Article 60 Functions of the managing authority
The managing authority shall be responsible for managing and implementing the operational programme in accordance with the principle of sound financial management and in particular for: (a) ensuring that operations are selected for funding in accordance with the criteria applicable to the operational programme and that they comply with applicable Community and national rules for the whole of their implementation period; (b) verifying that the co-financed products and services are delivered and that the expenditure declared by the beneficiaries for operations has actually been incurred and complies with Community and national rules; verifications on-the-spot of individual operations may be carried out on a sample basis in accordance with the detailed rules to be adopted by the Commission in accordance with the procedure referred to in Article 103(3); (c) ensuring that there is a system for recording and storing in computerised form accounting records for each operation under the operational programme and that the data on implementation necessary for financial management, monitoring, verifications, audits and evaluation are collected; (d) ensuring that beneficiaries and other bodies involved in the implementation of operations maintain either a separate accounting system or an adequate accounting code for all transactions relating to the operation without prejudice to national accounting rules; (e) ensuring that the evaluations of operational programmes referred to in Article 48(3) are carried out in accordance with Article 47; (f) setting up procedures to ensure that all documents regarding expenditure and audits required to ensure an adequate audit trail are held in accordance with the requirements of Article 90; (g) ensuring that the certifying authority receives all necessary information on the procedures and verifications carried out in relation to expenditure for the purpose of certification; (h) guiding the work of the monitoring committee and providing it with the documents required to permit the quality of the implementation of the operational programme to be monitored in the light of its specific goals; (i) drawing up and, after approval by the monitoring committee, submitting to the Commission the annual and final reports on implementation; (j) ensuring compliance with the information and publicity requirements laid down in Article 69; (k) providing the Commission with information to allow it to appraise major projects.
Article 61 Functions of the certifying authority
The certifying authority of an operational programme shall be responsible in particular for: (a) drawing up and submitting to the Commission certified statements of expenditure and applications for payment; (b) certifying that: (i) the statement of expenditure is accurate, results from reliable accounting systems and is based on verifiable supporting documents; (ii) the expenditure declared complies with applicable Community and national rules and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the programme and complying with Community and national rules; (b) certifying that: (i) the statement of expenditure is accurate, results from reliable accounting systems and is based on verifiable supporting documents; (ii) the expenditure declared complies with applicable Community and national rules and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the programme and complying with Community and national rules; (c) ensuring for the purposes of certification that it has received adequate information from the managing authority on the procedures and verifications carried out in relation to expenditure included in statements of expenditure; (d) taking account for certification purposes of the results of all audits carried out by or under the responsibility of the audit authority; (e) maintaining accounting records in computerised form of expenditure declared to the Commission; (f) keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the general budget of the European Union prior to the closure of the operational programme by deducting them from the next statement of expenditure.
Article 62 Functions of the audit authority
1. The audit authority of an operational programme shall be responsible in particular for: (a) ensuring that audits are carried out to verify the effective functioning of the management and control system of the operational programme; (b) ensuring that audits are carried out on operations on the basis of an appropriate sample to verify expenditure declared; (c) presenting to the Commission within nine months of the approval of the operational programme an audit strategy covering the bodies which will perform the audits referred to under points (a) and (b), the method to be used, the sampling method for audits on operations and the indicative planning of audits to ensure that the main bodies are audited and that audits are spread evenly throughout the programming period. Where a common system applies to several operational programmes, a single audit strategy may be submitted.; (c) presenting to the Commission within nine months of the approval of the operational programme an audit strategy covering the bodies which will perform the audits referred to under points (a) and (b), the method to be used, the sampling method for audits on operations and the indicative planning of audits to ensure that the main bodies are audited and that audits are spread evenly throughout the programming period. Where a common system applies to several operational programmes, a single audit strategy may be submitted.; (d) by 31 December each year from 2008 to 2015: (i) submitting to the Commission an annual control report setting out the findings of the audits carried out during the previous 12 month-period ending on 30 June of the year concerned in accordance with the audit strategy of the operational programme and reporting any shortcomings found in the systems for the management and control of the programme. The first report to be submitted by 31 December 2008 shall cover the period from 1 January 2007 to 30 June 2008. The information concerning the audits carried out after 1 July 2015 shall be included in the final control report supporting the closure declaration referred to in point (e); (ii) issuing an opinion, on the basis of the controls and audits that have been carried out under its responsibility, as to whether the management and control system functions effectively, so as to provide a reasonable assurance that statements of expenditure presented to the Commission are correct and as a consequence reasonable assurance that the underlying transactions are legal and regular; (iii) submitting, where applicable under Article 88, a declaration for partial closure assessing the legality and regularity of the expenditure concerned. When a common system applies to several operational programmes, the information referred to in point (i) may be grouped in a single report, and the opinion and declaration issued under points (ii) and (iii) may cover all the operational programmes concerned; (d) by 31 December each year from 2008 to 2015: (i) submitting to the Commission an annual control report setting out the findings of the audits carried out during the previous 12 month-period ending on 30 June of the year concerned in accordance with the audit strategy of the operational programme and reporting any shortcomings found in the systems for the management and control of the programme. The first report to be submitted by 31 December 2008 shall cover the period from 1 January 2007 to 30 June 2008. The information concerning the audits carried out after 1 July 2015 shall be included in the final control report supporting the closure declaration referred to in point (e); (ii) issuing an opinion, on the basis of the controls and audits that have been carried out under its responsibility, as to whether the management and control system functions effectively, so as to provide a reasonable assurance that statements of expenditure presented to the Commission are correct and as a consequence reasonable assurance that the underlying transactions are legal and regular; (iii) submitting, where applicable under Article 88, a declaration for partial closure assessing the legality and regularity of the expenditure concerned. When a common system applies to several operational programmes, the information referred to in point (i) may be grouped in a single report, and the opinion and declaration issued under points (ii) and (iii) may cover all the operational programmes concerned; (e) submitting to the Commission at the latest by 31 March 2017 a closure declaration assessing the validity of the application for payment of the final balance and the legality and regularity of the underlying transactions covered by the final statement of expenditure, which shall be supported by a final control report. 2. The audit authority shall ensure that the audit work takes account of internationally accepted audit standards. 3. Where the audits and controls referred to in paragraph 1(a) and (b) are carried out by a body other than the audit authority, the audit authority shall ensure that such bodies have the necessary functional independence. 4. The Commission shall provide its comments on the audit strategy presented under paragraph 1(c) no later than three months from receipt thereof. In the absence of comments within this period it shall be considered to be accepted.
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 62 Functions of the audit authority):
1. The audit authority of an operational programme shall be responsible in particular for: (a) ensuring that audits are carried out to verify the effective functioning of the management and control system of the operational programme; (b) ensuring that audits are carried out on operations on the basis of an appropriate sample to verify expenditure declared; (c) presenting to the Commission within nine months of the approval of the operational programme an audit strategy covering the bodies which will perform the audits referred to under points (a) and (b), the method to be used, the sampling method for audits on operations and the indicative planning of audits to ensure that the main bodies are audited and that audits are spread evenly throughout the programming period. With regard to Croatia, the audit authority of an operational programme shall submit to the Commission an update of the annual audit work plan as referred to in Article 29(2)(a) of Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA) ( 19 ) within three months from the date of accession. Where a common system applies to several operational programmes, a single audit strategy may be submitted.; (c) presenting to the Commission within nine months of the approval of the operational programme an audit strategy covering the bodies which will perform the audits referred to under points (a) and (b), the method to be used, the sampling method for audits on operations and the indicative planning of audits to ensure that the main bodies are audited and that audits are spread evenly throughout the programming period. With regard to Croatia, the audit authority of an operational programme shall submit to the Commission an update of the annual audit work plan as referred to in Article 29(2)(a) of Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA) ( 19 ) within three months from the date of accession. Where a common system applies to several operational programmes, a single audit strategy may be submitted.; (d) by 31 December each year from 2008 to 2015: (i) submitting to the Commission an annual control report setting out the findings of the audits carried out during the previous 12 month-period ending on 30 June of the year concerned in accordance with the audit strategy of the operational programme and reporting any shortcomings found in the systems for the management and control of the programme. The first report to be submitted by 31 December 2008 shall cover the period from 1 January 2007 to 30 June 2008. The information concerning the audits carried out after 1 July 2015 shall be included in the final control report supporting the closure declaration referred to in point (e). With regard to Croatia, the first annual control report shall be submitted by 31 December 2013 covering the period from 1 October 2012 until 30 June 2013. The following reports covering the periods from 1 July 2013 to 30 June 2014, from 1 July 2014 to 30 June 2015 and from 1 July 2015 to 30 June 2016 shall be submitted to the Commission by 31 December 2014, 31 December 2015 and 31 December 2016, respectively. The information concerning the audits carried out after 1 July 2016 shall be included in the final control report supporting the closure declaration referred to in point (e); (ii) issuing an opinion, on the basis of the controls and audits that have been carried out under its responsibility, as to whether the management and control system functions effectively, so as to provide a reasonable assurance that statements of expenditure presented to the Commission are correct and as a consequence reasonable assurance that the underlying transactions are legal and regular; (iii) submitting, where applicable under Article 88, a declaration for partial closure assessing the legality and regularity of the expenditure concerned. When a common system applies to several operational programmes, the information referred to in point (i) may be grouped in a single report, and the opinion and declaration issued under points (ii) and (iii) may cover all the operational programmes concerned; (d) by 31 December each year from 2008 to 2015: (i) submitting to the Commission an annual control report setting out the findings of the audits carried out during the previous 12 month-period ending on 30 June of the year concerned in accordance with the audit strategy of the operational programme and reporting any shortcomings found in the systems for the management and control of the programme. The first report to be submitted by 31 December 2008 shall cover the period from 1 January 2007 to 30 June 2008. The information concerning the audits carried out after 1 July 2015 shall be included in the final control report supporting the closure declaration referred to in point (e). With regard to Croatia, the first annual control report shall be submitted by 31 December 2013 covering the period from 1 October 2012 until 30 June 2013. The following reports covering the periods from 1 July 2013 to 30 June 2014, from 1 July 2014 to 30 June 2015 and from 1 July 2015 to 30 June 2016 shall be submitted to the Commission by 31 December 2014, 31 December 2015 and 31 December 2016, respectively. The information concerning the audits carried out after 1 July 2016 shall be included in the final control report supporting the closure declaration referred to in point (e); (i) submitting to the Commission an annual control report setting out the findings of the audits carried out during the previous 12 month-period ending on 30 June of the year concerned in accordance with the audit strategy of the operational programme and reporting any shortcomings found in the systems for the management and control of the programme. The first report to be submitted by 31 December 2008 shall cover the period from 1 January 2007 to 30 June 2008. The information concerning the audits carried out after 1 July 2015 shall be included in the final control report supporting the closure declaration referred to in point (e). With regard to Croatia, the first annual control report shall be submitted by 31 December 2013 covering the period from 1 October 2012 until 30 June 2013. The following reports covering the periods from 1 July 2013 to 30 June 2014, from 1 July 2014 to 30 June 2015 and from 1 July 2015 to 30 June 2016 shall be submitted to the Commission by 31 December 2014, 31 December 2015 and 31 December 2016, respectively. The information concerning the audits carried out after 1 July 2016 shall be included in the final control report supporting the closure declaration referred to in point (e); (ii) issuing an opinion, on the basis of the controls and audits that have been carried out under its responsibility, as to whether the management and control system functions effectively, so as to provide a reasonable assurance that statements of expenditure presented to the Commission are correct and as a consequence reasonable assurance that the underlying transactions are legal and regular; (iii) submitting, where applicable under Article 88, a declaration for partial closure assessing the legality and regularity of the expenditure concerned. When a common system applies to several operational programmes, the information referred to in point (i) may be grouped in a single report, and the opinion and declaration issued under points (ii) and (iii) may cover all the operational programmes concerned; (e) submitting to the Commission at the latest by 31 March 2017 a closure declaration assessing the validity of the application for payment of the final balance and the legality and regularity of the underlying transactions covered by the final statement of expenditure, which shall be supported by a final control report. With regard to Croatia, a closure declaration supported by the final control report, shall be submitted to the Commission by 31 March 2018. (e) submitting to the Commission at the latest by 31 March 2017 a closure declaration assessing the validity of the application for payment of the final balance and the legality and regularity of the underlying transactions covered by the final statement of expenditure, which shall be supported by a final control report. With regard to Croatia, a closure declaration supported by the final control report, shall be submitted to the Commission by 31 March 2018. 2. The audit authority shall ensure that the audit work takes account of internationally accepted audit standards. 3. Where the audits and controls referred to in paragraph 1(a) and (b) are carried out by a body other than the audit authority, the audit authority shall ensure that such bodies have the necessary functional independence. 4. The Commission shall provide its comments on the audit strategy presented under paragraph 1(c) no later than three months from receipt thereof. In the absence of comments within this period it shall be considered to be accepted.
