Subject matter
1. This Regulation establishes the Reform and Growth Facility for the Western Balkans (the ‘Facility’).
It lays down the objectives of the Facility, its financing and budget for the period from 2024 to 2027, the forms of Union funding under it and the rules for providing such funding.
2. The Facility shall complement Regulation (EU) 2021/1529 to provide assistance to the Western Balkans for the delivery of EU-related reforms, in particular inclusive and sustainable socio-economic reforms and reforms concerning fundamentals of the enlargement process, aligned with Union values, as well as investments to implement their respective Reform Agendas, as set out in Chapter III.
Definitions
For the purposes of this Regulation, the following definitions apply:
(1)
‘beneficiary’ means any of the following: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia or Serbia.
(2)
‘enlargement policy framework’ means the overall policy framework for the implementation of this Regulation as defined by the European Council and the Council, and includes the revised enlargement methodology, agreements that establish a legally binding relationship with the beneficiaries, the negotiating frameworks governing accession negotiations with candidates, where applicable, as well as resolutions of the European Parliament, relevant communications from the Commission, including, where applicable, on the rule of law, and joint communications from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy.
(3)
‘Facility Agreement’ means an arrangement concluded between the Commission and the beneficiary laying down the principles for the financial cooperation between the beneficiary and the Commission under this Regulation; this arrangement constitutes a financing agreement within the meaning of Article 114(2) of the Financial Regulation as regards the financial envelope under Article 6(2), point (a) of this Regulation;
(4)
‘loan agreement’ means an arrangement concluded between the Commission and a beneficiary laying down the conditions applicable to the support of the Facility;
(5)
‘Reform Agenda’ means a comprehensive, coherent and prioritised set of targeted reforms and priority investment areas in each beneficiary, including payment conditions that indicate satisfactory progress or completion of related measures, and an indicative timetable for their implementation;
(6)
‘measures’ means reforms and investments as set out in the Reform Agendas under Chapter III;
(7)
‘payment conditions’ means conditions for the release of funds that take the form of observable and measurable qualitative or quantitative steps to be implemented by a beneficiary, as set out in the Reform Agenda under Chapter III;
(8)
‘blending operation’ means an operation supported by the Union budget that combines non-repayable forms of support from the Union budget with repayable forms of support from development or other public financial institutions, including export credit agencies, or from commercial finance institutions and investors;
(9)
‘final recipient’ means a person or entity receiving funding under the Facility; for the part of the Facility that is made available as financial assistance, final recipient will be the treasury of the Beneficiary; for the part of the Facility that is made available through the Western Balkans Investment Framework (WBIF), final recipient will be the contractor or sub-contractor implementing the investment project;
(10)
‘do no significant harm’ means not supporting or carrying out economic activities that do significant harm to any environmental objective, where relevant, within the meaning of Article 17 of Regulation (EU) 2020/852.
Objectives of the Facility
1. The general objectives of the Facility shall be to:
(a)
support the enlargement process by accelerating the alignment with Union values, laws, rules, standards, policies and practices (‘ acquis ’) through the adoption and implementation of reforms with a view to future Union membership;
(b)
accelerate regional economic integration and progressive integration into the Union single market;
(c)
accelerate the socio-economic convergence of the beneficiaries’ economies with the Union;
(d)
foster regional cooperation, good neighbourly relations, reconciliation and the settlement of disputes in the Western Balkans, as well as people-to-people contact.
