CELEX: 51982PC0485
Language: en
Date: 1982-10-08
Title: OPINION OF COMMISSION ON THE REVIEW OF THE EUROPEAN SOCIAL FUND#PROPOSAL FOR A COUNCIL REGULATION TO IMPLEMENT A COUNCIL DECISION ON THE TASKS OF THE RUOPEAN SOCIAL FUND#OPINION OF THE COMMISSION ON THE RULES OF THE COMMITTEE OF THE EUROPEAN SOCIAL FUND (presented from the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (82) 485
Vol. 1982/0162
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                             COM(82 ) 485 final
                                             Brussels , 8th October 1982
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  OPINION OF          COMMISSION ON THE REVIEW OF THE EUROPEAN SOCIAL FUND
                PROPOSAL  FOR A COUNCIL REGULATION TO IMPLEMENT
           A COUNCIL DECISION ON THE TASKS OF THE RUOPEAN SOCIAL FUND
                OPINION OF THE COMMISSION ON THE RULES OF    THE
                     COMMITTEE OF THE EUROPEAN SOCIAL FUND
              ( presented from the Commission to the Council )
  COM ( 82 ) 485 final
 ---pagebreak---                                         - 1 -
          Opinion of the Commission on the review of the European Social 'Fund
   1 .    Introduction
           General issues
   1.1 Article 11 of Council Decision 71 / 66/EEC 0 )» as amended, by Decision
          77/80l /SEC ( 2 ) provides for a review of the European Social Fund by
          the Council not later than 31 December 1982 .    If necessary , the Decision
          may be amended on the basis of an opinion of the Commission based on
          Article 126 of the Treaty .    The Commission considers that amendments
          are needed to enable the Fund to play a more forward-looking and creative;
          role in improving employment opportunities , taking account of changing
          features of labour market and vocational training systems within the
          Community and the development of Community employment policj' .    In this
          opinion the Commission suggests a nunber of changes tc the F\jnd and
          explains why it regards them as necessary .
1-2 The Commission has also drafted a new decision to replace 71 / 66 / EEC . Although ?" f;.
       parts of the existing decision should , in the Commission 's view , be retained i;,or ;
        less unchanged , other parts require substantial alteration and it is therefore
        procedurally simpler to consider a complete new decision than a series of amendr.;e
        to the existing one . This opinion and the draft basic decision should be consic'e-
        with the Commission 's proposal for a regulation to implement the new deoisico
        and with the draft for a new decision on the rules of the Social Fund Committee .
       Together these instruments would form the basis of the Fund after the reviewC3 ).
  ( 1 ) OJ no. L 28 of 4.2.1971 , p. 15
  ( 2 ) OJ no. L 337 of 27.12.1977 , p. 8
  ( 3 ) These proposals do not prejudice the work in progress following the response
         given by the Commission to the memorandum put forward by Greece , which has
         specific problems regarding its participation in the Fund as a result of its
         particular economic and social structure .
 ---pagebreak---                                      - 2 -
       Context of the review
1 .3  The specific action of the Social Fund, to improve employment oppor­
     tunities should be reviewed in the context of the recent development
     of Community employment policy ( 1 ) which has taken on a new urgent
     dimension given that there aire now over 10 500 000 unemployed, in the
     Community and. that there are still few signs of any recovery in the
     employment situation .  The Social Fund , through its support of labour
     uarket measures , should be used to complement and not to substitute
     for concerted action on a broader level to promote a recovery in
     employment–creating economic growth and to encourage a more equitable
     distribution of employment opportunities .
1 .4 The Social Fond should continue to play a role in support of corrective
     labour market measures such as those designed to reduce the mismatch
     between the demand and supply of manpower and to facilitate the employ­
     ment of disadvantaged groups ..  It should also continue to concentrate
     its resources in areas of greatest need , taking account of the psrsistently
     high level of unemployment in the less developed regions and in those
     areas now experiencing a marked decline of traditional industries which
     were a major source of employment .   The Social Fund will also need ,
     however , to adjust to the more recent emphasis given by the Comnunity
     to measures designed to stimulate the creation of new employment oppor­
     tunities , whether through wage subsidies , or training programmes in
     management skills or through the provision of specialised advice and
     counselling on setting up new economic activities .
1 .5 The Social Fund should be equipped to adapt to ana support the changing
     orientation of labour market measures which are likely to diversify
     further in response to the varying pace of technological change .and the
     specific potential for employment growth in different parts of the Community .
     The Fund must also be able to adapt to meet the new Labour market requirements
     which will arise after the next enlargement of the Community .
     (1 ) Council Resolution of 27.5-1982
                                                                              ./.
 ---pagebreak---                                           - 3 -
    Objectives of the review
1.6 The major objective of the review is to establish a c Loser coordination
    between the Fund and Community priorities in respect of employment and
    vocationa L training . Similarly , greater consistency must be sought between
    the Fund 's interventions and the economic , industrial and sectoral policies
    pursued by the Community . Finally , the review must enable more effective
    coordination between the Fund and the Community 's other financial instruments
    to be guaranteed .
    Thus the principal objectives of the review derive from analysis both of the
    employment situation and of the functioning of the current Fund and may be
    summarised as follows :
    - to provide support for the implementation of a training guarantee
       for all young people and to promote a dynamic response to the
       Problem of youth unemployment ;
    -  to adapt the Fund to enable it to stimulate investment in human
       resources and to encourage equality of opportunity for all workers ;
    - to enable the Fund to play a more active role 0n behalf of local initia­
       tives concerned with employment and to stimulate job creation , particularly
        in small and medium^sized undertakings , including cooperatives;'
       to take account of the consequences , both positive and negative , which
       the introduction of new technology may have on the level of employment ,
       and to contribute in particular to raising the standard of training to
       meet the requirements of the development of such technology;
    –  to improve and perfect the Fund 's mechanisms so as to allow it to
       have greater impact where unemployment problems are most acute ;
    – to increase the flexibility and efficiency of the Fund to enable ix
       to respond rapidly to the changing requirements of the labour market
       and in line with Community policies in the area of employment and
       vocational training ;
    – to develop the role of the Fund in supporting innovatory training
       and employment measures and their wider application within fceir.ber
       States and throughout the Community .
                                                                                ./.
 ---pagebreak---                                        - 4 -
2.  Structure of the Fund
2.1 The structure of the current Fund is complicated , comprising a division into
    two parts under Articles 4 and 5 of Decision 71 / 66 / EEC , together with sub­
    division into 9 separate fields of intervention plus the small section for pre­
    paratory studies and pilot scherries . This has proved somewhat        rigid .
                  Instead the Commission suggests that the Fund rules should in future
    define a broad range of eligible people and operations ; from within the eligible
    operations specific target groups and areas of the Community would be selected for
    a concentration of Fund aid . The selection would be made through a set of geo­
    graphical criteria in the statutes combined with priorities set out in. the
    Guidelines . The Guidelines would continue to be updated annually by the v Com­
    mission , after consultation with the Fund Committee , to ensure Fund support for th
    achievement of Community objectives in the area of training and employment
    policies .
2.2    In order to meet the requirements arising from the latest developments
       in the labour market and in employment policies , the Fund 's interventions
       will need to be concentrated in three distinct areas of activity :
       ( a) The first area comprises support for initiatives linked to the
             development of employment opportunities for people aged 18
             and over belonging to the working population , including vulnerable
             groups such as migrants and members of their families , and the
             disabled . The types of operation eligible for funding in this
             category would include practically all those eligible under the
             existing provisions of the Fund . These essentially concern
             training operations , but also include recruitment subsidies linked
             to job creation , integrated training and employment meASureb as part
             of the restructuring or conversion of undertakings related to
             the introduction of new technology , resettlement and integration
             measures , and job adjustment for disabled people . This area of
             Fund activity should also in future extend to support for specific
             operations designed to stimulate the creation of new employment
             opportunities through the development of advice and counselling
             facilities especially for those involved in setting up new
             economic activities or extending them .
 ---pagebreak---                                           - 5 -
2.2 (b) The second area of activity concerns support for the progressive
          extension of vocational training provisions in order to meet , in
          principle within a period of five years ( 1 )/ the needs of all young
          people under the age of 18 who have completed compulsory schooling .
          The objective would "be to contribute to the efforts by Member States
          to establish a coherent strategy on the social and vocational pre­
          paration of young people for adult and working life . Fund aid on
        " behalf of those under 18 would take the form of support to schemes
          combining training and work experience provisions ( 2). These schemes
          may be developed on the basis of existing systems of vocational
          training (whether or not they are specifically designed for unemployed
          young people ) for instance by extending apprenticeship training or by
          adapting existing wage subsidy schemes to incorporate an appropriate
          training component . The specific character of this type of Fund
          intervention , which is directly linked to the development of
          Community policy on vocational training ( 3 ) should not provide a
          precedent for a proliferation of other separate categories of
          intervention for particular groups of unemployed people to be "
          catered for under 6(a) above .