Article 63 Monitoring committee
1. The Member State shall set up a monitoring committee for each operational programme, in agreement with the managing authority, within three months from the date of the notification to the Member State of the decision approving the operational programme. A single monitoring committee may be set up for several operational programmes. 2. Each monitoring committee shall draw up its rules of procedure within the institutional, legal and financial framework of the Member State concerned and adopt them in agreement with the managing authority in order to exercise its missions in accordance with this Regulation.
Article 64 Composition
1. The monitoring committee shall be chaired by a representative of the Member State or the managing authority. Its composition shall be decided by the Member State in agreement with the managing authority. 2. At its own initiative or at the request of the monitoring committee, a representative of the Commission shall participate in the work of the monitoring committee in an advisory capacity. A representative of the EIB and the EIF may participate in an advisory capacity for those operational programmes to which the EIB or the EIF makes a contribution.
Article 65 Tasks
The monitoring committee shall satisfy itself as to the effectiveness and quality of the implementation of the operational programme, in accordance with the following provisions: (a) it shall consider and approve the criteria for selecting the operations financed within six months of the approval of the operational programme and approve any revision of those criteria in accordance with programming needs; (b) it shall periodically review progress made towards achieving the specific targets of the operational programme on the basis of documents submitted by the managing authority; (c) it shall examine the results of implementation, particularly the achievement of the targets set for each priority axis and the evaluations referred to in Article 48(3); (d) it shall consider and approve the annual and final reports on implementation referred to in Article 67; (e) it shall be informed of the annual control report, or of the part of the report referring to the operational programme concerned, and of any relevant comments the Commission may make after examining that report or relating to that part of the report; (f) it may propose to the managing authority any revision or examination of the operational programme likely to make possible the attainment of the Funds' objectives referred to in Article 3 or to improve its management, including its financial management; (g) it shall consider and approve any proposal to amend the content of the Commission decision on the contribution from the Funds.
Article 66 Arrangements for monitoring
1. The managing authority and the monitoring committee shall ensure the quality of the implementation of the operational programme. 2. The managing authority and the monitoring committee shall carry out monitoring by reference to financial indicators and the indicators referred to in Article 37(1)(c) specified in the operational programme. Where the nature of the assistance permits, statistics shall be broken down by sex and by the size of the recipient undertakings. 3. Data exchange between the Commission and the Member States for this purpose shall be carried out electronically, in accordance with the implementing rules of this Regulation adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Article 67 Annual report and final report on implementation
1. For the first time in 2008 and by 30 June each year, the managing authority shall send the Commission an annual report and by 31 March 2017 a final report on the implementation of the operational programme. 2. The reports referred to in paragraph 1 shall include the following information in order to obtain a clear view of the implementation of the operational programme: (a) the progress made in implementing the operational programme and priority axes in relation to their specific, verifiable targets, with a quantification, wherever and whenever they lend themselves to quantification, using the indicators referred to in Article 37(1)(c) at the level of the priority axis; (b) the financial implementation of the operational programme, detailing for each priority axis: (i) the expenditure paid out by the beneficiaries included in applications for payment sent to the managing authority and the corresponding public contribution; (ii) the total payments received from the Commission and quantification of the financial indicators referred to in Article 66(2); and (iii) the expenditure paid out by the body responsible for making payments to the beneficiaries, Where appropriate, financial implementation in areas receiving transitional support shall be presented separately within each operational programme; (b) the financial implementation of the operational programme, detailing for each priority axis: (i) the expenditure paid out by the beneficiaries included in applications for payment sent to the managing authority and the corresponding public contribution; (ii) the total payments received from the Commission and quantification of the financial indicators referred to in Article 66(2); and (iii) the expenditure paid out by the body responsible for making payments to the beneficiaries, Where appropriate, financial implementation in areas receiving transitional support shall be presented separately within each operational programme; (c) for information purposes only, the indicative breakdown of the allocation of Funds by categories, in accordance with the implementation rules adopted by the Commission in accordance with the procedure referred to in Article 103(3); (d) the steps taken by the managing authority or the monitoring committee to ensure the quality and effectiveness of implementation, in particular: (i) monitoring and evaluation measures, including data collection arrangements; (ii) a summary of any significant problems encountered in implementing the operational programme and any measures taken, including the response to comments made under Article 68(2) where appropriate; (iii) the use made of technical assistance; (d) the steps taken by the managing authority or the monitoring committee to ensure the quality and effectiveness of implementation, in particular: (i) monitoring and evaluation measures, including data collection arrangements; (ii) a summary of any significant problems encountered in implementing the operational programme and any measures taken, including the response to comments made under Article 68(2) where appropriate; (iii) the use made of technical assistance; (e) the measures taken to provide information on and publicise the operational programme; (f) information about significant problems relating to compliance with Community law which have been encountered in the implementation of the operational programme and the measures taken to deal with them; (g) where appropriate, the progress and financing of major projects; (h) the use made of assistance released following cancellation as referred to in Article 98(2) to the managing authority or to another public authority during the period of implementation of the operational programme; (i) cases where a substantial modification has been detected under Article 57. The breadth of information transmitted to the Commission shall be proportional to the total amount of expenditure of the operational programme concerned. Where appropriate, such information may be provided in summary form. Information referred to in points (d), (g), (h) and (i) shall not be included if there has been no significant modification since the previous report. 3. The reports referred to in paragraph 1 shall be judged admissible where they contain all the appropriate information listed in paragraph 2. The Commission shall inform the Member State on the admissibility of the annual report within 10 working days from the date of its receipt. 4. The Commission shall inform the Member State of its opinion on the content of an admissible annual report on implementation submitted by the managing authority within two months from the date of receipt. For the final report on an operational programme, the time limit shall be a maximum of five months from the date of receipt of an admissible report. If the Commission does not respond within the time limit laid down, the report shall be deemed to be accepted.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 67 Annual report and final report on implementation):
1. For the first time in 2008 and by 30 June each year, the managing authority shall send the Commission an annual report and by 31 March 2017 a final report on the implementation of the operational programme. 2. The reports referred to in paragraph 1 shall include the following information in order to obtain a clear view of the implementation of the operational programme: (a) the progress made in implementing the operational programme and priority axes in relation to their specific, verifiable targets, with a quantification, wherever and whenever they lend themselves to quantification, using the indicators referred to in Article 37(1)(c) at the level of the priority axis; (b) quantification of the financial indicators referred to in Article 66(2) expressing the cumulative financial implementation of the operational programme, detailing for each priority axis the following: (i) the total amount of certified eligible expenditure paid by beneficiaries and the corresponding public contribution; (ii) the ratio between the total amount of certified eligible expenditure paid by the beneficiaries and the total funding of the programme including Union funding and national counterpart. Where appropriate, financial implementation in areas receiving transitional support shall be presented separately within each operational programme; (b) quantification of the financial indicators referred to in Article 66(2) expressing the cumulative financial implementation of the operational programme, detailing for each priority axis the following: (i) the total amount of certified eligible expenditure paid by beneficiaries and the corresponding public contribution; (ii) the ratio between the total amount of certified eligible expenditure paid by the beneficiaries and the total funding of the programme including Union funding and national counterpart. Where appropriate, financial implementation in areas receiving transitional support shall be presented separately within each operational programme; (c) for information purposes only, the indicative breakdown of the allocation of Funds by categories, in accordance with the implementation rules adopted by the Commission in accordance with the procedure referred to in Article 103(3); (d) the steps taken by the managing authority or the monitoring committee to ensure the quality and effectiveness of implementation, in particular: (i) monitoring and evaluation measures, including data collection arrangements; (ii) a summary of any significant problems encountered in implementing the operational programme and any measures taken, including the response to comments made under Article 68(2) where appropriate; (iii) the use made of technical assistance; (d) the steps taken by the managing authority or the monitoring committee to ensure the quality and effectiveness of implementation, in particular: (i) monitoring and evaluation measures, including data collection arrangements; (ii) a summary of any significant problems encountered in implementing the operational programme and any measures taken, including the response to comments made under Article 68(2) where appropriate; (iii) the use made of technical assistance; (e) the measures taken to provide information on and publicise the operational programme; (f) information about significant problems relating to compliance with Community law which have been encountered in the implementation of the operational programme and the measures taken to deal with them; (g) where appropriate, the progress and financing of major projects; (h) the use made of assistance released following cancellation as referred to in Article 98(2) to the managing authority or to another public authority during the period of implementation of the operational programme; (i) cases where a substantial modification has been detected under Article 57. The breadth of information transmitted to the Commission shall be proportional to the total amount of expenditure of the operational programme concerned. Where appropriate, such information may be provided in summary form. Information referred to in points (d), (g), (h) and (i) shall not be included if there has been no significant modification since the previous report. 3. The reports referred to in paragraph 1 shall be judged admissible where they contain all the appropriate information listed in paragraph 2. The Commission shall inform the Member State on the admissibility of the annual report within 10 working days from the date of its receipt. 4. The Commission shall inform the Member State of its opinion on the content of an admissible annual report on implementation submitted by the managing authority within two months from the date of receipt. For the final report on an operational programme, the time limit shall be a maximum of five months from the date of receipt of an admissible report. If the Commission does not respond within the time limit laid down, the report shall be deemed to be accepted.
