Thirteen Report of Session 2012-13 - European Scrutiny Committee Contents


21   EU Structural and Cohesion Funds

(34224)

13730/12

COM(12) 496

Amended proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1083/2006

Legal baseArticle 177 TFEU; co-decision; QMV
Document originated11 September 2012
Deposited in Parliament17 September 2012
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 2 October 2012
Previous Committee ReportsHC 428-xli (2010-12), chapter 1 (9 November 2011)
Discussion in Council16 October 2012
Committee's assessmentPolitically important
Committee's decisionClear

BACKGROUND AND PREVIOUS SCRUTINY

21.1  In October 2011, the Commission published a package of measures on the governance of EU Funds implementing EU cohesion policy during the next financial period, from 2014-20. Cohesion policy seeks to reduce disparities in levels of economic and social development and opportunity across the EU by promoting "economic, social and territorial cohesion, and solidarity among Member States."[107] The most important element in the Commission's package is the draft "Common Provisions" Regulation which proposes a set of common rules covering five EU Funds — the Structural and Cohesion Funds (comprising the European Regional Development Fund, the European Social Fund and the Cohesion Fund), the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. These Funds are referred to collectively as the Common Strategic Framework ("CSF") Funds because each one would be subject to an overarching Common Strategic Framework, to be developed by the Commission, which would focus on fewer, more strategic objectives and ensure a close alignment with the goal of "smart, sustainable and inclusive growth" set out in the Europe 2020 Strategy. Partnership Contracts agreed by each Member State and the Commission, as well as the operational programmes developed at national or regional level to implement them, would reflect the content of the Common Strategic Framework.

21.2  The draft Common Provisions Regulation identifies eleven thematic objectives, all linked to the Europe 2020 Strategy, which each of the CSF Funds would support. Article 11 of the draft Regulation envisages that the Common Strategic Framework would set out "key actions" corresponding to each of these thematic objectives. It would also establish:

  • the key territorial challenges for urban, rural, coastal and fisheries areas to be addressed by the CSF Funds;
  • horizontal principles and policy objectives governing the implementation of CSF Funds;
  • priority areas for cooperation for each CSF Fund;
  • mechanisms for coordinating the use of CSF Funds and other EU policies and instruments; and
  • mechanisms for ensuring that the programming of CSF Funds is consistent with the EU's broader economic governance policies.

21.3  Article 12 of the draft Common Provisions Regulation provides that the Common Strategic Framework shall be adopted, and may be amended, by the Commission by means of delegated acts.

21.4  In March 2012, the Commission published a document setting out the main elements which it believed should be included in the Common Strategic Framework.[108] The document:

  • describes how each of the CSF Funds will contribute to the thematic objectives set out in the draft Common Provisions Regulation and identifies a set of key actions for each Fund;
  • underlines the need for CSF Funds to support the country-specific recommendations issued as part of the European Semester in order to implement the structural changes needed to achieve the Europe 2020 headline targets;
  • encourages Member States to establish better coordination between the different CSF Funds and with other EU policies and funding instruments;
  • says that non-discrimination, the promotion of equality between men and women, and sustainable development must form an integral part of all actions under the CSF Funds;
  • recognises that the CSF Funds, while pursuing common objectives, must reflect the diverse needs and capacities of different regions and concentrate on the key bottlenecks to growth; and
  • highlights the importance of transnational cooperation, for example, to implement sea basin strategies.

21.5  The (then) Minister of State for Business and Enterprise (Mark Prisk) told us that the Government supported greater strategic alignment, and better coordination between, the CSF (and other EU) Funds, in order to strengthen the focus on Europe 2020 goals and improve the impact of EU funding. He therefore welcomed the concept of a Common Strategic Framework, but said that it should not be unduly prescriptive or generate excessive bureaucracy or burdens. He underlined the need for the separate processes and timeframes for developing the Common Strategic Framework, Partnership Contracts and Operational Programmes to run concurrently so that programmes could start promptly in 2014 and cautioned that too much detail "at the top of the strategic tree" might result in delays. Turning to process, the Minister noted that the UK and most other Member States, as well as the European Parliament, opposed the Commission's proposal to adopt the Common Strategic Framework by means of a delegated act and wanted it to be included as an Annex to the draft Common Provisions Regulation.

