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Opinion of the Committee of the Regions on ‘Proposal for a general regulation on the funds covered by the Common Strategic Framework’

OJ C 225, 27.7.2012, p. 58–113 (BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)

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Official Journal

27.7.2012

Official Journal of the European Union

C 225/58

Opinion of the Committee of the Regions on ‘Proposal for a general regulation on the funds covered by the Common Strategic Framework’

2012/C 225/07

THE COMMITTEE OF THE REGIONS

—	calls for an ambitious budget for the future cohesion policy (2014-2020) in order to fulfil the ambitions of the Treaty and of the Europe 2020 Strategy; also calls for criteria other than GDP to be taken into account in the evaluation of levels of development and the distribution of resources;

—

supports the structure proposed by the Commission, i.e. the identification of two major goals (‘investment in growth and jobs’ and ‘territorial cooperation’), keeping the ESF within the sphere of cohesion policy, and the creation of a new category of ‘transition regions’ providing the safety net for regions no longer eligible for full convergence support;

—

calls for greater flexibility in the distribution of the Structural Funds, adapting more realistically to territories' needs, through the direct involvement of local and regional authorities; this flexibility should apply to the distribution between the ERDF and the ESF and the thematic concentration of the Funds on certain Europe 2020 goals; in this regard, calls for the minimum thresholds laid down in the specific regulations be significantly lowered or made more flexible;

—

supports the strategic approach of the Common Strategic Framework, integrating all funds intended for regional purposes, which will mean better coordination with the EAFRD and the EMFF; also wishes greater account to be taken of the principle of territorial cohesion, through urban actions, local development actions, ITIs and Joint Action Plans, but would like more attention to be paid to regions undergoing industrial conversion or with demographic handicaps;

—	calls for the possibility of multi-fund programmes (ERDF, ESF, CF, EAFRD and EMFF) to be encouraged and that the European Commission adopts any measure for the setting-up and implementation of these programmes with due respect of the proportionality principle;

—

rejects macroeconomic conditionality, as well as the performance reserve, considering them to be contrary to the primary objective of cohesion policy; conversely, supports the creation of a flexibility reserve, made up of automatic decommitment resources and funding experimental initiatives; also backs the principle of ex ante conditionality, which is streamlined and preventive rather than repressive;

—	insists on genuine simplification of the management rules, particularly with regard to control and audit authorities, revenue-generating activities and flat-rate costs.

Rapporteur

Ms MARINI (IT/PES), President of the Region of Umbria

Reference document

Proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1083/2006

COM(2011) 615 final

I. POLICY RECOMMENDATIONS

A. Community budget and allocation of the funds

THE COMMITTEE OF THE REGIONS

For an appropriate, balanced Community budget

1.	points out that the European Union needs a budget capable of guaranteeing an effective cohesion policy and fulfilling the ambitions of the Europe 2020 strategy;

2.	calls for the EU contribution to remain at least at the same level for each category of regions as under the current planning period;

emphasises that the current situation of serious economic, financial and social crisis is establishing a settled balance of underemployment across the EU, with a strong, albeit uneven, impact on all regions of the EU. In this context, the Structural Funds are a crucial source of funding for combating the crisis and supporting the development of European regions;

Limiting problems of absorption

calls on the Commission to undertake suitable initiatives in order to mitigate the problems of absorption encountered by some Member States, namely by improving the management of the EU funds (particularly in terms of simplified and innovative management and control systems) and encouraging a results-oriented approach;

Towards fairer, more balanced distribution criteria

believes that the economic and financial crisis underscores the need for timely, comparable GDP figures and other complementary indicators, in order to establish more accurately the real level of development of European regions (1), without prejudice to the appropriate concentration of resources in regions that are lagging behind in their development;

considers that, with a view to the distribution of resources, proper attention must be paid to the specific features of Member States with significant internal economic disparities; is concerned, in particular, about the criteria for distributing resources allocated to the Common Agricultural Policy – with reference to the multiannual financial framework – as social, economic and structural differences are not taken into account;

B. Cohesion policy structure

Simplified structure

7.	supports the identification of two major goals (investment for growth and jobs, and territorial cooperation), which simplify the structure of cohesion policy;

endorses the creation of a category of transition regions, to be funded principally by resources released by regions and Member States which are no longer covered by the convergence objective and the Cohesion Fund, without reducing the level of support provided for the other two categories of region, and also welcomes the proposed safety net for regions no longer eligible for full convergence support. The new region will make it possible to provide better support both for regions moving out of the convergence objective and for other regions whose per capita GDP is between 75 % and 90 % of the EU average. This new category will allow EU support to be adjusted in line with the different levels of development and mitigate the threshold effects observed during the current programming period. These arrangements should apply to all CSF funds;

9.	considers that the arrangements relating to the regional aid guidelines for 2014-2020 should also be compatible with the structure of future cohesion policy and that there must be no conflict between cohesion policy and competition law when it comes to the designation of assisted areas;

Towards an appropriate role for the European Social Fund in cohesion policy

10.	is pleased that the ESF will remain in the sphere of cohesion policy as a key instrument for jobs, for improving people's skills and for social inclusion;

11.	insists however that in accordance with the subsidiarity principle regional and competent local authorities should be responsible for choosing investment priorities and distributing the Structural Funds between the ERDF and the ESF;

C. Principles common to all the funds

For stronger partnership and multilevel governance

12.

insists that, in accordance with the principle of multilevel governance and with the division of competences within each country, the local and regional authorities in every Member State should be fully involved in preparing, negotiating and implementing the various strategy documents, i.e. the Common Strategic Framework and in particular the Partnership Contract; Territorial Pacts between local, regional, and national authorities, should also be an option available to formalise partnership arrangements in conjunction with national governments;

13.

considers it unfair that local and regional authorities should be placed on the same footing as the economic and social partners with regard to partnership, when as representatives of the general interests of the municipalities which they administer, the authorities co-manage – taking into consideration the institutional framework of the Member States – and co-fund the Cohesion policy projects;

For a co-financing rate tailored to the regions' level of development

14.	reiterates its support for the principle of European co-financing, which guarantees that local and regional actors are aware of their responsibilities;

15.	believes that VAT should be eligible, if this is not recoverable;

16.

believes that there should be a distinction between stakeholders from the civil society and the public sector partners. The competent local and regional authorities, or their representatives, should be an integral part of the negotiation process for the preparation of the Partnership Contract or Agreement at Member State level and not just at regional level;

D. Link between cohesion policy and the europe 2020 strategy

For harmonious, flexible thematic concentration

17.

takes note of the principle of thematic concentration on key Europe 2020 goals and the objectives stated in Article 174 TFEU as set out in a table of EU areas of interest, but expresses concern regarding the lack of flexibility in the choice of thematic objectives, which should be determined on the basis of territorial analysis;

18.

therefore calls for real flexibility for all funds under the Common Strategic Framework, so that each managing authority has the widest margin possible to identify the thematic objectives on which its funds will be concentrated; more generally, calls for the minimum thresholds laid down in the specific regulations to be significantly lowered or made more flexible;

E. Strategic approach and governance of cohesion policy

Common Strategic Framework: towards better integration of the funds intended for regional purposes

19.	supports improved integration of the funds, and is pleased that the EAFRD and the EMFF are being included in the Common Strategic Framework, with the specific nature of each fund being preserved;

20.	agrees that the Common Strategic Framework should be approved by the Parliament and the European Council, and argues that it should be approved by the broadest possible range of EU institutions; accordingly is in favour of appending the Common Strategic Framework to the General Regulation;

21.	highlights the need for the mechanisms set out in the Common Strategic Framework to be sufficiently flexible to allow real integration with regional policies and local development policies;

22.

considers that the CSF should facilitate primarily a bottom-up territorial approach and integration of funding. CSF recommendations shall not be over prescriptive, in order to allow enough flexibility in choosing the means by which one can achieve thematic objectives and investment priorities as defined in the structural and cohesion funds regulations;

23.

stresses that the Common Strategic Framework should properly link the thematic objectives of Article 9 of the General Regulation with the investment priorities listed in the ERDF, ESF, CF, EAFRD and EMFF regulations, providing legal certainty on whether priorities can match and while avoiding gaps and overlaps between them so that multi-fund, but also multi-thematic, priority projects will be deliverable in an integrated and seamless fashion;

Partnership Contract: more contract than partnership

24.	calls for regional and competent local authorities, as the bodies responsible for funding and implementing cohesion policy, and in line with their respective institutional systems, to be fully involved in preparing, negotiating, implementing and amending partnership contracts (Article 13(2));

25.	insists specifically that in the context of the contract, and in line with their respective institutional systems, the regional authorities should be directly involved in setting the internal conditionalities and the resulting penalties (Article 14);

26.	expresses concern regarding the potential delays triggered by the obligation to submit the Partnership Contract and the operational programmes at the same time, and so again asks that the programmes be submitted within six months of the submission of the contract;

Operational programmes: for regionalised, integrated management

27.	recommends that regional and local authorities, in accordance with their respective institutional systems should be closely involved in managing the European funds and is strongly in favour of multi-fund programmes;

28.	points out that improved harmonisation of common provisions for the implementation of the funds would promote integration and boost their effectiveness and impact, as well as reduce the administrative burden to the final recipient;

29.	calls on the Commission to issue an evaluation of the functioning, impact and added value of current macroregional strategies;

F. Planning geared towards results and evaluation

Macroeconomic conditionality: a double penalty for Member States

30.	firmly rejects the proposals aiming to establish a link between cohesion policy and compliance with the stability pact (macroeconomic conditionality); the Committee of the Regions believes that macroeconomic conditionality and cohesion policy pursue different goals;

31.	therefore considers that regional authorities must not be penalised as a result of certain Member States' failure to comply with their obligations, particularly as regards the national deficit (Article 21);

For streamlined ex ante conditionality which is preventive rather than repressive

32.

backs the principle of ex ante conditionality, in order to ensure that the fundamental prerequisites are in place for making effective investments, based on the evaluation of previous experience. It is important to avoid burdening cohesion policy with responsibilities that do not belong to it and increasing red tape;

33.

nonetheless, is concerned that conditionality relating to a third party (such as the failure to transpose EU directives) might prejudice the preparation and implementation of programmes and projects at regional and local level. The CoR therefore considers that ex-ante conditionalities should be restricted to areas that are directly related to the implementation of cohesion policy;

34.	calls on the Commission to ensure that this ex ante conditionality does not lead to the suspension of payments or to financial corrections, with the exception of conditionalities with which the Member State has undertaken to comply;

Performance reserve

35.

is concerned about the creation of a performance reserve since this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, which could encourage the development of unambitious projects and discourage innovation; draws attention to the Court of Auditor's opinion 7/2011 which noted that a ‘performance reserve existed in the 2000-2006 period but had limited success due to the very limited amount of expenditure that had been completed in time for the mid-term review and the lack of an appropriate methodology for assessing progress achieved by programmes’;

36.	conversely, supports the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis;

Performance framework as steering mechanism

37.

points out that the framework for performance review establishes interim objectives for each priority for the years 2016 and 2018. In the Committee's view, this mechanism must steer and monitor the objectives pursued throughout the planning period and not trigger the application of financial corrections to the priority axes concerned in the event of failure to achieve the objectives set on the basis of the final progress report, as this failure may be due to socio-economic circumstances and the resultant necessary policy changes made by national and regional authorities;

38.

considers that no purpose is served by adding this new provision to the (macroeconomic, ex ante and ex post) conditionalities proposed by the Commission, to the ex ante, in itinere and ex post review system, and to the specific targets and performance indicators. The Committee calls for a stronger link with the evaluation measures set out in Articles 48, 49 and 50;

For an increase in advance payments

39.	welcomes the proposal requiring managing authorities to disburse money to beneficiaries before applying to the Commission for reimbursement, and calls for a more flexible and generous advance payment system with a view to boosting managing authorities' liquidity levels;

Penalties and financial corrections: towards an approach which is preventive rather than repressive

40.

asks that, if a Member State in the grip of deep financial crisis receives EU aid, the Commission should be able to amend the Partnership Contract and the operational programmes in the course of constructive dialogue with the Member State and the local authorities concerned. The Committee hopes that the Commission's experts will assist national and regional authorities and boost their capacity to manage the European funds effectively;

G. Reinforcing the principle of cohesion

Promotion of local urban development and integrated territorial investments

41.

strongly agrees with the focus on integrated urban development and, more particularly, welcomes the Commission's proposals on local development and integrated territorial investments which should be key delivery instruments of the next programming period; requests further information on the implementation of these new provisions;

42.

hopes that these provisions will be applied particularly carefully to guarantee that integrated local development is carried out efficiently, such as coordinating the contribution of the various funds – specifically, the ERDF and EAFRD in peri-urban and functional areas – integrating them, identifying project areas and drawing up a coherent strategy;

43.

strongly welcomes the fact that Community Led Local Development incentives are provided with an additional co-financing rate of 10 % and requests that this also be extended to the Integrated Territorial Investments, and considers that the organisation and functioning of the Local Action Groups must be agreed between the Managing Authorities and the local partners at the national level;

44.	demands that the rule whereby public authorities cannot hold more than 49 % of voting rights be reviewed in those cases where institutionalised local development partnerships are already in place;

45.	stresses the need for Local Development to be seen as a holistic concept whereby Integrated Territorial Investments, urban actions, Joint Action Plans, can be delivered;

For appropriate intervention in support of regions with specific geographic and demographic features

46.	urges that particular attention be paid to regions undergoing industrial conversion and regions with serious permanent natural or demographic handicaps that make them comparatively lag behind in economic and territorial cohesion terms, as well as outermost regions (Articles 174 and 349 TFEU);

Continued support for the establishment of links between regions through infrastructure funding

47.	is concerned that no provision has been made for financing infrastructure, particularly high-speed ICT networks, in developed regions;

H. Simplifying the rules for management, control and audit

For further simplification in management and shared responsibility for controls

48.	insists on genuine simplification of the provisions for implementing the funds, which will help managing, control and audit authorities and facilitate access to financing for beneficiaries;

49.	is concerned about the fact that the support for administrative capacity is limited for the ESF to Member States with less developed regions or eligible to the Cohesion Fund while this is not the case for ERDF although national systems for the two Funds are subject to similar requirements;

50.	hopes that a more results-oriented approach will lead to stronger emphasis on delivery, quality and efficiency in the use of the funds, rather than focusing on rules and total expenditure;

51.

believes that the Commission's excessive use of delegated acts (there are some fifty references to this instrument in the regulation) may lead to delays in the use of the funds and therefore proposes that a Commission implementing regulation be used initially to establish all the implementing rules;

