CELEX: 51988PC0500R(01)
Language: en
Date: 1988-08-01
Title: BACK-UP POLICIES: REFORM OF THE STRUCTURAL FUNDS Proposal for a COUNCIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments#Proposal for a COUNCIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards the European Regional Development Fund#Proposal for a COUNCIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards the European Social Fund#Proposal for a COUNCIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards the EAGGF Guidance Section#(presented by the Commission)

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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
REVISED VERSION                                   COM(88 ) 500 final - SYN 151 / 2
                                                  Brussels , 29 August 1988
THIS DOCUMENT CANCELS
AND REPLACES DOCUMENT
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CONCERNS ALL THE
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                                     BACK-UP POLICIES :       P        . . J ,,BC
                             REFORM OF THE STRUCTURAL
                                                              g
                                                          FUNDS
                                                                              Py Ü   ■I
                                       Proposai for a                              »
                                    COUNCIL REGULATION            ^<
                                                                   ^eo      \US^
        laying down provisions for implementing Council Regulation ( EEC )
             No 2052 / 88 as regards coordination of the activities of
            the different Structural Funds between themselves and with
                the operations of the European Investment Bank and
                       the other existing financial instruments
                                       Proposai for a
                                    COUNCIL REGULATION
        laying down provisions for implementing Council Regulation ( EEC )
           No 2052 / 88 as regards the European Regional Development Fund
                                       Proposai for a
                                     COUNCIL REGULATION
        laying down provisions for implementing Council Regulation ( EEC )
                   No 2052 / 88 as regards the European Social Fund
                                       Proposai for a
                                    COUNCIL REGULATION
        laying down provisions for implementing Council Regulation ( EEC )
                  No 2052 / 88 as regards the EAGGF Guidance Section
                              ( presented by the Commission )
 ---pagebreak--- Proposals for Council Regulations laying down provisions for implementing
Council Regulation (EEC) No 2052/88 as regards :
-  coordination of the activities of the Funds as between themselves and
   with the operations of the EEB and the other financial instruments ;
-  the ERDF ;
-  the ESF ;
-  the EAGGF , Guidance Section .
                           EXPLANATOKf MEM3RANDÜM
 ---pagebreak---                                      - 1 -
I.   EEVEUQEMSKT OF BACK-UP POLICES :    THE HEXT SEAGE
On 24 June 1988 the Council , acting unanimously within the period Ichd dcvn
in Article 130d of the EEC Treaty , adopted the comprehensive Peculation on
the reform of "che Community 's structural Funds .
On the basis of the principles and general provisions set out in that
Regulation , the reform envisaged should now be implemented as swiftly as
possible in order that tbs activities of the Fuads can he centred around
new guidelines for the hack-up policies as of the beginning of 1989 .
With this in mind , and following adoption of the comprehensive Regulation ,
the Commission is transmitting to the Council the attached proposals
pursuant to Article 150e of the EEC Treaty . These embody all the
decisions aimed at implementing the reform and mentioned in Article 3(4 )
and ( 5 ) of the comprehensive Regulation . They take the form of four
proposals for regulations :
- a "horizontal " regulation laying down the provisions for coordinating
   the activities of the different Funds as between themselves aid. with the
   operations of the KEB and the other financial instruments , as well as
   other provisions common to the three Funds ;
- an implementing regulation relating to the European Regional Development
   Fund that is to be adopted in accordance with the first paragraph of
   Article 130e of the ESC Treaty ;
- an implementing regulation relating to the European Social Fund ;
- an implementing regulation relating to the Guidance Section of the
   European Agricultural Guidance and Guarantee Fund ;
The Commission has drawn up the proposals for implementing provisions under
Article 130e on the basis of the following principles :
 ---pagebreak---                                        - 2 -
  - the general pro^atcns set wt in trie OGap^&aasive Regulation tibouid ta
     made more precl&s , in order to give the n&c«?-jsar¥ guidance tc nation*!
     authorities and to beneficiaries , while at the SSL3 time leaving the
     Ctammissian efficient flexibility to tailor assistance from the Punas to
     different specific needs ;
  - the opsratijDsl procedures cf the Funds should be simplified and
     harmonized , whore possible inaorporatiaag common provisions on such
     xcatters as ro.p.ont and controls that are applicable to the 'three Funds ;
  - the implementing provisions mentioned in Article 3(5) of the
     canrprehsnsive Regulation Should provide for effective coordination of
     the activities of the different Funds , the STB and the other existing
     financial instruments at operational level ;
  - the operations and policies specific to the individual Funis should he
     detailed in the three corresponding regulations .
  In the implementation of the back-up polioies , the Commission attaches
  particular importance to Joint action between the structural Funds , the EIB
  and the other financial instruments .    Community assistance must be offered
  in the most cost-effective way through both grants and loans .
*
Λ
 ---pagebreak---                                      - 3 -
n.    THE
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1.   Coordination
The proposed regulation assigns to the Commission the clear obligation to
ensure effective coordination at all levels between the Funds , the HD aid
the ether instruments .   Given than the Funds will continue in the future
to enjoy legal and budgetary autonomy as well as to have a neotisary 3 ini
with the specifio policies which they serve , it 1s essential than the
objective of coordinated action under -the five priority objectives should
not be lost sight of at the level of implementation .
The Peculation also lays down the criteria for selecting the areas eligible
for assistance under the three Funds in connection with Objective No 6jb )
(rural development) .   Outside the regions oovsrede by Objective No i , -She
principle of financial concentration underlying the reform of the
structural Funds and the relative scarcity of resources for
Objective No 5(b) mean that the rural areas concerned by Comaumity
financial assistnee will have to be selected on the basis of pruoriuy
criteria such as the extent to which an area ranks as a rural area aid. its
level of economic and agricultural development .
To ensure that Community assistance measures are sufficiently flexible to
cope with the wide variety of problems facing the rural sector , those
criteria may be supplemented by additional criteria (peripheral location ,
extent of depopulation , etc .).
2.   Partnership , planning and programming
The procedures that are outlined in the comprehensive Regulation and given
more concrete form in the horizontal Regulation will form the foundation
for decentralized management of assistance from the Funds and for a genuine
partnership at local , national , regional and Community level . Programming
should be the expression of , and channel for , initiatives at these levels ,
supplemented where appropriate with initiatives taken by the Commission .
The partnership should be most evident In the preparation and
implementation of the Community support frameworks and operational
 ---pagebreak---                                        - 4 -
pxovr.mi.-ss .   In this context , the Cawtoissiom 's firm intention is that
       tance should be planned and provided in as efficient and
untureauoratio a manner as possible .
Under the nsw procedure , Member States will submit plans linked to the
priorities objectives . These plans will explain in a concise bat concrete
form their priorities and schemes and set out their intentions as to the
use of Community resources .
The tesaunity support frameworks , which will also be in a succinct bat
concrete form , will reflect the priorities attached at Ctemssunity level to
the sdhsues proposed by the Msratesr States as well as to those stemming from
CcsmTunitj initiatives . On the basis of this selective approach , the
Ccsamission will also seek to ensure that the measures indicated in a
support framework form a coherent whole .
OciniaranitY support will be planned over a period of three to five years .
It will relate to each of the operations to be financed in a way
appropriate to each of the prioritY areas .       It will outline the programmes
and other operations to be undertaken , the Funds and other instruments to
be used , the technical assistance needed and the requisite financial
resources .
It is also within this Community support framework that discussion between
the Community and its partners may , in specific oases , reveal the
usefulness of an integrated programme . An integrated programme will seek
to achieve synergy between the measures implemented and to ensure organized
convergence of the efforts of different partners with different interests
and responsibilities .
Each Community support framework will be sent to the Member States and
other partners oaneemed as a Declaration of Intent and will be published
in the Official Journal .
 ---pagebreak---                                     - б -
3.   Operations , monitoring and assessment
The Community support frameworks will considerably simplify the processing
of individual applications for assistance ; the objectives , the financial
allocations , the precise forms of assistance and the Pund(s) involved will
have already been specified in the framework . Use of operational
programmes , part-financing of aid schemes and global grants will also make
for decentralized transfer of the planning and implementation of specifio
measures to the competent authorities in Member States .
This simplification and denoentralizatlan will have as its oorollary an
intensification of monitoring and assessment .   Experience with the
management of the various Community Funds and financial instruments shows
that the only way to ensure that Community measures are effective in
achieving the objectives pursued is constantly to monitor performance and ,
if necessary , to reshape the measures in progress as needs dictate .
The Commission is also proposing to strengthen considerably efforts to
evaluate the effectiveness of Community assistance , including where
appropriate periodic assessment of its macroeconomic impact in the regions
concerned .
4.   More straightforward financial procedures
The ocramon provisions on budgetary management laid down in this Regulation
are aimed at facilitating implementation of the budget for the structural
Funds , pursuant to the revised Financial Regulation . The disparity
between the existing rules is now such that it could, impede joint action by
the Funds .
Improvements to the highly disparate arrangements for making commitments ,
which in turn determine payments , will permit better organization of the
Commission 's work .
In order to move towards general use of the ECU in Implementing the budget ,
the Commission has also incorporated into the legislation the principle
that the Community 's financial entitlements and obligations with respect to
the structural Funds Should he expressed in ECUs .
 ---pagebreak---                                                  - 6 -
5,      EaTiiCEized rates of assistance and oorahinsd use of j
Tie Fcgolp tion. improves on the existing wide diversity of rate ; of
aooistsrsos frcra 1iha Funds through the ixrfcrodoction of a xrore noooLinieed
s.--ovoa£h *&&<&.„ while giving sox.13 necessary predictifxAliiy of rates to
* vytoiY dal rmi-/. ic/_/m. /.s , cU'_oo eI~U2v-/3 me GtO'.oxij_soooxi to C_I_Y '„oo„_ – *. o
e*ocordlcg to the criteria, and witiin the limits laid down in the
comprehensive Regulation .
To avoid excessive great aid to projects capable of being partially self-
 financed , the Regulation allows for the level of assistance in tee form of
grants to he determined at operational level according to the particular
nature of the investment concerned and to the conditions in which, it will
be carried out .         In. this context , am effective combination of loans and
grants is an extremely important principle underlying future management of
 the Funds and will require active cooperation with the KLB and the other
 financial instruments , in particular at the stage when the Community
 support framework is being drawn up .
 ---pagebreak--- m.       THE ERDF REGULATION
Pursuant to Article 130o of the EEC Treaty , the European Regional
Development Fund (ERDF) is intended to help redress the principal regional
imbalances in the Community through participating in the development and
structural adjustment of regions whose development is lagging behind and in
the conversion of declining industrial regions .
In the first instance , these principles have been put into effect by
Regulation (EEC) No 2052/88 , which states that the ERDF will contribute to
the attainment of Objectives Nos 1 , 2 and 5(b). A second important step
will ba the reform of the ERDF itself as set out in the following
regulation , which details the specific provisions for the implementation of
ERDF operations .
The reform of the Funds produces a significant improvement in the
effectiveness of the Community 's efforts in the fields of regional
development and conversion , since it provides for appropriate contributions
of all the structural Funds and instruments concerned to the attainment of
Objectives No 1 , 2 and 5(b), in line with the regional policy guidelines
provided in the new ERDF regulation .
In this context , the ERDF itself will help to Increase the economic
potential of regions , to assist structural adjustment and growth , and to
create permanent employment opportunities . In order to achieve this , it
wl.11 contribute to the financing of productive investments , investments in
infrastructures and measures for developing the Indigenous potential of the
areas oonoemed , together with the necessary preparatory and back-up
measures .
In addition , the ERDF will continue to play its part in the promotion of
regional development at Community level , in particular through encouraging
cross-border cooperation and the pooling of experience .
The Commissi on will also draw up periodic reports on the social and
economic situation and development of the regions with a view to gauging
the impact of regional policy and establishing guidelines for future
policy .
 ---pagebreak---                                     - 8 -
At operational level , the proposed ERDF regulation Introduces an Important
new element of flexibility by enabling the Fund to make use of all the
forms of assistance provided for in the comprehensive Regulation : part-
financing of operational programmes , of national aid schemes and of
suitable projects , the provision of global grants and support for technical
assistance and studies in preparation for regional policy operations .
