Opinion on the annual report on the cohesion financial instrument 1993/1994 (96/C 100/27)

On 13 March 1995, the Committee of the Regions, acting under Article 198c of the Treaty establishing the European Community, decided to draw up an Opinion on the above-mentioned report.

Commission 8 for Economic and Social Cohesion, Social Policy and Public Health was instructed to prepare the Committee's work on the subject. The Rapporteur was Mr Vieira De Carvalho.

At its 9th Plenary Session held on 20 and 21 September 1995 (meeting of 21 September 1995), the Committee of the Regions adopted the following Opinion.

Having regard to Council Regulation (EEC) No 792/93 of 30 March 1993 establishing a cohesion financial instrument;

Having regard to the Opinion of the Committee of the Regions on the proposal for a Council Regulation establishing the Cohesion Fund and the proposal for a Council Regulation (EC) laying down the implementing provisions in respect of the Regulation (EC) establishing the Cohesion Fund (CdR 16/94);

Having regard to the fact that the Court of Auditors has submitted a special report, No 1/95, on the cohesion financial instrument, covering the same period as the Commission report;

Having regard to the fifth EU programme on the environment and sustainable development;

Having regard to the Commission's communication on the future development of the common transport policy:

1. The Committee of the Regions congratulates the Commission and the Member States on their efforts to set up the cohesion financial instrument (henceforth referred to as 'the financial instrument`) within such tight deadlines; the Committee recognizes the difficulties caused by the lack of legal certainty arising from the fact that the Treaty of Maastricht had at that time not yet been ratified.

2. The Committee points out that most of the comments about the difficulties or shortcomings in applying the financial instrument seek to ensure that similar problems do not occur again with the implementation of the Cohesion Fund. These comments are designed to ensure more effective operation of the Cohesion Fund.

2.1. The Committee underlines the need for all possible measures to be taken to guarantee the effectiveness of the Fund.

3. The Committee calls for the competent authorities at regional and local level to be closely involved in the management of the financial instrument.

3.1. This would entail, on the one hand, the active participation of the regional and local authorities in the establishment of the priorities and in the process of considering and selecting the projects.

3.2. The regional and local authorities directly involved must properly participate in determining the priorities of the beneficiary Member States. The authorities in question should, however, be involved in all cases and not only in cases where they are fully responsible for defining or implementing projects in their respective areas.

3.3. Such involvement would also make it mandatory for aid applications to be accompanied by the opinions of the regional and local authorities concerned in respect of the regional and inter-regional impact which the projects would have. When approving projects the Commission should also take account of the opinions of such authorities.

3.4. Furthermore, regional and local authorities involved in financing projects selected for aid under the financial instrument should also participate in the budgetary management of these projects.

3.5. Turning to the follow-up to the projects and project assessment, the Committee welcomes the Commission's comment () that in future Member States will have to do more to ensure that better environmental impact analyses are carried out in respect of projects. Whilst recognizing that the projects to be financed by the Fund are selected on the basis of the fifth EU programme on the environment, local and regional authorities do, however, wish to point out that they are particularly concerned that the projects which are financed should conform to the rules for combating air and noise pollution, the protection of water, the treatment of solid waste and the protection of birds.

3.6. The Committee would reiterate how important it is for the regional and local authorities directly concerned to participate in the work of the follow-up committees, drawing on the example set by Ireland. It would be preferable to assign these regional management powers to elected local and regional representatives, rather than to central government representatives.

3.7. The Committee urges that in future more projects be financed in the most outlying regions. The Committee, however, points out that any increase in the financial resources allocated to such projects must not be made at the expense of other Funds (e.g. the Structural Funds).

3.8. The Committee urges that priority be given to assisting the most isolated regions of the 'convergence countries`.

4. The Committee refers to the concern expressed in the Court of Auditors special report that a number of small-scale projects may have received assistance from the financial instrument solely because of an urgent need to 'hand out` the funds as soon as possible. The Committee would point out that projects must have a significant impact on regional and inter-regional development; the impact is not, however, necessarily linked to the scale of the project.

5. The Committee would like to receive details of the total number of applications submitted for funding, the percentage of projects which were accepted, the main reasons for rejections and any input from the regional and local authorities in the decision-making process.