          ( 1 ) cf . Conclusions of the European Council of 29/ 30 March 1982 .
          ( 2 ) Council Resolution of 18.12 . 1979 on linked work and training
                for young people •
          ( 3 ) cf               Commission communication on the subject, C0MC82 )
                637 of 6.10.1982 .
 ---pagebreak---                                      - 6 -
2.2(c ) Finally as a thi rd area of activity , there is the funding of
        specific operations linked to the Community employment and vocational
        training policies and action programmes .    The aim here would be to
        enable the Fund to play a more active role in the development of
        innovatory policies throughout the Community .   More emphasis should
        in particular be placed on the comparative evaluation of demonstration
        projects , the exchange of experience and the dissemination of
        information for the benefit of both policy makers and practitioners .
        Such operations should be :
        - of Limited size and duration;
        - related to particular aspects of employment policy and vocational
            training ;      and
        - of potential interest to other Member States .
        For example , the launching of a group of projects within the framework
        of the action programme recently approved by the Council ( 1 ) on behalf
        of disabled people would come under this heading as would the action
        projects proposed in the Commission Communication on training and new
        technology ( 2 ) .
        Equally , as a part of this area of activity the Fund should continue
        to support innovative projects and experimental or pilot schemes in
        preparation for full-scale programmes which may in turn become the
        subject of applications for Fund aid .
        Similarly , the Fund should continue its action under this heading in
        support of experimental and pilot schemes of training for development
        which help those responsible in a local community to design and carry
        out projects introducing new economic activities or revitalising
        existing activities .
        (1 )  OJ No C 347 of 31 . 12.1981 .
         (2 )  COM ( 82 ) 296 final of 3.6.1982
 ---pagebreak--- The activities described in points 2.2(a ) and 2.2(b) above are those to be
carried out by Member States within national , regional or local manpower
programmes financed jointly by the Fund and specific public budgetary
provisions in Member States . The major part of the Fund 's resources must
           be allocated to the support of these activities , which should be
identified under two separate Articles within a single Chapter of the Budget .
The activities described in point 2.2(c ), which are different in nature and
origin from the other operations of the Fund , should come under a separate
Chapter in the Budget .
Although the majority of Member States' manpower policy measures under 2 .2 ( a ) and
 2.2(b) may be carried out by public bodies , and many of the experimental
projects under 2.2(c)may be undertaken by private organisations , it would
not be appropriate to establish separate criteria on this basis . . It is
therefore considered that no restrictions should be placed on the types
of bodies eligible for Fund support : both public and private bodies should
continue to be eligible , as at present .
Categories of people eli foible for Fond aid
In determining which categories of. people should be eligible for Fund aid ,
the starting point is ail those seeking employment and those groups
 known to be especially susceptible to unemployment .     Individuals *
employment prospects can be improved through vocational preparation , training
or retraining , through incentives to employers ( recruitment subsidies) and
through aids to geographical mobility . As a Community instrument , the Fund
has a particular responsibility to support the free movement of workers
between Member States and the integration of migrant workers within the
host country . The families of migrant workers should therefore also con­
tinue to be eligible for Fond aid .    It is therefore proposed that the
 ---pagebreak---                                       - 8 -
      following categories of people should continue to be eligible for Fund aid :
     – unemployed or under–employed people and those threatened with
     " unemployment ;
     – other people seeking employment such as women who wish to resume
        work , and disabled people capable of working in the open economy ;
     ~ people who change their place of residence in order to work in a
         Member State , together with members of their families .
3.2 In addition the following          categories should be specifically
     included amongst those eligible :
   . – young people under the age of 18 who have completed compulsory
        schooling ;
     - people who are employed in small and medium-sized undertakings and who
        require retraining owing to the introduction of new technology which
        substantially alters production or management techniques in those undertakings ;
     - people to be engaged in the following intermediary occupations on the
        labour market :  trainers ;  vocational guidance or placement experts ;
        development agents .
                                                                 •/.
 ---pagebreak---   Young people
 The change in eligibility as regards young people under 18 to include
 young people who are not necessarily registered job-seekers is necessary
 in order to enable the Fund to assist Member States more effectively
 in rationalising and developing existing training provisions for young
.people who have completed compulsory schooling , as mentioned in para 2.2(b )
 above . In the past , young people under 25 have been eligible for two
 types of assistance from the Fund : vocational training ( principally for
 first job-seekers) and for job creation through wage subsidies . However ,
 the Fund v:as specifically precluded from financing the initial training
 of young people immediately after the completion of compulsory schooling
 and therefore restricted its support to programmes specifically designed
 for those registered as unemployed .   By removing this Limitation, the
 Social Fund would be able to support efforts to make available a broad-based
 vocational training including work experience to all young people at the
 end of compulsory schooling .
 This provision would not detract from the support given by the Fund to
 measures on behalf of young job seekers aged between 18 and 25 . They
 would be eligible under the same conditions as at present and      would
  be catered for within the general area of Fund activity referred to under
  para 2.2(a ) above .
 ---pagebreak---                                     - 10 -
    Smalt and medium-sized undertakings
3.4 The Commission suggests a specific provision to enable the Fund to support
    the training or retraining of employees of small and medium-sized
    undertakings ( SMU ) which is made necessary by the introduction of new
    technology into production or management .    This provision would not
    affect the Fund 's capacity to intervene on behalf of employees in other
    firms when they find themselves threatened with unemployment as a result
    of changes in the employment situation , stemming for instance from
    technological developments .    There is nevertheless a two-fold justification
    for a particular emphasis on smaller-scale undertakings .     First , although
    these firms have considerable potential for industrial innovation , they
    often require extra incentives , particularly in the form of training
    provisions , to facilitate the adoption of new techniques and processes .
    But secondly , and more important in the context of employment within the
    Community , experience shows that small-scale firms have a considerable
    capacity for job creation .    In many areas small firms are stepping in to
    fill the gaps left by the closure of traditional large employers such as
    steel , textile and shipbuilding firms .  The diversity of small firms'
    activities provides a sound base for industrial restructuring by ensuring
    that areas are no longer heavily dependent on a single industry .
    Tra i ners
3.5 Hitherto the Fund has been able to support the training and employment
    of trainers only in so far as this was an integral part of programmes
    on behalf of specific categories of workers .   But an adequate supply
    of qualified training personnel is important both for the quality and
    quantity of training .   The Fund should therefore be able , in special
    cases , to assist programmes for the training of trainers which are not
    related to the subsequent training of particular workers but where there
    is a specific shortage of trainers , able , for instancy to combine
    teaching in business and technical skills .
 ---pagebreak---                                    - 11 -
    Vocational guidance and placement experts
3.6 The Commission proposes that , in cases of obvious need , the Fund should
    be able to assist with the training of experts of the vocational guidance
    and placement services .   In some parts of the Community , these services
    are not always sufficiently developed to ensure that the labour market
    functions really efficiently .   Adequate training for the experts involved
    is necessary if these services are to be improved and operate more effectively
    for instance in matching workers to jobs and filling vacancies .
    Development agents
3.7 The Commission sees a role for development agents , to stimulate job creation
    at local level particularly in small and medium-sized undertakings .   Managers
    of small firms have training needs which are usually much broader and less
    easily defined than purely vocational skills .   People starting small firms
    and cooperatives need advice on marketing , raising capital , accountancy and
    commercial and employment law .
    In most cases it would be sensible for such services to be provided at a
    local level , by development agents , so as to be best adapted to the needs
    of the small firms within a given area .   Hitherto the Fund has been able
    to support the training of such specialist advisers only on a limited scale ,
    where this resulted in a clear and necessary improvement in local- training
    structures .  The Commission considers that the availability of Fund
    aid for such agents should be increased because of their potential to
    generate employment .
3.8 Through the Guidelines the Commission would identify the circumstances
    in which the Fund could assist operations involving trainers , vocational
    guidance and placement experts , and development agents .   Priority would
    be given to operations designed to remedy clearly identified shortcomings
    in specific labour markets and to projects with a clear potential for
    job creation in areas of high unemployment .
 ---pagebreak---                                        - 12 -
 4.      Selection of applications for funding
4.1      At present the Fund 's rules provide for a substantial part of its assistance
         to be directed to those parts of the Community which are eligible for aid
         from the European Regional     Development Fund . In addition the Commission
         has established a list of regions of high youth unemployment and has given
         priority under the young people field of intervention to applications from
         those regions . However , the adoption of the Commission 's suggestion to
         abolish separate fields of intervention would necessitate a revised system
        of geographical priorities . The essential characteristics of such a
         system should be :
        - to concentrate Fund aid-, on . the parts of the Community where -it^is most
           needed, the level of need being established by an objective assessment
           both - of the level of unemployment and of the underlying economic resources
           of an area as indicated by its GDP per head;
        - to provide a method of allocating the Fund 's limited resources in the -
           most efficient and equitable manner .
