REPORT 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 risk-sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability

22.3.2012 - (COM(2011)0655 – C7‑0350/2011 – 2011/0283(COD)) - ***I

Committee on Regional Development
Rapporteur: Danuta Maria Hübner

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 risk-sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability

(COM(2011)0655 – C7‑0350/2011 – 2011/0283(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2011)0655),

–   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 (C7‑0350/2011),

–   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 of 8 December 2011[1],

–   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 and the opinions of the Committee on Budgetary Control and the Committee on Economic and Monetary Affairs (A7-0067/2012),

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.

Amendment                1 Proposal for a regulation – amending act Recital 1
Text proposed by the Commission	Amendment
(1) The unprecedented global financial crisis and economic downturn have seriously damaged economic growth and financial stability and provoked a strong deterioration in financial and economic conditions in several Member States.	(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.
Amendment  2 Proposal for a regulation – amending act Recital 3
Text proposed by the Commission	Amendment
(3) Based on Article 122(2) of the Treaty 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 has established such a mechanism with a view to preserving the financial stability of the Union.	(3) Pursuant to Article 122(2) of the Treaty on the Functioning of the European Union which provides for the possibility of granting Union financial assistance to a Member State in difficulties or seriously threatened with severe difficulties caused, inter alia, by exceptional occurrences beyond its control, Council Regulation (EU) No 407/2010 of 11 May 2010 established a European financial mechanism with a view to preserving the financial stability of the Union.
Amendment  3 Proposal for a regulation – amending act Recital 4
Text proposed by the Commission	Amendment
(4) By Council Implementing Decisions 2011/77/EU and 2011/344/EU Ireland and Portugal were granted such financial assistance.	(4) By Council Implementing Decisions 2011/77/EU and 2011/344/EU, Ireland and Portugal respectively were granted financial assistance under Regulation (EU) No 407/2010.
Amendment  4 Proposal for a regulation – amending act Recital 6
Text proposed by the Commission	Amendment
(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 will 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.	(6) The Intercreditor Agreement and the Loan Facility Agreement signed on 8 May 2010 entered into force on 11 May 2010. The Intercreditor Agreement is to 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.
Amendment  5 Proposal for a regulation – amending act Recital 8
Text proposed by the Commission	Amendment
(8) By Council Decisions 2009/102/EC, 2009/290/EC and 2009/459/EC Hungary, Latvia and Romania respectively were granted such financial assistance.	(8) By Council Decisions 2009/102/EC and 2009/459/EC Hungary and Romania respectively were granted financial assistance under Regulation (EC) No 332/2002.
Amendment  6 Proposal for a regulation – amending act Recital 9
Text proposed by the Commission	Amendment
(9) On 11 July 2011, finance ministers of the 17 euro-area Member States signed the Treaty establishing the European Stability Mechanism (ESM). It is foreseen that by 2013, the ESM will assume the tasks currently fulfilled by the European Financial Stability Facility and the European financial stabilisation mechanism. This future mechanism should therefore already be taken into account by this Regulation.	(9) On 11 July 2011, the finance ministers of the 17 euro-area Member States signed the Treaty establishing the European Stability Mechanism (ESM). Following decisions taken by the Heads of State and Government of the euro-area on 21 July and 9 December 2011, the Treaty was modified in order to improve the effectiveness of the mechanism and signed on 2 February 2012. Under that treaty the ESM will, by 2013, assume the tasks, currently fulfilled by the European Financial Stability Facility and the European financial stabilisation mechanism. The ESM should therefore be taken into account by this Regulation.
Amendment  7 Proposal for a regulation – amending act Recital 11
Text proposed by the Commission	Amendment
(11) In the statement by the Heads of State or Government of the Euro Area and the EU Institutions of 21 July 2011, the Commission and the European Investment Bank were invited to enhance the synergies between loan programmes and Union funds in all countries under Union or International Monetary Fund assistance. This Regulation contributes to that objective.	(11) In the statement by the Heads of State or Government of the Euro Area and the EU Institutions of 21 July 2011, the Commission and the European Investment Bank (EIB) were invited to enhance the synergies between loan programmes and Union funds in all countries under Union or International Monetary Fund assistance. This Regulation should contribute to that objective.
Amendment  8 Proposal for a regulation – amending act Recital 11 a (new)
Text proposed by the Commission	Amendment
	(11a) In the Statement of the Members of the European Council of 30 January 2012, the Heads of State and Government agreed on strengthening EIB support for infrastructure as an urgent measure and invited the Council, the Commission and the EIB to consider possible options to enhance EIB action to support growth and to make appropriate recommendations, including possibilities for the Union budget to leverage EIB Group financing capacity. This Regulation aims to respond to that invitation in the crisis management context.
Amendment  9 Proposal for a regulation – amending act Recital 13
Text proposed by the Commission	Amendment
(13) In order to alleviate those problems and to speed up the implementation of the operational programmes and projects, as well as to strengthen the economic recovery, it is appropriate that the managing authorities of the Member States having experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out above may contribute financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations foreseen under an operational programme.	(13) In order to alleviate those problems and to speed up the implementation of operational programmes and projects, as well as to strengthen the economic recovery, it is necessary that the Member States which have experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out in Article 77(2) 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 Fund1 as amended by Regulation (EU) No 1311/2011 of the European Parliament and of the Council of 13 December 2011 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 stability2, may contribute financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations provided for under an operational programme.
