Explanatory Memorandum to COM(2022)325 - Amending regulations 1303/2013, 2021/1060 on extra flexibility to address the consequences of military aggression of Russia FAST (Flexible Assistance for Territories) - CARE - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)325 - Amending regulations 1303/2013, 2021/1060 on extra flexibility to address the consequences of military aggression of Russia ... |
|---|---|
| source | COM(2022)325  |
| date | 29-06-2022 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The Russian war of aggression against Ukraine has brought a series of unexpected challenges for the European Union just when the Union and its Member States have been engaged in the recovery of our economies and societies after the COVID-19 pandemic.
Since Russia’s unprovoked invasion of Ukraine on 24 February, the Union has received over 6.2 million Ukrainian nationals fleeing Russian aggression. The EU has reacted rapidly, supporting Member States and regions in managing this arrival of people by mobilising all available funding. However, with the rising number of arrivals, it is clear that further action is required. The special meeting of the European Council in May 2022 invited the Commission to “present new initiatives … within the Multiannual Financial Framework” to support the effort of providing protection to millions of refugees fleeing the war in Ukraine.
In addition to providing support to Member States in the context of the inflow of displaced persons, the Commission has also been monitoring closely the on-going impact of Russia’s unprovoked invasion of Ukraine on the implementation of cohesion policy in particular. The consequences on infrastructure projects have been especially noted, both in terms of the availability and costs of raw materials and the availability of labour force. The European Parliament, the Council and regions have all raised concerns about the effect these issues may have on finalising the implementation of the 2014-2020 programmes and ensuring the start up of the new 2021-2027 programmes.
Since 24 February, the Commission has already tabled a number of proposals, under Cohesion’s Action for Refugees in Europe (CARE), to ensure that all the funding available under the 2014-2020 cohesion policy and European Fund for the Most Deprived programmes are speedily mobilised to address the immediate challenges faced by the Member States and several of their eastern regions in particular, notably as regards those fleeing Russian aggression.
These amendments have secured the possibility to mobilise available funding to address the immediate consequences of the Russian war of aggression against Ukraine, while allowing Member States to continue their efforts to ensure a green, digital and resilient recovery of their economies from the crisis resulting from the COVID-19 pandemic.
The possibility to use the European Regional Development Fund (ERDF) and the European Social Fund (ESF) for operations addressing the migratory challenges resulting from the military aggression by Russia under the rules of the other fund enables the use of available resources for existing needs, without the need for a transfer. Furthermore, these operations are made eligible as from the date of the invasion, to allow support for all related needs. Moreover, a new unit cost has been introduced and reporting arrangements on participants have been simplified to reduce the administrative burden for both beneficiaries and Member State administrations in the context of addressing migratory challenges. Finally, the possibility to make use of up to 100% co-financing was extended for these measures also to the accounting year ending on 30 June 2022 in order to contribute to alleviating the burden on Member States’ public finances, and the substantial increase of pre-financing from REACT-EU resources provided Member States with liquidity needed to cover the most pressing needs.
The consequences of the Russian military aggression have grown in scope and its impact has expanded. As a result, Member States are facing continuous substantial inflows of persons fleeing the Russian aggression. At the same time, some Member States are facing labour shortages and a scarcity of input materials in certain sectors. This situation comes on top of the consequences of the COVID-19 pandemic, notably the disruption of value chains, which challenges public budgets that were focused on the recovery of the economy, but also risks delaying investments, especially in infrastructure.
While the measures already adopted have played a major role in supporting Member States and regions addressing the immediate effects of the war, it is clear that the evolving situation calls for additional action. In particular, increased flexibility will help optimise the use of the remaining 2014-2020 resources and allow a smoother phasing of delayed projects between 2014-2020 and 2021-2027 programmes.
Consequently, further flexibility to allow quicker and more complete support from the Funds should be introduced to alleviate the burden on national budgets and facilitate the implementation of operations addressing both migratory challenges, as well as market disruptions of key economic sectors.
For operations addressing migratory challenges resulting from the military aggression by the Russian Federation, it is therefore appropriate, as part of that more complete support and as an exceptional measure, without prejudice to the rules that should apply under regular circumstances, to derogate from the requirements linked to the location of the operation within a given Member State, given that the persons fleeing the war may move location more than once. In addition, given the continuation of the Russian aggression, an extension in time and increase of the newly established unit cost allowed to cover the basic needs and support of persons granted temporary protection or other adequate protection under national law in accordance with Council Implementing Decision (EU) 2022/382 1 and Council Directive 2001/55/EC 2 in all Member States is justified.
