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A7-0383/2011

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P7_TA(2011)0527

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16.11.2011
PE v02-00 A7-0383/2011

on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1083/2006 as regards certain provisions relating to financial management for certain Member States experiencing or threatened with serious difficulties with respect to their financial stability

(COM(2011)0482 – C7‑0221/2011 – 2011/0211(COD))

Committee on Regional Development

Rapporteur: Danuta Maria Hübner

AMENDMENTS
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
 EXPLANATORY STATEMENT
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1083/2006 as regards certain provisions relating to financial management for certain Member States experiencing or threatened with serious difficulties with respect to their financial stability

(COM(2011)0482 – C7‑0221/2011 – 2011/0211(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2011)0482),

–   having regard to Article 294(2) and Article 177 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7‑0221/2011),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Economic and Social Committee,

–   after consulting the Committee of the Regions,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Regional Development (A7-0383/2011),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

AMENDMENTS BY PARLIAMENT(1)*

to the Commission proposal

---------------------------------------------------------

(1)

*              Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.


REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Regulation (EC) No 1083/2006 as regards certain provisions relating to financial management for certain Members States experiencing or threatened with serious difficulties with respect to their financial stability

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 177 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(1),

Having regard to the opinion of the Committee of the Regions(2),

Acting in accordance with the ordinary legislative procedure(3),

Whereas:

(1)         The unprecedented global financial crisis and economic downturn have seriously damaged economic growth and financial stability and provoked a strong deterioration in financial, economic and social conditions in several Member States. In particular, certain Member States experience serious difficulties or are threatened with such difficulties, notably with problems in their economic growth and financial stability and with a deterioration in their deficit and debt position, also due to the international economic and financial environment.

(2)         Whilst important actions to counterbalance the negative effects of the crisis have already been taken, including amendments of the legislative framework, the impact of the financial crisis on the real economy, the labour market and citizens is being widely felt. Pressure on national financial resources is increasing and further steps should be taken rapidly to alleviate that pressure through the maximum and optimal use of the funding from the Structural Funds and the Cohesion Fund.

(3)         Based on Article 122(2) of the Treaty on the Functioning of the European Union (TFEU) providing the possibility of granting Union financial assistance to a Member State in difficulties or seriously threatened with severe difficulties caused by exceptional occurrences beyond its control, Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism(4)has established such a mechanism with a view to preserving the financial stability of the Union.

(4)         By Council Implementing Decisions 2011/77/EU of 7 December 2010(5) and 2011/344/EU of 30 May 2011(6) Ireland and Portugal were granted such financial assistance.

(5)         Greece was experiencing serious difficulties with respect to its financial stability already before the entry into force of Regulation (EU) No 407/2010. Therefore financial assistance to Greece could not be based on that Regulation.

(6)         The Intercreditor Agreement and the Loan Facility Agreement concluded for Greece on 8 May 2010 entered into force on 11 May 2010. It foresees that the Intercreditor Agreement shall remain in full force and effect for a three-year programme period as long as there are any amounts outstanding under the Loan Facility Agreement.

(7)         Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments(7) has established an instrument providing that the Council will grant mutual assistance where a Member State which has not adopted the euro is in difficulties or is seriously threatened with difficulties as regards its balance of payments.

(8)         By Council Decisions 2009/102/EC of 4 November 2008(8), 2009/290/EC of 20 January 2009(9) and 2009/459/EC of 6 May 2009(10) Hungary, Latvia and Romania were granted such financial assistance.

(9)         The period during which the assistance is available to Ireland, Hungary, Latvia, Portugal and Romania is set out in the respective Council Decisions. The period during which assistance was made available to Hungary expired on 4 November 2010.

(10)       The period during which the assistance under the Inter-creditor Agreement together with the Euro Area Loan Facility Act is available to Greece is different as far as each Member State participating in these instruments is concerned. For the purposes of this Regulation it is necessary that any Member State making a request for benefiting from the derogation under this Regulation clearly specifies in its request the starting date, from which it considers justified that the derogation applies to that Member State in accordance with this Regulation.