 ---pagebreak---                                      - 9 -
IV .  ISF XBBJiJE'ÏIM
Pursuant to Couroll isolation (SEC) No 2052/66 , the European Social Fund
is to provide assistance :
(a) throughout the Caranunity , under Objectives Nos 3 and 4 , to oombat
     long-term unemployment and to facilitate the occupational Integration
     of young people ;
(b) acooriing to the rules on regional eligibility , and in cooperation
     with the other Funds , to promote stable employment and develop new
     cKtployioent opportunities for the unemployed or those tnreatened with
     unemployment (under Objectives Nos 1 , 2 and 5(b)).
It carries out the first of these tasks by providing back-up for the Member
States' anployraent policies in support of young people and the long-term
unemployed .
The scope available to it for carrying out the second task is wider ,
especially in the less-developed regions , with measures to help these whose
activities contribute to the economic development of the regions and areas
concerned ; for example , retraining for those employed in small firms in
preparation for the introduction of new technologies or new management
techniques .
In implementing social measures , the ESF needs to improve its management
methods , in particular by introducing multiannual programmes . The Fund 's
operations will thus oonsist less in isolated measures and , as they will
dovetail with Member States' medium-term employment strategies , a certain
measure of continuity will he achieved .
The ESF will continue to contribute to financing vocational training
measures , recruitment aids and start-up aids for self-employed persons .
Moreover , to prepare for the changes associated with completion of the
internal market , the ESF can help with back-up measures such as studies ,
 ---pagebreak---                                                             - 10 -
                        technical assistance or the pooling of experience between Member States or
                        regions , with the training of employees' representatives at Community level
                        or with innovative training measures .
                        In order to meet the specifio needs of the less-developed regions , the
                        concept of vocational training has been extended to cover training received
                        outside the firm and vocational training provided by state education
                        systems beyond oompulsory full-time schooling .
                        Lastly , it 1s proposed that guidelines should continue to be set solely for
                        ESF measures in connection with Objectives Nos 3 and 4 , pursuant to
                        Artiole 10(1 ) of Regulation (EEC) No 2052/88 .  The guidelines will
                        indicate which qualitative criteria are to be used to define priorities for
                        Community measures when the Community support frameworks axe established .
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 ---pagebreak---                                     - 11 -
V.    EAGGP BE3JLAT2XH (GOIQftNCE SECHON)
Pursuant to Regulation (EEC) No 2032/88 , the Guidance Seotlon of the EAQGF
is to concentrate on :
- promoting the development and structural adjustment of the less-
   developed regions (Objective No 1 );
- with a view to reform of the common agricultural policy :
       (a)   speeding up the adjustment of agricultural structures
             (Objective No 5(a));
       (b)   promoting the development of rural areas (Objective No 5(b)).
Objective No 6(a) (speeding up the adjustment of agricultural structures )
is a horizontal objective in that it covers the entire Community .
Structural adjustment in agriculture is a process closely linked to reform
of the common agricultural policy and will require a greater financial
effort in the form of structural measures connected with the adaptation of
agricultural production .
In implementing the horizontal measures relating to Objective No 5(a),
account will be taken of the different situations obtaining in different
parts of the Community , through a greater diversification of these measures
and , in particular , through differentiating the rates of assistance in
favour of the less-developed regions .
A number of existing horizontal measures must therefore be adapted in line
with the provisions of Regulation (EEC) No 2052/88 by 31 Deoember 1989 .
This applies in particular to the measures concerning the processing and
marketing of agricultural and fisheries products under Regulation (EEC)
No 355/77 .   These measures must be redefined to allow greater
concentration on the areas of Objectives No 1 and 5(b), greater selectivity
in the case of operations outside these areas and the introduction of
operational programmes as a form of assistance to replaoe project
financing .
 ---pagebreak---                                     - 12 -
The Commission will transmit appropriate proposals to the Counoil by the
end of 1968 .
In parallel with the efforts to adjust agricultural structures , the
Community must now play a new , oruoial role in promoting the development of
rural areas , mainly through measures aimed at the oonversion ,
revitalization and eoonomio stimulation of these areas .    The Commission
has demonstrated by its reoent work that it is determined to establish a
genuine Community policy to assist the rural sector and a comprehensive
strategy for forestry . Operations under the Funds in connection with
Objective No 1 in less-developed regions and in oomneoticn with
Objective No 6(b) in other regions will he essential to these comprehensive
policies .
ThiPi new role , which will also take account of environmental protection
needs , involves more extensive coverage of rural development needs , in
particular as regards infrastructures and the promotion of activities
outside agriculture , and necessitates contributions from all three Funds .
Finally , the proposed regulation on the EAGGF Guidance Section reflects a
clearer division of tasks between the Funds :
- on the one hand , with respect to the coverage of vocational training
    needs (excluding advisory measures), which are to be met in the future
    by the ESF ;
- on the other hand , in relation to infrastructures :   the EAGGF Guidance
    Section will finanoe those which, are directly linked to agriculture ,
    while other infrastructures can be financed by the ERDF .
 ---pagebreak---                                 - 13 -
                            Proposai for a
                          COUNCIL REGULATION
laying down provisions for implementing Council Regulation ( EEC )
     No 2052 / 88 as regards coordination of the activities of
   the different Structural Funds between themselves and with
        the operations of the European Investment Bank and
               the other existing financial instruments
 ---pagebreak---                                       14 -
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European
 Economic Community , and in particular Articles 130E and
 1 53 thereof ;
 Having regard to the proposal from the Commission * 1 * ;
 In cooperation with the European Pari iament ‘ 2 » ;
 Having regard to the opinion of the Economic and Social
 Committee * 3 ’ ;
 Uhereas the Council has adopted Regulation ( EEC )
 N® 2052 / 88 of 24         June 1988 on the tasks of the
 Structural Funds and their effectiveness and on the
 coordination of their activities between themselves and
 with the operations of the European Investment Bank and
 the other existing financial investments 1 * ’ :
'Whereas Article 3 ( 5 ) of Regulation ( EEC ) N° 2052 / 88
 provides that the Council , acting on the basis of
 Article 130 E of the Treaty , shall adopt the provisions
 necessary for ensuring coordination between the different
 Funds , on the one hand , and between them and the EIB and
 the other existing financial instruments , on the other ;
 Uhereas it is necessary to strengthen the coordination
 between the Structural Funds and between these Funds , the
 EIB and the Community 's other financial instruments , in
 order to enhance the effectiveness of their contributions
 to the attainment of the objectives set out in Article 1
 of Regulation ( EEC ) N° 2052 / 88 ; whereas the Commission has
 an important role to play in this respect ;
 Uhereas to ensure effective coordination between grant and
 loan instruments , the Commission should where appropriate
 associate the EIB with the preparation of its decisions ;
 Uhereas Articles 8 to 1 1 of the abovementioned Regulation
 provide for provisions relating to their implementation to
 be laid down in the implementing decisions referred to in
 Article 130e of the Treaty ;
 Uhereas it is necessary to determine the criteria which
 the Commission should use to select those rural areas
 outside the regions designated for assistance from the
 Funds under Objective 1 which may receive assistance under
 Objective 5b as defined in Article 1 of
 Regulation 2052 / 88 :
 ( 1 ) 0J C .
 (2)   OJ C. . . .
 (3 )  JO C . . . .
 ( 4 ) OJ L    185 , 15.7.1988 , p. 9
 ---pagebreak---                               - 15 -
Whereas it is necessary to specify the scope , duration and
content of the plans to be submitted by the Member States
and the time-limits for the submission of these plans ;
Whereas it is necessary to give guidelines on the content
and duration of the Community support frameworks to be
established by the Commission and the time-limit for their
establ ishment ;
Whereas , the Commission should be able to adapt Community
support frameworks to take account of measures not
provided for in the plans submitted by the Member States ,
including measures resulting from new Community
initiatives ;
Whereas assistance from the Funds envisaged in the
Community support frameworks should be provided mainly in
the form of part-financing of operational programmes ;
Whereas it is necessary to specify the conditions for the
implementation of operational programmes under the
integrated approach ;
Whereas it is necessary to specify the general conditions
governing the processing of applications for financial
assistance from the Structural Funds ;
Whereas financial assistance from the structural Funds
under Objectives 1 to 4 and 5(b ) should normally be
provided only for measures indicated in the Community
support frameworks and for expenditure incurred after
presentation of an application for assistance from the
structural Funds ;
Whereas it is necessary to define the conditions under
which the Structural Funds may provide global grants and
part-finance major projects ;
Whereas provision should be made for the financing of
studies and technical assistance linked to the joint or
coordinated use of the Structural Funds , the EIB and the
other financial instruments ;
Whereas to facilitate their own planning of programmes ,
beneficiaries should have    indications as to the rates of
assistance which will be provided by the Funds as a
proportion of eligible public expenditure ;
Whereas at  the same time   the Commission must differentiate
rates in the light of the criteria laid down in Article
13(1 ) of Regulation ( EEC ) n° 2052 / 88 , including in
particular the capacity of the other public bodies
concerned to contribute to the financing of the measures
concerned ;
 ---pagebreak---                              - 16 -
Whereas , to promote efficient and coordinated management
of the Funds' financial resources it is necessary to lay
down common rules and procedures on commitments , payments
and controls ;
Whereas in the interests of the wider use of the ECU in
financial transactions in the Community and more
specifically in the implementation of the Community
budget , it is important that the Community 's financial
entitlements and obligations with respect to the
Structural Funds should also be expressed in ECU ;
Whereas it is necessary to specify the arrangements for
the monitoring and assessment of Community structural
action in order to strengthen the effectiveness of
assistance methods in achieving the objectives and to
assess the impact of assistance ;
Whereas it is necessary to determine the arrangements for
the working of the committees which will assist the
Commission in the implementation of EEC Regulation
N°2052 / 88 ;
Whereas there is a need to specify the content of the
annual report to be submitted in accordance with Article
16 of the abovement ioned Regulation ;
Whereas provision should be made to give adequate
publicity to Community assistance provided towards
specific schemes ;
                                                           0
                                         V
 ---pagebreak---                              - 17 -
Whereas it is necessary to determine more specifically the
transitional arrangements for assistance from the Funds
which was approved or applied for before the entry into
force of the implementing decisions referred to in Article
130E of the Treaty ; whereas it may also prove necessary ,
with a view to ensuring continuity in the operations of
the Funds , to provide for approval of certain measures
before the Commission has decided the relevant Community
support frameworks ;
HAS ADOPTED  THIS REGULATION :
 ---pagebreak---                                   - 18-
                 PROPOSAL POSR COUNCIL REGULATION (EEC) No . /88
                            TITLE I :   Coordination
Artide  1:  General provisions
Artide  2:  Coordination between the Funds
Artide  3:  Coordination between the Funds , the ELB and the other
            financial instruments
Artide  4:  Sdection of rural areas (Objective 5(b))
                                TITLE II :  PLANS
Artide  5:  Scope and content
Artide  6:  Duration and timetable
Artide  7:  Preparation
                 TITLE III :    COMMUNITY SUPPORT FRAMEWORKS
Artide  8:  Preparation, scope and content
Artide  9:  Consistency and impact of measures
Artide 10 : Approval and implementation
Artide 11 : Community initiatives
Artide 12 : Forms of assistance
Artide 13 : Integrated approach
                     TITLE IV :  ASSISTANCE FROM THE FUNDS
Artide 14 : Processing of applications
Artide 15 : Eligibility
Artide 16 : Specific provisions
Artide 17 : Implementation
            TITLE V :   DIFFERENTIATION OF COMMUNITY ASSISTANCE
Artide 18 : Differentiation of the rates of contribution from the Funds
Artide 19 : Combination of grants and loans
                  ' #
                   >
 ---pagebreak---                                          19-
                           TITLE VI :   FINANCIAL PROVISIONS
Artiole 20 : General provisions
Article 21 : Coranitraente
Article 22 : Payments
Artiole 23 : Use of the ECO
Article 24 : TM TIATVYÌ Al mntml
Article 25 : Reduction, suspension and cancellation of assistance
                      TITLE VII :     1OHT0KENG AND ASSESSMENT
Artiole 26 : Monitoring
Article 27 : Assessment
                               TITLE VIII :   COMMITTEES
Article 28 : Advisory Committee on the Devdopment and Conversion of
             Regions
Artiole 29 : Committee referred to in Artide 124 of the EEC Treaty
Artide 30 :  Committee on Agricultural Structures and Rural Devdopment
Artide 31 :  Other provisions
                          TITLE IX :   REPORTS AND PUBLICITY
Artide 32 :  Reports
Artide 33 :  Information and puhlldty
                             TITLE X :    FINAL PROVISIONS
Artide 34 :  Transitional provisions
Artlole 35 : Entry into foroe
 ---pagebreak---                                    - 20-
                            TTHE I :    OOQRDINATIQN
                                    Artide 1
                              General provisions
Pursuant to Regulation (EEC) No 2052/88 , the Commission shall ensure
coordination of the activities of the different Funds as between themselves
aid with the operations of the EIB and the other existing financial
instruments .