Furthermore, it is also proposed to allow the remaining resources from the 2014-2020 Cohesion Fund to support operations falling within the scope of either the ERDF or the ESF, in accordance with the rules applicable to those Funds. This implies the extension to the Cohesion Fund of the flexibility for the use of ERDF and ESF resources introduced with Regulation (EU) 2022/562 of the European Parliament and of the Council 3 . Similarly, given that the eligibility for operations addressing the migratory challenges as a result of the military aggression by Russia was set as of 24 February 2022, the possibility to declare expenditure for such operations also when they are already physically completed or fully implemented should be made possible. These possibilities should also be extended to the European Maritime and Fisheries Fund (EMFF) as a result of the consequences of the war on the fishery and aquaculture sector.
In the same spirit and with the intention of alleviating the administrative burden on Member States that are constantly adjusting to the evolving needs, transfers between thematic objectives within a priority and within a Fund and category of region should be made possible without the need for a decision of the Commission amending the programme. In addition, it is proposed to increase the ceiling of the flexibility between priorities for calculating the final balance of the contribution from the Funds. Moreover, for priorities promoting the socio-economic integration of third country nationals, including those dedicated to operations addressing migratory challenges as a result of the military aggression by the Russian Federation, the possibility of a co-financing rate up to 100% should be established in both programming periods, in order to support Member States in addressing the needs of displaced people both now and in the future.
To reflect the easier conditions for phasing of projects between programming periods, it is also necessary to introduce targeted flexibilities for the 2021-2027 programming period.
In order to assist all Member States in addressing the impact of the war with their 2021-2027 programmes, support from the ERDF, ESF+ and Cohesion Fund under the Investment for jobs and growth goal should be mobilised quickly by increasing the rate of pre-financing.
In addition, the co-financing rate of up to 100% should be introduced for priorities promoting the socio-economic integration of third country nationals from the 2021-2027 programmes until mid-2024 and should be reviewed on the basis of how it has been used.
Finally, the ceiling for the possibility to phase operations from the 2014-2020 programmes to those of the 2021-2027 programming period should be lowered to enlarge this possibility to more operations facing delays. Moreover, the second phase of operations under 2021-2027 programmes should be made eligible in accordance with 2014-2020 rules and managing authorities should be given the possibility to grant support to such operations directly, provided that a limited number of key conditions are met. Such phasing flexibility will not affect Member States’ obligations to comply with thematic concentration requirements and climate contribution targets.
• Consistency with existing policy provisions in the policy area
The proposal is consistent with the overall legal framework established for the European Structural and Investment (ESI) Funds and cohesion policy and is limited to targeted and exceptional amendments of Regulations (EU) No 1303/2013 and (EU) 2021/1060. The proposal also complements the preceding amendments to Regulation (EU) No 1303/2013 via the amending regulations of 6 April 2022 and of 12 April 2022 as well as all other measures aimed at addressing the current unprecedented situation.
• Consistency with other Union policies
The proposal is limited to targeted and exceptional amendments of Regulations (EU) No 1303/2013 and (EU) 2021/1060 and maintains consistency with other Union policies.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The proposal is based on Article 177 of the Treaty on the Functioning of the European Union.
• Subsidiarity (for non-exclusive competence)
The proposal amends existing EU legislation and aims to facilitate the use and increase the flexibility in implementation of cohesion policy resources by Member States and regions to support measures addressing migratory challenges as a result of the military aggression by Russia both in the 2014-2020 and in the 2021-2027 programmes. Addressing such challenges cannot be sufficiently achieved by the Member States alone and can be better achieved at Union level.
• Proportionality
The proposal is limited to what is needed and targeted at ensuring that all available resources under cohesion policy can support measures to address migratory challenges as a result of the military aggression by Russia. The proposed flexibilities do not go beyond what is necessary to make full use of resources under the 2014-2020 ESI Fund programmes and to allow for smoother phasing of operations to the 2021-2027 programmes.
• Choice of the instrument
A Regulation amending existing Regulations is the appropriate instrument to facilitate the use of cohesion policy and resources to support measures to address migratory challenges as a result of the military aggression by Russia and to extend the possibility of phasing operations of a lower total cost, made necessary by these unprecedented circumstances.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
• Stakeholder consultations
The proposal follows high level exchanges with other institutions and Member States. A public consultation is not required given that there is no need for an impact assessment.
• Collection and use of expertise
• Impact assessment
An impact assessment has been carried out to prepare the proposal for Regulations (EU) No 1303/2013 and (EU) 2021/1060. This current targeted change to respond to a critical situation does not require a separate impact assessment.
• Regulatory fitness and simplification
• Fundamental rights
4. BUDGETARY IMPLICATIONS
The proposal concerns cohesion policy programmes from both the 2014-2020 period and the 2021-2027 period and does not modify existing budgetary commitments.
For the 2021-2027 period, it increases the level of pre-financing for programmes receiving support from the ERDF, the ESF+ and the Cohesion Fund under the Investment for the growth and jobs goal in 2022 and 2023. This will result in a frontloading of payment appropriations to 2022 and 2023 and is budgetary neutral over the 2021-2027 period.
