  under  the 
ESIF can be supportive of a particular reform (see also Figure 2). 

The  Commission  will  ensure  that  the  actions  proposed  for  implementation  under  the 
Programme are complementary to and do not overlap with other Union programmes and 
funds (the ESIF in particular). Coordination will continue to be ensured within the internal 
working  arrangements,  like  the  already-existing  coordination  mechanism  involving 
representatives  of  the  services  most  concerned72.  An  internal  technical  support  coordination 
mechanism  has  been  put  in  place  when  the  SRSS  was  established  in  order  to  ensure  the 
complementarities  within  the  technical  support  provided  by  the  Commission  to  Member  States 
under  various  Union  programmes  and  funds.  All  relevant  Commission  services,  providing 
technical  support  meet  on  a  regular  basis  in  horizontal  (High  Level  Steering  Committee  and 
Technical  Support  Working  Group)  and  country-specific  formations.  These  Technical  Support 
Country  Teams  are  closely  linked  to  the  European  Semester  Country  Teams.  In  the  country 
teams, requests for technical support from Member States are discussed in a more strategic way 
(e.g. whether they address challenges highlighted in the European Semester process and whether 
other  EU  instruments  support  those  challenges).  When  Member  States  submit  requests  for 
support, all relevant Commission services are consulted extensively on the links of the requests 
submitted  with  Commission  priorities,  the  risk  of  actual  overlaps  and  possible  synergies  or 
complementarities  that  the  additional  technical  support  can  bring  to  other  Commission 
programmes  and  instruments.  The  opinion  of  all  relevant  Commission  services  is  taken  into 
account  in  the  selection  of  the  requests  for  support.  Decisions  to  provide  support  to  a  Member 
State would, inter alia, take into account the existing actions and measures financed by the Union 
funds and programmes.  

72 Commission Staff Working Document, ex-ante evaluation accompanying the proposal for a Regulation of the European Parliament 
and of the Council on the establishment of the Structural Reform Support Programme for the period 2017 to 2020 and amending 
Regulations (EU) No 1303/2013 and (EU) No 1305/2013, SWD(2015) 750 final. 

36 

 
                                                            
Within the coordination mechanism, prior to the approval of individual projects, the SRSS 
checks  with  the  ESIF  Directorate-Generals  (DGs)  for  overlaps  and  similar  verification  is 
also carried out with the Managing Authorities in individual Member States to avoid risks 
of overlaps. In case overlaps are identified within the coordination mechanism, the Commission 
has the possibility to  indicate this to Member States, which  may  then wish to  reformulate their 
request for technical support or proposal for reform commitments. For the purpose of simplicity 
and efficiency, the same coordination mechanism  could be used and further enhanced for 
the  coordination  of  financial  support  to  ensure  complementarities  between  actions  under 
the  ESIF  related  to  investments  in  Member  States  and  actions  under  the  Reform  Support 
Programme  for  incentivising  the  implementation  of  structural  reforms  in  Member  States.  The 
coordination  mechanism  would  pay  particular  attention  to  the  "consistency"  with  the  ESIF  to 
ensure that there is no contradiction with possible  ex-ante and macro-economic conditionalities 
of the ESIF.  

There  is  a  clear  demarcation  between  technical  support  under  the  ESIF  and  technical 
support  under  the  RSP.  Technical  assistance  from  the  ESIF  lines  will  exclusively  focus  on 
administrative capacity issues related to the management of the Funds (Article 31 of the CPR). As 
regards  the  option  of  financing  not  linked  to  cost  for  all  or  part  of  priority  of  operational 
programmes  (Articles  45  and  89  of  the  CPR),  the  ESIF  will  focus  on  actions,  deliverables  and 
conditions related to concrete investments under shared management programmes in the Member 
State  or  region  concerned.  Dropping  Thematic  Objective  11  (administrative  capacity  building) 
from  the  CPR  Regulation  further  reduces  the  potential  overlap  with  the  Reform  Support 
Programme.  Lastly,  the  provisions  on  coordination  and  complementarity  in  the  Regulation 
establishing the Reform Support Programme mentioned in Article 33 will also apply to the ESIF.  

3.4.  Critical mass 

In  line  with  the  European  Commission  proposals  for  a  new  Multiannual  Financial 
Framework (MFF) for 2021-2027 adopted on 2 May 2018, the Reform Support Programme 
will  have  a  budget  of  EUR  25  billion  over  this  period.73  The  financial  size  of  the  Reform 
Support Programme should  be commensurate with the objectives to be achieved and should be 
sufficient for offering suitable incentives. The incentive is, however, not intended to compensate 
for  the  specific  economic  and  social  short-term  costs  related  to  the  reforms.  Rather,  it  is  a 
financial  incentive  (contribution)  offered  in  the  form  of  a  lump-sum  payment  to  help  Member 
States  embark  on  and  fully  complete  the  implementation  of  reforms.  With  this  lump  sum,  the 
financial  incentive  can  contribute  to  financing  accompanying  measures  in  relation  to  the 
implementation of specific reforms so as to mitigate short-term costs. The chosen allocation key 
(based on population) ensures that there is an appropriate link to the overall size of the country 
and the size of the contribution, providing a meaningful incentive for reform. At the same time, it 
should be acknowledged that the financial contribution may not be large enough to encourage all 
the reforms that are necessary in a specific Member State. It will be important to closely monitor 
the  implementation  of  the  Programme  and  to  learn  lessons  from  experience  for  potential  fine-
tuning of the instruments at a later stage, in particular with respect to the reform delivery tool.   

73 European Commission, Communication from the Commission to the European Parliament, the European Council, the Council, the 
European Economic and Social Committee and the Committee of the Regions "A modern for a Union that protects, empowers and 
defends, The Multiannual Financial Framework for 2021-2027", COM(2018) 321 final. 

37 

 
                                                            
The size of the Reform Support Programme must be proportionate to the objectives it aims 
to achieve. Both technical and financial support would be available to all Member States to help 
them with the design and implementation of structural reforms. In addition, Member States that 
take serious steps towards joining the euro area in a given time-frame would also benefit from the 
convergence facility. On 14 February 2018, the Communication on a new modern MFF for the 
EU announced that the size of the reform delivery tool should be large enough to provide strong 
support  and  incentives  for  a  broad  range  of  reforms  across  Member  States  and  help  avoid  a 
concentration of funding on only a few Member States.74 The total size is thus split into country 
allocations.  

The  size  of  technical  support  instrument  takes  into  account  the  current  proposal  for  the 
amendment of the SRSP Regulation 2017/825 and the need to increase the current funding 
envelope  of  EUR  142.8  million.  Technical  support  provided  under  the  technical  support 
instrument does not include pre-defined national envelopes. It is based on requests from Member 
States,  taking  into  account  the  amount  available  for  technical  support  and  the  capacities  of 
Member States to absorb the support.  

Given  the  envisaged  nature  of  the  programme  (especially  the  financial  support)  and  based  on 
experience with the SRSP, it is reasonable to believe that there will be sufficient demand from 
Member  States  for  the  Programme.  Should  fewer  Member  States  ask  for  support  in  the  first 
round,  more  Member  States  would  still  have  the  possibility  to  manifest  their  interest  in 
subsequent rounds. 

In order to provide sufficient incentives for the Member States to implement reforms, the 
overall funding of the Programme must allocate a significantly larger amount of the funding 
to  the  reform  delivery  tool  to  provide  sufficient  incentives  for  the  Member  States  to 
implement reforms (and make the action worth the effort). During the workshops on the pilot 
phase  of  the  reform  delivery  tool,  some  Member  States  noted  that  the  size  of  the  proposed 
instrument  should  be  even  higher  than  EUR  25  billion.  However,  taking  into  account  the 
budgetary  constraints  of  the  MFF  post-2020,  the  overall  size  of  EUR  25  billion  has  been 
considered  sufficient  to  fulfil  the  objectives  of  the  Programme:  EUR  22  billion  for  the  reform 
delivery tool, EUR 0.84 billion for the technical support instrument and EUR 2.16 billion for the 
convergence facility.  

The  regulation  provides  for  flexibility  to  reallocate  resources  within  the  programme.  In 
particular,  where,  by  the  end  of  2023,  an  eligible  Member  State  under  the  convergence  facility 
has not taken demonstrable steps towards adopting the single currency within a given time-frame, 
the maximum amount available for that Member State under the financial support component of 
the convergence facility will be transferred to the reform delivery tool.  

74  Communication  from  the  Commission  to  the  European  Parliament,  the  European  Council  and  the  Council  on  "A  new,  modern 
Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020", COM(2018) 98 final, 
p. 10. 

38 

 
 
                                                            
4.  DELIVERY MECHANISMS OF THE INTENDED FUNDING 

4.1.  Possible delivery mechanisms 

4.1.1.  Management mode 

The  Financial  Regulation  allows  for  different  ways  to  implement  the  EU  budget:  direct 
management,  indirect  management  or  shared  management.  For  the  future  Reform  Support 
Programme, direct and shared management were considered as possible options. After weighing 
the  pros  and  cons,  direct  management  was  chosen  as  the  preferred  option  for  the  following 
reasons: 

  The  Reform  Support  Programme  builds  upon  the  experience  of  the  SRSP,  which  has 
been managed under direct management, an attractive feature of which has proven to be 
its administrative simplicity.  

  The Reform Support Programme aims at influencing the pace and direction of reforms in 
Member  States.  This  requires  very  active  interaction  between  the  Commission  and  the 
Member  State  on  different  levels:  policy  dialogue,  technical  support  and  financial 
support.  Such  an  intense  cooperation  does  not  sit  well  with  the  shared  management 
mode, which puts the Commission at arm’s length.  

  The reform delivery tool provides lump-sum support not linked to cost to the budget of 
the  Member  State.  Co-financing  arrangements  have  no  practical  meaning  in  such  a 
context.  Direct  management  is  a  management  mode  that  allows  for  more  transparent, 
simpler and faster procedures.  

  The direct management mode would ensure continuity and maintain the coherence of a 

single framework for the three instruments.  

4.1.2.  Forms of implementing support 

Based on the principles of the proposed instruments and rules applicable to direct management, 
the  Commission  assessed  the  available  forms  of  implementing  support  and  identified  the 
preferred  delivery  mechanism  that  would  enable  the  most  effective  achievement  of  the  defined 
objectives. 

Technical support instrument 

Technical support under the post-2020 Reform Support Programme will be provided under 
direct  management  by  the  Commission,  which  will  use  grants,  procurement  and  internal 
expertise, or indirect management, entrusting tasks to international organisation or other bodies 
in accordance with the Financial Regulation. This offers the necessary flexibility and adaptability 
for providing tailor-made support to Member States. Shared management with the Member States 
is considered to be inappropriate for the purposes of the technical support under the Programme, 
since the direct coordination and provision of the support by the Commission services is key  to 
its added value. Direct coordination and provision of the support by the Commission facilitates 
exchanges  of  experiences  amongst  Member  States,  enables  the  mobilisation  of  expertise  from 
other  Member  States  and  international  organisations  and,  in  general,  promotes  spillovers  to 
Member States other than the direct recipient of the support.  

39 

 
As  regards,  the  possible  introduction  of  co-financing  requirements  under  the  technical  support 
instrument,  this  would  introduce  an  unnecessary  barrier  to  requesting  support.  Given  that  any 
support project already requires a significant effort in terms of staff and management time, it is 
unlikely that introducing a co-financing requirement would add anything in terms of ownership. 
In  addition,  given  the  construction  of  technical  support  instrument  (which  does  not  award  any 
money  to  the  beneficiary  Member  States),  such  co-financing  would  not  be  required  from  the 
beneficiary Member States, but would rather be required from the recipients of the actual grants 
(i.e.  from  the  providers  of  technical  support).  This possibility  is indeed  already  provided  for  in 
the SRSP (as cost can be eligible up to 100%) and will continue to be provided for under the new 
technical support instrument. 

Reform Delivery Tool 

For the reform delivery tool, the Commission considered the following delivery modes:  

  Grants, based on the costs incurred in carrying out reforms  

Under the Financial Regulation, grants are normally awarded to natural and legal persons 
in relation to specific actions, following calls for proposals from the Commission, while 
the Programme is primarily targeted to supporting Member States in the implementation 
of structural reforms. This delivery mode would require the Commission to analyse the 
exact costs of reform implementation. However, as explained in section 4.1.1., the cost of 
the reform is not a meaningful variable for assessing its impact, which therefore excludes 
the possibility of basing the reform delivery tool on grants. The support is to be paid out 
in  the  form  of  financing  not  linked  to  cost,  as  referred  to  in  Article  125(1)(a)  of  the 
revised Financial Regulation75.  

  Financial instruments (such as using equity investments, loans, guarantees)76 

As  indicated,  the  purpose  of  the  reform  delivery  tool  is  to  encourage  reforms.  For  this 
reason,  it  is  important  that  the  financial  incentive  is  sufficiently  strong.  The  financial 
incentive  is  a  function  of  the  subsidy  element,  which  is  far  bigger  in  a  financial 
contribution  than  in  alternatives  such  as  loans  or  blended  instruments.  Financial 
instruments, including subsidised loans or blending instruments, would not therefore be 
appropriate as they would offer very  little net benefit (and hence little incentive) to the 
beneficiary  Member  State  for  several  reasons.  First,  such  instruments  are  already 
available  to  Member  State  in  the  financial  markets.  Therefore,  and  in  particular  in  a 
situation  where  Member  States  have  good  access  to  financial  market,  this  would  not 
constitute a proper incentive. Second, this incentive would be State dependent; it would 
provide an incentive to pursue structural reforms only in bad times when interest rate are 
high or very high, while one would like Member States to carry out reforms also in good 
times. Thirdly, this delivery mode is more suitable for mobilising private capital, which - 
in  the  case  of  structural  reforms  to  be  implemented  by  Member  States  -  is  not  feasible 
and especially not desirable as it could lead to a potential influence of private capital on a 
selective implementation of structural reforms.  

  Co-financing 

75 OJ C […], […], p. […]. 
76 A particular way of financial support: using equity investments, loans, guaranties and similar; usually used to help mobilise private 

money. 

40 

 
                                                            
The reform delivery tool has two  defining  characteristics. The first characteristic is that 
the financial  support  is not linked to cost. This  means that it  is not possible to define a 
cost-sharing arrangement between the EU and the State. The second characteristic of the 
instrument  is  that  the  end-beneficiary  of  the  support  is  the  State.  While  it  would  be 
possible to agree a co-financing arrangement between the State and the EU on a financial 
support arrangement not linked to cost with a third party, this is simply not possible (in 
any  economically  meaningful  way)  when  the  State  itself  is  the  end  beneficiary  (one 
cannot provide co-financing to oneself). This is different from programmes under shared 
management  where  both  public  and  private  entities  can  be  the  end-beneficiaries  of  the 
support.  
However,  the  absence  of  co-financing  does  not  mean  that  governments  do  not  have  'a 
skin in the game'. The reason for creating the delivery tool is the observation that reforms 
are  often  slow  to  materialise,  not  least  because  of  the  political  costs  associated  with 
reforms. The reform delivery tool provides an incentive to accelerate the reform process.  

  Financial contribution 

Financial  contribution,  a  specific  form  of  financing  authorised  under  the  Financial 
Regulation,  is  not  linked  to  the  costs  but  related  to  the  nature  and  importance  of  the 
reform.  This  is  the  chosen  delivery  mode  as  it  would  bring  the  highest  incentive  for 
implementation  of  reforms,  while  also  ensuring  simple  and  light  administrative 
procedures. The purpose of the reform delivery tool is  to support reforms, which foster 
convergence and resilience of domestic economies. To do this, the Commission needs to 
provide a simple instrument that would provide strong incentives for the implementation 
of all reforms (even those not involving high financial costs). Hence, a simple delivery 
system  in  the form of payments linked  to results  (financing  not linked to cost as  set 
out in Article 121(1) of the revised Financial Regulation77) best serves the purpose and 
allows for reducing administrative costs and focussing human resources entirely on the 
monitoring of the agreed reform commitments. 

