What changed between the plenary report and the adopted text

Removed:3. ‘Framework Agreement’ means an arrangement concluded between the Commission and the Beneficiary laying down the principles of 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 Regulation (EU, Euratom) 2018/1046 as regards Funds under Article 6(2) point a.

Removed:4. ‘Loan agreement’ means an arrangement concluded between the Commission and the Beneficiary laying down the conditions applicable to the support of the Facility.

Removed:5. ‘Reform Agendas’ means a comprehensive package of a coherent and prioritised set of targeted reforms aligned with Union values and priority investment areas in each Beneficiary, including payment conditions that indicate satisfactory progress or completion of those measures, and an indicative timetable for the implementation of those measures.

Removed:6. ‘Measures’ means reforms and investments under the Reform Agendas pursuant to Chapter III.

Removed:7. ‘Payment Conditions’ means conditions for the release of funds taking the form of observable and measurable qualitative or quantitative steps to be implemented by the Beneficiaries, as set out in the Reform Agendas pursuant to Chapter III as conditions for the release of funds;

Removed: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 finance institutions, or from commercial finance institutions and investors.

Removed:8a. ‘Final recipient’ means a contractor, sub-contractor, remunerated external expert or a person or entity receiving prizes or funds under the Facility.

Removed:8b. ‘Do no significant harm’ means not supporting or carrying out economic activities that do significant harm to any environmental objective within the meaning of Article 17 of Regulation (EU) 2020/852.

Removed:1. The general objectives of the Facility shall be to:

Removed:(a) accelerate regional economic integration and promote balanced regional development through strengthening social and territorial cohesion and progressive integration with the Union single market;

Removed:(b) accelerate the socio-economic convergence of Beneficiaries’ economies, including decarbonisation of their economies, and of societies with the Union;

Removed:(c) in line with the general objectives of IPA III, accelerate alignment with Union values, laws, rules, standards, policies and practices through the adoption and implementation of reforms with a view to future Union membership

Removed:2. The specific objectives of the Facility shall be to:

Removed:(a) accelerate the transition of the Beneficiaries to sustainable, climate-neutral and inclusive economies, capable of withstanding competitive market pressures of the Union single market, and to a stable investment environment and reduce strategic dependencies;

Removed:(b) boost regional economic integration based on Union rules and standards, in particular through tangible progress in the establishment of the Common Regional Market, which was agreed in 2020 as part of the Berlin Process;

Removed:(c) boost economic integration of the Beneficiaries with the Union single market, including through promoting local industries and resilient Union value chains;

Removed:(d) support regional economic integration, address social challenges, support social and territorial cohesion, aligning with the European Pillar of Social Rights, as well as enhanced integration with the EU single market through improved and sustainable connectivity in the region in line with Transeuropean Networks;

Removed:(e) strengthen environmental protection, biodiversity and accelerate inclusive and sustainable green transition to climate neutrality by 2050 at the latest, 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 the renewable energy, and agriculture sectors, including the transition towards de-carbonised climate-neutral, climate-resilient and circular economy, while ensuring that all investments shall be fully aligned with and respect the Union climate acquis and the ‘Do no significant harm’ principle;

Removed:(f) promote the digital transformation and digital skills as an enabler for sustainable development and inclusive growth;

Removed:(g) boost innovation, research, and cooperation between academic institutions and industry ▌in support of the green and digital transitions, with a particular emphasis on locally based micro, small and medium-sized enterprises and start-ups;

Removed:(h) boost quality education, training, reskilling and upskilling at all levels, with a particular focus on youth, and employment policies in line with Union accession priorities, including those to tackle youth unemployment, prevent brain drain and support vulnerable communities;

Removed:(i) further strengthen the fundamentals of the enlargement process, including the rule of law, democracy, the respect of human rights, including fundamental labour rights, access to healthcare, and fundamental freedoms and the fight against hate crimes, through strengthening democratic institutions, including at regional and local level, promoting an independent judiciary, reinforced security, strengthening the fight against fraud and all types of, corruption, including high-level corruption and oligarchic structures, any types of nepotism and favouritism and conflicts of interest, organised crime, cross-border crime and money laundering and terrorism financing, tax evasion, tax avoidance, aggressive tax planning and tax fraud, the spread of disinformation and subversive foreign interference; compliance with international law and alignment with the Union’s Common Foreign and Security Policy; strengthen freedom and independence of media and academic freedom and an enabling environment for civil society; foster social dialogue and ensure that the capacities of stakeholders, including social partners, are strengthened; promote 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 all minorities, including ethnic and religious minorities, the LGBTI community, and people belonging to other vulnerable groups; enhance inclusion and accessibility for persons with disabilities;

Removed:(j) reinforce the effectiveness of public administration, ensure access to information, including environmental information, public scrutiny and the involvement of civil society in decision-making processes, support decentralisation and local development; 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, and ensure effective protection of whistle-blowers; build local capacities and invest in administrative staff in the Beneficiaries and encourage the secondment of experts to national institutions responsible for the implementation of the Facility in the Beneficiaries; support initiatives and bodies involved in supporting and enforcing international justice in the Western Balkans Beneficiaries;

Removed:(ja) reinforce regional and cross-border cooperation, good neighbourly relations, reconciliation, as well as people-to-people contact.

