Explanatory Memorandum to COM(2011)484 - Amendment of Council Regulation (EC) No 1198/2006 on the European Fisheries Fund, as regards certain provisions relating to financial management for certain Member States experiencing or threatened with serious difficulties with respect to their financial stability - Main contents
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| dossier | COM(2011)484 - Amendment of Council Regulation (EC) No 1198/2006 on the European Fisheries Fund, as regards certain provisions relating to ... |
|---|---|
| source | COM(2011)484  |
| date | 01-08-2011 |
- Reasons and objectives for the proposal
The sustained financial and economic crisis is increasing the pressure on national financial resources as Member States are reducing their budgets. In this context ensuring a smooth implementation of cohesion programmes is of particular importance as a tool for injecting funds to the economy.
Nonetheless, the implementation of the programmes is often challenging as a result of the liquidity problems resulting from budget constraints. This is particularly the case for those Member States which have been most affected by the crisis and have received financial assistance under a programme from the European Financial Stabilisation Mechanism (EFSM) for the EURO countries or from the Balance of Payments (BoP) mechanism for non EURO countries. To date, six countries - including Greece which has received financial assistance before the establishment of EFSM - have requested financial assistance under these mechanisms and have agreed with the Commission a macro-economic adjustment programme. These countries are Hungary, Romania, Latvia, Portugal, Greece and Ireland, hereafter called 'programme countries'. It should be noted that Hungary which has entrered the BoP mechanism in 2008 has already exited in 2010.
In order to ensure that these Member States continue the implementation of the European Fisheries Fund programmes on the ground and disburse funds to projects, the current proposal contains provisions that would allow the Commission to make increased payments to these countries, for the period they are under the support mechanisms. This will provide additional financial resources to the Member States and will facilitate the continuation of the implementation of the programmes on the ground.
- General context
The deepening of the financial crisis in some of the Member States is undoubtedly affecting substantially the real economy due to the amount of debt and the difficulties encountered by the Governments to borrow money from the market.
In 2008, the Council has adopted (based on a proposal from the Commission) a regulation in response to the crisis and to its socio-economic consequences. In the framework of this package, the regulation foresees a number of regulatory changes aiming to provide additional pre-financing through advance payments to EFF programmes. The additional advance payments paid out to the Member States have provided an immediate cash injection of EUR 293 million, within the financial envelope agreed for each Member State for the 2007-2013 period. The total of advance payments amounts to EUR 586.4 million.
- Provisions in force in the policy sphere of the proposal
Article 76 of the Council Regulation (EC) 1198/2006 provides for two possibilities to calculate interim payments. Paragraph 1, as a general rule, provides that interim payments shall be calculated by applying to the public contribution declared in the statement of expenditure certified by the certifying authority under each priority axis and under each Convergence/Non-convergence objective, the co-financing rate established under the current financing plan for that priority axis and that objective. Paragraph 2 allows, in response to a specific and properly grounded request by the Member State, to calculate interim payments as the amount of Union assistance paid or due to be paid to the beneficiaries in respect of the priority axis and of the objectives.
Article 77 of the Council Regulation (EC) 1198/2006 provides that the payment of balance shall be limited to whichever of these amounts is smaller: (a) the amount calculated by applying to the public contribution declared in the final statement of expenditure certified by the certifying authority under each priority axis and under each Convergence/Non-Convergence objective, the rate of Union co-financing established under the current financing plan for that priority axis and that objective or (b) the amount of Union assistance paid or due to be paid to the beneficiaries in respect of each priority axis and for each objective. The latter amount must be specified by the Member State in the last statement of expenditure certified by the certifying authority in respect of each priority axis and for each objective.
- Consistency with other policies and objectives of the Union
The proposal is consistent with other proposals and intitiatives adopted by the European Commission as a response to the financial crisis.
- Consultation of interested parties
There was no consultation of external stakeholders
- Procurement and use of expertise
Use of external expertise has not been necessary.
