COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 02.05.1996 
COM(96) 151 final 
COMMISSION REPORT TO THE 
COUNCIL AND PARLIAMENT ON THE 
IMPLEMENTATION OF FINANCIAL 
AND TECHNICAL COOPERATION WITH 
MEDITERRANEAN NON-MEMBER COUNTRIES 
1994 

1. The 1994 annual report is the second such report on the 
implementation of financial and technical cooperation with 
Mediterranean non-member countries, and covers both bilateral and 
the so-called "horizontal" cooperation. Compared with last year's, the 
report provides additional information on operations launched in 1994 
and assesses their implementation, in response to the wish expressed 
by the Council and Parliament. 
2. As regards the implementation, particular importance was attached to 
proper completion of all the various stages in a project's life cycle, and 
special attention will be given to project evaluation. In addition, 
coordination with the Member States and other donors, an in 
particular the World Bank, should ensure improved effectiveness of 
Community-funded operations. 
3. Implementation of bilateral cooperation with the MNC in 1994 was 
satisfactory with commitments being made comparatively earlier but 
disbursement taking longer. As described in more detail in the 
sections looking at specific countries, the long delays are mainly due to 
the political situation (events in Algeria, new government in Morocco). 
As for horizontal cooperation, the decentralized programmes, which are 
designed to meet actual needs expressed by local authorities, 
universities and the media, had far-reaching effects. 
4. However, 1994 will be remembered as the year of great changes in 
EU's policy vis-à-vis the Mediterranean. Since the Corfu European 
Council and the Commission communication of 19 October 1994 on 
strengthening the EU's Mediterranean policy - "Establishing a Euro-
Mediterranean partnership" - whose main guidelines were adopted by 
the Essen European Council, awareness of the importance for the EU 
of achieving genuine partnership with that region has grown 
considerably,' especially in consideration of the many challenges it will 
be confronted with in forthcoming years. 
COOPERATION WITH THE MNC 
I. NORTH MEDITERRANEAN1 
1. Generalities 
1. Financial and technical cooperation with north Mediterranean countries continued in 
1994 when funds for the last operations under the third financial protocols with 
Malta and Cyprus were committed. The fourth protocol with Turkey, adopted in 
1980, was suspended in 1994. 
2. In the case of Cyprus, it was decided to allocate available funds from the third 
protocol to the Greek community for the financing of a "European Institute", the 
preliminary work on which is now completed. 
3. As for Malta, efforts focused on monitoring, and wherever possible speeding up 
implementation of approved projects. 
4. The negotiation of fourth protocols with Malta and Cyprus was the year's key 
event; the instruments were initialled by the parties in December 1994. 
2. Evaluation bv country 
21 CYPRUS 
1- The first two protocols 
Budget funds under the first two protocols (ECU 26 million) were committed in full and 
96% was disbursed. EIB's own resources (ECU 48 million) were committed and 
disbursed in full. 
2. The third protocol 
ECU 18 million was available from budget funds. New commitments for 1994 from 
budget resources amounted to ECU 2.2 million and went to the following projects: 
Cyprus, Malta and Turkey. 
Sector Project Description 
(a) Rural sector Support for agricultural Boosting vegetal 
research (ECU 265 000) pathology research within 
the Agricultural Research 
Institute 
(b) Public sector Administrative Visits and seminars for 
cooperation officials in the fields 
(ECU 100 000) covered by Community 
law 
Survey of customs Training in EU procedures 
procedures (ECU 102 260) for central government 
officials 
Cartography and land Support for the 
register (ECU 800 000) computerization of 
Cyprus' land register 
(c) Industry Teacher training (ECU Training of government 
68 000) personnel 
Automation of production Introduction of modern 
procedures in SMEs (ECU production methods, 
99 700) computerization and 
productivity boosting in 
SMEs 
Standardization, Support for Cyprus' 
certification and quality institute for quality control 
control (ECU 474 000) and standardization 
(d) Environment Industrial pollution control Survey of industrial waste, 
(ECU 350 000) assistance with new 
legislation. 
In addition, ECU 3.05 million was set aside to cover interest rate subsidies on EIB 
loans. 
By the end of 1994 70% of budget funds had been committed, of which 88% actually 
disbursed. 
Remaining EIB resources (i.e. ECU 29 million out of ECU 44 million) were committed, 
with the opening of lines of credit for operations in the water supply and industrial 
sectors. Disbursement had reached 34% of the total as at 31 December 1994. 
The text of the fourth financial protocol (1995-1998) was initialled in December 1994. 
3. Evaluation 
Implementation of financial and technical cooperation continued in 1994 according to 
plan. The government authorities agreed to improve certain administrative procedures 
which should come on stream in 1995 and make for speedier project implementation. 
Conversely, little progress was made in the commitment of funds earmarked for 
initiatives bringing together the two communities, with the exception of the launch of 
feasibility studies for the treatment of waste waters in Nicosia. 
2.2. MALTA 
Funds available under the three financial protocols (1979-1993) concluded with Malta 
were committed in full (ECU 93.5 million) by 1 January 1994. 57% of budget funds 
(ECU 38.5 million) and 78% of EIB own resources (ECU 55 million) was disbursed. 
Budget funds mostly went to infrastructure projects, training initiatives and to promote 
local business, particularly in the tourist sector. 
EIB own resources were mainly spent on infrastructure (40%), telecommunications 
(20%), the environment and drinking-water supply projects. 