The preferred delivery mechanism, i.e. the direct financial contribution, would be provided 
based on the achievement of the agreed milestones and targets. As mentioned above, payment 
in full is envisaged after the completion of the reform. The SRSS considered  disbursements in 
several  tranches,  each  after  the  fulfilment  of  milestones.  The  advantage  of  a  payment  in 
tranches would be to provide more political incentive to reforms, particularly for lengthy reforms, 
as a part of the reward could be available sooner. However, payment in tranches would increase 
the  complexity  of  the  procedure  and  the  administrative  burden  for  both  the  Member  State 
concerned  and  the  Commission.  In  addition,  it  would  significantly  increase  the  risk  of  moral 
hazard as Member States would be able to decide to stop the implementation of the reform after 
some interim milestones had been achieved, while the reform would not be fully implemented in 
the  end.  It  should  be  acknowledged  that  there  is  always  a  possibility  that  reforms  are  reversed 
after  they  have  been  fully  implemented.  For  this  reason  provisions  are  included  to  allow  for 
recovery in cases of reform reversal. On balance, the risk of payment without results is likely to 
be lower with a more back-loaded payment scheme. Hence, after assessing the pros and cons of 
each of these two options, a payment in one single tranche after the completion of milestones and 
targets was chosen as the best option.  

77 OJ C […], […], p. […]. 

41 

 
                                                            
This proposal goes hand in hand with the principle of the simplification, as it is simple to 
administer and it has low transaction costs. This delivery method does not require (notably for 
the  Member  States)  the  establishment  of  specific  systems  for  management  of  the  EU  funding: 
staff, planning, budgeting, and accounting; and, as far as reporting procedures are concerned, the 
work will not be related to  the use of  money (only to the substance of the reform). In order to 
keep the delivery system of this instrument as simple as possible and transaction cost as low as 
possible,  payment  would  be  made  through  lump  sums  in  the  form  of  financial  transfers  upon 
implementation  of  measures  agreed  in  a  "reform  commitment  package",  without  being  directly 
linked to specific costs related to the implementation of the reform on the ground.  Unlike other 
delivery  methods  based  on  the  eligibility  of  costs,  this  financial  support  would  be  disbursed 
according to the results achieved. Thus, the results-based orientation of the EU funding is clearly 
reinforced. 

Given  that  the  financial  contributions  are  to  be  transferred  from  the  EU  budget  to  the 
Member States (and not to other beneficiaries) upon a positive assessment of the completion 
of reforms (i.e. results), there will be no "implementation tasks" that may be delegated to 
the  Member  States,  and  the  budget  will  be  managed  by  a  simple  transfer.  For  this  reason, 
direct  management  by  the  Commission  appears  to  be  the  appropriate  management  mode.  In 
addition,  given  that  the  financial  support  will  be  paid  in  one  tranche  once  the  reform 
commitments have been satisfactorily implemented and will take the form of budget support, the 
implementation  risks  and  notably  the  financial  error  rate  are  likely  to  be  small.  The 
instrument  would  also  be  easy  to  administer,  thus  limiting  operational  risks.  In  addition, 
contradictory procedures (suspension and cancellation of financial contributions) are foreseen in 
case the reform commitments are not implemented satisfactorily, i.e. if no tangible progress has 
been  made  in  respect  of  relevant  milestones  and  targets  and  if  there  is  evidence  of  reform 
reversal.  In  the  event  of  evidence  of  reform  reversal,  the  Commission  will  have  the  right  to 
recover  the  amounts  paid,  although  it  should  be  acknowledged  that  this  may  still  be  quite  a 
burdensome procedure in practice.  

Convergence facility  

The delivery mode under the convergence facility would be the same as for the two instruments 
(technical support and financial support) as indicated above.  

4.2.  Detailed structure of the instruments 

The  post-2020  Reform  Support  Programme  will  maximise  the  delivery  mechanism  chosen  to 
support structural reforms, while minimising the administrative burden for the Commission and 
the beneficiary Member States. This will be ensured through the following general principles: 

  Participation  in  the  Programme  (all  three  pillars)  is  voluntary:  Member  States  are 
not obliged to request support. This will strengthen the ownership of the support as the 
reforms would be home-grown;  

  The  procedures  within  the  Programme  will  be  simple:  the  instruments  contribute  to 
reducing  the  overall  administrative  burden  for  the  Member  States  and  for  the 
Commission  – as the Reform Support Programme is  managed  in direct  management, it 
will  benefit  from  standardised  central  procedures,  so  that  the  burden  on  the  Member 
States is low; and 

42 

 
  There will be no ring-fenced national allocations (no entitlement); only an indicative 
maximum  amount  has  been  set  up  for  the  reform  delivery  tool  to  be  provided  to  each 
Member  State.  This  aims  at  providing  incentives  for  Member  States  to  propose  reform 
agendas.  Under  the  technical  support  instrument,  there  is  no  allocation  of  funding  to 
Member  States,  but  the  provision  of  technical  support  measures  will  be  made  upon 
demand and subsequent selection of the best requests. 

Particular clauses are envisaged in the basic act of the future Reform Support Programme for all 
three  instruments  to  ensure  that  double  funding  and  overlaps  with  ESIF  investments  are 
avoided and that complementarities and consistency are enhanced. 

4.2.1.  Technical support instrument (ex-SRSP) 

Experience  gained  with  the  implementation  of  the  SRSP  shows  that  Member  States  have 
taken up technical support under the SRSP well beyond the initial expectations. Almost all 
Member  States  have  requested  support  under  the  SRSP  and  requests  are  distributed  across  all 
policy areas covered by that Programme. This confirms that the support provided under SRSP is 
considered to be attractive, which speaks in favour of keeping the main features of the technical 
support  instrument.  As  under  the  SRSP,  the  technical  support  instrument  under  the  Reform 
Support Programme should continue to support the implementation of reforms undertaken at the 
initiative  of  the  Member  States,  reforms  in  the  context  of  economic  governance  processes  or 
actions  related  to  the  implementation  of  Union  law,  or  in  relation  to  the  implementation  of 
economic  adjustment  programmes  (the  eligibility  of  reforms  covered  under  this  instrument  is 
therefore  much  broader  than  the  eligibility  of  reforms  covered  under  the  reform  delivery  tool). 
The instrument should now also provide technical support for the preparation and implementation 
of reforms to be undertaken under the other Programme instruments.  

The  technical  support  instrument  starts  with  a  voluntary  request  for  support  from  a 
Member  State;  the  support  provided  is  tailor-made  to  address  the  country's  specific  needs.  It 
requires no co-financing and strengthens the capacity of a Member State to prepare, design and 
implement  reforms. In order to facilitate the implementation  of technical support and to benefit 
from peers' experiences, the provision of technical support under this Programme is managed by 
the  Commission  and  implemented,  inter  alia,  in  cooperation  with  other  Member  States, 
international organisations and, when necessary, the private sector.  

In line with the rules and practice already existing under the SRSP, a light process for the 
submission  of  requests  for  technical  support  should  be  set  out.  A  Member  State  wishing  to 
receive support under the technical support instrument submits a request to the Commission, via 
a  national  Coordinating  Authority.  The  Commission  organises  calls  for  submission  of  requests 
for support in order to ensure equal treatment of all requests. The Commission analyses requests 
received  according  to  the  criteria  defined  in  the  original  SRSP  Regulation78  and  general 
principles  (transparency,  equal  treatment  and  the  sound  financial  management),  and  enters  into 
dialogue with the national authorities to assess the Member State's specific needs and the options 
to support the design and implementation of the reforms. Priority will be given to those requests 
which  comply  with  the  criteria  defined  in  the  regulation  (urgency,  breadth  and  depth  of  the 

78  Assessment  criteria  under  technical  support:  (a)  Urgency  of  the  request;  (b)  Breadth  and  depth  of  the  problems  identified;  (c) 
Support needs in respect of the policy areas concerned; (d) Socio-economic indicators; (e) General administrative capacity of the 
Member State. 

43 

 
                                                            
problems  identified,  support  needs  in  respect  of  the  policy  areas  concerned,  analysis  of 
socioeconomic  indicators  and  general  administrative  capacity  of  the  Member  State)  and  which 
respond  to  the  best  use  of  Union  funding  (under  sound  financial  management).  The  support  is 
provided  directly  through  the  Commission's  in-house  expertise  and/or  by  other  providers  of 
technical  support,  such  as  experts  from  national  administrations,  international  organisations, 
private firms and consultancies, and individual experts from the private sector. The selection of 
support  measures  is  tailor-made  to  Member-State  needs  and  is  "sealed"  by  the  conclusion  of  a 
Cooperation and Support Plan (CSP). The CSPs indicate the scope of the support measures, the 
objectives,  the  timeline  and  the  estimated  budget  of  the  support  to  be  provided  from  the 
Commission  to  the  Member  State.  The  technical  support  measures  envisaged  and  the  related 
estimated  financial  contribution  should  take  into  account  the  actions  and  activities  financed  by 
Union funds or Union programmes. 

In order to cater for additional needs of Member States that may want to benefit from the 
technical support instrument beyond its available budget, Member States should have the 
possibility  to  contribute,  on  a  voluntary  basis,  to  the  budget  of  the  technical  support 
instrument  under  the  Programme  by  transferring  part  of  the  resources  dedicated  to 
technical  assistance  at  the  initiative  of  a  Member  State  under  the  ESIF.  The  resources 
transferred  to  the  technical  support  instrument  budget  of  the  Programme  should  be  used  for 
supporting  actions  exclusively  in  that  Member  State  and  for  the  goals  of  the  Programme.  The 
possibility  of  contributing  with  additional  financial  resources  is  also  possible,  by  analogy, with 
respect  to  the  budget  of  the  technical  support  component  of  the  convergence  facility  under  the 
Programme. 

4.2.2.  Reform Delivery Tool  

The reform delivery tool is based on the following key principles:  

1.  The reform delivery tool is based on positive incentives, rather than on punitive measures 
such as suspension of funding or other financial sanctions. The objective is to speed up the 
pace of reform implementation.  The reform delivery tool contains a suspension  mechanism 
(available at the end of the process), which is not punitive or preventive but is only triggered 
in case the assessment by the Commission (backed by external expertise as the case may be) 
shows  that  the  reform  commitments  are  not  satisfactorily  fulfilled  by  the  Member  State 
concerned; 

2.  The  instrument  is  voluntary  in  order  to  increase  ownership;  Member  States  are  not 

obliged to request financial support;  

3.  The  mechanism  does  not  add  an  additional  administrative  layer  between  Commission 
and  Member  States  as  the  monitoring  and  reporting  will  be  aligned  with  the  European 
Semester framework; 

4.  The  incentive  is  linked  to  the  importance  of  the  reform.  The  assessment  criteria  of  the 
reform proposal as set out in the proposed Regulation will make sure that the Commission is 
in  a  position  to  support  structural  reforms  that  are  relevant  and  important  for  the  Member 
States and that the Member State has the willingness and capacity to follow-up on the their 
implementation; therefore, financing will not be awarded for any type of reforms that are put 
forward  by  the  Member  States.  In  particular,  the  Commission  should  assess:  whether  the 
reform  commitments  proposed  by  the  Member  States  are  expected  to  effectively  address 
challenges  identified  in  the  context  of  the  European  Semester;  whether  they  represent  a 

44 

 
comprehensive reform package; whether they are expected to strengthen the performance and 
resilience of the national economy; and whether their implementation is expected to have a 
lasting impact in the Member State; in addition, the Commission should also assess whether 
the internal arrangements proposed by the Member States, including the proposed milestones 
and targets, and the related indicators, are expected to ensure effective implementation of the 
reform commitments during a maximum period of three years (see the section "5. Assessing 
reform proposals"). 

5.  The amount of financial allocation made to a Member State will not be determined by the 
cost of reform or by a specific short-term cost related to the reform (several very important 
reforms  do  not  even  involve  a  high  financial  cost)  as  the  instrument  is  not  intended  to 
compensate for the direct economic costs related to the reforms, but it is a one-off, targeted 
financial  incentive  to  help  Member  States  embark  on  the  implementation  of  reforms.  The 
amount received can be used by the authorities of the Member States to mitigate costs related 
to  the  reforms,  including  the  financing  of  flanking  measures.  In  more  concrete  terms,  after 
the reform commitment is implemented (for instance, in the context of a reform to foster the 
transition  to  low-carbon  economy),  the  funds  will  be  transferred  to  the  state  budget  and 
could,  for  example,  be  used  to  set  up  a  new  mobility  scheme.  Even  though  the  reform  is 
expected to produce results only in the long term, the financial incentive can already unlock a 
possible political blockage and overcome political hesitation in the reform process; and  
6.  Any EU Member State can apply to receive support from the instrument. The financial 
contribution will not be pre-allocated in a budget envelope for different Member States, but it 
will rather be determined on the basis of the reform proposals submitted by the Member State 
when they apply. 

Those  key  principles  will  allow  for  better  adaptation  of  the  instrument  to  Member-State  needs 
and will promote ownership of reforms by Member States. If used and communicated properly, 
the  EU  financial  incentive  might  also  be  seen  more  positively  by  those  governments  ready  to 
embark  on  difficult  reforms.  Because  it  introduces  a  certain  level  of  competition,  it  could  also 
incentivise Member States to act in response to the actions of peers.  

Feedback received from the Member States during the workshops on the pilot phase of the 
reform delivery tool provided useful input for the design of the structure of the instrument. 
A  large  majority  of  Member  States  acknowledged  the  need  to  deal  with  structural  reforms,  but 
stressed  at  the  same  time  that  Member  States  should  be  given  greater  ownership  over  their 
implementation. Some Member States welcomed a new tool for incentivising structural reforms, 
whereas  some  others  felt  that,  since  structural  reforms  pay  for  themselves,  additional  financial 
incentives  might  not  necessarily  be  needed.  The  voluntary  nature  of  the  instrument  will  thus 
enable Member States to decide whether additional financial incentive is needed. 

Structure  

1.  Types  of  reforms:  In  order  to  optimise  the  added  value  and  effectiveness  of  the  financial 
incentives,  it  is  necessary  to  identify  the  type  of  reforms  that  should  be  eligible  for  support. 
Reforms that are eligible for support under the reform delivery tool are reforms addressing 
challenges  that  are  identified  in  the  context  of  the  European  Semester  of  economic  policy 
coordination.  This  comprises  challenges  raised  in  the  country-specific  recommendations 
(CSRs), where relevant in the macroeconomic imbalance procedure and challenges identified in 
the  country  reports  to  the  extent  that  they  are  officially  adopted  by  the  Commission.  The 

45 

 
definition  of  eligible  reforms  covered  under  the  reform  delivery  tool  is  narrower  than  the 
definition  of  eligible  reforms  under  the  technical  support  instrument,  which  also  covers,  inter 
alia,  Member  States'  own  reforms.  Within  the  reforms  identified  in  the  European  Semester, 
Member States will be able to choose the reforms they want to pursue with the financial support 
of  the  Commission.  This  ensures  proportionality  and  fosters  ownership  at  the  level  of  the 
Member State, which is a key ingredient of any successful reform effort. 

At  the  same  time,  the  focus  will  be  on  reforms  that  have  been  identified  within  the 
European Semester process, and have therefore not yet been implemented or completed by 
the Member States. Those reforms will have important impacts on the economic situation of the 
Member State concerned and possibly on its European neighbours, and they will  be considered 
priority for the Commission. The link to the European Semester also provides protection against 
moral hazard: the risk that Member States will put forward reforms that they would implement in 
any case. The experience so far is that many reforms identified in the Semester are not pursued or 
are  pursued  with  a  long  delay.  By  providing  a  financial  incentive  (contributions),  the  aim  is  to 
encourage the Member States to implement the reforms that have not been carried out or are too 
slow  in  being  completed.  At  the  same  time,  it  is  crucial  that  the  country's  ownership  of  the 
reforms is ensured. For this reason, the initiative to propose reform commitments is left with the 
Member  States.  During  the  workshops  on  the  pilot  phase  of  the  reform  delivery  tool,  overall, 
Member States agreed that the reforms subject to the reform delivery tool should be identified in 
the context of the European Semester. A few Member States preferred to limit the scope of the 
reforms  to  the  CSRs  only,  as  these  have  already  received  endorsement  by  all  Member  States, 
while  a  large  majority  of  Member  States  argued  in  favour  of  reforms  that  are  wider  than  the 
CSRs (e.g. the country reports).  

2. Maximum indicative financial contribution available per Member State: The size of the 
financial  contribution  cannot  be  based  on  the  cost  of  a  reform.  After  all  what  matters  is  the 
impact of the reform, which is not necessarily related to the financial costs of the reform. Some 
reforms  can  have  a  major  impact  on  a  Member  State  while  they  do  not  require  any  budgetary 
outlays.  Therefore  the  programme  will  define  indicative  amounts  by  Member  State,  which  will 
constitute  the  maximum  financial  contribution  available  for  each  Member  State  under  the 
instrument and will define criteria to determine the reforms that should be implemented in order 
to receive this contribution.  

At the same time, an allocation key setting the maximum amounts by Member State will ensure 
equal treatment for all Member States, while appropriately taking into account the differences in 
size of Member States. 

