Proposal for a COUNCIL REGULATION concerning Community financial contributions to the International Fund for Ireland (2003-2004)

(presented by the Commission)

EXPLANATORY MEMORANDUM

The International Fund for Ireland (IFI) was established in 1986 in order to contribute to the implementation of Article 10(a) of the Anglo-Irish Agreement of 15 November 1985 which provides that "the two governments shall co-operate to promote the economic and social development of those areas of both parts of Ireland which have suffered most severely from the consequences of the instability of recent years, and shall consider the possibility of securing international support for this work".

The objectives of the IFI are "to promote economic and social advance and to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland" [1].

[1] Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ireland concerning the International Fund for Ireland, 18 September 1986 (last amended 10 October 2000) ; UK Treaty Series N°58 (1987) Cm 266 / Republic of Ireland N°1 (1986) Cmnd 9908.

Following early contributions from the United States and other countries, the European Community, recognising that the objectives of the IFI were a reflection of those pursued by itself, wished to give practical support to the initiative. It began contributing to the IFI in 1989. EC funding now represents 34 % of annual contributions to the IFI and 38 % of cumulative contributions to date. The Commission has been represented by an observer at all IFI Board meetings since the beginning of 1989.

The political background of the region has evolved over the years : in 1994, the main paramilitary groups announced cease-fires ; in April 1998, the Belfast ("Good Friday") Agreement set a political settlement for a peace process, including the devolution of powers to a Northern Ireland Assembly and Executive Committee, which were set up at the end of 1999. However, violence and division between the main communities remain high and various suspensions of the devolved institutions have illustrated the threats and uncertainties surrounding the peace process in the region.

In this context, economic and social development in support of peace and reconciliation at grassroots level is a long term process. As an instrument towards this goal, the IFI complements the action carried out by the EU Programmes for Peace and Reconciliation in Northern Ireland and the Border Region of Ireland ("PEACE "I 1995-1999, and" PEACE "II 2000-2004).

In accordance with the current round of contributions [2], the European Commission has recently submitted an assessment of the IFI's activities to the Budgetary Authority [3]. This acknowledges the IFI's very valuable and positive actions for peace and reconciliation in the region, and thereby the fulfilment of its objectives. The report concluded that "the Commission believes that funding after 2002 should be provided on the basis of the observations made in this report, which could be reflected either in the future Council Regulation on the EC contribution to the IFI, or through other appropriate means of co-operation between the Commission and the IFI".

[2] Council Regulation (EC) Nr. 214/2000 of 24 January 2000; OJ L 24, p. 7

[3] COM(2001) 548 final, 1st October 2001.

In light of the above assessment, it is proposed that the Commission adopts the following proposal for a Council Regulation on the EC contributions to the IFI which will :

- continue the EU contributions of EUR 15 million per year to the IFI, for a further period of 2 years. The proposed new period will therefore end in 2004, which would coincide with the end of the PEACE II Programme.

- take account of the observations made in the Commission report, in particular those reinforcing synergy of objectives and co-ordination with Structural Funds interventions, in particular with the PEACE Programme.

2002/0210 (CNS)

Proposal for a COUNCIL REGULATION concerning Community financial contributions to the International Fund for Ireland (2003-2004)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

Having regard to the proposal from the Commission [4],

[4] OJ C , , p. .

Having regard to the opinion of the European Parliament [5],

[5] OJ C , , p. .

Whereas:

(1) The International Fund for Ireland (hereinafter "the Fund") was established in 1986 by the Agreement of 18 September 1986 between the Government of Ireland and the Government of the United Kingdom of Great Britain and Northern Ireland concerning the International Fund for Ireland [6] (hereinafter "the Agreement") in order to promote economic and social advance, and to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland, in implementation of one of the objectives specified by the Anglo-Irish Agreement of 15 November 1985.

[6] UK Treaty Series N°58 (1987) Cm 266 / Republic of Ireland N°1 (1986) Cmnd 9908.

(2) The sum of ECU 15 million a year has been provided from the Community budget from 1989 until 1995 to support projects of the Fund which have a genuine additional impact in the areas concerned.

(3) Pursuant to Council Regulation (EC) No 2687/94 of 31 October 1994 on Community financial contributions to the International Fund for Ireland [7], the sum of ECU 20 million was committed from the Community budget for each of the years 1995, 1996 and 1997.

[7] OJ L 286, 5.11.1994, p. 5.