The new financial protocol (1995-98) was initialled in December 1994. 
n. SOUTHERN AND EASTERN MEDITERRANEAN2 
1. Generalities 
1. In 1994 new financial commitments under the fourth financial protocol with SEM 
countries totalled ECU 574 million, of which ECU 250 million from budget funds 
and ECU 324 million from EIB own resources. 
2. The sectoral breakdown of financial cooperation under the last generation of 
protocols has changed somewhat. The first three protocols had granted priority to 
infrastructure, agriculture, rural development and vocational training. They were 
funded mostly from budget resources. Under the fourth protocol these were rounded 
off by ancillary measures and economic reforms launched by a number of SEM 
countries. 
3. Of the funds put at the disposal of SEM countries by the New Mediterranean Policy 
The Southern and Eastern Mediterranean region covers the Maghreb (Algeria, 
Morocco and Tunisia) and the Mashreq (Egypt, Israel, Jordan, Lebanon and Syria). 
to back up economic reform, ECU 300 million was allotted to structural adjustment 
programmes. Additional funds from the 4th financial protocol rounded up the 
amount. 
In addition, ECU 80 million from budget funds under the 4th protocol was 
earmarked as risk capital3 (only ECU 31 million under the 3rd protocol). Morocco, 
Egypt and Jordan began to draw funds from their shares in 1994 for a total of 
ECU 28 million. Tunisia had already drawn ECU 7 million in 1993, whereas 
Algeria, Lebanon and Syria have not yet availed themselves of the facility. 
At the end of 1994 the picture was as follows: the overall commitment rate for funds 
under the first three protocols (budget and EIB own resources) was 96.5%; for the 
fourth protocol it was 60%, with commitments for Morocco, Tunisia and Jordan 
taking the lead. Only Syria was lagging behind with a commitment rate of 3% on 
fourth protocol funds, but the delay can be explained by the late start of the third and 
fourth protocols. 
2. Evaluation bv country 
MA G H REB 
2.1. ALGERIA 
1. The first three protocols 
Of the budget funds allocated under the first three protocols (ECLT 144 million), 88% 
was committed and 49% disbursed. 
EIB own resources (ECU 360 million) were committed in full and 58% actually 
disbursed. 
2. The fourth protocol 
Budget funds allocated under the fourth protocol (ECU 70 million) were concentrated 
on a small number of operations and sectors, namely rural development, housing and 
economic infrastructure. 
Owing to the economic and political situation, commitments from budget funds in 1994 
were very limited: ECU 0.75 million was committed for a preliminary study for a World 
Bank agricultural programme (ASAL - agricultural sector adjustment loan). 
In addition to risk capital, MNC have qualified for ECIP funds and a total of 
ECU 8.75 million from that instrument has been committed in 1994. 
No operation could be launched using risk capital (amount earmarked : ECU 18 
million). 
At the end of 1994 64% (of the ECU 280 million total) of EIB own resources had been 
committed, in accordance with programming guidelines, to fund transport infrastructure 
and water supply operations. 
By the same date 66% of budget funds had been committed, and 33% actually 
disbursed. 64% of EIB own resources had been committed and 8% disbursed. 
3. Commentary 
The political situation in Algeria has prevented any substantial progress in Community 
cooperation during the past year. Delays accumulated in implementing the protocols 
have resulted in some projects due to be funded under the first three protocols being 
abandoned and other projects being retargeted. Similarly, in view of the difficulties 
encountered in implementing projects already approved and assessing new projects, 
utilisation of the balance from the fourth protocol (ECU 124 million out of a total 
ECU 350 million) could prove problematic in the short term. 
2.2 MOROCCO 
1. The first three protocols 
Over 99% of budget funds (ECU 356 million) was committed and 84% paid out. 
Loans from EIB own resources (ECU 297 million) were committed in full and 78% 
actually disbursed. 
2. The fourth protocol 
Out of a total of ECU 218 million in budget funds, ECU 112 million was allocated 
to the following projects: 
Sector Project Description 
(a) Infrastructure Drinking water supply and The project will bring 
sanitation (ECU 11 drinking water to 19 rural 
million) centres 
(b) Rural development Improvements to farmland Construction of irrigation 
in Haouz systems and technical 
(ECU 21.5 million) assistance for the Office 
Mise en Valeur Agricole 
of the Haouz region 
Support to local The project will 
agricultural credit funds strengthen local credit 
(ECU 16,4 million) funds enabling them to 
grant loans to 
smallholders 
Support for the The project will put at 
Agricultural Development the Fund's disposal budget 
Fund (ECU 50 million) credits enabling it to grant 
subsidies to smallholders 
implementing improved 
techniques 
(c) Scientific cooperation Development of remote The project comprises: 
sensing (ECU 4 million) - an operation to monitor 
vegetation on land, sea 
and forest conditions 
- specialized TA, 
training, supply of 
equipment 
(d) Health Support for mother and The project seeks to 
newborn child health improve mother and child 
(ECU 9 million) welfare services through 
training programmes, 
improved facilities and 
more effective 
management 
In addition, 80% of risk capital (ECU 20 million) was committed to fund projects 
undertaken by Moroccan small and medium-sized undertakings, preferably in partnership 
with European business. 
Loans from EIB own resources (ECU 220 million) were allocated to agricultural 
initiatives (improvements and credit) and infrastructure (electricity and water). Projects 
currently being considered should lead to funds being committed in full in 1995, with 
14% earmarked for a line of credit to assist the industrial sector. 
By the end of 1994, 72% of budget funds had been committed and 16% actually 
disbursed. 68% of EIB own resources had been committed and 12% paid out. 
3. Commentary 
By and large, implementation of the financial protocols produced good results in 1994. 
