POLICY
The European Union’s health and consumer policy focuses on issues that are of central importance to all European citizens – their health and safety and the availability of a wide range of food and consumer products in an efficient and secure internal market. EU policies in this area are designed to empower European consumers, to protect and improve the health of European citizens, to ensure that food is safe and wholesome, and to protect the health of plants and the welfare and health of animals.
The Commission has a particular responsibility to help protect and improve the health status and condition of animals in the Community, in particular food-producing animals, while facilitating intra-Community trade and imports of animals and animal products in accordance with the appropriate health standards and international obligations. Similarly, the EU supervises the marketing and use of plant protection products and sets standards to monitor and control pesticide residues. It implements preventative measures to guard against the introduction and spread of organisms harmful to plants or plant products within the EU. It also ensures quality conditions for the sale of seeds and propagating material within the EU. This task is carried out more efficiently and economically through the EU budget than through 27 different national budgets.
Promoting good health is an integral part of the smart and inclusive growth objectives of Europe 2020. Keeping people healthy and active for longer has a positive impact on productivity and competitiveness. Innovation in health care helps take up the challenge of sustainability in the sector in the context of demographic change.
Similarly, consumer policy contributes significantly to the efficiency of the European economy by empowering citizens to play a full role in the single market and strengthening their ability and confidence to buy goods and services cross-border, in particular on-line. With consumer expenditure accounting for 56% of EU GDP, an effective consumer policy can contribute actively to the Europe 2020 objectives.
Programmes funded as part of the EU’s health and consumer policy contribute to the well-being of European citizens. The added-value of EU health and consumer programmes lies in their capacity to tackle issues that could not be addressed as effectively by Member States acting alone. For example, activities to promote cross-border shopping or to respond to major challenges, diseases or pandemics affecting several Member States require a coordinated and coherent response. Similarly, animal and plant diseases do not respect national borders. Ensuring a uniform and high level of animal health and food safety throughout the EU enables the free movement of live animals and animal products, which is essential to the functioning of the single market, benefits consumers through greater choice and increased competition, and allows EU food producers to enjoy economies of scale.

INSTRUMENTS
The Commission proposes the following programmes to support the delivery of EU health and consumer policy.

>Health
Health for Growth Programme
The new Health for Growth programme will be oriented towards actions with clear EU added-value, in line with the Europe 2020 objectives and new legal obligations. The principal aim is to work with Member States to protect citizens from cross-border health threats, to increase the sustainability of health services and to improve the health of the population, whilst encouraging innovation in health. For example, the programme will support health policy by developing best practices and guidelines for the diagnosis and treatment of rare diseases, supporting European reference networks on diseases, developing best practices and guidelines for cancer screening and developing a common EU approach to health technology assessments and e-Health. Research and innovation actions in the area of health will be supported under the Common Strategic Framework for Research and Innovation.

Animal and Plant Health and Food Safety
The Animal and Plant Health and Food Safety programme focuses on the eradication of animal diseases, the emergency veterinary fund and related actions such as the financing of EU reference laboratories, training programmes and vaccine banks. The future programme will continue these activities with a strengthened emphasis on results. The programme will also fund additional and much-needed action to address the plant health pests and diseases which are becoming increasingly prevalent across the EU.

>Consumers
Consumers Programme
The Consumers programme will promote consumer empowerment as a key means to achieve a high level of protection throughout the single market. The programme will focus on improving the information flow to consumers and the representation of consumer interests. It will support the effective application of consumer protection rules, through cooperation between authorities and organisations responsible for their implementation, information, education and dispute resolution. The new programme will build on the positive results of the current programme with some refocusing to address key new priorities. In particular, the Commission proposes to increase the resources dedicated to alternative dispute resolution and to building capacity to advise consumers when shopping cross-border.

IMPLEMENTATION
The health and consumers budget is implemented through direct and indirect centralised management. Most of the food and feed budget is implemented by centralised direct management, notably by means of grants paid to Member State authorities.
In 2004, the Commission set up an Executive Agency for Health and Consumers to manage the Public Health Programme. The mandate of the Agency was enlarged in 2008 to cover the implementation of the Consumers programme and of food safety training measures financed under the food and feed budget. A number of other regulatory agencies are active in this area: the Community Plant Variety Office (CPVO), the European Centre for Disease Prevention and Control (ECDC), the European Food Safety Authority (EFSA) and the European Medicines Agency (EMA). The CPVO is totally self-financed by fees. The ECDC and EFSA are financed by an annual budgetary subsidy, while EMA receives a budget subsidy together with fees from the private sector. These bodies will be used to implement the new programmes in their areas of expertise.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €2.75 bn
of which
•Food Safety €2.2 bn
•Health for Growth Programme €396 million
•Consumers Programme €175 million

POLICY
The objective of the EU’s anti-fraud policy is to protect the financial interests of the European Union by preventing, deterring, investigating and ensuring the prosecution of fraud against the EU budget. The policy is implemented by the European Anti-Fraud Office (OLAF) which is part of the Commission but conducts investigations in full independence.
As a service of the Commission, OLAF administers the programmes described below in support of the Union’s anti-fraud policies. A specific strand of anti-fraud activity is the defence of the Euro against counterfeiting of notes and coins, which is central to the functioning of the single currency.

INSTRUMENTS
Three programmes are designed to coordinate the action of the Member States in combating fraud against the budget, in line with the duty of close and regular cooperation in Article 325 of the TFEU.
•The Hercule II programme promotes anti-fraud activity through enhancing transnational and multidisciplinary cooperation, training, specialist legal studies, the provision of other specialist anti-fraud services to Member State authorities with responsibilities in this area (police and customs agencies, public prosecutors, etc.), the building of professionals networks including acceding and candidate countries and the funding of technical equipment for the Member States. The Hercule programme has a particular role in supporting the fight against cigarette smuggling.
•The Anti-Fraud Information System (AFIS) provides a secure infrastructure for the exchange of fraud-related information among Member States and between Member States and the Commission. This infrastructure also enables joint customs operations involving Member States and third countries which coordinate the resources of different services against high-risk targets of common concern.
•The Pericles programme dedicated to the protection of the Euro against counterfeiting provides for staff exchanges, assistance and training programmes. The fight against Euro counterfeiting has been successful as a result of a coherent set of measures with an emphasis on close co-operation between all actors involved at national and European level, as well as training and awareness-raising.
In addition to the specific spending programme for anti-fraud, greater coherence in anti-fraud provisions across the whole range of spending programmes will help ensuring that the Union’s commitment to fight against fraud is implemented effectively. Anti-fraud provisions will therefore be included in each legal basis for the new generation of programmes 2014-2020.

