Opinion on the Draft Notice to Member States laying down guidelines for an Initiative in the framework of the special support programme for peace and reconciliation in Northern Ireland and the Border counties of Ireland (95/C 236/08)

On 21 February 1995 the Commission decided to consult the Economic and Social Committee on the Draft Notice to Member States laying down guidelines for an Initiative in the framework of the special support programme for peace and reconciliation in Northern Ireland and the Border counties of Ireland.

The Section for Regional Development and Town and Country Planning, which was responsible for preparing the Committee's work on the subject, made a fact-finding visit to Northern Ireland on 20-21 April 1995. The Rapporteur was Mr Frerichs.

At its 325th Plenary Session (meeting of 27 April 1995) the Economic and Social Committee unanimously adopted the following Opinion.

1. Committee's main recommendations

1.1. The Economic and Social Committee in principle welcomes the Community Initiative for Northern Ireland and the Border counties of the Republic, with initial funding of MECU 300.

1.2. The Committee considers that the Initiative will make a major contribution to the economic and social underpinning of the peace process, promote reconciliation and tolerance between the communities, and have a positive impact on the European Union as a whole.

1.3. It is important that the programme implementing the Community Initiative be balanced. It should not consist exclusively of high-profile, short-term actions, but should also comprise measures aimed at longer-term structural improvements. Activities should not be spread too thinly.

1.4. It is very important that the right priorities be established. Productive investment and industrial development should be encouraged in order to generate employment and thus open up new opportunities for the population. Particular emphasis should be placed on social inclusion; the particularly vital need for this in Northern Ireland and the Border counties is not adequately catered for.

1.5. In the field of social inclusion, priority should be given to measures enabling the long-term unemployed to readjust to work; these should include local socially-orientated job creation schemes aimed at reintegration of the unemployed, vocational retraining and further training programmes, and measures aimed at young people, who in many areas make up more than half the population. It is important to give the younger generation a better start in life in order to boost their confidence in the future. This should begin with schemes for pre-school-age children and their parents.

1.6. Past experience has highlighted the important and valued role of local economic and social interest groups in alleviating political tension and sectarian pressures. The trade unions in particular have been to the fore in this regard. Accordingly, the Committee is of the opinion that all these economic and social interest groups should be fully consulted and involved, on the basis of partnership and cooperation, in drawing up and putting into effect the concrete aspects of the Community Initiative. At the implementing stage, absolute impartiality should be maintained between the various population groups.

1.7. The Committee considers flexibility in the allocation of funds to be important with regard to: the various priority areas, the choice of the most suitable level of implementation for measures and the various scenarios for cross-Border measures. The laying down of over-detailed rules for specific measures should in particular be avoided; rules should, rather, be indicative.

1.8. Measures for urban and rural regeneration should be dealt with under separate action programmes, as they are quite distinct problems.

1.9. Particularly after having interviewed the project leaders concerned, the Committee considers it highly important that throughout the implementation stage, the Commission ensure that the principle of additionality (matching funds) is being strictly applied by both Governments and that the full amounts intended are thus actually being spent.

1.10. The Committee is impressed by the quality and vitality of various non-government organizations from the voluntary, statutory and private sectors who all wish to contribute to the implementation of the Community Initiative. The Committee hopes that the measures agreed under this Initiative will provide opportunities for these organizations to submit ideas, develop partnerships, and work within groups (possibly initiated and coordinated by local government authorities) to draw funds under a global grants procedure.

At its 326th Plenary Session (meeting of 31 May 1995) the Economic and Social Committee unanimously adopted the following additional Opinion, which had been adopted by the Section for Regional Development and Town and Country Planning on 19 May 1995.

2. Introduction

2.1. Against a long historical background and after the last 25 years of violent conflict, the peace process now underway in Northern Ireland holds out radical new prospects for reconciliation between the two communities, for repairing the social damage caused by the conflict and for improving the economic and social situation in Northern Ireland and the Border counties of the Republic (Donegal, Leitrim, Sligo, Cavan, Monaghan and Louth).

2.2. The Joint Framework Agreement announced by British Prime Minister, John Major, and An Taoiseach John Bruton on 22 February 1995, should be mentioned in this connection. This document could promote discussion of a lasting, democratic settlement for Northern Ireland, with guarantees for the right of self-determination and the protection of minorities; it could also serve as a basis for peaceful, democratic negotiations between all the parties involved, with guarantees of equal opportunity for all sectors of the population. Particularly important in guaranteeing the peace process are the formal ceasefires observed by the paramilitaries since the Autumn of 1994, and welcomed by the European Union.

