EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 14.11.2008 
SEC(2008) 2816 
  
COMMISSION STAFF WORKING DOCUMENT 
Annex to the: 
 
ANNUAL REPORT ON THE COHESION FUND (2007) 
  
{COM(2008)752 final} 
 
EN 2   EN TABLE OF CONTENTS 
1. General Context ........................................................................................................... 5 
1.1. Convergence and economic development in the beneficiary Member States.............. 5 
1.1.1 Greece ................................................................................................................... ....... 5 
1.1.2. Spain................................................................................................................... .......... 6 
1.1.3. Portugal ................................................................................................................ ........ 6 
1.1.4. Cyprus .................................................................................................................. ........ 7 
1.1.5. Czech Republic .......................................................................................................... .. 8 
1.1.6. Estonia................................................................................................................. ......... 8 
1.1.7. Hungary................................................................................................................. ....... 9 
1.1.8. Latvia.................................................................................................................. ........ 10 
1.1.9. Lithuania ............................................................................................................... ..... 11 
1.1.10. Malta .................................................................................................................. ........ 11 
1.1.11. Poland................................................................................................................. ........ 12 
1.1.12. Slovakia............................................................................................................... ....... 13 
1.1.13. Slovenia............................................................................................................... ....... 14 
1.2. Conditionality............................................................................................................ . 14 
2. Financial execution of th e 2000-2006 period in 2007 and closure of projects .......... 16 
2.1. Payments made in 2007 for projects  adopted under the 2000-2006 period............... 16 
2.2. Outstanding commitments from the 2000-2006 period ............................................. 18 2.3. Closure of projects from the 2000-2006 period ......................................................... 20 3. The implementation of the 2000-2006 projects by Member States ........................... 21 3.1. Greece .................................................................................................................... .... 21 
3.1.1. Environment............................................................................................................. .. 21 
3.1.1. Transport ............................................................................................................... ..... 22 
3.2. Spain..................................................................................................................... ...... 23 
3.2.1 Environment and transport......................................................................................... 23 3.3. Portugal .................................................................................................................. .... 24 
3.3.1. Environment and transport......................................................................................... 24 3.4. Cyprus .................................................................................................................... .... 25 
 
EN 3   EN 3.5. Czech Republic .......................................................................................................... 25  
3.5.1. Environment............................................................................................................. .. 25 
3.5.2. Transport ............................................................................................................... ..... 25 
3.6. Estonia................................................................................................................... ..... 26 
3.6.1. Environment............................................................................................................. .. 26 
3.6.2. Transport ............................................................................................................... ..... 26 
3.7. Hungary................................................................................................................... ... 27 
3.7.1. Environment............................................................................................................. .. 27 
3.7.2. Transport ............................................................................................................... ..... 27 
3.8. Latvia.................................................................................................................... ...... 28 
3.8.1. Environment............................................................................................................. .. 28 
3.8.2. Transport ............................................................................................................... ..... 28 
3.9. Lithuania ................................................................................................................. ... 29 
3.9.1. Environment............................................................................................................. .. 29 
3.9.2. Transport ............................................................................................................... ..... 29 
3.10. Malta .................................................................................................................... ...... 29 
3.10.1 Environment............................................................................................................. .. 29 
3.10.2. Transport .............................................................................................................. ...... 30 
3.11. Poland................................................................................................................... ...... 30 
3.11.1. Environment............................................................................................................ ... 30 
3.11.2. Transport .............................................................................................................. ...... 31 
3.12. Slovakia................................................................................................................. ..... 31 
3.12.1. Environment............................................................................................................ ... 31 
3.12.2. Transport .............................................................................................................. ...... 32 
3.13. Slovenia................................................................................................................. ..... 32 
3.13.1. Environment............................................................................................................ ... 32 
3.13.2. Transport .............................................................................................................. ...... 32 
4. Monitoring, controls and irregularities ...................................................................... 33 4.1. Monitoring: committees and missions ....................................................................... 33 4.1.1. Greece .................................................................................................................. ...... 33 
4.1.2. Spain................................................................................................................... ........ 33 
 
EN 4   EN 4.1.3. Portugal ................................................................................................................ ...... 34 
4.1.4. Cyprus .................................................................................................................. ...... 35 
4.1.5. Czech Republic .......................................................................................................... 35 
4.1.6. Estonia................................................................................................................. ....... 35 
4.1.7. Hungary................................................................................................................. ..... 35 
4.1.8. Latvia.................................................................................................................. ........ 35 
4.1.9. Lithuania ............................................................................................................... ..... 36 
4.1.10. Malta .................................................................................................................. ........ 36 
4.1.11. Poland................................................................................................................. ........ 37 
4.1.12. Slovakia............................................................................................................... ....... 37 
4.1.13. Slovenia............................................................................................................... ....... 38 
4.2. Inspections............................................................................................................... ... 38 
4.2.1. Greece .................................................................................................................. ...... 39 
4.2.2. Spain................................................................................................................... ........ 39 
4.2.3. Portugal ................................................................................................................ ...... 39 
4.2.4. Cyprus .................................................................................................................. ...... 40 
4.2.5. Czech Republic .......................................................................................................... 40 
4.2.6. Estonia................................................................................................................. ....... 40 
4.2.7. Hungary................................................................................................................. ..... 40 
4.2.8. Latvia.................................................................................................................. ........ 40 
4.2.9. Lithuania ............................................................................................................... ..... 40 
4.2.10. Malta .................................................................................................................. ........ 41 
4.2.11. Poland................................................................................................................. ........ 41 
4.2.12 Slovakia................................................................................................................ ...... 41 
4.2.13 Slovenia................................................................................................................ ...... 41 
4.3. Irregularities ............................................................................................................ ... 41 
5. Evaluation .................................................................................................................. 42 
6. Information and publicity........................................................................................... 43 6.1. Information to/from the Member States..................................................................... 43 
6.2. Commission measures on publicity and information................................................. 43
 
EN 5   EN 1. G ENERAL CONTEXT  
1.1. Convergence and economic development in the beneficiary Member States 
1.1.1 Greece 
In 2006 Greece's real GDP grew by 4.2% and GDP per capita1 in PPS reached 98% 
of the EU-27 average. In 2007, real GDP growth decelerated marginally to 4%, reflecting the slowdown of priv ate consumption and the fading of the previous year's 
extraordinary dynamism in residential i nvestment activity. The current external 
deficit appears to have wi dened further in 2007, exceeding 16% of GDP, compared 
with 14¼% in 2006 and 13¼% in 2005. The ge neral government deficit outcome for 
2007 was 2.8% of GDP, including a net one-o ff deficit-increasing impact of around a 
quarter of a percentage poi nts of GDP, which compares with the official budgetary 
target of 2¼%. This deviation of about ha lf a percentage point of GDP reflects an 
expenditure overrun of almost  ¼% of GDP and a net one-off deficit increase of the 
same amount. The debt-to-GDP ratio dec lined one percentage  point from 95.2% of 
GDP in 2006 to 94.2%. 
Greece submitted the most recent update of its stability programme for the period 
2008-2010 on 27 December 2007. According to the programme, real GDP growth 
should remain at 4% over the programme period on the back of buoyant domestic 
demand. The update targets a reduction of government deficit to 1.6% of GDP in 
2008, 0.8% in 2009 and, eventually, a ba lanced budget in nominal terms by 2010, 
mainly through higher tax revenues. The budgetary strategy outlined in the programme is aimed at speeding up fiscal  consolidation towards the medium-term 
objective (MTO) of a balanced budget in structural terms (i .e. in cyclic ally-adjusted 
terms net of one-off and other temporary meas ures), by reducing the structural deficit 
by more than half a percentage point pe r year. The programme does not specify the 
target year for attaining the MTO. 
In its Opinion of 4 March on the update , the Council noted that the fiscal 
consolidation strategy is subject to risks as the underlying macroeconomic scenario is 
favourable and the revenue-enhancing meas ures after 2008 are not fully spelled out. 
Ensuring a strong fiscal consolidation path would help address the imbalances of the 
Greek economy, notably persistent inflation, competitiveness losses and a large external deficit. The level of debt which remains is among the highest in the euro 
area and, coupled with the projected incr ease in age-related spending, will affect 
negatively the long-term sustainability of publ ic finances, which remains at high risk. 
The Council invited Greece to  carry out the envisaged adjustment towards the MTO 
and use any budgetary over-performance to speed up the consolid ation process in 
order to reach the MTO within the progr amme period. The Council also called for 
pursuing the ongoing tax administration reforms and, in view of the level of debt and 
the projected increase in ag e-related expenditure, improvement in the long-term 
sustainability of public finances th rough reforms of the pension system. 
                                                
 
1 According to Eurostat press release as of 29 October 2007, in 2006-2007 the National Statistical 
Service of Greece (NSSG) has carried  out an in-depth revision of th e Greek national accounts, leading 
to a rise of 9.6% in GDP for the base year 2000. This increase affects the whole period 1995-2006. 
 
EN 6   EN 1.1.2. Spain 
In 2006, Spain's GDP per capita in PPS r eached 105% of the EU -27 average while 
real GDP in 2007 grew by 3.8%. Consumer  price inflation has risen by 2.8% on 
average (3.6% in 2006), although inflationary pressures increased to 4% in the last 
quarter of 2007. According to the Apr il 2008 EDP notifica tion, the general 
government balance has reached a surplus of  2.2% of GDP, well above the initial 
targets. This better result stems from  higher-than-expected revenues, whereas 
expenditures would have been implemente d broadly as planned. Additionally, the 
debt-to-GDP ratio declined to 36.2 % in 2006 compared to 39.7% in 2006. 
Spain submitted its ninth update of its st ability programme, covering the period 
2007-2010, on 21 December 2007. The macro-economic scenario underlying the programme projects real GDP growth of 3.1% in 2008, 3% in 2009 and 3.2% in 
2010. Growth should be exclusively underpi nned by domestic demand, implying that 
the contribution of net exports would s till be negative. The update aims at 
maintaining macroeconomic and budgetary stability, fostering productivity and contributing to market efficiency through transparent and effi cient regulation. The 
general government surplus is  envisaged to decline from  2.2% of GDP in 2007 to 
about 1.2% in 2008 and remain stable for th e subsequent duration of the programme. 
In its Opinion of 4 March 2008 on the upda te, the Council considered the medium-
term budgetary position to be sound with high general government surpluses and a relatively low debt ratio. However, the economic growth assumptions were assessed 
as favourable and, as a result, the projected government revenue might turn out to be on the high side. The Council pointed out that fostering productivity-enhancing 
expenditure items, such as R&D, infrastructu re and education is needed to underpin a 
smooth adjustment of the economy in the light of large external imbalances, the contraction of the housing sector and the exis ting inflation differential with the euro 
area. Additionally, while maintaini ng a strong budgetary position, the Council 
invited Spain to further improve the long-term  sustainability of public finances with 
additional measures to contain the future  impact of ageing on spending programmes. 
1.1.3. Portugal 
Portugal’s GDP per capita in PPS attained  75% of the EU-25 average in 2006. In 
2007, GDP grew by 1.9% in real terms driv en by greater dynamism of domestic 
demand, especially investment, and a robust export performance.  The unemployment 
rate reached 8% in 2007, thus continuing th e upward trend observed in recent years. 
According to the March 2008 EDP notific ation, the general government deficit 
represented 2.6% of GDP in 2007, which comp ares with an outturn of 3.9% of GDP 
in 2006. This deficit reduction stems both fr om the revenue and the expenditure side. 
The overachievement of the initial budgeta ry target for 2007 benefited from the 
benign base effect created by the 2006 budgeta ry execution, which itself turned out 
to be some ¾% of GDP better-than-expected. It was further helped by additional revenue buoyancy. The debt-to-GDP ratio  fell to 63.6% in 2007, after the upward 
trend observed in recent years. 
The most recent update of the stability programme of Portugal, covering the period 
2007-2011, was submitted on 14 December 2007. The macroeconomic outlook underlying the programme projects real GDP  growth at 2.2% in 2008, 2.8% in 2009 
 