                                    Artide 2
                        Coordination between the Funds
In order to ensure coordination of the activities of the Funds as between
themselves , the Commission sha-i i have recourse to the following :
- Community support frameworks ;
- raultiannual budget foreoasts ;
- where expedient , integrated operational programmes ;
- monitoring and assessment of operations under the Funds carried out in
   connection with a single objective and of those carried out in
   connection with a number of objectives on the same territory .
                                    Artide 3
Coordination between the Funds , the EIB and the other financial instruments
1.   The Commission shall ensure consistency between assistance from the
     Funds and assistance provided :
     - by the European Coal and Steel Community in the form of readaptation
       aids , loans , interest subsidies or guarantees ;
     - by the EIB , the New Community Instrument and Euratam in the form of
       loans and guarantees ;
 ---pagebreak---                                   - 21-
     - fi-om resources from the Community budget allocated in particular to
       the Ir.tagrp-ted Mediterranean programmes , support for the Specific
       Programme for the Development of Portuguese Industry (PEulP ),
       fisheries structures , transport infrastructure , environmental
       protection , energy programmes , small and medium-size"! enterprises ,
       innovation schemes and venture-capital investments ;
     - from the resources of the Community research budget .
2    The v ‘(mission shall associate the EEB in the use of the Funds or the
     other existing financial instruments with a view to the part-firsancdiig
     of investments that are also eligible for assistance from the EEB in
     accordance with its Statute .
                                   Artiole 4
Selection of rural areas (Objective 5(b))
1.   When presenting the rural development plans referred to in
     Article 11(3 ) of Regulation (EEC) No 2052/88 , Member States shall
     propose to the Commission the areas which may be selected in the light
     of the criteria set out In paragraph 2 .
3.   In accordance with Artiole 11(2) of Regulation (EEC) No 2052/ 88 , the
     rural areas that may receive Community assistance under
     Objective 8(b) shall be selected in accordance with the following
     criteria :
     - high share of agricultural employment in total employment ;
     - low level of agricultural income , notably as expressed in terms of
       agricultural value added by agricultural work unit ;
     - low level of socio-economic development assessed on the basis of
       gross domestio product per inhabitant .
     In the selection of rural areas , areas to which one or more of the
     following criteria are applied may also be taken into consideration on
     receipt of a reasoned request from a Member State :
 ---pagebreak---                                 - 22-
   - the extent of depopulation ;
   - the peripheral nature of areas or Islands in relation to urban
      oentres ;
   - the sensitivity of the area to developments in agriculture ,
      especially with a view to reform of the common agricultural policy ,
      assessed on the basis of the trend in agricultural incomes and the
      size of the agricultural labour foroe ;
   - the structure of agricultural holdings and the age structure of the
      agricultural labour foroe ;
   - the pressures exerted on the environment and on the countryside .
3. The Commission shall , in accordance with the procedures provided for
   in Title VIII and in the light of the oriteria specified in paragraph
   2 , determine the rural areas to be eligible under Objective 5(b).
                             TITLE II :  PLANS
                                  Article 5
                            Scope and content
1. Subject to the guidelines laid down in this Article , plans submitted
   in connection with Objectives 1 to 4 and 5(b) shall be drawn up at the
   geographical level deemed to be most appropriate by the competent
   national , regional or other authorities in Member States .
   Plans submitted in connection with Objective 1 shall , as a general
   rule , cover one or more regions at NOTS level II .
   Plans submitted in connection with Objectives 2 and 5(b) shall , as a
   general rule , cover one or more areas at NUTS level HI .
   Plans may cover a wider territory than that of eligible regions or
   areas , provided they distinguish between operations in eligible
   regions or areas and operations elsewhere .
 ---pagebreak---                                 - 23 -
2.   For regions oanoemed by Objective 1 , the regional development plans
     shall include measures relating to the conversion of declining
     industrial areas and the development of rural areas , together with
     employment and vocational training measures not covered by plans
     submitted in connection with Objectives 3 and. 4 .
     Regional and social conversion plans submitted in connection with
     Objective 2 and rural development plans submitted in connection with
     Objective 5(b) shall also include employment and vocational training
     measures not covered by plans submitted in connection wi.th
     Objectives 5 and 4 .
     Plans submitted in connection with Objectives 3 and 4 shall
     distinguish between expenditure in respect of the regions covered by
     Objectives 1 . 2 and 5(b) and expenditure in respect of other regions .
     In the plans , Member States shall indicate the particulars relating to
     each Fund , including the volumes of assistance requested .
3.   In drawing up the plans , the competent authorities in Mather States
     shall, ensure that plans relating to the same objective within a Member
     State and plans relating to different objectives in the .same
     geographical area are mutually consistent .
4.   The competent authorities in Member States shall ensure that the plans
     take full account of the development of Community policies .
                                  Article 6
                           Duration and timetable
Each plan shall oover a period of not less than three years .
For areas designated for assistance by 31 January 1989 , the initial periods
covered by the plans shall commence on 1 January 1989 .
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Plans shall be submitted not later than 31 March. 1989 . However , plans
relating to Objectives 3 and 4 shall be submitted as soon as possible after
the Commission has issued the neoessary guidelines , and at the latest by
1 June 1989 .
                                   Article 7
                                  Préparation
1.   The Commission may provide Member States at their request with any
     technical assistance neoessary in the preparation of plans .
2.   The information provided in the plans shall oontain , where
     appropriate , details relating to the general socio-eoanamio situation
     and to maoroeoonomio policies and objectives .
3.   The Commission shall determine the detailed arrangements for the
     implementation of the provisions of this Title .
                   TITLE III : OCMMDNTIY SUPPORT FRAMEWOKKS
                                   Article 8
                        Préparation , scope and content
1.   The Community support frameworks relating to Objectives 1 to 4 and
     5(b) shall be drawn up on the basis of an agreement with the Member
     State concerned within the framework of the partnership and KhA.li be
     established by decision of the Commission in accordance with the
     procedures laid down in Title VIII .    The KIR shall be involved in the
     preparation of the Community support frameworks .
2.   A Community support framework may oover a period of three to five
     years .
3.   A Community support framework relating to any one objective may , where
     appropriate , relate to the combined territory of two or more eligible
     regions or areas .
 ---pagebreak---                                   25
4. Each Community support framework shall include :
   - a statement of the priorities for joint Community and national
     action in relation to the objectives set out in Article 1 of
     Regulation (ESC) No 2052/88 ;
   - an outline of the forms of assistance to be provided including , for
     operational programmes , their specific objectives and the main 'types
     of measure involved ;
   - an indicative financing plan specifying the financial allocations
     envisaged for the various fonts of assistance ;
   - where necessary , provisions for any studies or technical assistance
     operations relating to the preparation , implementation or adaptation
     of the measures concerned .
                                 Article 9
                  Consistency and impact of measures
1. The Community support frameworks shall indicate the consistency
   between the structural measures to be financed by the Community and ,
   where appropriate , the macroeconomic and structural policies pursued
   by the Member States concerned .
2. In establishing and implementing the Community support frameworks , the
   Commission and the Member States concerned shall ensure that the
   annual increase in the appropriations for the Funds provided for in
   Article 12(2) of Regulation (EEC) No 2052/88 has a genuine additional
   econamio impact in the regions concerned and results in corresponding
   increases in total public expenditure , in particular on investment .
   The Member States shall transmit to the Commission the information
   necessary for this purpose , In accordance with arrangements to be
   determined by the Commission .
 ---pagebreak---                                   - 26 -
                                   Article 10
                          Approuvai and. implémentation
1.   Unless otherwise agreed between the Commission and the Member State
     concerned , the Commission shall take a deals! on approving the
     Community support framework not later than six months after receiving
     the relevant plan or plans .
     In order to expedite implementation of the measures provided for in a
     Community support framework , Member States may submit applications for
     assistance in good time for the Commission to approve them at the same
     time as it takes its decision on the Community support framework .      In
     this case , the operational programmes may be implemented immediately .
2.   The Commission deolslan on the Community support framework shall be
     sent as a declaration of intent to the Member State and to the other
     competent authorities concerned .      The declaration shall be published
     in the Official Journal of the European Communities .
     The CCTnmisa1.cn and the Member States shall, ensure that measures
     accounting for at least two thirds of assistance from the Funds during
     the first year of the Community support framework are approved by the
     Commission within two months of its decision cm the Community support
     framework .
                                    Artide 11
                              Community initiatives
In accordance with Artide 5(5 ) of Regulation (ESC) No 2052/88 , the
Commission may , on its own initiative and in aooordance with the procedures
provided for in Title VIII , decide to invite Member States to submit
applications for assistance in respect of measures of significant interest
to the Cammunity not covered by the plans referred to in Title II . Any
assistance approved pursuant to this provision shall be reflected in the
establishment or revision of the rdevant Community support framework .
 ---pagebreak---                                   Artlole 12
                             Forms of assistance
Measures oovered by a Community support framework shall be oarried out
primarily by way of operational programmes .
                                  Article 13
                             Integrated, approach
The decision to implement measures cm the basis of an integrated, approach
gha.ii be taken in the context of the Community support framework .
An operational programme may be implemented in the form of an integrated
approach if :
   (i ) the programme involves financing by more than one Fund or at least
        one Fund and one financial instrument other than a loan instrument ;
  (ii ) the measures to be financed by different Funds or financial
        instruments are mutually reinforcing and significant benefits are
        likely to accrue from close coordination between all the parties
        involved ;
(111 ) the appropriate administrative structures are provided at national ,
        regional and local level in the interests of integrated
        implementation of the programme .
Where the Commission considers that Community assistance can best be
organized by way of an integrated operational programme , it may , within the
context of initiatives oovered by Article 11 , propose that the Member
State(s ) oonoemed submit an application for assistance in respect of such
a programme .   In such oases , the Commission shall ensure that Community
assistance is provided in the most effective manner , taking into account
the special coordination effort required .
 ---pagebreak---                                  - 28 -
                    TITLE IV :  ASSXSTAa&H RO( iuis PCsSuS
                                  Artide 14
                          Prooesslng of applications
1 . Applications for assistance from the structural Funds for specific
operations «Hg.n be prepared by the competent national , regional or other
authorities concerned and submitted to the Commission by Member States or
by any bodies designated to do so by them . Each application shall relate
to one of the fora® of assistance provided for In Article 5 of Regulation
(EEC) No 2052/88 (pant-financing of operational programmes and of aid
schemes , global grants , part-financing of major projects , and support for
technical assistance , preparatory studies and pilot projects).
2 . Applications shall contain the information the Commission needs in
order to assess them , including a description of the operation proposed ,
its scope and specific objectives , the bodies responsible , the proposed
beneficiaries and the proposed timetable and financing plan , together with
any other information neoessary to verify that the operation concerned is
compatible with Community legislation and policies (including those
concerning the rules of competition , the award of public contracts and
environmental protection).
3 . The Commission shall examine applications with a view in particular :
    to assessing the conformity of the proposed operations and measures
    with the relevant Community legislation and , where appropriate , with
    the relevant Community support framework ;
    to assessing the contribution of the proposed operation or measure to
    specifio development or other objectives and , in the oase of an
    operational programme , the consistency of the constituent measures ,
    to determining the arrangements for providing assistance from the Fund
    or Funds oonoerned ;
 ---pagebreak---                                    - 29 -
      to checking that the administrative and fina                   are
      adequate to ensure effective implementation .
  The Commission Shall subsequently deoide on the granting of financial
  assistance . In the case of an Integrated operational programme , a single
  Commission decision shall be taken in respeot of assistance from all the
  Funds and other Community budgetary instruments contributing to the
  financing of that programme .
