EU reform and stabilization support

ECON-VI/037
Adopted

EU reform and stabilization support

Olga ZRIHEN
Olga ZRIHEN
Alternate Belgium
Member of the Municipal Council of La Louvière
 +32 64 450966
 FR, EN, NL, DE
 Adoption: 06/12/2018
 Theme: Economy and Finance
Commission: Commission for Economic Policy (ECON-VI)
According to available reports, several Member States share the CoR position, expressed in the opinion, that RSP funding should be allocated according to the cohesion objective, i.e., to the countries most in need of structural reforms The key messages of the CoR opinion are summarized in the EP briefing on the RSP published on 13.3.2019 The recent Franco-German joint position on a possible Eurozone Budgetary Instrument (21.2.2019) mentions the possibility that such instrument funds the cost of reforms and/or investments identified in the context of the European semester. The position seems to focus on "diverging" MS (as the CoR's), rather than on all MS as the initial EC proposal. Unlike the EC proposal, it is based on co-financing, but the EU share could increase in case of severe downturn. The size of the financial contributions, in the FR-DE position, should be linked to the cost of reforms and/or investments In line with CoR positions, in October 2018, the EP rejected the Commission proposal to amend the Common Provisions Regulation (CPR) to allow the use of the performance reserve to support structural reforms not linked to cohesion objectives. In its position on the Commission's proposal on re-financing the SRSP and broadening its scope (4 July 2018), the EP proposed to give the programme the goal "to support the involvement and consultation of regional and local authorities in the preparation and implementation of structural reform measures to a degree commensurate with the powers and responsibilities of those regional and local authorities within the constitutional and administrative structure of each Member State". The EP decided not to vote on both the RSP and the EISF in the legislature ending in May 2019 In its follow-up (11 April 2019), the European Commission on the RSP, noted that other EU programmes also have a "neutral" allocation key, did not reply on whether a financial contribution would be enough to trigger complex structural reforms, keept rejecting the CoR idea of a Code of Conduct to involve the LRAs in the Semester, stated that dissaminating good practices would make it on the EISF, noted that national authorities would be free to redirect EU funding to support investments at regional and local level as needed, also noted that flexibility clauses would be taken into account when assessing compliance with the SGP, shared the view that the minimum level of investment member states would have to ensure should be defined in a flexible manner, stressed that with the EISF stabilisation would become an explicit objective of the EU budget.
THE EUROPEAN COMMITTEE OF THE REGIONS On the Reform Support Programme  calls for a better definition of the scope of reforms to be supported, which, to respect subsidiarity, should be relevant for the implementation of EU Treaty objectives, relate directly to EU competences and bring EU value added;  welcomes the idea of supporting Member States willing to engage in far-reaching reform commitments through financial contributions and technical assistance, as well as of a convergence facility for Member States having made demonstrable steps towards joining the euro;  calls for financial support to be allocated between Member States on the basis of cohesion policy indicators instead of population;  strongly supports the idea that country-specific recommendations should promote investments no less than regulatory reforms, investment-related CSRs should be aligned with the ESIF long-term objectives and the Programme should coordinate all relevant EU spending programmes;  notes the increased importance of the European Semester and stresses that, to ensure ownership and effective implementation of reforms, local and regional authorities should be involved in the Semester from its initial phases as design and implementation partners, and that this should become a criterion to assess the credibility of reform implementation arrangements;  stresses that access of local and regional authorities to the technical support instrument under the programme should be pro-actively encouraged at all levels of government; On the European Investment Stabilisation Function  stresses that protection from the impact of asymmetric shocks should be ensured for investments by all levels of government;  welcomes the EISF and reiterates its call to the European Commission to develop over time a fully-fledged insurance mechanism to cater for stabilisation, with a borrowing capacity based on contributions by Member States.
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