EN 7   EN and 3% in both 2010 and 2011. Grow th is expected to be increasingly driven by 
domestic demand, particularly invest ment. The update targets a reduction of 
government deficit to 2.4% of GDP in 2008, 1.5% in 2009, and eventually 0.2% in 
2011. Last March, the deficit target for 2008 was revised to 2.2% of GDP, following 
the publication of the 2007 better-than-est imated budgetary outcome. The stability 
programme plans fiscal consolidation to be achieved mainly via moderation of 
primary expenditure, with some further support from an increasing revenue ratio. 
In its Opinion of 4 March 2008 on the update, the Council considered that the 
programme is consistent with  a correction of the excessive  deficit no later than 2008, 
stressing that it might be achieved in  2007 if the better-than-expected budgetary 
execution were to be confirmed. At the same time, the Council considered that the programme aims at further fiscal cons olidation over the medium term, although it 
pointed out that achieving the objectives is subject to an effective implementation of 
the measures announced in the programme  and may require additional efforts, 
notably in the light of lower-than-projec ted economic growth. The Council invited 
Portugal to implement with determination th e fiscal consolidation envisaged in the 
programme so as to secure the correction of the excessive deficit, carrying out the 
planned adjustment towards the MTO and ensuring a rapid reduction of the debt-to-
GDP ratio. Additionally, the Council called on Portugal to  maintain expenditure 
moderation in a permanent way, enhancing the quality of public expenditure, and 
further improving the budgetary framework. 
1.1.4. Cyprus 
In 2006, Cyprus' GDP per capita in PPS attain ed about 92% of the EU-27 average. In 
2007, while real GDP grew by 4½%, inflati on remained at the 2006 levels of 2.2%, 
under conditions of almost full employment. In 2007, the general government balance recorded a surplus of about 3¼% of GDP, compared with a deficit of 1¼% 
of GDP in 2006. This would imply that th e medium-term objective for a balanced 
budget in structural terms (i.e. cyclically-a djusted net of one-off and other temporary 
measures) has been already comfortabl y overachieved. The marked turnaround in 
2007 is attributed to an unexp ected rise in total revenues,  due to especially high tax 
receipts brought by the strong profitability  of the financial s ector and the booming 
investment in real estate. The risk related to  this outlook is that part of the increase in 
tax bases and in the associated revenues would not be permanent and would fade over time on the back of decelerating growth of revenues to more normal trends. In 2007, the debt-to-GDP ratio decreased to about 60% from almost 65% of the 
previous year. 
Cyprus submitted its first stability pr ogramme, covering the period 2007-2011, on 7 
December 2007. The update envisages GDP growth of around 4% over the programme period. After achieving a budgetary  surplus in 2007, the programme aims 
at consolidating the budgetary outcome. Th e general government balance is expected 
to maintain a surplus until 2011. 
In its Opinion of 4 March 2008 on the stab ility programme, the Council noted that 
based on the estimated outturn for 2007 and taking account of the balance of risks to the budgetary targets, the programme puts forward a more ambitious medium-term objective of a balanced position in structural  terms (compared to a deficit of 0.5% of 
GDP previously), which has already been over-achieved in 2007. The budgetary 
 
EN 8   EN targets, which are significantly better th an in the previous programme, could be 
overachieved in 2008 and 2009 given the be tter 2007 outcomes. Th e Council invited 
Cyprus to avoid pro-cyclic al fiscal policies by furt her improving the control of 
current expenditures, while using reve nue windfalls to further reduce debt. 
Moreover, the Council invited Cyprus to contain public expenditure, notably by 
reforming the pension system and with tim ely implementation of the adopted reforms 
in health care in order to improve the long- term sustainability of the public finances. 
1.1.5. Czech Republic 
The Czech economy grew by 6.5% in real terms in 2007. GDP per capita in PPS 
reached 81% of the EU-27 average. While inflation remained relatively low in 2006 (2.1%), it accelerated in the last quarter  of 2007 mainly as a result of rises in 
commodity prices and climbed to 7.5% (year-o n-year basis) in the first quarter of 
2008 as a consequence of increases in admi nistrative prices. The general government 
deficit in 2007 was 1.6% of GDP compared to an estimated deficit of 3.4% in the 
November 2007 convergence programme. The be tter outturn was due  to expenditure 
restraint and higher revenues from stronger-than-anticipat ed growth including the 
public sector wage bill. Strong employment growth provided a boost in terms of 
higher social contributions and a lower-than- expected increase in social expenditure. 
The Czech Republic submitted its latest convergence programme, covering the 
period 2007-2010 on 30 November 2007. The macro-economic scenario underlying 
the programme estimated real GDP growth  at 5.9% in 2007 and about 5% of GDP 
for the rest of the period. Growth is likel y to be mainly driven by domestic demand 
while the contribution of net exports is expected to remain positive. The main aim of the budgetary strategy is to correct the excessive defi cit by the EDP (excessive 
deficit procedure) deadline of 2008. The programme targeted a deficit of 2.9% of 
GDP in 2008 declining to 2.3% of GDP in  2010. However, given the better-than-
expected budgetary outcome in 2007, the government’s most recent target is to contain the deficit in 2008 at the sa me level as 2007, namely 1.6% of GDP. 
The Council delivered its opinion on the convergence programme on 4 March 2008. 
The overall conclusion was that the programme  is consistent with correction of the 
excessive deficit in 2008 based on continuing  expenditure restrain t. In addition, due 
to the anticipated better budgeta ry outturn in 2007, the Coun cil considered that there 
was ample opportunity to achieve stronger-th an-targeted fiscal consolidation after 
correction of the excessive de ficit. The Council also i nvited the Czech Republic to 
exploit the high rate of gr owth in the economy by furthe r strengthening the pace of 
adjustment so as to build a safety margin  against breaching the reference value as 
soon as possible, and speed up the achievem ent of the mid-term objective. Finally, it 
was noted that the Czech Republic remains at high risk with respect to the sustainability of public finances, while the fi rst steps have been taken on health care 
reform. 
1.1.6. Estonia 
In 2006, GDP per capita in PPS reached 69% of  the EU-27 average, while real GDP 
growth in 2007 slowed  to 7.1% from 11.2% in  2006. Inflation in 2007 rose sharply to 
6.7% (4.4% in 2006), coming close to 10% in the last quarter of the year. According 
to the April 2008 EDP notification, in 2007 Estonia posted a general government 
 
EN 9   EN surplus of 2.8% of GDP, a stronger result th an the target surplus of 1.2% set in the 
December 2006 convergence programme. The result reflected carryover from a 
better outcome for 2006 than expected in th at convergence programme, together with 
revenue growth during 2007 exceeding the ta rgeted figure by a higher margin than 
that of expenditure. The general government  debt-to-GDP ratio declined further to 
3.4% at end-2007 from 4.2% at end-2006. 
Estonia submitted the fourth update of its convergence programme, covering the 
period 2007-2011, on 29 November 2007. The progr amme projects real GDP growth 
rising from 5.2% in 2008 to 7.0% in 2011, averaging 6.2% over the programme period. A moderation in domestic dema nd growth in 2008 and 2009, with positive 
contributions from net exports, will give  way thereafter to more vigorous domestic 
demand and resumption of a negative grow th contribution from net exports. The 
programme aims at maintaining the conditi ons for rapid real convergence through 
macroeconomic stability as well as intern al and external balance. The general 
government surplus was projected to decl ine from 2.6% of GDP in 2007, as then 
foreseen in the programme, to 0.8% in 2011. 
In its Opinion of 4 March 2008, the Council concluded that the programme is aimed 
at maintaining a sound budgetary position throughout the period with continued, 
albeit somewhat declining, surpluses above Estonia's medium-term objective (MTO) 
of structural balance. The Council cons idered that macroeconomic imbalances 
accumulated during the years of high growth, notably wage growth exceeding that of 
productivity, price pressures and high net bo rrowing vis-à-vis the rest of the world, 
were expected to moderate only gradually  and the deceleration path of the economy 
was surrounded by downward risks. Setting bud getary strategy with a view to over-
achieving the MTO was therefore a step fo rward in addressing the macroeconomic 
challenges. The Council invited Estonia to contribute to reducing risks to 
macroeconomic stability by aiming for a br oadly neutral fiscal stance in 2008 and 
beyond so as to contribute to an orderly adjustment towards a balanced convergence 
path, and complementing the recommended fiscal stance with appropriate public 
wage policy and further labour market reforms so as to co ntain inflationary pressures 
and sustain rapid productivity growth. 
1.1.7. Hungary 
In 2007, GDP growth slowed down consider ably to 1.3% annually, while inflation 
doubled to an annual average of 8%. GDP per capita in PPS reached 65% of the EU-
27 average. Due to the consolidation measures (including expenditure freezes and subsidy reductions as well as revenue-inc reasing measures) the general government 
balance was 5.5% in 2007, substantially lo wer than both the ta rget (6.2%) and in 
2006 (9.2%). Nevertheless, the debt-to- GDP ratio increased to 66% in 2007. 
Hungary submitted the most recent update  of its convergence programme on 30 
November 2007, covering the period 2007-2011. The baseline macroeconomic scenario is for real GDP growth to decel erate to below its long-term average in 2008 
and to return to 4% or above from 2009 onw ards. The anticipated recovery is based 
on an increasing contribution from domestic demand compone nts in parallel with a 
sustained growth in net exports. The main goal of the programme is to correct the 
excessive deficit by 2009 (reducing it from 6.2% of GDP in 2007 to 3.2% of GDP in 
2009) and to further reduce it to 2.2% of GDP in 2011. The update confirms the 
 
EN 10   EN medium-term objective (MTO) for the budgeta ry position of a 0.5% of GDP deficit 
in structural terms, which is not expect ed to be achieved within the programme 
period. 
In its Opinion of 12 February 2008 on th e update, the Council concluded that the 
programme is designed to continue the corre ction of past years' high deficits through 
a necessary frontloaded adjustment effort and envisages modest progress towards the 
MTO after the planned correction of th e excessive deficit in 2009. From 2009, 
achievement of the budgetary targets is s ubject to greater risks, linked mainly to 
possible expenditure overruns and reliance on better-than-expected revenues, which 
cannot be counted on after 2008. Thus, the durability of the planned adjustment 
hinges on the reinforcement of fiscal governance as well as on completing the 
structural reforms. Finally, Hungary was invited to rigorously implement the 2008 
budget and to take adequate action to ensu re correction of the excessive deficit by 
2009; given the insufficient margin in 2009, th ere is a need to allocate the better-
than-expected revenues to further deficit re duction and to continue  to enhance fiscal 
rules and institutions as well as to impr ove the long-term sustainability of public 
finances by making rapid progress towards the MTO and continuing to reform the 
pension system. 
1.1.8. Latvia 
In 2006, Latvia's GDP per capita in PPS r eached 54% of the EU-27 average while 
real GDP in 2007 grew by 10.3%. Consumer price inflation in 2007 rose to 10.1% on average (6.6% in 2006) and infl ationary pressures increased to above 15% in the first 
quarter of 2008. The April 2008 excessive deficit procedure (EDP) notification 
indicates a balanced budge t position for 2007 (0.0% of GDP). The outturn was 
clearly better compared with the D ecember 2006 convergence programme target, 
reflecting higher-than-expected revenues, only partly offset by higher-than-budgeted 
expenditure growth. The debt -to-GDP ratio declined to 9.7% in 2007 compared to 
10.7% in 2006. 
The 2007 update of Latvia’s convergence programme covering the period 2007-2010 
was submitted on 29 November 2007. The budget ary strategy of the programme aims 
to foster macroeconomic stability by ach ieving the medium-term objective (MTO) of 
a structural deficit of 1% of GDP over the programme period. The general 
government balance is planned to improve to a surplus of 0.7% of GDP in 2008 and 
to 1.0% and 1.2% of GDP respectivel y in 2009-2010, while the macroeconomic 
scenario underlying the programme envisage s a soft landing with  real GDP growth 
decreasing from 10.5% in 2007 to 7.5% in 2008, 7.0% in 2009 and 6.8% in 2010. 
However, growth remains driven by dom estic demand with a continuing strongly 
negative contribution from net exports. 
In its opinion of 4 March 2008 on th e convergence programme, the Council 
concluded that the programme seeks to reduce economic imbalances and excessive 
demand pressure by setting s lightly increasing but overall modest surplus target for 
2008-2010, in excess of Latvia's medium-term objective. However,  the risks to the 
achievement of the budgetary targets were considered high, primarily due to large 
macroeconomic uncertainty and a track record  of slippages from expenditure plans. 
Moreover, a considerably tighter fiscal policy stance was deemed to be urgently 
needed to meet the programme's aims in the context of an economy vulnerable to 
 