IMPLEMENTATION
Evaluations of the previous Hercule programmes have shown significant impact in terms of improvements in the level of technical equipment employed by Member States, facilitation of cross-border operations, and quality of evidence. Contacts between specialist law enforcement officers have been reinforced. Legal studies focussed on specific issues relating to cross-border anti-fraud operations have strengthened the basis for cooperation.
Use of AFIS in Member States has increased substantially following the introduction of new technology in 2010. Further improvements are planned, in particular facilitating risk analysis. Capacity to conduct joint customs operations will be increased.
The Pericles programme has contributed to the relatively low level of counterfeiting of Euro notes and coins and successful actions stopping counterfeits even before they enter into circulation. With about 110 actions and almost 6,000 officials trained, Pericles is an important part of the set of measures protecting the Euro against counterfeiting
These programmes are implemented through grants and public procurement.
The proposal for all three programmes is to improve the present approach in the light of experience, consistent with the Commission’s Anti-Fraud Strategy, while maintaining appropriate levels of spending.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020
for HERCULE, PERICLES and AFIS €150 million

POLICY
The European Union is a global player by virtue of its population and economic power. With 500 million inhabitants, it accounts for over 25% of the world’s gross domestic product and a fifth of global trade. The Union is also an active political player, with regional (in particular in its neighbourhood) and global security interests and responsibilities. In particular, it shows solidarity by providing more than half of all international development aid and is the world’s biggest donor of humanitarian assistance. It is actively involved in protecting human rights, promoting a decent work agenda, other universal values and respect of international environmental and social conventions.
The EU is increasingly active in conflict prevention, crisis management and peace building, through EU-led crisis management missions and EU crisis response and stabilisation instruments. The EU also supports UN and African Union peacekeeping and peace-restoring missions in fragile or war-torn countries. Moreover, the EU is committed to supporting the multilateral system and its reform, the Doha multilateral trade negotiations, the UNFCCC (United Nations Framework Convention on Climate Change) negotiations on climate change, the CBD (Convention on Biological Diversity) negotiations on biodiversity, negotiations on other multilateral agreements, G-8 and G-20 reforms and the global governance agenda.
External policies are therefore a major field of action for the EU, which has been reinforced within the new institutional framework of the Lisbon Treaty.
The EU uses financial instruments for external relations to support the implementation of these external policies, in particular in:
(1)Promoting and defending EU values abroad. Putting human rights, democracy and the rule of law at the core, recent events in different parts of the world call for a review of EU assistance to transitional and democratic processes and to civil society.
(2)Projecting EU policies in support of addressing major global challenges such as combating climate change, reversing biodiversity loss, and protecting global public goods and resources should be further strengthened. The Commission proposes to develop a proactive agenda of EU and mutual interests with third countries, with a specific focus on strategic partners.
(3)Increasing the impact of EU development cooperation, with the primary aim of helping to eradicate poverty. The EU will concentrate aid on those areas where the EU has particular expertise to offer, differentiating among partner countries and regions to ensure that aid resources are allocated according to needs, capacities, interests and commitments; improve aid coordination and policy coherence for development; and ensure adequate financing for development. A pan-African instrument will be created to support the implementation of the Joint Africa Europe Strategy, focusing on the clear added value of cross regional and continental activities. It will be flexible enough to accommodate contributions from EU Member States, African States, financial institutions and the private sector.
(4)Investing in the long-term prosperity and stability of the EU’s Neighbourhood. The aim of establishing an area of stability, prosperity and democracy will be pursued both through preparing (potential) candidate countries for membership and through our renewed neighbourhood policy. The EU will be active in supporting democratic values and principles in its neighbourhood and a more equitable distribution of the benefits of growth through greater political cooperation and deeper economic integration to the south and the east.
(5) Enhancing European solidarity following natural or man-made disasters. Upholding the internationally agreed principles of humanitarian law and upgrading its capacity, in humanitarian aid and civil protection, the EU budget will support actions to anticipate, prepare for, prevent and respond more quickly to disasters and engage more flexibly in development actions to rebuild from crisis and to develop resilience for the future.
(6) Improving crisis prevention and resolution. EU action on crisis prevention and resolution, preserving peace and strengthening international security, including enhancing EU capacities for crisis preparedness will be increased.
An open Europe, operating within a rules-based international framework, is the best route to exploiting the benefits of globalisation that will boost growth and employment.

INSTRUMENTS
The Commission proposes the following structure for the EU’s future external action instruments:

>Development cooperation
The Commission proposes to build on the current Development Cooperation Instrument (DCI) as regards its geographic and thematic scope. It proposes that the European Development Fund (EDF) covering cooperation with ACP (African, Caribbean and Pacific countries) and OCT (Overseas countries and territories) should remain outside the budget for the period of the next MFF.

>Instrument for enlargement countries
A single integrated pre-accession instrument is proposed as the financial pillar of the Enlargement Strategy, encompassing all dimensions of internal policies and thematic issues. The aim will be to ensure that candidate countries and potential candidates are fully prepared for eventual accession. Emphasis will be put on socio-economic development, on regional cooperation, on adopting and implementing the acquis, and on preparing for managing internal policies upon accession. It will be implemented through national/multi-beneficiary programmes agreed with the beneficiaries and will also mirror the Structural Funds, the Cohesion Fund and the European Agricultural Fund for Rural Development (EAFRD), including their refocusing on delivering public goods. In addition, political and financial crisis-related instruments (Macro Financial Assistance, Instrument for Stability) will continue to be available for use in enlargement countries, when needed.

