1. EUROCITIES webinar on the state of play of cohesion policy Overview of developments in Q1 2019
Guest speaker: Katarzyna Devavry, MEP advisor, European Parliament
Moderator: Helena Polomik, policy advisor, EUROCITIES
6 May 2019

2. Overview of the webinar
Part I – State of play on the Multiannual Financial Framework Part II - State of play on the CPR and ERDF/CF Part III - Questions and answers

3. State of play: MFF Part I
Broader context, main elements of the EC proposal
EP position on the issue at stake with a specific focus on cohesion policy, state of play and timeline

4. MFF Procedure
Regulation laying down the Multiannual Financial Framework is unanimously agreed by the Council after the consent of the European Parliament (consent procedure)
European Parliament’s MFF standing rapporteurs are Jan Olbrycht (EPP) & Isabelle Thomas (S&D) and for own resources Janusz Lewandowski (EPP) and Gérard Deprez (ALDE).

5. Future of EU finances – 5 scenarios
Publication: 28 June 2017

7. Context of the MFF discussion - Brexit
Challenges:
Brexit gap EUR bln/year
New priorities EUR 11 bln/year
Total of gap: EUR 25 bln/year
Solutions:
Higher MS’s contribution (%GNI)
New own resources
Reduction of policies

8. 14 March 2018: European Parliament presents its expectations on the MFF post-2020
European Parliament resolution of 14 March 2018 on the next MFF: Preparing the Parliament’s position on the MFF post (2017/2052(INI))
and
European Parliament resolution of 14 March 2018 on the reform of the European Union’s system of own resources(2017/2053(INI))

9. 2 May 2018: European Commission publishes its proposition for the next MFF
Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the regions A Modern Budget for a Union that Protects, Empowers and Defends The Multiannual Financial Framework for
Proposal for a Council regulation laying down the Multiannual Financial Framework for the years 2021 to 2027
Proposal for a Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management
Proposal for a regulation of the European Parliament and of the Council on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States
Proposal for a Council decision on the system of Own Resources of the European Union

10. Some aspects of the Commission proposal on MFF 2021-2027
Duration of the next MFF: 7 years
MFF figures: EUR bln (constant prices 2018), 1,11% GNI (including European Development Fund)
Reduction of sectoral programmes from 58 to 37
Less money for cohesion policy (-10%) and common agriculture policy (-15%)

13. 29 May 2018 – 14 June 2018 EC publishes sectorial regulations
Less sectorial programmes

14. New rule of law mechanism

15. New system of own resources

17. Reaction of the European Parliament to the Commission proposal
European Parliament resolution of 30 May 2018 on the Multiannual Financial Framework and own resources
European Parliament resolution of 14 November 2018 on the Multiannual Financial Framework – Parliament’s position with a view to an agreement (Interim report)

18. Main elements of Interim report
MFF figures: in the context of Brexit gap, need to finance new priorities and keep current level of financing of existing policies, EP considers that the level of the MFF should be set at EUR billion in 2018 prices, representing 1,3 % of the EU-27 GNI,
More flexibility and compulsory and legally binding mid-term revision,
Duration: last time 7 years as transitional solution and to move progressively towards a 5+5 political cycle
Structure: Accepts the overall structure of seven MFF headings (more clarity and transparency of the budget); EP position with regard to the structure and composition of the 37 new programmes will be determined in the course of adopting the relevant sectoral legislative acts;
Unity of the budget: all commitments and payments in one place; welcomes the proposed integration of the European Development Fund into the Union budget
Rule of law: warns, that final beneficiaries of the Union budget shall in no way be affected by the disregard
New own resources as condition to accept MFF

19. Main financial elements
Increase the budget for Horizon Europe to reach EUR 120 billion in 2018 prices;
Increase the allocation for the InvestEU Fund, so that it better reflects the level of the financial instruments integrated into the new programme;
Increase the level of funding for transport infrastructure through the Connecting Europe Facility programme (CEF-Transport) (+ EUR 6 bilion);
Double the specific funding for SMEs (compared to COSME) in the single market programme, with the aim of enhancing their access to markets, improving business conditions and the competitiveness of enterprises, and promoting entrepreneurship;
Further increase the single market programme to finance a new objective on market surveillance;
Double the proposed level of funding for the EU anti-fraud programme, and increase the level of funding for the FISCALIS programme;
Introduce a specific allocation for sustainable tourism;
Further reinforce the European space programme, notably to reinforce SSA / GOVSATCOM as well as Copernicus;
Maintain the financing of cohesion policy for the EU-27 at the level of the budget in real terms;
Double the resources for tackling youth unemployment in the ESF+ (compared to the current Youth Employment Initiative), while ensuring the scheme’s effectiveness and added value;
xi. Introduce a specific allocation (EUR 5.9 billion) for the Child Guarantee, in order to tackle child poverty both within the EU and through its external actions;
xii. Triple the current budget for the Erasmus+ programme;
xiii. Secure a sufficient level of funding for the DiscoverEU programme (Interrail);

