ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)825
Vol.1981/0231

Disclaimer
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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)825final
Brussels,11January1982
COMMISSION COMMUNICATION TOTHECOUNCIL
ONTHEIMPLEMENTATION OFCOMMUNITY AID
TOTHEACPSTATESANDTHEOCTANDODSITUATION
AT31DECEMBER1980
C0M(81)825final

Thisreportconstitutesthesecondcommunication presentedby
theCommissiontotheCouncHinaccordance withArticle25(4)of
theInternalAgreementonthefinancingandadministration of
Communityaid.(FirstLomeConvention and1976OCTDecision).It
followsonfromthecommunication presentedon24April1980(1)
ontheimplementation ofCommunityaidtotheACPStatesandthe
OCTand00situationat31December1978.
Thisreportcovers1979and19S0and,likeitspredecessor,
reviewsthesuccessivestagesintheimplementation operations
financedbytheCommunity.However,itdoesnotmerelyup-date
earlierinformation,astheCommissionfeltthatwherestriking
developments neededtobeassesseditwasusefultodrawcomparisons
withthe1976-68periodorproduceanoverallsurveyofcertain
activitiesrightfromtheentryintoforceofthefourthEDF.
TheCommissionwouldliketopointoutonceagainthatinorder
toavoidduplication,thiscommunication isdesignedtoprovidethe
Councilwithinformation on;pointsnotalreadycoveredinthereports
transmitted bytheCommissiontotheACP-EECCouncilofMinisters
underArticle41oftheFirstLom£Convention ortotheCouncil
itselfunderArticle29ofthe1976OCTDecision.
<1>Com(80)107final

A.FINANCING AGREEMENTS
1.Duringthetwoyearscoveredbythisreport252financing
agreementstotalling666800000ECUweresigned.Ofthistotal,25
agreementsinvolving24600000ECUconcernedtheOCT.
Inthelightofthesefiguresatotalof556financing
agreementshavebeensignedsincetheentryintoforceofthefourth
EDFrepresenting aggregatecommitmentstotalling 1600millionECU.
2.Fromthisdateitenvisagesthattenfinancingagreements
aresignedpermonth,althoughthisfigureisonlyanaverageforthe
fourthEDFasawhole,asthesituationhasrecentlychanged.About
nineagreementsweresignedpermonthbetween1976and1^78,whereas
theaveragewasclosertoelevenin1979and1980.
Thisprogressisallthemoresignificantinttjatithasbeen
accompaniedbyanincreasinglywidespreaduseofthewri|i:enprocedure
formula,which,itwillberemembered,consistsofforwaff^ingthe
document,alreadysignedbytheappropriate Memberofth|Commission,
tothecompetentauthorityoftheACPState(normallythg;Ambassador .
inBrussels). i
Duringtheperiodunderreviewtherehavebeen*poformal L-
ceremoniesorganizedatCommissionheadquartersattended|ythe
ambassadors ofanumberofrecipientstatesandonlyfivsragreements
havebeensignedinBrusselsontheoccasionofthevisifoftheHead
ofStateorMinisterofanACPState!similarly,agreementssignedin ;
ACPStatesontheoccasionofvisitsbytheMemberofthetpommission ''<
responsible fordevelopment havenotexceeded15.Thenormalwritten
procedurehasthereforebeenappliedextensively,whichshowsthatit
hasbeenassimilated byallACPStates,thenewcomersaswellasthe
former"associates"whohavebeenfamiliarwiththisprocedurefor
severalyears.
Thisbeingso,therearestillanumberofsituationswhere
thedelayinsigningagreementsisunusuallyLong,particularly inthe
followingcases:
a)Islandcountries,mostofwhichdonothaveambassadors in
Brussels,runintodifficulties becauseoftheircommunications problems,and
thisisamajorcauseofdelay.Thisproblem,whichexperiencehas
recentlybroughttolight,willbegiventheCommission'sparticularattention
inthefuture,-whereappropriate inthecontextofsuchspecificmeasures
asmaybejustifiedforthesecountries.
b)Asfinancingagreementsrelatingtoregionalprojectsaffect
severalcountries,itgenerallytakeslongerforthemtobesigned.This
problemisalleviatedtoalargeextentwhentheACPStatesconcerned
empoweraregionalinstitution (e.g.theSecretary-General oftheMano
RiverUnionforprojectsimplemented undertheaegisofthisorganization

linkingLiberiaand.SierraLeone)tosignagreements -ritheirstead.
However,thisfacilityisnotalwaysavailableandtherehasbeen
acasewhereithastakenfivemonthsforsixstatestosignan
agreementoneaftertheother("Aflatoxin"project)andaninstance
whereanACPStatehaskeptanagreementfromNovember1979toJuly1980
beforesigningit,holdingupthenormalcourseoftheprojectatits
partner'sexpense.Fortunate 'cheseareextremecasesandthegreat
majorityoffinancingsgreemeri.;-renowsignedwithinthreetofour
weeksofthefinancingdecis^rt.
»