2.3. The prospect of a lasting, peaceful and democratic solution in Northern Ireland offers a historic opportunity to secure the reconciliation of two communities which for decades have been divided by mutual opposition along mainly sectarian and traditional lines, and to help overcome intolerance, prejudice, and socio-economic inequality.

2.4. The sustained, bitter conflict has left significant social and economic scars, which are reflected inter alia in attitudes to the future, the physical appearance of urban and rural areas, social development and the stunting of certain social institutions. Thus it is now important to heal these scars as soon as possible, to create new opportunities and prospects as a sign of hope, and to develop better outlets for the talents of the rising generation.

3. Economic and social indicators for Northern Ireland and the Border counties

3.1. With 1.6 million inhabitants, Northern Ireland's population density in 1991 was well below the European average. It has the highest birth rate of any EU region, 16.5 per thousand compared with an EU average of 11.9. With population growth outstripping growth in employment, Northern Ireland has generally suffered from net emigration (an annual average of 0.4 % of the population emigrated in the late '80s). The majority of emigrants have been young people with skills.

3.2. In 1991, Northern Ireland's per capita income was 72 % of the EU average, although over the 1989-1992 period, the area's rate of economic growth, at 0.9 %, was higher than that for the United Kingdom as a whole (minus 1.1 % over the same period).

3.3. The industrial sector accounts for 21 % of gross added value (compared with 30 % in most EU Member States). Productivity is lower than in other Member States, reflecting the structure of the region's manufacturing industry, with traditional industries such as textiles, leather, clothing and footwear accounting for about 25 % of the total. Services account for 66.7 % of GDP, more than the EU average of 62.5 %. At 0.44 % of GDP, R& TD intensity is below the figure for the United Kingdom as a whole (1.09 %), and even that for the Republic of Ireland (0.55 %).

3.4. Agriculture accounts for some 4 % of GDP and 7 % of civilian employment. Approximately 70 % of agricultural land has relatively poor soil quality, leading to dependence on stock-rearing (approx. 90 %), rather than cereals. Farms are smaller than the UK average, with a fairly high proportion providing a secondary source of income. Fishing and fish processing provide some 2,500 jobs. The prospects for agriculture in Northern Ireland and the Border counties will improve only if milk and meat production can be boosted. In order to assist rural areas, consideration should therefore be given to increased allocations for milk and stock-rearing quotas, aimed at achieving a tangible and realistic adjustment.

3.5. In 1991, civilian jobs in Northern Ireland totalled 634,000, a relatively low rate of activity. Services accounted for almost 70 % of employment in the region, with industry and the supply sector accounting for about 29 % (as against an EU average of 32 %). The region is highly dependent on public-sector employment (33 % of civilian jobs in 1992).

3.6. Northern Ireland's unemployment rate is one of the highest in the EU; in 1993, at 15.0 %, it was almost 50 % above the Community average (Eurostat data). Long-term unemployment is particularly high, with more than 50 % out of work for more than one year, 30 % for more than three years and 19 % for more than five years. Youth unemployment is also very high.

3.7. It should be pointed out that these are only average figures. In some areas the social problems are even more acute. Some districts have a male unemployment rate of over 30 %. In general, the unemployment rate for Northern Irish Catholics is somewhat higher than for Protestants. Unemployment is now affecting the third generation of some families.

3.8. While some Northern Irish school-leavers and graduates achieve the highest grades in the UK, there are shortcomings in the educational system; this is illustrated by the fact that 59 % of registered jobseekers and 37 % of employed workers have no formal qualifications. A particular problem is the large number of young people dropping out of school without any formal qualifications. Specific action is needed to pinpoint these young people, give them the help they require and offer them a second chance.

3.9. One of the most pressing priorities for these young people is to enhance their preparation for employment. The Committee heard proposals for enhancing education and training facilities in some of the most deprived areas. Developments which are targeted on the needs of young people in these areas and which introduce new opportunities for vocational education and training deserve strong support from the Community Initiative for economic and social reasons, as well as for their potential contribution to reconciliation and steps to reduce social exclusion.

3.10. The problems often begin early, at the pre-school or primary school stage. Large classes in primary schools make it more difficult to provide proper tuition for the less able. A new approach could be tried at the pre-school stage in order to set children on the right path. This should involve assistance for parents to enable them to provide their children with the right home environment for doing homework.

