WIREDGOV

The regional development committee on Thursday endorsed the deal struck with Council on the reform of key regulation covering all EU funds. This clears the last hurdle before the full House votes on the new Cohesion Policy for 2014-2020 and paves the way for the €325 billion investment tool for EU regions to come into force on time.

"These funds deliver major investment in times of the economic crisis," said Danuta Hübner (EPP, PL), Chair of the Committee on Regional Development who chaired all the negotiating meetings with Council from 2012. She added: "After more than a year of negotiations with the Council and the Commission, we have been able to agree to a reform of EU regional policy which focuses investment on key areas for growth and jobs as outlined in the Europe 2020 strategy through a common set of rules which apply to all EU Funds, thus leading to considerable simplification".

"This will open the door to more ‘made in Europe’. Our investment funds will focus on Smart Specialisation, targeted to cooperation between partners in developed and less developed regions throughout Europe," said Lambert van Nistelrooij (EPP, NL), co-rapporteur for the Common Provisions regulation.

"After long and tough negotiations, we can finally go one step further towards letting the new Cohesion Policy finally work! Even with the most difficult element to find an agreement on, macro-economic conditionality, we have fought for a compromise that will make it impossible for this mechanism to ever be applied in practice," said Constanze Krehl (S&D, DE), co-rapporteur, for the Common Provisions regulation.

Fairer application of measures to link effective funding and sound economic governance

Following its approval in July of the agreement with Council on the bulk of the Cohesion Policy reform package, the Regional Development Committee's negotiating team won an important concession on the outstanding issue of "Macroeconomic Conditionalities" in further talks with member states. This is a mechanism that can trigger the suspension of funds in the event of a macroeconomic imbalance or an excessive budget deficit.

As a result, Parliament will in future be able to exercise its right of scrutiny over all decision-making procedures affecting the suspension of funds in a structured dialogue with the Commission. In addition, the suspension of funds will now be adjusted in line with social and economic circumstances in the member state concerned.

The negotiators also succeeded in changing the name of the "Macroeconomic Conditionalities" mechanism to "measures linking effectiveness of European Structural and Investment Funds to sound economic governance".

"We were a lonely sailor in the ocean; we were the only institution fighting for years against the Macroeconomic Conditionalities. Not one member state in the Council - nor the Commission - has ever supported the European Parliament's position, and we have here a huge success, with the opinion of the EP having to be taken into account, and all safeguards introduced in the mechanism," said Ms Hübner.

MEPs also succeeded in raising annual pre-financing rates which will provide regions with sufficient resources to kick-start investment and hence contribute to the efforts to overcome the economic crisis. In addition, co-financing rates for the most outermost regions and for Cyprus were increased from 50% to 85%.

Furthermore, the negotiating team succeeded in reducing the size of the so-called Performance Reserve, resulting in an increase in the overall level of payments for 2014-2020 by more than €1 billion.

Next steps

The draft reports on the Common Provisions Regulation (CPR) as well as the other regulations in the legislative package on Cohesion Policy reform are scheduled for a first-reading vote in plenary during the November session.

In the chair: Danuta Hübner (EPP, PL)