CELEX: 51988PC0500
Language: en
Date: 1988-07-26
Title: BACK-UP POLICIES: REFORM OF THE STRUCTURAL FUNDS Proposal for a COUNCIL REGULATION on coordination of the activities of the different structural Funds, between themselves and with the operations of the EIB and the other existing financial instruments#Proposal for a COUNCIL REGULATION on the activities of the European Regional Development Fund#Proposal for a COUNCIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards the European Social Fund#Proposal for a COUCNIL REGULATION laying down provisions for implementing Council Regulation (EEC) No 2052/88 as regards the EAGGF, Guidance Section#(presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 500
Vol. 1988/0179
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Verschlusssachen als herabgestuft angesehen.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
Provisional Text                                   COM(88 ) 500 final
                                                   Brussels , 3 August 1988
                 BACK-UP POLICIES :     REFORM OF THE STRUCTURAL FUNDS
                                      Proposai for a
                                    COUNCIL REGULATION
       on coordination of the activities of the different structural
        Funds , between themselves and with the operations of the EIB
                    and the other existing financial instruments
                                      Proposai for a
                                    COUNCIL REGULATION
         on the activities of the European Regional Development Fund
                                      Proposât' /for a
                                   COUNCIL REGULATION
         laying down /provisions for implementing Council Regulation
              ( EEC ) No 2052 / 88 as regards the European Social Fund
                                      Proposât for a
                                           \ RÉGULÂT ION
         laying down provisions for implementing Council Regulation
           ( EEC ) No 2052 / 88 as regards the EAGGF , Guidance Section
                            ( presented by the Commission )
 ---pagebreak--- Proposais for Council Régulations laying down provisions
implementi ng Council Régulation (ESC) No 2052/68 as regards :
-  coordination of the activities of the Funds as between
   themselves and with the operations of the EEB and the other
   financial instruments ;
-  the ERDF ;
-  the ESF ;
-  the EAGGF Guidance Section .
                       EXFLANATOK? MEMORANDUM
 ---pagebreak--- I. DEVELOPMENT OF BACK-UP POLICIES : THE NEXT STAGE
On 24 June 1988 the Council , acting unanimously within the period
laid down in Article 1301 of the EEC Treaty , adopted the
comprehensive Regulation on the reform of the Structural Funds of
the Community .
On the Basis of the principles and general provisions set out In
that Regulation , the reform envisaged should now be implemented
as swiftly as possible in order that the activities of the Funds
can be centre! around new guidelines for the haeX-up polici.es as
of the beginning of 1989 .
With this in mind , and following adoption of the compreliensive
Regulation , the Commission is transmitting to the Council the
attached proposals pursuant to Article 130e of the EEC Treaty .
These embody ail the decisions aimed at implementing the reform
and mentioned in Article 3(4 ) and ( 5 ) of the comprehensive
Regulation . They take the form of four proposals for
regulations :
- a "horizontal " regulation laying down the provisions for
   coordinating the activities of the different Funds as between
   themselves and with the operations of the EEB aid the other
   financial instruments , as veil as other provisions common to
   the three Funds ;
- an implementing regulation relating to the European Regional
   Development Fund that is to be adopted in accordance with the
   first paragraph of Article 130e of 'the EEC Treaty ;
- an implementing regulation relating to the European Social
   Fund ;
- an implementing regulation relating to the Guidance Section of
   the European Agricultural Guidance and Guarantee Fund ;
The Commission has drawn up the proposals for implementing
provisions under Article 13Qe on the basis of the following
principles :
 ---pagebreak---                                - 2 -
- the general provisions set out in the comprehensive Regulation
   should he made more precise , in order to give the necessary
   guidance to national authorities and to beneficiaries , while
   at the same time leaving the Commission sufficient flexibility
   to tai-lor assistance from the Funds to different specific
   needs ;
- the operational procedures of the Funds should be simplified
   and harmonized , where possible incorporating common provisions
   on such matters as payment and controls that are applicable to
   the three Funds ;
- the implementing provisions mentioned in Article 3(5 ) of the
   comprehensive Regulation should provide for effective
   coordination of the activities of the different Funds , the EEB
   and the other existing financial instruments at operational
   level ;
- the operations and policies specific to the individual Funds
 . should be detailed in the three corresponding regulations .
In the implementation of the back-up policies , the Commission
attaches particular importance to joint action between the
Structural Funds , the EIB and the other loan instruments .
Community assistance must be offered in the most cost-effective
way through both grants and loans .
                                                                 03
 ---pagebreak---                                  - 3 -
II .  THE HORIZONTAL REGULATION :
      OQMM3N PROVISIONS ON CCORDINATiaN AND MANAGEMENT
1 . Coordination
The proposed relaxation assigns to Hue Commission the clear
obligation to ensure effaced."; e cocadinardon at all. levels between
the Funds , the EIE and the other instruments .   Given that Hie
Funds will continue in Hie future to enjoy legal and budgetary
autonomy as well as to have a necessary link with the specific
policies which they serve , it is essential that the objective of
coordinated act.ion under the five priority objectives should not
be lost sight of at. the level of implaientaticn .
The Regulation also lays down the cri.tA.eia for selecting the
areas eligible for assistance under the three. Funds in connection
with Objective No 0(b) (rural development ). Outside the regions
covered by Objective No 1 , Hie principle cf fiiaanci ?!
concentration undox-Jying Hie reform of the Structural Funds and
the relative scarcity of resources for Objective No 8(b) mean
that the rural areas concerned by Community financial assistance
will have to be selects! on the .basis of priority criteria such
as the extent to whioli an area ranks as a ratal area and its
level of economic and agricultural development .
To ensure Hat Canimunity assistance measures are sufficiently
flexible to cope with the wide variety of problems facing the
rural sector , those criteria me.y be supplemented by additional
criteria (peripheral lccab.cn , extent of depopulation , etc ).
2.   Partnership , planning aid. programming
The procedures that are outlined in the comprehensive Regulation
and given more concrete form :...n the horizontal Regulation will
form the foundation for decentralized manage: :.ert of assistance
from the Funds and for a genuine partnership at local , national ,
regional and. Community level . Programming should be the
expression of , and channel for , initiatives at these levels ,
supplemented where appropriate with initiatives taken .by Hue
Commission . The partnership should be most evident in the
preparation and implementation of the Community support
frameworks and operational programmes . In this context , the
Commission 's firm intention is that assistance should be planned
and provided in as efficient and unburGancratic manner as
possible .
                                                                     04
 ---pagebreak---                                 - 4 -
Under the new procedure , Member States will submit plans linked
to the priority objectives . These plans will explain in a
concise but concrete form their priorities and schemes and set
out their intentions as to the use of CommunitY resources .
The Community support frameworks , which will also be In a
succinct but concrete form , will reflect the priorities attached
at Community level, to the schemes proposed by the Member States
as well as to these stemming fxm Community initiatives . On the
basis of this selective approach , the Commission will also seek
to ensure that the measures indicated In a support framework form
a coherent whole .
Cammunity support will be planned over a period of three to
five years . It will relate to each of the operations to .be
financed in a way appropriate to each of the priorities . It will
outline the programmes and other actions to be undertaken , the
Funds and other instruments to be used , the technical assistance
needed and the requisite financial resources .
It is also within this Camniunif/ support framework that
discussion between the Coiurturi ty and its partners may , in
specific cases , reveal the usefulness of an integrated programme .
An integrated programme will seek to achieve synergy between the
measures implemented and to ensure organized convergence of the
efforts of different partners with different interests and
responsibilities .
Each Community support framework will be sent to the
Member States and other partners concerned as a Declaration of
Intent and will be p.iblisbsd in the Official Journal .
3.  Operations , monitoring and assessment
The Community support frameworks will considerably simplify the
processing of individual applications for assistance ; the
objectives , the financial allocations , the precise forms of
assistance and the Funa(s) involved will have already been
specified in the framework . Use of operational programmes , part-
financing of aid schemes and global grants will also make for
decentralized transfer of the planning and implementation of
specific measures to the competent authorities in Member States .
This simplification and decentralization will have as its
corollary an intensification of monitoring and assessment .
Experience with the management of the various Community Funds and
financial instruments shows that the only way to ensure that
Community measures are effective in achieving the objectives
pursued is constantly to monitor performance and , if necessary ,
to reshape the measures in progress as needs dictate .
"The Commission is also proposing to strengthen considerably
efforts to evaluate the effectiveness of Community assistance ,
including where appropriate periodic assessment of its
macroeconomic impact In the regions concerned " .
 ---pagebreak---                                - 5 -
4.   More straightforward financial procedures
The common provisions on budgetary management laid down in this
Regulation are aimed at facilitating implementation of the budget
for the Structural Funds , pursuant to the revised Financial
Regulation . The disparity between the existing rules is now such
that it could impede joint action by the Funis .
Improvements to the highly disparate arrangements for making
commitments , which in turn determine payments , will permit better
organization of tlie Commission 's work .
In order to move towards general use cf the ECU in the
implementation of the budget , the Commission ha.s also
incorporated into the legislation Hie principle that the
Community 's financial entitlements aid obligations with respect
to the Structural Funds should be expressed in ECUs
5 . Harmonized rotes cf assistance and combined use of grants and
    loans
The Regulation improves on the existing vide diversity of rates
of assistance from the Funds through tne Introduction of a more
harmonized approach which , while giving sarre necessary
predictability of rates to potential benefioiaries , also allows
the Commission no differentiate rates within the limits laid down
in the comprehensive Regulation .
To avoid excessive grant aid to projects capable of being
partially self-financed , the Regulation allows for the level of
assistance in the form of grants to be determined at operational
level according to the particular nature of tire inves'fcment
concerned and to the conditions in which it will be carried out .
In this context , an effective combination of loans and grants is
an extremely important principle underlying future management of
the Funds and will require active cooperation with the E1"Q and
the other loan instruments , in particular at the stage when the
Community support framework is being drawn up .
 ---pagebreak---                                 - 6 -
III . THE ERDF REGULATION
Pursuant to Article 130c of the EEC Treaty , the European Regional
Development Fund (ERDF ) is intended to help redress the principal
regional imbalances in the Community through participating in the
development and structural adjustment of regions whose
development is lagging behind and in the conversion of declining
industrial regions . In the first instance , these principles have
been prut into effect by Regulation (ESC) No 2062/ 88 , which states
that the ERDF will contribute to attainment of Objectives Nos 1 ,
2 and 5(b). A second important step will, be marked by the reform
of the ERDF itself as set eat, in the following Regulation , which
details the sp>ecifio provisions for the implementation of ERDF
operations .
The reform of tlxa Funds provides for a significant improvement in
the effectiveness of the Community 's efforts in the fields of
regional development and conversion , since it provides for
appropriate contributions of all the Structural. Funds and
instruments concerned to attairmvsnt of Objectives No 1 , 2 and
5(b), in Dine v;ith the regional policy guidelines provided for in.
■the new ERDF regulation .
In this context , •die ERDF itself will help to increase the
economic potential of regions , to assist structural adjustment
and growth , and to create permanent employment opportunities . In
order to achieve this , it. will contribute to trie financing of
productive investments , investments in infrastructures and
measures for developing the internally generated potential of the
areas concerned , together with the necessary preparatory and
hack-up measures .
In addition , the ERDF will continue to play its part in the
promotion of regions! development at Caimamity level , in
particular through encouraging erross-horder cooperation and the
p>ocling of experience .
The Commission will also draw up periodic reports on the socio¬
economic situation and development of the regions with a view to
gauging the impact of regional policy and establishing guidelines
for future policy .
At operational level , the proposed ERDF regulation introduces an
important new element of flexibility by enabling the Fund to make
use of all the forms of assistance provided for in the
comprehensive Regulation :   part-financing of operational
programes , of national aid  schemes and of suitable projects , the
provision of global grants   and support for technical assistance
and studies in preparation   for regional policy operations .
                                                                     07
 ---pagebreak---                                - 7 -
IV . ESF REGULATION
Pursuant to Council Régulation (EEC) No 2052/88 , the European
Social Fund is to provide assistance :
(a ) throughout the Community , under Objectives Nos 3 and 4 , to
     combat long-term tmemployment and to facilitate the
     occupational integration of young people ;
(b) according to the rules on regional eligibility , and in
     cooperation with the other Funds , to promote stable
     employment and develop new employment opportunities for the
     unemployed or those threatened wi th unemployment (under
     Objectives Nos 1 , 2 and 5(b)).
