REPORT FROM THE COMMISSION - Thirteenth annual report on the Structural Funds (2001)

TABLE OF CONTENTS

Annex 1: Financial implementation by Objective

Annex 2: Financial implementation of the Community Initiatives

Annex 3: Financial implementation of technical assistance

Annex 4: Budget implementation

GENERAL SUMMARY

This report is compiled in accordance with Article 45(2) of Regulation (EC) No 1260/1999 laying down general provisions on the Structural Funds. It sets out the work of the Structural Funds and the activities undertaken to coordinate their work with that of the other financial instruments during 2001.

The report is centred on three main topics:

- the major events in the work of each Fund and the other financial instruments;

- coordination with the other Community instruments and policies;

- an evaluation of implementation during the year and in the past.

The major events of 2001

The main feature of 2001 was the conclusion of negotiations with the Member States on Objective 1, which accounts for 70% of the budget of the Structural Funds for 2000-06. The Commission drew up an overview of the negotiations on the Objective 1 programmes in a communication which it adopted on 5 July. This was broadly positive even though some difficulties had been encountered, including the overrunning by five months of the period for negotiations originally planned for finalising the programming documents because of the desire to ensure high-quality programming. A period of five months proved to be too short because of the complexity of a process which, if it was to result in effective programming, required the involvement of a large number of partners, paying attention to the constraints imposed by both national and Community policies and the establishment of adequate systems for management and inspection.

As regards implementation, adoption of all the single programming documents and operational programmes meant that all the appropriations planned could be committed and 70% of payments made for both Objective 1 and Objective 2. There were, however, some delays as regards Objective 3.

Implementation of the Community Initiatives also proceeded steadily:

Interreg III: 54 of the 70 programmes were approved.

Urban II: the 70 programmes were approved; the corresponding appropriations were committed and the payments on account made.

Equal: the Member States issued the calls for projects as soon as their CIPs were adopted; the Commission set up a common data base accessible via the Europa server to facilitate the search for transnational partners.

Leader+: 56 of the 73 programmes were approved.

The overall rate of budgetary implementation for the Community Initiatives was 89% for both commitments and payments.

As regards innovative measures, the ERDF approved 81 of the 103 projects submitted to it and the ESF selected 37 of the 148 projects proposed on the subject 'adjustment to the new economy' and granted part-financing averaging 72%. The call for projects on the second topic, 'a local employment strategy', was issued on 31 October 2001.

As regards the closure of programmes from before 1994, the bulk of balances were paid during 2001, so reducing the amounts still to be settled from EUR581 million to EUR315 million for Objective 1, from EUR144 million to EUR88 million for Objective 2 and from EUR146 million to EUR62 million for the Community Initiatives. Most of the amounts remaining open concern either cases where further checks are being undertaken because there is a serious suspicion of irregularities or those where legal proceedings are in progress.

Coordination with the other Community instruments and policies

The Cohesion Fund finances transport infrastructure and environmental projects. Coherence with the measures financed by the Structural Funds is ensured through the Strategic Reference Frameworks.

Similarly, the cooperation agreement between the EIB and the Commission for 2000-06 has permitted the introduction of arrangements for contacts between the geographical units in the two institutions, so improving coordination between the assistance they grant. In addition, the EIB helped evaluate eight major projects proposed for Structural Fund financing.

As in the past, account was taken of other Community policies through the careful scrutiny of assistance from the Structural Funds to ensure that it was compatible with Community legislation on competition, and particularly aid from public sources.

The consistency of assistance from the Structural Funds with employment policy also received particular attention. However, it should be noted that evaluation of the impact of the ESF is sometimes difficult to establish because of the lack of standardisation in the presentation of the National Action Plans for employment.

Assistance from the Structural Funds is subject to an ex-ante evaluation to ensure that it is compatible with legislation on the environment. However, the lack of harmonised data and indicators in most programmes made this evaluation difficult. During negotiations on the programming of the Structural Funds, the Commission also paid particular attention to implementation of the Natura 2000 directive.

Evaluation of implementation and checking

During 2001, the ERDF carried out 27 missions to audit the management systems of the Member States. These preventative audits demonstrated the care taken by the Member States as regards the quality of their systems, mainly by creating internal audit bodies. It is, however, regrettable that far too often the competent authorities in the Member States are still making payments without any real checks that the expenditure is genuine. The audits also revealed a lack of authority over the intermediate and implementing bodies, which, in any case, should have more precise and harmonised procedural rules.

The ESF carried out 41 audits and inspections and the FIFG 12.

The 18 inspections by the EAGGF basically revealed an unsatisfactory application of Regulation (EC) No 2064/97, some cases where ineligible expenditure had been financed and still too many problems in reconciling the declarations of expenditure sent to the Commission with the corresponding transactions.

CHAPTER 1: The main events of 2001

1.1 The Second report on Economic and Social Cohesion and the Cohesion Forum

Under the title 'Unity, solidarity, diversity for Europe, its people and its territory', the Commission adopted the Second report on Economic and Social Cohesion in January 2001. It looked at the results of the cohesion policy implemented since 1989 and laid the basis for the debate on the future of this policy in preparation for an enlarged Union. Mr Barnier, the Member with special responsibility for regional policy, presented the report to the European Parliament on 31 January.

This Report shows that national and regional cohesion has made significant progress since the end of the 80s. Disparities between the Member States have been reduced by one third and those between the regions by almost one fifth. In the three least prosperous Member States (Greece, Spain, Portugal), per capita income has risen from 68% of the Union average in 1988 to 79% in 1999. Ireland's convergence with the Community average has enabled it to leave the group of 'cohesion countries'. The least prosperous countries have also improved their communications and telecommunications infrastructure.

Within several Member States, however, the trend has not been towards a reduction in development gaps. Sometimes indeed inequalities have increased, even if, in the Cohesion countries, increased disparities between regions may have gone along with the convergence of all the regions towards the Community average in terms of per capita GDP. Other indicators reflect the persistence of regional disparities, e.g. substantial pockets of unemployment in certain regions (in Spain, Italy and the French overseas departments) and the persistence of growing regional disparities in research, innovation or education and training.

The Report extends its analysis to the candidate countries. The situation may be summed up in one statement: while the area and population of the Union will increase by one third, the GDP of the enlarged Community will grow by only 5%.

The Report sees the enlarged Union falling into three groups, each with a similar level of development. The first would include the twelve most prosperous States (with a GDP equal to or exceeding the current Community average). The second would include the three so-called cohesion countries (Greece, Spain, Portugal) plus some of the candidate countries (Cyprus, Malta, Slovenia, the Czech Republic) with a GDP approaching 80% of the Community average. The third would include the other candidate countries, eight countries accounting for about 16% of the population of the enlarged Union and with an income of about 40% of the Community average.

The challenges of enlargement require new ways of thinking and of acting. A vital question is the key criterion on which regional policy is to be based. If the criterion of per capita GDP is retained, the fall in the Union's average GDP will automatically mean that regions eligible under Objective 1 at present will cease to receive Community assistance.

The second Cohesion Forum, held in Brussels on 21 and 22 May, provided an opportunity for the 1 800 people present to make an active contribution to the discussion on the future of regional policy. Several ministers from the Member States and candidate countries, Members of the European Parliament and representatives of the regional authorities in the Union could compare their opinions and set out their expectations or fears about the implementation of regional aids in an enlarged Union.

While the aim of the Forum was to discuss the philosophy underlying Europe's future regional policy rather than how to finance it, frequent reference was made to the question of financial resources. Several speakers wanted the two ceilings for regional aid to be raised:

- in terms of the Union budget: the equivalent of 0.45% of total GDP;

- in terms of the volumes of finance transferred: 4% of national GDP for each beneficiary country.

The spatial topics covered in the second report on cohesion such as urban matters and rural diversification, areas with natural and geographical handicaps and those facing problems of conversion were also the subject of many speeches with the result that Mr Barnier proposed that they should be considered further in the next two years.

1.2. Launching the innovative actions

The Commission adopted its new guidelines for ERDF innovative actions 2000-06 in January 2001. Under the new system, eligible regions are invited to apply for an ERDF contribution of up to EUR3 million towards a Regional Programme of Innovative Actions based on a regional strategy to boost innovation which takes account of the relative circumstances of the region and includes a number of actions and accompanying pilot projects to be selected by the regional partnership responsible.

The aim is to increase and improve the quality of spending on innovation in the mainstream Objective 1 and Objective 2 programmes as well as influence the content of other regional development programmes. In addition to the regional programmes, a limited number of specific network programmes involving at least five regions from five Member States may also be approved.

The budget for innovative actions in each year in 2000-06 is 0.4% of the annual ERDF budget, which means approximately EUR400 million over the entire period.

1.3. The communication on the negotiations on the Objective 1 programmes

On 5 July the Commission adopted a communication [1] which set out the main points of the Community assistance planned for the regions eligible under Objective 1 during the new programming period (2000-06), with particular attention to the negotiations with the Member States and the value added by the Community. After 18 months of negotiations, a review was needed, although it was not required by the basic Regulation.

[1] COM(2001) 378 final of 5 July 2001 and SEC(2001) 1140/2 of 18 July 2001.

The Berlin European Council had decided on an amount of EUR195 billion for the Structural Funds for the period 2000-06, of which almost 70% (EUR127.5 billion) was to go to the Objective 1 regional development programmes. These resources should permit a substantial increase in GDP in real terms by 2006 in the Member States concerned (6% in Greece and Portugal, 2.4% in Spain and 4% in the eastern Länder of Germany). The new programmes will also have a marked impact on the level of investment towards 2006 (by 20% in Greece, 14% in Portugal and 6% in the eastern Länder).

