Proposal for a Council Regulation (EC) regarding the implementation of measures to promote economic and social development in Turkey (98/C 408/10) COM(1998) 600 final - 98/0300(SYN)

(Submitted by the Commission on 22 October 1998)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community and in particular Article 130 W thereof,

Having regard to the proposal from the Commission,

Acting in accordance with the procedure referred to in Article 189c of the EC Treaty,

Whereas relations between the European Union and Turkey are based mainly on the Association Agreement of 12 September 1963 and the decisions of the Association Council which the Association Agreement set up;

Whereas Turkey is engaged in substantial reform to improve its economy, restructure and increase the efficiency of its public sector, modernise its economic and social infrastructure and develop its manufacturing sector;

Whereas the Cardiff European Council on 15 and 16 June 1998 affirmed the importance it attached to the implementation of the European strategy for Turkey and requested the Commission to table proposals (including proposals on financial matters) in that connection;

Whereas income is unequally distributed across Turkey's provinces; whereas it will not be possible to act on the conclusions of the Cardiff European Council unless these disparities are remedied by backing the development of regions which are lagging behind and by strengthening economic and social cohesion;

Whereas the provisions of this Regulation are based on respect for democratic principles, the rule of law, human rights and fundamental freedoms and respect for international law, which underpin the policies of the European Community and its Member States;

Whereas the Community attaches great importance to the process on which Turkey has embarked to improve its democratic practices, promote respect for fundamental human rights and more closely involve civil society in its development;

Whereas a financial reference amount within the meaning of point 2 of the Declaration of the European Parliament, the Council and the Commission of 6 March 1995 has been included in this Regulation for the period 1999-2001, although it does not affect the competence of the budgetary authority as defined by the Treaty;

Whereas the projects and programmes financed on this basis must further Turkey's development, the reform of its development policies and the restructuring of its institutional framework;

Whereas the projects and programmes financed on this basis must benefit the entire population affected by Turkey's development lag,

HAS ADOPTED THIS REGULATION:

Article 1

The Community shall assist Turkey in its efforts to achieve economic and social development.

Article 2

The financial reference amount for this Regulation is ECU 135 million for the period 1999-2001.

The annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspectives.

Article 3

1. The beneficiaries of cooperation projects and operations may include not only the Turkish state and regions but also local authorities, regional organisations, public agencies, local or traditional communities, business support organisations, cooperatives and civil society, in particular associations, foundations and non-governmental organisations.

2. When an essential element for the continuation of assistance to Turkey is lacking, in particular in the event of the violation of democratic principles, the rule of law, human rights and fundamental freedoms, and international law, the Council, acting by qualified majority on a proposal from the Commission, may decide upon appropriate measures.

Article 4

1. Cooperation projects and operations may be financed in the following indicative areas:

- modernising manufacturing, improving institutional and infrastructure capacity in areas including the environment energy and transport;

- promotion of industrial cooperation by methods including support for diversification in industry and the establishment of small and medium-sized enterprises;

- cooperation in telecommunications, infrastructure, rural development and social services;

- boosting the capacity of the Turkish economy, inter alia by measures to encourage the restructuring of the country's private sector and private initiative;

- cooperation in protecting health;

- regional and cross-border cooperation;

- any form of cooperation seeking to defend and promote democracy, the rule of law, human rights and the protection of minorities;

- cooperation on humanitarian issues;

- all forms of assistance aimed at promoting the development of relations between the European Union and Turkey.

2. Where appropriate, measures could be taken to underpin a structural adjustment programme on the basis of the following principles:

- support programmes must be tailored to Turkey's particular circumstances and take account of economic and social conditions;

- support programmes must include measures to alleviate any negative impact of the structural adjustment process in social and employment terms, in particular for the most disadvantaged sectors of the population;

- account must be taken of Turkey's economic situation, and in particular its level of indebtedness, debt servicing charges, balance of payments and foreign currency supply, monetary situation, per capita gross domestic product and unemployment level.

Article 5

1. Community assistance under this Regulation shall be in the form of grants.

2. The instruments to be employed in the course of the operations covered by this Regulation shall include technical assistance, training or other services, supplies and works, along with audits and evaluation and monitoring missions.

3. Community financing may cover investment, with the exception of the purchase of buildings, and recurring costs (including administrative, maintenance and operational costs), taking account of the fact that the project must aim to have the recurring costs taken over by the beneficiaries.

4. A financial contribution from the partners defined in Article 3 shall be sought for each cooperation operation. The contribution requested shall be within the means of the partners concerned and shall depend on the nature of the operation. In specific cases where the partner is an NGO or a community-based organisation, a contribution in kind may be made.

