(Assent procedure)

The European Parliament,

–   having regard to the proposal for a Council regulation (COM(2004)0492 – 2004/0163(AVC)),

–   having regard to Article 161 of the EC Treaty,

–   having regard to its resolution of 22 April 2004 on the third report on economic and social cohesion(1),

–   having regard to Rule 75(3) of its Rules of Procedure,

–   having regard to the interim report of the Committee on Regional Development and the opinions of the Committee on Budgets, Committee on Budgetary Control, Committee on Employment and Social Affairs, Committee on the Environment, Public Health and Food Safety, Committee on Transport and Tourism, Committee on Fisheries and the Committee on Women's Rights and Gender Equality (A6-0177/2005),

1.  Considers the proposal for a regulation to be in overall accordance with its resolution of 22 April 2004 and makes no further direct endorsement, therefore, of the Commission proposals, but calls nevertheless, with particular reference to the debate in Council, on the Commission and the Council to take account of the following specific recommendations;

2.  Deplores the failure of the European Council to reach agreement on the financial perspectives and expresses its concern over the possible negative repercussions on cohesion policy; believes that the uncertainty surrounding the financing of structural policies might further undermine citizens' confidence in the European project;

3.  Urges the European Council to take a decision as early as possible, and in any event before the end of 2005, in order to ensure that an adequate period is allowed to European regions and Member States for the preparation of the new operational programmes;

4.  Requests that during the new period, wherever there is a reference to economic and social cohesion, reference also be made to the concept of territorial cohesion and that special attention be paid to developing this new concept;

5.  Rejects any significant modification to the overall architecture of the Commission proposal and in particular any attempt to renationalise all or part of the Union's regional policy (Title 1);

6.  Calls for statistical effect regions to have a funding level of 85% of the resources provided to the full convergence regions at the beginning of the funding period, which will reduce to 60% by 2013;

7.  Rejects any attempt to diminish the importance of a strong "Regional competitiveness and employment" objective and approves of its concentration on accessibility, research and development, education and training, employment and social inclusion and the information society; calls for these priorities to be closely coordinated with other Community programmes and policies, and in particular the Lisbon Strategy;

8.  Calls for the extension of eligibility of the natural effect regions also to apply to "convergence" objective actions, without any corresponding increase in Community funds intended for these regions (Article 6, paragraph 2);

9.  Underlines the importance of having a structure of three strands in the new European territorial cooperation objective, comprising transnational, cross-border and interregional cooperation; calls, therefore, for the inclusion of interregional cooperation as an independent component of this objective similar to the current INTERREG IIIc programme;

10.  Believes that the overall budget for the "European territorial cooperation" objective should be maintained and stresses the importance of that objective and, with regard to the allocation of resources, calls for a substantial shift in priorities towards cross-border cooperation (Article 18(a));

11.  Opposes the imposition of an arbitrary 150 km limit for defining maritime regions eligible for cross-border cooperation programmes and calls, moreover, for special measures to be taken to ensure that regions at the periphery of EU territory can participate in these programmes; in any event believes that this distance criterion should be waived when the NUTS level III regions in question border the same sea;

12.  Rejects any weakening of the principle of partnership as envisaged in the original proposal, especially in terms of strategic planning and monitoring of the programmes; calls particularly for the maintenance of the list of appropriate bodies (Article 10(1)(c);

13.  Calls on the Member States to strengthen links with regional, local and urban partners in order to make optimum use of their specific knowledge both in the preparation of programmes and in their implementation; advocates in this context, moreover, maximum decentralisation of powers in order to avoid excessive administrative work (Article 10);

14.  Calls for an extension of the principle of equality between men and women so as to ensure non-discrimination on the grounds of sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation, and that, in particular, accessibility for disabled persons is a condition of benefiting from the Funds and is monitored during the various stages of implementing the Funds (Article 14);

15.  Calls for the evaluation of the Funds also to include indications of the progress achieved in promoting equality between men and women and social inclusion, as well as in the fight against all forms of discrimination;

16.  Calls on Member States and the Commission to affirm that the protection and improvement of the environment will be promoted during the various stages of implementing the funds;

17.  Calls for all attempts to adjust the proposed financial framework, including both global resources and the breakdown of resources between the various objectives and their components, to be rejected most vigorously and, irrespective of this point, considers that the amounts proposed by the Commission for the allocation of resources between the various objectives represent a fair balance of interests (Articles 15-22);

18.  Considers that, given the serious need for structural funding for many EU regions in the new programming period, all resources allocated to cohesion policy should be spent for this purpose; calls, therefore, for the possibility of re-using unspent resources due to the N+2 rules within Sub-heading 1b for the regions that are in a position to absorb them on the basis of the principles of effectiveness and fairness;

19.  Calls for a political solution providing for special compensation to be established for those regions or Member States facing substantial financial losses due to the disparities caused by the implementation of the Commission proposal regarding the allocation of financial resources;

