On Monday 27 January, the Croatian Presidency of the Council of the European Union submitted compromise proposals on the Support Programme for Structural Reforms (see EUROPE 12031/7) and the governance framework for fiscal capacity for the euro area, two instruments that will be established from 2021 through the Multiannual Financial Framework (MFF) 2021-2027.
Open mainly to countries in the euro area and to those that have not adopted the single currency but are integrated into the 'ERM II' exchange rate mechanism, the programme was immediately renamed the 'Reform and Investment Support Programme'. It will aim to promote the territorial, social and economic cohesion of the Union and will support Member States' efforts in terms of administrative capacity.
In order to benefit from it, Member States will submit to the Commission a reform package annexed to their national stability and reform programmes submitted as part of the 'European Semester' budgetary process. They will have to explain how these reforms are consistent and compatible with those advocated in the annual and country-specific socio-economic policy recommendations. They will have to detail as concretely as possible which reforms will be implemented within four years and which investments will be undertaken within seven years of the decision to activate the programme.
The proposal does not set a budget allocation for the programme, although the European Commission envisages a total of €25 billion. The amounts will be determined in the MFF negotiation box.
The Croatian Presidency introduces in the Annex a complex methodology for calculating the maximum contribution per Member State on the basis of criteria such as population, GDP and Gross National Income.
See the Croatian compromise proposal on the Reform and Investment Support Programme: http://bit.ly/38ZBpn5
BICC. On the governance framework of the budgetary instrument for convergence and competitiveness (BICC), the Croatian compromise proposal specifies how the EU Council will define, on an annual basis, strategic orientations for reforms and investments in the framework of the socio-economic policy recommendation at euro area level.
The euro area summit could therefore set guidelines before the Commission presents its proposed recommendation for the euro area.
On the other hand, the Croatian proposal does not take on board the idea put forward by the Commission that the EU Council would provide annual guidelines for reform and investment on a country-by-country basis by adopting a specific recommendation.
Discussions on the modalities of fiscal capacity for the euro area are continuing within the Eurogroup (see EUROPE 12346/2). At the heart of the negotiations is the possibility for euro area countries that so wish to contribute above and beyond their contribution to the post-2020 EU budget, through an intergovernmental agreement that has yet to be drawn up.
See the compromise proposal on the governance framework for fiscal capacity for the euro area: http://bit.ly/2O6LcPS (Original version in French by Mathieu Bion)