	___________
	1 OJ L 210, 31.7.2006, p. 25.
	2 OJ L 337, 20.12.2011, p. 5.
Amendment  10 Proposal for a regulation – amending act Recital 14
Text proposed by the Commission	Amendment
(14) In light of the EIB's long-standing expertise as the major financier of infrastructure projects and its commitment to support the economic recovery, the Commission should be able to create in partnership with the EIB risk sharing instruments. The specific terms and conditions of the co-operation should be laid down in an agreement between the Commission and the EIB.	(14) In light of the EIB's long-standing expertise as a major financier of infrastructure projects and its commitment to support the economic recovery, the Commission should be able to establish risk-sharing instruments by means of a cooperation agreement concluded with the EIB for such a purpose. In order to provide legal certainty, it is necessary to exemplify the main and typical terms and conditions of such a co-operation agreement in Regulation (EC) No 1083/2006. As regards the specific crisis-management nature of the risk-sharing instrument, envisaged under this Regulation, the specific terms and conditions of each cooperation should be laid down in an individual cooperation agreement, to be concluded between the Commission and the EIB in accordance with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities1 .
	___________
	1 OJ L 248, 16.9.2002,p.1
Amendment  11 Proposal for a regulation – amending act Recital 16
Text proposed by the Commission	Amendment
(16) To respond rapidly in the context of the current economic and financial crisis, such risk sharing instrument should be implemented by the Commission in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002.	(16) To respond rapidly in the context of the current economic, financial and social crisis, risk-sharing instruments under this Regulation should be implemented by the Commission in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002.
Amendment  12 Proposal for a regulation – amending act Recital 16 a (new)
Text proposed by the Commission	Amendment
	(16a) In the interests of clarity and legal certainty, a definition of a risk-sharing instrument should be inserted in Article 36a of Regulation (EC) No 1083/2006. Risk-sharing instruments should be used for loans and guarantees as well as for other financial facilities in order to finance operations, co-financed by the European Regional Development Fund (ERDF) or the Cohesion Fund (CF), as regards investment costs which cannot be financed as, eligible expenditure pursuant to Article 55 of Regulation (EC) No 1083/2006, or pursuant to the Union rules on State aids. For this purpose, it is also necessary to establish a derogation from Article 54(5) of Regulation (EC) No 1083/2006.
Amendment  13 Proposal for a regulation – amending act Recital 16 b (new)
Text proposed by the Commission	Amendment
	(16b) A Member State seeking to benefit from a risk-sharing instrument should clearly specify in its written request to the Commission, why it considers that it meets one of the eligibility conditions of Article 77(2) of Regulation (EC) No 1083/2006 and it should attach to its request all the information, required under this Regulation in order to prove the specified eligibility condition. In its request, the requesting Member State should also identify the programmes (including the list of project proposals and related funding needs), co-financed by the ERDF or the CF and the part of the 2012 and 2013 allocations to such programmes that it wants to allocate to the risk-sharing instrument. Therefore, the Member State request should be transmitted to the Commission by 31 August 2013 at the latest with a view to the adoption of a Commission decision on the participation of the requesting Member State in a risk-sharing instrument by 31 December 2013 at the latest. Before the Commission decision on the Member State request, the related operational programmes under the ERDF and the CF should be revised, in accordance with Article 33(2) of Regulation (EC) No 1083/2006.
Amendment  14 Proposal for a regulation – amending act Recital 16 c (new)
Text proposed by the Commission	Amendment
	(16c) Selected operations, eligible under a risk-sharing instrument, should be either major projects that have already been subject to a Commission decision under Article 41 of Regulation (EC) No 1083/2006 or other projects, co-financed by the ERDF or CF and falling under one or more of their operational programmes, where these projects face a lack of finance regarding the investment costs to be borne by private investors. Finally, selected operations could also be operations which contribute to the objectives of the national strategic reference framework of the requesting Member State and of the Community strategic guidelines on cohesion and which can by virtue of their character contribute to support growth and strengthen the economic recovery subject to availability of funds under the risk-sharing instrument.
Amendment  15 Proposal for a regulation – amending act Recital 16 d (new)
Text proposed by the Commission	Amendment
	(16d) In addition, the requesting Member State should specify in its request the amount available for its exclusive benefit within its cohesion policy financial allocation pursuant to Article 18(2) of Regulation (EC) No 1083/2006 and which can be earmarked for the objectives of the risk-sharing instrument exclusively from the Union budget commitments to be effected in the years 2012 and 2013 pursuant to article 75(1) of Regulation(EC) No 1083/2006, and which should not exceed 10% of the indicative total allocation for the requesting Member State for the years 2007-2013 regarding the ERDF and the CF and approved in accordance with Article 28(3)b of Regulation (EC) No 1083/2006. Finally, it is necessary to ensure that the Union financing of the risk-sharing instrument, including management fees and other eligible costs, is clearly limited to the above-specified maximum amount of the Union contribution to the risk-sharing instrument and there should be no additional contingent liability for the general budget of the European Union. Any residual risk inherent in the financed operations under the established risk-sharing instrument therefore be borne either by the EIB or by the national or international public sector body or body governed by private law with a public service mission, together with which the risk-sharing instrument has been established by virtue of a cooperation agreement. Reuse of reflow or any leftover amount, allocated to the risk-sharing instrument, should be made possible, under this Regulation, for the same Member State, at its request and within the same risk-sharing instrument, provided that it still meets the eligibility conditions.
Amendment  16 Proposal for a regulation – amending act Recital 16 e (new)
Text proposed by the Commission	Amendment
