Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006

A suspension of commitments applied to a Member State shall in the first instance proportionally affect all programmes and priorities.

However, the following programmes and priorities shall be excluded from the scope of the suspension:

• (i) programmes or priorities which are already subject to a suspension decision adopted in accordance with Article 23(6);

• (ii) programmes or priorities whose resources are to be increased as a result of a reprogramming request addressed by the Commission in accordance with Article 23(1) in the year of the trigger event referred to in Article 23(9);

• (iii) programmes or priorities whose resources have been increased within the two years preceding the trigger event referred to in Article 23(9) as a result of a decision adopted in accordance with Article 23(5);

• (iv) programmes or priorities which are of critical importance to addressing adverse economic or social conditions. Such programmes or priorities shall cover programmes or priorities supporting investments of particular importance to the Union related to the YEI. Programmes or priorities may be considered of such critical importance when they support investments related to the implementation of recommendations addressed to the Member State concerned in the framework of the European Semester and aimed at structural reforms, or related to priorities supporting poverty reduction or to financial instruments for the competitiveness of SMEs.

3. DETERMINING THE FINAL LEVEL OF SUSPENSION OF COMMITMENTS FOR THE PROGRAMMES FALLING WITHIN THE SCOPE OF THE SUSPENSION

The exclusion of a priority within a programme shall be carried out by reducing the commitment of the programme pro rata to the allocation to the priority.

The level of suspension to be applied to the commitments of the programmes shall be that which is necessary to reach the aggregate level of suspension determined under point 1.

4. DETERMINING THE SCOPE AND THE LEVEL OF SUSPENSION OF PAYMENTS

The programmes and priorities referred to under point 2(i) to (iv) shall also be excluded from the scope of suspension of payments.

The level of suspension to be applied shall not exceed 50 % of the payments of programmes and priorities.

ANNEX IV

IMPLEMENTATION OF FINANCIAL INSTRUMENTS: FUNDING AGREEMENTS

• 1.Where a financial instrument is implemented under Article 39a and points (a), (b) and (c) of the first subparagraph of Article 38(4), the funding agreement shall include the terms and conditions for making contributions from the programme to the financial instrument and shall include at least the following elements:

• (a) the investment strategy or policy including implementation arrangements, financial products to be offered, final recipients targeted, and envisaged combination with grant support (as appropriate);

• (b) a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

• (c) the target results that the financial instrument concerned is expected to achieve to contribute to the specific objectives and results of the relevant priority;

• (d) provisions for monitoring of the implementation of investments and of deal flows including reporting by the financial instrument to the fund of funds and/or the managing authority to ensure compliance with Article 46;

• (e) audit requirements, such as minimum requirements for documentation to be kept at the level of the financial instrument (and at the level of the fund of funds where appropriate), and requirements in relation to the maintenance of separate records for the different forms of support in compliance with Article 37(7) and (8) (where applicable), including provisions and requirements regarding access to documents by audit authorities of Member States, Commission auditors and the European Court of Auditors in order to ensure a clear audit trail, in accordance with Article 40;

• (f) requirements and procedures for managing the phased contribution provided by the programme in accordance with Article 41 and for the forecast of deal flows, including requirements for fiduciary/separate accounting as set out in Article 38(6) and the second subparagraph of Article 39a(5);

• (g) requirements and procedures for managing interest and other gains generated as referred to in Article 43, including acceptable treasury operations/investments, and the responsibilities and liabilities of the parties concerned;

• (h) provisions regarding the calculation and payment of management costs incurred or of the management fees of the financial instrument;

• (i) provisions regarding the re-use of resources attributable to the support from the ESI Funds until the end of the eligibility period in compliance with Article 44 and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

• (j) provisions regarding the re-use of resources attributable to the support of the ESI Funds after the end of the eligibility period in compliance with Article 45 and a policy regarding the exit of those resources from the financial instrument;

• (k) conditions for a possible total or partial withdrawal of programme contributions from programmes to financial instruments, including the fund of funds where applicable;

• (l) provisions to ensure that bodies implementing financial instruments manage financial instruments with independence and in accordance with the relevant professional standards, and act in the exclusive interest of the parties providing contributions to the financial instrument;

• (m) provisions for the winding-up of the financial instrument.

