Proposal for a Council Regulation amending Regulation (EC) No 1083/2006 concerning general provisions

 on the European Regional Development Fund, the European Social Fund and the Cohesion Fund as regards simplification of certain requirements and as regards certain provisions relating to financial management

The current serious economic repercussions in the European economy lead to the reduction of growth perspectives over the medium term and the marked slow-down in real growth in 2009 and 2010. According to the latest available forecasts, several national economies are in recession. These poor economic prospects have considerable negative impacts on the public finances of the Member States. Moreover the basic conditions for implementing cohesion policy – which requires public match-funding in order to mobilise Structural Funds – risk being seriously disrupted.

In addition, the latest data covering the first months of 2009 show that EU labour markets are now reacting even more strongly than expected to the current economic downturn, with companies announcing substantial job reductions in several sectors and business and consumer confidence continuing to drop. More than 20 million Europeans are unemployed, which is 4 million more than one year ago, and the trend is still upwards.

In order to further accelerate programmes implementation and provide help to overcome the difficulties mentioned earlier, an additional measure is proposed to alleviate the current pressures and allow the highest possible use of Community funding targeting particularly the actions necessary to fight the crisis where the added value for the citizens, especially the unemployed or those at risk to become unemployed, will be highest. This measure will require amendment of Council Regulation n° 1083/2006 on general provisions governing Cohesion policy, including, as proposed in the Communication 'A Shared Commitment for Employment' a temporary change to the ways in which interim payments to programmes co-financed by the European Social Fund are calculated. This involves introducing a temporary option for Member States, where severe cash-flow difficulties exist for the financing of labour market measures necessary to combat the crisis, and which are eligible under the ESF, to request reimbursements made by the Commission at 100% during 2009 and 2010, thus obviating the need to provide national co-financing during this period. The aim is to increase the effectiveness of the important role assigned to the ESF in the above-mentioned communication in implementing active labour market measures, such as training in the context of short-time working arrangements, the anticipation and managing of restructuring, the upgrading of skills as well as the providing of high-quality apprenticeships for the young by the end of 2010. This proposal is presented together with a number of simplification measures that also imply amendments to the Council Regulation.