YOUTH EMPLOYMENT INITIATIVE

Transcription

1 YOUTH EMPLOYMENT INITIATIVE RELEVANT PROVISIONS IN THE LEGISLATION Regulation Common Provisions Regulation 1 European Social Fund Regulation Articles Article 20 Performance Reserve Article 25 - Procedure for adoption of programmes Article 65 Eligibility Article 91 - Resources for economic, social and territorial cohesion Article 92 - Resources for the Investment for growth and jobs goal and for the European territorial cooperation goal Article 104 Scope (Joint Action Plan) Article Technical assistance of the Member States Article Determination of co-financing rates Annex III - Provisions for determining the scope and the level of suspension of commitments or payments referred to in Article 23(11) Annex VI - Annual breakdown of commitment appropriations for 2014 to 2020 Annex VII - Allocation methodology Annex VIII - Methodology concerning the specific allocation for the YEI referred to in Article 91 Article 1 Article 3(1)(a)(ii) Article 5 Chapter IV (Articles 16-23) Youth Employment Initiative Annex I ESF Common indicators Annex II Result Indicators for the YEI BACKGROUND The Council adopted a Recommendation on establishing a Youth Guarantee in April Member States committed to ensure that all young people aged up to 25 receive a good quality offer of employment, continued education, an apprenticeship or a traineeship within four months of leaving formal education or becoming unemployed. Setting up a Youth Guarantee scheme represents a long-term structural reform and a positive investment in the future of young people and the economy. The design and implementation of a national Youth Guarantee scheme requires a firm commitment over time and substantial budgetary support in the mid- to long-term. In addition to national efforts, Member States can draw on support from the European Social Fund (ESF) and the resources of the Youth Employment Initiative (YEI) during the next multiannual financial framework for Further to the Council Recommendation on establishing a Youth Guarantee, applicable to all 28 Member States, the implementation of Youth Guarantee schemes is also referred to in a number of Country Specific Recommendations (CSRs) made in the context of the 2013 European Semester. Progress towards the implementation of the Youth Guarantee 1 Only articles making direct reference to the YEI have been listed

2 Recommendation by Member States will continue to be monitored through the European Semester also in 2014 and subsequent years. The YEI resources will comprise of EUR 3.2 billion 3 from a specific EU budget line dedicated to youth employment (also referred to as the specific allocation for the YEI), as well as at least EUR 3.2 billion from the ESF national allocations (also referred to as corresponding ESF support). Member States are also required to provide funds as national cofinancing to the ESF part. Where this guidance note refers to the YEI, the Initiative or the YEI resources, this includes all 3 sources of financing described above. The Initiative will provide financial support to the Member States worst hit by youth unemployment, as it is allocated to the regions that have youth unemployment rates (YUR) of more than 25% in 2012 and, for Member States where the YUR has increased by more than 30% in 2012, NUTS level 2 regions that have YUR of more than 20% in (Art. 16 ESF Regulation). The YEI will finance measures that directly help young people not in employment, education or training (NEETs) (see also further below). It will be implemented as part of the Investment for Growth and Jobs Goal. TARGET GROUP OF THE YEI In this regard, there are two relevant aspects: on the one hand the eligibility of YEI participants (from a legal point of view) and on the other hand which participants should YEI aim to target as a priority (from a policy perspective). Who is eligible for YEI? From the outset, the YEI has been intended as a financial resource providing concentrated support to young persons in Europe's regions that were worst affected by youth unemployment 4, namely those young persons that are not in any employment, education or training activity (NEET). 5 According to article 16 ESF Regulation, the YEI shall target "all young persons under the age of 25 not in employment, education or training, residing in eligible regions, who are inactive or unemployed including the long term unemployed, and whether or not registered as seeking work." On a voluntary basis, MS may decide to extend the target group to include young persons under the age of 30". The YEI will support, inter alia, the implementation of the Youth Guarantee Council Recommendation (Recital 11 ESF Regulation). In light of the above, from a legal point of view, no specific definition of NEET is stipulated in the YEI legal base. Therefore, in line with Art. 65 CPR MS may decide on the national rules on eligibility for the YEI, but should ensure that the YEI participants they consider as eligible (in line with art. 65 CPR) fall within the YEI target group as defined in art.16 ESF Regulation. 3 Figures are presented in current prices. 4 See also COM(2013) 144 final 5 A detailed analysis on the situation of NEETs in the EU is available in the Commission Staff Working Document accompanying the proposal for a Council Recommendation on establishing a Youth Guarantee, SWD(2012) 409 final. See in particular pages

