Explanatory Memorandum to COM(2024)496 - - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)496 - . |
|---|---|
| source | COM(2024)496 |
| date | 21-10-2024 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The recent natural disasters in Central, Eastern and Southern Europe have had a devastating effect on the populations living in these regions. Extensive reconstruction works will be required in many cities, towns and villages to repair damaged infrastructure and equipment and to build back better ensuring climate and disaster resilience in a cost-effective manner, in order to quickly alleviate the burden on local, regional and national budgets and mitigate the risk of agravated territorial disparities resulting from these disasters. Immediate measures will be needed to alleviate the social and economic consequences of such natural disasters. In addition, people directly affected by these natural disasters, who may have lost their homes and belongings may be in need of food and/or basic material assistance. Moreover, support to job maintenance may also be needed for businesses facing economic difficulties due to the occurrence of a natural disaster so that employees and self-employed are able to retain their job for the period where they were not able to access their usual place of employment. In order to tackle the devastating effect of natural disasters on people’s health, access to healthcare including for people who are not in imminent socio-economic vulnerability should also be allowed. Europe needs to be able to rapidly provide additional, effective support through the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+) to Member States, regions, local authorities and people severely affected by regional disasters, complementing the resources available from the European Union Solidarity Fund. An increase of the frequency of disasters needs to be anticipated. Therefore, building on the experience gained these past years, it is appropriate to provide for a framework that allows for flexibility and financial support in order to avoid recurrent changes in the cohesion policy legal framework and additional administrative burden, while preserving the long-term strategic nature of Cohesion policy.
Consequently, in order to provide additional assistance and further flexibility to Member States affected by natural disasters that occur as from 1 January 2024, the Commission proposes to create a new specific objective under the existing scope of the ERDF support. This would allow Member States to reprogramme under their 2021-2027 programmes under the Investments for Jobs and Growth goal amounts for the reconstruction following natural disasters as defined in Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund or recognised as such by a competent public authority of a Member State.
This additional specific objective is included under Policy Objective 2 (a greener, low-carbon transitioning towards a net zero carbon economy and resilient Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility). This policy objective directly supports the objectives of the European Green Deal and the EU Strategy on Adaptation to Climate Change which aims at developing adaptation measures to manage climate change risks, usually in the form of disasters, such as floods, wildfires or droughts.
In this context, it is important to anticipate and reinforce investments with a particular focus on disaster prevention and preparedness, as well as climate adaptation, including nature-based solutions, in order to mitigate the impact of the increasingly frequent climate-induced disasters. Reconstruction efforts should not come at the expense of long-term planned investment in disaster prevention and preparedness.
The ESF+ within its existing scope may also provide for resources to the alleviation of the negative socio-economic consequences of natural disasters. In addition to already exisiting measures, further flexibility should be ensured for Member States so that they can provide fast and immediate help in form of food and/or basic material assistance. Employees and self-employed should be able to retain their jobs until they can return to work, therefore, financing of short-time work schemes should be allowed in a more flexible manner. In order to tackle the devastating effect of natural disasters on people’s health, access to healthcare including for people who are not in imminent socio-economic vulnerability should also be allowed. This would allow Member States to reprogramme their ESF+ resources within the 2021-2027 programming period in order to be able to benefit from the additional assistance and flexibilities.
It is possible for Member States to make use of the existing transfer provisions set out in Article 26 of Regulation (EU) 2021/1060 to the ERDF or to the ESF+.
Given the potential magnitude of the impact of such natural disasters and in order to quickly inject liquidity to cover the most pressing needs, it is proposed that Member States, when using the proposed framework, benefit from an additional pre-financing of 30% of the amounts programmed under the dedicated priorities and the possibility to apply a Union financing of up to 100%. To respond to the present exceptional circumstances, in line with Article 63(7) of Regulation (EU) 2021/1060, Member States may already provide in their programmes that the eligibility of expenditure starts from the date of the first occurrence of damage as a consequence of the natural disaster. In addition, Member States should also be allowed to select for support under the dedicated priority completed or fully implemented operations that are aimed at providing a response to the natural disaster. The amounts reprogrammed for that priority (or priorities) need to be limited overall to maximum 10% of the national cohesion policy allocation of the Member State taking into account the ERDF, the ESF+ and the Cohesion Fund over the programming period. The dedicated priority may be used for one or more natural disasters through one or more programme amendments. Where the allocation to that priority is increased through subsequent programme amendments, the additional pre-financing will be paid on the increase so that the overall additional pre-financing corresponds to 30% of the resources allocated to this priority.
Where the Member State wants to make use of this dedicated priority and the corresponding flexibilities, the corresponding programme amendment needs to be submitted to the Commission at the latest four months after the first occurrence of damage as a consequence of the disaster. Where the natural disaster occurs before this amending Regulation enters into force, this amendment needs to be submitted within four months of the entry into force of this Regulation.
• Consistency with existing policy provisions in the policy area
The proposal is consistent with the objectives followed by the cohesion policy funds and is limited to a targeted amendment of Regulation (EU) 2021/1058 and Regulation (EU) 2021/1057. The proposal complements the type of support available under Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund.
• Consistency with other Union policies
The proposal is limited to a targeted amendment of Regulation (EU) 2021/1058 as well as of Regulation (EU) 2021/1057 and maintains consistency with other Union policies.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The proposal is based on Articles 164, 175(3) and 178 of the Treaty on the Functioning of the European Union.
