Article 38 Implementation of financial instruments
1. In implementing Article 37, managing authorities may provide a financial contribution to the following financial instruments: (a) financial instruments set up at Union level, managed directly or indirectly by the Commission; (b) financial instruments set up at national, regional, transnational or cross-border level, managed by or under the responsibility of the managing authority. 2. Contributions from the ESI Funds to financial instruments under point (a) of paragraph 1 shall be placed in separate accounts and used, in accordance with the objectives of the respective ESI Funds, to support actions and final recipients consistent with the programme or programmes from which such contributions are made. Contributions to the financial instruments referred to in the first subparagraph shall be subject to this Regulation unless exceptions are expressly provided for. The second subparagraph is without prejudice to the rules governing the set up and functioning of the financial instruments under the Financial Regulation, unless those rules conflict with the rules of this Regulation, in which case this Regulation prevails. 3. For financial instruments under point (b) of paragraph 1, the managing authority may provide a financial contribution to the following financial instruments: (a) financial instruments complying with the standard terms and conditions laid down by the Commission, in accordance with the second subparagraph of this paragraph; (b) already existing or newly created financial instruments which are specifically designed to achieve the specific objectives set out under the relevant priority. The Commission shall adopt implementing acts concerning the standard terms and conditions with which the financial instruments under point (a) of the first subparagraph shall comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3). 4. When supporting financial instruments referred to in point (b) of paragraph 1 the managing authority may: (a) invest in the capital of existing or newly created legal entities, including those financed from other ESI Funds, dedicated to implementing financial instruments consistent with the objectives of the respective ESI Funds, which will undertake implementation tasks; the support to such entities shall be limited to the amounts necessary to implement new investments in accordance with Article 37 and in a manner that is consistent with the objectives of this Regulation; (b) entrust implementation tasks to: (i) the EIB; (ii) international financial institutions in which a Member State is a shareholder, or financial institutions established in a Member State aiming at the achievement of public interest under the control of a public authority; (iii) a body governed by public or private law; or (c) undertake implementation tasks directly, in the case of financial instruments consisting solely of loans or guarantees. In that case the managing authority shall be considered to be the beneficiary as defined in point (10) of Article 2. When implementing the financial instrument, the bodies referred to in points (a),(b) and (c) of the first subparagraph shall ensure compliance with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism and tax fraud. Those bodies shall not be established and shall not maintain business relations with entities incorporated in territories, whose jurisdictions do not cooperate with the Union in relation to the application of the internationally agreed tax standards and shall transpose such requirements in their contracts with the selected financial intermediaries. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down additional specific rules on the role, liabilities and responsibility of bodies implementing financial instruments, related selection criteria and products that may be delivered through financial instruments in accordance with Article 37. The Commission shall notify those delegated acts simultaneously to the European Parliament and the Council by 22 april 2014. 5. The bodies referred to in points (a) and (b) of the first subparagraph of paragraph 4, when implementing funds of funds may further entrust part of the implementation to financial intermediaries provided that such entities ensure under their responsibility that the financial intermediaries satisfy the criteria laid down in Article 140(1),(2) and (4) of the Financial Regulation. Financial intermediaries shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflicts of interest. 6. The bodies referred to in point (b) of the first subparagraph of paragraph 4 to which implementation tasks have been entrusted shall open fiduciary accounts in their name and on behalf of the managing authority, or set up the financial instrument as a separate block of finance within the financial institution. In the case of a separate block of finance, an accounting distinction shall be made between programme resources invested in the financial instrument and the other resources available in the financial institution. The assets held on fiduciary accounts and such separate blocks of finance shall be managed in accordance with the principle of sound financial management following appropriate prudential rules and shall have appropriate liquidity. 7. Where a financial instrument is implemented under points (a) and (b) of the first subparagraph of paragraph 4, subject to the implementation structure of the financial instrument, the terms and conditions for contributions from programmes to financial instruments shall be set out in funding agreements in accordance with Annex III at the following levels: (a) where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds; and (b) between the duly mandated representatives of the managing authority, or where applicable, the body that implements the fund of funds, and the body that implements the financial instrument. 8. For financial instruments implemented under point (c) of the first subparagraph of paragraph 4, the terms and conditions for contributions from programmes to financial instruments shall be set out in a strategy document in accordance with Annex IV to be examined by the monitoring committee. 9. National public and private contributions, including where relevant contributions in kind as referred to in Article 37(10), may be provided at the level of the fund of funds, at the level of the financial instrument or at the level of final recipients, in accordance with the Fund-specific rules. 10. The Commission shall adopt implementing acts laying down uniform conditions regarding the detailed arrangements for the transfer and management of programme contributions managed by the bodies referred to in the first subparagraph of paragraph 4. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 38 Implementation of financial instruments):
1. In implementing Article 37, managing authorities may provide a financial contribution to the following financial instruments: (a) financial instruments set up at Union level, managed directly or indirectly by the Commission; (b) financial instruments set up at national, regional, transnational or cross-border level, managed by or under the responsibility of the managing authority. 2. Contributions from the ESI Funds to financial instruments under point (a) of paragraph 1 shall be placed in separate accounts and used, in accordance with the objectives of the respective ESI Funds, to support actions and final recipients consistent with the programme or programmes from which such contributions are made. Contributions to the financial instruments referred to in the first subparagraph shall be subject to this Regulation unless exceptions are expressly provided for. The second subparagraph is without prejudice to the rules governing the set up and functioning of the financial instruments under the Financial Regulation, unless those rules conflict with the rules of this Regulation, in which case this Regulation prevails. 3. For financial instruments under point (b) of paragraph 1, the managing authority may provide a financial contribution to the following financial instruments: (a) financial instruments complying with the standard terms and conditions laid down by the Commission, in accordance with the second subparagraph of this paragraph; (b) already existing or newly created financial instruments which are specifically designed to achieve the specific objectives set out under the relevant priority. The Commission shall adopt implementing acts concerning the standard terms and conditions with which the financial instruments under point (a) of the first subparagraph shall comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3). 4. When supporting financial instruments referred to in point (b) of paragraph 1 the managing authority may: (a) invest in the capital of existing or newly created legal entities, including those financed from other ESI Funds, dedicated to implementing financial instruments consistent with the objectives of the respective ESI Funds, which will undertake implementation tasks; the support to such entities shall be limited to the amounts necessary to implement new investments in accordance with Article 37 and in a manner that is consistent with the objectives of this Regulation; (b) entrust implementation tasks to: (i) the EIB; (ii) international financial institutions in which a Member State is a shareholder, or financial institutions established in a Member State aiming at the achievement of public interest under the control of a public authority; (iii) a body governed by public or private law; or (b) entrust implementation tasks to: (i) the EIB; (ii) international financial institutions in which a Member State is a shareholder, or financial institutions established in a Member State aiming at the achievement of public interest under the control of a public authority; (iii) a body governed by public or private law; or (c) undertake implementation tasks directly, in the case of financial instruments consisting solely of loans or guarantees. In that case the managing authority shall be considered to be the beneficiary as defined in point (10) of Article 2. When implementing the financial instrument, the bodies referred to in points (a),(b) and (c) of the first subparagraph shall ensure compliance with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism and tax fraud. Those bodies shall not be established and shall not maintain business relations with entities incorporated in territories, whose jurisdictions do not cooperate with the Union in relation to the application of the internationally agreed tax standards and shall transpose such requirements in their contracts with the selected financial intermediaries. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down additional specific rules on the role, liabilities and responsibility of bodies implementing financial instruments, related selection criteria and products that may be delivered through financial instruments in accordance with Article 37. The Commission shall notify those delegated acts simultaneously to the European Parliament and the Council by 22 april 2014. 5. The bodies referred to in points (a) and (b) of the first subparagraph of paragraph 4, when implementing funds of funds may further entrust part of the implementation to financial intermediaries provided that such bodies ensure under their responsibility that the financial intermediaries satisfy the criteria laid down in Article 140(1),(2) and (4) of the Financial Regulation. Financial intermediaries shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflicts of interest. 6. The bodies referred to in point (b) of the first subparagraph of paragraph 4 to which implementation tasks have been entrusted shall open fiduciary accounts in their name and on behalf of the managing authority, or set up the financial instrument as a separate block of finance within the financial institution. In the case of a separate block of finance, an accounting distinction shall be made between programme resources invested in the financial instrument and the other resources available in the financial institution. The assets held on fiduciary accounts and such separate blocks of finance shall be managed in accordance with the principle of sound financial management following appropriate prudential rules and shall have appropriate liquidity. 7. Where a financial instrument is implemented under points (a) and (b) of the first subparagraph of paragraph 4, subject to the implementation structure of the financial instrument, the terms and conditions for contributions from programmes to the financial instrument shall be set out in funding agreements in accordance with Annex IV at the following levels: (a) where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds; and (b) between the duly mandated representatives of the managing authority, or where applicable, the body that implements the fund of funds, and the body that implements the financial instrument. 8. For financial instruments implemented under point (c) of the first subparagraph of paragraph 4, the terms and conditions for contributions from programmes to financial instruments shall be set out in a strategy document in accordance with Annex IV to be examined by the monitoring committee. 9. National public and private contributions, including where relevant contributions in kind as referred to in Article 37(10), may be provided at the level of the fund of funds, at the level of the financial instrument or at the level of final recipients, in accordance with the Fund-specific rules. 10. The Commission shall adopt implementing acts laying down uniform conditions regarding the detailed arrangements for the transfer and management of programme contributions managed by the bodies referred to in the first subparagraph of paragraph 4. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).
Article 39 Contribution of ERDF and EAFRD to joint uncapped guarantee and securitisation financial instruments in favour of SMEs, implemented by the EIB
1. For the purposes of this Article, 'debt finance' means loans, leasing or guarantees. 2. Member States may use the ERDF and EAFRD to provide a financial contribution to financial instruments referred to in point (a) of Article 38(1) of this Regulation, managed indirectly by the Commission with implementation tasks entrusted to the EIB pursuant to point (c)(iii) of Article 58(1) and Article 139(4) of the Financial Regulation, in respect of the following activities: (a) uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation; (b) securitisation, as defined in point (61) of Article 4 (1) of Regulation (EU) 575/2013 of the European Parliament and of the Council ( 34 ) , of any of the following: (i) existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees; (ii) new portfolios of debt finance to SMEs. The financial contribution referred to in points (a) and (b) of the first subparagraph of this paragraph shall contribute to junior and/or mezzanine tranches of portfolios mentioned therein provided that the relevant financial intermediary retains a sufficient part of the risk of the portfolios at least equal to the risk retention requirement set out in Directive 2013/36/EU of the European Parliament and of the Council ( 35 ) and in Regulation (EU) No 575/2013 to ensure adequate alignment of interest. In the case of securitisation under point (b) of the first subparagraph of this paragraph, the financial intermediary is obliged to originate new debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation. Each Member State intending to participate in such financial instruments shall contribute an amount which is in line with SMEs' debt financing needs in that Member State and the estimated demand for such SME debt finance, taking into account the ex ante assessment referred to in point (a) of the first subparagraph of paragraph 4 and in any case which is not higher than 7 % of the allocation from the ERDF and EAFRD to the Member State. The aggregate ERDF and EAFRD contribution by all participating Member States shall be subject to a global ceiling of EUR 8 500 000 000 (in 2011 prices). Where it is considered by the Commission in consultation with the EIB that the aggregate minimum contribution to the instrument representing the sum of the contributions of all participating Member States is insufficient taking due account of the minimum critical mass defined in the ex ante assessment referred to in point (a) of the first subparagraph of paragraph 4, implementation of the financial instrument shall be discontinued and the contributions returned to the Member States. Where the Member State and the EIB are not able to agree the conditions of the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 the Member State shall submit a request for amendment of the programme referred to in point (b) of the first subparagraph of paragraph 4 and reallocate the contribution to other programmes and priorities in accordance with requirements for thematic concentration. Where the conditions for the termination of the Member State's contribution to the instrument established in the funding agreement between the Member State concerned and the EIB referred to in point (c) of the first subparagraph of paragraph 4 have been satisfied, the Member State shall submit a request for amendment of the programme referred to in point (b) of the first subparagraph of paragraph 4 and reallocate the remaining contribution to other programmes and priorities in accordance with requirements for thematic concentration. Where the participation of a Member State is discontinued, that Member State shall submit a request for amendment of the programme. Where unused appropriations are decommitted, the decommitted appropriations shall be made available again to the Member State concerned, in order to be re-programmed for other programmes and priorities in accordance with the requirements for thematic concentration. 3. The SMEs which receive new debt finance, as a result of the new portfolio built up by the financial intermediary in the context of the financial instrument referred to in paragraph 2 shall be considered the final recipients of the contribution of the ERDF and EAFRD to the financial instrument concerned. 4. The financial contribution referred to in paragraph 2 shall comply with the following conditions: (a) by way of derogation from Article 37(2), it shall be based on one ex ante assessment at Union level carried out by the EIB and the Commission. On the basis of available data sources on bank debt finance and SMEs, the ex ante assessment shall cover, inter alia, an analysis of the SME financing needs at Union level, SME financing conditions and needs as well as an indication of the SME financing gap in each Member State, a profile of the economic and financial situation of the SME sector at Member State level, minimum critical mass of aggregate contributions, a range of estimated total loan volume generated by such contributions, and the added value; (b) it shall be provided by each participating Member State as part of a single dedicated national programme per financial contribution by ERDF and EAFRD supporting the thematic objective set out in point (3) of the first paragraph of Article 9; (c) it shall be subject to the conditions set out in a funding agreement concluded between each participating Member State and the EIB including, inter alia: (i) tasks and obligations of the EIB including remuneration; (ii) minimum leverage to be achieved at clearly defined milestones within the eligibility period indicated in Article 65(2); (iii) conditions for the new debt finance; (iv) provisions relating to non-eligible activities and exclusion criteria; (v) schedule of payments; (vi) penalties in the event of non-performance by financial intermediaries; (vii) selection of financial intermediaries; (viii) monitoring, reporting and auditing; (ix) visibility; (x) the conditions for termination of the agreement. For the purposes of implementation of the instrument, the EIB will enter into contractual arrangements with selected financial intermediaries; (d) in the event that the funding agreement referred to in point (c) is not concluded within six months of the adoption of the programme referred to in point (b), the Member State shall have the right to reallocate such contribution to other programmes and priorities in accordance with requirements for thematic concentration. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt an implementing act laying down the model of the funding agreement referred to in point (c) of the first subparagraph. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 150(3). 5. A minimum leverage shall be achieved in each participating Member State at the milestones set out in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4, calculated as the ratio between the new debt finance to eligible SMEs to be originated by the financial intermediaries and the corresponding contribution of the ERDF and EAFRD from the relevant Member State to the financial instruments. Such minimum leverage may vary between participating Member States. In the event that the financial intermediary does not achieve the minimum leverage set out in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 it shall be contractually bound to pay penalties for the benefit of the participating Member State, in accordance with the terms and conditions set out in the funding agreement. Neither the guarantees issued nor the relevant securitisation transactions shall be affected by a failure by the financial intermediary to reach the minimum leverage set out in the funding agreement. 6. By way of derogation from the first subparagraph of Article 38(2), financial contributions referred to in paragraph 2 of this Article may be placed in separate accounts per Member State or, if two or more participating Member States give their consent, in a single account covering all such Member States and used in accordance with the specific objectives of the programmes from which the contributions are made. 7. By way of derogation from Article 41(1) and (2) as regards the financial contributions referred to in paragraph 2 of this Article, the Member State's request for payment to the Commission shall be made on the basis of 100 % of the amounts to be paid by the Member State to the EIB in accordance with the schedule defined in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 of this Article. Such requests for payment shall be based on the amounts requested by the EIB deemed necessary to cover commitments for guarantee contracts or securitisation transactions to be finalised within the three following months. Payments from Member States to the EIB shall be made without delay and in any case before commitments are entered into by the EIB. 8. At closure of the programme, the eligible expenditure shall be the total amount of programme contributions paid to the financial instrument, corresponding: (a) for the activities referred to in point (a) of the first subparagraph of paragraph 2 of this Article, to the resources referred to in point (b) of the first subparagraph of Article 42(3); (b) for the activities referred to in point (b) of the first subparagraph of paragraph 2 of this Article, to the aggregate amount of new debt finance resulting from the securitisation transactions, paid to or to the benefit of eligible SMEs within the eligibility period indicated in Article 65(2). 9. For the purpose of Articles 44 and 45, the uncalled guarantees and the amounts recovered in relation to, respectively, the uncapped guarantees and the securitisation transactions, shall be deemed to be resources paid back to the financial instruments. At the winding up of the financial instruments, the net liquidation proceeds, after deduction of costs, fees and payment of amounts due to creditors ranking senior to those contributed by the ERDF and EAFRD, shall be returned to the relevant Member States pro rata to their contributions to the financial instrument. 10. The report referred to in Article 46(1) shall include the following additional elements: (a) the total amount of ERDF and EAFRD support paid to the financial instrument in relation to uncapped guarantees or securitisation transactions, by programme and priority or measure; (b) progress in creating the new debt finance in accordance with Article 37(4), for eligible SMEs. 11. Notwithstanding Article 93(1), the resources allocated to instruments under paragraph 2 of this Article may be used for the purpose of giving rise to new SME debt finance in the entire territory of the Member State without regard to the categories of region, unless otherwise provided for in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4. 12. Article 70 shall not apply to programmes set up to implement financial instruments under this Article.
