Besluitpunt "PROPOSAL FOR A COUNCIL REGULATION AMENDING REGULATION (EC) 1083/2006 CONCERNING GENERAL PROVISIONS ON THE EUROPEAN REGIONAL DEVELOPMENT FUND, THE EUROPEAN SOCIAL FUND AND THE COHESION FUND AS REGARDS SIMPLIFICATION OF CERTAIN REQUIREMENTS AND AS REGARDS CERTAIN PROVISIONS RELATING TO FINANCIAL MANAGEMENT ­ FORMER WRITTEN PROCEDURE EP/2009/5567 The PRESIDENT spoke of the proposal concerning simplified provisions for financing active measures to boost employment through the European Social Fund, stressing that this proposal followed on from the communication on employment adopted on 3 June. At the June European Council he had stated final (22 July 2009) final 25 that the Commission would present a proposal in this field in order to meet the short-term financing needs of certain measures to boost employment in the current economic crisis. The proposed measures did not entail adjustments to the financial perspectives and one of their main purposes was to offer the option of flexibility in the distribution of payments for the period as a whole. He was convinced of the importance of this proposal in supporting the efforts of the Member States to address the difficulties of the labour market, in particular those States receiving support for the balance of payments. This was therefore a solidarity drive with a social dimension, aimed at meeting immediate needs in an exceptional situation, and was compatible with the rules governing the financial perspectives. He trusted that the proposal would also be duly supported in the interinstitutional process. Mr SPIDLA put the proposal in the context of the economic crisis, pointing out the adverse effects of the crisis on employment and the considerable differences between different Member States and regions. He was convinced that this was the most important issue to be taken into account when defining the response to the crisis and, moreover, that it was vital to maintaining social cohesion in Europe. The aim of the proposal was to facilitate the implementation by the Member States of active policies to boost employment and to favour the necessary investments needed by making it possible for Member States to request repayment of all public expenditure relating to their operational programmes carried out under the European Social Fund. However, these measures did not call into question the principle of co-financing; they were temporary, optional and within the limits of the current financial perspective. He felt sure that the proposal was sound and consistent and was ready to provide any clarifications still necessary. Mr SAMECKI, in turn, provided information on certain additional aspects of the proposal, in particular those aimed at making management of the structural funds simpler, more targeted and more flexible. He referred, for final (22 July 2009) final 26 example, to the harmonisation of thresholds for large projects, the diversification of sources of financing, the use of financial engineering so as to encourage energy efficiency in the housing sector, and the simplification of management of the European Social Fund and European Regional Development Fund. The Commission then held a brief exchange of views, covering the following points in particular: - the importance of paying particular attention to this proposal and highlighting its exceptional nature in view of the serious impact the crisis was having on employment and the need to adapt industrial production capacities, in particular in the most vulnerable sectors; - the fact that the proposed measures were swift, targeted and temporary and compatible with the European economic recovery plan; the importance of implementing the proposed measures as soon as possible, starting in 2009; - the importance of using this temporary measure to support the most vulnerable Member States in terms of employment resources and institutional structures, in particular those States in receipt of support for the balance of payments; - the need to propose measures aimed at simplifying management of the structural funds and reinforcing support for the beneficiary countries, whether or not they belonged to the euro area, so as to strengthen their absorption capacity; however, it was important to ensure compliance with the procedures and rules for proper management of Community funds with a view to the budget discharge exercise at the end of the period of implementation of these measures; - given the particularly serious impact of the crisis on the labour market, the need to avoid the development of structural unemployment and to prioritise active policies directed at this market; final (22 July 2009) final 27 - the need for ambitious measures and investment in human resources in order to address the current economic crisis; - the importance of promoting lifelong education and vocational training as an essential component of long-term employment policies, and the need for measures to simplify policies in this area and making them more flexible. Mr SPIDLA pointed out the temporary nature of the measures and stressed that they would have no impact on the principle of co-financing of Community funds. His clarifications, which would be added to the proposal, were set out in the amendments below. Concluding, the PRESIDENT expressed the Commission's support for this proposal, stressing the need to explain clearly the principles underlying it, in particular the fact that it was an exceptional measure with no effect on the current financial perspectives, and hoped that it would be supported by the Council. He also stated the support of the Commission as a whole for the following amendments being made to the French language version of : - in Chapter 1, Background to the proposal, of the Explanatory Memorandum, in the section General context, page 3, a new paragraph is inserted after the first paragraph, as follows: ""

The crisis is also having a negative impact on the budgets of Member States and the increase in unemployment outlined below is a significant factor in this.

On the one hand, an increase in the number of persons entitled to receive benefits can automatically lead to a strain on budgetary resources.

At the same time the need to implement active labour market measures in order to maintain people in employment or to get them back to work becomes more acute.

Given the general budgetary constraints, severe cash-flow difficulties can arise for the sources of public finance in Member States for the implementation of active labour market measures.

PV(2009)1883 final (22 July 2009) PV(2009)1883 final 28 As a consequence, such measures may be delayed at a time when they are increasingly necessary, to the detriment of the citizens." - in the same chapter, in the section Provisions in force in the policy sphere of the proposal, pages 3 and 4, the second paragraph now reads as follows:

"In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding.

This measure will require amendment of Council Regulation No 1083/2006 i on general provisions governing cohesion policy, including, as proposed in the Communication A Shared Commitment for Employment a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated.

This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period.

The aim is to increase the effectiveness of the important role assigned to the ESF in the above- mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010.

This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation." - in Chapter 4, Budgetary Impact, of the Explanatory Memorandum, page 9, the first three paragraphs read as follows:

"There is no impact on commitment appropriations since no modification PV(2009)1883 final (22 July 2009) PV(2009)1883 final 29 is proposed to the maximum amounts of ESF financing provided for in the Operational Programmes for the programming period 2007-2013.

Where Member States decide to make use of the option to request 100% reimbursements during 2009 and 2010 there will be an impact on payment appropriations.

The analysis of the Member States' payment forecasts and the payment appropriations available in the budget for 2009 and the Draft Budget for 2010 show that the maximum additional payment appropriations to be paid under the 100% reimbursement option in 2009 and 2010 for the ESF programmes would represent approximately 6.6 billion.

This will be compensated by a reduced need for payment appropriations later in the programming period." - in the text of the proposal for a regulation, pages 11 and 12, recital (11) reads as follows:

" (11) As outlined in the Communication of the Commission of 3 June 2009 on A Shared Commitment for Employment, in order to counteract cash flow problems occurring in Member States as a result of financial constraints during the peak of the crisis and in order to speed up the implementation of active labour market measures aiming at supporting citizens and more specifically the unemployed or those at risk of unemployment, it is necessary to modify for a limited period of time the provisions concerning the calculation of interim payments.

For this reason it is appropriate, without altering the national co-funding obligations which apply to operational programmes over the whole programming period, for the Commission to reimburse, where Member States so request, interim payment claims at 100% of the public contribution to each priority axis in operational programmes co-financed by the ESF." Subject to inclusion of the above amendments and to final linguistic revision, PV(2009)1883 final (22 July 2009) PV(2009)1883 final 30 the Commission approved the proposal for a Council regulation in COM(2009)384 i /3 for transmission to Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, and to the national parliaments.