Article 68 Annual examination of programmes
1. Every year, when the annual report on implementation referred to in Article 67 is submitted, the Commission and the managing authority shall examine the progress made in implementing the operational programme, the principal results achieved over the previous year, the financial implementation and other factors with a view to improving implementation. Any aspects of the operation of the management and control system raised in the last annual control report, referred to in Article 62(1)(d)(i), may also be examined. 2. After the examination referred to in paragraph 1, the Commission may make comments to the Member State and the managing authority, which shall inform the monitoring committee thereof. The Member State shall inform the Commission of the action taken in response to those comments. 3. When the ex post evaluations of assistance granted over the 2000 to 2006 programming period, where appropriate, are available, the overall results may be examined in the next annual examination.
Article 69 Information and publicity
1. The Member State and the managing authority for the operational programme shall provide information on and publicise operations and co-financed programmes. The information shall be addressed to European Union citizens and beneficiaries with the aim of highlighting the role of the Community and ensure that assistance from the Funds is transparent. The Commission shall adopt implementing rules for this Article in accordance with the procedure referred to in Article 103(3). 2. The managing authority for the operational programme shall be responsible for publicity in accordance with the implementing rules of this Regulation adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Article 70 Management and control
1. Member States shall be responsible for the management and control of operational programmes, in particular through the following measures: (a) ensuring that management and control systems for operational programmes are set up in accordance with Articles 58 to 62 and function effectively; (b) preventing, detecting and correcting irregularities and recovering amounts unduly paid together with interest on late payments where appropriate. They shall notify these to the Commission and keep the Commission informed of the progress of administrative and legal proceedings. 2. When amounts unduly paid to a beneficiary cannot be recovered, the Member State shall be responsible for reimbursing the amounts lost to the general budget of the European Union, when it is established that the loss has been incurred as a result of fault or negligence on its part. 3. The implementing rules for paragraphs 1 and 2 shall be adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Article 71 Setting up of management and control systems
1. Before the submission of the first interim application for payment or at the latest within twelve months of the approval of each operational programme, the Member States shall submit to the Commission a description of the systems, covering in particular the organisation and procedures of: (a) the managing and certifying authorities and intermediate bodies; (b) the audit authority and any other bodies carrying out audits under its responsibility. 2. The description referred to in paragraph 1 shall be accompanied by a report setting out the results of an assessment of the systems set up and giving an opinion on their compliance with Articles 58 to 62. If the opinion contains reservations, the report shall indicate the seriousness of the shortcomings and, where the shortcomings do not concern the whole programme, the priority axis or axes concerned. The Member State shall inform the Commission of the corrective measures to be taken and the timetable for their implementation and subsequently provide confirmation of the implementation of the measures and the withdrawal of the corresponding reservations. The report referred to in the first subparagraph shall be deemed to be accepted, and the first interim payment shall be made, in the following circumstances: (a) within two months of the date of receipt of the report when the opinion referred to in the first subparagraph is without reservations and in the absence of observations by the Commission; (b) if the opinion contains reservations, upon confirmation to the Commission that corrective measures concerning key elements of the systems have been implemented, and the corresponding reservations withdrawn, and in the absence of observations by the Commission within two months of the date of confirmation. Where the reservations concern only a single priority axis, the first interim payment shall be made as regards the other priority axes of the operational programme for which there is no reservation. 3. The report and the opinion referred to in paragraph 2 shall be drawn up by the audit authority or by a public or private body functionally independent of the managing and certifying authorities, which shall carry out its work taking account of internationally accepted audit standards. 4. Where a common system applies to several operational programmes, a description of the common system may be notified under paragraph 1 accompanied by a single report and opinion under paragraph 2. 5. The implementing rules for paragraphs 1 to 4 shall be adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 71 Setting up of management and control systems):
1. Before the submission of the first interim application for payment or at the latest within twelve months of the approval of each operational programme, the Member States shall submit to the Commission a description of the systems, covering in particular the organisation and procedures of: (a) the managing and certifying authorities and intermediate bodies; (b) the audit authority and any other bodies carrying out audits under its responsibility. 1a. Notwithstanding paragraph 1, as soon as possible following the date of its accession or, at the latest, before any payment by the Commission is made, Croatia shall submit to the Commission a description of the systems, covering the elements set out in points (a) and (b) of that paragraph. 2. The description referred to in paragraph 1 shall be accompanied by a report setting out the results of an assessment of the systems set up and giving an opinion on their compliance with Articles 58 to 62. If the opinion contains reservations, the report shall indicate the seriousness of the shortcomings and, where the shortcomings do not concern the whole programme, the priority axis or axes concerned. The Member State shall inform the Commission of the corrective measures to be taken and the timetable for their implementation and subsequently provide confirmation of the implementation of the measures and the withdrawal of the corresponding reservations. The report referred to in the first subparagraph shall be deemed to be accepted, and the first interim payment shall be made, in the following circumstances: (a) within two months of the date of receipt of the report when the opinion referred to in the first subparagraph is without reservations and in the absence of observations by the Commission; (b) if the opinion contains reservations, upon confirmation to the Commission that corrective measures concerning key elements of the systems have been implemented, and the corresponding reservations withdrawn, and in the absence of observations by the Commission within two months of the date of confirmation. Where the reservations concern only a single priority axis, the first interim payment shall be made as regards the other priority axes of the operational programme for which there is no reservation. 2a. Paragraph 2 shall apply mutatis mutandis to Croatia. The report referred to in the first subparagraph of paragraph 2 shall be deemed to be accepted under the same conditions as those set out in the second subparagraph of paragraph 2. However, such acceptance shall be a pre-requisite for the pre-financing amount referred to in Article 82. 3. The report and the opinion referred to in paragraph 2 shall be drawn up by the audit authority or by a public or private body functionally independent of the managing and certifying authorities, which shall carry out its work taking account of internationally accepted audit standards. 4. Where a common system applies to several operational programmes, a description of the common system may be notified under paragraph 1 accompanied by a single report and opinion under paragraph 2. 5. The implementing rules for paragraphs 1 to 4 shall be adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Article 72 Responsibilities of the Commission
1. The Commission shall satisfy itself in accordance with the procedure laid down in Article 71 that the Member States have set up management and control systems that comply with Articles 58 to 62 and, on the basis of the annual control reports and annual opinion of the audit authority and its own audits, that the systems function effectively during the periods of implementation of operational programmes. 2. Without prejudice to audits carried out by Member States, Commission officials or authorised Commission representatives may carry out on-the-spot audits to verify the effective functioning of the management and control systems, which may include audits on operations included in operational programmes, with a minimum of 10 working days' notice, except in urgent cases. Officials or authorised representatives of the Member State may take part in such audits. The implementing rules of this Regulation concerning the use of data collected during audits shall be adopted by the Commission in accordance with the procedure referred to in Article 103(3). Commission officials or authorised Commission representatives, duly empowered to carry out on-the-spot audits, shall have access to the books and all other documents, including documents and metadata drawn up or received and recorded on an electronic medium, relating to expenditure financed by the Funds. The aforementioned powers of audit shall not affect the application of national provisions which reserve certain acts for agents specifically designated by national legislation. Authorised Commission representatives shall not take part, inter alia, in home visits or the formal questioning of persons within the framework of the national legislation of the Member State concerned. However, they shall have access to information thus obtained. 3. The Commission may require a Member State to carry out an on-the-spot audit to verify the effective functioning of systems or the correctness of one or more transactions. Commission officials or authorised Commission representatives may take part in such audits.
Article 73 Cooperation with the audit authorities of the Member States
1. The Commission shall cooperate with the audit authorities of operational programmes to coordinate their respective audit plans and audit methods and shall immediately exchange the results of audits carried out on management and control systems in order to make the best possible use of resources and to avoid unjustified duplication of work. In order to facilitate this cooperation in cases where a Member State designates several audit authorities, the Member State may designate a coordination body. The Commission and the audit authorities, and the coordination body, where such a body has been designated, shall meet on a regular basis and at least once a year unless otherwise agreed between them in order to examine together the annual control report and opinion presented under Article 62 and to exchange views on other issues relating to the improvement of the management and control of operational programmes. 2. In determining its own audit strategy, the Commission shall identify those operational programmes for which the opinion on the compliance of systems under Article 71(2) is without reservations, or where reservations have been withdrawn following corrective measures, where the audit strategy of the audit authority is satisfactory and where reasonable assurance has been obtained that the management and control systems function effectively on the basis of the results of audits by the Commission and the Member State. 3. For those programmes, the Commission may conclude that it can rely principally on the opinion referred to in Article 62(1)(d)(ii) with regard to the effective functioning of the systems and that it will carry out its own on-the-spot audits only if there is evidence to suggest shortcomings in the system affecting expenditure certified to the Commission in a year for which an opinion under Article 62(1)(d)(ii) has been provided which contains no reservation in respect of such shortcomings. Where the Commission reaches such a conclusion, it shall inform the Member State concerned accordingly. Where there is evidence to suggest shortcomings, it may require the Member State to carry out audits in accordance with Article 72(3) or it may carry out its own audits under Article 72(2).