Various  allocation  keys  were  considered  with  the  aim  of  ensuring  and  efficient  and 
equitable distribution. The allocation key should provide for an incentive that is meaningful, i.e. 
large  enough  to  provide  for  a  sufficient  incentive,  but  also  allowing  for  a  fair  distribution. The 
contribution key that is being proposed – the population key – meets these criteria. On one hand, 
it ensures that the incentives that are provided are meaningful, as more populous Member States 
can benefit from a higher maximum contribution. At the same time, it ensures that the maximum 
net benefit per capita is the same across all Member States.  

When proposing the reform commitments, the dialogue between the Member States (including in 
the  Economic  Policy  Committee,  and  in  consultation  where  appropriate  with  relevant  Treaty-

46 

 
based committees) and the Commission will further ensure that Member States' reform proposal 
will  be  assessed  in  an  equal  manner.  The  legislative  proposal  will  contain  an  annex  with  the 
percentage and absolute figures for the maximum amounts available for each Member State.  

3. Allocation process and annual calls:  The allocation of funds to the Member States will  be 
made  in  stages.  As  the  purpose  of  the  RSP  is  to  accelerate  the  process  of  reforms,  the 
allocation  of  funds  is  relatively  frontloaded.  Fifty  percent  of  the  total  size  of  the  envelope 
(EUR 11 billion) will be allocated in the first stage (which will last twenty months from the entry 
into force of the Regulation establishing the Programme), during which they could receive up to 
their  maximum  allocation  by  submitting  proposals  for  reform  commitments.  This  period  of 
twenty months allows sufficient time and opportunity for each Member State to submit a reform 
proposal, should it wish to do so. After the end of this initial period (i.e. in a second stage, which 
lasts  for  the  remaining  period  of  the  Programme),  the  Commission  will  allocate  the  remaining 
fifty percent of the overall envelope (EUR 11 billion), plus the amount that has not been used by 
the  Member  States  in  the  first  stage,  through  appropriate  calls.  Simple  procedures  should  be 
organised to that effect during the second stage. In this second stage, under each call, all Member 
States  should  be  invited  to  submit  reform  proposals  concurrently,  and  they  could  be  awarded 
their  maximum  financial  contribution  on  the  basis  of  their  reform  proposals.  In  the  interest  of 
transparency, the first call organised by the Commission should be for an amount corresponding 
to  the  remaining  50%  of  the  overall  financial  envelope  of  the  instrument  (EUR  11  billion). 
Further calls should be organised by the Commission only where the overall financial envelope 
has not been fully used. The Commission should adopt and publish an indicative calendar of the 
further  calls  to  be  organised,  and  should  indicate,  at  each  call,  the  remaining  amount  of  the 
overall  envelope,  which  is  available  under  the  call.  This  arrangement  addresses  the  concerns 
raised during the workshops on the pilot phase of the reform delivery tool where Member States 
underlined  that  the  funds  should  not  be  allocated  in  a  purely  competitive  way  on  a  first-come 
first-served basis.  

4.  The  Member  State  proposes  reform  commitments:  A  Member  State  wishing  to  receive 
support under the reform delivery tool will have to submit a proposal for reform commitments to 
the  Commission  detailing  the  set  of  measures  for  the  implementation  of  structural  reforms 
identified in the European Semester process. The proposal by the Member State will also include 
information  regarding  the  nature  and  importance  of  the  reforms,  their  expected  social  and 
economic  impact  and,  where  possible,  spillover  effects  in  other  Member  States,  as  well  as 
accompanying measures, possible investment costs and information on the internal arrangements 
for the effective implementation of reform commitments. 

With a view to ensuring the expediency of procedures, the proposal for reform commitments will 
be  presented  by  the  Member  State  together  with  its  National  Reform  Programme  (NRP)  in  the 
form  of  a  separate  annex,  which  may  be  submitted  also  at  a  different  point  in  time.  Many 
Member States expressed their preference for such possibilities during the workshops on the pilot 
phase of the reform delivery tool. This will allow Member States to submit reform proposals that 
fully take into account the latest CSRs. The Member State should identify the reforms among the 
challenges raised in the context of the European Semester and propose a detailed set of measures 
for  their  implementation,  which  contain  appropriate  milestones  and  targets  and  a  timetable  for 
implementation over a period no longer than three years. The proposal for reform commitments 
submitted by Member States will focus on reform challenges included in the European Semester. 

47 

 
The discussions between the Member State concerned and the European Commission will allow 
for the request to be clarified and a Member State will also be able to revise its request if needed 
(in case the reform commitments prove not to be sufficiently comprehensive for instance). 

4.  Counselling:  In  order  to  contribute  to  the  preparation  of  high  quality  proposals  for  reform 
commitments,  peer  counselling  may  be  organised  by  the  Commission  to  allow  the  requesting 
Member States to benefit from the experience of other Member States.  

5.  Assessing  reform  proposals:  The  Regulation  sets  out  detailed  rules  defining  criteria  and 
procedures  for  assessing  proposals  for  reform  commitments,  the  related  financial  contribution 
(ex-ante), and the degree of compliance with reform targets and milestones (ex-post) that would 
trigger the release of funding.  

When  assessing  the proposals  for  reform  commitments,  the  Commission  will  closely  cooperate 
with  the  Member  State  concerned  to  ensure  ownership  by  the  Member  States  and  the 
effectiveness  of  the  reform.  In  particular,  the  Commission  will  assess  the  nature  and  the 
importance  of  the  reform  commitments  proposed  by  the  Member  States  by  taking  into  account 
the  substantive  elements  provided  by  the  Member  States  in  their  reform  proposals.  It  will  also 
determine the amount to be allocated to them on the basis of credible and transparent criteria. The 
Commission  will  also  establish  a  rating  system  for  the  assessment  of  proposals  for  reform 
commitments, which will allow for transparency and equal treatment among Member States. The 
proposed criteria and the related rating systems are illustrated below (with ratings ranging from A 
to C):  

  whether the reform commitments are expected to  effectively address challenges identified 

in the context of the European Semester:  

– 

in  the  country-specific  recommendations  and  in  other  relevant  European 
Semester documents officially adopted by the Commission; or 
–  where applicable, in the Macroeconomic Imbalance Procedure; 

The  following  elements  are  established  in  the  rating  system  for  the  assessment  of  that 
criterion:  

o  The proposal for reform commitments is aimed at addressing challenges identified in 

country-specific recommendations; or 

o  The proposal for reform commitments is aimed at addressing challenges identified in 
other relevant European Semester documents officially adopted by the Commission; 
or 

o  The proposal for reform commitments is aimed at addressing challenges identified in 

the Macroeconomic Imbalance Procedure; and 

o  The  reforms  envisaged  in  the  proposal  for  reform  commitments  are  expected  to 
effectively address the challenges identified, in that, following the completion of the 
proposed reform(s), those challenges would be expected to be considered resolved in 
the context of the European Semester process. 

On the basis of the elements elaborated above, a rating would be made as to whether the 
proposal  effectively  addresses  challenges  identified  in  the  context  of  the  European 
Semester: to a high/medium/low extent and efficacy.  

48 

 
  whether the reform commitments represent a comprehensive reform package:  

The  following  elements  are  established  in  the  rating  system  for  the  assessment  of  that 
criterion:  

o 

o 

the  proposal  for  reform  commitments  is  aimed  at  addressing  a  set  of  interrelated 
challenges for the Member State (coverage); and 
the  proposal  for  reform  commitments  is  aimed  at  addressing  challenges  that  are 
crucial for the functioning of the economy of the Member State (relevance). 

On the basis of the elements elaborated above, a rating would be made as to whether the 
reform commitments represent a comprehensive reform package: coverage and relevance 
are high – reform commitments aim at addressing several challenges raised in the country 
specific recommendations or in the Macroeconomic Imbalance Procedure / coverage and 
relevance are medium – reform commitments aim at addressing several challenges raised 
in  relevant  European  Semester  documents  officially  adopted  by  the  Commission  / 
coverage and relevance of reforms are low – none of the above.  

  whether  the  reform  commitments  are  expected  to  strengthen  the  performance  and 

resilience of the economy of the Member States concerned: 

The  following  elements  are  established  in  the  rating  system  for  the  assessment  of  that 
criterion:  

o 

o 

o 

the  proposal  for  reform  commitments  is  aimed  at  structurally  improving  the 
performance of the economy of the Member State; and 
the  proposal  for  reform  commitments  is  aimed  at  reducing  the  vulnerability  of  the 
economy of the Member State to shocks; or  
the  proposal  for  reform  commitments  is  aimed  at  increasing  the  capacity  of  the 
economic  and/or  social  structures  of  the  Member  State  to  adjust  to  and  withstand 
shocks. 

On the basis of the elements elaborated above, a rating would be made as to whether the 
reform  commitments  are  expected  to  strengthen  the  resilience  of  the  economy  of  the 
Member States concerned with: a high/medium/low expected impact on performance and 
resilience. 

  whether the reform commitments are expected, through their implementation, to have a 
lasting  impact,  where  relevant  by  strengthening  the  institutional  and  administrative 
capacity of the Member State concerned.  

The  following  elements  are  established  in  the  rating  system  for  the  assessment  of  that 
criterion:  

o 

o 

o 

the  implementation  of  the  proposed  reforms  is  expected  to  bring  about  a  structural 
change in the administration or in relevant institutions; or  
the  implementation  of  the  proposed  reforms  is  expected  to  bring  about  a  structural 
change in relevant policies; and 
the strengthening of administrative capacity can ensure a lasting impact. 

49 

 
On the basis of the elements elaborated above, a rating would be made as to whether the 
reform  commitments  are  expected  to  have  a  lasting  impact  to  a  large/moderate/small 
extent.  

 

In  addition,  the  Commission  should  also  assess  whether  the  internal  arrangements 
proposed by the Member States, including the proposed milestones and targets, and the 
related  indicators,  are  expected  to  ensure  effective  implementation  of  the  reform 
commitments during a maximum period of three years.  

The following rating  system is established to take into  account in  the assessment  when 
assessing these criteria:  
o  a  structure  is  tasked  within  the  Member  State  with:  (i)  the  implementation  of  the 
reform commitments; (ii) the monitoring of progress on milestones and targets; and 
(iii) the reporting; and 
the  proposed  milestones  and  targets  are  clear  and  realistic;  and  the  proposed 
indicators are relevant, acceptable and robust; and 
the  overall  internal  arrangements,  proposed  by  the  Member  States  in  terms  of 
organisation  (including  provision  to  ensure  sufficient  staff  allocation)  of  the 
implementation of the reform commitments, are credible. 

o 

o 

On the basis of the elements elaborated above, a rating would be made as to whether the 
are: 
for 
internal 
overall 
adequate/minimum/insufficient. 

implementation 

arrangements 

effective 

The  Commission  will  give  ratings  to  the  proposals  for  reform  commitments  submitted  by  the 
Member  States  under  each  of  the  assessment  criterion.  Annex  II  of  the  Regulation  provides 
further  guidance  on  the  assessment  process  of  the  proposals  for  reform  commitments  as 
submitted by Member States and further details on the assessment criteria and the rating system. 
Annex II will be the basis for the Commission to proceed in a transparent and equitable manner 
with  the  assessment  of  the  proposals  for  reform  commitments  as  put  forward  by  the  Member 
States. Annex II of the Regulation is attached to this impact assessment as Annex 3. 

This  assessment  and  rating  system  will  also  be  the  basis  for  determining  the  financial 
contribution in conformity with the objectives and any other relevant requirements laid down in 
the Regulation establishing the Programme. This mechanism will ensure equal treatment among 
Member States.  

  The financial contribution will be equal to the total amount of the maximum financial 
contribution  where  the  proposal  for  reform  commitments  submitted  by  the  Member 
State  complies  fully  with  the  assessment  criteria  –  the  reform  commitments  will  be 
considered to be "major"; 

  The financial contribution will be equal to half of the maximum financial contribution 
where the proposal for reform commitments complies satisfactorily with the assessment 
criteria – the reform commitments will be considered to be "significant".  

  No financial contribution will be allocated where the proposal for reform commitments 

does not comply satisfactorily with the assessment criteria. 

50 

 
 
The  amount  of  financial  allocation  to  a  Member  State  will  not  be  determined  by  the  cost  of 
reform  or  by  a  specific  short-term  cost  related  to  the  reform.  This  is  because  several  very 
important reforms do not involve a high financial cost and therefore the cost of the reform is not a 
meaningful variable for determining the amount of the financial support.  

In  its  assessment  of  the  proposal  for  reform  commitments  submitted  by  the  Member  State,  the 
Commission  may  be  assisted  by  relevant  expert  groups.  The  Economic  Policy  Committee,  in 
consultation  where  appropriate  with  relevant  Treaty-based  Committees,  may  be  consulted  to 
provide their opinion on the proposals for reform commitments as submitted by Member States 
(but not on the assessment of fulfilment of reforms).  

Such  assessment  process  and  criteria  will  allow  addressing  the  concerns  expressed  by  Member 
States during the workshops on the pilot phase of the reform delivery tool, so that Member States 
do not propose only simple, insignificant reforms, but reforms that can make a real difference. 

However, it should be noted that the rating system as such does not aim at prioritising reforms. 
Instead, it ensures that only those reform proposals that are of sufficient quality are supported. 

Example of reforms justifying a payment of 50% or 100% of the envelope 

To illustrate reforms that would justify a payment of 50% or 100% of the maximum allocation, 
we  take  the  example  of  a  Member  State  where  the  unemployment  rate  is  high  and  the  social 
welfare system does not adequately cover the poorest segment of the population. This Member 
State has received a country-specific recommendation urging it to take measures to ensure a more 
effective coverage of the most vulnerable by the social welfare system.  

1. A reform proposal that would benefit from 100% would be include the following measures: 

- 
The  Member  State  will  conduct  a  comprehensive  review  of  its  social  welfare  system, 
with a view to: (i) reviewing all social benefits, (ii) assessing the extent to which it is effective in 
ensuring targeted protection against poverty, (iii) identifying coverage gaps and duplication, and 
(iv) proposing recommendations to streamline, rationalise and adapt it to ensure its effectiveness 
in adequately protecting against poverty, based on simulations of the distributional impact of the 
various recommendations.  

On the basis of this social welfare review, the Member State will adapt the social welfare 

- 
system (including streamlining of benefits, change of eligibility conditions, etc.). 

- 
The Member State will design and introduce a guaranteed minimum income, which will 
take  into  account  the  coverage  gaps  identified  in  the  social  welfare  review.  This  will  notably 
include the following steps: 

Designing  the  new  scheme  (including  its  level,  eligibility,  link  to  employment  policies 

o 
and other social benefits, etc.); 

o 

Piloting its introduction in a few municipalities; 

Evaluating the pilot and taking the lessons learnt into account to roll out the scheme to 

o 
the entire country; 

51 

 
Setting  up  a  monitoring  and  information  system,  which  will  cover  beneficiaries  of  the 

o 
GMI and also all other social benefits; 

Creating a new administrative unit in charge of the administration and monitoring of the 

o 
GMI and all other social benefits; and 

Ensuring the appropriate training of all the staff of the administrative unit as well as all 

o 
other social centres.  

This proposal would be rated as follows: 

- 
“A”  for  the  criterion  of  whether  the  reform  commitments  are  expected  to  effectively 
address challenges identified in the context of the European Semester: as the reform would "to a 
high extent" aim at addressing challenges identified in country-specific recommendations and the 
reforms  envisaged  are  expected  to  effectively  address  the  challenges  identified  "with  high 
efficacy". 

- 
“A” for the criterion of whether the reform commitments represent a comprehensive set 
of reforms or a comprehensive reform: as the reform commitments would have "high coverage" 
(several  challenges  related  to  each  other)  and  "high  relevance"  (crucial  challenges  for  the 
Member State). 

“A” for the criterion of whether the reform commitments are expected to strengthen the 
- 
resilience  of  the  economy  of  the  Member  State  concerned:  as  the  reform  commitments  would 
have a "high expected impact" on resilience (it would be expected to reduce the vulnerability of 
the  economy  of  the  Member  State  to  shocks  by  establishing  an  adequate  welfare  system  and 
would also increase the capacity of its social structures to adjust to and withstand shocks). 

- 
“A”  for  the  criterion  of  whether  the  reform  commitments  are  expected,  through  their 
implementation,  to  have  a  lasting  impact,  where  relevant  by  strengthening  the  institutional  and 
administrative  capacity  of  the  Member  State  concerned:  as  the  implementation  of  the  proposed 
reforms is "to a high extent" expected to bring about a structural change in the administration of 
social benefits and in the social policies.  

