The Commission has proposed today that the agreement on an increased EU-share for investments in Greece, Cyprus and Portugal would be prolonged for another two years, and that Romania and Slovakia would be given more time to spend cohesion funds.
The original "top-up" measure, adopted in 2011, saw a temporary increase of EU co-financing, until the end of 2013, of up to 10 percentage points upon request, for those countries hardest hit by the crisis, Ireland, Hungary, Latvia, Greece, Portugal and Romania.
The measure does not represent new funding but it allows an easier implementation of funds already committed under EU cohesion policy. The EU contribution would be increased to a maximum of 95%, thereby reducing the national co-financing requirement to only 5%. In concrete terms, this would correspond in 2014 to around €500m with about €400m for Greece, €100m for Portugal and €20m for Cyprus (these three countries are expected to receive financial assistance under a macro-economic adjustment programme in 2014).
The second measure in this proposal responds to the request of the European Council on the EU’s future budget in February for the Commission to explore ways to make it easier for Romania and Slovakia to spend EU Funds.
Member States’ Cohesion Policy allocations are divided into annual amounts which must be spent within two or three years, depending on the country. This rule is known as the 'N+2 or N+3' rule, with N being the start year when the money is allocated. Any of that annual amount which is not claimed by the country within that period, is automatically deducted from their allocation and goes back into the overall EU budget.
Today's Commission's proposal extends the N+3 rule for Romania and Slovakia which would have otherwise expired in 2013. It gives them more leeway to spend and claim back EU money reducing the risk of losing funds.