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What is meant by the phrase in the regulation: “The majority of the operations shall be led by the private sector” (Art. 45)? Does this mean that the majority of the projects supported by the FLAG are led by the private sector or could this be extended to the majority of the budget?

The Regulation clearly states that the majority of the operations should be led by the private sector. This means that over 50% of the projects supported by the FLAG should be allocated to representatives of the private sector acting as project leaders, although this does not mean that the majority of the budget comes from the private sector. Practically this entails that more than half of the grant contracts should be signed by the representatives of the private sector (incl. NGO/ civic sector).

However, some Member States have interpreted this phrase as meaning that the majority of the budget should come from the private sector, in addition to the majority of projects. The Commission encourages this more ambitious approach since Axis 4 aims to stimulate bottom up initiatives from the private sector and to lever in as much private funding as possible. Therefore, ways of increasing private financial contributions should be investigated and encouraged. This could be done for instance by using the commitment of local private investors to contribute to the financing of the local strategy as a criterion for FLAG selection.