3.11. There is a mismatch between the skills required by firms and those actually possessed (if any) by the unemployed. There are special schemes to (re-)train unemployed people, under the Job Training Programme and the Youth Training Programme, which are now being replaced by a new Jobskills Programme. However, the Committee believes that the effectiveness of these programmes needs to be increased, the scale may need to be increased to offer places to more people, and the scope might be increased to offer a wider and more modern range of options.

3.12. Two factors place Northern Ireland at a disadvantage as a location for industry: 1) geography: apart from the land frontier with the Republic, Northern Ireland is peripheral in terms of the other Member States, and dependent on ferry links; 2) relative shortage of natural resources.

3.13. Northern Ireland's road network is generally adequate in terms of road surface quality, despite the low level of gross investment in road building, which at 0.2 % of GDP is far below the Community average of 0.74 %. But there are specific shortcomings which are the legacy of the Troubles. Some of the roads in the Border area and cross-Border roads are in an extremely bad state, as for the last 25 years they have been completely blocked to cross-Border traffic for security reasons.

3.14. But it is these very roads which have such a key role to play as communications arteries in reviving the areas hardest hit by the conflict, and they therefore need to be improved in the medium term. The main Belfast-Dublin road also urgently needs to be upgraded to dual carriageway standard so as to encourage, rather than deter, the steadily growing North-South traffic. East-West links also need to be improved to enable industry to expand along this development axis.

3.15. Northern Ireland is dependent on oil (70 %) and coal for its energy needs, as it is not yet connected to natural gas pipelines and its energy market is cut off from the British and Continental European grids. Even when the gas pipeline to Great Britain has been build, financial rules will preclude any cut in electricity prices for some years. As a result, Northern Irish energy prices are among the highest in the EU and this substantially hampers competitiveness.

Border counties of the Republic

3.16. No separate data are available for the Border counties, as the Republic (total 1991 population 3.5 million) publishes only national economic statistics. In considering the figures quoted below, it should be borne in mind that one-third of the Republic's population and a major part of its economic activity are concentrated on the capital, Dublin. The Border counties tend to be thinly populated.

3.17. In 1991, per capita income in the Republic was 70 % of the EU average. With population growth outstripping growth in domestic employment, the Republic too suffered from net emigration, 0.9 % of the population per year in the late 1980s. At 18 % (late 1993 figures) the Republic has one of the highest rates of unemployment in the EU, with particularly high figures for long-term unemployment (44 %) and youth unemployment (approx. 25 %).

3.18. Foreign firms account for a high proportion of the Republic's manufacturing industry, providing 45 % of jobs in the sector and contributing 68 % of net industrial output. Agriculture accounts for 9 % of GDP and 13 % of employment. The Republic suffers from a historically low level of investment; per employed worker this is more than 20 % below the EU average.

4. Main points of the Community Initiative for Northern Ireland and the Border counties

4.1. Against this economic and political background, and wishing to bolster the peace process, within the framework of the EU, the Commission has proposed a special support programme to promote peace and reconciliation based on the recommendations of the ad hoc Task Force. This was welcomed by the Essen European Council in December 1994.

4.2. Under EU regional policy, it was decided to go for a new Community Initiative rather than to step up normal Structural Fund aid for Northern Ireland and the Republic. This will raise the political profile of the Community's aid and it is also intended to give a clear, positive signal to the people of Northern Ireland and the Border counties, and to engender new hope and confidence and the courage to reject intolerance.

4.3. The special programme is to run from 1995 to 1999, with initial funding of ECU 300 million for the first three years; further funds are to be made available for the final two years, following an appraisal and interim report by the Commission.

4.4. The indicative allocation of resources earmarks 80 % for activities in Northern Ireland and not less than 20 % for the Border counties, with at least 15 % of the total devoted to cross-Border projects. Measures under the Initiative are to be financed jointly by the Community and the Member States concerned, with the Community covering up to 75 % of the cost.

4.5. The special programme is to provide support and economic assistance in five key areas:

(i) Employment

- Promotion of growth sectors such as tourism,

- Redirection of redundant skills (e.g. security and construction sectors),

- Getting long-term and young unemployed people back to work and boosting the female participation rate;

(ii) Urban and rural regeneration

- Upgrading the social and physical environment in the hardest-hit urban and rural areas;

(iii) Cross-Border development

- Exploiting the opportunities for cross-Border social and economic activities arising from the new situation;

(iv) Social inclusion

- Measures to help particularly disadvantaged social groups, such as victims of violence and ex-prisoners;

- Measures to encourage the integration of children and young people, including pre-school education;

- Cross-community activities;

(v) Productive investment and industrial development

- Upgrading existing facilities to promote competitiveness, particularly with a view to the development of SMEs,

- Stimulating innovative research and technological development,

- Promoting productive investment through soft loans.

