The European Structural and Investment Funds (ESIF) are the EU's main tools for promoting territorial cohesion in all Member States. Taking into account that local and regional authorities (LRAs) are the main beneficiaries of ESIF and are also involved in the management of ESIF Funds, according to the Committee of the Regions (CoR) simplification is needed to effectively deliver results and impact for Cohesion policy.
This opinion of the CoR will provide concrete proposals on how the implementation of Cohesion policy can be simplified. The opinion also responds to a request from the incoming Slovak Presidency of the Council.
In preparation of this opinion the CoR and the Dutch and Slovak Presidencies of the Council of the European Union organised three joint workshops on simplification of the implementation of Cohesion policy. Up to 100 experts from the Member States and regional and local authorities, including representatives from managing and audit authorities, discussed the challenges and proposals for simplification. These workshops resulted in a report including proposals for simplification. The report was sent to participants of the Director-Generals' meeting on Cohesion policy, which took place on 13 May 2016 in Amsterdam and the Dutch Presidency specifically asked delegations to comment on the simplification report and identify those proposals that were most important and realistic to be implemented. Therefore, the workshops helped to promote the CoR opinion to Managing and Audit Authorities across the EU as well as to national delegations through the Council's working party on structural measures.
EU Member States explicitly welcomed the CoR's practical and constructive approach towards the simplification of Cohesion policy, which was noted in the Council conclusions of 10 June 2016 on "A more R&I friendly, smart and simple Cohesion Policy and the European Structural and Investment Funds more generally": "WELCOMES the debate within the informal technical workshops on simplification jointly organised by the Netherlands Presidency and the Committee of the Regions"
The European Commission also acted on the policy recommendations of the CoR. Within the framework of the legislative package related to the MFF review, the European Commission presented on 14 September 2016 a Proposal for a Regulation aiming to revise both the general financial rules applicable the EU budget and the corresponding sectorial financial rules including Cohesion policy. This regulation, (called "Omnibus regulation"), entails significant changes to the implementation of the ESI funds, some of which entail far-reaching simplification and flexibility as requested by the CoR. European Commission Director-General for Budgets, Ms Calvino, said during the second annual conference on the EU Budget Focused on Results on 27 September 2016 that the CoR input was the most valuable input received in view of the preparations towards the Omnibus proposal. Elements which were suggested in the CoR opinion and which are addressed by the legislative proposal include: financial instruments, auditing and reporting requirements, simplified cost options as well as Joint Action Plans.
The rapporteur presented the opinion to the High Level Group monitoring simplification for beneficiaries of ESI Funds on 29 November 2016. Moreover, this opinion provides the basis of the CoR's work as rapporteur on regional policy in the stakeholders' group of the REFIT platform.
THE EUROPEAN COMMITTEE OF THE REGIONS
- warns that the procedure for using ESIF is getting more complicated not just with every programming period, but virtually every year;
- welcomes the close co-operation with the Dutch and Slovak Council Presidencies in jointly discussing practical steps for simplifying ESIF implementation and suggests continuing this exercise with the upcoming Council Presidencies and in view of the debate on the future of cohesion policy;
- emphasises that for simplification to really work, it needs the active involvement not just of all the Directorates-General of the European Commission that are involved in planning and monitoring ESIF, but other institutions and EU bodies as well (such as audit authorities). The system must be simplified for both, the beneficiaries as well as administrative authorities;
- warns that many beneficiaries feel that using ESIF at the present time is a "risky business", since they have no guarantee that funding for their project will not be scrapped or held up because of some dispute between their country and the Commission;
- stresses once more that current rulings and changes to procedures or guidelines should not be applied retroactively to projects that are at an advanced stage of implementation;
- points to an important inconsistency in the application of state aid rules. While programmes managed centrally by the European Commission are exempt from state aid procedures, funding under the EU's cohesion policy is not exempt;
- considers that the lack of consistency in audit methodologies at national and European level is perhaps the biggest challenge for the ESIF implementation process. Managing authorities and different European and national audit authorities frequently arrive at different interpretations of the same rules;
- Believes that there is an urgent need for simplifying the set-up, the reporting requirements and the audit rules for financial instruments under ESIF.