THE AMENDED DRAFT COMMON PROVISIONS REGULATION

21.6  The Commission maintains that the Common Strategic Framework contains "non-essential" elements for the purpose of Article 290 of the Treaty on the Functioning of the European Union (TFEU) which sets out the basis on which delegated powers may be conferred on the Commission. By contrast, the Council and European Parliament remain of the view that the Common Strategic Framework is an essential element of the legislative act, expressing political choices on fundamental aspects of EU cohesion policy, and that it should be incorporated as an Annex to the draft Regulation. The Commission has therefore brought forward an amended proposal which is an attempt to "facilitate a compromise between the institutions" but which only partially meets the demands of the Council and European Parliament.

21.7  The amended proposal includes a new Annex 1 incorporating four elements of the Common Strategic Framework:

  • coherence and consistency with the EU's economic governance policies;
  • mechanisms for ensuring effective coordination between the CSF Funds as well as their coordination with other EU policies and instruments in areas such as research and innovation, climate change, education, employment, social cohesion, and trans-European infrastructure projects in the field of transport, telecommunications and energy;
  • horizontal principles (partnership and multi-level governance, sustainable development, and equality and non-discrimination) and cross-cutting policy objectives (accessibility, demographic change, climate change mitigation and adaptation): and
  • specific territorial challenges.

21.8  The Commission says that the remaining elements of the Common Strategic Framework, comprising "indicative actions of high European added value" and principles for delivery, as well as priority areas for cooperation, will be set out in a delegated act to be adopted by the Commission. The term "indicative action of high European value" replaces the reference to "key actions" in the Commission' s original proposal and is defined in Article 2(4) of the amended proposal as "an action which can be expected to make a significant contribution to the achievement of the targets and objectives of the Union strategy for smart, sustainable and inclusive growth and which shall act as a reference point in the preparation of programmes."

21.9  In light of the Commission's view that all elements of the Common Strategic Framework, whether contained in Annex 1 or in the proposed delegated act, are not essential components of the draft Regulation, the amended proposal makes clear that both can be amended by the Commission by means of a delegated act.

21.10  The amended proposal also includes new figures on the amount of EU funding proposed for EU Structural and Cohesion Funds for the period 2014-20 which take account of new macro-economic forecasts and data and the accession of Croatia to the EU in 2013.[109]

THE GOVERNMENT'S VIEW

21.11  The Minister for Business and Enterprise (Michael Fallon) reiterates the Government's objection to the use of a delegated act to adopt the Common Strategic Framework, as originally proposed by the Commission, for legal and practical reasons. First, he considers that the Common Strategic Framework constitutes an essential element of the new regime governing the CSF Funds and, therefore, cannot be the subject of a delegated act. Second, delegated acts can only be adopted once the parent legislation, in this case the draft common Provisions Regulation, has been approved by the Council and European Parliament. The Minister fears that this could lead to delays in developing programmes to implement the CSF Funds which should commence from 1 January 2014.

21.12  The Minister notes that the Commission's amended proposal only partially meets the request of the European Parliament and Council to include the Common Strategic Framework as an Annex to the draft Common Provisions Regulation. Turning first to the content of the new Annex 1 proposed by the Commission, the Minister welcomes the effort made by the Commission to explain how the CSF Funds might work more effectively with other EU funds which are directly managed by the Commission to address particular territorial challenges. However, he cautions against making the Common Strategic Framework too prescriptive or unnecessarily burdensome. He continues:

"The text proposed by the Commission seems to add requirements that were not in its original proposal or in the partial general approach agreed by Council. For example, demographic change was not a horizontal principle nor required in the articles on the partnership agreement. The new annex also goes too far in saying Member States should identify measures to ensure cost-effective provision of health care and long-term care. The Government shall seek to remove these unnecessary prescriptive requirements.

