State of play of negotiation June 2013

High Level Trilogue (1) Composition Council (IE presidency) European Parliament (REGI and EMPL) Commission (Commissioners Hahn and Andor) 3 HLT so far (Outstanding issues: ESF minimum share, general ex ante conditionalities, financial issues, DA&IA) Outstanding issues in the last HLT in Strasbourg(11 June): The ESF minimum share General ex ante conditionalities Macroeconomic conditionality ESF minimum shares: the IE Presidency keeps linking the calculation of the ESF minimum shares to three thematic objectives. This is not acceptable for the EP, which supports the Commission compromise proposal (the topic is specific to cohesion policy).   General ex-ante conditionalities: at the first high level political trilogues, the IE Presidency showed openness to keeping the ex-ante conditionalities on anti-discrimination, disability and gender equality, which had been deleted in the partial general approach adopted by the Council. The IE Presidency has provided a compromise proposal to be discussed in the trilogue. The Commission hails this compromise proposal, but considers that improvements are still needed. To that effect the Commission would suggest some adaptations of the text to align it to the other general ex-ante conditionalities and to the fact that the Union is a party to the UN Convention on the Rights of Persons with Disabilities. Macroeconomic conditionality: this is the only thematic block not yet discussed in trilogues. The EP is strongly against it. IE Presidency prefers to leave the discussion to the LT Presidency, as it does not consider an agreement feasible under its Presidency. However, the Commission thinks it is important to start reflecting on this issue in order to pave the way for an agreement later on.

High Level Trilogue (1) On the ESF minimum share COM non-paper (21rst May): guarantees a minimum share of 25% of the overall cohesion policy allocation for the ESF while at the same time providing sufficient flexibility to Member States and regions and avoiding extreme decreases and increases IE non-paper ( 28th May): combined approach - keeps linking the calculation of the ESF minimum shares to three thematic objectives while establishing that MS have to maintain the share of ESF of the current programming period EP: IE non-paper not acceptable as it doesn't ensure a minimum share of 25% of the overall cohesion policy allocation for the ESF Outcome of HLT in Strasbourg COM POSITION on the PRES NON-PAPER: The Commission can be flexible on the method to reach the 25% minimum share of Cohesion Policy allocation for the ESF. However, it is not flexible on the result to be reached. The Council’s approach to link the shares to three thematic objectives is not acceptable, as it does not achieve the objective of an adequate share for the ESF as required by the European Council conclusions. ARGUMENTS AGAINST IT: The key problem of the IE Presidency proposal is that it results in an absolute and relative decrease of the ESF at EU level. The legally binding lower limit would result in an ESF share of only 21.8% of the total cohesion envelope in 2014-20 (vs. ESF share of 22.1% in 2007-13). It does not lead to what the European Council and the European Parliament have supported as an adequate allocation in support to investment in human capital. It is also far below the 25% ESF share proposed by COM. By referring to the current period, the approach of IE Presidency does not take into account the different environment in which MS find themselves now, in particular the significant employment challenges in many MS.

Informal Trilogue on CPR (2) Composition Council (IE presidency and Council LS) European Parliament (REGI Chair, Rapporteurs and shadow rapporteurs + EMPL committee rapporteur on the CPR) Commission (REGIO, EMPL, AGRI, MARE, SG, BUDG and LS) 40 meetings already organised Last meetings took place in Strasbourg, 10th and 11th June Indicative calendar for 2013: EP and LT Presidency plan to have meetings in the 1rst week of July

Informal Trilogue on CPR (2) Content of the discussions so far: Closed thematic blocks: Strategic programming, Territorial Development, Information and Communication, Monitoring and Evaluation and Eligibility Trilogue 10th and 11th June: Technical assistance, Management and Control , Revenue Generating Operations and PPPs, Major projects, Financial Instruments, Financial management Other open blocks: Financial issues, Final and Transitional Provisions, Performance reserve, DA&IA Outstanding issues in these blocks: Management and control – non-statistical sampling, deadline for e-cohesion, reporting of irregularities ( related to the horizontal issue of delegated/ implementing act). COM aligns with the EP. Main concerns of EP on the PGA regarding non-statistical sampling is that it doesn’t ensure representativity and that it should cover a minimum of 10% of the operations for which expenditure which has been declared to the Commission during an accounting year. COM agrees with these concerns. Financial management – EP and council have agreed to introduce N+3 across the board of the package as the general de-commitment rule. However there is still no agreement on key points, such as payments to beneficiaries (it allows MS to claim expenditure not yet paid to beneficiaries), availability of documents and financial corrections. COM and EP don’t agree with the Council. Performance reserve – key issue of disagreement between both institutions. EP doesn't agree with the idea of setting out a performance reserve. not convinced on the added value of the performance reserve. Main arguments are that the cohesion budget is already low and it also has some concerns regarding the allocation of the performance reserve (How to ensure equal treatment on the allocation of this reserve)

Informal Trilogue on ESF (1) Composition Council (EU presidency and Council LS) European Parliament (EMPL Chair, Rapporteur and shadow rapporteurs) Commission (EMPL, observers from SG and REGIO) Twenty meetings already organised

Informal Trilogue on ESF (2) Content of the discussions so far on which a Political Agreement has been reached under CY Presidency Article 6 (involvement of partners) Article 7 (gender equality) Article 8 (non-discrimination) Article 9 (social innovation) Article 10 ( transnational co-operation) Article 11 (fund-specific provisions for OP)

Informal Trilogue on ESF (3) Content of the discussions so far(under IE Presidency) on which a Partial General Approach was reached Article 2- Mission of the ESF Article 3 (scope of support-investment priorities) Article 5 (indicators) Article 12( territorial features-CLLD) Article 13 ( eligibility of expenditure) Article 14 ( simplified cost options) Chapter III bis - Articles 15i- 15viii (YEI) Chapter IV – Articles 16-21(delegations of power and final provisions )

Informal Trilogue on ESF (4) Still pending: Article 4 ( Consistency and thematic concentration) related to the issue of ESF minimum shares, currently debated within Political Trilogues Article 15 (Financial instruments) Council not favourable to their introduction in the ESF Regulation Recitals

NEXT STEPS During the IE Presidency: -COREPER 19th June/ GAC -No more CPR trilogues planned for the IE Presidency/ ESF - Effort to reach a political agreement on the MFF Next presidency (LT): -Adoption of the report in REGI: 11 July 2013. The report should include a maximum number of agreed thematic blocks and negotiations on the CPR could continue afterwards until the vote in REGI. -Trilogues foreseen for the first week of July -Adoption in Plenary: October I (week 7-10 Oct) or October II (week 21-24 Oct). Blocks that could be left for the LT Presidency ( TO UPDATE ONCE WE GET THE OUTCOME OF TRILOGUES IN STRASBOURG): performance framework; financial issues; macroeconomic conditionality and transitional and final provisions; thematic concentration (the ESF minimum share) and general ex ante conditionalities. LATEST INFO ON THE MFF: COREPER II 10 June had a table round concerning the texts regarding the Multi-annual Financial Framework (Regulation, IIA and Declarations) the Presidency intends to discuss with the EP at the trilogue meeting that takes place in strasbourg on the 11th june. Presidency expressed the hope that this week will be decisive in view of achieving a final agreement on the MFF with the EP. The Commission took the view that further concessions will be needed towards the EP, in particular on flexibility. The Presidency indicated its wish to conclude an agreement of the texts for the General Affairs Council based on a clear understanding with the EP.