Proposal for a Regulation of the European Parliament and of the Council on the European Regional Development Fund (ERDF) - Montesquieu Instituut

 

COUNCIL OFBrussels, 29 April 2005

THE EUROPEAN UNIONPUBLIC

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Interinstitutional File:

2004/0167 (COD)

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to : Structural Actions Working Party

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No Cion prop. : COM(2004) 495 final (11688/04 FSTR 18 REGIO 5 CADREFIN 25) Subject :

Proposal for a Regulation of the European Parliament and of the Council on the European Regional Development Fund (ERDF)

Delegations will find attached a compromise text on the proposal for a Regulation of the European

ANNEX

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the European Regional Development Fund

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN COMMUNITY,

Having regard to the Treaty establishing the European Community, and in particular the first

paragraph of Article 162 and the second subparagraph of Article 299(2) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the European Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Acting in accordance with the procedure laid down in Article 251 of the Treaty,

Whereas,

(2) The provisions common to the Structural Funds and the Cohesion Fund are set out in

Regulation (EC) No (...)1 laying down general provisions for the European Regional

Development Fund, the European Social Fund, and the Cohesion Fund. Specific provisions

concerning the type of activities which may be financed by the ERDF under the objectives

defined in that Regulation need to be laid down.

(3) The ERDF should provide assistance within the framework of an overall strategy for cohesion

policy which ensures greater concentration of assistance on the priorities of the Community,

particularly outside the less-developed regions.

(4) Regulation (EC) No (...) provides that the 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 related to the ERDF should therefore be laid down.

(5) Efficient and effective implementation of the action supported by the ERDF relies on good

governance and partnership among all the relevant territorial and socio-economic actors, and

in particular regional and local authorities.

(6) Building on the experience and strengths of the Urban Community initiative foreseen by

Article 20(1)(b) of Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down

general provisions on the Structural Funds2, the urban dimension should be reinforced by

(7) Particular attention should be paid to guaranteeing complementarity and consistency between

support granted by the ERDF and that granted by the European Agricultural Fund for Rural

Development pursuant to Regulation (EC) No (...)1 and by the European Fund for Fisheries

pursuant to Regulation (EC) No (...)2. Programmes co-financed by the ERDF should

therefore support the diversification of the rural economies and the areas dependent on

fisheries, away from traditional activities.

(8) It is necessary to ensure that the action supported by the ERDF in favour of small and medium

sized firms takes into account and supports the implementation of the European Charter for

Small and Medium Sized Enterprises adopted at the European Council in Santa Maria de

Feira.

(9) Specific attention should be paid to the outermost regions, namely by enlarging, on an

exceptional basis, the scope of the ERDF to the financing of operating aid linked to the

compensation of the additional costs in certain sectors. Such a derogation requires the use of

Article 299(2) of the Treaty as a legal basis.

(10) The ERDF should address the problems of accessibility and remoteness from large markets

confronting areas with an extremely low population density, as referred to in Protocol No 6 to

the Act of Accession of Austria, Finland and Sweden. The ERDF should also address the

specific difficulties encountered by certain islands, mountain areas and sparsely populated

(12) It is necessary to lay down specific provisions concerning the programming, management,

monitoring and control of operational programmes under the "European territorial

cooperation" objective.

(13) It is necessary to support an effective cross-border, [...] trans-national and inter-regional

cooperation with countries neighbouring the Community where this is necessary to ensure

that the regions of the Member States which border third-countries can be effectively assisted

in their development. Accordingly, it is appropriate to authorise on an exceptional basis the

financing of assistance from the ERDF for projects located on the territory of third countries

where they are for the benefit of the regions of the Community.

(14) Regulation (EC) No 1783/1999 of the European Parliament and the Council of 12 July 1999

on the European Regional Development Fund1 should be repealed,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation establishes that tasks of the European Regional Development Fund (ERDF), the

scope of its assistance with regard to the "Convergence", "Regional competitiveness and

employment", and "European territorial co-operation" objectives as defined in Article 3 of

Regulation (EC) No (...) laying down general provisions for the European Regional Development

Fund, the European Social Fund and the Cohesion Fund, and the types of expenditure eligible for

assistance1.