For greater coordination and proportionality of controls

52.

expresses doubts concerning the designation of an accrediting body at ministerial level which is an additional unnecessary layer of control that would be responsible for accrediting managing authorities and for certification based on a preliminary control, believing that accreditation should focus on the systems rather than on the managing authorities;

53.

highlights the risk that improper application of the proportionality principle may result in unequal treatment of the Member States. Checks and audits are liable to present much more of a burden for those Member States which receive the most funding; furthermore, a level of control proportionate to the programmes' financial dimension might steer authorities away from adopting multi-fund programmes;

54.	believes that the proposed annual clearance of accounts should be optional to enable only those managing authorities who so wish to simplify the closure procedure at the end of the period and reduce the duration for conserving accounting documents (Articles 67, 76, 77, 131);

55.	wishes to avoid the proliferation of controls by national or regional audit authorities, the Commission, the Court of Auditors and the operators themselves, and proposes that joint local audit missions be organised in order to avoid overlaps and promote a common analysis (Article 65(2));

Towards genuinely simplified, business-friendly financial engineering

56.

considers that further clarification is needed in relation to the use of financial instruments with regard to their accounting in the use of EU funds, their supervision and their ownership. Supports however the use of financial engineering instruments to enhance the funds' impact provided that it is an addition to and not at the expense of the grant element of Cohesion policy and that support is limited to conventional forms of financial instruments (equity participations, loans, guarantees), and not to opaque financial instruments such as derivatives or structured financial instruments;

57.	considers too restrictive the requirement that financial instruments – in accordance with the aims of the programme – be used within two years of their activation and for a period of at least ten years after the closure of the programme;

Joint action plan: an innovation to be trialled

58.

welcomes the Commission's proposal that joint action plans be drawn up, including a group of projects carried out under the responsibility of the beneficiary in the context of one or more operational programmes, in exchange for a substantial reduction in the rules on management and control; regrets, however, that infrastructure projects are excluded;

59.	calls for the Commission, the Member State and the local authorities associated with the programme to be party to drawing up the joint action plan, in view of the scale of the resources involved, and calls for the threshold to be lowered to EUR 5 million;

Revenue-generating operations: need for greater flexibility

60.	calls for the reinstatement of the 2000-2006 rules setting a single specific (reduced) intervention rate for revenue-generating operations;

Flat-rate costs: a simplification measure which has yet to be introduced

61.	welcomes the Commission's proposal regarding the various types of simplified grants and urges managing authorities and beneficiaries to make extensive use of standard scales of unit costs, flat-rate amounts and flat-rate financing;

62.

calls on the Commission and the Member States to adopt as swiftly as possible a fair, equitable and verifiable calculation method and methods and scales of unit costs to enable project operators to use them when planning begins, taking due account of previous experience in the current planning period.

II. RECOMMENDATIONS FOR AMENDMENTS

Amendment 1

Recital 14

Text proposed by the Commission

CoR amendment

The Commission should adopt by delegated act a Common Strategic Framework which translates the objectives of the Union into key actions for the CSF Funds, in order to provide clearer strategic direction to the programming process at the level of Member States and regions. The Common Strategic Framework should facilitate sectoral and territorial coordination of Union intervention under the CSF Funds and with other relevant Union policies and instruments.

a Common Strategic Framework which translates the objectives of the Union into key actions for the CSF Funds, in order to provide clearer strategic direction to the programming process at the level of Member States and regions. The Common Strategic Framework should facilitate sectoral and territorial coordination of Union intervention under the CSF Funds and with other relevant Union policies and instruments.

Reason

Delegated acts enable the legislator to delegate to the Commission the power to adopt non-legislative acts of general scope which supplement or amend non-essential aspects of a legislative act. The Common Strategic Framework aims to establish common guidelines and rules for all jointly managed funds; it therefore contains essential aspects which should be submitted to all the EU institutions and amended as necessary.

Amendment 2

Recital 16

Text proposed by the Commission

CoR amendment

On the basis of the Common Strategic Framework adopted by the Commission, each Member State should prepare, in cooperation with its partners and in dialogue with the Commission, a Partnership Contract. The Partnership Contract should translate the elements set out in the Common Strategic Framework into the national context and set out firm commitments to the achievement of Union objectives through the programming of the CSF Funds.

On the basis of the Common Strategic Framework adopted by the Commission, each Member State, should prepare, in cooperation with its partners and in dialogue with the Commission, a Partnership Contract. The Partnership Contract should translate the elements set out in the Common Strategic Framework into the national context and set out commitments to the achievement of Union objectives through the programming of the CSF Funds.

Reason

In their capacity of institutions responsible for funding and implementing cohesion policy, regional and local authorities should be fully involved in drawing up, negotiating, implementing and amending it.

Amendment 3

Recital 18

Text proposed by the Commission

CoR amendment

A performance framework should be defined for each programme with a view to monitoring progress towards the objectives and targets set for each programme over the course of the programming period. The Commission should undertake a performance review in cooperation with the Member States in 2017 and 2019. A performance reserve should be foreseen and allocated in 2019 where milestones set in the performance framework have been attained. Due to their diversity and multi-country character, there should be no performance reserve for ‘European Territorial Cooperation’ programmes. In cases where the shortfall in the achievement of milestones or targets is significant, the Commission should be able to suspend payments to the programme or, at the end of the programming period, apply financial corrections, in order to ensure that the Union budget is not used in a wasteful or inefficient way.

Reason

The amendment reflects the opposition to creating a national-level performance reserve because of concerns that this mechanism may encourage policy-makers to set very modest, easily achieved objectives with a view to tapping the additional resources, consequently giving priority to unambitious projects and discouraging innovation.

Amendment 4

Recital 19

Text proposed by the Commission

CoR amendment

Establishing a closer link between cohesion policy and the economic governance of the Union will ensure that the effectiveness of expenditure under the CSF Funds is underpinned by sound economic policies and that the CSF Funds can, if necessary, be redirected to addressing the economic problems a country is facing. This process has to be gradual, starting with amendments to the Partnership Contract and to the programmes in support of Council recommendations to address macroeconomic imbalances and social and economic difficulties. Where, despite the enhanced use of CSF funds, a Member State fails to take effective action in the context of the economic governance process, the Commission should have the right to suspend all or part of the payments and commitments. Decisions on suspensions should be proportionate and effective, taking into account the impact of the individual programmes for addressing the economic and social situation in the relevant Member State and previous amendments to the Partnership Contract. When deciding on suspensions, the Commission should also respect equality of treatment between Member States, taking into account in particular the impact of the suspension on the economy of the Member State concerned. The suspensions should be lifted and funds be made available again to the Member State concerned as soon as the Member State takes the necessary action.

Reason

The Committee of the Regions is staunchly opposed to the macroeconomic conditionality provisions. Applying penalties or financial incentives linked to the growth and stability pact with the aim of guaranteeing compliance with macroeconomic conditions risks penalising heavily regional and local authorities which are not responsible for the Member States' failure to comply with these requirements.

Amendment 5

Recital 29

Text proposed by the Commission

CoR amendment

Alignment of the monitoring and reporting arrangements of the CSF Funds is necessary to simplify management arrangements at all levels. It is important to ensure proportionate reporting requirements but also the availability of comprehensive information on progress made at key review points. Therefore it is necessary that reporting requirements reflect information needs in given years and are aligned with the timing of the performance reviews.

Reason

As regards the framework for performance review, a mechanism for steering and monitoring the objectives pursued throughout the programming period should be established.

Amendment 6

Recital 43

Text proposed by the Commission

CoR amendment

In accordance with the principles of shared management, Member States should have the primary responsibility, through their management and control systems, for the implementation and control of the operations in programmes. In order to strengthen the effectiveness of the control over the selection and implementation of operations and the functioning of the management and control system, the functions of the managing authority should be specified.

Reason

The funds covered by the Common Strategic Framework fall within the scope of regional policy: consequently, no mention of the participating authorities under the regulation governing the funds must overlook those principally involved, who are the regional and local authorities.

Amendment 7

Recital 44

Text proposed by the Commission	CoR amendment
In order to provide assurance ex ante on the set up and design of the main systems of management and control, Member States should designate an accrediting body that is responsible for the accreditation and withdrawal of accreditation of managing and control bodies.

Reason

The aim is to avoid the proliferation of bodies and actors which would make the management and control system still more complex.

Amendment 8

New recital after recital 55

Text proposed by the Commission	CoR amendment

Reason

Up until now, the concern for establishing common provisions for the various funds has not been implemented as regards the establishment of transitional arrangements and the associated EU participation (co-financing rates). Whilst transitional arrangements are being introduced for the ERDF and the ESF (including a safety net), there are none for the EAFRD. This would result in significantly different funding conditions for the implementation of the funds. This runs counter to the harmonisation that is being sought. It is therefore essential for these transitional arrangements to apply also to the EAFRD

Amendment 9

Recital 58

Text proposed by the Commission	CoR amendment
In order to strengthen the focus on results and achievement of the Europe 2020 objectives and targets, five per cent of the resources for the ‘Investment for growth and jobs’ goal should be set aside as a performance reserve for each Fund, and category of region in each Member State.

Reason

The Committee would however support the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis; this reserve would be linked to the Globalisation Adjustment Fund and the European Union Solidarity Fund.

Amendment 10

Recital 84

Text proposed by the Commission

CoR amendment

The process of annual clearance of accounts should be accompanied by an annual closure of completed operations (for the ERDF and the CF) or expenditure (for the ESF). In order to reduce the costs associated with the final closure of operational programmes, to reduce the administrative burden for beneficiaries and to provide legal certainty, annual closure should be obligatory thereby limiting the period during which the supporting documents need to be maintained and during which operations can be audited and financial corrections imposed.

The process of annual clearance of accounts be accompanied by an annual closure of completed operations (for the ERDF and the CF) or expenditure (for the ESF). In order to reduce the costs associated with the final closure of operational programmes, to reduce the administrative burden for beneficiaries and to provide legal certainty, annual closure thereby limiting the period during which the supporting documents need to be maintained and during which operations can be audited and financial corrections imposed.

Reason

It is considered that the proposed annual clearance of accounts is, in reality, introducing annual closure that will increase the administration burden, introduce mandatory financial corrections for irregularities detected by the European Commission and/or European Court of Auditors and reduce the flexibility of declaring and substituting ‘overbooking’ expenditure that currently exists in the 2007-2013 period.

Amendment 11

Recital 87

Text proposed by the Commission

CoR amendment

The frequency of audits on operations should be proportionate to the extent of the Union's support from the Funds. In particular, the number of audits carried out should be reduced where the total eligible expenditure for an operation does not exceed EUR 100 000. Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or, following closure of a completed operation, as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on.

The frequency of audits on operations should be proportionate to the extent of the Union's support from the Funds. In particular, where the total eligible expenditure for an operation does not exceed EUR . Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or, following closure of a completed operation, as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on.

Reason

In order to ensure real proportionality in the monitoring of operational programmes, the Committee proposes that where the total eligible expenditure does not exceed EUR 250 000 operations should be subject to no more than one audit.

Amendment 12

Recital 88

Text proposed by the Commission

CoR amendment

In order to supplement and amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of a code of conduct on the objectives and criteria to support the implementation of partnership, the adoption of a Common Strategic Framework, additional rules on the allocation of the growth and competitiveness reserve, the definition of the area and population covered by the local development strategies, detailed rules on financial instruments (ex ante assessment, eligibility of expenses, types of activities not supported, combination of support, transfer and management of assets, payment requests, and capitalisation of annual instalments), the definition of the flat rate for revenue generating operations, the responsibilities of Member States concerning the procedure for reporting irregularities and recovery of sums unduly paid, the model of management declaration of assurance on the functioning of the management and control system, the conditions of national audits, the accreditation criteria for managing authorities and certifying authorities, the identification of commonly accepted data carriers, the level of financial correction to be applied, the amendment of annexes and the specific measures necessary for the facilitation of transition from Regulation (EC) No 1083/2006. The Commission should also be empowered to amend Annexes I and IV in order to address future adaptation needs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

In order to supplement and amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of a code of conduct on the objectives and criteria to support the implementation of partnership, detailed rules on financial instruments (ex ante assessment, eligibility of expenses, types of activities not supported, combination of support, transfer and management of assets, payment requests, and capitalisation of annual instalments), the definition of the flat rate for revenue generating operations, the responsibilities of Member States concerning the procedure for reporting irregularities and recovery of sums unduly paid, the model of management declaration of assurance on the functioning of the management and control system, the conditions of national audits, the accreditation criteria for managing authorities and certifying authorities, the identification of commonly accepted data carriers, the level of financial correction to be applied, the amendment of annexes and the specific measures necessary for the facilitation of transition from Regulation (EC) No 1083/2006. The Commission should also be empowered to amend Annexes I and IV in order to address future adaptation needs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

Reason

By means of delegated acts, the legislator delegates to the European Commission the power to adopt non-legislative acts which supplement or amend various aspects of a legislative act. The proposal to delete part of the recital is consistent with the positions set out in the opinion, with particular reference to Article 12 (Common Strategic Framework), Article 18 (Performance reserve) and Article 29 (Local development strategies).

Amendment 13

Recital 90

Text proposed by the Commission

CoR amendment

The Commission should be empowered to adopt, by means of implementing acts, as regards all CSF Funds, decisions approving the Partnership Contracts, decisions allocating the performance reserve and decisions suspending payments linked to Member States' economic policies; and as regards the Funds, decisions adopting operational programmes, decisions approving major projects, decisions suspending payments and decisions on financial corrections.

The Commission should be empowered to adopt, by means of implementing acts, as regards all CSF Funds, decisions approving the Partnership Contracts, decisions adopting operational programmes, decisions approving major projects, decisions suspending payments and decisions on financial corrections.

Reason

Amendment 14

Article 5(1)

Text proposed by the Commission

CoR amendment

Partnership and multi-level governance

1. For the Partnership Contract and each programme respectively, a Member State shall organise a partnership with the following partners:

(a)	competent regional, local, urban and other public authorities;

(b)	economic and social partners; and

(c)	bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting equality and non-discrimination.

Partnership and multi-level governance

1. For the Partnership Contract and each programme respectively, Member State shall organise a partnership with the following partners:

(a)	other public authorities;

(b)	economic and social partners; and

(c)	bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting equality and non-discrimination.