(11)       On 11 July 2011, finance ministers of the 17 euro-area Member States signed the Treaty establishing the European Stability Mechanism (ESM). The Treaty follows the European Council decision of 25 March 2011. It is foreseen that by 2013, the ESM will assume the tasks currently fulfilled by the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM). This future mechanism should therefore already be taken into account by this Regulation.

(12)       The European Council conclusions of 23 and 24 June 2011 welcome the Commission's intention to enhance the synergies between the loan programme for Greece and the Union funds, supporting efforts to increase Greece's capacity to absorb Union funds in order to stimulate growth and employment by refocusing on improving competitiveness and employment creation. Moreover, the conclusions welcome and support the preparation by the Commission, together with the Member States, of a comprehensive programme of technical assistance to Greece. This Regulation contributes to these synergy efforts.

(13)       In order to facilitate the management of Union funding, to help accelerate investments in Member States and regions and to improve the availability of funding to implement the cohesion policy it is necessary to allow, in justified cases, temporarily and without prejudice to the 2014-2020 programming period, the increase of interim payments from the Structural Funds as well as from the Cohesion Fund by an amount corresponding to ten percentage points above the actual co-financing rate for each priority axis for Member States which are facing serious difficulties with respect to their financial stability and have requested to benefit from this measure. As a result, the required national counterpart will be reduced accordingly. Due to the temporary nature of the increase and in order to maintain the original co-financing rates as the reference point for calculation of the temporarily increased amounts, the changes resulting from application of the mechanism will not be reflected in the financial plan included in the operational programme. However, operational programmes may need to be updated in order to concentrate the funds on competitiveness, growth and employment an in order to align their targets and objectives with the decrease of total funding available.

(13a)     The Member State requesting to benefit from the derogation under this Regulation, in its request addressed to the Commission, should submit all the information necessary to establish the unavailability of resources for the national counterpart through data on its macroeconomic and fiscal situation; that an increase of payments from the derogation is necessary to safeguard the continuation of the implementation of operational programmes; that the absorption capacity problem persist even if the maximum ceilings applicable to co-financing rates of Annex III are used as well as the reference to the relevant Council Decision or other legal act making the Member State eligible for benefiting from the derogation. It is necessary that the Commission verifies the correctness of the submitted information, therefore, the Commission should have 30 days from the submission of the Member State request to raise any objection in case if any incorrectness is found in the Member State's request. In order to make the derogation effective and operational, it is also necessary to include a presumption that if the Commission does not raise any objection then the Member State request should be considered as justified. However, the Commission should be empowered, by way of implementing acts, to adopt a decision on any objection to the Member State request, in which case, the Commission should give the reasons.

(14)       The rules on calculation of interim payments and the payment of the final balance for operational programmes during the period in which the Member States receive the financial assistance for addressing serious difficulties with respect to their financial stability should be revised accordingly.

(14a)     It is necessary to ensure that there is appropriate reporting on the use of the increased amounts made available to the Member States benefiting from the temporary increase in interim payments under this Regulation.

(15)       After the end of the period during which financial assistance has been made available, evaluations carried out in accordance with Article 48(3) of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999(11) might need to inter alia assess whether the reduction of the national co-funding does not lead to a significant departure from the goals initially set. Such evaluation might lead to the revision of the operational programme.

(16)       Regulation (EC) No 1083/2006 should therefore be amended accordingly,

(17)       As the unprecedented crisis affecting international financial markets and the economic downturn which have seriously damaged the financial stability of several Member States necessitates a rapid response in order to counter the effects on the economy as a whole, this Regulation should enter into force as soon as possible and taking into account the exceptional circumstances of the concerned Member States should apply retroactively starting either from the budgetary year of 2010 or from the starting day when the financial assistance was made available depending on the requesting Member State status, for the periods during which the Member States received financial assistance from the Union or from other euro-area Member States in order to address serious difficulties with respect to their financial stability.