It lays down specific provisions concerning the treatment of urban and rural areas, of areas

dependent on fisheries, of the outermost regions, and of areas with natural handicaps2.

It also sets out specific provisions concerning the "European territorial cooperation" objective,

particularly in terms of programming, implementation, management, monitoring and control3.

Article 2

Purpose

Pursuant to Article 160 of the Treaty and Regulation (EC) No [...], the ERDF shall contribute

to the financing of assistance towards the reinforcement of economic, social and [territorial]

cohesion by correcting regional imbalances and supporting the structural sustainable development

and adjustment of regional economies, including the conversion of declining industrial regions, and

by supporting cross-border, trans-national and inter-regional cooperation.

In so doing, the ERDF shall give effect to the priorities of the Community, and in particular the

need to strengthen competitiveness and innovation1, to create and safeguard2 sustainable jobs, and

to promote environmentally sound and sustainable growth3.

Article 3

Scope of assistance

• 1. 

  The ERDF shall focus its assistance [...] on thematic priorities. The type and range of actions

to be financed within each priority shall reflect the different nature of the "Convergence",

"Regional competitiveness and employment" and "European territorial cooperation"

objectives in accordance with Articles 4, 5 and 6 of this Regulation4.

• b) 

  investment in1 infrastructure;
• c) 

  [...] development [...] of endogenous potential2 by measures which support

regional and local3 development, employment initiatives4, and the activities of

small and medium-sized enterprises (SMEs). These activities include services to

enterprises, creation and development of financing instruments such as venture capital,

loan and guarantee funds and local development funds, interest subsidies, [...] services

to the population5, networking and exchange of experience between regions, towns,

-

and relevant social, economic and environmental actors;

• d) 

  technical assistance as referred to in Articles 43 and 44 of Regulation (EC) No (...).

Article 46

Convergence

Under the "Convergence" objective7, the ERDF may focus its assistance on supporting sustainable

integrated regional and local economic development and employment by mobilising and

strengthening endogenous capacity through operational programmes aimed at the modernisation

and diversification of regional economic structures, primarily in the following areas :

• 1) 

  Research and technological development (R&TD), innovation and entrepreneurship,1

including strengthening [...] research and technological development capacities, aid to R&TD

in [...] SMEs and to technology transfer, improvement of links between SMEs and

universities, and research and technology centres, development of business networks and

clusters, support for the provision of business and technology services to groups of SMEs,

fostering of entrepreneurship and innovation funding for SMEs through [...] financial

engineering instruments;

• 2) 

  Information society, including development of local2 content, services and applications,

broad band networks, improvement of secure access to and development of on-line public

services, aid and services to SMEs to adopt and effectively use information and

communication technologies (ICTs);

• 3) 

  Environment, including investments connected with waste and water management,

local/communal waste-water treatment and air quality, 3integrated pollution prevention and

control,45 rehabilitation of contaminated sites and land and brownfield redevelopment,

6promotion of biodiversity and nature protection, including assistance in NATURA 2000

sites7, aid to SMEs to promote sustainable production patterns through the introduction of

cost-effective environmental management systems and the adoption and use of pollution-

prevention technologies;

• 4) 

  Prevention of risks, including development and implementation of plans to prevent and cope

with environmental risks1;

• 5) 

  Tourism, including promotion of natural and cultural assets as potential for the development

of sustainable tourism, protection and enhancement of the natural and cultural heritage in

support of socio-economic development, aid to improve the supply of tourism services

through new higher value-added services2;

• 6) 

  Transport investments, including trans-European networks and integrated [...] strategies for

clean urban3 transport, which contribute to improving the access to and quality of passenger

and goods services, to achieving a more balanced modal split, to promoting intermodal

systems and reducing environmental impacts4;

• 7) 

  Energy, including trans-European networks, which contribute to improving security of supply,

[...], and integrating environmental considerations, improvement of energy efficiency and the

development of renewable energies5;

• 8) 

  Social infrastructure1, including investment in education2 and health which contribute to

regional and local development3 [...];

[...]