>European Neighbourhood Instrument (ENI)
The European Neighbourhood Instrument (ENI) will benefit the EU’s neighbouring countries supporting deeper political cooperation, closer economic integration with the EU and support to effective and sustainable transition to democracy. Cooperation with the EU’s neighbours will be based on the principle ‘more for more’, in line with the conclusions of the Commission Communication ‘A new response to a changing neighbourhood’. The ENI will provide the bulk of the EU funding to the Neighbourhood and will be complemented by other external instruments as required.15

>Partnership Instrument
This new programme will provide ad hoc support for cooperation with all third countries (non-developing and developing) with a specific focus on strategic partners / emerging economies. It will finance activities to support the projection of EU policies abroad through bilateral cooperation and common approaches to challenges, economic partnerships and business cooperation, public diplomacy activities and networks, people-to-people links; the conduct of policy discussions and joint activities with individual partner countries; and the promotion of trade and investment and regulatory convergence with strategic partners.

>Promotion of human rights worldwide
A reinforced European Instrument for Democracy and Human Rights (EIDHR) will focus on two activities. First, there will be strengthened support for the development of thriving civil societies and to their specific role as actors for change and in support of human rights and democracy. This will include a reinforced capacity for the EU to react promptly to human rights emergencies as well as stronger support to international and regional human rights observations and mechanisms. Second, support will be given to electoral observation missions and improvement in electoral processes.

>Solidarity and aid for populations confronted by natural and man-made disasters
Humanitarian Assistance and Civil Protection will be strengthened and continue to follow a needs-based and principles-based approach.
–The Humanitarian Aid Instrument will provide response to natural and man-made disasters, based on the international principles of humanitarian law, and through the use of specialised organisations.
–The Civil Protection Mechanism will respond to natural and man-made disasters in third countries through coordination of civil protection agencies of EU Member States.

>Crisis prevention and management
There are several strands to the EU’s work in this area:
•Reaction to crises through the Instrument for Stability (IfS), including natural disasters, focusing on conflict prevention, peace building and state building. Its long term capacity will address global and trans-regional threats such as proliferation of weapons of mass destruction, the fight against terrorism and organised crime, prevention of illicit trafficking, etc.
•Addressing the short term financing needs of countries subject to stabilisation and adjustment programmes through Macro-Financial Assistance (MFA).
•Promoting nuclear safety in support of international regulations through the Instrument for Nuclear Safety Cooperation (INSC). The objective will be to support the promotion of a high level of nuclear safety, radiation protection and the application of efficient and effective safeguards of nuclear material in third countries.
•In addition, the Common Foreign and Security Policy budget will support actions without military and defence implications.

IMPLEMENTATION
Implementation of the new programmes will be further simplified, in particular to embrace aid effectiveness. The new instruments will, where appropriate, embed mutual accountability in the allocation and disbursement of funds. Increasing synergies in the use of external funds for multiple EU policy objectives will be sought, e.g. for delivering on the EU’s poverty reduction and climate and biodiversity finance commitments.
Increased flexibility in external actions will also be proposed. Budget mechanisms outside the financial framework for coping with large unforeseen events will be reinforced (Emergency Aid Reserve, Flexibility Instrument).
Simplification will be delivered through a clearer delineation and a reduction of overlaps between the instruments, so as to identify them individually with clearly defined policy objectives. Simplification of rules and procedures for the delivery of EU assistance will also be proposed, notably for programming to be conducive to joint action with Member States.
Further use of innovative financial instruments is proposed under all instruments (in particular through regional investment facilities), which should allow a greater share of grants to be blended with loans, so as to mobilise additional funding to cover the investment needs of partner countries.
It is considered that democratic scrutiny of external aid must be improved. This could be achieved by the use of delegated acts in accordance with Article 290 of the Treaty for certain aspects of programmes, not only placing the co-legislators on an equal footing but also ensuring more flexibility in programming. For the EDF, it is proposed to bring scrutiny into line with the DCI, whilst taking into account the specificities of this instrument.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €70 bn
of which
•Development Cooperation Instrument €20.6 bn
•Pre-accession instrument €12.5 bn
•European Neighbourhood Instrument €16.1 bn
•Partnership Instrument €1 bn
•Instrument for Stability €2.5bn
•European Instrument for Democracy and Human Rights €1.4 bn
•Common Foreign and Security Policy €2.5 bn
•Humanitarian Aid Instrument €6.4 bn
•Civil Protection and Emergency Response Capacity €0.2 bn
•European Voluntary Humanitarian Aid Corps €0.2 bn
•Instrument for Nuclear Safety Cooperation €0.56 bn
•Macro-financial Assistance €0.6 bn
•Guarantee Fund for External Actions €1.26 bn
Emergency Aid Reserve €2.45 bn
Total proposed budget under 11th EDF €30.3 bn

15) Russia will continue to benefit from the cross-border and regional cooperation support under the ENI

POLICY
The European Union’s environmental policy contributes to the Europe 2020 objectives of smart, sustainable and inclusive growth. Investments in environmental protection are investments in the modernisation of our societies and will help to transform Europe into a knowledge-based, resource-efficient economy. They are indispensable for protecting and improving the quality of the environment.
Greening the economy entails reducing environmental costs through the more efficient use of resources, thereby contributing to growth, competitiveness and job creation. Protecting biodiversity – our natural capital – and strengthening the resilience of ecosystems will make an important contribution to our sustainable growth objectives. Ecosystems provide food, fresh water, raw materials and many other benefits, thereby contributing to productivity and quality of life and reducing public health bills. The restoration of ecosystems and the services they provide contribute to the green economy through new skills, jobs and business opportunities, by boosting innovation and by contributing to climate change challenges mitigation and adaptation.
The value added of working together at European level to achieve common environmental goals is widely recognised, since environmental issues are not confined within national borders. Working closely with the EU’s neighbours and with emerging economies is a prerequisite for a greener Europe. Environmental sustainability is also one of the Millennium Development Goals, to which the EU is committed.
In addition to the benefits of European environmental legislation, the EU budget can contribute to environmental objectives, both through dedicated programmes and by ensuring that environmental objectives are firmly embedded in all the activities supported by the EU budget.