• In addition, where financial instruments are organised through a fund of funds, the funding agreement between the managing authority and the body that implements the fund of funds must also provide for the appraisal and selection of bodies implementing the financial instruments, including calls for expression of interest or public procurement procedures.

• 2.Strategy documents referred to under Article 38(8) for financial instruments implemented under point (d) of the first subparagraph of Article 38(4) shall include at least the following elements:

• (a) the investment strategy or policy of the financial instrument, general terms and conditions of envisaged loan or guarantees, target final recipients and actions to be supported;

• (b) a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

• (c) the use and re-use of resources attributable to the support of the ESI Funds in accordance with Articles 43, 44 and 45, and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

• (d) monitoring and reporting of the implementation of the financial instrument to ensure compliance with Article 46.

ANNEX V

DEFINITION OF FLAT-RATES FOR NET-REVENUE GENERATING PROJECTS

	Sector	Flat rates
1	ROAD	30 %
2	RAIL	20 %
3	URBAN TRANSPORT	20 %
4	WATER	25 %
5	SOLID WASTE	20 %

ANNEX VI

ANNUAL BREAKDOWN OF COMMITMENT APPROPRIATIONS FOR THE YEARS 2014 TO 2020

Adjusted annual profile (including the YEI top-up)

	2014	2015	2016	2017	2018	2019	2020	Total
EUR, 2011 prices	34 108 069 924	55 725 174 682	46 044 910 736	48 027 317 164	48 341 984 652	48 811 933 191	49 046 236 960	330 105 627 309

ANNEX VII

ALLOCATION METHODOLOGY

Allocation method for the less developed regions eligible under the Investment for growth and jobs goal, referred to in point (a) of the first subparagraph of Article 90(2)

• 1.Each Member State's allocation shall be the sum of the allocations for its individual eligible NUTS level 2 regions, calculated in accordance with the following steps:

• (a) determination of an absolute amount (in EUR) obtained by multiplying the population of the region concerned by the difference between that region's GDP per capita, measured in PPS, and the EU-27 average GDP per capita (in PPS);

• (b) application of a percentage to the above absolute amount in order to determine that region's financial envelope; this percentage shall be graduated to reflect the relative prosperity, measured in PPS, as compared to the EU-27 average, of the Member State in which the eligible region is situated, i.e.:
• (i) for regions in Member States whose level of GNI per capita is below 82 % of the EU-27 average: 3,15 %;
• (ii) for regions in Member States whose level of GNI per capita is between 82 % and 99 % of the EU-27 average: 2,70 %;
• (iii) for regions in Member States whose level of GNI per capita is over 99 % of the EU-27 average: 1,65 %;

• (c) to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 300 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the EU less developed regions applied.

Allocation method for transition regions eligible under the Investment for growth and jobs goal, referred to in point (b) of the first subparagraph of Article 90(2)

• 2.Each Member State's allocation shall be the sum of the allocations for its individual eligible NUTS level 2 regions, calculated in accordance with the following steps:

• (a) determination of the minimum and maximum theoretical aid intensity for each eligible transition region. The minimum level of support is determined by the average per capita aid intensity per Member State before the application of the regional safety net, allocated to the more developed regions of that Member State. If the Member State has no more developed regions, the minimum level of support will correspond to the initial average per capita aid intensity of all more developed regions, i.e. EUR 19,80 per head and per year. The maximum level of support refers to a theoretical region with a GDP per head of 75 % of the EU-27 average and is calculated using the method defined in points (a) and (b) of paragraph 1. Of the amount obtained by this method, 40 % is taken into account;

• (b) calculation of initial regional allocations, taking into account regional GDP per capita (in PPS) through a linear interpolation of the region's relative GDP per capita compared to EU-27;

• (c) to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 100 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the less developed regions applied.

Allocation method for the more developed regions eligible under the Investment for growth and jobs goal, referred to in point (c) of the first subparagraph of Article 90(2)

• 3.The total initial theoretical financial envelope shall be obtained by multiplying an aid intensity per head and per year of EUR 19,80 by the eligible population.