B.FINANCING CONTRACTS (SPECIALLOANS)
1.TheFirstLomeConventionentrustedresponsibility for
drawingupandnegotiatingfinancingcontractstotheCommission,
withtheEuropeanInvestment Bankbeingplacedinchargeofrecovering
theloans.
At31December1980,theCommunityhadenteredintocommitments
totalling412629000ECUforspecialloansvis-a-vistheassociatedstates,
territories anddepartments .Bythesamedate109ofthe114financing
agreementsmakingthesecommitmentsofficialhadbeensigned*
Asregardsthefinancingcontractsrelatingtothesecommitments,
80contractstotalling299658000ECUhadbeensigned,ar^danother24
hadbeendrawnupbytheCommissionbuthadnotyetbeen^igned.
2.Ashasbeenthecaseinthepast,thesefigures ;,showthatwhereas
thedrawing-upandsigningoffinancingagreementsdonot^generallypresent
anyproblem,theleadtimefromthefinancingdecisionto^hesigningof
aloancontractislonger,althoughinmostcasesfinancingagreementsand
draftfinancingcontractsaredrawnupatthesametime.v
Themainreasonforthisdifferenceisthegreatercomplexityof
boththefinancingcontractsthemselvesandtheprocedurepriortotheir
signature.
Byintroducinggeneralandnormallynon-negotiabt.e conditionsinto
thecontracts,itwaspossibletocutdownonagreatdeal'oftheclerical
workinvolvedandconfinediscussiontothespecialcondit|ons.Moreover,
thefactthatborrowersweregraduallyabletofamiIiarize]themselveswith
ourtextsandproceduresintheirfirstcontractmadethenegotiation of
subsequentcontractseasier.Anincreasingnumberofcontractshavebeen
finalizedwithoutnegotiators havingtocometoBrusselsastheCommission
Delegate,dulybriefed,hasbeeninstructedtodiscussthecontractonthe
spot,thedepartmentsreservingforthemselvesonlythenegotiationofcomplex
financingoperations.
Nevertheless,acertainamountofinertiaisoftenapparenton
thepartofthenationalauthorities,notonlyduringthefinalizationof
thecontracts,butalsowithregardtothesimpleformalityofsigning
textswhichthetwopartieshavealreadyagreedon.

C.TENDERING PROCEDURES
1.Withoutenteringintoallthedetailsofthenumber,valueand
paceofinternational invitations totender,asalltheseaspectsare
dealtwithregularlyinthereportsdrawnupbytheComrrnssion pursuant
toArticle41ofthefirstLomeConvention andArticle29ofthe1976
OCTDecision-thefollowingtwopointsshouldbemade.
-comparedwiththeperiod1976-78,thenumberofinvitations
totenderissuedin1979and'iyas30%upandtherewasa23%decrease
intheaggregatevalue.Thesefiguresreflectthetrendwhereby,withthe
fourthEDFfullyoperational,moreinvitations totenderwerebeingissued,
butingeneralforsmallerindividual amounts.Thistrendisexplained
inmanycasesbythefactthatafteraperiodmainlydevotedtothe
construction oflarge-scale infrastructure ,therefollowsaperiodwhere
complementary worksarecarriedoutandrelatedequipmentissupplied.
-thistrendisevenmorenoticeableifonelooksatthe
specialarrangements derogating fromthetenderingprocedure (contracts
bymutualagreement,execution bythepublicworksdepartments )where
therewasanincreaseinbothnumber(91%)andvalue(41%).Heretoo,
therewasanincreaseinthenumberofsmall-scale operations (190000ECU
peroperation onaverage,asagainst260000ECUforthepreviousperiod).
Moreover,themarkedincreaseinexceptional procedures meansthataccount
hasbeentakenoftheACPStates'desiretomakemoreuseofthese
essentially localproceduresforawardingcontracts.Althoughitisthe
Commission'sopinionthatthereshouldnotbeexcessivelaxityinthis
respect,italsofeelsthattheserelaxations canbejustifiedprovided
thatthereiscontinuedvigilancetoensurethatthereis';competition
betweenfirmsintheeventofrestrictedinvitationstotfnderormutual
agreementcontracts. A
2.MostoftheCommission'seffortsasregardscompetitive tendering
proceduresduringtheperiodunderreviewweregearedtoinformingthe
peopleconcerned.Thisactionstemsfromajointdiscussion withthe
MemberStatesinitiatedattheendof1979inviewofthefactthat
certainnationalities wereaccountingforveryfewofthecontracts.
Theoutcomeofthisexercise,whichwaswrittenupindetail
inareportfromtheCommissiontotheCouncilinaccordancewithArticle
43oftheFinancialRegulationapplicabletothefourthEDF(1),led
theCommissiontoimplement anumberofmeasuresattheendof1980.
Theseincluded:
(1)Com(80)911finalof9January1981.