3 The definition of the NEET target group that the MS will apply should be clearly stipulated in the Operational Programmes or the selection criteria for the YEI operations. Whom should the YEI target as a matter of policy priority? It should be noted that the YEI is intended to enhance the support the ESF already provides for wider groups of young people by ensuring that YEI targets young persons who would not normally be receiving any employment or education support. From a policy perspective, the objective is to ensure that YEI provides good quality offers, i.e. packages of interventions that would facilitate the person's transition to the labour market, by achieving the targets set under the result indicators as listed in Annex II of the ESF Regulation. Respectively, Member States should ensure adequate financial support per person targeted. It should be noted that clearly, in no MS would the YEI resources alone be sufficient to provide a Youth Guarantee offer to each and every young person NEET. The question then arises: on the basis of the much wider pool of potentially eligible persons as outlined/defined above, how the MS should select and prioritise the actual YEI participants and where it should put the focus. The MS could choose to target a mix of more- or less- educated NEETs including those leaving education without qualifications, harder and easier- to reach participants, including disadvantaged persons and those from marginalised communities (as such, the NEETs are a heterogeneous category). The YEI target group is expected to also include inactive persons who are not involved in any education or training activities 6. Borderline cases of young people who are unemployed but are also participating in training on the side (e.g. evening classes) may also enter that group. The MS can choose how to constitute this target group mix. Identifying the target population The YEI can only target young persons aged under 25 years, or where the MS chooses, persons aged under 30 years. Where the latter is the case, an explanation in the OP (needs analysis section) will be expected, to motivate this choice. In order to ensure compliance with the age limit requirement, the participants should meet the age criterion at the moment of entering the YEI operation. Member States will themselves have to identify the information sources about potential participants in YEI interventions the act of registration with the PES could be one such source (and in the case of hard-to-reach group, this registration would typically follow after social and motivation work to get the person to register activities which inter alia can be funded through other ESF operations) 7. School system records for the purpose of monitoring 6 "Inactive, not in education or training" does not exclude young people with a higher education but encompasses persons currently not part of the labour force (in the sense that they are not employed or are unemployed and not participating in education or training at the moment of being inactive). The definitions of the common indicator inactive, not in education or training is set out in the EC guidance on ESF monitoring and evaluation. 7 It is important to remember that young people not registered at a PES also fall under the scope of the Youth Guarantee. The Youth Guarantee applies to all young people below 25. Those who are not registered with the PES, or who registered prior to the introduction of the Youth Guarantee Scheme should not be at a disadvantage 3

4 early school leaving (absenteeism) could be another tool to screen and identify the target group for YEI activities. As the YEI can support NEETs 8 who can be unemployed (definition of corresponding common indicator given in Annex of the EC guidance on ESF monitoring and evaluation), it should be noted that the national arrangements in a number of MS allow for registered unemployed persons to also be involved in certain types of education or training activities of limited duration, such as part-time studies. Where this is the case, some of the YEI participants may fall into the category of unemployed participants while also being involved in part-time education and training activities, thus also falling within the YEI target population. Full-time students are excluded from YEI support. The NEET eligible target population for YEI actions will have to be residing in the YEI eligible regions. Regarding establishing the residence status Member States could draw on local or national residence registers or other relevant sources. It should be noted that the geographical location of YEI activities can be in other regions or even MS, if it benefits a NEET residing in an eligible region at the start of the operation. In other words, it is not compulsory of the participant in a YEI operation to stay in the region they are residents of, especially in the context of job and training mobility measures. PROGRAMMING OF THE YEI MS can only programme the YEI measures under the investment priority on NEET (Article 3 (1)(a)(ii) - Sustainable integration into the labour market of young people, in particular those not in employment, education or training, including young people at risk of social exclusion and young people from marginalised communities, including through the implementation of the Youth Guarantee. All YEI resources should be programmed under this investment priority. In addition, this investment priority can also be used for programming ESF funds outside the YEI, including for regions that do not qualify for the YEI. The YEI resources are integrated within the programming of the ESF. The YEI can be programmed in the following ways: - A dedicated operational programme - A dedicated priority axis - A part of one or more priority axes. with respect to those already registered. It is on to the MS to ensure this balanced approach among the target population for YEI. 8 There is a Eurostat definition of young persons neither in employment, education or training (NEET). This definition has been agreed by the Employment Committee (EMCO) in April 2010 for use in the context of the Europe 2020 Integrated Guidelines. This definition of NEET includes: - Unemployed persons (according to ILO definition) not in any education and training; - Inactive persons (ILO definition) not in any education and training. "Not employed" includes both unemployed and inactive, with "not in any education or training" meaning that persons who are employed and/or follow formal or non-formal education are not considered to be NEET. It is important to note, however, that from a policy perspective, the Eurostat NEET definition may be too restrictive. If Member States decided to apply this definition in the context of YEI actions, it may prove difficult for them to ensure compliance of all YEI participants with the definition (e.g. certifying that a person who is registered as unemployed has not followed any training during the 4 weeks preceding the YEI) and/or could lead to undesirable exclusion of certain young people from YEI support 4

