Legal provisions of COM(2017)826 - Amending regulation 1303/2013 on common provisions for EU funds (ERDF, ESF, Cohesion Fund, EAFRD, EMFF) as regards support to structural reforms in Member States

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Article 1

Regulation (EU) No 1303/2013 is amended as follows:

1. In Article 1 the first paragraph is replaced by the following:

“This Regulation lays down the common rules applicable to the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund, the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF), which operate under a common framework (the European Structural and Investment Funds - ESI Funds). It also lays down the provisions necessary to ensure the effectiveness of the European Structural and Investment Funds and their coordination with one another and with other Union instruments, and the rules for the use of the performance reserve to support structural reforms identified in the European Semester process. The common rules applying to the European Structural and Investment Funds are set out in Part Two. The rules applying to the partial or full use of the performance reserve to support structural reforms are laid down in Article 23a.”

2. In Article 2, point 40 is inserted:

"'structural reforms' mean reforms identified in the European Semester process in accordance with Article 2-a of Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies."

3. In Article 4, paragraph (7) shall be replaced by the following:

   “7. The part of the budget of the Union allocated to the European Structural and Investment Funds shall be implemented within the framework of shared management between the Member States and the Commission, in accordance with Article 62 of the Financial Regulation, with the exception of the amount of support from the Cohesion Fund transferred to the Connecting Europe Facility referred to in Article 92(6) of this Regulation, innovative actions at the initiative of the Commission under Article 8 of the ERDF Regulation, technical assistance at the initiative of the Commission, the support for direct management under the EMFF Regulation and the use of the performance reserve for the Funds to support structural reforms in accordance with Article 23a.”

4. In Article 15, a point (viii) is added to paragraph (1) point (a):

   “(viii) information on the re-allocation of the performance reserve used in accordance with Article 22(1a) point b),” 

5. In Article 20 the first paragraph shall be replaced by the following:

   “6 % of the resources allocated to the ERDF, ESF and the Cohesion Fund under the Investment for Growth and Jobs goal referred to in point (a) of Article 89(2) of this Regulation, as well as to the EAFRD and to measures financed under shared management in accordance with the EMFF Regulation shall constitute a performance reserve which shall be established in the Partnership Agreement and programmes and either allocated to specific priorities or, for the ERDF, ESF and Cohesion Fund, support structural reforms in accordance with Article 22 of this Regulation.” 

6. In Article 22, the following paragraph (1a) is added:

"1a. A Member State may decide to partially or fully use the performance reserve for either:

(a)programmes and priorities which have achieved their milestones in accordance with paragraphs 2 to 7;

(b)support for structural reforms, on the basis of reform commitments implemented in accordance with paragraph 8 and Article 23a.

   In Article 22, the following paragraph (8) is added:

"8. The decision of a Member State to use parts of or the full performance reserve to support structural reforms pursuant to paragraph (1a) shall be accompanied by a proposal to undertake reform commitments pursuant to Article 23a, and a proposal to re-allocate all or part of the performance reserve in submitting an amendment in accordance with Articles 16(4) and 30(3)."

7. A new Article 23a is added:

"Support to structural reforms on the basis of reform commitments in the European Semester process"

1. A Member State which opts for a partial or full allocation of the performance reserve under point (b) of Article 22(1a) shall propose to the Commission a detailed set of measures appropriate for the implementation of structural reforms in accordance with Union law. This proposal shall include reform commitments which shall contain milestones and targets for the implementation of the reform measures and a timetable which shall not be longer than three years.

2. The Commission shall assess the proposal. It may make observations or seek additional information. The Member State concerned shall provide the requested additional information and revise the reform commitments if requested to do so.

3. The Commission shall adopt a decision, by means of an implementing act, setting out the reform commitments to be implemented by the Member State and the amount allocated from the performance reserve for their support. This amount shall be proportionate to the nature and importance of the reform and complement other measures or operations supported from Union funds.

4. Support to structural reforms by Member States under this Article shall take the form of a financing not linked to cost referred to in Article 121 (1)(e) of the Financial Regulation, shall be managed in line with the rules for direct management set out in that Regulation, and shall not require national co-financing. Chapter I of Title II, and Titles III to IX of Part Two of this Regulation do not apply.

5. The decision referred to in paragraph 3 shall lay down that the support is paid in full once the Member State has fully implemented the reform commitment.

6. The Member State shall regularly report within the mechanisms of the European Semester on the progress in the achievement of the reform commitment. The modalities and timetable of the reporting shall be laid down in the decision referred to in paragraph 4.

8. In Article 91, the following paragraph is added:

"4. All or part of the performance reserve which is included in the amounts set out in Articles 91 and 92 may be allocated to support for structural reforms as referred to in Article 23a on request of a Member State under Article 22(8)."

Article 2

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.