While the rate of commitment was good, the payment level was low. In the main, 
delays can be put down to successive changes of government which have resulted in 
three different Finance ministers (acting as national authorizing officer) occupying the 
post over the 16-month period between November 1993 and February 1995. In addition, 
the low level of payments reflects the fact that certain invitations to tender produced no 
results (Faculty of Science and Technology, Scientific Research). 
2.3. TUNISIA 
1. The first three financial protocols 
Budget funds granted under the first three financial protocols (ECU 208 million) were 
committed in full and 89% was disbursed. 
EIB own-resources loans (ECU 251 million) were also committed in full and 87% was 
actually disbursed. 
2. The fourth protocol 
Budget funds granted in 1994 amounted to ECU 13 million out of a total of 
ECU 116 million, and went to fund the following projects: 
Sector Project Description 
(a) Rural development Rural development of The aim is to stabilize 
Sejnane-Stage 2 stock farmers' income, 
(ECU 5 million) strengthen the existing 
stock farmers' 
organization and teach 
them sustainable land 
management techniques to 
ensure that pastures and 
semi-intensive stock 
farming are preserved 
Hill-side dams Construction of water 
(ECU 3 million) reservoirs (three dams) 
for various purposes: 
irrigation, replenishment 
of ground water tables 
and protection against 
floods 
(b) Industry T.A. for promoting quality The project seeks to 
assurance implement a number of 
(ECU 5 million) initiatives to train workers 
and raise their awareness 
in Tunisian 
administrations and 
institutions, and provide 
training and technical 
assistance for 
implementing a quality 
assurance and 
infrastructure 
development scheme 
Of the risk capital (ECU 15 million) administered by the EIB, 47% had been committed, 
and the balance should be taken up in 1995. The funds will strengthen the capital base 
of Tunisian undertakings and will be channelled through a number of local financial 
institutions. 
As regards loans granted by the EIB from own resources, amounting to ECU 
168 million, 94% had been committed (23% in 1994) as follows: 
- 49% for infrastructure of economic significance (availability of water resources and 
means of communication); 
10 
- 41% for industry (lines of credit and establishment of business parks) and tourism 
(lines of credit). 
By the end of 1994, 65% of budget funds had been committed, and 61% disbursed. 
94% of EIB own resources had been committed with 16% disbursed. 
3. Commentary 
Overall, implementation of the financial protocols concluded with Tunisia is working 
well in terms of both commitments and payments. 
The Tunisian administration and the agencies entrusted with implementation of the 
projects funded under the protocols have all shown remarkable technical and financial 
capacities. Likewise, the new projects are usually backed by excellent supporting 
documentation. 
Projects being prepared at the end of 1994 in agriculture and economic development will 
enable funds under the fourth protocol to be committed virtually in full by the end of 
1995. 
MASHREQ 
2.4. EGYPT 
1. The first three protocols 
Of the available budget funds (ECU 403 million), 98% was committed and 71% 
disbursed. EIB own resources were committed almost in full (99%) and 81% was 
disbursed. 
2. The fourth protocol 
ECU 72.7 million of budget funds totalling ECU 258 million was allocated in 1994 to 
the following projects: 
ii 
Sector Project Description 
(a) Agricultural Veterinary services Assistance to the 
development programme Egyptian government 
(ECU 20 million) (credit programme, 
training, drafting new 
legislation) 
(b) Environment, Development project for Programme to protect the 
population issues the Protectorate of St. environment and tourist 
Catherine (ECU 6 million) sites in the region of the 
Monastery of St. 
Catherine 
Support for a family Supply of contraceptives, 
planning programme in technical assistance and 
Upper Egypt training 
(ECU 10 million) 
(c) Economic reform Reform of the banking The project offers 
sector. Assistance to the technical assistance and 
Central Bank of Egypt training to improve the 
(ECU 11.7 million) efficiency of Egypt's 
Central Bank 
Programme to develop the Quality improvement, 
private sector marketing techniques, 
(ECU 25 million) investment promotion 
In addition, ECU 8.8 million in budget funds were spent on interest rate subsidy on two 
EIB projects: the ANSDK Steel Plant and a CIB package loan. 
Of the ECU 16 million risk capital managed by the EIB, 38% was committed. 
EIB own resources (ECU 310 million) went to projects in the power generation 
(electricity transmission), industry and SME sectors. 
By the end of 1994 58% of budget funds had been committed with 4% paid out. 55% 
of EIB own resources had been committed and 20% actually disbursed. 
3. Commentary 
In 1994 financial and technical cooperation with Egypt was very positive. A good 
number of new projects, launched in 1994, were to become operational in the first half 
of 1995. Payments levels improved during the year as a result of lines of credit being 
opened (food industry, loan funds for agriculture). 
12 
All projects were carefully selected to boost the country's economic reform programme, 
bearing in mind the proposals made under the new partnership agreement currently being 
negotiated. The Community undertook to back economic reform during the transitional 
period, and to provide support for initiatives intended to lighten the social and economic 
burden of the reform programme, especially among the underprivileged. 
2.5. ISRAEL4 
1. The first three protocols 
EIB funds (ECU 133 million) were committed in full and 95% was actually paid out. 
2. The fourth protocol 
Out of a total of ECU 82 million, ECU 32 million had already been committed in 1993 
as package loans to the Israeli development bank to promote small and medium-sized 
businesses, and in 1994 ECU 25 million was allocated to the building of a sewage 
treatment plant in Sorek. 
3. Commentary 
In view of its level of development, Israel only qualifies for EIB loans from own 
resources. Although successful, their impact on the Israeli economy as a whole is 
obviously limited. 