While the negotiations with the national and regional authorities were broadly positive, there remain some difficulties, which the Commission noted in its communication:

- The period of five months allowed for negotiation of the programming documents proved too short (the average time for adoption varied from eight months to a year) because of the detailed discussions between the Commission and the Member States to improve the quality of programming. A balance had to be struck between the length of the negotiations and the quality of the results, particularly as regards the provision of adequate management and inspection systems, the integration of evaluation prior to programming and broad consultations through the partnership, and in the verification of compliance with Community policies, particularly those on the environment and competition. The Commission will ensure that the Member States comply with their commitments in this regard.

- The programme complement was sometimes seen as a separate phase of programming although its role is to provide details of the content of the programme priorities through a detailed description of the measures and the quantification of the targets and indicators relating to them, including for the performance reserve. This sometimes resulted in management problems because the authorities responsible for preparing the programme complements were not the same as those which had negotiated the plans and programmes.

- In several Member States, the new systems for management, inspection and monitoring were defined as regards their general outline but the arrangements for implementing them and making them fully operational remain to be settled.

The Commission would ask the Member States to make greater efforts in these essential areas to achieve increased efficiency in the use of the Structural Funds, in accordance with the new implementing Regulations, and particularly as regards the computerised management systems (to avoid delays in interim payments). The Commission intends to carry out a comparative analysis of financial management and inspection systems to identify best practice and promote new solutions to the problems arising in this area.

- Despite the progress made as regards the partnership during the preparation of the plans and programmes, the way this principle will be implemented during the implementation of assistance is not always clear.

The Commission will ensure the sound operation of the partnership, which should be as broad as possible, but also more proactive and more responsible in terms of the concrete management of assistance.

These less positive aspects do not call into question the principles decided on in the regulations governing the Structural Funds. The results-oriented management model, which is one of the pillars of this reform, has proved demanding and difficult to implement but it has already helped increase transparency and the quality of programming for 2000-06. The mid-term evaluation of these programmes will show the extent to which this will affect their implementation. The Commission will draw the necessary conclusions, particularly as regards simplicity, quality, efficiency and transparency.

The communication was discussed by the Ministers responsible for regional policy at an informal meeting in Namur on 13 July 2001. The debate covered the initial results of the establishment of the programming documents for Objective 1 and revealed substantial progress on the strategic content of the regional programmes thanks to the systematic use of evaluation, the strengthening of the partnership and giving consideration to Community priorities such as the information society and the environment. The representatives of certain Member States expressed concern about the risk of not achieving the goal of greater simplification linked to decentralisation because of the Commission's implementation of the rules on financial management and inspection. Following this discussion, Commissioner Barnier decided to launch an initiative, in close consultation with the Member States, on ways to simplify the implemenatation of the Structural Funds while fully respecting the principles of sound and efficient management.

The experience of these negotiations on Objective 1 will be particularly useful in the preparation of the programming documents for the candidate countries at the mid point of the period 2000-06.

The third Report on economic and social cohesion, which the Commission should normally present at the end of 2003, will provide an opportunity to review the statutory improvements to be made to the operation of the Structural Funds after 2006.

CHAPTER 2: IMPLEMENTATION OF THE PROGRAMMES

2.1. General overview

2.1.1. Adoption of new programmes

The SPDs and OPs for Objective 1 which had not been adopted in 2000 were adopted in 2001. They totalled 55 forms of assistance, mainly in Greece (25 OPs) and Spain (17 OPs). For the other Member States eligible under Objective 1, only a few isolated forms of assistance remained to be adopted.

For Objective 2 likewise all the assistance planned, a total of 86 SPDs, was adopted in 2001. In 2000, only the SPDs for Denmark, Finland and Sweden had been approved. However, most of the programmes for the other countries were ready for adoption at the end of 2000, so justifying the carryover of the appropriations concerned. Some programmes for Italy, Belgium, the Netherlands, Luxembourg and, to some extent, Germany were not ready for adoption at the end of 2000 and had to be adjusted following the decision to reenter in the budget the appropriations cancelled at the end of 2000.

For Objective 3, only the four OPs for Spain which still remained to be adopted were approved during the year.

Non-Objective 1 FIFG

The Commission committed the appropriations for the second instalment for ten of the eleven programmes in the non-Objective 1 regions, a total of EUR159.4 million. The first instalment of EUR14 million for the Italian programme was also committed from the appropriations carried over from 2000. The conclusion of the programme for the Netherlands was virtually complete by the end of the year but the Commission was unable to take a decision before 31 December. It decided to carryover the corresponding appropriations and these were committed before 31 March 2002.

As regards the Community Initiatives, all the programmes not yet adopted in 2000 were adopted in 2001, including 53 Interreg III programmes (strands A and B).

In addition, all the 70 programmes for urban regeneration (Urban II Community Initiative) were adopted in 2001, as were 56 national and regional programmes for Leader+.

The Member States also submitted their proposals for the Equal Community Initiative programme in September 2000. The total Community contribution was EUR3 026 million. Following negotiations with the Member States, the Commission adopted 17 Equal CIPs between 8 March and 22 May 2001, one for each Member State except Belgium and the United Kingdom, which had two each [2].

[2] For French and German and for Dutch-speaking Belgium and for Great Britain and Northern Ireland.

During 2001, [341] items of assistance were adopted under the various Objectives and Community Initiatives.

Programming for 2000-06, which could be regarded as virtually complete by the end of 2001 (apart from the programmes under Interreg III C) was therefore implemented through [452] items of assistance (SPDs and OPs). Programming for the previous period (1994-99) had entailed over 1 130 such items.

2.1.2. Implementation of Objectives 1, 2 and 3

Objective 1:

In terms of commitments, Objective 1 was bolstered by the carryover of appropriations from 2000 totalling EUR5 375 million, increasing the appropriations available by 25.8%. This carryover was justified by the need to commit in 2001 the annual instalments for 2000 in respect of a certain number of programmes for which decisions had been adopted or were ready for adoption at the end of 2000.

The payment appropriations for Objective 1 were increased by EUR1 020 million carried over from 2000. However, during the annual transfer procedure approved by the budgetary authority, EUR209.7 million was transferred, EUR160 million to other Structural Funds chapters and the remaining EUR49.7 million to other budget headings. These transfers account for 1.1% of the payment appropriations for Objective 1.

During the year, all the available commitment appropriations were implemented, as were 70% of the payment appropriations. The unimplemented payment appropriations were cancelled in accordance with the general rule in the Financial Regulation.

Considerable progress was made in 2001 as regards the closure of Objective 1 programmes from earlier programming periods and the settlement of outstanding amounts:

Amounts to be settled for Objective 1 programmes from before 1994:

>TABLE>

In accordance with Article 52(5) of Regulation (EC) No 1260/1999, amounts for programmes decided on by the Commission before 1 January 1994 for which no application for the balance has been received by 31 March 2001 must be automatically decommitted by 30 September 2001.

The persistence of amounts to be settled for the programmes covered by these provisions is due to the fact that the applications for the final balance required by that provision were made for the programmes concerned but, because of unresolved legal proceedings, checks on suspected irregularities, or both reasons, the remaining amount cannot be finally settled.

Objective 2:

Since the vast bulk of Objective 2 programmes were adopted in 2001, commitment appropriations totalling EUR2 652 million were carried over from 2000 to 2001, increasing appropriations by 73.4%. Despite this increase in available appropriations, all the commitment appropriations, including those carried over, were implemented in 2001.

Payment appropriations carried over from 2000 amounted to EUR150 million. About 70% of payment appropriations were implemented in 2001 and the unimplemented balance of these appropriations was cancelled in accordance with the general rule in Article 7(2) of the Financial Regulation. The information available led the Commission to consider that the payment appropriations entered were adequate for the implementation forecast.

As in the case of Objective 1, considerable progress was made as regards the closure of programmes from earlier programming periods and the settlement of outstanding amounts:

Amounts to be settled for Objective 2 programmes from before 1994:

>TABLE>

In accordance with Article 52(5) of Regulation (EC) No 1260/1999, amounts for programmes decided on by the Commission before 1 January 1994 for which no application for the balance has been received by 31 March 2001 must be automatically decommitted by 30 September 2001.

The persistence of amounts to be settled for the programmes covered by these provisions is due to the fact that the applications for the final balance required by that provision were made for the programmes concerned but, because of unresolved legal proceedings, checks on suspected irregularities, or both reasons, the remaining amount cannot be finally settled.

Objective 3:

By the end of 2001 total payments under Objective 3 amounted to EUR 2 800 million, or some 40% of the total commitments for the two years 2000-01. This was partly due to the late start for many programmes during 2000, a delay which was gradually reduced in many Member States during 2001. The relative level of payments was above average in Austria, Germany, France and Spain. Compared to the whole programming period 2000-06 total payments by end-2001 amounted to 11%. This figure reflects the fact that only in some Member States was the payment on account of 7% followed by further payment applications before the end of 2001.

These delays have raised worries in some Member States regarding a possible risk of decommitments or repayments, although the annual review meetings that took place during autumn 2001 suggest that these concerns are receding. Another related concern that appeared is the impact on programme implementation of the economic slowdown throughout 2001. The possibility of a pre-emptive re-examination of the programmes was raised by some managing authorities during the autumn meetings, particularly because of difficulties with the implementation of certain activating or preventive measures in a negative socio-economic context.