(17a)     The envisaged temporary increase in interim payments should also be considered in the context of the budgetary restraints facing all Member States, which should be reflected appropriately in the EU budget. In addition, since the main purpose of the mechanism is to address specific current difficulties, its application should be limited in time. Therefore application of the mechanism should start on 1 January 2010 and its duration should be limited until the end of 31 December 2013.

HAVE ADOPTED THIS REGULATION:

Article 1

Article 77 of Regulation (EC) No 1083/2006 is replaced by the the following:

"Article 77

Common rules for calculating interim payments and payments of the final balance

1.      Interim payments and payments of the final balance shall be calculated by applying the co-financing rate laid down in the decision on the operational programme concerned for each priority axis to the eligible expenditure indicated under that priority axis in each statement of expenditure certified by the certifying authority.

2.      By way of derogation from Article 53 (2) and the second sentence of Article 53(4) and from the ceilings set out in Annex III, ▌interim payments and the payment of the final balance shall be increased by an amount corresponding to ten percentage points above the co-financing rate applicable to each priority axis, but not exceeding one hundred percent, to be applied to the amount of eligible expenditure newly declared in each certified statement of expenditure submitted during the period in which a Member State meets one of the following conditions:

(a)       financial assistance is made available to it under Council Regulation (EC) No 407/2010 establishing a European financial stabilisation mechanism* or, financial assistance is made available by other euro-area Member States before the entry into force of that Regulation;

(b)      medium-term financial assistance is made available to it in accordance with Council Regulation (EC) No 332/2002**;

(c)       financial assistance is made available to it in accordance with the Treaty establishing the European Stability Mechanism following its entry into force.

2a.    The derogation, referred to in paragraph 2, shall be granted upon the written request of a Member State meeting one of the conditions mentioned in points (a), (b) and (c) above. The request shall be submitted within two months of the entry into force of this regulation or within two months from the date on which a Member State meets one of the conditions mentioned in points (a), (b) and (c).

2b.    In its request submitted to the Commission, the Member State shall justify the necessity of the derogation, referred to in paragraph 2, by providing information necessary to establish:

(a)      the unavailability of resources for the national counterpart through data on its macroeconomic and fiscal situation; and that an increase of payments referred to in paragraph 2 is necessary to safeguard the continuation of the implementation of operational programmes,

(b)      that the problems persist even if the maximum ceilings applicable to co-financing rates of Annex III are used.

(c)       reference to a Council Decision or other legal act, which justifies that the Member State falls under any of the points (a) - (c) of paragraph 2 as well as the concrete starting date from which the financial assistance was made available to the Member State.

The submitted information shall be verified and examined from a justification point of view by the Commission. The Commission shall have 30 days from the day of submission of the request to raise any objection against the correctness of the submitted information. If the Commission does not raise any objection, the Member State request for the derogation, referred to in paragraph 2, shall be considered as justified. However, if the Commission decides to object to the Member State's request, the Commission shall adopt a decision, by means of an implementing act, on this and shall give the reasons.

2c.    The Member State request shall also detail the intended use of the derogation, referred to in paragraph 2 and give information about complementary measures foreseen in order to concentrate the funds on competitiveness, growth and employment, including, where appropriate, a modification of the operational programmes.

2d.    The derogation referred to in paragraph 2 shall cease to be valid for statements of expenditure submitted after 31 December 2013.

3.      For the purpose of calculating interim payments and the payment of the final balance after the Member State ceases to benefit from the financial assistance referred to in paragraph 2, the Commission shall not take into account the increased amounts paid in accordance with that paragraph.

However, these amounts shall be taken into account for the purpose of Article 79(1).

3a.    The increased interim payments resulting from the application of Art. 77(2) shall within the shortest period of time be made available to the managing authority and shall only be used for making payments in implementation of the operational programme.

3b.    In the context of the strategic reporting in accordance with Article 29(1), the Member States shall provide the Commission with appropriate information on the use of the derogation referred to in paragraph 2 showing how the increased amount of support has contributed to promote competitiveness, growth and jobs in the Member State concerned. This information shall be taken into account by the Commission in the preparation of the strategic reporting provided for by Article 30(1).