Reason

The amendment aims to point out that, in accordance with the principle of multilevel governance, local and regional authorities in every Member State should be fully involved in drawing up, negotiating and implementing the various strategic documents, i.e. the Common Strategic Framework, the Partnership Contract and the operational programmes. It is considered to be unfair that local and regional authorities should be placed on the same footing as the economic and social partners with regard to partnership, when as representatives of the general interests of the citizens and territories that they administer, they are responsible for co-managing and co-funding the Structural Funds.

Amendment 15

Article 9(6) and (11)

Text proposed by the Commission

CoR amendment

Thematic objectives

[…]

6)	protecting the environment and promoting resource efficiency;

[…]

11)	enhancing institutional capacity and an efficient public administration.

Thematic objectives

[…]

6)	protecting the environment and promoting resource efficiency;

[…]

11)	enhancing institutional capacity and an efficient public administration .

Reason

Article 9(6):

It is crucial to include protection of cultural heritage among the thematic objectives of Common Strategic Framework funds. What is more, this proposal is consistent with Article 5(6)(c) of the proposal for a Regulation for the European Regional Development Fund.

Article 9(11):

Technical assistance should also facilitate strategic bottom-up intervention. Territorial Agenda 2020 endorsed by the Member States in 2011 provides very useful recommendations as regards territorial development in the EU.

Amendment 16

Article 11

Text proposed by the Commission

CoR amendment

The Common Strategic Framework shall establish:

(a)	for each thematic objective, the key actions to be supported by each CSF Fund;

(b)	the key territorial challenges for urban, rural, coastal and fisheries areas, as well as for areas with particular territorial features referred to in Articles 174 and 349 of the Treaty, to be addressed by the CSF Funds;

(c)	horizontal principles and policy objectives for the implementation of the CSF Funds;

(d)	priority areas for cooperation activities for each of the CSF Funds, where appropriate, taking account of macro-regional and sea basin strategies;

(e)	coordination mechanisms among the CSF Funds, and with other relevant Union policies and instruments, including external instruments for cooperation;

(f)	mechanisms for ensuring the coherence and consistency of the programming of the CSF Funds with the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty.

The Common Strategic Framework shall establish:

(a)	for each thematic objective, the key actions to be supported by each CSF Fund;

()	horizontal principles and policy objectives for the implementation of the CSF Funds;

()	coordination mechanisms among the CSF Funds, and with other relevant Union policies and instruments, including external instruments for cooperation;

()	mechanisms for ensuring the coherence and consistency of the programming of the CSF Funds with the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty.

Reason

The key actions proposed by the Commission within the Common Strategic Framework constitute a new form of concentration. Furthermore, the territorial features should be addressed by means of operational programmes. The same applies to interaction between the regional strategies included in the programmes and the macroregional strategies, where present.

Amendment 17

Article 12

Text proposed by the Commission

CoR amendment

The Commission shall be empowered to adopt a delegated act in accordance with Article 142 on the Common Strategic Framework within 3 months of the adoption of this Regulation.

Where there are major changes in the Union strategy for smart, sustainable and inclusive growth, the Commission shall review and, where appropriate, adopt, by delegated act in accordance with Article 142, a revised Common Strategic Framework.

Within 6 months of adoption of a revised Common Strategic Framework, Member States shall propose amendments, where necessary, to their Partnership Contract and programmes to ensure their consistency with the revised Common Strategic Framework.

Common Strategic Framework .

Reason

Amendment 18

Article 13

Text proposed by the Commission

CoR amendment

Preparation of the Partnership Contract

1. Each Member State shall prepare a Partnership Contract for the period from 1 January 2014 to 31 December 2020.

2. The Partnership Contract shall be drawn up by Member States in cooperation with the partners referred to in Article 5. The Partnership Contract shall be prepared in dialogue with the Commission.

3. The Partnership Contract shall cover all support from the CSF Funds in the Member State concerned.

4. Each Member State shall transmit its Partnership Contract to the Commission within 3 months of the adoption of the Common Strategic Framework.

Preparation of the Partnership Contract

1. Each Member State shall prepare a Partnership Contract for the period from 1 January 2014 to 31 December 2020.

The Partnership Contract shall be drawn up by Member States in cooperation with the partners referred to in Article 5. The Partnership Contract shall be prepared in dialogue with the Commission.

The Partnership Contract shall cover all support from the CSF Funds in the Member State concerned.

Each Member State shall transmit its Partnership Contract to the Commission within months of the adoption of the Common Strategic Framework.

Reason

In their capacity of institutions responsible for funding and implementing cohesion policy, local and regional authorities should be fully involved in drawing up, negotiating, implementing and amending it. In view of the quantity and sheer detail of the information requested, the fact that the programmes must be submitted at the same time as the contract (as stipulated in Article 23(3)) and the need to ensure that the partnership operates effectively, a longer period of time is necessary.

Amendment 19

Article 14

Text proposed by the Commission

CoR amendment

Content of the Partnership Contract

The Partnership Contract shall set out:

(a)

arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth, including:

(i)

an analysis of disparities and development needs with reference to the thematic objectives and key actions defined in the Common Strategic Framework and the targets set in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under Article 148(4) of the Treaty;

(ii)	a summary analysis of the ex ante evaluations of the programmes justifying the selection of the thematic objectives and the indicative allocations of the CSF Funds;

(iii)

for each thematic objective, a summary of the main results expected for each of the CSF Funds;

(iv)	the indicative allocation of support by the Union by thematic objective at national level for each of the CSF Funds, as well as the total indicative amount of support foreseen for climate change objectives;

(v)	the main priority areas for cooperation, taking account, where appropriate, of macro-regional and sea basin strategies;

(vi)	horizontal principles and policy objectives for the implementation of the CSF Funds;

(vii)

the list of the programmes under the ERDF, the ESF and the CF, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by CSF Fund and by year;

an integrated approach to territorial development supported by the CSF Funds setting out:

i)	the mechanisms at national and regional level that ensure coordination between the CSF Funds and other Union and national funding instruments and with the EIB;

ii)

the arrangements to ensure an integrated approach to the use of the CSF Funds for the territorial development of urban, rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28, 29 and 99 accompanied, where appropriate, by a list of the cities to participate in the urban development platform referred to in Article 7 of the ERDF Regulation;

[….]

arrangements to ensure efficient implementation of the CSF Funds, including:

i)	an assessment of whether there is a need to reinforce the administrative capacity of the authorities and, where appropriate, beneficiaries, and actions to be taken for this purpose;

ii)	a summary of the actions planned and corresponding targets in the programmes to achieve a reduction in the administrative burden for beneficiaries;

iii)	an assessment of the existing systems for electronic data exchange, and the actions planned to permit all exchanges of information between beneficiaries and authorities responsible for management and control of programmes to be carried out solely by electronic data exchange.

Content of the Partnership Contract

The Partnership Contract shall set out:

(a)

arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth, including:

(i)

(ii)	for each thematic objective, a summary of the main results expected for each of the CSF Funds;

()	horizontal principles and policy objectives for the implementation of the CSF Funds;

(v)	the list of the programmes under the ERDF, the ESF and the CF, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by CSF Fund and by year;

an integrated approach to territorial development supported by the CSF Funds setting out:

i)	the mechanisms at national and regional level that ensure coordination between the CSF Funds and other Union and national funding instruments and with the EIB;

ii)

the arrangements to ensure an integrated approach to the use of the CSF Funds for the territorial development of urban, , rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28, 29 and 99 accompanied, where appropriate, by a list of the cities to participate in the urban development platform referred to in Article 7 of the ERDF Regulation;

[….]

arrangements to ensure efficient implementation of the CSF Funds, including:

i)	a summary of the actions planned and corresponding targets in the programmes to achieve a reduction in the administrative burden for beneficiaries;

ii)	an assessment of the existing systems for electronic data exchange, and the actions planned to permit all exchanges of information between beneficiaries and authorities responsible for management and control of programmes to be carried out solely by electronic data exchange.

Reason

There is no need to include in the Partnership Contract data already provided and negotiated in the operational programmes; these provisions are redundant and run counter to simplification. Furthermore, the Member States cannot assume responsibility for commitments made previously at regional and local level.

As far as the integrated approach to the use of the CSF Funds is concerned, this is also vital in peri-urban areas, otherwise there is a risk that the latter will be deprived of both the funding allocated for rural areas and the funding allocated to cities, just when the number of peri-urban areas in the EU is increasing.

Finally, in relation to European Territorial Cooperation (ETC), because of its multilateral nature this cannot be controlled via the Partnership Contract instrument. It should therefore explicitly be left outside of the latter's scope.

Amendment 20

Article 16

Text proposed by the Commission

CoR amendment

Thematic concentration

Member States shall concentrate support, in accordance with the Fund-specific rules, on actions bringing the greatest added value in relation to the Union strategy for smart, sustainable and inclusive growth, addressing the challenges identified in the country-specific recommendations under Article 121(2) of the Treaty and the relevant Council recommendations adopted under 148(4) of the Treaty, and taking into account national and regional needs.

Thematic concentration

Reason

The Committee endorses the principle of concentrating the bulk of resources on a limited number of thematic objectives/investment priorities, but considers that the choice of objectives and priorities should be left to the managing authorities which will adapt the goals of the Europe 2020 strategy and the Common Strategic Framework to local conditions.

Amendment 21

Article 17

Text proposed by the Commission

CoR amendment

Ex ante conditionalities

1. Ex ante conditionalities shall be defined for each CSF Fund in the Fund-specific rules.

2. Member States shall assess whether the applicable ex ante conditionalities are fulfilled.

3. Where ex ante conditionalities are not fulfilled at the date of transmission of the Partnership Contract, Member States shall set out in the Partnership Contract a summary of the actions to be taken at national or regional level and the timetable for their implementation, to ensure their fulfilment not later than two years after the adoption of the Partnership Contract or by 31 December 2016, whichever is earlier.

4. Member States shall set out the detailed actions relating to the fulfilment of ex ante conditionalities, including the timetable for their implementation, in the relevant programmes.

5. The Commission shall assess the information provided on the fulfilment of ex ante conditionalities in the framework of its assessment of the Partnership Contract and programmes. It may decide, when adopting a programme, to suspend all or part of interim payments to the programme pending the satisfactory completion of actions to fulfil an ex ante conditionality. The failure to complete actions to fulfil an ex ante conditionality by the deadline set out in the programme shall constitute a basis for suspending payments by the Commission.

6. Paragraphs 1 to 5 shall not apply to programmes under the European territorial cooperation goal.

Ex ante conditionalities

1. Ex ante conditionalities shall be defined for each CSF Fund in the Fund-specific rules.

2. Member States shall assess whether the applicable ex ante conditionalities are fulfilled .

3. Where ex ante conditionalities are not fulfilled at the date of transmission of the Partnership Contract, Member States shall set out in the Partnership Contract a summary of the actions to be taken at national or regional level and the timetable for their implementation, to ensure their fulfilment not later than years after the adoption of the Partnership Contract or by 31 December 2016, whichever is earlier.

4. Member States, shall set out the actions relating to the fulfilment of ex ante conditionalities, including the timetable for their implementation, in the relevant programmes.

5. The Commission shall assess the information provided on the fulfilment of ex ante conditionalities in the framework of its assessment of the Partnership Contract and programmes. The failure to complete actions to fulfil an ex ante conditionality by the deadline set out in the programme constitute a basis for suspending payments by the Commission.

6. Paragraphs 1 to 5 shall not apply to programmes under the European territorial cooperation goal.

Reason

The Committee considers that such ex ante conditionalities should not lead to any suspension of payments or to financial corrections, with the exception of those conditionalities with which the Member State has undertaken to comply. In the event of failure to comply with ex ante conditionalities at the start of the programming period, the respective investments cannot be programmed, and so there would be no need to inflict penalties after the fact. It is also crucial that the Commission take into consideration the institutional context and distribution of competences of each Member State. It is inconceivable that a Member State should take on commitments for competences belonging to local and regional authorities, and vice versa.

Amendment 22

Article 18

Text proposed by the Commission

CoR amendment

Performance reserve

5 % of the resources allocated to each CSF Fund and Member State, with the exception of resources allocated to the European territorial cooperation goal and to Title V of the EMFF Regulation, shall constitute a performance reserve to be allocated in accordance with Article 20.

Reason

The Committee would however support the creation of a flexibility reserve made up of automatic decommitment resources and used to fund experimental initiatives in the area of smart, sustainable or inclusive growth or to intervene during a crisis; this reserve would remain within the appropriations allocated to each Member State.

Amendment 23

Article 19

Text proposed by the Commission

CoR amendment

Performance review

1. The Commission, in cooperation with the Member States, shall undertake a review of the performance of the programmes in each Member State in 2017 and 2019, with reference to the performance framework set out in the respective Partnership Contract and programmes. The method for establishing the performance framework is set out in Annex I.

2. The review shall examine the achievement of the milestones of the programmes at the level of priorities, on the basis of the information and the assessments presented in the progress reports submitted by the Member States in the years 2017 and 2019.

Performance review

Reason

As regards the framework for performance review, a mechanism for steering and monitoring the objectives pursued throughout the programming period should be established. In the event of failure to achieve the objectives, this mechanism would initiate technical support by the Commission, rather than the application of financial corrections.

Amendment 24

Article 20

Text proposed by the Commission

CoR amendment

Allocation of performance reserve

1. Where the review of performance undertaken in 2017 reveals that a priority within a programme has not attained its milestones set for the year 2016, the Commission shall make recommendations to the Member State concerned.

2. On the basis of the review undertaken in 2019, the Commission shall adopt a decision, by means of implementing acts, to determine for each CSF Fund and Member State the programmes and priorities which have attained their milestones. The Member State shall propose the attribution of the performance reserve for the programmes and priorities set out in that Commission decision. The Commission shall approve the amendment of the programmes concerned in accordance with Article 26. Where a Member State fails to submit the information in accordance with Article 46(2) and (3), the performance reserve for the programmes or the priorities concerned shall not be allocated.

3. Where there is evidence resulting from a performance review that a priority has failed to achieve the milestones set out in the performance framework, the Commission may suspend all or part of an interim payment of a priority of a programme in accordance with the procedure laid down in Fund-specific rules.

4. Where the Commission, based on the examination of the final implementation report of the programme, establishes a serious failure to achieve the targets set out in the performance framework, it may apply financial corrections in respect of the priorities concerned in accordance with Fund-specific rules. The Commission shall be empowered to adopt delegated acts in accordance with Article 142 to establish criteria and the methodology for determining the level of financial correction to be applied.

5. Paragraph 2 shall not apply to programmes under the European territorial cooperation goal and to Title V of the EMFF Regulation”.