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 39 Contribution of ERDF and EAFRD to joint uncapped guarantee and securitisation financial instruments in favour of SMEs, implemented by the EIB):
1. For the purposes of this Article, 'debt finance' means loans, leasing or guarantees. 2. Member States may use the ERDF and EAFRD to provide a financial contribution to financial instruments referred to in point (a) of Article 38(1) of this Regulation, managed indirectly by the Commission with implementation tasks entrusted to the EIB pursuant to point (c)(iii) of Article 58(1) and Article 139(4) of the Financial Regulation, in respect of the following activities: (a) uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation; (b) securitisation, as defined in point (61) of Article 4 (1) of Regulation (EU) 575/2013 of the European Parliament and of the Council ( 15 ), of any of the following: (i) existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees; (ii) new portfolios of debt finance to SMEs. (b) securitisation, as defined in point (61) of Article 4 (1) of Regulation (EU) 575/2013 of the European Parliament and of the Council ( 15 ), of any of the following: (i) existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees; (ii) new portfolios of debt finance to SMEs. The financial contribution referred to in points (a) and (b) of the first subparagraph of this paragraph shall contribute to junior and/or mezzanine tranches of portfolios mentioned therein provided that the relevant financial intermediary retains a sufficient part of the risk of the portfolios at least equal to the risk retention requirement set out in Directive 2013/36/EU of the European Parliament and of the Council ( 16 ) and in Regulation (EU) No 575/2013 to ensure adequate alignment of interest. In the case of securitisation under point (b) of the first subparagraph of this paragraph, the financial intermediary is obliged to originate new debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation. Each Member State intending to participate in such financial instruments shall contribute an amount which is in line with SMEs' debt financing needs in that Member State and the estimated demand for such SME debt finance, taking into account the ex ante assessment referred to in point (a) of the first subparagraph of paragraph 4 and in any case which is not higher than 7 % of the allocation from the ERDF and EAFRD to the Member State. The aggregate ERDF and EAFRD contribution by all participating Member States shall be subject to a global ceiling of EUR 8 500 000 000 (in 2011 prices). Where it is considered by the Commission in consultation with the EIB that the aggregate minimum contribution to the instrument representing the sum of the contributions of all participating Member States is insufficient taking due account of the minimum critical mass defined in the ex ante assessment referred to in point (a) of the first subparagraph of paragraph 4, implementation of the financial instrument shall be discontinued and the contributions returned to the Member States. Where the Member State and the EIB are not able to agree the conditions of the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 the Member State shall submit a request for amendment of the programme referred to in point (b) of the first subparagraph of paragraph 4 and reallocate the contribution to other programmes and priorities in accordance with requirements for thematic concentration. Where the conditions for the termination of the Member State's contribution to the instrument established in the funding agreement between the Member State concerned and the EIB referred to in point (c) of the first subparagraph of paragraph 4 have been satisfied, the Member State shall submit a request for amendment of the programme referred to in point (b) of the first subparagraph of paragraph 4 and reallocate the remaining contribution to other programmes and priorities in accordance with requirements for thematic concentration. Where the participation of a Member State is discontinued, that Member State shall submit a request for amendment of the programme. Where unused appropriations are decommitted, the decommitted appropriations shall be made available again to the Member State concerned, in order to be re-programmed for other programmes and priorities in accordance with the requirements for thematic concentration. 3. The SMEs which receive new debt finance, as a result of the new portfolio built up by the financial intermediary in the context of the financial instrument referred to in paragraph 2 shall be considered the final recipients of the contribution of the ERDF and EAFRD to the financial instrument concerned. 4. The financial contribution referred to in paragraph 2 shall comply with the following conditions: (a) by way of derogation from Article 37(2), it shall be based on one ex ante assessment at Union level carried out by the EIB and the Commission. On the basis of available data sources on bank debt finance and SMEs, the ex ante assessment shall cover, inter alia, an analysis of the SME financing needs at Union level, SME financing conditions and needs as well as an indication of the SME financing gap in each Member State, a profile of the economic and financial situation of the SME sector at Member State level, minimum critical mass of aggregate contributions, a range of estimated total loan volume generated by such contributions, and the added value; (a) by way of derogation from Article 37(2), it shall be based on one ex ante assessment at Union level carried out by the EIB and the Commission. On the basis of available data sources on bank debt finance and SMEs, the ex ante assessment shall cover, inter alia, an analysis of the SME financing needs at Union level, SME financing conditions and needs as well as an indication of the SME financing gap in each Member State, a profile of the economic and financial situation of the SME sector at Member State level, minimum critical mass of aggregate contributions, a range of estimated total loan volume generated by such contributions, and the added value; (b) it shall be provided by each participating Member State as part of a single dedicated national programme per financial contribution by ERDF and EAFRD supporting the thematic objective set out in point (3) of the first paragraph of Article 9; (c) it shall be subject to the conditions set out in a funding agreement concluded between each participating Member State and the EIB including, inter alia: (i) tasks and obligations of the EIB including remuneration; (ii) minimum leverage to be achieved at clearly defined milestones within the eligibility period indicated in Article 65(2); (iii) conditions for the new debt finance; (iv) provisions relating to non-eligible activities and exclusion criteria; (v) schedule of payments; (vi) penalties in the event of non-performance by financial intermediaries; (vii) selection of financial intermediaries; (viii) monitoring, reporting and auditing; (ix) visibility; (x) the conditions for termination of the agreement. For the purposes of implementation of the instrument, the EIB will enter into contractual arrangements with selected financial intermediaries; (c) it shall be subject to the conditions set out in a funding agreement concluded between each participating Member State and the EIB including, inter alia: (i) tasks and obligations of the EIB including remuneration; (ii) minimum leverage to be achieved at clearly defined milestones within the eligibility period indicated in Article 65(2); (iii) conditions for the new debt finance; (iv) provisions relating to non-eligible activities and exclusion criteria; (v) schedule of payments; (vi) penalties in the event of non-performance by financial intermediaries; (vii) selection of financial intermediaries; (viii) monitoring, reporting and auditing; (ix) visibility; (x) the conditions for termination of the agreement. For the purposes of implementation of the instrument, the EIB will enter into contractual arrangements with selected financial intermediaries; (d) in the event that the funding agreement referred to in point (c) is not concluded within six months of the adoption of the programme referred to in point (b), the Member State shall have the right to reallocate such contribution to other programmes and priorities in accordance with requirements for thematic concentration. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt an implementing act laying down the model of the funding agreement referred to in point (c) of the first subparagraph. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 150(3). 5. A minimum leverage shall be achieved in each participating Member State at the milestones set out in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4, calculated as the ratio between the new debt finance to eligible SMEs to be originated by the financial intermediaries and the corresponding contribution of the ERDF and EAFRD from the relevant Member State to the financial instruments. Such minimum leverage may vary between participating Member States. In the event that the financial intermediary does not achieve the minimum leverage set out in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 it shall be contractually bound to pay penalties for the benefit of the participating Member State, in accordance with the terms and conditions set out in the funding agreement. Neither the guarantees issued nor the relevant securitisation transactions shall be affected by a failure by the financial intermediary to reach the minimum leverage set out in the funding agreement. 6. By way of derogation from the first subparagraph of Article 38(2), financial contributions referred to in paragraph 2 of this Article may be placed in separate accounts per Member State or, if two or more participating Member States give their consent, in a single account covering all such Member States and used in accordance with the specific objectives of the programmes from which the contributions are made. 7. By way of derogation from Article 41(1) and (2) as regards the financial contributions referred to in paragraph 2 of this Article, the Member State's payment application to the Commission shall be made on the basis of 100 % of the amounts to be paid by the Member State to the EIB in accordance with the schedule defined in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4 of this Article. Such payment applications shall be based on the amounts requested by the EIB deemed necessary to cover commitments for guarantee contracts or securitisation transactions to be finalised within the three following months. Payments from Member States to the EIB shall be made without delay and in any case before commitments are entered into by the EIB. 8. At closure of the programme, the eligible expenditure shall be the total amount of programme contributions paid to the financial instrument, corresponding: (a) for the activities referred to in point (a) of the first subparagraph of paragraph 2 of this Article, to the resources referred to in point (b) of the first subparagraph of Article 42(1); (b) for the activities referred to in point (b) of the first subparagraph of paragraph 2 of this Article, to the aggregate amount of new debt finance resulting from the securitisation transactions, paid to or to the benefit of eligible SMEs within the eligibility period indicated in Article 65(2). 9. For the purpose of Articles 44 and 45, the uncalled guarantees and the amounts recovered in relation to, respectively, the uncapped guarantees and the securitisation transactions, shall be deemed to be resources paid back to the financial instruments. At the winding up of the financial instruments, the net liquidation proceeds, after deduction of costs, fees and payment of amounts due to creditors ranking senior to those contributed by the ERDF and EAFRD, shall be returned to the relevant Member States pro rata to their contributions to the financial instrument. 10. The report referred to in Article 46(1) shall include the following additional elements: (a) the total amount of ERDF and EAFRD support paid to the financial instrument in relation to uncapped guarantees or securitisation transactions, by programme and priority or measure; (b) progress in creating the new debt finance in accordance with Article 37(4), for eligible SMEs. 11. Notwithstanding Article 93(1), the resources allocated to instruments under paragraph 2 of this Article may be used for the purpose of giving rise to new SME debt finance in the entire territory of the Member State without regard to the categories of region, unless otherwise provided for in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4. 12. Article 70 shall not apply to programmes set up to implement financial instruments under this Article.