Article 74 Proportional control arrangements
1. For operational programmes for which the total eligible public expenditure does not exceed EUR 750 million and for which the level of Community co-financing does not exceed 40 % of the total public expenditure: (a) the audit authority is not required to present to the Commission an audit strategy under Article 62(1)(c); (b) where the opinion on the compliance of systems under Article 71(2) is without reservations, or where reservations have been withdrawn following corrective measures, the Commission may conclude that it can rely principally on the opinion referred to in Article 62(1)(d)(ii) with regard to the effective functioning of the systems and that it will carry out its own on-the-spot audits only if there is evidence to suggest shortcomings in the system affecting expenditure certified to the Commission in a year for which an opinion under Article 62(1)(d)(ii) has been provided which contains no reservation in respect of such shortcomings. Where the Commission reaches such a conclusion, it shall inform the Member State concerned accordingly. Where there is evidence to suggest shortcomings it may require the Member State to carry out audits in accordance with Article 72(3) or it may carry out its own audits under Article 72(2). (b) where the opinion on the compliance of systems under Article 71(2) is without reservations, or where reservations have been withdrawn following corrective measures, the Commission may conclude that it can rely principally on the opinion referred to in Article 62(1)(d)(ii) with regard to the effective functioning of the systems and that it will carry out its own on-the-spot audits only if there is evidence to suggest shortcomings in the system affecting expenditure certified to the Commission in a year for which an opinion under Article 62(1)(d)(ii) has been provided which contains no reservation in respect of such shortcomings. Where the Commission reaches such a conclusion, it shall inform the Member State concerned accordingly. Where there is evidence to suggest shortcomings it may require the Member State to carry out audits in accordance with Article 72(3) or it may carry out its own audits under Article 72(2). 2. For the operational programmes referred to in paragraph 1, a Member State may in addition exercise the option to establish according to national rules the bodies and procedures for carrying out: (a) the functions of the managing authority in relation to the verification of the co-financed products and services and expenditure declared under Article 60(b); (b) the functions of the certifying authority under Article 61; and (c) the functions of the audit authority under Article 62. Where a Member State exercises this option it need not designate a certifying authority and an audit authority under Article 59(1) (b) and (c). Article 71 shall apply mutatis mutandis . When the Commission adopts implementing rules for Articles 60, 61 and 62, it shall specify the provisions which shall not apply to operational programmes for which the option in this paragraph has been exercised by the Member State concerned .
Article 75 Budget commitments
1. The Community budget commitments in respect of operational programmes (hereinafter budget commitments) shall be effected annually for each Fund and objective during the period between 1 January 2007 and 31 December 2013. The first budget commitment shall be made before the adoption by the Commission of the decision approving the operational programme. Each subsequent commitment shall be made, as a general rule, by 30 April each year by the Commission on the basis of the decision to grant a contribution from the Funds referred to in Article 32. 2. Where no payment has been made, the Member State may request, by 30 September of the year n at the latest, the transfer of any commitments in respect of operational programmes related to the national contingency reserve referred to in Article 51 to other operational programmes. The Member State shall specify in its request the operational programmes benefiting from that transfer.
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 75 Budget commitments):
1. The Community budget commitments in respect of operational programmes (hereinafter budget commitments) shall be effected annually for each Fund and objective during the period between 1 January 2007 and 31 December 2013. The first budget commitment shall be made before the adoption by the Commission of the decision approving the operational programme. Each subsequent commitment shall be made, as a general rule, by 30 April each year by the Commission on the basis of the decision to grant a contribution from the Funds referred to in Article 32. 1a. With regard to Croatia, the respective budget commitments from the ERDF, the Cohesion Fund and the ESF for 2013 shall be made based on the decision referred to in Article 28(3) before the Commission takes any decision on the revision of an adopted operational programme. The decision referred to in Article 28(3) shall constitute a financing decision within the meaning of Article 75 of Regulation (EC, Euratom) No 1605/2002 for any budget commitment in favour of Croatia. 2. Where no payment has been made, the Member State may request, by 30 September of the year n at the latest, the transfer of any commitments in respect of operational programmes related to the national contingency reserve referred to in Article 51 to other operational programmes. The Member State shall specify in its request the operational programmes benefiting from that transfer.
Article 76 Common rules for payments
1. Payments by the Commission of the contribution from the Funds shall be made in accordance with the budget appropriations. Each payment shall be posted to the earliest open budget commitments of the Fund concerned. 2. Payments shall take the form of pre-financing, interim payments and payment of the final balance. They shall be made to the body designated by the Member State. 3. At the latest by 30 April each year, Member States shall send the Commission a provisional forecast of their likely applications for payment for the current financial year and the subsequent financial year. 4. All exchanges concerning financial transactions between the Commission and the authorities and bodies designated by the Member States shall be made by electronic means, in accordance with the implementing rules of this Regulation adopted by the Commission in accordance with the procedure referred to in Article 103(3). In cases of force majeure , and in particular of malfunction of the common computerised system or a lack of a lasting connection, Member States may forward statements of expenditure and applications for payment in hard copy.
Article 77 Common rules for calculating interim payments and payments of the final balance
Interim payments and payments of the final balance shall be calculated by applying the co-financing rate laid down in the decision on the operational programme concerned for each priority axis to the eligible expenditure mentioned under that priority axis in each statement of expenditure certified by the certifying authority. However the Community contribution through the interim payments and payments of the final balance shall not be higher than the public contribution and the maximum amount of assistance from the Funds for each priority axis as laid down in the decision of the Commission approving the operational programme.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The sustained financial and economic crisis is increasing the pressure on national financial resources as Member States are reducing their budgets. In this context ensuring a smooth implementation of cohesion policy programmes is of particular importance as a tool for injecting funds into the economy. Nonetheless, the implementation of the programmes is often challenging as a result of the liquidity problems resulting from budget constraints. This is particularly the case for those Member States which have been most affected by the crisis and have received financial assistance under a programme from the European Financial Stabilisation Mechanism (EFSM) for the EURO countries or from the Balance of Payments (BoP) mechanism for non EURO countries. To date, six countries - including Greece which has received financial assistance outside the EFSM - have requested financial assistance under these mechanisms and have agreed with the Commission a macro-economic adjustment programme. These countries are Hungary, Romania, Latvia, Portugal, Greece and Ireland, hereafter called "programme countries". It should be noted that Hungary which has entrered the BoP mechanism in 2008 has already exited in 2010. In order to ensure that these Member States (or any other Member State which maybe concerned by such assistance programmes in the future) continue the implementation of the Structural Fund and Cohesion Fund programmes on the ground and disburse funds to projects, the current proposal contains provisions that would allow the Commission to make increased payments to these countries, for the period they are under the support mechanisms, without modifying their overall allocation under cohesion policy for the period 2007-2013. This will provide additional financial resources to the Member States at a critical juncture and will facilitate the continuation of the implementation of the programmes on the ground. · General context The deepening of the financial crisis in some of the Member States is undoubtedly affecting substantially the real economy due to the amount of debt and the difficulties encountered by the Governments to borrow money from the market. The Commission has put forward proposals in response to the current financial crisis and to its socio-economic consequences. In the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes aiming to simplify the implementation rules for Cohesion Policy and to provide additional pre-financing through advance payments to ERDF and ESF programmes. The additional advance payments paid out to the Member States in 2009 have provided an immediate cash injection of EUR 6.25 billion, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brought the total of advance payments to EUR 11.25 billion. A proposal presented by the Commission in July 2009, provided for additional measures of simplification of the implementation of the Structural Funds and the Cohesion Fund. The adoption of these measures in June 2010 has contributed significantly towards the simplification of the implementation of the programmes and boosted the absorption of the funds, while reducing administrative burdens on beneficiaries. · Provisions in force in the policy sphere of the proposal Article 77 of Council Regulation (EC) No 1083/2006 (hereinafter the 'General Regulation') provides that the interim paymensts and the final balance shall be calculated by applying the co-financing rate for each priority axis laid down by the Commission decision adopting the operational programme concerned. · Consistency with other policies and objectives of the Union The proposal is consistent with other proposals and intitiatives adopted by the European Commission as a response to the financial crisis . 
Revised version (Article 77 Common rules for calculating interim payments and payments of the final balance):
1. Interim payments and payments of the final balance shall be calculated by applying the co-financing rate laid down in the decision on the operational programme concerned for each priority axis to the eligible expenditure indicated under that priority axis in each statement of expenditure certified by the certifying authority. 2. By way of derogation from Article 53(2), from the second sentence of Article 53(4) and from the ceilings set out in Annex III, interim payments and payments of the final balance shall be increased by an amount corresponding to 10 percentage points above the co-financing rate applicable to each priority axis, but not exceeding 100 %, to be applied to the amount of eligible expenditure newly declared in each certified statement of expenditure submitted during the period in which a Member State meets one of the following conditions: (a) financial assistance is made available to it in accordance with Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism ( 18 ) or financial assistance is made available to it by other euro area Member States before the entry into force of that Regulation; (b) medium-term financial assistance is made available to it in accordance with Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States’ balances of payments ( 19 ); (c) financial assistance is made available to it in accordance with the Treaty establishing the European Stability Mechanism following its entry into force. 3. A Member State seeking to benefit from a derogation under paragraph 2, shall submit a written request to the Commission by 21 February 2012 or within 2 months from the date on which the Member State meets one of the conditions referred to in paragraph 2. 4. In its request under paragraph 3, the Member State shall justify the need for the derogation, by providing information necessary to establish: (a) by means of data on its macroeconomic and fiscal situation, that no resources for the national counterpart are available; (b) that an increase of payments, as referred to in paragraph 2, is necessary to safeguard the continued implementation of operational programmes; (c) that problems persist even if the maximum ceilings applicable to co-financing rates set out in Annex III are used; (d) that it meets one of the conditions referred to in points (a), (b) or (c) of paragraph 2, by providing a reference to a Council Decision or other legal act, as well as the concrete date from which the financial assistance was made available to the Member State. The Commission shall verify whether the information submitted justifies granting a derogation under paragraph 2. The Commission shall have 30 days from the date of submission of the request to raise an objection as to the correctness of the submitted information. If the Commission decides to object to the Member State’s request, the Commission shall adopt a decision, by means of an implementing act, stating its reasons. If the Commission does not raise an objection to the Member State’s request under paragraph 3, the request shall be considered to be justified. 5. The Member State’s request shall also detail the intended use of the derogation provided for in paragraph 2, and give information about complementary measures foreseen in order to concentrate the Funds on competitiveness, growth and employment, including, where appropriate, a modification of operational programmes. 6. The derogation provided for in paragraph 2 shall not apply for statements of expenditure submitted after 31 December 2013. 7. For the purpose of calculating interim payments and payments of the final balance after a Member State ceases to benefit from the financial assistance referred to in paragraph 2, the Commission shall not take into account the increased amounts paid in accordance with that paragraph. However, those amounts shall be taken into account for the purpose of Article 79(1). 8. The increased interim payments resulting from the application of paragraph 2 shall be made available as soon as possible to the managing authority and shall only be used for making payments in the implementation of the operational programme. 9. In the context of strategic reporting under Article 29(1), Member States shall provide the Commission with appropriate information on the use of the derogation, provided for in paragraph 2 of this Article, showing how the increased amount of support has contributed to promote competitiveness, growth and employment in the Member State concerned. That information shall be taken into account by the Commission in the preparation of the strategic report referred to in Article 30(1). 10. Notwithstanding paragraph 2, the Union contribution through interim payments and payments of the final balance shall not be higher than the public contribution and the maximum amount of assistance from the Funds for each priority axis as laid down in the decision of the Commission approving the operational programme. 11. Paragraphs 2 to 9 shall not apply to operational programmes under the European territorial cooperation objective.