Reason

Amendment 25

Article 21

Text proposed by the Commission

CoR amendment

Conditionality linked to the coordination of Member States' economic policies

[…]

4. By derogation to paragraph 1, where financial assistance is made available to a Member State in accordance with paragraph 1(d) and is linked to an adjustment programme, the Commission may without any proposal from the Member State amend the Partnership Contract and the programmes with a view to maximising the growth and competitiveness impact of the available CSF Funds. To ensure effective implementation of the Partnership Contract and the relevant programmes, the Commission shall become involved in their management as detailed in the adjustment programme or the Memorandum of Understanding signed with the Member State concerned.

5. Where the Member State fails to respond to the Commission's request referred to in paragraph 1 or does not reply satisfactorily within one month to the observations of the Commission referred to in paragraph 2, the Commission may, within three months following its observations, adopt a decision, by means of implementing acts, suspending part or all of the payments for the programmes concerned.

6. The Commission shall suspend, by means of implementing acts, part or all of the payments and commitments for the programmes concerned where:

a)	the Council decides that the Member State does not comply with the specific measures set out by the Council in accordance with Article 136(1) of the Treaty;

b)	the Council decides in accordance with Article 126(8) or Article 126(11) of the Treaty that the Member State concerned has not taken effective action to correct its excessive deficit;

the Council concludes in accordance with Article 8(3) of Regulation (EU) No […]/2011 [on the prevention and correction of macroeconomic imbalances] that, on two successive instances, the Member State has not submitted a sufficient corrective action plan or the Council adopts a decision declaring non-compliance in accordance with Article 10(4) of that Regulation;

the Commission concludes that the Member State has not taken measures to implement the adjustment programme referred to in Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and as a consequence decides not to authorise the disbursement of the financial assistance granted to this Member State; or

e)	the Board of Directors of the European stability mechanism concludes that the conditionality attached to an ESM financial assistance in the form of an ESM loan to the concerned Member State was not met and as a consequence decides not to disburse the stability support granted to it.

7. When deciding to suspend part or all of the payments or commitments in accordance with paragraphs 5 and 6 respectively, the Commission shall ensure that the suspension is proportionate and effective, taking into account the economic and social circumstances of the Member State concerned, and respects equality of treatment between Member States, in particular with regard to the impact of the suspension on the economy of the Member State concerned.

8. The Commission shall without delay lift the suspension of payments and commitments where the Member State has proposed amendments to the Partnership Contract and the relevant programmes as requested by the Commission, which the Commission has approved and, where applicable:

a)	the Council has decided that the Member State complies with the specific measures set out by the Council in accordance with Article 136(1) of the Treaty;

b)	the excessive deficit procedure is held in abeyance in accordance with Article 9 of Regulation (EC) No 1467/97 or the Council has decided in accordance with Article 126(12) of the Treaty to abrogate the decision on the existence of an excessive deficit:

the Council has endorsed the corrective action plan submitted by the concerned Member State in accordance with Article 8(2) of Regulation (EU) No […] [EIP Regulation] or the excessive imbalance procedure is placed in a position of abeyance in accordance with Article 10(5) of that Regulation or the Council has closed the excessive imbalance procedure in accordance with Article 11 of that Regulation;

the Commission has concluded that the Member State has taken measures to implement the adjustment programme referred to in Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and as a consequence has authorised the disbursement of the financial assistance granted to this Member State; or

e)	the Board of Directors of the European stability mechanism has concluded that the conditionality attached to a financial assistance in the form of an ESM loan to the concerned Member State is met and as a consequence has decided to disburse the stability support granted to it.

At the same time, the Council shall decide, on a proposal from the Commission, to re-budget the suspended commitments in accordance with Article 8 of Council Regulation (EU) No […] laying down the multiannual financial framework for the years 2014 to 2020.

Conditionality linked to the coordination of Member States' economic policies

[…]

Reason

The Committee firmly rejects the proposals aiming to establish a link between cohesion policy and compliance with the stability pact (macroeconomic conditionality); the Committee of the Regions believes that macroeconomic conditionality and cohesion policy pursue different goals. It therefore considers that regional authorities must not be penalised as a result of certain Member States' failure to comply with their obligations, particularly as regards the national deficit. The Committee acknowledges that it may sometimes be necessary to amend the contract and operational programmes, but rejects the hypothesis of partial or total suspension of payments.

Amendment 26

Article 23

Text proposed by the Commission

CoR amendment

Preparation of programmes

1. The CSF Funds shall be implemented through programmes in accordance with the Partnership Contract. Each programme shall cover the period from 1 January 2014 to 31 December 2020.

2. Programmes shall be drawn up by Member States or any authority designated by them, in cooperation with the partners.

3. Programmes shall be submitted by the Member States at the same time as the Partnership Contract, with the exception of European territorial cooperation programmes, which shall be submitted within six months of the approval of the Common Strategic Framework. All programmes shall be accompanied by the ex ante evaluation as set out in Article 48.

Preparation of programmes

1. The CSF Funds shall be implemented through programmes in accordance with the Partnership Contract. Each programme shall cover the period from 1 January 2014 to 31 December 2020.

2. Programmes shall be drawn up by Member States or any authority designated by them, in cooperation with the partners.

Programmes shall be submitted by the Member States the Partnership Contract, with the exception of European territorial cooperation programmes, which shall be submitted within six months of the approval of the Common Strategic Framework. All programmes shall be accompanied by the ex ante evaluation as set out in Article 48.

Reason

The Committee considers that the choice (strongly supported by the Committee) to draw up multi-fund programmes should be encouraged and supported by all actors (European Commission, Member States, Local and Regional authorities). To this end, the Commission should abolish all procedural barriers and avoid further controls which, on the basis of the proportionality principle, could derive from the fact that a multi-fund programme has a larger financial dimension. The Committee is also concerned that the requirement to submit the contract at the same time as the programmes might delay the start of operations, and so proposes a deadline of six months.

Amendment 27

Article 25(1)

Text proposed by the Commission

CoR amendment

The procedure for adoption of programmes

1. The Commission shall assess the consistency of programmes with this Regulation, the Fund-specific rules, their effective contribution to the thematic objectives and the Union priorities specific to each CSF Fund, the Common Strategic Framework, the Partnership Contract, the country-specific recommendations under Article 121(2) of the Treaty and the Council recommendations adopted under 148(4) of the Treaty, taking account of the ex ante evaluation. The assessment shall address, in particular, the adequacy of the programme strategy, the corresponding objectives, indicators, targets and the allocation of budgetary resources.

The procedure for adoption of programmes

Reason

It is crucial to emphasise that the evaluation must demonstrate that the strategy is not only adequate, but really can be implemented.

Amendment 28

Article 28(1)

Text proposed by the Commission

CoR amendment

Community-led local development

1. Community-led local development, which is designated as LEADER local development in relation to the EAFRD, shall be:

(a)	focused on specific sub-regional territories;

(b)	community-led, by local action groups composed of representatives of public and private local socio-economic interests, where at the decision-making level neither the public sector nor any single interest group shall represent more than 49 % of the voting rights;

Community-led local development

1. Community-led local development, which is designated as LEADER local development in relation to the EAFRD, shall be:

(a)	focused on specific sub-regional territories;

(b)	community-led, by local action groups composed of representatives of public and private local socio-economic interests, where at the decision-making level neither the public sector nor any single interest group shall represent more than 49 % of the voting rights;

Reason

Whenever local partnerships already exist they should not be unfairly penalised because their internal voting arrangements do not exactly match those required by the draft Directive. The regulation should allow enough leeway to allow the partners to identify a workable solution during the preparation of the Partnership Contract.

Amendment 29

Article 29

Text proposed by the Commission

CoR amendment

Local development strategies

1. A local development strategy shall contain at least the following elements:

a)	the definition of the area and population covered by the strategy;

b)	an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats;

a description of the strategy and its objectives, a description of the integrated and innovative character of the strategy and a hierarchy of objectives, including clear and measurable targets for outputs or results. The strategy shall be coherent with the relevant programmes of all the CSF Funds involved;

d)	a description of the process of community involvement in the development of the strategy;

e)	an action plan demonstrating how objectives are translated into actions;

f)	a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation;

g)	the financial plan of the strategy, including the planned allocation of each of the CSF Funds.

2. Member States shall define criteria for the selection of local development strategies. The Fund-specific rules may set out selection criteria.

[….]

6. The Commission shall be empowered to adopt delegated acts in accordance with Article 142 concerning the definition of the area and population covered by the strategy referred in paragraph 1(a).

Local development strategies

1. A local development strategy shall contain the following elements:

a)	the definition of the area and population covered by the strategy;

b)	an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats;

c)	a description of the strategy and its objectives, ;

;

)	an action plan demonstrating how objectives are translated into actions;

)	a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation;

)	the financial plan of the strategy, including the planned allocation of each of the CSF Funds .

2. Member States shall define criteria for the selection of local development strategies. The Fund-specific rules may set out selection criteria.

[….]

Reason

The Committee welcomes the Commission's proposals on local development and integrated territorial investments but at the same time calls for the arrangements and procedures for implementing the new provisions to be simplified to avoid discouraging local actors from using them. Using delegated acts for the definition of the area and population covered by the local development strategy is excessive; local and regional authorities are typically responsible for such tasks as detailed local knowledge is needed. Furthermore, it should be entirely possible to combine the Local Development Strategies with the delivery of Integrated Territorial Investments and Joint Action Plans.

It is also important for the local development strategies that are implemented to promote urban-rural relations and that local players in peri-urban zones can be fully involved in these local development strategies.

Amendment 30

Article 35

Text proposed by the Commission

CoR amendment

Requests for payment including expenditure for financial instruments

2. As regards financial instruments referred to in Article 33(1)(b) implemented in accordance with Article 33(4)(a) and (b), the total eligible expenditure presented in the request for payment shall include and separately disclose the total amount of support paid or expected to be paid to the financial instrument for investments in final recipients to be made over a pre-defined period of maximum two years, including management costs or fees.

3. The amount determined in accordance with paragraph 2 shall be adjusted in subsequent requests for payment, to take account of the difference between the amount of support previously paid to the financial instrument concerned, and the amounts effectively invested in final recipients, plus management costs and fees paid. These amounts shall be separately disclosed in the payment request.

[….]

Requests for payment including expenditure for financial instruments

2. As regards financial instruments referred to in Article 33(1)(b) implemented in accordance with Article 33(4)(a) and (b), the total eligible expenditure presented in the request for payment shall include and separately disclose the total amount of support paid or expected to be paid to the financial instrument final recipients to be made over a pre-defined period of maximum two years, including management costs or fees.

[….]

Reason

The proposal for a regulation promotes the use of the standard instruments established by the Commission, with the laudable aim of preventing excessive use of financial engineering instruments for the sole purpose of certifying expenditure. The Committee's amendments aim to redress the balance by further diversification of the terms and conditions and the introduction of a margin of tolerance as regards the ability to comply with forecasts.

Amendment 31

Article 39

Text proposed by the Commission

CoR amendment

Use of legacy resources after closure of the programme

Member States shall adopt the necessary measures to ensure that the capital resources and gains and other earnings or yields attributable to the support from the CSF Funds to financial instruments are used in accordance with the aims of the programme for a period of at least 10 years after the closure of the programme.

Use of legacy resources after closure of the programme

Reason

Considers that the period during which financial engineering instruments and the resulting resources must be used should be shorter; a period of ten years after the closure of a programme constitutes long-term legal uncertainty.

Amendment 32

Article 40(2)

Text proposed by the Commission

CoR amendment

Report on Implementation of Financial Instruments

2. The report referred to in paragraph 1 shall include, for each financial instrument, the following information:

a)	identification of the programme and of the priority from which support from the CSF Funds is provided; [….]

e)	total amount of support paid or committed in guarantee contracts by the financial instrument to the final recipients by programme and priority or measure included in requests for payment submitted to the Commission;

f)	revenues of, and repayments to, the financial instrument;

g)	multiplier effect of investments made by the financial instrument and value of investments and participations;

h)	contribution of the financial instrument to the achievement of the indicators of the programme and of the priority concerned. [….]

Report on Implementation of Financial Instruments

2. The report referred to in paragraph 1 shall include, for each financial instrument, the following information:

a)	identification of the programme and of the priority from which support from the CSF Funds is provided; [….]

e)	total amount of support paid or committed in guarantee contracts by the financial instrument to the final recipients by programme and priority or measure included in requests for payment submitted to the Commission;

)	multiplier effect of investments made by the financial instrument and value of investments and participations;

[….]

Reason

The aim here is to simplify annual reporting obligations for data requested by the Commission pertaining to the implementation of the financial instruments.

Amendment 33

Article 42(1)

Text proposed by the Commission

CoR amendment

Composition of the monitoring committee

1. The monitoring committee shall be composed of representatives of the managing authority and intermediate bodies and of representatives of the partners. Each member of the monitoring committee shall have a voting right.

The monitoring committee of a programme under the European territorial cooperation goal shall also include representatives of any third country participating in that programme.

Composition of the monitoring committee

The monitoring committee of a programme under the European territorial cooperation goal shall also include representatives of any third country participating in that programme.

Reason

It is unclear how the involvement of third countries and territories neighbouring on the outermost regions is to be fitted into European territorial cooperation. In the case of programmes with funding under the ENI and IPA, as well as from the ERDF, referred to in Article 28 of the Territorial Cooperation Regulation, third countries of course need to be involved. However, in the case of the outermost regions, third countries and neighbouring regions (with the exception of the Canary Islands – Morocco) are not included in either the ENI or the IPA. These countries receive EDF funds and make no additional contribution to European Territorial Cooperation. Although there must be cooperation with third countries, the outermost regions' territorial cooperation programmes only include allocations from the ERDF, and although 30 % of these funds may be used outside EU territory, such third countries must not be members of the monitoring committees.

Amendment 34

Article 43(1)

Text proposed by the Commission

CoR amendment

Functions of the monitoring committee

1. The monitoring committee shall meet at least once a year and shall review implementation of the programme and progress towards achieving its objectives. In doing so, it shall have regard to the financial data, common and programme-specific indicators, including changes in result indicators and progress towards quantified target values, and the milestones defined in the performance framework.

Functions of the monitoring committee

Reason

Considers that the in itinere evaluation exercises stipulated under Article 49 should also be taken into account when evaluating the programme's implementation.

Amendment 35

Article 47, new point 2

Text proposed by the Commission

CoR amendment

General Provisions

1. Evaluations shall be carried out to improve the quality of the design and implementation of programmes, as well as to assess their effectiveness, efficiency and impact. Impact of programmes shall be evaluated in accordance with the mission of the respective CSF Funds in relation to the targets for the Union strategy for smart, sustainable and inclusive growth (2) as well as in relation to Gross Domestic Product (GDP) and unemployment, where appropriate.

2. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to common and where appropriate programme-specific indicators.

General Provisions

Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to common and where appropriate programme-specific indicators.

Reason

Impact evaluations should also have the option of exploring other, equally important aspects using the ‘beyond GDP’ approach described in the opinion of the Committee of the Regions on Measuring progress – GDP and beyond (cf. CoR 163/2010 fin).

Amendment 36

Article 48(3)

Text proposed by the Commission

CoR amendment

3. Ex ante evaluations shall appraise:

[….]

g)	whether the quantified target values for indicators are realistic, having regard to the support from the CSF Funds envisaged;

h)	the rationale for the form of support proposed;

i)	the adequacy of human resources and administrative capacity for management of the programme;

j)	the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations;

k)	the suitability of the milestones selected for the performance framework;

l)	the adequacy of planned measures to promote equal opportunities between men and women and to prevent discrimination;

m)	the adequacy of planned measures to promote sustainable development.

3. Ex ante evaluations shall appraise:

[….]

g)	whether the quantified target values for indicators are realistic, having regard to the support from the CSF Funds envisaged;

h)	the rationale for the form of support proposed;

i)	the adequacy of human resources and administrative capacity for management of the programme;

)	the adequacy of planned measures to promote equal opportunities between men and women and to prevent discrimination;

)	the adequacy of planned measures to promote sustainable development.

Reason

The Committee considers that the ex ante evaluation should not contain aspects which cannot be adequately quantified before the programme is launched or which are already referred to in other documents (e.g. management and control system, Partnership Contract); therefore proposes to delete some information.

Amendment 37

Article 49, new point 4

Text proposed by the Commission

CoR amendment

Evaluation during the programming period

1. An evaluation plan shall be drawn up by the managing authority for each programme and submitted in accordance with the Fund-specific rules.

2. Member States shall ensure that appropriate evaluation capacity is available.

3. During the programming period, managing authorities shall carry out evaluations including evaluations to assess effectiveness, efficiency and impact, for each programme on the basis of the evaluation plan. At least once during the programming period, an evaluation shall assess how support from the CSF Funds has contributed to the objectives for each priority. All evaluations shall be examined by the monitoring committee and sent to the Commission.

4. The Commission may carry out, at its own initiative, evaluations of programmes.

Evaluation during the programming period

1. An evaluation plan shall be drawn up by the managing authority for each programme and submitted in accordance with the Fund-specific rules.

2. Member States shall ensure that appropriate evaluation capacity is available.

. The Commission may carry out, at its own initiative, evaluations of programmes.

Reason

In order to ensure a more results-oriented approach, the findings of the in itinere evaluations must be used to improve the programmes' effectiveness.

Amendment 38

Article 54(1)

Text proposed by the Commission

CoR amendment

Revenue-generating operations

1. Net revenue generated after completion of an operation over a specific reference period shall be determined in advance by one of the following methods:

a)	application of a flat rate revenue percentage for the type of operation concerned;

b)	calculation of the current value of the net revenue of the operation, taking into account the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State concerned.

The eligible expenditure of the operation to be co-financed shall not exceed the current value of the investment cost of the operation less the current value of the net revenue, determined according to one of these methods.

The Commission shall be empowered to adopt delegated acts in accordance with Article 142 concerning the definition of the flat rate referred to in point (a) above.

The Commission shall adopt the methodology under point (b) by means of implementing acts in accordance with the examination procedure referred to in Article 143(3).

Revenue-generating operations

1. Net revenue generated after completion of an operation over a specific reference period shall be determined in advance by one of the following methods:

a)	application of a flat rate revenue percentage for the type of operation concerned;

b)	calculation of the current value of the net revenue of the operation, taking into account the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State concerned.

oncerning the definition of the flat rate referred to in point (a) above

The Commission shall adopt the methodology under point (b) by means of implementing acts in accordance with the examination procedure referred to in Article 143(3).

Reason

Calls for the reinstatement of the 2000-2006 rules setting a single specific (reduced) intervention rate for revenue-generating operations to avoid discouraging project promoters.

Amendment 39

Article 55

Text proposed by the Commission

CoR amendment

Eligibility

1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in or on the basis of this Regulation or the Fund-specific rules.

[…]

6. Net revenue directly generated by an operation during its implementation which has not been taken into account at the time of approval of the operation, shall be deducted from the eligible expenditure of the operation in the final payment claim submitted by the beneficiary. This rule shall not apply to financial instruments and prizes.

[…]

Eligibility

1. The eligibility of expenditure shall be determined on the basis of national rules, except where specific rules are laid down in or on the basis of this Regulation or the Fund-specific rules.

[…]

Reason

Paragraph 6 should be deleted to ease the review process during the implementation of operations. A new paragraph (9) should be inserted, as territorial cooperation deserves a specific regime because the application or alignment of different national rules would represent a too high administrative obstacle to the proper implementation of the projects.

Amendment 40

Article 59(3)

Text proposed by the Commission

CoR amendment

Specific eligibility rules for grants

3. The following costs shall not be eligible for a contribution from the CSF Funds:

a)	interest on debt;

b)	the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. In exceptional and duly justified cases, a higher percentage may be permitted for operations concerning environmental conservation;

value added tax. However, VAT amounts shall be eligible where they are not recoverable under national VAT legislation and are paid by a beneficiary other than non-taxable person as defined in the first subparagraph of Article 13(1) of Directive 2006/112/EC, provided that such VAT amounts are not incurred in relation to the provision of infrastructure.

Specific eligibility rules for grants

3. The following costs shall not be eligible for a contribution from the CSF Funds:

a)	interest on debt;

b)	the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. In exceptional and duly justified cases, a higher percentage may be permitted for operations concerning environmental conservation;

c)	value added tax. .

Reason

The Committee considers that only recoverable VAT should not be eligible for a contribution from the CSF Funds. Indeed, if VAT that was not recoverable were to be considered as ineligible for all projects undertaken by public sector institutions, then the part to be co-financed by the Member States would increase substantially and the capacity of regional and local authorities to complete projects would be undermined. Furthermore, the CoR considers that the rule on ineligibility of VAT as regards the provision of infrastructure for beneficiaries is discriminatory in relation to other types of operations.

Amendment 41

Article 64

Text proposed by the Commission

CoR amendment

Accreditation and coordination

[…]

3. The accreditation shall be based on an opinion of an independent audit body that assesses the body's compliance with the accreditation criteria. The independent audit body shall carry out its work in accordance with internationally accepted audit standards.

[…]

5. The Member State may designate a coordinating body whose responsibility is to liaise with and provide information to the Commission, promote the harmonised application of Union rules, establish a synthesis report providing an overview at national level of all management declarations and the audit opinions and coordinate the implementation of remedial actions as regards any deficiencies of a common nature.

Accreditation and coordination

[…]

Reason

The aim is to avoid the proliferation of bodies and actors which would make the management and control system still more complex.

Amendment 42

Article 67

Text proposed by the Commission

CoR amendment

Common rules for payments

1. Payments by the Commission of the contribution from the CSF Funds to each programme shall be made in accordance with budget appropriations and subject to available funding. Each payment shall be posted to the earliest open budget commitment of the Fund concerned.

2. Payments shall take the form of pre-financing, interim payments and payment of the annual balance, where applicable, and of the final balance.

3. For forms of support under Article 57(1)(b), (c) and (d), the amounts paid to the beneficiary shall be regarded as eligible expenditure.

Common rules for payments

2. Payments shall take the form of pre-financing, interim payments and of the final balance.

3. For forms of support under Article 57(1)(b), (c) and (d), the amounts paid to the beneficiary shall be regarded as eligible expenditure.

Reason

Against the reference to the ‘annual balance’ as it introduces a principle of annual clearance of account (annual closure). It is considered that the proposed annual clearance of accounts is, in reality, introducing annual closure that will increase the administration burden, introduce mandatory financial corrections for irregularities detected by the European Commission and/or European Court of Auditors and reduce the flexibility of declaring and substituting ‘overbooking’ expenditure that currently exists in the 2007-2013 period.

Amendment 43

Article 75(1) a)

Text proposed by the Commission

CoR amendment

Submission of information

1. By 1 February of the year following the end of the accounting period, the Member State shall submit to the Commission the following documents and information in accordance with [Article 56] of the Financial Regulation:

a)	the certified annual accounts of the relevant bodies accredited pursuant to Article 64;

Submission of information

a)	the certified annual accounts of the relevant bodies accredited pursuant to Article 64;

Reason

It would be useful if, as is the case for the current programming period, the annual settlement of accounts remained an optional choice taken by the certifying authority itself. The timeframe set down in Article 75 is not easy to meet as it is too tight.

Amendment 44

Article 82(2)

Text proposed by the Commission

CoR amendment

Investment for growth and jobs

[…]

2. Resources for the Investment for growth and jobs goal shall be allocated among the following three categories of NUTS level 2 regions:

(a)	less developed regions, whose GDP per capita is less than 75 % of the average GDP of the EU-27;

(b)	transition regions, whose GDP per capita is between 75 % and 90 % of the average GDP of the EU-27;

(c)	more developed regions, whose GDP per capita is above 90 % of the average GDP of the EU-27.

The three categories of regions are determined on the basis of how their GDP per capita, measured in purchasing power parities and calculated on the basis of Union figures for the period 2006 to 2008, relates to the average GDP of the EU-27 for the same reference period.

Investment for growth and jobs

[…]

2. Resources for the Investment for growth and jobs goal shall be allocated among the following three categories of NUTS level 2 regions:

(a)	less developed regions, whose GDP per capita is less than 75 % of the average GDP of the EU-27;

(b)	transition regions, whose GDP per capita is between 75 % and 90 % of the average GDP of the EU-27;

(c)	more developed regions, whose GDP per capita is above 90 % of the average GDP of the EU-27.

The three categories of regions are determined on the basis of how their GDP per capita, measured in purchasing power parities and calculated on the basis of Union figures for the period , relates to the average GDP of the EU-27 for the same reference period.

Reason

To clarify that the latest available figures should be used to determine a region's eligibility and not pre-crisis figures from 2006-2008.

Amendment 45

Article 83 (2)

Text proposed by the Commission

CoR amendment

Global resources

2. The Commission shall adopt a decision, by means of implementing acts, setting out the annual breakdown of the global resources by Member State, without prejudice to paragraph 3 of this Article and Article 84(7).

Global resources

2. The Commission shall adopt a decision, by means of implementing acts, setting out the annual breakdown of the global resources by Member State , without prejudice to paragraph 3 of this Article and Article 84(7).

Reason

The CoR wishes to ensure that resources allocated to territorial cooperation programmes will be awarded by the Commission per cooperation area and not by a breakdown of national envelopes.

Amendment 46

Article 84

Text proposed by the Commission

CoR amendment

Resources for Investment for growth and jobs and for European territorial cooperation

2. The following criteria shall be used for the breakdown by Member State:

a)	eligible population, regional prosperity, national prosperity and unemployment rate for less developed regions and transition regions;

b)	eligible population, regional prosperity, unemployment rate, employment rate, educational level and population density for more developed regions;

c)	population, national prosperity and surface area for the Cohesion Fund.

3. At least 25 % of the Structural Funds resources for less developed regions, 40 % for transition regions and 52 % for more developed regions in each Member State shall be allocated to the ESF. For the purposes of this provision, the support to a Member State through the [Food for deprived people instrument] shall be considered as part of the share of Structural Funds allocated to the ESF.

[….]

5. The support from the Structural Funds for [food for deprived people] under the Investment for Growth and Jobs shall be EUR 2 500 000 000.

The Commission shall adopt a decision by implementing act setting out the amount to be transferred from each Member State's Structural Funds allocation for the whole period in each Member State. The Structural Funds allocation of each Member State shall be reduced accordingly.

The annual appropriations corresponding to the support from the Structural Funds mentioned in the first subparagraph shall be entered in the relevant budget lines of the [food for deprived people instrument] with the 2014 budgetary exercise.

6. 5 % of the resources for the Investment for growth and jobs goal shall constitute the performance reserve to be allocated in accordance with Article 19.

[….]

8. Resources for the European territorial cooperation goal shall amount to 3,48 % of the global resources available for budgetary commitment from the Funds for the period 2014 to 2020 (i.e., a total of EUR 11 700 000 004).

Resources for Investment for growth and jobs and for European territorial cooperation

2. The following criteria shall be used for the breakdown by Member State:

a)	eligible population, regional prosperity, national prosperity and unemployment rate for less developed regions and transition regions;

b)	eligible population, regional prosperity, unemployment rate, employment rate, educational level and population density, for more developed regions;

c)	population, national prosperity and surface area for the Cohesion Fund.

3. At least of the Structural Funds resources for less developed regions, for transition regions and for more developed regions in each Member State shall be allocated to the ESF. For the purposes of this provision, the support to a Member State through the [Food for deprived people instrument] shall be considered as part of the share of Structural Funds allocated to the ESF.

[….]

5. upport for [food for deprived people] shall be EUR 2 500 000 000.

The Commission shall adopt a decision by implementing act setting out the amount to be transferred from the

[….]

Reason

In addition to the criteria usually used when allocating support to the Member States, the Committee of the Regions calls for criteria such as severe and permanent natural or demographic regional handicaps, as set out in Article 174 TFEU, to be taken into account. Other demographic criteria to be taken into account include population dispersal, depopulation in certain parts of regions, e.g. rural and border areas, and even demographic ageing, which can have a serious impact on economic development and the cost of public services.

Furthermore, the Committee considers that the proposed minimum percentage to be allocated to the ESF is too high. It therefore calls for the threshold to be lowered for each category of region. The Committee considers that it is important to enable regions to invest in dynamic sectors which create jobs, while also guaranteeing an ambitious level of funding in the area of jobs and social affairs.

The Structural Funds' regulatory framework could constitute a new legal basis for the European programme of food aid for the most deprived people, but in financial terms it can never replace the food aid programme whose objectives are set by the Common Agricultural Policy.

Finally, the CoR wishes to ensure that resources allocated to territorial cooperation programmes will be awarded by the European Commission per cooperation area.

Amendment 47

Article 86(4)

Text proposed by the Commission

CoR amendment

Additionality

4. Verification of whether the level of public or equivalent structural expenditure under the Investment for growth and jobs goal has been maintained for the period shall only take place in those Member States in which less developed and transition regions cover at least 15 % of the total population.

In those Member States in which less developed and transition regions cover at least 70 % of the population, the verification shall take place at national level.