	(16e) The Commission should verify that the information submitted by the requesting Member State is correct and that the Member State request is justified, and should be empowered to adopt, by means of an implementing act, within four months of the Member State request, a decision on the terms and conditions of the participation of the requesting Member State in the risk-sharing instrument. However, only projects for which a favourable financing decision is taken either by the EIB or by the national or international public sector bodies or bodies governed by private law with a public service mission, as the case may be, should be accepted as eligible for financing through an established risk-sharing instrument. In the interests of transparency and legal certainty, the Commission decision, should be published in the Official Journal of the European Union.
Amendment  17 Proposal for a regulation – amending act Recital 16 f (new)
Text proposed by the Commission	Amendment
	(16f) Given the crisis-management purpose and the nature of the risk-sharing instrument introduced by this Regulation, as well as the unprecedented crisis affecting international markets and the economic downturn, which have seriously damaged the financial stability of several Member States and which require a rapid response in order to counter the effects on the real economy, the labour market and citizens, it is appropriate that this Regulation enters into force on the day of its publication in the Official Journal of the European Union.
Amendment  18 Proposal for a regulation – amending act Article 1 - point 1 Regulation (EC) No 1083/2006 Article 14 - paragraph 1
Text proposed by the Commission Amendment Regulation (EC) No 1083/2006 is amended as follows: Regulation (EC) No 1083/2006 is hereby amended as follows: (1) In Article 14, paragraph 1 is replaced by the following: (1) in article 14, paragraph 1 is replaced by the following: "1. The budget of the European Union allocated to the Funds shall be implemented within the framework of shared management between the Member States and the Commission, in accordance with Article 53(1)(b) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, * with the exception of the risk sharing instruments referred to in Article 36(2a) and of the technical assistance referred to in Article 45. "1. The budget of the European Union allocated to the Funds shall be implemented within the framework of shared management between the Member States and the Commission, in accordance with Article 53(1)(b) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities*, with the exception of instrument referred to in Article 36a of this Regulation and of the technical assistance referred to in Article 45 of this Regulation.
Amendment  19 Proposal for a regulation – amending act Article 1 - point 2 Regulation (EC) No 1083/2006 Article 36 - paragraph 2a
Text proposed by the Commission Amendment (2) In Article 36, the following paragraph 2a is inserted: (2) the following article is inserted:   "Article 36a   Risk sharing instrument   1. For the purpose of this Article a risk-sharing instrument means a financial instrument (loan, guarantee, as well as other financial facility) which guarantees the total or partial coverage of a defined risk, where appropriate in exchange for an agreed remuneration. "2a. Member States meeting one of the conditions set out in Article 77(2), may contribute a part of the financial allocations indicated in Article 19 and Article 20 to a risk sharing instrument, to be established by the Commission in agreement with the European Investment Bank, or in agreement with national or international public sector bodies or bodies governed by private law with a public service mission providing adequate guarantees as referred to in Article 54(2)(c) of Regulation (EC, Euratom) No 1605/2002, under similar terms and conditions to those applied to and by the European Investment Bank, to cover the provisioning and capital allocation of guarantees and loans, as well as other financial facilities, granted under the risk sharing instrument. 2. Member States meeting one of the conditions set out in points (a), (b) and (c) of Article 77(2), may contribute a part of the overall resources distributed in accordance with Articles 19 and 20 to a risk-sharing instrument, which shall be established by means of a cooperation agreement, to be concluded by the Commission either with the EIB, or with national or international public sector bodies or bodies governed by private law with a public service mission providing adequate guarantees as referred to in Article 54(2)(c) of Regulation (EC, Euratom) No 1605/2002, under similar terms and conditions to those applied to and by the EIB ("contracted implementing body"), to cover the provisioning and capital allocation of guarantees and loans, as well as other financial facilities, granted under the risk sharing instrument.   3. The cooperation agreement, referred to in paragraph 2, shall contain rules in particular on: the total amount of the Union contribution and a schedule on how it will be made available; the trust account conditions to be set up by the contracted implementing body; the eligibility criteria for the use of the Union contribution, the details of the exact risk-sharing (including the leverage ratio), to be covered and the guarantees to be provided by the contracted implementing body; the pricing of the risk-sharing instrument, based on the risk margin and the coverage of all the administrative costs of the risk-sharing instrument; the application and approval procedure of the project proposals, covered by the risk-sharing instrument; the availability duration of the risk-sharing instrument and the reporting requirements.   The exact risk sharing (including the leverage ratio), to be undertaken pursuant to the cooperation agreement by the contracted implementing body, shall as an average, aim at being at least 1,5 times the amount of the Union contribution to the risk-sharing instrument.   Payments to the risk-sharing instrument shall be made in tranches, in accordance with the scheduled use of the risk-sharing instrument in providing loans and guarantees financing specific operations. Such risk sharing instrument shall be used exclusively for loans and guarantees, as well as other financial facilities, to finance operations co-financed by the European Regional Development Fund or the Cohesion Fund, regarding expenditure which is not covered by Article 56. 4. By way of derogation from Article 54(5) the risk-sharing instrument shall be used to finance operations co-financed by the ERDF or the Cohesion Fund, regarding investment costs which cannot be financed as, eligible expenditure pursuant to Article 55, or pursuant to the Union rules on state aids.   It may also be used to finance operations, which contribute to the achievement of the objectives of the national strategic reference framework of the requesting Member State and the Community strategic guidelines on cohesion1, and bring the greatest added value to the Union strategy for smart, sustainable and inclusive growth. The risk sharing instrument shall be implemented by the Commission within the framework of indirect centralised management in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002. 