European Union Regional Policy Employment, Social Affairs and Inclusion. EU Cohesion Policy Proposals from the European Commission
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1 EU Cohesion Policy Proposals from the European Commission 1
2 Legislative package The General Regulation Common provisions for cohesion policy, the rural development policy and the maritime and fisheries policy Common provisions for cohesion policy only (ERDF, CF, ESF) Fund specific regulations ERDF regulation CF regulation ESF regulation ETC regulation EGTC regulation 2
3 Building Blocks Financial Framework and co-financing rates Strategic approach Conditionalities and performance Programming Territorial development Financial instruments Monitoring, evaluation and indicators, information and communication Conditions of assistance, including simplified costs Management and control and financial management Scope, thematic concentration in ERDF and CF regulations Scope, thematic concentration in ESF regulation European territorial cooperation Comitology, etc. 3
4 Block 1 Objectives, Financial Framework and cofinancing rates (mainly cohesion policy specific provisions) Articles of CPR Article 53 of CPR Article 22 of CPR Articles of CPR 4
5 Mission and Goals Mission of EU cohesion policy to reduce disparities between Europe's regions strengthening economic, social and terrritorial cohesion in line with article 174 of the Treaty to contribute to the Union Strategy of smart, sustainable growth Two goals: Investment for growth and jobs European Territorial cooperation 5
6 Budget for Cohesion Policy post 2013 billion EUR (2011 prices) Cohesion Fund* 68.7 Less developed regions Transition regions 39.0 More developed regions 53.1 Territorial Cooperation 11.7 Extra allocation for outermost and northern regions 0.9 TOTAL** Connecting Europe facility for transport, energy and ICT TOTAL *Cohesion Fund will ringfence 10 billion EUR for the new Connecting Europe Facility **Includes 2,5 billion EUR allocation for food for deprived persons 6
7 Geographical coverage of support Three categories of regions Less developed regions (GDP per capita < 75% of EU average) Transition regions (GDP per capita between 75% and 90%) More developed regions (GDP per capita > 90%) The new category of transition regions replaces the current statistical phasing-out and phasing-in regions Why a new category for transition regions? Fairer system for regions with similar level of economic development Helps to soften the transition between less and more developed regions Safety net for regions whose GDP per capita is below 75% of the EU average in
8 8
9 Cohesion Fund for Member States with GNI per capita <90% Investments in the fields of environment and trans- European transport Networks On the basis of latest GNI figures, Greece and Cyprus will benefit from phasingout of Cohesion Fund 9
10 Financial support from the Funds Maximum co-financing rates at the level of the priority axis: 85 % for the Cohesion Fund 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 80% for the less developed regions in Member States eligible for the transitional regime of the Cohesion Fund on 1 January % for the less developed regions in Member States other than those mentioned above 75% for all regions whose GDP per capita for the 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 % for other transition regions 50 % for the more developed regions (apart from those whose GDP per capita was less that 75% of EU average in ) 75% for European Territorial Cooperation 10
11 Block 2 Strategic approach (common provisions for the CSF Funds) Articles 3-15 of CPR 11
12 Common Principles for all Funds (1) Strengthening partnership and multi-level governance Introduction of a binding European Code of conduct Sets out objectives and criteria to support the implementation of partnerships Facilitates sharing of information and good practices among Member States Compliance with Union and national law 12
13 Common Principles for all Funds (2) Reinforcement of gender equality and non-discrimination: Horizontal principle of the regulations Specific actions in OPs, covered by ex-ante evaluation Opinion of the national equal opportunities body on the OPs Project selection Followed up in reporting Promoting sustainable development Horizontal principle of the regulations Specific actions in OPs, covered by ex-ante evaluation Project selection Followed up in reporting Tracking of expenditure for climate change objectives 13
14 Thematic Objectives to Deliver Europe 2020 Strengthening research, technological development and innovation Enhancing access to, and use and quality of, information and communication technologies Enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF) Supporting the shift towards a low-carbon economy in all sectors Promoting climate change adaptation, risk prevention and management Protecting the environment and promoting resource efficiency Promoting sustainable transport and removing bottlenecks in key network infrastructures Promoting employment and supporting labour mobility Promoting social inclusion and combating poverty Investing in education, skills and lifelong learning Enhancing institutional capacity and an efficient public administration 14
15 Strengthening the Strategic Approach Common Strategic Framework Partnership contract Operational Programmes 15
16 Common Strategic Framework Sets a comprehensive investment strategy for all the funds, including rural development and maritime and fisheries policies Translates the thematic objectives into key actions for Member States and regions Establishes priority areas for cooperation activities Ensures better coherence and consistency with the National Reform Programmes 16
17 Partnership Contract Prepared at national level with close involvement of partners Agreed between the Commission and Member State, includes: The contribution of the CSF Funds towards the achievement of thematic objectives Specific objectives and corresponding indicators that translate Europe 2020 priorities in a national and/or regional context An integrated approach for territorial development supported by the CSF Funds Arrangements for effective implementation: involvement of partners, ex-ante conditionalities, performance framework, additionality Arrangements for efficient implementation: administrative capacity, administrative burden reduction 17