It carries out the first of these tasks by providing back-up for
the Member States' employment policies in support of young i*?ople
and the long-term unemployea .
The scope available to it for carrying' out the second task is
much wider , especially in the less-developed regions , with
measures to help those whose activities contribute to the
economic development of the regions and areas concerned ; for
example retraining for those employed in smell firms in
preparation for the introduction of new technologies or new
management techniques .
In implementing social measures , the ESF needs to improve its
management methods , in particular by introducing multiannual
programmes . The Fund 's operations will thus consist less in
isolated measures and , as they will dovetail with Member States'
medium-term employment strategies , a certain measure of
continuity will be achieved .
                                                                   08
 ---pagebreak---                                 - 8 -
The ESF will continue to contribute to financing vocational
training measures , recruitment aids and start-up adds for self-
employed people . Moreover , to prepare for the changes associated
with completion of the internal market , the ESF can help with
back-up measures such as studies , technical assistance or the
pooling of experience between Member States or regions , with the
training of employees' representatives at Community level or with
innovative training measures .
In order to meet the specific needs of the less-developed
regions , the concept of vocational training has been extended to
cover training received outside the firm and vocational training
provided by state education systems beyond compulsory full-time
schooling .
Lastly , it is proposed that guidelines should continue to be set
solely for ESF measures in connection with Objectives Nos 3 and
4 , pursuant to Article 10(1 ) of Regulation (EEC ) No 2052/88 . The
guidelines wjll indicate which qualitative criteria are to be
used to define priorities for Community measures when the
Community support frameworks are established .
 ---pagebreak---                                 - 9 -
V. EAGGF REGULATION (GUIDANCE SECTICN )
Pursuant to Regulation (EEC) No 2052/88 , the Guidance Section of
the EAGGF is to concentrate on :
- promoting the development and structural adjustment of the
   less-developed regions (Objective No 1 );
- with a view to reform of the common agricultural policy :
     (a)     speeding up the adjustment of agricultural structures
             (Objective 5(a));
     (b)     promoting the development of rural areas (Objective
             5(b)).
Objective No 5(a) (speeding up the adjustment of agricultural
structures ) is a horizontal objective in tiiat it covers the
entire Community . Structural adjustment in agriculture is a
process close]:/ linked to reform of common agricultural policy
and will require a greater1 financial effort in the form of
structural .measures connected with the adaptation of agricultural
production .
For the implementation of the horizontal measures relating to
Objective No 5(a), account will be taken of the different
situations obtaining in different parts of the Community , through
a greater diversification of these measures and , in particular ,
through differentiating the rates of assistance in favour of the
less developed regions .
                                                                   10
 ---pagebreak---                                - 10 -
A number of existing horizontal measures must therefore be
adapted in line with provisions of Regulation ( EEC) No 2052/88 by
31 December 1989 . This applies in particular to the measures
concerning the processing and marketing of agricultural and
fisheries products tinder Regulation (EEC ) No 355/77 .  These
measures must be redefined to allow more concentration on the
areas of Objectives No 1 aid. 5(b), greater selectivity in the
case of actions outside these areas and the introduction of
operational programmes as a form of financing to replace the
financing of individual projects .
The Commission will transmit appropriate proposals to the Council
by the end of 1988 .
In parallel with the efforts to adjust agricultural structures ,
the Community must now play a new , crucial role in promoting the
development of rural areas , mainly through measures aimed at the
conversion , revitalization and economic stimulation of the
regions . The Commission has demonstrated by its recent work that
it is determined to establish a genuine Commmitv policy to
assist the rural sector and a comprehensive strategy for
forestry . Operations under the Funds in connection with
Objective No 1 in less-developed regions and in connection with
Objective No 5(b) in other regions will be essential to these
comprehensive policies .
This new role , which will also take account of environmental
protection needs , involves more extensive coverage of rural
development needs , in particular as regards infrastructures and
the promotion of activities outside agriculture , and necessitates
contributions from ail three Funds .
Fi nally , the proposed regulation on the EAGGF Guidance Section
reflects a clearer division of tasks between the Funds :
- on one hard , with respect to the coverage of vocational
    training needs (excluding advisory measures ), which are to be
    met in the future by the ESF ;
-   on the other hand , in relation to infrastructures : the EAGGF
    Guidance Section will finance those which are directly linked
    to agriculture , while other infrastructures can be financed by
    the EKDF .
 ---pagebreak---                        Proposai for a
                     O0ÜNCIL REGULATION
laying down provisions implementing Council Regulation (EEC )
No 2052/88 as regards coordination of the activities of the
 different Structural Funis as between themselves and with
      the operations of the KTB and the other existing
                    financial instruments
 ---pagebreak---    THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
   Having regard to the Treaty establishing the European
   Economic Community ,        and in particular Articles 130E and
   1 53 ;
  Having regard to the proposal from the Commission' 1 ’ ;
  Having regard to the opinion of the Economic and Social
  Committee ' 2 * ;
  And in cooperation with the European Pari iament ' * * ;
  Whereas the Council has adopted Regulation ( EEC )
  n° 2052 / 88 of 24th June 1988 on the tasks of the
  structural Funds and their effectiveness and on the
  coordination of their activities between themselves and
  with the operations of the European Investment Bank and
  the other existing financial investments'*’ :
  Whereas Article 3 ( 5 ) of Regulation ( EEC ) N° 2052 / 88
  provides that the Council acting on the basis of
  Article 130 E of the Treaty shall adopt the provisions
  necessary for ensuring coordination between the different
  Funds on the one hand , and between them and the EIB and
  the other existing financial instruments , on the other ;
  Whereas it is necessary to strengthen the coordination
 between the Structural Funds and between these Funds , the
 EIB and the Community 's other financial instruments , in
 order to       enhance    the  effectiveness of their contributions
  to the attainment of the objectives set out in Article 1
 of Council Regulation ( EEC ) n° 2052 / 88 of 24 June 1988 ;
 whereas the Commission has an important role to play in
 this respect ;
 Whereas to ensure effective coordination between grant and
 loan instruments , the Commission should where appropriate
associate the EIB in the preparation of its decisions ;
whereas      Articles 8 to 11 of the above-mentioned Regulation
provide       for arrangements relating to their implementation
to be        aid down in the provisions referred to in Article
 1 3 0e of    the EEC Treaty ;
Whereas it is necessary to determine the criteria which
the Commission should use to select the rural zones
outside the regions designated for Fund assistance under
objective 1 which may benefit from assistance under
Objective 5b as defined in Article 1 of
Regulation 2052 / 88 ;
( 1 )   0J C .
( 2 )   0J C . . . .
( 3 )   JO C . . . ,
(4)     OJ L 1 85 / 9 , 1 5.7.1 988
                                                                     13
 ---pagebreak---                                     2
  whereas it is necessary to specify the scope , duration and
  content of the plans to be submitted by the Member States
  as well   as  the time-limits  for  the  submission of  these
  plans ;
  Whereas it is necessary to give guidelines on the content
 and duration of the Community support frameworks to be
  established by the Commission and the time-limit for their
 establ ishment ;
 Whereas , the Commission should be able to adapt Community
 support frameworks to take account of actions not foreseen
 in the plans submitted by the Member States including the
 actions resulting from new Community initiatives ;
 Whereas Fund assistance envisaged in the Community support
 frameworks should be provided mainly in the form of the
 cofinancing of operational programmes ;
 Whereas it is necessary to specify the conditions for the
 implementation of operational programmes by way of the
 integrated approach ;
 Whereas   financial   assistance  from   the structural  Funds
 under Objectives n° 1 to A and 5(b ) should normally be
 provided only for actions indicated in the Community
 support frameworks and for expenditure incurred after
 presentation of a request for Fund assistance ;
 Whereas it is necessary to specify the general conditions
 governing the processing of applications for financial
 assistance from the Structural Funds ;
 Whereas it is necessary to define the conditions under
which the Structural Funds may provide global grants and
 cofinance major projects ;
Whereas provision should be made for financing studies and
technical assistance linked to the joint or coordinated
use of the Structural Funds ,      the EIB and the other
financial instruments ;
Whereas to facilitate their own planning of schemes ,
beneficiaries should have indications as to the rates of
assistance which will be offered by the Funds as a
proportion of eligible public expenditure ; whereas at the
same   time   the Commission must differentiate     rates  in
function of the criteria laid down in Article 13 paragraph
1 of the Council Regulation ( EEC ) n° 2052 / 88 , including in
particular the capacity of the other public bodies
concerned to contribute to the financing of the actions
concerned ;
                                                                14
 ---pagebreak---                                  3
 Whereas ,   to promote efficient and coordinated management
 of the Funds' financial resources it is necessary to lay
 down common rules and procedures on commitments , payments
 and controls ;
 Whereas    in the context of the wider use of the ECU in
 financial transactions in the Community and more
 specifically in the implementation of the Community
 budget , it is important that the Community 's financial
 entitlements and obligations with respect to the
 Structural Funds should also be expressed in ECU ;
 Whereas it is necessary to specify the arrangements for
 the monitoring and evaluation of Community structural
 action in order to strengthen the effectiveness of
 intervention methods in achieving the objectives and to
 asses the impact of assistance ;
whereas it is necessary to determine the arrangements for
 the working of the committees which will assist the
Commission in the implementation of EEC Regulation
 n°2052 / 88 of 24 June 1988 ;
Whereas there is a need to specify the content of the
annual report to be submitted to Council and Parliament
under Article 16 of the above mentioned Regulation ;
whereas measures should be foreseen to give adequate
publicity to the assistance given by the Community to
specific actions ;
whereas it is necessary to determine more specifically the
transitional arrangements for the Fund assistance which
has been approved or requested before the entry into force
of the implementary decisions foreseen under Article 130E
of the EEC Treaty ; whereas it may also be necessary , with
a view to ensuring continuity in the operations of the
Funds , to provide for approval of certain actions before
the Commission has decided the relevant Community support
f rameworks ;
                                                             15
 ---pagebreak---      PRDPOSAL POR A CCTJNCIL REGULATICN ( ESC ) No          / &&
                        TITLE I :  Coordination
Article 1 :  General provisions
Article 2 :  Coordination between the Funds
Article 3 :  Coordination between the Funds , the EIB and. the other
              financial instruments
Article 4:    Selection of rural areas (Objective No 5(b))
                            TXTLE II : PLANS
Article 5 :   Scope and content
Article 6 :  Duration and. timetable
Article ? :   Préparation
               TXTLE III :  OCMMCN1TY SUPPORT FRAMEWORK,!
Article 8 : Préparation , scope and content
Article 9 : Consistency and impact of actions
Article 10 : Approval and implementation
Article 11 : Community initiatives
Article 12 : Forms of assistance
Article 13 : Integrated approach
                 TITLE IV :  ASSISTANCE FPCM THE FUNDS
Article 14 :  Processing of applications
Article 15 :  Eligibility
Article 16 :  Specific provisions
Article 17 :  implementation
             TITLE V : DIFFERENTIATION OF THE COMMUNITY
                  CONTRIBUTION
Article 18   Differentiation of the rates of contribution from the
              Funds
Article 19 : Combination of grants and loans
 ---pagebreak---                                  - 2 -
                  TITLE VI :   FINANCIAL PROVISIONS
Article 20 : General provisions
Article 21 : Commitments
Article 22 : Payments
Article 23 : Use of the ECU
Article 24 : Financial control
Article 25 : Reduction , suspension  and cancellation of assistance
               TITLE VII :   MONITORING AND ASSESSMENT
Article 26 : Monitoring
Article 27 : Assessment
                      TITLE VIII :   COMMITTEES
Article 28 : Advisory Committee on the Development and Conversion
             of Regions
Article 29 : Committee referred to in Article 124 of the EEC
             Treaty
Article 30 : Committee on Agricultural Structures and Rural
             Development
Article 31 : Other provisions
                  TITLE IX :   REPORTS AND PUBLICITY
Article 32 : Reports
Article 33 : Information and publicity
                     TITLE X :   FINAL PROVISIONS
Article 34 : Transitional provisions
Article 35 : Entry into force
 ---pagebreak---                        TTTLE I :  OOQRDINATICIN
                               Article 1
                          General provisions
Pursuant to Council Regulation (EEC) No 2052/ 88 , the Commission
shall ensure coordination of the activities of the different
Funds as between themselves and with the operations of the EH3
and the other existing financial instruments .