5 Where the YEI is implemented through a dedicated priority axis, this implies that the priority axis is composed only of the specific allocation for the YEI and the ESF corresponding support. Where the YEI is implemented as part of a priority axis, this entails a priority axis where the specific allocation for YEI and the ESF corresponding support are programmed as a separate part within a priority axis which also includes additional funding outside of YEI. A dedicated YEI OP would consist exclusively of dedicated YEI priority axes, with the exception of a possible technical assistance priority axis, which can not be financed by YEI and should be financed solely by technical assistance resources from the ESF. Art. 25 of the CPR contains a derogation with regard to dedicated YEI Operational programmes which may be approved by the Commission before the formal submission of the Partnership Agreement. This derogation, together with the frontloading of the resources from the YEI dedicated budget line (for which no national co-financing is required) and the earlier start of eligibility for the YEI (expenditure under the YEI shall be eligible as from 1 September 2013) constitute a set of measures intended to promote the swift implementation of the YEI. Each programming option has merits, depending on the MS context and the financial volume that the YEI entails in that MS. For the major YEI beneficiary countries a more consolidated approach to programming is encouraged (a dedicated priority axis or operational programme). MS should consider what would be the best arrangements that would provide for quick results from YEI investments (possibly not scattering the YEI too much across OPs). WHAT ACTIONS DOES THE YEI SUPPORT? The ESF Regulation does not specify which activities are eligible under the YEI. However, there is a clear link to the Youth Guarantee Recommendation made in recital 11 of the ESF Regulation. This together with the result indicators for the YEI in Annex II of the ESF Regulation provide a clear focus on the integration to be achieved through quality interventions directly on the target group. The YEI (meaning both the resources from the dedicated budget line, the corresponding ESF support and its national co-financing) supports directly individuals, and not structures or systems. Thus, with regard to the link between YEI and Youth Guarantee schemes, the YEI can financially support only certain aspects of the implementation of Youth Guarantee schemes, namely actions targeting the direct provision of jobs, apprenticeships, traineeships, or continued education for the target group in the YEI eligible regions. Therefore, the focus is on providing YEI-targeted individuals with pathways/packages of measures with the objective of active labour market integration, thus putting the individual and his/her needs at the core of the intervention and tailoring the interventions accordingly. Under YEI each individual would receive an appropriate range of interventions and ultimately an offer of employment and/or continued education and training, a traineeship or an apprenticeship. Interventions/actions should thus be aimed at the sustainable activation of the target group. Furthermore, as mentioned above, the design of the interventions should be guided by the goal of achieving the targets YEI under the result indicators as listed in Annex II of the ESF Regulation. Typical examples of YEI-supported interventions as part of an individual plan/pathway could include: 5

6 Provision of traineeships and apprenticeships Provision of first job experience Reduction of non-wage labour costs Targeted and well-designed wage and recruitment subsidies Job and training mobility measures Start-up support for young entrepreneurs Quality vocational education and training courses Second chance programmes for early school leavers The examples of actions above are in line with the interventions on young persons referred to in the Recommendation on Establishing a Youth Guarantee 9. The YEI will therefore be a key financial instrument to support the implementation of the relevant actions set out in the national Youth Guarantee Implementation Plans of all YEI eligible Member States. As regards eligible cost items under YEI, these are the same as those that are typically supported by ESF (training fees, equipment, stipends and scholarships, relocation allowance, hiring costs, etc.). However, the objective and the context of the design of the YEI interventions are of utmost importance and should directly be linked with the results concerning the person targeted (see above). With regard in particular to wage subsidies, these are eligible under the ESF Regulation and indeed are often applied in a number of Member States as a measure for labour market integration and providing access to employment and social inclusion. However, from a policy perspective, wage subsidies should be temporary and well-targeted, in view of aiming to achieve sustainable labour market integration as part of an overall policy approach (as opposed to short-term and isolated, piecemeal projects). Wage or other types of recruitment subsidies are expensive measures: this means that they need to be designed in the most efficient and effective way from the outset. It should be noted that recruitment subsides are state-aid relevant and thus when designing recruitment subsidies, Member States must take State Aid Regulations into consideration. 10 WHAT ACTIONS IS YEI EXPECTED NOT TO SUPPORT? Structural measures to reform the PES to better assist NEETs would not be funded under YEI (recital 11 of the ESF Regulation states that YEI will support actions targeted towards individuals and not systems reforms). The latter can of course be supported by the ESF outside YEI, by programming the respective measure under the relevant IP, e.g. Modernising labour market institutions. The YEI should not be focused on simply supporting isolated operations that do not feed into an individual, tailor-made plan for the YEI participant. Such operations should be avoided as these may not be relevant or sufficiently tailored to the needs of the participants. Likewise, similar to ESF interventions, operations that in themselves exclusively consist of passive financial transfers into the participants' accounts, e.g. setting up an emergency income support fund to help young persons meet their monthly living expenses, cannot be considered as measures that the YEI can support. Such operations would not stand the test for being 9 OJ C 120/01, See: 6