4.2     To feet these requirements the Commission proposes to compile a new index
        to replace the existing criteria for geographical selectivity . This index
        would give an equal weight to the following four      components : GDP per head of
        population , overall unemployment , long-term unemployment and youth unemp loyment .
  The aim is to identify these components for smaller geographical units than
        those currently used for Community purposes . In practice this would mean
        moving from the large level II regions for which Community statistics
        are currently compiled and establishing a ranking of the Community 's level
        III regions ( 1 ). This ranking would be published in the Official Journal
        well before the annual closing date for the submission of applications
                                                                                ./.
  ( 1 ) The following are level III regions : Belgium - arrondi ssements :
        Denmark - amtskommune ; France - departements ; Ireland - planning regions ;
        Italy - provincie ; Netherlands - regio 's ; United Kingdom - counties .
        Level III has not been defined for Greece . For the purposes of the Fund
        it should be possible to use Arbeitsamtsbezi rke for Germany .
        The Grand Duchy of Luxembourg is considered as a level III region .
 ---pagebreak---                                         - 13 -
     to the Fund , so as to enable potential applicants to gaucje their chances
    of receiving Fund aid . The Council , acting on a proposal from the Com­
    mission , would designate the regions to be placed at the head of the
     list , i.e. the regions with the most acute problems . This
    provision is necessary to safeguard the position of regions which currently
    benefit from the Fund 's increased rate of intervention . The designation
    could be reviewed in the light of subsequent economic and labour market
    developments    and of new accessions to the Community .
4.3 in view of the need to ensure a more effective concentration of Fund
    resources in the area most affected by unemployment , the Commission
    attaches great importance to the improved collection of statistics to
    facilitate the compilation of an index based on smaller geographical units
    than the regions currently used . Until Member States make arrangements
    to supply the necessary information for level III regions , the Commission
    will use the best estimates derived from the available statistics . Never­
    theless , it is unlikely that such a refinement of the method of identifying
    areas will enable account to be taken of all those areas in the Community
    with employment problems justifying Fund intervention . The Commission
    therefore considers that it should retain the right to take any measures
    necessary in order to ensure that the Fund may continue to intervene , in
    exceptional cases , on behalf of clearly defined operations relating to
    local unemployment 'black spots' which , for the purposes of the statistics
    used to compile the index , are disguised by surrounding areas with less
    serious problems .
4.4 The proposed method , with its accent on the identification of smaller
    geographical areas , is intended to take account of the increase in
    structural unemployment in certain areas , as a result mainly of the rapid
    decline of large-scale laboui– intensive industries . The ERDF regions in
    which the Fund 's aid is at present largely concentrated are characterised
    by structural unemployment of long standing; by subdividing the large
    regions into smaller areas and introducing the element of overall unemployment ,
    which is far from being simply an indicator of the economic cycle , the Fund
    will become able to contribute to resolving certain problems which are not
    covered by the current regional priorities . The decline of important sectors
 ---pagebreak---                                               - 14 -
    of activity has had serious consequences even in               more prosperous parts
    of the Community which are now faced with the need to undertake major
    industrial restructuring where former principal activities are disappearing .
    The proposed index must enable the areas with the most serious employment
    problems to be identified and included amongst those able to benefit from
    Fund intervention .
4.5 The index would be used to classify applications on behalf of young people
    under 18 and for operations forming part of normal labour market policy
    ( cf . points 2.2 ( a ) and ( b ) above ) . The method of using the index would be as
    follows : the Commission would identify those schemes meeting the criteria
    for priority set out in the Guidelines for the management of the Fund . The
    commitments budget would then be distributed among the priority applications ,
    beginning with the regions at the head of the index and working down until
    the point was reached where the budget was exhaused . Such a system has the
    advantage of concentrating Fund aid where it is most needed , but also
    avoids a problem of the current Fund whereby there are often insufficient
    resources to meet all the applications in a given level of priority and
    Fund aid is spread thinly amongst all applications .
4.6 It is not    intended that the operations , studies and evaluations specified
    in point ( c ) of para      2.2     above should be subject to these regional
    criteria . The logic for Fund support for experimental and innovative schemes
    is different to that for more conventional labour market measures . Fund
    support for the former is designed to support small-scale action research and
    the development of innovative           approaches in employment and vocational trai­
    ning policy . The exchange of experience and the dissemination of information
    would be further developed in order to enable policy-makers throughout the
    Community to draw on the results of such projects . The considerations of
    concentration in those parts of the Community with the greatest employment
    problems would not therefore apply to these projects of limited number and
    size aimed at improving standards throughout the Community .
 ---pagebreak---                                       - 15 -
5 . Guidelines for the management of the Fund
   5.1   The Commission proposes that it should continue to draw up the
         Guidelines annually . These would contain qualitative criteria , to
         be used in combination with the regional index , and their regular
         revision would enable priorities to be adjusted to maintain close
         coordination with Community training and employment policies .
         They would also ensure that Fund interventions were consistent
        with other Community policies , such as those relating to industrial
         sectors . The Commission 's services would discuss the Guidelines in
        outline with each Member State before they are finalised by the
        Commission . The Guidelines would in practice serve two purposes : on
        the one hand they would contain general criteria reflecting broad
        policy and management objectives which would permit the identification
        and financing of operations to counteract the most serious imbalances
        in employment ; on the other hand they would contain very specific
        criteria reflecting certain more ambitious Community policies to
        enable exceptionally high quality operations to be identified which
        could then be moved up the index and considered for financing with a
        higher degree of priority than would otherwise have been the case .
        Although the latter provision would be intended to have only a limited
       impact on the classification of applications , it would provide an addi­
        tional means for the Fund to continue to support innovatory projects and
        certain operations ( e.g. those on behalf of migrant workers and women )
        which are traditionally located in areas of low priority .
        In applying the Guidelines the Commission will ensure that close
        coordination is maintained between the Fund and other Community
        financial instruments in order both to assure the optimum use of
        available resources and to avoid any risk of overlap .
 ---pagebreak---                              - 16 -
6 . Rates of intervention
6.1 Under the current rules , the Fund finances 50% of eligible expenditure
     in the case of operations by public authorities and bodies governed by
     public law .   In the case of private sponsors , the Fund contributes an
     amount equal to the share of expenditure borne by public authorities .
     In certain areas of the Community - currently the French overseas department ,
     Greece , Greenland , Ireland , the Mezzogiorno and Northern Ireland - the
     rate of intervention is increased by 10 per cent ( i.e. to 55 per cent
     of eligible costs ).   These rates of intervention by the Fund appear
     to be adequate and it is proposed that they would be retained for
     operations carried out in the two areas of activity described in
     paragraph 2.2 ( a ) and ( b ) above .  As regards the rate of intervention
     by public authorities , the Commission suggests the adoption of a more
     flexible approach :   instead of a matching contribution , it is proposed
     that public authorities should cover a minimum of 30 per cent of
     eligible costs , thereby ensuring that certain worthwhile projects
     with access to other sources of finance are not prevented from going
     ahead through lack of corresponding public finance .
6.2 One departure from the Fund rates of intervention proposed above will
     be necessary in respect of operations where the Fund 's contribution is
     to be made on the basis of flat rates rather than as a percentage
     of real costs .    In the first instance , it is proposed ( in the
     implementing Regulation) that flat rates should be applied in the
     case of employment aids .     Flat rates should be calculated in ECU
     and expressed as an amount per person per unit of time , ( as is
     currently the case for the ceiling rates for employment aids
     concerning young people).      The introduction of flat rates for other
     types of expenditure would bring considerable advantages in terms
     of administrative efficiency and simplicity both for Fund applicants
     and for the Fund 's management .      The opportunity for the Commission
     to submit further proposals to the Council in this respect is therefore
     provided for .
 ---pagebreak---                                      - 17 -
   6.3 As regards the operations and studies referred to under paragraph 2.2 ( c )
        above , there would be no requirement for a public contribution to such
        operations , as is presently the case for Fund pilot projects and studies .
        For the specific innovatory projects , it is proposed that the Fund 's
        normal rate of intervention ( 50 per cent and 55 per cent ) may be
        increased by up to 40 per cent ( i.e. 70 per cent and 77 per cent ).
        The intention of this change is to encourage innovatory experiences
        carried out by private bodies . As regards preparatory studies and
        evaluations , the Fund should continue, as at present , to be able to
        cover the entire cost , if necessary .