[...]

Article 54

Regional competitiveness and employment

Under the "Regional competitiveness and employment" objective, the ERDF may focus its

assistance, while promoting employment, in the context of regional sustainable development

strategies,5 primarily on the following three priorities:

• 1) 

  innovation and the knowledge economy, through support [...] to the creation of efficient

regional innovation systems, and in particular :

• a) 

  enhancing regional R&TD and innovation capacities directly linked to regional

economic development objectives by supporting industry or technology-specific

competence centres, by promoting technology transfer, and by developing technology

forecasting and international benchmarking of policies to promote innovation, and by

supporting inter-firm collaboration and joint R&TD and innovation policies;

• b) 

  stimulating innovation mainly in SMEs, in all sectors of the regional and local

economy, by supporting the introduction of new or improved products, processes

and services onto the market1, [...], by supporting business networks and clusters of

SMEs, by promoting cooperation networks between SMEs and higher education

and research institutes and by facilitating SMEs' access to [...] business support

services, and by supporting the integration of cleaner and innovative technologies in

SMEs;

• c) 

  promoting entrepreneurship by facilitating the economic exploitation of new ideas, and

by fostering the creation of new firms by higher2 education and research institutes

-

and existing firms;

• d) 

  creating [...] financial engineering instruments and incubation facilities conducive to

the creation or expansion of knowledge-intensive firms.

3

• 2) 

  environment and risk prevention, and in particular:
• a) 

  stimulating investment for the rehabilitation of contaminated4 sites and land ,

brownfield redevelopment and of cultural and natural assets5, and promoting the

development of infrastructure linked to biodiversity and assistance in NATURA 2000

• b) 

  stimulating energy efficiency and renewable energy production;
• c) 

  promoting clean urban1 public transport;
• d) 

  developing plans and measures to prevent and cope with environmental risks.

2

• 3) 

  access, outside major urban centres3, to transport and telecommunication4 services of general

economic interest, and in particular:

• a) 

  strengthening secondary networks5 by improving links to TEN-transport networks, to

regional railway hubs, airports and ports, or to multimodal platforms,6 by providing

radial links to main railways lines, and by promoting regional and local inland

waterways, and short-sea shipping;

• b) 

  promoting access to, take up, and efficient use of ICTs by SMEs by supporting access

to networks, the establishment of public Internet access points, equipment, and the

development of services and applications.

In [...] justified cases, the Member States and the Commission may decide to extend to the

domains referred to in article 4 of this Regulation the assistance from the ERDF in the regions

eligible to the specific and transitional financing referred to in article 6(2) of Regulation (EC)

No [...]1.

Article 62

European territorial cooperation

Under the "European territorial cooperation" objective, the ERDF may focus its assistance on3:

• 1) 

  the development of cross-border economic, social and environmental activities4 through joint

strategies for sustainable territorial development, and primarily:

• a) 

  by encouraging entrepreneurship and, in particular, the development of SMEs, tourism,

culture, and cross-border trade;

• b) 

  by encouraging 5the protection and joint management of the environment;
• c) 

  by supporting urban and rural development and relationships6;
• d) 

  by reducing isolation through improved access to transport, information and
• e) 

  by developing collaboration, capacity and joint use of infrastructures in particular in

sectors such as health, culture and education1.

In addition, the ERDF may contribute to promoting [...] administrative cooperation2, the

integration of cross-border labour markets, local employment initiatives, gender equality

and equal opportunities, training and social inclusion, and sharing of human resources and

facilities for R&TD.