Article 40 Management and control of financial instruments
1. Bodies designated in accordance with Article 124 of this Regulation for ERDF, Cohesion Fund, ESF, EMFF and with Article 65 of the EAFRD Regulation for the EAFRD shall not carry out on-the spot verifications of operations comprising financial instruments implemented under point (a) of Article 38(1). Those designated bodies shall receive regular control reports from the bodies entrusted with the implementation of those financial instruments. 2. The bodies responsible for the audit of programmes shall not carry out audits of operations comprising financial instruments implemented under point (a) of Article 38(1) and of management and control systems relating to those financial instruments. They shall receive regular control reports from the auditors designated in the agreements setting up those financial instruments. 3. The bodies responsible for the audit of programmes may conduct audits at the level of final recipients only when one or more of the following situations occur: (a) supporting documents, providing evidence of the support from the financial instrument to final recipients and of its use for the intended purposes in line with applicable law, are not available at the level of the managing authority or at the level of the bodies that implement financial instruments; (b) there is evidence that the documents available at the level of the managing authority or at the level of the bodies that implement financial instruments do not represent a true and accurate record of the support provided. 4. The Commission shall be empowered to adopt delegated acts, in accordance with Article 149, concerning the management and control of financial instruments referred to in point (b) of Article 38(1), including controls to be performed by managing and audit authorities, arrangements for keeping supporting documents, elements to be evidenced by supporting documents, and management and control and audit arrangements. The Commission shall notify those delegated acts simultaneously to the European Parliament and the Council by 22 April 2014. 5. The bodies implementing financial instruments shall be responsible for ensuring that supporting documents are available and shall not impose on final recipients record-keeping requirements that go beyond what is necessary to enable them to fulfil that responsibility.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 40 Management and control of financial instruments):
1. The authorities designated in accordance with Article 124 of this Regulation and with Article 65 of the EAFRD Regulation shall not carry out on-the-spot verifications at the level of the EIB or other international financial institutions in which a Member State is a shareholder, for financial instruments implemented by them. However, the designated authorities shall carry out verifications in accordance with Article 125(5) of this Regulation and checks in accordance with Article 59(1) of Regulation (EU) No 1306/2013 at the level of other bodies implementing the financial instruments in the jurisdiction of their respective Member State. The EIB and other international financial institutions in which a Member State is a shareholder shall provide to the designated authorities a control report with each application for payment. They shall also provide to the Commission and to the designated authorities an annual audit report drawn up by their external auditors. Those reporting obligations are without prejudice to the reporting obligations, including as regards the performance of the financial instruments, as set out in Article 46(1) and (2) of this Regulation. The Commission shall be empowered to adopt an implementing act concerning the models for the control reports and the annual audit reports referred to in the third subparagraph of this paragraph. That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 150(2). 2. Without prejudice to Article 127 of this Regulation and Article 9 of Regulation (EU) No 1306/2013, the bodies responsible for the audit of the programmes shall not carry out audits at the level of the EIB or other international financial institutions in which a Member State is a shareholder, for financial instruments implemented by them. The bodies responsible for the audit of the programmes shall carry out audits of operations and of management and control systems at the level of other bodies implementing the financial instruments in their respective Member States and at the level of the final recipients provided that the conditions set out in paragraph 3 are fulfilled. The Commission may carry out audits at the level of the bodies referred to in paragraph 1, where it concludes that this is necessary to obtain reasonable assurance given the risks identified. 2a. As regards financial instruments referred to in point (a) of Article 38(1) and Article 39 which were established by a funding agreement signed before 2 August 2018, the rules set out in this Article applicable at the moment of the signature of the funding agreement shall apply, by way of derogation from paragraphs 1 and 2 of this Article. 3. The bodies responsible for the audit of programmes may conduct audits at the level of final recipients only when one or more of the following situations occur: (a) supporting documents, providing evidence of the support from the financial instrument to final recipients and of its use for the intended purposes in line with applicable law, are not available at the level of the managing authority or at the level of the bodies that implement financial instruments; (b) there is evidence that the documents available at the level of the managing authority or at the level of the bodies that implement financial instruments do not represent a true and accurate record of the support provided. 4. By 3 November 2018, the Commission shall adopt delegated acts in accordance with Article 149 supplementing this Regulation by laying down additional specific rules on the management and control of financial instruments referred to in points (b) and (c) of Article 38(1), the types of controls to be performed by managing and audit authorities, the arrangements for keeping supporting documents and the elements to be evidenced by supporting documents. 5. The bodies implementing financial instruments shall be responsible for ensuring that supporting documents are available and shall not impose on final recipients record-keeping requirements that go beyond what is necessary to enable them to fulfil that responsibility. 5a. By way of derogation from Article 143(4) of this Regulation and from the second paragraph of Article 56 of Regulation (EU) No 1306/2013, in operations comprising financial instruments, a contribution cancelled in accordance with Article 143(2) of this Regulation or in accordance with the first paragraph of Article 56 of Regulation (EU) No 1306/2013, as a result of an individual irregularity, may be reused within the same operation under the following conditions: (a) where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the final recipient, the contribution cancelled may be reused only for other final recipients within the same financial instrument; (b) where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the financial intermediary within a fund of funds, the contribution cancelled may be reused only for other financial intermediaries. Where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the body implementing funds of funds, or at the level of the body implementing financial instruments where a financial instrument is implemented through a structure without a fund of funds, the contribution cancelled may not be reused within the same operation. Where a financial correction is made for a systemic irregularity, the contribution cancelled may not be reused for any operation affected by the systemic irregularity.
Article 41 Requests for payment including expenditure for financial instruments
1. As regards financial instruments referred to in point (a) of Article 38(1) and financial instruments referred to in point (b) of Article 38(1) implemented in accordance with points (a) and (b) of Article 38(4), phased applications for interim payments shall be made for programme contributions paid to the financial instrument during the eligibility period laid down in Article 65(2) (the 'eligibility period") in accordance with the following conditions: (a) the amount of the programme contribution paid to the financial instrument included in each application for interim payment submitted during the eligibility period shall not exceed 25 % of the total amount of programme contributions committed to the financial instrument under the relevant funding agreement, corresponding to expenditure within the meaning of points (a), (b) and (d) of Article 42(1) expected to be paid during the eligibility period. Applications for interim payment submitted after the eligibility period shall include the total amount of eligible expenditure within the meaning of Article 42; (b) each application for interim payment referred to in point (a) of this paragraph may include up to 25 % of the total amount of the national co-financing as referred to in Article 38(9) expected to be paid to the financial instrument, or at the level of final recipients for expenditure in the meaning of points (a), (b) and (d) of Article 42(1), within the eligibility period; (c) subsequent applications for interim payment submitted during the eligibility period shall only be made: (i) for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payments has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (ii) for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payments have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (d) each application for interim payment, which includes expenditure related to financial instruments, shall separately disclose the total amount of programme contributions paid to the financial instrument and the amounts paid as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1). At closure of a programme, the application for payment of the final balance shall include the total amount of eligible expenditure as referred to in Article 42. 2. As regards financial instruments referred to in point (b) of Article 38(1) implemented in accordance with point (c) of Article 38(4), the applications for interim payments and for payment of the final balance shall include the total amount of the payments effected by the managing authority for investments in final recipients as referred to in points (a) and (b) of Article 42(1). 3. The Commission shall be empowered to adopt delegated acts in accordance with Article 149, laying down the rules for withdrawal of payments to financial instruments and consequent adjustments in respect of applications for payments. 4. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts laying down the models to be used when submitting additional information concerning financial instruments with the applications for payments to the Commission. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 41 Payment applications including expenditure for financial instruments):
1. As regards financial instruments referred to in point (a) of Article 38(1) and financial instruments referred to in point (b) of Article 38(1) implemented in accordance with points (a) and (b) of Article 38(4), phased applications for interim payments shall be made for programme contributions paid to the financial instrument during the eligibility period laid down in Article 65(2) (the 'eligibility period") in accordance with the following conditions: (a) the amount of the programme contribution paid to the financial instrument included in each application for interim payment submitted during the eligibility period shall not exceed 25 % of the total amount of programme contributions committed to the financial instrument under the relevant funding agreement, corresponding to expenditure within the meaning of points (a), (b) and (d) of Article 42(1) expected to be paid during the eligibility period. Applications for interim payment submitted after the eligibility period shall include the total amount of eligible expenditure within the meaning of Article 42; (b) each application for interim payment referred to in point (a) of this paragraph may include up to 25 % of the total amount of the national co-financing as referred to in Article 38(9) expected to be paid to the financial instrument, or at the level of final recipients for expenditure in the meaning of points (a), (b) and (d) of Article 42(1), within the eligibility period; (c) subsequent applications for interim payment submitted during the eligibility period shall only be made: (i) for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payment has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (ii) for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payment have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (c) subsequent applications for interim payment submitted during the eligibility period shall only be made: (i) for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payment has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (ii) for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payment have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1); (d) each application for interim payment, which includes expenditure related to financial instruments, shall separately disclose the total amount of programme contributions paid to the financial instruments and the amounts paid as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1). At closure of a programme, the application for payment of the final balance shall include the total amount of eligible expenditure as referred to in Article 42. (d) each application for interim payment, which includes expenditure related to financial instruments, shall separately disclose the total amount of programme contributions paid to the financial instruments and the amounts paid as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1). At closure of a programme, the application for payment of the final balance shall include the total amount of eligible expenditure as referred to in Article 42. 2. As regards financial instruments referred to in point (b) of Article 38(1) implemented in accordance with point (c) of Article 38(4), the applications for interim payments and for payment of the final balance shall include the total amount of the payments effected by the managing authority for investments in final recipients as referred to in points (a) and (b) of Article 42(1). 3. The Commission shall be empowered to adopt delegated acts in accordance with Article 149, laying down the rules for withdrawal of payments to financial instruments and consequent adjustments in respect of applications for payment. 4. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts laying down the models to be used when submitting additional information concerning financial instruments with the applications for payment to the Commission. ose implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).
Article 42 Eligible expenditure at closure
1. At closure of a programme, the eligible expenditure of the financial instrument shall be the total amount of programme contributions effectively paid or, in the case of guarantees, committed by the financial instrument within the eligibility period, corresponding to: (a) payments to final recipients, and in the cases referred to in Article 37(7) payments to the benefit of final recipients; (b) resources committed for guarantee contracts, whether outstanding or already come to maturity, in order to honour possible guarantee calls for losses, calculated on the basis of a prudent ex ante risk assessment, covering a multiple amount of underlying new loans or other risk-bearing instruments for new investments in final recipients; (c) capitalised interest rate subsidies or guarantee fee subsidies, due to be paid for a period not exceeding 10 years after the eligibility period, used in combination with financial instruments, paid into an escrow account specifically set up for that purpose, for effective disbursement after the eligibility period, but in respect of loans or other risk-bearing instruments disbursed for investments in final recipients within the eligibility period; (d) reimbursement of management costs incurred or payment of management fees of the financial instrument. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down the specific rules concerning the establishment of a system of capitalisation of annual instalments for interest rate subsidies and guarantee fee subsidies referred to in point (c) of the first subparagraph. 2. In the case of equity-based instruments and micro-credit, capitalised management costs or fees due to be paid for a period not exceeding six years after the eligibility period, in respect of investments in final recipients which occurred within the eligibility period, which cannot be covered by Articles 44 or 45, may be considered as eligible expenditure when paid into an escrow account specifically set up for that purpose. 3. In the case of equity-based instruments targeting enterprises referred to in Article 37(4) for which the funding agreement referred to in point (b) of Article 38(7) was signed before 31 December 2017, which by the end of the eligibility period invested at least 55 % of the programme resources committed in the relevant funding agreement, a limited amount of payments for investments in final recipients to be made for a period not exceeding four years after the end of eligibility period may be considered as eligible expenditure, when paid into an escrow account specifically set up for that purpose, provided that State aid rules are complied with and that all of the conditions set out below are fulfilled. The amount paid into the escrow account: (a) shall be used solely for follow-on investments in final recipients having received initial equity investments from the financial instrument within the eligibility period, which are still wholly or partially outstanding; (b) shall be used solely for follow-on investments to be made in accordance with market standards and market standard contractual arrangements and limited to the minimum necessary to stimulate private sector co-investment, while ensuring continuity of financing for the target enterprises so that both public and private investors can benefit from investments; (c) shall not exceed 20 % of the eligible expenditure of the equity-based instrument referred to in point (a) of the first subparagraph of paragraph 1 from which ceiling capital resources and gains returned to that equity-based instrument during the eligibility period shall be deducted. Any amounts paid into the escrow account which are not used for investments in final recipients paid in the period referred to in the first subparagraph shall be used in accordance with Article 45. 4. The eligible expenditure disclosed in accordance with paragraphs 1 and 2 shall not exceed the sum of the: (a) total amount of the support from the ESI Funds paid for the purposes of paragraphs 1 and 2; and (b) corresponding national co-financing. 5. Management cost and fees as referred to in point (d) of the first subparagraph of paragraph 1 and in paragraph 2 of this Article may be charged by the body implementing the fund of funds or bodies implementing financial instruments pursuant to points (a) and (b) of Article 38(4) and shall not exceed the thresholds defined in the delegated act referred to in paragraph 6 of this Article. Whereas management costs shall comprise direct or indirect cost items reimbursed against evidence of expenditure, management fees shall refer to an agreed price for services rendered established via a competitive market process, where applicable. Management costs and fees shall be based on a performance based calculation methodology. Management costs and fees may comprise arrangement fees. Where arrangement fees, or any part thereof, are charged to final recipients, they shall not be declared as eligible expenditure. Management costs and fees, including those incurred for preparatory work in relation to the financial instrument before the signature of the relevant funding agreement, shall be eligible as from the date of signature of the relevant funding agreement. 6. The Commission shall be empowered to adopt delegated acts, in accordance with Article 149, laying down the specific rules setting out the criteria for determining management costs and fees on the basis of performance and the applicable thresholds as well as rules for the reimbursement of capitalised management costs and fees for equity-based instruments and micro-credit.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 42 Eligible expenditure at closure):
1. At closure of a programme, the eligible expenditure of the financial instrument shall be the total amount of programme contributions effectively paid or, in the case of guarantees, committed by the financial instrument within the eligibility period, corresponding to: (a) payments to final recipients, and in the cases referred to in Article 37(7) payments to the benefit of final recipients; (b) resources committed for guarantee contracts, whether outstanding or already come to maturity, in order to honour possible guarantee calls for losses, calculated on the basis of a prudent ex ante risk assessment, covering a multiple amount of underlying new loans or other risk-bearing instruments for new investments in final recipients; (c) capitalised interest rate subsidies or guarantee fee subsidies, due to be paid for a period not exceeding 10 years after the eligibility period, used in combination with financial instruments, paid into an escrow account specifically set up for that purpose, for effective disbursement after the eligibility period, but in respect of loans or other risk-bearing instruments disbursed for investments in final recipients within the eligibility period; (d) reimbursement of management costs incurred or payment of management fees of the financial instrument. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down the specific rules concerning the establishment of a system of capitalisation of annual instalments for interest rate subsidies and guarantee fee subsidies referred to in point (c) of the first subparagraph. 2. In the case of equity-based instruments and micro-credit, capitalised management costs or fees due to be paid for a period not exceeding six years after the eligibility period, in respect of investments in final recipients which occurred within the eligibility period, which cannot be covered by Articles 44 or 45, may be considered as eligible expenditure when paid into an escrow account specifically set up for that purpose. 3. In the case of equity-based instruments targeting enterprises referred to in Article 37(4) for which the funding agreement referred to in point (b) of Article 38(7) was signed before 31 December 2018, which by the end of the eligibility period invested at least 55 % of the programme resources committed in the relevant funding agreement, a limited amount of payments for investments in final recipients to be made for a period not exceeding four years after the end of the eligibility period may be considered as eligible expenditure, when paid into an escrow account specifically set up for that purpose, provided that State aid rules are complied with and that all of the conditions set out below are fulfilled. The amount paid into the escrow account: (a) shall be used solely for follow-on investments in final recipients having received initial equity investments from the financial instrument within the eligibility period, which are still wholly or partially outstanding; (b) shall be used solely for follow-on investments to be made in accordance with market standards and market standard contractual arrangements and limited to the minimum necessary to stimulate private sector co-investment, while ensuring continuity of financing for the target enterprises so that both public and private investors can benefit from investments; (c) shall not exceed 20 % of the eligible expenditure of the equity-based instrument referred to in point (a) of the first subparagraph of paragraph 1 from which ceiling capital resources and gains returned to that equity-based instrument during the eligibility period shall be deducted. Any amounts paid into the escrow account which are not used for investments in final recipients paid in the period referred to in the first subparagraph shall be used in accordance with Article 45. 4. The eligible expenditure disclosed in accordance with paragraphs 1, 2 and 3 shall not exceed the sum of the: (a) total amount of the support from the ESI Funds paid for the purposes of paragraphs 1, 2 and 3 ; and (b) corresponding national co-financing. 5. Where management costs and fees as referred to in point (d) of the first subparagraph of paragraph 1 of this Article and in paragraph 2 of this Article are charged by the body implementing the fund of funds or bodies implementing financial instruments pursuant to point (c) of Article 38(1) and points (a), (b) and (c) of the first subparagraph of Article 38(4), they shall not exceed the thresholds defined in the delegated act referred to in paragraph 6 of this Article. Whereas management costs shall comprise direct or indirect cost items reimbursed against evidence of expenditure, management fees shall refer to an agreed price for services rendered established via a competitive market process, where applicable. Management costs and fees shall be based on a performance-based calculation methodology. Management costs and fees may comprise arrangement fees. Where arrangement fees, or any part thereof, are charged to final recipients, they shall not be declared as eligible expenditure. Management costs and fees, including those incurred for preparatory work in relation to the financial instrument before the signature of the relevant funding agreement, shall be eligible as from the date of signature of the relevant funding agreement. 6. The Commission shall be empowered to adopt delegated acts, in accordance with Article 149, laying down the specific rules setting out the criteria for determining management costs and fees on the basis of performance and the applicable thresholds as well as rules for the reimbursement of capitalised management costs and fees for equity-based instruments and micro-credit.