20. Increase the current funding for the Creative Europe programme;
Increase the current funding for the Rights and Values programme and introduce a specific allocation for a new Union values strand (at least EUR 500 million), in order to support civil society organisations which promote fundamental values and democracy within the EU at local and national level;
Maintain the financing of the Common Agricultural Policy (CAP) for the EU-27 at the level of the budget in real terms while budgeting the initial amount of the agricultural reserve;
Reinforce by 10 % the level of the European Maritime and Fisheries Fund, in accordance with its new mission on the blue economy;
Double the current funding for the Life+ programme, including dedicated envelopes for biodiversity and the management of the Natura 2000 network;
Introduce a specific allocation (EUR 4.8 billion) for a new Just Energy Transition Fund to address societal, socio-economic and environmental impacts on workers and communities adversely affected by the transition from coal and carbon dependence;
Reinforce the instrument(s) in support of neighbourhood and development policies (EUR 3.5 billion) to further contribute to the financing of an investment plan for Africa;
Reinstate at least the 2020 level for all agencies.

21. Annex III – MFF 2021-2027: breakdown per programme (2018 prices)

26. State of play of the MFF negotiations
European Parliament is ready to negotiate since 14 November 2018
Council is working on its common position (Working Groups, GAC) and prepare “negotiation box” with co-decision sectorial elements
but
Problem of the European Council in this negotiations (formally has no say, in practice heads of state and government will decide everything unanimously and inform the Council!) They will take a final decision on co- decision sectorial elements!
European Parliament opposed to this method!

27. Next steps
European Council is expecting to take its final decision in autumn 2019
Council will send the MFF proposal to the European Parliament for the consent at the beginning of 2020
EP might say YES or NO! Depending on the content!
If EP says NO, Council should work on the new proposal...
and
Problem with Brexit: UK in? out?
Problem with the late start of the sectorial programmes (especially important for cohesion policy)

28. State of play: CPR and ERDF/CF
Part II
State of play: CPR and ERDF/CF
Main elements of EC proposals, relevant aspects for local authorities
EP position on the issue at stake with a specific focus on the urban policy related matters, state of play of the trialogues and timeline

29. Our requests on cohesion policy (CPR/ERDF)
Cities must be properly involved in programming
Ensure that the partnership principle is fully applied also in the programming phase
Integrated place-based approach must work better across funds
Enable a stronger integration of ERDF and ESF+ in all territorial tools
Make more explicit that the scope of ESF+ covers policy objective 5
Reinstall the integrated territorial approach in ESF+
Greener and more flexible thematic concentration
Increase the concentration on green/climate objectives (PO2) in all regions
Ensure sustainable, multimodal urban mobility is (back) in PO2
Increase flexibility to address country/region specific challenges
Stronger ambition to innovate urban development
increase the earmarking for sustainable urban development to 10% of ERDF
create the conditions for ESF+ to support sustainable urban development
strengthen links between urban agenda, URBACT, UIA and mainstream ERDF
Partnership with cities
To ensure that cities are properly involved in both design and implementation of programmes through clear provisions on partnership based on EU code of conduct
Article 6 (partnership) and Article 8 (partnership agreement) of CPR
Integrated approach across the funds
Enable cities to combine ERDF, CF and ESF+ under PO5 tailored to local challenges
Article 22 (integrated territorial development) of CPR
Greener and more flexible thematic concentration
1 in 3 euros for green & climate investments (PO2) in all regions, including sustainable urban mobility
Flexibility to define second priority (PO1-5) to address country/region specific challenges
Article 2 (spec objectives) and 3 (thematic concentration) of ERDF
Support urban innovation
Higher ambition to support urban innovation via 10% earmarked for sustainable urban development and through strengthened links between urban agenda, URBACT, UIA and mainstream policy
Article 9 (sustainable urban development) and Article 10 (European Urban Initiative) of ERDF

30. Cohesion policy in the MFF 2021-2027%
I. Single Market, Innovation and Digital
14,7%
II. Cohesion and Values
Of which:
Economic, social and territorial cohesion
34,5%
29,1%
III. Natural Resources and Environment
29,7%
IV. Migration and Border Management
2,7%
V. Security and Defence
2,1%
VI. Neighbourhood and the World
9,6%
VII. European Public Administration
6,7%