2.6. JORDAN 
1. The first three protocols 
ECU 85 million in budget funds was committed in full and 80% disbursed. 
EIB loans totalled ECU 128 million, of which ECU 118 million from own resources and 
ECU 10 million as special loans. The amount was committed and disbursed in full. 
2. The fourth protocol 
ECU 4.1 million in budget funds was committed in 1994, out of a total of 
ECU 46 million, and went to fund the following projects: 
EIB loans only. 
13 
Sector Project Description 
(a) Infrastructure Study for Aqaba Railway Study on modernization of 
Corporation Jordan's railways 
(ECU 0.25 million) 
(b) Training Teacher training The project seeks to improve 
(ECU 3.9 million) teaching quality, especially in 
primary education 
In addition, ECU 2.01 million in budget funds went to fund interest rate subsidies on 
an EIB loan for a water supply project. 
Risk capital (ECU 2 million) was committed in full to finance projects launched by 
SMEs. Funds were committed in the form of a line of credit opened with the Industrial 
Development Bank. 
At the end of 1994 the EIB had committed 58% of own resources, out of a total of 
ECU 80 million earmarked under the protocol, on transport infrastructure and water 
supply operations and a line of credit for industry and the tourist sector. 
At the end of 1994, 85% of fourth protocol budget funds had been committed with 38% 
disbursed. Of EIB own resources 58% had been committed but no payment had been 
made. 
3. Commentary 
Community cooperation made good progress in 1994, against a background dominated 
by the peace process and exploratory discussions for the negotiation of the EU-Jordan 
partnership agreement. 
Financial cooperation worked well, with the usual delays due to the Jordanian 
authorities' lack of familiarity with Community procedures. 
2.7. LEBANON 
1. The first three protocols 
Of the ECU 46 million in budget funds, 98% had been committed and 51% disbursed, 
whereas EIB own resources (ECU 107 million) had been committed in full and 46% 
disbursed. 
14 
2. The fourth protocol 
As large amounts from budget funds had already been committed by the end of 1993, 
no further funds were committed in 1994. Instead projects concerning in particular the 
assessment of war damage and technical assistance for the Lebanese administration were 
launched. 
EIB own resources (ECU 45 million) were allocated to projects concerning the 
rehabilitation of power generation plants, the port of Beirut and water sanitation. 
By the end of 1994, 71% of budget funds (ECU 24 million) had been committed with 
12% disbursed, and 42% of EIB own resources had been committed but no funds had 
been paid out. 
3. Commentary 
Lebanon, which is entering a crucial stage of its economic and social recovery after 17 
years of war, has shown a remarkable capacity for using the aid granted to it. 
The European Community was the first to assist Lebanon in the reconstruction process 
and is now the largest contributor to the National Reconstruction Plan. 
The main problem encountered when implementing aid (especially in the case of EIB-
funded infrastructure projects) is how to rebuild the country's administration and 
strengthen its ability to manage reconstruction programmes. Accordingly, the project 
providing technical assistance to the Lebanese authorities, which runs for the three years 
during which vital infrastructure will be rehabilitated, is of the outmost importance for 
the Lebanese government. 
2.8. SYRIA 
1. The first two financial protocols (1977-1991) 
Budget funds under the first two protocols (ECU 59 million) were committed in full, 
with 80% actually disbursed. 
Own-resources EIB loans (ECU 98 million) were committed in full with 81% disbursed. 
2. The third and fourth financial protocols 
These (totalling ECU 304 million) were adopted with some delay by Parliament (entry 
into force was January 1993 and April 1994 respectively). 
15 
Under the protocols, ECU 17.5 million in budget funds out of a total of ECU 79 million 
was committed in 1994 to fund the following projects: 
Sector Project Description 
(a) Infrastructure Development of energy The project aims to: 
production - improve management of the 
(ECU 11 million) Electricity Board 
- train personnel 
- conduct a study for a national 
transmission centre 
- prepare a master plan 
(b) Economic Banking sector support The project aims to: 
reform programme - modernize the Syrian Bank of 
(ECU 4.5 million) Commerce 
- modernize the Syrian Central 
Bank 
(c) Population Population issues and In the light of the population 
family planning census, this project, cofunded 
(ECU 2 million) with UNFPA - the UN Fund 
for Population Activities - aims 
at strengthening the Central 
Statistical Office and conduct 
family planning activities 
In addition, ECU 12.9 million had been committed as interest rate subsidies (PEE 
Transmission). 
EIB loans under the third and fourth protocols (ECU 225 million) had not yet been 
taken up. They were essentially meant to fund improvements to the power supply and 
road systems and the rural telephone network. 
At the end of 1994 94% of budget funds under the third protocol (ECU 36 million) had 
been committed with 2% disbursed; and 12% had been committed under the fourth 
protocol (ECU 43 million). 
3. Commentary 
1994 was a very productive year from the point of view of EU-Syria cooperation. 
Following the adoption of the fourth protocol in December 1993, the Syrian authorities 
and the delegation have launched a number of preparatory studies, all of which have 
been completed, enabling budget funds under the third and fourth protocols to be 
committed almost in full (water supply, banking system reform, development of energy 
16 
sector, population issues) and the remaining funds to be earmarked for 1995 
(tourism, business centre, management school). 
These excellent results (notwithstanding the rigidity of the local authorities) 
are the product of Syria's eagerness to open up and modernize its economy 
and the Union's resolve to show its interest in resuming cooperation with 
Syria, after a long interruption, together with its support for the peace 
process. 