5. The risk sharing instrument shall be implemented by the Commission within the framework of indirect centralised management in accordance with Articles 54 and 56 of Regulation (EC, Euratom) No 1605/2002. Payments to the risk sharing instrument shall be made in tranches, in accordance with the scheduled use of the risk sharing instrument in providing loans and guarantees financing specific operations.     6. A Member State seeking to benefit from a risk sharing instrument shall submit a written request to the Commission by 31 August 2013. In its request, the Member State shall provide all the information necessary to establish:   (a) that it meets one of the conditions referred to in points (a), (b) or (c) of Article 77(2), by providing a reference to a Council Decision or other legal act proving its eligibility;   (b) the list of programmes (including project proposals and related funding needs) co-financed either by the ERDF or by the Cohesion Fund and the part of the 2012 and 2013 allocations to such programmes that it wants to take out of those programmes in order to reallocate those amounts to the risk- sharing instrument;   (c) the list of proposed projects pursuant to paragraph 4, second subparagraph, and the part of the 2012 and 2013 allocations that it wants to take out of the programmes in order to reallocate those amounts to the risk-sharing instrument;   (d) the amount available for its exclusive benefit within its cohesion policy financial allocation pursuant to Article 18(2) and an indication of the amount, which may be earmarked for the objectives of the risk sharing instrument exclusively from the Union budget commitments to be effected in years 2012 and 2013 pursuant to Article 75(1); The Member State concerned shall address a request to the Commission who shall adopt a decision by means of an implementing act, describing the system established to guarantee that the amount available is used for the exclusive benefit of the Member State which provided it within its cohesion policy financial allocation pursuant to Article 18(2), as well as the terms and conditions applicable to such risk sharing instrument. These terms and conditions shall at least address the following: 7. After verifying that the Member State request is correct and justified - the Commission shall adopt a decision, within four months of the Member State request, by means of an implementing act, describing the system established to guarantee that the amount available is used for the exclusive benefit of the Member State which provided it within its cohesion policy financial allocation pursuant to Article 18(2), as well as setting out the concrete terms and conditions of the participation of the requesting Member State in the risk-sharing instrument. The terms and conditions shall in particular cover the following: (a) traceability and accounting, information on the use of the funds and monitoring and control systems; and (a) traceability and accounting, information on the use of the funds, payment conditions and monitoring and control systems; (b) structure of the fees and other administrative and management costs. (b) structure of the fees and other administrative and management costs;   (c) indicative list of eligible projects for financing; and   (d) the maximum amount of the Union contribution that can be allocated to the risk sharing instrument from the Member State allocations available, and the instalments for practical implementation.   The Commission decision shall be published in the Official Journal of the European Union.   When deciding on the Member State request, the Commission shall ensure that only projects, for which a favourable financing decision is taken either by the EIB or by a national or international public-sector body or body governed by private law with a public-service mission, shall be accepted as eligible for financing through an established risk-sharing instrument.   8. The Commission decision, referred to in paragraph 7, shall be preceded by the revision of the operational programmes under the ERDF and Cohesion Fund in accordance with Article 33(2). The financial allocations to the risk-sharing instrument shall be strictly capped and shall not create contingent liabilities for the Union budget or the Member State concerned. 9. The financial allocations to the risk sharing instrument shall be strictly capped and shall not exceed 10% of the indicative total allocation for the requesting Member State for the years 2007-2013 regarding ERDF and Cohesion Fund, which was approved in accordance with Article 28(3)b. The financial allocations available to the projects in the second subparagraph of paragraph 4 of this Article, are limited to the amounts left after financing the operations mentioned in the first subparagraph of paragraph 4 of this Article. Apart from the total Union contribution to the risk-sharing instrument, endorsed in the decision, referred to in paragraph 7 of this Article, the Union participation in a risk-sharing instrument shall not create any additional contingent liabilities for the general budget of the Union or for the Member State concerned. Any amount left-over after the completion of an operation covered by the risk sharing instrument may be reused, at the request of the Member Sate concerned, within the risk-sharing instrument, if the Member State still meets one of the conditions set out as specified in Article 77(2). If the Member State no longer meets those conditions, the amount left-over shall be considered as assigned revenue within the meaning of Article 18 of the Financial Regulation. At the request of the Member State concerned, additional commitment appropriations generated by this assigned revenue shall be added the following year to the cohesion policy financial allocation of the Member State concerned." 10. Any reflow or amount left-over after the completion of an operation covered by the risk-sharing instrument may be reused, at the request of the Member State concerned, within the risk sharing instrument, if the Member State still meets one of the conditions set out in points (a), (b) or (c) of Article 77(2). If the Member State no longer meets any of those conditions, the reflow or the amount left-over shall be considered as assigned revenue within the meaning of Article 18 of t Regulation (EC, Euratom) No 1605/2002. At the request of the Member State concerned, additional commitment appropriations generated by this assigned revenue shall be added the following year to the cohesion policy financial allocation of the Member State concerned."   _______________   1 See: Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion, OJ L 291, 21.10.2006, p.11."
Amendment  20 Proposal for a regulation – amending act Article 2 Regulation (EC) No 1083/2006 .
Text proposed by the Commission Amendment This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union.