INSTRUMENTS
>Mainstreaming
Environmental policy priorities will be ‘mainstreamed’ into all the major EU funding instruments, including cohesion, agriculture, maritime and fisheries, research and innovation, as well as into external aid programmes. This approach will maximise synergies between environmental policies and other areas, recognising that the same actions can and should pursue a variety of complementary objectives. This approach will also help to avoid a proliferation of programmes and to minimise administrative burden.
•Agriculture. A major objective of the reform of the Common Agricultural Policy (CAP) is to promote environmental objectives through the greening of direct payments to farmers. 30% of direct payments will be made conditional on respect for a range of environmental best practices, over and above existing cross-compliance obligations. In addition, rural development under the CAP will be further re-focused on delivering public goods, including through agri-environment measures. These measures will help to ensure that the EU agricultural sector is sustainable and a key provider of environmental public goods such as clean water, biodiversity, soil protection, cleaner air and landscape protection. This will also contribute to the achievement of the EU’s climate objectives, both on mitigation and adaptation.
•Maritime and Fisheries Policy. Environmental sustainability will be at the heart of the future maritime and fisheries policy. This will be achieved inter alia through reducing overfishing and overcapacity and reducing direct impacts (such as by-catch or impact on the sea bottom), as well as supporting marine-protected areas. The Integrated Maritime Policy will further define the boundaries of sustainability of human activities that have an impact on the marine environment as part of the implementation of the Marine Strategy Framework Directive.
•Cohesion policy. Cohesion policy will be given a stronger focus on the Europe 2020 priorities, including making the EU a more resource efficient, green and competitive economy. This will be achieved through a strong focus on results and conditionality, including in relation to environmental objectives. These objectives include promoting the implementation of the environmental acquis (water, waste, marine, nitrates, Industrial Emissions Directive, air quality, flood legislation) and funding the related environmental infrastructure; protecting and restoring biodiversity and ecosystem services, including through the development of green infrastructures and reducing and preventing desertification. Environmental proofing will be strengthened as part of cohesion policy.
•Research and innovation. The new Common Strategic Framework for Research and Innovation will contribute to catalysing the scientific and technological breakthroughs needed for the transition to a resource efficient economy. Continuing financial support for eco-innovation more broadly will also help to deliver smart and sustainable growth. Innovation partnerships will have a direct impact on resource efficiency, for instance on water, ecosystems, raw materials, and smart cities.
•In external action, the Pre-Accession Instrument will help candidates to finance the environmental infrastructure and capacity building needed to respect the EU acquis. Through policy dialogue at the regional and national level, the Commission will continue to mainstream support for environment under the European Neighbourhood Instrument. Environment should also be further mainstreamed into aid programmes for developing countries. Biodiversity and ecosystems are key global public goods and will be part of the planned thematic programme for global public goods and challenges. The Lisbon Treaty gives the EU a stronger role to play in multilateral environmental agreements and international environmental governance, which will be reflected in enhanced funding.

>A dedicated instrument for Environment and Climate Action
In addition to mainstreaming, the Commission proposes to continue the LIFE+ programme and to align it more closely to Europe 2020 objectives. As is the case under the current programming period, the new instrument will cover within one programme a variety of actions in the areas of environment and climate action.
Under the Environment sub-programme12, the instrument will focus on two types of project: new Integrated Projects, the number and financial share of which will gradually increase over the lifetime of the programme; and “traditional” projects. The Commission considers that integrated projects can play an essential role as a catalyst for achieving goals such as the protection and restoration of biodiversity and ecosystems, effective management of the Natura 2000 network, the promotion of environmental governance, waste and water management and to effectively mobilise other funds to these ends. Projects will continue to be selected for their EU added value and potential for transfer of know-how.
LIFE Integrated Projects are designed to demonstrate the sustainable implementation of environmental action plans13 relating to major EU environmental directives, such as the Habitats Directive or the Water Framework Directive. Integrated Projects will support a series of specific activities and measures. Additional funding for these projects will be sourced from other EU funding programmes as well as national, regional and private sector funds and will be jointly directed towards the environmental objectives. LIFE funding would thus act as a catalyst, ensuring consistency and a strategic environmental focus, exploiting synergies to the full and more structured cooperation with other EU funds will be established through the Common Strategic Framework.
The Environment sub-programme will be organised according to the following priorities:
(a)LIFE Biodiversity, while still focusing on Natura 2000 and on the development and sharing of best practices in relation to biodiversity, will also target wider biodiversity challenges in line with the Europe 2020 biodiversity strategy target to maintain and restore ecosystems and their services;
(b)LIFE Environment will focus on supporting the implementation of EU environmental policy by the public and private sectors and in particular the implementation of environmental legislation relevant to the Europe 2020 resource efficiency objectives (such as the Water Framework Directive or the Waste Framework Directive).
(c)LIFE Governance will support the creation of platforms for the exchange of best practices for improved compliance with EU environmental policy priorities and enforcement, policy development and knowledge-based decision-making (e.g., wide dissemination of project results), with an emphasis on good governance. This strand will also support environmental NGOs and promote awareness-raising, advocacy and dissemination of environmental information, as these are inextricably linked to achieving good governance and full implementation and compliance.

>Financing biodiversity
Financing the EU Biodiversity Strategy to 202014 requires mainstreaming biodiversity throughout the EU budget, both within the EU via the main funding instruments and through external action funding. To increase the efficiency of EU spending, it is also important to maximise synergies with climate finance through funding ecosystem-based adaptation and mitigation projects that also provide wider ecosystem services, both within the EU and externally.
The effective management and restoration of Natura 2000 protected areas is central to the attainment of the Europe 2020 target of halting and reversing the decline of biodiversity in the EU set by the European Council in 2010. At EU level, a strengthened integrated approach using the various EU sectoral funds, ensuring their consistency with the priorities of the Natura 2000 action frameworks, together with an enhanced LIFE Biodiversity strand, will provide a strong basis for the new Natura 2000 financing strategy.
Externally, the EU committed itself, along with other participating parties, at the 10th meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD COP10) in October 2010 in Nagoya, to increasing substantially the mobilisation of financial resources for global biodiversity by 2020. Funding from the EU budget will be provided through the geographic and regional allocations of the EU’s external action programmes as well as through the thematic programme for global public goods.
In addition to mainstreaming biodiversity into the external action budget, the Commission is also proposing the creation of a mechanism/fund outside the budget to pool together contributions from the Member States and the EU budget.