- Impact analysis
The proposal would allow the Commission to increase payments to the countries concerned, for the period they are under the support mechanisms. The increase will be an amount calculated by applying ten percentage points top-up to the co-financing rates applicable to the priority axis of the programmes to the newly certified expenditure submitted during the period in question. In applying the top-up, the co-financing rate of the programme cannot exceed by more than 10 percentage points the maximum ceilings of Article 53(3)of the EFF Regulation. In any case the EU contribution to the operational programmes and the priority axis concerned cannot be higher than the amount mentioned in the Commission decision.
This will not impose additional financial requirements to the overall budget since the total financial allocation for the period from the EFF to the countries and the programmes in question will not change.
Contents
- Summary of the proposed measures
It is proposed to modify article 76 and 77 of the EFF Regulation in order to allow the Commission to reimburse the newly declared expenditure for the period and the countries concerned by an increased amount calculated by applying a 10 percentage points top-up of the applicable co-financing rates for the priority axis.
In applying the top-up, the co-financing rate of the programme cannot exceed by more than 10 percentage points the maximum ceilings of Article 53(3)of the EFF Regulation. In any case contribution from the funds to the priority axis concerned cannot be higher than the amount mentioned in the Commission decision.
Following the adoption of a Council decision granting assistance to a Member State under the support mechanisms, the Commission will be applying the above mentioned calculation for all the newly declared expenditure under an operational programme for the Member State concerned.
This will be a temporary measure which will be terminated once the Member State exits the support mechanism.
- Legal basis
Council Regulation (CE) No 1198/2006 of 27 July 2006 laying down general provisions on the European Fisheries Fund defines the framework for Union support for the sustainable development of the fisheries sector, fisehries areas and inland fishing. Based on the principle of shared management between the Commission and the Member States, this Regulation includes provisions for the programming process as well as arrangements for programme (including financial) management, monitoring, financial control and evaluation of projects.
- Subsidiarity principle
The proposal complies within the subsidiarity principle to the extent that it seeks to provide increased support through the European Fisheries Fund for certain Member States which experience serious difficulties [or are threatened with such difficulties] notably with problems in their economic growth and financial stability and with a deterioration in their deficit and debt position, also due to the international economic and financial environment. In this context, it is necessary to establish at the European Union level a temporary mechanism which allows the European Commission to increase the reimbursement on the basis of the certified expenditure under the European Fisheries Fund.
- Proportionality principle
The proposal conforms to the proportionality principle:
The current proposal is indeed proportionate since it goes a long way in providing increased support from the European Fisheries Fund to the Member States in difficulties or threatened with severe difficulties caused by exceptional occurrences going beyond its control and falling under the conditions of Council Regulation (EU) No 407/2010 (establishing the European financial stabilization mechanism), or in difficulties or seriously threatened with difficulties as regards its balance of payments and falling under the conditions of Council Regulation (EC) No 332/2002, as well as to Greece, which was addressed by Council Decision 2010/320/EU giving Greece a notice with a view to reinforcing and deepening fiscal surveillance and take measures to remedy the situation of excessive deficit.
- Choice of instruments
Proposed instrument: regulation.
Other instruments would not be appropriate for the following reasons:
The Commission has explored the scope for manoeuvre provided by the legal framework and considers necessary, in the light of the experience up to now, to propose modifications to the General Regulation. The objective of this revision is to further facilitate the co-financing of projects thereby accelerating both their implementation and the impact of such investments on the real economy.
There is no impact on commitment appropriations since no modification is proposed to the maximum amounts of the European Fisheries Fund financing provided for in the Operational Programmes for the programming period 2007-2013.
The proposal shows the willingness on the part of the Commission to assist the efforts of the Member States to deal with the financial crisis. The amendment will provide the Member States concerned with the funds necessary to support projects and the recovery of the economy.
For payment appropriations in 2012, the proposal can result in a higher reimbursment to the Member States concerned. The additional payment appropriations for this proposal will imply an increase of payment appropriations (for 2012 approximatly EUR 20 million) which will be compensated by the end of the programming period. Therefore, the total payment appropriations for the whole programming period remains unchanged
In the light of Member State's request to benefit from the action and taking into account the evolution in regard to the submission of interim payments, the Commission will in 2012 review the need for additional payment credits and if necessary propose the necessary actions to the Budgetary Authority.