Proposal for a Council Regulation establishing a Cohesion Fund - Montesquieu Instituut

 

COUNCIL OFBrussels, 24 June 2005

THE EUROPEAN UNIONPUBLIC

9867/05

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Interinstitutional File:

2004/0166 (AVC)

FC 32

DOCUMENT PARTIALLY

ACCESSIBLE TO THE PUBLIC CADREFIN 121

NOTE from :

Presidency

to : Structural Actions Working Party

No. prev. doc. : 8772/05 FC 26 CADREFIN 101

8329/05 FC 20 CADREFIN 85 7172/05 FC 12 CADREFIN 45 6889/05 FC 11 ECOFIN 72 UEM 75 CADREFIN 37

No. Cion prop. : COM(2004) 494 final (11637/04 FC 5 CADREFIN 23) Subject :

Proposal for a Council Regulation establishing a Cohesion Fund

Delegations will find in Annex to this note the text of the draft Cohesion Fund Regulation as it

ANNEX

Proposal for a

COUNCIL REGULATION

establishing a Cohesion Fund

THE COUNCIL OF THE EUROPEAN,

Having regard to the Treaty establishing the European Community, and in particular Article 161(2)

thereof,

Having regard to the proposal from the Commission1,

Having regard to the assent of the European Parliament2,

Having regard to the opinion of the European Economic and Social Committee 3,

Having regard to the opinion of the Committee of the Regions4,

Whereas:

(1) Regulation (EC) No [...] laying down general provisions on the European Regional

Development Fund, the European Social Fund and the Cohesion Fund1, establishes the

framework for the action of the Structural Funds and the Cohesion Fund. It fixes, in

particular, the objectives, the principles2 and the rules concerning partnership, programming,

evaluation and management. It is therefore necessary to specify the mission of the Cohesion

Fund in relation to this new framework and to the purpose assigned to it in the Treaty and to

repeal, for the sake of clarity, Council Regulation (EC) No 1164/94 of 16 May 1994

establishing the Cohesion Fund3.

(2) Trans-European network projects financed from the Cohesion Fund must fit the guidelines for

these networks adopted by the Council and the European Parliament. In order to concentrate

the efforts, priority shall be given to projects of European interest as defined in Decision No

1692/96/EC of the European Parliament and the Council of 23 July 1996 on Community

guidelines for the development of the trans-European transport network 4.

(3) The Community may, through the Cohesion Fund, contribute to action in pursuit of the

Community's environmental policy objectives specified in Article 174 of the Treaty. Under

Article 175(5) of the Treaty and without prejudice to the principle that the polluter should

pay, the Council can decide, in the case of measures on the basis of paragraph 1 of that Article

which are deemed to involve disproportionate costs for the public authorities of a Member

State, that the measure is to be aided from the Cohesion Fund.

(4) Granting of assistance from the Cohesion Fund must take due account of the priorities of the

enlarged Union, in particular those set by the Göteborg European Council on the environment

in the interests of sustainable development.

(5) Regulation (EC) No [...] provides that eligibility of expenditure is to be established at

national level, with certain exceptions, for which it is necessary to lay down specific

provisions. The exceptions concerning the Cohesion Fund should therefore be laid down.

(6) Conditionality provisions in the granting of financial assistance will continue to apply in

conjunction with the fulfilment of the conditions of economic convergence as set out in

article 99 of the Treaty and the need for sound government finances. In this respect, Member

States having adopted the euro are to implement stability programmes and Member

States not having adopted the euro convergence programmes, as defined in Council

Regulation (EC) n° 1466/97 of 7 July 1997 on the strengthening of the surveillance of

budgetary positions and the surveillance and coordination of economic policies, leading to the

avoidance of excessive government deficits referred to in Article 104 of the Treaty. At the

same time, the conditionality provisions should not apply to the operations that had

already been approved at the time of suspension.

HAS ADOPTED THIS REGULATION:

Article 1

Creation and purpose of the Cohesion Fund

• 1. 

  A Cohesion Fund (hereinafter: the Fund) is hereby set up for the purpose of strengthening the

economic and social [...]1 cohesion of the Community in the interests of promoting

sustainable development.

[...]

• 2. 