- 
“A”  for  the  criterion  of  “whether  the  internal  arrangements  proposed  by  the  Member 
States concerned are expected to ensure an effective implementation of the reform commitments, 
including  the  proposed  milestones  and  targets,  and  the  related  indicators”:  as  the  internal 
arrangements would be assessed as "adequate" to ensure for effective implementation, including 
a structure tasked within the Member State with the implementation of the reform commitments, 
the  monitoring  of  progress  on  milestones  and  targets  and  the  reporting;  clear  and  realistic 
proposed  milestones  and  targets;  relevant,  acceptable  and  robust  proposed  indicators;  and 
credible  overall  internal  arrangements  for  the  organisation  of  the  implementation  of  the  reform 
commitments. 

This  reform  would  thus  be  rated  "AAAAA"  and  would  be  allocated  100%  of  the  maximum 
allocation of that Member State.  

2. A reform proposal that would benefit from 50% would include the following measures: 

52 

 
 
The  Member  State  will  design  and  introduce  a  guaranteed  minimum  income.  This  will 

- 
notably include the following steps: 

Designing  the  new  scheme  (including  its  level,  eligibility,  link  to  employment  policies 

o 
and other social benefits, etc.); 

o 

Piloting its introduction in a few municipalities; 

Evaluating the pilot and taking the lessons learned into account to roll out the scheme to 

o 
the entire country; 

Setting  up  a  monitoring  and  information  system,  which  will  cover  beneficiaries  of  the 

Creating a new administrative unit in charge of the administration and monitoring of the 

o 
GMI; 

o 
GMI.  

This proposal would be rated as follows: 

“B”  for  the  criterion  of  whether  the  reform  commitments  are  expected  to  effectively 
- 
address challenges identified in the context of the European Semester: as the reform would cover 
only  the  introduction  of  a  GMI  and  not  the  rationalisation  of  other  social  benefits  and  would 
therefore  "to  a  medium  extent"  aim  at  addressing  challenges  identified  in  country-specific 
recommendations  and  the  reforms  envisaged  would  be  expected  to  effectively  address  the 
challenges identified with "medium efficacy". 

- 
“B” for the criterion of whether the reform commitments represent a comprehensive set 
of  reforms  or  a  comprehensive  reform:  as  the  reform  commitments  would  have  "medium 
coverage"  (several  challenges)  and  "medium  relevance"  (as  the  proposal  would  address  only 
some of the crucial challenges for the Member State in respect of the effectiveness of the social 
safety net). 

- 
“B” for the criterion of whether the reform commitments are expected to strengthen the 
resilience  of  the  economy  of  the  Member  State  concerned:  as  the  reform  commitments  would 
have a "medium expected impact" on resilience (it would be expected to reduce the vulnerability 
of  the  economy  of  the  Member  State  to  shocks  by  introducing  a  safety  net  for  the  poorest  but 
would  not  improve  the  targeting  and  adequacy  of  other  social  benefits  and  therefore  their 
capacity to adjust to and withstand shocks). 

- 
“B”  for  the  criterion  of  whether  the  reform  commitments  are  expected,  through  their 
implementation,  to  have  a  lasting  impact,  where  relevant  by  strengthening  the  institutional  and 
administrative  capacity  of  the  Member  State  concerned:  as  the  implementation  of  the  proposed 
reforms  is  "to  a  moderate  extent"  expected  to  bring  about  a  structural  change  in  the 
administration of social benefits and in the social policies.  

“A”  for  the  criterion  of  “whether  the  internal  arrangements  proposed  by  the  Member 
- 
States concerned are expected to ensure an effective implementation of the reform commitments, 
including  the  proposed  milestones  and  targets,  and  the  related  indicators”:  as  the  internal 
arrangements would be assessed as "adequate" to ensure for effective implementation, including 
a structure tasked within the Member State with the implementation of the reform commitments, 

53 

 
the  monitoring  of  progress  on  milestones  and  targets  and  the  reporting;  clear  and  realistic 
proposed  milestones  and  targets;  relevant,  acceptable  and  robust  proposed  indicators;  and 
credible  overall  internal  arrangements  for  the  organisation  of  the  implementation  of  the  reform 
commitments. 

This  reform  would  thus  be  rated  "BBBBA"  and  would  be  allocated  50%  of  the  maximum 
allocation of that Member State.  

6.  Commission  decision:  The  Commission  will  adopt  a  decision  within  four  months  of  the 
submission of the proposal by the Member State (which is considered a reasonable time-frame), 
by  means  of  an  implementing  act,  setting  out  reform  commitments,  to  be  implemented  by  the 
Member State, and the financial contribution.  

The  decision  will  establish  that  the  financial  contribution  will  be  paid  in  one  instalment79 
once  the  Member  State  has  satisfactorily  implemented  all  the  milestones  and  targets 
identified in relation to the implementation of each  reform commitment. The decision will also 
lay down the period for implementation of the reform commitment, which shall be within three 
years  of  the  adoption  of  the  decision  and  specify  reporting  arrangements  within  the  European 
Semester.  

For the purposes of transparency, the reform commitments, as adopted by the Commission in the 
relevant implementing act, should be transmitted to the European Parliament and the Council. 

7. Amending reform commitments: Member States may make a request to amend the decision 
on  their  reform  commitments  if  objective  circumstances  make  the  reform  commitments, 
including  relevant  milestones  and  targets,  no  longer  achievable.  The  Member  State  may  then 
propose a modified or a new set of reform commitments. This was mentioned by some Member 
States during the workshops on the pilot phase of the reform delivery tool. Given the short period 
for the implementation of the reform commitment, the Member  State  may submit a  request for 
amendment  only  once  during  this  period.  This  will  ensure  a  certain  stability  of  the  reform 
commitments. 

8. Reporting: In the interest of simplification, the reporting by Member States on the progress of 
the  implementation  of  reform  commitments  should  be  made  in  the  framework  of  the  European 
Semester, as largely supported by a majority of Member States during the workshops on the pilot 
reform delivery tool.80 Member States will be invited to use the National Reform Programmes for 
this purpose. The Commission would provide an annual assessment of the progress made by the 
Member States. 

9. Payment: For reasons of efficiency in the financial management of the instrument, the Union 
financial  support  for  reform  commitments  shall  take  the  form  of  a  financial  contribution  not 
linked to cost (see point 5  here above). During the workshops on the pilot phase of the reform 

79 In accordance with the feedback received from Member States during the workshops on the pilot phase of the reform delivery tool, 
the Commission has considered also payments through several instalments, but in order to maximize the incentive to complete the 
reform  and  to  reduce  the  risk  of  moral hazard,  payment  in  one  single  tranche  after the  completion  of  milestones  and  targets  was 
chosen as the best option.  

80  Some  Member  States  warned,  however,  that  the  link  with  the  European  Semester  process  should  not  be  too  tight  in  terms  of 

deadlines in order not to make the process more complex and burdensome. 

54 

 
 
                                                            
delivery  tool,  some  Member  States  particularly  emphasised  the  fact  that  the  creation  of  a  new 
instrument should not increase administrative burden to Member States. 

The payment would be made once the agreed milestones and targets have been achieved and the 
reform has been completed. Member States will submit to the Commission a request for payment 
of the financial contribution and the Commission will assess whether the relevant milestones and 
targets,  such  as  the  adoption  of  law,  piloting  of  the  reform,  operational  targets,  etc.  are 
satisfactorily implemented.  

the 

The Commission may be assisted by relevant expert groups for this purpose. For the purpose of 
sound  financial  management, 
instrument  will  contain  specific  rules  on  budget 
commitments,  payments,  and  suspension  and  recovery  of  funds.  Payments  should  be  based 
on a positive assessment by the Commission of the implementation of the reform commitments 
by the Member State. Suspension and cancellation of the financial contribution should occur in 
case the reform commitments have not been satisfactorily implemented by the Member State or 
in the event of a reform reversal.  

10. Rules on payments, suspension, cancellation and recovery: At the end of the process (i.e. 
after  the  completion  of  the  reform  commitments),  if  the  Commission  considers  that  a  reform 
commitment has been satisfactorily implemented, the financial contribution will be paid. If not, 
no payment will be made. There are rules for dealing with situations of disagreement, whereby 
Member States can contest Commissions decision to suspend, cancel or recover all or part of the 
financial contribution. In such cases, a number of contradictory procedures provide the Member 
State  with  the  possibility  to  present  its  observations.  However,  the  design  of  the  instrument  is 
such that the risk for the Commission would not be high. To minimise this risk, the Commission 
will ensure that it applies the assessment criteria in a transparent and equitable manner.  

  The reform delivery tool provides for financial support upon implementation of the 
agreed  reform  commitments,  thus  creating  positive  incentives  for  reform.  This 
approach  is  quite  different  from  the  sanction-based  approach  followed,  for  example, 
under the Stability and Growth Pact. Under the SGP, Member States can be fined if they 
do not comply with the provisions of the pact. This constitutes a negative incentive. The 
effectiveness of this approach has proven to be limited, not least because imposing a fine 
on  a  Member  State  is  considered  to  be  very  difficult  to  effect  in  political  terms.  In 
practice,  it  has  never  happened.  Withholding  (suspending)  a  payment  under  the  reform 
delivery  tool  means  that  Member  State  has  no  right  to  the  payment  unless  the 
Commission  has  positively  concluded  (backed  by  eventual  external  expertise)  its 
assessment  that  the  completion  of  the  reform  commitments  is  satisfactory.  There  is  no 
sanction  element,  but  rather  an  assessment  that  a  "contract"  has  not  been  fulfilled  and 
thus  no  payment  can  be  made.  A  sanction  system  means  that  it  would  be  up  to  the 
Commission  to  build  a  case  against  the  Member  State  in  the  first  place  and  to  issue 
penalties for non-compliance, similarly to the infringement procedures under Article 258 
TFEU. The "burden of proof" is therefore reversed. It is true that, through a contradictory 
procedure,  the  Member  State  concerned  is  offered  the  possibility  to  present  its 
observations, but the logic of the decision process is still that the case must be "made" by 
the Member State to show full compliance in the first place and not the reverse (i.e. the 
Commission demonstrating lack of compliance). 

55 

 
 
The case of "recovery" of funds is different, since in such case it is up to the Commission 
to  build  the  case  for  possible  "reversal"  of  the  reform  commitments,  for  which  the 
Member State would have already received a payment. In that case, however, rather than 
an element of penalty or sanction, there is the need to ensure that the principle of sound 
financial  management  is  respected  for  the  use  of  the  Union  budget,  as  it  is  customary 
under any Union programme and as is mandated by the Financial Regulation.  
At the same time one should not underestimate the implementation of the contradictory 
procedures.  They  can  also  be  burdensome.  Nevertheless,  the  Regulation  would  have  to 
include such provisions; otherwise there would be a serious legislative gap.  

  A few rules have been set in the Regulation in case of unsatisfactory implementation 

of reforms: 
  Where,  as  a  result  of  the  verification,  the  Commission  has  established  that  the 
milestones  and  targets  set  out  in  its  decision  on  the  reform  commitments  are  not 
satisfactorily  implemented  (e.g.  if  some  or  only  certain  aspects  of  the  reform 
commitments  are  completed),  the  Commission  will  suspend  the  payment  of  all  or 
part of the financial contribution, after having given the Member State concerned the 
possibility  to  present  its  observations.  The  Commission  will  end  the  suspension 
where  the  Member  State  has  taken  the  necessary  measures  to  ensure  a  satisfactory 
implementation of the milestones and targets (within six month). 

  Where,  after  eighteen  months  from  the  date  of  the  adoption  of  the  reform 
commitments,  no  tangible  progress  has  been  made  in  respect  of  any  relevant 
milestones and targets, the amount of the financial contribution will be cancelled by 
the Commission. 

  Where  within  five  years  of  the  payment,  the  conditions  that  allowed  such  payment 
have  changed  significantly  in  the  Member  State  concerned  (the  achievement  of  the 
reform commitments were reversed or the elements that led to the achievement of the 
the 
reform  commitments  were  significantly  modified  by  other  measures), 
Commission has the right to recover the amounts paid. 

  The  Commission  will  take  a  decision  on  the  suspension,  cancellation  or  recovery 
after  having  given  the  Member  State  concerned  the  possibility  to  present  its 
observations  within  a  reasonable  time  (one  month  for  suspension,  two  months  for 
cancellation, and two months for recovery). 

There is no need to cater for specific a remedy against the Commission decision in respect of any 
of the above cases, since such a remedy (review of legality) is provided for under the TFEU (cf. 
Article 263) and is substantiated by the possibility to bring the case before the Court of Justice of 
the  EU.  This  is  applicable  to  all  acts  of  the  Union  institutions  (Council,  Commission,  EU 
Parliament , ECB and even agencies and bodies of the Union) intended to produce legal effects 
on third parties. This means that all Commission decisions taken under the Regulation (which are 
intended  to  produce  legal  effects)  are  challengeable  in  Court  (including  the  decision  on 
suspension and recovery of funds).  

56 

 
  
 
4.2.3.  Convergence Facility  

A  separate  third  instrument,  the  convergence  facility,  is  intended  to  provide  both  financial  and 
technical  support  to  Member  States  whose  currency  is  not  the  euro  and  which  have  taken 
demonstrable steps towards adopting the single currency within a given time-frame, with a view 
to helping them prepare for participation in the euro area.  

All  Member  States  have  committed  to  adopting  the  euro  (except  Denmark  and  the  UK,  which 
negotiated  an  opt-out  clause).  So,  the  former  Member  States  are  legally  committed  to  adopting 
the euro. The demonstrable steps towards adopting the single currency within a given time-frame 
will  consist  of  a  formal  letter  from  the  government  of  the  Member  State  concerned  to  the 
Commission stating its intention to join the euro area within a reasonable and defined timeframe 
and  presenting  a  credible  time-bound  roadmap,  after  consultation  with  the  Commission,  for 
implementing  concrete  measures  to  prepare  for  successful  participation  in  the  euro  area, 
including  steps  to  ensure  full  alignment  of  its  national  legislation  with  the  requirements  under 
Union law (including the Banking Union).. 

The instrument aims to: a) provide additional, increased financial stimulus for those Member 
States which embark and complete the relevant structural reforms for joining the euro area, and 
b)  additional  and  targeted  technical  support  for  the  design  and  implementation  of  such 
reforms,  as  non-euro-area  Member  States  on  their  way  to  joining  the  euro  area  have  additional 
reform needs arising from their future participation in the euro area. 

The scope of this support instrument is the same as for the two other instruments, provided that 
the  reform  commitments  and  requests  for  technical  support  are  relevant  for  preparation  for 
participation in the euro area. 

The convergence facility will include a specific clause on "no double funding", i.e. reforms 
that are financed under the reform delivery tool will not be financed under the financial support 
component of the convergence facility. 

In the interest of consistency and simplification, the financial and technical support components 
carried  out  under  the  convergence  facility  should  follow  the  same  rules  and  implementation 
process as the other instruments under the Programme. Only few additional rules should be added 
regarding  the  eligibility  of  reforms  and  actions,  the  calculation  of  the  maximum  indicative 
allocation, and the proposals for reform commitments and the requests for technical support, as 
well as on the related assessment process.  

There will be a separate indicative budget for both financial support and technical support 
component.  There  will  also  be,  however,  some  flexibility  permitting  some  reallocation  of  the 
earmarked budget for the convergence facility to the reform delivery tool in case there is a low 
demand for such support from prospective euro-area Member States. 

A) Financial support component of the "convergence facility": 

Regarding the financial support component of the convergence facility, structural reforms eligible 
for  financing  under  the  convergence  facility  shall  encompass  reforms  aimed  at  addressing 
challenges identified in the context of the European Semester of economic policy coordination, 
including but not limited to those challenges raised in the country-specific recommendations.  

57 

 
A  maximum  indicative  financial  contribution  out  of  the  dedicated  overall  envelope  will  be 
available for each Member State. In a similar manner to the reform delivery tool, those amounts 
should be calculated on the basis of pre-defined allocation criteria. Various allocation keys were 
considered  with  the  aim  of  ensuring  efficient  and  equitable  distribution.  The  allocation  key 
should  provide  for  an  incentive  that  is  meaningful,  i.e.  large  enough  to  provide  for  a  sufficient 
incentive, but also allowing for a fair distribution. The legislative proposal will contain an annex 
with the percentage and absolute figures for maximum amounts available for each Member State. 
The amounts will be available at each stage of the allocation process and will be received over 
and above the financial contribution from the reform delivery tool. The amounts will be granted 
in return for additional reforms undertaken by the Member State concerned. 