Even though there is still scope for improvement in terms of speed of 
implementation, there is evidence that close and sustained contacts between 
the partners (local government and the Commission) are essential for 
effective cooperation. 
III. STRUCTURAL ADJUSTMENT 
The special ECU 300 million package to support economic reforms in SEM 
countries implementing a structural adjustment programme is an 
innovation of the fourth generation of financial protocols. 
A limited share of the means allocated under fourth financial protocols 
concluded with those countries may be added to the funds provided under 
the package. 
Community aid takes the form of funding for general or sectoral import 
programmes and of technical assistance for macro-economic and sectoral 
support programmes. The counterpart funds generated by the programmes 
are used to fund initiatives to palliate the adverse effects of structural 
adjustment on the population. 
Funds were allocated to eligible countries on the basis of parameters 
measuring structural imbalance and long-term development needs. 
By the end of 1994 ECU 220 million out of the ECU 300 million package 
had been committed (cf. table below) 
EU SUPPORT 1 
CO 
ALGERIA 
MOROCCO 
TUNISIA 
JORDAN 
RESERVE 
TOTAL FOR STRUCTURAL ADJUSTMENT IN SEM 
COUNTRIES 
MMITMENTS AS AT END 1994 
Special package 
funds 
55 
60 
40 
65 
80 
300 Protocol funds 
15 
20 
-
15 
-
50 TOTAL 
70 
80 
40 
80 
-
350 
1? 
It would be premature to attempt an evaluation of the full effects of the programmes, 
however it could be said that they have facilitated the implementation of economic 
reforms, reduced the need for external funding and boosted expenditure on the most 
disadvantaged groups of population. 
Algeria was granted a contribution of ECU 70 million to support its reform programme 
in the low-cost housing sector. Aid has taken the form of a sectoral programme to 
import building materials needed to complete council dwellings; counterpart funds are 
used to fund operations to provide the dwellings with basic infrastructure. In 
February 1994 the first ECU 35 million instalment was paid out. The programme could 
be said to be on track even though implementation has been delayed mainly owing to 
Algeria's political situation. 
Morocco was granted ECU 80 million in Community aid for its structural adjustment 
programme. Counterpart funds are used to boost budget expenditure on health and 
education. The first ECU 50 million instalment was released in December 1993. 
Results have been more than satisfactory, both from the point of view of the economic 
reforms and in terms of budget support (loans made available from counterpart funds 
have all been taken up and economic indicators for the target sectors have shown 
sustained growth for the period concerned). The second instalment was released at the 
end of 1994. 
Tunisia was the first country to receive Community aid for its structural adjustment 
programme. The contribution was fully paid out by 31 December 1993. Counterpart 
funds go to finance job creation schemes, which thanks to support from the Community 
have been kept going. Economic reforms have been implemented according to plan and 
social indicators have shown a positive trend during the same period. 
As for Jordan. ECU 50 million (of which ECU 40 million under the adjustment package) 
have gone to support the 1992-93 economic reform programme. For the period 1994-95 
the Community disbursed (as at December 1994) ECU 30 million (of which 
ECU 25 million as part of the adjustment package) to support the economic reform 
programme. Counterpart funds are spent on education and health. 
18 
COOPERATION WITH SEM COUNTRIES AS A WHOLE 
In accordance with the New Mediterranean Policy (NMP), the relevant Council 
Regulation (EEC 1763/92 of 24/6/92) and the priority sectors selected for cooperation 
with SEM countries as a whole, operations already under way were pursued in 1994 
and new programmes, funded from both budget funds and EIB own resources, were 
launched. 
I. BUDGET FUNDS : 
Budget funds for the past year totalled ECU 65 million in commitment appropriations 
and ECU 44.66 million in payment appropriations. 
Since the launch of the NMP in July 1992 ECU 165.05 million have been committed 
and ECU 65.47 million disbursed, i.e. 40% of the amount committed. 
As at 31 December 1994 the projects, programmes and activities funded from 
Commission budget funds (see annexed list) could be grouped by priority area as show 
below: 
Environment 22% 
Decentralized cooperation 48% 
Population issues 6% 
Culture - Communication 2% 
Training - Education 5% 
Peace process 3% 
Risk capital 5% 
Microprojects 9% 
Between 1 January and 31 December 1994 funds were allocated as follows: 
Environment 
ECU 6.36 million in interest rate subsidies for the second stage of the EIB project 
"Sanitation for coastal towns in Tunisia". 
Decentralized cooperation5 
Following the successful completion of the pilot phase, the following activities were 
confirmed and expanded: 
Activities launched in 1993 under the "Med Invest" programme (ECU 10 million^ 
continued in 1994. Med Invest supports cooperation between small and medium-sized 
enterprises and the EC. 
19 
Med Urbs (ECU 8.9 million) support for cooperation between local 
authorities in SEM countries and the EC 
Med Campus (ECU 8.9 million) support for cooperation between universities 
in SEM countries and the EC 
Med Media (ECU 6.1 million) support for the media in SEM countries in 
the EC 
Med Avicenne (ECU 7.39 million) support for research institutes in SEM 
countries and the EC 
All these programmes essentially aim, through the establishment of cooperation networks 
between development agents, to create or strengthen civil society links not only between 
the Community and its Southern and Eastern Mediterranean partners, but also between 
the partners themselves. 
Regional cooperation 
The Commission approved a project to establish a Euro-Arab Management School 
(ECU 8.3 million) which will be the first institute jointly set up as part of official Euro-
Arab relations. The School, based in Granada, will offer a comprehensive management 
training programme in Arab countries and at the same time will train high-level Arab 
and European managers in Europe. 