    Conclusions
7.  The changes proposed would remove existing statutory rigidities in the
    Fund and make it a more flexible instrument of Community employment
    policy. The establishment of a broad basis of eligibility would enable
    precise priorities for Community policies to be adapted and modified
    in response to the latest developments and policies affecting employment
    and vocational training *    The concentration of resources in structurally
    disadvantaged regions would be maintained and the Fund would continue to
    support vocational training , employment promotion and the geographical
    mobility of workers , wherever possible with a closer relationship to
    labour market needs .    Specific provision would be made to support new
    operations flowing from Community action programmes and to promote
    experimentation and innovation in labour market measures .
 ---pagebreak---                      Council Decision 82 /      / EEC of
                 on the tasks of the European Social Fund
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economic Community ,
 and in particular Article 126 thereof .
 Having regard to the opinion of the Commission ,
 Having regard to the opinion 'of the European Parliament ( 1 ),
 Having regard to the opinion of the Economic and Social Committee ( 2 ),
 Whereas Council Decision 71 / 66 / EEC of 1 February 1971 on the reform of the
 European Social Fund ( 3 ) as amended by Decision 77 / 801 / EEC ( 4 ) has been the
 subject of- a review of the basis on an opinion of the Commission as provided
 for in Article 11 of that Decision which it would be appropriate to replace
 by a new Council Decision establishing rules for the Fund ;
 Whereas the task of the Fund is to participate in particular in the financing
 of vocational training , employment promotion ar.d geographical mobility , it
 being understood that its action cannot contravene the Treaty provisions
   regarding State aids ;
Whereas in carrying out its tasks the Fund should assist in the implementation
of Community employment policies and should contribute in particular to the
social and vocational integration of young people and di sadvantaged workers , t
the adaptation of the workforce to labour market developments and technolog i a
change , to the promotion of new employment opportunities and to the
reduction of regional imbalances ;
Whereas the means should be provided to finance operations which arc concerned
with specific aspects of Community action programmes in the area of employment
policy and vocational training and which aim at promoting innovatory policy
in areas of common interest to Member States ;
( 1 ) OJ No . L28 of 4.2.1971 p. 15
( 2 ) OJ No . L337 of 27.12.1977 p. 8
( 3 ) OJ No . L 28 of 4.2.1971 , p. 15
( 4 ) OJ No . L. 337 of 27.12.1977 , p. 8
 ---pagebreak---                             - 2 -
                                                                     (
Whereas to enable the Fund to become a more active instrument in support
of job creation policies , the range of people eligible for assistance
should be enlarged so as to extend the possibility of support to those
working as trainers , vocational guidance or placement experts , and
development agents ;
Whereas in order to develop employment the Fund must take a particular
effort on behalf of small and. medium–sized undertakings modernising thair
management or production techniques on the "basis of new technology
Whereas it is appropriate on the one hand to maintain an increased rate of
Fund intervention for operations to further employment in the most
disadvantaged regions of the Community , and on the other to provide
increased assistance for operations of particular significance for the
development of Community policies ;
Whereas in order to simplify the procedures of granting   Fund assistance ,
flat rates should be established in ECU for the whole of the Community
in respect of certain types of expenditure ;
Whereas the Fund 's support for operations carried out in Member States
within the framework of their labour market policies must be concentrated
where there are the greatest imbalances in employment ;
Whereas the Commission shall be responsible for drawing up the guidelines for
the management of the Fund so as to ensure a more effective concentration
on operations in accordance with Community priorities and with related
action programmes in the area of employment or vocational training :
HAS ADOPTED THIS DECISION
 ---pagebreak---                               Article 1
1 . The Fund shall assist in the implementation of policies designed
to equip the workforce with skills required for stable employment and
to generate employment opportunities . It shall in particular contribute
to the social and vocational integration of young people and disadvantaged
workers , to the adaptation of the workforce to labour market developments
and to technological change and to the reduction of regional imbalances .
2 . The Fund shall participate in the financing of operations concerning
( a ) vocational training and guidance
( b ) recruitment and wage subsidies
( c ) re .'settlement and social integration in connection with geographical mobil
( d ) technical services and advice on employment creation .
                              Article 2
Fund assistance shall be given for operations carried out both by public
bodies and by individuals or entities governed by private law . The
relevanl Member States shall guarantee the successful completion of the
operat ions .
                              Article 3
1 . Fund assistance may be granted for operations carried out in Member
States within the framework of their training and labour market policies .
These operations shall include those concerned with the extension of
training provision for young people immediately after their completion
of compulsory schooling .
 ---pagebreak--- 2 . Fund assistance may also be granted for specific operations ,
preparatory studies or evaluations intended to
( a ) facilitate the launching of innovatory operations , notably in the
      application of a Community programme or
(b )  test new methods or
( c ) promote the dissemination of experience .
                             Article 4
1 . Fund assistance may be granted on behalf of all people seeking work and
particularly on behalf of :
( a ) unemployed people , those who are threatened with unemployment or
      who are underemployed ;
( b ) young - people under the age of 18 years who have completed compulsory
      schooling ;
( c ) women who wish to return to work ;
( d ) disabled      people who are capable of working in the open labour
      Market .
2 . Fund assistance may also be granted on behalf of :
( a) people who are employed in Mall and medium-sized undertakings and who
       require retraining owing to the introduction of new technology which
       substantially alters   production   or management techniques in those
      tfidertakings ;
( b ) ptople to be engaged as trainers , vocational guidance or placement
      experts , or development agents ;
( c ) people who move to take up work in a Member State , together
      with aenbers of their families .
                             Article 5
 1 « Fund assistance shall be granted at the rate of fifty percent of el <3 1 1 1
expenditure .
 ---pagebreak---                                   - 5 -
                                                                                 u
 2 . In the case of operations to further employment in regions where there is an
      especially serious and prolonged imbalance in employment , such regions
      to be defined by the Council , acting by a qualified majority on a
      proposal from the Commission , Fund assistance shall be increased by
      ten percent .
 3 . In the case of operations under Article 3 paragraph 2 , assistance shall
      be increased by forty percent . Assistance for the preparatory
      studies or evaluations specified in Article 3 , paragraph 2 , may cover
      the total eligible expenditure .
 A. In the case of operations under Article 3 , paragraph 1 , the financial
      contribution of Member States' public authorities shall be equal to
      at least thirty percent of eligible expenditure .
 5 . For the types of expenditure , laid down by the Council , acting by a
      qualified majority on a proposal from the Commission , Fund assistance
      shall be calculated on the basis of flat rates established    for the Community
      as a whole in ECU per person and per unit of time for each type of expenditure .
 6 . Fund assistance shall not result in financing in excess of actual expenditure .
                                Article 6
1 . Fund assistance shall be granted, until the budget is exhausted, to operations
     to further employment in regions with the greatest imbalances in employment .
2 . In order to implement paragraph 1 above the Commission shall , before 1 May
     of each year , draw up a list classifying the regions of the Community , at
     the lowest level permitted by Community statistics , taking account both of
    economic capacity and of the employment situation as these are reflected in
    overall employment , in long-term structural unemployment and in youth unemploy­
    ment . The Commission shall publish the list in the Official Journal of the
    European Communities . The Council , acting by a qualified majority on a proposal
    from the Commission , may determine the regions to appear at the head of that
     list .
                                                                             ./.
 ---pagebreak---                                                                                       1
                                            - 6 -
3 . The Commission may exceptionally also grant aid from the Fund for operations to
      further employment    in         areas for which the competent authority in
      the Member State has identified an unemployment rate equal to not less
      than three times the national average, irrespective of the classification
     on the list , provided for in paragraph 2 , of the regions in which these
     areas are located .
4 . These provisions shall not apply to the assistance specified in Article 3 ,
     paragraph 2 .
                                        Article 7
   1 . The Commission shall adopt , before 1 May of each year and for the three
        following financial years , the guidelines for the management of the Fund
        which shall determine those operations to be given priority in accordance
        with Community policies and in particular with action programmes in the
        area of employment or vocational training .
    2 . The Commission shall inform the European Parliament and the Council of the
        Guidelines and shall publish them in the Official Journal of the Europecin
        Cornmuni ties .
                                        Article 8
        The assistance provided for in Article 125 of the Treaty shall no longer
        be granted .
                                        Article 9
   1 . This decision shall be published in the Official Journal of the European
        Communities and shall enter into force on 1 January 1983 .
   2 . The Decision 71 / 66 / EEC , as amervded by Decision 77/ 801 / EEC , is hereby
        repealed . However , that Decision and the Decisions taken by virtue of
        Article 4 cf that Decision , shall remain in force in respect of operations
        for which       applications are submitted before 1 April 1983 .