34. Cohesion policy – some elements of Common Provisions Regulation (CPR)
CPR regulation
Ordinary legislative procedure (COD) = Parliament and Council on equal footing – formerly ‘co-decision’
Key dates of the procedure
text adopted by Parliament = mandate for the negotiations
4 formal trialogues with the Council + technical meetings
text adopted by Parliament, 1st reading
Next: Second reading

35. Cohesion policy – some elements of CPR
CPR Common Provisions Regulation = common framework for
7 Funds (EP 8 Funds)
ERDF European regional Development Fund
CF Cohesion Fund
ESF+ European Social Fund+
EMFF European Maritime and Fisheries Fund
AMIF Asylum and Migration Fund
SF Internal Security Found
BMVI Border Management and Visa Instrument
EAFRD European Agriculture Fund for Rural Development

36. Partnership agreement

41. Investment for jobs and growth
Readjustment of balance between the Investment for jobs and growth goal and the European territorial cooperation (Interreg) goal
EC proposal
Goal
EP position
97,5%
Investment for jobs and growth
97,0%
2,5%
Interreg 3%

42. European Urban Initiative
EC proposal
Goal
EP position
500 mln EUR
European Urban Initiative
+ 560 mln EUR

43. Transfer from cohesion policy to InvestEU and CEF
EC proposal
Transfer out from cohesion to
EP position 5%
InvestEU
2% z ERDF, ESF+, CF, EMFF before mid-term review and up to 3% under the mid-term review
10 bln EUR
CEF Connecting Europe Facility
4 bln
Transfer to CEF was not specified in the MFF interim report

44. Transfers between funds and between categories of regions – more flexibility
Transfer from the allocation from less developed regions
EC proposal
EP position
5% between all the funds
5% only between ERDF, CF and ESF+
EC proposal
EP position
15% 5%

45. Co-financing rate EC proposal Category of regions EP position 70%
Less developed
Outermost regions
Cohesion Fund
Interreg
85%
55%
Transition
65%
40%
More developed
50%

46. Cohesion policy – some elements of ERDF
ERDF and Cohesion Found regulation
Ordinary legislative procedure (COD) = Parliament and Council on equal footing – formerly ‘co-decision’
Key dates of the procedure
Council not ready for the negotiation so no need to adopt in hurry EP mandate for the negotiations (like for CPR)
text adopted by Parliament, 1st reading
Next: Second reading

47. Importance of 5 policy objectives

48. Thematic concentration
EC proposal
For countries with:
minimum % "PO1"
minimum % "PO2"
GNI below 75%
35%
30%
GNI %
45%
GNI above 100%
60%
not applicable
PO1 and PO2 min. 85%
EP position
For regions:
minimum % "PO1"
minimum % "PO2"
Less developed regions
30%
Transition regions
40%
More developed regions
50%

49. Policy objectives: some changes
Urban mobility: from PO PO2

50. NEW: investments in housing in PO4

51. Sustainable urban development (art. 9)

52. European Urban Initiative (art. 10)

53. European Urban Initiative (art. 10)
NEW: Urban Innovative Actions

54. European Urban Initiative (art. 10)

55. European Urban Initiative (art. 10)

56. Integrated territorial development (art. 8)
NEW: Support of non-urban areas

57. Next steps
New European Parliament will continue negotiations with the Council to have a final cohesion policy framework
New EP’s rapporteurs
End of negotiations? Late beginning of programming?

58. Support the EP in its activity (URBAN Intergroup)
Next steps
Support the EP in its activity (URBAN Intergroup)
Influencing the work of Council
Involvement of our cities in the programming
Briefing note
Is designed and implemented in partnership with cities and citizens
Innovates the governance of urban development
Innovates across policies using an integrated approach
Supports the transition to a climate-friendly future for the EU

59. Part III
Questions and answers

60. Thank you for your attention!
Katarzyna Devavry
Advisor to Jan Olbrycht, MEP
European Parliament, ASP 12E140
60 rue Wiertz, B-1047 Bruxelles
URBAN Intergroup at the EP
Helena Polomik
Policy advisor, EUROCITIES

61. Sources:
EPRS Briefing: Cohesion funds, values and economic and monetary union in the MFF European Parliament position on Heading 2 – Cohesion and value.
EPRS Briefing: Challenges for EU cohesion policy: Issues in the forthcoming post reform.
EPRS Briefing: Common Provisions Regulation. New rules for cohesion policy for
EPRS Briefing: European Regional Development Fund and Cohesion Fund
EC presentation: EU Budget for the future CPR and cohesion policy; DG REGIO: 20 June 2018.
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