2. The specific objectives of the Facility shall be to:
(a)
further strengthen the fundamentals of the enlargement process, including the rule of law and fundamental rights, the functioning of democratic institutions, including at regional and local level and including de-polarisation, public administration and fulfil the economic criteria; this includes promoting an independent judiciary, reinforcing security and stability in the region, strengthening the fight against fraud and all forms of corruption, including high-level corruption and nepotism, organised crime, cross-border crime and money laundering as well as terrorism financing, tax evasion and tax fraud, tax avoidance; increasing compliance with international law; strengthening freedom and independence of media and academic freedom; combating hate speech; enabling an environment for civil society, fostering social dialogue; promoting gender equality, gender mainstreaming and the empowerment of women and girls, non-discrimination and tolerance, to ensure and strengthen respect for the rights of persons belonging to minorities, including national minorities and Roma, as well as rights of lesbian, gay, bisexual, transgender and intersex persons;
(b)
move towards full alignment of the beneficiaries with the Union Common Foreign and Security Policy (CFSP), including Union restrictive measures;
(c)
fight disinformation and Foreign Information Manipulation and Interference against the Union and its values;
(d)
move towards harmonisation of visa policies with the Union;
(e)
reinforce the effectiveness of public administration, build local capacities and invest in administrative staff in the beneficiaries; ensure access to information, public scrutiny and the involvement of civil society in decision-making processes; support transparency, accountability, structural reforms and good governance at all levels, including as regards their powers of oversight and inquiry over the distribution of and access to public funds as well as in the areas of public financial management and public procurement and State aid control; support initiatives and bodies involved in supporting and enforcing international justice in the beneficiaries;
(f)
accelerate the transition of the beneficiaries to sustainable, climate-neutral and inclusive economies, that are capable of withstanding competitive market pressures of the Union single market, and to a stable investment environment and reduce their strategic dependencies;
(g)
boost regional economic integration in particular through progress in the establishment of the Common Regional Market;
(h)
foster economic integration of the beneficiaries with the Union single market, in particular through increased trade and investment flows, and resilient value chains;
(i)
support regional economic integration and enhanced integration with the Union single market through improved and sustainable connectivity in the region in line with trans-European networks to reinforce regional cooperation, good neighbourly relations, reconciliation, as well as people-to-people contact;
(j)
accelerate the inclusive and sustainable green transition to climate neutrality by 2050, in accordance with the Paris Agreement and the Green Deal, in line with the 2020 Green Agenda for the Western Balkans and covering all economic sectors, particularly energy, including the transition towards a de-carbonised, climate-neutral, climate-resilient and circular economy, while ensuring that investments respect the ‘do no significant harm’ principle;
(k)
promote the digital transformation and digital skills as an enabler of sustainable development and inclusive growth;
(l)
boost innovation, research, and cooperation between academic institutions and industry in support of the green and digital transitions, promoting local industries with a particular emphasis on locally based micro, small and medium-sized enterprises and start-ups;
(m)
boost quality education, training, reskilling and upskilling at all levels, with a particular focus on youth, including tackling youth unemployment, preventing brain drain and supporting vulnerable communities and support employment policies, including labour rights, in line with the European Pillar of Social Rights, and fighting poverty.
General principles
1. Cooperation under the Facility shall be needs-based and shall promote the development effectiveness principles, namely ownership of development priorities by the beneficiaries, a focus on clear conditionality and tangible results, inclusive partnerships, transparency and mutual accountability. That cooperation shall be based on an effective and efficient allocation and use of resources. The Facility shall strive to ensure an appropriate geographical balance of investment projects.
2. The provision of macro-financial assistance shall not fall within the scope of this Facility.
3. Support from the Facility shall be additional and complementary to the support provided under other Union programmes and instruments. Activities eligible for funding under this Regulation may receive support from other Union programmes and instruments provided that such support does not cover the same cost and that appropriate oversight and budget control is ensured. The Commission shall ensure complementarities and synergies between the Facility and other Union programmes, with a view to avoiding the duplication of assistance and double funding. There shall be no overlap between support provided under this Regulation and Regulation (EU) 2021/1529.
4. In order to promote the complementarity, coherence and efficiency of their actions, the Commission and the Member States shall cooperate and shall strive to avoid duplication and ensure synergies between assistance under this Regulation and other forms of assistance, including integrated financial packages composed of both export and development financing provided by the Union, Member States, third countries, multilateral and regional organisations and entities, such as international organisations and the relevant international financial institutions, agencies and non-Union donors, in line with the established principles for strengthening operational coordination in the field of external assistance, including through enhanced coordination with Member States at local level. Such coordination at local level shall involve regular and timely consultations and frequent exchanges of information throughout the implementation of the Facility.