                                    Artide 15
                                    EUgi.h1.li.ty
  1.  Subject to Artide 34 , expenditure in respect of measures covered by
  Objectives 1 to 4 and 5(b) shall be eligible for financial assistance from
  the structural Funds only if the measures in question are indicated in the
  rdevant Community support framework .
  2.  Except as provided for in Artide 34 of this Regulation and in Artides
  9 of Regulation (K3F) 1 and 11 of Regulation (EAQGF)2 , expenditure may not
  be considered eligible for assistance from the Funds if it is incurred
  before the date on which the corresponding application reaches the
  Commission . The Commission shall fix the date on which eligibility for
  expenditure in respect of each measures takes effect .
                                    Artide 16
                                Spécifie provisions
  1 . In the case of global grants , the intermediaries shall be designated
  by agreement between the Member States concerned and the Commission . The
  Member State concerned shall ensure that all intermediaries have a sound
  financial standing and have the administrative capability to manage global
  grant schemes . The intermediaries shall also be selected in the light of
  the particular situation in the Member States or areas concerned . In
  managing global grants , they shall be subject to control by the competent
  public authorities .
£
*
§
*
  1
  2
 ---pagebreak---                                  - 30 -
2 . The Funds may provide financial assistance toward expenditure in
respect of major projects if the total oost taken into account in
determining the amount of Community assistance is greater than
2D million ECU for infrastructure investments or 16 million KXs for
productive investments .
However , projects costing less than this in the fisheries sector may be
financed if they are covered by a multiannual guidance programme approved
by the Commission under Council Regulation (EEC) No 4028/86 . 1
3 . In addition to similar assistance connected with the operations of the
various Funds , the Commission may finance studies and technical assistance
linked to the joint or coordinated deployment of the structural Funds , the
EEB and the other financial instruments :
    in preparation for the establishment of plans ;
    with a view to assessing the Impact and effectiveness of assistance
    provided under the relevant Community support frameworks ;
    in relation to integrated operational programmes .
                                  Article 17
                                Implémentation
The Commission shall determine the detailed arrangements for the
implementation of the provisions of this Title .
10JNOL 376 , 31.12.1986 , p.7 .
 ---pagebreak---                                   - 31
              ri 'raa v : DDTSRSJTIAI1C2Î GF • • .XIII mn ASSISTANCE
                                   Artide 18
         Differentiation of the rates of contribution from the Funds
1.  The financial contribution from the Funds shall be fixed as a
percentage and shall be calculated in relation to either the total eligible
cost of , or the total public or similar expenditure (national , regional or
local , and Community) on , each measure (operational programme , aid scheme ,
global grant , projeot , technical assistance , study).
2.  In accordance with the first indent of Article 13(1 ) cf Regulation
(EEC) No 2052/88 , the rates of financial contribution from the structural
Funds shall be differentiated in the light of the seriousness of the
specific regional problems . As a general rule , assistance from the Funds
expressed as a percentage of public expenditure shall be :
    65% in regions covered by Objective 1 ;
    50% in areas covered by Objective 2 ;
    40% in all other oases .
The rates indicated above may be increased or reduced within the limits
laid down in Article 13(3 ) of Regulation (EEC) No 2052/88 and in the light
of the other criteria set out in Article 13(1 ) of that Regulation , taking
account in particular of the capacity to contribute of the regional or
local authorities concerned , notably In Greece , Ireland , Portugal and
Spain .
3 . Where the measure concerned , among its other intrinsic characteristics ,
entails the financing of revenue-generating investments , the rates of
 ---pagebreak---                                 - 32 -
financial contribution from the Funds shall be differentiated in the light
of the last Indent of Article 13(1 ) of the aforementioned Regulation and
according to the size of the oash flow which the expected revenue will
generate .
In any event , in connection with the development effort in the regions
concerned , the contribution from the Funds to investments in firms may not
exceed 50% of the total cost in the regions covered by Objective 1 and 30%
of the total cost in the other regions . It shall conform to the
differentiation principles set out above .
4 . The Commission may differentiate the rates of contribution for
individual measures forming part of operational programmes , aid schemes or
global grants .
                                 Artide 19
                       Combination of grants and loans
In the case of investments likely to be financed from both budget resources
and borrowed funds , Community financing shall be a combination of loans and
grants .   This combination shall be determined in conjunction with the EEB
when the Community support framework is being established . It Shall take
account of the balance in the proposed financing plan , the rates of
contribution from the Funds established in accordance with Artide 18 and
the devdopment objectives pursued .
 ---pagebreak---                                  - 33 -
                       Tins VI :   FINANCIAL PROVISIONS
                                  Article 20
                             General provisions
1 . Financial assistance from the structural Funds shall be subject to the
relevant rules applicable to the Funds under the Financial Regulation and
to the availability of budgetary resources .
2 . The financial assistance to be granted in respect of specific measures
undertaken in Implementing a Community support framework shall be
consistent with the financing plan laid down in that support framework .
3 . In order to avoid administrative delays at the year end , Member States
shall ensure that requests for payment are submitted in accordance with a
balanced schedule throughout the year .
                                  Article 21
                                  Cammitments
1 . Budgetary commitments shall be made on the basis of the Commission
decisions approving the operations concerned . They flha.ii be valid for a
limited period , depending on the nature of the operations and on the
specifio conditions for their implementation .
2 . Commitments in respect of operations to be carried out over a period of
two or more years shall , as a general rule , be effected In annual
instalments . The commitments in connection with the first annual
instalment shall be made when the decision approving the operation is
adopted by the Commission .
Commitments in connection with subsequent annual instalments shall be based
on the financing plan for the operation concerned and on the progress made
in Implementing it .
3 . For operations to be carried out over a period of less than two years ,
the total amount of Community assistance shall be committed when the
Commission adopts the decision approving the operation.
 ---pagebreak---                                  - 34 -
                                  Article 22
                                   Payments
1 . Payments of financial assistance shall be made in accordance with the
corresponding budgetary commitments to the responsible body indicated in
the application submitted through the Member State concerned . They may
take the form of advances or final payments .
2 . Following each commitment , the Commission may make a first advance of
up to 60% of the amount committed , taking into account the nature of the
operation concerned .
3.  A second advance such that the sum of the two advances does not exceed
80% of the commitment shall be made after the responsible body has
certified that at least half of the first advance has been used up and that
the operation is progressing according to the timetable laid down.
4.  Final payments in respect of each commitment shall be conditional on :
    submission to the Commission by the responsible body of a request for
    payment within six months of the end of the year ooooemed or of
    completion of the operation concerned ;
    submission to the Commission of the relevant reports referred to in
    Article 26(4);
    transmission by the Member State to the Commission of a oertifioate
    confirming the information contained in the request for payment and the
    reports .
5 . Member States shall designate the authorities empowered to issue the
certificates referred to in paragraphs 3 and 4 .
6 . In the case of measures that are designed to support agricultural
incomes , such as compensation for natural handloaps in less-favoured or
mountain areas , and that are governed by the provisions referred to in
Article 11(1 ) of Regulation (EEC) No 2052/88 , the conditions and procedures
applicable in respect of advances or final payments shall be laid down in
the corresponding Commission decisions , due regard being had to the
specific nature of those measures .
 ---pagebreak---                                   - 35 -
7.  In the case of studies and Innovation schemes , the Commission shall
determine the appropriate payment procedures .
                                  Article 23
                                Use of the ECU
Commission decisions , commitments and payments shall be denominated and
oarried out In ECU .  The Commission shall determine the detailed
arrangements for the implenentation of this Article .
                                  Article 24
                               Financial control
1 . In order to guarantee successful completion of operations oarried out
by public or private promoters , Member States shall take the necessary
measures :
    to verify that operations financed by the Community have been properly
    oarried out ;
    to prevent and to take action against irregularities ;
    to recover any amounts lost as a result of an Irregularity or
    negligence . The Member State concerned shall be responsible in a
    subsidiary capacity for repayment of any sums paid in error .
Member States shall inform the Commission of the measures taken for those
purposes and , in particular , of the progress of administrative and judloial
proceedings .
When submitting requests for payment , Member States shall make available to
the Commission any national oontrol reports on the measures included in the
programmes or other operations concerned .
2 . Without prejudice to checks carried out by Member States under Article
206 of the Treaty or to any inspection arranged on the basis of
Article 209(c) of the Treaty , Commission officials may oarry out
on-the-spot checks , Including sample checks , in respect of operations
financed by the structural Funds .
 ---pagebreak---                                  - 36 -
Before carrying out an on-the-spot check , the Commission shall , as a
general rule , give notice to the Member State oancemed with a view to
obtaining all the assistance neoessary . Officials of the Member State
oonoemed may take port in such checks .
The Commission may require the Member State concerned to carry out an
on-the-spot check to verify the regularity of payment requests . Commission
officials may take part in such checks .
3.  For a period of three years following the last payment in respect of
any operation , the responsible body and authorities shall keep available
for the Commission all the supporting documents regarding expenditure on
the operation .
                                  Article 26
            Reduction , suspension and cancellation of assistance
1 . The Commission may reduce or suspend assistance in respect of a
particular operation or measure if a check reveals irregularities or a
significant change affecting the nature or conditions of the operation or
measure for which the Commission 's approval has not been sought .
2 . If completion dates have not been respected or if a particular
operation or measure has been carried out in such a manner that payment of
only part of the financial assistance allocated to it is justified , the
Commission shall ask the responsible body and the Member State concerned to
submit their ocmments within a specified period . Unless adequate
justification is given to it , the Commission may cancel the remaining
portion of the financial assistance oonoemed .
3 . Any sum received unduly and to be recovered shall be repaid to the
Commission . Interest on account of late payment may be charged on sums not
repaid . The Commission shall determine the detailed arrangements for the
implementation of this paragraph .
 ---pagebreak---                                  - 37 -
                    TULE VU :   ICKTTOKING AND ASSESSMHfT
                                  Artiole 28
                                  Monitoring
1.  Within the framework of the partnership between all the bodies
concerned , the Commission and the Member States shall ensure effective
monitoring of implementation of assistance from the Funds , geared to the
Community support framework and specific operations (programmes , etc .).
Such monitoring shall be carried out by way of Jointly agreed reporting
procedures , sample checks and the establishment of monitoring committees .
The Commission shall report to the ocmmittees referred to in Title VIII on
the progress made in Implementing assistance operations under the Funds ,
including the use made of appropriations in relation to the particulars
given in the Community support frameworks .
2 . Monitoring        be carried out by reference to physical and financial
indicators specified , where appropriate , in the Commission decision
approving the operation concerned . The indicators shall relate to the
specific character of the operation , its objectives and the form of the
assistance provided , and to the macroeconomic and structural situation in
the countries in which the assistance is to be provided .
3.  Monitoring committees shall be set up by agreement between the Member
State concerned and the Commission .
The Commission and , where appropriate , the EEB may be represented on those
committees and may appoint technical advisers to them .
4.  For each multiannual operation , the responsible body shall submit
progress reports to the Commission within six months of the end of each
full year of implementation . A final report shall be submitted to the
Commission within six months of completion of the operation .
 ---pagebreak---                                        38
For each operation to be implemented over a period of less than two years ,
the responsible body shall submit a report to the Caaanlssion within six
months of completion of the operation . The Commission shall determine the
form and content of the reports .
5 . On the basis of the monitoring procedures and reports outlined above ,
the Commission shall make any necessary adjustments to the volume or
conditions of assistance as initially approved and to the schedule of
payments envisaged .
6 . The Commission <=fo«.n determine the detailed arrangements for the
implementation of this Artiole .
                                      Article 27
                                      Assessment
1.  Assessment shall be carried out within the framework of the
partnership . The competent authorities in the Member States shall , where
appropriate , contribute in such a way as to ensure that assessment can be
carried out in the roost effective manner .      In tills oonneotion , assessment
shall make use of the various particulars that the monitoring arrangements
can yield in order to gauge the socio-eoonomio impact of the operations ,
where appropriate in close association with the monitoring oammittees .
2 . Ex ante and ecx post assessment of operations undertaken for structural
purposes by the Community shall be ooncerned with their effectiveness at
three levels :
    their overall impact on the objectives set out in Article 130a of the
    Treaty , and in particular the strengthening of the economic and social
    cohesion of the Community . At this level , assessment shall be
    concerned in particular with maoroeconomio effects and performance ,
    account being taken of the general socio-economic context in which the
    operations are being carried out and of the extent to which they
    complement national policies ;
    the impact of operations under each Community support framework ,
    ■lrvTinri-iTTg their macroeoonoralo effects on the economy of the regions and
    areas concerned and their contribution to the attainment of specific
    objectives , and in particular the development priorities ;
 ---pagebreak---                                  - 39 -
    the impact of individual operations (programmes , etc .). At this level ,
    assessment «ha.n be concerned primarily with the mloroecononlo effects
    of operations .