• [1]  OJ C 43, 15.2.2012, p. 13.

EXPLANATORY STATEMENT

Context and content of Commission's proposal

Following the two previous proposals for amending Council Regulation (EC) No 1083/2006 in response to the current economic and financial crisis, the Commission proposes the third Amendment that lays down provisions for creation of a risk-sharing instrument.

The Commission and the EIB have been asked by the Heads of States or Governments of the Euro Area, on 21 July 2011, to enhance the synergies between the loan programmes and Union funds in those Member States which are under Union or International Monetary Fund assistance at the moment the modification enters into force. Currently the Member States that are under the above mentioned assistance are: Ireland, Greece, Portugal, and Romania.

The measure is intended to address the serious obstacles faced by some Member States, particularly Greece, in raising the private financing needed to implement infrastructure and productive investment projects which can only be part-financed by public funds.

This is particularly the case of infrastructure projects which generate net revenues (such as toll motorways or other infrastructure which collect charges from users), the value of which cannot be covered by grant financing through cohesion policy. It is also the case for productive investments for which the maximum allowable public aid is capped by state aid rules. The Commission proposal concerns only revenue generating projects, since the investment cost covered by revenues is not eligible for EU co-financing.

In the Member States most affected by the financial and economic crisis, and in particular Greece, a number of strategic projects which have been selected for co-financing under cohesion policy programmes are at risk of not being implemented because private sector investors and banks either lack the liquidity to lend to projects and project promoters or are no longer willing to bear the risks of investing in the present circumstances.

The measure proposed is an exception to the normal framework in which cohesion policy is implemented, justified only by the exceptional circumstances imposed by the crisis. It aims therefore to cover part of the risks associated with lending to banks or to project promoters in the Member States experiencing or threatened with serious difficulties with respect to their financial stability, in order to maintain the involvement of private investors and to overcome important obstacles faced in implementing cohesion policy programmes.

According to the proposal in order to implement the risk sharing instrument the transfer of part of the financial allocations available to these Member States back to the Commission would be allowed. The objective would be to provide capital contributions to cover expected and unexpected losses of loans and guarantees to be extended under a risk-sharing partnership with the European Investment Bank and/or other financial institutions with a public policy mission who are willing to continue to lend to project sponsors and banks with a view to provide private match funding for projects implemented with Structural Funds and Cohesion Fund contributions. The overall allocation under cohesion policy for the period 2007-2013 would therefore not be modified. The proposed measures would be temporary, coming to an end when the Member State exits the financial assistance mechanism. The risk sharing instrument shall be implemented by the Commission within the framework of indirect centralised management in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002.

Rapporteur's comments

The Rapporteur welcomes the proposal and notes that the aim is to ensure the continuation of the implementation of the programmes co-financed by the European Regional Development Fund (ERDF) and Cohesion Fund (CF) in the context of economic recovery of the Member States under financial assistance.

The Rapporteur considers that some elements of the proposal should be clarified and tables amendments aiming at clarifying the text, adding the definition of a risk-sharing instrument (in line with the recent compromise proposal for Financial Regulation text) together with a detailed description of the procedure to be applied to establish and implement a risk-sharing instrument based on the legal patterns of existing risk-sharing instruments in other Union policies. Furthermore, the Rapporteur suggests rather to insert a new Article 36a for better legal drafting purposes, as well as to structure the article in paragraphs and sub-paragraphs.

The Rapporteur proposes amendments that specify a budget ceiling for the risk-sharing instrument and reiterate that there are no contingent liabilities for the Union budget or the Member State concerned beyond the financial allocations dedicated to the risk-sharing instrument.

In order to ensure that only economically viable revenue-generating projects are included into the mechanism the Rapporteur specifies that only projects for which a positive financing decision has been taken by the EIB or similar institutions are eligible for finance under the risk-sharing instrument. Similarly, for the purpose of emphasising that the Union budget does not cover all the risk but shares it with the EIB or similar institutions the exact risk-sharing (the leverage ratio) shall be as an average aimed at being at least 1,5 times the amount of the Union contribution to the risk-sharing instrument.

Concerning the scope of the projects eligible for the risk-sharing instrument, the Rapporteur tables amendments that should give preferential access to the revenue-generating and state aid projects already included in the operational programmes of the Member States concerned but it would not exclude other projects which contribute to the achievement of the objectives of the national strategic reference framework of the requesting Member State and the Community strategic guidelines on Cohesion and which can contribute to economic recovery of the Member States concerned.

OPINION of the Committee on Budgetary Control (1.3.2012)

for the Committee on Regional Development

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 risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability
(COM(2011)0655 – C7‑0350/2011 – 2011/0283(COD))

Rapporteur: Crescenzio Rivellini

SHORT JUSTIFICATION

The European Union is currently being confronted with a persistent economic and financial crisis that is not only affecting the macroeconomic stability of many Member States but also the access to finance across the whole European Union. This is jeopardising the implementation of cohesion policy programmes as the liquidity problems being faced by financial institutions is limiting the amount of financing available for the public and private stakeholders carrying out the underlying projects.

The Rapporteur welcomes the proposal of the European Commission (COM (2011)0655) amending Council Regulation (EC) No 1083/2006 (General Regulation), and notes that the main objective is to improve the access to financing to the promoters of projects in order to allow them to continue the implementation of the Structural Funds and Cohesion Fund programmes on the ground. In order to do so, a risk sharing instrument would be created. Member States would transfer part of their financial allocations into such instrument that would then provide capital contributions to cover expected and unexpected losses of loans and guarantees granted under a risk-sharing partnership with the European Investment Bank and / or other financial institutions with a public policy mission. This would therefore provide additional liquidity to implement infrastructure and productive investments projects without modifying the overall allocation under cohesion policy for the period 2007-2013.

