Opinion of the Committee of the Regions on the 'Proposal for a Council Regulation (EC) laying down general provisions on the Structural Funds'
2. 12. 98 EN Official Journal of the European Communities C 373/1 II (Preparatory Acts) COMMITTEE OF THE REGIONS Opinion of the Committee of the Regions on the ‘Proposal for a Council Regulation (EC) laying down general provisions on the Structural Funds’ THE COMMITTEE OF THE REGIONS, (98/C 373/01) having regard to the proposal for a Council Regulation (EC) of 18 March 1998 laying down general provisions on the Structural Funds [COM(98) 131 final — 98/0090 (AVC)] (1); having regard to the decision of the Council of 19 May 1998 to consult the Committee, under Articles 130d and 198c of the Treaty establishing the European Community; having regard to the decision of the bureau of 13 May 1998 to instruct Commission 1 for Regional Policy, Structural Funds, Economic and Social Cohesion, Cross-Border and Inter-Regional Cooperation to prepare the opinion; having regard to the draft opinion (CdR 167/98 rev. ) adopted by Commission 1 on 8 July 1998 (rapporteurs: Mr Behrendt and Mr Fraga Iribarne); having regard to Article B of the EU Treaty and Article 2 of the EC Treaty, making the promotion of economic and social progress which is balanced and sustainable and the strengthening of economic and social cohesion and solidarity among the Member States objectives and tasks of the European Union and the European Community respectively; having regard to the Community policy, formulated in Article 130a of the EC Treaty, of strengthening economic and social cohesion and of reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, including rural areas; having regard to the task of the Community, defined in Article 130b of the Treaty, of supporting the efforts of the Member States to strengthen economic and social cohesion by means of the Structural Funds, the European Investment Bank and the other existing financial instruments; having regard to the task of the European Regional Development Fund, defined in Article 130c of the Treaty, of helping to redress the main regional imbalances in the Community, the task of the European Social Fund, defined in Article 123 of the Treaty, of improving employment opportunities for workers in the internal market, and the task of the European Agricultural Guidance and Guarantee Fund, Guidance Section, defined in Article 40 of the Treaty, of achieving the objectives of the common agricultural policy; (1) OJ C 176, 9. 6. 1998, p. 1. C 373/2 EN Official Journal of the European Communities 2. 12. 98 having regard to the Committee’s right, set out in Articles 130d and 130e of the Treaty, to participate in the definition of the tasks, priority objectives, organization, general rules, implementing provisions and reports on progress on achievement of economic and social cohesion; having regard to its opinions on the Commission’s Communication: Agenda 2000: For a stronger and wider Union, and on the Future of European structural policy, and in particular: — Views of the regions and local authorities on arrangements for European Structural Policy after 1999 (CdR 131/97 fin) (1), — First report on economic and social cohesion (CdR 76/97 fin) (2), — Agenda 2000: the financing of the European Union after 1999 taking account of enlargement prospects and the challenges of the 21st century (CdR 303/97 fin) (3), — The role of the regional and local authorities in the partnership principle of the Structural Funds (CdR 234/95 fin) (4), — The CAP and eastward enlargement (CdR 239/96 fin) (5), — The effects of the Union’s policies of enlargement to the applicant countries of central and eastern Europe (Impact Study) (CdR 280/97 fin) (6); — Towards an urban agenda in the European Union (CdR 316/97 fin) (7), at its 25th plenary session of 16/17 September 1998 (meeting of 17 September) adopted the following opinion. 1. Part A: General assessment The Commission proposal for a new framework 1. 1. regulation for the Structural Funds falls within the general ambit of the Agenda 2000 legislative proposals. The aim is both to secure the Community’s future viability in a number of important fields and to create the conditions for eastward enlargement of the European Union. The Committee of the Regions particularly stresses the close linkage between the various aspects of Agenda 2000, its legislative proposals and the political decisions to be taken. The prospect of eastward enlarge- ment requires a willingness to change, even within the existing European Union. International changes require a reorientation of agricultural and structural policy. The focus of structural assistance must be on overcoming development deficits and on securing structural adap- tation which combats unemployment and leads to a durable economy through promoting regional competi- tiveness, with special attention to regions with specific characteristics, such as mountainous areas, islands and remote areas. 1. 2. The Community can rise to the challenges facing it only through solidarity. The principle of solidarity (1) OJ C 64, 27. 2. 1998, p. 5. (2) OJ C 379, 15. 12. 1997, p. 34. (3) OJ C 64, 27. 2. 1998, p. 40. (4) OJ C 100, 2. 4. 1996, p. 72. (5) OJ C 116, 14. 4. 1997, p. 39. (6) OJ C 64, 27. 2. 1998, p. 48. (7) OJ C 251, 10. 8. 1998, p. 11. was established because the balanced development of the Community is a basic objective of the Union and because we are required to work for economic and social progress, which is essential if regional imbalances are to be reduced. 1. 3. For these reasons, reform of European structural policy will play a key role in the forthcoming decisions on Agenda 2000. The draft framework regulation is the focus for the future use of the Funds, as it encapsulates all the general provisions of European structural policy. The Committee of the Regions regards the draft submit- ted as a suitable basis for further discussions and negotiations. The Committee feels that in its proposals the Commission has in principle done justice to the aim of reducing the number of Objectives and Community initiatives and concentrating the areas eligible for as- sistance. 1. 4. The Committee is pleased to note that the Commission has continued to place the overcoming of development deficits and structural adjustment prob- lems, the combating of structural unemployment and the creation of new jobs at the centre of European structural policy. These priorities also include the need to combat the ever widening development gaps in Europe between the centre and the outlying regions, as described in the cohesion report and the work on the European Spatial Development Perspective. In view of the danger of dispersion of the Structural Funds among a multi- plicity of themes, these central priorities are needed to 2. 12. 98 EN Official Journal of the European Communities C 373/3 guarantee the concentration of funds on the achievement of common objectives. Above all, the priorities are in harmony with the EU’s acknowledged political priorities of strengthening economic and social cohesion and combating unemployment. timetable not be met, special measures should be adopted and the gap between the two funding periods should be minimized. In addition the COR urges the Commission to review the SEM 2000 data sheets urgently. 1. 