Commission Proposes Increase of EU Funds Co-Financing for Six Countires

The European Commission has proposed to increase the co-financing rates for the EU funds for six EU countries that have been affected by the crisis.

Under the proposal, six countries would be asked to contribute less to projects that they currently co-finance with the European Union. The supplementary EU co financing is designated for Greece, Ireland, Portugal, Romania, Latvia and Hungary.

The measure does not represent new or additional funding but it allows an earlier reimbursement of funds already committed under EU cohesion policy, rural development and fisheries. The EU contribution would be increased to a maximum of 95% if requested by a Member State concerned. This should be accompanied by a prioritisation of projects focusing on growth and employment, such as retraining workers, setting up business clusters or investing in transport infrastructure. In this way level of execution can be increased, absorption augmented and extra money injected into the economy faster.

It concerns Member States that have been most affected by the crisis and have received financial support under a programme from the Balance of Payments mechanism for countries not in the Euro area (Romania, Latvia and Hungary) or from the European Financial Stabilisation Mechanism for countries in the Euro area (Greece, Ireland and Portugal). Bulgaria is not included in this scheme.

 

 

Commission Proposal for the New Multiannual Financial Framework 2014-2020

The Commission has put forward its proposal for the new Multiannual Financial Framework of the European Union for the period 2014-2020. The Multiannual Financial Framework is the main budgeting document of the EU for the seven-year period, and little can be changed once it is adopted. The proposal has to be approved by the Member States and the Parliament.

The main innovations:

1. Expenses

• A new fund for financing infrastructure, the Connecting Europe Facility that includes a preliminary list of transport, energy and ICT projects;
• Stronger link of cohesion financing with the Europe 2020 objectives;
• New category of ‘transition regions’;
• New conditionality provisions;
• Partnership contracts with each Member State to ensure mutual reinforcement of national and EU funding;
• An integrated programme of €15.2 billion for education, training and youth, with a clear focus on developing skills and mobility;
• A common EU strategy called “Horizon 2020” for investment in research and innovation worth 80 billion €;
• 30% of direct support to farmers will be conditional on “greening” their businesses;
• €4.1 billion for the fight against crime and terrorism and €3.4 billion for migration and asylum policies.

2. Revenues

• New own resources for financing the budget- a financial transaction tax (Tobin tax) and a new modernized VAT;
• Simplification of the existing correction mechanisms.

You can also read the critical assessment of the proposal by Charlemagne. Real Time Brussels looks at the fierce political battles that will likely emerge in the process of adoption of the Multiannual Financial Framework.

 

Windless Weather for Enlargement?

There are reports that Slovenia is slowing down the accession negotiations with Croatia by preventing the chapter on freedom of movement of capitals from being closed, although Croatia has fulfilled all the necessary criteria. Macedonia’s name problems with Greece remain “in coma”.

That is why I read with great interest the report by Natasha Wunsch and Julian Rappold from DGAP about the EU accession of the Western Balkans. The authors outline two main reasons for the current enlargement fatigue: the early accession of Bulgaria and Romania, broadly viewed as a premature step, and the overwhelming focus on internal affairs that lets enlargement sink to the bottom of the list of priorities.

The authors warn that the slowing down of the accession process may lead to dangerous destabilization of the region. The economic consolidation in the region due to IMF intervention will be carried out at the cost of even the most necessary reforms. Social cuts also risk weakening the trust in the institutions. That is why according to the authors it is essential to mobilize all existing EU funds for the region and to facilitate their calling by the Western Balkan states.

Progress Report on Structural Actions

The European Commission has presented a progress report on the implementation of its action plan to strengthen the shared management of the EU structural and cohesion funds.

The report summarizes common errors in the management of EU funds on national level:

• contracts awarded without following the correct tender procedure;
• inadequate documentation to support expenditure (lack of audit trail);
• inaccurate calculation of overheads;
• application of incorrect co-financing rate;
• overestimated payment claims.

Member States Demand Sanctions for Bulgaria and Romania

The spokesman of the European Commission has reportedly said that some Member States have demanded sanctions for Bulgaria and Romania due to failed fight against corruption and misuse of EU funds.

This is not news for me, but we still need to see any public claims and the supporting arguments of those unnamed Member States.

OLAF: Bulgarian Criminals Are Dancing Around

Franz-Hermann Brüner, director general of OLAF, said during the presentation of the annual report of the anti-fraud office that “Some criminals are still dancing around us and the Bulgarian government, and I don’t like it.”

According to him, Bulgarian courts are the weakest link in the judiciary. He believes that political pressure on the judiciary system must be relieved.