The Rapporteur supports the intention of the Commission to improve the access to finance for promoters of infrastructure and productive investments. Even though agreeing with the overall spirit of the Commission’s proposal, the Rapporteur believes that there is a need to introduce a few changes to improve feasibility of the proposal.

First of all, the Rapporteur believes that the lack of liquidity faced by the financial sector is not limited to the countries that have received financial assistance from the European Financial Stabilisation Mechanism or the Balance of Payments mechanism. Therefore, promoters of infrastructure and productive investments in all Member States are seeing their sources of finance reduced. The Rapporteur therefore believes that extending the possibility of setting up such risk sharing mechanisms to all Member States would increase investment in growth and employment throughout the Union by using Structural and Cohesion funds that could otherwise remain unabsorbed by the end of the current programming period.

Furthermore, the Rapporteur believes that, for the proposal to have a real impact on the economy of the Member States deciding to put it in place, it should be applicable both to operations already co-financed by the Structural or Cohesion funds and also to infrastructure and SME operations relevant to the economic recovery of the Member State concerned. The possibility of supporting “infrastructure projects relevant in the context of the economic recovery of the Member States concerned” is already included in the explanatory memorandum of the Commission proposal. The possibility of supporting SME operations will open the possibility to increase the liquidity available to one of the sectors that provides employment to a larger portion of the EU population and which is currently suffering a severe liquidity shortage.

Finally, the Rapporteur believes that, in order to allow for an increased use of the instrument and ensure that the private sector contributes at an appropriate level in the projects supported, the limitation to supporting only expenditure which is not covered by Article 56 should be removed.

AMENDMENTS

The Committee on Budgetary Control calls on the Committee on Regional Development, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation – amending act Recital 2 a (new)
Text proposed by the Commission	Amendment
	(2a) The serious debt crisis in several Member States calls for new and innovative ways for investing the Structural Funds, which would facilitate their best possible use both in the 2007-2013 and the 2014-2020 programming periods.
Amendment  2 Proposal for a regulation – amending act Recital 13
Text proposed by the Commission	Amendment
(13) In order to alleviate those problems and to speed up the implementation of the operational programmes and projects, as well as to strengthen the economic recovery, it is appropriate that the managing authorities of the Member States having experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out above may contribute financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations foreseen under an operational programme.	(13) In order to alleviate those problems and to speed up the implementation of the operational programmes and projects, as well as to strengthen the economic recovery, it is appropriate that the managing authorities of the Member States having experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out above may contribute financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations foreseen under an operational programme. In addition, infrastructure and productive investment relevant to the economic recovery and job creation in the Member States concerned and compliance with the objectives of the Europe 2020 strategy can also be supported.
Amendment  3  Proposal for a regulation – amending act Article 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 2
Text proposed by the Commission Amendment Such risk sharing instrument shall be used exclusively for loans and guarantees, as well as other financial facilities, to finance operations co-financed by the European Regional Development Fund or the Cohesion Fund, regarding expenditure which is not covered by Article 56. Such risk sharing instrument shall be used exclusively for loans and guarantees, as well as other financial facilities, to finance operations co-financed by the European Regional Development Fund or the Cohesion Fund, or infrastructure, SME projects and productive investment projects relevant to the economic recovery and job creation in the Member States concerned, and to ensure compliance with the objectives of the Europe 2020 strategy. For the Member States meeting one of the conditions set out in the second paragraph of Article 77, such risk sharing instrument shall also be used for operations linked to cohesion policy objectives which are not co-financed by national strategic reference framework (NSRF) programmes.
Justification
It is important to ensure that it is clear that the risk sharing instruments comply with the objectives of the EU2020 Strategy because they are serving broader goals than the ones of the ERDF and the Cohesion Fund.
Amendment  4 Proposal for a regulation – amending act Article 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 5 – point a
Text proposed by the Commission Amendment (a) traceability and accounting, information on the use of the funds and monitoring and control systems; and (a) traceability and accounting, governance structure in close consultation with the Member State and participating financial institutions, information on the leverage ratio, on the use of the funds and on monitoring and control systems; and

PROCEDURE

Title	Amendment of Council Regulation (EC) No 1083/2006 as regards certain provisions relating to risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability
References	COM(2011)0655 – C7-0350/2011 – 2011/0283(COD)
Committee responsible        Date announced in plenary	REGI 25.10.2011
Committee(s) asked for opinion(s)        Date announced in plenary	CONT 15.12.2011
Rapporteur(s)        Date appointed	Crescenzio Rivellini 29.11.2011
Date adopted	29.2.2012
Result of final vote	+: –: 0:	14 11 0
Members present for the final vote	Marta Andreasen, Jean-Pierre Audy, Inés Ayala Sender, Zigmantas Balčytis, Andrea Češková, Tamás Deutsch, Martin Ehrenhauser, Jens Geier, Gerben-Jan Gerbrandy, Ingeborg Gräßle, Ville Itälä, Cătălin Sorin Ivan, Bogusław Liberadzki, Monica Luisa Macovei, Jan Mulder, Eva Ortiz Vilella, Crescenzio Rivellini, Theodoros Skylakakis, Bart Staes, Søren Bo Søndergaard, Michael Theurer
Substitute(s) present for the final vote	Philip Bradbourn, Derk Jan Eppink, Lucas Hartong, Edit Herczog, Véronique Mathieu, Derek Vaughan

OPINION of the Committee on Economic and Monetary Affairs (13.3.2012)

for the Committee on Regional Development

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 risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability
(COM(2011)0655 – C7‑0350/2011 – 2011/0283(COD))

Rapporteur: Rolandas Paksas

SHORT JUSTIFICATION

The European Commission proposal comes at the time when the implementation of the Structural and Cohesion Funds programmes encounters serious problems in a number of Member States. The sustained financial and economic crisis has severely damaged Member States budgets, the pressure on national financial resources available to finance public investments is constantly increasing and the conditions for the private and particularly the financial sector participation are deteriorating.