5. The Committee of the Regions feels urban areas and their surroundings are underexposed in the Commission proposals. Europe is the most urbanized continent: 80 % of its inhabitants live in urban agglomer- ations. The importance of urban areas is not reflected in the Commission proposals. The relation between rural and urban areas is changing. This requires a better integration of urban policies, agricultural policies and structural policies. 1. 6. The Committee of the Regions welcomes with interest the integrated approach advocated by the new Objective 2. The implementation of global regional strategies should indeed serve to boost the effectiveness of the Structural Funds. However, the Committee emphasizes the need to ensure that such an integrated approach does not make procedures more cumbersome and complicated. The COR also feels that more of its proposals for simplifying European structural policy contained in the opinions referred to above should have been incorporated into the draft regulation. Generally, the COR hopes that the reduction in the number of priority objectives and the streamlining of Structural Fund procedures at Community level will have tangible implications both for the local partners responsible for implementing programmes on the spot and for citizens. 1. 7. The Committee of the Regions is disappointed that there is no reference to culture in the proposed regulations and would call, as it has done in previous opinions, for an explicit reference to culture. This would help strengthen the contribution culture and its associated activities can make to social cohesion and the positive impact it has in promoting growth, competi- tiveness and employment in many cities and regions. 1. 8. In order to facilitate project funding and secure private sector cooperation in projects, the Committee of the Regions feels that it should be possible, during the forthcoming period, to consider private co-financing alongside public co-financing (public-private partner- ship). 1. 9. The Committee of the Regions considers it important that, after careful programming, the new Structural Funds’ period begin immediately, in full, at the beginning of 2000. This requires that the final decisions on the Structural Funds be taken as soon as possible, in the first half of 1999 at the latest. The COR urges the European Commission to take all steps to meet the timetable set out and requests that should this 1. 10. The Committee of the Regions reiterates the views on the detailed arrangements for structural policy set out in the opinions referred to above, and therefore comments below only on the proposals of the draft regulation to which the Committee would like to suggest changes or additions. 1. 11. The Commission proposals need further clarifi- cation. The Committee urges the Commission to provide further information as soon as possible, so that sub- sequent negotiations can proceed smoothly. 2. Part B: Proposed changes and additions to the draft regulation 2. 1. Title I: General principles 2. 1. 1. C h a p t e r s 1 a n d 2 : O b j e c t i v e s a n d g e o g r a p h i c a l e l i g i b i l i t y ( A r t i c l e s 1 - 6 ) The Committee of the Regions backs the 2. 1. 1. 1. Commission’s proposal to concentrate on promoting the development and structural adjustment of regions whose development is lagging behind (Objective 1). The Committee also supports the proposal that the criteria for Objective 1 eligibility be NUTS level II and per capita GDP of less than 75 % of the three-year Community average. As transitional arrangements are provided for regions which, because of their development progress, will no longer satisfy this criterion in the new funding period, the Committee of the Regions joins the Com- mission in calling for strict application of this criterion. This will ensure the necessary concentration of structural assistance under Objective 1 up to the end of the funding period. It also recognizes the need for the transitional arrangements to take account of regions that are no longer covered by Objective 1 in the implementation phase for current rules, but which are not eligible for support under any other Community objectives. The Committee of the Regions also endorses the Com- mission’s proposal to support the most remote regions, as defined in the new Article 299(2) of the Amsterdam Treaty, and the areas currently covered by Objective 6 under Objective 1. The COR proposes that the automatic inclusion of the current Objective 6 should be defined on the basis of population sparsity. 2. 1. 1. 2. The Committee of the Regions is pleased to note that the European Commission proposes assistance under Objective 2 for areas undergoing socio-economic C 373/4 EN Official Journal of the European Communities 2. 12. 98 change in the industrial and service sectors, declining rural areas, urban areas in difficulty and depressed areas dependent on fisheries. The Committee points out that this is a highly complex Objective, which will (a) need to be broken down into sub-objectives tailored to the specific problems of the areas concerned, and (b) coordinated at programme level; the eligibility and assistance criteria for these sub-objectives must take account of the specifics of the structural problems involved at the appropriate territorial level and of remoteness criteria. The European Commission should also specify in particular for implementing the EAGGF Guarantee Section assistance provided for in the new regional development pro- grammes and dovetailing it with the other Structural Funds. the arrangements 2. 1. 1. 3. The Committee of the Regions recognizes that, in the interests of the concentration of assistance on the worst affected areas of the Community, the proportion of the population living in the new Objec- tive 2 areas must gradually be reduced. But in accordance with the principle of smooth adjustment, properly coordinated with the transitional mechanisms, the Com- mittee of the Regions feels it is vital that the percentage of the population covered by Objective 2, previously 25 %, should be reduced gradually and equitably to 18 %. 2. 1. 1. 4. The method proposed by the European Com- mission for allocating this population ceiling among the Member States needs further explanation however. This is true in particular of the consideration of the severity of regional structural problems in the areas falling under the new Objective 2 at the appropriate territorial level, which should be distinguished from the severity of structural problems at national level. The COR would note that, in individual 2. 1. 1. 5. cases, concentration may however also mean a dispro- portionate reduction in Objective 2 assistance for some Member States. The Committee therefore welcomes the Commission’s proposal that the maximum reduction in the population covered by Objective 2 not exceed one third of the existing Objective 2 and 5b areas with the exception of areas in the phasing-out stage of Objective 1, which are eligible for the new Objective 2. This safety net will help to prevent excessively radical cuts, which might otherwise compromise the success of past assistance. 2. 1. 1. 