Removed:-1. The enlargement policy framework defined by the European Council and the Council, the agreements that establish a legally binding relationship with the Beneficiaries, as well as resolutions of the European Parliament, communications of the Commission and joint communications of the Commission and High Representative of the Union for Foreign Affairs and Security Policy shall constitute the overall policy framework for the implementation of this Regulation. The Commission shall ensure coherence between the assistance under this Regulation and the enlargement policy framework.

Removed:1. Cooperation under the Facility shall be needs-based and shall promote the development effectiveness principles, across all modalities, namely ownership of development priorities by the Beneficiaries, a focus on clear conditionality and tangible results, inclusive partnerships with local and regional authorities, social partners, civil society organisations and voluntary associations, and good neighbourly relations, transparency and mutual accountability. The cooperation shall be based on effective and efficient resources allocation and use.

Removed:2. Support from the Facility shall be additional 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 established. 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.

Removed:3. In order to promote the complementarity and efficiency of their action, the Commission and the Member States shall cooperate and shall ▌avoid duplication between assistance under this Regulation and other assistance provided by the Union, the 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.

Removed:3a. The provision of macro-financial assistance shall not fall within the scope of this Regulation.

Removed:4. Activities under the Facility shall comply with the social, climate and environmental standards of the Union, mainstream climate change mitigation and adaptation, biodiversity and environmental protection and conservation of ecosystems, animal welfare standards, including, where appropriate, environmental impact assessments, while fully respecting human rights, social, and labour rights democracy, gender equality, sustainable water management, and where relevant, disaster risk reduction, 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. They shall avoid stranded assets, and shall be compatible with 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.

Removed:5. Beneficiaries and the Commission shall ensure that gender equality ▌, gender mainstreaming and the integration of a gender prespective 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 will report on these measures in the context of its regular reporting under the Gender Action Plans.

Removed:6. The Facility shall not support activities or measures which are incompatible with the Beneficiaries’ National Energy and Climate Plans, their Nationally Determined Contribution under the Paris Agreement, and 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 or the climate or biodiversity.

Removed:6a. In line with the EU partnership principle and the EU Code of Conduct on Partnership, the Commission shall ensure that relevant stakeholders, including the national Parliaments of the Beneficiaries, local and regional authorities, social partners as well as civil society organisations, are duly and fairly consulted and have timely access to relevant information to allow them to meaningfully participate in shaping the design and implementation of activities eligible for funding under this Facility, and in the related monitoring, scrutiny and evaluation processes. Such involvement shall seek to represent the pluralism of the society in the Western Balkans.

Removed:7. The Commission, in cooperation with the Member States and the Beneficiaries, shall ensure the implementation of Union commitments to increased transparency and accountability in the delivery of assistance, through ▌the implementation and reinforcement of robust internal control systems and anti-fraud policies, and by compulsorily making information on the volume and allocation of assistance, to the level of the final recipient, publicly available through a single web- portal, including a list of persons and legal entities receiving cumulative amounts higher than 50 000 EUR, and shall ensure that data is up-to-date comparable and can be easily accessed, shared and published.

Removed:7a. To ensure the efficiency of the financial instrument, Member States may launch regular and shared consultations with Beneficiaries to offer assistance in program formulation.

Removed:1. Preconditions for the support under the Facility shall be that the Beneficiaries improve, uphold and respect effective democratic mechanisms, including a functioning multi-party parliamentary system, safeguard free and pluralistic media and fight against disinformation, foreign information manipulation and interference and the rule of law, also in view of threats to the financial interests of the Union, and guarantee protection and respect for all human rights including the rights of persons belonging to all minorities and communities.

Removed:Another precondition shall be alignment with the Union’s common foreign and

Removed:security policy, including the adoption of restrictive measures against Russia, as well as with Union visa requirements for third countries.

Removed:Another pre-condition shall be that Serbia and Kosovo engage constructively with clearly measurable progress and tangible results in the normalisation of their relations in order to fully implement 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.

Removed: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 latest Rule of Law Report and Enlargement Package as well as relevant resolutions of the European Parliament. The Commission shall also take into account the relevant recommendations of international bodies such as OSCE/ODIHR and the Council of Europe and its Venice Commission in this process. The Commission may adopt a decision based on clear and impartial criteria concluding that some of these preconditions are not met, and insuch cases, shall withhold the release of funds referred to in Article 21, irrespective of the fulfilment of payment conditions referred to in Article 16(3). The Commission shall withhold the release of funds in cases of a persistent lack of progress, serious deficiencies and regression on rule of law and fundamental reforms after consulting the European Parliament and the Council. The Commission shall develop and publish clear guidelines on the application of conditionality for the release of funding. The Commission’s assessment shall be transmitted simultaneously to the European Parliament and the Council. Beneficiaries may be given the opportunity to remedy shortcomings in order to meet the preconditions, allowing the Commission to release the funds after a positive assessment.