2.1.3. Implementation of the Community Initiatives

Following the adoption on 28 April 2000 of the guidelines for Interreg III for 2000-06 [3] (EUR4 875 million at 1999 prices), the Member States were invited to submit detailed proposals within six months of the date of publication of the final communication in the Official Journal [4].

[3] OJ C 143, 23.5.2000, p. 6.

[4] OJ C 143, 23.5.2000, p. 6.

Although many of the programmes (particularly the cross-border ones) had already been submitted during 2000, the Commission received 12 further cross-border programmes (strand A), nine transnational programmes (strand B), the four interregional programmes (strand C) and one networking programme under point 53 of the ESPON Guidelines (European Spatial Planning Observatory Network).

The Commission examined these programmes and those already submitted during 2000 and began negotiations with the national and regional authorities concerned so that the various programmes could be approved as soon as possible.

During 2001, the Commission adopted 44 cross-border programmes (out of 53), 8 transnational programmes (out of 13) and two interregional programmes (out of four).

As a result, the actual implementation of the bulk of the Interreg III programmes began in earnest in 2001. The Commission also attended several Monitoring Committees as provided for in the general Regulation on the Structural Funds and Steering Committees where these were set up as required by the Interreg III guidelines.

The Urban II Community Initiative is intended to advance the economic and social regeneration of towns and neighbourhoods in crisis in order to promote sustainable urban development. It covers the period 2001-06 and finances 70 towns and neighbourhoods in difficulty proposed by the Member States. The total contribution from the ERDF amounts to EUR743.6 million [5], plus an equivalent amount from the public and private sectors. This will be used for measures such as the renovation of buildings and public areas, initiatives to promote employment, improvements to the systems of education and training for the most disadvantaged groups, the development of environmentally-friendly public transport, the introduction of more efficient management systems, the use of renewable sources of energy and the development of the potential created by the information and the communications technologies. A programme to exchange information and share experiences on the regeneration of urban areas will also be launched during 2002.

[5] At current prices.

Despite the fact that many of the 70 programmes were submitted in the first half of 2001, all the programmes were examined, negotiated, approved and committed by the Commission during the second part of the year. The payment on account were also made.

Work began on the spot as part of a broad partnership embracing all those involved (at national, regional and local level).

>TABLE>

The Member States began the implementation of Equal, principally through the call for proposals and the receipt and selection of Equal projects on the basis of the guidelines in their programmes. They all agreed to follow a joint schedule in order to facilitate transnational cooperation, the main point of the Initiative.

Action 1 began on 15 November for almost 1 500 Development Partnerships following selection in their countries. Two Member States, Germany and Greece, were late in making their selection but made this up during January. Detailed information on each Development Partnership may be found in the Equal data base developed by the Commission and fed regularly since 15 November 2001 by the Member States. This data base is a tool for Development Partnerships seeking transnational partners and the main source of information throughout the life of the programme; it may be consulted on the Equal site on Europa.

Throughout Action 1, the Development Partnerships finalised their national work programmes and established transnational cooperation with at least one Development Partnership in another Member State. In addition to the Equal data base, other tools were developed at European level such as the "Equal Guide on Transnationality" or the ETCIM computer application, which allows finalisation of the transnational cooperation agreements between Development Partnerships in different countries.

Action 2 began on 15 May 2002 and constitutes the effective launching of 1 500 Equal Development Partnerships across the Union.

Two countries applying for accession are involved in the Equal Initiative, the Czech Republic and Hungry. They have selected their Equal Development Partnerships, which are participating in the programme like their colleagues in the Member States.

In 2001 56 Leader+ programmes were approved, 11 at national level and 45 at regional level. The remaining 17 were approved in the first quarter of 2002. Total Community assistance to Leader+ in 2000-06 will amount to EUR2 020 million from the EAGGF Guidance Section.

2001 was devoted mainly to the selection of the local action groups on the basis of the guidelines in the programme so that, by the end of the year, actual implementation of Leader+ on the ground had not yet started.

Budgetary implementation of the Community Initiatives:

The Commission did not adopt any carryover of commitment appropriations because the decision-making procedures to adopt programmes were not sufficiently advanced by the end of the year.

The delay in the adoption of the programmes meant that no carryover of payment appropriations was decided although there was inevitably some shortfall when all the programmes were adopted in time for the initial payment on account to be made. During the annual general transfer procedure approved by the budgetary authority, a total of EUR160 million was transferred to this chapter from Objective 1. By contrast, because some proposals for Interreg programmes were defective so that they could not be adopted before the end of 2001, commitment appropriations totalling EUR75.75 million (including EUR2.4 million from Urban) were made available to other chapters of the Structural Funds. Finally, the Commission proposed to the budgetary authority the transfer of these appropriations to increase the funds available for the adoption of programmes of ERDF innovative measures where funds were inadequate for the adoption of all the programmes selected during examination.

In terms of implementation, both commitment and payment appropriations were implemented at the rate of 89%.

A decision was taken to carry over the balance remaining to be committed at the end of the year (EUR161.8 million) in order to complete the procedures for the adoption of certain programmes which were then almost complete. However, the unimplemented balance of payment appropriations was cancelled in accordance with the general rule in Article 7(2) of the Financial Regulation.

Considerable progress was made in 2001 as regards the closure of outstanding items of assistance and the settlement of outstanding amounts:

Amounts to be settled for the Community Initiatives programmes from before 1994:

>TABLE>

2.1.4. The innovative measures and technical assistance

Under the ERDF, 103 regions applied for a regional programme in 2001. Each application was examined by DG Regional Policy and other relevant DGs in accordance with the selection criteria laid down in the guidelines. Given the limited budget available, the Commission had to select the best qualified applications for part-financing but had to turn down some even though their quality was relatively good. In these cases, each region was informed why its application did not score sufficiently highly and was invited to make an improved application in the following year.

In all, 81 of the 103 applications received were granted ERDF part-financing from the budget available. The total ERDF amount for approved programmes was approximately EUR206 million and their total value approximately EUR393 million.

As for the ESF, on 12 January the Commission adopted a "Communication on the implementation of innovative measures under Article 6 of the European Social Fund Regulation for the programming period 2000-2006" [6] setting out how it intends to use the possibilities offered by Article 6 of the ESF Regulation to promote new approaches and identify examples of good practice in support of mainstream ESF operations. Experience during the previous programming period had suggested that innovative measures should concentrate on a limited number of defined themes, focusing on particular issues. The Communication defines the priority themes for Article 6 in 2001 and 2002:

[6] COM(2000) 894 final.

- Adaptation to the new economy within the framework of social dialogue, and

- Local employment strategies and innovation

Adaptation to the new economy within the framework of social dialogue

A call for proposals under this priority theme was published in the Official Journal on 27 February 2001 [7] with a deadline for submitting applications of 18 May.

[7] OJ C 62, 27.2.2001, p. 5.

The maximum total budget available was EUR30 million. The Community grant requested had to be between EUR300 000 and EUR3 million over a two-year period. Applicants were required to make a financial (cash) contribution to the project covering a minimum of 5% of the total costs while in-kind contributions were limited to a maximum of 10% of the total costs.

Projects could start between 1 September and 1 December 2001 for a maximum duration of 24 months, ending by 30 November 2003 at the latest.

The Commission Communication specified that applications could address one or more of five themes, under the general heading of "Adaptation to the new economy within the framework of social dialogue":

- Anticipation of economic and social change;

- Use of information society tools in the framework of social dialogue;

- New approaches to corporate social responsibility;

- Modernisation of work organisation;

- Promotion of lifelong learning.

The call for proposals was open to a wide range of applicants. In principle, and depending on the thematic priority covered, applicants could be social partner organisations, private companies, non-profit organisations, or education and training bodies located in the European Union. However, in order to ensure consistency with the overall theme, during the evaluation procedure priority was given to projects based on a partnership approach with social partner organisations.

A total of 148 applications were submitted by the deadline of which 35 were eventually selected for ESF part-financing. The average ESF contribution to individual projects amounts to EUR785 135, or 72% of the average total cost of the projects.

Local employment strategies and innovation

A call for proposals on the priority theme of "Local employment strategies and innovation" was published in the Official Journal on 31 October 2001 [8]. Applicants can apply before one of two deadlines: 22 February 2002 and 31 January 2003. The fact that the call includes application deadlines in two consecutive years is a reflection of the importance attached to this issue by the Commission and it ensures that support for projects to develop and implement local employment strategies will continue in 2003.

[8] OJ C 306, 31.10.2001.

The aim of this call is to support innovative actions to develop local employment strategies in order to reinforce the implementation of the European Employment Strategy at a local level. Applications must be aimed at applying the priorities of the National Action Plan (NAP) for employment in a given territory in the form of local employment strategies. The call for proposals, therefore, aims to part-finance innovative projects which may include the following activities (among others):

- Analysis of the existing local employment situation;

- Development of partnerships at local level which include relevant actors from different sectors;

- Relevant studies and research to prepare the local employment strategies;

- Development and implementation of the local employment strategies;

- Monitoring, benchmarking and evaluation;

- Exchange of information, dissemination and networking.

The organisations eligible to apply under this call are, in principle, public authorities and territorial public administrations acting in territories at NUTS levels 2 or 3.

The budget available under this call will be up to EUR40 million in both 2002 and 2003. The Commission will contribute up to of 75% of total eligible costs, with part-finance ranging from EUR300 000 to EUR3 million over a two-year period. Applicants must make a financial (cash) contribution of 25% of the total cost of the project.