6. The Committee of the Regions points out that the criteria proposed by the Commission for the selection of areas eligible for assistance under the new Objective 2 require further discussion. As a matter of principle it is welcome that special weight will continue to be assigned to labour market criteria in establishing eligibility and in relation to support measures. In this context it should be pointed out, however, that the unemployment rates calculated by Eurostat give an inaccurate and incomplete picture of the situation in the individual European regions and that efforts should be made to achieve suitable harmon- ization with Eurostat. There is a danger that insufficient account will be taken of the specific problems of rural or industrial areas. The COR believes there is a continuing need to support deindustrialized urban areas which have suffered sub- stantial job losses. Within national assistance ceilings it should be possible to include additional criteria for industrial areas, such as indices of poverty, household income relative to regional costs of living and dependence on income support, and indicators of competitiveness, such as poor labour productivity and poor record of SME survival. Within the population ceiling, the Objective 2 industrial strand core criteria should not be applied strictly and must allow for borderline cases to be taken into account, thereby recognising the difficulty of comparing some data sets. The regulations should specify that the Member States shall have flexibility in defining economic and social indicators to determine eligible areas of greatest need. These indicators should be drawn up by the Member State in consultation with local and regional partners. Given that the services sector is also one of the areas of activity to be included in Objective 2, this sector should also be mentioned in demarcating eligible areas. For rural areas, other criteria, in addition to per capita GDP in the region, such as income level, population density, the proportion of the workforce engaged in agriculture and ageing of the population should also be taken into consideration. Further evaluation is required as to whether the criteria for support for rural areas are broad enough to take account of the particular situation in such areas. The fact that, in future, EAGGF guidance will apply only to regions eligible under Objective 1 and that the EAGGF guarantee will be applied in Objective 2 regions must not be allowed to disadvantage the rural regions thus affected. In the case of fishery-dependent areas, a broad inter- pretation of fishery-dependence should be applied, taking account of the conditions for regional develop- ment. The deciding factors could be the size and age of the fleet and the level of employment in the sector. In addition, the likely restrictions on assisted urban areas — linked with the limited funds allocated — are not consistent with the problems of conurbations in Europe. These restrictions reflect the absence of Com- munity prioritization of urban problems; the selection of criteria for determining whether urban areas are eligible under Objective 2 indicates a wish to assist ailing urban districts rather than to implement a genuine urban structural policy. 2. 12. 98 EN Official Journal of the European Communities C 373/5 Moreover many current Community initiatives have fully proved their worth, e. g. the Urban programme and the four industrial initiatives. The current proposals fail to adequately reflect these experiences in future policy. COR feels there is a danger that the Commission’s moves to achieve coherence between support criteria will unduly restrict the scope needed by the regions to conduct their own regional policy. The COR agrees with the Commission that bordering on an Objective 1 area may be a criterion for a region to be classified as an Objective 2 area as otherwise there is a too big a discrepancy in the level of support. It would also point out the inconsistency of not applying the same reasoning to areas bordering on accession countries, as these countries are already receiving pre- accession aid and will eventually have Objective 1 status, while their wage levels and social and environmental standards are far lower. The COR therefore feels that special study should be devoted to the situation of these regions in the light of the future accessions. 2. 1. 1. 7. The selection of new Objective 2 areas could be made in accordance with similar principles to those applied in the allocation of national assistance ceilings under the guideline for regional aid (Art. 92(3)(c) of the EC Treaty). To this end the framework regulation should set the support area population ceiling for the new Objective 2 at EU level as well as for each Member State. The demarcation criteria for the new Objective 2 areas should be laid down by the Member States with the involvement of local and regional authorities, and confirmation by the Commission of an area’s eligibility for national regional aid should be sufficient to qualify it for selection as an Objective 2 area. If the Commission wants greater consistency in future between regions eligible for Structural Fund aid and regions receiving regional aid, Community competition policy [Treaty Article 92(3)(c)] must not be the de facto determinant of zoning for future Structural Fund programmes. It is essential that local and regional authorities be closely involved in drawing up not only the map of areas eligible for Structural Fund aid but also the map of areas covered by regional aid. 2. 1. 1. 8. The Committee of the Regions sees its pro- posal for a specific objective for the development of human resources essentially fulfilled in the new Objective 3. The broad assistance criteria will on the one hand give the regional and local authorities room for manoeuvre in combating unemployment and mod- ernizing employment systems. They do however carry with them the danger of fragmentation of assistance. This would reduce the intended efficiency gains in the fight against unemployment in Europe. The Committee of the Regions argues therefore that the use of the European Social Fund must in future continue to focus on all the fund’s tasks, as laid down in the Amsterdam Treaty. Closer attention must therefore be paid to social exclusion, this being an action area mentioned in Agenda 2000 but not included in the regulations now being proposed. In particular, it must be left up to the regional and local authorities to select from the opportunities offered by Objective 3 and the European Social Fund priorities and measures which best take account of their specific conditions for the development of human resources. A proportion of Objective 3 funds could also be earmarked for accompanying measures under the territorial employment pacts. The Committee of the Regions also suggests 2. 1. 1. 9. that in future it should be made possible for Objective 3 measures under the European Social Fund to be used in Objective 2 areas as well. Objective 2 assistance only partially exploits the potential of the European Social Fund for the development of human resources. The target group-specific approach of Objective 3 runs the risk of not being taken into consideration sufficiently in Objective 2 programmes. The coherent, horizontal use of Objective 3 in the Member States would then not be guaranteed. Assistance provided under this Article has narrower objectives than those of the Structural Funds, especially given the proposed new strands to Objective 2. The question is whether this approach can adequately antici- pate the rapid changes on the economic front in Europe’s regions. For this reason, there should also be scope for assistance for regions outside the national support areas, this within the framework of the development of a sub-regional economic policy. Derogations should be provided for in the case of regions whose ability to meet aid criteria has hitherto varied more than the average. The COR doubts whether the ceiling proposed by the Commission, 2 % of the population, is sufficient. The 2. 1. 1. 