IMPLEMENTATION
>Mainstreaming
Mainstreaming will be delivered via the structures and instruments described elsewhere in the sectoral policy fiches. In order to ensure the delivery of results, there will be clearly established benchmarks, monitoring and reporting rules for all relevant EU policy instruments, with appropriate indicators.
To maximise synergies between different policy objectives, a tracking procedure for environment-related expenditure similar to that proposed for climate-related expenditure is envisaged.
As regards biodiversity, the ‘Rio markers’ established by the OECD and already used by the Commission for external instruments will be integrated in the existing methodology for measuring performance used for EU programmes. They will also help to demonstrate the co-benefits of climate and biodiversity expenditures, and to highlight the biodiversity co-benefits of climate spending on REDD+ (Reducing Emissions from Deforestation and Forest Degradation) actions.

>A specific instrument for Environment and Climate Action
The current LIFE+ programme is managed by the Commission in direct centralised management mode. The Commission considers that the future programme should remain centrally managed, but that management tasks could to a large extent be delegated to an existing executive agency. The extent, conditions and terms of the delegation will have to take into account the need for the Commission to maintain strong policy links as regards Integrated Projects.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices. Excludes funds for mainstreaming which are included within the budgetary allocations for sectoral funding instruments.
LIFE+ Programme (environment sub-programme) €2.4 bn

12) See separate fiche on Climate Action policy for the proposed features of the Climate Action sub-programme.
13) Environmental action plans are plans or programmes for the implementation of a specific environmental policy as required by EU environment Directives (e.g., a Prioritised Action Framework under the Habitats Directive, a River Basin Management Plan under the Water Framework Directive, waste minimisation plan under the Waste Framework Directive, air pollution abatement plan to meet the air quality requirements of the CAFÉ legislation, etc.) or developed by the authorities in line with EU recommendations (e.g., a sustainable urban plan, integrated coastal zone management plans etc.).
14) COM(2011) 244.

POLICY
The European Union faces considerable challenges in the employment and social fields. Almost 23 million people are today unemployed and over 113 million are estimated to be living at risk of poverty or exclusion8. Social and employment issues are a primary concern of European citizens and an area where more is expected from the Union. Despite a recent improvement in the economic outlook, employment prospects remain mixed in the medium term, among other things due to the uneven situation among Member States and the expected pressures on economic restructuring coming from the global economy.
Unemployment and persistently high rates of poverty call for comprehensive action. Policies that have already been put in place need to be updated and strengthened as the Union is faced with pressing challenges: shortfalls in skill levels, under-performance in active labour market policy and education systems, social exclusion of marginalised groups and low labour mobility. Many of these challenges have been exacerbated by the financial and economic crisis, demographic and migratory trends and the fast pace of technological change. Unless tackled effectively, they constitute a significant threat to social cohesion and competitiveness.
The main responsibility for modernising labour market and social policy systems lies with the Member States. However, the EU adds value to their efforts by acting as a catalyst to promote and facilitate reform, providing funding notably through the European Social Fund and by empowering social partners, civil society organisations and other stakeholders who have a crucial role to play in the delivery of reform.

INSTRUMENTS
A European employment and social inclusion initiative will be set up through joint action in the fields of education and vocational training, employment and inclusion. Funding in this area will be delivered essentially through three main instruments. These will be fully aligned with the Europe 2020 objectives and their delivery improved through enhanced complementarity with other instruments and the simplification of relevant procedures.

>The European Social Fund
The European Social Fund (ESF) will provide funding for structural actions for economic, social and territorial cohesion. Funding will be concentrated on the key priorities of the Europe 2020 strategy, in particular through four ‘investment windows’:
–employment promotion;
–investment in skills, education and life-long learning;
–social inclusion and the fight against poverty; and
–enhancing institutional capacity and efficient public administration.
Within these windows, the ESF will also contribute to other policy objectives, such as facilitating the transition to a low-carbon and resource efficient economy, promoting research and innovation, especially in the social area, strengthening gender equality and combating discrimination. It is proposed to regroup actions, in particular in favour of social inclusion, by transferring the scheme of food support for the most deprived persons to the ESF.
For the post-2013 period, the ESF will be covered by the Common Strategic Framework (CSF) for structural funds 9). Funding will be programmed as part of the Partnership Contracts which will be negotiated with the Member States. The targets set will be aligned with the National Reform Programmes and will translate the agreed objectives into decisions on investment.
To strengthen the focus on results, a conditionality mechanism, based on a comprehensive set of ex-ante defined requirements, will be put in place to maximise the impact of the EU budget and trigger and support the necessary reforms in the Member States.
In order for the ESF to make a real contribution to the Europe 2020 strategy targets, a critical mass of funding is required both at EU level and at the level of the operational programmes. The necessary minimum share of cohesion policy investments allocated to the ESF will be tailored to the different categories of region reflecting the different intensities of aid they receive and challenges that they face: this will be done by establishing minimum shares for the ESF of the structural funds support for each category of region (25% for convergence regions, 40% for transition regions, 52% for competitiveness regions, based on the Cohesion Fund continuing to represent one third of the cohesion policy allocation in eligible Member States, and excluding territorial co-operation). The application of these shares result in a minimum overall share for the ESF of 25% of the budget allocated to cohesion policy.
Within these windows, the ESF will also contribute to other policy objectives, such as facilitating the transition to a low-carbon and resource efficient economy, promoting research and innovation, especially in the social area, strengthening gender equality and combating discrimination. It is proposed to regroup actions, in particular in favour of social inclusion, by transferring the scheme of food support for the most deprived persons to the ESF.
For the post-2013 period, the ESF will be covered by the Common Strategic Framework (CSF) for structural funds 9). Funding will be programmed as part of the Partnership Contracts which will be negotiated with the Member States. The targets set will be aligned with the National Reform Programmes and will translate the agreed objectives into decisions on investment.
To strengthen the focus on results, a conditionality mechanism, based on a comprehensive set of ex-ante defined requirements, will be put in place to maximise the impact of the EU budget and trigger and support the necessary reforms in the Member States.
In order for the ESF to make a real contribution to the Europe 2020 strategy targets, a critical mass of funding is required both at EU level and at the level of the operational programmes. The necessary minimum share of cohesion policy investments allocated to the ESF will be tailored to the different categories of region reflecting the different intensities of aid they receive and challenges that they face: this will be done by establishing minimum shares for the ESF of the structural funds support for each category of region (25% for convergence regions, 40% for transition regions, 52% for competitiveness regions, based on the Cohesion Fund continuing to represent one third of the cohesion policy allocation in eligible Member States, and excluding territorial co-operation). The application of these shares result in a minimum overall share for the ESF of 25% of the budget allocated to cohesion policy.
Promoting intra-EU labour mobility and improving access to employment opportunities, in particular for young people, building on the activities of the EURES network;
•Supporting entrepreneurship and self-employment as a means of creating jobs and combating social exclusion by increasing the availability and accessibility of micro-finance for vulnerable groups, micro-enterprises and the social economy, building on the Progress Micro-finance Facility.

