31. 12. 81 Official Journal of the European Communities No C 346/9 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the European Regional Development Fund Fourth Annual Report (1978) 
The opinion of the Committee is not based on any text. 
A. LEGAL BASIS FOR THE OPINION 
At its 171st plenary session held on 26 and 27 September 1979 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 
173rd plenary session held in Brussels on 21 November 1979. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the fourth paragraph of Article 20, 
line 4 of the Rules of Procedure of the Economic and 
Social Committee, 
Having regard to the decision of its Bureau of 
25 September 1979, instructing Mr Pearson, as the 
rapporteur, to draw up a draft opinion on the 
European Regional Development Fund Fourth 
Annual Report (1978), 
Having regard to Articles 22, 46 and 47 of the Rules 
of Procedure, 
Having regard to the report presented by Mr 
Pearson, rapporteur, 
Having regard to the opinion adopted by the Section 
for Regional Development on 9 November 1979, 
Having regard to the discussions at the 173rd plenary 
session of 21 November 1979, 
HAS ADOPTED THE FOLLOWING OPINION 
unanimously: The Committee notes and approves the Fourth 
Annual Report of the ERDF, subject to the following 
comments: 
1. Due to the delay in finalizing the details of the 
amended Regulation, the new measures were not in 
operation in 1978 as originally intended. One of the 
main changes involves the creation of a 'quota-free' 
element. The Committee is of the opinion that its size 
at 5 % of the total allocation, is too small. It is noted 
that there will be a re-examination of the Fund prior 
to 1 January 1981. The Committee hopes this matter 
will be reconsidered and that in the same context the 
working regulations of Community funds with a 
structural purpose will be revised. 
2. The very small size of the Fund makes it 
imperative that future allocations to it from the 
Community budget be reviewed realistically and 
determined in relation to the size of its task. The 
current allocation is too low if the increasing 
disparity between the underprivileged regions and 
the rest of the Community is not to grow to much 
greater proportions. The Committee doubts whether 
the 'quota-free' section can have the hoped-for 
impact since it is such a small percentage of an 
already insufficient percentage of Community 
budget allocation. 
No C 346/10 Official Journal of the European Communities 31. 12. 81 
3. The Committee is of the opinion that the 
accuracy of projections relating to the economic 
situation in 1979 (such as the expected increase of 
6-9% in the consumer price index — the same as for 
1978 — and the average increase of 4-5% in overall 
Community investments) will need to be modified by 
the large and continually escalating costs of 
energy. 
4. The Committee has previously suggested that 
greater concentration of Fund aid should be made to 
less widespread geographical areas. This point is 
reiterated, not apparently having met with 
recognition earlier. 
5. The Committee, once, again, notes with 
disappointment the fact that no Member State 
availed itself of the interest rate subsidy available 
from the European Investment Bank. It also regrets 
the fact that no applications have been received for 
the financing of regional development studies; the 
Committee has, heretofore, emphasized its interest in 
such studies, particularly those of a cross-border 
type. 
6. The Committee also notes that few applications 
for aid in the services sector were received. The 
Report considers that such aid, particularly in the 
tourism sector, can be of great benefit to the regions 
and the Committee agrees with this view. 
7. The Committee deplores once again, in the 
strongest terms, the fact that the Annual Statistical 
Summaries, which are intended to enable the 
Commission to assess the economic impact of Fund 
assistance, were submitted even later in 1978 than 
they had been in 1977 and were not sufficiently 
detailed when they came to hand. 
8. As regards the level of control checks, the 
Committee notes with satisfaction that nearly twice 
as many checks were carried out in 1978 as in the 
previous year, thereby exceeding the percentage 
target of 10% laid down in the Fund Regulation. The 
Committee regrets the existence of a number of 
shortcomings which were disclosed as a result of 
these checks. It endorses the concern expressed in the 
Report that in France Commission inspectors have 
not so far been allowed to visit industrial projects. 
However, the problem is still under discussion with 
the French authorities. 
9. It would appear that the Fund is not being really 
effective at a fundamental structural level since in its 
Done at Brussels, 21 November 1979. reference to Community enlargement, the Report 
states that 'although enlargement will bring 
economic benefits to the already rich regions of the 
Nine, certain less prosperous regions ... will find it 
difficult to counter the effect of competition from the 
new members'. The Committee endorses the 
statement in the Report that 'the Community's 
regional policy and its long-term structural 
instruments must be reinforced'. The Committee 
therefore considers that the Community budget must 
provide adequate resources for furthering the 
development of the less affluent regions. These 
increased resources would then have to be devoted to 
specific regional and structural policies, and to any 
new problems that might arise as a result of the 
enlargement of the Community. 
10. The new approach by the Commission services 
responsible for the operation of the Fund stressed 
greater cooperation, in 1978, between national, 
regional and local bodies. This is to be welcomed 
especially as this approach should help to ensure that 
Fund assistance is more clearly additional to, and its 
disbursement can coincide in time with, national 
contributions in respect of the investments 
involved. 
11. The Committee welcomes the importance which 
the Commission attaches to the coordination of all 
policies both at Community and at national levels 
which impinge on regional development. Such 
coordination would include the coordination of all of 
the Community's financial instruments which, up 
until now, has been inadequate. This latter point has 
often been stressed by the Committee. 
The introduction of the new concept of 'integrated 
operations' could be the answer to some of these 
difficulties and the Committee hopes that the 
Commission will soon take a final decision regarding 
the choice of pilot-areas within which these 
integrated operations will be implemented. The 
extent to which Community policies are mutually 
consistent also needs to be regularly monitored. The 
Committee suggests that problems relating to the 
coordination of Community financial instruments, 
and the extent to which Regional Fund aid, in 
comparison to other aids and policies, contributes to 
the development of a region, should be the subject of 
further work within the Committee. 
The Chairman 
of the Economic and Social Committee 
Raffaele VANNI