4.6. A flexible approach to funding will benefit the social inclusion measures (point (iv)) in particular; one of the proposed forms is global grants - which have already proved their worth in other Community programmes - to relevant local players (youth services, non-governmental organizations (NGOs), women's groups, local authorities). Suitable candidates should be selected from the 2,500 or so NGOs - particularly those working in local communities and on a cross-community basis. The Commission should not hold back from supporting proposals which are imaginative and experimental, provided they are clearly geared to the objective of 'peace and reconciliation'.

5. General comments

5.1. In the Committee's view, the Community Initiative should help to bring about a visible, rapid improvement in the economic situation of the people of Northern Ireland and the Border counties. Strict impartiality in implementing the special programme is absolutely essential in order to avoid potential conflicts between the communities. Equal treatment for all citizens in terms of economic and social opportunities must be guaranteed.

5.2. The special programme must be integrated with other measures and programmes designed to assist Northern Ireland. In particular, the Initiative should be vetted for compatibility and complementarity with existing EU aid programmes (in regional policy, primarily the Single Programming Document, Northern Ireland and the Community Support Framework, Ireland, plus other Community initiatives). It should also be effectively coordinated with the activities of other organizations such as the International Fund for Ireland.

5.3. The Committee welcomes the Commission's decision to opt for a Community Initiative. It hopes that this will give the right signals to the population and that they will construe it as an expression of new hope and of the solidarity and constructive assistance of the EU Member States.

5.4. The Committee regards the five priority areas for action under the special programme as generally appropriate for tackling the specific problems of Northern Ireland and the Border regions in the context of the peace and reconciliation process. The Committee is however aware that there is a need to set priorities for practical implementation.

5.5. One of the benefits to be maximized from the Initiative is the involvement of local people and organizations in the preparation and implementation of programmes which will benefit particular localities. Whilst major parts of two of the priority areas, those dealing with aspects of employment and investment, by their nature, need a strategic regional overview, the others can be seen as being more amenable to delegated responsibilities at a local level. The Committee, therefore, recommends that measures for urban and rural regeneration, cross-Border development and social inclusion should be delegated as far as possible by the national governments to local authorities or other coordinating agencies who, through appropriate partnerships, prepare schemes for local action which are approved by the agency(ies) administering the global grants procedure.

5.6. The Committee has considered how the needs of innovative measures, partnership actions, delegated authority, and accountability can be reconciled. The Commission is invited to suggest to the national authorities that a system using a small number of global grants should be developed and that applications for access to the global grants should be on the basis of measures developed at a local level and approved by the authority holding the global grant(s) using criteria linked to the overall guidelines.

5.7. The Committee was impressed by the quality and variety of potential contributions which the special fund might make. It was also impressed by the vitality of the different agencies (from the voluntary, statutory and private sectors), who can each make their own contribution. The critical factor is to ensure that the measures agreed are designed to secure maximum benefit for people who live in disadvantaged circumstances in Northern Ireland and the Border counties. There are over 2,500 NGOs, many of which wish to play a part. They include youth services, women's groups, community associations, charitable groups, enterprise agencies and agencies offering social services. The Committee hopes that the Commission will seek to ensure that the funding arrangements reflect this diversity, apply fairly to the different communities, and avoid excessive fragmentation. The administration of the global grants and the coordinating/partnership role of local authorities should take their interests into account.

5.8. The Committee considers that the ECU 300 million package for the first three years is a good start, but consideration should be given to topping it up if good economic and social progress is made. The Committee welcomes the indicative allocation of funds between Northern Ireland and the Border counties and the earmarking of at least 15 % of the funds for cross-Border projects.

5.9. Flexibility in fund allocation is absolutely essential for effective implementation of the special programme. The Committee therefore regards it as essential to retain some room for manoeuvre in regard to the proposed 80:20 allocation of funds between Northern Ireland and the Border regions, in terms of the actual allocation of funds to eligible projects. In particular, there should be no obstacles to exceeding the minimum of 15 % for cross-Border measures.

5.10. Excessively strict management of these allocations should be avoided, in order to allow the Community contribution to total 75 %, not per individual measure but across the board for all measures. Flexible management would not entail relaxing standard financial control procedures governing the use of Community funds.