7 tailored to the needs of the participants 11. Second, such operations could not be directly linked to results for the target group, from the perspective of the YEI result indicators. As a matter of principle, any passive measure should always be combined with an active measure. Furthermore, income support measures should be exceptional (as has been the case at the height of the recent economic crisis) and limited in duration to the length of the activation measure. The Member State would have to demonstrate why these passive measures need to be combined with the active measures and are considered as having a direct impact on the activation of the participant. YEI RESOURCES The annual breakdown of the specific allocation for the YEI per Member State will be set out in the Commission decision referred to in art. 91(2) of the CPR, which will also specify the global resources for each MS for the Investment for Growth and Jobs Goal and resources for the European Territorial Cooperation Goal. The decision will also include the list of eligible regions under the YEI for each Member State, but will not provide allocations at regional level. Member States have the discretion of allocating the funds between the eligible regions. However, there are several issues, which should be taken into account: - While Member States are free to allocate the funds at regional level, the proposed distribution should be based on objective criteria, including, where appropriate, through the use of data from an official data source. - The resources from the specific allocation for the YEI should be at least matched by the same amount of ESF funds (Art. 22 (1) ESF Regulation). Member States are encouraged to include additional ESF resources as part of the YEI, particularly if they extend the YEI target group to young people under the age of 30 or include additional sub-regions within the scope of the YEI. In this way the available resources per person are not reduced as a result of the extended target group. - While the specific allocation for the YEI is not allocated by category of region, the ESF resources are. Art. 23 of the ESF Regulation contains a specific mechanism for the reimbursement of the YEI (described in detail below) based on an automatic allocation of the ESF support by category of region based on a pre-defined ratio. Such a mechanism implies the intention of the legislator to allow Member States to implement the YEI without breaking down the resources actually invested by category of region. - During the programming stage Member States have to ensure that for each YEI (part of) priority axis the corresponding ESF support comes from the category(ies) of the YEI target regions. - When regions from different categories are grouped in a single (part of) priority axis, the share of the foreseen ESF matching support for each category of regions should be consistent with the national allocation methodology and should correspond to the share of YEI funds, which the Member State wants to allocate to each category of regions. However, once the resources of the YEI (part of) priority axis have been fixed, they can be spent on activities targeting eligible young people residing in any of the eligible 11 Note that the NEET group is diverse and ranges from socially disadvantaged persons with no education background to persons with university degree. 7

8 regions targeted by the priority axis without taking into account the origin of the ESF matching support across the different categories of regions. Example: A Member State has 3 regions, eligible for the YEI 1 less developed and 2 more developed. The YEI will be implemented through a dedicated priority axis. The national methodology for allocating the specific allocation for the YEI foresees that 35% of the YEI should be allocated to the less developed region, 45% to one of the more developed regions and 20% to the other more developed region. In this case 35% of the corresponding ESF support should come from ESF (less developed regions) and 65% should be from ESF (more developed regions). However, as regards the amounts actually spent and a fortiori the number of persons targeted in these regions, this ratio (35%/65%) does not necessarily have to be followed. - The MFF commitments for the YEI specific allocation are frontloaded over the first two years of the programming period, 2014 and 2015, instead of over the full cycle. The split between the two annual commitments for each Member State will be provided for in the Commission decision mentioned above. The frontloading is a result of the urgent need to mobilize the resources allocated to the YEI to support its immediate implementation. It entails that both the specific allocation for the YEI and the corresponding ESF support will have to be committed and spent over a shorter period of time (taking account of the N+3 rule). That is why there should be sufficient ESF amounts for 2014 and 2015 in the respective programme(s) to be used as corresponding ESF support. That is also in line with the provision that the Commission will reimburse payment claims from Member States equally between the YEI and the ESF. While the specific allocation for the YEI is frontloaded in the MFF, there is no frontloading of the corresponding ESF credits foreseen in the MFF. Therefore, the frontloading of the corresponding ESF support in 2014 and 2015 induces a proportionate reduction of the ESF commitments in other non-yei (part of) priority axes/programmes for 2014 and 2015 so as to ensure full compliance with the financial profile notified to each MS in total yearly amounts and by category of region. For instance, since a YEI-specific OP will only contain ESF commitments for 2014 and 2015 (including in the case of a possible Technical Assistance priority axis), a MS should make sure that the ESF commitments for 2014 and 2015 in other programmes are reduced accordingly in order to comply with the financial profile notified (stemming from the MFF) and with the ESF share at national level. - Annex VIII CPR and Art. 16 of the ESF Regulation also envisages the possibility for the YEI resources to be revised upwards for the years 2016 to 2020 in the framework of the budgetary procedure in accordance with Art. 14 of the MFF Regulation (1311/2013). Margins left available below the MFF ceilings for commitment appropriations for the years shall constitute a Global MFF Margin for commitments, to be made available over and above the ceilings established in the MFF for the years 2016 to 2020 for policy objectives related to growth and employment, in particular youth employment. 8