• 4.The share of each Member State concerned shall be the sum of the shares of its eligible NUTS level 2 regions, which are determined on the basis of the following criteria, weighted as indicated:

• (a) total regional population (weighting 25 %);

• (b) number of unemployed people in NUTS level 2 regions with an unemployment rate above the average of all more developed regions (weighting 20 %);

• (c) employment to be added to reach the Union strategy for smart, sustainable and inclusive growth target for regional employment rate (ages 20 to 64) of 75 % (weighting 20 %);

• (d) number of persons aged 30 to 34 with tertiary educational attainment to be added to reach the Union strategy for smart, sustainable and inclusive growth target of 40 % (weighting 12,5 %);

• (e) number of early leavers from education and training (aged 18 to 24) to be subtracted to reach the Union strategy for smart, sustainable and inclusive growth target of 10 % (weighting 12,5 %);

• (f) difference between the observed GDP of the region (measured in PPS), and the theoretical regional GDP if the region were to have the same GDP per head as the most prosperous NUTS level 2 region (weighting 7,5 %);

• (g) population of NUTS level 3 regions with a population density below 12,5 inhabitants/km² (weighting 2,5 %).

Allocation method for the Member States eligible for the Cohesion Fund under Article 90(3)

• 5.The total theoretical financial envelope shall be obtained by multiplying the average aid intensity per head and per year of EUR 48 by the eligible population. Each eligible Member State's a priori allocation of this theoretical financial envelope corresponds to a percentage based on its population, surface area and national prosperity, and shall be obtained by applying the following steps:

• (a) calculation of the arithmetical average of that Member State's population and surface area shares of the total population and surface area of all the eligible Member States. If, however, a Member State's share of total population exceeds its share of total surface area by a factor of five or more, reflecting an extremely high population density, only the share of total population will be used for this step;

• (b) adjustment of the percentage figures so obtained by a coefficient representing one third of the percentage by which that Member State's GNI per capita (measured in purchasing power parities) for the period 2008-2010 exceeds or falls below the average GNI per capita of all the eligible Member States (average expressed as 100 %).

• 6.In order to reflect the significant needs of Member States, which acceded to the Union on or after 1 May 2004, in terms of transport and environment, their share of the Cohesion Fund will be set at a minimum of one third of their total final financial allocation after capping as defined in paragraphs 10 to 13 received on average over the period.

• 7.The allocation from the Cohesion Fund for the Member States defined in the second subparagraph of Article 90(3) shall be digressive over seven years. This transitional support will be of EUR 48 per capita in 2014, applied to the total population of the Member State. The amounts in the following years will be expressed as a percentage of the amount defined for 2014, the percentages being 71 % in 2015, 42 % in 2016, 21 % in 2017, 17 % in 2018, 13 % in 2019 and 8 % in 2020.

Allocation method for the European territorial cooperation goal referred to in Article 4 of the ETC Regulation

• 8.The allocation of resources by Member State, covering cross-border and transnational cooperation, and including the contribution from the ERDF to the European Neighbourhood Instrument and the Instrument for Pre-Accession Assistance, is determined as the weighted sum of the share of the population of border regions and of the share of the total population of each Member State. The weight is determined by the respective shares of the cross-border and transnational strands. The shares of the cross border and transnational cooperation components are 77,9 % and 22,1 %.

Allocation method of the additional funding for regions referred to in point (e) of Article 92(1)

• 9.An additional special allocation corresponding to an aid intensity of EUR 30 per inhabitant per year will be allocated to the outermost NUTS level 2 regions and the northern sparsely populated NUTS level 2 regions. That allocation will be distributed per region and Member State in a manner proportional to the total population of those regions.

