Proposal for a Regulation on the European Regional Development Fund and the Cohesion Fund

In “An Economy that Works for People”

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For a brief overview of the key points of the adopted text and its significance for the citizen, please see the corresponding summary note.

In preparation for the upcoming Multiannual Financial Framework 2021-2027, on 29 May 2018 the European Commission published a proposal for a regulation on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF).

The general framework for the delivery and implementation of ERDF and CF is set out in the new Common Provisions Regulation which covers several EU funds. The new single regulation on ERDF and CF (previously covered by two separate regulations) identifies the specific objectives and scope of support for both funds. It also provides an indicator framework for monitoring progress (Annex I and II) and outlines the approach for specific territories, including urban areas and outermost regions.

The ERDF will support the 5 new policy objectives of cohesion policy: PO1 'a smarter Europe by promoting innovative and smart economic transformation'; PO2 ‘a greener, low-carbon Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate adaptation and risk prevention and management’; PO3 'a more connected Europe by enhancing mobility and regional ICT connectivity'; PO4 'a more social Europe implementing the European Pillar of Social Rights' and PO5 'a Europe closer to citizens by fostering the sustainable and integrated development of urban, rural and coastal areas and local initiatives'. The majority of ERDF funding (65% to 85%) will be concentrated on PO1 and PO2, i.e. smart growth and green economy. Member States will be required to earmark 6% of their ERDF resources to sustainable urban development, while 30 % of ERDF is expected to contribute to climate objectives (37% in case of the CF).

The Cohesion Fund will continue to provide financial support mainly to environmental and transport infrastructure projects, including trans-European networks (TEN-T). It will therefore cover activities under PO 2 and parts of PO3.

The regulation also mentions activities not eligible for support under ERDF and CF, such as: landfills, the tobacco industry, fossil fuels, decommissioning of nuclear facilities and airport infrastructure (except in outermost regions).

On 28 May 2020, the European Commission presented an amended Regulation on ERDF and CF. The proposal takes into account the COVID-19 epidemic and extends the scope and flexibility of the ERDF to cover further actions in the sphere of health.

In the Council, the proposal was examined by the Working Party on Structural Measures in the second half of 2018. In February 2019, Coreper agreed on a partial mandate for negotiations on the ERDF/CF Regulation. The amended Commission proposal was examined by the Working Party in June 2020. Following the party level discussion of presidency compromise proposals, a new partial mandate for negotiations with the EP was submitted to Coreper in July 2020. In order to take into account the European Council conclusions of July 2020, the mandate has been updated and a new compromise text emerged in September 2020.

At the European Parliament, the Committee on Regional Development (REGI) took the lead and Andrea Cozzolino (S&D, Italy) was appointed as rapporteur. The rapporteur’s draft report presented on 15 October 2018. The vote in committee took place on 14 February 2019, while the plenary vote took place on 27 March 2019. The adopted legislative resolution constitutes the Parliament's first-reading position for the negotiations with the Council. The proposed amendments included adding more details to specific objectives of ERDF and CF support (e.g. digital connectivity, creation and safeguarding of jobs, housing investments and resource efficiency), a shift of funding focus from national to regional level and making allocations dependent on GDP per capita rather than gross national income ratio. The resolution also proposed to raise investments for urban development from 6 to 10%, strengthen R&D and SME investments within the scope of ERDF support, and expand technical assistance for administrative capacity building of local and regional authorities. It also suggested to accommodate the special needs of outermost regions (e.g. by allowing continued ERDF support for productive investments in enterprises, irrespective of their size) and adding clarifying elements to the exclusions regarding investments in airport infrastructure and treatment of residual waste. Moreover, it proposed amendments to the thematic concentration requirements for PO 1 and 2 (i.e. smart and green issues) and additional provisions relating to territories with particular features (creating a minimum reserve for areas facing problems of impoverishment and falling population numbers). Further amendments included adding a number of indicators to the list of output, result and performance indicators in annexes I and II.

In the new parliamentary term, on 3 September 2019 the new REGI committee confirmed the re-appointment of Andrea Cozzolino as rapporteur. The vote on entry into negotiations under Rule 72 took place on 2 October 2019. The first trilogue took place on 12 December 2019. The ERDF/CF regulation is linked to the negotiations on MFF 2021-2027 and the new Common Provisions Regulation.

The co-legislators (EP and Council of the EU) reached a provisional political agreement in trilogue on 8 December 2020. Remaining technical and political work on the recitals and annexes was finalised in January and February 2021 during the Portuguese presidency. A final political trilogue took place on 9 February 2021, confirming the agreement between the Council and the European Parliament. The REGI committee approved the outcome of the negotiations on 16 March 2021. The Council adopted its first-reading position on 27 May 2021, based on the compromise text agreed in trilogue. The Parliament formally adopted the text in second reading at its June II plenary session. The final act was published in the Official Journal on 30 June 2021.

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Further reading:

Author: Agnieszka Widuto, Members' Research Service, legislative-train@europarl.europa.eu

As of 15/12/2022.