28. 5. 79 Official  Journal  of the European  Communities No C 133/27 
market  monitoring  system  and  (b) the  need  to take 
account  of the harmonization  of terms  of competition. 
However,  it considers  that  the information  referred  to in 
Article  2 (2) might  already  constitute  a valid  framework 
for determining  bilateral  quotas  on an objective  basis. 
2.3. Article  3 
2.3.1.  The  Commission  proposes  that  there  should  be 
no restriction  on transit  through  third  Member  States 
when  this  is necessary  for hauls  effected  under  bilateral 
quotas. 2.4. Article  4 
As it observed  in the general  comments,  the Committee 
considers  that  it is not desirable  at the present  time  to 
propose  procedures  for  Commission  participation  in 
the fixing  of all  bilateral  quotas.  However,  such 
participation  may  prove  necessary  in an increasing 
number  of cases  on account  of the  Commission's 
knowledge  of the specific  situation.  The  Committee  also 
considers  that  the Commission  should  be informed  about 
bilateral  transport  capacity  in order  that  it may  assess  the 
situation  on the market. 
2.5. Article  5 
No comment. 
2.6. Article  6 
The Committee  considers  that  this  approach  fails  to 
make  allowance  for the third  Member  State's  interests, 
especially  as regards  the capacity  of this  State's  roads. The Committee  considers  that  a procedure  for 
negotiating  agreements  on road  haulage  quotas  with 
non-member  countries  would  be premature  for the time 
being. 
Done  at Brussels,  22 February  1979. 
The Chairman  of 
the Economic  and  Social  Committee 
Fabrizia  BADUEL  GLORIOSO 
Opinion  on the European  Regional  Development  Fund  third  annual  report  (1977) 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 162nd  plenary  session  held  on 19 October  1978  the Committee,  acting  on a proposal 
from  the Bureau,  decided  to deliver  an opinion  on the abovementioned  subject  on its own 
initiative. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 166th 
plenary  session  held  in Brussels  on 21 and  22 February  1979. 
The full text of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 of 
the Rules  of Procedure, Having  regard  to the  decision  taken  by  the  full 
Committee  on 19 October  1978  to draw  up an opinion 
on the matter, 
No C 133/28 Official  Journal  of the European  Communities 28. 5. 79 
Having  regard  to earlier  work  of the Committee,  and  in 
particular  the opinion  on the guidelines  for Community 
regional  policy  (1), the opinion  on the first  annual  report 
on the European  Regional  Development  Fund,  1975,  and 
the summary  analysis  of annual  information  1976  (2) as 
well as the opinion  on the second  annual  report  on the 
European  Regional  Development  Fund  and the summary 
of the annual  information  for 1977  (3), 
Having  regard  to the opinion  issued  by the Section  for 
Regional  Development  at its meeting  held  on 9 February 
1979, 
Having  regard  to the  report  submitted  by  the 
rapporteur,  Mr Pearson, 
Having  regard  to the discussions  at its 166th  plenary 
session  held  on 21 and  22 February  1979  (meeting  of 
22 February), compared  to 1976,  may  be seen  as a response  to the 
Commission's  request  to Member  States  that  they  give 
priority  to grant  applications  which  relate  to projects 
which  directly  create  jobs.  While  the  Committee 
recognizes  the  need  to increase  employment  in the 
industrial  sector,  particularly  in current  circumstances,  it 
would  point  out that  infrastructural  projects  very  often 
create  the  preconditions  for  industrial  investment, 
particularly  in weaker  regions,  and by acting  as a magnet 
for the attraction  of further  investments  promote  the 
long-term  development  of such  regions.  An optimum 
balance  between  the  various  types  of investments  is, 
therefore,  called  for and  should  form  part  of overall 
regional  development  planning.  In this  connection  it 
should  be recalled  that  funding  of infrastructural  projects 
often  involves  capital  purchases  from  outside  an 
under-developed  region  and the Committee  suggests  that 
extra  efforts  should  be made  wherever  feasible  to supply 
as many  as possible  of these  imputs  from  local  sources. 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by a large  majority: 
The Committee  approves  the third  annual  report  (1977) 
of the European  Regional  Development  fund  subject  to 
the following  observations: 
1. The  Committee  reiterates  its long  held  view  that 
the size  of the Fund  is inadequate  and  totally  out  of 
proportion  with  the size  of the regional  problems  facing 
the Community,  a position  which  has also  been  adopted 
by the European  Parliament.  In particular  the Committee 
draws  attention  to the fact  that  the erosion  in the real 
value  of grant  aid due to inflationary  factors  continued  in 
1977.  The  comments  in the  final  paragraph  of the 
Committee's  opinion  on the 1976  annual  report  (3) are 
therefore  increasingly  valid.  Recent  suggestions  that 
subventions  from  the Fund  might  be used  to help  weaker 
Member  States  to adjust  to the implementation  of a new 
European  monetary  system  are viewed  with  alarm  by the 
Committee,  since  the  amounts  reportedly  involved 
would  prevent  the Fund  from  operating  as originally 
envisaged. 
2. Distribution  of aid  between  industry/service  and 
infrastructure  (paragraph  28 of the annual  report) 
The report  suggests  that  the decline  in the proportion  of 
funds  allocated  to infrastructural  projects  in 1977, 
(») OJ No C 292,  3. 12. 1977,  p. 5. 
(2) OJ No C 56, 7. 3. 1977,  p. 49. 