In those Member States in which less developed and transition regions cover more than 15 % and less than 70 % of the population, the verification shall take place at national and regional level.

For that purpose, those Member States shall provide to the Commission information about the expenditure in the less developed and transition regions at each stage of the verification process.

Additionality

In those Member States in which less developed and transition regions cover more than 15 % and less than 70 % of the population, the verification shall take place at national and regional level.

For that purpose, those Member States shall provide to the Commission information about the expenditure in the less developed and transition regions at each stage of the verification process.

Reason

It would serve no purpose and be redundant to carry out the verification on the basis of the size of the population, as it is up to the Member States to establish how they will comply with this principle. We welcome the fact that verification of the additionality principle is to be done away with in Member States where only a small percentage of the population lives in less developed and transition regions. In line with the proportionality principle and for reasons of administrative simplification, the threshold should be raised to 20 %.

Amendment 48

Article 87(2) c) and h)

Text proposed by the Commission

CoR amendment

Content and adoption of operational programmes under the Investment for growth and jobs goal

2. An operational programme shall set out:

[…]

the contribution to the integrated approach for territorial development set out in the Partnership Contract, including:

i)	the mechanisms that ensure coordination between the Funds, the EAFRD, the EMFF and other Union and national funding instruments, and with the EIB;

ii)	where appropriate, a planned integrated approach to the territorial development of urban, rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28 and 29;

iii)

the list of cities where integrated actions for sustainable urban development will be implemented, the indicative annual allocation of the ERDF support for these actions, including the resources delegated to cities for management under Article 7(2) of Regulation (EU) No [ERDF] and the indicative annual allocation of ESF support for integrated actions;

iv)	the identification of the areas in which community-led local development will be implemented;

v)	the arrangements for interregional and transnational actions with beneficiaries located in at least one other Member State;

vi)	where appropriate, the contribution of the planned interventions towards macro regional strategies and sea basin strategies;

the contribution to the integrated approach set out in the Partnership Contract to address the specific needs of geographical areas most affected by poverty or target groups at highest risk of discrimination or exclusion, with special regard to marginalised communities, and the indicative financial allocation;

[…]

the implementing provisions for the operational programme containing:

i)	identification of the accrediting body, the managing authority, the certifying authority, where applicable, and the audit authority;

ii)	identification of the body to which payments will be made by the Commission.

Content and adoption of operational programmes under the Investment for growth and jobs goal

2. An operational programme shall set out:

[…]

the contribution to the integrated approach for territorial development set out in the Partnership Contract, including:

i)	the mechanisms that ensure coordination between the Funds, the EAFRD, the EMFF and other Union and national funding instruments, and with the EIB;

ii)	where appropriate, a planned integrated approach to the territorial development of urban, rural, coastal and fisheries areas and areas with particular territorial features, in particular the implementation arrangements for Articles 28 and 29;

iii)

list of cities where integrated actions for sustainable urban development will be implemented the indicative annual allocation of the ERDF support for these actions, including the resources delegated to cities for management under Article 7(2) of Regulation (EU) No [ERDF] and the indicative annual allocation of ESF support for integrated actions;

iv)	the identification of the areas in which community-led local development will be implemented;

v)	the arrangements for interregional and transnational actions with beneficiaries located in at least one other Member State;

vii)	where appropriate, the contribution of the planned interventions towards macro regional strategies and sea basin strategies ;

)

[…]

)

the implementing provisions for the operational programme containing:

i)	identification of the managing authority, the certifying authority, where applicable, and the audit authority;

ii)	identification of the body to which payments will be made by the Commission.

Reason

The Commission's proposal to identify a fixed number of cities is too prescriptive. It is therefore proposed that this list should be indicative. Furthermore, this list of cities could be drawn up in partnership with the local and regional authorities.

It is proposed to incorporate d) into c) (viii), which then provides exhaustive details on the integrated approach; in line with the amendment to Article 64(3), it is proposed to delete the reference to the external accrediting body.

Amendment 49

Article 91(2)

Text proposed by the Commission

CoR amendment

Information to be submitted to the Commission

2. Major projects submitted to the Commission for approval shall be contained in the list of major projects in an operational programme. The list shall be reviewed by the Member State or the managing authority two years following the adoption of an operational programme and may at the request of the Member State be adjusted in accordance with the procedure set out in Article 26(2), in particular to include major projects with an expected completion date by the end of 2022.

Information to be submitted to the Commission

2. Major projects submitted to the Commission for approval shall be contained in the list of major projects in an operational programme. ajor projects must the end of 2022.

Reason

The Committee of the Regions would like major projects submitted during the programming period to be able to start without waiting for approval by the Commission, as proposed under the current programming period. The Committee calls for the option for expenditure to be declared before the major project is approved by the Commission in order to avoid delaying the start of operations.

Amendment 50

Article 93(1)

Text proposed by the Commission

CoR amendment

1. A joint action plan is an operation defined and managed in relation to the outputs and results which it will achieve. It comprises a group of projects, not consisting in the provision of infrastructure, carried out under the responsibility of the beneficiary, as part of an operational programme or programmes. The outputs andresults of a joint action plan shall be agreed between the Member State and the Commission and shall contribute to specific objectives of the operational programmes and form the basis of support from the Funds. Results shall refer to direct effects of the joint action plan. The beneficiary shall be a public law body. Joint action plans shall not be considered as major projects.

1. A joint action plan is an operation defined and managed in relation to the outputs and results which it will achieve. It comprises a group of projects, , carried out under the responsibility of the beneficiary, as part of an operational programme or programmes. The outputs and results of a joint action plan shall be agreed between the Member State and the Commission and shall contribute to specific objectives of the operational programmes and form the basis of support from the Funds. Results shall refer to direct effects of the joint action plan. The beneficiary shall be a public law body. Joint action plans shall not be considered as major projects.

Reason

The Committee points out that the joint action plan primarily facilitates the implementation of the ESF in the context of specific, defined actions, but regrets that for the ERDF, use of this mechanism is difficult owing to the exclusion of infrastructure projects.

Amendment 51

Article 93(2)

Text proposed by the Commission

CoR amendment

Scope

2. The public support allocated to a joint action plan shall be a minimum of EUR 10 000 000 or 20 % of the public support of the operational programme or programmes, whichever is lower.

Scope

2. The public support allocated to a joint action plan shall be a minimum of EUR 000000 or % of the public support of the operational programme or programmes, whichever is lower.

Reason

A lower threshold is widely seen as more pertinent to ensure that this instrument fits available critical mass. However it should be noted that this is the legally minimum, and in many Member States the threshold to be agreed in the negotiation process will be notably higher.

Amendment 52

Article 102(1)

Text proposed by the Commission

CoR amendment

Transmission of financial data

1. By 31 January, 30 April, 31 July and 31 October, the managing authority shall transmit electronically to the Commission for monitoring purposes, for each operational programme and by priority axis:

a)	the total and public eligible cost of the operations and the number of operations selected for support;

b)	the total and public eligible cost of contracts or other legal commitments entered into by beneficiaries in implementation of operations selected for support;

c)	the total eligible expenditure declared by beneficiaries to the managing authority.

Transmission of financial data

1. By 31 January, , 31 July , the managing authority shall transmit electronically to the Commission for monitoring purposes, for each operational programme and by priority axis:

a)	the total and public eligible cost of the operations and the number of operations selected for support;

b)	the total and public eligible cost of contracts or other legal commitments entered into beneficiaries ;

c)	the total eligible expenditure declared by beneficiaries to the managing authority.

Reason

The Committee wishes to simplify the transmission of financial data by lowering the requirement from four times to twice a year. The same applies to the transmission of information on chosen operations: this should only apply to total eligible costs, public eligible costs, contracts and other legal commitments between managing authorities and beneficiaries.

Amendment 53

Article 105

Text proposed by the Commission

CoR amendment

Information and publicity

1. Member States and managing authorities shall be responsible for:

(a)	ensuring the establishment of a single website or a single website portal providing information on, and access to, all operational programmes in that Member State;

(b)	informing potential beneficiaries about funding opportunities under operational programmes;

(c)	publicising to Union citizens the role and achievements of cohesion policy and of the Funds through information and communication actions on the results and impact of Partnership Contracts, operational programmes and operations.

2. Member States shall in order to ensure transparency in the support of the Funds maintain a list of operations by operational programme and by Fund in CSV or XML format which shall be accessible through the single website or the single website portal providing a list and summary of all operational programmes in that Member State.

The list of operations shall be updated at least every three months.

The minimum information to be set out in the list of operations is laid down in Annex V.

Information and publicity

1. Member States and managing authorities shall be responsible for:

(a)	ensuring the establishment of a single website or a single website portal providing information on, and access to, all operational programmes in that Member State;

(b)	informing potential beneficiaries about funding opportunities under operational programmes;

(c)	publicising to Union citizens the role and achievements of cohesion policy and of the Funds through information and communication actions on the results and impact of Partnership Contracts, operational programmes and operations.

. Member States shall in order to ensure transparency in the support of the Funds maintain a list of operations by operational programme and by Fund in CSV or XML format which shall be accessible through the single website or the single website portal providing a list and summary of all operational programmes in that Member State.

The list of operations shall be updated at least every months.

The minimum information to be set out in the list of operations is laid down in Annex V.

Reason

The Regulations should allow joint awareness raising actions between the European Commission and the Committee of the Regions to support Regional and Local Authorities in explaining how cohesion policy works: ex ante, during the implementation and ex post. The CoR should have the possibility to support the Regional and Local Authorities' efforts, as beneficiaries of cohesion funds asked to deliver results on the ground. The CoR should also have the means to explain to the citizens the way Structural Funds were implemented and the role of the European Union in this process.

Furthermore, the Committee wishes to simplify the information and disclosure procedures, and consequently updating the list of operations twice a year would be adequate.

Amendment 54

Article 110(3)

Text proposed by the Commission

CoR amendment

Determination of co-financing rates

3. The co-financing rate at the level of each priority axis of operational programmes under the Investment for growth and jobs goal shall be no higher than:

(a)	85 % for the Cohesion Fund;

(b)	85 % for the less developed regions of Member States whose average GDP per capita for the period 2007 to 2009 was below 85 % of the EU-27 average during the same period and for the outermost regions;

(c)	80 % for the less developed regions of Member States other than those referred to in point (b) eligible for the transitional regime of the Cohesion Fund on 1 January 2014;

(d)

75 % for the less developed regions of Member States other than those referred to in points (b) and (c), and for all regions whose GDP per capita for the 2007-2013 period was less than 75 % of the average of the EU-25 for the reference period but whose GDP per capita is above 75 % of the GDP average of the EU-27;

(e)	60 % for the transition regions other than those referred to in point (d);

(f)	50 % for the more developed regions other than those referred to in point (d).

The co-financing rate at the level of each priority axis of operational programmes under the European territorial cooperation goal shall be no higher than 75 %.

Determination of co-financing rates

3. The co-financing rate at the level of each priority axis of operational programmes under the Investment for growth and jobs goal shall be no higher than:

(a)	85 % for the Cohesion Fund;

(b)	85 % for the less developed regions of Member States whose average GDP per capita for the period 2007 to 2009 was below 85 % of the EU-27 average during the same period and for the outermost regions;

(c)	80 % for the less developed regions of Member States other than those referred to in point (b) eligible for the transitional regime of the Cohesion Fund on 1 January 2014;

(d)

(e)	60 % for the transition regions other than those referred to in point (d);

(f)	50 % for the more developed regions other than those referred to in point (d).

The co-financing rate of operational programmes under the European territorial cooperation goal shall be no higher than 5 %.

Reason

The proposed cofinancing rate of 75 % for operational programmes in the European territorial cooperation goal is lower than that for less developed regions under the investment for growth and jobs goal. This lower level of funding makes ETC programmes unattractive in these regions. The Committee of the Regions does not agree, therefore, with ETC programmes being cofinanced at less than 75 %. The Committee thinks that there are no grounds for such a distinction and calls for the cofinancing level for both goals to be the same at 85 %. To maintain the quality of operations, the present conditions established by Article 53(3) and (4) of Council Regulation (EC) No 1083/2006 must be preserved:

‘3. For operational programmes under the European territorial cooperation objective in which at least one participant belongs to a Member State whose average GDP per capita for the period 2001 to 2003 was below 85 % of the EU-25 average during the same period, the contribution from the ERDF shall not be higher than 85 % of the eligible expenditure. For all other operational programmes, the contribution from the ERDF shall not be higher than 75 % of the eligible expenditure co-financed by the ERDF.

4. The contribution from the Funds at the priority axis level shall not be subject to the ceilings set out in paragraph 3 and in Annex III. However, it shall be fixed so as to ensure compliance with the maximum amount of contribution from the Funds and the maximum contribution rate per Fund fixed at the level of the operational programme.’

At the same time, the Committee of the Regions does not consider it appropriate for the maximum rate of cofinancing to be established at the level of each priority axis. This makes it impossible to differentiate the level of cofinancing within individual priority axes in order to motivate recipients to fulfil certain strategic priorities.

Amendment 55

Article 111(4)

Text proposed by the Commission

CoR amendment

Modulation of the co-financing rates

4) the coverage of areas with severe and permanent natural or demographic handicaps defined as follows:

(a)	island Member States eligible under the Cohesion Fund, and other islands except those on which the capital of a Member State is situated or which have a fixed link to the mainland;

(b)	mountainous areas as defined by the national legislation of the Member State;

(c)	sparsely (less than 50 inhabitants per square kilometre) and very sparsely (less than 8 inhabitants per square kilometre) populated areas.

Modulation of the co-financing rates

(4) the coverage of areas with severe and permanent natural or demographic handicaps defined as follows:

(a)	island Member States eligible under the Cohesion Fund, and other islands except those on which the capital of a Member State is situated or which have a fixed link to the mainland;

(b)	mountainous areas as defined by the national legislation of the Member State;

(c)	sparsely (less than 50 inhabitants per square kilometre) and very sparsely (less than 8 inhabitants per square kilometre) populated areas.

Amendment 56

Article 112(2)

Text proposed by the Commission

CoR amendment

Responsibilities of Member States

2. Member States shall prevent, detect and correct irregularities and shall recover amounts unduly paid, together with any interest on late payments. They shall notify these irregularities to the Commission and shall keep the Commission informed of the progress of related administrative and legal proceedings.

Responsibilities of Member States

Reason

The detail added to the Commission text has been endorsed but the adoption of electronic information exchange mechanisms should not be restricted to public beneficiaries.