18 Adoption and amendment of the partnership contract The Commission shall assess the consistency of the Partnership Contract with the CPR, with the Common Strategic Framework, and 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 evaluations of the programmes The Commission shall adopt a decision approving the Partnership Contract within 6 months of its submission If the Common Strategic Framework is revised, the Member States shall propose amendments, where necessary, to their Partnership Contract and programmes to ensure their consistency with the revised Common Strategic Framework 18
19 Block 3 Conditionalities and performance (common provisions for the CSF Funds) Articles 17, of CPR and Annex IV Articles 18, 19 of CPR and Annex I 19
20 Ex-ante conditionality Conditions to be fulfilled prior to submission of Partnership Contracts and operational programmes Directly related to the thematic objectives or horizontal conditions of effectiveness Specified criteria for fulfilment defined in annex IV of CPR Conditionalities must be fulfilled within two years of the approval of the Partnership Contract or by end of 2016 Non-fulfilment of conditionalities at the time of the adoption of the programmes or by the deadline outlined above constitutes a basis for suspension of payments 20
21 Regulation: Thematic and horizontal ex-ante conditionalities set out in the Regulation Preparation of programming documents: Member States undertake a self-assessment verifying whether the ex-ante conditionality criteria have been met. Conditionality respected: Draft programmes explain that no further action needs to be taken Partially respect: Draft programmes lay down commitments for fulfilment Not respected: Draft programmes lay down commitments for fulfilment, payments could be made only upon fulfilment Submission of programming documents: The results of the self-assessment and commitments are included in the draft programmes. Negotiation and agreement on commitments: The agreed commitments are set out in the programmes and synthesised in the Partnership Contract. 21
22 Reinforced macroeconomic conditionality for the Funds Closer link between cohesion policy and the economic governance of the Union in two areas: Council recommendations The broad economic guidelines, the employment guidelines as well as the Eurozone-specific measures The excessive deficit procedure The macroeconomic imbalances procedure Union financial assistance to a Member State under the European financial stabilisation mechanism under the facility providing medium-term financial assistance for Member States' balances of payments in the form of an ESM loan 22
23 Amendment of programmes and partnership contracts Commission may request or propose amendments to the Partnership Contract and relevant programmes where it is necessary to: support the implementation of Council recommendations maximise the impact of the funds where the Member State receives financial assistance from the EU Commission can suspend payments where Member State fails to react to Commission requests or observations within the established deadlines 23
24 Specific provisions linked to adjustment programmes Where a Member State receives Union financial assistance linked to an adjustment programme, the Commission may amend the Partnership Contract and the OPs without a proposal by the Member State In this case the Commission will become directly involved in the management of the programmes 24
25 Automatic suspension of payments The Commission shall suspend part or all of payments and commitments where: the Council decides or concludes that a Member State: does not comply with measures set out by the Council in relation to the economic policy guidelines for Eurozone members has not taken effective action to correct its excessive deficit has not taken the necessary measures to correct macro-economic imbalances it concludes that the Member State has not taken measures to implement the adjustment programme and decides not to authorise the disbursement of the financial assistance granted to this Member State 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 25
26 Application and lifting of suspension When deciding to suspend part or all of the payments or commitments the Commission shall ensure that the suspension is: proportionate and effective, takes into account the economic and social circumstances of the Member State concerned, and respects the equality of treatment between Member States, in particular with regard to the impact of the suspension on the economy of the Member State concerned. All suspensions shall be lifted without delay when the underlying cause for suspension has been addressed 26
27 Performance framework Focuses on the achievement of programme objectives Sets out milestones and targets for performance of programme priorities for 2016, 2018 and 2022 Milestones established for 2016 shall include financial indicators and output indicators Milestones established for 2018 shall include financial indicators, output indicators and where appropriate, result indicators Milestones may also be established for key implementation steps 27
28 Performance review The performance framework shall constitute the basis for the performance review in 2017 and 2019 and the disbursement of the performance reserve Information for the performance review is drawn from the progress reports Member States are expected to react to significant shortfalls in the achievement of milestones (measures to improve performance, reprogramming) In the absence of sufficient action, Commission can suspend payments Significant failure to achieve the targets set for 2022 in the performance framework can lead to a financial correction at the end of the programming period 28
29 Performance reserve A performance reserve of 5% is set aside at the beginning of the programming period (exception for ETC) The performance reserve is established per CSF Fund, per Member State and per category of region The 5% reserve is allocated to each Member State following the performance review in 2019 Allocation can only be used for priority axes where performance has been satisfactory (milestones have been achieved) based on Member State proposal 29
