Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1303/2013, Regulation (EU) No 1301/2013 and Regulation (EU) No 508/2014 as regards specific measures to mobilise investments in the health care systems of the Member States and in other sectors of their economies in response to the COVID-19 outbreak [Coronavirus Response Investment Initiative]
Date: 2020-03-13
Institutions: Directorate-General for Budget, European Commission
Subjects: EU Member State, EU initiative, European Regional Development Fund, epidemic, health care system, infectious disease, investment, public health, small and medium-sized enterprises

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   EUROPEAN COMMISSION  Brussels, 13.3.2020  COM(2020) 113 final 2020/0043 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1303/2013, Regulation (EU) No 1301/2013 and Regulation (EU) No 508/2014 as regards specific measures to mobilise investments in the health care systems of the Member States and in other sectors of their economies in response to the COVID-19 outbreak  [Coronavirus Response Investment Initiative]  
 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The coronavirus crisis, or COVID-19 outbreak, has affected the Member States in a sudden 
and dramatic manner, with a major potential impact on their societies and their economies. It 
hampers growth in the Member States as economic activity decelerates sharply. This may be 
aggravated  by  liquidity  constraints  as  businesses  struggle  to  pay  their  suppliers  and 
employees.  At  the  same  time,  additional  public  resources  are  needed  to  support  health  care 
systems and other activities directly linked to the outbreak of the disease. 

This has created an exceptional situation which needs to be addressed with specific measures 
to support and protect Member States’ economies, companies and workers. Sizeable and fast 
interventions are needed in the health care systems to allow it to operate under considerable 
stress, for SMEs which often have lower margins, in cushioning the negative consequences on 
labour markets and other vulnerable parts of their economies. This is a matter for the whole 
EU  that  necessitates  that  all  available  resources,  at  EU  and  Member  States  level,  are 
mobilised to overcome the unprecedented challenges related to the COVID-19 outbreak. 

The Commission therefore proposes a “Coronavirus Response Investment Initiative” directed 
at  promoting  investments  by  mobilising  available  cash  reserves  in  the  European  Structural 
and  Investments  Funds,  to  fight  the  crisis  immediately.  The  investment  will  be  sizable  and 
reach  more  than  €37  billion  quickly.  To  achieve  this,  the  Commisson  proposes  to  the 
European Parliament and the Council to release about €8 billion of investment liquidity. 

In  order  to  quickly  direct  these  €37  billion  of  European  public  investment  to  address  the 
consequences  of  the  coronavirus  crisis,  the  Commission  proposes  to  relinquish  this  year’s 
obligation  to  request  refunding  of  unspent  pre-financing  for  the  European  Regional 
Development  Fund  (ERDF),  the  European  Social  Fund  (ESF),  the  Cohesion  Fund (CF)  and 
the European Maritime and Fisheries Fund (EMFF) until programme closure.  

The  Member  States  shall  use  the  amounts  not  recovered  in  2020  to  accelerate  investments 
related to  the  COVID-19 outbreak under the  ERDF and  the ESF, the CF and the EMFF. In 
view  of  the  average  co-financing  rates  across  Member  States,  the  €8  billion  will  be  able  to 
trigger the release and use of some €29 billion of structural funding across the EU.  

It  is  proposed  that  the  ERDF  can  support  the  financing  of  working  capital  in  SME  where 
necessary as a temporary  measure to provide an effective response to  a public health crisis. 
Financial  instruments  financed  by  the  Funds  should  also  provide  support  in  the  form  of 
working capital to SME if necessary as a temporary measure. The ERDF investment priority 
to  strengthen  research,  technological  development  and  innovation  is  modified  to  cover 
investment  in  products  and  services  necessary  for  fostering  the  crisis  response  capacities  in 
public  health  services.  Expenditure  for  operations  for  fostering  crisis  response  capacities 
should be eligible as of 1 February 2020. 

Where  this  leads  to  a  need  to  modify  programmes,  the  proposal  identifies  non-substantial 
modifications  that  do  not  require  approval  by  a  Commission  decision.  The  proposal  also 
makes  clear  that  expenditure  for  fostering  crisis  response  capacities  shall  in  any  event  be 
eligible as of 1 February 2020. Possibilities to speed up the declaration of expenditure through 
the  use  of  new  forms  of  support  as  available  under  Article  67  of  the  Common  Provisions 
Regulatin introduced since 2018, e.g. simplified cost options, should be used to the maximum 
extent possible. 