Amendment 57

Article 113

Text proposed by the Commission

CoR amendment

Designation of authorities

[…]

5. For the Investment for growth and jobs goal, provided that the principle of separation of functions is respected, the managing authority, the certifying authority, where applicable, and the audit authority may be part of the same public authority or body. However, for those operational programmes for which the total amount of support from the Funds exceeds EUR 250 000 000, the audit authority may not be part of the same public authority or body as the managing authority.

[…]

7. The Member State or the managing authority may entrust the management of part of an operational programme to an intermediate body by way of an agreement in writing between the intermediate body and the Member State or managing authority (a ‘global grant’). The intermediate body shall provide guarantees of its solvency and competence in the domain concerned, as well as its administrative and financial management.

Designation of authorities

[…]

Reason

The CoR considers it would be preferable to maintain the current system under which, even for programmes over 250 MEuros, the audit authority may belong to the same public body as the managing authority.

The CoR also considers that the guarantees required should not apply to intermediate bodies that are public entities.

Amendment 58

Article 114 (2)

Text proposed by the Commission

CoR amendment

Functions of the managing authority

2. As regards the programme management of the operational programme, the managing authority shall:

(a)	support the work of the monitoring committee and provide it with the information it requires to carry out its tasks, in particular data relating to the progress of the operational programme in achieving its objectives, financial data and data relating to indicators and milestones;

(b)	draw up and, after approval by the monitoring committee, submit to the Commission annual and final implementation reports;

(c)	make available to intermediate bodies and beneficiaries information that is relevant to the execution of their tasks and the implementation of operations respectively;

(d)	establish a system to record and store in computerised form data on each operation necessary for monitoring, evaluation, financial management, verification and audit, including data on individual participants in operations, where applicable;

(e)	ensure that the data referred to in point (d) is collected, entered and stored in the system, and that data on indicators is broken down by gender where required by Annex I of the ESF Regulation.

Functions of the managing authority

2. As regards the programme management of the operational programme, the managing authority shall:

(a)	support the work of the monitoring committee and provide it with the information it requires to carry out its tasks, in particular data relating to the progress of the operational programme in achieving its objectives, financial data and data relating to indicators and milestones;

(b)	draw up and, after approval by the monitoring committee, submit to the Commission annual and final implementation reports;

(c)	make available to intermediate bodies and beneficiaries information that is relevant to the execution of their tasks and the implementation of operations respectively;

d)	establish a system to record and store in computerised form data on each operation necessary for monitoring, evaluation, financial management, verification and audit;

(e)	ensure that the data referred to in point (d) is collected, entered and stored in the system, and that data on indicators is broken down by gender where required by Annex I of the ESF Regulation.

Reason

It is important to keep data on operations that may be useful for various reasons, relating to litigation, for instance.

Amendment 59

Article 117

Text proposed by the Commission

CoR amendment

Accreditation and withdrawal of accreditation of the managing authority and the certifying authority

1. The accrediting body shall adopt a formal decision to accredit those managing authorities and certifying authorities that comply with the accreditation criteria that have been established by the Commission by means of delegated acts in accordance with Article 142.

2. The formal decision referred to in paragraph 1 shall be based on a report and an opinion of an independent audit body that assesses the management and control system, including the role of intermediate bodies therein, and its compliance with Articles 62, 63, 114 and 115. The accrediting body shall take into account whether the management and control systems for the operational programme are similar to those in place for the previous programming period, as well as any evidence of their effective functioning.

3. The Member State shall submit the formal decision referred to in paragraph 1 to the Commission within six months of the adoption of the decision adopting the operational programme.

4. Where the total amount of support from the Funds to an operational programme exceeds EUR 250 000 000 the Commission may request, within two months of receipt of the formal decision referred to in paragraph 1, the report and the opinion of the independent audit body and the description of the management and control system.

The Commission may make observations within two months of receipt of these documents.

In deciding whether to request those documents, the Commission shall take into account whether the management and control systems for the operational programme are similar to those in place for the previous programming period, whether the managing authority also carries out the functions of the certifying authority, and any evidence of their effective functioning.

Reason

We reject the proposed accreditation of management and control authorities. The implementation of cohesion policy by the Member States is in line with the subsidiarity principle in the EU. Accreditation of state authorities by other state authorities has no basis in administrative law in some Member States and interferes in the organisational sovereignty of Member States.

Amendment 60

Article 118, new point 4

Text proposed by the Commission

CoR amendment

Cooperation with audit authorities

Reason

The Committee of the Regions proposes to reinstate former Article 74(1) of the 2007-2013 programming period, for the sake of simplification in the area of proportionality of controls.

Amendment 61

Article 121(1)

Text proposed by the Commission

CoR amendment

Payment applications

1. Payment applications shall include, for each priority axis:

a)	the total amount of eligible expenditure paid by beneficiaries in implementing operations, as entered into the accounts of the certifying authority;

b)	the total amount of public support incurred in implementing operations, as entered into the accounts of the certifying authority;

c)	the corresponding eligible public support which has been paid to the beneficiary, as entered into the accounts of the certifying authority.

Payment applications

1. Payment applications shall include, for each priority axis:

a)	the total amount of eligible expenditure paid by beneficiaries in implementing operations, as entered into the accounts of the certifying authority;

b)	the total amount of public support incurred in implementing operations, as entered into the accounts of the certifying authority;

Reason

The CoR considers that the data on public support paid to the beneficiary should not be included in the requests for payment sent to the Commission. The Committee therefore proposes that this information be simplified.

Amendment 62

Article 124(1)

Text proposed by the Commission

CoR amendment

Payment of pre-financing

1. The initial pre-financing amount shall be paid in instalments as follows:

a)	in 2014: 2 % of the amount of support from the Funds for the entire programming period to the operational programme;

b)	in 2015: 1 % of the amount of support from the Funds for the entire programming period to the operational programme;

c)	in 2016: 1 % of the amount of support from the Funds for the entire programming period to the operational programme.

If an operational programme is adopted in 2015 or later, the earlier instalments shall be paid in the year of adoption.

Payment of pre-financing

1. The initial pre-financing amount shall be paid in instalments as follows:

a)	in 2014: 2 % of the amount of support from the Funds for the entire programming period to the operational programme;

b)	in 2015: of the amount of support from the Funds for the entire programming period to the operational programme;

c)	in 2016: of the amount of support from the Funds for the entire programming period to the operational programme.

If an operational programme is adopted in 2015 or later, the earlier instalments shall be paid in the year of adoption.

Reason

The Committee welcomes the proposal requiring managing authorities to disburse money to beneficiaries before applying to the Commission for reimbursement; however, this system requires a more flexible advance payment system if the managing authorities are to have sufficient resources to advance the sums requested by beneficiaries. The Committee therefore calls for an increase in the resources proposed by the Commission, which could reduce the difficulties encountered by some Member States during the crisis in terms of their national contribution.

Amendment 63

Article 128(1)

Text proposed by the Commission

CoR amendment

Content of the annual accounts

1. The certified annual accounts for each operational programme shall cover the accounting year and shall include at the level of each priority axis:

(a)

the total amount of eligible expenditure entered into the accounts of the certifying authority as having been paid by beneficiaries in implementing operations and the corresponding eligible public support which has been paid and the total amount of public support incurred in implementing operations;

(b)	the amounts withdrawn and recovered during the accounting year, the amounts to be recovered as at the end of the accounting year, the recoveries effected pursuant to Article 61, and the irrecoverable amounts;

(c)	for each priority axis, the list of operations completed during the accounting year that were supported by ERDF and Cohesion Fund;

(d)	for each priority axis, a reconciliation between the expenditure stated pursuant to point (a) and the expenditure declared in respect of the same accounting year in payment applications, accompanied by an explanation of any differences.

Content of the annual accounts

1. The

certified annual accounts for each operational programme shall cover the accounting year and shall include at the level of each priority axis:

(a)

(b)	the amounts withdrawn and recovered during the accounting year, the amounts to be recovered as at the end of the accounting year, the recoveries effected pursuant to Article 61, and the irrecoverable amounts;

(c)	for each priority axis, the list of operations completed during the accounting year that were supported by ERDF and Cohesion Fund;

(d)	for each priority axis, a reconciliation between the expenditure stated pursuant to point (a) and the expenditure declared in respect of the same accounting year in payment applications, accompanied by an explanation of any differences.

Reason

Amendment 64

Article 134

Text proposed by the Commission

CoR amendment

Suspension of payments

1. All or part of the interim payments at the level of priority axes or operational programmes may be suspended by the Commission where:

a)	there is a serious deficiency in the management and control system of the operational programme for which corrective measures have not been taken;

b)	expenditure in a statement of expenditure is linked to an irregularity having serious financial consequences which has not been corrected;

c)	the Member State has failed to take the necessary action to remedy the situation giving rise to an interruption under Article 74;

d)	there is a serious deficiency in the quality and reliability of the monitoring system or of the data on common and specific indicators;

e)	the Member State has failed to undertake actions set out in the operational programme relating to fulfilment of an ex ante conditionalities;

f)	there is evidence resulting from a performance review that a priority axis has failed to achieve the milestones set out in the performance framework;

g)	the Member State fails to respond or does not reply satisfactorily under Article 20(5);

h)	one of the cases set out in Article 21(6)(a) to (e) applies.

2. The Commission may decide, by means of implementing acts, to suspend all or part of interim payments, after having given the Member State the opportunity to present its observations.

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.

Suspension of payments

1. All or part of the interim payments at the level of priority axes or operational programmes may be suspended by the Commission where:

a)	there is a serious deficiency in the management and control system of the operational programme for which corrective measures have not been taken;

b)	expenditure in a statement of expenditure is linked to an irregularity having serious financial consequences which has not been corrected;

c)	the Member State has failed to take the necessary action to remedy the situation giving rise to an interruption under Article 74;

d)	there is a serious deficiency in the quality and reliability of the monitoring system ;

Reason

The Committee of the Regions considers the principle of suspension of all or part of the interim payments by the Commission to be justifiable only in cases of serious breach of the management and control system.

Amendment 65

Article 140(1)

Text proposed by the Commission

CoR amendment

Proportional control of operational programmes

1. Operations for which the total eligible expenditure does not exceed EUR 100 000 shall not be subject to more than one audit by either the audit authority or the Commission prior to the closure of all the expenditure concerned under Article 131. Other operations shall not be subject to more than one audit per accounting year by the audit authority and the Commission prior to the closure of all the expenditure concerned under Article 131. These provisions are without prejudice to paragraph 4.

Proportional control of operational programmes

1. Operations for which the total eligible expenditure does not exceed EUR shall not be subject to more than one audit prior to the closure of all the expenditure concerned under Article 131. Other operations shall not be subject to more than one audit per accounting year prior to the closure of all the expenditure concerned under Article 131. These provisions are without prejudice to paragraph 4.

Reason

In order to ensure genuine proportional control of operational programmes, the Committee proposes that operations for which the total eligible expenditure does not exceed EUR 250 000 should be subject to no more than one audit.

Amendment 66

ANNEX IV

Ex ante conditionalities

Thematic ex ante conditionalities points 1, 2, 3, 6, 7, 8, 9, 10, 11

Thematic objectives

Ex ante conditionality

Criteria for fulfilment

1.	Strengthening research, technological development and innovation (R&D target) (referred to in Article 9(1) )

1.1.

Research and innovation: The existence of a national or regional research and innovation for smart specialisation in line with the National Reform Program, to leverage private research and innovation expenditure, which complies with the features of well-performing national or regional research and innovation systems (3).

—

A national or regional research and innovation for smart specialisation is in place that:

—	is based on a SWOT analysis to concentrate resources on a limited set of research and innovation priorities;

—	outlines measures to stimulate private RTD investment;

—	contains a monitoring and review system.

—	A Member State has adopted a framework outlining available budgetary resources for research and innovation

—

2.	Enhancing access to and use and quality of information and communication technologies (Broadband target) (referred to in Article 9(2) )

2.1.

Digital growth: The existence within the national or regional innovation for smart specialisation of an explicit chapter for digital growth to stimulate demand for affordable, good quality and interoperable ICT-enabled private and public services and increase uptake by citizens, including vulnerable groups, businesses and public administrations including cross border initiatives.

—

A chapter for digital growth within the national or regional innovation for smart specialisation is in place that contains:

—	budgeting and prioritisation of actions through a SWOT analysis carried out in alignment with the Scoreboard of the Digital Agenda for Europe (4);

—	an analyses of balancing support for demand and supply of information and communication technologies (ICT) should have been conducted;

—

—	assessment of needs to reinforce ICT capacity-building.

2.2.	Next Generation Access (NGA) Infrastructure: The existence of national NGA Plans which take account of regional actions in order to reach the EU high-speed Internet access targets (5) in line with the EU competition and state aid rules, and provide accessible services to vulnerable groups.

—

A national NGA Plan is in place that contains:

—	a plan of infrastructure investments through demand aggregation and a mapping of infrastructure and services, regularly updated;

—	sustainable investment models that enhance competition and provide access to open, affordable, quality and future proof infrastructure and services;

—	measures to stimulate private investment.

3.	Enhancing the competitiveness of small and medium-sized enterprises (SMEs) (referred to in Article 9(3))

3.1.	Specific actions have been carried out for the effective implementation of the Small Business Act (SBA) and its Review of 23 February 2011 (6) including the ‘Think Small First’ principle.

—

The specific actions include:

—	a monitoring mechanism to ensure the implementation of the SBA including a body in charge of coordinating SME issues across different administrative levels (‘SME Envoy’);

—	measures to reduce the time to set-up business to 3 working days and the cost to EUR 100;

—	measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise to 3 months;

—	a mechanism for systematic assessment of the impact of legislation on SMEs .

3.2.	Transposition into national law of Directive (2011/7/EU) of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (7).

—	Transposition of that Directive in accordance with Article 12 of the Directive (by 16 March 2013).

6.	Protecting the environment and promoting the sustainable use of resources (referred to in Article 9(6) )

6.1.

Water sector: The existence of a a) water pricing policy which ensures provides adequate incentives for users to use water resources efficiently and b) an adequate contribution of the different water uses to the recovery of the costs of water services, in accordance with Article 9 of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (8).

—	A Member State has ensured contribution of the different water uses to the recovery of the costs of water services by sector in accordance with Article 9 of Directive 2000/60/EC.

—

The adoption of a river basin management plan for the river basin district where investments will take place in accordance with Article 13 of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (9).

6.2.	Waste sector: Implementation of Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (10), in particular the development of waste management plans in accordance with the Directive and with the waste hierarchy..