It is envisaged that grant agreements for successful applications under the first round of applications will be signed in October 2002, with projects starting between 1 November 2002 and 31 December 2002. Projects can last up to 24 months and must finish by 31 December 2004.

The technical assistance programme for the FIFG was implemented as planned in 2001. A total of EUR1 127 000 was committed. However, no innovative measure was committed in 2001 and the work programme was carried over to 2002.

2.2. Implementation of programmes in the Member States

2.2.1. BELGIUM

1994-99:

The still provisional outturn of the Objective 1 SPD for Hainaut gives a rate of commitment exceeding 98%. Assistance from the four Structural Funds concentrated on direct aid to firms (for investment and research), measures providing indirect support for economic development (equipping of industrial areas) and the development of human resources. The development and equipping of research centres and centres of excellence continued successfully. The evaluations available suggest that the number of jobs will reach 12 000, which may be considered satisfactory.

Measures were taken to modernise education alongside training in the new technologies for teaching staff. The fields of new information and communications technologies were given pride of place among young people and in contacts with job seekers and older workers in small firms. This measure resulted in the emergence of new structures such as the CEMI (Centre d'excellence en maintenance industrielle - Centre for excellence in industrial maintenance), the Centre de technologies avancées (Centre for advanced technologies) and CEqual. In addition five effective instruction centres were set up to provide Hainaut with the skills it needs.

The measures under the Objective 2 SPD for Meuse Vesdre continued and work on most of the infrastructure projects (improved access, reception, R&D, tourist projects and restoration of waste land) were completed. In the Aubange SPD, construction of the distance support centre and the economic development projects were completed.

In Flanders all available funds were committed. The rhythm of payments indicates that the two Objective 2 programmes are on schedule. For both areas (Limburg and Turnhout), the programmes focus on encouraging the services sector, in particular services which are expected to create additional jobs for women.

The integrated ESF/ERDF measures to improve research centres under Objectives 2 and 5(b) yielded satisfactory results and, as regards human resources, specialist training for workers and job-seekers and training in the new technologies achieved genuine success. The measures to promote the social economy are expected to be successful, although to a much lesser degree than anticipated.

All the resources for the five Belgian programmes under Objective 3 were used, mainly on measures for the long-term unemployed, ex-convicts, immigrants, the handicapped and those with poor education records and skills. The introduction of the pathways to integration continued. The "Training Carrefours" now provide information and advice, so ensuring transparency in supply and the effective dissemination of information to all those operating at local level.

Thanks to Objective 4, considerable progress was made in the training of workers. In partnership with the sectoral Funds, consultants were engaged to promote appropriate training in firms. The Walloon employment observatory, which was established under Objective 4, and the Brussels observatory produced studies on sectors undergoing change and conversion and the new sectors. The measures for small firms were successful, including the PLATO project which combines a management training programme for small firms with sponsorship by managers in large firms and the exchange of experience and know-how between firms. Despite successes, it is already likely that not all the appropriations for the five programmes under this Objective will have been used when the final account is drawn up on 30 June 2002.

Under the structural programme for fisheries (Objective 5(a) fisheries) almost all the FIFG funds of EUR25.4 million have been committed. According to preliminary information, the programme had been almost fully implemented by the end of 2001.

2000-06:

The Monitoring Committee approved the programme complement for the Objective 1 SPD for Hainaut after it was amended to make it an operational and transparent document incorporating the comments which the Commission made on the first version, submitted at the end of 2000.

One year after approval of the SPD, over 150 EFRO projects have been approved with a total contribution from the Structural Funds of over EUR410 million, over two-thirds of the budget available in this programme. The main measures on which project commitment decisions were taken were aid for investment in industry and the service sector and financial engineering, support for centres of excellence (research centres) and developing the potential of tourism and culture. The level of expenditure is still quite low at EUR30 million or 5% of the funds available.

Two Objective 2 programmes were approved for Wallonia: one for the Meuse-Vesdre basin (assistance from the ERDF and the ESF totalling EUR158.3 million) and one for the rural area of Dinant-Philippeville (assistance from the ERDF and the ESF totalling EUR58.4 million)

The main aim of the Objective 2 plan for 2000-06 for the Meuse-Vesdre basin is to increase the economic and social prosperity of the eligible area by affirming its status as a town. The Objective 2 SPD has five priorities plus technical assistance which are: 1: Diversification of the economic base, 2: Access to the knowledge society, 3: Improving employability and know-how, 4: Consolidation of its international role, and 5: Promotion of sustainable urban development.

The main aim of the Objective 2 plan for Dinant-Philippeville is to promote and structure the locally-generated development of the area. It has three priorities plus technical assistance: 1: Encouraging and supporting the locally-generated development of merchant economic activities, 2: Structuring the rural area, and 3: Improving employability and know-how.

2001 saw the closure of the negotiations with the Flemish regional authorities on adoption of the four programmes they had submitted under Objective 2 and for transitional support under Objectives 2 and 5(b).

The Commission approved the four SPDs in May and June and the four programme complements were accepted in September and November. The Monitoring Committees met so that the programmes could start as soon as negotiations with the Commission were completed.

During the current programming period, Flanders will have available Community funding totalling EUR186.4 million, of which EUR148.2 million will go to the areas eligible under Objective 2 and EUR38.2 million to transitional support.

Structural measures are aimed at areas undergoing conversion, particularly the former mining area of Flanders and the Belgian coast, urban areas in difficulty (Antwerp, Ghent) and rural areas. Four programmes have been proposed (one for each province excluding Flemish Brabant) and their examination was completed in February/March. The final decisions were taken in May/June.

Each of the four 'provincial' programmes can be regarded as falling into two clearly distinct sub-programmes.

Limburg: This programme will receive financial support from the European Union totalling EUR92.7 million (EUR82.1 million from the ERDF and EUR10.6 million from the ESF). In addition the Flemish public sectors will invest EUR119 million and the private sector EUR28.7 million, resulting in total expenditure of EUR240.4 million. The programme includes the following priorities: Initiatives by and for private investment and employment; Improving overall local economic conditions and Integrated rural development in rural Hesbaye.

Kustgebied-Westhoek (West Flanders): This programme will receive a Community contribution of EUR33 million (EUR30.5 million from the ERDF and EUR2.5 million from the ESF). It concerns both the coastal area, which has specific difficulties because of the decline of the fisheries sector and so is eligible under Objective 2 of the Structural Funds, and the Westhoek, a former Objective 5(b) area now eligible for transitional support. The Union funds will be supplemented by EUR70.6 million in public investment by Flanders and EUR13.7 million from the private sector, giving a total cost for the programme of EUR117.4 million. The programme is based on the following priorities: the development of tourism, improving the local economic fabric, sustainable inter-sectoral development and qualitative improvements to the area as a place for both living and working and training and the employment market.

East Flanders: This programme will receive a Community contribution of EUR13.6 million (ERDF only). In addition it will receive EUR32 million in public investment by Flanders and EUR13.5 million from the private sector, giving a total amount for the programme of EUR59.1 million. The programme is based on the following priorities: development of economic initiative and employment, improved viability and quality of life in urban and rural centres and stimulating the development of tourism in the rural part.

Province of Antwerp: The programme will receive financial support worth EUR47 million from the European Union (EUR41.6 million from the ERDF and EUR5.5 million from the ESF). In addition it will receive EUR81.5 million in public investment by Flanders and EUR7.3 million in private investment, giving a total amount for the programme of EUR135.8 million. The programme has two geographical priorities: Campine: measures to develop and restore industrial sites, promote cooperation among local small firms, encourage the new communications and information technologies and innovation through the exchange of knowledge among firms and networking, the development of infrastructures for training and research and the promotion of better integrated supply in the tourism sector. North-east Antwerp: This priority contains measures to promote training and improve the skills of the local population, rebuild and make more attractive the public areas of the town, improve the quality of local public services and promote synergies in sectors which are important locally, such as the food industry, fashion and design.

The Commission adopted five SPDs under Objective 3 in Belgium for vocational training and employment for a total de EUR765 million and a programme of transitional support for Hainaut with an ESF contribution of EUR192 million. These six programmes will help implement the European employment strategy in Belgium.

Federal Ministry of Employment and Labour SPD: EUR69.1 million. Half the budget will go to measures to reintegrate disadvantaged groups into the labour market. Other measures will concern the consolidation of employment and measures to promote equality for men and women at work.

Flanders SPD: EUR376.2 million. The labour market in Flanders suffers from a shortage of skilled labour, a low rate of employment among older workers and high unemployment among young people, women and immigrants. These are the priorities for the SPD.

Wallonia/Brussels SPD (excluding Hainaut): EUR285.5 million. The priority remains reducing unemployment. Social and vocational exclusion also affects a large number of men and women. The SPD relies primarily on a preventative approach.

Brussels-Capital SPD: EUR23.7 million. Although it is the major source of employment in the country, Brussels has the highest unemployment rate in Belgium (16.5%). The measures adopted concern the socio-professional integration of job seekers.

German-speaking Community SPD: EUR10.7 million. This assistance is intended to reduce long-term unemployment, encourage the integration into the labour market of disadvantaged groups, promote training and education, develop capacity to adapt and the business spirit and promote equality for men and women.

Hainaut SPD: EUR191.9 million from the ESF. These resources will be used mainly under two priorities: a preventive approach to the labour market and improving vocational reintegration and social inclusion.