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A Task  Force has  been setup to coordinate work with  Member States, identify their  precise 
needs and assist them so as to ensure that the money starts flowing as soon as possible. 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

It is proposed to:  

Amend the ERDF Regulation (EU) No 1301/2013 as follows: 

(1) 

(2) 

In Article 3 (1) of a sub-paragraph is added clarifying that the ERDF may support the 
financing  of  working  capital  in  SMEs  where  necessary  as  a  temporary  measure  to 
provide an effective response to a public health crisis; 

Article  5  (1)  (b)  of  the  same  Regulation  is  modified  so  that  the  ERDF  investment 
priority to strengthen research, technological development and innovation can cover 
investment  in  products  and  services  necessary  for  fostering  the  crisis  response 
capacities in health services; 

Amend Regulation (EU) No 1303/2013 (the Common Provisions Regulation) d as follows: 

(3) 

(4) 

(5) 

(6) 

In Article 30 on programme amendments, a new paragraph (5) is added setting out 
certain  amendments  that  do  not  require  approval  through  a  Commission  decision; 
Article 96 (10) is amended to reflect this; 

In Article 37 (4) on financial instruments it is added that financial instruments may 
also  provide  support  in  the  form  of  working  capital  to  SMEs  if  necessary  as  a 
temporary measure to provide an effective response to a public health crisis; 

In Article 65 (10) a subparagraph is added to clarify that expenditure for operations 
for fostering crisis response capacities shall be eligible as of 1 February 2020; 

An additional sub paragraph is added in Article 139 (7) to provide for non-recovery 
of  amounts  normally  due  in  2020  for  2014-2020  cohesion  policy  operational 
programmes  under  the  Investment  for  Growth  and  Jobs  Goal  and  for  programmes 
financed from the EMFF; 

Amend the EMFF Regulation (EU) No 508/2014 as follows: 

(7) 

(8) 

3. 

Article 35 is modified to make it possible for the EMFF to contribute to mutual funds 
which provide financial compensation to fishermen for economic losses caused by a 
public health crisis, and  

Article 57 is modified to add the possibility for the EMFF to safeguard the income of 
aquaculture  producers  by  contributing  to  an  aquaculture  stock  insurance  covering 
economic losses due to a public health crisis. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

There was no consultation of external stakeholders. 

4. 

BUDGETARY IMPLICATIONS 

The  proposed  modification  does  not  imply  any  changes  in  the  Multiannual  Financial 
Framework  annual  ceilings  for  commitments  and  payments  as  per  Annex  I  of  Regulation 
(EU) No 1311/2013. The annual breakdown of commitment appropriations for the European 

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Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund  remains 
unchanged. 

The  proposal  will  facilitate  an  acceleration  of  the  programme  implementation  resulting  in  a 
frontloading of payment appropriations. 

The Commission will carefully monitor the impact of the proposed modification on payment 
appropriations in 2020 taking into account both the implementation of the budget and revised 
Member States forecasts. 

The non-recovered amounts in 2020 will be cleared at programme closure. 

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2020/0043 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 1303/2013, Regulation (EU) No 1301/2013 and Regulation 
(EU) No 508/2014 as regards specific measures to mobilise investments in the health care 
systems of the Member States and in other sectors of their economies in response to the 
COVID-19 outbreak 

[Coronavirus Response Investment Initiative] 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 43(2), 177 and 178 thereof,  

Having regard to the proposal from the European Commission, 

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

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The  Member  States  have  been  affected  by  the  consequences  of  the  COVID-19 
outbreak crisis in a unique manner. The crisis hampers growth in the Member States, 
which  in  turn  aggravates  the  serious  liquidity  shortages  due  to  the  sudden  and 
important increase in public investments needed in their health care systems and other 
sectors of their economies. This has created an exceptional situation which needs to be 
addressed with specific measures. 

investments  under  programmes  supported  by 

It  is  vital  that  the  lack  of  liquidity  and  of  public  funds  in  the  Member  States  do  not 
hinder 
the  European  Regional 
Development  Fund  (the  'ERDF'),  the  European  Social  Fund  (the  'ESF')  and  the 
Cohesion  Fund  (the  'CF')  (the  'Funds')  and  by  the  European  Maritime  and  Fisheries 
Fund (the 'EMFF') needed to fight the COVID-19 outbreak.  

