Explanatory Memorandum to COM(2015)46 - Increase of the initial pre-financing amount paid to operational programmes supported by the Youth Employment Initiative - Main contents
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| dossier | COM(2015)46 - Increase of the initial pre-financing amount paid to operational programmes supported by the Youth Employment Initiative. |
|---|---|
| source | COM(2015)46  |
| date | 04-02-2015 |
Giving 'a new boost to jobs, growth and investment' is an essential priority of the new Commission. In its Work Programme for 2015, the Commission committed to take initiatives to promote integration and employability in the labour market, including measures to support Member States in getting young people into work. The proposal on the table regarding the Youth Employment Initiative is one of the ways to take this priority forward without delay.
The Youth Employment Initiative (YEI) was adopted following a high-level political call from the European Council of February 2013 to address the unprecedented levels of youth unemployment in certain regions of the European Union (EU) facing a particularly difficult situation. The February 2013 Council and subsequent Council conclusions once again stressed that the highest priority should be given to promoting youth employment. The European Council called for the EU budget to be mobilised in support to Member States' efforts in counteracting this trend. The purpose of the YEI is to provide additional funding for promoting youth employment to the regions most affected by youth unemployment including through the implementation of the Council recommendation on establishing the Youth Guarantee. Support provided under the YEI can only directly target young people not in employment, education or training and, unlike the European Social Fund, it cannot support systems and structures. The YEI is integrated in the programming of the ESF and the programming arrangements can take the form of a dedicated operational programme, a dedicated priority axis within an operational programme or a part of one or more priority axes.
Due to the urgency of the youth unemployment situation already from the outset the Commission proposed special provisions so that the total amount of resources allocated to the YEI are committed (frontloaded) in the first two years of the 2014-2020 programming period, in order to allow for a speedy and substantial mobilisation of youth measures and for immediate results. Operations under the YEI therefore have to be implemented, in principle, by the end of 2018 and not 2023 as it is the case for other operations supported by the European Structural and Investment Funds (ESI Funds), including the European Social Fund. In addition, it was decided that expenditure under the YEI is eligible as from 1 September 2013 and that no national co-financing is required for the specific allocation for the YEI. There are also other provisions in the 2014-2020 regulatory framework to speed up the implementation of the YEI.
The shorter implementation period of the YEI implies that progress with the implementation on the ground in the first years will be crucial for the overall success of the Initiative to tackle the problem faced by 7 million young Europeans who are without a job and are not in education or training. Any further delays in the implementation of the YEI are likely to compromise the process and actions undertaken by Member States to combat youth unemployment.
However, one year after the adoption of the ESF Regulation and the YEI, the results do not meet the initial expectations. The frontloading of the YEI commitments as such and the other specific measures for the YEI have not led to the expected quick mobilisation of the resources from the YEI. Among the main reasons identified are the ongoing process of negotiation of the relevant operational programmes and the roll-out of respective implementation arrangements in the Member States; the limited capacity of the authorities to launch calls for projects and to process applications speedily and the lack of sufficient pre-financing to launch the necessary measures. The latter issue has been raised at political level by, Member States. A number of them have reported, at various levels, including in the context of meetings of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) as well as in bilateral meetings with the Commission, that they are facing significant difficulties in starting the implementation of operations due to the absence of sufficient funding to advance payments to beneficiaries. From its side the European Parliament voiced concerns about the slow take-up of the YEI. This situation is particularly acute in the Member States with the highest levels of youth unemployment since they are also the ones which are facing more budgetary constraints and lack of funding.
The Commission has already adopted 28 out of the 34 operational programmes implementing the YEI and has closed negotiations on a further four of those programmes which are pending adoption. In addition, the Council adopted in 2014, a number of country-specific recommendations calling on Member States to intensify their efforts in reducing youth unemployment. Administrative capacity and programme implementation arrangements for the current period are being put in place by the Member States and the Commission has been supporting this process through technical guidance. In terms of immediate action on the Commission's side regarding pre-financing, the present proposal intends to respond to the issue raised by the Member States.