In addition, a large number of ad-hoc initiatives (totalling ECU 4.5 million) have been 
launched with a view to encouraging the peace process, notably an economic 
development programme based on partnership between Europe and the Middle East and 
particularly aimed at SMEs. 
Mention should be made of some 60 micro-projects (ECU 3.7 million) comprising 
technical assistance, surveys, trade promotion and training (including seminars, debates, 
meetings and publications). 
II. EIB OWN RESOURCES 
As at end of December 1994 nine non-protocol operations had been approved totalling 
ECU 612 million out of the total ECU 1800 million made available. 
The following initiatives were added to the four already approved in 1992 and 1993. 
Environment: three loans (qualifying for a 3% interest-rate subsidy): 
(a) "Sorek Sewage Treatment" (ECU 10 million) - construction of a sewage 
treatment plant eight km. west of Jerusalem and connections to sewers; 
20 
(b) "Antalya Sewerage" (ECU 35 million) - construction of a sewage system and 
sewage treatment plant in Antalya; 
(c) "Sanitation for coastal towns in Tunisia" (ECU 25 million, stage II) - funding 
for the extension and construction of two sewage treatment plants (Greater 
Tunis and Médénine) and upgrading of sewage systems in the towns of Menzel 
Bourguiba, Sousse, Monastir, Kelibia, M'Saken and Médénine. 
A i rpo it i nfras true hire : ECU 80 million was granted for the construction/enlargement 
of two new runways, a passenger terminal and annexed public and technical 
facilities at Beirut international airport (Lebanon). 
Lastly, an ECU 80 million loan went to fund electricity transfer between the EC and 
Morocco. The project consists in the extension of the European grid to Morocco 
via cables 30 km. long across the Straits of Gibraltar and the improvement of the 
Moroccan national grid system. 
21 
CONCLUSION 
Overall financial and technical cooperation with Mediterranean non-member countries 
in 1994 gave positive results, despite the political uncertainties which continued to affect 
cooperation adversely, particularly in A Igeria . 
Most encouraging is the success encountered by several decentralized cooperation 
programmes. It is evident that they fulfil a need and point at the importance of the 
various partners in civil society as agents of cooperation with the MNC. 
22 
List of Annexes 
1. Financial implementation of protocols 
2. Sectoral implementation of protocols 
North Mediterranean 
Souther and Eastern Mediterranean 
3. Cooperation with MNC as a whole 
Budget funds 
EIB 
23 
TOTAL FINANCIAL IMPLEMENTATION OF THE FIRST THREE PROTOCOLS 
-C 1978-1991 
Cyprus 
Malta 
Turkey 
s/t Northern Med. 
Algeria 
Morocco 
Tunisia 
s/t Maghreb 
Egypt 
Jordan 
Lebanon 
Syria 
s/t Mashreq 
Israel 
s/t Mashreq & Isr. 
s/t Maghr. & Mash. 
s/t Med TOTAL BUDGET 
Commitments Payments 
Amount % Amount % 
44 38,6 88% 36,1 94% 
38,5 38,5 100% 22 57% 
590 590 100% 590 100% 
672,5 667,1 99% 648,1 97% 
144 126 88% 62 49% 
356 354 99% 297 84% 
208 208 100% 186 89% 
708 688 97% 545 79% 
403 393 98% 280 71% 
85 85 100% 68 80% 
46 45 98% 23 51% 
95 93 98% 48 52% 
629 616 98% 419 68% 
1337 1304 98% 964 74% 
2009,5 4579,1 228% 3540,1 77% TOTAL EIB 
Commitments Payments 
Amount %Amoun1 % 
92 92 100% 63 68% 
55 55 100% 43 78% 
115 115 100% 115 100% 
262 262 100% 221 84% 
360 360 100% 207 58% 
297 297 100% 232 78% 
250 250 100% 217 87% 
907 907 100% 656 72% 
492 492 100% 394 80% 
118 118 100% 118 100% 
107 107 100% 49 46% 
208 98 47% 79 81% 
925 815 88% 640 79% 
133 133 100% 127 95% 
1058 948 90% 767 81% 
1965 1855 94% 1423 77% 
2227 6642 298% 5130 77% TOTAL TOTAL PROTOCOL 
Commitments Payments 
Amount % Amount % 
136 130,6 96% 99,1 76% 
93,5 93,5 100% 65 70% 
705 705 100% 705 100% 
934,5 929,1 99% 869,1 94% 
504 486 96% 269 55% 
653 651 100% 529 81% 
458 458 100% 403 88% 
1615 1595 99% 1201 75% 
895 885 99% 674 76% 
203 203 100% 186 92% 
153 152 99% 72 47% 
303 191 63% 127 66% 
1554 1431 92% 1059 74% 
133 133 100% 127 95% 
1687 1564 1186 
3302 3159 96% 2387 76% 
4236,5 4088,1 96% 3256,1 80% 
1) Commitments/total. 2) Payments/commitments inci. ongoing commitments. 