In order to respond to the impact of the crisis, the ERDF should support the financing 
of  working  capital  in  SMEs  where  necessary  as  a  temporary  measure  to  provide  an 
effective response to a public health crisis.  

In  order  to  respond  to  the  impact  of  the  crisis,  the  ERDF  investment  priority  to 
strengthen  research, 
innovation  should  cover 
investment  in  products  and  services  necessary  for  fostering  the  crisis  response 
capacities in public health services. 

technological  development  and 

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OJ C , , p. . 
OJ C , , p. . 

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(5) 

(6) 

(7) 

(8) 

In  order  to  provide  more  flexibility  in  addressing  the  COVID-19  outbreak,  more 
flexibility should be provided to Member States in programme implementation and a 
simplified  procedure  not  requiring  a  Commission  decision  should  be  provided  for 
changes  to  operational  programmes.  The  information  to  be  submitted  to  the 
Commission about such changes should be clarified. 

In  order  to  respond  to  the  impact  of  the  crisis, financial  instruments  financed  by  the 
Funds should also provide support in the form of working capital to SMEs if necessary 
as a temporary measure to provide an effective response to a public health crisis. 

In order to provide an immediate response to the impact of the crisis, expenditure for 
operations for fostering crisis response capacities should be eligible as of 1 February 
2020. 

In order to ensure that the Member States have sufficient financial means to make the 
investments  needed  without  delay,  it  is  appropriate  for  the  Commission  not  to  issue 
recovery  orders  for  amounts  recoverable  from  the  Member  States  for  the  annual 
accounts submitted in 2020. Member States should use the amounts not recovered  to 
accelerate  investments  related  to  the  COVID-19  outbreak  crisis  and  eligible  under 
Regulation (EU) No 1303/20133 and the Fund specific rules. 

(9) 

In order to respond to the impact of the crisis, the EMFF should support mutual funds 
and  stock  insurance  to  safeguard  the  income  of  fishermen  and  aquaculture  farmers 
affected by a public health crisis. 

(10)  The amounts not recovered in 2020 should be cleared or subject to recovery orders at 

the closure of programmes. 

(11)  Given the urgency of the support needed, this Regulation should enter into force as a 

matter of urgency. 

(12)  Regulations (EU) 1301/2013,4 (EU) No 1303/2013 and Regulation (EU) No 508/20145 

should therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EU) No 1301/2013 

Regulation (EU) No 1301/2013 is amended as follows: 

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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 (OJ L 347, 20.12.2013, p. 320). 
Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on 
the  European  Regional  Development  Fund  and  on  specific  provisions  concerning  the  Investment  for 
growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ L 347, 20.12.2013, p. 289) 
Regulation (EU) No 508/2014 of the European Parliament and of the Council of 15 May 2014 on the 
European  Maritime  and  Fisheries  Fund  and  repealing  Council  Regulations  (EC)  No 2328/2003,  (EC) 
No 861/2006,  (EC)  No 1198/2006  and  (EC)  No 791/2007  and  Regulation  (EU)  No 1255/2011  of  the 
European Parliament and of the Council 

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(1) 

In Article 3 (1) the following sub-paragraph is added: 

“In addition, the ERDF may support the financing of working capital in SMEs where 
necessary as a temporary measure to provide an effective response to a public health 
crisis.” 

(2) 

Article 5 (1) (b) is replaced by the following : 

“(b)  promoting business investment in  R&I,  developing  links and synergies between 
enterprises,  research  and  development  centres  and  the  higher  education  sector,  in 
particular  promoting  investment  in  product  and  service  development,  technology 
transfer,  social  innovation,  eco-innovation,  public  service  applications,  demand 
stimulation,  networking,  clusters  and  open  innovation  through  smart  specialisation, 
and supporting technological and applied research, pilot lines, early product validation 
actions, advanced manufacturing capabilities and first production, in particular in key 
enabling  technologies  and  diffusion  of  general  purpose  technologies  as  well  as 
fostering  investment  necessary  for  strengthening  the  crisis  response  capacities  in 
health services” 

Article 2 

Amendments to Regulation (EU) No 1303/2013 

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

(1) 

In Article 30, the following paragraph 5 is added: 

“ 5. 