EN 11   EN instability, stemming from infl ationary pressures, deteriorating cost competitiveness 
and sharply increasing net foreign liabilities . The Council invited La tvia to contribute 
to reducing overheating pressures and poten tial macroeconomic instability by aiming 
for significantly more ambitious budgetary targets; carefully prioritising public 
expenditure and re-examining taxation inst ruments to avoid demand stimulus in 
sectors which do not significantly strengt hen the economy's medium- and long-term 
supply potential; and adopting further policie s to contain inflationary pressures. 
1.1.9. Lithuania 
In 2006 Lithuania's GDP per capita in PPS reached 56.1% of the EU-27 average 
while real GDP in 2007 grew by 8.8%. Cons umer price inflation in 2007 rose to 
5.7% on average (3.7% in 2006). The April 2008 excessive defici t procedure (EDP) 
notification indicates a budge t deficit of 1.2% of GDP for 2007, a weaker outturn 
than the target deficit of  0.9% of GDP, as higher-than-budgeted revenues were more 
than offset by higher-than-planned expenditures, including unscheduled 
compensation of 0.6% of GDP for pensions underpaid in previous years. The debt-
to-GDP ratio declined to 17.3% in 2007, compared to 18.2% in 2006. 
The 2007 update of Lithuania’s converg ence programme was submitted on 28 
December 2007 and covers the period 2007-2010. The budgetary strategy of the 
programme aims to foster macroeconomi c stability by achieving the medium-term 
objective (MTO) of a structural deficit of 1% of GDP or below by 2009 and to reach 
a balanced or surplus budget in  later years. From a planne d deficit of 0.5% of GDP in 
2008, the general government balance is project ed to improve to a surplus of 0.2% in 
2009 and 0.8% in 2010, while the macro economic scenario underlying the 
programme envisages real GDP  growth slowing rather sh arply from 9.8% in 2007 to 
5.3% in 2008, 4.5% in 2009 and 5.2% in 2010. However, growth remains driven by 
domestic demand with a continuing strongl y negative contribution from net exports. 
In its March 2008 opinion on the convergen ce programme, the Council concluded 
that the programme is aimed at tackling Lithuania's macroeconomic imbalances by 
tightening fiscal policy but that the budgetary  targets seem modest in the light of 
high economic growth. Moreover, the pr ogramme envisages only a back-loaded 
adjustment effort. The Council considered  that the achievement of the budgetary 
targets was insufficiently backed by a nnounced measures while the medium-term 
framework had to be strengthened. The re venue projections seem optimistic given 
the planned direct tax cuts and a relianc e on improved tax collection. The Council 
invited Lithuania to contri bute to reducing overhea ting pressures by aiming for 
significantly more ambitious budgetary outturn s; notably by rest raining expenditure 
growth, saving windfall revenues and re inforcing the binding character of the 
medium-term expenditure ceilings as well as by tackling inflationary pressures, 
including by promoting wage moderation and removing labour market bottlenecks. 
1.1.10. Malta 
In 2006, Malta's GDP per capita in PPS stood at 77% of the EU-27 average. Real 
GDP grew by 3.8% in 2007, driven by strong domestic demand and to a lesser extent by a positive contribution of net exports. Inflation in 2007  eased to 0.7% but was 
very volatile, with a significant decelerati on in the first part of the year followed by 
an acceleration in the second part. The gene ral government deficit in 2007 amounted 
 
EN 12   EN to 1.8% of GDP, which compares with a ta rget of 1.6% of GDP in the 2007 stability 
programme. The difference is mainly due  to lower deficit-reducing one-off 
operations. The debt-to-GDP ratio continued to decline, falling from 64.2% in 2006 
to 62.6% in 2007. 
On 1 January 2008, Malta joined the euro area. Malta’s first stability programme 
covering the period 2007-2010 was submitted on 30 November 2007. The programme foresees a slow down in th e pace of economic activity from 3.5% in 
2007 to around 3.1% in 2008 and 2009, and acceleration by the end of the 
programme period. According to the progr amme, GDP growth is forecast to be 
mainly underpinned by domestic demand over the reference period. The budgetary 
strategy outlined in the progr amme aims at pursuing fis cal consolidation with the 
overarching objective of achieving a ba lanced position by 2010. According to the 
stability programme, the general government deficit is projected to decline further 
over the forecast horizon, reaching 1.2% of  GDP in 2008 and a balanced budget in 
2009. By 2010, the general government balance is  anticipated to tu rn into a surplus 
of around 1% of GDP. 
In its Opinion of 4 March 2008 on the stab ility programme, the Council noted that 
although Malta plans continued progress to wards reaching its medium-term objective 
(MTO) through expenditure rest raint and in a context of sustained economic growth, 
there are risks to the achieve ment of the budgetary target s, especially  after 2008. The 
Council invited Malta to pursue further fi scal consolidation towards the medium-
term objective as envisaged in the programme , ensure that the debt-to-GDP ratio is 
reduced accordingly and enhance the efficiency and flexibility of public spending, including by accelerating the design and implementation of a comprehensive healthcare reform. 
1.1.11. Poland 
In 2006, Poland’s GDP per capita in PPS reach ed 52% of the EU-27 average while 
real GDP in 2007 grew by 6.5%. Consumer  price inflation has risen by 2.6% on 
average (1.3% in 2006) with in flationary pressures increasing strongly in the last 
quarter of 2007 to 3.7%. A ccording to the April 2008 excessive deficit procedure 
(EDP) notification, the gene ral government deficit decreased to 2.0% of GDP in 
2007, well below the initial targets. This better result stems from both higher-than-
expected revenues and expenditures executed below the planned levels. 
Poland submitted its most recent convergen ce programme, covering the period 2008-
2010, on 26 March 2008. The macro-economic scenario underlying the programme 
projects real GDP growth of  5.5% in 2008 and 5% for the rest of the period. Growth 
is likely to be mainly underpinned by dome stic demand while the contribution of net 
exports would be negative. The update aims at maintaining macroeconomic and 
budgetary stability, increasing labour force participation, es pecially of older groups, 
and fostering productivity by increasing infrastructure, human and technological 
capital. The general government balance is envisaged to improve by 0.5 percentage 
points of GDP over the period 2007-2010, to 1 .5% of GDP. However, the deficit is 
expected to deteriorate to 2.5% of GDP in 2008 mainly as a result of a reduction in 
social contributions. 
 
EN 13   EN In its Opinion of 8 July 2008 on the update, the Council considered that the 
envisaged deterioration of the general govern ment balance by 0.5 percentage point of 
GDP in 2008 was not in line with the Stab ility and Growth Pact. Progress towards 
the MTO (a structural deficit of 1% of GDP) in the following years was back-loaded 
in a context of favourable gr owth prospects. Given the risks to the budgetary targets 
from 2009, mainly due to a lack of specified measur es, the MTO might not be 
achieved by 2011 as planned in the programme. The Co uncil invited Poland to 
exploit the favourable growth conditions to strengthen the pace of structural 
adjustment towards the MTO, including in  the light of possi ble inflationary 
pressures. 
1.1.12. Slovakia 
Slovakia's GDP per capita in PPS reached 64% of the EU-27 average in 2006 while 
economic growth accelerated  to 10.4% in 2007 from 8.5% recorded in 2006. 
Unemployment fell significantly to roughly 11% in 2007 from 13.4% in the previous 
year. Inflation decreased to just below 2% in 2007 (4.3% in 2006) on the back of 
strong appreciation of the SKK and lower in creases in energy pr ices. According to 
the April 2008 excessive deficit proce dure (EDP) notification, the 2007 general 
government deficit was 2.2% of GDP, well be low the initial target  of 2.9% envisaged 
in the December 2006 update of the c onvergence programme. The over-performance 
was mainly induced by higher-than-exp ected GDP and employment growth, lower-
than-budgeted co-financing for the EU funds and a larger-than-expected pre-stocking 
with cigarettes at the end of 2007, triggered by a hike in the excise tax on tobacco in 
January 2008. 
Slovakia submitted the most recent update  of its convergence programme on 29 
November 2007, covering the period 2007- 2010. According to the macro-economic 
scenario underlying the programme, real GDP growth will d ecelerate from 8.8% in 
2007 to 5.0% in 2010. Growth should be mainly driven by domestic demand but external growth is also set to conti nue its positive contri bution. The general 
government deficit is projected to decrea se from 2.5% of GDP in 2007 to 0.8% of 
GDP in 2010. The main goal of the budgetary strategy is to reach the medium-term 
objective (MTO) for the budgetary position of a st ructural deficit of just below 1% of 
GDP by 2010. 
In its opinion of 12 February 2008 on th e programme update, the Council concluded 
that the update is consistent with co rrection of the excessive deficit by 2007. 
Thereafter, it envisages back-loaded progre ss towards the MTO in a context of strong 
growth prospects; in 2008, the envisaged st ructural improvement is not in line with 
the Pact and should be more ambitious. Gi ven risks to the budgetary targets from 
2009 onwards, the MTO may not be achieved by 2010 as planned in the programme and therefore additional efforts might be required. Moreover, should inflationary 
pressures emerge, a tighter fiscal stance th an foreseen in the programme would be 
required along with further structural reforms to improve the labour market performance. With respect  to medium-term challenges, the programme does not 
envisage any progress in reallocating expenditure towards R&D and innovation 
while it states that educat ion spending should increasingly rely on European funds. 
 
EN 14   EN 1.1.13. Slovenia 
In 2006, Slovenia's GDP per capita in PPS re ached 88% of the EU-27 average. In 
2007, the year Slovenia joined the euro area,  real GDP grew by 6.1%, mainly driven 
by strong investment. Due to external commodity price impulses amplified by domestic factors, such as strong demand pressures, inflation picked up markedly, 
reaching 3.8% for the year as a whole, the highest value in the euro area. According 
to the April 2008 excessive deficit pr ocedure (EDP) notification, a general 
government deficit of 0.1% of GDP was recorded in 2007, against an initial target of 
1.5%. This outcome mainly reflects a posi tive revenue growth effect only partly 
offset by higher-than-planned expenditure  growth. Slovenia's debt-to-GDP ratio 
declined from 27% in 2006 to 24% in 2007. 
Slovenia submitted the first update of its stability programme on 30 November 2007, 
which covered the period 2007-2010. The pr ogramme's macroeconomic scenario 
foresees real GDP growth slowing in 2008 (to 4.6%) and 2009, before picking up in 2010. While domestic demand should continue to be the main driver of growth, an 
increase in the contribution from net expor ts is expected over the programme period. 
The update's budgetary strategy aims at c ontinuing to respect Slovenia's medium-
term objective (MTO), a structural deficit of 1 % of GDP, by a growing margin over 
the programme period, despite some w eakening planned for 2008. The headline 
deficit should widen to 0.9% of GDP in 2008 and then gradually close, due to expenditure restraint more than offsetti ng a gradual decline in  the revenue ratio. 
In its Opinion of 4 March 2008 on the upda te, the Council considered the budgetary 
stance as sufficient to maintain the MTO throughout the programme period, while 
indicating that a tighter fiscal stance than  presently envisaged for 2008 appeared to 
be warranted also given the strong infl ationary pressures.  The Council invited 
Slovenia to use the better-than-expected 2007 outturn to aim fo r stronger budgetary 
positions in 2008 and beyond than planned in  the programme, thereby avoiding pro-
cyclical policies. Moreover, Slovenia should be  prepared to adopt further measures to 
tame inflationary pressures. Finally, in vi ew of the projected in crease in age-related 
expenditure, the Council invite d Slovenia to improve the lo ng-term sustainability of 
public finances, in particular by fu rther reforming the pension system. 
1.2. Conditionality 
The Council Regulation on the Cohesion Fund
2 attaches macro-economic conditions 
to the use of the Fund. It states that "no new projects or, in th e event of important 
projects, no new project stages  shall be financed by the F und in a Member State in 
the event of the Council, act ing by a qualified majority  on a recommendation from 
the Commission, finding that the Member Stat e has not implemented [its stability or 
convergence programme] in such a way as to avoid an excessive deficit". This 
reflects the role of the Cohesion Fund as  an instrument of budgetary support at 
national level helping Member States to maintain macro-economic rigour. 
In the course of 2007 three Member States  eligible for supp ort under the Cohesion 
Fund (the Czech Republic, Hungary and Poland)  were involved in additional steps of 
                                                 
2 Based on Article 6 of Council Regulation (EC) No 1164/94 
 
EN 15   EN the excessive deficit procedure (EDP) which, according to the aforementioned 
Regulation, may under certain conditions be  associated with the suspension of 
transfers from the Fund. There was, howev er, no need to adopt such a measure for 
any of these countries. In 2008 the Council de cided to abrogate the EDP for Poland 
and the Czech Republic. 
The Czech Republic has been subject to the EDP since the Council decision in July 
2004. The deadline for the excessive deficit correction was set to 2008. In July 2007 
the Council decided that the Czech Republic  had not adopted adequate measures in 
response to its July 2004 recommendations. Since the Czech Republic is not a member of the euro area, it has a specific derogation from the application of further 
steps of the EDP. In effect, in Octobe r 2007 the Council issued only a new set of 
recommendations under Article 104(7) of the Treaty
3. There has been no subsequent 
suspension of support from the Cohesion F und. The Council deliver ed its opinion on 
the latest update of the Czech convergence programme on 4 March 2008. The overall conclusion was that the programme is consis tent with a correction of the excessive 
deficit in 2008. In June 2008 the Council issu ed the decision to abrogate the EDP for 
the Czech Republic. The excessive deficit procedure for Hungary started in 2004. 
Since then, Hungary's failure to take effective action in response to Council 
recommendations has been noted on two occasions, in January 2005 and in November 2005. However, on neither of these occasions did the Commission recommend a suspension of Cohesion Fund commitments to the Council. The latest 
set of recommendations concerning the Hunga rian excessive deficit was adopted by 
the Council on the basis of a new Article 104(7)
 decision in October 2006. In July 
2007 the Council decided that Hungary had been complying with the recommendations.  
In November 2006, Poland was the subject of an Article 104(8) decision by the 
Council, establishing that the action taken to correct its excessive deficit in line with 
the 2004 Council recommendations was proving to be inadequate. In effect new 
recommendations were issued for this country in February 2007. In December 2007 
the Council decided that the measures take n by Poland were consistent with these 
latest recommendations. In July 2008 the excessive deficit procedure for Poland was 
abrogated by the Council. 
At the end of 2007 two other Member States  eligible for support under the Cohesion 
Fund (Portugal and Slovakia) remained subjec t to an excessive deficit procedure. No 
action associated with the EDP was, however , taken in regard to these countries in 
the course of 2007. Neither of the countries was subject to a suspension of transfers 
from the Cohesion Fund. In June 2008 the C ouncil issued a decisi on to abrogate the 
EDP for both Member States. 
The Regulation on the Cohesi on Funds for the period 2007-2013
4 has cleared up 
several uncertainties that surrounded the application of Cohesion Fund conditionality 
in the past. It foresees that, following an Article 104(8) the Commission may propose 
the suspension of Cohesion Fund support. In turn, the Council may decide to suspend 
                                                 