10. The national level should not be the sole reference framework for all Objective 3 actions in favour of human resources. It is absolutely essential to adopt a regional or local approach for Objective 3 programmes, in addition to national schemes, so that local and regional characteristics are not neglected in the development of human resources, nor the fact that regional authorities are often the main co-financers of the ESF. Regional innovation strategies must be able to offer points of contact for this as advocated in a recent Commission decision. The level for the development and implemen- tation of Objective 3 programmes should therefore be defined in negotiations between the Commission and the Member State with due regard to the views of the partners. C 373/6 EN Official Journal of the European Communities 2. 12. 98 2. 1. 1. 11. The Committee of the Regions suggests that the definition of Objective 3 in Article 5 of the framework regulation be clarified by making direct reference to all the fields of the policy remit of the European Social Fund in accordance with the Amsterdam Treaty and to the scope of the Member States and regional and local authorities in selecting measures for assistance in conjunction with national employment action plans. The Committee would reiterate the need for close consultation with local and regional authorities when drawing up the national employment plans which will be an important reference point for future Objective 3 programmes. 2. 1. 2. 2. The Committee of the Regions asks the Commission to explain the procedure laid down for the allocation of funds to the Member States under Article 7(3) of the draft regulation, in particular the weightings assigned to the objective criteria (population, regional and national prosperity, relative severity of structural problems, unemployment). Equal treatment of all regions can only be guaranteed by an objective and transparent procedure based primarily on the establishment of a Community-wide criterion for defin- ing remote areas and on the extent of regional structural problems. 2. 1. 1. 12. The Committee of the Regions notes that its call for transitional arrangements for former Objective 1, 2 and 5b areas, which because of their development are no longer eligible for assistance, has been taken up by the Commission in Article 6 of the draft framework regulation. Transitional arrangements will be needed to cushion the impact of the withdrawal of Structural Fund assistance so as not to undo what has already been achieved. This requirement is essentially met by the Commission proposals. However, the Committee of the Regions would ask that, in the interests of achieving a balanced compromise, the Commission make known its views on the length of the transitional periods and the shape of the transitional arrangements before a decision is adopted by the Council. 2. 1. 2. C h a p t e r I I I : F i n a n c i a l p r o v i s i o n s ( A r t i c l e 7 ) 2. 1. 2. 1. The Committee of the Regions reiterates the view expressed in its opinions on Agenda 2000 and the Future of European Structural Policy of 19 and 20 November 1997 (1) that the EU’s future structural policy in the existing and new Member States should be financed within the existing ceiling on own resources and the limitation of structural spending to 0,46 % of the Union’s GNP. The Commission’s proposal of funding of Euro 218. 4 billion at 1999 prices for eligible areas in the existing Member States for the period 2000-2006 makes it clear that, with appropriate concen- tration, average assistance for the future beneficiary regions over the period 2000-2006 can be continued at the high level reached during the current period. In the interests of concentration of assistance on the neediest regions, the Committee of the Regions assumes that two thirds of the available funds are to be concentrated on the Objective 1 regions. The Committee of the Regions suggests that the funds earmarked for Objective 1 be exactly quantified, as in the existing framework regulation. (1) CdR131/97 fin — OJ C 64, 27. 2. 1998, p. 5; CdR 303/97 fin — OJ C 64, 27. 2. 1998, p. 40. The Committee of the Regions reiterates the 2. 1. 2. 3. view expressed in the above mentioned opinions of 19 and 20 November 1997, and continues to have a number of questions about the performance reserve of 10 % of total resources proposed by the Commission. The submission of the draft regulation has not answered the question as to whether it will be possible to use these funds at mid-term in accordance with a procedure which genuinely encourages high-quality programme implementation. Rather, it is to be feared that priority will be given to the rapid deployment of resources rather than to high-quality and therefore possibly longer-term projects. It seems better to look into whether the figures of the European Court of Justice which talk about under-spending are not lagging behind what goes on in practice in the regions, and also whether under-spending is not due above all to making much too late a start to programmes and to potential operators’ lack of information. The Committee of the Regions considers that 2. 1. 2. 4. the reasons behind the ‘performance-linked reserve’ of encouraging project quality and efficient management of resources over a long programming period to be sound. The 10 % performance reserve is however incom- patible with the principles of planning, programming and proper implementation, as it effectively freezes an amount equivalent to one year’s funding until after the mid-term evaluation. Moreover, it creates major uncertainties, as there is no guarantee that its application will generate positive effects additional to those already implicit in the responsible control and monitoring of assistance. The Committee is therefore opposed to a reserve of this kind. The Committee of the Regions supports the 2. 1. 2. 5. earmarking of 5 % of total Structural Fund resources for the financing of Community initiatives and the use of 1 % of funds to finance innovative and technical assistance measures. It must be ensured however that implementing structures built up, including regional structures, and the system for the necessary monitoring 2. 12. 98 EN Official Journal of the European Communities C 373/7 and assessment of programmes are continued in full. The Committee points out however that in these two areas in particular the Commission should pay greater attention to transparent procedures for the allocation of resources and the evaluation of the efficiency of the measures undertaken. 2. 1. 3. C h a p t e r I V : O r g a n i z a t i o n ( A r - t i c l e s 8 - 1 1 ) 2. 1. 3. 1. The COR is pleased to see that, on several points, the draft regulation implements the expressed intention to enhance the role and influence of partner- ship. The Committee would point to the need to involve the regional and local authorities more closely in the programming and implementation of the Structural Funds. It also stresses that the provisions of the draft regulation on complementarity and partnership must leave the national, regional and local authorities scope legal and financial appropriate to the institutional, system of the Member State in question in the selection of the most representative partners and in the manner, extent and level of their involvement in Structural Fund assistance. This will promote the effective pursuit of regional policy in Member States and the role of regional government as the basis for programming in the individual Member States in accordance with their internal structure of responsibilities. 