EN Official Journal of the European Union CE 88/394

(2004/C 88 E/0400)

WRITTEN QUESTION P-2252/03

by Glenys Kinnock (PSE) to the Commission

(1 July 2003)

Subject: Uncommitted and unspent EC funds in South Africa

Would the Commission confirm that in the case of South Africa, because decommitted funds cannot be reprogrammed, they are lost? There is a need to urgently consider applying a more flexible approach likely to allow the extension of essential projects. This approach would lessen the strong likelihood of serious social and/or political consequences. Would the Commission give its view on this matter?

Answer given by Mr Nielson on behalf of the Commission

(29 July 2003)

The Commission confirms that, in the case of external aid allocated from the general budget, funds de-committed in one budget year cannot in principle be re-used or made available again in subsequent budget years. These annual budget operations are subject to binding legal rules in the Financial Regulation (1) adopted by Council and Parliament. (Programming is essentially a longer-term planning exercise to set out key priorities – it does not constitute a formal financial commitment). This is not only the case for South Africa but applies also for all other countries that receive external aid from the Commission's general budget. Regarding this issue the Commission has conducted intensive discussions with the South African Authorities over the last months.

The Commission has always applied a large degree of flexibility for the extension of cooperation projects with South Africa. Since the start of the European Programme for Reconstruction and Development (EPRD) with South Africa, the Commission has approved over 150 riders for the extension of Financing Agreements. Unfortunately, not all of these extensions have produced the expected results. Nevertheless, the Commission remains open to continuing discussions with the South African Authorities for the extension of projects that have experienced difficulties in implementation. Some 14 projects have been identified for extensions and adjustments during 2003. The fact is that the Commission is trying to cope with the problem that too many earlier commitments and projects were launched without meeting the same standards in relation to quality and implementability as the Commission is insisting on today, – even if the objectives of these were, and are, good and valid.

Following criticism from the Parliament and Council, the Commission has undertaken to find a better balance between budgetary commitments made and funds actually spent. Moreover, as part of the effort to improve budget implementation, Parliament and Council agreed in the Financial Regulation that a final date for implementation should be fixed in compliance with the principle of sound financial management. Thus each individual request for project extension must be carefully assessed and extension may be granted only if duly justified by the relevance of the project and in terms of sound financial management.

(1) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities, OJ L 248, 16.9.2002. See Article 77 (3).