Maximum level of transfers from funds supporting cohesion

• 10.In order to contribute to achieving adequate concentration of cohesion funding on the least developed regions and Member States and to the reduction of disparities in average per capita aid intensities, the maximum level of transfer (capping) from the Funds to each individual Member State will be 2,35 % of the GDP of the Member State. The capping will be applied on an annual basis, subject to adjustments necessary to accommodate the frontloading of the YEI, and will - if applicable - proportionally reduce all transfers (except for the more developed regions and European territorial cooperation goal) to the Member State concerned in order to obtain the maximum level of transfer. For Member States which acceded to the Union before 2013 and whose average real GDP growth 2008-2010 was lower than -1 %, the maximum level of transfer will be 2,59 %.

• 11.The ceilings referred to in paragraph 10 above include the contributions from the ERDF to the financing of the cross-border strand of the European Neighbourhood Instrument and of the Instrument for Pre-Accession Assistance. Those ceilings do not include the specific allocation of EUR 3 000 000 000 for the YEI.

• 12.Calculations of GDP by the Commission will be based on the statistics available in May 2012. Individual national growth rates of GDP for 2014 to 2020, as projected by the Commission in May 2012, will be applied for each Member State separately.

• 13.The rules described in paragraph 10 shall not result in allocations per Member State higher than 110 % of their level in real terms for the 2007-2013 programming period.

Additional provisions

• 14.For all regions whose GDP per capita (in PPS) was used as an eligibility criterion for the 2007-2013 programming period and was less than 75 % of the EU-25 average, but whose GDP per capita is above 75 % of the EU-27 average, the minimum level of support in 2014-2020 under the Investment for growth and jobs goal will correspond every year to 60 % of their former indicative average annual allocation under the Convergence allocation, calculated by the Commission within the multiannual financial framework 2007-2013.

• 15.No transition region shall receive less than what it would have received if it had been a more developed region. In order to determine the level of this minimum allocation, the allocation distribution method for more developed regions will be applied to all regions having a GDP per capita of at least 75 % of the EU-27 average.

• 16.The minimum total allocation from the Funds for a Member State shall correspond to 55 % of its individual 2007-2013 total allocation. The adjustments needed to fulfil this requirement shall be applied proportionally to the allocations from the Funds, excluding the allocations under the European territorial cooperation goal.

• 17.To address the effects of the economic crisis on Member States within the euro area on their level of prosperity, and in order to boost growth and job creation in these Member States, the Structural Funds will provide the following additional allocations:

• (a) EUR 1 375 000 000 for the more developed regions of Greece;

• (b) EUR 1 000 000 000 for Portugal, distributed as follows: EUR 450 000 000 for more developed regions, of which EU 150 000 000 for Madeira, EUR 75 000 000 for the transition region and EUR 475 000 000 for the less developed regions;

• (c) EUR 100 000 000 for the Border, Midland and Western region of Ireland;

• (d) EUR 1 824 000 000 for Spain, of which EUR 500 000 000 for Extremadura, EUR 1 051 000 000 for the transition regions and EUR 273 000 000 for the more developed regions;

• (e) EUR 1 500 000 000 for the less developed regions of Italy, out of which EUR 500 000 000 for non-urban areas.

• 18.In order to recognise the challenges posed by the situation of island Member States and the remoteness of certain parts of the Union, Malta and Cyprus shall receive, after applying the method of calculation referred to in paragraph 16, an additional envelope of EUR 200 000 000 and EUR 150 000 000 respectively under the Investment for growth and jobs goal and distributed as follows: one third for the Cohesion Fund and two thirds for the Structural Funds.

• The Spanish regions of Ceuta and Melilla shall be allocated an additional total envelope of EUR 50 000 000 under the Structural Funds.

• The outermost region of Mayotte shall be allocated a total envelope of EUR 200 000 000 under the Structural Funds.

• 19.To facilitate the adjustment of certain regions either to changes in their eligibility status or to the long-lasting effects of recent developments in their economy the following additional allocations are made:

• (a) for Belgium EUR 133 000 000 , out of which EUR 66 500 000 for Limburg and EUR 66 500 000 for the transition regions of the Region of Wallonia;

• (b) for Germany EUR 710 000 000 , out of which EUR 510 000 000 for the former Convergence regions in the transition regions' category and EUR 200 000 000 for the Leipzig region;

• (c) notwithstanding paragraph 10, the less developed regions of Hungary will be allocated an additional envelope of EUR 1 560 000 000 , the less developed regions of the Czech Republic an additional envelope of EUR 900 000 000 and the less developed region of Slovenia an additional envelope of EUR 75 000 000 , under the Structural Funds.