2. 1. 3. 2. The COR agrees that action must be based on a broad partnership which also involves the relevant economic and social players in the preparation, monitor- ing and evaluation of assistance. However, local and regional authorities should continue to play a key role by virtue of their political responsibility, local knowledge and major contribution to co-funding and democratic legitimacy, including when it comes to deciding on the involvement of other partners. The regulation should set out framework provisions rather than detailed rules for how partnerships should be formed in practice. Such rules should be defined in the various programming documents in consultation with local and regional authorities so that account can be taken of the particular circumstances in each region or Member State. 2. 1. 3. 4. The Commission proposes that it should in future be able to lay down the Community priorities for assistance in the form of guidelines. While fully recognizing the Commission’s role of Community guid- ance, and the usefulness of such guidelines as a basis for discussions on the programmes between the Com- mission, Member States and regional and local auth- orities, the Committee of the Regions feels that the ‘bottom-up’ approach must be guaranteed, and that the programme documents must retain their binding and reliable nature for the implementation of Structural Fund assistance. In no cases should these guidelines mean that the Commission has the right unilaterally to interpret regulations adopted by the Council. 2. 1. 3. 5. The situation is different however at the mid-point of a programming period. Changes in circum- stances and accumulated experience of management in mid-stream make it advisable to publish guidelines and priorities for the adjustment of regional policy, without however resorting to legislative changes to the general regulation. The Committee of the Regions should be the EU body charged with assessing the redefinition and reorientation of the priorities and guidelines for the Commission’s management. As assistance will be programme-based, the 2. 1. 3. 6. Committee of the Regions also points out that the information needed at this level must be more clearly defined. The degree of detailed information to be contained in a programme must be determined. The regulation speaks of measures and operations. The Committee considers it undesirable that detailed infor- mation on measures and operations should come within the ambit of partnership between Commission and Member State, as this could result in considerable delays in making changes to programmes. In this article the Commission once again 2. 1. 3. 7. advocates a combination of loans and grants in the application of the European funds. The Committee of the Regions feels that the participation of the EIB or the other Community bodies should not be made a binding condition. The choice of the most suitable forms of assistance should be guided by the requirements of programme content and specific local conditions. 2. 1. 3. 3. The Committee regrets that the Commission has not defined its own role in partnership more clearly and developed this, although this is a contribution which complements national and regional efforts on the application of the European Structural Funds, in which European, national, regional and local funds are used in a coordinated way. The Committee draws attention to its proposals for the development of a genuinely equal partnership which could be encapsulated in a treaty. 2. 1. 3. 8. The Committee of the Regions points out that, as in the previous programme period, account must be taken of overall economic conditions and specific economic situations, including local and regional contri- butions, in determining the additionality of Structural Fund resources. Otherwise unusually high national structural expenditure, cyclical trends in individual economies and the national and regional bases for financial planning might not be properly considered. The Committee of the Regions proposes that the detailed C 373/8 EN Official Journal of the European Communities 2. 12. 98 arrangements for determining additionality be agreed in the programme planning documents in the framework of partnership. Because of the laws governing national budgets and the necessary involvement of national parliaments, it is not possible to set the level of expenditure for national labour market policy in advance for the whole six-year support period, as the Commission proposes. 2. 2. Title II: Programming 2. 2. 1. C h a p t e r I : G e n e r a l p r o v i s i o n s ( A r t i c l e s 1 2 - 1 4 ) 2. 2. 1. 1. The COR welcomes the requirement that the partners give an opinion on the plans before they are submitted to the Commission, and that the Commission take account of these opinions. These plans should be submitted to the partners in due time for them to give their opinion. The COR expects these provisions to be taken seriously so that local and regional authorities really are given greater influence in organizing action. The COR regrets the fact that it is still not guaranteed that local and regional authorities will be involved in — or even informed about — the Member States’ negotiations with the Commission to approve the plans. The Committee of the Regions draws the Commission’s attention to the burden which programme preparation, particularly with regard to the deadline for approval, could place on the regional and local authorities and the Member States. 2. 2. 1. 2. Whilst the Member States and regions are allowed three months for drawing up regional develop- ment plans, the Commission allows itself six months for the decisions on Community support frameworks, the single programme documents and the operational pro- grammes. There are objective reasons for reversing these deadlines. Six months should be allowed for the drawing up of plans and programmes, which is the more demanding part of the job, whilst with proper coordi- nation three months should suffice for making a decision. The COR calls on the Commission to ensure that the Structural Funds operating principles are applied to all funds and in particular the rural development measures established by the EAGGF Guarantee Fund. The Commission proposal for the introduc- 2. 2. 1. 3. tion of a programming supplement introduces a further step into the programming procedure. The Committee of the Regions rejects this as being unnecessary and unjustified. Article 14(1) already provides for the opinion of the partners on the regional development plan. The involvement of the partners in the programming process is therefore already guaranteed. Moreover, the monitor- ing committees could be set up as soon as the eligible areas have been determined so that they could give their opinion on the draft operational programme. 2. 2. 1. 4. The operational programme provides, as hitherto, for financial planning for the individual pri- orities and a qualitative description of measures within the individual priorities. The supplementary document will now refer financial planning to individual measures. Detailed financial plans of this kind cannot be accurately forecast for a seven-year funding period. This merely complicates the programming procedure and makes programme changes more cumbersome. As the Com- mission previously did not require this information at all, the fact that this document is to be submitted to the Commission purely for information rather than for approval is no compensation. Moreover, Article 31 of the draft regulation requires that the programming supplement be submitted to the Commission before interim payments are made. The programming sup- plement could therefore impede the flow of assistance funds. 