(3) OJ No C 292,  3. 12. 1977,  p. 13. 3. Projects  on which  work  has already  begun 
(paragraph  32 of the annual  report) 
The Committee  regrets  that  part  of the EDF  funds  are 
still being  used  to a large  degree  to finance  projects  which 
are already  in progress.  The  Committee  endorses  the 
view  of the Commission,  expressed  in paragraph  32 of 
the annual  report,  that  particular  emphasis  should  be 
paid to financing  entirely  new  projects  so that  Fund 
assistance  may  be seen  to be initiating  solutions  to 
regional  problems. 
4. Impact  assessment  (paragraph  109  of the  annual 
report) 
One of the main  aims  of the Fund  is the creation  and 
maintenance  of jobs  in economically  weaker  regions.  In 
order  to determine  whether  the Fund  has succeeded  in 
this objective,  an assessment  needs  to be made  of the job 
creation  effects  of assisted  projects  in the assisted  areas  in 
comparison  with  the impact  of comparable  projects  in 
the rest  of the Community.  In other  words,  the number 
of actual  jobs  created,  compared  with  the  number 
originally  projected,  needs  to be measured.  Moreover,  in 
order  to ensure  the  optimum  balance  between  the 
various  regions,  both  Member  State  Governments  and 
the Commission  need  to ensure  coordination  between 
the programmes  in favour  of weak  regions  and  the 
development  policies  of more  industrialized  areas. 
28. 5. 79 Official  Journal  of the European  Communities No C 133/29 
The Committee  deplores  the failure  of some  governments 
to supply  the statistical  data  that  is necessary  to evaluate 
the achievement  of this  objective  of the Fund.  Although 
the time  limit  was  extended  by the Council  from  April  to 
October,  the majority  of Member  States  have  not  yet 
provided  the  necessary  statistical  data  to enable  an 
assessment  of the impact  of the Fund  to be made. 
In this  connection  it is difficult  to accept  the statement  of 
this annual  report  that  infrastructural  projects  have 
created  'substantial  work'  (paragraph  34 of the annual 
report)  when  there  is no statistical  evidence  provided  in 
the report  to support  its contention  in this  regard. 
5. Complementary  character  of Fund  activity 
(paragraphs  37 and  118  of the annual  report) 
The Committee  endorses  the  Commission's  insistence 
that Fund  resources  must  be treated  as additional  to, and 
not as part  replacement  of, the overall  national  regional 
development  budget,  and  deplores  the fact  that  certain 
Member  States  have  failed  to demonstrate  that  they  are 
using  Fund  resources  in this  additional  way. 
6. Control  checks  (paragraphs  67 to 72 of the annual 
report) 
It is noted  with  some  concern  that  the percentage  number 
of control  checks  has  fallen  below  the 10%  minimum 
level  which  the Commission  considers  as the minimal 
acceptable  level.  The  Commission  should  ensure  that  the 
Member  States  operate  these  checks  at a much  higher 
level  of activity.  An additional  purpose  of the  checks 
should  be to ascertain  the results  achieved,  particularly  in 
relation  to job creation.  The  annual  report  is lax in its 
criticism  of this  shortcoming. welcomes  the intention  of the Commission  to endeavour 
to increase  coordination  with  Bank  operations  for 
regional  projects  and  Regional  Fund  activity.  The 
Committee  drew  attention  strongly  to this  item  in its 
opinion  on the 1976  annual  report. 
8. Areas  of high  unemployment  (paragraph  94 of the 
annual  report) 
The Committee  notes  the need  to take  action  on both  the 
demand  and  the supply  sides  of the labour  market  in 
order  to combat  unemployment  in the weakest  regions. 
The Committee  fully  endorses  the  Commission's 
intention  to find  new  and  unorthodox  ways  of solving 
these  problems. 
The Committee  suggests  that  a lower  eligibility  limit  for 
infrastructure  projects  be adopted  in order  that  smaller 
or isolated  communities  in rural  areas  might  benefit 
substantially  in terms  of improved  economic  viability 
and employment  prospects. 
9. Cross-border-studies  and  action 
In its opinion  on the 'cross-border  communications  study 
on the  Londonderry/Donegal  area'  the  Committee 
suggested  that  cross-border  studies  and  projects  be 
undertaken.  The  Committee  continues  to maintain  the 
view  that  such  projects  should  be encouraged. 
The critical  situation  of some  of these  regions,  their  high 
unemployment,  the infrastructure  problems  facing  them 
and the serious  threats  that  jeopardize  the future  of the 
people  living  in them  require  urgent  and  specific  action 
to be taken  by the ERDF  and  the Community's  financial 
instruments. 
7. Loan  interest  rebates  (paragraph  120  of the annual 
report) 
The Committee  also  notes  with  regret  that,  as in 1975 
and 1976,  Member  States  have  not taken  advantage  of 
the facility  provided  by the Fund  Regulations  to give  aid 
in the form  of interest  rebates  on loans  issued  by the 
European  Investment  Bank.  The  Committee  therefore 10. Geographical  concentration  of Fund  activities 
The Committee  continues  to hold  the  view  that 
expenditure  from  the  Fund  should  be concentrated 
geographically  in the  weakest  regions  in order  to 
maximize  its  efficiency.  The  Committee  therefore 
deplores  the trend  to depart  from  this  principle  during 
1976  and  1977. 
Done  at Brussels,  22 February  1979. 
The Chairman  of 
the Economic  and  Social  Committee 
Fabrizia  BADUEL  GLORIOSO