• 20.A total of EUR 150 000 000 will be allocated for the PEACE programme, of which EUR 106 500 000 for the United Kingdom and EUR 43 500 000 for Ireland. That programme will be implemented as a cross-border cooperation programme involving Northern Ireland and Ireland.

Additional adjustments in accordance with Article 92(2)

• 21.In addition to the amounts set out in Articles 91 and 92, Cyprus shall benefit from an additional allocation of EUR 94 200 000 in 2014 and EUR 92 400 000 in 2015 to be added to its Structural Funds allocation.

ANNEX VIIa

METHODOLOGY FOR THE ALLOCATION OF THE REACT-EU RESOURCES – ARTICLE 92b(4)

Allocation method for the REACT-EU resources

The REACT-EU resources shall be distributed between the Member States according to the following methodology:

• 1. Each Member State’s provisional share from the REACT-EU resources is determined as the weighted sum of the shares determined on the basis of the following criteria, weighted as indicated:
• (a) A factor of GDP (weighting of 2/3) obtained by applying the following steps:
• (i) share of each Member State of the total loss of real seasonally adjusted GDP expressed in EUR between the first semester of 2019 and the end of the applicable reference period for all Member States considered;
• (ii) adjustment of the shares obtained under point (i) by dividing them with the Member State’s GNI per capita expressed as a percentage of the average GNI per capita of the EU-27 (average expressed as 100 %).
• (b) A factor of unemployment (weighting of 2/9) expressed as the weighted average of:
• (i) the share of the Member State in the total number of unemployed (weighting of 3/4) for all Member States considered in January 2020; and
• (ii) the share of the Member State in the total increase in the number of persons unemployed (weighting of 1/4) between January 2020 and the end of the applicable reference period for all Member States considered.
• (c) A factor of youth unemployment (weighting of 1/9) expressed as the average of:
• (i) the share of the Member State in the total number of young persons unemployed (weighting of 3/4) for all Member States considered in January 2020; and
• (ii) the share of the Member State in the total increase in the number of young persons unemployed (weighting of 1/4) between January 2020 and the applicable reference period for all Member States considered. If the Member State’s real seasonally adjusted GDP expressed in EUR for the applicable reference period is higher than in the first semester of 2019, that Member State’s data shall be excluded from the calculations in point (a)(i). If the number of people unemployed (age group 15 to 74) or young people unemployed (age group 15 to 24) in the Member State for the applicable reference period is lower than in January 2020, that Member State’s data shall be excluded from the calculations in points (b)(ii) and (c)(ii).

• 1. The rules set out in paragraph 1 shall not result in allocations per Member State for the whole period 2021 to 2022 higher than:
• (a) for Member States whose average GNI per capita (in PPS) for the period 2015-2017 is above 109 % of the EU-27 average: 0,07 % of their real GDP of 2019;
• (b) for Member States whose average GNI per capita (in PPS) for the period 2015-2017 is equal to or below 90 % of the EU-27 average: 2,60 % of their real GDP of 2019;
• (c) for Member States whose average GNI per capita (in PPS) for the period 2015-2017 is above 90 % and equal to or below 109 % of the EU-27 average: the percentage is obtained through a linear interpolation between 0,07 % and 2,60 % of their real GDP of 2019 leading to a proportional reduction of the capping percentage in line with the increase in prosperity. The amounts exceeding the level set out in points (a) to (c) per Member State are redistributed proportionally to the allocations of all other Member States whose average GNI per capita (in PPS) is under 100 % of the EU-27 average. The GNI per capita (in PPS) for the period 2015-2017 is the one used for cohesion policy in the MFF 2021-2027 negotiations.