                               Article 2
                   Coordination between the Funds
In order to ensure coordination of the activities of the Funds as
between themselves , the Commission shall have recourse to the
following Instruments :
- the Community support frameworks ;
- the multiamtual budget forecasts ;
- where expedient , integrated operational programmes ;
- the monitoring and assessment of operations under' the Funds
    carried out in connection with a single objective and of those
    carried out in connection with a number of objectives on the
    same territory .
                               Article 3
   Coordination with the EIB and the other financial instruments
1 . The Commission shall ensure consistency between assistance
from the Funds and assistance provided :
- by the European Coal and Steel Community in the form of
    readaptation aids , loans , interest subsidies or guarantees ;
- by the EIB , the New Community Instrument and Euratom in the
    form of loans and guarantees ;
 ---pagebreak---                                 - 2 -
- from resources within the CommunitY budget devoted in
   particular to the integrated Mediterranean programmes , support
   for the Specific Programme for the Development of Portuguese
   Industry (PEDIP ), fisheries structures , transport
   infrastructure , environmental protection , energy projects ,
   small and medium-sized enterprises , innovative measures and
   venture-capital investments ;
- from the resources of the Community research budget .
2.  The Commission shall associate the EEB on the use of the
Funds or the other existing financial instruments in the part-
financing of investments that are also eligible for assistance
from the EIB in accordance with its Statute .
                             Article 4
            Selection of rural areas (Objective No 5(b))
1.  Vlien presenting the rural development plans referred to in
Article 11(3 ) of Council Regulation (EEC) No 2052/88 , the Member
States shall propose to the Commission the areas which may be
selected in the light of the criteria set out in paragraph 2 .
2.  Pursuant to Article 11(2) of Regulation (EEC) No 2052/88 , the
rural areas that my be concerned by Community assistance
operations shall be selected in accordance with the following
criteria :
- high share of agricultural employment in total employment ;
- low level of agricultural income , notably as expressed in
   tents of agricultural value added by agricultural work unit
   (AWU);
- low level of socio-economic development assessed on the basis
   of gross domestic product (GDP ) per inhabitant .
In the selection of rural areas , areas for which account is taken
of one or more of the following criteria may also be taken into
consideration on receipt of a reasoned request from a Member
State :
- the extent of dépopulation ;
- the peripheral nature of areas or islands in relation to urban
   centres ;
                                                                   19
 ---pagebreak---                                  - 3 -
- the sensitivity of the area to developments in agriculture ,
    especially with a view to reform of the common agricultural
    policy , assessed on the fcasis of the trend in agricultural
    incomes and the size of the agricultural labour force ;
- the structure of agricultural enterprises and the age
    structure of the agricultural labour force ;
- the pressures exerted on the environment and on the
    countryside .
3 . The Commission shall , in accordance with the procedures
provided for in Title VIII and in the light of the criteria
specified in paragraph 2 above , determine the rural areas to be
eligible under Objective No 5(b).
                           TITLE II :  PLANS
                              Article 5
                          Scope and content
1 . Subject to the guidelines laid, down in this Article , plans
submitted in connection with Objectives Nos 1 to 4 and 5(b) shall
be drawn up at the geographical level deemed to be most
appropriate by the competent national , regional or other
authorities in Member States .
Plans submitted in connection with Objective No 1 shall , as a
general rule , cover one or more regions at NUTS Level II .
Plans submitted in connection with Objectives Nos 2 and 5(b)
shall , as a general rule , cover one or more areas at NUTS Level
III .
Plans may cover a wider territory than that of eligible regions
or areas , provided they distinguish between operations in
eligible regions or areas and operations elsewhere .
                                                                 20
 ---pagebreak---                                - 4 -
2 . For regions concerned by Objective No 1 , the regional
development plans shall Include actions in connection with the
conversion of industrial areas and the development of rural areas
as well as employment and vocational training actions not covered
by plans submitted in connection with Objectives Nos 3 and 4 .
Social and conversion plans submitted in connection with
Objective No 2 and rural development plans submitted in
connection with Objective No 5(b) shall also include employment
and vocational training actions not covered by plans submitted in
connection with Objectives Nos 3 end 4 .
Plans submitted in connection vith Objectives Nos 3 and 4 shall
distinguish between expenditure in respect of the regions covered
by Objectives Nos 1 , 2 and 5(b) and expenditure in respect of
other regions .
In the plans , Member States shall indicate the particulars
relating to each Fund , including the volumes of assistance
requested .
3 . In drawing up the plans , the competent authorities in
Member States shall ensure that plans relating to the same
objective within a Member State and plans relating to different
objectives in the same geographical area are mutually consistent .
4 . The competent authorities in Member States shall ensure that
the plans take full account of the developnent of Community
policies .
                             Article 6
                      Duration and timetable
Each plan shall cover a period of not less than three years .
For areas designated for assistance by 31 January 1989 , the
initial periods covered by the plans shall commence on
1 January 1989 .
                                                                  21
 ---pagebreak---                                  - 5 -
Plans shall be submitted not later than 31 March 1989 .       However ,
plans relating to Objectives Nos 3 and 4 shall be submitted as
soon as possible after the Commission has issued the necessary
guidelines , and at the latest by 1 June 1989 .
                               Article 7
                              Préparation
1 . The Commission may provide Member States at their rerpiest
with any technical assistance necessary in tl^e preparation of
plans .
2 . The information included in the plans shall contain , where
appropriate , details relating to the general sccio-eoononlc
situation and to macroeconomic policies axd objectives .
3.   The Commission sh.all determine the detailed arrangemerts for
the implemen'tation of the provisi cns of ills Titl e ( II ).
              TITLE III :  GOMMONTT* SUPPORT FRAMEWORKS
                               Article 8
                   Préparation , scope and content
1 . The Community support frameworks relating to Objectives Nos 1
to 4 and 5(b) shall be drawn up on the basis of an agreement with
the Member State concerned within the framework of the
partnership and shall be established by decision of the
Commission in accordance with the procedures laid down in
Title VIII . The SIB shall .be involved jn the preparation of the
Community support frameworks .
2 . A Community support framework may cover a period of three to
five years .
3 . A Community support framework relating to any one objective
may , where appropriate , relate to tlie combined territory of two
or more eligible regions or areas .
                                                                        22
 ---pagebreak---                                 - 6 -
4.   Each Canrmmity support framework shall include :
- a statement of the priorities for joint Community and national
    action in relation to the objectives spelt out in Article 1 of
    Council Regulation (EEC) No 2052/88 ;
- an outline of the forms of assistance to be provided
    including , for operational programmes , their specific
    objectives and the main types of measure involved ;
- an indicative financing plan specifying the financial
    allocations envisaged for the various forms of assistance ;
- where neoessary , provisions for any studies or technical
    assistance operations relating to the preparation ,
    implementation or adaptation of the actions concerned .
                              Article 9
                  Consistenoy and impact of actions
1 . The Community support frameworks shall indicate the
consistency between the structural actions to be financed by the
Community and the wider-ranging macroeconomic end structural
policies , where appropriate , pursued by the Member States
concerned .
2.   In establishing aid. implementing the Community support
frameworks , the Commission aid the Member States concerned shall
ensure that the annual increase in the appropriations for the
Funds provided for in Article 12(2) of Council Regulation (EEC )
No 2052/83 have a genuine additional economic impact in the
regions concerned and result in corresponding increases in total
public expenditure , in particular on investment . The Member
States shall transmit to the Commission the information neoessary
for this purpose , in accordance with arrangements to be
determined by the Commission .
 ---pagebreak---                                 - 7 -
                             Article 10
                     Approval and Implémentation
1.  Unless otherwise agreed between the Commission and the
Member State concerned , the Commission shall take a decision
approving the CoranunitY support framework not later than
six months after receiving the relevant plan or plans .
In order to expedite implementation of the actions provided for
in a Community support framework , Member States may submit
applications for operational assistance in good time for the
Commission to approve them at the same time as it takes its
decision on the Community support framework . In this cose , the
operational programmes may be implemented immediately .
2.  The Commission decision on the CcmwfnLty support framework
shall be addressed as a declaration of intent to the Mernoer State
and to the other competent author Liles ooreerrea . This
declaration shall be published in tre Official Journal of the
European Communities .
The Commission and the Member States shall ensure that actions
accounting for at least two thirds of assistance from the Fords
during the first year- ox the Community support ihmtework are
approved by the Commission within two months of its decision on
the relevant Community support framework .
                             Article 11
                        Cammunity initiatives
In aocordanoe with Article 5(5 ) of Council Regulation (ESC )
No 2052/ 58 , the Commission may , on its own initiative and in
aocordanoe with the procedures provided for in Title VIII , decide
to invite Member States to submit applications for assistance in
respect of actions of significant interest to the Comroxnity not
covered by the plans referred to in Title II . Any assistance
approved pursuant to this provision shall be reflected m the
establishment or revision of the relevant Community support
framework .
 ---pagebreak---                                   - 8 -
                              Article 12
                          Forms of assistance
Measures covered by a Community support framework shall be
carried out primarily by way of operational programmes .
                              Article 13
                          Integrated approach
The decision to implement actions on the basis of an integrated
approach shall be taken at the level of the Community support
framework .
An operational programme my be implemented in the form of an
integrated approach if :
    (i ) the programme involves financing by more than one Fund or
         at least one Fund and one other financial instrument other
         than a loan instrument ;
  (ii ) the measures to be financed by different Funds or
         financial instruments are mutually reinforcing and
         significant benefits are likely to accrue from close
         coordination between all the parties involved ;
(.1 ii,) the appropriate administrative structures are provided for
         at national , regional and local level in the interests of
         integrated implementation of the programme .
Where the Commission considers that Community assistance can best
be organized by way of an integrated operational programme , it
may , within the context of initiatives covered by Article 11 ,
propose that the Member State(s ) concerned submit an application
for assistance in respect of such a programme . In such cases ,
the Commission shall ensure that Community assistance is provided
in the most effective manner , taking into account the special
coordination effort involved .
                                                                    25
 ---pagebreak---                                 - 9 -
                TITLE IV : ASSISTANCE FRCM THE FUNDS
                             Article 14
                     Processing of applications
1 . Applications for assistance for specific actions from the
Structural Funds shall be prepared, by the competent national ,
regional or ether authorities concerned a.xi submitted to the
Commission by Meitner States or by airy bodies designated to do so
by them . Each application shall relate to one of the forms cf
assistance provided for in Article 5 of Council Regulation (EEC )
No 2052 / 88 (part-fira'XxLog of operational programmes and of aid
schemes , global grants , part-financing of major projects , and
support for technical assistance , preparatory studi.es and pilot
projects ) .
2 . The applications shall contain the info.mati.on the Commission
needs in order to assess them , including a description of the
action proposed , its scope fin specific objectives , the bodies
responsible , the proposed beneficiaries and the proposed
timetable and financing plan , es well as airy other information
necessary tc verify that the action concerned is computable with
CcmmunitY legislation and policies ( turluriung those concerning
the rules on competition , the award of public contracts and
environmental protection) .
3 . The Commission shall examine applications with a view in
particular :
- to assessing the conformity of the proposed actions and.
    measures with the relevant Comrvunity legislation and , where
    appropriate , with the relevant Community support framework ;
- to assessing the contribution of the proposed action or
    measure to specific development or other objectives and , in
    the case of an operational programme , the consistency of the
    constituent measures ;
- to determining the arrangements for providing assistance from
    the Fund or Funds concerned ;
-   to check that the administrative and fi.nancial mechanisirs are
    adequate to ensure effective implementation .
 ---pagebreak---                                - 10 -
The Commission shall subsequently decide on the granting of
financial assistance . In the case of an integrated operational
programme , a single Commission decision shall, be taken in respect
of assistance from all the Funds and other Community budgetary
instruments contributing to the financing of that programme .
                            Article 15
                            Eligibility
1.  Subject to Article 34 , expenditure in respect of measures
covered by Objectives Nos 1 to 4 and 5(b) shall be eligible for
financial assistance from the Structural Funds only if the
measures in question are indicated .in the relevant Community
support framework .
2.  Except as provided for in the transitional arrangements under
Article 34 and. in Articles .... ( of the Regulations concerning
the Funds ), expenditure may not be considered eligible for
assistance from the Funds if it is incurred before the date on
which the corresponding application reaches the Commission .   The
Commission shall fix the date on which eligibility for
expenditure in respect of each action takes effect .