Assessment shall , according to the circumstances , be carried out by
reference to macroeconomic indicators based on regional or national
statistics , to information yielded by descriptive and analytical studies
and to qualitative analyses .
3 . In drawing up Community support frameworks and in vetting Individual
applications for assistance , the Commission shall take into account , as the
determining factor , the findings of assessments made in accordance with
this Artide .
4 . The assessment principle and procedures shall be laid down in the
Commission decisions concerning the Community support frameworks .
                            TITLE VIE : COMMITTEES
                                  Artide 28
      Advisory Committee on the Development and Conversion of Regions
In accordance with Artide 17 of Regulation (ESC) No 2082/88 , an Advisory
Committee on the Devdopment and Conversion of Regions , made up of Member
States' representatives and chaired by the Commission representative , is
hereby set up under the auspices of the Commission . The EEB shall take
part in its deliberations .
The Commission representative shall submit to the Committee a draft of the
measures to be taken . The Committee shall deliver its opinion an the draft
within a time limit which the Chairman may lay down according to the
urgency of the matter , where appropriate by taking a vote .
The opinion shall be recorded in the minutes . In addition , each Member
State shall have the right to request that its position he recorded in
those minutes .
 ---pagebreak---                                 - 40 -
The Commission shall take the utmost aooount of the opinion delivered by
the Committee .  It shall inform the Committee of the maimer in vzhich it
took aooount of the opinion .
The Committee shall deliver opinions on draft Commission decisions
concerning the Community support frameworks as provided for in Articles
8(5 ) and 9(9) of Regulation (EEC) No 2052/88 and on the drawing-up and
revision of the list of areas eligible in connection with Objective 2 . The
matters referred to in Article 10 of Regulation (EEC) No - (ERDF
Regulation) may also be referred to it by the Commission .
                                 Article 29
             Committee referred to in Article 124 of the Treaty
In accordance with Article 17 of Regulation (EEC) No 2052/88 , the Committee
referred to in Article 124 of the Treaty shall be composed of two
government representatives , two representatives of the workers'
organizations and two representatives of the employers' organizations from
each Member State . The member of the Commission responsible for chairing
the Committee may delegate that responsibility to a senior Commission
official .
For each Member State , an alternate shall be appointed for each category of
representative mentioned above . In the absence of one or both members , the
alternate shall be automatically entitled to take part in the proceedings .
The members and alternates shall be appointed by the Council , acting on a
proposal from the Commission , for a period of three years . They may be re¬
appointed . The Council shall , as regards the composition of the Committee ,
endeavour to ensure fair representation of the different groups concerned .
The Committee shall deliver opinions on the draft Commission decisions
relating to the guidelines for action in connection with Objectives 3 and
4 , on the Community support frameworks relating to those objectives and , in
the case of support from the European Soolal Fund , on the Community support
frameworks relating to Objectives 1 , 2 and 5(b).
 ---pagebreak---                                   41
For their adoption , the opinions of the Committee shall require an absolute
majority of the votes validly oast . The Commission shall inform the
Committee of the manner in which, it took aooount of those opinions .
The Committee shall draw up its rules of procedure .
                                 Article 30
         Committee on Agricultural Structures and Rural Development
In accordance with Article 17 of Regulation (EEC) No 2052/88 , a Committee
on Agricultural Structures and Rural Development , made up of Member States '
representatives and chaired by the Commission representative , is hereby set
up under the auspioes of the Commission .
The Commission representative shall submit  to the Committee a  draft of the
measures to be taken . The Committee shall  deliver an opinion  on the draft
within a time limit which the Chairman may  lay down according  to the
urgency of the matter under consideration .   The opinion shall be delivers!
by the majority stipulated in Article 148(2) of the Treaty in the case of
decisions which the Council is requested to adopt on a proposal from the
Commission ; when a matter is put to the vote within the Committee , the
votes of the Member States' representatives shall be weighted as provided
for in the aforementioned Article .  Tie Chairman, shall not vote .
The Commission shall adopt measures which shall apply immediately . However ,
if they are not in accordance with the opinion delivered by the Committee ,
they shall be communicated forthwith by the Commission to the Council . In
that event , the Commission may defer application of the measures which it
has decided for a period of not more than one month from the date of such
communication .
The Council , acting by a qualified majority , may take a different decision
within the period provided for in the preceding paragraph .
 ---pagebreak---                                    - 42 -
The Committee shall deliver opinions on draft Commission decisions :
     relating to oommon measures in oonneotion with Objective B(a) ;
     relating to Community support frameworks in oonneotion with Objective
     5(b).
The Committee provided for in this Article shall replace the Standing
Committee on Agricultural Structures , set up by Article 1 of the Council
Decision of 4 December 1962 , 1 in respect of all the functions assigned to
it under that Deoision or under Article 6 of Council Regulation (EEC) No
729/70 . 2
                                    Article 31
                                 Other provisions
1 . The Commission shall periodically refer to the Committees provided for
in Articles 28 , 29 and 30 the reports referred to in Article 16 of
Regulation (ESC) No 2052/88 . It may seek the opinion of those Committees
on any matter relating to assistance operations under the Funds other than
those provided for in this Article , notably in connection with its power of
initiative referred to in Article 5(5) of Regulation (ESC) No 2052/88 .
2 . Council Decision 75/185/EEC3 setting up a Regional Policy Committee ,
Council Decision 83/517/EBC4 concerning the Committee of the European
Social Fund and , as regards the EAQGF Guidance Section, Articles 11 to 15
of Regulation (EEC) No 729/70 concerning the EAGGF Committee are hereby
repealed .
1  0JNO 136 , 17.12.1962 , p. 2892/62 .
2  OT No L 94 , 28.4.1970 , p.13 .
3  OJ NO L 73 , 21.3.1975 , p.47 .
4  0JNOL 289 , 22.10.1983 , p.42 .
 ---pagebreak---                                   - 43 -
                      TITLE IX :   REPORTS AND PUBLICnY
                                   Article 32
                                     Reports
The annual reports referred to in Article 16 of Regulation (EEC) No 2052/88
Shall review , Inter alia :
    the efforts deployed under all the Funds , the PUB and the other
    financial instruments in support of the priority objectives referred to
    in Article 1 of the aforementioned Regulation ;
    the activities of each Fund , the utilization of the budgetary resources
    concerned and the deployment of the other financial instruments for
    which the Commission has responsibility .
                                   Article 33
                            Information and publicity
1 . The body responsible for implementing an operation carried out with
financial assistance from the Community shall ensure that adequate
publicity is given to the operation with a view to :
    making potential beneficiaries and trade organizations aware of the
    opportunities afforded by the operation ;
    making the general public aware of the role played by the Community in
    relation to the operation .
Member States shall consult the Commission on , and inform it about , the
Initiatives taken for these purposes .
 ---pagebreak---                                 - 44 -
                        TITLE X:   FINAL FRÜVISICNS
                                 Artiole 34
                          Transitlonal provisions
1 . In aooordance with Article 15(3) of Regulation (ESC) No 2052/88 ,
applications in respect of multlannual operations received after adoption
of that Regulation but before the entry into force of the implementing
decisions referred to in Article 130e of the Treaty must be in keeping with
the objectives set out in Article 1 of that Regulation and involve one of
the forms of assistance provided for in Article 5 of that Regulation .
2 . In drawing up Community support frameworks , the Commission s'na.1 1. take
account of any multiannual operation already approved by the Council or by
the Commission before the entry into force of the implementing decisions
referred to in Article 130e of the Treaty and having financial
repercussions during the period covered by those support frameworks .
3 . The Commission may propose that the Member State oonoemed apply the
provisions set out in the Funds' rules which, enter into foroe on
1 January 1989 to operations decided on before that date .
4 . In order to guarantee continuity of the activities of the Funds in the
period between 1 January and 1 October 1989 , the Commission may approve
operations by way of derogation from Artiole 15(1 ). Such operations shall
be indicated in the subsequent decisions concerning the relevant Community
support framework .
                                 Artiole 35
                              Entry into foroe
This Regulation ahAii enter into foroe on 1 January 1989 .
TMg Regulation «h«.n be binding in its entirety and directly applicable in
all Member States .
Done at Brussels                                   For the Council
                                                   The President
 ---pagebreak---                 - 45
               Proposai for a
            OOÜNCIL R330IATIŒÎ
 laying down provisions for implernentating
Regulation (ESC) No 2062/88 as regards the
    European Regional Development Fund
 ---pagebreak---                                     - 46 -
                             CONTENTS OF THE REGULATION
ТТПЕ I :    8                3 OP ASSISTANCE
Artide 1 :    Scope of assistance                               48
Artide 2 :    Regional plans                                    49
Artide 3 :    Regional operational programmes                   50
Artide 4 :    Part-financing of aid. schemes                    50
Artide 5 :    Major projects                                    51
Artide 6 :    Global grants                                     51
Artide 7 :    Preparatory and accompanying measures             52
TITLE II :               AND PA!»«»« 3SECP
Article 8 :   Periodio                                          52
Article 9 :   Regional partnership                              53
IIMIIIII »     * mi t min I'I . . . 'i ' ■ i ■ i m Pini r LEVEL
Artiole 10 :   Definition of assistance
TETTE IV :   GENERAL AND FINAL PROVISICNS
Artiole 11 :   Monitoring of oanrpat.1h1.l.1.ty                 54
Artiole 12 :    Information and publicity                       54
Article 13 :    Indicative allocation of ERDF resources         54
Article 14 :   Final provisions                                 54
Artide 15 :    Entry into force                                 54
 ---pagebreak---                                          - 47 -
•ШЕ СПЖПЪ ОР ТЕ8 ШЮРЕАН СШШЖГГГЕЗ ,
Having regard to the Treaty establishing the European Eoonomio Ctokminity ,
and in particular Article 13Ge thereof ,
Having regard to the proposal from the Commission , 1
In cooperation with the European Parliament , 2
Having regard, to the opinion of the Economic and Social Committee , 3
Whereas Article 130c of the Treaty states that the European Regional
Development Fund is intended to help redress the principal regional
imbalances in the Community through participating in the development aid
structural adjustment of regions whose development is lagging benind arc. in
the conversion of declining industrial regions ;
Whereas Council Regulation (EEC) Ho 2052/ 8S of 21 dune i(»5 cn 'da tasics of
the Sumctural Funds and their effectiveness and on ocv-aiLcs/iion. of their
activities between themselves and with, -she operations o_'
Itrrss't&ont Bank assd the other eshsting finaaoisl instrn* ~*t'rf^ -CJ ■jS'jj 0*3*3 1-il
Article 3(1 )            the TSczxxr&m Eeglaa&l              uVri/G 1 'li'- l          -i                 'Citlib
eFsantiai t&afe of providing support for Qd, relives i «hl. i xv - ecuxi-tn. n
Article i of the same Regulation , th&t it stall participate in me
q;«ra.uiaus of Objective 5(b) and , in addition , shall p:cvvr-.o.e ev.-.ert for
studies or pilot schemes concsi-ning regional develop* .ant at C-.uniU.oicy
level ;
             j revisit-ns costr-aon to the Community 's ebanicturii                          U-v -e be«a
e&idbiicgLei by Council Rr-giLAticn (liC) Wo                   /«6 of                 J^-vug down,
pwisiccs rpoleiftenting R.'g'i’rt.i-on (bl:>) bo bClf / Ci as ^.,-.aos ;j.e;                                       ..on
of the o,oo.i\rL eras                      u?     t'Ui.     i       ^'■•5 u- t- c-v c-h..,.-   «i. "tfit?  iic ' . o
aaxi           tne c^eratlQRS
together with, other prcvrliuo common to lie acnrott^co of o. .e ivn.13 ;
Whereas these ccacmoa previsions Koet be suppCsoented . ir. totv-rcaioa wi.li
   '-O.ce. 3 oi-v) ox Regulation           Wo o n i-:_, , ...p
concerning the activities cf the European Regittial Devvrlupn^oi Fund ;
Whereas , as part of the reform of the Fords , the Oomtnieslcn should lay down
the regional policy guidelines to be applied in the various sieges of
planrdng , notably in establishing the Community support frameworks and in
'the activities of the European Regional Development Fund ,
НАЗ АШРТЕЮ тат,д БШЗЬАПШ :
 1 Otf No C
 2 0JNOC
 3 0JKOC
 4 GJ No L 183        15.7.1988 , p.9 .
 5 0JNOL
 ---pagebreak---                                     48
                                     ТГШЗ I
                         flOOPB AMD FORMS OP ASSISTANCE
                                    Article 1
                               Soope of assistance
1 . The European Regional Development Fund, hereinafter referred to as the
ERDF , shall contribute to the correction of the main regional imbalances in
the Community , and to the strengthening of its social and eoanomio
ooiheslon .
