Explanatory Memorandum to COM(2020)223 - Amendment of Regulation (EU) No 223/2014 as regards the introduction of specific measures for addressing the COVID-19 crisis - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2020)223 - Amendment of Regulation (EU) No 223/2014 as regards the introduction of specific measures for addressing the COVID-19 crisis. |
|---|---|
| source | COM(2020)223  |
| date | 28-05-2020 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The direct and indirect effects of the COVID-19 pandemic continue to increase in all Member States. The current situation is unprecedented and requires exceptional measures adapted to the situation to be applied in these circumstances, including for the support to the most deprived provided by the Fund for European Aid to the Most Deprived (FEAD). In particular, the crisis presents not only specific risks to the most deprived, but also furthers economic hardship. It is expected that the most vulnerable in society will be hit hardest by the socio-economic consequences of the crisis. Moreover, due to the social and economic consequences of the COVID-19 pandemic the number of the most deprived is increasing.
The first “Coronavirus Response Investment Initiative” (CRII) 1 , a package of measures which entered into force on 1 April 2020, introduced a number of important changes to the legislative framework applicable to the European Structural and Investment Funds that allow for a more effective response in the current situation. Complementary measures were adopted under the “Coronavirus Response Investment Initiative Plus” (CRII Plus) 2 . This package also included amendments to Regulation (EU) No 223/2014 3 (FEAD Regulation), through Regulation (EU) 2020/559 of the European Parliament and of the Council of 23 April 2020 4 , which entered into force on 25 April 2020, introducing specific measures of additional flexibility and liquidity for Member States to address the COVID-19 pandemic under the FEAD.
The situation is slowly evolving and many regions and Member States prepare for a cautious easing of restrictions on their societies and enterprises, and restarting their economies. Nevertheless, the direct and indirect effects of the crisis have already taken their toll in many sectors. The process of recovery will take time and the need for further lockdown measures cannot be excluded. In this context, there is a serious risk that the number of people suffering from food and material deprivation will increase and therefore further action is required in order to respond to the social consequences of the COVID-19 pandemic to ensure a socially fair recovery in line with the European Pillar of Social Rights.
While the Commission proposed extraordinary measures that granted the greatest flexibility and support possible to public authorities, partner organisations and other actors involved in the implementation of the FEAD, Member States are facing liquidity problems to provide a response to the COVID-19 crisis and the growing needs on the ground.
Therefore, in order to help Member States to provide an effective response to the COVID-19 pandemic, including its social and economic consequences, it is appropriate to adopt additional measures, including increasing the resources available for the European Regional Development Fund (ERDF), the European Social Fund (ESF) and also the FEAD. In this context, the Commission proposes a new amendment to the Common Provisions Regulation (CPR) (REACT-EU) 5 and to the FEAD Regulation in response to the COVID-19 pandemic, in order to provide that additional resources are made available for the years 2020, 2021 and 2022 for these funds.
The additional resources for 2020 stem from an increase of the global resources for economic, social and territorial cohesion in the multiannual financial framework for 2014-2020. The additional resources for 2021 and 2022 constitute external assigned revenue stemming from the [European Recovery Instrument].
These amounts will be distributed among Member States taking into account their relative prosperity and the extent of the effects of the current crisis on their economies and societies. 0.35 % of the additional resources need to be allocated to technical assistance at the initiative of the Commission. By way of derogation from the rules applicable to external assigned revenues set out in the Financial Regulation, these additional resources shall follow the applicable rules set out in the CPR and the FEAD Regulation once they are assigned to operational programmes, including rules on commitments and decommitments.
Member States may use these amounts under the investment for growth and jobs goal to support operations fostering crisis repair in the context of the COVID-19 pandemic in the regions whose economy and jobs have been most hardly hit and preparing the recovery of their economies from the ERDF or the ESF or to increase the allocation for programmes supported by the FEAD.
The allocation of additional resources to the FEAD is voluntary for Member States, according to their specific needs. In considering this, Member States should pay due attention to the increases in the number of the most deprived since the COVID-19 pandemic.