2. 2. 2. C h a p t e r I I : C o n t e n t o f t h e p r o - g r a m m i n g ( A r t i c l e s 1 5 - 1 8 ) 2. 2. 2. 1. The Committee of the Regions sees the usefulness of an integrated programme for each region. On this question too, it would be preferable for a level and number of programmes appropriate to the administrative structure and practice of the Member State in question to be agreed on the basis of the cooperation procedure. The Committee of the Regions feels that it 2. 2. 2. 2. would be appropriate for regional conversion plans submitted under Objective 2 to cover all areas of the same NUTS II-level region, as well as one or more NUTS III or sub-NUTS III-level areas at the appropriate territorial level, as happens at present, depending on which option is more suited to the internal structure of each Member State. The thrust of point 5. 1. 4 of the COR Opinion of 14 May 1998 (1) should also be borne in mind. 2. 2. 2. 3. The Committee of the Regions considers that there is no reason why a revision of the operational programmes and the single programming documents should necessarily be carried out after the mid-term review; rather; it should be an option in the event of major changes in the economic and social situation. Moreover, this revision should be carried out in the framework of consultation. 2. 2. 3. C h a p t e r I I I : C o m m u n i t y i v e s ( A r t i c l e s 1 9 - 2 0 ) i n i t i a t - 2. 2. 3. 1. The Committee of the Regions notes that its call for the number of Community initiatives to be reduced and for thematic concentration has been heard. (1) CdR 316/97 fin — OJ C 251, 10. 8. 1998, p. 11. 2. 12. 98 EN Official Journal of the European Communities C 373/9 the areas the absence of As in the previous period, it is important that the Community initiative formula should be applicable throughout the Community, regardless of Objective such status. The area status or Committee welcomes for Community initiatives proposed by the Commission. However, with regard to the Community initiative programme the on human resources and equal opportunities, Committee reiterates the need to step up the drive against all forms of discrimination and inequality in access to the labour market, in particular those resulting from exclusion or the threat of exclusion in urban areas. It also reiterates the need for an additional instrument to flank industrial and sectoral structural change and military conversion. i. e. transfrontier, As a continuation of the Interreg Community 2. 2. 3. 2. initiative, all instruments of cross-border, trans-national and inter-regional cooperation should be packaged together so as to constitute a back-up instrument for regions confronted with internationalization in several areas. The COR endorses the proposed strengthening of inter-regional cooperation. The COR thinks that the clear focal point within the Interreg Community initiative should be cross-border cooperation — as it has been to date. The broad range of cooperation transnational and inter- forms, regional, would continue. This cooperation should also cover a coherent group of regions, including non-neighbouring regions, with a view to boosting the region and promoting balanced, harmonious planning of the EU area; for example, cooperation could be between regions which include a major urban agglomeration. The COR refers to the good experiences with cooperation across the EU’s internal and external borders. Special efforts should be made to use the good experiences with the current Interreg IIA and Interreg IIC Programmes, where responsibility is largely regionalized. 2. 2. 3. 3. The Committee of the Regions calls for greater consistency and coordination between Interreg, the Instrument for Structural Policies for Pre-Accession (ISPA) and cooperation programmes with the Central and Eastern European accession candidates and Cyprus on the one hand, and with third countries in the Mediterranean and Russia, Norway and Switzerland on the other. It also urges that an appropriate role be assigned to local and regional cooperation and that experience with ECOS/Ouverture, Recite and similar programmes be used to organize and implement the new initiatives for local and regional cooperation. It has been found, among other things, that the objectives the programmes make a valuable and thrust of contribution to exchanges of experience between decentralized authorities in areas of importance for regional development. On the other hand, the mechanisms for granting funds and disbursement arrangements have sometimes been lacking in trans- parency. Meanwhile, it welcomes the fact that the new initiative will provide general financial support, within a single mechanism, for interregional cooperation initiatives which previously either were supported sporadically, i. e. per project included in a programme, or were eligible for no support at all. 2. 2. 3. 4. Finally, the Committee of the Regions reiter- ates its proposal that Community initiative projects be coordinated with eligible area assistance programmes. Implementation of the Community initiatives should tie in with the regional operational programmes and should be integrated into the regional operational programmes, where the local and regional authorities concerned so wish. 2. 2. 3. 5. In this context, however, it is worth pointing out that the Leader initiative, which has achieved success to date in the development of rural areas, must not lose its positive effect as a stimulus to small regions because of the planned horizontal orientation. The Committee therefore calls upon the Commission, in preparing the Community initiative, further to strengthen the position of the local action groups in the planning and implementation of programmes, so as to give a clear signal of acknowledgement of these groups’ competence for autonomous regional development. Thus what is needed is not a bureaucratic integration into the horizontal rural development programme, but rather cooperation and coordination. The implementation of the new rural development Community Initiative must be based on the principles of programming and partnership. If Local Action Groups are adopted, they should work closely with locally and regionally led partnerships, operating according to principles of accountability and trans- parency. With particular reference to the Community rural development initiative, the Committee welcomes the importance given to this sector. This sector needs to be strengthened, as is shown in part by the positive results of the Leader experiment. In this regard, it is stressed that the principle of ‘bottom-up’ planning — essential to effective rural development action — must be preserved and reinforced. In the interests of consistency and compatibility, it should also be ensured that the initiative is built into the planning documents. C 373/10 EN Official Journal of the European Communities 2. 12. 98 2. 2. 4. C h a p t e r I V : I n n o v a t i v e m e a s u r e s a n d t e c h n i c a l a s s i s t a n c e ( A r t i c l e s 2 1 - 2 3 ) 2. 2. 4. 