h 6.
a)Thepublication in"TheCourier"ofanewsectionentitled
"operational summaryofEEC-financed development schemes",aimedat
givingaprogressreportontheprojectsbeforetheyreachimplementation,
byproducinginformation fromtheearlieststage(identification and
up-datingitasandwhenthesuccessivestagesinthelifeoftheproject
arereached.Inthiswaythefirmsconcernedcanfollowtheprogressof
aprojectlongbeforethenoticeofinvitationtotenderispublished
intheOfficialJournaloftheCommunities .
b)thepublication ofnoticesofinvitationtotenderinthe
review"Development Forum",whichispublishedfortnightly bytheUnited
Nations,soastoreachawiderpublicthanthecircleofsubscribers
totheOfficialJournalamongthosefamiliarwithprojectsfinancedby
theWorldBank,theAsianDevelopment Bank,andsoon.
c)thepreparation ofaCommissioncircularaimedatdrawing
theattentionofitsDelegatestotheneedtoimprovelocalconditionsof
competition,particularly inthecaseofmutualagreementcontracts
whereaccessshouldbemorereadilyavailabletoallfirmsfromthe
MemberStatesandnotjustthoserepresented onthespot. (
D.RESULTSOFCOMPETITIVE TENDERING PROCEDURES
Theannexedtablesummarizestheresultsinaggregatefigures,
ofcontractsactuallyawardedat31December1980,andcomparespercentages
withthoserelatingtoDecember1978.
1.In1979-80therewasasignificantincreaseincontractsawarded,
witha124%riseinthevalue'ofcontractsingeneralcomparedwiththe
1976-78periodandaparticularly markedincrease(195%)insupply
contracts.
2.Asregardsthegeneralbreakdown,itshouldbepointedout
that,unlikethefirstyearsofoperationofthefourthEDF,therewas
atrendtowardsamuchmoredominantpositionfortheACP-OCT(at
31December1979theirsharehadinfactpassedthe30Zmark),while
thebestplacedMemberState(France)fellbackandtheshareoftheother
threeMemberStateswhichmakethelargestcontribution totheFund
settledatbetween8%and12%.
a)The'shareachievedbytheACP-OCTcanbeattributedto
theverymarkedincreaseinworkscontractsawardedtothesecountries
(morethan42%ofthetotal),whichshowsthattheacceleratedprocedure,
whichwasdesignedasapreferential mechanism,isindeedoperatingvery
muchintheirfavour.Ontheotherhand,therehasbeenasteepdecline
intheproportionofsuppliesoriginatingintheACP-OCT,whichismainly
becausetheequipmentrequiredismorecomplex.
./

b)therewasquiteaclearfallinFranceandGermany's
sharescomparedwiththeendof1978.InthecaseofGermanythis
decreaseaffectedalltypesofoperations,whiteFrancesucceededin
recovering someofitsshareofservicecontracts.
c)theUnitedKingdomwasthecountrywhichmadethebest
progressoverallcomparedwiththeprecedingperiod(+1.83%).This
isattributable togreaterparticipation inworkscontractsanda
sizeableincreaseintechnic&lcooperationcontracts.
d)Italy,whichcamefourthintheoverallresultsat
31December1978moveduptothirdplacethankstoaspectacular leap
insupplycontracts(+12.3$%).Thisisaparticularly goodexample
ofhowcompetitiveness hasanimportanteffectontheresultsof
tenderingprocedures.
e)thegapbetweenBelgiumandtheNetherlands narrowed,
withapracticallyidenticalpercentagevariation (Belgium:-1.06%;
Netherlands :+1%).Thedifferenttrendswereparticularly noticeable
inrespectofworkscontracts,whereDutchfirmsmaderelativeprogress
(particularly in1979).Onthesuppliesside,however,Belgiumand
theNetherlands recordedsimilarimprovements .
f)asregardsDenmark,IrelandandLuxembourg,where,apart
fromtechnicalcooperationcontracts,theresultswerepracticallynil
at31December1978,therewasaslightimprovementinsupplycontracts
andDenmarkwastheonlycountryinthisgrouptorecordasuccessin
theareaofworkscontracts.Itwasinordertotaketheunfavourable
situationofthesethreecountriesintoaccountthat-asmentioned
earlier-theCommissionagreedtorecommendacertainnumberofmeasures
toitsDelegateswithaviewtoimprovingtheconditionsofcompetition,
particularly inmutualagreementcontracts.
g)duringtheperiod1979-80therewasanincreaseintheshare
takenbythirdcountries,thedetailsofwhichwereexaminedinthe1980
ReportproducedbytheCommissioninaccordancewithArticle41ofthe
FirstLom6Convention.Sufficeittosayherethatthiswasbecause
Article56(3)oftheConvention wasappliedmoreoften,particularly to
Zimbabwe,whichwasathirdcountryundertheFirstLom§Convention.