Total ESF assistance in Belgium is now increasing in a generally satisfactory manner and is on target. In 2001 over 90% of ESF assistance programmed was implemented. The measures include a conversion unit for the thousands of workers affected by the bankruptcy of Sabena.

Non-Objective 1 FIFG: The programme adopted includes an allocation of EUR35.3 million for fish processing and the renewal and modernisation of the fishing fleet. In addition, the Hainaut SDP contains a measure for aquaculture.

2.2.2. DENMARK

Objective 2:

1994-99

A number of programmes from the previous period were completed in 2001 and await the final report and closure. These are:

The Objective 2 programmes for Lolland and Nordjylland 1997-99. These programmes received a total Community contribution of EUR68.2 million.

The overall objectives of the Nordjylland programme (EUR54.4 million) were to improve the conditions for increased growth in business in the region, and so maintain and increase the number of jobs. The strategy for reaching this objective was 'Globalisation': a strengthening of firms' ability to compete internationally through innovation, capacity conversion and improved skills and by strengthening educational and other framework infrastructure.

For the Lolland Programme (EUR13.8 million) the overall objectives were to foster the region's development potential, widen the base for business development, maintain and increase the number of jobs in the short and the long term, and increase the overall income of the region.

Both programmes performed well in 1997-99 in terms of both financial and physical implementation. Job creation, for example, exceeded the targets set out in the programmes. Demand was also high for these programmes and consequently all the funding available was committed by the end of 1999.

2000-06

On 9 November 2000 the Commission took the final decision on the Objective 2 programme for Denmark for 2000-06. The programme totals EUR617 million, EUR189 million of which will come from the EU, EUR206 million from the national public sector and EUR222 million from the private sector. The transitional regions will receive EUR27 million.

The programme aims to create the conditions for self-sustaining growth in the regions of Denmark that are facing structural difficulties. It combines measures under the ERDF (71% of Community resources) and the ESF (29%).

The programme complement detailing the strategy was finalised in autumn 2001. It consists of an "umbrella" covering general aspects and five sections each covering one of the five geographical sub-regions: Bornholm (Objective 2), Lolland, Falster and Møn (Objective 2), parts of the counties of Viborg, Århus, Ringkøbing and Sønderjylland (Objective 2 and transitional), Sydfyn and islands not covered by the regions mentioned above (Objective 2).

The SPD presents the general strategy for the whole Objective 2 area while the sub-regional sections deal with the relevant specific conditions.

Each of these regional sections can be categorised as a sub-programme with analysis of specific needs, potentials etc. and focussing the assistance outlined in the SPD in the specific regions. The background for this model is first and foremost the small size of Denmark combined with eligible (mostly coherent) areas in different parts of the country, each of which has its own specific socio-economic character.

Two programme Monitoring Committee (PMC) meetings were organised in the course of 2001. The first, held on 6 March, concentrated on setting up the operation of the partnership and the PMC, and established the administrative and functional arrangements for implementing the programme. The second, held on 2 October, focused primarily on the adoption of the programme complement and on the work of catching up on spending the allocations for 2000 and 2001. The meeting further discussed the possibilities of including activities in the film industry and decided to consult the Commission. No concrete proposal has yet been made.

The annual meeting between the managing authorities and the Commission was held on 22 October. The general view was that the financial and physical implementation of the programme was progressing very well, as regards both the ERDF and the ESF.

By the end of 2001 the ERDF value of the adopted projects has almost absorbed the first two years of allocation, i.e. the programme had almost caught up with a rather late start. The payments to the projects alone constituted about 1/3 of the first year's allocation, leaving 2/3 to be paid in 2002 (together with preferably a substantial part of the allocation for 2001), in order not to lose money under the n+2 rule. However, it seems that the programme faces no substantial problems in this respect.

Objective 3

A EUR379 million seven-year programme to support education, training and employment in Denmark was approved by the Commission on 24 October 2000. The programme sets out five priorities, reflecting the country's 1999 National Action Plan for Employment: strengthening active labour market policies to prevent long-term unemployment and improve labour market structures; promoting equal opportunities for all in accessing the labour market; developing skills and training and encouraging business spirit and innovation.

A further 3% of the budget (EUR12 million) is set aside for technical assistance to manage, implement and evaluate the results of the programme.

The National Labour Market Authority within the Ministry of Labour is responsible for the day-to-day coordination, management and monitoring of the programme. The Regional Social Fund Committees of the counties are responsible for the implementation of the decentralised funds, which amount to about 75% of total funds. The constituent meeting of the Monitoring Committee took place on 16 January 2001 and the first annual review meeting with the managing authority was held on 26 November.

The Danish programme has been strongly promoted by the managing authority which resulted in a large number of project applications being received. Generally, incoming project applications amount to more than five times the available budget. The 2000 and 2001 commitments have been made. By the end of 2001 total payments, including the initial payment on account, amounted to 7.12% of the total available funds.

Non-Objective 1 FIFG:

The Commission adopted the structural programme for 2000-06 on 8 August 2000. EUR205 million is available from FIFG and investment totalling EUR1 000 million is envisaged. The major areas are processing, port facilities and the fleet, which is in need of modernisation in order to improve working conditions, health conditions and selectivity of the fishing gear. After the first meeting of the Monitoring Committee on 27 October 2000 and the final approval of aid schemes by the Commission early in January 2001, programme implementation started as expected. Some of the assistance schemes, for example modernisation and decommissioning of the fleet, however, were first adopted by the Danish authorities late in 2001 and so did not begin until later.

2.2.3. GERMANY

1994-99

By the end of 1999, 99.95% of the budget for all programmes and 99.91% of the budget for the Community Initiatives had been committed. Payments to beneficiaries were normally possible up to 31 December 2001. The final payment for one Objective 3 programme (Baden-Württemberg) had already been paid and implementation of the remaining 138 programmes for this period, which had to use all their funds by the end of 2001, continued. For six Community Initiatives or Objective 2 programmes DG REGIO considered the requests for extension well justified, because of either an error by the Commission or a natural catastrophe. For most of the other cases alternative solutions could be prepared with the managing authorities.

The closure procedure for one Community Initiative (Konver II in Hamburg) started in 2001.

For all programmes, including the Community Initiatives, EUR347 million was paid out by the Commission in 2001. For one Objective 2 programme payments were suspended pending a commitment to tighten checks by the region.

2000-06

Objective 1: The German CSF was adopted in June 2000 and is implemented by nine operational programmes (six for the Länder and three horizontal programmes under the responsibility of the federal authorities). Commission decisions for the regional programmes and the 'Fisheries' horizontal programme were taken by the end of 2000. The outstanding two operational programmes (transport and the ESF federal programme) for the implementation of the CSF (in total EUR20 700 million of Community funding, including EUR748 million for transitional areas in Berlin) were approved by the Commission in February 2001. Commitments for all Funds and all programmes were made. The programme complements for Brandenburg, Mecklenburg-Western Pomerania, Saxony-Anhalt, Saxony and Thuringia were approved after the checks required by the Commission showed that they complied with Regulation (EC) No 1260/1999. However, the chapters on human resources development in the programme complements for Brandenburg and Mecklenburg- Western Pomerania in particular required substantial amendments in order to bring them into line with the respective chapters of the underlying operational programmes.

The nine operational programmes in the CSF aim to create a total of 370 000 full-time permanent jobs and further limited jobs equivalent to 265 000 full-time jobs. Around 1.35 million people will benefit from measures to improve skills or employment aids financed by the ESF.

The financial tables (national part-financing) for the German CSF were amended following a request from the German authorities with no change to the objectives or the scope of the measures. A request for an amendment to the programme for Saxony was tabled.

The Monitoring Committees for all the operational programmes met up to six times in the year. The Monitoring Committee for the CSF was convened twice. The social and economic partners were increasingly involved and will attend future meetings at CSF level. They were formally involved in the Monitoring Committees for the operational programmes from the start and some programmes give them voting rights. The Commission has taken several steps to encourage the regional authorities to be involved in the EES (European Employment Strategy) and NAP (National Measure Plan) process and to strengthen the contribution of the human resources development priority in the regional programmes to the German NAP process. There was also a first exchange of views of the Job-Active-Law (the revision of the German labour market policy law) and of its impact on the operational programmes. This discussion continues in 2002.

One major project was submitted at the end of the year under the 'Transport' horizontal programme.

The transport projects are often concentrated on the trans-European networks (TENs) and links to the accession countries in particular are funded.

The programme complements show that most regional programmes include financial engineering and that the funding of these measures is four times higher than in the previous period.

The financial inspection systems were checked at an early stage by the Commission. Revision of the 1997 agreement between Germany and the Commission on financial inspections is under discussion.

The Commission asked for and received the communications action plans by programme. Information and communication will be a prominent element in the administration of programmes. Several programmes have for example started an measure to determine a 'project of the month' to whose promotion particular efforts are devoted.

The ERDF paid a total of EUR981 million and the ESF EUR1 003 million as advance payments or interim payments to the Objective 1 programmes.

In the agricultural sector, all EAGGF measures adopted in 2000 are now in operation. For the whole period EAGGF expenditure for Objectives 1 and 2 amounts to EUR188.7 million.

The programme for fisheries within Objective 1 regions includes an FIFG allocation of EUR105.2 million and focuses particularly on processing and investment in fishing ports. Programme implementation started in the second half of 2000 and progressed as scheduled in 2001.

Objective 2: Up to 2006 in Germany EUR3 096 million was available for Objective 2 and another EUR530 million for the transitional areas.