Article 43 Interest and other gains generated by support from the ESI Funds to financial instruments
1. Support from the ESI Funds paid to financial instruments shall be placed in accounts domiciled within financial institutions in Member States and shall be invested on a temporary basis in accordance with the principles of sound financial management. 2. Interest and other gains attributable to support from the ESI Funds paid to financial instruments shall be used for the same purposes, including the reimbursement of management costs incurred or payment of management fees of the financial instrument in accordance with point (d) of the first subparagraph of Article 42(1), and expenditure paid in accordance with Article 42(2), as the initial support from the ESI Funds either within the same financial instrument, or following the winding up of the financial instrument, in other financial instruments or forms of support in accordance with the specific objectives set out under a priority, until the end of the eligibility period. 3. The managing authority shall ensure that adequate records of the use of interest and other gains are maintained.
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 43 Interest and other gains generated by support from the ESI Funds to financial instruments):
1. Support from the ESI Funds paid to financial instruments shall be placed in accounts domiciled within financial institutions in Member States and shall be invested on a temporary basis in accordance with the principles of sound financial management. 2. Interest and other gains attributable to support from the ESI Funds paid to financial instruments shall be used for the same purposes, including the reimbursement of management costs incurred or payment of management fees of the financial instrument in accordance with point (d) of the first subparagraph of Article 42(1) and in accordance with Article 42(2) and (3), as the initial support from the ESI Funds, either within the same financial instrument or, following the winding up of the financial instrument, in other financial instruments or forms of support in accordance with the specific objectives set out under a priority, until the end of the eligibility period. 3. The managing authority shall ensure that adequate records of the use of interest and other gains are maintained.
Article 44 Re-use of resources attributable to the support from the ESI Funds until the end of the eligibility period
1. Resources paid back to financial instruments from investments or from the release of resources committed for guarantee contracts, including capital repayments and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by investments, which are attributable to the support from the ESI Funds, shall be re-used for the following purposes, up to the amounts necessary and in the order agreed in the relevant funding agreements: (a) further investments through the same or other financial instruments, in accordance with the specific objectives set out under a priority; (b) where applicable, preferential remuneration of private investors, or public investors operating under the market economy principle, who provide counterpart resources to the support from the ESI Funds to the financial instrument or who co-invest at the level of final recipients; (c) where applicable, reimbursement of management costs incurred and payment of management fees of the financial instrument. The need and the level for preferential remuneration pursuant to point (b) of the first subparagraph shall be established in the ex-ante assessment. The preferential remuneration shall not exceed what is necessary to create the incentives for attracting private counterpart resources and shall not over-compensate private investors, or public investors operating under the market economy principle. The alignment of interest shall be ensured through an appropriate sharing of risk and profit and shall be carried out on a normal commercial basis and be compatible with Union State aid rules. 2. The managing authority shall ensure that adequate records of the use of the resources referred to in paragraph 1 are maintained.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 44 Re-use of resources attributable to the support from the ESI Funds until the end of the eligibility period):
1. Without prejudice to Article 43a, resources paid back to financial instruments from investments or from the release of resources committed for guarantee contracts, including capital repayments and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by investments, which are attributable to the support from the ESI Funds, shall be re-used for the following purposes, up to the amounts necessary and in the order agreed in the relevant funding agreements: (a) further investments through the same or other financial instruments, in accordance with the specific objectives set out under a priority; (b) where applicable, to cover the losses in the nominal amount of the ESI Funds contribution to the financial instrument resulting from negative interest, if such losses occur despite active treasury management by the bodies implementing financial instruments; (c) where applicable, reimbursement of management costs incurred and payment of management fees of the financial instrument. 2. The managing authority shall ensure that adequate records of the re-use of the resources referred to in paragraph 1 are maintained.
Article 45 Use of resources after the end of the eligibility period
Member States shall adopt the necessary measures to ensure that resources paid back to financial instruments, including capital repayments and gains and other earnings or yields generated during a period of at least eight years after the end of the eligibility period, which are attributable to the support from the ESI Funds to financial instruments pursuant to Article 37, are used in accordance with the aims of the programme or programmes, either within the same financial instrument or, following the exit of those resources from the financial instrument, in other financial instruments provided that, in both cases, an assessment of market conditions demonstrates a continuing need for such investment, or in other forms of support.
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 45 Re-use of resources after the end of the eligibility period):
Member States shall adopt the necessary measures to ensure that resources paid back to financial instruments, including capital repayments and gains and other earnings or yields generated during a period of at least eight years after the end of the eligibility period, which are attributable to the support from the ESI Funds to financial instruments pursuant to Article 37, are re-used in accordance with the aims of the programme or programmes , either within the same financial instrument or, following the exit of those resources from the financial instrument, in other financial instruments provided that, in both cases, an assessment of market conditions demonstrates a continuing need for such investment, or in other forms of support.
Article 46 Report on implementation of financial instruments
1. The managing authority shall send to the Commission a specific report covering the operations comprising financial instruments as an annex to the annual implementation report. 2. The specific report referred to in paragraph 1 shall include, for each financial instrument, the following information: (a) identification of the programme and of the priority or measure from which support from the ESI Funds is provided; (b) description of the financial instrument and implementation arrangements; (c) identification of the bodies implementing financial instruments, and the bodies implementing funds of funds where applicable, as referred to under point (a) of Article 38(1), points (a), (b) and (c) of Article 38(4), and the financial intermediaries referred to under Article 38(6); (d) total amount of programme contributions by priority or measure paid to the financial instrument; (e) total amount of support paid to the final recipients or to the benefit of final recipients, or committed in guarantee contracts by the financial instrument for investments in final recipients, as well as management costs incurred or management fees paid, by programme and priority or measure; (f) the performance of the financial instrument including progress in its set-up and in selection of bodies implementing the financial instrument, including the body implementing a fund of funds; (g) interest and other gains generated by support from the ESI Funds to the financial instrument and programme resources paid back to financial instruments from investments as referred to in Articles 43 and 44; (h) progress in achieving the expected leverage effect of investments made by the financial instrument and value of investments and participations; (i) the value of equity investments, with respect to previous years; (j) contribution of the financial instrument to the achievement of the indicators of the priority or measure concerned. The information in points (h) and (j) of the first subparagraph may be included only in the annex to the annual implementation reports submitted in 2017 and 2019 as well as in the final implementation report. The reporting obligations set out in points (a) to (j) of the first subparagraph shall not be applied at the level of final recipients. 3. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts establishing the models to be used when reporting on financial instruments to the Commission. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3). 4. Each year, starting in 2016, the Commission shall, within six months of the deadline for the submission of the annual implementation reports referred to in Article 111(1) for the ERDF, ESF and the Cohesion Fund, Article 75 of the EAFRD Regulation for the EAFRD, and the relevant provisions of Funds-specific rules for the EMFF, provide summaries of the data on the progress made in financing and implementing the financial instruments, sent by the managing authorities in accordance with this Article. Those summaries shall be transmitted to the European Parliament and the Council and shall be made public.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 46 Report on implementation of financial instruments):
1. The managing authority shall send to the Commission a specific report covering the operations comprising financial instruments as an annex to the annual implementation report. 2. The specific report referred to in paragraph 1 shall include, for each financial instrument, the following information: (a) identification of the programme and of the priority or measure from which support from the ESI Funds is provided; (b) description of the financial instrument and implementation arrangements; (c) identification of the bodies implementing financial instruments, and the bodies implementing funds of funds where applicable, as referred to under points (a), (b) and (c) of Article 38(1); (d) total amount of programme contributions by priority or measure paid to the financial instrument; (e) total amount of support paid to the final recipients or to the benefit of final recipients, or committed in guarantee contracts by the financial instrument for investments in final recipients, as well as management costs incurred or management fees paid, by programme and priority or measure; (f) the performance of the financial instrument including progress in its set-up and in selection of bodies implementing the financial instrument, including the body implementing a fund of funds; (g) interest and other gains generated by support from the ESI Funds to the financial instrument and programme resources paid back to financial instruments from investments as referred to in Articles 43 and 44 and amounts used for differentiated treatment as referred to in Article 43a; (h) progress in achieving the expected leverage effect of investments made by the financial instrument; (i) the value of equity investments, with respect to previous years; (j) contribution of the financial instrument to the achievement of the indicators of the priority or measure concerned. The information in points (h) and (j) of the first subparagraph may be included only in the annex to the annual implementation reports submitted in 2017 and 2019 as well as in the final implementation report. The reporting obligations set out in points (a) to (j) of the first subparagraph shall not be applied at the level of final recipients. 3. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts establishing the models to be used when reporting on financial instruments to the Commission. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3). 4. Each year, starting in 2016, the Commission shall, within six months of the deadline for the submission of the annual implementation reports referred to in Article 111(1) for the ERDF, ESF and the Cohesion Fund, Article 75 of the EAFRD Regulation for the EAFRD, and the relevant provisions of Funds-specific rules for the EMFF, provide summaries of the data on the progress made in financing and implementing the financial instruments, sent by the managing authorities in accordance with this Article. Those summaries shall be transmitted to the European Parliament and the Council and shall be made public.
Article 47 Monitoring committee
1. Within three months of the date of notification to the Member State of the Commission decision adopting a programme, the Member State shall set up a committee, in accordance with its institutional, legal and financial framework, to monitor implementation of the programme, in agreement with the managing authority (the "monitoring committee"). A Member State may set up a single monitoring committee to cover more than one programme co-financed by the ESI Funds. 2. Each monitoring committee shall draw up and adopt its rules of procedure in accordance with the institutional, legal and financial framework of the Member State concerned. 3. The monitoring committee of a programme under the European territorial cooperation goal shall be set up by the Member States participating in the cooperation programme and by third countries, in the event that they have accepted the invitation to participate in the cooperation programme, in agreement with the managing authority within three months of the date of notification of the decision adopting the cooperation programme to the Member States. That monitoring committee shall draw up and adopt its rules of procedure.
Article 48 Composition of the monitoring committee
1. The composition of the monitoring committee shall be decided by the Member State, provided that the monitoring committee is composed of representatives of the relevant Member State authorities and intermediate bodies and of representatives of the partners referred to in Article 5. Representatives of the partners shall be delegated to be part of the monitoring committee by the respective partners through transparent processes. Each member of the monitoring committee may have a voting right. The composition of the monitoring committee of a programme under the European territorial goal shall be agreed by the Member States participating in the programme and by third countries in the event that they have accepted the invitation to participate in the cooperation programme. The monitoring committee shall include relevant representatives of those Member States and third countries. The monitoring committee may include representatives of the EGTC carrying out activities related to the programme within the programme area. 2. The list of the members of the monitoring committee shall be published. 3. The Commission shall participate in the work of the monitoring committee in an advisory capacity. 4. If the EIB contributes to a programme, it may participate in the work of the monitoring committee in an advisory capacity. 5. The monitoring committee shall be chaired by a representative of the Member State or of the managing authority.
Article 49 Functions of the monitoring committee
1. The monitoring committee shall meet at least once a year and shall review implementation of the programme and progress made towards achieving its objectives. In doing so, it shall have regard to the financial data, common and programme-specific indicators, including changes in the value of result indicators and progress towards quantified target values, and the milestones defined in the performance framework referred to in Article 21(1), and, where relevant, the results of qualitative analyses. 2. The monitoring committee shall examine all issues that affect the performance of the programme, including the conclusions of the performance reviews. 3. The monitoring committee shall be consulted and shall, if it considers it to be appropriate, give an opinion on any amendment of the programme proposed by the managing authority. 4. The monitoring committee may make observations to the managing authority regarding implementation and evaluation of the programme including actions related to the reduction of the administrative burden on beneficiaries. The monitoring committee shall monitor actions taken as a result of its observations.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 49 Functions of the monitoring committee):
1. The monitoring committee shall meet at least once a year and shall review implementation of the programme and progress made towards achieving its objectives. In doing so, it shall have regard to the financial data, common and programme-specific indicators, including changes in the value of result indicators and progress towards quantified target values, and the milestones defined in the performance framework referred to in Article 21(1), and, where relevant, the results of qualitative analyses. 2. The monitoring committee shall examine all issues that affect the performance of the programme, including the conclusions of the performance review. 3. The monitoring committee shall be consulted and shall, if it considers it to be appropriate, give an opinion on any amendment of the programme proposed by the managing authority. 4. The monitoring committee may make observations to the managing authority regarding implementation and evaluation of the programme including actions related to the reduction of the administrative burden on beneficiaries. It may also make observations on the visibility of support from the ESI Funds and on raising awareness about the results of such support. It shall monitor actions taken as a result of its observations.
