Documents considered by the Committee on 11 January 2017 Contents

1Funds to help Member States affected by natural disasters

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Regulation amending Regulation (EU) No 1303/2013 as regards specific measures to provide additional assistance to Member States affected by natural disasters

Legal base

Article 177 TFEU, QMV, Ordinary Legislative Procedure

Department

Business, Energy and Industrial Strategy

Document Number

(38330), 15058/16, COM(16) 778

Summary and Committee’s conclusions

1.1Recent earthquakes in Italy have had a devastating effect on the region, causing death, displacement and substantial physical and cultural damage. The Commission notes that large scale reconstruction works will be required, notably to restore the cultural heritage of the affected areas. It considers that the EU ought to be able to provide support from its structural funds to Member States and regions hit by major or regional natural disasters, complementing the means already available under the European Union Solidarity Fund.

1.2The Commission proposes to allow the European Regional Development Fund (ERDF) to support reconstruction operations, which can be backdated to 2014 onwards. Under the proposal, such operations could be financed fully from the ERDF, without the need for national co-financing. Normally, the ERDF co-finances projects alongside national funding, with the proportion of ERDF and national funding varying according to the wealth of a particular region.

1.3The Minister for Small Business, Consumers and Corporate Responsibility, (Margot James), recognises the need for a fast and efficient mechanism to assist Member States affected by natural disasters. She notes that the proposal is within the financial limits set by the 2014–2020 financial framework. While generally supportive, the Government will be looking for the Commission to provide stronger justification for the proposal to allow up to a 100% ERDF contribution. Current rules already permit a 90% ERDF contribution for Member States in serious financial difficulties.

1.4We understand the wish to support Member States affected by natural disasters and we note that the proposal does not require any amendment to the agreed 2014–2020 financial framework. Equally, we agree with the Government’s position that a clearer justification for the 100% ERDF support is required. Co-financing is an important principle for EU structural funding and there is a risk that this new proposal—however well intended—could start to erode the principle.

1.5We retain the proposal under scrutiny and look forward to further information from the Minister once the Commission has responded to her request for a clearer justification. We would also welcome an indication of the likely speed of progress through the European Parliament and Council, assuming that there is likely to be strong support from some Member States and MEPs for swift adoption.

Full details of the documents

Proposal for a Regulation amending Regulation (EU) No 1303/2013 as regards specific measures to provide additional assistance to Member States affected by natural disasters: (38330), 15058/16, COM(16) 778.

European Commission proposal

1.6In order to provide additional assistance to Member States affected by natural disasters, the Commission proposes the introduction of a new option (“priority axis”) under the ERDF with a co-financing rate of up to 100%. The operations that may be supported under this option are those linked to reconstruction in response to major or regional natural disasters as defined in the European Union Solidarity Fund (EUSF). For these operations, expenditure incurred as from the date of the natural disaster can be declared for reimbursement (as long as it was after the beginning of the current funding cycle in 2014).

Minister’s Explanatory Memorandum of 15 December 2016

1.7The Minister sets out the Government’s position in the following terms:

“The United Kingdom recognises the need for a fast and efficient mechanism to assist reconstruction mechanisms in Member States or regions affected by major natural disasters. The United Kingdom notes that the proposal is intended to complement the existing possibility to apply for EUSF funding by providing an opportunity to draw on existing ERDF funds. The United Kingdom notes that the proposal is not intended to increase the existing budget over the course of this Multiannual Financial Framework, 2014–2020.

“The United Kingdom believes that requirements for co-financing provide an important means to reinforce the commitment of Member States to programmes and projects, improving their quality. It will be looking for the Commission to provide stronger justification for the proposal to allow up to a 100% co-financing rate in these circumstances. The United Kingdom notes that Article 24 of the Common Provisions Regulation allows Member States who are in serious financial difficulties to have only an additional 10 per cent co-financing.”

Previous Committee Reports

None.





13 January 2017