The current levels of the initial pre-financing established in the Common Provisions Regulation have proved to be insufficient to close the existing funding gap and - taking into account the political commitment entailed by the YEI - to support the effort of providing an immediate and quick response to the unacceptably high level of youth unemployment in the EU. The current levels of the initial pre-financing immediately paid upon adoption of an operational programme equal 1% of the Union contribution to that operational programme (or 1,5% for Member States under financial assistance). In addition, interim payments to the Member State can only be made on the basis of expenditure already incurred by beneficiaries and paid, which is certified by the Member State. Interim payments are to be used to reimburse beneficiaries for incurred expenditure. Therefore the interim payments are insufficient to make advance payments to beneficiaries.
This situation, coupled with the increase in the rate of young people at risk of poverty or social exclusion, calls for additional measures to be put in place that address the specificities of the YEI. The frontloading of the YEI resources should be backed by mechanisms that can actually ensure a quick mobilisation of the funding to operations in the first years of the programming period. In particular, it is necessary to ensure that the initial pre-financing paid to operational programmes implementing the YEI is sufficient to fund payments to beneficiaries to start and implement operations. Contrary to the other shared management programmes, the YEI is supported by a specific allocation which is fully funded by the EU budget. The specific allocation for the YEI is, thus, the only source of funding under shared management which benefits of the exemption of the national co-financing requirement. With the present proposal, the initial pre-financing made available from the specific allocation for the YEI in 2015 will be increased to about EUR 1 billion. The present proposal does not alter the initial pre-financing paid from the ESF to operational programmes implementing the YEI, neither does it alter the initial pre-financing to be paid in 2016 from the specific allocation for the YEI. Furthermore, it does not affect the initial pre-financing paid to other programmes co-financed by other ESI Funds.
This increase of the initial pre-financing from the specific allocation for the YEI paid to operational programmes supported by the YEI (irrespective of the form of the programming arrangements) is considered as adequate and fully in line with the specific rules applicable to the YEI. Furthermore, this proposal intends to adjust the YEI pre-financing profile to the one of cohesion policy programmes and thus allow for the same level of pre-financing in relation to YEI as is normally the case for other programmes. In this sense the proposal aims to ensure equal treatment between the YEI and cohesion policy funds.
Moreover, the initial pre-financing should only be used by the Member States for payments to beneficiaries in the implementation of the programme supported by the YEI, in accordance with Article 81 of the Common Provisions Regulation and has to be made available to the responsible body without delay. In addition, to ensure that the additional pre-financing results in immediate implementation of the YEI, this proposal foresees for these operational programmes that if 12 months after the entry into force of this Regulation the Commission has not received interim payment applications in which the Union contribution from the YEI amounts to at least 50% of the additional pre-financing, the additional pre-financing will need to be reimbursed to the Commission.
This proposal is in line with the political commitment of the European Union to provide an immediate support to the integration of young people into the labour market.
Last but not least, this proposal of increasing pre-financing payments to the Member States does not alter the already agreed overall financial profile of national allocations: it merely proposes to advance in time the allocations that already have been secured in the EU budget for the YEI. The present proposal therefore increases the flexibility for the Member States to access this funding and mobilise it more thoroughly, which would facilitate its implementation and thus using it to launch measures that directly benefit the integration of young Europeans into the labour market, notably through providing jobs, apprenticeships and traineeships.
If the current proposal were not to be adopted, the implementation of the YEI would continue to be very much delayed – contrary to the European Council's call for urgent action. As a result of the lack of readily available funding, crucial and much needed policy measures for the integration of young people into the labour market would be seriously hampered.
In this context, there is an urgent need to increase the amount of funding made available early in the programming period for operations supported by the YEI. It is therefore necessary to increase the initial pre-financing of the specific allocation for the YEI to allow speeding up the implementation of the YEI. The proposed pre-financing rate provides a maximum impact without exceeding the budget availability for the YEI.
Contents
There was no consultation of external stakeholders.
It is proposed to introduce an additional provision in Regulation (EU) No 1304/2013, Article 22a, on the additional initial pre-financing for operational programmes supported by the YEI.
The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments as per Annex I of Regulation (EU) No 1311/2013. The proposal is budgetary neutral over the 2014-2020 programming period.
The annual breakdown of commitment appropriations for the YEI remains unchanged.
The increased need for payment appropriations for the YEI additional initial pre-financing in 2015 will be fully covered by appropriations of the 2015 budget for the YEI specific allocation. Consequently, the proposed modification should not trigger a potential backlog of 2014-2020 unpaid claims.