• 2) 

  the establishment and development of trans-national cooperation, including bilateral

cooperation between maritime regions, primarily through the financing of networks and of

actions conducive to integrated territorial development on the following [...] priorities3:

• a) 

  water management, with a clear trans-national dimension, including protection and

management of river basins, coastal zones, marine resources, water services and

wetlands4;

• b) 

  improving accessibility5, including6 investments in cross-border sections of trans-

European networks, improved local and regional access to national and trans-national

networks and platforms, enhanced inter-operability of national and regional systems,

and promotion of advanced communications and information technologies;

• c) 

  risk prevention, including the promotion of maritime security and protection against

environmental risks [...]. Programmes may include the provision of equipment and

development of infrastructure, drawing up and implementing trans-national assistance

plans, common risk mapping systems, and the development of common instruments for

studying, preventing, monitoring and controlling natural and technological risks.

• d) 

  the creation of scientific and technological networks connected with issues relating to

the balanced development of trans-national areas, including the establishment of

networks between higher education and research institutes, SMEs and links for

accessing scientific knowledge and technology transfer between R&TD facilities and

international centres of R&TD excellence, the development of trans-national consortia

for sharing R&TD resources, twinning of technology transfer institutions, and

development of joint financial engineering instruments directed at supporting R&TD in

SMEs.

1

Bilateral cooperation between maritime regions may be extended to the domains

referred to in point 1). 2

• 3) 

  reinforcement of the effectiveness of regional policy by promoting inter-regional co-

operation [...]1 focusing on the topics referred to under2 Articles 4, 5(1) and (2) [...] . Inter-

regional co-operation programmes are reinforced by programmes supporting the

identification, transfer and dissemination of best practices, including on urban renewal3

as referred to in Article 8, and [...] by actions involving studies, data collection, and the

observation and analysis of development trends in the Community.4

Article 7

List of ineligible expenditure

The following expenditure is not eligible for a contribution from the ERDF:

• a) 

  VAT5;
• b) 

  interest on debt;
• c) 

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

operation concerned. In exceptional and duly justified cases, a higher percentage can be

fixed for operations concerning environmental conservation.6

• d) 

  housing7;
• e) 

  decommissioning of nuclear power stations.

CHAPTER II1

SPECIFIC PROVISIONS ON THE TREATMENT OF PARTICULAR

TERRITORIAL FEATURES

Article 82

Urban dimension3

Without prejudice to Articles 4 and 5 of the present Regulation, in the case of action involving

4urban renewal as referred to in Article 25(4) a) and 36(4) a) of Regulation (EC) No (...), the

ERDF may support the development of participative, integrated strategies to tackle the high

concentration of economic, environmental and social problems affecting urban agglomerations.

This may combine5 the rehabilitation of the physical environment, brownfield redevelopment, and

the preservation and development of the historical and cultural heritage6 with measures to promote

entrepreneurship, local employment and community development, as well as the provision of

services to the population taking account of changing demographic structures.

By way of derogation from Article 33(2) of Regulation (EC) No (...), the ERDF funding of

measures under the "Regional competitiveness and employment" objective falling within the scope

of Regulation (EC) N° (...) on the European Social Fund shall be raised to 15%7 of the priority

8

Article 9

Rural areas and areas dependent on fisheries

Member States and regions shall ensure complementarity and consistency between the measures co-

financed by the European Agricultural Fund for Rural Development (EAFRD) pursuant to

Regulation (EC) No (...) and the actions co-financed by the European Fund for Fisheries (EFF)

pursuant to Regulation (EC) No (...), on the one hand, and the programmes co-financed by the

ERDF, on the other.

The ERDF intervention in rural areas and areas dependent on fisheries shall concentrate on the

economic diversification of such areas, including:

• 1) 

  infrastructure to improve accessibility;
• 2) 

  acceleration of the rolling-out of telecommunication networks and services in rural areas;
• 3) 

  development of new economic activities outside the agricultural and fishery sectors;
• 4) 

  reinforcement of links between urban and rural areas;
• 5) 

  development of tourism and rural amenities.

Article 10

Areas with natural handicaps

Regional programmes co-financed by the ERDF covering areas facing natural handicaps as referred

to in Article 52(1) b) of Regulation (EC) No (...) shall pay particular attention to addressing the

specific difficulties of those areas.