Proposal  for  reform  commitments  will  be  submitted  in  the  same  way  as  for  the  reform 
delivery  tool.  The  reform  commitment  will  set  out  reforms  that  are  considered  important  for 
Member States' participation in the euro area. Proposals for such reform commitments, however, 
shall not concern reforms already proposed or financed under the reform delivery tool.  

The  proposal  for  reform  commitment  will  be  assessed  in  the  same  way  as  for  the  reform 
delivery  tool,  therefore  using  the  same  rating  system  as  explained  above;  in  addition,  the 
Commission  will  also  assess  the  relevance  of  the  proposed  reform  commitment  for 
preparation  for  participation  in  the  euro  area.  For  this  purpose,  the  Commission  will  also 
establish  a  rating  system  for  the  assessment  of  the  relevance  of  the  proposals  for  reform 
commitments  for  participation  in  the  euro  area.  The  proposed  criteria  and  the  related  rating 
systems in that regard are illustrated below (with ratings ranging from A to C):  

  Scope:  

The Commission shall take into account the following elements for the assessment under 
this criterion:  

o 
o 
o 

the proposal for reform commitments is in line with the Member State's roadmap 
 for preparation for participation in the euro area; and 
the  proposal  for  reform  commitments  is  expected  to  contribute  to  the  successful 
implementation  of  the  Member  State's  roadmap  for  preparation  for  participation  in 
the euro area . 

On  the  basis  of  the  elements  elaborated  above,  a  rating  would  be  made  as  to  whether  the 
relevance  of  the  proposal  and  its  substantial  expected  contribution  for  participation  in  the  euro 
area is high/medium/low. 

A  Commission  decision  on  the  reform  commitments  and  amount  of  the  financial  contribution 
within the financial support component of the convergence facility will be adopted in the same 
way  as  for  the  reform  delivery  tool.  That  decision  shall  also  refer  to  the  formal  letter  from  the 
government of the Member State concerned to the Commission stating its clear commitment to 
join  the  euro  area  within  a  reasonable  and  defined  timeframe  and  presenting  a  credible  time-
bound roadmap, after consultation with the Commission, for implementing concrete measures to 
prepare for successful participation in the euro area, including steps to ensure full alignment of its 
national  legislation  with  the  requirements  under  Union  law  (including  the  Banking  Union).  No 
financial contribution will be allocated to the reform proposal irrespective of other scores if the 

58 

 
proposal  is  expected  to  have  a  medium  or  low  impact  on  the  resilience  of  the  economy  (as 
explained above).  

B) Technical support component of the "convergence facility": 

Request for technical support within the convergence facility will be submitted in the same way 
as for the technical support instrument. Such requests shall indicate whether they are relevant for 
the  preparation  for  euro-area  membership  and  provide  an  appropriate  justification.  The 
Commission will analyse these requests separately from other requests for technical support and 
consider  in  its  assessment  the  relevance  of  the  requests  for  the  preparation  for  euro-area 
membership.  The  cooperation  and  support  plans  agreed  under  the  technical  support  instrument 
will identify measures linked to the preparation for euro-area membership separately. The work 
programmes  of  the  technical  support  instrument  will  also  include  the  allocation  of  technical 
support in relation to these reforms. 

4.3.  Moral hazard  

When providing financial incentives to EU Member States to implement reforms, there is a 
risk  of  providing  financial  incentives  for  reforms  that  the  Member  States  would  have 
implemented  in  any  case,  which  would  not  be  efficient  from  an  economic  point  of  view. 
There could also be other crowding-out effects and deadweight losses. A further source of moral 
hazard is ineffective or partial implementation of reforms. As regards the issue of moral hazard, a 
number of issues need to be considered: 

First, it should be acknowledged that the purpose of the Reform Support Programme is not 
to  force  Member  States  to  undertake  reforms  that  they  absolutely  do  not  want  to 
implement. As mentioned in several sections of the report above, ownership of the reforms by 
the  Member  States  is  crucial  for  their  sustainability.  The  Reform  Support  Programme  aims  to 
help Member States to implement reforms.  

Second, the link to the Semester offers an important protection against cherry picking. Only 
reform  challenges  that  are  identified  in  the  country-specific  recommendations  (and,  where 
relevant,  the  Macroeconomic  Imbalance  Procedure)  or  have  been  identified  in  the  relevant 
country report and have been endorsed by the Commission are eligible for support. Regrettably, 
the  experience  so  far  does  not  suggest  that  recommendations  under  the  Semester  lead 
automatically  to  policy  action  at  the  level  of  the  Member  State.  Therefore,  the  risk  of  moral 
hazard seems limited.  

Third,  the  reform  commitments  proposed  by  the  Member  States  will  be  discussed  with  the 
Commission  and  with  the  Member  States  in  the  Economic  Policy  Committee  (in 
consultation,  where  appropriate,  with  relevant  Treaty-based  Committees),  to  ensure  that 
they are fit for purpose and provide value for money.  

Fourth, the regulation  also foresees the possibility for the Member State to  provide additional 
information to the Commission and to revise its proposal if needed 

Fifth, the financial support will be paid only once the agreed milestones and targets have been 
achieved – this system will provide incentives to speed up the implementation of reforms. Sixth, 
the  allocation  process  will  be  organised  in  such  a  way  that,  if  Member  States  do  not  propose 

59 

 
reform  commitments,  other  Member  States  could  benefit  instead  from  the  available  funding, 
which  should  provide  an  additional  incentive  for  Member  States  to  speed  up  reform 
implementation. 

For the convergence facility, even if non-euro-area Member States do not join the euro area 
as soon as foreseen, they and others will benefit from the reforms that they will have carried 
out  for  the  preparation  of  euro-area  membership  (because  of  strengthened  resilience  and  its 
positive spillover effects to the euro area).  

4.4.  Governance arrangements 

The Reform Support Programme provides for complementarity, consistency and synergies 
with  other  Union  programmes  and  policies  at  regional,  national,  Union  and  international 
levels,  as  also  requested  by  Member  States  in  the  reform  delivery  tool  workshops.  The 
Commission will ensure the necessary coordination at the Union level to ensure consistency and 
avoid duplication at the programming and implementation stages, between actions supported by 
this  Programme  and  the  measures  carried  out  under  other  Union  programmes  (the  ESIF  in 
particular).  Coordination  will  continue  to  be  ensured  within  the  internal  working 
involving 
arrangements,  using 
representatives  of  the  services  most  concerned.81  Decisions  to  provide  support  to  a  Member 
State would, inter alia, take into account the existing actions and measures financed by the Union 
funds and programmes.  

coordination  mechanism 

already-operating 

the 

For  the  purpose  of  simplicity  and  efficiency,  the  same  coordination  mechanism  in  use  for 
technical support could be used also for the coordination of financial support. As explained 
in  section  2.1.3.,  the  ESIFs  are  intended  for  financing  investment  components  of  reforms, 
whereas  the  Reform  Support  Programme  will  support  regulatory  changes  and  changes  in 
framework conditions by providing financial contributions not linked to costs.  

The  fact  that  the  reforms  subject  to  financial  contributions  from  the  Programme  will  be 
identified in the context of the existing European-Semester process will be instrumental for 
ensuring additionality and avoiding that the Reform Support Programme supports reforms 
that  would  have  happened  in  any  case.  In  addition,  the  monitoring  of  the  implementation  of 
these reforms within the European Semester will provide additional safeguards to this effect.  

4.5.  Possible impacts of the preferred delivery mechanism  

The  impacts  of  the  Programme  will  mainly  depend  on  the  reforms  that  Member  States  will 
propose and implement in the context of the reform delivery tool, or on the type of support which 
they  will  ask  for  and  make  use  of  in  the  framework  of  the  technical  support  instrument.  It  is 
therefore not possible to quantify these impacts, as the range of possible reforms is very wide.  

Expected  positive  impacts  are  described  in  the  sections  below.  Potential  negative  impacts  can 
occur in the following cases: 

81 Commission Staff Working Document, ex-ante evaluation accompanying the proposal for a Regulation of the European Parliament 
and of the Council on the establishment of the Structural Reform Support Programme for the period 2017 to 2020 and amending 
Regulations (EU) No 1303/2013 and (EU) No 1305/2013, SWD(2015) 750 final. 

60 

 
                                                            
  Trade-offs  (for  example,  economic  reform  resulting  in  positive  economic  impacts  but 

negative social or environmental impacts); 

  Redistributive effects (e.g. reforms bringing benefits to a section of the population, while 

disadvantaging another section); and/or 

  Time effects (e.g. reforms bringing benefits after 10 years, but having negative impacts 

in the meantime).  

While  a  reform  could  generate  a  negative  social  impact,  several  features  of  the  new  financial 
support are likely to mitigate such impacts to a large extent:  

First,  when  submitting  its  reform  proposal,  the  Member  State  should  indicate  the  expected 
economic and social impacts of the reform in the Member State concerned and, where possible, 
the spillover effects to other Member States. This information, like any other elements provided 
by  the  Member  State  in  its  reform  proposal,  would  be  taken  into  account  by  the  Commission 
when assessing the proposal for reform commitments. Should the expected social impact of the 
proposed reform be very high, the Commission would discuss possible mitigating measures with 
the Member States, which would be included in the agreed reform commitments. 

Second,  the  financial  support  that  would  be  received  once  the  reform  has  been  satisfactorily 
implemented could help offset some of the social impact of the reforms by paying for mitigating 
or flanking measures. 

These elements stress the importance of ensuring that the impacts of reforms, including potential 
negative impacts, are adequately anticipated and that, where necessary, accompanying measures 
or risk-mitigating actions are put in place. 

Another  risk  of  the  proposed  programme  is  the  lack  of  positive  impacts,  due  either  to  the 
inefficiency  and/or  poor  design  of  a  reform,  or  to  the  lack  of  follow-up  by  national  authorities 
following the provision of technical support.  

Likely economic impacts 

The  initiative  will  provide  support  to  Member  States  in  the  preparation,  design  and 
implementation of growth-enhancing reforms and will stimulate the implementation of reforms 
that will be beneficial to their economy, strengthen their resilience to shocks and bring positive 
spillovers  to  other  Member  States.  It  is  therefore  expected  to  generate  positive  impacts  on 
economic  growth  across  the  EU.  Under  certain  assumptions,  quantitative  model-based 
assessment  of  the  potential  impact  of  structural  reforms82  show,  for  example,  that  euro-area 
Gross  Domestic  Product  (GDP)  could  be  up  to  6-7%  higher  after  ten  years  if  Member  States 
were to jointly adopt measures to halve the gap vis-à-vis the average of the three best-performing 
Member States in each of the reform areas assessed (labour and product markets) in the model 
simulation.83 Implementation of reforms will however lead to costs and negative impacts in the 
short term, which the reform delivery tool seeks to mitigate.  

82 Varga, J. and in't Veld, J., 2014. "The potential growth impact of structural reforms in the EU. A benchmarking exercise" European 
Economy Economic Papers No 541: http://ec.europa.eu/economy_finance/publications/economic_paper/2014/ecp541_en.htm   
83 An ECB Working Papers confirm the results of the above mentioned assessment by concluding that the reform of the labour tax is 

quite effective in stimulating employment and macroeconomic activity in the euro-area Member States (source: 
https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2127.en.pdf?8a0680267517cba4f2ba532c9900cba2). 

61 

 
 
                                                            
It is also important to note that there are positive spill overs of structural reforms across Member 
States. 

Positive economic impacts also include an improvement in national fiscal positions and debt-to-
GDP ratios. 

Likely social impacts  

The initiative is expected to have a positive effect on  employment by stimulating job creation 
across  the  EU.  Employment  can  be  generated,  on  the  one  hand,  by  economic  growth  and 
investments  and,  on  the  other  hand,  by  reforms  of  the  labour  market,  in  particular  those  that 
increase  the  level  of  labour  force  participation  and  the  qualifications  of  the  labour  force,  and 
adapt skills to market needs.  

Under  certain  assumptions,  according  to  QUEST  modelling,84  the  implementation  of  CSRs 
identified  in  2011-2014  had  the  potential  to  raise  employment  by  1.1%,  1.3%  and  1.5%  in 
Portugal, Spain and Italy, respectively, in the 2020 horizon.85  

The  programme  can  also  bring  positive  effects  on  income  distribution,  active  labour  market 
policies,  social  inclusion,  and  social  protection,  by  supporting  the  realisation  of  the  European 
Pillar  of  Social  Rights.  It  can  also  support  reforms  to  fight  tax  evasion  and  corruption,  which 
severely  affect  citizens  and  businesses,  and  undermine  good  governance  and  economic 
development.  

Likely environmental impacts 

The  Programme  can  provide  technical  support  to  design  and  implement  reforms  in  Member 
States  in  the  areas  of  sustainable  development,  such  as  climate  change  mitigation,  the  circular 
economy, and water management. In addition, among other objectives, the reform delivery tool 
could include reforms in related areas to bring about environmental benefits. 

As  mentioned  above,  structural  reforms  in  other  areas  may  in  some  cases  lead  to  adverse 
environmental impacts. These are partially mitigated by existing EU and national environmental 
legislation.  However,  it  will  also  be  important  to  identify  such  negative  effects,  if  they  are 
significant.  

Likely impacts on fundamental rights 

The  initiative  is  expected  to  support  reforms  that  do  not  jeopardise  and  possibly  have  positive 
impacts on fundamental rights, notably gender equality, equal treatment and opportunities, non-
discrimination  and  rights  of  persons  with  disabilities.  The  Reform  Support  Programme  will 
ensure that reforms supported through the programme respect fundamental rights. The proposal 
can  have  a  positive  effect  on  the  preservation  and  development  of  Union  fundamental  rights, 
assuming  that  the  Member  States  request  and  receive  support  in  related  areas.  For  example, 
support  in  areas  such  as  migration,  labour  markets  and  social  insurance,  healthcare,  education, 
public  administration  and  the  judicial  system  can  support  Union  fundamental  rights  such  as 
the 
dignity,  freedom,  equality,  solidarity,  citizens'  rights  and 

justice.  By  supporting 

84 However, these estimated effects are based on some assumptions related to the implementation speed and on how quickly measures 
change  economic  conditions.  In  reality,  implementation  may  be  delayed  or  brought  forward,  and  measures  may  take  a  longer  or  a 
shorter period before they have an impact on the real economic conditions than assumed in the study.  

85 European Commission "The Economic Impact of Selected Structural Reform Measures in Italy, France, Spain and Portugal", 2016, 
European Economy, Institutional Paper 023. The estimates concern only those CSRs the implementation of which can be quantified 
and modelled.  

62 

 
                                                            
implementation of reforms in the social domain (such as reforms aimed at enhancing the quality 
and inclusiveness of education systems, ensuring adequate social protection systems, or fostering 
social  dialogue),  the  Programme  could  also  have  a  positive  impact  on  the  realisation  of  the 
European Pillar of Social Rights. 

Likely impacts on simplification and/or administrative burden 

The incentive could be disbursed in the form of financing not linked to cost as set out in Article 
125(1)(a) of the new Financial Regulation, thus minimising administrative and transaction costs, 
both for the Commission and for the Member States. It would not be subject to national co-
financing requirements. Administrative burden related to the technical support instruments will 
remain very low - the submission of requests is relatively simple and the required information is 
limited to a minimum; once the selection is made, the SRSS and the coordinating authorities sign 
a "Cooperation and Support Plan", which is the only administrative work to be done prior to the 
project implementation. In order to minimise administrative burden of the reform delivery tool 
and provide for simplification, monitoring of implementation and milestones will be carried out 
within the European Semester process. 
The new Programme will be complementary to existing support provided by the ESIF and other 
EU programmes.  

5.  HOW THE PERFORMANCE WILL BE MONITORED AND EVALUATED?  

5.1.  Monitoring 

The Commission will monitor the implementation of the Programme and measure the achievement 
of the general and specific objectives through appropriate indicators, as defined below.  

The set of indicators to be monitored (and the underlying data to be collected) will be identified for 
each instrument, at the level of individual Member States and within each area of intervention (i.e. 
by policy sector). 

For  the  proposals  for  reform  commitments  made  under  the  reform  delivery  tool  and  the  financial 
support  component  of  the  convergence  facility,  Member  States  should provide  the  underlying  data 
and propose the related indicators; they should  also indicate how the necessary  data (in relation to 
the relevant indicators) will be collected.  

Consistency and accuracy checks on data provided by the Member States will be carried out by  the 
Commission  services  also  in  the  context  of  the  European  Semester  process.  For  that  purpose, 
Member  States  will  include,  in  their  annual  reporting  on  progress  with  respect  to  the  reform 
commitments, appropriate evidence on the progress made towards achieving milestones and targets, 
and should provide access to the underlying data to the Commission, including administrative data 
where relevant. For the reform delivery tool, as well as for the financial support component of the 
convergence facility, it will be important to regularly update the monitoring and evaluation process 
to ensure that the new instruments meet their expectations. 