30 Block 4 Programming (both common and specific provisions) Articles of CPR Articles of CPR Articles 51 and 52 of CPR Articles 108 and 109 of CPR Articles 6-12 of the ESF Regulation 30
31 Programming Common provisions on preparation, adoption and amendment, as well as on the shared elements of the content Specific provisions on the content of operational programmes under cohesion policy: Strategy for smart, sustainable and inclusive growth Description of priority axes Contribution to territorial development Arrangements to ensure effective implementation Financing plan Implementing provisions Specific actions (related to horizontal principles) Operational programmes submitted shall be accompanied by the ex-ante evaluation 31
32 Adoption and amendment of operational programmes 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 countryspecific 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 Commission shall adopt a decision approving the operational programmes within 6 months of its submission Any amendment to an operational programme shall be duly substantiated and shall set out the expected impact of the amendment. Where necessary the Commission will amend the Partnership Contract at the same time with the amendment of the operational programme 32
33 Reinforcing Integrated Programming Integrated programme approach The Common Strategic Framework at EU level and the Partnership Contract at national level covering all the CSF Funds Possibility for Member States to prepare and implement multifund programmes combining ERDF, ESF and the Cohesion Fund 33
34 Major projects A coherent approach focusing on: realistic planning the preparation of the project pipeline monitoring and regular reporting threshold maintained Clear information requirements Major projects submitted must correspond to the list in the operational programme Limiting the scope of Commission appraisal Expenditure can be declared only upon approval of the major project by the Commission 34
35 Joint actions plans Optional approach operations implemented and financed based on outputs and results agreed between the Member State and the Commission JAP adopted by the Commission, based on a proposal by the Member State Negotiation on: Outputs and results necessary to reach an objective such as an education reform Pricing of outputs and results based on lump sums and standard scales of unit costs Payments correspond to the achievement of «milestones» Control of outputs and results, not expenditure by the beneficiary Flexibility of financial management practices at beneficiary level 35
36 Block 5 Territorial development (common and specific provisions) Articles of CPR Articles 99 of CPR Articles 7-11 of the ERDF Regulation 36
37 Reinforcing community-led local development Integrated approach to community-led local development Facilitates integrated investment by small communities including local authorities, NGOs, and economic and social partners Integrated local development strategies Local action groups to design and implement these strategies Integrated approach and common rules = can be financed jointly from ERDF, ESF, EAFRD and EMFF 37
38 Reinforcing Territorial Cohesion Focus on sustainable urban development At least 5% of the ERDF resources to be allocated to integrated actions for sustainable urban development Creation of an urban development platform To promote capacity-building and networking between cities and exchange of experience on urban policy at EU level Adoption of a list of cities to participate in the platform Support for innovative actions in the field of sustainable urban development - Subject to a ceiling of 0,2% of the annual funding Integrated territorial investments Investments under one or more Operational Programmes can take the form of integrated territorial investments Adressing 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 contribution highlighted in the content of each OP 38
39 Block 6 Financial instruments (common provisions for the CSF Funds) Articles of CPR Article 15 of the ESF Regulation 39
40 Financial Instruments (1) Common rules for cohesion policy, the rural development policy and the maritime and fisheries policy Clarification of implementation rules Reinforcement of legal certainty Extension of the present scope of financial instruments Simplification of access to instruments such as JEREMIE, JESSICA and JASMINE 40
41 Financial Instruments (2) Necessity for an ex ante assessment which has identified market failures or suboptimal investment situations, and investment needs Combination with grants, interest rate subsidies and guarantee fee subsidies Combination with other financial instruments Eligibility of in-kind contributions in limited circumstances 41
42 Financial Instruments (3) Options for set-up: 1) EU level platforms 2) Financial instruments established by the Member States complying with standard terms and conditions laid down by the Commission (standard models) 3) Financial instruments of specific design established by Member States Support may be given by: Investment in the capital of legal entities Entrusting implementation tasks to the EIB, international financial institutions or a body selected in accordance with applicable Union and national rules Direct implementation by the managing authority (for loans and guarantees only) 42
43 Financial Instruments (4) Special management and control provisions for instruments set up at EU level Special provisions for financial management: more flexible co-financing arrangements the 2 year rule clarification of eligible expenditure at closure re-use of resources until closure the use of legacy resources specific reporting requirements (deadlines aligned with annual reports on implementation) 43
44 Block 7 Monitoring, evaluation and indicators Information and communication (both common and specific provisions) Articles of CPR Articles of CPR Article 6 and Annex of ERDF Regulation Article 4 and Annex of CF Regulation Article 5 and Annex of the ESF regulation Article 15 and Annex ETC Regulation Articles and Annex V of CPR 44
45 A Focus on Results: Indicators Fund Specific Common Indicators Common output and, where appropriate, result indicators Fund specific rules on baselines, targets and reporting Programme Specific Indicators Output indicators, where appropriate Result indicators related to the priority axis 45