                            Article 16
                        Spécifie provisions
1 . In the case of global grants , the intermediaries shall be
designated by agreement between the Member States concerned and
the Commission .  The Member State concerned shall ensure that an
intermediaries have a sound financial standing and have the
administrative capability to manage global grant schemes . The
intermediaries shall also be selected in the light of the
particular situation in the Member States or areas concerned . In
managing global grants , they shall be subject to control by the
competent public authorities .
2 . The Funds may provide financial assistance towards
expenditure in respect of major projects if the total cost taken
into account in determining the amount of Community assistance is
greater than 25 million ECU for infrastructure investments or
15 million ECU for productive investments .
                                                                    27
 ---pagebreak---                                  - 11 -
However , projects costing less than this in the fisheries sector
may be financed If they are covered by a multiannual g'lidance
programme approved by the Commission under Regulation
( EEC ) No 4028/ 86 .
3.   In addition to similar assistance connected with the
operations of individual Funds , the Commission may finance
studl.es and technical assistance linked to tlie joint or
coordinated deployment of tire Structural Pane's , the E1B and the
other financial instruments :
- in preparation for the establishment of plans ;
- with a view to evaluating the impact aid. effectiveness of
    assistance provided under the relevant Community support
    frameworks ;
- in relation to integrate! operational programmes .
                               IrtJoJ.e 17
                             Implecoentaticn
The Commission shall determine tire dereiJed arrangements for the
implementation of the provision.? of tills Title ( IV ).
       TITLE V :  DIFFERENTIATION OF THE COMMUNITY COTIRIBDTia:
                               Article 18
    Differentiation of tlie rates of contribution from the Funds
1.   The financial contribution from tlie Funds shall be fixed as a
percentage and shall be calculated, in relation to either tlie
total eligible cost of , or the total public or similar
expenditure (national , regional or local , and Community ) on , each
action (operational programme , aid scheme , global grant , project ,
technical assistance , study).
 ---pagebreak---                                 - 12 -
2.   Pursuant to the first indent of Article 13(1 ) of Council
Regulation (EEC ) No 2052/88 , the rates of financial contribution
from the Structural Funds shall be differentiated in the light of
the seriousness of the specific regional problems . As a general
rule , assistance from the Funds expressed as a percentage of
public expenditure shall be :
- 65% in regions covered by Objective No 1 ;
- 50% in areas covered by Objective No 2 ;
-   40% in all other cases .
The rates indicated above may he increased or reduced within the
limits laid down in Article 13(3 ) of Council Regulation (EEC)
No 2052/88 and in the light of the other criteria spelt out in
Article 13(1 ) of that Regulation , taking account in particular of
the capacity to contribute of the regional or local authorities
concerned , notably in Greece , Ireland , Portugal and Spain .
3 . Where the measure concerned , among its other intrinsic
characteristics , entails the financing of revenue-generating
investments , the rates of financial contribution from the Funds
shall be differentiated in the light of the last indent of
Article 13(1 ) of the aforementioned Regulation and according to
the size of the cash flow which the expected revenue will
generate .
In any event , in connection with the development effort in the
regions concerned , the contribution from the Funds to productive
investments may not exceed 50% of the total cost in the regions
covered by Objective No 1 and 3036 of the total cost in the other
regions . It shall conform to the differentiation principles
spkLt out above .
 ---pagebreak---                                - 13 -
4 . The Commission may differentiate tlie rates of contribution
for individual measures forming part of operational programmes ,
aid schemes or global grants .
                            Article 19
                 Combination of loans and grants
In the case of investments likely to be financed from both budget
resources and borrowed funds , Community financing shall be a
combination of loans and grants . This combination shall be
determined in conjunction with the ETB when the Community support
framework is being established . It shall take account of the
balance in the proposed financing plan , the rates of contribution
from the Funds established in accordance with Articii e 18 above .
and the development objectives pursued .
                 TTTLE VI :  niWHCIAL PROVISIONS
                            Artj.de 20
                        General provisions
1.  Financial assistance from the Structural Funds shall be
subject to the relevant rules applicable to the Funds under the
Financial Regulation and to 'Che availability of budgetary
resources .
2.   The financial assistance to be granted in respect of
specific actions in execution of a Community support framework
shall be consistent with the financing plan laid down. in. that
support framework .
3 . In older to avoid administrative delays at the year end ,
Member States shall ensure that financing requests are submitted
in accordance with a balanced schedule throughout the year .
                                                                   30
 ---pagebreak---                                - 14 -
                            Article 21
                            Commitments
1 . Budgetary commitments shall be made on the basis of
Commission decisions approving the actions concerned . They shall
be valid for a limited period , depending on the nature of the
actions concerned and on the specific conditions for their
implementation .
2 . Commitments in respect of actions to be carried out over a
period of two or more years shall , as a general rule , be effected
in annual instalments .  The commitment in connection with the
first annual instalment shall be made when the decision approving
the action is adopted by the Commission .
Commi'cments in connection with subsequent annual instalments
shall be based on the financing plan for the action concerned and
on the progress made in implementing it .
3 . For actions to be carried out over a period of less than
two years , the total amount of Community assistance shall be
committed when the Commission adopts the decision approving the
action .
                             Articl e 22
                              Fayments
1 . Payments of financial assistance shall be made in. .accordance
with the corresponding budgetary commitments to the responsible
body indicated in the application submitted through the
Member State concerned . They may take the form of advances or
final payments .
2 . Following each commitment , the Commission may make a first
advance of up to 50% of the amount committed , taking into account
the nature of the action concerned .
3 . A second advance such that the sum of the two advances does
not exceed 80% of the commitment sha.ll be made after the
responsible body has certified that at least half of the first
advance has been used up and that the action is progressing
according to the timetable laid down .
 ---pagebreak---                                - 15 -
4.   Final payments In respect of each commitment shall be
conditlonal on :
- submission to the Commission by the responsible body of a
    request for payment within six months of the end of the year
    concerned or of completion of the action concerned ;
- submission to the Commission of the relevant reports referred
    to in Article 26(4 );
- submission by the Member State of a .certificate coidi raving the
    information contained in the request for payment and the
    reports .
5 . Member States shall designate the authorities empowei'ed to
issue the certificates referred, to in paragraphs 3 and 4 .
6 . In the case of measures that are designed to support
agricultural Incomes , such as compensation for natural handicaps
in. less-favoured or mountain erers , ard th?t fire governed by the
provisions referred to in Art! ole 11(1 ) of Iteration ( IT9C )
No 2052/88 , the conditions and procedures applicable in respect
of advance or final payments shall. be laid down in the
corresponding Commission decisions , due regard losing had to the
specific nature of those measures .
?.   In the case of studies and innovative measures , the
Commission shall determine the appropriate payment procedures .
                             Article 23
                           Use cf the ECU
Commission decisions , commitments and payments shall be
denominated and carried out in ECUs .   The Commission shall
determine the detailed arrangements for the implementation of
this Article .
                             Article 24
                          Financial contre!
1 . In order to guarantee successful completion of actions
carried out by public or private promoters . Member States shall
take the necessary measures :
 ---pagebreak---                                - 16 -
- to verify that actions financed by the Canmunity have been
    properly carried out ;
- to prevent and to take action against irregularities ;
- to recover any amounts lost as a result of an irregularity or
    negligence ; the Member State concerned shall be responsible in
    a subsidiary capacity for repayment of any sums paid in error .
Member States shall inform the Commission of the measures taken
for those purposes and , in particular , of the progress of
administrative and Judicial proceedings .
When submitting payment requests , Member States shall make
available to the Commission any national control reports on the
measures included in the programmes or other actions concerned .
2 . Without prejudice to checks carried out by Member States
under Article 206 of the Treaty or to any inspection arranged on
the basis of Article 209(c ) of the Treaty , Commission officials
may carry out on-the-spot checks , including sample checks , in
respect of operations financed by the Structural Funds .
Before carrying out an on-the-spot check , the Commission shall ,
as a general rule , give notice to the Member State concerned
with a view to obtaining all the assistance necessary . Officials
of the Member State concerned may take part in such checks .
The Commission may require the Member State concerned to carry
out an on-the-spot check to verify the regularity of payment
requests . Commission officials may take part in such checks .
3 . For a period of three years following the last payment in
respect of any action , the responsible body and authorities shall
keep available for the Commission all the supporting documents
regarding expenditure on the action .
 ---pagebreak---                                  - 17 -
                               Article 25
                Reduction , suspension and cancellation
                        of financial assistance
1 . The Commission may reduce or suspend assistance in respect of
a particular action or measure if a check reveals irregularities
or a significant change affecting the nature or conditions of the
action or measure for which, the Commission 's approval has not
been sought .
2 . If the completion dates have not been respected or if a
particular action or measure has been carried out in such a
manner that payment of only part of the financial assistance
allocated to it Is justified , the C/anmissian shall ask. toe
responsible body and the Member State concerned to suiiit their
comments within a fixed period . CM e:-s adequate justificafcl.cn is
given to it , the Giromisslcn may cancel the remaining portion cf
the financial assistance concerned .
3 . Any sum received unduly and to be recovered shall be repaid to
the Comrrdssi..on Interest on acocur.t of late payment /my be
charged on sums not repaid The Comission shall determine the
detailed arrangements for the Implementation of this paragraph .
                 TITLE VI :  MONITORING AID ASSESSMENT
                               Article 23
                               Monitoring
1 . Within the framework of toe partnership between all the bodies
concerned , the Commission and the Member States shall ensure
effective monitoring of implementation of assistance from the
Funds at the level of the Community support framework and at the
level of specific actions (programmes , etc . ) .  Such monitoring
shall be carried out by way cf jointly agreed reporting
procedures , sample checks axd the establishment of monitoring
committees .
 ---pagebreak---                                - 18 -
The Commission sha.ll report to the relevant committees referred
to in Title VIII on the progress made in implementing assistance
operations under the Funds , including the use made of
appropriations in relation to the particulars given in the
Community support frameworks .
2 . Monitoring shall be carried out by reference to physical and
financial indicators . These indicators shall , where appropriate ,
be       down in the Commission decision approving the action
concerned . They shall relate to the specific character of the
action concerned , its objectives and the form of the assistance
provided , as well as to the macroeconomic and structural
conditions in the countries in which the assistance is to be
provided .
3 . Monitoring committees shall be set up by agreement between the
Member State concerned and the Commission .
The Commission ard., where appropriate , the EEB may be represented
on those committees and may nominate technical adviser's to them .
4 . For each multiannual action , the responsible body shall submit
progress reports to the Commission within six months of the end
of each full year of implementation . A final report shall be
submitted to the Commission within six months of completion of
the action .
For each action to be implemented over a period of less than two
years , the responsible body shall submit a report to the
Commission within six months of completion of the action . The
Commission shall determine the form ard. content of the reports .
5 . On the basis of the monitoring reports and procedures outlined
above , the Commission shall make any necessary adjustments to the
volume or conditions of assistance as initially approved and to
the schedule of payments envisaged .
6 . The Commission shall determine the detailed arrangements for
the implementation of this Article .
 ---pagebreak---                                  - 19 -
                             Artiole 27
                             Assessment
1 . Assessment shall be carried out within the framework of the
partnership . The competent authorities in the Member States
shall , where appropriate , contribute in such a way as to ensure
that assessment can be carried out in the most effective manner .
In this connection , assessment shall, make use of the various
particulars that the monitoring arrang’ements can yield in order
to gauge the socio-economic impact of the actions , where
appropriate in close association with the monitoring committees .
2 . Ex ante and ex post assessment of operations undertaken for
structural purposes by the Conrsrjnity shall be concerned with
their effectiveness at three levels -
- their overall impact, on the objectives spelt out in
    Article 130a of the Treaty , and in particular the
    strengthening of the economic and social cohesion of the
    Community ; at tills level , assessment shall be concerned jn
    particular with macroeconciric effects and performance , aocount
    being taken of the general sooio-econamic context in which the
    operations are being carried out and of ttie extent to which
    they complement national policies ;
- the impact of operations under each Gammunity support
    framework , Including their macroeconomic effects on the
    economy of the regions and areas concerned and their
    contribution to the attainment of specific objectives , and in
    particular the development priorities ;
- the impact of individual actions (programmes , etc .); at this
    level , assessment shall be concerned primarily with the
    effects of actions at microeconomic level .
Assessment shall , according to the circumstances , have recourse
to macroeconomic indicators based on regional, or national
statistics , information yielded by descriptive and analytical
studies and qualitative analyses .
 ---pagebreak---                                - 20 -
3.     In drawing up Community support frameworks and in vetting
individual applications for assistance , the Commission shall take
into account , as the determining factor , the findings of
assessments made in accordance with this Article .