Article 78 Statement of expenditure
1. All statements of expenditure shall include, for each priority axis, the total amount of eligible expenditure, in accordance with Article 56, paid by beneficiaries in implementing the operations and the corresponding public contribution paid or due to be paid to the beneficiaries according to the conditions governing the public contribution. Expenditure paid by beneficiaries shall be supported by receipted invoices or accounting documents of equivalent probative value, unless otherwise provided in specific Regulations for each Fund. However, as regards aid schemes within the meaning of Article 87 of the Treaty only, in addition to the conditions set out in the previous subparagraph, the public contribution corresponding to the expenditure included in a statement of expenditure shall have been paid to the beneficiaries by the body granting the aid. 2. By way of derogation from paragraph 1, as regards State aid within the meaning of Article 87 of the Treaty, the statement of expenditure may include advances paid to the beneficiaries by the body granting the aid, under the following cumulative conditions: (a) they shall be subject to a bank guarantee or a financial public facility having an equivalent effect; (c) they shall be covered by expenditure paid by beneficiaries in implementing the project and supported by receipted invoices or accounting documents of equivalent probative value at the latest three years after the year of the payment of the advance or on 31 December 2015, whichever earlier; if they are not, the next statement of expenditure shall be corrected accordingly. 3. Statements of expenditure shall identify, for each operational programme, the elements referred to in paragraph 1 relating to regions receiving transitional assistance. 4. When, in application of Article 41(3), the Commission refuses to make a financial contribution to a major project, the expenditure declaration following the adoption of the Commission decision must be rectified accordingly. 5. Where the contribution from the Funds is calculated with reference to public expenditure as provided for in Article 53(1), any information on expenditure other than public expenditure shall not affect the amount due as calculated on the basis of the payment request. 6. By way of derogation from paragraph 1, as regards financial engineering instruments as defined in Article 44, the statement of expenditure shall include the total expenditure paid in establishing or contributing to such funds or holding funds. However, at the partial or final closure of the operational programme, eligible expenditure shall be the total of: (a) any payments from urban development funds for investment in public private partnerships or other projects included in an integrated plan for urban development; or (b) any payments for investment in enterprises from each of the abovementioned funds; or (c) any guarantees provided including amounts committed as guarantees by guarantee funds; and (d) eligible management costs. The co-financing rate shall be applied to the eligible expenditure paid by the beneficiary. The corresponding statement of expenditure shall be corrected accordingly. 7. Interest generated by payments from operational programmes to funds as defined in Article 44, shall be used to finance urban development projects in the case of urban development funds or financial engineering instruments for small and medium-sized enterprises in other cases. Resources returned to the operation from investments undertaken by funds as defined in Article 44 or left over after all guarantees have been honoured shall be reused by the competent authorities of the Member States concerned for the benefit of urban development projects or of small and medium-sized enterprises.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 78 Statement of expenditure):
1. All statements of expenditure shall include, for each priority axis, the total amount of eligible expenditure, in accordance with Article 56, paid by beneficiaries in implementing the operations and the corresponding public contribution paid or due to be paid to the beneficiaries according to the conditions governing the public contribution. Expenditure paid by beneficiaries shall be supported by receipted invoices or accounting documents of equivalent probative value, unless otherwise provided in specific Regulations for each Fund. However, as regards aid schemes within the meaning of Article 87 of the Treaty only, in addition to the conditions set out in the previous subparagraph, the public contribution corresponding to the expenditure included in a statement of expenditure shall have been paid to the beneficiaries by the body granting the aid. 2. By way of derogation from paragraph 1, as regards State aid within the meaning of Article 87 of the Treaty, the statement of expenditure may include advances paid to the beneficiaries by the body granting the aid, under the following cumulative conditions: (a) they shall be subject to a guarantee provided by a bank or other financial institution established in a Member State; (c) they shall be covered by expenditure paid by beneficiaries in implementing the project and supported by receipted invoices or accounting documents of equivalent probative value at the latest three years after the year of the payment of the advance or on 31 December 2015, whichever earlier; if they are not, the next statement of expenditure shall be corrected accordingly. A facility provided as a guarantee by a public entity or by the Member State itself shall be considered equivalent to a guarantee referred to in point (a) in the first subparagraph. 3. Statements of expenditure shall identify, for each operational programme, the elements referred to in paragraph 1 relating to regions receiving transitional assistance. 4. When, in application of Article 41(3), the Commission refuses to make a financial contribution to a major project, the expenditure declaration following the adoption of the Commission decision must be rectified accordingly. 5. Where the contribution from the Funds is calculated with reference to public expenditure as provided for in Article 53(1), any information on expenditure other than public expenditure shall not affect the amount due as calculated on the basis of the payment request. 6. By way of derogation from paragraph 1, as regards financial engineering instruments as defined in Article 44, the statement of expenditure shall include the total expenditure paid in establishing or contributing to such funds or holding funds. However, at the partial or final closure of the operational programme, eligible expenditure shall be the total of: (a) any payments from urban development funds for investment in public private partnerships or other projects included in an integrated plan for urban development; or (b) any payments for investment in enterprises from each of the abovementioned funds; or (c) any guarantees provided including amounts committed as guarantees by guarantee funds; and (d) eligible management costs or fees; and (e) any loans or guarantees for repayable investments from funds or other incentive schemes providing loans, guarantees for repayable investments, or equivalent instruments, for energy efficiency and use of renewable energy in buildings, including in existing housing. The co-financing rate shall be applied to the eligible expenditure paid by the beneficiary. The corresponding statement of expenditure shall be corrected accordingly. 7. Interest generated by payments from operational programmes to funds as defined in Article 44 shall be used to finance any of the following: (a) urban development projects in the case of urban development funds; (b) financial engineering instruments for small and medium-sized enterprises; (c) in the case of funds or other incentive schemes providing loans, guarantees for repayable investments, or equivalent instruments, for energy efficiency and use of renewable energy in buildings, including in existing housing. Resources returned to the operation from investments undertaken by funds as defined in Article 44 or left over after all guarantees have been honoured shall be reused by the competent authorities of the Member States concerned for the benefit of urban development projects, of small and medium-sized enterprises or for energy efficiency and use of renewable energy in buildings, including in existing housing.
Article 79 Accumulation of pre-financing and of interim payments
1. The cumulative total of pre-financing and interim payments made shall not exceed 95 % of the contribution from the Funds to the operational programme. 2. When this ceiling is reached, the certifying authority shall continue transmitting to the Commission any certified statement of expenditure on 31 December of year n, as well as the amounts recovered during the year for each Fund, at the latest by the end of February of year n+1.
Article 80 Wholeness of payment to beneficiaries
Member States shall satisfy themselves that the bodies responsible for making the payments ensure that the beneficiaries receive the total amount of the public contribution as quickly as possible and in full. No amount shall be deducted or withheld and no specific charge or other charge with equivalent effect shall be levied that would reduce these amounts for the beneficiaries.
Article 81 Use of the euro
1. Amounts set out in operational programmes submitted by Member States, certified statements of expenditure, applications for payment and expenditure mentioned in the annual and final report of implementation shall be denominated in euro. 2. Commission decisions on operational programmes and Commission commitments and payments, shall be denominated and carried out in euro. 3. Member States which have not adopted the euro as their currency on the date of an application for payment shall convert into euro the amounts of expenditure incurred in national currency. This amount shall be converted into euro using the monthly accounting exchange rate of the Commission in the month during which the expenditure was registered in the accounts of the certifying authority of the operational programme concerned. This rate shall be published electronically by the Commission each month. 4. When the euro becomes the currency of a Member State, the conversion procedure set out in paragraph 3 shall continue to apply to all expenditure recorded in the accounts by the certifying authority before the date of entry into force of the fixed conversion rate between the national currency and the euro.
Article 82 Payment
1. Following the Commission decision approving a contribution from the Funds to an operational programme, a single pre-financing amount for the 2007 to 2013 period shall be paid by the Commission to the body designated by the Member State. The pre-financing amount shall be paid in different instalments as follows: (a) for Member States of the European Union as constituted before 1 May 2004: in 2007 2 % of the contribution from the Structural Funds to the operational programme, in 2008 3 % of the contribution from the Structural Funds to the operational programme, and in 2009 2,5 % of the contribution from the Structural Funds to the operational programme; (b) for Member States that acceded to the European Union on or after 1 May 2004: in 2007 2 % of the contribution from the Structural Funds to the operational programme, in 2008 3 % of the contribution from the Structural Funds to the operational programme and in 2009 4 % of the contribution from the Structural Funds to the operational programme; (c) if the operational programme falls under the European territorial cooperation objective and at least one of the participants is a Member State that acceded to the European Union on or after 1 May 2004, in 2007 2 % of the contribution from the ERDF to the operational programme, in 2008 3 % of the contribution from the ERDF to the operational programme and in 2009 4 % of the contribution from the ERDF to the operational programme; (d) for Member States of the European Union as constituted before 1 May 2004, in 2007 2 % of the contribution from the Cohesion Fund to the operational programme, in 2008 3 % of the contribution from the Cohesion Fund to the operational programme, and in 2009 2,5 % of the contribution from the Cohesion Fund to the operational programme; (e) for Member States that acceded to the European Union on or after 1 May 2004, in 2007 2,5 % of the contribution from the Cohesion Fund to the operational programme, in 2008 4 % of the contribution from the Cohesion Fund to the operational programme, and in 2009 4 % of the contribution from the Cohesion Fund to the operational programme. 2. The total amount paid as pre-financing shall be reimbursed to the Commission by the body designated by the Member State if no application for payment under the operational programme is sent within 24 months from the date on which the Commission pays the first instalment of the pre-financing amount. The total contribution from the Funds to the operational programme shall not be affected by such reimbursement.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 82 Payment):
1. Following the Commission decision approving a contribution from the Funds to an operational programme, a single pre-financing amount for the 2007 to 2013 period shall be paid by the Commission to the body designated by the Member State. The pre-financing amount shall be paid in different instalments as follows: (a) for Member States of the European Union as constituted before 1 May 2004: in 2007 2 % of the contribution from the Structural Funds to the operational programme, in 2008 3 % of the contribution from the Structural Funds to the operational programme, and in 2009 2,5 % of the contribution from the Structural Funds to the operational programme; (b) for Member States that acceded to the European Union on or after 1 May 2004: in 2007 2 % of the contribution from the Structural Funds to the operational programme, in 2008 3 % of the contribution from the Structural Funds to the operational programme and in 2009 4 % of the contribution from the Structural Funds to the operational programme; (c) if the operational programme falls under the European territorial cooperation objective and at least one of the participants is a Member State that acceded to the European Union on or after 1 May 2004, in 2007 2 % of the contribution from the ERDF to the operational programme, in 2008 3 % of the contribution from the ERDF to the operational programme and in 2009 4 % of the contribution from the ERDF to the operational programme; (d) for Member States of the European Union as constituted before 1 May 2004, in 2007 2 % of the contribution from the Cohesion Fund to the operational programme, in 2008 3 % of the contribution from the Cohesion Fund to the operational programme, and in 2009 2,5 % of the contribution from the Cohesion Fund to the operational programme; (e) for Member States that acceded to the European Union on or after 1 May 2004, in 2007 2,5 % of the contribution from the Cohesion Fund to the operational programme, in 2008 4 % of the contribution from the Cohesion Fund to the operational programme, and in 2009 4 % of the contribution from the Cohesion Fund to the operational programme; (f) for Member States that were granted loans in 2009 in accordance with Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term assistance for Member States' balances of payments ( 18 ) or for Member States with a decrease in GDP in 2009 of more than 10 % in real terms in comparison to 2008: in 2010, 2 % of the contribution from the Cohesion Fund and 4 % of the contribution from the ESF to the operational programme. For the purpose of applying the criteria referred to in point (f) of the second subparagraph, GDP figures shall be based on Community statistics published in November 2009 ( 19 ). 2. The total amount paid as pre-financing shall be reimbursed to the Commission by the body designated by the Member State if no application for payment under the operational programme is sent within 24 months from the date on which the Commission pays the first instalment of the pre-financing amount. The total contribution from the Funds to the operational programme shall not be affected by such reimbursement.