Without prejudice to Article 4 and 5, the ERDF shall in particular contribute towards the financing

of investments aimed at improving accessibility, promoting and developing economic activities

related to the cultural heritage, promoting the sustainable use of natural resources, and stimulating

the tourism sector.

Article 11

Outermost regions

In accordance with the additional allocation referred to in Article 16(1) d) of Regulation (EC) No

(...) and by way of derogation from Article 3(2) of this Regulation, the ERDF shall help finance

operating aid in the outermost regions to offset the additional costs incurred in the areas covered by

Article 4 and in the following additional areas, with the exception of products falling within

Annex I to the Treaty:

CHAPTER III

SPECIFIC PROVISIONS CONCERNING

THE "EUROPEAN TERRITORIAL COOPERATION" OBJECTIVE

Article 11 bis

Without prejudice of the provisions of the present Chapter, the provisions of Regulation (EC)

n° .../... shall apply to operational programmes under the "European territorial cooperation"

objective.

SECTION 1

OPERATIONAL PROGRAMMES

Article 12

Content

Each operational programme under the "European territorial cooperation" objective shall contain

the following information:

• 1) 

  an analysis of the situation of the cooperation area in terms of its strengths and weaknesses,

and the strategy adopted to deal with it;

• 4) 

  a breakdown of the spheres of assistance by category, in conformity with the detailed rules for

-

the implementation of Regulation (EC) No (...);

• 5) 

  a single financing plan, with no breakdown by Member State, comprising two tables:
• a) 

  a table breaking down for each year, in accordance with Articles 50 to 53 of Regulation

(EC) No (...), the amount of the total financial allocation from the ERDF. The total

ERDF contribution provided for annually shall be compatible with the relevant financial

perspective;

• b) 

  a table specifying, for the whole programming period and for each priority, the amount

of the total financial allocation from the Community and of the matching national public

funding, and the rate of the ERDF contribution;

• 6) 

  the implementing provisions for the operational programme:
• a) 

  designation by the Member State of all the entities stipulated in Article 14;
• b) 

  a description of the monitoring and evaluation systems as well as the composition of the

-

monitoring committee;

• 7) 

  an indicative list of major projects within the meaning of Article 38 of Regulation (EC) No

(...) scheduled to be submitted during the programming period.

SECTION 2

ELIGIBILITY

Article 13

Rules on eligibility of expenditure

Without prejudice to Article 55 of Regulation (EC) No (...), and to Article 7 of the present

Regulation, the Commission shall adopt rules on eligibility [...] of expenditure incurred under the

"European territorial cooperation" objective in conformity with the provisions of Article 104(3) of

Regulation (EC) No (...).

SECTION 3

MANAGEMENT, MONITORING AND CONTROL

Article 14

Designation of authorities

• 2. 

  The audit authority for the operational programme shall be assisted by a group of auditors in

carrying out the duties provided for in Article 61 Regulation (EC) No (...). This group shall

be set up by the Member States participating in an operational programme. It shall comprise a

representative of an audit body designated by each Member State participating in the

operational programme. Each group of auditors shall be set up within three months of the

decision approving the operational programme at the latest. It shall draw up its own rules of

procedure. It shall be chaired by the audit authority for the operational programme.

The final report of the audit authority for the operational programme referred to in

Article 61(1)(e)(i) of Regulation (EC) No (...) shall have been approved by the group of

auditors.

• 3. 

  Each Member State participating in the operational programme shall appoint representatives

to sit on the monitoring committee referred to in Article 64 of Regulation (EC) No (...).

Article 15

Function of the managing authority

The managing authority shall perform the duties provided for in Article 59 of Regulation (EC) No

(...), with the exception of those concerning the regularity of operations and expenditure in relation

to national and Community rules. In this connection, its responsibilities shall be limited to verifying

Article 16

Control system

• 1. 

  In order to validate the expenditure [...], each Member State shall set up a control system

making it possible to verify the delivery of the products and services co-financed, the

soundness of the expenditure declared for operations or parts of operations implemented on its

territory, and the compliance of such expenditure and of related operations, or parts of those

operations, with Community and national rules.