                                                  Done in Brussels on
                                                  for the Council
 ---pagebreak---              Proposa l
for a Council Regulation to implement
Council Decision 82 /  / EEC on the
tasks of the European Social Fund
 ---pagebreak---                         Proposal for a Council Regulation to implement
                        Council Decision 82 /   / EEC on the tasks of the
                        European Social Fund - Explanatory Memorandum
    Introduct ion
1 . In its opinion on the review of the Social Fund , together with the accompanying
    draft for the basic decision on the Fund 's tasks /                     the Commission
    has set out its general policy obj ect i ves for the Fund . In its proposal for a
    regulation to implement that decision the Commission has concentrated on the
    major administrative provisions which have a direct bearing on the financial
    shape of Fund interventions . . Such further administrative arrangements as may
    be necessary are of less significance and may be dealt with by means of
    Commission decisions . The proposed regulation is intended to replace Council
    Regulation ( EEC ) No . 2396 / 71 C1 ) as amended by Regulation ( EEC ) No . 2893 / 77 ( 2 )
    and Council Regulation ( EEC ) Mo . 858 / 72 ( 3 ) as amended by Regulation ( EEC )
    No . 2894 / 77   ( 4 ).
                                       Article 1
2 . The first Article deals with the types of expenditure eligible for Fund
    assistance and corresponds to Article 3 of Regulation 2396 / 71 as amended .
    The Commission proposes a simplification and rationalisation of the eligible
    expenditure under the Fund 's current rules .        All the main forms of eligible
    expenditure under the existing rules are maintained but in revised forms .
    Certain minor categories of expenditure which have either not been implemented
    or which have seldom been used are abolished . All expenditure which is not
    specifically declared eligible by this Article is by implication ineligible .
3 . The most important types of expenditure , in volume terms , are those in
    respect of vocational training . They are available for all the categories
    of people eligible for Fund support and are divided into ( a ) trainees'
    incomes and ( b ) all other costs involved in running training courses ,
    including depreciation costs of buildings and equipment and , in the case
    of the vocational integration of disabled people , the cost of adapting
    jobs .
     ( 1 ) OJ No . L 249 of 10.11.1971 , p. 54
     ( 2 ) OJ No . L 337 of 27.12.1977 , p. 1
     ( 3 ) OJ No . L 101 of 28.4.1972 , p. 3
     ( 4 ) OJ No . L 337 of 27.12.19 77 , p. 5
 ---pagebreak--- The present Fund has three main "types of employment aid : one for
newly-engaged workers in the regions eligible for assistance from
the Regional Development Fund ( Article 3(l)(e ) of Reg . 2396/7*0 an<i
two for young people under Council Regulation ( EEC) No . 3039/78 of
18 December 1 978 ( 5 ). These are replaced by three new types of aid ,
one for recruitment premiums for people aged 18 and over ; one for the
employment of those out of work for more than twelve months on projects
for the creation -of additional jobs which fulfil a public need ; and one
for assisting in the remuneration of development agents .      All three
would be limited to a maximum period of twelve months per person
benefitting from Fund aid .
The recruitment premiums for people aged 18 and over are similar to the
two types of aid currently available to promote the recruitment of young
people under 25 and of workers in regions with a serious and prolonged
imbalance in employment ( ERDF regions ). In future a single form of
recruitment premium would be available .     Far from being an operating subsidy ,
such assistance should continue to be used to encourage the selective granting
of recruitment premiums : assistance would effectively be reserved for young
people aged between 18 and 25 , women , disabled people and those unemployed
for over six months .   As at present , recruitment should be into newly created
jobs likely to enable workers to improve their vocational qualifications
through additional training and work experience .     The Commission should
continue to include precise priorities in the Guidelines for the management
of the Fund for the use of recruitment premiums .
 The aid for employment on projects of social benefit is similar to the
 other type of aid for young people under the existing rules .      However ,
 the Commission believes that such aid should be sade available to adult
 workers as weJl as young people , but only for those who have been unemployed
 for more than 12 months . This restriction
 is necessary to ensure that such projects do not absorb an exaggerated
 share of the Fund 's resources .   This type of aid is intended to help those
 who are difficult to place in employment because they have been unemployed
 for a long period .
( 5) OJ Ko . L 361 oi' 23.12.1978 , p. 3
 ---pagebreak---                                                - 3 -                                      7
7 . The proposed income support for development agents follows from the
    suggested extension of eligibility to include them (c f . article 4(f ) of
    the Commission 's draft basic decision). The intention is to assist the
    first twelve months of programmes to create jobs through the stimulation,
    development and counselling particularly of small firms and cooperatives]
8 . Finally the Article provides for expenditure on the social and vocational
     integration of migrant workers and their families, and on the operation
    of studies and pilot projects,, to be eligible for Fund support . This is
    a continuation of the existing position and derives from the categories
    of people and types of operation defined as eligible in the draft basic
    decision .
                                          Article 2
9 . This . Article contains provisions relating to flat-rate payments .
    Article 5 ( 5 ) of the draft basic decision enables the Council , acting
    on a Commission proposal , to determine certain types of expenditure
    for which the Fund will pay a fixed amount , rather than 50% of the real
    cost . The purpose of flat-rate payments is to simplify the financial
    aspect s' of applications andofpayments,both for applicants them se Ives and for the
     fund . The maxi mum s i nip li f i cation would be achieved by adopt ing flat rates for
    all types of expenditure . However , analysis of existing Fund applications
    shows very large variations in the different types of expenditure . The
    immediate application of the flat-rate system would therefore result
    in anomalous and arbitrary levels of Fund support for some applications .
    Accordingly the Commission proposes that the flat-rate system should be
    applied initially to expenditure relating to employment aids ( Article 1
    ( c ) of the proposed regulation ).
 ---pagebreak---   A            safeguard is provided by Article 5 ( 4 ) of the Commission 's draft
  basic decision . This provides that for operations w.ithin the framework           of
  Member States' manpower . policies , whether carried out by public or private bodi£
  the public authority contribution must equal at least 30% of the total eligible
  expenditure . In addition Article 5 (6 ) of the draft decision provides that the
  Fund 's contribution must not leadto funding in excess of the real cost of an operation
 Thi s means that it may in some c i rcumstarices be necessary to reduce t he amount pa i d
 by the Fund - whether this amount is a flat rate or 50% of forecast
 eligible expenditure - in order to avoid over-funding .
Paragraph .2 of Article 2 sets out the method of calculating the flat-rate
amounts .   For the expenditure to be covered by a flat         rate , the
average expenditure borne by the Fund per person per day or week will be
calculated from all the applications submitted to the Fund during the most
recent financial year for which results are available preceding the commence­
ment of the regulation .            The flat rates would therefore be averages ,
expressed in ECU , of the share of costs which is met by the fund across
the whole of the Community ; they would be updated annually in line with
the change in the cost of living averaged across the Community as a whole .
Paragraph 3 provides for a 50% increase in the flat rates for
 recruitment premiums .    The objective of this provision is to provide
 increased incentives for operations on behalf of groups of people
 of particular priority .
 ---pagebreak---                                      - 5 -
                                   Article 3
13 . This Article provides for the regions which under the current rules benefit
     from the increased rate of Fund intervention to continue to do so and for
     them to be placed ex aequo at the head of the list of priority regions .
     This provision , intended to replace the Fund 's existing geographical selection
     criteria ,              is made by virtue of Articles 5 ( 2 ) and 6 ( 2 ) of the
     draft basic decision which enable the Council , acting by a qualified
     majority on a proposal from the Commission , to determine the regions to
     benefit from the increased rate of intervention ( 55% instead of 50% ) and
     to be placed at the head of the list of priority regions . The accelerated
     depreciation of recently established training centres is maintained for these
     regions .
14 . It is intended that the designation of Greece , Greenland , the French over­
     seas departments , Ireland , the Mezzogiorno and Northern Ireland as heading
     the priority ranking of regions should remain in force until such time as
     changes in the economic and employment situation in the Community justify
     a review of this provision , on the basis of a oroposal from the Commission .
                                  Article 4
15 . This Article is concerned with procedures for the submission of applications
     for assistance . Paragraph 1 provides that , in order to be considered ,
     applications for operations taking place within the framework of -national
     manpower policies ( i.e. those covered by Article 3 ( 1 ) of the draft basic
     decision ) must be submitted by Member States before 1 September of the year
     preceding that during which the operations take place . At present appli­
     cations are submitted in two batches and this has le d to delays in the
     Commission 's decision approving or refusing assistance . The Commission
     cannot judge the relationship between applications and budget until
     examination of the second batch has been completed . This means that decisions
     on many first batch applications must be delayed until the final budget
     position is known , at which point the Commission can decide which levels
     of priority can be financed and to what extent . As a result of this
     inevitable delay , the Commission 's decision on some applications cannot
     be taken until several months after the scheduled start date .