Article 50 Implementation reports
1. From 2016 until and including 2023, each Member State shall submit to the Commission an annual report on implementation of the programme in the previous financial year. Each Member State shall submit to the Commission a final report on implementation of the programme for the ERDF, the ESF and the Cohesion Fund and an annual implementation report for the EAFRD and the EMFF by the deadline established in the Fund-specific rules. 2. Annual implementation reports shall set out key information on implementation of the programme and its priorities by reference to the financial data, common and programme-specific indicators and quantified target values, including changes in the value of result indicators where appropriate, and, beginning from the annual implementation report to be submitted in 2017, the milestones defined in the performance framework. The data transmitted shall relate to values for indicators for fully implemented operations and also, where possible, having regard to the stage of implementation, for selected operations. They shall also set out a synthesis of the findings of all evaluations of the programme that have become available during the previous financial year, any issues which affect the performance of the programme, and the measures taken. The annual implementation report to be submitted in 2016 may also set out, where relevant, actions taken to fulfil ex ante conditionalities. 3. By way of derogation from paragraph 2, specific rules on the data to be transmitted for the ESF may be established in the ESF Regulation. 4. The annual implementation report to be submitted in 2017 shall set out and assess the information referred to in paragraph 2 and progress made towards achieving the objectives of the programme, including the contribution of the ESI Funds to changes in the value of result indicators, when evidence is available from relevant evaluations. That annual implementation report shall set out the actions taken to fulfil the ex-ante conditionalities not fulfilled at the time of adoption of the programmes. It shall also assess the implementation of actions to take into account the principles set out in Articles 7 and 8, the role of the partners referred to in Article 5 in the implementation of the programme and report on support used for climate change objectives. 5. The annual implementation report to be submitted in 2019 and the final implementation report for the ESI Funds shall, in addition to the information and assessment referred to in paragraphs 2 and 3, include information on, and assess progress towards, achieving the objectives of the programme and its contribution to achieving the Union strategy for smart, sustainable and inclusive growth. 6. In order to be deemed admissible, the annual implementation reports referred to in paragraphs 1 to 5 shall contain all the information required in those paragraphs and in the Fund-specific rules. The Commission shall inform the Member State within 15 working days of the date of receipt of the annual implementation report if it is not admissible, failing which it shall be deemed admissible. 7. The Commission shall examine the annual and final implementation report and inform the Member State of its observations within two months of the date of receipt of the annual implementation report and within five months of the date of receipt of the final implementation report. Where the Commission does not provide observations within those deadlines, the reports shall be deemed to be accepted. 8. The Commission may make observations to the managing authority concerning issues which significantly affect the implementation of the programme. Where such observations are made, the managing authority shall provide all necessary information with regard to those observations and, where appropriate, inform the Commission, within three months, of measures taken. 9. The annual and final implementation reports, as well as a summary for citizens of their content, shall be made available to the public.
Article 51 Annual review meeting
1. An annual review meeting shall be organised every year from 2016 until and including 2023 between the Commission and each Member State to examine the performance of each programme, taking account of the annual implementation report and the Commission's observations where applicable. 2. The annual review meeting may cover more than one programme. In 2017 and 2019, the annual review meeting shall cover all programmes in the Member State and shall also take account of the progress reports submitted by the Member State, in accordance with Article 52, in those years. 3. By way of derogation from paragraph 1, the Member State and the Commission may agree not to organise an annual review meeting for a programme in years other than 2017 and 2019. 4. The annual review meeting shall be chaired by the Commission or, if the Member State so requests, co-chaired by the Member State and the Commission. 5. The Member State shall ensure that appropriate follow-up is given to comments of the Commission following the annual review meeting concerning issues which significantly affect the implementation of the programme and, where appropriate, inform the Commission, within three months, of the measures taken.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 51 Annual review meeting):
1. An annual review meeting shall be organised every year from 2016 until and including 2023 between the Commission and each Member State to examine the performance of each programme, taking account of the annual implementation report and the Commission’s observations where applicable. The meeting shall also review the programme’s communication and information activities, in particular the results and effectiveness of measures taken to inform the public about the results and added value of support from the ESI Funds. 2. The annual review meeting may cover more than one programme. In 2017 and 2019, the annual review meeting shall cover all programmes in the Member State and shall also take account of the progress reports submitted by the Member State, in accordance with Article 52, in those years. 3. By way of derogation from paragraph 1, the Member State and the Commission may agree not to organise an annual review meeting for a programme in years other than 2017 and 2019. 4. The annual review meeting shall be chaired by the Commission or, if the Member State so requests, co-chaired by the Member State and the Commission. 5. The Member State shall ensure that appropriate follow-up is given to comments of the Commission following the annual review meeting concerning issues which significantly affect the implementation of the programme and, where appropriate, inform the Commission, within three months, of the measures taken.
Article 52 Progress report
1. By 31 August 2017 and by 31 August 2019, the Member State shall submit to the Commission a progress report on implementation of the Partnership Agreement as at 31 December 2016 and 31 December 2018 respectively. 2. The progress report shall set out information on and assess: (a) changes in the development needs in the Member State since the adoption of the Partnership Agreement; (b) progress made towards achievement of the Union strategy for smart, sustainable and inclusive growth, as well as of the Fund-specific missions referred to in Article 4(1), through the contribution of the ESI Funds to the thematic objectives selected, and in particular with regard to the milestones set out in the performance framework for each programme, and to the support used for climate change objectives; (c) whether the actions taken to fulfil the applicable ex ante conditionalities set out in the Partnership Agreement not fulfilled at the date of adoption of the Partnership Agreement have been implemented in accordance with the timetable established. This point shall only apply to the progress report to be submitted in 2017; (d) implementation of mechanisms to ensure coordination between the ESI Funds and other Union and national funding instruments and with the EIB; (e) implementation of the integrated approach to territorial development, or a summary of the implementation of the integrated approaches that are based on the programmes, including progress towards achievement of priority areas established for cooperation; (f) where appropriate, actions taken to reinforce the capacity of the Member State authorities and beneficiaries to administer and use the ESI Funds; (g) actions taken, and progress made, with regard to reducing the administrative burden on beneficiaries; (h) the role of the partners referred to in Article 5 in the implementation of the Partnership Agreement; (i) a summary of the actions taken in relation to the application of the horizontal principles referred to in Articles 5, 7 and 8 and policy objectives for the implementation of the ESI Funds. 3. Where the Commission determines, within two months of the date of submission of the progress report, that the information submitted is incomplete or unclear in a manner which significantly affects the quality and reliability of the assessment concerned, it may request additional information from the Member State, on condition that that request does not cause unjustified delays and that the Commission provides reasons to substantiate the alleged lack of quality and reliability. The Member State shall provide to the Commission the information requested within three months and, where appropriate, shall revise the progress report accordingly. 4. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts establishing the model to be used when submitting the progress report. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 150(2).
Article 53 Reporting by the Commission and debate on the ESI Funds
1. The Commission shall transmit each year from 2016 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, a summary report in relation to ESI Fund programmes based on the annual implementation reports of the Member States submitted under Article 50 as well as a synthesis of the findings of the available evaluations of programmes. In 2017 and 2019 the summary report shall form a part of the strategic report referred to in paragraph 2. 2. In 2017 and 2019, the Commission shall prepare a strategic report summarising the progress reports of the Member States, which by 31 December 2017 and 31 December 2019, respectively, it shall submit to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions and those institutions shall be invited to hold a debate on it. 3. The Council shall debate the strategic report in particular with regard to the contribution of the ESI Funds to the achievement of the Union strategy for smart, sustainable and inclusive growth and shall be invited to provide input to the spring meeting of the European Council. 4. Every two years from 2018, the Commission shall include in its Annual Progress Report to the spring meeting of the European Council a section summarising the most recent of the reports referred to in paragraphs 1 and 2, in particular with regard to the contribution of the ESI Funds to progress made towards the Union strategy for smart, sustainable and inclusive growth.
Article 54 General Provisions
1. Evaluations shall be carried out to improve the quality of the design and implementation of programmes, as well as to assess their effectiveness, efficiency and impact. The impact of programmes shall be evaluated, in the light of the mission of each ESI Fund, in relation to the targets under the Union strategy for smart, sustainable and inclusive growth and, having regard to the size of the programme, in relation to GDP and unemployment in the programme area concerned, where appropriate. 2. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to common and where appropriate programme-specific indicators. 3. Evaluations shall be carried out by internal or external experts that are functionally independent of the authorities responsible for programme implementation. The Commission shall provide guidance on how to carry out evaluations, immediately following the entry into force of this Regulation. 4. All evaluations shall be made available to the public.
Article 55 Ex ante evaluation
1. Member States shall carry out ex ante evaluations to improve the quality of the design of each programme. 2. Ex ante evaluations shall be carried out under the responsibility of the authority responsible for the preparation of the programmes. They shall be submitted to the Commission at the same time as the programme, together with an executive summary. The Fund-specific rules may establish thresholds below which the ex ante evaluation may be combined with the evaluation for another programme. 3. Ex ante evaluations shall appraise: (a) the contribution to the Union strategy for smart, sustainable and inclusive growth, having regard to the selected thematic objectives and priorities, taking into account national and regional needs and potential for development as well as lessons drawn from previous programming periods; (b) the internal coherence of the proposed programme or activity and its relationship with other relevant instruments; (c) the consistency of the allocation of budgetary resources with the objectives of the programme; (d) the consistency of the selected thematic objectives, the priorities and corresponding objectives of the programmes with the CSF, the Partnership Agreement and the relevant country specific recommendations adopted in accordance with Article 121(2) TFEU and where appropriate at national level, the National Reform Programme; (e) the relevance and clarity of the proposed programme indicators; (f) how the expected outputs will contribute to results; (g) whether the quantified target values for indicators are realistic, having regard to the support envisaged from the ESI Funds; (h) the rationale for the form of support proposed; (i) the adequacy of human resources and administrative capacity for management of the programme; (j) the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations; (k) the suitability of the milestones selected for the performance framework; (l) the adequacy of planned measures to promote equal opportunities between men and women and to prevent any discrimination, in particular as regards accessibility for persons with disabilities; (m) the adequacy of planned measures to promote sustainable development; (n) measures planned to reduce the administrative burden on beneficiaries. 4. Ex ante evaluations shall incorporate, where appropriate, the requirements for strategic environmental assessment set out in Directive 2001/42/EC of the European Parliament and of the Council ( 36 ) taking into account climate change mitigation needs.
Article 56 Evaluation during the programming period
1. An evaluation plan shall be drawn up by the managing authority or Member State and may cover more than one programme. It shall be submitted in accordance with the Fund-specific rules. 2. Member States shall ensure that appropriate evaluation capacity is available. 3. During the programming period, the managing authority shall ensure that evaluations, including evaluations to assess effectiveness, efficiency and impact, are carried out for each programme on the basis of the evaluation plan and that each evaluation is subject to appropriate follow-up in accordance with the Fund-specific rules. At least once during the programming period, an evaluation shall assess how support from the ESI Funds has contributed to the objectives for each priority. All evaluations shall be examined by the monitoring committee and sent to the Commission. 4. The Commission may carry out, at its own initiative, evaluations of programmes. It shall inform the managing authority and the results shall be sent to the managing authority and provided to the monitoring committee concerned. 5. Paragraphs 1, 2 and 3 of this Article shall not apply to the dedicated programmes referred to in point (b) of the first subparagraph of Article 39(4).
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 56 Evaluation during the programming period):
1. An evaluation plan shall be drawn up by the managing authority or Member State and may cover more than one programme. It shall be submitted in accordance with the Fund-specific rules. 2. Member States shall ensure that appropriate evaluation capacity is available. 3. During the programming period, the managing authority shall ensure that evaluations, including evaluations to assess effectiveness, efficiency and impact, are carried out for each programme on the basis of the evaluation plan and that each evaluation is subject to appropriate follow-up in accordance with the Fund-specific rules. At least once during the programming period, an evaluation shall assess how support from the ESI Funds has contributed to the objectives for each priority. All evaluations shall be examined by the monitoring committee and sent to the Commission. 4. The Commission may carry out, at its own initiative, evaluations of programmes. It shall inform the managing authority and the results shall be sent to the managing authority and provided to the monitoring committee concerned.
Article 57 Ex post evaluation
1. The ex post evaluations shall be carried out by the Commission, or by the Member States in close cooperation with the Commission. Ex post evaluations shall examine the effectiveness and efficiency of the ESI Funds and their contribution to the Union strategy for smart, sustainable and inclusive growth taking account of the targets established in that Union strategy and in accordance with specific requirements established in the Fund-specific rules. 2. Ex post evaluations shall be completed by 31 December 2024. 3. The ex-post evaluation of the dedicated programmes referred to in point (b) of the first subparagraph of Article 39(4) shall be carried out by the Commission and completed by 31 December 2019. 4. For each of the ESI Funds, the Commission shall prepare, by 31 December 2025, a synthesis report outlining the main conclusions of ex-post evaluations.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 57 Ex post evaluation):
1. The ex post evaluations shall be carried out by the Commission, or by the Member States in close cooperation with the Commission. Ex post evaluations shall examine the effectiveness and efficiency of the ESI Funds and their contribution to the Union strategy for smart, sustainable and inclusive growth taking account of the targets established in that Union strategy and in accordance with specific requirements established in the Fund-specific rules. 2. Ex post evaluations shall be completed by 31 December 2024. 3. Paragraph 1 and 2 of this Article shall also apply to the contributions from the ERDF or the EAFRD to the dedicated programmes referred to in point (b) of the first subparagraph of Article 39(4). 4. For each of the ESI Funds, the Commission shall prepare, by 31 December 2025, a synthesis report outlining the main conclusions of ex-post evaluations.