E.CONTRACTS
1.At31December1980,primarycommitments (financingdecisions)
foralltheACPStatesandtheOCTamountedto2731millionECU,an
increaseof65%duringtheperiod1979-80.
Onthesamedate,secondarycommitments (contractsconcluded)
enteredintounderthosedecisionsamountedto2031millionECUfora
totalof3817operations.Thisshowsa106%increaseinvaluecompared
with31December1978andasixfoldincreaseinthenumberofoperations.
Thisbearsoutwhatwassaidinthesectionontenderingprocedureswith
regardtothesizeoftheoperationsfinanced.
Themostmarkedimprovement,however,concernsdisbursements ,
whichreached1455millionECUat31December1980,a154%increase
comparedwith31December1978.
a)examination oftheseoverallfiguresshowsthatthesecondary
commitments-primarycommitmentsrationwas74.4%at31December1980,
asagainst59.6%at31December1978.
If,however,theexaminationisrestrictedtosecondarycommitments
foractual"projects",excludingoperationsgivingrisetoasingle
secondarycommitment (Stabextransfers,risk-capital operationsandinterest
ratesubsidies)thesecondarycommitments-primarycommitmentsratio
fallsto54.4%(asagainst44.3%at31December1978).
Nevertheless,therehasbeensomeprogress,whichcanbeseen
alongthewholeofthe"primarycommitments/secondarycommitments/
disbursements "pipeline:
-disbursements (*1455millionECU)represented 53.3%of
total(primarycommitments (2731millionECU)asagainst34.6%at
31December1978-thisconsiderable improvementisduetothesignificant
increaseinthelevelofdisbursements referredtoabove.
If,however,theamountsgivingrisetotherapidmobilization
(interest-rate subsidies,Stabex),thatis452millionECU,arededucted
fromtheoverallfigure,thislowersthepercentageto36.8%(25.2%as
at31December1978).
-accordingtothetwomethodsofassessmentgivenabove,
disbursements represent71.6%and49.4%respectively ofsecondary
commitments (2031millionECU)(58%and45.5%at31December1978).

b)abreakdownbyrecipientcountryshowsthatforallthe
ACPcountries,withtheexceptionofMadagascar (49.1/0(1),thesecondary
commitment-primarycommitmentratioismorethan50%.Somecountries
(Barbados,IvoryCoast,Dominica,Gabon,Guyana,Mali,RwandaandSenegal)
exceeda90%rate,buttherateisgenerallybetween70%and80%.
ThecaseoftheIvoryCoastisaparticularly goodexampleof
acountry'scapacityforimplementing aidwhenitisfamiliarwithEDF
procedures.Thesecondarycommitmentsfigurewaslessthan10%at
31December1978,becauseofa'!dupinfinancingdecisions,but
hadrisento94%by31Deceir<b-?ri;'SQ.
Itshouldbepointedout,however,thatalthoughthesituation
issatisfactory fortheACPStates,thesamecannotbesaidforthe
0CT/0D,someofwhichstillhaveverylowsecondarycommitmentrate
(Guadeloupe 13.13%;Reunion10.13%;WallisandFutunaIslands1.50%).
c)asregardstheprovisionsaimedataccelerating the
executionofcertaintypesofoperationakintoprogrammeaid,thereare
noparticularobservations tobeaddedtothosesetoutintheprevious
reportwithrespecttoemergencyaidandStabexoperations-wherethe
rateofexecutionissatisfactory .
Thesecondary-primarycommitmentsratioimprovedconsiderably
formicroprojects ,increasing from66.5%at31December1978to87.9%at
31December1980.Ontheotherhand,thedisbursements -secondary
commitmentsratiowasslightlyworse,decreasing from61.3%to57%.Both
phenomenacanbeput.downbytheveryrapidgrowthinsecondarycommitments
andthefactthat,ashasalreadybeenexplained,thereisaninevitable
timelagbetweenthemobilization ofadvancepaymentsoncetheestimates
arecommittedandthepaymentofthebalance.
Therehasalsobeenasignificant improvement inthesecondary
commitments-primarycommitmentsratiofortradepromotionprogrammes-
from37.7%to66.3%intwoyears.
(1)Theslightdelayinthecaseofthiscountrywascausedbyaholdup
inafinancingdecision'onanimportantroadproject,sothatitwas
sometimebeforetheinvitations totendercouldbeissued.