9 YEI IN THE PARTNERSHIP AGREEMENT AND OPERATIONAL PROGRAMMES The information related to the programming of the YEI should be included in all relevant sections of the PA template and the OP template. Managing Authorities should bear in mind in particular the following: 1) PA template - 1.1: where appropriate, the analysis should also identify the need to allocate YEI funds for young persons residing in sub-regions which experience high youth unemployment levels and which are outside the eligible NUTS2 level regions and provide a justification. This only applies to the MS which want to make use of the 10% flexibility; - 1.4: this section contains a table with the resources from the specific allocation for the YEI, the corresponding ESF resources, and the YEI resources making use of the flexibility option; it should be noted that table will not include the YEI specific allocation, but only the ESF corresponding support under thematic objective 8; : the YEI resources are excluded from the performance reserve: the YEI specific allocation should not be included in this table at all, while the ESF corresponding support should be included as part of all ESF funds in column 3 and then be separately presented by category of regions in column 4 in order to be excluded from the calculation of the reserve. 2) OP model/template - Section 2.A.6.1 should specify, where appropriate, the amount of resources allocated from the priority axis to make use of the flexibility arrangement for the YEI. - Tables 4, 4a, 5, and 6 have to be completed for the YEI resources. It is not required to have a breakdown by category of region. - The information in Tables 7-11 should be presented for the YEI resources without a breakdown between the specific allocation for the YEI and the ESF. It is not required to have a breakdown by category of region. - Table 17: in the table the resources from the specific allocation for YEI (row 9) should be presented separately from the corresponding ESF support. The corresponding ESF support should be presented as part of the overall ESF resources per category of regions (rows 5-8). The columns for the performance reserve in this table should not include the matching ESF support for the YEI, as this is excluded from the performance reserve. - Table 18a: in this table the YEI specific allocation and the corresponding ESF resources for each (part of) priority axis should be presented together as a sum. At the bottom of the table in the total ESF funds for each category of region cells the ESF corresponding resources should not be taken into account, but should be included in the sum of the total YEI funds. - Table 18b: this table should be completed for every (part of) a priority axis implementing the YEI and should be used to determine the co-financing rates, the total allocation between the specific allocation for the YEI and the corresponding ESF support, and the ratio between the categories of regions for the corresponding ESF support. - Table 18c: information about the YEI (specific allocation and corresponding ESF support) should be presented separately from the remaining ESF credits in the OP. 9

10 YEI FLEXIBILITY Art. 16 of the ESF regulation provides for 10% flexibility for YEI resources, which can be used to target young persons residing in sub-regions which experience high youth unemployment levels and are outside the eligible NUTS level 2 regions. Note, however, that the burden is on the MS to demonstrate and justify this choice. The Commission will have to agree and approve this element as part of the PA/OP adoption. The sub-regional entity could be a city, municipality, a NUTS-3 level entity (but not a NUTS 2 entity) as long as the MS can demonstrate clearly the gravity of the problem on the basis of data produced by EU or national statistical offices. The flexibility provision applies to the YEI resources at Member State level, which is why Member States are asked to specify in their PAs if they intend to make use of it, identify the sub-regions concerned and provide a justification. In the relevant OPs MS are expected to specify the amount of YEI resources planned to make use of the flexibility arrangement, while the funds actually spent outside the eligible regions will be reported in the annual implementation reports. The funds from the specific allocation for the YEI should be at least matched by ESF resources from the category of region where the sub-regions in question are located. YOUTH MEASURES UNDER THE ESF (OUTSIDE THE YEI) AND THE EUROPEAN GLOBALISATION ADJUSTMENT FUND (EGF) Independently of YEI or where not benefiting from YEI, Member States are also entitled and encouraged to programme measures for the same age groups also under the same ESF investment priority, or under other relevant ESF investment priorities, for example those related to access to employment, active inclusion, early school leaving prevention, or life-long learning. However, when the MS benefits from YEI, it is expected that it will concentrate the measures targeting young persons by programming them under the IP relevant to young people (Article 3(1)(a)(ii)), to avoid excessive dispersion of actions for young people. The ESF may finance investments in systems and structures, as well as investments in individuals, including additional early intervention measures. Youth-related ESF measures may be financed simultaneously or at a different time from the YEI funds under the same investment priority. The ESF may support identical activities to those eligible under the YEI, in all regions of a Member State while it can also target young people who do not fall within the YEI target group. The ESF could be used to enhance the YEI support on the one hand by increasing the coverage of interventions to a wider target group, as well as finance more costly measures in view of achieving better quality of services. If the implementation of additional ESF measures outside the YEI is planned for post-2018, however, this should be taken into account during programming, as it will have implications on the milestones in the performance framework (in case indicators of this investment priority are used for the performance framework). If a Member State does not intend to implement youth measures with ESF resources before 2019, then it is not expected to include such a milestone in the performance framework of the relevant OP. Art. 6 (2) of the EGF Regulation allows applicant Member States until 31 December 2017 to provide personalised services co-financed by the EGF to NEETs under the age of 25, or where Member States so decide under the age of 30. The participants should be primarily those who have been made redundant or whose activity has ceased, and must be residents of 10