Removed:Financing and implementation

Removed:1. The resources to be made available through the Facility, pursuant to paragraphs 2 and 3, shall not exceed EUR 6 000 000 000 for the period from 2024 to 2027.

Removed:2. The financial envelope for the implementation of the Facility shall be EUR 2 000 000 000 for the period from 1 January 2024 to 31 December 2027, of which:

Removed:(a) 98.5% in the form of non-repayable financial support to the Beneficiaries for the implementation of the Reform Agendas;

Removed:(b) 1.5% for expenditure pursuant to paragraph 6.

Removed:3. The support in the form of a loans, shall be available for an amount of up to EUR 4 000 000 000 for the period from 1 January 2024 to 31 December 2027. That amount shall not constitute part of the amount of the External Action Guarantee within the meaning of Article 31(4) of Regulation No 2021/947.

Removed:The budgetary nomenclature of the Facility shall be structured according to its specific objectives, in view of ensuring full transparency and accountability to the budgetary authority.

Removed:The amounts shall be mobilised annually by the budgetary authority. The nomenclature of the Reform and Growth Facility for the Western Balkans shall be composed of additional budgetary items, corresponding to each of the Beneficiaries under this Regulation.

Removed:4. The Commission shall set out the initial indicative amount of financing available for each Beneficiary, in accordance with the methodology set out in Annex I, in the corresponding delegated act referred to in Article 15, calculated based on the latest available data on the day of the entry into force of this Regulation in line with Article 29. Indicative amounts may change during implementation in accordance with the principles laid out in Article 21.

Removed:5. Pursuant to Article 19, the amount of funds made available under the Western Balkans Investment Framework (WBIF) referred to in Article 12 of Regulation (EU) 2021/1529 shall be at least 50% of the overall amount in paragraph 1. That contribution shall include the entire amount of non-repayable financial support as referred to in paragraph 2 point (a) of this Article after deducting the amount of provisioning.

Removed:6. The resources referred to in paragraph 2 point (b) may be used for technical and administrative assistance for the implementation of the Facility, such as building local capacities, the secondment of experts to the responsible national institutions of the beneficiaries, impact assessments, preparatory actions, monitoring, control, audit and evaluation activities, which are required for the management of the Facility and the achievement of its objectives, in particular studies, meetings of experts, trainings, consultations with the Beneficiary authorities, conferences, consultation of stakeholders, including local and regional authorities and civil society organisations, information and communication actions, including inclusive outreach actions, and corporate communication of the political priorities of the Union, insofar as they are strictly related to the objectives of this Regulation, expenses linked to IT networks focusing on information processing and exchange, corporate information technology tools, as well as all other expenditure at headquarters and Union delegations for the administrative and coordination support needed for the Facility. Finally, expenses may also cover the costs of other supporting transparency activities such as quality control and monitoring of projects or programmes on the ground and the costs of peer counselling and experts for the assessment and implementation of reforms and investments. Where resources are used for auditing purposes, conflicts of interest between the entity performing the audit and other activities of that entity in the framework of the Facility, such as consulting or administrative and coordination support, quality control and monitoring of projects, shall be disclosed and prevented.

Removed:1. The Facility shall be implemented in accordance with Regulation (EU, Euratom) 2018/1046, either in direct management or in indirect management with any of the entities referred to in Article 62(1), first subparagraph, point (c) of Regulation (EU, Euratom) 2018/1046.

Removed:2. Union funding may be provided in any of the forms laid down in Regulation (EU, Euratom) 2018/1046, in particular financial assistance, grants, procurement and blending operations.

Removed:3. Depending on the required operational and financial capacity, the entrusted entity implementing blending operations may be the European Investment Bank group▌, multilateral European financial institutions, such as the European Bank for Reconstruction and Development, or bilateral European finance institutions, such as development banks or the World Bank Group. ▌

Removed:Where possible, non-European multilateral financial institutions may participate in the Facility through joint operations with European financial institutions.

Removed:Member States, third countries, international organisations, international financial institutions or other sources may provide additional financial contributions, including for the implementation of blending operations under the Facility. Such contributions shall constitute external assigned revenue within the meaning of Article 21(2), points (a)(ii), (d), and (e) of Regulation (EU, Euratom) 2018/1046.

Removed:Article 8 Rules on eligibility of persons and entities, origin of supply and materials and restriction under the Facility

Removed:1. Participation in procurement and grant award procedures for activities financed under the Facility shall be open to international and regional organisations and to all natural persons who are nationals of, and to legal persons which are effectively established in:

Removed:(a) Member States, Beneficiaries, contracting parties to the Agreement on the European Economic Area and countries covered by Annex I to Regulation (EU) 2021/947 and Annex I to Regulation (EU) 2021/1529;

Removed:(b) countries which provide a level of support to Beneficiaries comparable to the one provided by the Union taking into account the size of their economy and for which reciprocal access to external assistance in Beneficiaries is established by the Commission in line with the Union’s strategic autonomy.