4.      Notwithstanding paragraph 2, the Union contribution through interim payments and payments of the final balance shall not be higher than the public contribution and the maximum amount of assistance from the Funds for each priority axis as laid down in the decision of the Commission approving the operational programme.

5.      Paragraphs 2, 2a, 2b, 2c, 2d, 3, 3a, 3b shall not apply to operational programmes under the European territorial cooperation objective.

_______________

*       OJ L 118, 12.5.2010, p. 1.

**     OJ L 53, 23.2.2002, p. 1.".

Article 2

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union.

However, it shall apply retroactively to the following Member States: in case of Ireland, Greece and Portugal with effect from the day when the financial assistance was made available to these Member States under Article 77(2), and in case of Hungary, Latvia and Romania from 1 January 2010.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at …

For the European Parliament                           For the Council

The President                                                 The President

(1)

              Opinion of 27 October 2011

(2)

             OJ, , p.

(3)

             Position of the European Parliament of....

(4)

              OJ L 118, 12.5.2010, p. 1.

(5)

          OJ L 30, 4.2.2011, p. 34.

(6)

          OJ L 159, 17.6.2011, p. 88.

(7)

          OJ L 53, 23.2.2002, p. 1.

(8)

          OJ L 37, 6.2.2009, p. 5.

(9)

          OJ L 79, 25.3.2009, p. 39.

(10)

         OJ L 150, 13.6.2009, p. 8.

(11)

         OJ L 210, 31.7.2006, p. 25.


EXPLANATORY STATEMENT

The European Union is being confronted with the persistence of the economic and financial crisis having an alarmingly negative impact on macroeconomic stability and budget of Member States. Reductions in national financial resources available to finance public investments have become a clear constraint to Cohesion Policy implementation and absorption of Structural Funds in some countries.

The Rapporteur welcomes the proposal of the European Commission (COM (2011)0482) amending Council Regulation (EC) No 1083/2006 (General Regulation), and notes that the aim is to provide additional financial resources to EU Member States facing particular difficulties in managing public debt/deficit and ensuring financial stability – with a view to ensure the continuation of the implementation of the programmes.

Member States eligible for this measure are defined as (1) those EURO countries that have received financial assistance under a programme from the European Financial Stabilisation Mechanism (EFSM) or (2) those NON-EURO countries that that have received financial assistance from the Balance of Payments (BoP) mechanism.

The way to provide additional financial assistance through Cohesion Policy is a “top-up” of co-financing rate, allowing for an increase in payments to the countries eligible. The EC proposes a 10 percentage points top-up of the applicable co-financing rates for the priority axis of the programmes.

To date, the countries concerned by this regulation would be: Hungary, Romania, Latvia, Portugal, Greece and Ireland; and in fact their overall allocation under cohesion policy for the period 2007-2013 would remain unchanged. It has to be noted in the case of Greece that it has received financial assistance outside the EFSM, and in the case of Hungary, that it has already exited the BoP mechanism.

The proposed measures would be temporary, coming to an end when the Member State exits the financial assistance mechanism, and the Regulation is proposed to be applied retroactively.

Upon reception of the proposal, the Committee on Regional Development has appointed its Chair as Raporteur and given mandate to rapid conclusion of the negotiations if possible through a “first reading agreement”, having the view that to ensure the full efficiency of the proposed “top-up”, the proposed measures need to be approved quickly in order to provide immediate liquidity to Member States.

The urgency of the proposal and the tight timetable of the Committee’s report require close coordination between the Rapporteur and the Polish Presidency leading negotiations in the Council. The shared aim is to lead the negotiations to a conclusion in autumn 2011, with a view to obtain Parliament’s position (vote in plenary) in early December 2011.

The calendar of committee meetings imposes the need to present a draft report in early October 2011. Unfortunately, at this stage the outcome of the debates in the Council is not yet available.