Germany submitted eleven Objective 2 programmes. These were multifund programmes (ERDF and ESF), with the exception of the programmes in Baden-Württemberg, Bremen, Hamburg and Hessen (ERDF alone). The Commission approved 11 programmes in 2002 and the programme complements for six programmes (Baden-Württemberg, Bremen, Lower Saxony, North Rhine-Westphalia, Rhineland-Palatinate and Saarland) were declared to comply with Regulation (EC) No 1260/1999.

During the negotiations particular emphasis was placed on achieving complementarity between the Objective 2 programmes and other EU programmes. So for example the Baden-Württemberg Objective 2 programme includes close cooperation with Objective 3 and the Mannheim-Ludwigshafen Urban programme. Measures under all three programmes are linked to each other, avoiding duplication. Two major projects were submitted from North Rhine-Westphalia.

The Commission made advance payments totalling EUR229 million for Objective 2 programmes for 2000-06. Annual reports were due and received for all programmes with the exception of Hamburg, Berlin and Baden-Württemberg.

Objective 3: Following adoption of the Objective 3 SPD on 10 October 2000, the draft programme complement was adopted in principle by the Monitoring Committee on 30 January 2001 and after finalisation sent to the Commission on 18 April; it was accepted on 23 May.

The key results of the implementation of assistance in 2000 were presented at the Monitoring Committee meeting on 4/5 July 2001, at which the contribution of the SPD to the National Action Plans for Employment and Social Inclusion was highlighted. In 2000 61.5% of the planned overall resources of the year (37.1% of the ESF resources) was spent. Commitments in 2000 reached 87% of the ESF resources planned for that year. Taking into account the late decision on the SPD, in general and taking all the priorities together the ESF results were in line with forecasts. About 170 000 persons (42% women) have taken part in measures. This corresponds to 96% of the planned overall level. Two-thirds of them engaged in measures undertaken by the Federal Office of Employment. Within individual priorities and measures, actions did not start in all Länder with the same speed and scope. Apart from certain financial bottlenecks, this was mainly due to the fact that measures under priority 4 (adaptability and entrepreneurship) especially needed more intensive preparation than other measures under, for example, priority 1 (active and preventive labour market policy).

By the end of 2001, a total of EUR830 million (EUR332 million in advances and EUR498 million in reimbursements) had been paid for the Objective 3 programme, that is 17.5% of the total SPD.

The Commission adopted the programme for non-Objective 1 fisheries on 28 September 2000. It provides a total FIFG allocation of EUR111.1 million for the whole period and focuses in particular on the processing and marketing of fish and on the renewal and modernisation of the fishing fleet. Implementation began in 2001.

2.2.4. GREECE

2000-06

Following approval of the CSF in November 2000, almost all its operational programmes were approved between February and April 2001, with the exception of the Environment OP, approved in July, and Technical assistance, which was submitted by the Greek authorities in October and approved by the Commission in December 2001. In December, the Commission also approved an additional EUR165 million for the Environment OP.

Of the 26 current OPs, 13 are regional and 13 national. The ESF makes the bulk of the contribution to the three national programmes: 'Promoting employment and vocational training', 'Education and initial vocational training' and 'Health and prevention', which were approved in March and April. The total Community contribution to all these programmes is EUR21 320.6 million, of which the ESF will provide EUR4 241 million, 19.8% of the total from the Structural Funds for 2000-06.

The three human resources programmes seek to modernise the public employment services by encouraging a personalised approach and following the guidelines of the European employment policy, linking initial and continuing training, further promoting life-long training, continuing the modernisation of education, reforming the health sector to achieve better budgetary management and high-quality services and reducing social exclusion. The 'Information Society' OP was designed to promote the horizontal nature of this type of measure by simultaneously encouraging an integrated approach to associate human resources questions with all the measures planned. The measures will normally be implemented in a decentralised manner and the systematic consultation of all involved is recommended. The 13 regional OPs contain measures to encourage local development and employment initiatives. A special effort was made to incorporate equal opportunities into both the measures under the CSF and into specific measures.

Under the Objective 1 CSF, the EAGGF Guidance Section will contribute a total of EUR2 260.3 million to the agriculture and rural development priority during the period 2000-06.

The EAGGF Guidance Section will contribute alone to the Rural development OP, providing EUR1 233,4 million.

With the other Funds, it will also contribute EUR1 026.9 million to the regional development priority.

The main measures are intended to:

- improve the competitiveness of agriculture through integrated assistance at the level of the holding, assistance for the processing, standardisation and marketing of agricultural and forestry products and assistance for agricultural products;

- promote the sustainable and integrated development of rural areas and the restoration of social balance by improving the age profile of the agricultural population, improving support mechanisms providing information to the rural population and introducing integrated plans for the development of rural areas;

- maintain the environment and social cohesion for the entire rural population through the development and protection of natural resources and the environment.

In 2001, the EAGGF Guidance Section made commitments of EUR341.2 million and payments of EUR261.1 million.

The programme for fisheries (FIFG contribution EUR211.1 million) was adopted on 28 March. The thrust of this programme is similar to that of the previous one (38% on fleet measures, 17% on aquaculture and 18% on processing and marketing) except there is more emphasis on improving the quality of aquaculture products and working conditions and on preventing environmental pollution. The allocation for 2000 was redistributed to later years.

Following approval of the CSF and of the vast majority of operational programmes, the first meeting of the CSF Monitoring Committee was held on 23 and 24 April. After that meeting, all the Monitoring Committees for the approved operational programmes held their first meetings in the next few months, before the summer break, and approved the programme complements and the annual implementation reports for 2000 before their submission to the Commission.

All the annual reports for 2000 were submitted to the Commission before the deadline of 30 June. In view of the general delay in approving the OPs for Greece, the annual reports for 2000 for all the OPs were formal and descriptive in nature, and concerned mainly the preparation of programming and the arrangements for management and implementation but virtually ignored financial implementation.

The first annual meetings on the CSF programmes for 2000-06 were held on 23 and 24 November. They discussed the CSF in general and in particular implementation of the horizontal priorities, the operation of the managing authorities, the monitoring and inspection system and the monitoring of the commitments given under the CSF.

On 6 and 7 December the Commission organised an event which was well attended and appreciated, two workshops for the managing authorities of the CSF and all the operational programmes and the intermediate agencies, final beneficiaries and social partners, concerning implementation mechanisms for local and regional development projects (including local employment initiatives, innovation and information society in the regions, integrated actions for urban and mountain regions), and concerning information and publicity measures during the implementation of the CSF.

Finally, the Commission began an enquiry under Article 24 of Regulation (EEC) No 2082/93 concerning the financing of a project to establish a land register in Greece under the CSF for 1994-99. Following this enquiry, the Commission decided in December 2001 to make a financial correction amounting to EUR57.9 million, to be reimbursed in two instalments.

For 2001 a total of EUR623.3 million was committed for the OPs as a whole and the payment on account of 7% was made.

2.3.5. SPAIN

Objective 1

1994-99

All the resources for the programmes for 1994-99 were committed and only the payments of the balance need to be made to close the programmes. In three cases, the EAGGF Guidance Section OP for Castile-La Mancha and the ERDF OPs for Extremadura and Asturias, application was made to extend the deadline for payments but the Commission accepted only the first of these.

2000-06

During 2001 the Commission approved 18 OPs which, with the five others already adopted in 2000, complete the 23 programmes which comprise the Spanish CSF for 2000-06. Twelve of these are integrated regional programmes covering each of the Objective 1 regions and accounting for about 66% of the Community assistance in the CSF while the remainder are multiregional. The Canary Islands, along with the other outermost regions of the Union as defined by Article 299 of the Treaty, benefit from the decision of the Council of 28 June 2001, that allows higher co-financing rates in a number of fields.

Besides the sharp fall in the number of programmes compared with the previous period (23 as against 73), the progress to be noted in the regional programmes in particular comprises:

- the integration of the various Funds and their subsequent effective coordination on the ground. This forces the managing authority to keep the Monitoring Committee regularly informed of the coordination work undertaken in this field;

- the guarantee of an improved integration of the horizontal priorities for the environment and equal opportunities for men and women through the presence on the Monitoring Committees of representatives of the national network of environmental authorities and the bodies responsible for equal opportunities;

- the strengthening of the partnership principle through the active participation in the programme Monitoring Committees of representatives of the social and economic partners, with the notable exceptions of the Autonomous Communities of Castile-León and Valencia and the city of Melilla, which preferred a less participative partnership;

- extended and more balanced cooperation between the national and regional administrations thanks to the spirit of co-responsibility which attended the designation of the managing authorities.

Apart from the 'Information society' programme, which the Spanish authorities sent later than the others and which the Commission approved in December 2001, the first Monitoring Committees approved the programme complements during the first half of the year. The managing authority sent these to the Commission for information so that it could check their compliance with the rules in force.

To provide genuine assistance in taking decisions and implementing without delay the interim assessment required by the rules, in October the Monitoring Committees for both the CSF and each of the 23 operational programmes set up the 'Technical Evaluation Groups', for which provision had been made in the programming documents. Their basic purpose was to undertake the mid-term evaluation and its subsequent updating in satisfactory conditions of transparency and independence and a level of quality adequate to ensure credible results within the time limits laid down in the rules. The Groups, whose members have direct responsibilities as regards evaluation, will also provide forums for the exchange of ideas and experiences on evaluation.