2 . In accordance with Article 3(1) of Regulation (EEC) No 2052/86 , the
ERDF shall participate in the financing of :
(a) investment in firms which leads to the creation or maintenance of
     permanents jobs ;
(b) infrastructure , and more specifically:
          in the regions designated under Objective 1 , infrastructure
          contributing to their eoanomio development ,
          in the regions or areas designated under Objective 2 ,
          infrastructure relating to the redevelopment of derelict industrial
          sites and leading to the creation or development of economic
          activity ;
          in the areas designated under Objective 5(b) , infrastructure
          directly linked to eoonomio activity which, creates jobs providing
          an alternative to employment in agriculture ;
(c) the development of indigenous potential in the regions by measures
     which encourage and support local development initiatives and the
     activities of small and medium-sized enterprises , involving in
     particular :
          assistance towards services for firms ;
          Improvement of aooess for firms to the oapital market , particularly
          by the provision of guarantees , equity participation, surety and
          insurance ;
          direct add to investment , where no aid scheme exists ;
          the provision of small-scale Infrastructure .
(d) operations planned in the context of regional development at Community
     level .
 ---pagebreak---                                    49 -
                                   Article 2
                                Regional plans
1 . Apart from the g'enexvl provisions laid down in Title II of Regain. L.on
(KSC ) No . (" the coordinating Regulation" ) , the following specific
pr^-vnsiors shall apply to the regional plans referred to 1Q Article 8(4)
ant article 9(8) of Regulation (SBC) No 2052/88 .
2 . The plans relating to the regions designated under Objective 1 shall ,
as a general rule , cover one or more regions at NOTS level II .
These plans shall contain in particular the following information :
(a) a succinct analysis of the socio-economic situation of the region ,
    indicating in particular the demographic outlocte ,
Cb) o, description of the development strategy envisaged by the Member
    State , with an indication of the rational and regional financial
    resources proposed ,
(c) the Member State 's priorities for action and the regional development:
    measures for whloh it plans to request Community financial
    participation , together with tbs estimated sums involved in those
    inquests for the various forms of Community assistance ,
(d) an indication of the national , regional , local or other authorities
    respjxiadble for implementing the measures .
Ay a general rile , these plans Shall be for a period of five years and ov
be up-dated annually .
5 . The plans relating to the regions designated under Objective 2 sb .-1
as a general rule , cover one or more areas at NOTS level III .
These plats shall contain in particular the following information :
(a) A description of the conversion strategy envisaged by the Nsubsr f :: 1
    ^Ith an indication of the rational or regional financial reso'u:c'-s
    proposed ,
(b) the Member State 's priorities for action and the regional conversion
    measures for which it plans to request Community financial
     participation , together with the estimated sums involved in these
     requests for the various forms of Community assistance ,
(c) sufficient information to enable an opinion to be formed cf the overall
     regional economic situation ;
(d) an indication of the national , regional , local or other an " heritage
     responsible for Implementing the measures .
As a general rule , these plans shall be for a period of three years and rn^-y
be up-dated annually .
 ---pagebreak---                                  - 50 -
                                   Article 3
                       Regional operational programmes
1 . For the regions designated under Objective 1 , regional operational
programmes shall in principle oover one or more regions at NLJTS level II or
in specific oases areas at NUTS level III . For regions designated under
Objectives 2 and 5(b), and for frontier regions , they shall in general
cover one or more areas at NUTS level HI .
2 . The programmes may be undertaken on the initiative of the Member States
or of the Commission in agreement with the Member State concerned .
When they are undertaken on the Initiative of a Member State , they shall be
drawn up by the competent authorities designated by the Member State , in
consultation with the Commission .
When they are undertaken on the initiative of the Comml.ssj.on , the latter ,
after consulting the Committee referred to in Article 28 of [ the
coordinating Regulation] , shall lay down the procedures and invite the
competent authorities designated by the Member State to establish
operational programmes .
The Commission 's initiative shall be designed :
    to help resolve serious problems directly associated with the
    Implementation of other Community policies and affecting the socio¬
    economic situation of one or more regions , or
    to promote the application of Community policies at regional level , or
    to help resolve problems common to pertain categories of region .
3 . For the regions designated under Objective 1 , the total cost of a
regional operational programme may not , as a general rule , be less than
100 million EOT .
                                   Article 4
                         Part-financing of aid. schemes
1 . Incentives to investment in firms shall be mainly in the form of part-
financing of regional aid schemes .
2 . With a view to deciding the Community 's financial participation , the
Commission shall examine , with the competent authorities of the Member
State , the characteristics of the add scheme concerned .  It shall make sure
that the procedures for the scheme take account of the following :
 ---pagebreak---                                    - 51
      the rate of assistance to be t&dored to the scxjio-eooia'Kiic si roaticn
      of the regions concerned and toe consequent locational dliadv.integes
      for firms ;
      operating procedures and the types of aid to be varied to meet the
     needs of beneficiaries ;
     priority to be given to small and medium-sized enterprises and to the
      eDCoarageaent of services supplied to than sum as management advice
     and market surveys .
                                 Major projeots
1 . In addition to the information specified in Article 16 of [ the
coordinating Regulation ] , applications for ERDF assistance for major
projects shall provide the following details :
(a ) for infrastructure :
          an indication of the expected rate of use and the induced effects
          on employment ,
          an indication of the consequences that Community participation will
          have on the completion of the project ,
          an analysis of the costs and socio-eoanccriic benefits of the
          project ,
          the expected impact on the development or conversion of the r^t-ors
          concerned ;
Cb) f or investment in firms :
          an. indication of the economic outlook for the sector concerned ,
          an analysis of the expected profitability of the project .
2 . All the information concerning major projects Shall also be given ocr
those projects which form part of an operational programme .
                                     Article 6
                                  Global grants
1 In accordance with Article 6(1 ) of Regulation (ESC) No 2052/38 , fas
Grtraission may entrust to regional development organisations the mangos.’.:
of global grants , which it shall use primarily to assist local developi^nc
initiatives . 'These organizations must operate in the public ircersst a„d
sv -u- associate adequately the sooio-eoanotmio interests directly invol” 3d
it, the implemer. bation of the measures planned .
2 . Tie procedures for the use of global grants , on which an agreement has
been concluded between the Commission and the relevant regional devel cpraii:
organization , shall be adopted by the Commission in agreement with, the
Member State concerned..
 ---pagebreak---                                  - 52 -
These procedures shall detail in particular :
    the types of measure to be carried out ,
    the criteria for choosing benefioiaries ,
    the conditions and rates of ERDF assistance ,
    the arrangements for monitoring use of the global grants .
                                   Artlole 7
                    Preparatory and accompanying measures
1 . The ERDF may finance , up to a limit of 1% of its annual allocation ,
preparatory , accompanying and management measures necessary for the
implementation of this Regulation . These measures may be oaxrled out by
the Commission or by outside experts . They shall include studies , among
them studies of a general nature concerning Community regional action , and
technical assistance or information measures .
2.  Measures oarried out on the Commission 's initiative may be financed by
the ERDF at a rate of 100% .  For other measures the rates laid down in
Article 18(2) of [ the coordinating Regulation] shall apply .
                                    TITLE II
                               [INIS AND PARTNERSHIP
                                   Article 8
                        Periodic report and guidelines
1 . A periodic report on the social and economic situation and development
of the regions of the Community , which also .indicates the macroeconomic
effects of the Community 's regional action , shall be prepared by the
Commission at four-yearly intervals . Member States shall provide the
Commission with the relevant information enabling it to make an analysis of
all the regions of the Community on the basis of statistics which are as
comparable and as up to date as possible .
The first periodic report shall be prepared by 31 December 1990 at the
latest .
2 . The report shall constitute a basis for the establishment of guidelines
for Community regional policy . These shall be applied in the various
stages of planning , notably in establishing Community support frameworks
and in the activities of the ERDF . The guidelines shall be published in
the Official Journal of the European Communities .
3 . The development or conversion strategies shall be devised in such a way
as to encourage economic growth and the creation of permanent jobs in the
regions or areas concerned . Infrastructure in receipt of ERDF assistance
must contribute directly to increasing the economic potential of the
 ---pagebreak---                                        - 53 -
 regions . The G^xaifision aMll adopt the aeoess&ry provisions cxsnoasning
 the categories of infrastructure In question .
                                        A2ÈlQlâ_&
                                   Regional partnersSjip
The Coisemity's regional action shall bs carried out in close consultation
l>3twesa t-ia OcL'srtis&ion , the felsr State <x®cern6& and the ccttyetent
ant&irities designated by the latter , particularly at regional level .
                                        52m_.ni   1
                                        Article 1Q
                                Définition of assistance
1.   In 3fr:oj?:b;iX>'7< mth. Article 5(1 ) „ last sil^m‘:5g~a.gh , of lalliion (£ZC)
Ho S0S2/S&, the muF ttsy also oo&trttoate to ths finakidng at arcsuliy
level cf :
(a) stdies at the Commission's initiative aiadxg to identify :
          the              coaseqo^nes of PBasures placed by the laidarsa
          5lboi,t;;. ■;.£!, particularly major iirlraotmotui-viS , lir-u their effects
          go bcyecil national J^ndarles ;
          sitesnoas cling to correct wpeoifio problems of the border regions
          within ths Ccamsoity ;
          ■th3 elsosnts ascsssary to establish a prospective outlies of the
          utilization of CtoiHBuaity territory .
 (b) pilot schémas whlch :
          oocstitute incentives to the creation of inffcastxucture , investment
          in firsts and other specific measures having' a marked Community
          interest , in particular in the border regions within the Osarannity ;
          encourage the pooling of experience and development cooperation
          between different CaaEGunity regions , and iroxovative measures .
2 . At the Commission 's initiative , matters relating to regional
development at Community level , coordination of national regional policies
or any other problem connected with, implementation of Community regional
action may be referred to the Committee specified in Article 28 of [ the
coordinating Regulation] . The Committee may arrive at common conclusions
on the basis of which the Commission shall , where appropriate , address
recommendations to the Member States .
 ---pagebreak--- 3 . The Commission shall, lay down the detailed provisions for
Implementation of this Article .
                                    TITLE IV
                         GENERAL AND FINAL PROVISIONS
                                   Article 11
–--__                     Monitoring of campatibility
Member States whan supply the Commission with- inforaation enabling it to
verify that the provisions of Article 7(1 ) of Regulation (EEC) -No 2052/88
have been complied with .
                                   Article 12
                           Information and publicity
The provisions on information and publicity referred to in Article 33 of
 [ the coordinating Regulation] and concerning ERDF assistance shall be laid
down by the Commission and published in the Official Journal of the
 European Communities .
                                   Artlole-15.
                    Indicative allocation of ERDF resouroes
 In accordance with Article 12(6) of Regulation (EEC) No 2052/88 , the
 Commission shall , before 1 January 1989 , decide for a period of five years
 and as a guide , on the allocation per Member State of 85% of the commitment
 appropriations of the ERDF .
                                   Article 14
                                 Final provision
Council Regulation (EEC) No 1787/841 is hereby repealed , subject to the
application of Article 15 of Regulation (EEC) No 2052/88 and of Article 34
of [ the coordinating Regulation] .
                                                              ' .A
                                   Article 15
                              --Entry into force -         _
This Regulation shall enter into force on 1 January 1989 .
However , Article 13 shall apply with effect from the date of adoption of
the Regulation .
This Regulation Shall be binding in its entirety and directly applicable in
all Member States .