(4) Pursuant to Council Regulation (EC) No 2614/97 of 15 December 1997 on Community financial contributions to the International Fund for Ireland [8], the sum of ECU 17 million was committed from the Community budget for each of the years 1998 and 1999.

[8] OJ L 353, 24.12.1997, p. 5.

(5) Pursuant to Council Regulation (EC) No 214/2000 of 24 January 2000 on Community financial contributions to the International Fund for Ireland [9], the sum of EUR 15 million was committed from the Community budget for each of the years 2000, 2001 and 2002.

[9] OJ L 24, 29.1.2000, p. 7.

(6) The assessments carried out in accordance with Article 5 of Council Regulation (EC) No 214/2000 have confirmed the need for further support for Fund activities, while reinforcing synergy of objectives and co-ordination with Structural Funds interventions, in particular with the Special Programme for Peace and Reconciliation in Northern Ireland and the Border Counties of Ireland (hereinafter "the PEACE Programme").

(7) Council Regulation (EC) No 214/2000 expires on 31 December 2002.

(8) The peace process in Northern Ireland requires a continuation of European Community support to the Fund beyond that date.

(9) At its meeting in Berlin on 24 and 25 March 1999, the European Council decided that the PEACE Programme should be continued for five years, that is to say, from 2000 until 2004, with a total Community contribution of EUR 500 million.

(10) The Community contribution to the Fund should take the form of financial contributions for the years 2003 and 2004, thus terminating at the same time as the PEACE programme.

(11) In allocating the Community contribution, the Fund should give priority to projects of a cross-border or cross-community nature, in such a way as to complement the activities funded by the PEACE programme for the period 2000 to 2004.

(12) In accordance with the Agreement, all financial contributors to the Fund participate as observers at the meetings of the Board of the International Fund for Ireland.

(13) It is vital to ensure proper co-ordination between the activities of the Fund and those financed under the Community Structural Funds provided for by Article 159 of the Treaty, in particular the PEACE programme.

(14) Assistance from the Fund will be regarded as effective only in so far as it brings about sustainable economic and social improvement and is not used as a substitute for other public or private expenditure.

(15) An assessment reviewing the performance of the Fund and the need for further Community support should be carried out before 1 April 2004.

(16) A financial reference amount, within the meaning of Point 33 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure is inserted in this Regulation for the entire duration of the programme, without the powers of the budgetary authority as defined by the Treaty being affected thereby. The amount of the Community contribution to the Fund should be EUR 15 million for each of the years 2003 and 2004, expressed in current values.

(17) That support will contribute to reinforcing solidarity between the Member States and between their peoples.

(18) The Treaty provides no powers other than those in Article 308 for the adoption of this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Subject to the annual budget procedure and in accordance with the second paragraph of Point 34 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure [10], an annual contribution of EUR 15 million shall be made to the International Fund for Ireland (hereinafter "the Fund") for each of the years 2003 and 2004, amounting to a total contribution, over these years, of EUR 30 million.

[10] OJ C 172, 18.6.1999, p. 1.

Article 2

The contribution shall be used by the Fund in accordance with the Agreement of 18 September 1986 between the Government of Ireland and the Government of the United Kingdom of Great Britain and Northern Ireland concerning the International Fund for Ireland (hereinafter "the Agreement") under which it was established, priority being given to projects of a cross-border or cross-community nature, in such a way as to complement the activities financed by the Structural Funds, and especially those of the Special Programme for Peace and Reconciliation in Northern Ireland and the Border Counties of Ireland (hereinafter "the PEACE Programme").

It shall be used in such a way as to bring about sustainable economic and social improvement in the areas concerned. It shall not be used as a substitute for other public and private expenditure.

Article 3

The Commission shall represent the Community as an observer at the meetings of the Board of the International Fund for Ireland (hereinafter "the Board").

The Fund shall be represented as an observer at the Monitoring Committee meetings of the PEACE programme, and of other Structural Funds interventions as appropriate.

Article 4

The Commission shall foster co-ordination at all levels between the Fund's Board and agents, and the managing bodies set up under the Structural Funds interventions concerned, in particular under the PEACE programme.

Article 5

The Commission shall, in co-operation with the Fund's Board, determine appropriate publicity and information procedures in order to publicise the Community's contribution to the projects financed by the Fund.

