12 The European Social Fund
| (35269)
13121/13
COM(13) 560
| Draft Regulation amending Council Regulation (EC) No. 1083/2006 as regards the financial allocation for certain Member States from the European Social Fund
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| Legal base | Article 177 TFEU; co-decision; QMV
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| Department | Business, Innovation and Skills
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| Basis of consideration
| Minister's letter of 3 December 2013
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| Previous Committee Report
| HC 83-xiv (2013-14), chapter 4 (11 September 2013)
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| Discussion in Council
| No date set |
| Committee's assessment
| Politically important
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| Committee's decision
| Cleared |
Background and previous scrutiny
12.1 In June 2013, the European Council agreed Conclusions
which set out a number of concrete measures to tackle youth unemployment
and to "mobilise all available instruments in support of
youth employment."[39]
The measures include €6 billion of funding in 2014 and 2015
from the Youth Employment Initiative for regions with levels of
youth unemployment exceeding 25%, and the use of the European
Social Fund (ESF) to support the creation of new jobs for young
workers.
12.2 In July, the Commission put forward its seventh
draft amending budget for 2013, followed in August by a draft
Decision on the mobilisation of the Flexibility Instrument.[40]
This Instrument can only be used for clearly identified needs
requiring expenditure which exceeds the maximum allocations of
resources (ceilings) for one or more budget Headings set in the
EU's Multiannual Financial Framework (MFF). Before recommending
recourse to the Flexibility Instrument, the Commission is required
to verify that no reallocation of funds is possible under the
relevant budget Heading — in this case, Heading 1b on EU
cohesion policy.
12.3 The seventh draft amending budget for 2013
proposed to increase European Social Fund allocations for France,
Italy and Spain in 2013 in recognition of "the special effort
needed to address the specific situations of unemployment, in
particular youth unemployment, and of poverty and social exclusion
in these Member States."[41]
A small proportion of this increase — €16 million
— would be covered by the margin available under the ceiling
for Heading 1b. The remaining sum — €134 million —
would be obtained from the Flexibility Instrument. Our Thirteenth
Report of 4 September 2013 provides a more detailed overview of
the Commission's seventh draft amending budget for 2013 and its
proposal to mobilise the Flexibility Instrument.[42]
12.4 The purpose of the draft Regulation is to amend
the figures set out in the 2006 Regulation establishing the framework
and resources for EU Structural and Cohesion Funds (including
the ESF) for 2007-13 in order to reflect the outcome agreed by
the European Council in June. The Commission proposal makes clear
that the bulk of the additional commitments — €100
million — will be allocated to France, with €30 million
for Italy and €20 million for Spain. It also underlines
the need for urgency in agreeing the changes to the 2006 Regulation
as they concern commitment appropriations for 2013.
12.5 The Government told us that the proposed increase
in European Social Fund allocations for France, Italy and Spain
had been agreed unanimously at the June European Council and formed
part of a wider commitment to tackle youth unemployment. The
Minister for Business and Enterprise (Mr Michael Fallon) described
the draft Regulation as "a technical amendment" to give
effect to that agreement.
12.6 We asked the Minister to explain why the June
European Council had only agreed additional commitments
for France, Italy and Spain, even though Greece has the highest
youth unemployment rate in the EU (58% in August 2013), the rate
in Portugal is comparable to that in Italy, and France is one
of a number of Member States with a rate exceeding 20%. We also
noted that the seventh draft amending budget for 2013 and the
Commission's proposal to mobilise the Flexibility Instrument remained
under scrutiny pending further information from the Treasury explaining
whether the Government supported the use of the Flexibility Instrument
in this case.
The Minister's letter of 3 December 2013
12.7 The Minister (Mr Michael Fallon) tells us that
the seventh draft amending budget for 2013 — the budgetary
instrument providing the necessary resources to increase European
Social Fund allocations to France, Spain and Italy — has
been finalised by the Council, European Parliament and Commission.
He expects the draft amending Regulation, which will make the
necessary legislative changes, to be adopted at a forthcoming
Council meeting. He continues:
"You...asked why the
extra allocations were made to France, Spain and Italy and not
for example to Greece which had a much higher youth unemployment
rate. In the explanatory memorandum I submitted, I noted that
this extra allocation was in advance of the Youth Employment Initiative
which will start in 2014. Allocations for this are calculated
on youth unemployment rates at NUTS II level. According to the
Commission's website, France, Italy and Spain will be three largest
recipients of the Youth Employment Initiative on this basis, receiving
respectively €289.76m, €530.18m and €881.44m.
Greece on the other hand will receive €160.24m."
12.8 The Minister notes that the seventh draft amending
budget for 2013 and the Commission's proposal to mobilise the
Flexibility Instrument remain under scrutiny pending further information
from the Treasury, but invites us to consider clearing the draft
amending Regulation from scrutiny so that the Government is in
a position to support its adoption at a forthcoming Council.
Conclusion
12.9 We thank the Minister for his explanation
of the reason why the European Council agreed to make provision
for additional European Social Fund allocations for France, Italy
and Spain in 2013. We await a response from the Economic Secretary
to the Treasury (Nicky Morgan) clarifying the Government's position
on the use of the Flexibility Instrument in this case. Although
the seventh draft amending budget and the draft Decision authorising
the use of the Flexibility Instrument remain subject to scrutiny
pending a Ministerial response, we see no need to hold the draft
Regulation under scrutiny and agree to clear it.
39 See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/137634.pdf Back
40
See Council documents 12769/13 and 12770/13. Back
41
See recital 3 of the draft Regulation. Back
42
See (35232) and (35259), HC 83-xiii (2013-14), chapter 20 (4 September
2013). Back
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