>European Globalisation Adjustment Fund
Specific support to workers made redundant as a result of major structural change will be provided through the European Globalisation Adjustment Fund (EGF).
Through the EGF, the EU will continue to assist the Member States in providing tailor-made support for workers made redundant as a result of major structural changes triggered by the increasing globalisation of production and trade patterns. In addition, the EGF will address large-scale redundancies resulting from a serious disruption of the local, regional or national economy caused by a sudden and unexpected crisis. The EGF will aim to achieve a 50% rate of assisted workers finding a new and stable job after 12 months 10).
The Commission will propose to extend the scope of the EGF to provide compensation in certain cases for the consequences of globalisation on certain agricultural sectors.

>Autonomous budget lines
In addition to these instruments and by virtue of the powers conferred on it by the Treaty, the Commission will continue to implement autonomous budget lines11 in order to:
–facilitate the European social dialogue which is a crucial component of the European social model;
–analyse and evaluate major trends in national legislation on free movement of persons and promote coordination of national social security systems; and
–analyse the social situation and the impact of demographic change.

IMPLEMENTATION
The reduction in the number of financial instruments and budget lines and the streamlining of management and implementation methods and systems will allow for greater integration between instruments and bring considerable simplification, notably for the beneficiaries.

>The European Social Fund
The implementation of the ESF will focus on combining a stronger results-based approach, through the incorporation of the ESF within the Common Strategic Framework for all shared management instruments and the Partnership Contracts negotiated with Member States.
Implementation will also be simplified. More use will be made of simplified cost options, in particular for small projects, thereby reducing the administrative burden on Member States and regions and facilitating access to funding for local initiatives. Closer linkage of payments to achievement of targets pre-defined in the Partnership Contracts will also be enabled on the basis of joint action plans.
Finally, result-based incentive mechanisms will be introduced to reward successful programmes and measures and stimulate changes in those that under-perform.

>An integrated programme (direct management) for employment, social policy and inclusion
The new integrated programme for employment and social inclusion will be directly managed by the Commission. The main procedures include calls for tender, calls for proposals and joint management – in particular for implementing the microfinance facility in collaboration with the European Investment Fund. The new programme will focus on large projects with clear EU added value in order to reach critical mass and reduce administrative burden. Harmonised and simplified rules and procedures will be put in place to facilitate access to the programme, in particular for small organisations.
In addition, multi-annual programming will be put in place to set out long-term policy objectives together with annual funding, thereby ensuring that the programme is a genuine policy-driven instrument. The programme will be implemented through a results-based management approach based on regular monitoring of progress against clear indicators.

>Support for workers made redundant
The mobilisation of the EGF will continue to require a decision of the budgetary authority. The Commission will seek to ensure that the operation of the EGF becomes simpler and more responsive to changing economic circumstances.

>Autonomous budget lines
The implementation of the autonomous budget lines will be fully coordinated with both instruments to avoid overlap and to increase synergies. Their number will be reduced and larger projects will be given priority in order to achieve critical mass and reduce administrative burden.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €88.3 bn
of which
•European Social Fund (based on the 25/40/52 formula per category of regions, resulting in 25% of the cohesion envelope, except the Connecting Europe Facility) €84 bn
•Integrated Policy for Employment, Social Policy and Inclusion €850 million
•European Globalisation Adjustment Fund €3 bn
•Autonomous Budget Lines €400 million

8) Eurostat unemployment report 10 May 2011 and Eurostat data on Europe 2020 indicators, 20 May 2011
9) The CSF will cover the ESF, the European Regional Development Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund.
10) Experience so far suggests that the reintegration rate is around 40 % after 12 months and further positive impact can be observed over a longer period of time.
11) As set out in the Financial Regulation, these actions do not require a specific basic act for their implementation. Their financial appropriations are allocated by the Budgetary Authority on an annual basis.

POLICY
Education and training are essential to the development and growth of the European economy and will play a crucial role in the collective pursuit of the Europe 2020 targets. Increased investment in human capital and the modernisation of education and training systems will help the EU to become a smart, sustainable and inclusive economy.
Much of this investment will be made at national level. However, with increasing numbers of European citizens looking beyond national borders for education and training opportunities, the EU has an important role to play in ensuring that the opportunities of the single market are made available to all.
The EU works to promote education and training in a wide variety of ways. Programmes to promote transnational learning mobility – such as the Erasmus programme – have proven to be a great success, helping people to acquire the new skills that will be needed for the jobs of tomorrow. Increased mobility can also contribute to the reform of education and training systems by facilitating the cross-border dissemination of ideas and best practices. Through a combination of targeted funding programmes and in combination with other sources of funding, such as the structural funds, the EU budget can deliver real value-added by promoting mobility, facilitating cooperation and exchange of best practice and supporting Member States in the modernisation of their education and training systems.
Europe’s cultural diversity is one of our greatest strengths, enriching and inspiring citizens and delivering real economic benefits. The economic and social role of the cultural and creative industries is increasingly evident, representing 4.5% of total European GDP in 2008 and accounting for some 3.8% of the workforce. The EU works in close co-operation with Member States in this area to harness the potential of the single market and to provide the right conditions for cultural and creative industries to prosper.
The next generation of programmes funded by the EU budget will address the weaknesses that limit the growth potential of this sector, by tackling market fragmentation, strengthening competitiveness in the cultural and audiovisual sectors, and focusing on capacity building measures and support for the circulation of cultural works.

