European funds for advance payments

The European Parliament recently adopted, on its first reading, a position in favor of the proposal of the European Commission to amend the Regulation no. 1083/2006 of the Council, concerning structural and cohesion funds, in order to speed the projects co-financed using structural funds. The proposal will facilitate the quicker absorption of funds allocated under the operational programs, as a result of the financial crisis.

According to a press release sent to our editors, the EU member countries that will benefit from the new provisions include Romania, Hungary, Latvia, Lithuania and Estonia. The countries concerned saw a steep drop of their GDP. For this reason they will be eligible for advance payments in 2010, (2% of the Social European Fund and 4% of the Cohesion Fund) and will receive an additional pre-financing tranche amounting to EUR 776 million, of which EUR 278 million will belong to Romania. This influx of cash will make the payments to the beneficiaries possible.

A novelty in the proposal of the European Commission is the fact that the youth internships, the professional trainings and public works projects, which usually would have only qualified fro national funding, will now be eligible for European funding.

The amendments brought about to the Regulation 1083/2006 also add more flexibility in the clause of automatic disengagement, namely the obligation of the member states to return the unspent amounts. The amendment made will eliminate the risk of losing the funds for this year, as the new rules allow for longer deadline for projects that have not yet been approved or implemented within the specified delays.

Another major change to the Regulation, which will speed up the process for the approval of major environmental projects, concerns the increase of the maximum allowed funding from 25 to 50 million Euros. Also, a limit of 50 million Euros has been set for major projects. Environemntal projects worth between 25 and 50 million Euros will no longer be subject to the standard approval procedure specific for major projects, a procedure which necessitates a longer analysis period.

The new provisions are scheduled for adoption by the Council of General Affairs during its June 14 reunion, and may come into effect in summer this year.