For  the  technical  support  instrument  and  the  technical  support  component  of  the  convergence 
facility,  the  Commission  will  collect  data  for  the  key  indicators  periodically,  also  with  input  from 
Member States, as needed.  

63 

 
 
The underlying data (in relation to  the relevant indicators) will be stored by the Commission in an 
internal  IT  tool  that  has  been  set  up  in  the  SRSS  for  monitoring  purpose  (JIRA).  The  data  will  be 
broken  down  by  Member  State  and  will  be  aggregated  at  instrument  level  (financial  support, 
technical support and convergence support) for further analysis and reporting as needed. 

The  indicators  are  to  be  identified  and  monitored  at  two  different  levels  (output  and  result 
indicators),  split  by  instrument,  as  follows  (the  split  below  corresponds  to  the  Annex  3  on 
Indicators  of  the  Regulation  establishing  the  Programme  and  attached  as  Annex  3  to  this  Impact 
Assessment): 

5.1.1.  Technical Support Instrument (ex-SRSP) 

Output indicators:  

a)  number of cooperation and support plans concluded; 
b)  number of technical support activities carried out;  
c)  deliverables  provided  by  the  technical  support  activities  such  as  action  plans, 

roadmaps, guidelines, handbooks and recommendations.  

Result indicators: 

d)  outcomes of the technical support activities provided, such as adoption of a strategy, 
adoption  of  a  new  law/act  or  modification  of  an  existing  one,  adoption  of  (new) 
procedures and actions to enhance the implementation of reforms. 

5.1.2.  Reform Delivery Tool  

Output indicators: 

e)  number of reform commitments concluded;  
f)  overall financial contribution allocated to the reform commitments. 

Result indicators:  

g)  number of reform commitments completed.  

5.1.3.  Convergence Facility  

 
 

for the financial support component, the same indicators as referred to in letters e) to g);  
for the technical support component, the same indicators as referred to in letters a) to d). 

5.2.  Impact indicators of the Programme 

Impact indicators of the Programme serve the purpose of measuring the degree of achievement of 
the  objectives  set  under  each  instrument  (through  the  appropriate  individual  act  adopted  by 
Member  State,  e.g.  a  reform  commitments  package  or  a  cooperation  and  support  plan)  and 
according to the form of support provided (financial or technical support). Against this background, 
the impact indicators of the Programme are defined as follows:  

64 

 
 
Reform  delivery  tool:  the  objectives  set  in  the  reform  commitments,  which  have  been  achieved 
due, inter alia, to the financial support received. 

Technical support instrument: the objectives set in the cooperation and support plans that have 
been achieved due, inter alia, to the technical support received. 

Table  2  provides  an  illustration  of  the  way  and  frequency  in  which  data  and  indicators  will  be 
collected under the Programme instruments. 

Table 2: Monitoring data/indicators collection 

MONITORING DATA COLLECTION 

Instrument 

Type of data 

Frequency  Responsible for data 

Source  

Reform delivery 
tool 
(standard or under 
convergence facility) 

Output indicator: 
Number of reform 
commitments 
concluded 

Annual 

collection 
European 
Commission 

Reform delivery 
tool 
(standard or under 
convergence facility) 

Output indicator: 
Financial 
Contribution 
allocated 

Annual 

European 
Commission 

Result indicator: 
Number of reforms 
completed 

At the end 
of each 
intervention 

Member State 

Annual  

Member State 

Member State reporting 

Reform delivery 
tool 
(standard or under 
convergence facility) 
Reform delivery 
tool 
(standard or under 
convergence facility) 
Technical support 
instrument 
(standard or under 
convergence facility) 

Data on the 
milestones and 
targets set in the 
reform commitment  
Output indicator: 
Number of activities 
carried out 

Annual 

European 
Commission 

Technical support 
instrument 
(standard or under 
convergence facility) 

Output indicator: 
Number of 
deliverables 
produced 

Annual 

European 
Commission 

Technical support 
instrument 

Result indicator: 
Outcomes of the 

Annual 

European 
Commission and 

Reported by Member 
States and stored in an 
internal IT tool for 
monitoring – JIRA - 
broken down by 
Member State and by 
area of 
intervention/policy area 
Reported by Member 
States and stored in an 
internal IT tool for 
monitoring – JIRA - 
broken down by 
Member State and by 
area of 
intervention/policy area 
Member State reporting  

Collected by European 
Commission and stored 
in an internal IT tool for 
monitoring – JIRA - 
broken down by 
Member State and by 
area of 
intervention/policy area 
Collected by European 
Commission and stored 
in an internal IT tool for 
monitoring – JIRA - 
broken down by 
Member State and by 
area of 
intervention/policy area 
Collected by European 
Commission and stored 

65 

 
 
(standard or under 
convergence facility) 

technical support 
activities provided 

Member State 

Technical support 
instrument 
(standard or under 
convergence facility) 

Data on the specific 
result and impact 
indicators set in the 
cooperation support 
plan 

5.3.  Evaluation  

Annual 

European 
Commission and 
Member State 

in an internal IT tool for 
monitoring – JIRA - 
broken down by 
Member State and by 
area of 
intervention/policy area 
Member State reporting 

A  mid-term  evaluation  and  an  ex-post  evaluation  for  each  instrument  –  technical  support, 
financial support and convergence support- will be carried out. The Commission will communicate 
the  conclusions  of  the  evaluations,  together  with  its  observations,  to  the  European  Parliament,  the 
Council, the European Economic and Social Committee and the Committee of the Regions.  

Evaluations will be carried out in a timely manner to feed into the decision-making process and the 
preparation of the next programme.  

The  mid-term  evaluation  of  the  Programme  will  be  carried  out  by  30  June  2025.  The  mid-term 
evaluation will assess the effectiveness, efficiency, relevance, coherence and EU added value of the 
three instruments and aggregate the results into a cross-cutting evaluation of the overall Programme. 

The ex-post evaluation will be carried out at the end of the implementation of the Programme and 
by  30  June  2029.The  ex-post  evaluation  will  consider  in  particular  the  success  of  the  instruments 
constituting the Programme by considering the following two aspects: 

1 – effective implementation of the reforms, to examine whether the Programme is incentivising the 
implementation of reforms and is therefore delivering the expected results; and 

2 – effectiveness of the reforms in delivering the expected results and impacts related to the specific 
policy sector object of the reform. 

For  the  first  aspect,  the  following  example  of  intervention  logic  will  be  elaborated  for  both  the 
financial and technical support in agreement with the Member State in order to evaluate the success 
of the Programme. 

Table 3: Examples of intervention logic for the three instruments  

Examples of intervention logic for the three instruments  

Instrument 

Objective of 
the reform 

Reform delivery tool 
(standard or under 
convergence facility) 

Strengthening 
the energy 
efficiency 
and 
renewables 
framework 

Inputs 

Outputs 

Results 

Impacts 

Reform 
commitments 
completed 

Increased energy 
efficiency and 
renewables 
framework ratios 

Financial 
contributi
on (total 
amount 
allocated) 

Conclusion of 
the reform 
commitment 
between the 
European 
Commission 
and the 
Member State 

Technical support 
instrument 

Setting up a 
guaranteed 

CSPs 
concluded 

Activities and 
deliverables 

Adoption of 
new 

Number of people 
benefitting from 

66 

 
 
 
 
(standard or under 
convergence facility) 

minimum 
income 
scheme 

Reform delivery tool 
(standard or under 
convergence facility) 

Setting up a 
sustainable 
pension and 
social 
security 
system 

Technical support 
instrument 
(standard or under 
convergence facility) 

Improving 
tax collection 

between 
the 
European 
Commissi
on and the 
Member 
State 

Financial 
contributi
on (total 
amount 
allocated) 

CSPs 
concluded 
between 
the 
Commissi
on and the 
Member 
State 

provided by the 
technical 
support 

legislation for 
setting up the 
minimum 
income 
scheme 

the scheme  

Conclusion of 
the reform 
commitment 
between the 
European 
Commission 
and the 
Member State 

Activities and 
deliverables 
provided by the 
technical 
support 

Reform 
commitments 
completed 

Reduced pension 
expenditures 

Increased tax 
compliance  

Adoption of 
new 
legislation 
framework for 
revenue 
administration
s  

For the second aspect, in the order to measure the success of the reforms in delivering the expected 
results  after  their  implementation,  some  targets  in  relation  to  the  appropriate  result  indicators  by 
policy sector - will be set by the Member State. 

At this stage, an illustrative example is presented in Table 4.  

Table 4: Example of success factors in relation to a reform 

Example of success factors in relation to a reform 

Objective of 
the reform 
Setting  up  an 
in 
tool 
ICT 
the 
Public 
Administratio
n  in  order  to 
increase 
productivity, 
achieve 
efficiency 
gains  

Output indicator 

Implementation 
of  the  ICT  tool 
for  delivering 
online services 

Result 
Indicator 
  Increase  in 
the  number 
of 
daily 
treated 
requests  
  Decrease 

in 
the 
number  of 
working 
hours 

Baseline 

Target 

  Current 
of 
number 
treated 
daily 
requests 
in 
relation  to  the 
total 
  Current 
number 
working 
hours  of  PA 
employees 

of 

  Target  to  be  set 
on  a  case-by-case 
in  relation  to  the 
and 
baseline 
the 
considering 
context 
specific 
the  Member 
of 
State. 
Example 
increase  of  20% 
in  the  number  of 
treated requests  
  Decrease  of  20% 
in  hours  spent  at 
work  (increase  in 
productivity  and 
efficiency gain) 

67 

 
 
 
 
Finally, the evaluations will also assess complementarity among the three instruments as part of its 
"coherence  analysis"  and  a  form  of  counterfactual  analysis  may  be  carried  out  (if  feasible)  to 
underpin the evidence of the EU added value of the Programme. 

68 

 
 
 
Annex 1: Procedural information 

6.  LEAD DG(S), DECIDE PLANNING/CWP REFERENCES 

Structural Reform Support Service (SRSS) 

7.  ORGANISATION AND TIMING 

An  Inter-service  Group/Working  group,  composed  of  representatives  from  relevant  Commission 
Directorates-Generals (SG, BUDG, ECFIN, EMPL, GROW, LS, REGIO) was set up originally to 
assist  in  the  drafting  of  the  main  building  blocks  of  the  new  Reform  Support  Programme.  The 
services were consulted on the main elements of the impact assessment and contributed to the draft 
impact assessment report. 

As the need for the new initiative was announced only in December 2017, the fact-finding period 
for strengthening the analysis in the Impact Assessment remained limited. 

The  Inter-service  Group  was  active  in  February  and  March  2018.  This  group  was  preceded  by  a 
working group discussing the possible proposal in detail at senior management level.  

8.  CONSULTATION OF THE RSB 

An  informal  upstream  meeting  was  held  on  27  February  2018  with  RSB  representatives  and  the 
participation  of  the  SG,  DG  BUDG  and  the  JRC.  During  this  discussion,  Board  members  and 
representatives  of  the  horizontal  Services  provided  early  feedback  and  advice  on  the  basis  of  the 
inception  impact  assessment  (scoping  paper).  Board  members'  feedback  did  not  prejudge  in  any 
way the subsequent formal deliberations of the RSB. 

The formal hearing with the RSB was held on 3 May. On 22 May, the Impact Assessment received 
a positive opinion with reservations86 with the following comments: 

Main RSB considerations 

IA report modifications 

(1)  The  report  does  not  explain  the  rationale 
and the adequacy of the practical allocation of 
the  financial  support  between  Member  States, 
between 
the 
programming period. 

reform  proposals  and  over 

text 

in  section  4.2.2.  "2.  Maximum 
The 
indicative  financial  contribution  available  per 
Member  State"  has  been  strengthened 
to 
explain  the  rationale  and  the  adequacy  of  the 
allocation  key  for  the  Reform  Delivery  Tool. 
Section 4.2.2. "5. Assessing reform proposals" 
has  been  further  developed  by  including  an 
illustrative  example  of  reform  commitments 
and  their  assessment  justifying  a  payment  of 
50%  or  100%.  The 
rationale  behind 
frontloading  of  the  disbursements  has  been 
explained  in  section  4.2.2.  "3.  Allocation 
process and annual calls". 

86 http://ec.europa.eu/transparency/regdoc/?fuseaction=ia 

69 

 
                                                            
(2)  The  scope  of  the  initiative  is  not  precise 
enough  when 
relevant 
European  Semester  documents  officially 
adopted by the Commission' when it comes to 
identify reforms needs. 

referring 

'any 

to 

The  scope  of  the  financial  support  instrument 
in terms of reforms covered has been  clarified 
in  section  4.2.2.  "1.  Types  of  reforms". 
Potential trade-offs in terms of negative social 
and  environmental  impacts  have  been  further 
clarified  in  section  4.5.  The  relationship  with 
the  European  pillar  of  Social  Rights  has  been 
clarified in section 4.5. 

(3)  The  discussion  of  alternative  delivery 
support 
the 
for 
mechanisms 
instruments remains incomplete. 

financial 

Section  4.1.2.  has  been  redrafted  to  further 
evaluate  benefits  of  potential  co-financing 
requirements  and  partial 
front-loading  of 
payments. 

(4)  The  report  is  not  sufficiently  critical  and 
transparent  about potential  risks  with  applying 
new  instruments,  such  as  moral  hazard  or 
or 
insufficient 
suspension,  cancellation  or 
recovery  of 
financial support. 

incentive 

volume 

for 

also 

stressing 

Section 4.3. has been modified to acknowledge 
that  there  is  always  a  possibility  that  reforms 
they  have  been  fully 
are  reversed  after 
that 
implemented,  while 
provisions are included for recovery in cases of 
reform  reversal.  The  rationale  behind  the  size 
of the Programme has been clarified in section 
3.3.  Section  4.2.2  "10.  Rules  on  payments, 
suspension,  cancellation  and  recovery"  has 
been  expanded  to  explain  better  the  risks 
related 
recovering  or  withholding  of 
payments and to provide explanations on legal 
remedies  for  Member  States  contesting  the 
Commission's decisions on the disbursement of 
payments. 

to 

9.  EVIDENCE, SOURCES AND QUALITY 

Evidence  and  data  were  collected  from  the  broadest  possible  sources  (lessons  learned  from 
previous related programmes, past evaluations, literature review, etc.).  

DG ECFIN has a work-stream on estimating the impact of structural reforms, using a DSGE model 
(QUEST) and other econometric methods. The latest publications are: 

  Deroose S., and Griesse D., 2014, "Implementing Economic Reforms – Are EU Member 
States responding to European Semester Recommendations?" ECFIN Economic Brief, 
issue 37: 
http://ec.europa.eu/economy_finance/publications/economic_briefs/2014/pdf/eb37_en.pdf  

  European Commission, "The economic impact of selected structural reform measures in 

Italy, France, Spain and Portugal", 2016, ECFIN Institutional Paper 23. 

70 

 
 
  European Commission, "Market reforms at work in Italy, Spain, Portugal and Greece", 

2014 ECFIN European Economy 5. 

  European Commission, "The growth impact of structural reforms", Quarterly report on the 

euro area, 2013, Vol. 12, Issue 4: 
http://ec.europa.eu/economy_finance/publications/qr_euro_area/2013/pdf/qrea4_section_2
_en.pdf  

  Varga, J. and J. in 't Veld, J., 2014. "The potential growth impact of structural reforms in 

the EU. A benchmarking exercise" European Economy Economic Papers No 541. 

  Working Group on support to Structural Reforms, "Link between the EU budget and the 

European Semester.", non-paper, Issues and Options for the next MFF. 

The ECFIN database on structural reforms - CeSaR - provided useful data for the assessment of the 
implementation of structural reforms. 

The following papers also served as background information: 

  Banerji, A., Barkbu, J., John, J., Kinda, T., Saksonovs, S., Schoelermann, H. and Wu, T.: 
"Building a better Union: incentivizing structural reforms in the euro area", 2015, IMF 
Working Paper, WP/15/201. 

  Claeys, P., 2015, "On Measuring Structural Reform", 2015, Romanian Journal of Fiscal 

Policy 6 (1), 17. 

  European Central Bank, "Progress with structural reforms across the euro area and their 

possible impacts", 2015, Economic Bulletin, Issue 2/2015.  

  European Central Bank, "Increasing resilience and long-term growth: the importance of 
sound institutions and economic structures for euro area countries and EMU", 2016, 
Economic Bulletin, Issue 5/2016. 