20.  Regards the Commission's proposal to allocate EUR 336.1 billion at 2004 prices to support the three priorities of the revised cohesion policy as the bare minimum needed to make the reform a success and takes the view that once the next Financial Perspectives have been adopted the Commission will confirm the figures set out in the proposal for a regulation;

21.  Points out that the funds are subject to the provisions of the Financial Regulation and emphasises the need for the Commission and Member States to apply the transparency and sound financial management rules;

22.  Calls for the maintenance of clear and comprehensive Community strategic guidelines on cohesion which must be adopted in accordance with the procedure laid down in Article 161 of the EC Treaty; calls moreover for any mid-term review to be carried out under the same procedure unless the Treaty establishing a Constitution for Europe has come into force, in which case Article III-223 must be applied so as to allow for the legislative codecision of Parliament (Article 23 – 24);

23.  Calls for the inclusion of the Decisions on the trans-European transport network ("TEN-T") (Decision No 884/2004/EC(2) and Decision No 1692/96/EC(3)), in Article 23(3);

24.  Calls for the proposal for a regulation to include a stronger link to the European sustainable development strategy (Article 23); calls, in this context, for Member States to demonstrate in the national strategic reference framework how they intend to finance the needs of the environment, in particular supporting the Natura 2000 network, implementing the Water Framework Directive and achieving Kyoto targets, from Community resources or from own resources (Article 25);

25.  Reiterates its demand for a balanced and fair financial treatment for areas suffering from severe and permanent natural, climatic or demographic handicaps such as islands, mountainous and border areas and sparsely populated regions, particularly the very thinly populated northern areas of the Union (Recital 12); Calls also for the inclusion of a reference to these areas under the thematic and territorial priorities to be specified in the strategic section of the national strategic reference framework (Article 25);

26.  Calls for the new Member States of Malta and Cyprus, in order for them to tackle specific problems they are confronted with as islands on the periphery of the European Union, to receive adequate financial support on the basis of insularity, peripherality, and the principle of equal treatment;

27.  Strongly supports the special action of EUR 1 100 million for the outermost regions proposed by the Commission, as well as the possibility of financing operating aid, as provided in Article 11 of the proposal for a regulation of the European Parliament and of the Council on the European Regional Development Fund (COM(2004)0495); calls for full practical expression to be given to the requirement laid down in Article 299(2) of the EC Treaty for the outermost regions to be treated as a special case as regards their access to the Structural Funds, including those regions whose GDP has already risen above 75% of the Community average;

28.  Calls for the maintenance of a national strategic reference framework which is prepared in close cooperation with the partners referred to in Article 10 and which must remain the subject of a Commission decision negotiated within the framework of the partnership (Article 26);

29.  Calls for the inclusion of the possibility for the national strategic reference framework to be revised (Article 26);

30.  Calls for a simplification of the strategic follow-up so that there is reporting by the Member States and the Commission every two years (Articles 27 and 28); calls in this context for a debate every two years in a strategic forum involving Parliament, the Commission, the Committee of the Regions and the Member States (Article 29);

31.  Calls in the context of the single Fund per programme approach, for an increase from 5% to 10% as a limit up to which either the ESF or the ERDF may fund measures falling within the scope of the other Fund (Article 33); however, suggests that in certain circumstances the Commission may grant approval for the same management authority to preside over more than one intervention, but that the 10% limit should still apply;

32.  Calls, in order to highlight the urban dimension and in particular sustainable urban development, for structural fund financed operational programmes under the "Convergence" and "Regional competitiveness and employment" objectives to maintain the requirement for information to be submitted on the approach to the urban issue, including the list of urban areas chosen and the procedures for sub-delegation; calls for such procedures to be placed in the context of regional and local partnership; considers that the level of funding must be at least equivalent to that for which urban areas are eligible under the current regulation (Article 36);

33.  Calls for the three Funds to take account of the priorities of small and micro enterprises, particularly craft enterprises, given their importance for cohesion and regional development and their contribution to growth and employment, and to support the implementation of the principles and action lines of the European Charter for Small Enterprises adopted by the Feira European Council in 2000;

34.  Considers that Member States should specify the arrangements for the Strategic Environmental Assessment of national strategic reference frameworks and operational programmes, and ensure timely Environmental Impact Assessments of the major infrastructure projects; further calls on the Commission to ensure that major infrastructure projects do not conflict with the protection and improvement of the environment (Articles 38 to 40); calls for payments to projects undertaken in breach of EU environmental legislation to be suspended;

35.  Calls for a coherent approach and the maintenance of Structural Funds procedures when the current neighbourhood programmes are transformed into programmes under the new cooperation instruments for the external borders of the Union (ENPI and IPA);

36.  Calls for the retention of the proposal for a Community reserve for quality and performance as a mechanism for rewarding progress including the Cohesion Fund; calls, however, for fair, objective, transparent and jointly adopted criteria to apply, so as to ensure that it genuinely achieves this purpose (Article 48);

37.  Calls for an explicit requirement and recognition of the principle and practice of accessibility for disabled persons in the strategic guidelines and in the evaluation process required by the strategic guidelines;