INSTRUMENTS
The Commission proposes that the EU budget will support education and cultural policy via two main instruments:
>A programme for education, training and youth – ‘Education Europe’
This programme will bring together the currently separate sub-programmes of the Lifelong Learning Programme, the international aspects of Higher Education, including Erasmus Mundus, and Youth in Action. This will allow for greater efficiency, a stronger strategic focus and for synergies to be exploited between the various aspects of the programme.
Although they constitute the most efficient education degrees for innovative jobs and research, the current EU instruments for mobility are not adapted to masters’ students. The most cost efficient manner to reach this category of students is to use the EU budget to leverage funds from the private sector, mainly national banks, to guarantee the portability of student loans and grants.
The actions currently supported by the Leonardo programme will be boosted as part of efforts to combat youth unemployment and the Commission will work with the EIB to provide guarantees for loans to Master students wishing to do their Masters in another Member State.
The new programme will focus on:
–
providing targeted transnational learning opportunities;
–
matching skills and labour market demand in order to boost the employability, entrepreneurial spirit and participation of young people;
–
volunteering as well as non-formal and informal learning; and
–
supporting widespread reforms and the modernisation of education and training systems throughout Europe and beyond.
Concretely, the programme will comprise three main lines of action:
(1)
Trans-national learning mobility – as many as 800,000 EU citizens, mainly students, could be helped to be mobile each year.
(2)
Co-operation activities between education institutions and the world of work will be supported to promote the modernisation of education, innovation and entrepreneurship.
(3)
Policy support will be provided to gather evidence on the effectiveness of education investments and to help Member States implement effective policies.
Strict quality conditions for mobility, concentration on key policy objectives where critical mass can be achieved and complementarity with other EU programmes will be instrumental in ensuring very high European added value.
The Education Europe programme will incorporate existing international programmes such as Erasmus Mundus, Tempus, Alfa and Edulink and cooperation programmes with industrialised countries under the same instrument, and will accommodate different objectives (attractiveness of European Higher Education Area, excellence, solidarity and equity).
This approach will put an end to the current fragmentation of EU instruments supporting international cooperation in higher education which makes it difficult for students and universities to get access to information on Europe’s higher education opportunities and for EU higher education to be visible on the global scene.

>Sport
As part of the Education Europe programme, the proposed Sport sub-programme will focus on:
•tackling transnational threats that are specific to sport such as doping, violence, racism and intolerance, or issues relating to the integrity of competitions and sportspersons;
•developing European cooperation in sport through, for example, guidelines for dual careers of athletes or benchmarks for good governance of sporting organisations; and
•supporting grassroots sports organisations which can play a role in addressing wider socioeconomic challenges such as social inclusion.
This programme will bring EU added-value to issues arising from the specific nature of sport, mobilising private-sector financing from actors in the field of sport, and supporting organisations at the base of the sporting pyramid – not the top professional level.

>A programme for culture and the audiovisual industry – ‘Creative Europe’
This programme will bring together the current Culture, MEDIA and MEDIA Mundus programmes in order to focus support on the achievement of the Europe 2020 goals and to help unlock the job creation potential of the cultural and creative sectors. The programme will complement other EU programmes by specifically targeting the needs of the cultural and creative sectors aiming to operate beyond national borders, and with a strong link to the promotion of cultural and linguistic diversity. The specificities of each sector will be catered for, including through a dedicated budgetary allocation, and a third strand will provide horizontal support to the creative and cultural industries through the use of innovative financial instruments.

IMPLEMENTATION
Implementation of the new programmes will be greatly simplified.
The new Education Europe programme will bring about a significant simplification of actions and rules through the elimination of sub-programmes, a reduction in the overall number of activities and an increased use of lump sums.
The Creative Europe programme will be managed centrally through the Education Audiovisual and Communication Executive Agency (EACEA), as is currently the case for both Culture and MEDIA. A small number of actions will be managed directly by the Commission (e.g. European Capitals of Culture, EU cultural prizes, joint actions with international institutions).
The Culture and MEDIA strands of the Creative Europe programme will be complemented by an innovative financial instrument, run by the EIB group, to provide debt and equity finance for cultural and creative industries (CCI). This will address one of the key barriers to the development of cultural and creative content – access to finance – and would reach cultural and creative industries that are not supported through other EU programmes.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €16.8 bn
of which
•Education Europe €15.2 bn
•Creative Europe €1.6 bn

POLICY
The primary objective of EU cohesion policy is to reduce the significant economic, social and territorial disparities that still exist between Europe’s regions. Failure to act to reduce these disparities would undermine some of the cornerstones of the EU, including its single market and its currency, the euro.
Cohesion policy also has a key role to play in delivering the Europe 2020 objectives throughout the EU. Well-targeted cohesion spending can deliver real added-value, stimulating growth and creating jobs in Europe’s regions. In accordance with the conclusions of the 5th Cohesion Report7, the Commission proposes to strengthen the focus on results and EU added-value by tying cohesion policy more systematically to the Europe 2020 objectives.
In particular, the Commission is proposing important changes to the way cohesion policy is designed and implemented. Funding will be concentrated on a smaller number of priorities, progress towards agreed objectives will be monitored more closely and strict conditionalities will be established in partnership contracts with the Member States. This will allow EU cohesion policy to make the greatest possible contribution to economic, social and territorial cohesion and the creation of growth and jobs.