4.     The assessment principle and procedures shall be laid down
in the Commission decisions concerning the Community support
frameworks .
                      TITLE VIII :  COMMITTEES
                            Article 28
             Advisory Committee on the Development and
                       Conversion of Regions
Pursuant to Article 17 of Council. Regulation (EEC ) No 2052/88 , an
Advisory Committee on the Development ard Conversion of Regions ,
that will be attached to the Commissi on , made up of Member
States' representatives aid chained by the Commission
representative , stall be set up . The FIB fdiall take part in its
deliberations .
The Commission representative shall submit to the Committee draft
measures to be taken . The Committee shall deliver its opinion on
the draft measures within a period that the Chairman may
determine in the light of the urgency of the matter , where
appropriate by taking a vote .
The opinion shell be entered in the minutes . In addition , each
Member State shall have the right to request that its position be
recorded in those minutes .
The Caronission shall take the fullest possible account of the
opinion delivered by the Committee . It shall inform the
Committee of the manner in which it took account of tlie opinion .
The Committee shall deliver opinions on draft Commission
decisions concerning the Comanuxd ty support frameworks adopted .in
connection with Objectives Ncs 1 and 2 and on the drawing-up and
revision of the list of areas eligible in connection with
Objective No 2 . The matters referred to in Article 10 of
Regulation (EEC) No . (ERDF Regulation) may also be referred
to it by the Commission .
                                                                     37
 ---pagebreak---                               - 21 -
                            Article 29
      Committee referred to in Article 134 of the EEC Treaty
Pursuant to Article 17 of Council Regulation (EEC ) No 2052/ 88 ,
the Committee referred, to in Article 124 of the Treaty shall be
composed of two government representatives and two
representatives of both the workers' and the employers'
organizations in each Member State . The Member of the Commission
responsible for chairing the Committee may delegate that
responsibility to a senior Commission official . For each Member
State , an alternate shall be appointed for each category of
representative mentioned above . In the absence of one or both
members , the alternate shall take part in the deliberations
without requiring to be convened .
The members and alternates shall be appoint. d! iy the Council ,
acting on a proposal from the Commission , for a period of three
years . They my be re-appointed . Hie Council shall , as regards
•the composition of the Committee , endeavoitr to secure fair
representation for the different groups corjjerned .
The Committee shall deliver opinions on the draft Commission
decisions relating to the guidelines for action in connection
with Objectives Nos 3 and 4 , on the Community support frameworks
relating to those objectives and , in the case of support from the
European Social Fund , on the Community support frameworks
relating to Objective Kos 1 , 2 and 5(b).
The opinions of the Committee shall be delivered by an absolute
majority of the votes validly cast . Hie Commission shall inform
the Committee of the manner in which it took account cf those
opinions .
The Committee shall draw up its rules of procedure .
 ---pagebreak---                                - 22 -
                             Artd.de 30
    Committee on Agricultural Structures and Rural Development
Pursuant to Article 17 of Council Regulation (EEC) No 2052/33 , a
Committee on Agricultural Structures and Rural Development, that
will be attached to the Commission , made up of Member States'
representatives and chaired by the Commission representative ,
shall be set up .
The Commission representative shall submit to the Committee draft
measures to be taken . The Camndxtee shall deliver an opinion on
the draft measures within a period that the Chairsen may
determine in the light of the urgency of the matter under
oonsideraticn . The opinion shall be delivered by the majority
provided for in Article 148(2) of the Treaty for the adoption of
decisions which the Council has to tafee acting cn a proposal from
the Commission . Whan a matter is pit to the vote within the
Committee , the -votes of the Mather States' representatives shall,
be weighted as provided, for in the e forementioned Article . The
Chairman shall net vote .
The Commission shall lay down measures that are immediately
applicable . However , if they are not consistent with the opinion
delivered by the Committee , they shall be notified forthwith by
the Commission to ‘the Council . In such cases , the Commission may
defer by one month or more , starting from tlie date of such
notification , the applioati.on cf the measures decided on by it .
Hie Council , acting by a qualified majority , iray take a different
decision within the period provided for in the preceding
paragraph .
The Committee shall deliver opinions on draft Commission
decisions :
- relating to common measures in connection with Objective No
   5(a);
- relating to Community support frameworks in connection with
   Qbjective No 5(b).
 ---pagebreak---                                - 23 -
The Committee provided for in this Article shall replaoe the
Standing Committee on Agricultural Structure , set up by Article 1
of the Council Decision of 4 Deoember 19S2 , 1 in respect of all
the functions assigned to it under that Decision or under Article
6 Of Regulation (EEC) No 729/ 70 .
                             Article 31
                          Other provisions
1.     The Commission shall periodically refer to the Committees
provided for in Articles 26 ,, 29 and 30 above the 3’eports referred
to in Article 16 of Regulation (EEC) No 2052/88 . It may seek the
opinion of those Committees on any matter relating to assistance
operations under trie Ponds other than those provided for in this
Article , notably in connection with its power of initiative
referred to in Article 5(5 ) of Council Regulation (ESC)
No 2052 / 88 .
2.     Council Decision 75/ 185 'ESC! eettuig up a Regional Policy
Committee . Council Derision 83/ 317 / EEC concern:! ng the Committee
of the European Social Pune: and , as regards the BAGS’ Guidance
Section , Articles 11 to 15 of Regulation (130 ) No 729/70
concerning the EAQGF Committee are hereby repealed .
                  TITLE IX : REPORTS AND PUBLICITY
                             Article 32
                               Peter es
The anmial reports referred to in Article 16 of Regulation (EEC )
No 2052/ 88 shall , among other things , take stock of :
- the efforts deployed under all of the Funds , the EZB and the
   other financial instruments in support of the priority
   objectives referred to in Article 1 of the aforementioned
   Regulation ;
- the activities of each Fund , the utilization of the budgetary
   resources concerned and the deployment of the other financial
   instruments for which the Commission has responsibility .
1 OJNo 136 , 17.12.1962 , p. 2892 .                                   40
 ---pagebreak---                                  - 24 -
                               Article 33
                      Information and publicity
1.      The body responsible for implementing an action carried
out with financial assistance from the Community sha.Il ensure
that adequate publicity is given to the action with a view to :
- making potential beneficiaries , and professional organisations
   aware of the opportunities afforded by the action ;
- making the general public aware of the role played by the
   Community in relation to the action ,
Member States shall consult the Commission on , and inform it
about , the initiatives taken for these purposes .
                     TITUS X :   FINAL PRÛV1JIQNS
                               Article 34
                       Transiticrai provisions
1.      Pursuant to Article 15(3 ) of Council Régulation (EEC )
No 2052/ 68 , applications in respect of mul-biannual actions
received after adoptl.cn of that Regulation bat before Has entry
into force of the implex, anting decisions referred to in Article
130e of the Treaty shall be in keeping with the objectives spelt
cut in Article 1 of that Regulation and shall involve one of the
forms of assi stance provided for in Article 5 of that Regulation .
2.      Ha drawing up Community support frameworks , the Commi.s3i.on
shall take account of any multiannual action already approved by
the Counc.il or by the Commission before the entry into force of
the implementing decisions referred to in Article 130e of the
Treaty and having an effect on the period covered by those
support frameworks .
 ---pagebreak---                                - 25 -
3.      The Commission may propose that the Member State concerned
apply provisions set out in the Funds' rules that enter into
force on 1 January 1989 to operations decided on before that
date .
4.      In order to guarantee continuity of the activities of the
Funds in the period between 1 January and 1 October 1989 , the
Commission may approve actions by way of derogation from Article
15(1 ) only . Such actions shall be indicated in the subsequent
decision concerning the relevant Community support framework .
                             Article 35
                          Entry into force
This Regulation shall enter into force on 1 January 1939 .
This Regulation shall be binding in its entirety and directly
applicable in all Member States .
 ---pagebreak---              DRAFT REGULATION
        CONCERNING THE ACTIVITIES
OF THE EUROPEAN REGIONAL DEVELOPMENT FUND
 ---pagebreak---                                      - 2 -
                          CONTENTS OF THE REGULATION
                                                     pages
TITLE I ; SCOPE AND FORMS OF INTERVENTION
Article 1 : scope of intervention                      4
Article 2 : plans of a regional nature                 5
Artide 3 : regional operational programmes             6
Article 4 : co-financing of aid schemes                6
Article 5 : major projects                             7
Article 6 : global grants                              7
Article 7 : preparatory and accompanying measures      7
TITLE II : GUIDELINES AND PARTNERSHIP
Artide 8 : periodic report and guidelines              8
Article 9 : regional partnership                       8
TITLE III : REGIONAL DEVELOPMENT AT COMMUNITY LEVEL
Article 10 : definition of the interventions           9
TITLE IV : GENERAL AND FINAL PROVISIONS
Article 11 : monitoring of compatibility              10
Article 12 : information and publicity                10
Article 13 : indicative allocation of ERDF resources  10
Article 14 : final provisions                         10
Article 15 : entry into force                         10
                                                           44
 ---pagebreak---                                        - 3 -
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community and
in particular Article 130 E ,
                                                       1
Having regard to the proposal from the Commission ,
Having regard to the opinion of the Economic and Social Committee^,
and in cooperation with the European Parliament ^
Whereas Article 130 C states that the European           Regional Development Fund
( ERDF ) is intended to help redress the principal       regional imbalances in the
Community through participating in the development        and structural adjustment
of regions whose development is lagging behind           and in the conversion of
declining industrial regions ;
Whereas Regulations ( EEC ) No . 2052 / 88 of the Council of 24 June 1988 on the
tasks of the Structural Funds and their effectiveness and on co-ordination of
their   activities between themselves and i^ith the operations of the EIB and
the other existing financial instruments^ states in Article 3 paragraph 1
that the European Regional Development Fund shall have the essential task of
providing support for the objectives Nos . 1 et 2 specified in the first
article of the same Regulation , that it shall participate in the operations
of objective No . 5 b ) and , in addition , shall provide support for studies or
pilot schemes concerning regional development at Community level ;
Whereas the provisions common to the Community 's Structural Funds have been
defined by Regulation ( EEC ) No .        / 88 of the Council of           applying
the implementing provisions of Regulation ( EEC ) No . 2052/ 88 which concern on
the   one   hand the  coordination   between    the  activities   of  the different
structural Funds and ,   on the other hand ,     between them and those of the EIB
and the other existing instruments as well as other provisions common to the
action of the Funds 3 ;
Whereas these common provisions must be completed as laid down in Article 3
paragraph 4 of Regulation ( EEC ) No . 2052 / 88 , by specific provisions
concerning the activities of the European Regional Development Fund ;
Whereas it is agreed that within the framework of the reform of the Funds the
Commission shall adopt guidelines for regional policy intended to be used in
the different steps of programming , in particular for the establishment of
the Community support frameworks and for the activities of the European
Regional Development Fund
HAS ADOPTED THIS REGULATION :
1 OJ No .  C
; 0J No . C
I 0J NO . C
5 OJ No . L 185 of 15.7.1988 ,  page 9
   OJ No . L
                                                                             45
 ---pagebreak---                                     TITLE I
                        SCOPE AND FORMS OF INTERVENTION
                       Article 1 ; Scope of intervention
1. The European Regional Development Fund , hereinafter referred to as ERDF ,
   contributes to the correction of the main regional imbalances in the
   Community , and to the reinforcement of its social and economic cohesion .
2. In accordance with Article 3 ( 1 ) of Regulation ( EEC )) No . 2052 / 88 ,  the
   ERDF shall participate in the financing of :
   a)  investment   in  firms which  leads  to the creation or maintenance of
       permanent jobs ;
   b)  infrastructure , in particular :
       - in the regions designated under objective 1 ,    those contributing to
         their economic development ,
       - in the regions or zones designated under objective 2 , those
         concerned with the redevelopment of derelict industrial sites and
         leading to the creation or development of economic activity;
       - in the zones designated under objective 5b ), those directly linked
         to economic activity which creates jobs providing an alternative to
         employment in agriculture ;
   c)  the development of indigenous potential in the regions by measures
       which encourage and support local development initiatives and the
       activities of small and medium sized enterprises ,         in particular
       relating to :
       - assistance towards services for firms ;
       - improvement of access for firms to the capital market , particularly
         by the provision of guarantees , equity participation, securities
         and insurance ;
       - direct aid to investment , where no regional aid scheme exists ;
       - the provision of small-scale infrastructure .
   d)  actions   foreseen under    the  heading of    regional  development     at
       Community level .