11 the NUTS 2 level regions eligible under the YEI in which at least some of the redundancies have occurred. Member States are free to select the NEETs according to their own criteria and to provide either the same active labour market policy measures for them as for the redundant workers, or to opt for different measures, provided that these too are eligible under Article 7(1) of the EGF Regulation. They must put in place relevant monitoring and control arrangements ensuring that the specific actions receiving a financial contribution from the EGF do not also receive assistance from other Union financial instruments (i.e. avoid the risk of "double funding"). YEI CO-FINANCING RATE Art. 22 of the ESF Regulation contains 3 main provisions, which need to be taken into account with regard to the YEI co-financing rate. 1. The specific allocation for the YEI is not subject to the national co-financing requirement (Art of the ESF regulation). This provision implies that the maximum EU co-financing rate of the priority axes in which the YEI is programmed, is generally higher than other priority axes. This is so because as regards YEI, national co-financing is required only for the corresponding ESF support; there is no national co-financing for the YEI specific allocation and therefore adding that allocation increases the overall budget of the priority axis and consequently the overall EU co-financing rate at the level of the YEI-relevant priority axis (see example 1 below). This provision always applies, regardless of whether the YEI is implemented as a dedicated priority axis or a part of a priority axis. 2. Where the YEI is implemented by a dedicated YEI priority axis, which covers YEI eligible regions from more than one category, the highest EU co-financing rate applies for all categories of regions in that priority axis (Art of the ESF regulation). Member States can only make use of this provision if they have regions of more than one category, which are eligible for the YEI and they all are grouped in a dedicated YEI priority axis. For instance, if a Member State includes corresponding ESF support for a more developed and a transition region in a dedicated YEI priority axis, the total of ESF resources can benefit from the highest EU co-financing rate (in this case, that of the transition region). This provision does not apply when the YEI is implemented as a part of a priority axis. When the YEI resources cover one category of region, there is no difference in the calculation of the co-financing rate, regardless of whether the YEI is implemented as a specific priority axis or part of a priority axis. 3. The corresponding ESF support shall at least match the support from the specific allocation for the YEI for each priority axis (Art of the ESF regulation). This implies that the corresponding ESF should be equal to the specific allocation for the YEI, but may also surpass it. Since no national co-financing requirement applies to the YEI specific allocation, the EU co-financing rate for a YEI priority axis (or part of a priority axis) is determined by the allocated corresponding ESF support. 11

12 As a result of the provisions outlined above, the following possibilities exist when programming the YEI: 1) The YEI is programmed through a dedicated priority axis or part of a priority axis (in YEI dedicated OPs all priority axes are YEI-specific, except in the case of a possible TA priority axis). 2) The YEI (part of) priority axis targets regions from 1 category or more than 1 category. The ESF corresponding support is equal to the specific allocation for the YEI or exceeds it. Examples of YEI co-financing Example 1: Co-financing rate (1 category of regions, YEI:ESF ratio is 1:1) Union support National Total Co-financing counterpart funding Rate* YEI % Corresponding ESF (Less % developed) Priority axis: % *The rate is rounded in the table, but the calculation will be based on the real rate of 600/653. In this example the specific allocation for YEI is implemented through a dedicated priority axis and the YEI is matched by exactly the same amount of ESF resources. There is no requirement for a national counterpart for the specific allocation for YEI, but only for the corresponding ESF resources. The overall EU co-financing rate of the priority axis is calculated by summing up the 2 sources of financing and dividing the sum of Union support by the sum of total funding. In this case this equals to 600/653 = 92%. Example 2: Co-financing rate (1 category of regions, ESF exceeds YEI) Union support National Total Co-financing counterpart funding Rate* YEI % Corresponding ESF (Less % developed) Priority axis: % *The rate is rounded in the table, but the calculation will be based on the real rate of 800/888. Example 3: Co-financing rate for multiple categories of regions in a dedicated YEI priority axis Less Developed Transition More Developed Total YEI Corresponding ESF EU National counterpart Total Rate* YEI % Corresponding ESF (only the highest rate applies) % 12