1. The Committee of the Regions proposes that the close link between the innovative measures and the eligible area programmes and other regional strategy formation programmes be enshrined in the Treaty. The tender and selection procedure for the innovative measures should retain a strong Community dimension in order to safeguard the granting to local players and representatives of civil society of access to the Structural Funds. The abovementioned procedure should, how- ever, be framed in such way that expectations are not aroused which cannot be fulfilled because of the limited amount of actual assistance. Before funding is allocated for innovative measures and pilot projects in Objective 1 and 2 areas the Commission should consult the bodies entrusted with administration of the programmes in order to ensure that the activities are coherent. The Committee of the Regions points out 2. 2. 4. 2. that the innovative actions and pilot projects must be available to all regions, possibly in partnership with those regions which are entitled to assistance under the Objectives. As part of the efforts to simplify and streamline these instruments, steps should be taken in the future to ensure transparent criteria, unbureaucratic management, decentralized administration and con- tinued scope for assistance to small pilot projects. 2. 2. 5. C h a p t e r V : M a j o r p r o j e c t s ( A r - t i c l e s 2 4 - 2 5 ) The Committee of the Regions is pleased that 2. 2. 5. 1. the Commission intends to raise the threshold for major projects to a total cost of Euro 50 million. However, the approvals for major projects should continue to be granted, as hitherto, in the framework of the approved programmes, rather than on a separate basis to be defined by the Commission. The planning uncertainty associated with the Commission proposal and the time-consuming approval and administration pro- cedures give rise to fears that in future major projects will rarely be financed from the European Funds, if at all. 2. 2. 5. 2. It does not seem appropriate for the Com- mission to be able subsequently to confirm or amend the level of the Community contribution, if the project is part of a priority, in respect of which the co-financing proportion has been negotiated under the Community support framework. 2. 2. 6. C h a p t e r V I : G l o b a l g r a n t s ( A r - t i c l e 2 6 ) The Committee of the Regions considers it 2. 2. 6. 1. necessary to maintain global grants as a form of assistance independent of the operational programmes, as the global grants were originally designed to provide a more dynamic instrument, more attuned to economic reality, than the operational programmes. Moreover, the removal of the global grants as a form of assistance would make their use slower and more cumbersome than that of the operational programmes. The Committee of the Regions endorses the possibility provided for in the framework regulation for an intermediate body to reach an agreement with the Commission on the use of global grants in Community initiatives, within the framework of the partnership with the regions, local authorities and Member States concerned. The COR considers that bodies should be designated to mediate between the competent local and regional authorities. 2. 3. Title III: Contributions and financial manage- ment by the Funds 2. 3. 1. C h a p t e r I : b u t i o n s b y 2 7 - 2 9 ) F i n a n c i a l t h e F u n d s c o n t r i - ( A r t i c l e s 2. 3. 1. 1. With a view to greater flexibility in the implementation of operational programmes, the Com- mittee of the Regions feels that the decision as to whether programmes should be financed from a single fund or from several should be taken in partnership with the managing authorities. 2. 3. 1. 2. The Committee of the Regions considers that the financial participation of the Funds should continue to take the traditional form of subsidies. Recourse to other forms, such as those mooted for the first time in the draft regulation (repayable assistance, interest-rate subsidy, guarantee etc. ) could perhaps be contemplated as complementary approaches but under no circum- stances as substitutes for subsidies. The Committee of the Regions advocates the 2. 3. 1. 3. retention of the existing limits on fund participation in eligible costs and eligible public expenditure. There is perceived to be no need for further differentiation of the participation rates in the framework of the regulation. If necessary the participation limits for Community funding could be eased, e. g. in the case of peripheral or ultra-peripheral regions, to take account of specific situations and difficulties. This could be agreed on the basis of partnership under the Community support frameworks or the programme planning documents with due regard to the provisions of Community law on the monitoring of aid. The Committee of the Regions suggests that 2. 3. 1. 4. a clear definition of the eligibility of expenditure on operations and innovative measures is needed in consultation with the Member States before the new programmes begin. To simplify operation as far as possible, the relevant framework regulation should refer to the SEM work sheets (work sheets on the eligibility for assistance of expenditure under the Structural Funds). 2. 3. 2. C h a p t e r I I : F i n a n c i a l m a n a g e m e n t ( A r t i c l e s 3 0 - 3 2 ) 2. 3. 2. 1. The Commission proposes that any commit- ments for which no acceptable payment application has been received within two years be automatically 2. 12. 98 EN Official Journal of the European Communities C 373/11 decommitted and the contribution of the Funds reduced by that amount. While recognizing the need for Com- munity credits to be managed strictly, the Committee of the Regions is concerned as to the consequences of this type of proposal, as it would increase planning uncertainty in the beneficiary regions and would hinder efforts to carry out high-quality, and thus in some cases longer-term, projects. The regional and local authorities must make binding payment commitments to the final beneficiaries during the funding period. If, because of external problems, the funds are not available, this could pose intractable problems for regional and local budgets. The flexibility of the Structural Funds to span financial years must therefore be retained. This also applies to the requirement that the European Parliament carry over Structural Fund resources in the budget. 2. 3. 2. 2. The Committee of the Regions considers that the four-month deadline (until 30 April) which the Commission proposes in the draft regulation for the adoption of budget agreements for the proposed funding is too long and should be reduced. 2. 3. 2. 3. The Committee of the Regions feels that the period of ‘two months from receipt of an acceptable application’ within which payment is to be made by the Commission should be mandatory rather than a ‘general rule’ 2. 3. 2. 4. The Committee notes with interest that in the coming funding period the Commission plans to put management of the Funds on a reimbursement basis whereby, apart from a single advance of 10 % of total costs, all payments by the Commission to Fund administrators will take the form of reimbursement of expenditure actually made, supported by receipted invoices. However, the Committee fears that this would, at the latest during the second half of the programme period, place an unacceptable burden on the budgets of the regional and local authorities, from which these costs would have to be pre-financed. In the light of current budget constraints, this would be an excessive burden which could only result in complications in the deployment of Structural Fund resources. The requirement on the Member States to 2. 