                                                                              46
 ---pagebreak---                                        - 5 -
                      Article 2 : plans of a regional nature
1. Apart    from   the   general    provisions  foreseen in  Title  II  of  the
   coordinating regulation , the following specific provisions apply to the
   plans of a regional nature referred to in Article 8 ( A ) and in Article 9
   ( 8 ) of Regulation ( EEC ) No . 2052 / 88 .
2. The plans relating to the regions designated under objective 1 will , as a
   general rule , be drawn up for one or more regions at NUTS level II .
   These plans will contain in particular the following information :
   a)    a succinct analysis of the socio-economic situation of the region ,
         laying particular emphasis on its demographic forecasts ,
   b)    a description of the development strategy foreseen by the Member
         State , with an indication of the national and regional financial
         resources proposed ,
   c)    the Member State 's priorities for action and the regional development
         measures for which it anticipates requesting Community financial
         participation , together with the estimated sums involved in these
         requests for the different forms of Community intervention .
   d)    an indication of the national , regional , local or other authorities
         responsible for putting the actions into effect .
   As a general rule ,    these plans will cover a period of five years and may
   be up-dated annually .
3. The plans relating to the regions designated under objective 2 will , as a
   general rule , be drawn up for one or more zones at NUTS level III .
   These plans will contain in particular the following information :
   a)    a description of the reconversion strategy foreseen by the Member
         State ,  with an indication of the national or regional financial
         resources proposed ,
   b)    the Member State 's priorities for action and the regional
         reconversion measures for which it anticipates requesting Community
         financial participation , together with the estimated sums involved in
         these requests for the different forms of Community intervention ,
   c)    sufficient information to enable a judgment to be made of the overall
         regional economic situation ,
   d)    an indication of the national , regional , local or other authorities
         responsible for putting the measures into effect .
   As a general rule , these plans will cover a period of three years and may
   be up-dated annually .
                                                                         47
 ---pagebreak---                                     - 6 -
                  Artide 3 : regional operational programmes
1. For the regions designated under objective 1 ,     the regional operational
   programmes will in principle concern one or more regions at NUTS level II
   or in specific cases regions at NUTS level III .            For the regions
   designated under objectives 2 and 5b ), as well as for the frontier zones ,
   they will in general concern one or more zones at NUTS level III .
2. They can be undertaken on the initiative of Member States or of the
   Commission in agreement with the Member State concerned .
   When they are undertaken on the initiative of a Member State , they will
   be drawn up by the competent authorities designated by the Member State ,
   in consultation with the Commission .
   When they are undertaken on the initiative of the Commission , the latter ,
   after consulting the Committee referred to in Article 28 of the
   coordinating regulation , will adopt the procedures and invite the
   competent authorities designated by the Member State to establish
   operational programmes .
   The Commission 's initiative is intended :
   - to help resolve serious problems directly associated with              the
     implementation of other Community policies ,           and affecting   the
     socio-economic situation in one or more regions , or
   - to promote the application of Community policies at regional level , or
   - to help resolve problems common to certain categories of region .
3. For the regions designated under objective 1 , the total cost of a
   regional operational programme cannot , as a general rule , be less than
   100 MECU .
                    Article A : co-financing of aid schemes
1. Investment incentives in enterprises will be mainly in the form of
   co-financing of regional aid schemes .
2. With regard to deciding the Community 's financial participation ,       the
   Commission will examine , with the competent authorities of the Member
   State , the characteristics of the aid scheme concerned , ensuring that the
   relevant operational procedures take account of the following :
   - the rate of assistance taking into account the socio-economic situation
     of the regions concerned and the consequent disadvantages of locating
     therein for firms ;
   - variations in operating procedures and the types of aid ,     so that they
     correspond to the needs of beneficiaries ;
   - the priority given to smalt and medium sized enterprises ,         and the
     encouragement to services to them such as management advice and market
     surveys .
                                                                         48
 ---pagebreak---                                         - 7 -
                             Article 5 : major projects
1. In   addition    to   the   information    laid  down  in  Article 16  of  the
   coordinating Regulation ,       requests for ERDF aid for major projects must
   provide the following details :
   a)   for infrastructure :
        -    an indication of the expected rate of usage and the effects on
             encouraging employment ,
        -    an indication of the consequences that Community participation
             will have on the completion of the project ,
        -    an analysis of the costs and socio-economic advantages of the
             project ,
        -    the expected impact on the development or reconversion of the
             region concerned .
   b)   for investment in firms :
        -    an   indication    of   the   economic  perspectives  of the  sector
             concerned ,
             an analysis of the expected profitability of the project .
2. All the information given for major projects must also be given for those
   which form a part of an operational programme .
                              Article 6 : global grants
1. In accordance with Article 8 , first paragraph of regulation ( EEC ) No .
   2052 / 88, the Commission can entrust to regional development organisations
   the management of global grants . Through these grants the Commission will
   give preference to interventions which favour local development
   initiatives . These organisations must operate in the public interest and
   be adequately linked to the socio-economic fields directly concerned with
   the implementation of the measures proposed .
2. The operational procedures for global grants which are the subject of an
   agreement between the Commission and the regional development
   organisations shall be adopted by the Commission in agreement with the
   Member State concerned .
   These decisions will detail in particular :
        the  types of actions to be carried out ,
   -    the  criteria for choosing beneficiaries ,
   -    the  conditions and rates at which ERDF assistance may be granted ,
   -    the  arrangements for monitoring the usage of these global grants .
                Article 7 : Preparatory and accompanying measures
1. The ERDF may finance ,       up to a limit of 1% of its annual allocation ,
   preparatory , accompanying , and management measures necessary for the
   implementation of this regulation . These measures may be carried out by
   the Commission or by outside experts . They include , notably , studies -
   including those of a general nature concerning Community regional
   actions , and technical assistance or information measures .
                                                                           49
 ---pagebreak---                                       - 8 -
2 . Measures carried out on the Commission 's initiative can be financed by
    the ERDF at a rate of 100% .      For other measures the rates laid down in
    Article 18 ( 2 ) of the coordinating regulation are applicable .
                                      TITLE II
                            GUIDELINES AND PARTNERSHIP
                    Artide 8 : periodic report and guidelines
1.  A periodic report on the social and economic situation and development of
    the regions of the Community shall be prepared by the Commission at four
    yearly intervals . This report shall also indicate the macro-economic
    effects of the Community 's regional action . Member States shall provide
    the Commission with the relevant information enabling it to make an
    analysis of all the regions of the Community on the basis of statistics
    which are as comparable and as up to date as possible .
    The first periodic report shall be prepared by 31 December 1990 at the
    latest .
2.  With a view to encouraging growth and the creation of employment in the
    regions this report shall constitute a base for guidelines for Community
    regional policy .     These will be used for the different steps of
    programming , notably establishing Community support frameworks and ERDF
    interventions .
3.  The development or reconversion strategies shall be devised in such a way
    as to favour economic growth and the creation of permanent jobs in the
    regions or zones concerned . Infrastructure which will benefit from ERDF
    assistance must contribute directly to increasing the economic potential
    of the regions . The Commission will adopt the necessary provisions
    concerning the categories of infrastructure in question .
                         Article 9 : regional partnership
The Community 's regional action is to be carried out in close consultation
between the Commission, the Member State concerned and the competent
authorities designated by the latter , particularly at the regional level .
                                                                          50
 ---pagebreak---                                    - 9 -
                                  TITLE III
                   REGIONAL DEVELOPMENT AT COMMUNITY LEVEL
                Article 10 ; definition of the interventions
1. According to Article 3(1 ) last indent of Regulation ( EEC ) No . 2052 / 88 the
   ERDF may also contribute to the financing at the Community level of :
   a)  studies at the Commission 's initiative aiming to identify :
       -   the spatial consequences of measures proposed by the national
           authorities , particularly major infrastructures , when their
           effects go beyond national boundaries ;
       -   measures aiming to correct specific       problems   of   the    border
           regions within the Community ;
       -   the elements necessary to establish a prospective outline of the
           utilisation of Community territory .
   b)  pilot schemes which :
       -   constitute incentives towards the creation of infrastructure ,
           investment in firms , and other specific measures having a marked
           Community interest , in particular in the border regions within
           the Community ;
       -   encourage the pooling of experience and development cooperation
           between different Community regions ,      as well as innovative
           actions .
2. At the Commission 's initiative ,        questions relating to regional
   development at Community level ,       coordination of national regional
   policies or any other problem involving implementation of Community
   regional action may be referred to the Committee specified in article 28
   of the coordinating regulation .      This Committee can come to common
   conclusions on the basis of which the Commission will , where appropriate ,
   address recommendations to the Member States .
3. The Commission will adopt operational procedures for the present article .
                                                                              51
 ---pagebreak---                                               10 -
                                            TITLE IV
                                GENERAL AND FINAL PROVISIONS
                         Artide 11 : monitoring of compatita lity
The Member States are required to provide the information necessary to enable
the Commission to verify that the provisions of Article 7 ( 1 ) of Regulation
( EEC ) No . 2052 / 88 are respected .
                          Article 12 : information and publicity
The provisions in the fields of             information and publicity referred to in
Article 33 of the coordinating regulation and concerning ERDF interventions
will be adopted by the Commission and published in the Official Journal of
the European Communities .
                 Article 13 : indicative allocation of ERDF resources
In accordance with Article 12 ( 6 ) of Regulation ( EEC ) No . 2052 / 88 ,          the
Commission shall before 1 January 1989 , decide for a period of five years and
as a guide ,       on the allocation per Member State of 85% of the commitment
appropriations for the ERDF .
                                Article 14 : final provisions
Regulation     ( EEC )  No .    1787 / 84 is   hereby  repealed  and  replaced by  this
Regulation ,      subject to the application of Article 15 of Regulation ( EEC )
No . 2052 / 88 and of Article 34 of the coordinating regulation .
                                Article 15 : entry into force
This Regulation shall enter into force on 1 January 1989 .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at                     , the                         For the Council
                                                          The President
                                                                                  52
 ---pagebreak---                                                                          P. 02
          РВОРОВАЬ ГОЙ А
                  жш                    КЕПП1АТТГК ГЕЗС') N0 2052/ 88
  THE OTMCTL CF TES SOBQPBAN 03KKCNITIES ,
  Having regard to the Treaty establishing the Europear. Economic Qsrcauru.ty ,
  aid in particular Article If*? thereof ,
  Saving regard to the proposal from the Catmisaion ,
 Having regard to the opinion of the Boaocmio and SocJ-al Oonsuittee ,
 Having regard to the opinion of the European Parliament ,
 Whereas Article 3(4) of Council P,-egvlatian (EEC) No 2052/88 on the tasks of
 the structural Funds and their effectiveness and on coordination of their
 activities between themselves ard with the operations of the European.
 Investment Bank and the other existing financial ±rusrtruri~ints( - ' provides
 for the Council to adopt the epsolfio previsions governing operations under
 each structural Fund ;
 Whereas the types of measure to be supported by the European Social turd
 (hereinafter referred to as " the Fund ") should foe defined ;
(1 ) OJ No L 185 . 1B . 7.1088 , p. © .