Article 83 Interest
Any interest generated by the pre-financing shall be posted to the operational programme concerned, being regarded as a resource for the Member State in the form of a national public contribution, and shall be declared to the Commission at the time of the final closure of the operational programme.
Article 84 Clearance
The amount paid as pre-financing shall be totally cleared from the Commission accounts when the operational programme is closed in accordance with Article 89.
Article 85 Interim payments
Interim payments shall be made for each operational programme. The first interim payment shall be made in accordance with Article 71(2).
Article 86 Acceptability of applications for payment
1. Each interim payment made by the Commission shall be subject to the following conditions being met: (a) the Commission must have been sent a application for payment and a statement of expenditure in accordance with Article 78; (b) no more than the maximum amount of assistance from the Funds as laid down in the decision of the Commission approving the operational programme has been paid by the Commission during the whole period for each priority axis; (c) the managing authority must have sent the Commission the most recent annual implementation report in accordance with Article 67(1) and (3); (d) there is no reasoned opinion by the Commission in respect of an infringement under Article 226 of the Treaty as regards the operation(s) for which the expenditure is declared in the application for payment in question. 2. If one or more of the conditions referred to in paragraph 1 are not met, the Member State and the certifying authority shall be informed by the Commission within a period of one month so that the necessary steps can be taken to remedy the situation.
Article 87 Date of presentation of applications for payment and payment delays
1. The certifying authority shall satisfy itself that requests for interim payments for each operational programme are grouped together and sent to the Commission, as far as possible, on three separate occasions a year. For a payment to be made by the Commission in the current year, the latest date on which a application for payment shall be submitted is 31 October. 2. Subject to available funding, and the absence of a suspension of payments in accordance with Article 92, the Commission shall make the interim payment no later than two months after the date on which a application for payment meeting the conditions referred to in Article 86 is registered with the Commission.
Article 88 Partial closure
1. Partial closure of operational programmes may be made at periods to be determined by the Member State. Partial closure shall relate to operations completed during the period up to 31 December of the previous year. For the purposes of this Regulation, an operation shall be deemed completed where the activities under it have been actually carried out and for which all expenditure by the beneficiaries and the corresponding public contribution have been paid. 2. Partial closure shall be made on the condition that the Member State sends the following to the Commission by 31 December of a given year: (a) a statement of expenditure relating to the operations referred to in paragraph 1; (b) a declaration for partial closure in accordance with Article 62(1)(d)(iii). 3. Any financial corrections made in accordance with Articles 98 and 99 concerning operations subject to partial closure shall be net financial corrections.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 88 Partial closure):
1. Partial closure of operational programmes may be made at periods to be determined by the Member State. Partial closure shall relate to operations completed during the period up to 31 December of the previous year. For the purposes of this Regulation, an operation shall be deemed completed where the activities under it have been actually carried out and for which all expenditure by the beneficiaries and the corresponding public contribution have been paid. 2. Partial closure shall be made on the condition that the Member State sends the following to the Commission by 31 December of a given year: (a) a statement of expenditure relating to the operations referred to in paragraph 1; (b) a declaration for partial closure in accordance with Article 62(1)(d)(iii). 3. Any financial corrections made in accordance with Articles 98 and 99 concerning operations subject to partial closure shall be net financial corrections. However, in cases where irregularities in operations which have been subject to a declaration of partial closure are detected by the Member State, Article 98(2) and (3) shall apply. The statement of expenditure referred to in paragraph 2(a) of this Article shall be adjusted accordingly.
Article 89 Conditions for the payment of the final balance
1. The Commission shall pay the final balance provided that: (a) the Member State has sent an application for payment comprising the following documents by 31 March 2017: (i) an application for payment of the final balance and a statement of expenditure in accordance with Article 78; (ii) the final implementation report for the operational programme, including the information set out in Article 67; (iii) a closure declaration referred to in Article 62(1)(e); and (a) the Member State has sent an application for payment comprising the following documents by 31 March 2017: (i) an application for payment of the final balance and a statement of expenditure in accordance with Article 78; (ii) the final implementation report for the operational programme, including the information set out in Article 67; (iii) a closure declaration referred to in Article 62(1)(e); and (b) there is no reasoned opinion by the Commission in respect of an infringement under Article 226 of the Treaty as regards the operation(s) for which the expenditure is declared in the application for payment in question. 2. Failure to send any of the documents referred to in paragraph 1 to the Commission shall automatically result in the decommitment of the final balance, in accordance with Article 93. 3. The Commission shall inform the Member State of its opinion on the content of the closure declaration referred to in paragraph 1(a)(iii) within five months of the date of its receipt. The closure declaration shall be deemed to be accepted in the absence of observations by the Commission within that five-month period. 4. Subject to available funding, the Commission shall pay the final balance within no more than 45 days from the later of the following dates: (a) the date on which it accepts the final report in accordance with Article 67(4); and (b) the date on which it accepts the closure declaration referred to in paragraph 1(a)(iii) of this Article. 5. Without prejudice to paragraph 6, the balance of the budgetary commitment shall be decommitted 12 months following the payment. The closure of the operational programme shall be on the date of the earliest of the following three events: (a) the payment of the final balance determined by the Commission on the basis of the documents referred to in paragraph 1; (b) the sending of a debit note for sums unduly paid by the Commission to the Member State in respect of the operational programme; (c) the decommitment of the final balance of the budgetary commitment. The Commission shall inform the Member State about the date of the closure of the operational programme within a deadline of two months. 6. Notwithstanding the results of any audits performed by the Commission or the European Court of Auditors, the final balance paid by the Commission for the operational programme may be amended within nine months of the date on which it is paid or, where there is a negative balance to be reimbursed by the Member State, within nine months of the date on which the debit note is issued. Such amendment of the balance shall not affect the date of the closure of the operational programme as set out in paragraph 5.
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 89 Conditions for the payment of the final balance):
1. The Commission shall pay the final balance provided that: (a) the Member State has sent an application for payment comprising the following documents by 31 March 2017: (i) an application for payment of the final balance and a statement of expenditure in accordance with Article 78; (ii) the final implementation report for the operational programme, including the information set out in Article 67; (iii) a closure declaration referred to in Article 62(1)(e); and (a) the Member State has sent an application for payment comprising the following documents by 31 March 2017: (i) an application for payment of the final balance and a statement of expenditure in accordance with Article 78; (ii) the final implementation report for the operational programme, including the information set out in Article 67; (iii) a closure declaration referred to in Article 62(1)(e); and (b) there is no reasoned opinion by the Commission in respect of an infringement under Article 226 of the Treaty as regards the operation(s) for which the expenditure is declared in the application for payment in question. With regard to Croatia, an application for payment comprising the documents listed in point (a) (i) to (iii) shall be sent by 31 March 2018. 2. Failure to send any of the documents referred to in paragraph 1 to the Commission shall automatically result in the decommitment of the final balance, in accordance with Article 93. 3. The Commission shall inform the Member State of its opinion on the content of the closure declaration referred to in paragraph 1(a)(iii) within five months of the date of its receipt. The closure declaration shall be deemed to be accepted in the absence of observations by the Commission within that five-month period. 4. Subject to available funding, the Commission shall pay the final balance within no more than 45 days from the later of the following dates: (a) the date on which it accepts the final report in accordance with Article 67(4); and (b) the date on which it accepts the closure declaration referred to in paragraph 1(a)(iii) of this Article. 5. Without prejudice to paragraph 6, the balance of the budgetary commitment shall be decommitted 12 months following the payment. The closure of the operational programme shall be on the date of the earliest of the following three events: (a) the payment of the final balance determined by the Commission on the basis of the documents referred to in paragraph 1; (b) the sending of a debit note for sums unduly paid by the Commission to the Member State in respect of the operational programme; (c) the decommitment of the final balance of the budgetary commitment. The Commission shall inform the Member State about the date of the closure of the operational programme within a deadline of two months. 6. Notwithstanding the results of any audits performed by the Commission or the European Court of Auditors, the final balance paid by the Commission for the operational programme may be amended within nine months of the date on which it is paid or, where there is a negative balance to be reimbursed by the Member State, within nine months of the date on which the debit note is issued. Such amendment of the balance shall not affect the date of the closure of the operational programme as set out in paragraph 5.
Article 90 Availability of documents
1. Without prejudice to the rules governing State aid under Article 87 of the Treaty, the managing authority shall ensure that all the supporting documents regarding expenditure and audits on the operational programme concerned are kept available for the Commission and the Court of Auditors for: (a) a period of three years following the closure of an operational programme as defined in Article 89(5); (b) a period of three years following the year in which partial closure took place, in the case of documents regarding expenditure and audits on operations referred to in paragraph 2. These periods shall be interrupted either in the case of legal proceedings or at the duly motivated request of the Commission. 2. The managing authority shall make available to the Commission on request a list of completed operations which have been subject to partial closure under Article 88. 3. The documents shall be kept either in the form of the originals or in versions certified to be in conformity with the originals on commonly accepted data carriers.
Article 91 Interruption of the payment deadline
1. The payment deadline may be interrupted by the authorising officer by delegation within the meaning of Regulation (EC, Euratom) No 1605/2002 for a maximum period of six months if: (a) in a report of a national or Community audit body there is evidence to suggest a significant deficiency in the functioning of the management and control systems; (b) the authorising officer by delegation has to carry out additional verifications following information coming to his attention alerting him that expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected. 2. The Member State and the certifying authority shall be informed immediately of the reasons for the interruption. The interruption shall be ended as soon as the necessary measures have been taken by the Member State.