2.Costoverrunsinprojectimplementation areaconstant
sourceofconcerntotheCommissionastheyaffectanumberofprojectsboth
inagriculture andinfrastructure .Itisdifficulttocontrolthis
problem-whichalsoarisesintheindustrialized countriesbecause
whencostsarebeingestimateditisimpossibletopredictpricetrends
andcertainpricescanfluctuateveryerratically .
However,thisexplanation shouldnotmaskothercausesof
overspending suchas:underestimating ofcosts,erroneousstudiesand,
especially,overrunning ofschedules. ..
Ifitistosolvetheseproblems,theCommissionisfacedwith
addlemma.Eitherittakesareasonablemargin(15%to20%)ofthe
estimatedcosttocopewithcontingencies ,runningtheriskofbeing
overwhelmed byasuddenpriceexplosion,oritmakesprovisionfora
widermargin,whichmeansthatfundswhichcouldbeusedelsewhereare
"frozen".
TheCommission,andtheEDFCommitteeforthatmatter,usually
choosethefirstsolution,whichobviouslymeansthatappropriations may
havetobeadjusted,seekingthebestpossiblesolutionwiththeACP
authorities concernedonacasebycasebasis,eveniftheprogramme
hastobeparedasaresult.

11
F.DISBURSEMENTS ANDDISBURSEMENT PROCEDURES (inmillionECU)
1.FourthEDFexpenditure enteredforthe
period1April1976to31December1980(asshown
inthebalancesheetforfinancialyear1980)
amountsto 1455
Itisnecessarytoaddtothisamountthe
following"paymentstoberegularized"chargeable
tothefourthEDF:
-advancetotheEAC 16
-advanceforawardholders 15
-expenditure enteredas"provisional",
whichwillnotbecome"final"until
approvedinaccordance withArticle12
oftheFinancialRegulation 33 64
At31December1980overallexpenditure therefore
amountsto 1_519
Until1978therewasquiteaconsiderable difference betweenannual
expenditure andcommitments,butin1979and1980thisgapnarrowedsatisfactorily :(inmillionECU)
Fundsearmarked iFundsallocated 1Disbursements
1976-77 1090 450 313
1978 564 535 299
1979 569 528 423
1980 507 518 484
2730 2031 1519
Thisimprovement isduetoabettergraspofEDFprocedures bytheACP
authorities,particularly thenewones,andalsoeffectiveactionon
thepartoftheCommission Delegates,whosediligenceaccelerates procedures
considerably .
2.TheFirstLomeConvention introduced theprincipleofopening
apayingagentaccountineachACPStateforlocalpaymentswithinthe
State.Uptonow56accountsdenominated inaEurooeancurrencyhave
beenopened-19inpoundssterling,17inGermanmarks,15inFrenchfrancs,
3inBelgianfrancsand2inDutchguilders.Withtwoexceptions,these
accountshavebeenopenedwithcentralbanks.
Havingalargenumberofaccountsinsteadofthefouraccountspreviously
heldhasobviouslyaddedconsiderably totheworkofcashmanagement .
Nevertheless ,thissystemisnowworkingsatisfactorily ,apartfromafew
shortcomings duetotheperipheral locationofcertainsmallstatesand
theabsenceofpermanentsubdelegations .Thosesubdelegations arenowbeing
setup.
TheCommissionisundernoobligationtoopenaccountsinthe0CT/0Dinorder
tomakepaymentsthereinlocalcurrencyandsocontinuestomakesuchpayments
viaitspayingagentsinEuropetheBankofEngland,theCaisseCentrale
deCooperation Economique andtheAlgemeneBankNetherland.