The annual meetings between the Commission and the managing authorities were held in January 2002 on the basis of the programme complements, the annual reports on implementation for 2000 and other available information. These meetings enabled the Commission and the Spanish administration to hold useful discussions confirming the strategic aspects of programming, compliance with Community priorities, the quality of implementation of assistance and analysis of the first results secured in order to improve the physical and financial implementation, management, monitoring and inspection of the measures part-financed.

Progress in agricultural measures under the EAGGF Guidance Section varied sharply from one region to another. Programme implementation ranged from 100% for the horizontal 'Improving structures' OP to 57.4% in Cantabria and Castile-León; 28.7% in Galicia; 22.9% in Andalusia; 9% in Extremadura; 9.3% in Murcia; 4.8% in Valencia; 0.1% in the Canary Islands and 0% in Asturias, Castile-La Mancha and technical assistance.

The total investment planned for fisheries amounted to EUR3 122 million, including EUR1 504 million from the FIFG. This was aimed mainly at the processing and marketing of fisheries products and the restructuring and renewal of the fleet.

Objective 2

1994-96

All the OPs were closed. In the case of the ERDF, all the Community appropriations for the seven items of assistance were used.

1997-99

The last two reprogramming decisions (OPs for Catalonia and Madrid) were signed in 2001.

Several payments for these OPs were made in 2001. By the end of the year, only the final balances remained to be considered; in the case of the ERDF, the average level of payments for the CSF was 87% of the total provision for that Fund.

2000-06

The Commission gave its agreement in principle to six SPDs on 29 December 2000 and to that for Madrid on 17 January 2001. The Decisions on the SPDs for Aragon, the Balearic Islands, Catalonia and Navarre were signed on 15 February and those for Madrid, La Rioja and the Basque Country on 7 March.

Each of the seven SPDs covers 'transitional' and 'non-transitional' areas. Community assistance for the non-transitional areas amounts to EUR2 649 million at current prices, excluding provision for the performance reserve (EUR115 million for 2004-06), or 12.9% of total Union assistance to the non-transitional areas under Objective 2.

The breakdown of this amount among the seven SPDs is proportional to the population covered in each region as a percentage of the total population of Spain.

Community assistance for the transitional areas amounts to EUR99 million at current prices, excluding provision for the performance reserve (EUR4 million for 2004-05), or 3.6% of total Union assistance to the transitional areas under Objective 2.

The seven SPDs cover five priorities for assistance, plus technical assistance:

1. Improving competitiveness and employment and developing the productive fabric.

2. The environment, natural surroundings and water resources.

3. The knowledge society (innovation, R&D, information society).

4. Development of communications and energy networks.

5. Local and urban development.

6. Technical assistance.

The regional and local administrations will contribute to virtually all the priorities to the extent of 65% to 75% of the total ERDF allocation to each SPD. The national administration will contribute to only three priorities: 3 (through the development of infrastructure and support for projects in the science-technology-innovation system) and, to a very limited extent, 1 (to promote the internationalisation of firms) and 6 (technical assistance).

The activities to be part-financed by the ESF in six SPDs concern only 5% (five items) or 7% (SPD for Madrid) of the total allocation to the non-transitional areas; they are the responsibility of the national administration and concern priority 3. However, this figure exceeds 21% in the SPD for Catalonia, where work under priorities 1, 3 and 5 will be carried out by the public central, regional and local administrations.

2000 was the year when the SPDs were considered and drawn up and 2001 was the first in which all the other regulatory elements required for the monitoring of assistance (programme complements, Monitoring Committees, annual reports and annual meetings) were set up.

The first meetings of the Monitoring Committees were held in the regions between 27 April and 5 July. They were attended by the national public administrations concerned, the Commission administrative departments and the enlarged partnership (economic and social partners, local authorities, regional representatives responsible for the protection and improvement of the environment and application of the principle of equal opportunities). These meetings approved the Rules of Procedure of the Committees and considered the programme complements.

The complements were officially sent to the Commission between 6 August and 25 October so that it could establish that they complied with the statutory provisions.

The Monitoring Committees considered and approved the reports on implementation for 2000 in October. In mid-November the managing authority sent them to the Commission, which found them satisfactory.

On the basis of the annual reports and other documents concerning the SPDs, the first annual meetings about these items of assistance were held on 19 and 20 December, comprising an initial plenary session (on the aspects common to the seven SPDs) and seven specific meetings.

The managing authority and the Commission, with the participation of the regional administrations concerned, looked at the main results of the first year of implementation and reached a number of conclusions concerning improvements to the implementation, monitoring and inspection of assistance which were sent to the managing authority early in 2002.

The national coordination structure, an ad hoc body set up by the managing authority to coordinate certain aspects of information, monitoring and evaluation of the SPDs, met on 20 December in Madrid. The first meeting covered the first steps in the preparation of the interim evaluation and provided financial information on the SPD and the other forms of Structural Fund assistance in the areas eligible under Objective 2.

Objective 3

The CSF for Objective 3 is being implemented through 12 operational programmes (7 regional and 5 multiregional or thematic). The negotiations were completed at the end of 2000 and four multiregional OPs were approved in January 2001. The total Community contribution to these programmes is EUR1 338 million, or 60.2% of the total ESF contribution to Objective 3 in 2000-06.

These programmes will support the development and improvement of systems of vocational training, assistance with integration and the reintegration of unemployed workers into the labour market by giving priority to a preventative approach, the implementation of pathways of integration and support for local employment initiatives, promoting the participation of women in the labour market, combating gender discrimination and promoting the integration of the disadvantaged into the market, promoting the business spirit and life-long training for workers.

The Monitoring Committees for the regional OPs met in January and February. A joint Monitoring Committee was set up for the four multiregional programmes; it met on 4 May. The programme complements were approved at the first meeting of the Committees.

Following approval of the Spanish OPs for 2000-06 at the end of 2000 and early in 2001, the annual reports on implementation for 2000 sere sent to the Commission with some delay (after the deadline of 30 June). They were approved by the Monitoring Committees and sent to the Commission during the second half of 2001. The annual reports for 2000 on the business initiative and continuing training OPs (Objectives 1 and 3) were approved by the Monitoring Committee at the end of 2001 and forwarded in January 2002.

The first annual meetings of the OPs for the 2000-06 programming period were held at the end of 2001. The annual meeting of the Objective 3 OPs was held on 17 and 18 December 2001 (apart from 'Developing employment' and 'Business initiative', for which it was held on 7 February 2002) along with that for the Objective 1 OP 'Vocational training system and combating discrimination'. The main subjects discussed at these meetings were the implementation of the horizontal priorities, integration of the European Employment Strategy into the OP, the revision and improvement of the selection criteria, the establishment of technical groups to evaluate the OPs and general improvements in the information contained in the annual reports.

Between January and May, EUR318 065 was committed for Objective 3. 18 applications for interim payments under the Objective 1 and 3 OPs were received during October and November. Of these, 8 were paid before the end of the year. These totalled EUR118 509 527, 9% of the payments predicted by the Member State as sent to the Commission in April.

Non-Objective 1 FIFG

Total investment planned amounted to EUR824.5 million, including EUR207.5 million part-financed by the FIFG. During 2001, the SPD for fisheries committed 17% and paid 7.8% of the total amount programmed. The priorities for investment were the same as for Objective 1.

2.2.6. FRANCE

Objective 1

In addition to two regions in the phasing-out category, Corsica and Nord Pas de Calais (French Hainaut), Objective 1 in France covers the four Overseas departments ("DOM"). For the latter, along with the other outermost regions of the Union as defined by Article 299 of the Treaty, the decision of the Council of 28 June 2001, allows higher co-financing rates to be applied to investments in infrastructure, in SMEs, in improving farm holdings and in the processing and marketing of agricultural produce. These provisions are designed to take account of the handicaps specific to the outermost regions.

The total amount for ERDF in the six Objective 1 French regions represents EUR2.215 million for the period 2002-2006, of which EUR1.908 million (86%) for the four overseas departments. The ERDF amount paid in 2001 to these regions represents EUR68.481 million. This amount includes EUR64.466 million which is the 7% advance for Martinique, Guyane and Nord-Pas-de-Calais and an intermediary payment of EUR4.015 million.

No request for modification of SPDs for the overseas departments relevant to Council decision of 28 June 2001 was submitted to the Commission in 2001.

As regards the ESF, 2001 saw the start of implementation of the Objective 1 programmes. By the end of the year, the ESF had paid EUR124.36 million (including the payments on account), 13% of the total funding for the period. The priorities selected included the training of workers, combating exclusion (including action against illiteracy), learning and the acquisition of skills by young people (including adapted military service) and encouragement for the vocational mobility of the unemployed and young people. Particular attention was paid to the new information and communications technologies and respect for equal opportunities.

The EAGGF Guidance Section provided EUR680 million for rural development in the four overseas departments and Corsica and French Hainaut. During 2001 the programme complements were considered and accepted. Only Martinique is awaiting official acceptance of its programme complement. Five regions submitted applications for interim payments: Guadeloupe (two applications), Réunion, Corsica and French Hainaut in 2001 and Martinique in February 2002. However, only interim payments for Guadeloupe and Réunion could be made in 2001.

The derogations from Community rules (rates of public assistance to agricultural holdings and agri-food firms, the eligibility of State forests) granted by the Council on 28 June 2001 required the amendment of the programme complements for the four overseas departments and of the SPDs, which should be done in the first half of 2002.