  European Central Bank, "Progress with structural reforms across the euro area and their 

possible impacts", 2015, Economic Bulletin, Issue 2/2015. 

  European Central Bank, "The short-term fiscal implications of structural reforms", 2015, 

ECB Economic Bulletin, issue 7: 
https://www.ecb.europa.eu/pub/pdf/other/eb201507_article02.en.pdf?728f2325a9269245f5
f8b3d956c1ab20  

  Gros, D., & C. Alcidi. C,. 2013. ‘"Is debt deflation a risk? The trade-off between fiscal and 
competitiveness adjustments", 2013’ EuroParl.Europa.eu, 9 September. As of 17 May 
2017: http://www.europarl.europa.eu/thinktank/en/document.html?reference=IPOL-
ECON_NT(2013)497725  

  Hammerschmid, G., Palaric, E., Thijs, N.," Comparative overview of public administration 

characteristics and performance in EU28", 2017, p. 57: 
http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8072  

  Sondermann, D., "Towards more resilient economies: the role of well-functioning 

economic structures", 2017, CEPS working document, No 2017/03: 
https://www.ceps.eu/system/files/WD%202017_03%20DSondermann%20ResilientEcono
mies.pdf  

In 2014-2020, cohesion policy established a close link between the investment co-financed and the 
broader economic governance agenda and structural reforms:  

71 

 
  During the 2014-2020 period, annual summary reports and strategic reports in 2017 and 

2019, as well as a series of thematic studies to support the Commission's proposals for the 
next MFF. 

  European Court of Auditors, Special Report, ex-ante conditionalities and performance 

reserve in cohesion: innovative but not yet effective instruments, 2017. 

  European Commission, "Ex Post Evaluation of the ERDF and the Cohesion Fund: Key 

outcomes of Cohesion Policy in 2007-2013" SWD(2016) 318 final. 

  European Commission, "The Value Added of ex-ante conditionalities in the European 

Structural and Investment Funds", 2017, SWD(2017) 127. 

  Studies to assess uptake and impact of new elements in 2014-2020 programmes and to 

prepare policy options (http://ec.europa.eu/regional_policy/en/policy/how/improving-
investment/studies_integration). 

  The 7th Report on Economic, Social and Territorial Cohesion 

(http://ec.europa.eu/regional_policy/en/information/publications/reports/2017/7th-report-
on-economic-social-and-territorial-cohesion). 

  ESF ex-post evaluation 2007-13. 

  Study on: The implementation of the performance frameworks in 2014-2020 ESI Funds. 

Lessons learned on the quality of the public administration have been drawn from: 

  European Commission, European Semester thematic factsheet, Quality of Public 
Administration: https://ec.europa.eu/info/sites/info/files/file_import/european-
semester_thematic-factsheet_quality-public-administration_en.pdf; and  

  Sustainable Governance Indicators http://www.sgi-network.org/2016/ or Public sector 

achievement in 36 countries 
https://www.scp.nl/Publicaties/Alle_publicaties/Publicaties_2015/Public_sector_achievem
ent_in_36_countries.  

Furthermore, the following studies under finalisation served as useful background information: 

  Support of European Structural and Investment Funds (ESI Funds) to the implementation 
of the Country Specific Recommendations and to structural reforms in Member States; 

  Effective and efficient delivery of European Structural and Investment Funds investments 

– Exploring alternative delivery mechanisms; and 

  Feasibility study for a potential use of budget support in the delivery of the European 

Structural and Investment Funds. 

In addition, extensive lessons can be learned from: 

  Lessons learned from the Commission's budget support outside the EU: 

o  Evaluations of Commission's external budget support : 

https://ec.europa.eu/europeaid/node/80199;  

72 

 
o  European Commission, Budget Support Guidelines no 7, 2017; 

o  European Commission, "Analysis of the findings, conclusions and 

recommendations of seven country evaluations of budget support", Synthesis of 
budget support evaluations, 2014; and 

o  German Institute for Development Evaluation (Deval), "What we know about the 

effectiveness of budget support", Evaluation synthesis, 2017. 

  Lessons learned from the technical assistance provided to non-EU countries and to Greece 

by TFGR (prior to the establishment of the SRSP): 

o  European Commission, "Making Technical Cooperation More Effective", G, 

guidelines no 3, 2009; 

o  Alvarez & Marsal Taxand, Adam Smith International, "VC/2014/0002 

"Preliminary Evaluation of the Technical Assistance provided to Greece in 2011-
2013 in the areas of Tax Administration and Central Administration Reform", 
2014; and 

o  European Court of Auditors, "More attention to results needed to improve the 

delivery of technical assistance to Greece", 2015: 
http://www.eca.europa.eu/Lists/ECADocuments/SR15_19/SR_TFGR_EN.pdf. 

  The  establishment  of  the  SRSP  as  supported  by  its  ex  ante  evaluation  (SWD(2015)750 

final). 

Other  sources  of  evidence  include:  audit  reports;  European  semester  monitoring  reports  and 
chapeau  communications;  the  Annual  Growth  Survey;  Reflection  Papers  published  as  part  of  the 
White  Paper  process,  opinions  of  the  EESC  and/or  COR;  European  Parliament  reports;  Council 
conclusions; Country-specific recommendations, etc. 

The  Commission's  Joint  Research  Centre  (JRC)  was  consulted  on  Section  5,  performance, 
monitoring and evaluation. 

73 

 
 
Annex 2: Stakeholder consultation  

10.  RESULTS OF THE OPEN PUBLIC CONSULTATION 

An open public consultation was published from the 10/01/2018 to 09/03/2018 on the following 
webpage: https://ec.europa.eu/info/consultations_en 

For  the  purpose  of  the  open  public  consultation,  the  SRSP  was  included  in  the  "cohesion 
cluster", which covered questions in the following areas: regional policy, employment and social 
affairs,  social  inclusion,  vocational  education  and  training,  research  and  innovation,  business 
and  industry,  energy,  justice  and  fundamental  rights,  migration  and  asylum,  transport,  rural 
development,  digital  economy  and  society,  climate  action,  maritime  affairs  and  fisheries, 
structural reforms, and youth. 

In  the  questionnaire,  the  current  SRSP  was  not  explicitly  mentioned  as  one  of  the  funding 
programmes under the "cohesion cluster", therefore, the questions had only limited relevance for 
the design of the Reform Support Programme. The results of the public consultation could thus 
only  be  used  to  a  limited  extent  (only  input  on  questions  specifically  mentioning  the 
implementation of reforms was used). 

Overall, there were 4,395 respondents, who replied to the questionnaire: 

  55% of the respondents replied in their professional capacity and/or in the behalf of the 

organisations they represent; and 

  45% of respondents replied as individual in their personal capacity. 

The respondents representing organisations were distributed as follows: 

Churches and religious communities 
International or national public authority 
Non-governmental organisation, platform or network 
Other 
Private enterprise 
Professional consultancy, law firm, self-employed consultant 
Regional or local authority (public or mixed) 
Research and academia 
Trade, business or professional association 

3% 
8% 
17% 
17% 
5% 
5% 
34% 
5% 
6% 

76%  of  respondents  indicated  they  referred  in  their  replies  to  the  topic  of  economic  and 
sustainable development.87 

The relevant conclusions of the stakeholder consultations can be summarised as follows: 

87  Apart  from  the  specific  question  on  the  sound  economic  governance  and  implementation  of  reforms,  other  questions  were  not 
directly  relevant  to  the  SRSP.  Considering  that  SRSP  is  a  small  size  programme,  compared  to  the  others  which  are  in  the  same 
cluster, and  considering  that flexible management  modes  are one  of  the main  characteristics  of the  support provided so far to  the 
requesting Member States, some responses might be of a limited relevance for the SRSP, but useful for the evaluation of the ESIF. 

 
 
 
 
 
                                                            
  A  total  of  63%  respondents  consider  that  the  policy  challenges  identified  by  the 
Commission  in  relation  to  the  sound  economic  governance  and  implementation  of 
reforms by Union programmes/funds to be important or very important; 

  42% of the respondents stated that the programmes/funds were successful in promoting 
sound economic governance and implementation of reforms to some extent only, while 
19%  stated  that  those  programmes/funds  were  successful  to  a  fairly  large  extent.  15% 
replied that they were not at all successful; 

  A  total  of  77%  of  respondents  recognise  the  EU  added  value88  of  the  current  Union's 
programmes/funds (added value to a large extent or a fairly large extent); only 2% state 
that there was no EU added value at all; 

  When  referring  to  the  added  value  compared  to  what  Member  States  could  achieve  at 
national, regional and/or local levels, respondents have underlined the lack of resources 
as  the  main  obstacle  to  the  implementation  of  reforms  in  different  areas  such  as  the 
health  care,  education,  etc.  EU  funds.89  Support  for  the  implementation  of  reform  can 
thus be an area where the Union's intervention might prove efficient; and 

  A  number  of  respondents  would  like  to  link  the  achievement  of  long-term  structural 
changes with national reform programmes, the CSRs and other national initiatives. 

11.  FEEDBACK FROM THE MEMBER STATES ON THE CURRENT SRSP 

The  amendment  to  the  SRSP  Regulation  announced  on  6  December  2017  is  being  discussed 
with the co-legislators. The SRSP was discussed in the Council on five occasions, on 13 and 28 
February,  21  March  2018,  17  and  23  April.  The  discussions  in  the  Council  have  shown  that 
Member  States  are  very  positive  about  the  SRSP  programme  and  supportive  of  the  idea  to 
increase  SRSP's  budget.90  The  Council  endorsed  its  general  approach  to  the  proposal  for  the 
SRSP  amendment  in  the  COREPER  meeting  of  2  May.  The  European  Parliament  is  also 
supportive of the SRSP. Three committees are responsible for this file: REGI (lead committee), 
ECON  and  BUDG.  The  Plenary  vote  in  the  European  Parliament  is  provisionally  planned  for 
July, with trilogues possibly starting after the summer break (if it is not possible in July). 

A number of missions conducted by the SRSS staff in the Member States also demonstrate that 
technical  support  for  the  design,  preparation  and  implementation  of  reforms  is  desirable, 
relevant and effective.91 

88 This question refers to the EU added value of the various programmes under the cluster cohesion. Therefore, it cannot be directly 

referred to the current SRSP programme or to sound economic governance and implementation of reforms. 

89 The majority of replies were referring to the ESIF. Since the SRSP was not mentioned in the list of programmes, it is impossible to 
establish an unambiguous link between the replies and the SRSP. However, given that the implementation of reforms was mentioned 
in a number of replies, this is an indication that implementation of reforms is important issue to be tackled in the future.  

90 See flash reports from the two Council meetings upon requests. 
91 See SRSS mission reports upon request. 

75 

 
 
 
 
 
                                                            
12.  FEEDBACK  FROM  THE  WORKSHOPS  IN  MEMBER  STATES  ON  THE  REFORM  DELIVERY 

TOOL  

As part of the package of legislative and non-legislative measures for deepening EU's Economic 
and Monetary Union, the Commission proposed, inter alia, to create a new reform delivery tool 
for the period after 2020 to support the implementation of national reforms identified within the 
European Semester process of economic policy coordination. The Commission also proposed to 
test the idea of the reform delivery tool in a pilot phase already during the current programming 
period (through the amendment of the Common Provisions Regulation92). 

In  order  to  present  to  the  Member  States  the  pilot  as  well  as  the  future  idea  of  the  reform 
delivery tool, the Commission decided to organise technical workshops in each Member State. 
The purpose of the workshops was two-fold: to collect Member State's views and interest in the 
pilot of the reform delivery tool, and to gather ideas on the design of the future reform delivery 
tool and possible type of reforms that could benefit from this instrument.  

The feedback received from the Member States on the reform delivery tool feeds into the Impact 
Assessment as stakeholders' consultation. 

The workshops took place in 27 Member States: Poland (9/3); Croatia (12/3); Czech Republic 
(12/3);  Hungary  (13/3);  Slovakia  (13/3);  Ireland  (14/3);  Romania  (15/3);  Latvia  (15/3); 
Denmark  (19/3);  Italy  (19/3  and  12/4);  Austria  (20/3);  Latvia  (20/3);  Lithuania  (20/3); 
Luxembourg  (20/3);  Slovenia  (20/3);  Finland  (21/3);  Sweden  (22/3);  Bulgaria  (23/03);  France 
(23/3); Cyprus (26/3); the Netherlands (27/3); Belgium (27/03); Estonia (27/3); Germany (11/4); 
Malta (11/4); and Spain (17/4).  

The  section  below  provides  a  summary  of  Member  States'  feedback  on  the  future  reform 
delivery tool: 

A large majority of Member States acknowledged the need to deal with structural reforms, but 
stressed  at  the  same  time  that  Member  States  should  be  given  more  ownership  over  the 
implementation of those reforms.  

Some Member States would  welcome a new tool for incentivising  structural reforms,  whereas 
others believe that as structural reforms pay for themselves, thus, additional financial incentives 
are not needed. In addition, some Member States are sceptical of creating yet another EU tool, 
as  new  instruments  might  lead  to  additional  administrative  burden.  One  Member  State  was  of 
the opinion that modernisation of the ESIF alone would be sufficient to incentivise reforms. At 
the opposite end, one Member State stated that the size of the proposed tool (EUR 25 billion) is 
not sufficient.  

For a large majority of Member States, the European Semester seems to be the right vehicle to 
deal with the future reform delivery tool. On the other hand, others pointed out to that the link 
with  the  European  Semester  process  should  not  be  too  tight  in  terms  of  deadlines  in  order  to 

92  European  Commission,  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, 2017, COM/2017/0826 final. 

76 

 
                                                            
avoid  making  the  process  more  complex  and  burdensome.  Audit  and  monitoring  should  be 
proportionate to outcomes.  

Reforms should be submitted through the NRPs, but this should not be the only possibility for 
submitting  reform  commitments.  One  Member  State  suggested  reforming  the  European 
Semester to make the CSRs multi-annual. 

Member States mostly believe that the possibility of moral hazard should be mitigated and that 
the tool should not finance simple, insignificant reforms, but rather reforms that can make a real 
difference. At the same time, one Member State pointed to the risk of delaying reforms, which 
are currently under way, to the post-2020 period. In addition, it was argued that there is a risk of 
diverting funds to Member States that have not carried out sufficient number of reforms in the 
past, at the expense of Member State that have implemented significant structural reforms.  

Some  Member  States  pointed  out  that frequent  political  changes  hinder  the  implementation  of 
reforms. In addition, they noted that, if some governments are overambitious, reforms can very 
often no longer be implemented when the next government takes office. One Member State felt 
that if a reform backtracks from a reform commitment due to a change in government, the new 
government should not be held responsible for possible repayments to the Commission. 

Member States have divergent views on whether the future reform delivery tool should take into 
account  reforms,  which  have  a  wider  scope  than  the  CSRs,  or  CSRs  only.  The  majority  of 
Member States is in favour of reforms that go beyond the CSRs and are at least identified in the 
Country Reports, or even reforms that go beyond the European Semester (e.g., corruption under 
Cooperation  and  Verification  Mechanism,  recommendations  in  the  energy  field,  etc.).  Some 
Member States think that reforms that are proposed in the NRPs should also be eligible, in order 
to  further  strengthen  ownership  of  the  Member  States.  Other  Member  States  strongly  believe 
that  the  future  reform  delivery  tool  should  be  limited  to  CSRs  and  its  recitals  to  ensure  that 
reforms that will be financed receive the endorsement of all Member States.93  

Regarding  the  structure  of  the  Programme,  at  this  stage,  Member  States  have  more  questions 
than  answers.  For  some,  payments  for  the  completion  of  the  reform  should  be  made  through 
several  instalments/tranches,  even  suggest  an  exploration  of  possibilities  for  pre-financing.  A 
timeframe of three years for the implementation of reforms was considered by some to be too 
short. One Member State believes that money should be available also for reforms, which have 
already taken place, but continue to have significant economic consequences. 

Member States suggested taking into account some criteria for the allocation key, such as: the 
quality of reforms and the relevance of the reforms for a Member State, available fiscal space to 
implement  reforms,  amounts  available  from  the  cohesion  funding,  European  added  value,  and 
incentives  for  small  administrations  and  those  with  greater  reform  needs.  In  general,  Member 
States  believe  that  there  needs  to  be  a  clear  definition  of  structural  reforms,  as  well  as  of  the 
milestones  and  that  there  should  be  a  possibility  to  adjust  reform  commitments  during  the 
implementation phase. 