3.Attentionshouldbedrawntothebenefitdrawnbyassociated
Statesnotbelongingtoamonetaryzonewithaconvertiblecentral
currencyfromthepaymentseffectedfortherequirements ofEOFprojects
inlocalcurrency.Thesepaymentsarefinancedbyatransferofconvertible
currenciestotheexchangestabilization fundoftherecipientstate.They
accountforabout43%ofEDFdisbursements ingeneralandmakequitea
significantcontribution tothebalanceofpaymentsoftherecipient
countriesastheexpenditure inlocalcurrencyhasnotinvolvedany
previousexpenditure inforeigncurrency.
Intheory,theprospectofthisnetrevenueinforeigncurrencyshould
encouragestatestoexecuteprojectsasquicklyaspossible.Unfortunately
thisisnottheeasiestwayandsomestateswouldpreferjanoperationnot
providedforbyEDFruleswherebymoneywouldbeprovidedviatheadvance
mobilization ofEDFforeigncurrencyassetstocoverthe.financingof
localexpenditure undercurrentorfutureprojects.
9
4.'Inviewofthebalanceofpaymentsproblemsfacingagrowing
numberofACPStates,theCommissionhastokeepaclosefwatchonhow
governments usethecurrencyassetsobtainedfromtheEDIfandthe
EuropeanInvestmentBank.Difficultiesarisefortworeasons:
a.thenationalbodiesresponsible forprojectsfinancedbyspecialloans
sometimescomeupagainstadministrative difficultiesi/hichareinfact
duetothebankingauthorities,unwillingnesstoallov^externalpayments
tobemadewithforeignexchangewhichhadbeenprovidedbytheCommission
ortheEIBspecifically forthispurpose;
b.inthecaseofcofinancing,wheretherecipientstatehasexternalpayment
obligations,certainstatesaretemptedtouseshortageofforeignexchange
asanexcuseforahold-upintheexecutionofsuchprbjects,evenalthough
theamountofconvertiblecurrencytransferredtotheexchangestabilization
fund,undertheproceduredescribedabove,isveryoftenmorethanthe
country'sshareintheexternalpaymentsnecessitated bytheprojects.
ThesolutionputforwardbytheCommission,whichwasaccepted,albeitwith
somereticence,bythestatesconcerned,involvedopeninganexternalaccount
inthenameofthenationalbodyresponsiblefortheexecutionoftheproject
intowhichthefollowingpaymentsaremade:
-directlybytheCommissionandtheEIB,theforeigncurrencyintended
specifically forthefinancingoftheproject.
-inaccordancewiththecofinancing requirements and£sandwhentransfers
aremadetotheCentralBank,convertiblecurrencytocoverlocalpayments
madebythepayingagent.
Theactualavailability offoreigncurrencyresourcesisafactor
whichtheCommissionshouldbearinmindinfuturewhenexaminingfinancing
proposalswhichstipulatethattherecipientstateistocoversomeofthe
costpayableinforeigncurrenciesfromitsownresources.

13.
5. A§managerofthecashassetsprovidedbytheMemberStates,
theCommissionisalwaysupagainsttheproblemofexchangerisks.
ItmustensurethattheMemberStates'contributions ,whicharepaidin
theirowncurrenciesattheexchangeratesobtainingonthedateon
whichthecontributions falldue,retainthisvalueinrelationtothe
ECUuntilsuchtimeastheyareusedasthecommitments whichtheCommunity
enteredintovis-a-vistheACPStatesareinECU.
TosomeextentthisexchangeriskisoutsidetheCommission'scontrol:
1)asinthepast,someMemberStatesdonotpaytheircontributions on
theduedate,sothatwhenCommissionfinallyreceivesthemtheir
exchangevaluehasalread •:.-nged;
2)aproportionofthecashassetsarespreadover56accountsopenedin
theACPStatesinordertocovertheanticipated localpaymentsineach
ofthesecountries.Hence,evenifitweretechnicallypossible,the
Commissioncannotjugglewiththeseaccountstobalanceexpenditure between
thevariouscurrenciesoftheMemberStatesandthusmaintaintheir
valueinECU.
Hence,theCommissionhasnootheroptionbuttorestrictitsactivitiesto
theassetsinitsspecialaccountsanditsbankaccountsinEurope.Ithas
pursueditspolicyofopeningaccountsinECU,andtherearenowinoperation
inBelgium,Germany,FranceandItaly.Itissoontostartnegotiations
withLloydsBankontheopeningofanECUaccountintheUnitedKingdomtoo.
IthasalsocontinuedtomanageEuropeanaccountsinnationalcurrencies \
insuchawayastoensureabalancedutilization ofthevariouscurrencies.
Attheendof1978,aggregateexchangelossestotalled7.7millionECU
oncalledcontributions of921millionECUand9.6millionECUattheend
of1979on1420millionECU1,butbytheendof1980theyhad.fallento
1.3millionECUoncalledcontributions of2107millionECU.Theselosses
areequivalentto0.84%,0.68%and0.06%respectively ofcalledcontributions .
Thissatisfactory developmentisdueto:
-morepunctualpaymentofcontributions bycertainMemberStates
-thespectacularriseofthepoundsterling
-ameasuredsupplyoffundstotheaccountsopenedintheACPStates,
madepossiblebytheconstantsupplyofinformation onforecastpayments
inlocalcurrency
-theopeningofaccountsdenominated inECUinthreeMemberStateswhose
currencieshavebeenfalling.
)