46 A Focus on Results: Monitoring & Reporting (1) Lighter annual reports on implementation: Information of financial progress and indicators Actions to fulfil ex-ante conditionalities Issues which affect the performance of the programme Information on the implementation of major projects and JAPs Thorough information and analysis of all the elements of the OP required only in 2017, 2019 and for the final report 46
47 A Focus on Results: Monitoring & Reporting (2) Financial data to be submitted electronically 4 times a year: the total and public eligible cost of the operations and the number of operations selected for support the total and public eligible cost of contracts or other legal commitments entered into by beneficiaries in implementation of operations selected for support the total eligible expenditure declared by beneficiaries to the managing authority A progress report (at national level) common for the CSF Funds to be submitted in 2017 and 2019 content corresponds to that of the Partnership Contract 47
48 A Focus on Results: Evaluation (1) Ex-ante evaluation: Justification for selected thematic objectives contributing to EU2020 & consistency, relevance and realism of indicators, targets & financial allocations Monitoring and evaluation capacities and appropriate data collection arrangements Milestones for performance framework 48
49 A Focus on Results: Evaluation (2) Evaluation during the programming period: Evaluation plan obligatory to be adopted by first Monitoring Committee More evaluation of the effects of interventions (impact) Implementation evaluations when necessary Synthesis report of evaluations by MS in 2020 Ex-post evaluation by the Commission 49
50 Information and Communication Rules on information and communication is part of main regulation 7 year strategy with yearly updates (no Commission approval, Monitoring Committee adoption) List of operations with comparable information Single national website/portal for all programmes Designation of national information officers Networks to ensure exchange of experience and good practice 50
51 Block 8 Conditions of Assistance (common provisions for the CSF Funds) Articles of CPR Articles of CPR Articles 13 and 14 of the ESF Regulation 51
52 Revenue generating operations Review of the rules on revenue generation Member States can choose between: The current approach based on the funding gap analysis; A new approach based on application of a flat rate revenue percentages established at EU level for different types of operations Where revenue cannot be determined in advance, the net revenue must be deducted retrospectively Maintaining current exemptions (for all ESF operations, and operations under EUR 1 million, state aid and financial instruments) to ensure a proportionate approach 52
53 Changes in eligibility rules (1) An operation may receive support from one or more CSF Funds and from other Union instruments, provided that the expenditure item included in a request for payment for reimbursement by one of the CSF Funds does not receive support from another Fund 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 Operations shall not be selected for support by the CSF Funds where they have been physically completed or fully implemented before the application for funding under the programme is submitted by the beneficiary to the managing authority 53
54 Changes in eligibility rules (2) In the case of repayable assistance, the support repaid to the body that provided it, or to another competent authority of the Member State, shall be kept in a separate account and reused for the same purpose or in accordance with the objectives of the programme As a rule, VAT is not eligible. 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 54
55 Changes in eligibility rules (3) Eligibility of operations depending on their location Operations supported by the CSF Funds shall be located in the area covered by the programme under which they are supported Exemptions subject to conditions: benefit to the programme area ceiling of 10% at the level of a priority axis Monitoring Committee approval fulfilment of management, control and audit obligations Only promotional activities may be financed outside the Union Provisions do not apply to ETC and ESF 55
56 Reimbursement options Grants may take the following forms: reimbursement of eligible costs actually incurred and paid, together with, where applicable, in-kind contributions and depreciation; standard scales of unit costs; lump sums not exceeding EUR of public contribution; flat-rate financing, determined by the application of a percentage to one or several defined categories of costs. The Member State may choose which option to use - exception for ESF grants < EUR: only simplified costs are allowed 56
57 Simplified costs (1) Simplified costs can be established on the basis of: a fair, equitable and verifiable calculation method based on: statistical data or other objective information; or the verified historical data of individual beneficiaries or the application of their usual cost accounting practices; methods and corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary; methods and corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary; rates established by the CPR or the Fund-specific rules (no methodology required). 57
58 Simplified costs (2) Rates established at EU level shall include: A flat rate for indirect costs (all CSF Funds) - up to 15 % of eligible direct staff costs For ETC - staff costs up to 15 % of the direct costs other than the staff costs of that operation. For ESF: scales of unit costs / lump sums established by the Commission 40% flat rate of direct personnel costs to calculate the amount of all the other eligible costs. The rates established at EU level will not need to be justified by analysis at national or regional level 58
59 Durability Durability affected when an operation undergoes: a cessation or relocation of a productive activity; a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage; or a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives. Clarification of situations where exemptions apply ESF, operations other than infrastructure and productive investment, financial instruments and non-fraudulent bankruptcy 59
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