The main objective of the Commission proposal is therefore to help the Member States that have been most affected by the crisis to continue with the implementation of the Structural and Cohesion Funds programmes on the ground, hence injecting funds into economy. By allowing for a possibility to transfer a part of EU funds allocations to set up risk sharing instruments the Commission aims to facilitate the provision of loans and guarantees by the European Investment Bank or by other international financial institutions to co-finance private contributions to projects implemented with public support.

The Rapporteur welcomes the Commission proposal and its potentially positive impact on the EU economy and the absorption of the EU Funds. In order to ensure its most optimal and rapid application, the Rapporteur proposes two amendments to the text of the proposal.

Firstly, the Rapporteur believes that in the current adverse economic environment all EU Member States - whether already receiving financial assistance from the EU mechanisms or facing difficulties with respect to their financial stability and struggling to attract private sector capital to complement increasingly limited public financial resources shall have a possibility to benefit from the introduction of risk sharing instruments. Such instruments would allow to increase investment in growth and employment generating projects by using the Structural and Cohesion Funds which may remain unabsorbed towards the end of the 2007-2013 programming period.

Secondly, the Rapporteur agrees with the Commission that the priority under risk sharing instruments should be given to financing of the operations co-financed by the Structural or Cohesion Funds; however, other infrastructure projects relevant to the economic recovery and creation of employment in the Member States should also be eligible (the explanatory memorandum of the Commission proposal already includes such possibility). In particular, some revenue generating infrastructure projects which in non-crisis situation would have obtained financing from external sources (and therefore not eligible or not included in the operational Structural and Cohesion Funds programmes for 2007-2013) but under current circumstances unable to find financing could benefit from the inclusion in the risk sharing instruments without having to undergo a time-consuming amendment of the operational programmes.

Lastly, taking into account the success of similar instruments in other sectors (e.g. Risk-Sharing Finance Facility for R&D) the Rapporteur hopes that the establishment of such temporary risk sharing instrument will prove equally beneficial to the Member States that decide to use it in the present crisis situation and considers it valuable after the current programming period expires to explore possibilities of creating an analogous permanent risk sharing instrument to benefit all Member States under clearly defined conditions.

AMENDMENTS

The Committee on Economic and Monetary Affairs calls on the Committee on Regional Development, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 2 a (new)
Text proposed by the Commission	Amendment
	(2a) The serious debt crisis in several programme countries calls for new and innovative ways for investing the Structural Funds, which will facilitate their best possible use in the 2007 to 2013 programming period.
Amendment  2 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) In order to alleviate those problems and to speed up the implementation of the operational programmes and projects, as well as to strengthen the economic recovery, it is appropriate that the managing authorities of the Member States having experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out above may contribute financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations foreseen under an operational programme.	(13) In order to alleviate those problems and to speed up the implementation of the operational programmes and projects, as well as to strengthen the economic recovery, it is appropriate that the managing authorities of the Member States having experienced serious difficulties with respect to financial stability and which have been granted financial assistance according to one of the financial assistance mechanisms set out above may contribute, temporarily and without prejudice to the 2014 to 2020 programming period, financial resources from operational programmes to the establishment of risk sharing instruments providing loans or guarantees or other financial facilities, in support of projects and operations foreseen under an operational programme.
Amendment  3 Proposal for a regulation – amending act Article 1 - point 2 Regulation (EC) No 1083/2066 Article 36 – paragraph 2a– subparagraph 2
Text proposed by the Commission Amendment Such risk sharing instrument shall be used exclusively for loans and guarantees, as well as other financial facilities, to finance operations co-financed by the European Regional Development Fund or the Cohesion Fund, regarding expenditure which is not covered by Article 56. Such risk sharing instrument shall be used exclusively for loans and guarantees, as well as other financial facilities, to finance impending operations that are part of an operational programme and that are co-financed by the European Regional Development Fund or the Cohesion Fund, or infrastructure projects relevant in the context of the economic recovery and job creation in the Member States concerned, regarding expenditure which is not covered by Article 56.
Justification
The intention is to allow for financing of other important infrastructure projects having potential to generate growth and jobs without having to undergo a time-consuming amendment of the operational programmes. The focus here is on revenue-generating infrastructure projects which in non-crisis situation would have obtained financing from external private sources and therefore not eligible or not included in the operational Structural and Cohesion Funds programmes for 2007-2013, but under current circumstances unable to find funding.
Amendment  4 Proposal for a regulation Article 1 – paragraph 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 3
Text proposed by the Commission Amendment The risk sharing instrument shall be implemented by the Commission within the framework of indirect centralised management in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002. The risk sharing instrument shall be implemented by the Commission within the framework of indirect centralised management in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002. The Commission's selection of an operation shall take place in accordance with Article 41(1) and shall demonstrate positive impacts on local economies and labour markets.
Amendment  5 Proposal for a regulation Article 1 – paragraph 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 3a (new)
Text proposed by the Commission Amendment   The Commission shall set the deadlines for the implementation of the respective risk sharing instruments.
Justification
Although the request from the Member State concerned will be accepted till the end of 2013, the implementation of the risk sharing instruments shall be closed in the foreseen future specified by the Commission.
Amendment  6 Proposal for a regulation Article 1 – paragraph 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 5– point a
Text proposed by the Commission Amendment (a) traceability and accounting, information on the use of the funds and monitoring and control systems; and (a) traceability, democratic scrutiny and accounting, governance structure in close consultation with the Member State and participating financial institutions, information on the use of the leverage factor, the use of the funds and monitoring and control systems; and
Amendment  7 Proposal for a regulation Article 1 – paragraph 1 – point 2 Regulation (EC) No 1083/2006 Article 36 – paragraph 2a – subparagraph 7
Text proposed by the Commission Amendment Any amount left-over after the completion of an operation covered by the risk sharing instrument may be reused, at the request of the Member Sate concerned, within the risk-sharing instrument, if the Member State still meets one of the conditions set out as specified in Article 77(2). If the Member State no longer meets those conditions, the amount left-over shall be considered as assigned revenue within the meaning of Article 18 of the Financial Regulation. At the request of the Member State concerned, additional commitment appropriations generated by this assigned revenue shall be added the following year to the cohesion policy financial allocation of the Member State concerned. Any amount left-over after the completion of an operation covered by the risk sharing instrument may be reused, at the request of the Member Sate concerned, within the risk-sharing instrument, if the Member State still meets one of the conditions set out as specified in Article 77(2). If the Member State no longer meets those conditions, the amount left-over shall be considered as assigned revenue within the meaning of Article 18 of the Financial Regulation. At the request of the Member State concerned, additional commitment appropriations generated by this assigned revenue shall be added the following year to the cohesion policy financial allocation of the Member State concerned. The amount left over on 31 December 2013 shall be transferred to the budget of the European Union.
Justification
State actually gives up its cohesion policy allocation due to the absorption problems. If the respective allocation is not absorbed before the next programming period, it shall be transferred to the EU budget.