5.11. The Committee endorses the proposals to promote productive investment in the industrial, commercial and service sectors. It considers soft loans to be a particularly effective tool. In particular it welcomes the emphasis on the development of SMEs, which are important for employment. It notes with approval, however, that investment schemes by other firms which can help to create jobs also qualify for assistance. The important thing now is to reduce the time-lag between investment decisions and actual implementation.

5.12. On the basis of its on-the-spot findings, the Committee feels that, particularly in this priority area, limiting cross-Border measures to the six Border Counties of the Republic is too restrictive, as experience shows that investment by firms does not stop at arbitrary, administratively defined borders. A more flexible interpretation of 'cross-Border' should be permitted.

5.13. The Committee stresses the importance of stepping up the promotion of research and development in order to guarantee jobs in the long term; in this connection, exchanges of young academics between higher education establishments in Northern Ireland, the Republic and Great Britain should be further encouraged. The current programme of school exchanges between Northern Ireland and the Republic should be expanded. Support should also be available to promote cultural and sporting exchanges between sports clubs and cultural organizations in both Northern Ireland and the Republic, so as to further develop mutual trust.

Specific Comments

5.14. The Committee sets great store by the fact that when the Initiative is up and running, the Commission is to verify that programme funding is genuinely additional and that the two Governments actually provide the promised matching funds.

5.15. In order to cover the aforementioned areas effectively, the Committee considers that the Commission must constantly monitor implementation, so as to ensure that the EU money is spent effectively and is allocated fairly between the various regions and communities. In view of the still relatively unstable situation in Northern Ireland, three years is too long for an evaluation report. Interim reports should be drawn up after one and two years.

5.16. The Committee accepts that this Community Initiative is designed to be effective at local level in areas of great need. This has lead to an emphasis on delegation and the role of global grants. However, this does not mean that the Commission will relax its normal wish to ensure that the national authorities are fully accountable for the administration and effectiveness of local actions. The monitoring arrangements may be more complex, but the standards of scrutiny must not be inadequate.

5.17. The Committee believes that among the many possible beneficiaries, funding should be concentrated on umbrella organizations and those NGOs involved in cross-Border work; this is the most effective way of promoting reconciliation between the communities, and of building bridges between neighbours in the context of European integration.

5.18. Nevertheless, the Committee considers it important that global grants for socioeconomic measures aimed at exploiting the prospects opened up by the peace process should not be confined to NGOs and other bodies working in the social field; socio-economic interest groups (chambers of industry, commerce and craft industries, trade unions, employers' associations and the welfare associations, consumer organizations, sports clubs, etc. which are important in this context) should also be eligible.

5.19. The Committee welcomes the fact that, where necessary, technical assistance is to be given to beneficiary organizations, authorities and socio-economic groups, in order to ensure that the Community's money is used in line with the aims of the special programme.

5.20. The Committee recommends that the Operational Programmes to be submitted by the Member States should be required to provide, inter alia, an indicative allocation of total funds between the five priorities and, bearing in mind that priorities vary in each local area, an indicative allocation of funds to be available at national level and for appropriate local areas. The publication of such allocations would help to meet the pressing call for openness and visibility seen as vital for the success of the Initiative.

6. Prospects

6.1. The Economic and Social Committee broadly endorses the Commission's proposed special support programme for peace and reconciliation in Northern Ireland and the Border Counties of the Republic. Its objective of promoting peace, prosperity and economic security is extremely important for securing lasting peace on the basis of democracy, the benefits of which will go beyond the two Member States concerned to foster the coexistence of peoples throughout the European Union.

6.2. Per head of population, Northern Ireland receives significantly less Structural Fund money than the Republic. Against this background the Committee urges the Commission to assess whether the Structural Fund allocation for Northern Ireland could be increased.

6.3. The Committee would also ask the Commission to spell out to what extent it intends to leave implementation of special programme measures to local authorities and NGOs (voluntary and Community sector) on-the-spot, (see point 5.16), using global loans.

6.4. The Committee urges the Commission to involve grass-roots economic and social interest groups as far as possible in selecting projects under the special programme. The Committee wishes to be briefed specifically about the actual allocation of funds for projects, measures and beneficiaries of global loans before their implementation, as well as in the annual interim reports (see point 5.13).

6.5. The Committee believes that the Community Initiative can contribute to the economic and social basis for the peace process, for reconciliation and for cross-community tolerance, and that it will also benefit the European Union as a whole.

Done at Brussels, 31 May 1995.

The President

of the Economic and Social Committee

Carlos FERRER