                                                                                 ./.
 ---pagebreak---                                     - 6 -
16. In order to ensure that applicants receive a decision as quickly as          ^J
      possible , and in many cases before their operations are due to begin ,
      the Commission proposes that all applications should be submitted     in one batch
         during       the year preceding the start of schemes . This would enable all
      applications to be considered simultaneously , thereby avoiding the problem
      of the second batch . The advance of the submission date by some 7 weeks ,
      together with administrative improvements , notably through the adoption
      of flat rates for some forms of expenditure and through increasing
      computerisation of applications by Member States and the Commission , would
      enable the Commission to take its decision by 31 January , provided that
      the Community budget , including the Social Fund budget , has been finalised
      by 1 January . If the budget is finalised after that date , the Commission
      will decide within 30 days of the announcement of the affinitive, budget .
17 . The above timing is not intended to apply to the innovatory operations
      or preparatory studies or evaluations cited in Article 3 ( 2 ) of the
      draft decision . Paragraph 3 of Article 4 of the Commission 's proposed
      regulation would enable the Commission to adopt the necessary administrative
      arrangements for such schemes . These arrangements would be designed to
      take account of the needs of promoters of small , experimental projects and
      should be more flexible than the provisions in respect of established
     labour market measures . The paragraph also enables the Commission to mske
     arrangements to consider applications of a particularly urgent nature . The
     object of this provision is to enable the Fund to support operations which
     conform to the criteria of eligibility and priority in the ordinary way ,
     but "for which applications could not have been submitted by the normal
     deadline . Such applications may be submitted when a sudden emergency occurs
     which threatens the level of employment in an area , for example , a decision
     to close a large factory .
                               Article 5
 18 . Article 5 of the proposed regulation makes provisions relating to
       advance and final payments . Paragraph 1 provides that the approval
       of an application under Article 3(1 ) of the draft decision ( operations
       within the framework of national manpower policies) will automatically
       be followed by the payment of an advance of 60% of the amount approved .
       Paragraph 2 provides that for applications under Article 3(2 ) of the
       draft decision ( pilot projects , studies and evaluations ) the
       Commission 's approval will automatically be followed by an advance of
       40% of the total aid committed , even where operations are due to last
       for more than one year , with a further advance of 40% payable when
 ---pagebreak---                                       - 7 -
     the Member State concerned certifies that half of the operation has
     been completed . For both types of operation the balance is payable
     when the operations have been completed and a full report on their
     content and financial aspects has been submitted .
19 . These arrangements for advance payments represent a change to the
     existing system whereby , at the request of the promoter and Member
     State concerned , annual advances of 30% may be paid when an operation
     has begun , followed by a further advance of up to 30% when the Member
     State certifies that the planned activities for the year in question
     are half completed .   The proposed changes to this system are intended
     both to simplify and reduce the administrative burden on the Fund ,
     Member States and applicants , and to overcome the cash flow difficulties
     which some applicants, notably those running pilot projects etc ., have
     encountered because of the delay in receiving a large proportion of
     the aid committed .
20 . Such a system of automatic advances may lead to a slight increase in
     the risk of overpayments from the Fund which must subsequently be
     recovered .  However , there are two safeguards in Article 6 ( described
     below ):  the new requirement for unwarranted payments to be repaid with
     interest , and the fact that Member States have subsidiary responsibility
     for sums owed to the Fund .   These safeguards are an essential precondition
     for the improved system of advance payments .
21 . Paragraph 4 provides for the Commission to make payments directly to
     those with financial responsibility for operations .    At present
     many payments are made via national authorities and this can delay
     the receipt by applicants of Fund assistance .    The Commission therefore
     proposes that it should in future make payments directly to beneficiaries
     but should continue to notify Member States of all payments made as
     at present .
 ---pagebreak---                                        - 8 -
                                       Article 6
22 . This Article deals with cases where the Fund 's assistance is not used in
     accordance with the conditions laid down in the Commission 's decision . Para­
     graph 1 provides that in these circumstances the Commission may suspend ,
     reduce or withdraw Fund assistance , after having given the relevant Member
     State an opportunity to comment . This provision repeats that in the
     existing rules ( Regulation 858 / 72 as amended . Article 4 ( 3 ).
23 . Paragraph 2 provides that where payments have been made which are
     subsequently shown not to have been i-.arranted , because operations have not
     been carried out to the extent or in accordance with the conditions         laid
     down in the decision approving Fund assistance , the amounts involved must
     be repaid with interest calculated according to the bank rate obtai n ",n S
     in the Member State concerned at the time of the unwarranted payment . This
     sanction is necessary to ensure the prompt restitution by applicants of
     Fund assistance which they no longer intend to use , since without such a
     provision advance payments which are not used for the purpose intended
     could become a form of soft loan to applicants . Under the existing rules ,
     which do not contain such a provision , a significant proportion of Fund
     assistance is not taken up by applicants and in some cases advances must
     be partly repaid . If restitutions are not made by the end of the year
     following that to which the decision granting Fund assistance applies , then
     those resources are lost . If , on the other hand , restitutions are made
     quickly , they can be used to 'finance projects which would otherwise have
     to be refused .
24 . Paragraph 2 also maintains the provisions of the existing rules ( in
     Article 4 ( 3 ) of Council Regulation ( EEC ) No . 858 / 72 as amended ) whereby
     Member States have secondary liability for sums owed to the Community .
     Where a Member State repays to the Community an amount owed by an applicant ,
     the rights of the Community in the matter are transferred to the Member
     State . In other words , where an applicant has received an unwarranted payment
     from the Fund and the Commission has not been able to secure its return ,
                                                                                     -/.
 ---pagebreak---                                    - 9 -
     the Commission may require the Member State to pay the amount owed .
     When the Member State has done so , it acquires        the right to proceed
     against the applicant in question to recover the amount which it has
     repaid on the applicant 's behalf .
                                 Articls 7
25 . This Article is concerned with checks to be carried out on operations
     and payment claims . The main purpose of the Article is to maintain the
     existing provisions ( in Article 5 of Regulation 858 / 72 as amended ) which
     empower the Commission 's representatives to go wherever necessary and to
     have access to all materials and documents relating to applications in
     order to check the accuracy of applications and payment claims . Two
     new provisions are contained in paragraph 2 , which enables checks to
     be made by sampling , and paragraph 5 , which enables the Commission to
     request officials of the Member State to carry out checks , accompanied
     by Commission officials where appropriate . Paragraph 2 gives legal
     backing to a practice which occurs under the present rules with the
     consent of some Member States-and applicants . Sampling is the most
     efficient method checking claims where , for example , not all participants
     in a programme are eligible for Fund aid and the ratio of eligible to non-
     eligible must be verified . A random sample of all participants can be
     examined for eligibility and the resulting percentages applied to the
     whole claim .
26 . Since Member States themselves have a responsibility to verify appli­
     cations and payment claims , it may on occasions be appropriate for the
     Commission to entrust the verification of details to Member States , thereby-
     reducing administrative effort and avoiding duplication . Paragraph 5
     provides the necessary legal basis for such a division of responsibility .
                                 Article 8
27 . This Article maintains the existing requirement for the Commission to
     present a report to the Parliament and Council before 1 July of each
 ---pagebreak---                                   - 10 -
     year on the activities of the Fund during its preceding financial
     year .
                                  Article 9
28 .   This Article empowers the Commission to adopt administrative arrangements
     necessary both for the implementation of the proposed regulation and for
     all the subsequent management functions of the Fund .
                                  Article 10
29 . The final Article provides for commencement on 1 January 1983 and repeals
     the regulations which it replaces ( Nos . 2396 / 71 as amended and 858 / 72
     as amended ) while providing that these regulations shall remain in force
      in respect of applications submitted before 1 April 1983 . This transi­
     tional period is necessary because Fund applicants will have prepared
     their applications for 1983 on the basis of the existing rules .
30 . Paragraph 3 of this Article contains a technical provision to enable
     the Commission to re-approve under the new rules any applications
     previously approved which continue into the period where applications
     are dealt with under the new rules . The purpose of this provision is
     to ensure that the Fund does not have to apply simultaneously two
     different sets of rules and procedures , eg in respect of final payment
     claims . Applications already approved would continue to be funded
     for the period laid down in tne Commission 's original decision but
     would be subject to the provisions of the new rules on payment forms ,
     method o f presentation and verification of expenditure , flat rate
     payments etc .
 ---pagebreak---                                Proposal
                Council Regulation ( EEC ) No „          / 82
                      of                            1982
      concerning the implementation of Council Decision 82 /       / EEC
      on the tasks               of the European Social Fund
THE COUNCIL OF THE EUROPEAN COMMUNITIES
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 127 thereof .