38.  Calls for Member States which so wish to be able to make provision for a national contingency reserve and recommends that greater flexibility be introduced into the means of its implementation (Article 49);

39.  Rejects pressure to change the proposed co-financing rates (Article 51), but calls for a doubling of the permitted increase to 10 percentage points for those areas suffering from more than one of the geographical or natural handicaps defined in the proposal; calls also for the introduction of an increase of 10 percentage points for urban areas (Article 52);

40.  Strongly supports all the incentives that are given for the mobilisation of private capital and the promotion of public-private partnerships in the new programming period (Articles 50(d) and 54); considers that the calculation of the Community co-financing rate as a percentage of only the declared public expenditure constitutes an important simplifying proposal of this Regulation and better ensures the application of the principle of additionality, disregarding whether public expenditure of the co-financing rate of the Member State could be partly replaced by private capital within the programme; calls, at the same time, for the maintenance of the flexibility provided by the calculation of the co-financing rate for each priority and not for each measure (Articles 51 and 76); stresses, however, that the calculation of the co-financing rate should not be such as to prejudice the participation of NGOs and other not-for-profit organisations in Structural Fund activities;

41.  Draws particular attention to the fact that all EU policies must be required to contribute to the objective of economic and social cohesion and that international trade policy is also committed to this objective and must not be regarded as an exception; calls for trade policy to be designed to avoid producing shock effects on regions and draws particular attention to the fact that the relocation of firms or production units represents a serious threat to regional development;

42.  Considers that the Commission proposal to impose financial corrections on firms that relocate their activities is an indispensable measure, in order not to put in jeopardy the consolidation of economic, social and territorial cohesion in the affected regions; proposes the establishment of monitoring systems in order to quantify the economic and social costs of any relocation so that appropriate penalties may be set accordingly; calls, at the same time, for the adoption of all necessary legal measures to ensure that firms which receive Community funding do not relocate for a long and predetermined period;

43.  Calls for a provision whereby co-financing of operations, which result in substantial job losses or the closure of plants at their existing locations, will be ruled out;

44.  Calls for the inclusion of a reference to the need for a high level of project management skills and qualifications as an essential element in ensuring that projects are delivered on time and on budget (Article 57);

45.  Calls for the proportionality principle to be applied effectively to programming (Articles 31 to 37), evaluation (Article 45) and management, monitoring and controls (Articles 57 to 73) in accordance with the size of the programmes; considers, moreover, that in these areas the principle of simplification must be applied to all programmes in the interests of all the Member States;

46.  Notes that the Commission and the Member States have joint responsibility for the Structural Funds; calls on the Member States to make annual declarations of assurance that EU taxpayers' money has been spent in a regular, legal and transparent manner; calls for these declarations to be signed by the finance minister of each Member State; the Commission should define clearly what it means by "irregularity" for reporting purposes by Member States;

47.  Calls for the spirit of the proposed limits in respect of proportional control arrangements (33% co-financing and EUR 250 million cost) below which no systematic controls are undertaken by the Commission to be maintained; calls nevertheless for the specific characteristics of the different funds to be taken into account (Article 73);

48.  Rejects any change to the proposed pre-financing amounts (Article 81);

49.  Rejects any further weakening of the N+2 rule for the Structural Funds beyond the flexibility already proposed for major projects, since the benefits of this rule have been demonstrated through its effectiveness in improving the efficient implementation of Funds over the current programming period (Article 93); calls, however, for greater flexibility to be allowed for the Cohesion Fund;

50.  Calls for greater flexibility to be introduced so as to extend the proposed two-month deadline for Member States to challenge financial corrections by the Commission; calls for this time-limit to be varied in accordance with the seriousness of the problem at issue (Article 100);

51.  Asks the Commission to find, in cooperation with the cohesion countries, a solution with regard to the issue of the eligibility of non-reimbursable VAT, ensuring straightforward accessibility for municipalities to Funds;

52.  Rejects any attempt to introduce expenses which do not relate to investment, such as housing costs, as eligible expenditure for the purposes of calculating Community co-financing; considers, however, that expenses which relate to renovation of social housing with a view to saving energy and protecting the environment should be included within eligible expenditure;

53.  Rejects any reduction in the ceilings for State aids to convergence regions, including those subject to the statistical effect; calls, therefore, for all regions covered by the "Convergence" objective also to be given equal treatment in terms of aid rules and to come under Article 87(3)(a) of the EC Treaty; calls moreover for a gradual transition in aid ceilings for the natural effect regions; stresses the need for the maintenance of territorial differentiation, with particular regard to natural or geographical handicaps, in the application of State aids to regions outside of the "Convergence" objective;

54.  Instructs its President to request further discussion with the Council pursuant to Rule 75(3) of its Rules of Procedure;

55.  Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ C 104 E, 30.4.2004, p. 1000. (2) OJ L 167, 30.4.2004, p. 1. (3) OJ L 228, 9.9.1996, p. 1.