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1. Parts of the Programme may be implemented through European Partnerships. The involvement of the Union in European Partnerships shall take any of the following forms:

(a) participation in European Partnerships set up on the basis of memoranda of understanding or contractual arrangements between the Commission and the partners referred to in point (3) of Article 2, specifying the objectives of the European Partnership, related commitments of the Union and of the other partners regarding their financial and/or in-kind contributions, key performance and impact indicators, the results to be delivered and reporting arrangements. They include the identification of complementary R&I activities that are implemented by the partners and by the Programme (Co-programmed European Partnerships);

(b) participation in and financial contribution to a programme of R&I activities, specifying the objectives, key performance and impact indicators, and the results to be delivered, based on the commitment of the partners regarding their financial and/or in-kind contributions and the integration of their relevant activities using a Programme co-fund action (Co-funded European Partnerships);

(c) participation in and financial contribution to R&I programmes undertaken by several Member States in accordance with Article 185 TFEU or by bodies established pursuant to Article 187 TFEU, such as Joint Undertakings or by the EIT's KICs in accordance with the EIT Regulation (Institutionalised European Partnerships). Institutionalised European Partnerships shall be implemented only where other parts of the Programme, including other forms of European Partnerships, would not achieve the objectives or would not generate the necessary expected impacts, and where justified by a long-term perspective and a high degree of integration. European Partnerships in accordance with Article 185 or Article 187 TFEU shall implement a central management of all financial contributions, except in duly justified cases. In the case of central management of all financial contributions, project level contributions from one participating state shall be made on the basis of the funding requested in proposals from legal entities established in that participating state, unless otherwise agreed among all participating states. The rules for Institutionalised European Partnerships shall specify, among other things, the objectives, key performance and impact indicators, and the results to be delivered, as well as the related commitments for financial and/or in-kind contributions of the partners.

2. European Partnerships shall:

(a) be established for the purpose of addressing European or global challenges only in cases where the objectives of the Programme would be achieved more effectively through a European Partnership than by the Union alone and when compared to other forms of support under the Programme; an appropriate share of the budget of the Programme shall be allocated to those actions of the Programme that are implemented through European Partnerships; the majority of the budget in Pillar II shall be allocated to actions outside European Partnerships;

(b) adhere to the principles of Union added value, transparency and openness, and to having impact within and for Europe, strong leverage effect on sufficient scale, long-term commitments of all involved parties, flexibility in implementation, coherence, coordination and complementarity with Union, local, regional, national and, where relevant, international initiatives or other European Partnerships and missions;

(c) have a clear life-cycle approach, be limited in time and include conditions for phasing-out the Programme funding.

3. European Partnerships under points (a) and (b) of paragraph 1 of this Article shall be identified in strategic R&I plans before being implemented in work programmes.

4. Provisions and criteria for the selection, implementation, monitoring, evaluation and phasing-out of European Partnerships are set out in Annex III.