  The Fund is governed by the provisions of Regulation (EC) No [...] and by the provisions of

this Regulation.

Article 2

Scope of assistance2

• 1. 

  Assistance from the Fund shall be given to actions in the following areas ensuring an

appropriate balance and according to the investment and infrastructure needs specific to each

Member State receiving assistance:

• b) 

  environment [...] falling within the priorities assigned to the Community

environmental protection policy under the policy and action programme on the

environment.

In this context, the Fund may1 intervene in areas related2 to sustainable

development which clearly3 present environmental benefits, namely4 energy efficiency

and renewable energy and, in the transport sector5 outside the trans-European networks,

6rail, river, [...] sea [...] transport, intermodal transport systems and their

interoperability, management of road, sea and air traffic, clean urban transport and

public transport7.

8

• 2. 

  The appropriate balance of [...] assistance should be agreed in partnership between

Member States and the Commission9.

1 DELETED suggested adding "also". DELETED suggested deleting "In this context,"

2 DELETED entered a scrutiny reservation on this new formulation.

Article 3

Rules on eligibility of expenditure

The following expenditure shall be ineligible:

• 1) 

  VAT1, except for non recoverable VAT, when it is genuinely and definitively borne by

the beneficiaries other than non taxable persons foreseen at article 4(5), 1st

subparagraph of the 6th Council VAT Directive (States, regional and local government

authorities and other bodies governed by public law)

• 2) 

  interest on debt;
• 3) 

  the purchase of land for an amount exceeding 10% of the total eligible expenditure for the

operation concerned;2

• 4) 

  housing, excluding energy efficiency investments for an amount not exceeding 5%3 of the

total eligible expenditure for the operation concerned4;

• 5) 

  decommissioning of nuclear power stations.

Article 4

Conditions applying to access to Fund assistance1

• 1. 

  Assistance from the Cohesion Fund shall be conditional on the following rules.
• 2. 

  If the Council:
• a) 

  has decided in accordance with Article 104(6) EC that excessive government deficit

exists in a beneficiary Member State, and

• b) 

  has established in accordance with Article 104(8) EC that the Member State concerned

has not taken effective action in response to a Council Recommendation issued under

Article 104(7) EC [...],

it may decide to suspend either the totality or part of the financial assistance from the Fund

for the Member State concerned with effect from 1st January of the year following the

decision. The suspension concerns commitments,2 except for operations already approved.

• 3. 

  [...] If the Council establishes that the Member State concerned has taken the necessary

corrective action, it shall decide, without delay, to lift the suspension of the financial

assistance from the Fund. At the same time, it shall decide, on a proposal from the

Article 5

Transitional provisions1

[...]2

• 1. 

  Applications 3made under Regulation (EC) No 1164/94 shall remain valid4 provided such

applications are supplemented, where necessary, so as to comply with the requirements

of this Regulation within not more than two5 months as of 1 January 20076.

1 DELETED indicated the need of more precise rules concerning the transitional period. DELETED entered a reservation on the new wording. DELETED suggested adding a new

paragraph. Nevertheless, DELETED sought for clarification as to the drafting.

2.

If for an operation approved under Regulation 1164/94 the amounts committed until 31 December 2006 are below the maximum amount of assistance as set in a granting decision for the operation, the Member State concerned shall include continuation of such operation in an operational programme for the Cohesion Fund. The amounts for continuation of such operations shall be excluded from the amounts subject to automatic decommitment under Art. 92 of Regulation No [...].

Article 6

Repeal1

Without prejudice to the provisions laid down in Article 106 (1) of Regulation (EC) No [laying

down general provisions on the European Regional Development Fund, the European Social

Fund and the Cohesion Fund], Regulation (EC) No 1164/94 is hereby repealed with effect from

1 January 20072.

References to Regulation (EC) No 1164/94 shall be construed as reference to this Regulation.3

Article 7

Review

The Council shall review this Regulation by 31 December 2013 at the latest in accordance with

Article 161 of the Treaty.

Article 8

Entry into force1

This Regulation shall enter into force on the twentieth day following that of its publication in the

Official Journal of the European Union.

It shall apply from 1 January 2007.2

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

Done at Brussels, [...].

For the Council

The President

[...]

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