Having regard to Council Decision 82 /          / EEC of      1982 on the tasks
                of the European Social Fund ( 1 ),
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ( 2 ),
Having regard to the opinion of the Economic and Social Committee ( 3 ),
Whereas the types of expenditure which may be the subject of Fund assistance
snould be defined ;
Whereas for the types of expenditure for which Fund assistance is granted by
flat rates , the method of calculating those flat rates must be determined;
Whereas the regions of the Community which are economically and socially rr.ost
disadvantaged must oe placed at the head of the list provided for in Article 6,
paragraph 2 of the Decision 82 /        / EEC ;
Whereas it is appropriate to determine the methods of submitting and approving
applications relating to operations carried out in Member States within tne
framework of their labour market policies ;
Whereas it is appropriate to determine the methods of checking and making
payments in respect of approved operations ;
Whereas when payments are made which are not warranted, the original sum must
be repaid with interest ;
(1)
 C2 )
 ---pagebreak---    HAS ADOPi'ED THIS REGULATION j
                                  Article 1
   Assistance may be granted from the Fund for expenditure in respect of :
   a) incomes of trainees ;
  b ) the costs of
       – the preparation , operation and administration of tra-ining courses ,
          including the cost of the training of teaching staff and of depreciation
       – tramees' accommodation ,
       – in the case of vocational integration of the disabled , the adaptation
          of workplaces ;
   c ) the granting for a period not exceeding twelve months of
       - premiums for the recruitment of young people aged 18 to 25 , women,
          disabled people and those unemployed for over six months, in newly
          created jobs which will enable the workers concerned to improve their
         skills through further training and work experience , or
      – assistance towards the wage costs of those who , having "been out
         of work for more than twelve months , are engaged on projects for
        the creation of additional jobs which fulfil a public need , or •
      – assistance towards the remuneration of development agents *
 d) benefits designed to assist the integration into new social and
      vocational environments of people who move to take up work in a
      Member State and of members of their families ;
 e) carrying out preparatory or e\raluation operations or studies .
                                    Article 2
 * jnd assistance shall be granted in flat rates for the expenditure
 specified in Article 1 ( c ) .
Tne fiat rates snail "be equal to the average of the costs met by
the Fund across the whole Community in respect of each relevant
type of expenditure during the latest financial year for which
results are available preceding the entry into force of this
regulation . They shall be revised in line with the change in
the cost of living .
 ---pagebreak---                                          - 3 -
3 . The flat rates for recruitment premiums regarding the categories
     of people specified in Article 1(c ) first indent , shall be
     increased by fifty per cent .
4 . Before 1 May of each year , the Commission shall determine the levels of
     the flat rates for the following financial year and shall publish them
     in the Official Journal of the European Communities .
                                 Art i c le 3
1 . Operations to further employment in the French overseas departments ,
     Greece , Greenland , Ireland , the Mezzogiorno and Northern Ireland shall
     benefit from the increased rate of assistance provided for in Article 5 ,
     paragraph 2 of Decision 82 /              / EEC .
2 . In the application of Article 1(b) first indent , the depreciation of
     training centres established in the regions specified in paragraph 1 may
     be calculated over a period of six years , in so far as such a method of deprecia
     tion i s compatible w it h that i n force in the Member State concerned .
     In such a case , the allowance for depreciation shall be considered fully
     provided for at the end of the sixth year after the establishment of a centre .
3 . The regions specified in paragraph 1 shall appear at the head of the List
     provided for in Article 6 of Decision 82 /              / EEC .
                                 Article 4
 1 . Applications relating to expenditure during the following year or , in the
     case of operations lasting more than one year ,                 years , on measures
     specified in Article 3 , paragraph 1 , of Decision 82 /                / EEC must , in order
     to be taken into consideration , be submitted by Member States before
     1 September of each year .
2 . The Commission shall take decisions on these applications before 31 January
     of the relevant financial year .          If the date of adoption of the budget
     for that financial year is               after 1 January , the Commission shall
     take its decisions within thirty days of that date .
3 . The Corafflission shall draw up the arrangements for the procedure to be
     followed in the case of applications submitted under Article 3 ,
     paragraph 2 of the Decision 82 /             / EEC and of applications of an urgent
     nature .
 ---pagebreak---                                  - A -
                              Article 5
1 . The approval of an application submitted under Article 3 , paragraph 1
    of Decision 82 /       / EEC shall be followed by the payment of an advance
    of sixty percent of the assistance approved .
2 . The approval of an application submitted under Article 3 , paragraph 2
    of Decision 82 /          / EEC , even if the application concerns an operation
     lasting , for more than one year , shall be followed by the payment of a
    first advance of an amount equal to forty percent of the assistance granted ™
    A second advance , not exceeding forty percent , may be paid when
    the Member State concerned certifies that the first half of the operation
     has been completed in accordance with the conditions set out in the decision .
3 „ Final payment claims shall contain a detailed report on the content ,
    results and financial aspects of the relevant operation .       The Member State
    shall certify the accuracy of the facts and accounts in payment claims .
                                               ι
4 . The Commission shall make payments to those with financial responsibility
    for operations .    It shall inform the relevant Member State of all payments
    made .
                                Article 6
1 . When Fund . assistance is not used in conformity with the conditions set out
    in the decision of approval , the Commission may suspend , reduce or withdraw
    the aid after having given the relevant Member State an opportunity to
    comment .
2 . Sums paid which are not used in accordance with the conditions laid down in
    the decision of approval must - be repaid together with interest, calculated
    according to the bank discount rate obtaining in the relevant Member State
    on the day on which the unwarranted payment was made .       The relevant Member
    State has secondary liability for the sums to be repaid ; to the extent that
    a Member State repays to the Community sums owed by the body financially
    responsible for an operation , the Community 's rights in the matter are
    transferred to the Member State .
 ---pagebreak---                                 Article 7
  1 . The Commission may make checks wherever applications and payment claims
      are drawn up and wherever operations for which assistance is granted are
      carried out and administered .
  2 . Checks on the content of a payment claim may be made by samp ! ing .
      Before making a check the Commission shall determine in advance the
      sample size with reference to the physical and technical aspects of the
      operation concerned . To the extent that a sample leads to a reduction , this
      shall be appl ied proportionally to the whole of the amount claimed .
  3. The Commission shall have access to all sources of information necessary
      to enable it to appraise both the aims and content of applications and of
      claims , and the progress , financing and results of operations .   Member
      States shall make available to the Commission the material justifying
      the certification specified in Article 5 , paragraphs 2 and 3 .
  4 . The relevant Member State shall provide the Commission with any assistance
      necessary to carry out checks .     The Commission shall give the Member State
      due notice of checks .  Representatives of the Member State may participate
      in such checks .
  5 . At the request of the Commission and with the agreement of the relevant
      Member State , checks may be carried out by the co.npecent authorities of
      the State .  Representatives of the Commission may participate in such check
                                  Art i cle 8
. The Commission shall present to the European Parliament and to the Council
  before 1 July of each year a report on the activities of the Fund during the
  preceding financial year .
                                  Article 9
  The Commission shall draw up the necessary arrangements for the implementation
  of this regulation .
 ---pagebreak---                                           - 6 -
                                      Article 10                                           4
1 « This Regulation comes into force on 1 January 1983 ,
2m The regulations ( EEC ) No , 2396 / 71 , as amended by the regulation ( EEC )
       No . 2893 / 77 ( 4 ), No * 2895 / 77 ( 5 ) and No « 858 / 72 , as amended by regulation
       ( EEC ) No . 2894 / 77 ( 6 ), are hereby repealed .       However , they shall remain in
       force for operations for which applications are submitted before 1 April
       1983 .
3 . In order to ensure equal treatment of all operations carried out with
       assistance from the Fund , when the first decision on applications is taken
       under this regulation , the decisions previously taken concerning operations
       to be carried out after 31 December 1983 shall be the subject of a new
       Commission decision .
      This Regulation shall be binding in its entirety and directly applicable
      in all Member States .
                                                          Done at Brussels ,
                                                          For the Council
 ( 4 ) OJ No L 249 , 10.11 . 1971 , p . 54 and L 337 , 27.12.1977 , p.1 .
 ( 5 ) 0J No L 337 , 27.12.1977 , p. 7 .
 ( 6 ) 0J No L 101 , 28.04.1972 , p. 3 and L 337 of 27.12.1977 , p. 5 .
 ---pagebreak--- Opinion of the Commission
on the rules of the Committee
of the European Social Fund
 ---pagebreak--- Opinion of the Commission concerning the rules of the Committee of t he
European Social Fund
1.   Council    Decision       /82 / EEC of              1982 and Council Regulation
     ( EEC ) No .       /82 OT                 1982 lay down new rules governing the
     tasks                   of the Fund . The duties of the Committee must be
     adapted to those new rules . The Commission therefore considers that it would
     be appropriate to replace the existing rules , in force with only minor          "
     amendments since 1960 , by new rules taking account of the need for the
 j . Committee to assist the Commission in the administration of the Fund as
     provided for in Article 124 of the Treaty . .