6. In future, it would be advisable to assess the socio-economic impact of projects which have been financed (not only at national level but also at regional and local level) by, for example, including in the annual reports a section on the local, regional and inter-regional impact of the projects.

In the annual report, the Commission should use diagrams and maps to provide an overall picture of the trend in financing projects.

In order to provide a better picture of the balance between projects in the two areas (infrastructure and environment), the reports should take account of data from previous years in order to permit verification that funds have been distributed equitably. It is, for example, a matter of regret that road transport projects have attracted more funds than projects involving modes of transport which are less harmful to the environment. A longer reference period than one year is however necessary in order to confirm an imbalance in the allocation of funds.

7. The Committee would underline the importance of proper coordination between the various EU intervention instruments, namely the cohesion financial instrument and the Cohesion Fund, on the one hand, and the Structural Funds, the European Investment Bank, Interreg II and other EU policies, on the other.

The special report by the Court of Auditors states that, in a number of cases, Member States have withdrawn projects earmarked for ERDF or EIB funding and have instead applied for aid from the cohesion financial instrument. Such practices must be avoided in future. Better coordination and information would obviate the risk of a) double financing and b) cohesion fund aid for projects which might be rejected by another intervention instrument. Such a step would also ensure more consistent linkage with national infrastructure programmes.

8. The Committee is aware of the problems which arise as a result of failure to comply with EU laws on the awarding of public contracts in a number of states. It trusts that these problems will soon be resolved.

9. The absence of irregularities or fraud in the projects approved is a source of considerable satisfaction.

Done at Brussels, 21 September 1995.

The Chairman of the Committee of the Regions

Jacques BLANC

() Reply by the Commission to the special report drawn up by the Court of Auditors.

APPENDIX of the Committee of the Regions to the annual report 1994 'Cohesion Fund - Complement`

On 18 July 1995, the Committee of the Regions, acting under Article 198c of the Treaty establishing the European Community, decided to draw up an Opinion on the above-mentioned report.

Commission 8 for Economic and Social Cohesion, Social Policy and Public Health was instructed to prepare this Opinion, which is appended to the Opinion on the annual report on the cohesion financial instrument 1993/1994 (COM(95) 1 final). The Rapporteur was Mr Viera De Carvalho.

At its 9th Plenary Session, held on 20 and 21 September 1995 (meeting of 21 September), the Committee of the Regions adopted the following Opinion.

Having regard to Council Regulation (EEC) No 792/93 of 30 March 1993 establishing a cohesion financial instrument;

Having regard to the Opinion of the Committee of the Regions on the proposal for a Council Regulation establishing the Cohesion Fund and the proposal for a Council Regulation (EC) laying down the implementing provisions in respect of the Regulation (EC) establishing the Cohesion Fund (CdR 16/94);

Having regard to the fact that the Court of Auditors has submitted a special report, no. 1/95, on the cohesion financial instrument, covering the same period as the Commission report;

Having regard to the fifth EU programme on the environment and sustainable development;

Having regard to the Commission's communication on the future development of the common transport policy;

Having regard to the annual report on the cohesion financial instrument 1993/1994 (COM(95) 1 final):

1. The Committee of the Regions is pleased to note that there has been a reduction in the imbalance between infrastructure projects and environment projects - to the detriment of the latter - to which it drew attention in its Opinion on the annual report on the cohesion financial instrument.

2. The Committee also welcomes the fact that, in the area of transport infrastructure, the rail network is starting to receive a bigger slice of the financial assistance than was the case under the cohesion financial instrument.

3. The comments in the Opinion on the cohesion financial instrument on the role which regional and local authorities should play (see point 3 of that Opinion) also apply in the case of the Cohesion Fund.

4. The Committee would underline once again how important it is for annual reports to include a section on the local, regional and national impact of projects. In the technical description of the projects, the annual report under review includes a heading on 'socio-economic benefits`, but more comprehensive information on the impact of projects would be welcome.

5. The Committee reiterates its request for information on the total number of applications submitted for funding, the percentage of projects which were accepted, the main reasons for rejection and any input from local and regional authorities in the decision-making process.

6. The Committee takes note of the small number of irregularities recorded in respect of projects which have been approved.