                                                                             53
 ---pagebreak--- JUL.26 '88 15:46  BRUX DGSC XI38 FAX 32- 2 -2181801                        r . bJ
                                                - 2 -
         Whereas the soope of the Fund Should ba specified in the light of ite
         responsibility for contributing to the attainment of the five objectives
         laid down in Artiole 1 of Regulation (EEC) No 2052/ 88 ;
         Whereas the categories of expenditure eligible for assistance from the Fund
         should be defined ;
        Whereas expenditure trends should not, be allowed to diverge and standard
        amounts should be introduced by stages for contributions by the Fund
        towards operating costs in respect of training ;
        Whereas under Artiole 10(1 ) of Regulation (ESC) No 2052/88 the Ownmiaaicn
        is required to establish guidelines for the attainment of Objectives Nos 5
        and 4 laid, down in that Regulation ;
        Whereas arrangements Should ba specified for the submission of the plans to
       be drawn up by Member States pursuant to Regulation (ESI) No 2052 /88 ;
       Whereas it is necessary to define the forme of assistance to be granted by
       the Fund and specify the content of applications relating to operations to
       be carried out within the framework of Member States' labour mrket
       policies ;
       Whereas arrangements should ba laid down for the submission and approval of
       applications for assistance from the Fund , as should details of the
       arrangements for monitoring ;
       Whereas the transitional provisions Should be specified ,
      HAS ADQFTED TEIS REGULATION :
                                                                                54
 ---pagebreak--- JUL . 26 '88 15:47     BRUX DG9C KI38 FflX 32-2-2181801                        P. 04
                                                    - 3 -
                                    Article Qua (eligible operations )
          1 . Under the conditions laid down by Council Regulations CsaC) No 2032/68
               and CDCRD/88 , as weld as those in this Reflation , the Fond Shall
               contribute to the financing of the following :
               (a) vocational training operations , aocmpanied where n&oeasary bv
                     vocational guidance ;
               (b) subsidies towards rearuit&snt into newly created Jobs of
                    unspecified duration and towards the creation of self-®apl eyed
                    activities
         2 . In this connection , the Fund fball also contribute 'to the financing of
              the following :
              (a) operations of an innovatory nature which are intended to test nsw
                    approaches to the oontert , methods end organisation of vocational,
                    training and more generally the development of snployrent , with a
                   view to establishing a basis for subsequent Fund intervention in a
                   number of Mauber States :
             (b) preparatory , ocoodperiying and ronageenent measures needed for the
                   implementation of ‘this Regulation ; such measures include studies ,
                   technical assistance end the exchange of eccpsflease which has
                   Multiplier effect , as wall as follow-up to ard valuation of
                   measures financed by the Fund ;
                                                                                 55
 ---pagebreak--- JUL . 26 '88 15:48 BRUX DG9C KI38 FflX 32-2-2181801                             P. 05
                                                  - 4 -
                (o) measures involving the training of staff representatives from ■ :WO
                     or more         States , carried out at the request of employers and
                     workers' organizations in ocrmectlan with the modernization of tbe
                     production apparatus .
          3 . Vocational training within the meaning of paragraph 1(a) means , first ,
               any measure aimed at providing the skills necessary to carry out one or
               more speoific typiss of employment , with the exception of apprenticeship
               schemes , and eeoond , any measure involving high technology aimed, at
              developing the advanced qualifio&ti ans required by this dbangirsg labour
              market and carried out in coder to meet the requirements of avail phis
              posts .
          4 . By way of derogation , vocational training includes, in the regions
               concerned by objectives n2 1 and 5b , any vocational training ana
               further training measure required for the use of new production and / or
              management techniques in small and medium-sized undertakings .
          5 . By way of derogation, vocational training includes , in the regions
              concerned by Objective No 1 :
                    the theoretical portion of training given outside the undertaJcu^f ;
                    that port of national secondary education systems speaifiophly
                   devoted to vocational training following oompulsory fuH-tir«
                   schooling where the system is reorganizing its structures and
                   vocational training methods to take aoooiuit of the challenges posed
                   by eoancsaio and technological change .
                                                                                   56
 ---pagebreak--- JUL . 26 '88 15:49    BRUX DG9C Kl 38 FAX 32-2-2181801                          P.06
                                                   - 8 -
           6. In the regions ocsherned by Qbjeotive No l , end for a period of
               three Years following the entry into foroe of this Regulation ,
               recruitment subsidies shall be attended to projects whlrih fulfil a
               puhlio need involvlrg the orcation of additional Jobe of at least
               six months ' duration for the long-term unenployed aged over 23 .
                                            Anianü (scsops)
         In aooordenoe with Article f'(S ) of Council Regulation (EEC) No 2032/66 ,
         Fund assistance may be grautad :
              (a) as regards Objectives S and. 4 , to operations intended to
                    ombat long-term unemployment by Mans of the occupational
                    integration of persona aged over 25 who have been unesrplcyad for
                   more than twelve months ;
                   facilitate the occupational integration of persons aged under 25
                   from the age at 'which octrpulsGry fuH-time schooling ends , however
                   long or short the period during which they have bean seeking
                   employment .
             Cb) as regards Objectives Nos i , 2 and 8(b), to measures intended to :
             -     encourage job stability and develop new errrployment possibilities ,
                   organized for parsons employed in small and medium-sized
                                                                                   57
 ---pagebreak--- JUU.UD  dd lb:^a   tíPUX DG9C KI38 FflX 32 - 2-2181801                      P.07
                                                   - 6 -
                 undertakings and those who are unemployed or threatened with
                 unemployment ;
                 facilitate vocational training for any working person involved in
                 an operation which is essential to the achievement of the
                 development and conversion objectives of an integrated programme .
            Co) as regards Objective No 1 , operations for persons :
                 holding an appr-sntiosisMp agreeoant ;
                 trained under national eeoond&ry vocational education eystsae .
                                ArtioleJS. (©ligiblo experditure )
       1 . Fund essistaiaoe my be granted only in raepeot of expenditure aimed at
           covering :
           Ca) the income of persons receiving vocational training ;
           Cb)  the oast :
                of preparing , operating and managing vocational training operations
                including vocational guidance , including the cost of training the
                teaching staff ;
               subsistenoe and travel ooats of those covered by vocational
               training operations ;
                                                                               58
 ---pagebreak--- JUL.26 '88 15:51    BRUX DG9C K 138 FAX 32-2-2181801                            P. 08
                                                 - 7 -
             (o) the granting , during a maximum period of twelve months per person ,
                  of subsidies towards recruitment into newly orestad jobs of
                  unspecified duration and towards the creation of self-employed
                  activities ;
             (d) cost of preparing , aooarrrpanyirig and managing operations which have
                  reoaivBd assistance from the ToxA under Article l(2)(b ) and (o ) of
                  tMs Regulat-Lcxa .
        2 . Tbs Commissian shall dateiains each year the maximum eligible amount per
            person and per wsdk granted under paragraph i(o). This amount shall be
            based on 3Oft of the averfiga greed Income cf industrial workers in each
            M&nber State. , determined in accordance with the bec.ii^nuixei definition of
            the Stfttistaoal Offlos cf the Buropea-n Cteammttias ,   it shall bo
            pohlished in the Official Journal of the European Ccranunltiaa .
       3 . The Commission shall ensure that Fund expenditure for operations of the
            same type does not develop in different ways . To this end , it shall
            determine the standardized cost by Member State for each item of
            expenditure to be borne by tug Fund according to the type of training
            involved .
       The Commission shall establish the first sat of standarliisad oasts in 'She
       first financial year tills Regulation comas into force : tliey shall be
      published in the Official Journal of the European Communities and shall be
      applicable the following financial year .
                                                                                  59
 ---pagebreak--- JUL . 26 '88 15:52     BRUX DG9C KI38 FflX 32-2-2181801                            P. 09
                                                    - 8 -
           1 . Pursuant to Artlole 10(1 ) Of Regulation (EEC) No 2062/ 88 , the Commission
                shall ftgtAhi 1 rih before 10 February 1980 for a period oovering a number
                of years the general guidelines oonoerning aotion under Objectives Nos 3
               And 4 to be used in defining the Cannnunlty support frameworks ; they
               will be published in the Official Journal of the European Ocncrmitias .
          2 . Any amendments rihal-l be made before 1 February of a financial year ;
               they shall apply to the new Community support frameworks or amended
               frameworks in respect of the following financial years .
          3 . The guidelines Shall establish the training and employment pclioics
               oovering measures that may be eligible for European Social Fund
               assistance ; apart from regions covered by Objectives Nos 1 , 2 &ni 8(b),
               priority shall be given to Community financing for measures leading to
               recruitment in available Jobs .
                                                        (plana )
         The plans referred to in Articles 8 to 11 of Council Regulation ( TEC)
         No 2082/88 make particular reference in oonnection with matters concerning
         the Fund to ;
                    the mifinw.tnh between Job applications and vacancies ,
                                                                                  60
 ---pagebreak--- JUL.26 'EC iZ.53   BRUX DG9C KI38 FAX ?2-2-21fU801                             P. 10
                                                 - 9 -
                  the nature and charaoteristlos of unfilled vacancies ,
                  the oooupati onal openings which appear cm labour markets ,
                 the list of measures planned or underway in regard to training and
                 employment ,
                 the number of parsons ooaoernai , broken down by category and type
                 of measure ,
                 the scale of the financial effort by pibJJLo authcritl.es at all
                 levels .
                                . ftrtiole g (forms of assistance)
       1 . Pursruant to Artioie 5 of Counoil Régulation (ESC) No 2052/86
           applications for fund assistance shall be presented in the form of
           operational prograremee , global grants or aotion within the mixing of
           Article I(2)(b) and Co). The operational programmes and global grants
           may include relevant preparatory , aoaanpairying' , and adrainistr&tive
           measures .
       2 . The Member States shall occmxnioate the information neoaasary for the
           eaaroin&ticm of measures , in particular the information specified in
                                                                                  61
 ---pagebreak--- JUL . 26 ' 88 15:54   BPi IX røC KI38 FP1X 32-2-2181801                        P. 11
                                                   - 10 -
              Article 14(2) of Council Regulation (EEC) No COORD/ 65 anl the
              information specifically required by the European Soolal Fund (location ,
              number of persons , duration of the operation for each person ,
              occupational level ooncemed).
              Furthermore it is neoeesary :
                    with raspoot to registered unemployed persons and others without
                    jobs to state tlxair occupational level at the beginning of the
                    operations ;
                   with respect to employed persons , to specify the nature and soepe
                    of proposed occupational conversion operations ;
                   with respect to operations involving oonversion or ©oencrio
                   restruoturing , to state th© volume and type of investment plannei ,
                   changes produced or production systems .
               Article 7 (submission and approval of applications for assistance )
         1 . Applications for assistance shall be submittel at least Z months before
             the start of operations . ‘They Shall be accompanied by a form drawn up
             using computerized means listing the particulars for each measure so
             that it r*ai be followed fron budgetary oommitment to final payment .
         2 . The Carmaission shall lay down rules with respect to these applications
             before the beginning of operations .
                                                                                   62
 ---pagebreak--- JUL . 2b '88 15:55   B5UX DG9C KI30 fPX 32-2-2181801                           P. 12
                                                - 11 -
                                       Article S (monltorlng )
          Pursuant to Article 24(2) of Council Regulation (ESC) No CDCBD/68 , the
          Commission may carry out cn-tflae-spot cfo&cks . These checks may he carried
          out by means of representative sample checks .    In snob oases after
          consultation with the Member State oaaceraed , the Commission sChall
          establish the number of samples taken in ‘the light of the material aid.
          technical ooixiitiona of the operation oocoerned . To the eKtsnt that the
          sample leads to a reduction , it shall be applied in proportion to tha
         entire amount for which payment is requested. after tha Member State h-*3 bwd
         an opportunity to present its observations .
                                Artiola 8 ( trausitionsl provisions )
         1 . Pursuant to Article 15(4) of Counoil Regulation (SSC) No 3062/ 56
             applications for assistance for 1959 subrltted before 21 October 1966
             shall be covered by tecisicn 63/ S18/KSC and its imple-centurig provisions .
         2 . Tha first plane shall cover a period beginning on 1 January 1990 , Plans
             concerning Objectives Nos 1 , 2 and 3(b) shall be presented bofore
             31 March 1959 . Flans oanoernirg Objectives Nos 3 and 4 shall be
             presented by 1 June 1969 .
        3 . Applications for assistance for operations to be implemented starting in.
             the 1990 financial year shall be submitted before 30 June 1969 .
                                                                                     63
 ---pagebreak--- JUL.26 '88 15:56   CRUX DG9C KI38 FAX 32-2-21 81801                        P. 13
                                               - 12 -
                             Article 10 (administrative prooedures)
        Hie Commission «hai_l adopt the neoeesary procedures to implement this
        Regulation .
                                 Artiole 11 (entry into foroe )
        This Regulation shall enter into for-oe aa 1 January 1969 subject to the
        transitional provisions laid down in Artiole 9 . It shall be applicable as
        from that date .
        3 . Council Regulation (EEC) No 2980/83(2) is hereby repealed .
       This Regulation ehth! be binding In its entirety and shall be applicable in
       all Member States .
       Done at
                                                         By the Counoil .
      (3) OJ L 269 , 22.10.1963 , p   1.