G-CONTROL ANDINSPECTION
ICommission Delegations
a)Developments inthestatusoftheEAC
TheproposalforaregulationrelatingtothecreationofaEuropean
AgencyforCooperation (1)transmitted bytheCommissiontothe
Councilin1978wasexaminedindepthbytheCouncil'sACP/FIN
WorkingParty.
Discussions centredonhowandatwhatlevelMemberStateswould
participate insupervising theAgency'sactivities andthedetails
ofthisparticipation .InJanuary1980thePermanentRepresentatives
Committee,whichhadreceivedaninterimreportonthesituation
fromtheACP/FINWorkingParty,adoptedthefollowingposition:
-itinstructed theACP/FINWorkingPartytocontinueexaminingthe
Commission'sproposaltocreateanagencyunderCommunitypublic
lawandworkoutthemeasurestobetakenintheshorttermand
mediumterm;
-italsoaskedtheCommissiontobeginadetailedstudytofindout
whatmeasuresshouldbetakenifagencystaffweretobeintegrated
eventually intheCommission departments .Thiswouldinvolve
examiningtheamendments tobemadetothestaffregulations of
Communityofficials and,possibly,drawingupspecialregulations
forstaffinexternaloffices.Assoonasthesestudieswere
completed,thePermanentRepresentatives Committeewouldinstruct
therelevantworkingparties,inparticulartheWordingPartyon
theStaffRegulations,toexaminethem.
InresponsetothisrequesttheCommission hassetupanadhoc
groupofexpertswithinitsdepartments tocarryoutthisstudy.
b)Commission Delegations
1.Staffrecruitment andmanagement
ThenumberofDelegations hasremainedat42,asinanumberof
casesoneDelegateisaccreditedtoseveralACPStates;tocomply
withthewishesexpressed bytheACPStatestheCommission had
nevertheless comeroundtotheideaofhavingtheDelegate
responsible forseveralACPStatesrepresented onthespotin
eachcase.ThispolicywasformalisedintheSecondLom6Convention
whichmakesexpressprovision-inArticle123-fortheappointment
ineachACPStateofadeputyresidenttorepresenttheaccredited
Delegatewhenthelatterisnotresidentonthespot.
(1)C0M(78)93finalof9March1978amendedbyC0M(78)667finalof
19December1978. ■>

PursuanttotheaboveArticle,subdeLegationswereopenedattheend
of1979inGrenada,SaoTomeandPrincipeandDjibouti,andin1980asub-
delegation,established intheRepublicofCapeVerdeC1).
ThenumberofexpatriatestaffintheDelegations remainedthesamein
1978and1979(224)andincreasedto235in1980.Themovementsofall
expatriatestaff(recruitment-transfers)wererationalised andstreamlined
toalargeextentwhenasingler<-<nmitteedealingwithdelegationstaff
wassetupin1979.
2.Managementofequipment
-asregardsbuildings,sinceitwasbecomingincreasinglydifficult
toobtainofficesandaccommodation fortheDelegations intheACP
States,theAssociation decidedtopurchasebuildings.Accordingly,
andonthebasisofafinancingproposalagreedtobytheEDF
Committee,theCommissionauthorized anoverallcommitmentof
4millionECU(2)on23July1980tocoverthepurchaseofbuildings
forDelegations intheACPcountries,ifthisprovedtobenecessary
threesuchoperations wereundertaken in1980,inRwanda,CapeVerde
andEquatorial Guinea.,
-theprotectionofstaffandtheirfamilies,andtheequipmentand
vehiclesplacedattheirdisposal,wasanotherseriouspointofconcern
in1980;thepoliticaleventsincertaincountries (ChadandUganda)
madeanumberofmeasuresnecessary (installation ofgrills,
alarmsystems)aimedatprovidingstaffandtheirfamilieswitha
reasonable amountofprotection,similartosecurityforstaffin
MemberStates'embassies.
3.Expenditure
Incomparison'withtheestimateswhichwerepublishedpreviously
thefollowingtablegivestheamountofrealexpenditure perannum
fortheACPandOCTfrom1976to1980andalsogivesanideaofthe
costoffourthEDFDelegations (inECU).
(1)
(2)Asubdelegation hadalreadybeenopenedintheComorosin1977.
Fromtheunexpended balanceoffourthEDFfundsearmarkedforthe
delegations' administrative andrunningcosts,