5. Activities under the Facility shall mainstream and promote democracy, human rights and gender equality, progressively align with the social, climate and environmental standards of the Union, mainstream climate change mitigation and adaptation, where relevant, disaster risk reduction, environmental protection and biodiversity conservation, including through, where appropriate, environmental impact assessments, and shall support progress towards the Sustainable Development Goals, promoting integrated actions that can create co-benefits and meet multiple objectives in a coherent way. Those activities shall avoid stranded assets, and shall be guided by the principles of ‘do no significant harm’ and of ‘leaving no one behind’, as well as by the sustainability mainstreaming approach underpinning the European Green Deal.
6. Beneficiaries and the Commission shall ensure that gender equality, gender mainstreaming and the integration of a gender perspective are taken into account and promoted throughout the preparation of the Reform Agendas and the implementation of the Facility. Beneficiaries and the Commission shall take appropriate steps to prevent any discrimination based upon gender, racial or ethnic origin, religion or belief, disability, age or sexual orientation. The Commission shall report on these measures in the context of its regular reporting under the Gender Action Plans.
7. The Facility shall not support activities or measures which are incompatible with the beneficiaries’ Energy and Climate Plans, their Nationally Determined Contribution under the Paris Agreement, and the ambition to reach climate-neutrality by 2050 at the latest or that promote investments in fossil fuels, or that cause significant adverse effects on the environment, the climate or biodiversity.
8. In line with the principle of inclusive partnership, the Commission shall strive to ensure, as appropriate, democratic scrutiny in the form of consultation by a beneficiary’s government of its respective parliament as well as of relevant stakeholders, including local and regional authorities, social partners and civil society, including vulnerable groups, all minorities and communities, as relevant, so as to allow them to participate in shaping the design and the implementation of activities eligible for funding under the Facility and in the related monitoring, scrutiny and evaluation processes, as relevant. That consultation shall seek to represent the pluralism of the beneficiary’s society.
9. The Commission, in close cooperation with the Member States and beneficiaries, shall ensure the implementation of Union commitments to increased transparency and accountability in the delivery of support, including by promoting the implementation and reinforcement of internal control systems and anti-fraud policies. The Commission shall make information on the volume and allocation of support publicly available through the Scoreboard referred to in Article 26. The beneficiaries shall publish up-to-date data on final recipients receiving Union funds for the implementation of reforms and investments under this Facility, as described in Article 22.
Preconditions for Union support
1. Preconditions for the support under the Facility shall be that:
(a)
the beneficiaries uphold and respect effective democratic mechanisms, including a multi-party parliamentary system, free and fair elections, pluralistic media, an independent judiciary and the rule of law, and guarantee respect for all human rights obligations, including the rights of persons belonging to minorities;
(b)
as regards Serbia and Kosovo, they engage constructively with measurable progress and tangible results in the normalisation of their relations with a view to fully implementing all of their respective obligations stemming from the Agreement on the Path to Normalisation and its Implementation Annex as well as all past Dialogue Agreements and engage in negotiations on the Comprehensive Agreement on normalisation of relations.
2. The Commission shall monitor the fulfilment of the preconditions set out in paragraph 1 before funds, including pre-financing, are released to beneficiaries under the Facility and throughout the period of the support provided under the Facility taking duly into account the enlargement policy framework. The Commission shall also take into account the relevant recommendations of international bodies, such as the Council of Europe and its Venice Commission, or the Office for Democratic Institutions and Human Rights of the Organization for Security and Co-operation in Europe (OSCE), in the monitoring process.
3. As regards the precondition set out in point (b) of paragraph 1 of this Article, the Commission, in accordance with Decision 2010/427/EU, shall duly take into account the role and contribution of the EEAS.
4. The Commission may adopt a decision concluding that some of the preconditions set out in paragraph 1 of this Article are not met, and in particular, withhold the release of funds referred to in Article 21, irrespective of whether the payment conditions referred to in Article 12 are fulfilled.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