INSTRUMENTS
>A common strategic framework
The Commission is proposing to bring the European Regional Development Fund, the European Social Fund and the Cohesion Fund together under a Common Strategic Framework, which will also cover the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. This will ensure greater coherence between the sources of funding and a much sharper focus on Europe 2020.

>Increased concentration on Europe 2020
To increase the effectiveness of cohesion spending, funding in future will be targeted on a limited number of objectives linked to the priorities of Europe 2020.
Cohesion funding will continue to be concentrated on the less developed regions and Member States. However, in view of the difficulties experienced by Member States in absorbing structural funding and in raising the necessary co-financing, the cohesion allocation will be capped at 2.5% of GNI.
A new category of region – ‘transition regions’ – will be introduced to replace the current phasing-out and phasing-in system. This category will include all regions with a GDP per capita between 75% and 90% of the EU27 average, and more in particular:
•Regions currently eligible under the convergence objective but whose GDP per capita has grown to more than 75% of the EU27 average. As a safety net, these regions will keep two thirds of their current allocation; and
•Regions which – although currently not eligible under the convergence objective – have a GDP per capita between 75% and 90% of the EU27 average. The level of support will vary according to the level of GDP, so that regions with GDP close to 90% of the EU average will receive an aid intensity similar to that of the more developed regions.
Competitiveness regions with GDP above 90% of the EU average will continue to receive support from cohesion policy for a limited number of priorities.
Transition regions and competitiveness regions would be required to focus the entire allocation of cohesion funding (except for the ESF) primarily on energy efficiency and renewable energy; SME competitiveness and innovation. In these regions, investments in energy efficiency and renewable energy will be at least 20%. Convergence regions will be able to devote their allocation to a wider range of objectives reflecting their broader range of development needs.
Finally, territorial cooperation will continue to play its role in helping regions overcome the disadvantages of their location on internal or external borders, in contributing to an ambitious neighbourhood policy and addressing shared cross-border and transnational challenges.
The cohesion instruments will be used to pursue distinct but complementary objectives:
•European Regional Development Fund
The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. The ERDF supports regional and local development by co-financing investments in R&D and innovation; climate change and environment; business support to SMEs; services of general economic interests; telecommunication, energy and transport infrastructures; health, education and social infrastructures; and sustainable urban development.
Contrary to the current period, all these types of investment will in future be able to be financed not only by grants but also by financial instruments (risk capital risk funds, local development funds, etc.).
•European Social Fund
The European Social Fund aims to strengthen economic and social cohesion by supporting employment promotion; investment in skills, education and life-long learning; social inclusion and the fight against poverty; and enhancing institutional capacity and efficient public administration.
Minimum shares for the European Social Fund will be established for each category of regions (25% for convergence regions; 40% for transition; and 52% for competiveness regions) and the scope of the European Social Fund will be extended to cover the cost of equipment linked to investments in social and human capital
•Cohesion Fund
The Cohesion Fund helps Member States whose GNI per inhabitant is less than 90% of the EU27 average in making investments in TEN-T transport networks and the environment. Part of the Cohesion Fund allocation (€10 billion) will be ring-fenced to finance core transport networks under the “Connecting Europe” facility (see also separate fiche). The Cohesion Fund can also support projects related to energy, as long as they clearly present a benefit to the environment, for example by promoting energy efficiency and the use of renewable energy.

IMPLEMENTATION
>Shared management
The support provided through cohesion policy will continue to be subject to shared management by the European Commission and the Member States (except for the Connecting Europe Facility which will be centrally managed), which will be required to provide co-financing. Countries receiving financial assistance in accordance of Article 136 or 143 TFEU will have the possibility of benefitting from a higher rate of co-financing.

>Partnership Contracts
Partnership Contracts between the Commission and each Member State will set out the commitments of partners at national and regional level and the Commission. They will be linked to the objectives of the Europe 2020 strategy and the National Reform Programmes. They will set out an integrated strategy for territorial development supported by all of the relevant EU structural funds and include objectives based on agreed indicators, strategic investments and a number of conditionalities. They will contain commitments to give yearly account of progress in the annual reports on cohesion policy and in other public reporting.

>Integrated programming
Member States will in the future be encouraged to use multi-fund programmes with common processes for preparation, negotiation, management and implementation, in particular where the need for improved coordination of human capital and infrastructure investments is greatest.
Where appropriate, a “lead fund” will be established, linked to the policy domain(s) of the programme. The lead fund’s interventions would be complemented by interventions from the other structural funds so to ensure coherent support for the different thematic objectives under cohesion policy.

>Conditionality
New conditionality provisions will be introduced to ensure that EU funding is focussed on results and creates strong incentives for Member States to ensure the effective delivery of Europe 2020 objectives and targets through Cohesion policy. And to ensure that the effectiveness of cohesion expenditure is not undermined by unsound macro-fiscal policies, conditionality linked to the new economic governance will complement the sector specific ex ante conditionalities set out in each contract.
Conditionality will take the form both of ‘ex ante’ conditions that must be in place before funds are disbursed and ‘ex post’ conditions that will make the release of additional funds contingent on the achievement of pre-specified results. To facilitate this, clear milestones and indicators will be specified and progress monitored rigorously through annual reporting. Lack of progress will give rise to the suspension or cancellation of funding,

>Performance reserve
In order to strengthen the focus on results and the achievement of the Europe 2020 objectives, 5% of the cohesion budget will be set aside and allocated, during a mid-term review, to the Member States and regions whose programmes have met their milestones in relation to the achievement of the programme’s objectives related to Europe 2020 targets and objectives. The milestones will be defined in accordance with the regulations for cohesion policy.

>Innovative financing
In addition to grant funding, it is proposed that cohesion support for enterprises and projects expected to generate substantial financial returns will be delivered primarily through innovative financial instruments. (See also separate fiche on innovative financial instruments)

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €376 bn
Of which
•Convergence regions €162.6 bn
•Transition regions €39 bn
•Competitiveness regions €53.1 bn
•Territorial cooperation €11.7 bn
•Cohesion fund €68.7 bn
•Extra allocation for outermost and sparsely populated regions €926 million
•Connecting Europe Facility for transport, energy and ICT €40 bn plus €10 bn ring fenced inside the Cohesion Fund