On the horizontal principles, the annex appears to duplicate or elaborate on requirements in the body of the Common Provisions Regulation. The Government will check carefully that what is said in the Common Strategic Framework does not conflict with what is in the substantive articles, or causes confusion by restating things in slightly different words"[110]

21.13  The Minister questions the need for a further delegated act to supplement Annex 1 with a description of "indicative actions" and suggests that this could be better achieved by means of a Commission guidance note. He adds:

"Putting these indicative actions in a legislative form, albeit as a delegated act, risks giving them a legal status that they do not merit and causing confusion with the investment priorities set out in the Fund-specific regulations. Furthermore a delegated act can be introduced only after the main regulation has been adopted and this will be too late to shape [the] programme. The Government believes the reference to "indicative actions" should be deleted from Article 12 and these are better produced by the European Commission as informal guidance now."[111]

21.14  The Minister objects to the use of a delegated act to amend those elements of the Common Strategic Framework set out in Annex 1, not least because it gives the Council limited opportunity to shape its content. He continues:

"The Government believes that amendments to the annex should be treated the same as amendments to the main body of the regulation: that is, through the ordinary legislative procedure with the agreement of both European Parliament and the Council."[112]

21.15  Turning to changes to the figures on the amount of EU funding proposed for EU Structural and Cohesion Funds for the period 2014-20, he says these take account of Croatia's accession in 2013, as well as the latest data and forecasts for GDP, and will be dealt with as part of the settlement on the next Multiannual Financial Framework.

21.16  The Minister notes that the General Affairs Council agreed a partial general approach on elements of the Commission's original draft Common Provisions Regulation at its meetings in April and June this year. He continues:

"In terms of the Common Strategic Framework, the Cyprus Presidency has indicated that it wants to make rapid progress in getting agreement among Member States so that it can have a mandate as soon as possible to begin discussions on the annex with the European Parliament. It has hinted that it would like this considered at the General Affairs Council in October, as part of the partial general approach and with the proviso that nothing is agreed until everything is agreed. However, protocol suggests there needs to be a minimum of 8 weeks from publication of the proposal to putting it on a provisional council agenda. The Government will make clear that it expects there to be proper time allowed for scrutiny by national Parliaments."[113]

CONCLUSION

21.17  We thank the Minister for reminding the Cypriot Presidency of the importance of ensuring that national Parliaments have a reasonable opportunity to examine draft legislation, including any significant amendments thereto, before it is put forward for political agreement in the Council.

21.18  The five CSF Funds covered by the draft Common Provisions Regulation together account for roughly one third of the EU's budget for the period 2014-20. Given their budgetary significance, we agree with the Government that a Common Strategic Framework is potentially helpful in ensuring that Member States and regions use the Funds strategically in a way which enhances their overall impact. We also agree that a document of such strategic importance should be considered an essential element of the legislative framework for the CSF Funds and should, therefore, form part of the draft Common Provisions Regulation and be subject to approval by the Council and the European Parliament.

21.19  We think that the Government is right to highlight possible inconsistencies between the content of the Common Strategic Framework, as set out in Annex 1 of the Commission's amended proposal, and the general principles and thematic objectives applicable to the CSF Funds which are described in Part Two, Titles 1 and 2 of the draft Common Provisions Regulation. We agree that such inconsistencies create a risk of confusion and may undermine the sense of common strategic direction.

21.20  We can see little value in a further delegated act setting out "indicative actions of high European added value." We think that Annex 1 should contain all the detail necessary to provide the overarching strategic direction for the CSF Funds, without being unduly prescriptive. To the extent that further clarification is required to inform the programming processes undertaken at national and regional level, we agree with the Government that this should be achieved by means of informal guidance issued by the Commission.

21.21  As our comments indicate, we agree with the Government's position and understand that it is broadly shared by other Member States who are equally keen to ensure that the Common Strategic Framework is clearly rooted in the draft Common Provisions Regulation. We are therefore content to clear the amended proposal from scrutiny.



107   See Article 3(3) of the Treaty on the European Union. Back

108   Commission Staff Working Document, 7752/12: Elements for a Common Strategic Framework 2014-2020. Back

109   See Articles 83 and 84 of the amended proposal. Back

110   See paras 18-19 of the Minister's Explanatory Memorandum. Back

111   See para 16 of the Minister's Explanatory Memorandum. Back

112   See para 17 of the Minister's Explanatory Memorandum. Back

113   See para 25 of the Minister's Explanatory Memorandum. Back


 
previous page contents next page


© Parliamentary copyright 2012
Prepared 2 November 2012