3 Treaty establishing the European Community, Article 104 on the excessive government deficits 
4 Council Regulation (EC) No 1084/2006 of 11 July 2006, establishing a Cohesion Fund and repealing 
Regulation (EC) No 1164/1994 
 
EN 16   EN all or part of commitments, with effect  from 1 January of the year following the 
decision. If the Council later finds, in the c ontext of the EDP that the Member State 
has taken the necessary corrective action, this  automatically implies a decision to lift 
the suspension of Cohesion Fund comm itments. Rules for re-budgeting the 
suspended commitments have been laid down. 
2. F INANCIAL EXECUTION OF THE 2000-2006  PERIOD IN 2007  AND CLOSURE OF 
PROJECTS  
2.1. Payments made in 2007 for proj ects adopted under the 2000-2006 period 
In 2007 there were 15 Member States (12 ne w Member States plus Greece, Portugal 
and Spain) eligible to receive financial assistance from the Cohesion Fund, in which 
projects were co-financed by the Fund under the 2000/04-2006 period. Since 1 January 2004, as a result of economic growt h, Ireland is no longer eligible. Bulgaria 
and Romania became eligible for the Cohesion Fund with their accession on 1
 January 2007.  
Given that all commitments for the C ohesion Fund projects financed under 2000-
2006 programming period had been executed by 31 December 2006, the financial resources available for the Cohesion F und in 2007 consisted only of payment 
appropriations.  
The 2007 initial budget amounted to € 3,250 million. However in September, DG 
Regional Policy requested a € 500 million reduction of payment appropriations. Another € 172 million has been transferred to the Solidarity Fund. This reduction in 
credits was the result of a weak initial pe rformance on the part of Member States and 
in particular of four sign ificant beneficiaries for whom the total value of payment 
claims was less than 30% of their forecast by mid-September 2007.  
Towards the end of 2007, the submission pace of payment requests accelerated and 
finally resulted in 100 % execution rate in respect of the availa ble appropriations. At 
the end of December 2007, following late adoption of 2007-2013 operational programmes with the Cohesion Fund contribution, unused payment appropriations amounting to € 167 million had been executed for reimbursement of payment requests for 2000-2006 projects. 
At the end of 2007, the averag e absorption rate (payments vs. commitments) of all 
current beneficiary countrie s (excluding Ireland) for both the Cohesion Fund and 
former ISPA projects was 55 %. Three c ountries (Bulgaria, Romania and Poland) 
show the lowest absorption rates (below  40%), whereas another two countries 
(Portugal and Spain) show the highest absorption rates between 63 % and 68 % of 
the decided amount.  
Table 1: Implementation of the Cohesion Fund and ex-ISPA payments in 2007 (Euro) 
Payment 
Appropriations Initial Movements Final 
Resources Outturn Cancelled Carryovers 
2008 
2007 Budget 3.880.000.000 - 672.195.985 
+166.755.099 3.374.559.114 3.326.965.802 - -
 
EN 17   EN Payment 
Appropriations Initial Movements Final 
Resources Outturn Cancelled Carryovers 
2008 
Appropriations 
carried over 
from 2006 60.776 - - 60.776 - -
Appropriations 
made available again - - - -  - -
Repayments - - - - - -
TOTAL 3.880.060.776 -505.440.886 3.374.559.114 3.327.026.578 - -
Table 2 shows the level of payments in 2007 for each Member State. Please note that 
the figures for the new Member  States refer only to paym ents for projects adopted 
under the Cohesion Fund as of 1 May 2004  (i.e. not taking into account the pre-
accession aid for ISPA projects). The impl ementation of payments to the former 
ISPA projects adopted before accession is presented in Table 3.  
Table 2: Payments made in 2007 to th e Cohesion Fund projects per Member State 
(including technical assistance) 
Environment Transport Technical 
Assistance TOTAL 
Member State 
Amount % Amount % Amount Amount % of 
total CF 
payments 
Cyprus 5.744.483,00 48,7% 6.039.770,69 51,3%   11.784.253,69 0,5% 
Czech Republic 50.944.092,45 47,7% 55.805.709,38 52,2% 154.834,69 106.904.636,52 4,4% 
Estonia 20.588.710,28 44,5% 25.648.095,12 55,5% 9.458,15 46.246.263,55 1,9% 
Greece 142.007.398,85 41,5% 200.498.998,20 58,5%   342.506.397,05 14,0% 
Hungary 52.417.244,67 42,8% 70.048.195,27 57,2%   122.465.439,94 5,0% 
Latvia 46.795.684,41 49,4% 44.224.991,28 46,7% 3.764.782,97 94.785.458,66 3,9% 
Lithuania 43.673.969,15 49,5% 44.208.895,26 50,1% 290.280,00 88.173.144,41 3,6% 
Malta 4.166.034,67 43,0% 4.946.842,98 51,0% 582.856,73 9.695.734,38 0,4% 
Poland 200.750.047,49 52,1% 184.249.405,16 47,8% 512.396,12 385.511.848,77 15,7% 
Portugal 205.426.616,57 47,8% 223.909.764,01 52,2%   429.336.380,58 17,5% 
Slovakia 24.185.556,67 48,7% 25.445.895,17 51,3%   49.631.451,84 2,0% 
Slovenia 14.064.896,65 59,9% 9.408.923,42 40,1%   23.473.820,07 1,0% 
Spain 535.761.824,69 72,1% 206.543.470,15 27,8% 339.638,00 742.644.932,84 30,3% 
TOTAL 1.346.526.559,55 54,9% 1.100.978.956,09 44,9% 5.654.246,66 2.453.159.762,30 100,0% 
 
EN 18   EN Table 3: Payments made in 2007 to ex-ISPA projects per Member State (including 
technical assistance) 
Environment Transport Technical 
Assistance TOTAL 
Member State 
Amount % Amount % Amount Amount % of 
total CF 
payments 
Bulgaria 56.284.491,71 65,9% 22.055.005,42 25,8% 7.109.024,52 85.448.521,65 9,0% 
Czech Republic 21.174.558,40 83,3% 4.243.770,33 16,7%   25.418.328,73 2,7% 
Estonia 8.834.835,16 78,4%   0,0% 2.427.010,09 11.261.845,25 1,2% 
Hungary 41.309.873,87 48,6% 43.203.427,21 50,8% 475.121,25 84.988.422,33 9,0% 
Latvia 21.172.848,89 51,4% 19.993.648,99 48,6%   41.166.497,88 4,4% 
Lithuania 19.430.221,47 66,7% 9.164.901,62 31,4% 551.651,01 29.146.774,10 3,1% 
Poland 208.493.213,57 59,1% 137.384.678,36 39,0% 6.775.893,50 352.653.785,43 37,3% 
Romania 120.081.126,61 44,2% 124.352.547,81 45,8% 27.171.189,06 271.604.863,48 28,7% 
Slovakia 24.878.004,65 63,5% 13.562.033,45 34,6% 749.475,43 39.189.513,53 4,1% 
Slovenia 3.554.814,46 80,9% 841.530,00 19,1%   4.396.344,46 0,5% 
TOTAL 525.213.988,79 55,6% 374.801.543,19 39,7% 45.259.364,86 945.274.896,84 100,0% 
2.2. Outstanding commitments from the 2000-2006 period 
At the end of 2007, the outstanding commit ments (RAL) corresponding to the 2000-
2006 period (including two new Member States : Bulgaria and Romania) amounted to 
€ 14,800,243,181.27 (€ 11,259,182,886.39 for the Cohesion Fund and € 3,541,060,294.88 for ex-ISPA projects). The cu rrent regulatory framework for 
commitments and payments implies a re latively large stoc k of outstanding 
commitments. They are equal to the am ount corresponding to approximately three 
years of commitments, which may be caused in part by the fact that the rule of 
automatic decommitment ("N+2" rule) does  not apply to the Cohesion Fund for the 
2000-2006 period. 
Table 4.1: Cohesion Fund accepted amounts in 2000-2006 (including RAL) 
Member State Net Committed 
(until 12/2007) Paid  
(until 12/2007) RAL 
Greece 3.623.591.038,72 2.255.055.185,63 1.368.535.853,09 
Spain 12.935.250.808,79 9.198.976.311,34 3.736.274.497,45 
 
EN 19   EN Member State Net Committed 
(until 12/2007) Paid  
(until 12/2007) RAL 
Ireland 625.755.408,00 570.010.222,71 55.745.185,29 
Portugal 3.505.110.859,45 2.239.884.294,52 1.265.226.564,93 
TOTAL EU-4 20.689.708.114,96 14.263.926.014,20 6.425.782.100,76 
Cyprus 54.014.695,00 22.844.221,33 31.170.473,67 
Czech Republic 748.976.735,00 248.036.041,09 500.940.693,91 
Estonia 242.449.651,00 86.011.929,46 156.437.721,54 
Hungary 976.865.860,00 373.703.305,54 603.162.554,46 
Latvia 388.206.109,00 181.497.966,25 206.708.142,75 
Lithuania 521.392.688,00 188.680.965,59 332.711.722,41 
Malta 21.966.289,00 12.287.371,40 9.678.917,60 
Poland 3.369.015.816,00 768.422.849,76 2.600.592.966,24 
Slovakia 410.520.447,00 128.052.263,94 282.468.183,06 
Slovenia 172.654.702,00 63.125.292,01 109.529.409,99 
TOTAL EU-10 6.906.062.992,00 2.072.662.206,37 4.833.400.785,63 
TOTAL 27.595.771.106,96 16.336.588.220,57 11.259.182.886,39 
 
Table 4.2: Accepted amounts for ex-ISPA projects (including RAL) 
Member State Net Committed
(until 12/2007) Paid  
(until 12/2007) RAL 
Bulgaria 879.908.118,00 296.570.622,32 583.337.495,68 
Czech Republic 479.117.989,65 376.462.763,84 102.655.225,81 
Estonia 184.709.389,40 132.834.958,14 51.874.431,26 
Hungary 505.736.480,16 326.977.250,88 178.759.229,28 
Latvia  325.781.346,52 217.958.178,74 107.823.167,78 
Lithuania 304.015.168,61 187.355.758,57 116.659.410,04 
Poland 2.265.523.798,03 1.318.714.851,29 946.808.946,74 
Romania 2.042.727.117,78 720.467.042,46 1.322.260.075,32 
Slovakia 355.729.850,36 256.174.389,45 99.555.460,91 
 
EN 20   EN Member State Net Committed
(until 12/2007) Paid  
(until 12/2007) RAL 
Slovenia  81.543.400,50 50.216.548,44 31.326.852,06 
TOTAL 7.424.792.659,01 3.883.732.364,13 3.541.060.294,88 
. 
2.3. Closure of projects from the 2000-2006 period 
During 2007, 40 Cohesion Fund projects with payments totalling € 911 million were 
closed. This comprised 26 Spanish, 7 Portuguese and 7 Greek projects. As a result, the total number of closed CF projects for the 2000-2006 period reached 117 and the number of projects still to  be closed is 721. Table 5.1 provides information on the 
projects closed up to the end of 2007. 
Table 5.1: Number of CF projects closed in 2007 and in previous years 
Projects closed in 2007 Projects closed in 2002-2006 
Member State Total 
number 
of 2000-
2006 CF 
projects Number 
of 
Projects Total Paid in 
Euro Number 
of 
Projects Total Paid in 
Euro Number of 
open 
projects as 
of end 2007 
Czech Republic 31         31 
Estonia 12         12 
Greece 124 7 279.014.171,23 17 305.593.888,69 100 
Spain 407 26 370.739.722,09 46 1.717.885.020,70 335 
Ireland 10     3 250.368.797,00 7 
Cyprus 2         2 
Latvia 22         22 
Lithuania 22         22 
Hungary 10         10 
Malta 3         3 
Poland 65         65 
Portugal 109 7 261.667.677,57 11 272.118.226,90 91 
Slovenia 11         11 
Slovakia 10         10 
 838 40 911.421.570,89 77 2.545.965.933,29 721 
 