Article 92 Suspension of payments
1. All or part of the interim payments at the level of priority axes or programmes may be suspended by the Commission where: (a) there is a serious deficiency in the management and control system of the programme which affects the reliability of the procedure for certification of payments and for which corrective measures have not been taken; or (b) expenditure in a certified statement of expenditure is linked to a serious irregularity which has not been corrected; or (c) there is a serious breach by a Member State of its obligations under Article 70(1) and (2). 2. The Commission may decide to suspend all or part of interim payments after having given the Member State the opportunity to present its observations within a period of two months. 3. The Commission shall end suspension of all or part of interim payments where the Member State has taken the necessary measures to enable the suspension to be lifted. Where the required measures are not taken by the Member State, the Commission may adopt the decision to cancel all or part of the Community contribution to the operational programme in accordance with Article 99.
Article 93 Principles
1. The Commission shall automatically decommit any part of a budget commitment in an operational programme that has not been used for payment of the pre-financing or interim payments or for which an application for payment has not been sent in conformity with Article 86 by 31 December of the second year following the year of budget commitment under the programme, with the exception mentioned in paragraph 2. 2. For Member States whose GDP from 2001 to 2003 was below 85 % of the EU-25 average in the same period, as listed in Annex III, the deadline referred to in paragraph 1 shall be 31 December of the third year following the year of the annual budget commitment from 2007 to 2010 under their operational programmes. This deadline shall also apply to the annual budget commitment from 2007 to 2010 in an operational programme falling under the European territorial cooperation objective if at least one of the participants is a Member State referred to in the first subparagraph. 3. That part of commitments still open on 31 December 2015 shall be automatically decommitted if the Commission has not received an acceptable application for payment for it by 31 March 2017. 4. If this Regulation enters into force after 1 January 2007, the period after which the first automatic decommitment as referred to in paragraph 1 may be made shall be extended, for the first commitment, by the number of months between 1 January 2007 and the date of the first budget commitment.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 93 Principles):
1. The Commission shall automatically decommit any part of the amount calculated in accordance with the second subparagraph in an operational programme that has not been used for payment of the pre-financing or interim payments or for which an application for payment has not been sent in conformity with Article 86 by 31 December of the second year following the year of budget commitment under the programme, with the exception mentioned in paragraph 2. For the purpose of the automatic decommitment, the Commission shall calculate the amount by adding one sixth of the annual budget commitment related to the 2007 total annual contribution to each of the 2008 to 2013 budget commitments. 2. For Member States whose GDP from 2001 to 2003 was below 85 % of the EU-25 average in the same period, as listed in Annex III, the deadline referred to in paragraph 1 shall be 31 December of the third year following the year of the annual budget commitment from 2007 to 2010 under their operational programmes. This deadline shall also apply to the annual budget commitment from 2007 to 2010 in an operational programme falling under the European territorial cooperation objective if at least one of the participants is a Member State referred to in the first subparagraph. 2a. By way of derogation from the first subparagraph of paragraph 1 and from paragraph 2, the deadlines for automatic decommitment shall not apply to the annual budget commitment related to the 2007 total annual contribution. 3. That part of commitments still open on 31 December 2015 shall be automatically decommitted if the Commission has not received an acceptable application for payment for it by 31 March 2017. 4. If this Regulation enters into force after 1 January 2007, the period after which the first automatic decommitment as referred to in paragraph 1 may be made shall be extended, for the first commitment, by the number of months between 1 January 2007 and the date of the first budget commitment.
Article 94 Period for interruption for major projects and aid schemes
When the Commission takes a decision to authorise a major project or an aid scheme, the amounts potentially concerned by automatic decommitment shall be reduced by the annual amounts concerned by such major projects or aid schemes. For these annual amounts, the starting date for the calculation of the automatic decommitment deadlines referred to in Article 93 shall be the date of the subsequent decision necessary in order to authorise such major projects or aid schemes.
Amendment rationale: EXPLANATORY MEMORANDUM 1. background to the proposal · Reasons and objectives for the proposal The current financial and economic crisis has created major challenges for the European Union. Therefore the Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges. Whereas a number of important measures to counterbalance the negative effects of the crisis have already been taken both at the Community and national level, including amendments of the Community legislative framework governing Cohesion policy, the actual impact of the financial crisis on the real economy and on the labour market starts only now to make itself widely felt. On 3 June the Commission presented the Communication on 'A Shared Commitment for Employment' in which additional measures were proposed in order to boost job creation and counter the effects of the crisis on jobs. The pressure on national financial resources increases and necessitates taking further steps to alleviate this pressure through a better use of Community funding, and mobilisation and acceleration of all available Funds to tackle the crisis, in particular using the ESF for rapid recovery packages as outlined in the above-mentioned Communication. In the context of the current crisis, ensuring a smooth implementation of Cohesion programmes is of particular relevance as they represent the most powerful and relevant lever for assisting the real economy. With total financial resources of 347 billion € for the 2007-2013 period, Cohesion policy provides a powerful support for both budgetary stability and public investment in the Member States and the regions of the European Union. Experience shows that more effort is needed to facilitate the management of the Community funding in order to speed up the flow of the funding to the beneficiaries that are most affected by the economic downturn. The December European Council supported proposals for 'simplification of procedures and faster implementation of programmes financed by the Cohesion Fund, Structural Funds'. The current proposal therefore includes further elements of simplification, with the overall objective to accelerate co-financed investments in Member States and regions and to increase the impact of the funding on the economy as a whole. · General context The current crisis is substantially affecting the real economy due to the difficulties encountered by the banks and due to the tightening of credit policy which could reduce household consumption as well as business investment, support to innovation, technological and industrial development with negative effects on GDP and employment. The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this. On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources. At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute. Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures. As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens. The Commission's most recent economic forecasts predict a marked reduction of growth in the European Union - which would fall to 1,4 % in 2008 (half of that achieved in 2007), 0,2 % in 2009 and 1,1 % in 2010. These poor economic prospects will probably weigh heavily on public finances. Assuming unchanged policies, budget deficits could increase from 1 % of GDP in 2007 to 2,6 % in 2010. Reliable forecasting on public finances - and particularly in the area of debt - is difficult, however, on account of the uncertainty surrounding the budgetary impacts of emergency measures already taken by governments. It is in this context that the Commission has endeavoured to contribute to the debate currently taking place within the Union and with its international partners on how best to react to the current financial crisis and to its socio-economic consequences. In particular in the framework of its recovery package, the Commission proposed in December 2008 a number of regulatory changes to simplify the implementation rules for Cohesion Policy and to increase the pre-financing (advance payments) to ERDF and ESF programmes. The additional advance payments have provided an immediate cash injection of EUR 6.25 billion in 2009 to pre-finance investment, within the financial envelope agreed for each Member State for the 2007-2013 period. This amendment brings the total of advance payments in 2009 to EUR 11.25 billion. The Commission proposal was adopted by the Council in May 2009 and all advance payments now have been paid to Member States. The Commission has repeatedly encouraged Member States to transfer the additional advance payments to the bodies involved in project management to frontload expenditure to Cohesion Policy Projects. · Provisions in force in the policy sphere of the proposal The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted. In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards. In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation. · Consistency with other policies and objectives of the Union Not applicable.
Revised version (Article 94 Period of interruption for major projects and aid schemes):
1. Where the Member State submits a major project application which meets all the requirements laid down in Article 40, the amounts potentially concerned by automatic decommitment shall be reduced by the annual amounts concerned by such major projects. Where the Commission takes a decision to authorise an aid scheme, the amounts potentially concerned by automatic decommitment shall be reduced by the annual amounts concerned by such aid schemes. 2. For the annual amounts referred to in paragraph 1, the starting date for the calculation of the automatic decommitment deadlines referred to in Article 93 shall be the date of the subsequent decision necessary in order to authorise such major projects or aid schemes.
Article 95 Period of interruption for legal proceedings and administrative appeals
The amount potentially concerned by automatic decommitment shall be reduced by the amounts that the certifying authority has not been able to declare to the Commission because of operations suspended by a legal proceeding or an administrative appeal having suspensory effect, on condition that the Member State sends the Commission information stating the reasons by 31 December of the second or third year following the year of the budget commitment pursuant to Article 93. For that part of commitments still open on 31 December 2015, the time limit referred to in Article 93(3) shall be interrupted under these same conditions in respect of the amount relating to the operations concerned. The abovementioned reduction may be requested once if the suspension lasted up to one year or several times corresponding to the number of years between the date of the legal or administrative decision suspending the implementation of the operation and the date of the final legal or administrative decision.
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 95 Period of interruption for legal proceedings and administrative appeals):
The amount potentially concerned by automatic decommitment shall be reduced by the amounts that the certifying authority has not been able to declare to the Commission because of operations suspended by a legal proceeding or an administrative appeal having suspensory effect, on condition that the Member State sends the Commission information stating the reasons by 31 December of the second or third year following the year of the budget commitment pursuant to Article 93. For that part of commitments still open on 31 December 2015, the time limit referred to in Article 93(3) shall be interrupted under these same conditions in respect of the amount relating to the operations concerned. By way of derogation from the first and second paragraphs, with regard to Croatia the deadlines referred to in Article 93(3a) shall be interrupted under the conditions set out in the first paragraph of this Article in respect of the amount relating to the operations concerned. The abovementioned reduction may be requested once if the suspension lasted up to one year or several times corresponding to the number of years between the date of the legal or administrative decision suspending the implementation of the operation and the date of the final legal or administrative decision.
Article 96 Exceptions to the automatic decommitment
The following shall be disregarded in calculating the automatic decommitment: (a) that part of the budget commitment for which a application for payment has been made but whose reimbursement has been interrupted or suspended by the Commission on 31 December of the second or third year following the year of the budget commitment pursuant to Article 93 and in accordance with Articles 91 and 92. When the problem resulting in the interruption or suspension has been resolved, the automatic decommitment rule shall be applied to that part of the budget commitment which is concerned; (b) that part of the budget commitment for which a application for payment has been made but whose reimbursement has been capped in particular due to a lack of budget resources; (c) that part of the budget commitment for which it has not been possible to make an acceptable application for payment for reasons of force majeure seriously affecting implementation of the operational programme. The national authorities claiming force majeure shall demonstrate its direct consequences on the implementation of all or part of the operational programme.