FINANCIAL IMPLEMENTATION OF THE FOURTH PROTOCOL 
1991-1996 
Algeria 
Morocco 
Tunisia 
s/t Maghreb 
Egypt 
Jordan 
Lebanon 
Syria 
s/t Mashreq 
Israel 
s/t Mashreq & Isr. 
s/t Med. TOTAL BUDGET 
Commitments Payments 
Amount % Amount % 
70 46 66% 15 33% 
218 157 72% 25 16% 
116 75 .65% 46 61% 
404 278 69% 86 31% 
258 150 58% 6 4% 
46 39 85% 15 38% 
24 17 71% 2 12% 
43 5 12% 
371 211 57% 23 11% 
371 211 57% 23 11% 
775 489 63% 109 22% TOTAL EIB 
Commitments Payments 
Amount % Amounl % 
280 180 64% 15 8% 
220 150 68% 18 12% 
168 158 94% 25 16% 
668 488 73% 58 12% 
310 172 55% 35 20% 
80 46 58% 0% 
45 19 42% 0% 
115 0% 
550 237 43% 35 15% 
82 34 41% 30 88% 
632 271 43% 65 24% TOTAL TOTAL PROTOCOL 
Commitments Payments 
Amount % Amount % 
350 226 65% 30 13% 
438 307 70% 43 14% 
284 233 82% 71 30% 
1072 766 71% 144 19% 
568 322 57% 41 13% 
126 85 67% 15 18% 
69 36 52% 2 6% 
158 5 3% 0 0% 
921 448 49% 58 13% 
82 34 41% . 30 88% 
1003 482 88 18% 
1300 759 58% 123 16%| 2075 1248 60% 232 19% 
N 
1) Commitments/total. 2) Payments/commitments inci. ongoing commitments. 
IMPLEMENTATION OF THE MEDITERRANEAN PROTOCOLS (NORTHERN MED) BY SECTOR 
EEC/NORTHERN MEDITERRANEAN (1978 - 1993) 
00 SECTOR 
OF ACTIVITY 
1, INFRASTRUCTURE, WATER 
(Collection and supply) 
2, SANITATION, ENVIRONMENT 
3, ENERGY (Thermal power stations, 
gas and electricity supply) 
4, AGRICULTURE, FISHERIES, FORESTRY 
5, TRADE, INDUSTRY, SERVICES 
6, SCIENTIFIC COOPERATION 
7, EDUCATION 
8, HEALTH CARE, HOUSING 
9, STRUCTURAL ADJUSTMENT 
(bilateral component) 
10 COMMITMENT REMAINING 
11, TOTAL PROTOCOL 1 
ECU mill. 
105,2 
8,5 
7,6 
73,7 
0,0 195,0 % 
53,9% 
4,4% 
3,9% 
37,8% 
0,0% 100% PROTOCOL 2 
ECU mill. 
68,9 
10,7 
77,0 
62,9 
5,0 
5,0 
0,0 
229,5 % 
30,0% 
4,7% 
33,6% 
274% 
2,2% 
2,2% 
0,0% 
100% PROTOCOL 3 
ECU mill. 
127,0 
4,6 
89,0 
10,5 
15,0 
0,6 
6,3 
253,0 % 
50,2% 
4,2% 
5,9% 
0,2% 
2,5% 
100% TOTAL 
(1965/1993) 
ECU mill. 
301,1 
19,0 
151,6 
5,0 
5,6 
0,0 
6,3 
677,5 % 
44,4% 
2,8% 
22,4% 
0,7% 
0,8% 
0,0% 
0,9% 
100% 
31.12.94 
IMPLEMENTATION OF THE MEDITERRANEAN PROTOCOLS (NORTHERN MED) BY SECTOR 
EIB-ALL COUNTRIES (1978 - 1994) 
SECTOR 
OF ACTIVITY 
1. INFRASTRUCTURE, SANITATION, 
WATER (Collection and supply) 
2. ENERGY (Thermal power stations, gas 
and electricity supply) 
3. AGRICULTURE, FISHERIES, FORESTRY 
4. TRADE, INDUSTRY, SERVICES 
5. GLOBAL LOANS 
(to industry or mixed) 
6. COMMITMENT REMAINING 
7. TOTAL PROTOCOL 1 
(1965/1983) 
ECU mill. 
36 
36 % 
100% 
100% PROTOCOL 2 
(1973/1988) 
ECU mill. 
44 
25 
69 % 
64% 
36% 
100% PROTOCOL 3 
(1979/1993) 
ECU mill. 
(D 
40 
10 
27 
80 
157 % 
25% 
6% 
17% 
51% 
100% TOTAL 
(1965/1993) 
ECU mill. 
120 
10 
27 
105 
262 % 
46% 
4% 
10% 
40% 
100% 
P*3 (1) incl. environment - ECU 7 million. December 1994 
IMPLEMENTATION OF THE MEDITERRANEAN PROTOCOLS (SEM) BY SECTOR 
EEC-ALL COUNTRIES (1978-1994) 
SECTOR 
OF ACTIVITY 
1. INFRASTRUCTURE, 
WATER (Collection and supply) 
2. SANITATION, ENVIRONMENT 
3. ENERGY (Thermal power stations, 
gas and electricity supply) 
4. AGRICULTURE, FISHERIES, FORESTRY 
5. TRADE, INDUSTRY, SERVICES 
6. SCIENTIFIC COOPERATION 
7. EDUCATION (1) 
8. HEALTH CARE, HOUSING 
9. STRUCTURAL ADJUSTMENT (2) 
(Bilateral component) 
10. COMMITMENT REMAINING 
11. TOTAL PROTOCOL 1 
(1978/1981) 
ECU mill. 
85 
0 
60 
5 
0 
35 
34 
20 
61 
1 
0 
0 
6 
307 % 
28% 
0% 
20% 
2% 
0% 
11% 
11% 
7% 
20% 
0% 
0% 
0% 
2% 
100% PROTOCOL 2 
(1981/1986) 
ECU mill. 