The four overseas departments and Corsica enjoy specific measures for fisheries, which receive EUR40.7 million in part financing from the FIFG. The main priorities concern the preservation of employment, the improvement of port facilities and the development of aquaculture.

Objectives 1 and 2

1994-99

In 2001 the Commission received some 33 applications to extend the final date for payment (originally 31 December 2001). In most (20) cases, it granted a further period of several months (up to 9) because of force majeure or similar reasons. Six applications were rejected and on 31 December the others were still being considered.

2000-06

In March the Commission formally adopted all the decisions concerning the 21 regional SPDs under Objective 2 for 2000-06 and the two decisions on the PNI (National computer programme) for the Objective 1 and 2 areas for that programming period.

The Commission also approved the proposal by the French authorities on the PNAT (National technical assistance programme) for the Objective 1 and 2 areas.

The Commission committed appropriations for the 2000 and 2001 instalments of these programmes and made the 7% payments from the Structural Funds for each programme.

The Commission received all the 26 programme complements for the regional SPDs and the PNI and found that 18 of these complements complied with Article 18(3) of Regulation (EC) No 1260/1999. The others are still being considered.

In 2001 it also received 25 annual reports for 2000 on these 27 programmes, of which 21 were considered to comply satisfactorily with Article 37(2) of Regulation (EC) No 1260/1999. The Commission is still considering the other reports.

To ensure the correct implementation of the next generation of programmes, the Commission, in close cooperation with the French authorities, both national and regional, organised three seminars for promotion and discussion, in Guadeloupe and Corsica for the Objective 1 regions and a third in Rhône-Alpes for the Objective 2 areas.

The topics discussed at these seminars included the implementation of the arrangements for evaluation and monitoring and the performance reserve, the implementation of the single computer system to manage the SPDs, management and inspection systems, the procedure for implementing financial corrections, the content of the annual reports, the procedure for taking decisions on major projects, the introduction of global grants, implementation of the territorial aspects of the SPDs and the establishment and implementation of the communications plans.

Objective 2

The approval of the last programmes and of the proposal by the French authorities to increase the SPDs for Brittany and Picardy because of the floods which hit those two regions in the autumn meant that all the appropriations available for France for 2000-06 were allocated.

All the programme Monitoring Committees were set up during the year.

During 2001, the Commission also decided to agree to the ERDF contributing to the finance of two major projects within the meaning of Article 26 of Regulation (EC) No 1260/1999.

The first is 'PORT 2000 - LE HAVRE' in the SPD for the Upper Normandy Region to which the ERDF will contribute EUR38 099 846, 25% of the total eligible cost of EUR152 399 384. Completion of this project will have a considerable impact on the whole region and in particular employment (direct creation of 3 500 jobs).

The second major project is the Route Nationale 106: it is intended to dual the 10.7 km section from Boucarain to La Calmette of the existing road from Alès to Nîmes in the Gard department under the SPD for the Languedoc-Roussillon Region. This is the main road serving the Alès industrial area and will provide efficient links with the A54 and A9 motorways and Nîmes airport. The ERDF will contribute EUR16.07 million (25 %) to the total eligible cost of EUR64.29 million.

Five programmes for human resources submitted a first declaration of ESF expenditure in 2001 so that EUR4.45 million in ESF appropriations could be reimbursed.

Objective 3

The ESF will contribute EUR4 713 million to financing Objective 3. The programme has six priorities with the following shares in total funding: active labour market policies (20.5%), equal opportunities and social integration (26%), life-long education and training (23%), adaptation of workers, business spirit, research, innovation, technology (22.5%), increasing the participation of women in the labour market (4%), horizontal measures (4%).

At the end of 2001, ESF payments stood at EUR585 million (including the statutory payment on account), or 12% of total funding for period. Since the Objective 3 SPD gave priority to a preventative approach, priorities 1 and 3 have the highest rates of consumption of appropriations. This is particularly true of priority 1, which offers a new start to job-seekers to head off long-term unemployment. The public employment service is very active and offers a personalised service to job-seekers in the first months of unemployment. This includes guidance, monitoring during training and support towards employment. In June the Monitoring Committee decided to extend personal treatment to all the unemployed and to increase the offer of services to them. Assistance under priority 3 concentrates on apprenticeship programmes supported by the regional councils and transition classes to help pupils at risk of being excluded from education.

In addition to the meetings of the national Monitoring Committee, the regional steering committees met in all the regions the better to assist the decentralised management of the SPD.

Non-Objective 1 FIFG

The SPD for the non-Objective 1 areas of France has FIFG funding totalling EUR233.7 million for 2000-06 (a payment on account of EUR16.4 million has been made). Strategic priorities are the long-term management of fisheries resources, assisting the modernisation of firms to enable them to increase their value added and improving the socio-economic environment of territories dependent on fishing. At 31 December 2001, EUR18 million had been committed - mainly for fleet measures.

The FIFG allocation for 1994-99 was EUR197 million. At the end of 2000, 87% of the programme had been committed. This shortfall was because the programme was late in starting, new procedures had to be adapted to and not enough priority was given initially to the programme. By 31 October, 67% of the funding had been paid - with fleet renewal and modernisation prominent.

2.2.7. IRELAND

1994-99

Most of the operational programmes and Community Initiatives being implemented in the programming period 1994-99 were due to complete expenditure by 31 December 2001. Following requests from Irish authorities, the Commission agreed short extensions of the deadlines for expenditure and the submission of final reports for a number of programmes.

2000-06

Six Irish Objective 1 programmes approved in 2000 were being implemented in 2001. They concern Economic and social infrastructure, Employment and human resource development, Productive sector, Technical assistance, Border, Midland and Western region and Southern and Eastern region. The Community funding decided under the six programmes amounts to EUR3 066 million, of which EUR1 205 million had been committed and EUR449 million paid by the end of 2001.

In March 2001 the Commission adopted the Peace II programme 2000-04 that benefits Northern Ireland and the Border (NUTS III) region of Ireland. Community funding for the Border region under the programme amounts to EUR106 million.

Progress on operations relating to infrastructure and the productive sector is generally on target for roads, public transport and environmental infrastructure. Some delays have been experienced in relation to the development of tourism, renewable energy and broadband (e-commerce) capacity. In the case of research and development, the major slowdown in the high technology sector has greatly reduced the availability of private sector part-financing for the types of projects in the Productive sector OP. Therefore, following a proposal from the Irish authorities, the Commission agreed to the transfer of commitment appropriations of some EUR51 million for 2001 and 2002 from the Research and development priority of the Productive sector OP to the Public transport priority of the Economic and social infrastructure OP.

In relation to human resource development, the economic slowdown has also affected Ireland and resulted in layoffs and closures in electronics companies. In addition, Ireland also has suffered from the impact of the foot and mouth crisis on agriculture and tourism in particular. In labour market terms this means slower employment growth and even declines in some sectors, increased layoffs and redundancies, lower levels of recruitment, a reduction in labour and skill shortages, increased unemployment, greater difficulties in finding jobs (especially among less employable groups) and a reduction in net immigration.

Against this changing environment, progress in implementing the human resources OP was nevertheless satisfactory. Good progress was made in respect of the Employability and Adaptability priorities whilst some difficulties were identified in relation to Entrepreneurship and Equality. Problems with existing staff in firms were debated at the Employment and Human Resource Development Co-ordinating Committee on 13 November with stakeholders and a temporary transfer of funds helped ease the problem until a lasting solution can be found. Within the Equality Pillar the Monitoring Committee approved a transfer of funds from the Department of Education and Science to the Department of Justice, Equality and Law Reform.

Notable policy changes include innovative developments in the National Employment Service measure, with the extension of the Callnet and Jobconnect programmes and the extension of the Callnet service by FAS to take vacancies from Northern Ireland. Apprenticeships and traineeships continued to expand and the establishment of a traineeship in childcare work is likely to improve the level of female participation in the traineeship programme. Finally, an important and innovative initiative under the Adult Literacy measure is the huge success of the TV and radio series "Read Write Now", which is continuing with a new TV series from September 2001.

After submission by the Irish Authorities of the programme complement and the Communications Action Plan, the Commission made a first interim payment of some EUR76 million.

The managing authority submitted the first annual report on implementation for 2000, which the Commission accepted. Finally, the first annual review meeting on implementation in 2000 took place in December 2001.

Significant progress with regard to gender mainstreaming has been made over recent years. This is now a requirement for all policies and programmes under the Irish National Development Plan 2000-06. In addition to mainstreaming equality for women and men in all but six measures in the National Development Plan, a number of other commitments have been made to advance equal opportunities in NDP spending.

A practical example of how gender mainstreaming is making progress is the development of a series of training courses for policy makers and implementing agencies which explains the requirements and explores the practice of gender mainstreaming in areas such as tourism, transport and local development.

In the agricultural sector, payments on forestry measures are proceeding while other rural development and agricultural measures were delayed due to foot and mouth restrictions.

The annual reports for 2000 were received. Implementation of the rural development measures under the Operational Programmes were hampered by the foot and mouth restrictions and the transfer of staff in the early part of 2001. All part-financed measures are now operational and the Irish authorities selected Local Action Groups under the measure for Area Based Development.

The FIFG contribution to the three fisheries programmes concerned totals EUR67.6 million (EUR42 million for the Productive sector OP, EUR16 million for the Border, Midland and Western region and EUR9.6 million for the Southern and Eastern region)

2.2.8. ITALY

1994-99 and earlier periods

Early in 2001 there still remained 51 items of assistance to be closed for the period before 1989 and the period 1989-93; of these 31 were actually closed