Article 58 Technical assistance at the initiative of the Commission
1. At the initiative of the Commission, the ESI Funds may support the preparatory, monitoring, administrative and technical assistance, evaluation, audit and control measures necessary for implementing this Regulation. The measures referred to in the first subparagraph may be implemented either directly by the Commission or indirectly, by entities and persons other than Member States in accordance with Article 60 of the Financial Regulation. The measures referred to in the first subparagraph may include in particular: (a) assistance for project preparation and appraisal, including with the EIB; (b) support for institutional strengthening and administrative capacity-building for the effective management of the ESI Funds; (c) studies linked to the Commission's reporting on the ESI Funds and the cohesion report; (d) measures related to the analysis, management, monitoring, information exchange and implementation of the ESI Funds, as well as measures relating to the implementation of control systems and technical and administrative assistance; (e) evaluations, expert reports, statistics and studies, including those of a general nature, concerning the current and future operation of the ESI Funds, which may be carried out where appropriate by the EIB; (f) actions to disseminate information, support networking, carry out communication activities, raise awareness and promote cooperation and exchange of experience, including with third countries; (g) the installation, operation and interconnection of computerised systems for management, monitoring, audit, control and evaluation; (h) actions to improve evaluation methods and the exchange of information on evaluation practices; (i) actions related to auditing; (j) the strengthening of national and regional capacity regarding investment planning, needs assessment, preparation, design and implementation of financial instruments, joint action plans and major projects, including joint initiatives with the EIB; (k) the dissemination of good practices in order to assist Member States to strengthen the capacity of the relevant partners referred to in Article 5 and their umbrella organisations; (l) measures to identify, prioritize and implement structural and administrative reforms in response to economic and social challenges in Member States which meet the conditions set out in Article 24(1). To bring about greater efficiency in communication to the public at large and stronger synergies between the communication activities undertaken at the initiative of the Commission, the resources allocated to communication actions under this Regulation shall also contribute to the corporate communication of the political priorities of the Union as far as they are related to the general objectives of this Regulation. 2. The Commission shall set out each year its plans on the type of actions related to the measures listed in paragraph 1, when a contribution from the ESI Funds is envisaged, by means of implementing acts.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(1) and (5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI to decisions adopted since the adoption of that Regulation. Firstly, to adapt the amounts to the result of the technical adjustment exercise in accordance with Article 92(3) of that Regulation; secondly, to reflect the different transfers decided on the basis of Articles 25, 93 and 94 of that Regulation affecting the global amounts per year; thirdly, to include the increase of the Youth Employment Initiative ('YEI') until 2020 by an total amount of EUR 1.2 billion in current prices for the specific allocation for the YEI, which needs to be complemented by at least EUR 1.2 billion from targeted ESF investment; and fourthly to reflect the transfer of some of the 2014 commitment appropriations to subsequent years because of the adoption of new programmes after 1 January 2015. The results of the technical adjustment and the transfers decided on the basis of Articles 25, 93 and 94 of that Regulation were already addressed in Commission Implementing Decision (EU) 2016/1941 2 . The proposal also reflects that Cyprus was to become newly eligible for support from the Cohesion Fund and was no longer to receive support from the Cohesion Fund on a transitional and specific basis as of 1 January 2017. This had already been addressed in Commission Implementing Decision (EU) 2016/1916 3 . The technical adjustment exercise has its origin in Article 7 of Council Regulation (EU) No 1311/2013 4 to take account of the particularly difficult situation of Member States suffering from the crisis and to review in 2016 the total allocation for the Investment for growth and jobs goal. Article 25 sets out a mechanism regarding the management of technical assistance for Member States with temporary budgetary difficulties, i.e. the transfer of part of that technical assistance to the technical assistance at the initiative of the Commission. Under certain conditions, Article 93 allows for the transfer of resources between categories of regions and Article 94 for the transfer of resources between goals. 
Revised version (Article 58 Technical assistance at the initiative of the Commission):
1. At the initiative of the Commission, the ESI Funds may support the preparatory, monitoring, administrative and technical assistance, evaluation, audit and control measures necessary for implementing this Regulation. The measures referred to in the first subparagraph may be implemented either directly by the Commission or indirectly, by entities and persons other than Member States in accordance with Article 60 of the Financial Regulation. The measures referred to in the first subparagraph may include in particular: (a) assistance for project preparation and appraisal, including with the EIB; (b) support for institutional strengthening and administrative capacity-building for the effective management of the ESI Funds; (c) studies linked to the Commission's reporting on the ESI Funds and the cohesion report; (d) measures related to the analysis, management, monitoring, information exchange and implementation of the ESI Funds, as well as measures relating to the implementation of control systems and technical and administrative assistance; (e) evaluations, expert reports, statistics and studies, including those of a general nature, concerning the current and future operation of the ESI Funds, which may be carried out where appropriate by the EIB; (f) actions to disseminate information, support networking, carry out communication activities, raise awareness and promote cooperation and exchange of experience, including with third countries; (g) the installation, operation and interconnection of computerised systems for management, monitoring, audit, control and evaluation; (h) actions to improve evaluation methods and the exchange of information on evaluation practices; (i) actions related to auditing; (j) the strengthening of national and regional capacity regarding investment planning, needs assessment, preparation, design and implementation of financial instruments, joint action plans and major projects, including joint initiatives with the EIB; (k) the dissemination of good practices in order to assist Member States to strengthen the capacity of the relevant partners referred to in Article 5 and their umbrella organisations; (l) actions financed under Regulation (EU) 2017/825 in order to contribute to delivering the Union strategy for smart, sustainable and inclusive growth. To bring about greater efficiency in communication to the public at large and stronger synergies between the communication activities undertaken at the initiative of the Commission, the resources allocated to communication actions under this Regulation shall also contribute to the corporate communication of the political priorities of the Union as far as they are related to the general objectives of this Regulation. 2. The Commission shall set out each year its plans on the type of actions related to the measures listed in paragraph 1, when a contribution from the ESI Funds is envisaged, by means of implementing acts.
Article 59 Technical assistance at the initiative of the Member States
1. At the initiative of a Member State, the ESI Funds may support actions for preparation, management, monitoring, evaluation, information and communication, networking, complaint resolution, and control and audit. The ESI Funds may be used by the Member State to support actions for the reduction of the administrative burden on beneficiaries, including electronic data exchange systems, and actions to reinforce the capacity of Member State authorities and beneficiaries to administer and use those Funds. The ESI Funds may also be used to support actions to reinforce the capacity of relevant partners in line with point (e) of Article 5(3) and to support exchange of good practices between such partners. The actions referred to in this paragraph may concern previous and subsequent programming periods. 2. The Fund-specific rules may add or exclude actions which may be financed by the technical assistance of each ESI Fund.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 59 Technical assistance at the initiative of the Member States):
1. At the initiative of a Member State, the ESI Funds may support actions for preparation, management, monitoring, evaluation, information and communication, networking, complaint resolution, and control and audit. The ESI Funds may be used by the Member State to support actions for the reduction of the administrative burden on beneficiaries, including electronic data exchange systems, and actions to reinforce the capacity of Member State authorities and beneficiaries to administer and use those Funds. The ESI Funds may also be used to support actions to reinforce the capacity of relevant partners in line with point (e) of Article 5(3) and to support exchange of good practices between such partners. The actions referred to in this paragraph may concern previous and subsequent programming periods. 1a. Each ESI Fund may support technical assistance operations eligible under any of the other ESI Funds. 2. The Fund-specific rules may add or exclude actions which may be financed by the technical assistance of each ESI Fund. 3. Without prejudice to paragraph 2, Member States may implement actions referred to in paragraph 1 through the direct award of a contract to: (a) the EIB; (b) an international financial institution in which a Member State is a shareholder; (c) a publicly-owned bank or institution, as referred to in point (b)(iii) of the first subparagraph of Article 38(4).
Article 60 Determination of co-financing rates
1. The Commission decision adopting a programme shall fix the co-financing rate or rates and the maximum amount of support from the ESI Funds in accordance with the Fund-specific rules. 2. Technical assistance measures implemented at the initiative of, or on behalf of, the Commission may be financed at the rate of 100 %.
Article 61 Operations generating net revenue after completion
1. This Article shall apply to operations which generate net revenue after their completion. For the purposes of this Article 'net revenue' means cash in-flows directly paid by users for the goods or services provided by the operation, such as charges borne directly by users for the use of infrastructure, sale or rent of land or buildings, or payments for services less any operating costs and replacement costs of short-life equipment incurred during the corresponding period. Operating cost-savings generated by the operation shall be treated as net revenue unless they are offset by an equal reduction in operating subsidies. Where not all the investment cost is eligible for co-financing, the net revenue shall be allocated pro rata to the eligible and non-eligible parts of the investment cost. 2. The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced in advance taking into account the potential of the operation to generate net revenue over a specific reference period that covers both implementation of the operation and the period after its completion. 3. The potential net revenue of the operation shall be determined in advance by one of the following methods chosen by the managing authority for a sector, subsector or type of operation: (a) application of a flat rate net revenue percentage for the sector or subsector applicable to the operation as defined in Annex V or in any of the delegated acts referred to in the second, third and fourth subparagraphs; (b) calculation of the discounted net revenue of the operation, taking into account the reference period appropriate to the sector or subsector applicable to the operation, the profitability normally expected of the category of investment concerned, the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State or region concerned. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 in duly justified cases to amend Annex V by adjusting the flat rates established therein taking into account historical data, the potential for cost recovery and the polluter-pays principle where applicable. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 establishing flat rates for sectors or subsectors within the fields of ICT, RDI and energy efficiency. The Commission shall notify the delegated acts to the European Parliament and the Council not later than 30 June 2015. In addition, the Commission shall be empowered to adopt delegated acts in accordance with Article 149 in duly justified cases with regard to adding sectors or subsectors, including subsectors for sectors in Annex V, falling under the thematic objectives defined in the first paragraph of Article 9 and supported by the ESI Funds. Where the method referred to in point (a) of the first subparagraph is applied, all the net revenue generated during implementation and after completion of the operation shall be considered to be taken into account by the application of the flat rate and shall therefore not be deducted subsequently from the eligible expenditure of the operation. When a flat rate for a new sector or subsector has been established by the adoption of a delegated act in accordance with the third and fourth subparagraphs, a managing authority may choose to apply the method set out in point (a) of the first subparagraph for new operations in relation to the sector or subsector concerned. The Commission shall be empowered to adopt delegated acts, in accordance with Article 149, laying down the method referred to in point (b) of the first subparagraph. Where that method is applied, the net revenue generated during implementation of the operation, resulting from sources of revenue not taken into account in determining the potential net revenue of the operation, shall be deducted from the eligible expenditure of the operation, no later than in the final payment claim submitted by the beneficiary. 4. The method by which the net revenue is deducted from the expenditure of the operation included in the request for payment submitted to the Commission shall be determined in accordance with national rules. 5. As an alternative to the application of the methods laid down in paragraph 3, the maximum co-financing rate referred to in Article 60(1) may, at the request of a Member State, be decreased at the moment of adoption of a programme for a priority or measure under which all operations supported under that priority or measure could apply a uniform flat rate in accordance with point (a) of the first subparagraph of paragraph 3. The decrease shall be not less than the amount calculated by multiplying the maximum Union co-financing rate applicable under the Fund-specific rules by the relevant flat rate referred to in point (a) of the first subparagraph of paragraph 3. Where the method referred to in the first subparagraph is applied, all net revenue generated during implementation, and after completion, of the operation shall be considered to be taken into account by application of the decreased co-financing rate and shall therefore not be deducted subsequently from the eligible expenditure of the operations. 6. Where it is objectively not possible to determine the revenue in advance based on any of the methods set out in paragraphs 3 or 5, the net revenue generated within three years of the completion of an operation, or by the deadline for the submission of documents for programme closure fixed in the Fund-specific rules, whichever is the earlier, shall be deducted from the expenditure declared to the Commission. 7. Paragraphs 1 to 6 shall not apply to: (a) operations or parts of operations supported solely by the ESF; (b) operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000; (c) repayable assistance subject to an obligation for full repayment and prizes; (d) technical assistance; (e) support to or from financial instruments; (f) operations for which public support takes the form of lump sums or standard scale unit costs; (g) operations implemented under a joint action plan; (h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation. Notwithstanding point (b) of the first subparagraph of this paragraph, where a Member State applies paragraph 5, it may include in the relevant priority or measure operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000. 8. In addition, paragraphs 1 to 6 shall not apply to operations for which support under the programme constitutes: (a) de minimis aid; (b) compatible State aid to SMEs, where an aid intensity or an aid amount limit is applied in relation to State aid; (c) compatible State aid, where an individual verification of financing needs in accordance with the applicable State aid rules has been carried out. Notwithstanding the first subparagraph, a managing authority may apply the paragraphs 1 to 6 to operations which fall under points (a) to (c) of the first subparagraph of this paragraph where this is provided for in national rules.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 61 Operations generating net revenue after completion):
1. This Article shall apply to operations which generate net revenue after their completion. For the purposes of this Article, ‘net revenue’ means cash in-flows directly paid by users for the goods or services provided by the operation, such as charges borne directly by users for the use of infrastructure, sale or rent of land or buildings, or payments for services less any operating costs and replacement costs of short-life equipment incurred during the corresponding period. Operating cost-savings generated by the operation, with the exception of cost-savings resulting from the implementation of energy efficiency measures, shall be treated as net revenue unless they are offset by an equal reduction in operating subsidies. Where not all the investment cost is eligible for co-financing, the net revenue shall be allocated pro rata to the eligible and non-eligible parts of the investment cost. 2. The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced in advance taking into account the potential of the operation to generate net revenue over a specific reference period that covers both implementation of the operation and the period after its completion. 3. The potential net revenue of the operation shall be determined in advance by one of the following methods chosen by the managing authority for a sector, subsector or type of operation: (a) application of a flat rate net revenue percentage for the sector or subsector applicable to the operation as defined in Annex V or in any of the delegated acts referred to in the second, third and fourth subparagraphs; (aa) application of a flat rate net revenue percentage established by a Member State for a sector or subsector not covered by point (a). Before the application of the flat rate the responsible audit authority shall verify that the flat rate has been established according to a fair, equitable and verifiable method based on historical data or objective criteria; (b) calculation of the discounted net revenue of the operation, taking into account the reference period appropriate to the sector or subsector applicable to the operation, the profitability normally expected of the category of investment concerned, the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State or region concerned. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 in duly justified cases to amend Annex V by adjusting the flat rates established therein taking into account historical data, the potential for cost recovery and the polluter-pays principle where applicable. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 establishing flat rates for sectors or subsectors within the fields of ICT, RDI and energy efficiency. The Commission shall notify the delegated acts to the European Parliament and the Council not later than 30 June 2015. In addition, the Commission shall be empowered to adopt delegated acts in accordance with Article 149 in duly justified cases with regard to adding sectors or subsectors, including subsectors for sectors in Annex V, falling under the thematic objectives defined in the first paragraph of Article 9 and supported by the ESI Funds. Where the method referred to in point (a) of the first subparagraph is applied, all the net revenue generated during implementation and after completion of the operation shall be considered to be taken into account by the application of the flat rate and shall therefore not be deducted subsequently from the eligible expenditure of the operation. When a flat rate for a new sector or subsector has been established by the adoption of a delegated act in accordance with the third and fourth subparagraphs, a managing authority may choose to apply the method set out in point (a) of the first subparagraph for new operations in relation to the sector or subsector concerned. The Commission shall be empowered to adopt delegated acts, in accordance with Article 149, laying down the method referred to in point (b) of the first subparagraph. Where that method is applied, the net revenue generated during implementation of the operation, resulting from sources of revenue not taken into account in determining the potential net revenue of the operation, shall be deducted from the eligible expenditure of the operation, no later than in the final payment claim submitted by the beneficiary. 4. The method by which the net revenue is deducted from the expenditure of the operation included in the payment application submitted to the Commission shall be determined in accordance with national rules. 5. As an alternative to the application of the methods laid down in paragraph 3 of this Article, the maximum co-financing rate referred to in Article 60(1) may, at the request of a Member State, be decreased for a priority or measure under which all supported operations could apply a uniform flat rate in accordance with point (a) of the first subparagraph of paragraph 3 of this Article. The decrease shall be not less than the amount calculated by multiplying the maximum Union co-financing rate applicable under the Fund-specific rules by the relevant flat rate referred to in that point. 6. Where it is objectively not possible to determine the revenue in advance based on any of the methods set out in paragraphs 3 or 5, the net revenue generated within three years of the completion of an operation, or by the deadline for the submission of documents for programme closure fixed in the Fund-specific rules, whichever is the earlier, shall be deducted from the expenditure declared to the Commission. 7. Paragraphs 1 to 6 shall not apply to: (a) operations or parts of operations supported solely by the ESF; (b) operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000 ; (c) repayable assistance subject to an obligation for full repayment and prizes; (d) technical assistance; (e) support to or from financial instruments; (f) operations for which public support takes the form of lump sums or standard scale unit costs; (g) operations implemented under a joint action plan; (h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation. Notwithstanding point (b) of the first subparagraph of this paragraph, where a Member State applies paragraph 5, it may include in the relevant priority or measure operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000 . 8. In addition, paragraphs 1 to 6 shall not apply to operations for which support under the programme constitutes State aid.