Article 6

By 31 March 2004 at the latest, the Commission shall submit a report to the Budgetary Authority, assessing the results of the activities of the Fund and the need for continuing contributions beyond 2004, taking into account developments in the peace process in Northern Ireland. That report shall incorporate, inter alia, the following:

(a) a survey of the Fund's activities;

(b) a list of projects which have received aid;

(c) an assessment of the nature and impact of the Fund's activities, notably in relation to its objectives and the criteria laid down in Articles 2 and 8;

(d) an assessment of action taken by the Fund to ensure co-operation and co-ordination with Structural Funds interventions, taking account, in particular, of obligations under Articles 3, 4 and 5;

(e) an annex setting out the results of the verifications and controls carried out by the Commission pursuant to the undertaking referred to in Article 7.

Article 7

The Commission shall administer the contributions.

Subject to an assessment of the Fund's financial needs, to be carried out by the Commission on the basis of the Fund's cash balance at the time scheduled for each payment. The annual contribution shall normally be paid in instalments as follows:

(a) a first advance payment of 40% shall be made after the Commission has received an undertaking, signed by the Chairman of the Fund's Board, to the effect that the Fund will comply with the conditions attaching, in accordance with this Regulation, to the grant of the contribution;

(b) a second advance payment of 40% shall be made six months later;

(c) a final payment of 20% shall be made after the Commission has received and accepted the Fund's annual activity report and audited accounts for the year in question.

If the assessment referred to in the second subparagraph leads to the conclusion that, at the material date, the Fund's financial needs do not justify payment of one of those instalments, the payment concerned shall be suspended until such time as the Commission concludes, on the basis of new information provided by the Fund, that it is justified.

Article 8

The contribution referred to in Article 1 shall be subject to the condition that, in the case of an operation which receives or is due to receive financial assistance under a Structural Funds intervention, a contribution from the Fund may be allocated to that operation only if the sum arrived at when the figure representing 40% of the amount of the Fund's contribution is added to the figure representing the amount of assistance from the Structural Funds does not exceed 75% of the operation's total eligible costs.

Article 9

This Regulation shall enter into force on 1 January 2003.

It shall expire on 31 December 2004.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

FINANCIAL STATEMENT

1. Title of operation

COMMUNITY CONTRIBUTIONS TO THE INTERNATIONAL FUND FOR IRELAND (2003-2004)

2. Budget heading(s) involved

B2-604

3. Legal basis

Article 308(EC)

4. Description of operation

4.1 General objective

to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland by promoting the economic and social advance of the two communities

4.2 Period covered and arrangements for renewal

2003, 2004

5. Classification of expenditure or revenue

5.1 Compulsory/Non-compulsory expenditure

5.2 Differentiated/Non-differentiated appropriations

6. Type of expenditure or revenue

- Subsidy for joint financing with other sources in the public and/or private sector

7. Financial impact

7.1 Indicative schedule of appropriations

7.2 Schedule for proposed new operation

Commitment and payment appropriations EUR million (at current prices)

>TABLE POSITION>

8. Fraud prevention measures

the Commission is represented on the Board of the Fund and the final annual contribution is only paid over after receipt and acceptance of the Fund's annual report and audited accounts. The Fund operations are moreover controlled by DG REGIO audit and control services.

9. Elements of cost-effectiveness analysis

9.1 Specific and quantified objectives; target population

- Objectives : to promote economic and social advance, and to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland.

- The Fund operates mainly in Northern Ireland and in the Border Region of Ireland; it targets designated disadvantaged areas.

- For a detailed analysis of Fund activities : cf. Commission report SEC(2001)1579 / COM(2001) 548 of 1st October 2001.

9.2 Grounds for the operation

- The European Community, recognising that the objectives of the Fund are a reflection of those pursued by itself, has given practical backing (EUR 15 million p.a. since 1989; EUR 20 million for each of the years 1995, 1996, 1997; EUR 17 million for the years 1998 and 1999; EUR 15 million for the years 2000, 2001 and 2002). Continuation of this contribution for another two years illustrates the clear EU support for the peace process in Northern Ireland.

9.3 Monitoring and evaluation of the operation

- The Commission will monitor the Fund's activities through its continuing presence on the Board as an observer. It is informed of all the Fund's proposed decisions before they are put to the Board. The Fund operations are moreover controlled by DG REGIO audit and control services.

10. Administrative expenditure (Section III, Part A of the budget)

None