To respond to the economic crisis, EU institutions have agreed to speed up the flow of funding to regional development projects and simplify structural fund implementing rules, so as to enable public authorities to go on investing in projects, despite severe budgetary constraints.
Advance payments to be increased
MEPs backed plans to increase EU advance payments for projects, so as to ease the burden on national and regional public authorities, which also contribute funding. The new rules will allow countries badly hit by the economic downturn to receive advance payments in 2010 of 2% from the European Social Fund and 4% from the Cohesion Fund. To decide which countries are eligible for these increased advances, objective economic criteria will be used to measure the impact of the crisis on Member States.
Job training courses, youth apprenticeships, public works and other initiatives should thus be implemented faster, and projects that might otherwise have been axed for want of national funding may now be pursued.
The European Commission had originally suggested allowing Member States to apply for 100% reimbursement of interim payments from the European Social Fund during 2009 and 2010, but MEPs considered that full - albeit temporary - financing by the EU would go against the underlying principle of co-financing (by the EU and Member States), and would prove too costly and complicated.
More time for Member States to spend EU funds
Rules on the "de-commitment" of funds will also be eased (for funds committed in 2007), to give Member States more time to spend EU funds. Member States are currently obliged to pay back to the Commission any funds that they have not spent within two years of the approval of their request for funding (or three years in the case of the "EU-12" Member States, Portugal and Greece). The new rules will buy more time for projects not approved or implemented within the deadlines.
Simplification measures and multi-instrument financing
MEPs strongly supported simplifying the structural fund implementing rules. A single threshold of €50 million has been agreed for the approval of "major projects". These will not lose their funds through the "de-commitment" procedure (i.e. if they are not spent within the two or three year time limit), and will be eligible for funding from more than one EU programme. This could save nation-wide or EU-wide projects straddling several regions which otherwise would have to be artificially separated into multiple projects.
Projects to boost energy efficiency and the use of renewable energies in housing will also be encouraged to make use of the multi-instrument financing. Financial engineering instruments will be set up to support such projects, in addition to existing instruments.
Next steps
MEPs are now keen to see these simplified rules and procedures enter into force as soon as possible, to enable Member States and regions to benefit quickly from EU funding. Under the Lisbon Treaty, the revision of these rules is subject to the co-decision procedure, which puts Parliament on an equal footing with Council.
Parliament will put the proposals to a plenary vote on 21 April, and the Council is expected to formalise its position shortly thereafter, so that the measures can take effect by the summer.