EN 21   EN There were 14 ex-ISPA projects with payments totalling € 89 million closed during 
2007. The total number of closed ex-ISPA  projects for the 2000-2006 period thus 
reached 50 and the number of projects sti ll to be closed is 304. Table 5.2 provides 
information per country on closed ex-ISPA projects. 
. 
Table 5.2: Number of ex-ISPA projects closed in 2007 and in previous years 
Projects closed in 2007 Projects closed in 2002-
2006 
Member State Total 
number of 
2000-2006 
Ex-ISPA 
projects Number 
of 
Projects Total Paid in 
Euro Number 
of 
Projects Total Paid in 
Euro Number 
of open 
projects 
as of 
end 
2007 
Bulgaria 38         38 
Czech Republic 27 2 36.838.453,19 7 124.496.115,65 18 
Estonia 25 2 3.487.155,90 8 45.070.156,40 15 
Latvia 24 2 17.530.155,17 2 18.416.589,32 20 
Lithuania 29 1 19.816.800,00 5 66.724.564,61 23 
Hungary 37     7 2.526.165,16 30 
Poland 65 3 4.673.775,30 1 5.377.712,03 61 
Romania 63 2 1.794.821,78 0 1.794.821,78 61 
Slovenia 17     4 11.159.700,50 13 
Slovakia 29 2 4.726.875,55 2 6.880.841,36 25 
 354 14 88.868.036,89 36 282.446.666,81 304 
3. T HE IMPLEMENTATION OF THE 2000-2006  PROJECTS BY MEMBER STATES  
3.1. Greece 
3.1.1. Environment 
The solid waste management interventi ons are based on the 2003 National Solid 
Waste Management Plan which in turn is  linked to Regional Management Schemes. 
The strategic objective is the appropriate in tegrated management of urban solid waste 
and, where necessary, the rehabilitation of po lluted or degraded areas. A similar plan 
has been drawn up for the treatment of ur ban waste water, in accordance with the 
requirements of Directive 91/172/EEC. 
Modification decisions were adopted fo r nine environment projects. These 
modification decisions concern mainly the extension of the final date of eligibility, the adaptation of the physical object and the financing plan. 
 
EN 22   EN The rate of performance of the environment projects differs per sector. The waste 
water treatment projects are relatively well advanced, while solid waste, drinking water and nature protection pr ojects, and in particular ma jor projects such as the 
construction of dams, are seriously delayed. 
Close monitoring and accelerated efforts are required in order to ensure that they are 
completed and put into operation within the time frames set. 
3.1.1. Transport 
The strategy for transport projects seek s to develop the following corridors and 
projects: 
– the priority trans-European (TEN) road  axes in Greece, i.e. the PATHE, 
EGNATIA and IONIAN axes, as well as th e Korinthos – Tri poli – Kalamata / 
Sparti motorway; 
– the modernisation of the PATHE railway ax is, also part of the TEN, including its 
electrification and signalli ng systems, and construction of a freight railway line 
from the Ikonio port to the railwa y freight centre of Thriassio; 
– the infrastructure facilities of Igou menitsa and Iraklion ports including the 
construction of new port infrastructure at Lavrio; 
– the airports of Thessaloni ki and Iraklion and the air traffic control system in 
Greece; and 
– public transport infrastructures in Attic a and Thessaloniki, such as metro, 
tramway, and bus transport. 
In 2007, modification decisions for two tr ansport projects were adopted. These 
modification decisions mainly concern the ex tension of the final date of eligibility, 
the adaptation of the physical object and the financing plan. 
It is clear that the transport projects ar e progressing better than the environment 
projects with motorway projects being particularly well advanced. 
Closure 
During 2007 the substantial efforts concerni ng the closure of Cohesion Fund projects 
adopted during the 1993-1999 period continued with the closure of five projects. 
Additionally, four bridge pr ojects (financed in part bothunder the 1993-1999 period 
and under the 2000-2006 period) were also closed during 2007
5.  
The closure process revealed certain aspect s that require further attention, such as 
whether projects are operational upon comple tion. In the course of  closures carried 
out so far, this has proved to be a pers istent problem, in particular as regards 
environment projects. 
                                                 
5 Some projects are partially closed or  closed with suspensive clauses. 
 
EN 23   EN Specific clauses 
Since 2002, Cohesion Fund decisions in clude certain specific clauses whose 
fulfilment, in a number of cases, is a pr econdition for the execution of either the 
advance or interim and final payments. Th ese specific clauses can be divided into 
those of an administrative nature (e.g. se tting up of a solid waste management body 
or of an agency to manage the operation of  a dam), and those of a legal or technical 
character (e.g. the completion of the lega l framework relating to the solid waste 
management or certain actions considered necessary for the integrated management 
of solid waste). 
As regards the former, their implementation is  directly related to the progress of the 
projects. Accelerated efforts for the impl ementation / fulfilment of these specific 
clauses are needed as they contribute to the operability of the projects. 
Concerning specific clauses of a legal character, the Greek administration has 
completed and put in place th e bulk of the legal requireme nts relating to solid waste. 
3.2. Spain 
3.2.1 Environment and transport 
Some 65 modifying decisions  were adopted in 2007 - 49 for environment projects 
and 16 for transport projects. In general, modifications concern an extension of the 
final date of eligibility and modifications  of the physical object  (generally minor 
changes).  
The transposition into Spanish law of the European Directives on public 
procurement, in particular concerning am endments to contract s carried out through 
negotiated procedure, raised specific difficu lties in the management of the projects, 
in particular at the time of closure.  
In order to cope with these difficulties, tw o meetings were held in Madrid in January 
and September. The first meeting ended with a commitment on the part of the 
Spanish authorities to include in the clos ure documentation all necessary information 
for checking the eligibility of expenditure relating to the additional contracts. The second meeting contributed to solving formal  problems raised in audit statements, in 
particular concerning projects managed by municipalities.  
During these meetings, information and pub licity measures were also carefully 
assessed. In particular, the national author ities emphasised the prominent role of 
Community financing concerning high-speed rail projects.  
In this context, three weeks before the inauguration of the Madrid-Valladolid and 
Cordoba-Malaga railway lines, a meeting with the press took place in Madrid in December. During this meeting, the level of  the Community financing in favour of 
Spanish high-speed railway lines was stre ssed (representing some € 7,300 million, of 
which € 5,575 million came from the Cohesion Fund). 
 
EN 24   EN  Closure 
The process of closure of pr ojects is slow and complex, due partly to the deadlines 
necessary for the Member State to subm it the audit reports which must accompany 
the final payment claims and the final report s, and also because of specific problems 
concerning the transposition into Spanish law of the European Directives on public 
procurement. 
Some 35 projects were clos ed in 2007, of which 10 were adopted under the 1993-
1999 period. Almost all of the projects closed (34) concerned projects in the 
environment sector. At the end of 2007, a total of 340 projects remained open, including 8 projects from the 1993- 1999 period. The outstanding commitments 
(RAL) amounted to € 3.749 million, of wh ich € 70.8 million corresponds to the 
1993-1999 period. 
3.3. Portugal 
3.3.1. Environment and transport 
At the end of 2007, total payments for the 104 Cohesion Fund projects adopted under 
the 2000-2006 period amounted to € 2.384 million. In total, 14 projects were already 
closed (8 transport projects and 6 environm ent projects), while 15 other projects were 
in the process of closure. As a result,  a total of 75 projects were still being 
implemented at the end of 2007. 
As regards the 15 projects in the process of closure, additional information was 
requested from the Portuguese author ities concerning public procurement 
procedures, the results achieved, physical  indicators, and information and publicity 
measures. In some cases, the audit report wa s not yet complete, reservations having 
been made by the IGF (Portuguese indepe ndent audit authorit y), or additional 
information was requested by the Commission. 
Some 25 projects were modified during the year or are in the process of being 
modified: 
- in the transport sector, the six modifying decisions concern an extension of the final 
date of eligibility until 31 December 2010. Dela ys with these projects were due to the 
minimisation of the environmental impact (railway line between Lisbon and Porto; metro in Lisbon and Porto; speed road in the Lisbon region). 
- in the environment sector, the 19 m odifying decisions concern implementation 
delays, mainly due to environmental problems or to the additional works necessary for completion of the projects. Projects in the waste treatment sector are particularly 
affected, following recent changes in th e national strategy in this sector. 
Implementation of the remaining 50 projects  has not caused any specific problems. 
The main transport projects (apart from th e modified projects cited above) are the 
metro link of Baixa – Chiado / Santa Apolóni a and modernisation of the railway line 
between Vilafranca de Xira and Santarem  in the Centro region, and Ermidas and 
Faro in the Algarve region. Th ese projects are now physically  finalised and are in the 
process of closure. The most expensive environmental projects that are being 
 
EN 25   EN implemented concern water supply and wate r treatment systems in Minho Lima and 
Vale do Ave, and waste treatment systems in Madeira. 
Apart from these projects adopted u nder the programming period 2000-2006, three 
projects from the 1994-1999 period are still open: the waste water network in Vila 
Real and the water treatment projects in Great er Porto – Gai and in Caldas de Rainha 
– Obidos. 
3.4. Cyprus 
The budget available for Cyprus within the programming period after accession is  
€ 54 million. In this framework, two projects were adopted, one in the environment sector (New landfill site for Larnaka and Ammochostos regions adopted in 2005), 
and the other in the trans port sector (Upgrading of th e Limassol bypass adopted in 
2004) which allowed Cyprus to take up all available funds. 
The transport project is adva ncing well, with the payments made from 2005 up to the 
end of 2007 reaching approximately 67.6%  of the total Cohesion Fund amount 
allocated. As for the environment project, despite some initial delays, the project seems to be advancing well. 
3.5. Czech Republic 
3.5.1. Environment 
Implementation of the Cohesion Fund projects in the environment sector is 
progressing well. Out of 38 projects appr oved in the 2000-2006 programming period, 
two projects were closed (one of them in 2007 - Ostrava) and most of the 2000-2002 
projects are in the final stage of imple mentation. The closure procedure for three 
projects (Olomouc sewerage system I, Podkrušnoho ří water supply/sewerage 
system/water treatment, clean river Be čva) was launched in 2007. 
In 2007, the Commission adopted four ame nding decisions granti ng assistance from 
the Cohesion Fund (Czech Hydro-Meteorol ogical Institute, South Bohemia water 
supply, P říbram waste water treatment plant up grading, quality improvement of the 
Upper Moravia river basin); the modifica tions concerned change of the physical 
scope and/or the extension of the end date of the project. 
For several waste water projects the releva nt CF decisions include a special clause 
stating that operational contra cts with private operators related to the co-financed 
infrastructures should be amended to comply  with the best inte rnational practice. 
This condition had not been fulfilled by th e end of 2007, but the Czech authorities 
are working towards submission of amendmen ts to these operational contracts in the 
near future. 
3.5.2. Transport 
In the transport sector, very good progress is being made with most of the projects. In 
2007, one project was closed (F rýdek-Místek – Dobrá), wh ich makes it 3 out of 12 
approved projects closed in total. No modification request was received in 2007. 
 
EN 26   EN 3.6. Estonia 
3.6.1. Environment 
By the end of 2007, five projects were closed  and three were in the process of being 
closed. Thirteen projects were being implem ented with a total allocation of 238 957 
745 EUR including one techni cal assistance project. 
Due to the overheating of the construction ma rket, there have been cost increases in 
the environmental sector (on average 217% since 2006). However, by the end of 2007, the construction market had cooled dow n and prices were stabilised. Estonia 
planned an extra EEK 720 million to be fina nced out of the State budget for the years 
2007 and 2008 in order to c over these cost overruns. 
The Commission approved two modificati on decisions. For the project "Technical 
assistance for environment sector: project  preparation and management of the 
Cohesion Fund", it was decided to extend the eligib ility end date and modify the list 
of sub-projects and their cost without cha nging the total cost of the project. For the 
project "Narva Water and Wast ewater network", the total eligible cost was increased 
without increasing the Co mmunity participation. 
The main problems hindering project implemen tation stem from delays in the design 
and/or construction process, a nd/or are due to cost overruns. 
Preparation of financial analyses, according to the Commission's cost-benefit 
analysis (CBA) guidelines, has been the mo st difficult part for Estonia to comply 
with at project closure. Estonia has anal ysed the situation a nd concluded that the 
quality of the final documents is not sufficien t. To resolve this issue, action will be 
taken in order to improve quality. As a consequence, it has taken on average between six months and one year to close environment projects. 
3.6.2. Transport 
By the end of 2007, four proj ects (including two technica l assistance projects) had 
been closed and two projects were under the process of being closed. 
Regarding ongoing projects, the financial a nd physical progress is satisfactory in 
relation to six projects where the major ity of the works have been physically 
completed. However, for two projects, works had not started on the ground by the 
end of 2007 and no payments were made. On e of the projects faces the risk of 
cancellation due to the "M+24" rule
6. In this case, the delay was due to the rapidly 
changing environment in which the project has to be implemented. The circumstances were not under the co ntrol of the project promoters. 
No modification proposals were submitted in 2007 in the transport sector. Due to the overheating of the construction market, transport projects have suffered 
from cost increases concerning the tende rs launched from 2006 onwards. However, 
the increase has been lower than in the environmental sector – amounting to 36% on 
                                                