The additional pre-financing of EUR 1.74 billion for 2023 was not envisaged in the draft budget. The Commission will therefore consider proposing to cover the additional payment needs through an amending letter to the 2023 draft budget taking into account the revised Member States forecasts.
The proposed modification does not require changes in the Multiannual Financial Framework annual ceilings for commitments and payments as per Annex I to Council Regulation (EU, Euratom) 2020/2093, and does not imply changes to the overall payment needs over either programming period.
The Commission will carefully monitor the impact of the proposed modification on payment appropriations in 2022 and 2023, taking into account the overall implementation of the budget, revised Member State forecasts, as well as any possible emerging needs or priorities.
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 Regulations (EU) No 1303/2013 and (EU) 2021/1060.
• Explanatory documents (for directives)
• Detailed explanation of the specific provisions of the proposal
It is proposed to amend Regulations (EU) No 1303/2013 and (EU) 2021/1060 in order to:
·Derogate from the location requirements within a given Member State for operations addressing the migratory challenges as a result of the military aggression by Russia, as people fleeing the war may move location more than once (amendment of Article 70 of Regulation (EU) No 1303/2013);
·Introduce the possibility to declare expenditure for such operations that are already physically completed or fully implemented (amendment of Article 65 of Regulation (EU) No 1303/2013);
·With a notification to the Commission of the revised financial tables approved by the monitoring committee and without a decision of the Commission amending the programme, allow for the application of a co-financing rate of up to 100% for a separate priority axis that has been established for promoting the socio-economic integration of third country nationals, including those dedicated to operations addressing migratory challenges as a result of the military aggression by the Russian Federation (Article 120, new paragraph (9) of Regulation (EU) No 1303/2013);
·Introduce additional flexibility between the Funds, specifically allowing the use of 2014-2020 Cohesion Fund resources for operations addressing the migratory challenges as a result of the military aggression by Russia and under the scope and Fund-specific rules of the ERDF and the ESF, as long as a minimum financial allocation of 30% of the budget of the priority axis is granted to beneficiaries that are local authorities and civil society organisations operating in local communities in order to ensure that these types of beneficiaries receive an appropriate share of such resources given their active role in actions to welcome and integrate refugees (amendment of Article 98 i of Regulation (EU) No 1303/2013);
·Allow for the use of informed estimates limited to the total number of supported persons and the number of children under 18 years of age when data on participants is required to be reported under the separate priority axis supporting operations addressing migratory challenges as a result of the military aggression by the Russian Federation (amendment of Article 98 i of Regulation (EU) No 1303/2013);
·Extend the recently established unit cost to support measures to address migratory challenges as a result of the military aggression by the Russian Federation to EUR 100 per week for each full week or partial week that the person is in the Member State concerned, for a maximum of 26 weeks in total from the date of arrival of the person in the Union (amendment of Article 68c of Regulation (EU) No 1303/2013);
·Increase the flexibility for payments of the final balance for each priority per Fund and per category of regions in the final accounting year from 10% to 15% (amendment of Article 130(3) of Regulation (EU) No 1303/2013);
·Allow for transfers in programmes of allocation between thematic objectives within the same priority and the same Fund and category of region without a decision of the Commission amending the programme (amendment of Articles 30 and 96(10) of Regulation (EU) No 1303/2013);
·Increase the rate of pre-financing for progammes from the ERDF, ESF+ and Cohesion Fund under the Investment for the jobs and growth goal by 0.5% in 2022 and 0.5% in 2023 of the total support from the Funds set out in the decision approving the programme in all Member States (amendment of Article 90(2) of Regulation (EU) 2021/1060);
·Allow for the application of a co-financing rate of up to 100% until 30 June 2024 for a separate priority established within a programme to support operations promoting the socio-economic integration of third country nationals. At least 30% of the support within the priority should be granted to beneficiaries that are local authorities and civil society organisations operating in local communities in order to ensure that these types of beneficiaries receive an appropriate share of such resources given their active role in actions to welcome and integrate refugees. The total amount programmed under such priorities in a Member State cannot exceed 5% of the initial national allocation of that Member State from the ERDF and the ESF+ combined. The co-financing rate of up to 100% will be reviewed by 30 June 2024 (amendment of Article 112 of Regulation (EU) 2021/1060);
·Deem eligible for support also under the 2021-2027 programmes operations with a total cost exceeding EUR 1 000 000 that were selected for support from the 2014-2020 programmes and started before 29 June 2022, and allow for direct granting by the managing authority, provided that a limited number of key conditions are met (new Article 118a of Regulation (EU) 2021/1060);
·Add dedicated fields of intervention to cover phased operations that would otherwise not be eligible for support in 2021-2027 (amendment of Table 1 of Annex I to Regulation (EU) 2021/1060).