Article 97 Procedure
1. The Commission shall inform the Member State and the authorities concerned in good time whenever there is a risk of application of automatic decommitment under Article 93. The Commission shall inform the Member State and the authorities concerned of the amount of the automatic decommitment resulting from the information in its possession. 2. The Member State shall have two months from the date of receipt of that information to agree to the amount or submit its observations. The Commission shall carry out the automatic decommitment not later than nine months after the deadline referred to in Article 93. 3. The Fund's contribution to the operational programme shall be reduced, for the year concerned, by the amount automatically decommitted. The Member State shall produce within two months of the date of decommitment a revised financing plan reflecting the reduced amount of assistance over one or several priority axes of the operational programme. Failing this, the Commission shall reduce the amounts allocated to each priority axis proportionately.
Article 98 Financial corrections by Member States
1. The Member States shall in the first instance bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or the conditions for the implementation or control of operations or operational programmes and making the financial corrections required. 2. The Member State shall make the financial corrections required in connection with the individual or systemic irregularities detected in operations or operational programmes. The corrections made by a Member State shall consist of cancelling all or part of the public contribution to the operational programme. The Member State shall take into account the nature and gravity of the irregularities and the financial loss to the Funds. The resources from the Funds released in this way may be reused by the Member State until 31 December 2015 for the operational programme concerned in accordance with the provisions referred to in paragraph 3. 3. The contribution cancelled in accordance with paragraph 2 may not be reused for the operation or operations that were the subject of the correction, nor, where a financial correction is made for a systemic irregularity, for existing operations within the whole or part of the priority axis where the systemic irregularity occurred. 4. In the case of a systemic irregularity, the Member State shall extend its enquiries to cover all operations liable to be affected.
Amendment rationale: CONTEXT OF THE PROPOSAL In the context of the negotiations of the new Multiannual Financial Framework for 2014-2020, certain issues stemming from the final outcome of the negotiations should be addressed. The European Commission is therefore proposing to provide France, Italy and Spain with EUR 100 million, EUR 30 million and EUR 20 million respectively as additional commitments to their 2013 ESF allocations. Nonetheless, since the amounts in the regulation are expressed in 2004 prices, the corresponding amounts quoted in the regulation total EUR 126 million as follows: EUR 84 million for France, EUR 17 million for Spain and EUR 25 million for Italy. The compensation will be provided from the 2007-2013 period with the amounts been made available through the flexibility instrument. 
Revised version (Article 98 Financial corrections by Member States):
1. The Member States shall in the first instance bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or the conditions for the implementation or control of operations or operational programmes and making the financial corrections required. 2. The Member State shall make the financial corrections required in connection with the individual or systemic irregularities detected in operations or operational programmes. The corrections made by a Member State shall consist of cancelling all or part of the public contribution to the operational programme. The Member State shall take into account the nature and gravity of the irregularities and the financial loss to the Funds. The resources from the Funds released in this way may be reused by the Member State until 31 December 2015 for the operational programme concerned in accordance with the provisions referred to in paragraph 3. With regard to Croatia, the resources from the Funds released in this way may be reused by Croatia until 31 December 2016. 3. The contribution cancelled in accordance with paragraph 2 may not be reused for the operation or operations that were the subject of the correction, nor, where a financial correction is made for a systemic irregularity, for existing operations within the whole or part of the priority axis where the systemic irregularity occurred. 4. In the case of a systemic irregularity, the Member State shall extend its enquiries to cover all operations liable to be affected.
Article 99 Criteria for the corrections
1. The Commission may make financial corrections by cancelling all or part of the Community contribution to an operational programme where, after carrying out the necessary examination, it concludes that: (a) there is a serious deficiency in the management and control system of the programme which has put at risk the Community contribution already paid to the programme; (b) expenditure contained in a certified statement of expenditure is irregular and has not been corrected by the Member State prior to the opening of the correction procedure under this paragraph; (c) a Member State has not complied with its obligations under Article 98 prior to the opening of the correction procedure under this paragraph. 2. The Commission shall base its financial corrections on individual cases of irregularity identified, taking account of the systemic nature of the irregularity to determine whether a flat-rate or extrapolated correction should be applied. 3. The Commission shall, when deciding the amount of a correction, take account of the nature and gravity of the irregularity and the extent and financial implications of the deficiencies found in the operational programme concerned. 4. Where the Commission bases its position on facts established by auditors other than those of its own services, it shall draw its own conclusions regarding the financial consequences after examining the measures taken by the Member State concerned under Article 98(2), the reports supplied under Article 70(1)(b), and any replies from the Member State. 5. When a Member State does not comply with its obligations as referred to in Article 15(4), the Commission may, in relation to the degree of non-compliance with these obligations, make a financial correction by cancelling all or part of the Structural Funds contribution to the Member State concerned. The rate applicable to the financial correction referred to in this paragraph shall be laid down in the implementing rules of this Regulation adopted by the Commission in accordance with the procedure referred to in Article 103(3).
Article 100 Procedure
1. Before taking a decision on a financial correction, the Commission shall open the procedure by informing the Member State of its provisional conclusions and requesting the Member State to submit its comments within two months. Where the Commission proposes a financial correction on the basis of extrapolation or at a flat rate, the Member State shall be given the opportunity to demonstrate, through an examination of the documentation concerned, that the actual extent of irregularity was less than the Commission's assessment. In agreement with the Commission, the Member State may limit the scope of this examination to an appropriate proportion or sample of the documentation concerned. Except in duly justified cases, the time allowed for this examination shall not exceed a further period of two months after the two-month period referred to in the first subparagraph. 2. The Commission shall take account of any evidence supplied by the Member State within the time limits mentioned in paragraph 1. 3. Where the Member State does not accept the provisional conclusions of the Commission, the Member State shall be invited to a hearing by the Commission, in which both sides in cooperation based on the partnership shall make efforts to reach an agreement concerning the observations and the conclusions to be drawn from them. 4. In case of an agreement, the Member State may reuse the Community funds concerned in conformity with the second subparagraph of Article 98(2). 5. In the absence of agreement, the Commission shall take a decision on the financial correction within six months of the date of the hearing taking account of all information and observations submitted during the course of the procedure. If no hearing takes place, the six-month period shall begin to run two months after the date of the letter of invitation sent by the Commission.
Article 101 Obligations of Member States
A financial correction by the Commission shall not prejudice the Member State's obligation to pursue recoveries under Article 98(2) of this Regulation and to recover State aid under Article 87 of the Treaty and under Article 14 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 88 of the EC Treaty ( 17 ).
Article 102 Repayment
1. Any repayment due to be made to the general budget of the European Union shall be effected before the due date indicated in the order for recovery drawn up in accordance with Article 72 of Regulation (EC, Euratom) No 1605/2002. The due date shall be the last day of the second month following the issuing of the order. 2. Any delay in effecting repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be one-and-a-half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.
Article 103 Committee procedure
1. The Commission shall be assisted by a coordination committee of the Funds (hereinafter referred to as the Coordination Committee of the Funds). 2. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply. 3. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply. The period referred to in Article 4(3) of Decision 1999/468/EC shall be set at three months. 4. The Coordination Committee of the Funds shall adopt its Rules of Procedure. 5. The EIB and the EIF shall each appoint a non-voting representative.
Article 104 Committee under Article 147 of the Treaty
1. The Commission shall be assisted by a committee set up under Article 147 of the Treaty (hereinafter referred to as the Committee). The Committee shall be composed of one government representative, one representative of the workers' organisations and one representative of the employers' organisations from each Member State. The Member of the Commission responsible for chairing the Committee may delegate that responsibility to a senior Commission official. 2. Each Member State shall nominate a representative and an alternate for each representative of each category referred to in paragraph 1. In the absence of one member, the alternate shall be automatically entitled to take part in the proceedings. 3. The members and alternates shall be appointed by the Council, acting on a proposal from the Commission, for a period of three years. They may be reappointed. The Council shall, as regards the composition of the Committee, endeavour to ensure fair representation of the different categories concerned. For the items on the agenda affecting it, the EIB and the EIF may appoint a non-voting representative. 4. The Committee shall: (a) deliver its opinion on the implementing rules of this Regulation; (b) deliver opinions on the draft Commission decisions relating to programming in the case of support from the ESF; (c) be consulted when it deals with the categories of technical assistance measure referred to in Article 45 in the case of support from the ESF and other relevant issues having an impact on the implementation of employment, training and social inclusion strategies at EU level relevant to the ESF. 5. The Commission may consult the Committee on questions other than those referred to in paragraph 4. 6. For their adoption, the opinions of the Committee shall require an absolute majority of the votes validly cast. The Commission shall inform the Committee of the manner in which it has taken account of its opinions.
Article 105 Transitional provisions
1. This Regulation shall not affect the continuation or modification, including the total or partial cancellation, of assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund approved by the Commission on the basis of Regulations (EEC) No 2052/88 ( 18 ), (EEC) No 4253/88 ( 19 ), (EC) No 1164/94 ( 20 ) and (EC) No 1260/1999 or any other legislation which applies to that assistance on 31 December 2006, which shall consequently apply thereafter to that assistance or the projects concerned until their closure. 2. While taking decision on operational programmes, the Commission shall take account of any assistance co-financed by the Structural Funds or of any project co-financed by the Cohesion Fund approved by the Council or by the Commission before the entry into force of this Regulation and having financial repercussions during the period covered by those operational programmes. 3. By way of derogation from Articles 31(2), 32(4) and 37(1) of Regulation (EC) No 1260/1999, partial sums committed for assistance co-financed by the ERDF or the ESF approved by the Commission between 1 January 2000 and 31 December 2006 for which the certified statement of expenditure actually paid, the final report on implementation and the statement referred to in Article 38(1)(f) of that Regulation have not been sent to the Commission within15 months after the final date of eligibility of expenditure laid down in the decision granting a contribution from the Funds, shall be automatically decommitted by the Commission not later than 6 months after that deadline, giving rise to the repayment of amounts unduly paid. Amounts relating to operations or programmes which have been suspended due to legal proceedings or administrative appeals having suspensory effect shall be disregarded in calculating the amount to be automatically decommitted.
Article 106 Review clause
The Council shall review this Regulation by 31 December 2013 at the latest in accordance with the procedure laid down in Article 161 of the Treaty.
Article 107 Repeal
Without prejudice to the provisions laid down in Article 105(1) of this Regulation, Regulation (EC) No 1260/1999 is hereby repealed as of 1 January 2007. References to the repealed Regulation shall be construed as references to this Regulation.
Article 108 Entry into force
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union . The provisions laid down in Articles 1 to 16, 25 to 28, 32 to 40, 47 to 49, 52 to 54, 56, 58 to 62, 69 to 74, 103 to 105 and 108 shall apply from the date of entry into force of this Regulation only for programmes for the period 2007 to 2013. The other provisions shall apply from 1 January 2007. This Regulation shall be binding in its entirety and directly applicable in all Member States.