By way of derogation from paragraphs 1 and 2, for the programmes supported 
by  the  ERDF,  Cohesion  Fund  and  ESF,  the  Member  State  may  transfer  during  the 
programming period an amount of up to 8% of the allocation as of 1 February 2020 
of a priority and no more than 4% of the programme budget to another priority of the 
same Fund of the same programme. 

Such  transfers  shall  not  affect  previous  years.  They  shall  be  considered  to  be  not 
substantial  and  shall  not  require  a  decision  of  the  Commission  amending  the 
programme.  They  shall  however  comply  with  all  regulatory  requirements  and  shall 
be approved by the monitoring committee in advance. The Member State shall notify 
the revised financial tables to the Commission.” 

(2) 

In Article 37(4), the following subparagraph is added: 

“ Financial  instruments  may  also  provide  support  in  the  form  of  working  capital  to 
SMEs  if  necessary  as  a  temporary  measure  to  provide  an  effective  response  to  a 
public health crisis.” 

(3) 

In Article 65(10), the following subparagraph is added: 

“ By  way  of  derogation  from  paragraph  (9),  expenditure  for  operations  for  fostering 
crisis response capacities in the context of the COVID-19 outbreak shall be eligible 
as of 1 February 2020.” 

(4) 

Article 96(10) is replaced by: 

“10.  Without  prejudice  to  Article  30  (5),  the  Commission  shall  adopt  a  decision,  by 
means of implementing acts, approving all the elements, including any of its future 
amendments,  of  the  operational  programme  falling  under  this  Article,  except  those 
falling  under  points  (b)(vi),  (c)(v)  and  (e)  of  the  first  subparagraph  of  paragraph  2, 

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paragraphs 4 and 5, points (a) and (c) of paragraph 6 and paragraph 7, which remain 
under the responsibility of the Member States” 

(5) 

In Article 139 (7), the following subparagraphs are added: 

"By way of derogation from the first subparagraph, the Commission shall not issue a 
recovery  order  for  amounts  recoverable  from  the  Member  State  for  the  accounts 
submitted  in  2020.  Amounts  not  recovered  shall  be  used  to  accelerate  investments 
related  to  the  COVID-19  outbreak  and  eligible  under  this  Regulation  and  Fund 
specific rules. 

The amounts not recovered shall be cleared or recovered at closure.” 

Article 3 

Amendments to Regulation (EU) No 508/2014 

Regulation (EU) No 508/2014 is amended as follows: 

(1) 

In Article 35, paragraphs 1, 5, 6 and 8 are replaced by the following : 

“1.  The  EMFF  may  contribute  to  mutual  funds  which  pay  financial  compensation  to 
fishermen for economic losses caused by a public health crisis, adverse climatic events or by 
environmental incidents or for the rescue costs for fishermen or fishing vessels in the case of 
accidents at sea during their fishing activities.” 

… 

“5. Member States shall define the rules for the establishment and management of the mutual 
funds, in particular for the granting of compensation payments and the eligibility of fishermen 
for  such  compensation  in  the  event  of  a  public  health  crisis,  adverse  climatic  events, 
environmental  incidents  or  accidents  at  sea  referred  to  in  paragraph  1,  as  well  as  for  the 
administration  and  monitoring  of  compliance  with  those  rules.  Member  States  shall  ensure 
that the fund arrangements provide for penalties in the case of negligence on the part of the 
fisherman.” 

 “6. Public health crises, adverse climatic events, environmental incidents or accidents at sea 
referred  to  in  paragraph  1  shall  be  those  that  are  formally  recognised  by  the  competent 
authority of the Member State concerned as having occurred.” 

… 

 “8.   The contributions referred to in paragraph 1 shall only be granted to cover losses caused 
by  public  health  crises,  adverse  climatic  events,  environmental  incidents  or  accidents  at  sea 
which amount to more than 30 % of the annual turnover of the business concerned, calculated 
on the basis of the average turnover of that business over the preceding three calendar years.” 

(2) 

In Article 57(1) the following point (e) is added : 

“(e) a public health crisis” 

Article 4 

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

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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