Article 62 PPPs
The ESI Funds may be used to support PPP operations. Such PPP operations shall comply with applicable law, in particular concerning State aid and public procurement.
Article 63 Beneficiary under PPP operations
1. In relation to a PPP operation, and by way of derogation from point (10) of Article 2, a beneficiary may be either: (a) the public law body initiating the operation; or (b) a body governed by private law of a Member State (the "private partner") selected or to be selected for the implementation of the operation. 2. The public law body initiating the PPP operation may propose that the private partner, to be selected after approval of the operation, be the beneficiary for the purposes of support from the ESI Funds. In that event, the approval decision shall be conditional on the managing authority satisfying itself that the selected private partner fulfils and assumes all the corresponding obligations of a beneficiary under this Regulation. 3. The private partner selected to implement the operation may be replaced as beneficiary during implementation where this is required under the terms and conditions of the PPP or the financing agreement between the private partner and the financial institution co-financing the operation. In that event the replacement private partner or public law body shall become the beneficiary provided that the managing authority satisfies itself that the replacement partner fulfils and assumes all the corresponding obligations of a beneficiary under this Regulation. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down additional rules on the replacement of a beneficiary and on the related responsibilities. 5. The replacement of a beneficiary shall not be considered a change in ownership within the meaning of point (b) of Article 71(1) if that replacement satisfies the applicable conditions set out in paragraph 3 of this Article and in a delegated act adopted pursuant to paragraph 4 of this Article.
Article 64 Support for PPP operations
1. In the case of a PPP operation where the beneficiary is a public law body, expenditure under a PPP operation which has been incurred and paid by the private partner may, by way of derogation from Article 65(2), be considered as incurred and paid by a beneficiary and included in a request for payment to the Commission provided that the following conditions are met: (a) the beneficiary has entered into a PPP agreement with a private partner; (b) the managing authority has verified that the expenditure declared by the beneficiary has been paid by the private partner and that the operation complies with applicable Union and national law, the programme and the conditions for support of the operation. 2. Payments to beneficiaries made in respect of expenditure included in a request for payment in accordance with paragraph 1 shall be paid into an escrow account set up for that purpose in the name of the beneficiary. 3. The funds paid into the escrow account referred to in paragraph 2 shall be used for payments in accordance with the PPP agreement, including any payments to be made in the event of termination of the PPP agreement. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down the minimum requirements to be included in PPP agreements which are necessary for the application of the derogation laid down in paragraph 1 of this Article, including provisions related to termination of the PPP agreement and for the purpose of ensuring an adequate audit trail.
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 64 Support for PPP operations):
1. In the case of a PPP operation where the beneficiary is a public law body, expenditure under a PPP operation which has been incurred and paid by the private partner may, by way of derogation from Article 65(2), be considered as incurred and paid by a beneficiary and included in a payment application to the Commission provided that the following conditions are met: (a) the beneficiary has entered into a PPP agreement with a private partner; (b) the managing authority has verified that the expenditure declared by the beneficiary has been paid by the private partner and that the operation complies with applicable Union and national law, the programme and the conditions for support of the operation. 2. Payments to beneficiaries made in respect of expenditure included in a payment application in accordance with paragraph 1 shall be paid into an escrow account set up for that purpose in the name of the beneficiary. 3. The funds paid into the escrow account referred to in paragraph 2 shall be used for payments in accordance with the PPP agreement, including any payments to be made in the event of termination of the PPP agreement. 4. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down the minimum requirements to be included in PPP agreements which are necessary for the application of the derogation laid down in paragraph 1 of this Article, including provisions related to termination of the PPP agreement and for the purpose of ensuring an adequate audit trail.
Article 65 Eligibility
1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in, or on the basis of, this Regulation or the Fund-specific rules. 2. Expenditure shall be eligible for a contribution from the ESI Funds if it has been incurred by a beneficiary and paid between the date of submission of the programme to the Commission or from 1 January 2014, whichever is earlier, and 31 December 2023. In addition, expenditure shall only be eligible for a contribution from the EAFRD if the relevant aid is actually paid by the paying agency between 1 January 2014 and 31 December 2023. 3. By way of derogation from paragraph 2, expenditure under the YEI shall be eligible as of 1 September 2013. 4. In the case of costs reimbursed pursuant to points (b) and (c) of the first subparagraph of Article 67(1), the actions constituting the basis for reimbursement shall be carried out between 1 January 2014 and 31 December 2023. 5. By way of derogation from paragraph 4, the starting date in relation to costs reimbursed on the basis of (b) and (c) of the first subparagraph of Article 67(1) for actions under the YEI shall be 1 September 2013. 6. Operations shall not be selected for support by the ESI Funds where they have been physically completed or fully implemented before the application for funding under the programme is submitted by the beneficiary to the managing authority, irrespective of whether all related payments have been made by the beneficiary. 7. This Article shall be without prejudice to the rules on eligibility of technical assistance at the initiative of the Commission set out in Article 58. 8. This paragraph shall apply to operations which generate net revenue during their implementation and to which paragraphs 1 to 6 of Article 61 do not apply. The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced by the net revenue not taken into account at the time of approval of the operation directly generated only during its implementation, not later than at the final payment claim submitted by the beneficiary. Where not all the costs are eligible for co-financing, the net revenue shall be allocated pro rata to the eligible and non-eligible parts of the cost. This paragraph shall not apply to: (a) technical assistance; (b) financial instruments; (c) repayable assistance subject to an obligation for full repayment; (d) prizes; (e) operations subject to the State aid rules; (f) operations for which public support takes the form of lump sums or standard scale unit costs provided that the net revenue has been taken into account ex ante; (g) operations implemented under a joint action plan provided that the net revenue has been taken into account ex ante; (h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation; or (i) operations for which the total eligible cost does not exceed EUR 50 000. For the purposes of this Article and Article 61, any payment received by the beneficiary arising from contractual penalties as a result of a breach of contract between the beneficiary and a third party or third parties or that has occurred as a result of the withdrawal of an offer by a third party chosen under public procurement rules (the 'deposit') shall not be considered as revenue and shall not be deducted from the eligible expenditure of the operation. 9. Expenditure that becomes eligible as a result of an amendment to a programme shall only be eligible from the date of submission to the Commission of the request for amendment or, in the event of application of Article 96(11), from the date of entry into force of the decision amending the programme. The Fund-specific rules for the EMFF may derogate from the first subparagraph. 10. By way of derogation from paragraph 9, specific provisions on the starting date of eligibility may be established in the EAFRD Regulation. 11. An operation may receive support from one or more ESI Funds or from one or more programmes and from other Union instruments, provided that the expenditure item included in a request for payment for reimbursement by one of the ESI Funds does not receive support from another Fund or Union instrument, or support from the same Fund under another programme.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 65 Eligibility):
1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in, or on the basis of, this Regulation or the Fund-specific rules. 2. Expenditure shall be eligible for a contribution from the ESI Funds if it has been incurred by a beneficiary and paid between the date of submission of the programme to the Commission or from 1 January 2014, whichever is earlier, and 31 December 2023. In addition, expenditure shall only be eligible for a contribution from the EAFRD if the relevant aid is actually paid by the paying agency between 1 January 2014 and 31 December 2023. 3. By way of derogation from paragraph 2, expenditure under the YEI shall be eligible as of 1 September 2013. 4. In the case of costs reimbursed pursuant to points (b) and (c) of the first subparagraph of Article 67(1), the actions constituting the basis for reimbursement shall be carried out between 1 January 2014 and 31 December 2023. 5. By way of derogation from paragraph 4, the starting date in relation to costs reimbursed on the basis of (b) and (c) of the first subparagraph of Article 67(1) for actions under the YEI shall be 1 September 2013. 6. Operations shall not be selected for support by the ESI Funds where they have been physically completed or fully implemented before the application for funding under the programme is submitted by the beneficiary to the managing authority, irrespective of whether all related payments have been made by the beneficiary. 7. This Article shall be without prejudice to the rules on eligibility of technical assistance at the initiative of the Commission set out in Article 58. 8. This paragraph shall apply to operations which generate net revenue during their implementation and to which paragraphs 1 to 6 of Article 61 do not apply. The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced by the net revenue not taken into account at the time of approval of the operation directly generated only during its implementation, not later than at the final payment claim submitted by the beneficiary. Where not all the costs are eligible for co-financing, the net revenue shall be allocated pro rata to the eligible and non-eligible parts of the cost. This paragraph shall not apply to: (a) technical assistance; (b) financial instruments; (c) repayable assistance subject to an obligation for full repayment; (d) prizes; (e) operations subject to the State aid rules; (f) operations for which public support takes the form of lump sums or standard scale unit costs provided that the net revenue has been taken into account ex ante; (g) operations implemented under a joint action plan provided that the net revenue has been taken into account ex ante; (h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation with the exception of those operations for which reference is made to this paragraph in the EMFF Regulation; or (i) operations for which the total eligible cost does not exceed EUR 100 000 . For the purposes of this Article and Article 61, any payment received by the beneficiary arising from contractual penalties as a result of a breach of contract between the beneficiary and a third party or third parties or that has occurred as a result of the withdrawal of an offer by a third party chosen under public procurement rules (the 'deposit') shall not be considered as revenue and shall not be deducted from the eligible expenditure of the operation. 9. Expenditure that becomes eligible as a result of an amendment to a programme shall only be eligible from the date of submission to the Commission of the request for amendment or, in the event of application of Article 96(11), from the date of entry into force of the decision amending the programme. The Fund-specific rules for the EMFF may derogate from the first subparagraph. 10. By way of derogation from paragraph 9, specific provisions on the starting date of eligibility may be established in the EAFRD Regulation. 11. An operation may receive support from one or more ESI Funds or from one or more programmes and from other Union instruments, provided that the expenditure declared in a payment application for one of the ESI Funds is not declared for support from another Fund or Union instrument, or for support from the same Fund under another programme. The amount of expenditure to be entered into a payment application of an ESI Fund may be calculated for each ESI Fund and for the programme or programmes concerned on a pro rata basis in accordance with the document setting out the conditions for support.
Article 66 Forms of support
The ESI Funds shall be used to provide support in the form of grants, prizes, repayable assistance and financial instruments, or a combination thereof. In the case of repayable assistance, the support repaid to the body that provided it, or to another competent authority of the Member State, shall be kept in a separate account or separated with accounting codes and reused for the same purpose or in accordance with the objectives of the programme.
Article 67 Forms of grants and repayable assistance
1. Grants and repayable assistance may take any of the following forms: (a) reimbursement of eligible costs actually incurred and paid, together with, where applicable, contributions in kind and depreciation; (b) standard scales of unit costs; (c) lump sums not exceeding EUR 100 000 of public contribution; (d) flat-rate financing, determined by the application of a percentage to one or more defined categories of costs. Fund-specific rules may limit the forms of grants or repayable assistance applicable to certain operations. 2. By way of derogation from paragraph 1, additional forms of grants and methods of calculation may be established in the EMFF Regulation. 3. The options referred to in paragraph 1 may be combined only where each option covers different categories of costs or where they are used for different projects forming a part of an operation or for successive phases of an operation. 4. Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, goods or services, only point (a) of the first subparagraph of paragraph 1 shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in paragraph 1 may be applied. 5. The amounts referred to in points (b), (c) and (d) of the first subparagraph of paragraph 1 shall be established in one of the following ways: (a) a fair, equitable and verifiable calculation method based on: (i) statistical data or other objective information; (ii) the verified historical data of individual beneficiaries; or (iii) the application of the usual cost accounting practices of individual beneficiaries; (b) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary; (c) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary; (d) rates established by this Regulation or the Fund-specific rules; (e) specific methods for determining amounts established in accordance with the Fund-specific rules. 6. The document setting out the conditions for support for each operation shall set out the method to be applied for determining the costs of the operation and the conditions for payment of the grant.
Amendment rationale: CONTEXT OF THE PROPOSAL The financial crisis had led to persistently negative growth rates in Greece and to serious liquidity problems and a lack of public funds available for much needed investments to boost growth and job creation. Therefore, as an exceptional measure and given the unique situation this has created in Greece, the Commission in its Communication "A new start for Jobs and Growth in Greece" proposes three elements to ensure that the available EU funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF), is effectively used for investments on the ground and reaches beneficiaries as rapidly as possible. In this context, the Commission proposes to increase the level of initial pre-financing of the funding available for the 2014-2020 period for cohesion policy programmes under the Investment for Growth and Jobs Goal and programmes supported by the EMFF to give an immediate boost to investment. In addition, in order to improve the effective use of available cohesion policy funding for the financing of operations under programmes adopted for the 2007-2013 period, it proposes to increase the maximum co-financing rates and to raise the ceiling for payments to programmes at the end of the programming period.