Done at                                            For the Council
                                                   The President
1 OJNoL 169 , 28.6.1984 , p.l .
 ---pagebreak---                                - 55 -
                           Proposai for a
                         COUNCIL REGULATION
laying down provisions for implementing Council Regulation ( EEC )
         No 2052 / 88 as regards the European Social Fund
 ---pagebreak---                                    - 56 -
                                  Proposai for a
                               OOGNCüL KB3ULATICN
                     laying down provisions for Implementing
     Counoll Regulation (EEC) No 2052/88 as regards tbs European Social Fund
  THE COUNCIL OF THE EUROPEAN OCMMONITIES ,
  and in particular Article 127 thereof ,
                                                     1
  Having regard to the proposal from the Commission,
  Having regard to the opinion of the European Parliament ,
  Having regard to the opinion of the Economic and Social Committee ,"
  Whereas Article 3(4) of Council Regulation (EEC) No 2052/88 of 24 June 1988
' on the tasks of the Structural Funds and their effectiveness and on
  coordination of their activities between themselves and with the operations
  of the European Investment Bank and the other existing financial
  instruments provides for the Council to adopt the speoifio provisions
  governing operations •under each, structural Fund;
  Whereas the types of measure to be supported by the European Social Fund
  (hereinafter referred to as "the Fund") should be defined ;
   1
   2
   3
   40J No L 185, 15.7.1988, p   9.
 ---pagebreak---                                 - 57 -
 Whereas the scope of the Fund ShouM be specified in the light of its
 responsibility for contributing to the attainment of the five objectives
 laid down in Artiole 1 of Regulation (ESC) No 2052/88 ;
 Whereas the categories of expenditure eligible for assistance from the Furd.
 should be defined ;
Whereas expenditure trends should not be allowed to diverge and standard
amounts should be introduced by stages for contributions by the Fund
towards operating costs in respect of training ;
Whereas Article 10(1 ) of Regulation (EEC) No 2052/88 requires the
Commission to establish guidelines for the attainment of Objectives 3 and 4
laid down in that Regulation ;
Whereas arrangements should be specified for the submission of the plans to
be drawn up by Member States pursuant to Regulation (EEC) No 2052/88 ;
Whereas it is neoessary to define the forms of assistance to be granted by
the Fund and to specify the content of applications relating to operations
to be carried out within the framework of Member States' labour market
policies ;
Whereas arrangements «hrmld be laid down for the submission and approval of
applications for assistance from the Fund , as Should details of the
arrangments for monitoring ;
Whereas the transitional provisions should be specified ,
HAS ADOPTED THIS REGULATION :
 ---pagebreak---                                   - 58 -
                                   Article 1
                              Eligible operations
1 . Under the conditions laid down by Council Regulations (EEC) No 2052/88
    and [COORD/ 88] 1 and those specified in this Regulation, the Fund shall
    contribute to the financing of the following :
    (a) vocational training operations , accompanied where necessary by
        vocational guidance ;
    (b) subsidies towards recruitment into newly created jobs of
        unspecified duration and towards the creation of self-employed
        activities .
2.  In this connection , the Fund shall also contribute to the financing of
    the following :
    Ca) operations of an innovatory nature which are Intended to test new
        approaches to the content , methods and organization of vocational
        training and more generally the development of employment , with a
        view to establishing a basis for subsequent Fund assistance in a
        number of Member States ;
    (b) preparatory , accompanying and management measures needed for the
        Implementation of this Regulaton ; such measures shall include
        studies , technical assistance and the exchange of experience which
        has a multiplier effect , and follow-up to and evaluation of
        measures financed by the Fund ;
1
 ---pagebreak---                                  - 59 -
    (o) measures involving the training of employees' representatives from
        two or more Member States , carried out at the request of employers'
        and workers ' organizations in oonneotion with the modernization of
        the production apparatus .
3 . Vocational training within the meaning of paragraph 1(a) means , first ,
    any measure aimed at providing the skills necessary to carry out one or
    more specific types of employment , with the exception of apprenticeship
    schemes , and second , any measure with a large technology content aimed
    at developing the advanced qualifications required by the changing
    labour market and carried out in order to meet the requirements of
    available jobs .
4 . By way of derogation from paragraph 3 , vocational training shall
    include , in the regions concerned by Objectives 1 and 5(b), any
    vocational training and further training measure required for the use
    of new production and/or management techniques in small and medium-
    sized enterprises .
5 . By way of derogation from paragraph 3 , vocational training shall
    include , in the regions concerned by Objective 1 :
        the theoretical portion of apprenticeship training given outside
        the firm ;
        that part of national secondary education systems specifically
        devoted to vocational training following compulsory full-time
        schooling where the system is reorganizing its structures and
        vocational training methods to meet the challenges posed by
        economic and technological change .
 ---pagebreak---                                  - 60 -
6.  In the regions concerned by Objective 1 , and for a period of three
    years following the entry into foroe of this Regulation , recruitment
    subsidies shall be extended to projeota which fulfil a public need
    involving the creation of additional jobs of at least six months'
    duration for the long-term unemployed aged over 25 .
                                  Article 2
                                     Soope
In accordance with Article 3(2) of Regulation (EEC) No 2052/88 , Fund
assistance may be granted :
    (a) as regards Objectives 3 and 4 , to operations intended to :
            combat long-term unemployment by means of the occupational
            integration of persons aged over 25 who have been unemployed
            for more than twelve months ;
            facilitate the occupational integration of persons of up to 25
            from the age at which oompulsory full-time schooling ends ,
            however long or short the period during which they have been
            seeking employment .
    (b) as regards Objectives 1 , 2 and 5(b), to measures intended to :
            encourage job stability and develop new employment
            possibilities , organized for persons employed in small and
 ---pagebreak---                                - 61
           medium-sized enterprises and those who are unemployed or
           threatened with unemployment ;
           facilitate vocational training for any working person involved
           in an operation which is essential to the achievement of the
           development and conversion objectives of an integrated
           programme .
   (c) as regards Objective No 1 , operations for persons :
           holding an apprenticeship contract ;
           trained under national secondary vocational education systems .
                                 Article 3
                           Eligible expenditure
1. Fund assistance may be granted only towards expenditure to cover :
   (a) the income of persons reoeiving vocational training ;
   (b) the oost :
           of preparing , operating and managing vooational training
           operations including vocational guidance , including the cost of
           training teaching staff ;
           subsistance and travel costs of those covered by vocational
           training operations ;
 ---pagebreak---                                  - 62 -
   (o ) the granting , during a maximum period of twelve months p-ctr person ,
        of subsidies towards recruitment into newly-created jobs of
        unspecified duration and towards the creation of self-employed
        activities ;
   (d) the oost of preparing , accompanying and managing operations which
        receive assistance from the Fund under Article l(2)(b) and (c) of
        this Regulation .
2. The Commission shall determine each year the maximum eligible amount
   per person and per week granted under paragraph 1(c). This amount
   shall be based on 30% of the average gross earnings of industrial
   workers in each Member State , determined in accordance with the
   harmonized definition of the Statistical Offioe of the European
   Communities ; it shall be published in the Official Journal of the
   European Communities .
3. The Commission «hfl.n ensure that Fund expenditure for operations of the
   same type does not develop in different ways . To this end , it shall
   determine the standardized oost by Member State for each item of
   expenditure to be borne by the Fund according to the type of training
   involved .
   The Commi ssi on «ha.n establish the first set of standardized costs in
   the first financial year this Regulation comes into foroe ; they shall
   be published in the Official Journal of the European Communities and
   Shall be applicable in the following finanioal year .
 ---pagebreak---                                 - 63
                                  Article 4
                                 Guidelines
1.  In accordance with Artlole 10(1 ) of Regulation (SBC) No 2052/88 , the
    Commission shall establish before 15 February 1989 for a period
    covering a number of years the guidelines concerning action under
    Objectives 3 and 4 which it will apply in defining the Community
    support frameworks ; they shall be published in the Official Journal of
    the European Communities .
2.  Any amendments shall be made before 1 February of a financial year ;
    they shall apply to the new Community support frameworks or amended
    frameworks in respect of the following financial years .
3 . The guidelines shall establish the training and employment policies
    oovering measures that may be eligible for European Social Fund
    assistance ; apart from regions covered by Objectives 1 , 2 and 5(b),
    priority shall be given to Community financing for measures leading to
    recruitment in available Jobs .
                                  Article 5
                                     Plans
The plans referred to in Articles 8 to 11 of Regulation (EEC) No 2052/88
shall , in the part concerning the Fund , indicate in particular :
         the disparity between job applications and vacancies ,
 ---pagebreak---                                - 64 -
       the nature and characteristics of unfilled vacancies ,
       the occupational openings which appear on labour markets ,
       the list of measures planned or underway in regard to training and
       employment ,
       the number of persons oonoemed , broken down by category and type
       of measure ,
       the scale of the financial effort by public authorities at all
       levels .
                                 Article 6
                            Forms of assistance
1. In accordance with Article 5 of Regulation (EEC) No 2052/88 ,
   applications for Fund assistance shall be presented in the form of
   operational programmes , global grant schemes or action within the
   meaning of Article l(2)(b) and (c). The operational programmes and
   global grant schemes may include associated preparatory , accompanying
   and administrative measures .
2. The Member States Shall communicate the information necessary for the
   examination of measures , in particular the information specified in
 ---pagebreak---                                 - 65 -
   Article 14(2) of Regulation (EES) No [ COGRD/88 ] and the information
   specifically related to the European Sooial Fund (location , number of
   persons , duration of the operation for each person , occupational level
   concerned).
   Furthermore , Member States shall :
       in the case of registered unemployed persons and others without
       jobs , state their occupational level at the beginning of the
       operations ;
       in the case of employed persons , specify the nature and scope of
       proposed occupational conversion operations ;
       in the case of operations involving conversion or economic
       restructuring , state the volume and type of investment planned and
       the changes in products or production systems .
                                  Article 7
          Submission and approval of applications for assistance
1. Applications for assistance shall be submitted at least three   months
   before the start of operations . They shall be accompanied by   a form
   drawn up using computerized means listing the particulars for   each
   measure so that is oan be monitored from budgetary commitment   to final
   payment .
2. The Commission shall decide on these applications before the beginning
   of operations .
 ---pagebreak---                                  - 66 -
                                  Article 8
                                  Monitoring
In accordance with Artiole 24(2) of Regulation (EEC) No [OOGRD/88 ] , the
Commission may carry out on-the-spot checks . These checks may take the
form of representative sample checks . In this case , after consultation
with the Member State concerned , the Commission shall establish the
proportion of samples taken in the light of the material and technical
conditions of the operation concerned . Where the sample check leads to a
reduction , it shall be applied proportionately to the entire amount for
which payment is requested after the Member State has had an opportunity to
present its observations .
                                   Article 9
                           Transitional provisions
1.  In accordance with Article 15(4) of Regulation (EEC) No 2052/88 ,
    applications for assistance for 1989 submitted before 21 October 1988
    shall be covered by Council Decision 83/516/EBC1 and the provisions
    implementing it .
2.  The first plans shall cover a period beginning on 1 January 1990 .
    Plans concerning Objectives 1 , 2 and 5(b) shall be presented before 31
    March 1989 .  Plans concerning Objectives 3 and 4 shall be presented by
    1 June 1989 .
3 . Applications for assistance for operations to be implemented starting
    in the 1990 financial year shall be submitted before 30 June 1989 .
1 OJNoL 289 , 22.10.1983 , p.38 .
 ---pagebreak---                                  - 67 -
                                  Article 10
                          Administrative procédures
The Commission «ha.n lay down the detailed provisions necessary for the
implementation of this Regulation .
                                  Article 11
                               Entry into foroe
1.  'This Regulation shall enter into force on 1 January 1969 . Subject to
    the transitional provisions laid down in Article 9 , it shall be
    applicable as from that date .
2 . Council Regulation (EEC) No 2950/832 is hereby repealed .
This Regulation shall be h1.nd.1ng in its entirety and directly applicable in
all Member States .