• Subsidiarity (for non-exclusive competence)
The proposal to provide additional flexibility to Member States affected by natural disasters by providing the possibility to finance reconstruction works by the ERDF with a Union financing rate of up to 100% and with an additional pre-financing for a dedicated priority in programmes requires an amendment of Regulation (EU) 2021/1058. The proposal to provide flexibility for Member States in the implementation of the ESF+, including the additional pre-financing and the Union financing of up to 100%, to alleviate the socio-economic consequences of natural disasters and in addition, to be able to provide immediate food and/or basic material assistance to people directly affected by natural disasters, as well as short-time work schemes for employees and self-employed without active measures and access to healthcare including for people who are not in imminent socio-economic vulnerability requires the amendment of Regulation (EU) 2021/1057. The same result cannot be achieved through actions at national level.
• Proportionality
The proposal is a limited and targeted change not going beyond what is necessary to achieve the objective of providing additional assistance to Member States affected by natural disasters.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex post-evaluations/fitness checks of existing legislation
• Stakeholder consultations
• Collection and use of expertise
• Impact assessment
An impact assessment has been carried out to prepare the proposal for Regulation (EU) 2021/1058 as well as for Regulation (EU) 2021/1057. The limited and targeted changes do not require a separate impact assessment.
• Regulatory fitness and simplification
• Fundamental rights
4. BUDGETARY IMPLICATIONS
The proposal concerns cohesion policy programmes from the 2021-2027 programming period and does not modify existing budgetary commitments. It remains within the limits of the overall allocation for the period 2021-2027 and is therefore budgetarily neutral.
The proposal will result in additional pre-financing to be paid under the ERDF and ESF+ and will lead to frontloading of payment appropriations.
For 2025, the additional pre-financing was not envisaged in the draft budget. In order to address the urgent needs and provide swift support to the disaster-stricken Member States, the Commission proposed to cover the additional payment needs through an amending letter to the 2025 draft budget. The additional amount for 2025 is EUR 3 billion - for the ERDF and the ESF+ taken together - and corresponds to the 30% pre-financing to the estimated allocation (EUR 10 billion) of the dedicated priorities subsequent to the natural disasters having taken place as from 1 January 2024.
The possibility to apply for an increased Union financing rate up to 100% for both the ERDF and the ESF+ will also lead to a partial front-loading of payments, followed by lower payments at a later stage as the overall envelope is unchanged. The actual impact will depend on the Member States’ uptake.
The proposed modifications do 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, nor do they imply changes to the overall payment needs over the programming period.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The implementation of the measure will be monitored and reported upon in the framework of the general reporting mechanisms established in Regulation (EU) 2021/1060, Regulation (EU) 2021/1057 and Regulation (EU) 2021/1058.
• Explanatory documents (for directives)
• Detailed explanation of the specific provisions of the proposal
In order to provide additional assistance and further flexibility to Member States affected by natural disasters, it is proposed to amend Regulation (EU) 2021/1058 to:
- introduce a new specific objective under Policy Objective 2 (a greener, low-carbon transitioning towards a net zero carbon economy and resilient Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility) within the existing scope of the ERDF support in response to natural disasters that occur as from 1 January 2024. Resources under this specific objective should be programmed under dedicated priorities of programmes under the Investment for jobs and growth goal to support operations aimed at repair and reconstruction.
- allow for the application of a Union financing rate of up to 100% from the EU budget for a separate priority established within a programme to support operations linked to reconstruction and repair. Member States should also ensure that support from other national or Union instruments or private insurance schemes is taken into account so that overpayment is excluded;
- provide additional pre-financing for this separate priority by applying 30% to the allocation of the priority as set out in the decision approving the programme where the new dedicated priority is established. Where subsequently the allocation for the priority is increased as a result of further natural disasters, the additional pre-financing will only be paid on the amount by which the allocation to the priority is increased;
- allow Member States to select for support operations that have been physically completed or fully implemented before the application for the funding under the programme is duly submitted to the managing authority where they provide a response to a natural disaster occurring as of 1 January 2024;
- set out a deadline of four months after the first occurrence of damage as a result of a natural disaster or the entry into force of the amending Regulation where a disaster occurred before that date to submit corresponding programme amendments.
In order to ensure further flexibility for Member States in response to natural disasters that occur as from 1 January 2024 it is proposed to amend Regulation (EU) 2021/1057 to:
- allow for a focused support to alleviate the negative socio-economic consequences of natural disasters under a dedicated priority that benefits from further flexibilities;
- allow for the financing of short-time work schemes for the benefit of employees and self-employed affected by natural disasters without the need to carry out active measures for a limited time period, whether or not programmed under the dedicated priority;
- allow for financing measures to support access to healthcare including for people who are not in imminent socio-economic vulnerability, whether or not programmed under the dedicated priority;
- allow for the distribution of food and/or basic material assistance without accompanying measures if it is to provide a response to the consequences of natural disasters, whether or not programmed under the dedicated priority;
- allow Member States to select for support operations that have been physically completed or fully implemented before the application for the funding under the programme is duly submitted to the managing authority where they provide a response to a natural disaster occurring as from 1 January 2024;
- set out a deadline of four months after the occurrence of the natural disaster or the entry into force of the amending Regulation where a disaster occurred before that date to submit corresponding programme amendments;
- provide additional pre-financing for this dedicated priority by applying 30% to the allocation of the priority as set out in the decision approving the programme where the new dedicated priority is established. Where subsequently the allocation for the priority is increased as a result of further natural disasters, the additional pre-financing will only be paid on the amount by which the allocation to the priority is increased;
- allow for the application of a Union financing rate of up to 100% from the EU budget for the dedicated priority.
In order to safeguard the long-term strategic nature of cohesion policy investments, the total amount allocated to such dedicated priorities cannot exceed 10% of the total initial national allocation of the ERDF, the ESF+ and the Cohesion Fund taken together in a Member State for the 2021-2027 programming period. Member States should also ensure that support from other national or Union instruments or private insurance schemes is taken into account so that overpayment is excluded.