Revised version (Article 67 Forms of grants and repayable assistance):
1. Grants and repayable assistance may take any of the following forms: (a) reimbursement of eligible costs actually incurred and paid, together with, where applicable, contributions in kind and depreciation; (b) standard scales of unit costs; (c) lump sums not exceeding EUR 100 000 of public contribution; (d) flat-rate financing, determined by the application of a percentage to one or more defined categories of costs. Fund-specific rules may limit the forms of grants or repayable assistance applicable to certain operations. 2. By way of derogation from paragraph 1, additional forms of grants and methods of calculation may be established in the EMFF Regulation. 3. The options referred to in paragraph 1 may be combined only where each option covers different categories of costs or where they are used for different projects forming a part of an operation or for successive phases of an operation. 4. Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, goods or services, only point (a) of the first subparagraph of paragraph 1 shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in paragraph 1 may be applied. 5. The amounts referred to in points (b), (c) and (d) of the first subparagraph of paragraph 1 shall be established in one of the following ways: (a) a fair, equitable and verifiable calculation method based on: (i) statistical data or other objective information; (ii) the verified historical data of individual beneficiaries; or (iii) the application of the usual cost accounting practices of individual beneficiaries; (a) a fair, equitable and verifiable calculation method based on: (i) statistical data or other objective information; (ii) the verified historical data of individual beneficiaries; or (iii) the application of the usual cost accounting practices of individual beneficiaries; (b) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary; (c) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary; (d) rates established by this Regulation or the Fund-specific rules; (e) specific methods for determining amounts established in accordance with the Fund-specific rules. 6. The document setting out the conditions for support for each operation shall set out the method to be applied for determining the costs of the operation and the conditions for payment of the grant.
Article 68 Flat rate financing for indirect costs and staff costs concerning grants and repayable assistance
1. Where the implementation of an operation gives rise to indirect costs, they may be calculated at a flat rate in one of the following ways: (a) a flat rate of up to 25 % of eligible direct costs, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method or a method applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary; (b) a flat rate of up to 15 % of eligible direct staff costs without there being a requirement for the Member State to perform a calculation to determine the applicable rate; (c) a flat rate applied to eligible direct costs based on existing methods and corresponding rates, applicable in Union policies for a similar type of operation and beneficiary. The Commission shall be empowered to adopt delegated acts in accordance with Article 149 concerning the definition of the flat rate and the related methods referred to in point (c) of the first subparagraph of this paragraph. 2. For the purposes of determining staff costs relating to the implementation of an operation, the hourly rate applicable may be calculated by dividing the latest documented annual gross employment costs by 1 720 hours.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 68 Flat-rate financing for indirect costs concerning grants and repayable assistance):
Where the implementation of an operation gives rise to indirect costs, they may be calculated at a flat rate in one of the following ways: (a) a flat rate of up to 25 % of eligible direct costs, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method or a method applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary; (b) a flat rate of up to 15 % of eligible direct staff costs without there being a requirement for the Member State to perform a calculation to determine the applicable rate; (c) a flat rate applied to eligible direct costs based on existing methods and corresponding rates, applicable in Union policies for a similar type of operation and beneficiary. The Commission is empowered to adopt delegated acts in accordance with Article 149 to supplement the provisions on the flat rate and the related methods referred to in point (c) of the first subparagraph of this paragraph.
Article 69 Specific eligibility rules for grants and repayable assistance
1. Contributions in kind in the form of provision of works, goods, services, land and real estate for which no cash payment supported by invoices, or documents of equivalent probative value, has been made, may be eligible on condition that the eligibility rules of the ESI Funds and the programme so provide and that all the following criteria are fulfilled: (a) the public support paid to the operation which includes contributions in kind does not exceed the total eligible expenditure, excluding contributions in kind, at the end of the operation; (b) the value attributed to contributions in kind does not exceed the costs generally accepted on the market in question; (c) the value and the delivery of the contribution can be independently assessed and verified; (d) in the case of provision of land or real estate, a cash payment, for the purposes of a lease agreement of a nominal amount per annum not exceeding a single unit of the currency of the Member State, may be made; (e) in the case of contributions in kind in the form of unpaid work, the value of that work is determined by taking into account the verified time spent and the rate of remuneration for equivalent work. The value of the land or real estate referred to in point (d) of the first subparagraph of this paragraph shall be certified by an independent qualified expert or duly authorised official body and shall not exceed the limit laid down in point (b) of paragraph 3. 2. Depreciation costs may be considered as eligible where the following conditions are fulfilled: (a) the eligibility rules of the programme allow for it; (b) the amount of the expenditure is duly justified by supporting documents having equivalent probative value to invoices for eligible costs where reimbursed in the form referred to in point (a) of the first subparagraph of Article 67(1); (c) the costs relate exclusively to the period of support for the operation; (d) public grants have not contributed towards the acquisition of the depreciated assets. 3. The following costs shall not be eligible for a contribution from the ESI Funds and from the amount of support transferred from the Cohesion Fund to the CEF as referred to in Article 92(6): (a) interest on debt, except in relation to grants given in the form of an interest rate subsidy or guarantee fee subsidy; (b) the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. For derelict sites and for those formerly in industrial use which comprise buildings, that limit shall be increased to 15 %. In exceptional and duly justified cases, the limit may be raised above the respective aforementioned percentages for operations concerning environmental conservation; (c) value added tax except where it is non-recoverable under national VAT legislation.
Article 70 Eligibility of operations depending on location
1. Operations supported by the ESI Funds, subject to the derogations referred to in paragraphs 2 and 3, and the Fund-specific rules, shall be located in the programme area. 2. The managing authority may accept that an operation is implemented outside the programme area but within the Union, provided that all the following conditions are satisfied: (a) the operation is for the benefit of the programme area; (b) the total amount allocated under the programme to operations located outside the programme area does not exceed 15 % of the support from the ERDF, Cohesion Fund and EMFF at the level of the priority, or 5 % of the support from the EAFRD at the level of the programme; (c) the monitoring committee has given its agreement to the operation or types of operations concerned; (d) the obligations of the authorities for the programme in relation to management, control and audit concerning the operation are fulfilled by the authorities responsible for the programme under which that operation is supported or they enter into agreements with authorities in the area in which the operation is implemented. 3. For operations concerning technical assistance or promotional activities, expenditure may be incurred outside the Union provided that the conditions set out in point (a) of paragraph 2 and the obligations in relation to management, control and audit concerning the operation are fulfilled. 4. Paragraphs 1 to 3 shall not apply to programmes under the European territorial cooperation goal and paragraphs 2 and 3 shall not apply to operations supported by the ESF.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 70 Eligibility of operations depending on location):
1. Subject to the derogations referred to in paragraph 2 and the Fund-specific rules, operations supported by the ESI Funds shall be located in the programme area. Operations concerning the provision of services to citizens or businesses which cover the whole territory of a Member State shall be considered as being located in all programme areas within a Member State. In such cases, expenditure shall be allocated to the concerned programme areas on a pro-rata basis, based on objective criteria. The second subparagraph of this paragraph does not apply to the national programme referred to in Article 6(2) of Regulation (EU) No 1305/2013 or to the specific programme for the establishment and the operation of the national rural network referred to in Article 54(1) of that Regulation. 2. The managing authority may accept that an operation is implemented outside the programme area but within the Union, provided that all the following conditions are satisfied: (a) the operation is for the benefit of the programme area; (b) the total amount from the ERDF, Cohesion Fund, EAFRD or EMFF allocated under the programme to operations located outside the programme area does not exceed 15 % of the support from the ERDF, Cohesion Fund, EAFRD or EMFF at the level of the priority at the time of adoption of the programme; (c) the monitoring committee has given its agreement to the operation or types of operations concerned; (d) the obligations of the authorities for the programme in relation to management, control and audit concerning the operation are fulfilled by the authorities responsible for the programme under which that operation is supported or they enter into agreements with authorities in the area in which the operation is implemented. Where operations financed from the Funds and the EMFF are implemented outside the programme area in accordance with this paragraph and have benefits both outside and within the programme area, such expenditure shall be allocated to those areas on a pro rata basis based on objective criteria. Where operations concern the thematic objective referred to in point (1) of the first paragraph of Article 9 and are implemented outside the Member State but within the Union, only points (b) and (d) of the first subparagraph of this paragraph shall apply. 3. For operations concerning technical assistance or information, communication and visibility measures and promotional activities, and for operations concerning the thematic objective referred to in point (1) of the first paragraph of Article 9, expenditure may be incurred outside the Union provided that the expenditure is necessary for the satisfactory implementation of the operation. 4. Paragraphs 1, 2 and 3 shall not apply to programmes under the European territorial cooperation goal. Paragraphs 2 and 3 shall not apply to operations supported by the ESF.
Article 71 Durability of operations
1. An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within five years of the final payment to the beneficiary or within the period of time set out in State aid rules, where applicable, it is subject to any of the following: (a) a cessation or relocation of a productive activity outside the programme area; (b) a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage; (c) a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives. Sums unduly paid in respect of the operation shall be recovered by the Member State in proportion to the period for which the requirements have not been fulfilled. Member States may reduce the time limit set out in the first subparagraph to three years in cases concerning the maintenance of investments or jobs created by SMEs. 2. An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within 10 years of the final payment to the beneficiary the productive activity is subject to relocation outside the Union, except where the beneficiary is an SME. Where the contribution from the ESI Funds takes the form of State aid, the period of 10 years shall be replaced by the deadline applicable under State aid rules. 3. Operations supported by the ESF and operations supported by the other ESI Funds that are not investments in infrastructure or productive investments shall repay the contribution from the Fund only where they are subject to an obligation for maintenance of investment under the applicable State aid rules and where they undergo a cessation or relocation of a productive activity within the period laid down in those rules. 4. Paragraphs 1, 2 and 3 shall not apply to contributions to or by financial instruments or to any operation which undergoes cessation of a productive activity due to a non-fraudulent bankruptcy. 5. Paragraphs 1, 2 and 3 shall not apply to natural persons who are beneficiaries of investment support and, after the completion of the investment operation, become eligible for and receive support under Regulation (EU) No 1309/2013 of the European Parliament and of the Council where the investment concerned is directly linked to the type of activity identified as eligible for support from the European Globalisation Adjustment Fund.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The objective of the proposal is to adapt the amounts of resources available for the Investment for growth and jobs goal and for the European territorial cooperation goal set out in Articles 91(1) and 92(5) of Regulation (EU) No 1303/2013 1 and the annual breakdown of commitment appropriations reflected in Annex VI in order to reflect changes in the financial programming for the Youth Employment Initiative ('YEI'). More specifically, in line with the adopted budget for 2018, commitment appropriations for the specific allocation for the YEI should be increased by an amount of EUR 116.7 million, bringing the overall amount for 2018 up to EUR 350 million. The commitment appropriations for 2020 were adjusted to reflect the frontloading to 2018. In addition, it is necessary to correct some errors with regard to the amounts and percentages concerning the resources for the Investment for Growth and Jobs goal set out in point (2)(a) of Article 1 of Regulation (EU) 2017/2305, amending Article 92(1) of Regulation (EU) No 1303/2013. 
Revised version (Article 71 Durability of operations):
1. An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within five years of the final payment to the beneficiary or within the period of time set out in State aid rules, where applicable, it is subject to any of the following: (a) a cessation or relocation of a productive activity outside the programme area; (b) a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage; (c) a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives. Sums unduly paid in respect of the operation shall be recovered by the Member State in proportion to the period for which the requirements have not been fulfilled. Member States may reduce the time limit set out in the first subparagraph to three years in cases concerning the maintenance of investments or jobs created by SMEs. 2. An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within 10 years of the final payment to the beneficiary the productive activity is subject to relocation outside the Union, except where the beneficiary is an SME. Where the contribution from the ESI Funds takes the form of State aid, the period of 10 years shall be replaced by the deadline applicable under State aid rules. 3. Operations supported by the ESF and operations supported by the other ESI Funds that are not investments in infrastructure or productive investments shall repay the contribution from the Fund only where they are subject to an obligation for maintenance of investment under the applicable State aid rules and where they undergo a cessation or relocation of a productive activity within the period laid down in those rules. 4. Paragraphs 1, 2 and 3 of this Article shall not apply to contributions to or by financial instruments or for lease purchase under point (b) of Article 45(2) of Regulation (EU) No 1305/2013 nor to any operation which undergoes cessation of a productive activity due to a non-fraudulent bankruptcy. 5. Paragraphs 1, 2 and 3 shall not apply to natural persons who are beneficiaries of investment support and, after the completion of the investment operation, become eligible for and receive support under Regulation (EU) No 1309/2013 of the European Parliament and of the Council where the investment concerned is directly linked to the type of activity identified as eligible for support from the European Globalisation Adjustment Fund.
Article 72 General principles of management and control systems
Management and control systems shall, in accordance with Article 4(8), provide for: (a) a description of the functions of each body involved in management and control, and the allocation of functions within each body; (b) compliance with the principle of separation of functions between and within such bodies; (c) procedures for ensuring the correctness and regularity of expenditure declared; (d) computerised systems for accounting, for the storage and transmission of financial data and data on indicators, for monitoring and for reporting; (e) systems for reporting and monitoring where the body responsible entrusts execution of tasks to another body; (f) arrangements for auditing the functioning of the management and control systems; (g) systems and procedures to ensure an adequate audit trail; (h) the prevention, detection and correction of irregularities, including fraud, and the recovery of amounts unduly paid, together with any interest on late payments.
Article 73 Responsibilities under shared management
In accordance with the principle of shared management, Member States and the Commission shall be responsible for the management and control of programmes in accordance with their respective responsibilities laid down in this Regulation and in the Fund-specific rules.
Article 74 Responsibilities of Member States
1. Member States shall fulfil the management, control and audit obligations, and assume the resulting responsibilities, which are laid down in the rules on shared management set out in the Financial Regulation and the Fund-specific rules. 2. Member States shall ensure that their management and control systems for programmes are set up in accordance with the Fund-specific rules and that those systems function effectively. 3. Member States shall ensure that effective arrangements for the examination of complaints concerning the ESI Funds are in place. The scope, rules and procedures concerning such arrangements shall be the responsibility of Member States in accordance with their institutional and legal framework. Member States shall, upon request by the Commission, examine complaints submitted to the Commission falling within the scope of their arrangements. Member States shall inform the Commission, upon request, of the results of those examinations. 4. All official exchanges of information between the Member State and the Commission shall be carried out using an electronic data exchange system. The Commission shall adopt implementing acts establishing the terms and conditions with which that electronic data exchange system is to comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).