2 . The duties of the Committee are essentially threefold :
     - it has a part in the drafting of the Fund 's annual budget . In view of both
        the growth of the Fund in recent years and the Community 's new financial
        order , there are two important aspects to this role : first , since it is
        essential to adapt the budget to developments in labour markets and to
        Community priorities , Committee members must be in a position to undertake
        thorough studies cf the employment situation in their respective countries ;
        and secondly the Committee must help the Commission by advising of the
        results of its research which are of assistance in making the political
        choices inherent in the preparation of the budget ;
     - it can assist the Commission to determine any operating rules of the Fund .
        Here the Committee has an important role to play in the process of drawing
        up proposals to the Council for new regulations , of fixing flat rates for
        Fund assistance and of drafting the annual Guidelines for the management,
        of the Fund ;
     - it can assist the Commission to decide which applications for assistance
        submitted by Member States should be approved . Approval should depend not
        only cn whether applications conform to the rules in force but also or. the
        extent to which proposed operations are consistent with Co:i..nunity priori frcs .
 ---pagebreak---                                       - 2 -
3 . The duties of the Committee , whether they concern the budget , the
                                                                            S
                                                                            –■'
    Guidelines or applications for assistance , all require that , for decisions
    to be taken , all the necessary information on employment within countries ,
    regions and industrial sectors should be available at the Community level .
    Members of the Committee representing Governments and the Social Partners
    should therefore relay to the Community information on the areas and
    problems for which they are responsible . The role of the Committee increases
    in importance with the acceleration of economic and social developments
    and as the employment effects of these rapid developments become increasingly
    serious ; at the same time the adaptation of the workforce to new technology
    and the ratio between job vacancies and unemployment play an ever - growing
    role in determining the speed of economic growth and social progres-s . In
    this context the representatives of the Social Partners have a particularly
    important contribution to make .
A. Turning to the Committee 's methods of operation , the Commission suggests
    that the full Committee should delegate its responsibilities for the
    day - to- day management of the Fund to a sub-committee, drawn from its
    membership, which would have have the duty of assisting the Commission
    to examine applications . The full Committee would then be better able
    to devote' itself to the study of budgetary problems linked to the
    implementation of Community priorities .
5 . In order for the Fund Committee to fulfil its duties properly , the Co rami ssion
    considers that the existing rules should be replaced by new statutory
    provisions , a draft of which is attached as an annex to this opinion . The
    proposed new rules contain the following principal new elements :
    - the grouping into a single legal instrument of all the rules concerning
      the Committee ;
    - the exercise of the chairmanship ;
    - the possibility of creating a sub-committee responsible for issuing an
      opinion on applications for assistance ;
    - the obligations on members before applications are considered within
      the Committee .
 ---pagebreak---                                                                       Annex
                                  Draf t
                  COUNCIL DECISION
         O K THE RULES OF THE   COMMITTEE OF THE EUROPEAN! SOCIAL FUND
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
 and in particular Articles 124 and 153 thereof .
Having regard to the opinion " of the Commission ,
Whereas Council Regulation ( EEC ) No . . . . /82 of                1982 ( 1 ) lays down
new methods of operation       for the European Social Fund deriving from the tssks of
the Fund as defined by Council Decision 82 /. ../ EEC of                 1982 ( 2 );
Whereas it is appropriate to revise the rules of the Committee of the Social
Fund        to enable it to become more efficient taking account of the new
methods of operation of the Fund ;
Whereas in the interests of greater clarity and legal certainty it is appropri ate
for the Council Decision of 25 August 1960 on the rules of the Committee of the
European Social Fund ( 3 ), amended by Council Decision 68 /188 /EEC of 9 April 19tS
( 4 ) and by the Acts of Accession of 1972 and 1979 , to be replaced by a new decisis
HAS DECIDED    AS FOLLOWS   :
(1 )
(2 )
(3 ) 0J No . 56 , 31.08.1960
( 4 ) 0J No . L 91 , 18.04.1968
 ---pagebreak---                                      - 2 -
                                                                             ' ν'
                                Article 1
 1 . The Committee shall at the request of the Commission give its opinion on
    a ) proposals and drafts concerning the rules governing the tasks and
        operation of the fund ,
    b ) decisions applying the rules governing the tasks and operation of the
        Fund ,
    c ) the guidelines for the management of the Fund ,
    d ) the preliminary draft of the budget relating to the
        Fund ,
    e ) applications for assistance from the Fund .
2 . The Committee may , at its own initiative , present opinions to the
      Commission on any question concerning the tasks and operation cf the
      Fund .                I
                                Art iele' 2
The Committee shall be composed of two representatives of the Government ,
two representatives of Trade Unions and two representatives of Emoloyers'
Organizations for each Member State .
                                Article 3
1 . For each Member State , one alternate member shall be appointed for each
      category referred to in Article 2 .
 ---pagebreak---                                   -s   -
                                                                           b
 2 . In the absence of one or both members , their alternate shall be
      automatically entitled to take part in the deliberations of the
      Committee .
                                Article 4
 1 . The term of office for members and alternates shall be two years .
      Their appointments may be renewed .
2.    After expiry of their term of office , members and alternates
      shall remain in office until they are replaced or until their
      appointments are renewed .
                                Article 5
 1 . Only nationals of Member States may be appointed Committee members
     or alternates .
2 . The duties of a member or alternate shall be incompatible with those
     of a member cf an institution of the European Communities or    of the
     Economic and Social   Committee and with those of an official of the
     European Communities .
                                Article 6
1 . Members and alternates shall be appointed by the Council . In appointing
     the Committee , the Council shall make every effort to achieve fair
     representation within the various groups concerned .
2 . The List of members and alternates shall be published in the Official
     Journal of the European Communities .
 ---pagebreak---                                  Article 7
In the event of the death or resignation of a member or alternate or if he
is no longer qualified to serve on the Committee , a new member or alternate
shall be appointed in accordance with the procedure provided for in Article
6   for the remainder of the term of office .
                                 Article S
The member of the Commission responsible for chairing the .Committee may
delegate this duty to a     senior official of the Commission .
                                 Article ?
1 . The Committee may delegate the duty af issuing      an opinion on applications
     for assistance to a sub-Committee composed     for each Member State of one
     member for each category referred to in Article 2 .
2 . The provisions governing the operation of the Committee
     shall apply to the sub-Committee .
                                 Artic'le 10
1 . The Committee shall be conver.ea    by its chairman either on his own initiate
    or at the request of a third of the members .
2 . Notices   of meetings shall contain the agenda decided on by the chairman
     for discussion . The Committee may decide to discuss other matters falling
    within its competence .
3 . The meetings of the Committee snail not be public .
                                 Article 11
Before meetings where the agenda provide for the examination of applications
for assistance , each Member State shall organise        a meeting, to be attended
by the members of the Committee who are nationals of that State/ during which
shall be considered any problems which , in the opinion of the social partners
might be raised by the submission of certain applications . The minutes of this
meeting shall be forwarded to the chairman of the Committee .
 ---pagebreak---                                 Article 12
The Committee shall take all decisions by an absolute majority of the votes
validly cast .
                                Article 13
On a proposal from the chairman , the Committee may hear experts .
                                Article 14
The Committee shall present to the Commission a summary of the opinions which
it has formulated ; this summary shall also mention minority opinions expressed
                                Art i c le 15
The Commission may consult the Committee in writing when consultation is
of an urgent nature and is appropriate        for such a procedure . The Committee
shall be informed without delay of the opinions expressed by its members .
If one third of the members of the Committee so request , the written procedure
shall be suspended and the chairman shall convene the       Committee without delay .
                            j Article 16
When the Commission disagrees with an opinion cf the Committee it shall inform
the Committee within forty    days of the reasons for its disagreement .
                                Article 17
The Commission shall inform the Committee regularly of the principle aspects
of Community policy on economic and social affairs .
                                Article 18
Secretarial services shall be provided for the Committee by the Commission .
The Commission shall make available to the Committee the premises and
facilities needed for its operation .
 ---pagebreak---                                      Art iele 19
1 . The Committee shall establish its rules of procedure .
2 . The rules of procedure shall be approved by the Council ,      after
     consulting the Commission .
                                     Article 20
The Council Decision of 25 August 1960 , as amended by Council Deci
68 / 188 / EEC arid by the Acts of Accession of 1972 and 1979 , is hereb
repealed .
                                             Done at Brussels
                                             for the Council