13 Priority axis: % *The rate is rounded in the table, but the calculation will be based on the real rate of 2400/2612. In this example the specific allocation for YEI is implemented through a dedicated priority axis and the YEI is matched by exactly the same amount of ESF resources, which come from 3 categories of regions. Same as in the previous examples, there is no requirement for a national counterpart for the specific allocation for YEI, but only for the ESF corresponding resources. However, for all three categories of regions, the highest co-financing rate applies (that for the less developed region). This is why for all the ESF resources the required national counterpart equals 15%. This possibility is available when a MS decides to implement the YEI as a dedicated priority axis. Where a MS decides to implement the YEI as part of a priority axis and decides to match the YEI with ESF from more than one category of region, then for each category of region the usual co-financing rate will apply. The overall co-financing rate for the part of the priority axis implementing the YEI, will be calculated in the following way: Example 4: Co-financing rate for multiple categories of regions in a part of a priority axis Less Developed Transition More Developed Total YEI Corresponding ESF ESF outside YEI 2000 EU National public Total Rate* YEI % Corresponding ESF (LD) % Corresponding ESF (Transition) % Corresponding ESF (MD) % YEI part of priority axis: %* Part of priority axis outside of YEI: % * The YEI rate is rounded in the table, but the calculation will be based on the real rate of 2400/3220. In this case the co-financing rate is calculated in the same way as in the previous examples. The only difference is that the determination of the national counterpart varies between the different categories of region because different co-financing rates are applied. The rationale behind this provision is that MS are encouraged to program the YEI as a dedicated priority axis, rather than a part of a priority axis. As the YEI is implemented through part of a priority axis, for the co-financing rate for the ESF resources outside the YEI the usual rules apply. TECHNICAL ASSISTANCE The YEI cannot finance technical assistance actions due to its nature and focus on a single investment priority. Article 119(1) of the CPR makes a differentiation between the Funds and the specific allocation for YEI 4% of the amount of the Funds allocated to OPs in a MS under each category of region may be allocated to technical assistance, while the specific allocation for YEI may be taken into account in the calculation of the limit to the total amount 13

14 of the Funds allocated to the technical assistance of the MS. ESF TA can thus be used to support additional tasks required to implement the Initiative, within the limit set out in Article 119(2) of the CPR. Within a YEI dedicated OP it would be possible to include a priority axis for TA, financed entirely by the ESF. It should be noted, however, that the maximum TA rate will remain unchanged. EX-ANTE CONDITIONALITY The ex-ante conditionality (8.6) on YEI applies to YEI investments only. It is an important prerequisite to ensure that Member States' ESF investments in this policy field are embedded in a strategic policy framework for youth employment and including for setting up youth guarantee schemes. It should be noted that the conditionality does not call for establishing a new strategy but for demonstrating the existence of a strategic policy framework. The Guide on ex-ante conditionalities includes methodological guidance on the concepts such as NEETs, a strategic policy framework, etc., for the purpose of assessing the fulfilment of the ex-ante conditionality criteria related to YEI. The Youth Guarantee Implementation Plans that Member States have been required to prepare in the context of implementing the Youth Guarantee Recommendation will be considered as an important element in view of assessing the fulfilment of this ex-ante conditionality with regard to MS eligible for the YEI. THEMATIC CONCENTRATION With regard to calculating thematic concentration, the specific allocation for YEI is not taken into account when calculating thematic concentration. However, the ESF contribution to the YEI is taken into account for thematic concentration. PERFORMANCE RESERVE AND FRAMEWORK The YEI resources (both the specific allocation for the YEI and the corresponding ESF support) are excluded from the basis for calculating the performance reserve. This allows Member States to program all their YEI resources in the beginning of the programming period. The ESF funds, which are used to match the specific allocation for the YEI should not be taken into account for the purposes of calculating the 6% reserve for the ESF at Member State level. The YEI resources will be part of the performance framework, which presupposes that Member States will have to define milestones and targets related to the YEI. Given that the YEI operations can be declared to the Commission until the end of 2018, at the time of submission of programmes the milestones and the targets are expected to have the same value and be reached by 2018 (which corresponds to the N+3 time target related to the 2015 financial allocation). In addition, where the YEI is implemented as part of a priority axis, YEI implementation will be reported separately from the rest of the priority axis with dedicated YEI indicators (set out in Annex II of the ESF Regulation) in addition to the common indicators set out in Annex I of the ESF Regulation and, if the Member State wishes to do so, with programme-specific indicators. All common YEI indicators set out in Annex II must be linked with a cumulative quantified target value for