 
6 Article C(5), Annex II to Regulation (EC) No 1164/94 
 
EN 27   EN average. Cost increases have mainly been  covered by additional allocations from the 
national budget. 
Technical assistance has helped to prepar e transport infrastructure projects for 
implementation in the new programming period.  
3.7. Hungary 
3.7.1. Environment 
In 2007, further progress towards the co mpletion of ongoing projects was observed 
and the first projects adopted in 2000 and 2001 are in their final stage of 
implementation. In spite of the initially sl ow development, projects adopted in the 
last years of the 2000-2006 programming period show in general an improved 
performance and in the case of two wa ste water projects adopted in 2004 all 
contracts have been signed a nd the works are well under way. 
A number of projects in the solid waste sect or show significant cost overruns due to 
underestimation of the initial budget concerni ng the closure and rehabilitation of old 
landfills and concerning compliance of these landfills with European and national legislation. Some of these projects were modified and their scope reduced. The 
rehabilitation works, taken out of these projects, will be carried out in the 2007-2013 
period. 
In the case of two solid waste projects (North-East Pest and North Balaton), the 
contracting rate is only 3%. These projects s how a very slow progr ess and are at risk 
of non-completion by the end of 2010. 
Waste water projects are mostly subject to cost savings, which will be used within 
the projects for financing additional elem ents in line with the initial project 
objectives by the end of 2010. The savings within the biggest ongoing environmental 
project – the Budapest Central Munici pal Wastewater Treatment Works and 
Collector Systems – amount to € 47.7 million.  
The closure procedure for two projects (Was te water project in Györ and Technical 
Assistance for the elaboration of the Za gyva-Tarna river basin management plan) 
was started in the second half of 2007. The procedure under Article H of Annex II to Regulation (EC) No 1164/1994 (as amende d) was initiated for the Technical 
assistance for the preparation of ISPA  projects in the second half of 2007. 
3.7.2. Transport 
During 2007, project progress con tinued at a slightly  reduced level, due to the effects 
of internal re-organisation and changes made to certain intermediate bodies and final beneficiaries. These processes were complete by the second half of 2007, and 
contracting and payment performance improved. 
Cost overruns have been encountered in a number of railways  projects, but the 
necessary funds to cover such  overruns were made availa ble from national resources 
at the end of 2007. 
 
EN 28   EN In several projects public proc urement problems have led to  the re-launch and review 
of a number of contracts. This causes serious  delays and puts certa in projects at risk 
of not completing all elements by the curr ently foreseen eligibility end date. In 
certain projects important works contracts have still not been contracted. 
Problems related to land acquisition are pr esent in a number of projects. While in 
some cases the outstanding issues are purel y procedural, there are instances where 
work is being delayed because of this. 
No transport projects have been closed, or  are in the process of being closed. One 
modification request (railways project) wa s received in the course of 2007. This 
modification is still ongoing. 
3.8. Latvia 
3.8.1. Environment 
By the end of 2007, five projects had been  completed and their closure documents 
have been submitted to the Commission (for  three projects closure documents were 
submitted in 2007). 
In 2007, Latvia submitted one request for m odification which concerned a technical 
assistance project in the environment se ctor. The request for modification included 
the following adjustments:  
– Inclusion of additional components to allo w the project to absorb the full grant 
and corresponding adjustment of the phys ical indicators. For instance, the 
proposed new components would give an oppo rtunity for more efficient planning 
of network maintenance and repair wo rks; prepare a digital model of the 
wastewater network that would simulate the operation of the existing wastewater 
network. 
– Extension of the final date of eligibility until 31 December 2009. 
3.8.2. Transport 
By the end of 2007, two projects were closed  and three projects we re in the process 
of closure. 
In 2007, Latvia submitted three modification re quests for transport sector projects - 
two of which were technical assistance pr ojects and one was a railway project. 
Commission decisions were adopted in  2008. The modifications concerned the 
following projects:  
– Modernisation of the signalling system in Latvia: extension of the final date of 
eligibility until 31 December 2010; adjustments of certain physical indicators (adjustments due to improvement works that have been implemented); 
– Technical Assistance for the transport s ector: extension of the final date of 
eligibility until 31 December 2009; inclus ion of a new component – feasibility 
study of the railway routes to the port and to Riga international airport;  
 
EN 29   EN – Technical Assistance to Mi nistry of Transport: ad justment of the project 
indicators by including Daugavpils regi onal airport to absorb cost savings; 
inclusion of a new component (gathering information and identifying territories 
for the long-term development of the national transport infrastructure). 
3.9. Lithuania 
3.9.1. Environment 
In the course of the 2000-2006 programm ing period the Commission adopted 27 
decisions for reinforcement of environm ental infrastructure in Lithuania. 
Furthermore, two technical assistance proj ects have been devoted to preparation of 
technical documentation of Cohesion Fund projects and the capacity-building of the 
Ministry of Environment and proj ect implementing agency (EPMA). 
In the course of implementation of the environmental projects the following common 
problems were identified by the Mana ging Authority: complicated public 
procurement procedures; low interest in tenders; interinstitutional disagreements; inaccuracies revealed in technical designs and cost overruns. Nevertheless, despite these problems, an improvement in the implementation of projects on the ground was 
observed.  
Three waste water projects were amended in  2007 to extend eligib ility deadlines and 
adapt monitoring indicators.  
The closure procedures have been initia ted for two environment projects. For one 
project in the waste water sector the cons truction works were completed during the 
year and the closure documents are expect ed to be presented to the Commission in 
2008. 
3.9.2. Transport 
In total the Commission adopted decisions  for 21 Cohesion Fund transport projects 
(two of them are technical assistance proj ects). Out of those, three projects were 
closed before 2007, and one more project was closed in 2007. 
In 2007, Lithuania submitted eight modificati on requests for transport sector projects 
- two of which were technical assistance projects and six we re infrastructure projects. 
The modifications included extension of el igibility deadlines, adjustments of the 
physical monitoring indicators and the allocation of savings to additional 
components. 
3.10. Malta 
3.10.1 Environment 
The aim of the environment project is to implement an advanced mechanical thermal 
and biological treatment plan t at St. Antnin, by upgrading an  existing one. This will 
result mainly in reduction of the environmental impact of the waste cycle, and notably the reduction of the waste land fille d. This is of uttermost importance for 
Malta main island and its very high popul ation density (1 500 inhabitants / km²). 
 
EN 30   EN Delays in implementation occurred dur ing the procurement process and the 
substitution of a component was needed – total expenditure certified is still low 
(16%). 
Consequently, a modification of the project was submitted on 29 January 2008. 
3.10.2. Transport 
The project consists in an upgrade of three lots of the TEN-T road and is progressing 
satisfactorily; payment on account is being recovered on interim payments. Financial 
execution exceeds 75% and physic al execution is above 90%. 
Technical assistance  
The technical assistance project aims at preparing the environmental projects 
pipeline for 2007-2013 Cohesion Fund projects  (Storm Water masterplan; advanced 
waste treatment plants). 
Delays have been experienced due to a lengthy procurement process and to 
difficulties in identifying the site for the waste treatment plant. Physical and financial executions are around 50%. 
Consequently a modification of the project was submitted on 21 January 2008. 
3.11. Poland 
In 2007, the Commission adopted 18 amendi ng decisions granti ng assistance from 
the Cohesion Fund – 13 in the environment s ector and 5 in transport. In addition the 
Commission adopted two corrigenda. The modifications mostly concerned the 
physical scope and/or the exte nsion of the end date of th e project. As a result, 84 
projects out of the 130 projects ar e planned to be completed in 2010. 
The implementation of most projects was st rongly affected by cost overruns which 
amount to € 2.2 billion in both sectors. This am ount is not final as the contracting in 
many projects was still ongoing. Though the na tional authorities in itiated measures 
to give beneficiaries easier access to a dditional funding in orde r to cover the cost 
overruns in the course of 2007, it has not yet been possible to solve the problem for all the projects concerned. 
During 2007, the Commission authorised pa yments amounting to € 737.9 million. 
The payment rate at the end of 2007 reached 38% of committed funds. The remaining funds to be disbursed (includi ng final payments) amounted to € 3.5 billion 
at the end of 2007. 
3.11.1. Environment 
No environment projects were closed during the year. In total some 88 projects are 
still ongoing. The tota l eligible cost of these pr ojects is € 4.28 billion and the 
Cohesion Fund contribution amounts to € 2.85 billion.  
Despite the progress in the co ntracting registered for al l projects implementation is 
often delayed. The completion of works fo r the majority of projects is being 
 
EN 31   EN rescheduled for 2010. The main problems en countered during implementation relate 
to delays in tendering that re sult in delays in the execution of the works and to cost 
overruns. 
There were 19 projects for which the environmental conditions blocking the 
payments were lifted in 2007. For five of the total of 35 projects affected by this 
conditionality, fulfilment of the conditions  was still pending at the end of 2007.  
Technical assistance 
The Commission finalised closure of one t echnical assistance project. One technical 
assistance project is still ongoing. 
3.11.2. Transport 
The total eligible costs of the 38 transpor t projects amounts to € 3.57 billion, with the 
Cohesion Fund contribution reaching € 2.78 billion. 
In the course of 2007 the level of 80% spending was achieved for three railway 
projects and for twelve road projects. 
In 2007 cost overruns continued to hamper  a number of rail and road projects. 
However, in all cases the pr oblem has been addressed eith er by way of an EIB loan 
to the beneficiary (some railway projec ts) or by the budgetary reserve. The only 
proposal of project phasing between the programming periods 2004-2006 and 2007-
2013 (Modernisation of E-65 ra ilway line) was abandoned. 
There are three road projects where the environmental conditions have not been fully 
fulfilled: projects "National road 2", "E xpressway S-8" (partly blocked) and 
"Motorway A4". 
One transport project was closed in 2007. 
Technical assistance 
Closure was initiated for one technica l assistance project for transport. 
3.12. Slovakia 
3.12.1. Environment 
Physical realisation of I SPA / Cohesion Fund took an important step forward during 
2007, especially in the case of some projec ts approved in 2004 which had significant 
delays because of a long tendering pro cess: Bratislava Flood prevention; water 
supply and sewerage systems of Orava; Preseov; Vranov and Horné Kysuce. Four 
projects, however, did not get off the ground: Velky Krtis and Žilina heating plant; Samorin and Galanta water supply and wa ste water. An action plan is being 
established by the Slovak au thorities in order to address these problems. 
In 2007 three project modifications were  adopted: for water projects in Ša ľa and 
South Eastern Zemplín and for the air pollu tion project Žilina heating plant, all of 
which concerned extension of the final date of eligibility and two of them concerned 
 
EN 32   EN a modification of the physical indicators. Tw o closures of projects were carried out - 
one for a waste water treatment plant project in Tren čín and one for a technical 
assistance project aimed at prepar ation of flood protection measures. 
3.12.2. Transport 
All contracting within the projects wa s completed in 2007 (with some minor 
exceptions) and physical implementation a dvanced satisfactorily during the year, 
especially in the case of ra ilway modernisation projects. 
In 2007 one modifying decision was adopted in order to extend the final date of 
eligibility due to unsuccessf ul public procurement at the beginning of the project 
implementation. The first transport project "Modernisation of rail track Bratislava 
Raca-Tmava (section Bratislava- Ra ča-Šenkvice)" was submitted for closure. 
3.13. Slovenia 
3.13.1. Environment 
The main aim of assistance from the C ohesion Fund and former ISPA during the 
period 2000-2006 was to assist municipali ties and regions in improving drinking 
water supplies, sewerage networks and wast ewater treatment (12 projects) and waste 
management (4 projects). 
Before 2007, public procurement was one of  the main reasons for delays in 
implementation of projects. A substantial increase in the number of successfully 
concluded public procurement procedures he lped to raise considerably the level of 
contracting and eliminated the decommi tment risk linked to the "M+24" rule7 in all 
but one project. It is expected that the improved contracting figures will lead to an accelerated financial execution in 2008. 
Construction and/or trial operation was completed in four projects in the water 
sector. In compliance with the relevant pr ocedures, closure of these projects and 
processing of final payments is expected in 2008. 
One modifying decision was approved in 2007 concerning the "waste water 
treatment in the Mislinja river basin" project.  
3.13.2. Transport 
The national authorities defined in 2003 a National Cohesion Strategy for the 
Transport sector which identifies the objec tives of its transport strategies and the 
projects to be financed  through the Cohesion Fund. It involves the country 
establishing itself as a maritime transit country within the European Union and marketing its geopolitical position at the crossroads of two important European 
corridors (Corridors V and X) along the exis ting southern border of the EU. To this 
end, bottlenecks on corridors must first be removed, entailing completion of the 
motorway network, upgrading, modernisation and completion of the railway network 
and an increase in the range  of logistical services. 
                                                