3. 2. 5. submit to the Commission by 30 April each year an updated forecast of applications for payment for the current and following budget years will entail a major commitment for administrations. The Committee of the Regions considers that it would be more appropriate to require that the programme for the current and following financial years be submitted to the Commission by 31 May of each year to allow time for any necessary revision of the payment forecasts for the two years in question. 2. 4. Title IV: Effectiveness of assistance from the funds 2. 4. 1. C h a p t e r I : M o n i t o r i n g ( A r t i c l e s 3 3 - 3 6 ) 2. 4. 1. 1. With regard to the annual review of the main outcomes of the previous year to be carried out by the Commission and the managing authorities, the draft regulation does not make clear the weight to be assigned to any comments or recommendations made by the Commission in the light of this review, nor the status of these in the event that they are rejected by a managing authority. The Committee of the Regions feels that these comments and recommendations should be made in the framework of partnership and not unilaterally by the Commission. 2. 4. 1. 2. The Committee of the Regions was expecting the monitoring committees to be granted new powers, as the Commission had itself suggested. The matter is unfortunately not clearly resolved in the draft regulation. The Committee feels that in particular the right of the monitoring committee to make the final decision on small and medium-sized programme changes — includ- ing the limited transfer of funds between the priorities of an operational programme — should be strengthened. This would make use of the Structural Funds more flexible and bring it more closely into line with practice, as well as significantly strengthening the role of the regional and local authorities and other partners. The Committee of the Regions urges the Commission to play an active and responsible role in the work of the monitoring committees, as part of the cooperation procedure 2. 4. 1. 3. The Committee of the Regions also welcomes the proposed distinction between the partners rep- resented on the committee on the basis of their financial responsibility for assistance. This model should also be used in relation to human resources. 2. 4. 1. 4. The number, level and size of the monitoring committees to be established should be agreed in the Community support framework or the programme planning document with due regard to the specific features of the Member State. The Committee of the Regions draws atten- 2. 4. 1. 5. tion to its proposal that the material and financial indicators for the monitoring of assistance be laid down in partnership in the framework of the programme planning decisions. The indicators should be established after consultation and in line with the specific conditions and needs of the regions responsible for the practical implementation of the programmes. 2. 4. 2. C h a p t e r I I : F i n a n c i a l c o n t r o l ( A r t i c l e s 3 7 - 3 8 ) 2. 4. 2. 1. The Committee of the Regions proposes that the activities of the various Community-level control bodies, such as the financial control departments of C 373/12 EN Official Journal of the European Communities 2. 12. 98 DGs XVI and XX, checks by the Court of Auditors and occasional checks by UCLAF be stepped up. These controls should be standardized with a view to the greatest possible effectiveness. In this respect, consider- ation should be given to coordination between Com- munity control bodies and the bodies responsible at national, regional and local level. The procedure, accord- ing to which the Member States are to take remedial measures in line with the Commission’s recommen- dations or requirements, is not clear. Nor is it clear in what cases and in what way the Commission is entitled to withhold payments in whole or in part in the event of irregularities. There should be a more effective partnership procedure for this eventuality too. In the case of Community structural measures having modest levels of funding, such as innovative measures, the eligibility rules should be made more flexible and a retrospective system of financial control should be introduced; the latter system should be backed up by machinery for the pooling of risks. 2. 4. 2. 2. The Committee of the Regions considers that financial corrective measures should be carried out in the framework of cooperation with suitable procedural guarantees. accepted method for the evaluation of operational programmes to be established in accordance with the principle of cooperation. 2. 4. 3. 3. Any evaluation should be based on the principle of cooperation. The Committee would there- fore like to see establishment of an arbitration body which could, in cases of conflict, settle differences over evaluations between the Member State and regions on the one hand and the Commission’s departments on the other. 2. 4. 3. 4. With regard to the ex ante evaluation of plans, the Committee of the Regions notes with concern that the requirements are very extensive and ill-defined, particularly the short deadlines for submission and the requirements for preparation. 2. 4. 3. 5. The Committee of the Regions would like to see the mid-term evaluation initiated and coordinated by the managing authority and approved by the monitoring committee, on which, if the COR’s recommendation in this opinion is heeded, the Commission would be an active, voting participant. In this way a subsequent Commission pronouncement on the accuracy and quality of the evaluation would be unnecessary. 2. 4. 3. C h a p t e r I I I : E v a l u a t i o n ( A r t i c l e s 3 9 - 4 2 ) 2. 5. Title VI: Committees 2. 4. 3. 1. The Commission’s proposal for a regulation stresses the appropriateness of evaluations, and in the view of the Committee of the Regions this is beyond dispute. Such evaluations would bring clear added value in terms of the transparency and effectiveness of Fund activities. 2. 4. 3. 2. Regional policy has essentially been im- plemented on the basis of operational programmes and it is planned that this should continue in the new period. The Committee of the Regions notes however that there is no single accepted and viable method for the evaluation of operational programmes. There are methods for the evaluation of projects, but not for the multiplicity of actions which an operational programme may comprise. Consequently, without calling into question the principle of evaluation, it would be a good thing for a generally Brussels, 17 September 1998. 2. 5. 1. The COR proposes that local and regional authorities — as part of their national delegations — be guaranteed a place on the advisory and management committees which are to advise the Commission on development and conversion of the regions, Treaty Article 124, rural development, fisheries and aquaculture and Community Initiatives. It would be a logical consequence of the Commission’s intention to enhance partnership that involvement in these bodies should not be limited to the Member States. The COR also proposes that, as well as the European Parliament, the COR be kept informed of the work of the committees. 3. The Committee of the Regions calls on the Com- mission to revise the proposal for a Council Regulation laying down general provisions on the Structural Funds and, in so doing, to take account of the Committee’s suggestions. The President of the Committee of the Regions Manfred DAMMEYER