The Rapporteur supports the intention of the Commission to provide additional assistance to Member States particularly hit by the financial crisis. Also, with a view to ensuring equal treatment among Member States falling or having been fallen under either of the above mentioned eligibility criteria, the Rapporteur considers the retroactive application of the proposal to be indispensable.

Even though agreeing with the overall spirit of the Commission’s proposal, there was a need to introduce a few changes to improve feasibility of the proposal. Amendments were tabled in Committee to make the Commision's proposal more detailed or precise on the following issues: sunset clause and retroactivity, procedure of granting the top-up measure to Member States, reporting on the use of the temporary top-up measures, clarifications of the context and need of the proposed measures.

The Rapporteur considers that the procedure of granting the top-up measures to member States needs to be clear, and that there needs to be appropriate reporting on the use of the increased interim payments. However, neither the procedure to request such measures, nor the reporting exercise should lead to an increase of administrative burden, also to allow for fast policy adjustment responding to the needs of countries mostly hit by the crisis. The reporting should form part of the existing strategic reporting exercise.

The Rapporteur, supported by the Committee on Regional Development has concluded negotiations with the Council, leading to the agreement as shown in the present report voted by the Committee.

As a result, the request of the Member State concerned submitted to the Commission needs to be duly justified (to prove the unavailability of resources for the national counterpart, that the problems persist even in case of applying maximum co-financing rates, etc.) Deatils of the intended use of the derogation neeeds to be provided, and if necessary the operational programmes may be modified.

The Rapporteur considers that a balanced compromise has been reached on the retroactivity of the proposed measures, combined with a "sunset clause", allowing for all "programme countries" to make use from the increased co-financing rate, but also ensuring that the present amending regulation is without prejudice to the negotiations on the future legislative framework and on the future multiannual financial framework.

The Rapporteur is convinced that this amendment to the General Regulation will allow for swift actions to help Member States hit hard by the crisis. The temporary rise of co-financing ceilings will facilitate the concentration of the funds on the realisation of some projects and reduce the pressure on national budget.


PROCEDURE

Title

Amendment of Council Regulation (EC) No 1083/2006 as regards certain provisions relating to financial management for certain Members States experiencing or threatened with serious difficulties with respect to their financial stability (ERDF and ESF)

References

COM(2011)0482 – C7-0221/2011 – 2011/0211(COD)

Date submitted to Parliament

1.8.2011

 

 

 

Committee responsible

       Date announced in plenary

REGI

13.9.2011

 

 

 

Committee(s) asked for opinion(s)

       Date announced in plenary

BUDG

13.9.2011

CONT

13.9.2011

EMPL

13.9.2011

 

Not delivering opinions

       Date of decision

BUDG

8.9.2011

CONT

22.9.2011

EMPL

15.9.2011

 

Rapporteur(s)

       Date appointed

Danuta Maria Hübner

5.10.2011

 

 

 

Discussed in committee

5.10.2011

 

 

 

Date adopted

14.11.2011

 

 

 

Result of final vote

+:

–:

0:

28

0

3

Members present for the final vote

François Alfonsi, Luís Paulo Alves, Charalampos Angourakis, Catherine Bearder, Victor Boştinaru, Alain Cadec, Salvatore Caronna, Danuta Maria Hübner, María Irigoyen Pérez, Seán Kelly, Mojca Kleva, Constanze Angela Krehl, Ramona Nicole Mănescu, Riikka Manner, Iosif Matula, Erminia Mazzoni, Tomasz Piotr Poręba, Georgios Stavrakakis, Nuno Teixeira, Michail Tremopoulos, Lambert van Nistelrooij, Oldřich Vlasák, Elżbieta Katarzyna Łukacijewska

Substitute(s) present for the final vote

Catherine Grèze, Lena Kolarska-Bobińska, Maurice Ponga, Marie-Thérèse Sanchez-Schmid, Elisabeth Schroedter, Giommaria Uggias, Derek Vaughan, Iuliu Winkler

Date tabled

16.11.2011

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