• 1. For the purposes of calculating the distribution of the REACT-EU resources for the year 2021:
• (a) for the GDP the reference period shall be the first semester of 2020;
• (b) for the number of people unemployed and the number of young people unemployed the reference period shall be the average of June to August 2020;
• (c) the maximum allocation resulting from the application of paragraph 2 is multiplied by the share of the REACT-EU resources for the year 2021 in the total REACT-EU resources for the years 2021 and 2022. Before the application of the method described in paragraphs 1 and 2 concerning the REACT-EU resources for the year 2021, an amount of EUR 100 000 000 and EUR 50 000 000 shall be allocated to Luxembourg and Malta, respectively. In addition, an amount corresponding to an aid intensity of EUR 30 per inhabitant shall be allocated to the outermost NUTS level 2 regions from the allocation. That allocation will be distributed per region and Member State in a manner proportional to the total population of those regions. The additional allocation for the outermost regions shall be added to the allocation that every outermost region receives through the distribution of the national budget. The remaining amount for the year 2021 shall be distributed among Member States in accordance with the method described in paragraphs 1 and 2.

• 1. For the purposes of calculating the distribution of the REACT-EU resources for the year 2022:
• (a) for GDP the reference period shall be the first semester of 2021;
• (b) for the number of people unemployed and the number of young people unemployed the reference period shall be the average of June to August 2021;
• (c) the maximum allocation resulting from the application of paragraph 2 is multiplied by the share of the REACT-EU resources for the year 2022 in the total REACT-EU resources for the years 2021 and 2022.

ANNEX VIII

METHODOLOGY CONCERNING THE SPECIFIC ALLOCATION FOR THE YEI REFERRED TO IN ARTICLE 91

• I.The breakdown of the specific allocation for the YEI shall be determined in accordance with the following steps:

• 1. The number of young unemployed persons between the ages of 15-24 shall be identified in the eligible NUTS level 2 regions as defined in Article 16 of the ESF Regulation, namely NUTS level 2 regions that have youth unemployment rates for young persons aged 15 to 24 of more than 25 % in 2012 and, for Member States where the youth unemployment rate has increased by more than 30 % in 2012, regions that have youth unemployment rates of more than 20 % in 2012 (the ‘eligible regions’).

• 1. The allocation corresponding to each eligible region shall be calculated on the basis of the ratio between the number of young unemployed persons in the eligible region and the total number of young unemployed persons referred to in point 1 in all eligible regions.

• 1. The allocation for each Member State shall be the sum of the allocations for each of its eligible regions.

• II.The specific allocation for the YEI shall not be taken into account for the purpose of applying the capping rules set out in Annex VII in relation to the allocation of the global resources.

• III.For the determination of the specific allocation from the YEI to Mayotte, the youth unemployment rate and number of young unemployed persons shall be determined on the basis of the latest available data at national level as long as Eurostat data at NUTS level 2 are not available.

• IV.The resources for the YEI may be revised upwards for the years 2016 to 2020 in the framework of the budgetary procedure in accordance with Article 14 of Regulation (UE, Euratom) No 1311/2013. The breakdown by Member State of the additional resources shall follow the same steps as applied for the initial allocation but shall refer to the latest available annual data.

ANNEX IX

METHODOLOGY FOR DETERMINING MINIMUM SHARE OF THE ESF

The additional percentage share to be added to the share of Structural Funds resources referred to in Article 92(4) allocated in a Member State to the ESF which corresponds to the share of that Member State for the 2007-2013 programming period shall be determined as follows, based on employment rates (for persons between the ages of 20-64) of reference year 2012:

• — where the employment rate is 65 % or less the share shall be increased by 1,7 percentage points;

• — where the employment rate is above 65 % but not higher than 70 % the share shall be increased by 1,2 percentage points;

• — where the employment rate is above 70 % but not higher than 75 % the share shall be increased by 0,7 percentage points;

• — where the employment rate is above 75 %, no increase shall be required.

The total percentage share of a Member State after the addition shall not exceed 52 % of Structural Funds resources referred to in Article 92(4).

For Croatia the share of Structural Funds resources, excluding the European Territorial Cooperation goal, allocated to the ESF for the 2007-2013 programming period shall be the average share of convergence regions of those Member States which acceded to the Union on or after 1 January 2004.