34 
0 
27 
23 
0 
145 
75 
26 
41 
22 
0 
0 
22 
415 % 
8% 
0% 
7% 
6% 
0% 
35% 
18% 
6% 
10% 
5% 
0% 
0% 
5% 
100% PROTOCOL 3 
(1986/1991) 
ECU mill. 
44 
0 
56 
39 
0 
260 
143 
18 
44 
6 
0 
0 
5 
615 % 
7% 
0% 
9% 
6% 
0% 
42% 
23% 
3% 
7% 
1% 
0% 
0% 
1% 
100% PROTOCOL 4 
(1991/1996) 
ECU mill. 
23 
0 
61 
15 
0 
136 
169 
4 
12 
19 
50 
0 
286 
775 % 
3% 
0% 
8% 
2% 
0% 
18% 
22% 
1% 
2% 
2% 
6% 
0% 
37% 
100% TOTAL 
(1978/1996) 
ECU mill. 
186 
0 
204 
82 
0 
576 
421 
68 
158 
48 
50 
0 
319 
2112 % 
9% 
0% 
10% 
4% 
0% 
27% 
20% 
3% 
7% 
2% 
2% 
0% 
15% 
100% 
(1) Targeted projects, programmes and training initiatives are included under the relevant sector. 
(2) Structural adjustment sector - ECU 300 million, incl. ECU 220 million already committed. 
IMPLEMENTATION OF THE MEDITERRANEAN PROTOCOLS (SEM) BY SECTOR 
EIB-ALL COUNTRIES (1978-1994) 
SECTOR 
OF ACTIVITY 
1. INFRASTRUCTURE, 
WATER (Collection and supply) 
2. SANITATION - ENVIRONMENT 
3. ENERGY (Thermal power stations, 
gas and electricity supply) 
4. AGRICULTURE, FISHERIES, FORESTRY 
5. TRADE, INDUSTRY, SERVICES 
6. COMMITMENT REMAINING 
7. TOTAL PROTOCOL 1 
(1978/1981) 
ECU mill. 
166,5 
0 
97 
20,5 
78 
0 
362 % 
46% 
0% 
27% 
6% 
22% 
0% 
100% PROTOCOL 2 
(1981/1986) 
ECU mill. 
136,5 
10 
201,5 
132 
120 
0 
600 % 
23% 
2% 
34% 
22% 
20% 
0% 
100% PROTOCOL 3 
(1986/1991) 
ECU mill. 
97,5 
129 
188 
284 
187,5 
117 
1003 % 
10% 
13% 
19% 
28% 
19% 
12% 
100% PROTOCOL 4 
(1991/1996) 
ECU mill. 
337 
12 
127 
59 
224 
541 
1300 % 
26% 
1% 
10% 
5% 
17% 
42% 
100% TOTAL 
(1978/1996) 
ECU mill. 
738 
151 
614 
496 
610 
658 
3265 % 
23% 
5% 
19% 
15% 
19% 
20% 
100% 
SOURCE: EIB quarterly statistics 
COOPERATION WITH MNC AS A WHOLE 
Budget funds (December 1994) 
Sector of activity Commitment (ECU million) 
/. Environment 
1.1 Interest rate subsidies (EIB loans) 
1.2. IMPHOS - cadmium removal (phosphate) 
1.3. EIW training 
1.4. Gaza - sanitation project 
Total 1 19.95 
1.10 
0.53 
15.00 
36.58 (22%) 
Decentralized cooperation 
2.1. CIHEAM 
2.2. MED-URBS 
2.3. MED-CAMPUS 
2.4. MED-INVEST 
2.5. MED-MEDIA 
2.6. MED-AVICENNE 
Total 2 3.00 
22.32 
23.30 
10.00 
11.04 
8.82 
78.48 (48%) 
3. Regional cooperation 
3.1 Framework contract 
3.2 Population 
3.3 EURONEWS 
3.4 Risk capital 
3.5 EURO-ARAB Management 
3.6 "Peace process" projects 
3.7 Microprojects * 
Total 3 0.5 
10.50 
3.00 
9.00 
8.30 
4.45 
14.24 
49.99 (30%) 
GRAND TOTAL 165.05(100%) 
'Microprojects 
Technical assistance 
Studies 
Trade promotion 
Training, seminars 3.18(22.3%) 
3.81 (26.8%) 
0.33 (2.3%) 
6.92 (48.6%) 
^>o 
COOPERATION WITH MNC AS A WHOLE 
EIB own resources (December 1994) 
Sector of activity Commitment (ECU million) 
/. Environment 
1.1 Effluent treatment and associated infrastructure 40.0 
(Coastal towns of Tortus and Latakia (Syria)) 
1.2. Waste water disposal - coastal towns in Tunisia 42.0 
1.3. Sewage treatment plant at Soreq (Israel) 10.0 
1.4. Sewerage system and treatment plant at Antalya 35.0 
Total 1. 127.0(21%) 
Other 
2.1. Telecommunications/international network Jordan 45.0 
2.2. Beirut airport (Lebanon) 80.0 
2.3. Maghreb-Spain gas pipeline (Algerian section) 200.0 
2.4. Telecommunications/international network Morocc 80.0 
2.5. EU-Morocco electricity supply link 80.0 
Total 2 485.0 (79%) 
GRAND TOTAL 612.0 (100%) 
'3>1 

ISSN 0254-1475 
COM(96) 151 final 
DOCUMENTS 
EN 11 
Catalogue number : CB-CO-96-161-EN-C 
ISBN 92-78-02414-7 
Office for Official Publications of the European Communities 
L-298S Luxembourg 
^