                                                                               64
 ---pagebreak---                  DRAFT
   Proposal for a Council Regulation
laying down provisions for implementing
      Regulation ( EEC ) No 2052 / 88
as regards the EAGGF , Guidance Section
                                        65
 ---pagebreak---                                          2
                                      DRAFT
  Proposal for a Council Regulation laying down provisions for implementing
  Regulation ( EEC ) No 2052 / 88 as regards the EAGG F , Guidance Section
  THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
  Having regard to the Treaty establishing the European Economic Community,,
  and in particular Article 43 thereof ,
                                                          1
  Having regard to the proposal from the Commission ,
                                                                2
  Having regard to the opinion of the European Parliament ,
  Having regard to the opinion of the Economic and Social Committee,^
                                                            L
 Whereas Article 3(4 ) of Regulation ( EEC ) No 2052 / 88 provides for the
  Council to adopt the specific provisions governing operations under
  each of the structural Funds ;
 Whereas the tasks laid down for the Guidance Section of the European Agricultural
Guidance and Guarantee Fund , hereinafter called the Fund ,            by
 Article 3(3 ) of the above Regulation should be further specified in
 the light of the contribution they make to achieving Objectives 1 ,
 5(a ) and 5(b ) as set out in Article 1 of that Regulation ;
 Whereas measures to speed up the adjustment of agricultural structures
 with a view to the reform of the Funds must include measures closely
 connected with the common agricultural policy and likely to meet its
 general requirements ;
1
2
3
4
                                                                              66
 ---pagebreak---                                      - 3 -
 Whereas , however , some of those measures , which already exist at
 Community Level , may be adjusted to allow for the differing structural
 situations in the different parts of the Community , by diversification ,
 and specifically by modulation of the contribution in favour of the areas
concerned by Objective 1 ;
Whereas measures designed to contribute to Objective 1 and to
promoting the development of rural areas ( Objective 5(b )) should include
action to respond to those areas' specific structural problems ;
Whereas , however , that action - must be implemented in accordance
with the objectives of the common agricultural policy and should not lead to an
 increase in.. output of - products in which there is a surplus , especially'
through irrigation ;
Whereas measures for the development and exploitation of woodland are
of particular interest , not bnly as offering alternative activity and
income for agriculture in those areas but also in order to increase
woodland 's contribution to improving the environment and to expand its
protective function ;
Whereas the forms of assistance by the Fund should be determined and
whereas operational programmes , and where appropriate global grants ,
are the most appropriate forms , both for measures for the development
of less-developed areas and of rural areas and for measures to improve
structures for marketing and processing agricultural products ;
Whereas provision should be made for the Commission to adopt such
provisions as are necessary for the implementation of this Regulation ,
and specifically as regards the way in which operational programmes
are to be presented ;
                                                                                67
 ---pagebreak---                                             1
  HAS ADOPTED THIS REGULATION :
                                      Article 1
 1 . The Guidance Section of the European Agricultura ! Guidance and
      Guarantee Fund , hereinafter called the Fund , referred to in Article 1(1 )
      of Regulation ( EEC ) No 729 / 70 , may ; in accordance with the criteria and objectives
       laid: down in Titles I to IV of this Regulation , finance measures for performing
       the tasks referred to in Article 3(3) of Regulation ( EEC ) No 2052 / 88 in order to
      attain Objectives No 1 and No 5 as set out in Article 1 of that Regulation .
 2 . The conditions and criteria laid down in Regulation ( EEC ) No           / 88
      ( horizontal ) shall apply to measures financed under this Regulation ,
      except if this Regulation or provisions adopted under Arti c le 2(1 ) thereof
      specify otherwise .
 3 . Without prejudice to Article 34 of Regulation ( ETC ) No           / 88 and
      Article 11 of this Regulation , the Council , acting on a proposal
      from the 'Commission 1n accordance with the procedure laid down in
      Article 43 of the Treaty , shall decide by 31 December 1989 on any
      alterations to the common measures introduced under Article 6 of
      Regulation ( EEC ) No 729 / 70 in order to achieve the objectives
      referred to in Regulation ( EEC ) No 2052 / 88 , in conformity with
     the rules laid down by Regulation ( EEC ) No           / 88 and with this
     Régulation .
TITLE I : SPEEDING UP THE ADJUSTMENT OF AGRICULTURAL S TRUCTURES WITH A
             VIEW TO THE REFORM OF THE COMMON AGRICULTURAL POLICY
                                     Art i c l e 2
1 , The Fund may finance common measures adopted by the Council in
     accordance with the procedure provided for in the third subparagraph
     of Article 43(2 ) of the Treaty , in order to speed up the adjustment
     of agricultural structures , with a view in particular to the reform
     of the common agricultural policy .
                                                                                          68
 ---pagebreak--- 2 . The common measures referred to in paragraph 1 moy concern :
    - measures to accompany markets policy /, such as reducing production
      potential and adjusting and converting production , including
      measures to promote quality products and the marketing of produce
      at the farm ;
    - the afforestation of farmland ;
    - measures to encourage early retirement from farming , in order to
      reduce the area of land devoted to farm production ;
    - measures to support farm incomes , such as compensation for permanent
      natural handicaps in mountain , hill or less-favoured areas ;
    - measures to protect the environment and safeguard the landscape ;
    - measures to encourage the installation of young farmers ;
    - measures to adapt structures on holdings , especially investments ;
    - measures to improve the marketing and processing of agricultural
      and forestry products , in accordance with the conditions and the
      criteria laid down in the provisions referred to in Article 14(3 );
    - measures to improve the marketing and processing of fishery products .
 ---pagebreak---                                           3
 TITLE II : PROMOTING THE DEVELOPMENT AND STRUCTURAL ADJUSTMENT OF THE
             LESS-DEVELOPED REGIONS
                                   Article 3
 1 . The Fund may contribute to achieving Objective No 1 referred to
      in Article 1 of Regulation ( EEC ) No 2052 / 88 by financing measures for
      developing and strengthening agricultural and forestry structures ,
      for maintaining the landscape and for rural development .
                                 I
 2 . Priority for assistance from the Fund shall be granted to areas
      within less-developed regions where agricultural structure is
      seriously inadequate , especially if they are located in mountain , hill
      or less-favoured areas within the meaning of Article 3 of
      Directive 75 / 268 / EEC .
                                   Article 4
 In accordance with Article 5 of Regulation ( EEC ) No 2052 / 88 , the Fund
 may finance operational programmes , integrated operational programmes
 and global grants which are within the framework of Community support
 and concern one or more of measures as      referred to in Article 5 .
                                   Article 5
 Financial assistance by the Fund to operational programmes may cover
the following :
- encouraging retirement from farming in order to restructure
    agriculture and encourage the installation of young farmers ;
- the conversion , diversification and reduction of production by
    specific measures ;
- if their financing is not provided for by Regulation ( EEC ) No         / 88 ( ERDF ),
. improving rural infrastructures which are necessary for the development
   of agriculture and forestry ;
. measures to achieve diversification , especially those providing
    multiple activities or alternative incomes for farmers ;
 ---pagebreak---                               - 4 -
 reparcelling and associated work ;
 individual or collective land or pasture improvement ;
 irrigation , including the renovation and improvement of irrigation
networks , the creation of collective irrigation works from existing
main channels, and the creation of small irrigation systems
not supplied from collective networks , and the renovation of
drainage systems ;
encouragement for tourist and craft investments , including
the improvement of living accommodation on agricultural holdings ;
protection of the environment and maintenance of the countryside ;
restoring agricultural production potential after natural disasters ;
the development and exploitation of woodland , in accordance
with conditions and criteria to be adopted by the Council on
a proposal from the Commission, including :
. afforestation and the improvement and reconstitution of woodland ,
. related work and accompanying measures necessary for the
   exploitation of woodland ,
in order to increase woodland 's contribution to the conservation
and protection of the environment and to offer farmers alternative
activities and income ;
the development of agricultural and forestry advisory services ,
and the improvement of facilities for agricultural training .
                                                                      71
 ---pagebreak---                                       - 5 *
 TITLE in :      PROMOTING THE DEVELOPMENT OF RURAL AR EA S OF THE COMMUNITY IN REGIONS
                      COVERED BY OBJECTIVE 5
                                       Article 6
 1.    In order to promote ,, with a view to the reform of the common
       agricultural policy , the development of rural areas of the Community
     in regions not covered by Objective 1 , in particular by exploiting
       the endogenous development potential of those areas , Member States
       may submit rural development plans for geographical areas
       at the territorial level considered appropriate , selected
       in accordance with the criteria specified in Article 4 of
       Regulation ( EEC ) No            / 88 .
2.     In accordance with Article 5 of Regulation ( EEC ) No 2052 / 88
       the Fund may finance operational programmes , Integrated
      operational programmes and global grants which are within
       the framework of Community support and concern one or more
      of     measures   as    referred to in Article 5 .
                                      Article 7
1.    Rural development plans shall include the particulars referred
     to in Article 11(3 ) of Regulation ( EEC ) No 2052 / 88 and Article 5
     of Regulation ( EEC ) No              / 88 , and in addition :
     - a delimitation of the rural areas proposed and the reasons
         therefor .      As a rule an area proposed must be a territorial
         unit at level NUTS III or a homogeneous area not exceeding
         an area equivalent to regional level NUTS III ;
     - the particulars required for verifying compliance with
         the selection criteria laid down in Article .,, of Regulation
         ( EEC ) No        / 88 ;
      - particulars of the socio-economic environment of the areas
         proposed .
 ---pagebreak--- I
                                    - 6 -
                                                                                      I
  TITLE IV :    GENERAL AND TRANSITIONAL PROVISIONS
                                    Article 8
  Assistance from the Fund for the measures provided for in Article 5(2 ) ( e )
  of Regulation ( EEC ) No 2052 / 88 may cover :
  - carrying out pilot projects for promoting the development of
     rural areas , including the development and exploitation of
     woodland ;
  - supporting such technical assistance and preparatory studies
     as are necessary for operations ;
  - studies to assess the effectiveness of the measures provided
     for by this Regulation ;
  - carrying out demonstration projects to show farmers the real
     possibilities of systems , methods and techniques of production
     which are in accordance with the objectives of the reform of
     the common agricultural poLicy .
                                    Article 9
  The Commission shall adopt the detailed provisions necessary for the implementation
  of this Regulation .
                                   Article 10
  Member States shaLl supply the Commission with Information enabling
  it to verify that the provisions of Article 7(1 ) of Regulation
  ( EEC ) No 2052 / 88 are complied with .
                                                                                73
 ---pagebreak---                                          - 7 -
                                       Artide 11
1.  The Council , acting on a proposal from the Commission in accordance with the
   procedure laid down in Article 43 of the Treaty , shall by 31 December 1989
   decide upon the forms of and the conditions for the EAGGF contribution to
   measures to improve the conditions under which agricultural , forestry and
   fishery products are processed and marketed , as referred to in Article 2(2 ),
    in compliance with the following principles :
   - Community assistance shall be subject to the approval of sector plans showing
      the need for the production sector concerned to be adjusted in line with the
      requirements of the common agricultural policy and the common fisheries policy;
   - the form of assistance shall be an operational programme within the meaning
      of Article 8 of Regulation ( EEC ) No      / 88 or a global grant as provided
      for in Article 9 of that Regulation ;
   - in parts of the Community other than those referred to in Articles 3 and 6
      of this Regulation assistance shall be granted only if the measures concern :
      . the necessary adaptation of a sector of agriculture ,
      . conversion to products which are not in surplus , including non-food
        products , or alternative forms of production ,
      . forestry ,
      . fisheries .
2. With effect from the date of entry into force of the Council Decision referred
   to in paragraph 1 , Regulation ( EEC ) No 355 / 77 on common measures to improve
   the conditions under which agricultural and fishery products are processed and
   marketed is repealed .
   However , projects concerning fisheries may still be submitted under that
   Regulation until ...
3. By way of derogation from the previous paragraph , Articles 6 to 15 and 17 to
   23 of Regulation ( EEC ) No 355 / 77 shall continue to apply to projects
   submitted by the date of entry into force of the Council Decision referred to
   in paragraph 1 , or as regards the fishery sector , by
                                                                                   74
 ---pagebreak---                                  - 8 -
 4.     Operational programmes as referred to in Articles 4 and 6
       may, as soon as this Regulation enters into force , include
       measures for improving the marketing and processing of
       agricultural , forestry and fishery products , provided they
       comply with the relevant current provisions .
                                 Article 12
Article 1(3 ), Articles 6 to 6c and Article 7(2 ) of Regulation
( EEC ) No 729 / 70 are hereby repealed .
                                  Article 13
This Regulation shall enter into force on 1 January 1989 .
This Regulation shall be binding in its entirety and directly
applicable in all Member States .
                                                                    75