For this purpose each Member State shall designate the approved controllers

responsible for verifying the legality and regularity of the expenditure declared by each

beneficiary participating in the operation.

Where the verification on the delivery of the products and services co-financed can be carried

out only in respect of the entire operation, such a verification shall be performed by the

approved controller of the lead beneficiary or by the managing authority.

• 2. 

  Each Member State shall ensure that the expenditure can be validated by the approved

controllers within a period of two months.

Article 17

Financial management

• 3. 

  If the lead beneficiary does not succeed in securing repayment from a beneficiary, the

Member State on whose territory the relevant beneficiary is located shall reimburse the

certifying authority the amount paid in error to that beneficiary.

Article 18

European grouping of cross-border cooperation

Member States participating in an operational programme under the "European territorial

cooperation" objective may make use of the legal instrument on cooperation established by

Regulation (EC) No (...) with a view to making it responsible for managing the operational

programme by conferring on it the responsibilities of the managing authority and of the joint

technical secretariat. In this context, each Member State shall continue to assume financial

responsibility.

SECTION 4

OPERATIONS

Article 19

Selection of operations

• 1. 

  Operations selected for operational programmes aimed at developing cross-border economic
• 2. 

  Operations selected for operational programmes involving cooperation networks and

exchange of experience, as referred to in Article 6(3), shall include at least three beneficiaries

from at least three regions of at least two Member States, which shall cooperate in the

following ways for each operation: joint development, joint implementation, joint staffing and

joint financing.

• 3. 

  In addition to the tasks referred to in Article 64 of Regulation (EC) No (...), the monitoring

committee shall be responsible for selecting operations.

Article 20

Responsibility of the lead beneficiary

• 1. 

  For each operation, a lead beneficiary shall be appointed. The lead beneficiary shall assume

the following responsibilities:

• a) 

  It shall lay down the arrangements for its relations with the beneficiaries participating in

the operation in an agreement comprising, inter alia, provisions guaranteeing the sound

financial management of the funds allocated to the operation, including the

arrangements for recovering amounts unduly paid. Each beneficiary participating in

the operation shall assume responsibility in the event of any irregularity in the

expenditure which it has declared.

• d) 

  it shall verify that the expenditure presented by the beneficiaries participating in the

operation has been validated by the approved controllers referred to in Article 16(2);

• e) 

  it shall be responsible for transferring the ERDF contribution to the beneficiaries

participating in the operation.

• 2. 

  The managing authority shall lay down the implementing arrangements for each operation, in

agreement with the lead beneficiary.

[...]

Article 21

Special conditions governing the location of operations

• 1. 

  In the context of cross-border cooperation, in duly justified cases, financing of up to 20% of

the budget for the operational programme concerned may be granted for operations in

NUTS level III areas adjacent to the areas referred to in Article 7(1) of Regulation (EC) No

(...).

• 2. 

  In the context of transnational cooperation, in duly justified cases, financing of up to 20% of

the budget for the relevant operational programme may be granted for operations which

include partners outside the area.

CHAPTER IV

FINAL PROVISIONS

Article 22

Transitional provisions

The transitional provisions set out in Article 106 of [Regulation (EC) No [...] [laying down

general provisions on the Structural Funds and the Cohesion Fund] shall apply mutatis

mutandis to this Regulation. [...]

Applications made under Regulation (EC) No 1783/99 shall remain valid.

Article 23

Repeal

Without prejudice to the provisions set out in Article 22 (1) of the present Regulation,

Regulation (EC) No. 1783/99 shall be repealed as of the 1st January 2007.

References to Regulation (EC) No 1783/99 shall be construed as reference to this Regulation.

Article 24

Article 25

Entry into force

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

Official Journal of the European Union.

The provisions of Articles 7 and 13 shall apply from the date of entry into force of the present

Regulation. The others shall apply from 1 January 2007.

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

Done at Brussels, [...].

For the European Parliament For the Council

The President The President

[...] [...]