 
7 Article C(5), Annex II to Regulation (EC) No 1164/94. 
 
EN 33   EN The Cohesion Fund co-finances 6 railway a nd 2 motorway projects in the transport 
sector. The progress of implementation is in  general considered as similar to the 
environmental sector. With the exception of  one project, all are fully contracted, 
which should improve the financial execution in 2008. 
In 2007 construction was completed in two pr ojects, one in the railway and one in 
the motorway sector. In compliance with th e relevant procedures , closure of these 
projects and processing of final payments is expected in 2008. 
Three modifying decisions were approve d concerning the following projects: 
modernisation of railway line Divaca-Koper;  upgrading of signalling of railway line 
Pragesrko-Ormoz (two modifying decisions for this project).  
4. M ONITORING , CONTROLS AND IRREGULARITIES  
4.1. Monitoring: committees and missions 4.1.1. Greece 
The progress made with the Cohesion Fund projects for the 2000-2006 period was 
discussed during the monitoring committee meeting held in Athens. Among other 
things, the financial situa tion and progress achieved was discussed, as well as the 
2005 action plan which was put in place by  the Greek authorities to accelerate 
project implementation. Individual project s requiring particular attention were 
examined in more detail. 
A technical meeting was organised in N ovember in Athens to review progress 
achieved during the year and examine issues related to the Cohesion Fund with emphasis placed on the waste sector. The 2005 action plan was assessed; individual 
projects were discussed in more detail, while the specifi c clauses included in funding 
decisions were also discussed in order to demonstrate their progress. During the 
meeting the Greek authorities presented thre e examples of best practices at regional 
level relating to solid waste. 
Various other meetings took place during the ye ar, either in Greece or in Brussels, in 
order to monitor progress achieved and to accelerate implementation. 
4.1.2. Spain 
A monitoring committee meeting was held in Madrid on 25 and 26 April. The 
managing authority, in partnership with the Commission, selected some 145 projects 
which were the subject of specific follow-up.  
In addition, pursuant to Article 10 of  Commission Regulati on (EC) No 621/2004 
concerning publicity measures, the state of pl ay in respect of publicity measures was 
presented.  
Three other main topics were  raised during the meeting: 
– The problems linked to incorrect transposition of the European directives 
concerning public procurement in national la w. The consequence is that there is a 
 
EN 34   EN high risk of expenditure being considered  irregular. Therefore, the Commission 
insisted that the expenditure at risk must not be certified in th e statements sent to 
the Commission. 
– VAT: following the judgment of the Cour t of Justice of 6 October 2005, certain 
VAT should be regarded as irregular expe nditure as from 1 January 1999 (date of 
enforcement of the national legislation linke d to the judgment). In order to recover 
the irregular amounts concerne d in projects already clos ed, the Member State was 
requested to quantify these amounts. 
– Lastly, in view of the large number of requests for payments of the balances 
expected during 2007, the Spanish author ities were asked to ensure timely 
presentation of all closure documents as we ll as the submission of final reports of 
high quality in order to allow for a swift closure process.  
A monitoring mission was carried out in De cember, in order to test the Madrid-
Valladolid high-speed railway line, one week before its inauguration. Co-financing 
from the Cohesion Fund amounted to almost € 1,600 million, enabling a connection between the two cities in 55 minutes, ag ainst 2h 24mn previously. The mission 
provided an opportunity to check  the correct operat ion of the line, the nature of the 
technical works completed, including a tunnel of more than 28 km, and the 
placement of commemorative plaques in the stations. 
In addition, a mission was car ried out to inspect the pr oject "Tramos I, II, IV: 
Segundo anillo de distribución de agua in Madrid" (water distribution in Madrid). 
The visit was justified by the fact that the project was delayed at its start, and made it possible to clarify the difficulties encount ered in the course of implementation. 
4.1.3. Portugal 
Two monitoring committee meetings took place in 2007. 
The April monitoring committee reviewed  all the ongoing projects and those 
approaching closure. This meeting was preceded by technical discussions between 
the national authorities and the Commission, in order to look at the main issues 
outstanding, such as closure or projects s ubject to modifications. The results of the 
action plan concerning a prope r application of public proc urement rules were also 
discussed: the Portuguese authorities ha ve adopted new procedures, notably new 
check-lists, in order to address infringe ments of public procurement procedures. 
Financial corrections were made by the national authority and will be taken into account in future payment claims. The Port uguese authorities also presented the 
latest results of the communication campai gn. Finally, a study concerning indicators 
in order to harmonise information for the 2007-2013 period was also presented. 
The October monitoring committee meeti ng focused mainly on projects with 
particular problems or outstanding issues, as identified by the Commission and/or the 
Member State. General questions were al so discussed, such as the evaluation 
exercise, the action plan on public procur ement and the level of budgetary execution. 
This meeting was also preceded by technical discussions between the national authorities and the Commission, in order to deal with specific issues, such as 
 
EN 35   EN difficulties in implementing the national strategy for the recovery of biodegradable 
organic waste, and the closure of projects. 
4.1.4. Cyprus 
A monitoring committee meeting was held in December. Progress in the 
implementation of the two Cypriot projec ts was presented, while other technical 
issues related to monitoring and reporting were also addressed. 
4.1.5. Czech Republic 
In 2007, one monitoring committee meeting took place on 11-12 June. A second 
meeting, originally scheduled for Decembe r was postponed to the beginning of 2008 
due to excessive workload. Discussions in  the monitoring committees are organised 
on a project-by-project basis, giving su fficient time to national authorities, 
beneficiaries and the Commission to clarify any outstanding issues.  
In the course of 2007, the Czech Cohesi on Fund monitoring system was further 
improved, allowing the managing authority to have a better overvie w of the progress 
on the ground. 
4.1.6. Estonia 
Two monitoring committee meetings were  held in 2007 covering implementation, 
quality of spending, financial progress and publicity actions. 
The problem of cost overruns received gr eat attention during the meetings. The 
Estonian authorities provided  explanations and proposals for improving the situation. 
Discussion in the monitoring committees re vealed the need to possibly lower the 
level of the outcome indicators for some envi ronment projects, as certain parts of the 
works are not feasible due to cost increases. 
The situation regarding de lays in implementation was followed up. In this 
framework, the Commission highlighted the ne ed to learn from the past and try to 
improve and build on existing experi ence for the 2007-2013 programming period. 
4.1.7. Hungary 
Four Cohesion Fund monitoring committee meetings (two for each sector – 
environment and transport) were held in  Budapest in the course of 2007: on 22 
March 2007 and 15 October 2007 for the transport sector and on 14-15 May 2007 
and 16-17 October 2007 for the environmen t sector. All the projects receiving 
assistance from the Cohesion Fund were re viewed and overall presentations were 
provided for each sector. The monitoring co mmittee meetings were conducted in the 
form of technical discussions on a proj ect-by-project basis,  giving the final 
beneficiaries sufficient time to present the state of play for each project. 
4.1.8. Latvia 
Two Cohesion Fund monitoring committee m eetings for Latvia took place: on 25 
April and on 5 November. 
 
EN 36   EN The meetings dealt with horizontal i ssues like financial execution of on-going 
projects; technical assistance for the managing authority in Latvia; problems with project execution and other issues. At the meeting of 25 April 2007 the Minister for 
Special Assignments for Administration of  European Union Funds was present and 
the preparation for the implementation of the 2007-2013 period was discussed. The impact of cost increases on Cohesion Fund projects was discussed in both meetings 
and the Latvian authorities reported on the steps taken by the Government to combat 
inflation.  
During the April meeting, the Commission also  performed a site visit to the project 
“Jūrmala water services development” and part icipated in the special meeting on the 
implementation problems for the project “M odernisation of the signalling system 
(East-West rail corridor)”. The meeting took place with the ma naging authority, the 
Ministry of Transport, the Latvian Railway  Company and the contractor for Stage 1. 
This meeting provided an opportunity to cl arify the difficulties encountered and to 
urge all parties concerned to take the n ecessary measures to get the project moving. 
On 1 February in Jelgava the managing authority organised a conference "Best 
experience in implementation of Cohe sion Fund projects (2000-2006)". The 
Conference concluded with a presenta tion by the managing authority on the 
preparation for the 2007-2013 programming period.  
4.1.9. Lithuania 
Two monitoring committee meetings took pl ace in Lithuania, on 24-25 April and 16-
17 October 2007, including site visits and m eetings with final beneficiaries. The 
committee examined the progress reports submitted by the national authorities and discussed the implementation of all ex-I SPA and Cohesion Fund projects and how to 
accelerate the rate of implementation. 
Two technical meetings with the Ministry  of Environment took place in Brussels, 
focussing on the substantial cost increases of Cohesion Fund projects, the underlying 
causes, the problems encountered, and relevant corrective actions. 
Three Cohesion Fund monitoring missions t ook place in February, June and October 
to visit projects, meet final beneficiaries,  discuss the implementation and closure of 
projects, the support from JASPERS a nd information and publicity measures.  
4.1.10. Malta 
Two monitoring committee meetings took place, on 25 May and 3 October. In 
addition, a meeting for information purposes was held in February. 
The main differences between the management and implementation methods of the 
Cohesion Fund and the Structural Fund were discussed. 
During the monitoring committee meeting he ld in October the modification of 
environment projects and of technica l assistance projects was discussed. 
 
EN 37   EN 4.1.11. Poland 
Two Cohesion Fund monitoring committee meetings were held in 2007: on 21 June 
and on 14 December. The meetings were preceded by working groups for the environment sector (on 4-5 June and 8-9 November) and the transport sector (on 30-
31 May and 6-7 November). The meetings we re attended by representatives of the 
managing authority, the paying authority, th e intermediate bodies, the implementing 
agencies, social and economic partners and the final beneficiarie s responsible for all 
projects adopted since 2000. 
The main purpose of the meetings was to re view progress made with the projects. In 
addition, several horizontal issues were  discussed, namely: payment rate and 
financial forecasts, modifications of pr ojects, unblocking of projects through the 
completion of the Environmen t Impact Assessment (EIA) requirements, delays in 
implementation, cost overruns and compliance with the "M+24"
8 and "M+12"9 rules.  
All of the projects are progressing on th e ground; however, the national authorities 
were urged to intensify the works on the ground in order to complete the projects 
before the final date for completion of  the works. Many projects registered 
substantial cost overruns; however, for all of  them the financing resources to cover 
the gap was secured, with the exception of a limited number of projects for which the 
national authorities were still identifyi ng appropriate solutions. Cost overruns 
averaged approximately 25% of the originally estimated total eligible cost. The monitoring committee of December recorded significant progress in the fulfilment of 
the EIA specifications. Only a limited numb er of projects still suffered from a 
complete blockage of payments at the e nd of 2007. No projects breached the M+24 
and M+12 rules.  
4.1.12. Slovakia 
Two monitoring committee meetings were held  in Bratislava, one in March and the 
other in October. The monitoring committees re viewed the state of play in respect of 
the ex-ISPA and Cohesion Fund on-going pr ojects. In addition, the key horizontal 
issues discussed were: privatisation and fragmentation of water companies, cost 
overruns, closure of projects, and the use of generated interests. 
The Commission also participated in Ju ly in the completion ceremony of the 
environment project in Liptov, while staff of the European Commission 
representation in Slovakia participated  in the closure ceremonies of other 
environment projects in Nitra, Považská Bystrica and Martin, as well as in the 
opening ceremony for the Bratislava flood protection project. The Commission also 
undertook a site visit in November for the environment projects in Pieš ťany and 
Trnava, where proposals for m odification were discussed a nd progress in regard to 
implementation was monitored on site. 
                                                
 
8 Article C(5), Annex II to Regulation (EC) No 1164/94 
9 Article D(2)(a), Annex II to Regulation (EC) No 1164/94 
 
EN 38   EN 4.1.13. Slovenia 
One monitoring committee meeting was held  on 6 June. It focused on the ongoing 
implementation of projects and possibl e delays, questions on the automatic 
cancellation of assistance ("M+24" rule)10 and issues related to the programming 
period 2007-2013. The meeting included a detailed review of all ongoing 
environment and transport projects, discus sion on financial data including payments 
and payment forecasts and possible de-com mitments. The Commission in particular 
highlighted the necessity to further acceler ate the implementation of projects, where 
substantial delays occur especially with regard to public procurement.   
4.2. Inspections 
The Cohesion Fund closure enquiry con cerning the period  1994-1999 covered 10% 
of Cohesion Fund projects representing 20%  of the co-financed expenditure during 
this period. The fieldwork was finalised in 2003 and th e main deficiencies found 
were insufficient management verifications resulting in ineligible expenditure and numerous breaches of public procurement rules. In 2007, for Spain the procedures for three projects were concluded by Co mmission decisions and for Portugal the 
procedure for one project was concluded following acceptance by the Member State. 
The remaining financial correction procedures  (8 projects: 4 in Spain, 1 in Greece 
and 3 in Portugal) resulting from this audit enquiry will be completed in 2008. 
As regards the period 2000-2006, the audit work carried out in 2007 focused on 
follow-up audits to verify the effective implementation of recommendations made on 
the systems in 2005 and further compliance te sting of projects e xpenditure. Special 
emphasis was also given to reviewing the wo rk of the national a udit bodies including 
checking the quality of system audits, samp le checks and other issues in relation to 
the work of preparing the winding-up decl aration. Some 20 audit missions were 
carried out: 7 missions under the EU-14 Cohesion Fund enquiry; 2 missions under 
the public procurement enquiry; 3 missions  under the winding-up body enquiry and 8 
missions concerning Romania and Bulgaria. 
Financial correction procedur es resulting from Cohesion Fu nd project audits carried 
out before 2007 were followed up. For Spain, final position letters were sent out for 
all 14 projects outstanding. For Portugal, the procedures for three projects were 
concluded with acceptance of corrections  by the Member State and there are 
procedures for three projects outstanding. For Greece the procedure for a flat-rate 
correction for a horizontal issue on public pr ocurement completed the hearing stage, 
and there are two further projects outstand ing. All the remaining procedures will be 
completed in 2008. 
In 2007, other audit work included ex amination of winding-up declarations 
submitted for the closure of 2000-2006 Cohesion Fund projects, examination of the annual control reports under Article 12 of Regulation (EC) No 1386/2002, and 
participation in the releva nt annual bilateral meetings  with national audit bodies. 
                                                