ANNEX X

ADDITIONALITY

1. PUBLIC OR EQUIVALENT STRUCTURAL EXPENDITURE

In Member States in which less developed regions cover at least 65 % of the population, the figure on gross fixed capital formation reported in the Stability and Convergence Programmes, prepared by Member States in accordance with Regulation (EC) No 1466/97 to present their medium term budgetary strategy, will be used to determine public or equivalent structural expenditure. The figure to be used shall be that reported in the context of the general government balance and debt and related to general government budgetary prospects and shall be presented as a percentage of GDP.

In those Member States in which less developed regions cover more than 15 % and less than 65 % of the population, the total figure on gross fixed capital formation in the less developed regions will be used to determine public or equivalent structural expenditure. It shall be reported in the same format as laid down in the first subparagraph.

2. VERIFICATION

Verifications of additionality in accordance with Article 95(5) are subject to the following rules:

2.1   Ex ante verification

• (a)When a Member State submits a Partnership Agreement, it shall provide information on the planned profile of expenditure in the format of Table 1.

Table 1

Expenditure of the General Government as a share of GDP	2014	2015	2016	2017	2018	2019	2020
P51	X	X	X	X	X	X	X

• (b)Member States, in which less developed regions cover more than 15 % and less than 65 % of the population, shall also provide information on the planned profile of expenditure in those less developed regions in the format of Table 2.

Table 2

	2014	2015	2016	2017	2018	2019	2020
Gross Fixed Capital Formation of the General Government in the less developed regions as a share of GDP	X	X	X	X	X	X	X

• (c)Member States shall provide to the Commission information on the main macroeconomic indicators and forecasts underlying the level of public or equivalent structural expenditure.

• (d)Member States, in which less developed regions cover more than 15 % and less than 65 % of the population, shall also provide to the Commission information on the method used to estimate gross fixed capital formation in those regions. For this purpose, Member States shall use regional level public investment data where available. In the event that such data is not available, or in other duly justified cases, including where a Member State for the period 2014-2020 has significantly changed the regional breakdown as defined in Regulation (EC) No 1059/2003, gross fixed capital formation can be estimated by applying regional public expenditure indicators or regional population to national level public investment data.

• (e)Once there is agreement by the Commission and the Member State, Table 1 and, where applicable, Table 2 will be included in the Partnership Agreement of the Member State concerned as the reference level of the public or equivalent structural expenditure to be maintained in the years 2014-2020.

2.2   Mid-term verification

• (a)At the time of the mid-term verification, a Member State shall be deemed to have maintained the level of public or equivalent structural expenditure if the annual average of expenditure in the years 2014-2017 is equal to or higher than the reference level of expenditure set in the Partnership Agreement.

• (b)Following the mid-term verification, the Commission may revise, in consultation with a Member State, the reference level of public or equivalent structural expenditure in the Partnership Agreement if the economic situation of the Member State has significantly changed from that estimated at the time of adoption of the Partnership Agreement.

2.3   Ex post verification

At the time of the ex post verification, a Member State shall be deemed to have maintained the level of public or equivalent structural expenditure if the annual average of expenditure in the years 2014-2020 is equal to or higher than the reference level of expenditure set in the Partnership Agreement.

3. FINANCIAL CORRECTION RATES FOLLOWING EX POST VERIFICATION

Where the Commission decides to carry out a financial correction in accordance with Article 95(6), the rate of financial correction shall be obtained by subtracting 3 % from the difference between the reference level in the Partnership Agreement and the level achieved, expressed as a percentage of the reference level, and then dividing the result by 10. The financial correction shall be determined by applying that rate of financial correction to the Funds' contribution to the Member State concerned for the less developed regions for the full programming period.

If the difference between the reference level in the Partnership Agreement and the level achieved, expressed as a percentage of the reference level in the Partnership Agreement, is 3 % or less, no financial correction shall be made.

The financial correction shall not exceed 5 % of the Funds' allocation to the Member State concerned for the less developed regions for the full programming period.

ANNEX XI

Ex ante conditionalities

PART I:  Thematic ex ante conditionalities