The unprecedented global financial crisis and the unprecedented economic downturn have seriously damaged economic growth and financial stability and have provoked a strong deterioration in financial and economic conditions in several Member States. In particular, certain Member States are experiencing or are threatened with serious difficulties, notably problems concerning their economic growth and financial stability and a deterioration in their deficit and debt position, due to the international economic and financial environment.
(2)
Whilst important actions to counterbalance the negative effects of the crisis have already been taken, including amendments to the legislative framework, the impact of the financial crisis on the real economy, the labour market and citizens is being widely felt. Pressure on national financial resources is increasing and further steps should be taken to alleviate that pressure through the maximal and optimal use of funding from the European Fisheries Fund.
(3)
Pursuant to Article 122(2) of the Treaty on the Functioning of the European Union, which provides for the possibility of granting Union financial assistance to a Member State in difficulties or seriously threatened with severe difficulties caused inter alia by exceptional occurrences beyond its control, Council Regulation (EU) No 407/2010 (3) established a European financial stabilisation mechanism, with a view to preserving the financial stability of the Union.
(4)
By Council Implementing Decisions 2011/77/EU (4) and 2011/344/EU (5) respectively, Ireland and Portugal were granted such Union financial assistance.
(5)
Greece was already experiencing serious difficulties with respect to its financial stability before the entry into force of Regulation (EU) No 407/2010. Financial assistance to Greece could not, therefore, be based on that Regulation.
(6)
The Intercreditor Agreement and the Loan Facility Agreement for Greece signed on 8 May 2010 entered into force on 11 May 2010. The Intercreditor Agreement is to remain in full force and effect for a three-year programme period as long as there are any amounts outstanding under the Loan Facility Agreement.
(7)
Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States’ balances of payments (6) provides that the Council is to grant mutual assistance where a Member State which has not adopted the euro is in difficulties or is seriously threatened with difficulties as regards its balance of payments.
(8)
By Council Decisions 2009/102/EC (7), 2009/290/EC (8) and 2009/459/EC (9) respectively, Hungary, Latvia and Romania were granted such Union financial assistance.
(9)
The period during which the financial assistance is available to Ireland, Hungary, Latvia, Portugal and Romania is set out in the relevant Council Decisions. The period during which financial assistance was made available to Hungary expired on 4 November 2010.
(10)
The period during which financial assistance under the Intercreditor Agreement and the Loan Facility Agreement is available to Greece is different for each Member State participating in those instruments.
(11)
Following the European Council Decision of 25 March 2011, finance ministers of the 17 euro area Member States signed the Treaty establishing the European Stability Mechanism on 11 July 2011. Following decisions taken by the Heads of State and Government of the euro area Member States on 21 July and 9 December 2011, the Treaty was modified in order to improve the effectiveness of the mechanism and signed on 2 February 2012. Under this Treaty, the European Stability Mechanism will, by 2013, assume the tasks currently performed by the European Financial Stability Facility and the European Financial Stabilisation Mechanism. This future mechanism should therefore already be taken into account in this Regulation.
(12)
In its conclusions of 23 and 24 June 2011, the European Council welcomed the Commission’s intention to enhance the synergies between the loan programme for Greece and the Union funds, and supported efforts to increase Greece’s capacity to absorb Union funds, with the aim of stimulating growth and employment by refocusing on improving competitiveness and employment creation. Moreover, it welcomed and supported the preparation, by the Commission, together with the Member States, of a comprehensive programme of technical assistance to Greece. This Regulation contributes to such efforts to enhance synergies.
(13)
In order to facilitate the management of Union funding, to help accelerate investments in Member States and regions and to increase the impact of funding on the economy, it is necessary to allow, in justified cases, temporarily and without prejudice to the 2014 to 2020 programming period, an increase of interim payments from the European Fisheries Fund by an amount corresponding to 10 percentage points above the co-financing rate applicable for each priority axis for Member States that are facing serious difficulties with respect to their financial stability and that have requested to benefit from this measure, resulting in a corresponding reduction in the national counterpart. Due to the temporary nature of that increase, and in order to maintain the original co-financing rates as the reference point for calculation of the temporarily increased amounts, the changes resulting from application of the mechanism should not be reflected in the financial plan included in the operational programmes. However, it should be possible to update operational programmes in order to concentrate the funds on competitiveness, growth and employment, and in order to align their targets and objectives with the decrease in the total funding available.
(14)
A Member State making a request to the Commission to benefit from a derogation under this Regulation should submit all the information necessary to enable the Commission to establish, by means of data on the Member State’s macroeconomic and fiscal situation, that resources for the national counterpart are not available. It should also show that an increase of payments resulting from the granting of the derogation is necessary to safeguard the continued implementation of operational programmes and that the absorption capacity problems persist even if the maximum ceilings applicable to co-financing rates laid down in Article 53(3) of Council Regulation (EC) No 1198/2006 (10) are used.
(15)
The Member State making a request to the Commission to benefit from a derogation under this Regulation should also provide the reference to the relevant Council Decision or other legal act pursuant to which it is eligible to benefit from the derogation. It is necessary for the Commission to have an appropriate period, starting from the submission of the Member State’s request, in which to verify the correctness of the information submitted and to raise any objections. In order to make the derogation effective and operational, there should be a presumption that such a request is justified if the Commission does not raise an objection. If the Commission objects to the Member State’s request, it should adopt, by way of implementing acts, a decision to this effect, stating reasons.
(16)
The rules on the calculation of interim payments and of payments of the final balance for operational programmes during the period in which the Member States receive the Union financial assistance for addressing serious difficulties with respect to their financial stability should be revised accordingly.
(17)
It is necessary to ensure that there is appropriate reporting on the use of the increased amounts made available to the Member States benefiting from a temporary increase in interim payments under this Regulation.
(18)
After the end of the period during which financial assistance has been made available, it might be necessary for the evaluations carried out in accordance with Article 18(2) of Regulation (EC) No 1198/2006 to assess, inter alia, whether the reduction of the national co-funding leads to a significant departure from the goals that were initially set. Such evaluations might lead to the revision of the operational programme.
(19)
As the unprecedented crisis affecting international financial markets and the unprecedented economic downturn, which have seriously damaged the financial stability of several Member States, necessitate a rapid response in order to counter the effects on the economy as a whole, this Regulation should enter into force as soon as possible. Given the exceptional circumstances of the Member States concerned, it should apply retroactively, starting either from the budgetary year of 2010 or from the date on which the financial assistance was made available, depending on the requesting Member State’s status, for the periods during which the Member States received financial assistance from the Union or from other euro area Member States in order to address serious difficulties with respect to their financial stability.
(20)
Where a temporary increase in interim payments is envisaged, that temporary increase should also be considered in the context of the budgetary restraints facing all Member States, and those budgetary restraints should be reflected appropriately in the general budget of the European Union. In addition, since the main purpose of the mechanism is to address specific current difficulties, its application should be limited in time. Therefore, the mechanism should start to apply on 1 January 2010 and should operate for a limited period until 31 December 2013.
(21)
Regulation (EC) No 1198/2006 should therefore be amended accordingly,