93 CSRs are endorsed by the Council, while the country reports are only staff working documents.  

77 

 
                                                            
Some Member States felt that the allocation key would need to ensure equal level playing field 
for  all  Member  States  and  that  all  Member  States  should  be  eligible.  Some  also  suggested 
involvement of Member States in the approval of the reform commitments, possibly through the 
Economic Policy Committee. The process of identifying reforms and evaluating progress in the 
implementation should be transparent. 

Complementarity with the ESIF appears to be crucial for most Member States – but there should 
not  be  a  clear  link  between  ESIF  ex-ante  conditionality  and  the  future  reform  delivery  tool. 
Above  all,  the  reform  delivery  tool  should  not  come  at  the  expenses  of  ESIF  envelopes. 
Financial  envelopes  should  not  be  distributed  on  a  competitive  basis  and  funds  should  be 
available also at the regional level. 

Many Member States welcomed clearly defined complementarities between the reform delivery 
tool and SRSP. Many Member States were supportive of the SRSP and expressed appreciation 
for its added value.  

78 

 
 
 
Annex 3: Annexes to the Regulation establishing the Reform Support Programme 

ANNEX II 

Assessment guidelines 

1. Scope  

The purpose of these assessment guidelines is to serve together with this Regulation as a basis for the 
Commission to assess - in a transparent and equitable manner - the proposals for reform commitments 
put  forward  by  Member  States  and  to  determine  the  financial  contribution  in  conformity  with  the 
objectives and any other relevant requirements laid down in this Regulation, when the implementation 
of the Reform delivery tool and of the financial support component of the convergence facility. These 
guidelines  notably  represent  the  basis  for  the  application  of  the  assessment  criteria  and  the 
determination  of  the  financial  contribution  as  referred  to,  respectively,  in  Article  11(7)  and  Article 
12(2), and Article 28.  

The  guidelines  are  thus  neither  applicable  to  the  technical  support  instrument  nor  to  the  technical 
support  component  of  the  convergence  facility.  Therefore,  they  do  not  apply  to  the  assessment  of 
requests for technical support referred to in Articles 19 and 31. 

The assessment guidelines are designed to:  

(a)  give  further  guidance  on  the  assessment  process  of  the  proposals  for  reform  commitments 
submitted by Member States;  

(b) provide further details on the assessment criteria and provide for a rating system, to be established 
with a view to ensuring an equitable and transparent process; and 

(c)  define  the  link  between  the  assessment  to  be  made  by  the  Commission  under  the  assessment 
criteria and the determination of the financial contribution to be set out in the Commission decision in 
relation to the reform commitments selected.  

The  guidelines  are  a  tool  to  facilitate  assessment  by  the  Commission  of  the  proposals  for  reform 
commitments  as  submitted  by  Member  States,  and  to  ensure  that  the  Reform  delivery  tool  and  the 
financial  support  component  of  the  convergence  facility  provide  financial  incentives  for  the 
implementation  of  reforms  that  are  relevant  and  display  high  added  value,  while  ensuring  equal 
treatment among the Member States.  

2. Process  

In accordance with Article 11, a Member State wishing to receive support under the reform delivery 
tool shall submit a proposal for reform commitments to the Commission. The proposal shall be duly 
reasoned  and  substantiated,  and  shall  contain  all  the  elements  referred  to  in  Article  11(3).  For  the 
purpose of the preparation of high-quality proposals for reform commitments, peer counselling may be 
organised  by  the  Commission  in  order  to  allow  the  Member  State  concerned  to  benefit  from  the 
experience of other Member States, prior to the submission of the proposal.  

The assessment process shall be carried out by the Commission in close cooperation with the Member 
State  concerned.  The  Commission  may  make  observations  or  seek  additional  information.  The 
Member  State  concerned  shall  provide  the  requested  additional  information  and  may  revise  the 
proposal,  if  needed,  prior  to  its  official  submission.  The  Commission  shall  take  into  account  the 
justification  and  the  elements  provided  by  the  Member  State  concerned,  and  any  other  relevant 
information. 

In accordance with Article 12(1), the Commission shall carry out the assessment and adopt a decision 
by  means  of  an  implementing  act  within  four  months  of  the  official  submission  of  the  proposal  for 
reform commitments by the Member State concerned.  

79 

 
 
For  the  purpose  of  the  assessment  of  the  proposals  for  reform  commitments  submitted  by  Member 
States, the Commission may be assisted by experts.  

Independently  of  the  assessment  to  be  carried  out  by  the  Commission,  the  Economic  Policy 
Committee, set up by Council decision 2000/604/EC, in consultation, where appropriate, with relevant 
Treaty-based  Committees,  may  also  provide  its  opinion  on  the  proposals  for  reform  commitments 
submitted by Member States.  

The  Commission  decision  shall  set  out  the  reform  commitments  to  be  implemented  by  the  Member 
State,  including  the  milestones  and  targets.  It  shall  lay  down  the  period  for  implementation  of  the 
reform commitments, which shall not be longer than three years from the adoption of that decision. It 
shall  also  establish  the  detailed  arrangements  and  timetable  for  reporting  by  the  Member  State 
concerned within the European Semester process, and the relevant indicators relating to the fulfilment 
of  the  milestones  and  targets  and  the  modality  for  providing  access  by  the  Commission  to  the 
underlying  relevant  data.  Finally,  in  accordance  with  Article  12(2),  the  Commission  decision  shall 
determine the financial contribution to be allocated to the reform commitments being selected. 

3. Assessment criteria 

In accordance with Article 11(7), the Commission shall assess the nature and importance of the 
proposal for reform commitments, and, for that purpose, it shall take into account the following 
criteria:  

(a)  whether the reform commitments:  

i. 

are expected to effectively address challenges identified in the context of the 
European Semester, namely:  

 

 

in the country-specific recommendations and in other relevant European 
Semester documents officially adopted by the Commission; or 

where applicable, in the Macroeconomic Imbalance Procedure; 

represent a comprehensive reform package;  

are expected to strengthen the performance and resilience of the economy of 
the Member State concerned; 

are  expected,  through  their  implementation,  to  have  a  lasting  impact,  where 
relevant  by  strengthening  the  institutional  and  administrative  capacity  of  the 
Member State concerned;  

ii. 

iii. 

iv. 

and 

(b)  whether  the  internal  arrangements  proposed  by  the  Member  States  concerned  are 
expected  to ensure an effective implementation  of the reform commitments during a 
maximum period of three years, including the proposed milestones and targets, and the 
related indicators.  

As a result of the assessment process, the Commission shall give ratings to the proposals for reform 
commitments  submitted  by  the  Member  States,  under  each  of  the  assessment  criteria  referred  to  in 
Article 11(7), in order to assess the nature and importance of the proposals under the reform delivery 
tool and with a view to establishing the financial allocation in accordance with Article 12(2). 

For the sake of simplification and efficiency, under each criterion, the rating system shall range from 
A to C, as set out in the following: 

80 

 
 
 
 
 
3.1 Reform commitments are expected to effectively address challenges identified in the context 
of the European Semester 

The Commission shall take into account the following elements for the assessment under this criterion:  

Scope  
- the proposal for reform commitments is aimed at addressing challenges identified in country-specific 
recommendations;  
or 
- the proposal for reform commitments is aimed at addressing challenges identified in other relevant 
European Semester documents officially adopted by the Commission;  
or 
- the proposal for reform commitments is aimed at addressing challenges identified in the 
Macroeconomic Imbalance Procedure; 
and 
- the reforms envisaged in the proposal for reform commitments are expected to effectively address the 
challenges identified, in that, following the completion of the proposed reform(s), those challenges 
would be expected to be considered resolved in the context of the European Semester process. 

Rating 
A – To a high extent and with high efficacy 

B – To a medium extent and with medium efficacy 

C – To a low extent and with low efficacy 

3.2 Reform commitments represent a comprehensive reform package 

The Commission shall take into account the following elements for the assessment under this criterion:  

Scope 
- the proposal for reform commitments is aimed at addressing a set of interrelated challenges for the 
Member State (coverage); 
and 
- the proposal for reform commitments is aimed at addressing challenges that are crucial for the 
functioning of the economy of the Member State (relevance). 

Rating  
A - Coverage and relevance are high: reform commitments aim at addressing several challenges raised 
in the country specific recommendations or in the Macroeconomic Imbalance Procedure; 

B - Coverage and relevance are medium: reform commitments aim at addressing several challenges 
raised in relevant European Semester documents officially adopted by the Commission; 

C - Coverage and relevance of reforms are low: none of the above. 

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3.3 Reform commitments are expected to strengthen the performance and resilience of the 
economy of the Member State concerned 

The Commission shall take into account the following elements for the assessment under this criterion:  

Scope 
-  the  proposal  for  reform  commitments  is  aimed  at  structurally  improving  the  performance  of  the 
economy of the Member State;  
and 
- the proposal for reform commitments is aimed at increasing the capacity of the economic and/or 
social structures of the Member State to adjust to and withstand shocks. 

Rating 
A – High expected impact on performance and resilience 

B – Medium expected impact on performance and resilience  

C – Low expected impact on performance and resilience 

3.4 Implementation of reforms is expected to have a lasting impact, where relevant by 
strengthening the institutional and administrative capacity 

The Commission shall take into account the following elements for the assessment under this criterion: 

Scope 
- the implementation of the proposed reforms is expected to bring about a structural change in the 
administration or in relevant institutions;  

or  

- the implementation of the proposed reforms is expected to bring about a structural change in relevant 
policies;  

and 

- the strengthening of administrative capacity can ensure a lasting impact.  

Rating 

A – To a large extent  

B – To a moderate extent  

C – To a small extent  

3.5 Internal arrangements proposed by the Member States concerned are expected to ensure 
effective implementation of the reform commitments over a maximum period of three years, 
including the proposed milestones and targets, and the related indicators 

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The Commission shall take into account the following elements for the assessment under this criterion: 

Scope 
- a structure is tasked within the Member State with: (i) the implementation of the reform 
commitments; (ii) the monitoring of progress on milestones and targets; and (iii) the reporting; 

and 

- the proposed milestones and targets are clear and realistic; and the proposed indicators are relevant, 
acceptable and robust;  

and 

- the overall internal arrangements, proposed by the Member States in terms of organisation (including 
provision to ensure sufficient staff allocation) of the implementation of the reform commitments, are 
credible.  

Rating 

A – Adequate internal arrangements for effective implementation  

B – Minimum internal arrangements for effective implementation 

C – Insufficient internal arrangements for effective implementation 

4. Determination of the financial contribution under the reform delivery tool 

In  accordance  with  Article  12(2),  the  Commission  shall  determine  the  financial  contribution  taking 
into  account the  nature  and  importance  of  the  reforms  proposed by  the  Member  State  concerned,  as 
assessed  on  the  basis  of  the  criteria  set  out  in  Article  11(7).  For  that  purpose,  it  shall  apply  the 
following criteria: 

(a)  where  the  proposal  for  reform  commitments  submitted  by  the  Member  State 
concerned  complies  fully  with  the  criteria  set  out  in  Article  11(7),  the  reform 
commitments shall be considered to be "major", and the total amount of the maximum 
financial  contribution  referred  to  in  Article  9  shall  be  allocated  to the  Member  State 
concerned; 

(b)  where the proposal for reform commitments by the Member State concerned complies 
satisfactorily with the criteria set out in Article 11(7), the reform  commitments shall 
be  considered  to  be  "significant",  and  half  of  the  maximum  financial  contribution 
referred to in Article 9 shall be allocated to the Member State concerned. 

(c)  where the proposal for reform commitments by the Member State concerned does not 
comply satisfactorily with the criteria set out in Article 11(7), no financial contribution 
shall be allocated to the Member State concerned. 

As  a  result  of  the  assessment  process,  and  taking  into  account  the  ratings,  the  Commission  shall 
allocate the financial contribution to the Member States in the following manner:  

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Major reform commitments (the proposal complies fully with the assessment criteria) 

If the final rating includes scores with: 

- all A's, or 

- a majority of A's over B's and no C's,  

the maximum financial contribution will be allocated to the reform proposal. 

Significant reform commitments (proposal complies satisfactorily with the assessment criteria) 

If the final rating includes scores with: 

- a majority of B's over A's and no C's, or 

- all B's,  

half of the maximum financial contribution will be allocated to the reform proposal. 

Insufficient reform commitments (proposal does not comply satisfactorily with the assessment 
criteria) 

If the final rating includes scores with: 

- at least one C, 

no financial contribution will be allocated to the reform proposal. 

5. Additional criterion under the convergence facility  

In accordance with Article 27(3), in the context of the convergence facility, in addition to the criteria 
set  out  in  Article  11(7),  among  which  the  assessment  of  the  expected  impact  on  resilience  has  a 
significant importance for the preparation for euro-area membership, the Commission shall also assess 
the relevance of the proposed reform commitments for preparation by the Member State concerned for 
participation in the euro area.  

5.1 Relevance of reform commitments for participation in the euro area  

The Commission shall take into account the following elements for the assessment under this criterion:  

Scope  
- the proposal for reform commitments is in line with the Member State's roadmap for preparation for 
participation in the euro area; 
and 

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- the proposal for reform commitments is expected to contribute to the successful implementation of 
the Member State's roadmap for preparation for participation in the euro area. 

Rating 
A – High relevance and substantial expected contribution 

B – Medium relevance and moderate expected contribution  

C – Low relevance and limited expected contribution  

5.2 Determination of the financial contribution under the convergence facility 

Under the financial support component of the convergence facility, in compliance with Articles 26 and 
28, the financial contribution shall be determined in accordance with the same criteria as specified in 
Article  12(2),  and  shall  represent  a  separate  and  additional  contribution,  which  shall  be  allocated  in 
return  for  additional  reforms  that  are  important  for  the  preparation  for  participation  in  the  euro  area 
and are undertaken by the Member State concerned. 

As  a  result  of  the  assessment  process,  and  taking  into  account  the  ratings,  the  Commission  shall 
allocate the financial contribution to the Member States in the following manner: 

High relevance for participation in the euro area  

If the final rating includes scores under all criteria with: 

- All A's, or  

- a majority of A's over B's and no C's,  

and  

the  scores  under  the  criterion  on  performance  and  resilience  under  point  3.3  and  the  criterion  on 
relevance for participation in the euro area under point 5.1 are both A's,  

the maximum financial contribution will be allocated to the reform proposal. 

Medium relevance for participation in the euro area 

If the final rating includes scores under all criteria with: 

- a majority of B's over A's and no C's,  

and 

the score for the criterion on performance and resilience under point 3.3 is an A and the score for the 
criterion on relevance for participation in the euro area under point 5.1 is a B, 

half of the maximum financial contribution will be allocated to the reform proposal. 

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Low relevance for participation in the euro area 

Irrespective of other scores, if the criteria on performance and resilience under point 3.3 is awarded a 
B or a C,  

no financial contribution will be allocated to the reform proposal. 

ANNEX III 

Indicators 

The achievement of the objectives referred to in Articles 4 and 5 shall be measured on the basis of the 
following indicators, broken down by Member State and by area of intervention. 

Indicators  shall  be  used  in  accordance  with  data  and  information  available,  including  quantitative 
and/or qualitative data.  

Reform delivery tool 

 

 

Output indicators: 

(a) 

(b) 

number of reform commitments concluded; 

overall financial contribution allocated to the reform commitments; 

Result indicators:  

(c) 

number of reform commitments completed;  

Technical support instrument 

 

Output indicators:  

(d) 

(e) 

(f) 

number of cooperation and support plans concluded; 

number of technical support activities carried out; 

deliverables  provided  by  the  technical  support  activities  such  as  action  plans, 
roadmaps, guidelines, handbooks, and recommendations;  

 

Result indicators: 

(g) 

outcomes of the technical support activities provided, such as adoption of a strategy, 
adoption  of  a  new  law  /act  or  modification  of  an  existing  one,  adoption  of  (new) 
procedures and actions to enhance the implementation of reforms; 

Convergence facility  

 

 

for the financial support component, the same indicators as referred to in points a) to c); 

for the technical support component the same indicators as referred to in points d) to g). 

Impact indicators of the Programme 

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 

 

The objectives set in the reform commitments, which have been achieved due, inter alia, to 
the financial support received under the instruments of the Programme; 

The objectives set in the cooperation and support plans, which have been achieved due, inter 
alia, to the technical support received under the instruments of the Programme.  

The  ex-post  evaluation  referred  to  Article  36  shall  be  undertaken  by  the  Commission  also  with  the 
purpose  of  establishing  the  links  between  the  (financial  and  technical)  support  from  the  Programme 
and the implementation of structural reforms in the Member State concerned with a view to enhancing 
competitiveness, productivity, growth, jobs and cohesion. 

87