5. Opportunities may be sought for cofinancing with other providers of funds, especially with Member States.

6. The necessary measures shall be taken to emphasise the Community character of the aid provided under this Regulation.

7. In order to achieve the objectives of coherence and complementarity referred to in the Treaty and with the aim of guaranteeing optimum efficiency for these action as a whole, the Commission will take all necessary coordination measures, notably:

(a) the establishment of a system for systematic exchange and analysis of information on operations financed or for which financing is foreseen by the Community and the Member States;

(b) on-the-spot coordination of these operations by means of regular meetings and exchange of information between the representatives of the Commission and Member States in the beneficiary country.

8. The Commission, in conjunction with the Member States, may take any initiatives necessary for ensuring good coordination with the other providers of funds involved.

Article 6

1. The Commission shall appraise, approve and administer operations covered by this Regulation according to the budgetary and other procedures in force, and in particular those laid down in the Financial Regulation applicable to the general budget of the European Union.

2. Project and programme appraisal shall take into account the following factors:

- effectiveness and viability of operations,

- cultural, social, gender and environmental aspects,

- institutional development necessary to achieve project goals,

- experience gained from operations of the same kind.

3. Decisions relating to grants of more than ECU 2 million for individual operations financed under this Regulation shall be taken under the procedure laid down in Article 7.

The Commission shall inform the Committee referred to in Article 7 succinctly of any financing decisions it intends to take with regard to projects and programmes of less than ECU 2 million in value. The information shall be made available at least one week before the decision is taken.

4. The Commission is authorised to approve, without seeking the opinion of the Committee referred to in Article 7, any extra commitments needed for covering expected or real cost overruns in connection with the operations, provided that the overrun or additional requirement is not more than 20 % of the initial commitment fixed by the financing decision.

Where the additional commitment referred to in the previous subparagraph is less than ECU 4 million, the Committee referred to in Article 7 shall be informed of the decision taken by the Commission. Where the said additional commitment is more than ECU 4 million but less than 20 %, the Committee's opinion shall be sought.

5. All financing agreements or contracts concluded under this Regulation shall provide for the Commission and the Court of Auditors to conduct on-the-spot checks according to the usual procedures laid down by the Commission under the rules in force, and in particular those of the Financial Regulation applicable to the general budget of the European Union.

6. Where operations are the subject of financing agreements between the Community and Turkey, such agreements shall stipulate that the payment of taxes, duties or any other charges is not to be covered by the Community.

7. Participation in invitations to tender and the award of contracts shall be open on equal terms to natural and legal persons of the Member States and Turkey.

8. Supplies shall originate in the Member States or Turkey.

Article 7

The Commission shall be assisted by the Committee set up by Regulation (EC) No 1488/96 of 23 July 1996 (1), known as the MED Committee, composed of the representatives of the Member States and chaired by the representative of the Commission, in accordance with the following procedure.

The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft, within a time limit which the Chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148(2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the Committee shall be weighted in the manner set out in that Article. The Chairman shall not vote.

The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the Committee.

If the measures envisaged are not in accordance with the opinion of the Committee or if no opinion is delivered, the Commission shall without delay submit to the Council a proposal relating to the measures to be taken. The Council shall act by qualified majority.

If, on the expiry of a period of three months from the date of referral to the Council, the Council has not acted, the proposed measures shall be adopted by the Commission.

Within one month of taking a decision, the Commission shall inform the Member States of the measures and projects approved, describing their nature, the sums attached to them and the partners involved.

Article 8

An exchange of views shall take place, once a year, on the basis of a presentation by the Commission's representative of the general guidelines for the operations to be carried out in the year ahead, in a meeting of the Committee referred to in Article 7.

Article 9

After each budget year, the Commission shall report to the European Parliament and the Council, summarising the operations financed in the course of that year and assessing the implementation of this Regulation in that period.

The summary shall in particular contain information about those with whom implementation contracts have been concluded.

The report shall also include a summary of the conclusions of any evaluations, including those relating to specific operations.

Article 10

The Commission shall regularly evaluate operations financed by the Community in order to establish whether the objectives of the operations have been achieved and to provide guidelines for improving the effectiveness of future operations. The Commission shall submit to the Committee referred to in Article 7 a summary of the evaluations made, which the latter may, if necessary, examine. Evaluation reports shall be made available to any Member States requesting them.

Article 11

Three years after this Regulation enters into force, the Commission shall submit to the European Parliament and the Council an overall evaluation of operations financed by the Community under this Regulation, together with suggestions regarding the future of this Regulation and, where necessary, proposals for amending it.

Article 12

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities.

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

(1) OJ L 189, 30.7.1996, p. 1.