15 MONITORING AND EVALUATION ARRANGEMENTS The relevant arrangements are set out in article 19 and Annex I and II of the ESF Regulation and relevant CPR provisions related to monitoring and evaluation. The first reporting of common indicators set out in Annex I and the common YEI indicators set out in Annex II of the ESF Regulation is required already in early Two evaluations are required, by end and by end The findings are to be reported in the AIRs submitted in 2016 and 2019 respectively. These two evaluations are very important in order to demonstrate the results achieved and assess the effectiveness of the use of YEI resources. The evaluation due at the end-of 2015 will also inform the overall progress review of YEI and will feed into the mid-term budgetary review of the MFF which may lead to increasing YEI resources at EU level. In this context, given the dramatic rates of youth unemployment, the risk of a lost generation is substantial. Therefore a high degree of accountability is expected from MS with regard to the YEI funding allocated to the NEETs. This requires regularly assessing the situation and ensuring that the measures are adequately targeted and provide results. The YEI immediate result indicators (the situation upon the participant's leaving the ESF operation) aim to demonstrate the effectiveness, e.g. that the person is in training, or has received a qualification, or has been offered a job or entered a job. The common and the YEI specific common indicators aim to ensure proper monitoring of implementation. As regards the longer-term result indicators (measuring effects 6 months after leaving), the aim is to ensure that results are sustainable and are thus of a certain quality (i.e. measures that are likely to significantly improve the employment prospects of the person). It should be noted that the indicators set out in Annex II of the ESF Regulation should be reported for YEI interventions only. At the same time, Annex II is additional to Annex I on the ESF common indicators. Hence for YEI interventions all indicators set out in Annex I and II must be reported. Where a MS has decided, based on justified grounds, to extend the YEI target group age to under 30 years, Member States should include an additional programme-specific output indicator that captures the age bracket years old. This age bracket is not captured with the common output indicators. This is to ensure that results reported under the result indicators are meaningful and refer to the entire population of the supported young people. The relevant provisions related to monitoring and evaluation of the YEI, as stated in Article 19(4) ESF specifically refer to assessing the quality of support to disadvantaged young persons, those from marginalised communities and those leaving education without qualifications. The longer-term result indicators in Annex II (as well as in Annex I) will be reported based on a representative sample. The data collection for the longer-term result indicators does not necessarily require an evaluation. The data collection method could be e.g. a survey. The YEI longer-term result set out in Annex II are to be reported annually, starting in April 2015, whereas the common longer-term result indicators set out in Annex I are to be reported only in 2019 and Unlike for the rest of the OP, reporting on the implementation of YEI does not require to provide the indicator data broken down by category of region. It does however require a breakdown by gender. 15

16 The enhanced reporting and evaluation requirements for YEI set out in the Regulation take the funding arrangements applicable for YEI into account, namely that the amounts must be committed in 2014 and 2015 and spent at the latest by the end 2018 ("n+3" rule). For further guidance on monitoring and evaluation please refer to EC guidance on ESF monitoring and evaluation and EC guidance on YEI evaluation (forthcoming). EARLY ELIGIBILITY DATE OF EXPENDITURE As noted above, one of the measures to speed up the implementation of the YEI was the introduction of an early date for eligibility of expenditure. Expenditure eligible under the YEI shall be eligible as of 1 September 2013 (Art. 65(3); (5) CPR). These provisions allow Member States to incur and subsequently declare expenditure in the period between 1 September 2013 and the date of the Commission decision approving the relevant operational programme. When Member States decide to make use of this provision it is important to apply it in conjunction with other relevant provisions of the CPR and the ESF Regulation. In particular Member States should take account of the following: - An operation has to be selected for support on the basis of selection procedures and criteria. The methodology and criteria used for selection of operations will have to be approved by the programme's monitoring committee (Art. 110 (2)(a) and Art. 125 (3) (a) CPR). Given that the Monitoring Committee cannot be set up as long as the programme is not adopted, the Member States should put in place provisional selection criteria and methodology, as close as possible as the final ones, in order to be able to select YEI operations before adoption of the OP. Following the approval of the OP once the Monitoring Committee has been formed, the selection criteria and the methodology should be formally confirmed. - Operations cannot be reimbursed by the YEI if they have been physically completed or fully implemented before the application for funding is submitted by the beneficiary to the managing authority (Art. 65 (6) CPR). This provision implies that expenditure incurred under the YEI should be part of operations, which are still ongoing at the moment of application for funding. - For operations, which have started before the submission of an application for funding to the managing authority, the managing authority has to satisfy itself that the applicable law has been complied with (Art. 125 (3) (e) CPR), including responsibilities of Member States with regard to management, control, and audit, as well as with regard to information and communication measures MANAGEMENT AND CONTROL AND FINANCIAL MANAGEMENT The responsibilities of Member States and the Commission with regard to management, control, and audit apply to all YEI resources. The closure of programmes, which implement the YEI, will follow the provisions of Art. 141 CPR. The same level of pre-financing will apply to the specific allocation for the YEI as for the ESF, it will be subject to the examination of accounts procedure, as well as interruptions/suspensions and financial corrections. The N+3 rule will apply to the YEI resources. 16