 
10 Article C(5), Annex II to Regulation (EC) No 1164/94 
 
EN 39   EN In the Directorate General's Annual Activ ity Report for 2007, for the functioning of 
the management and control systems, an unqualified opinion was given for the 
systems in seven Member States (Cyprus , Estonia, Hungary – transport sector, 
Latvia, Malta, Portugal and Slovenia). 
For six Member States the opinion was qualifie d as a result of material deficiencies 
with a moderate impact affecting key elements of the systems (Bulgaria – 
environment sector, Greece, Irela nd, Lithuania, Romania and Spain). 
For the remaining five Member States th e opinion was qualified with significant 
impact as a result of material deficiencies affecting key elements of the system (Bulgaria – transport sector, Czech Republic , Hungary – environment sector, Poland 
and Slovakia). In line with the criteria set out by the Directorate General in view of 
the material deficiencies to the systems wh ich give rise to an unacceptable risk for 
payments in 2007, the Directorate General ma de a reservation for these five Member 
States. 
4.2.1. Greece 
In 2007, three audits took place for the Cohesion Fund: one closure audit in 
September, during which four closed proj ects were audited and two system and 
project audits in October and November. 
The closure audit mission that took place in 2006 and the system audit missions that 
took place in April and October 2005 were followed up and closed in 2007. There is a horizontal issue that arose from the sy stem audit mission in May 2005 regarding 
the use of a "mathematical formula" for the award of public contr act that is not in 
compliance with the European directives. 
4.2.2. Spain 
One closure audit was carried out in September 2007 where the audit work 
performed by the most important windi ng-up body in Spain, IGAE, was reviewed. 
Several irregularities concerni ng public procurement cont racts have been identified 
during the audits carried out  in Spain. The main risk is that the expenditure 
declarations sent to the Commission contai n irregular expenditure, mainly additional 
works (modification of cont racts and complementary contracts) which were not 
awarded in conformity with the Commun ity directives on public procurement. 
The risk is mitigated by the fact that  DG Regional Policy assesses the winding-up 
declarations before the cl osure of the projects on an individual basis. DG Regional 
Policy will be able to identify and deduct th e irregular expenditure at closure of each 
project. 
4.2.3. Portugal 
At the request of DG Regional Policy, th e winding-up body carried out a specific 
enquiry in 2007 on the implementation of c ontrol procedures for the period from 1 
January 2005 onwards. The conclusions of that  enquiry revealed th at the risk of non-
compliance in respect of public procurement rules was mitigated. On the basis of that 
enquiry, together with the conclusions drawn from DG Regional Policy's audits and 
 
EN 40   EN the analysis of national aud it strategy, the DG signed a c ontract of confidence with 
"Inspecção-Geral de Finanças" (winding- up body and audit aut hority) covering the 
Cohesion Fund (and 20 programmes funded by the ERDF). 
4.2.4. Cyprus 
A systems audit was carried out in April 2005. In the field of ex-ante checks, the 
systems audit revealed deficiencies which do not affect key elements of the management and control systems. In  2006 and 2007 DG Regional Policy followed up 
this audit and all fi ndings were closed. 
4.2.5. Czech Republic 
A follow-up audit combined with an audit of Cohesion Fund projec ts was carried out 
in 2007. The follow-up audit concluded th at, despite clear improvements, the 
performance of the checks by the mana ging authority on the work done by the 
intermediate bodies, as well as the checks carried out by the paying authority to 
satisfy itself of the quality of the wo rk done by the managing authority and the 
intermediate bodies should be further enha nced. Specific actions will have to be 
taken by the Czech authorities during 2008 to remedy these weaknesses. 
4.2.6. Estonia 
On the basis of audit work carried out in 2006 and 2007, the DG signed a contract of 
confidence with Estonia coveri ng the Cohesion Fund and ERDF. 
4.2.7. Hungary 
The systems audit of June 2006 was followe d up with two project audit missions in 
2007. It was concluded that the main system ic deficiency relating to the lack of 
central guidance on Article 4 checks by th e managing authority had been remedied. 
The audit of one major project revealed  serious irregularities in the tendering 
procedure for the main works contract as  well as significant weaknesses in the 
management verifications of public procurem ent. Further audit work will be carried 
out in 2008 to obtain assuran ce that other contracts have not been affected by similar 
irregularities in the environment sector. 
4.2.8. Latvia 
Two audit missions were carried out in 2007, concerning follow-up of previous 
missions and review of the winding-up body and national authorities. Except for the 
information system, the measures taken by the Latvian authorities were considered 
satisfactory. 
4.2.9. Lithuania 
Two audits were performed in 2007. A follow-up of the system audits was carried 
out in February 2007. It was found again th at the managing aut hority did not issue 
sufficient guidelines on management ve rifications and that the computerised 
monitoring system was not yet fully opera tional for the Cohesion Fund. In addition, a 
review of the winding-up body and national audit bodies was carri ed out in June 
 
EN 41   EN 2007. This revealed that there was insuffici ent quality review of the audit work 
performed by the internal audit units in charge of the Article 9 checks. 
4.2.10. Malta 
An audit mission carried out in Malta in November 2007 gave rise to no significant 
findings. 
4.2.11. Poland 
In 2007 the Polish authorities undertook to implement a reme dial action plan to: (i) 
ensure that all bodies in charge of carrying out public procurement checks apply 
financial corrections when irregularities  are detected, and (ii) revise their 
methodology for public procurement checks in order to ensure an adequate level of 
checking. 
4.2.12 Slovakia 
A mission was carried out in 2007 to veri fy the work of the winding-up body and 
other audit bodies covering bo th the Cohesion Fund and ERDF. The conclusion was 
that there are some doubts about the overall re liability of their work which need to be 
addressed. 
Following the Commission's findings in th e public procurement procedures, the 
Member State was requested to carry out a retrospective review (on a sample basis) 
of all public procurement procedures in the Cohesion Fund and ERDF projects. The 
Slovak authorities have agreed to carry out this exercise in 2008. 
4.2.13 Slovenia 
There was one mission in September for the purpose of reviewing the winding-up 
body. The review revealed that the work  carried out by the Budget Supervision 
Office is sufficient and reliable. The DG signed a contract of confidence with 
Slovenia in February 2008. 
4.3. Irregularities 
In 2007, OLAF undertook two missions to conduct controls on the spot under 
Regulation (EC) No 2185/9611 in connection with four external investigation cases 
open in relation to Cohesion Fund matters . As these cases are ongoing, it is not 
possible to comment further upon them for operational and possible judicial reasons. 
In 2007, the Member States communicated to the Commission, in accordance with 
Regulation (EC) No 1831/9412, 92 notifications of irregular ities affecting co-financed 
projects and involving a sum of  € 110.222.823. Out of this amount, € 63.68 6.298 has been recovered, and the 
remainder is to be recovered. The Member States reporting the majority of cases are 
                                                
 
11 O.J. L 292, 15.10.1996, p. 2 
12 O.J. L 191, 29.07.94, p. 1, as amended by Regulation (EC) No 2168/2005, O.J. L 345, 21.12.2005, p. 
15. 
 
EN 42   EN Greece and Spain (26 and 34 respectively, more  than 50% of the total). The cases 
reported by Greece involved an amount of  € 67.259.450 out of which € 57.788.966 has been recovered. Ireland communicated 
to the Commission only one case but it s financial impact, amounting to  
€ 6.638.190, is significant in rela tion to the average amount of the notifications. The 
number of notifications showed a decrease compared to the previous year
13. The 
figures demonstrate better reporting in confor mity with the legal obligations by “old 
beneficiaries Member Stat es”. However, taking into  account the Community 
contribution involved in the projects co -financed by the Cohesion Fund, the reporting 
discipline of the Member States has to be improved. 
The main types of irregularity reported are:  ineligible expenditure and infringements 
of public procurement rules. These two cat egories cover almost 75% of all cases 
reported. 
5. E VALUATION  
The Commission and the Member States carry out appraisal and evaluation of all co-
financed projects. The projects to be  financed by the Fund are adopted by the 
Commission in agreement with th e beneficiary Member States. 
Each request for assistance is accompanied by a cost-benefit analysis (CBA) of the 
project. The CBA has to demonstrate that the socio-economic bene fits in the medium 
term are proportionate to the financia l resources mobilised. The Commission 
examines this CBA on the basis of the princi ples set out in the guide to cost-benefit 
analysis. The guide, first published in 2003, wa s recently updated to incorporate the 
development of Community policies, fina ncial instruments and the new regulatory 
framework under which major projects will be financed during the 2007-2013 
programming period. 
During 2007, the Commission assisted Me mber States thr ough capacity-building 
measures aiming to improve the consistenc y of the ex-ante financial and economic 
analysis of the projects. To this end, dedicated software  is fully operational, and a 
guidance document, adopted in 2006, sets out  the methodology to be used in carrying 
out CBA. The document presents some genera l principles of CBA along with a set of 
working rules and encourages the Memb er States to develop their own CBA 
guidelines. 
In addition, the Commission carries out ex-pos t evaluation on samples of projects co-
financed by the Cohesion Fund. The la st evaluation was published in 2005 and 
looked at a sample of 200 projects implemented over the 1993-2002 period. The next 
ex-post evaluation is scheduled to be la unched for 2009 and will look at projects 
implemented during the 2000-2006 period. 
                                                 
13 2006: Number of communicated cases 228; overall amount related to the communications 
€ 186.604.797 
 
EN 43   EN 6. I NFORMATION AND PUBLICITY  
6.1. Information to/from the Member States 
As indicated in the 2006 annual report, issu es concerning the Cohesion Fund are, as 
from 1 January 2007, dealt within the Coordination Committee of the Funds 
(COCOF), according to Re gulation (EC) No 1083/2006. 
Apart from issues of common interest fo r the ERDF and Cohesion Fund, some issues 
of specific interest for the Cohesion Fund were presented or discussed during the 
following meetings of the Coordination Committee of the Funds: 
January: Treatment of cohesion projects in the 2007-2013 period - implementation of 
transitional provisions (Ar ticle 5 (2) of Council Regul ation (EC) No 1084/2006).  
February: Complementarities between f unding for actions under Structural and 
Cohesion Funds and other Community instruments.  
May: Submission for opinion of the updati ng at midyear of the various types of 
measures of technical assistance to be financed by the ERDF and the Cohesion Fund 
under Article 45 of Regulation (EC) No 1083/ 2006.  
July: (1) Guidelines for the determination of financial corrections applicable to 
expenditure co-financed by th e Structural Funds and C ohesion Fund in relation to 
infringements of rules concerning pub lic procurement. (2) Study on Regional 
expenditure of ERDF and Cohesion Fund. 
6.2. Commission measures on publicity and information 
While the publications of the European Commission regularl y cover general and 
project-specific informati on on the Cohesion Fund, the focus in 2007 was the on 
implementation of the new publicity requirements for the 2007-2013 period. The latter are laid down in the Commission Regulation (EC)  
No 1828/2006 and replace Commission Re gulation (EC) No 621/2004 for all 
projects selected in the new programming period.  
In addition to assessment of the communication plans, whic h started at th e end of 2007, 
the Commission organised a major conferen ce in Brussels on 25 and 26 November 
on: "Telling the Story. Communicating Cohesion Policy Together". Over 500 
communication officers from all over Europe pa rticipated (proceedings of that event 
are available on DG REGIO website
14). For the new programmes, enhanced 
networking between the Commission and the Member States and regions will be based on a network ("INFORM") which will perm it the exchange of best practice in 
communicating the Structural and Cohesion Funds. 
                                                
 
14 http://ec.europa.eu/regional_policy/country/ commu/conferences/november07/sources_en.cfm