Done at
                                                          For the Counoil
2   OJNoL 289 , 22.10.1983 , p    1.
 ---pagebreak---              - 68 -
            Proposai for a
laying down provisions for implementing
      Regulation (EEC) No 2062/88
as regards the EAGGF Guidance Seotion
 ---pagebreak---                                   - 69 -
Proposal for a Council Regulation laying down provisions for implementing
Regulation (EEC) No 2052/88 as regards the EAGGF , Guidance Seotion
THE COUNCIL OF THE EUROPEAN OCMMUNTTHS ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 43 thereof ,
Having regard to the proposal from the Commission, 1
Having regard to the opinion of the European Parliament , 2
Having regard to the opinion of the Economic and Social Committee , 3
Whereas Article 3(4) of Council Regulation (EEC) No 2052/884 provides for
the Council to adopt the specific provisions governing operations under
each structural Fund ;
Whereas the tasks laid down for the Guidance Section of the European
Agricultural Guidance and Guarantee Fund , hereinafter palled " the Fund" , by
Article 3(3) of the above Regulation should be further specified in the
light of the contribution it makes to achieving Objectives 1 , 5(a) and 5(b)
as set out in Article 1 of that Regulation ;
Whereas measures to speed up the adjustment of agricultural structures with
a view to the reform of the Structural Funds must include measures closely
connected with the common agricultural policy and designed to meet its
general requirements ;
1
2
3
4 CJ No L 185 , 15.7.1988 , p.9 .
 ---pagebreak---                                   - 70 -
Whereas , however , some of those measures , which already exist at Community
level , may he adjusted to allow for the differing structural situations in
the different regions of the Community , by increased diversification , and
specifically by differentiation of the contribution in favour of the areas
concerned by Objective 1 ;
Whereas measures designed to contribute to Objective 1 and to promoting the
development of rural areas (Objective 5(b)) should include action to
respond to those areas' specific structural problems ;
Whereas , however , that action must be implemented in accordance with the
objectives of the common agricultural policy and should not lead to an
increase in output of products in which there is a surplus , especially
through irrigation ;
Whereas measures for the development and exploitation of woodland are of
particular interest , not only as offering alternative activity and income
for agriculture in those areas but also in order to increase woodland 's
contribution to improving the environment and to expand its protective
function ;
Whereas the forms of assistance by the Fund should be determined and
whereas operational programmes , and where appropriate global grants , are
the most appropriate forms , both for measures for the development of less-
developed areas and of rural areas and for measures to improve structures
for marketing and processing agricultural products ;
Whereas provision should be made for the Commission to lay down such
provisions as are neoessary for the implementation of this Regulation , and
specifically as regards the way in which operational programmes are to be
presented ;
 ---pagebreak---                                   - 71
HAS ADOPTED THIS REGULATION :
                                    Article 1
1.  The Guidance Section of the European Agricultural Guidance and
    Guarantee Fund , hereinafter called the Fund , referred to in
    Article 1(1 ) of Council Regulation (EEC) No 729/701 , may , In
    accordance with the criteria and objectives laid down in Titles I to IV
    of this Regulation , finance measures for performing the tasks referred
    to in Article 3(3) of Regulation (EEC) No 2052/88 in order to attain
    Objectives 1 and 5 as set out in Article 1 of that Regulation .
2 . The conditions and criteria laid down in Council Regulation (EEC)
    [No(COORD)/8^ shall apply to measures financed under this Regulation,
    except if this Regulation or provisions adopted under Article 2(1 )
    thereof specify otherwise .
3 . Without prejudice to Article 34 of Regulation (EEC) [No COCERD/ 88 ] and
    Article 11 of this Regulation , the Council , acting on a proposal from
    the Commission in accordance with the procedure laid down in Article 43
    of the Treaty , shall decide by 31 December 1989 on any alterations to
    the common measures introduced under Article 6 of Regulation (EEC)
    No 729/70 in order to achieve the objectives referred to in Regulation
    (EEC) No 2052/88 , in conformity with the rules laid down by Regulation
    (EEC) [No (COORD/88 ] and with this Regulation .
TITLE I :   SPEEDING UP THE ADJUSTMENT OF AGRICULTURAL STRUCTURES WITH A
            VIEW TO THE REFORM OF TEE COMMON AGRICULTURAL POLICY'
                                    Article 2
1.  The Fund may finance common measures adopted by the Council in
    accordance with the procedure provided for in the third subparagraph of
    Article 43(2) of the Treaty , in order to speed up the adjustment of
    agricultural structures , with a view in particular to the reform of the
    common agricultural policy .
1 OJ No L 94 , 28.4.1970 , p.13 .
2
 ---pagebreak---                                  - 72 -
2 . The oonnnan measures referred to In paragraph 1 may concern:
        measures to aooampany markets policy , such as reducing production
        potential and adjusting and converting production, InclvKilng
        measures to promote quality products and the marketing of produce
        at the farm ;
        the afforestation of famnland ;
        measures to encourage early retirement from fanning , in order to
        reduce the areas of land devoted to farm production;
        measures to support farm incomes , such as compensation for
        permanent natural handicaps in mountain, hill or less-favoured
        areas ;
        measures to protect the environment and safeguard the landscape ;
        measures to encourage the installation of young farmers ;
        measures to adapt structures on holdings , especially Investments ;
        measures to improve the marketing and processing of agricultural
        and forestry products , in accordance with the conditions and the
        criteria laid down in the provisions referred to in Article 11(1 );
        measures to improve the marketing and processing of fishery
        products .
 ---pagebreak---                                    73 -
TITLE II :   Vv *                       AND        3AL ADJTJ ***{•»« ? OF THE
            IJSS-nEVELDPED REGIONS
                                   Article 3
1.  The Fund may contribute to achieving Objective 1 referred to in Article
    1 of Regulation (EEC) No 2052/88 by financing measures for developing
    and strengthening agricultural and forestry structures , for maintaining
    the landscape and for rural development .
2.  Priority for assistance from the Fund shall be granted to areas within
    less-developed regions where agricultural structure is seriously
    inadequate , especially if they are located in mountain , hill or less-
    favoured areas within the meaning of Article 3 of Council Directive
    75/268/EBC . 1
                                   Artide 4
In accordance with Artide 5 of Regulation (EEC) No 2052/88 , the Fund may
finance operational programmes , integrated operational programmes and
global grants oovered by Community support frameworks and concerning one or
more measures as referred to in Artide 5 .
                                   Artide 5
Financial assistance by the Fund to operational programmes may oover the
following :
    encouraging retirement from farming in order to restructure agriculture
    And encourage the installation of young farmers ;
     the conversion , diversification and reduction of production by specific
     measures ;
     if their financing is not provided for by Council Regulation (EBC) [No
     FEDER/88 ] 2 :
     improving rural infrastructures which are neoessary for the development
     of agriculture and forestry ;
     measures to achieve diversification , especially those providing
     multiple activities or alternative incomes for farmers ;
 1 OJNoL 128 , 19.5.1975 , p.l .
 2
 ---pagebreak---                              - 74 -
reparoelling and associatel work ;
individual or collective land or pasture improvement ;
irrigation , including the renovation and improvement of irrigation
networks , the creation of collective irrigation works from existing
main channels , the creation of small irrigation systems not supplied
from collective networks , and the renovation of drainage systems ;
encouragement for tourist and craft investments , including the
improvement of living accommodation on agricultural holdings ;
protection of the environment and maintenance of the countryside ;
restoring agricultural production potential after natural disasters ;
the development and exploitation of woodland , in accordance with
conditions and criteria to be laid down by the Council on a proposal
from the Commission , including :
    afforestation and the improvement and reconstitution of woodland ,
    related work and accompanying measures necessary for the
    exploitation of woodland ,
in order to increase woodland 's contribution to the conservation and
protection of the environment and to offer farmers alternative
activities and income ;
the development of agricultural and forestry advisory services , and the
improvement of facilities for agricultural training .
 ---pagebreak---                                   75
TITLE III :  PBUM0TIN5 THE DEVE       ? QF RURAL A?E*S QF THE QCMMUNITY IN
             REGIONS COVERED BY       aVE 5
                                  Artiole 6
1.  In order to promote , especially with a view to the reform of the common
    agricultural policy , the development of rural areas of the Community in
    regions not covered by Objective 1 , in particular by exploiting the
    indigenous development potential of those areas , Member States may
    submit rural development plans for geographical areas at the
    territorial level considered appropriate , seleoted in accordance with
    the criteria specified in Article 4 of Regulation (EEC) [No CJ00KD/88 ] .
2.  In accordance with Article 5 of Regulation (EEC) No 2052/ 88 the Fund
    may finance operational programmes , integrated operational programmes
    and global grants covered by Community support frameworks and
    concerning one or more measures as referred to in Article 5 .
                                  Article 7
1.  Rural development plans shall Include the particulars referred to in
    Article 11(3) of Regulation (EEC) No 2052/88 and Article 5 of
    Regulation (EEC) [No OOQRD/88 ] , and in addition :
        a delimitation of the rural areas proposed and the reasons
        therefor . As a rule an area proposed must be a territorial unit
        at NOTS level III or a homogeneous area not exceeding an area
        equivalent to regional NUTS level III ;
        the particulars required for verifying compliance with the
        selection criteria laid down in Article 4(2) of Regulation (EEC)
         [NO COORD/ 88 ] ;
        particulars of the socio-economic environment of the areas
        proposed .
 ---pagebreak---                                   - 76 -
ТШ IV :         RAL AND TRANSITIGNAL       CSICNS
                                   Article 8
Assistance from the Fund for the measures provided for in Artiole 8(2) Ce)
of Regulation (ESC) No 2052/88 may cover :
    carrying out pilot projects for promoting the development of rural
    areas , including -Use development and exploitation of woodland ;
    supporting such, technical assistance and preparatory studies as are
    neoessary for operations ;
    studies to assess the effectiveness of the measures provided for by
    this Regulation;
-   carrying out demonstration projects to show farmers the real
    possibilities of systems , methods and techniques of production which
    are in accordance with the objectives of the reform of the oommon
    agricultural policy .
                                    Article 9
The Commission shall lay down the detailed provisions neoessary for the
implementation of this Regulation.
                                   Article 10
Member States «ha~n supply the Commission with information enabling it to
verify that the provisions of Artiole 7(1) of Regulation (EBC) No 2052/88
have been complied with.
 ---pagebreak---                                   77 -
                                 Article 11
1. The Council „ acting on a proposal from the Commission in accordance
   with the procedure laid down in Article 43 of the Treaty , shill by
   31 December 1989 decide upon the forms of and the conditions for the
   Fund contribution to measures to improve the conditions under which
   agricultural , forestry and fishery products are processed and. m&rieted ,
   as referred to in Article 2(2 ), in compliance with the following
   principles :
       Community assistance shall be subject to the approval of sector
       plans showing the need for the production sector concerned to be
       adjusted in line with the requirements of the common agricultural
       policy and the common fisheries policy ;
       the form of assistance shall he an operational programme within the
       meaning of Article 5(5 ) of Regulation (EEC) No 2052/88 or a global
       grant as provided for in Article 6(2) (c) of that Regulation ;
       in areas of the Community other than those referred to in Articles
       3 and 6 of this Regulation assistance shall he granted only it the
       measures concern :
            the necessary adaptation of a sector of agriculture ,
            conversion to products which are not in surplus , including non¬
            food products , or alternative forms of production ,
            forestry ,
            fisheries .
2. With effect from the date of entry into force of the Council Decision
   referred to in paragraph 1 , Council Regulation (EEC) No 355/771 is
   hereby repealed .
   However , projects concerning fisheries may still be submitted under
   that Regulation until .
3. By way of derogation from paragraph 2 , Articles 6 to 15 and 17 to 23 of
   Regulation (EEC) No 355/77 shall continue to apply to projects
   submitted by the date of entry into foroe of the Council Decision
   referred to in paragraph 1 , or as regards the fishery sector , by . . .
10JNOL 51 , 23.2.1977 , p.l .
 ---pagebreak---                                          78 -
4.      Operational pcogzamadB as referred to in Articles i az& 3 s-ay , as
        soon as this Kqg\iatian enters Into force , include j^asor-ss for
        itprcv±rg the HSTjesting end processdx^ of a^riaaitireal , forestry
        <a_OL fxsusry px*c iiici-i , provxdfeci tuey OG- pu.y with uu'-' y,"wi'S‘ -;: ot
        current provisions .
                                        Article 12
Article 1(3 ), Articles 6 to 6c and Article 7(2) of Regulation (EEC )
No 729/70 are hereby repealed .
                                        Article 13
This Regulation shall enter into force on 1 January 1989 .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                               For the Counci l
                                                                 The President