16.
ACP OCT TOTAL
Amountsblocked 94607 3782 98389
Realexpenditure 1976
1977
1978
1979
198013.486
21176
22364
25450
4848843
423
657
346
199314329
21599
23021
25796
6841
Commitment forthe
purchaseofbuildings87324
40004262 91586
4000
91324 4262 95586

2.FinancialcontroL
a)Activities_o_f_t_he_j_ec_or^de^d_fj_na^n_c_i^L__C£n_t_ro^Qej ^
Thisdecentralization measurewhichwasinitiatedin1977,
wassteppedupin1980.Ithascontinuedtoproducebeneficial
resultsinsofarasalldossiersnotexceeding60000ECUmaybe
endorseddirectlybythefinancialcontrollersecondedwithin
DGVIII.Newmeasureshaveheir-preparedfor1981.
b)0n-the_S£o_t ^jn£p£ct_i£n_
Themainobjectofmissionsundertakenabroadbythe
FinancialControllerinconjunction withthefinancialdepartments
oftheDirectorate-General forDevelopmentistocheckthatcommitments
madeandtheresultingprojectimplementation areinconformity
withtheprovisionsoffinancingagreements.Thesemissionsvisited
thefollowingcountries:
-in1979:IvoryCoast.Gabon.Malawi,Mauritius,
Barbados,SaintVincent,St.Lucia,•JàmaicaandZaïre.
-in1980:Ethiopia,Mauritania,Senegal,Tanzania,
BotswanaandLesotho.
Thismeansthat25countrieshavebeenvisitedsince1977for
inspectionpurposes. 1
Furthercontrolmissionsarescheduledfor1981.
c)Inspectionba_sedonrecords
Thisprocedure,whichrequirespriorendorsement bythe
FinancialController,wasextendedin1979toauthorizations made
inlocalcurrencybyauthorizingofficersbeforebeingenteredfinally
intheEDFaccounts.Itisnolongerrestrictedtoexpenditure
authorizations tobemadeinforeigncurrencyviatheEDFaccounting
officer.Ithasbeenamintainedforallcommitmentproposals
concerningcontracts.
3.CourtofAuditors
Duringthetwoyearsunderreviewthecollaboration between
theCommissionandtheCourtofAuditorswhichhadbegunin1978was
furtherextended.TheCourtwaskeentostepupitson-the-spot
inspectionofprojectsandprogrammesfinancedbytheEDF,and
undertookmissionstothefollowingcountries:
/

-in1979-Mali,Senegal,Cameroon,Madagascar,Niger
andUpperVolta.
-in1980-NetherlandsAntilles,FrenchGuiana,Suriname,
Kenya,Somalia,Togo,BeninandZaire.
H.CLOSUREOFOPERATIONS
ThenumberofoperationsclosedunderthefourthEDFat;
31December1980stoodat118,thatisabout10%ofalloperationsundertaken,notincludingStabextransferoperations.Thjissituation
canbeconsiderednormalinthelightofexperiencewiththeprevious
EDFs.Theoperationsclosedrepresentabout334millionECU.

BREAKDOWNo*workscontractsbynationality ofcontractors
ofsupplycontractsbyoriginofgoods
oftechnicalcooperationcontractsbynationality ofcontractors
FourthEDF-Situationat31December1980
in000ECU
Nationalityof
firmsWorkscontracts Sunplvcontracts Technicalcooperation
contractsAllcontracts
amount*at
31.12.80J0at
31.12.78amount%at
31.12.80%at
31.12.78amount%at
31.12.80at
31.12.73amount%at
31.12.80Ί»at
31.12.78
Germany 379275,589,305072021,0125,074576319,0821,7513441011,53 14,46
Belgium 473666,978,11111334,612,90208608,7010,94 Y93596,34 7,90
France 17315425,4829,625095921,1125,144876I20,3315,4827287423,50 I5.87
Italy 6966010,2511,924444218,416,052656911,0712,1114067112,12 11,04
Luxembourg-- - 210,01M,37031,542,37 37240,32 0,51
Netherlands 266303,932,24103004,272,59181237,559,15551034,75 3,78
Denmark 23090,34 -6130,250,0559102,463,1488320,760,63
UnitedKingdom 259253,81,2,5!3644115,1016,653361014,0110,39959768,27 6,44
Ireland -- 380,02-35501,431,4035880,31 0,30
ACP/OCT 28732942,2836,30221779,19 U-Mä ■--13,2734131129,40 27,94
Thirdcountries 92561,36 -145266,02*6,8412390,52-250212,15 1,08
Total 6796061001002413701001002398931001001160869100 100
58,54% 20,79$ 20,67* 100%