PROCEDURE

Title	Amendment of Council Regulation (EC) No 1083/2006 as regards certain provisions relating to risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability
References	COM(2011)0655 – C7-0350/2011 – 2011/0283(COD)
Committee responsible        Date announced in plenary	REGI 25.10.2011
Committee(s) asked for opinion(s)        Date announced in plenary	ECON 25.10.2011
Rapporteur(s)        Date appointed	Rolandas Paksas 25.10.2011
Discussed in committee	24.1.2012	12.3.2012
Date adopted	12.3.2012
Result of final vote	+: –: 0:	40 1 3
Members present for the final vote	Burkhard Balz, Udo Bullmann, Pascal Canfin, Nikolaos Chountis, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Elisa Ferreira, Jean-Paul Gauzès, Sven Giegold, Liem Hoang Ngoc, Gunnar Hökmark, Wolf Klinz, Jürgen Klute, Philippe Lamberts, Werner Langen, Hans-Peter Martin, Arlene McCarthy, Sławomir Witold Nitras, Ivari Padar, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Ivo Strejček, Kay Swinburne, Sampo Terho, Marianne Thyssen, Ramon Tremosa i Balcells, Corien Wortmann-Kool, Pablo Zalba Bidegain
Substitute(s) present for the final vote	Philippe De Backer, Sari Essayah, Vicky Ford, Krišjānis Kariņš, Olle Ludvigsson, Thomas Mann, Gay Mitchell, Theodoros Skylakakis
Substitute(s) under Rule 187(2) present for the final vote	Mario Mauro

PROCEDURE

Title	Amendment of Council Regulation (EC) No 1083/2006 as regards certain provisions relating to risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability
References	COM(2011)0655 – C7-0350/2011 – 2011/0283(COD)
Date submitted to Parliament	12.10.2011
Committee responsible        Date announced in plenary	REGI 25.10.2011
Committee(s) asked for opinion(s)        Date announced in plenary	CONT 15.12.2011	ECON 25.10.2011	EMPL 25.10.2011
Not delivering opinions        Date of decision	EMPL 27.10.2011
Rapporteur(s)        Date appointed	Danuta Maria Hübner 14.11.2011
Discussed in committee	22.11.2011	25.1.2012	28.2.2012
Date adopted	20.3.2012
Result of final vote	+: –: 0:	36 2 5
Members present for the final vote	Catherine Bearder, Jean-Paul Besset, Victor Boştinaru, John Bufton, Salvatore Caronna, Nikos Chrysogelos, Tamás Deutsch, Rosa Estaràs Ferragut, Brice Hortefeux, Danuta Maria Hübner, Vincenzo Iovine, María Irigoyen Pérez, Seán Kelly, Mojca Kleva, Constanze Angela Krehl, Petru Constantin Luhan, Riikka Manner, Iosif Matula, Erminia Mazzoni, Jens Nilsson, Jan Olbrycht, Wojciech Michał Olejniczak, Younous Omarjee, Markus Pieper, Tomasz Piotr Poręba, Monika Smolková, Ewald Stadler, Georgios Stavrakakis, Nuno Teixeira, Lambert van Nistelrooij, Kerstin Westphal, Joachim Zeller, Elżbieta Katarzyna Łukacijewska
Substitute(s) present for the final vote	Andrea Cozzolino, Karima Delli, Cornelia Ernst, Ivars Godmanis, Maurice Ponga, Vilja Savisaar-Toomast, Patrice Tirolien, Giommaria Uggias, Derek Vaughan, Sabine Verheyen
Date tabled	22.3.2012