—	A Member State has reported to the Commission on progress towards targets of Article 11 of Directive 2008/98/EC, reasons for failure, and intended actions to meet the targets;

—	A Member State has ensured that its competent authorities establish, in accordance with Articles 1, 4, 13 and 16 of Directive 2008/98/EC, one or more waste management plans as required by Article 28 of the Directive;

—	No later by 12 December 2013, a Member State has established, in accordance with Articles 1 and 4 of Directive 2008/98/EC, waste prevention programmes, as required by Article 29 of the Directive;

—	A Member State has taken necessary measures to achieve 2020 target on re-use and recycling in accordance with Article 11 of Directive 2008/98/EC.

7.	Promoting sustainable transport and removing bottlenecks in key network infrastructures (referred to in Article 9(7) )

7.1.	Road:ppropriate prioritisation of investments in the core Trans European Network of Transport Infrastructure (TEN-T) network, in the comprehensive network (investments other than the core TEN-T) and in secondary connectivity (including public transport at regional and local level).

—

prioritisation of investments in the core TEN-T network, the comprehensive network and secondary connectivity. The prioritisation should take into account the contribution of investments to mobility, sustainability, the reduction of greenhouse gas emissions and contribution to the Single European transport area;

—	a realistic project pipeline (including timetable, budgetary framework);

—	a strategic environmental assessment fulfilling the legal requirements for the transport plan;

—	measures to strengthen capacity of intermediary bodies and beneficiaries to deliver the project pipeline.

7.2.

Railway:rioritisation of investments in the core Trans European Network of Transport Infrastructure (TEN-T) network, in the comprehensive network (investments other than the core TEN-T) and in secondary connectivity of the railway system according to their contributions to mobility, sustainability, national and European wide network effects. The investments cover mobile assets and interoperability and capacity building.

—

A chapter on railway development is in place that contains:

—	a realistic project pipeline (including a timetable, budgetary framework);

—	a strategic environmental assessment fulfilling the legal requirements for the transport plan;

—	measures to strengthen capacity of intermediary bodies and beneficiaries to deliver the project pipeline.

8.	Promoting employment and supporting labour mobility (Employment target) (referred to in Article 9(8) )

8.1.

Access to employment for job-seekers and inactive people, including local employment initiatives and support for g labour mobility Active labour market policies are designed and delivered in coherence with the Employment guidelines and the Broad Guidelines for the economic policies of the Member States and of the Union (11) regarding the enabling conditions for job creation.

—

Employment services have the capacity to and do deliver:

—	personalised services and active and preventive labour market measures at an early stage, which are open for all jobseekers;

—

—	transparent and systematic information on new job vacancies.

—	Employment services have set up networks with employers and education institutes.

8.2.

Self-employment, entrepreneurship and business creation: the existence of a comprehensive strategy for inclusive start-up support in accordance with the Small Business Act (12) and in coherence with the Employment guidelines and the Broad Guidelines for the economic policies of the Member States and of the Union (13), regarding the enabling conditions for job creation.

—

A comprehensive strategy in place which will includes:

—	measures to reduce the time to set up businesses to three working days and the cost to EUR 100;

—	measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise business to three months;

—	actions linking suitable business development services and financial services (access to capital), including the outreach to disadvantaged groups and areas.

8.3.

Modernisation and strengthening of labour market institutions , including actions to enhance transnational labour mobility (14):

—	Labour market institutions are modernised and strengthened in accordance with the Employment Guidelines;

—	Reforms of labour market institutions will be preceded by a clear strategy and ex ante assessment including the gender dimension.

—

Actions to reform employment services, aiming at providing them the capacity to deliver (15):

—	personalised services and active and preventive labour market measures at an early stage, which are open for all jobseekers;

—

—	transparent and systematic information on new job opening accessible at Union level.

—	Reform of employment services will include the creation of networks with employers and education institutes.

8.4.	Active and healthy ageing: Active ageing policies are designed and delivered in accordance with the Employment Guidelines (16)

—	Actions to deliver on active and healthy ageing challenges (17):

—	Relevant stakeholders are involved in the design and implementation of active ageing policies;

—

8.5.	Adaptation of workers, enterprises and entrepreneurs to change: The existence of policies aimed at favouring anticipation and good management of change and restructuring at all relevant levels (national, regional, local and sectoral) (18).

—	Effective instruments are in place to support social partners and public authorities to develop proactive approaches towards change and restructuring.

9.	Investing in skills, education and lifelong learning (Education target) (referred to in Article 9(10)

9.1.	Early school leaving: The existence of a comprehensive strategy to reduce early school leaving (ESL) in accordance with Council Recommendation of 28 June 2011 on policies to reduce early school leaving (19).

—

A system for collecting and analysing data and information on ESL at national, regional and local level is in place that:

—	provides a sufficient evidence-base to develop targeted policies;

—	is used systematically to monitor developments at the respective level.

—

A strategy on ESL is in place that:

—	is based on evidence;

—	prevention, intervention and compensation ;

—	sets out objectives that are consistent with the Council Recommendation on policies to reduce early school leaving;

—	cuts across-sectors, and involves and coordinates all policy sectors and stakeholders that are relevant to address ESL.

9.2.	Higher education: The existence of national or regional for increasing tertiary education attainment, quality and efficiency in accordance with the Communication of the Commission of 10 May 2006 on delivering on the modernisation agenda for universities: education, research and innovation (20).

—

A national or regional for tertiary education is in place that includes :

—

measures to increase participation and attainment that:

—	improve guidance provided to prospective students;

—	increase higher education participation among low income groups and other under-represented groups.

—	increase participation by adult learners;

—	(where necessary) reduce drop-out rates/improve completion rates;

—

measures to increase quality that:

—	encourage innovative content and programme design;

—	promotes high standards of quality in teaching;

—

measures to increase employability and entrepreneurship that:

—	encourage the development of ‘transversal skills’, including entrepreneurship in all higher education programmes;

—	reduce gender differences in terms of academic and vocational choices and encouraging students to choose careers in sectors were they are under represented in order to reduce the gender segregation of the labour market.

—	ensure informed teaching using knowledge from research and developments in business practices.

9.3.	Lifelong learning: The existence of a national and/or regional policy framework for lifelong learning in line with Union level policy guidance (21).

—

A national or regional policy framework for lifelong learning is in place that contains:

—	measures to support lifelong learning (LLL) implementation and skills upgrading and for the involvement of, and partnership with stakeholders, including social partners and civil society associations;

—	measures for the effective provision of skills development for young people in vocational training, adults, women returning in the labour market, low skilled and older workers, and other disadvantaged groups;

—

measures to widen access to LLL including through the effective implementation of transparency tools (European Qualifications Framework, National Qualifications Framework, European Credit system for Vocational Education and Training, European Quality Assurance in Vocational Education and Training) and the development and integration of lifelong learning services (education and training, guidance, validation);

—	measures to improve the relevance of education and training and to adapt it to the needs of identified target groups.

10.	Promoting social inclusion and combating poverty (poverty target) (referred to in Article 9(9) )

10.1.

Active inclusion

—	Integration of marginalised communities such as the Roma:

—	The existence and the implementation of a strategy for poverty reduction.

—

A strategy for poverty reduction is in place that:

—	is based on evidence. This requires a system for collecting and analysing data and information which provides sufficient evidence to develop policies for poverty reduction. This system is used to monitor developments;

—	is in accordance with the national poverty and social exclusion target (as defined in the National Reform Programme), which includes the extension of employment opportunities for disadvantaged groups;

—

—	demonstrates that social partners and relevant stakeholders are involved in the design of active inclusion;

—

—	indicates clearly measures to prevent and combat segregation in all fields.

—	A national Roma inclusion strategy is in place in accordance with the EU Framework for national Roma integration strategies (23)

—

A Roma inclusion strategy is in place that:

—	sets achievable goals for Roma integration to bridge the gap with the general population. These targets should address, as a minimum, the four EU Roma integration goals relating to access to education, employment, healthcare and housing;

—	is coherent with the National Reform Programme;

—	identifies where those disadvantaged or segregated neighbourhoods, where communities are most deprived, using already available socio-economic and territorial indicators (i.e. very low educational level, long-term unemployment, etc).

—

—	includes strong monitoring methods to evaluate the impact of Roma integration actions and a review mechanism for the adaptation of the strategy.

—	is designed, implemented and monitored in close cooperation and continuous dialogue with Roma civil society, regional and local authorities.

—

—	The provision of support for relevant stakeholders in accessing the Funds.

—	Relevant stakeholders are provided support for submitting project applications and for implementing and managing the selected projects.

10.2.

Health: The existence of a national or regional for health ensuring access to quality health services and economic sustainability.

—

A national or regional strategy for health is in place that:

—	Contains coordinated measures to improve access to quality health services;

—	contains measures to stimulate efficiency in the health sector, including through deployment of effective innovative: technologies, service delivery models and infrastructure;

—	contains a monitoring and review system.

—	A Member State or region has adopted a framework outlining available budgetary resources for health care.

11.	Enhancing institutional capacity and efficient public administration (referred to in Article 9(11) )

Member States administrative efficiency:

—	The existence of a strategy for reinforcing the Member Status's administrative efficiency including public administration reform (24)

—

A strategy for reinforcing a Member State's administrative efficiency is in place and in the process of being implemented (25) the strategy includes:

—	an analysis and strategic planning of legal, organisational and/or procedural reform actions;

—	the development of quality management systems;

—	integrated actions for simplification and rationalisation of administrative procedures;

—	the development and implementation of human resources strategies and policies covering competence building and resourcing;

—	the development of skills at all levels;

—	the development of procedures and tools for monitoring and evaluation.

Ex ante conditionalities

General ex-ante conditionalities points 2, 5

Area

conditionality

Criteria for fulfilment

2.	Gender equality

The existence of a strategy for the promotion of gender equality and a mechanism which ensures its effective implementation.

—

Effective implementation and application of a strategy for the promotion of gender equality is ensured through:

—	a system for collecting and analyzing data and indicators broken down by sex and to develop evidences-based gender policies;

—	a plan and ex-ante criteria for the integration of gender equality objectives ;

—	Implementation mechanisms including involvement of a gender body and the relevant expertise to draft monitor and evaluate the interventions.

State aid

The existence of a mechanism which ensures effective implementation and application of EU State aid law

—

Effective implementation and application of EU State aid law is ensured through:

—	institutional arrangements for the implementation, application and supervision of EU State aid law;

—

—	measures to strengthen administrative capacity for implementation and application of EU State aid rules.

Reason

The proposed amendments are intended to trim the text as the Commission proposal seems overly heavy and detailed, particularly the section on criteria for fulfilment.

Brussels, 3 May 2012.

The President of the Committee of the Regions

Mercedes BRESSO

(1) CoR opinion Measuring progress – GDP and beyond (CdR 163/2010 fin).

(2) Ref. EU2020 headline targets.

(3) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Europe 2020 Flagship Initiative Innovation Union (COM(2010) 546 final of 6.10.2010). Commitments 24/25 and Annex I ‘Self assessment tool: Features of well performing national and regional research and innovations systems’. Conclusions of the Competitiveness Council: Conclusions on Innovation Union for Europe (doc. 17165/10 of 26.11.2010).

(4) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Digital Agenda for Europe (COM(2010) 245 final/2 of 26.8.2010); Commission Staff Working Paper: Digital Agenda Scoreboard (SEC(2011) 708 of 31.5.2011). Conclusions of the Transport, Telecommunications and Energy Council on the Digital Agenda for Europe (doc. 10130/10 of 26 May 2010).

(5) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Digital Agenda for Europe (COM(2010) 245 final/2 of 26.8.2010); Commission Staff Working Paper: Digital Agenda Scoreboard (SEC(2011) 708 of 31.5.2011).

(6) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Think Small First - A Small Business Act for Europe (COM(2008) 394 of 23.6.2008); Conclusions of the Competitiveness Council: Think Small First – A Small Business Act for Europe (doc. 16788/08, 1.12.2008); Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions: Review of the ‘Small Business Act’ for Europe (COM(2008) 78 final, 23.2.2011); Conclusions of the Competitiveness Council: Conclusions on the Review of the ‘Small Business Act’ for Europe (doc. 10975/11 of 30.5.2011).

(7) OJ L 48, 23.2.2011, p. 1.

(8) OJ L 327, 22.12.2000, p. 1.

(9) OJ L 327, 22.12.2000, p. 1.

(10) OJ L 312, 22.11.2008, p. 3.

(11) Council Recommendation (2010/410/EU) of 13 July 2010, OJ L 191, 23.07.2010, p. 28.

(12) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Think Small First - A Small Business Act for Europe (COM(2008) 394 of 23.6.2008); Conclusions of the Competitiveness Council: Think Small First – A Small Business Act for Europe (doc. 16788/08, 1.12.2008); Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions: Review of the ‘Small Business Act’ for Europe (COM(2008) 78 final, 23.2.2011); Conclusions of the Competitiveness Council: Conclusions on the Review of the ‘Small Business Act’ for Europe (doc. 10975/11 of 30.5.2011).

(13) Council Recommendation (2010/410/EU) of 13 July 2010, OJ L 191, 23.07.2010, p. 28.

(14) If a country specific Council Recommendation is in place, directly linked to this conditionality provision, then the assessment of its fulfilment will take account of the assessment of progress made on the fulfilment of the country specific Council Recommendation.

(15) Deadlines for delivery on all elements here contained may be during the programme implementation period.

(16) If a Country Specific Council Recommendation is in place, directly linked to this conditionality provision, then the assessment of its fulfilment will take account of the assessment of progress made on the fulfilment of the country specific Council Recommendation.

(17) Deadlines for the achievement of delivery on all the elements contained in that section may be set during the programme implementation period.

(18) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – A shared commitment for employment – COM(2009)257 Final.

(19) OJ C 191, 1.7.2011, p. 1.

(20) COM (2006) 208 final [(To be replaced by the forthcoming Communication by the end of September 2011)].

(21) Council conclusions of 12 May 2009 on a strategic framework for European cooperation in education and training (‘ET 2020’) (2009/C 119/02).

(22) Commission Recommendation of 3 October 2008 on the active inclusion of the people excluded from the labour market (OJ L 307, 18.11.2008, p. 11).

(23) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: An EU framework for National Roma Integration Strategies up to 2020. COM(2011) 173.

(24) If a Country Specific Council Recommendation is in place, directly linked to this conditionality provision, then the assessment of its fulfilment will take account of the assessment of progress made on the fulfilment of the Country Specific Council Recommendation.

(25) Deadlines for the achievement of all the elements contained in this section may expire during the programme implementation period.

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