In addition, in line with the amendments proposed for the Common Provisions Regulation (REACT-EU) 6 , the Commission proposes to introduce additional measures which provide for more liquidity to Member States, notably by allowing that Member States receive a substantial pre-financing payment in case the resources under the FEAD are increased and by exempting Member States from providing a national contribution to the increased resources. Moreover and similarly to what is proposed for the Common Provisions Regulation (REACT-EU), given the need to make sure that these additional resources are deployed rapidly to investments on the ground and take effect in the real economy, it is not proposed to extend the final date of eligibility, which shall remain – also for the additional resources – 31 December 2023 (for expenditure incurred at the level of beneficiaries). Nevertheless, it is clarified that the commitments linked to the additional resources shall be decommitted in accordance with the rules to be followed for the closure of the programmes (i.e. in 2025 following the submission of the necessary documents pursuant to Article 52). It is also envisaged that the electronic exchange system used for official exchanges between the Commission and the Member States in accordance with Article 30 i is adjusted to provide the possibility to Member States to submit requests for operational programme amendments for the allocation of the additional resources for the years 2020, 2021 and 2022 without any delay.
The COVID-19 pandemic also had a disproportionate socio-economic effect on women. Therefore, Member States should pay due account that operations strictly follow the horizontal principle of gender equality as laid down in Article 5 (11) of the FEAD Regulation.
Finally, the Commission also proposes additional provisions providing for flexibility for Member States to use technical assistance.
• Consistency with existing policy provisions in the policy area
This proposal is consistent with existing policy provisions in the policy area, in particular with provisions proposed by the Commission for the Common Provisions Regulation (REACT-EU) in response to the COVID-19 outbreak, as part of the Commission´s proposal to provide exceptional flexibility for the use of the ERDF and the ESF in response to the COVID-19 outbreak.
• Consistency with other Union policies
The proposal is consistent with other proposals and initiatives adopted by the Commission, in particular with the proposals adopted by the Commission for the ERDF and ESF in response to the COVID-19 pandemic.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The proposal is based on Article 175(3) of the Treaty on the Functioning of the European Union. It provides for possibilities for Member States to increase the resources under the FEAD, to receive an additional pre-financing payment and exempts the additional resources from national contributions. These exceptional changes are without prejudice to the rules that apply under regular circumstances.
• Subsidiarity (for non-exclusive competence)
The proposal complies with the subsidiarity principle. The proposal does not modify the delivery mode of the FEAD, which remains under shared management.
Shared management is underpinned by the subsidiarity principle, as the Commission delegates strategic programming and implementation tasks to Member States. It also limits EU action to what is necessary to achieve its objectives as laid down in the Treaties.
This proposal, together with the proposal to amend Regulation (EU) No 1303/2013 7 , aims to allow for making available additional resources. It also aims to clarify the rules governing the use of those resources in the context of programmes under the 2014-2020 programming period.
• Proportionality
The proposal is proportionate and does not include provisions which are not necessary to achieve the objectives of the Treaty. It is limited to the amendments considered necessary for establishing the rules to be followed in relation to the additional resources and for addressing problems faced by Member States during the COVID-19 crisis in the context of the implementation of the FEAD.
• Choice of the instrument
The choice of instrument is a Regulation of the European Parliament and of the Council, in accordance with the ordinary legislative procedure as set out in Article 175(3) of the Treaty. The Commission has explored the scope for manoeuvre provided by the legal framework and considers it necessary to propose amendments to Regulation (EU) No 223/2014.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Given the specific circumstances of this proposal, there was no ex-post evaluation/or fitness checks of the existing legislation.
• Stakeholder consultations
Given the specific circumstances of this proposal, there was no consultation of external stakeholders.
• Collection and use of expertise
Use of external expertise has not been necessary.
• Impact assessment
Not applicable.
• Regulatory fitness and simplification
• Fundamental rights
The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
The proposal will lead to additional commitments in the year 2020, financed from an increase of the ceiling of the 2014-2020 Multiannual Financial Framework. It will also lead to additional commitments for the years 2021 and 2022, financed from external assigned revenues. It will trigger additional payments in the years 2020 to 2025. The budgetary implications are covered by the Legislative Financial Statement accompanying the REACT-EU Regulation.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The implementation of the measures will be monitored and reported upon in the framework of the general reporting mechanisms established in Regulation (EU) No 223/2014.
• Explanatory documents (for directives)
N/A