Special report No 4/90 on the Integrated Mediterranean Programmes (IMPs) together with the replies of the Commission
Date: 1990-09-27
Institutions: European Court of Auditors
Subjects: EU financing, Integrated Mediterranean Programmes, Mediterranean region (EU), report













EUR-Lex - 31990Y1128(03) - EN






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31990Y1128(03)

Special report No 4/90 on the Integrated Mediterranean Programmes (IMPs) together with the replies of the Commission  


Official Journal C 298 , 28/11/1990 P. 0001 - 0024 





SPECIAL REPORT N° 4/90 on the Integrated  Mediterranean Programmes (IMPs) together with the replies of the Commission (90/C 298/01) (Observations pursuant to Article 206a (4) of the EEC Treaty) >TABLE>1.  Introduction1.1. Council Regulation (EEC) N° 2088/85 of 23 July 1985 concerning the integrated  Mediterranean programmes () defines the objective of these programmes as being the improvement of  the socio-economic structures of certain southern regions of the Community, in Greece, Italy and  France. More specifically, the Integrated Mediterranean Programmes (IMPs) are intended to enable  these regions to adjust under the best possible conditions to the new situation brought about by  the accession of Spain and Portugal to the Community. 1.2. According to the Regulation, the measures envisaged, extending over a period not exceeding  seven years, are to relate in particular to investments in the productive sector, the creation of  infrastructure and better use of human resources. These measures should strengthen or complete  those already covered by the existing Structural Funds, which continue to apply as usual to the  regions under consideration. The IMPs are to be drawn up by the regional or other authorities  designated for that purpose by each Member State concerned and must be submitted to the Commission  for examination and co-financing. 1.3. Article 10 of Council Regulation (EEC) N° 2088/85 stipulates that financial aid from the  Community budget for the implementation of IMPs shall take the form of: - a contribution of 2  500  Mio ECU from the Structural Funds (European Regional Development Fund,  European Social Fund and the Guidance Section of the European Agricultural Guidance and Guarantee  Fund); - an additional budgetary allocation of 1  600  Mio ECU from the appropriations allocated to a  special budget article entitled 'Integrated Mediterranean Programmes - Additional contribution`  (Article  551); - the option of loans from the European Investment Bank (EIB), from its own own resources or from  NCI resources, totalling an estimated 2  500  Mio ECU. Of the 4  100  Mio ECU of budgetary resources, 2  000  Mio ECU must be allocated to IMPs submitted  by Greece. 1.4. The main feature of the IMPs is a planned and multiannual approach to the national and  Community contributions in the regions concerned, which results in the development programmes being  drawn up on the basis of interdependent and complementary measures in respect of all the sectors of  economic activity. The aim is to integrate the national and Community resources used into a single  whole, with a view to increasing their effectiveness. 1.5. The rate of Community participation in financing IMP measures (aid from the Structural Funds  plus any additional contribution) may not exceed 70  % of the total cost of the project or measure.  This rate may be exceeded in the case of Greece, for infrastructure projects that are of special  interest and are part-financed by loans. In contrast, in the case of France and Italy Community aid  may not be more than 10 percentage points higher than the maxima applied by the Funds, and if it  comes solely from the specific budgetary heading mentioned in the second indent of paragraph 1.3  above it may not exceed the present maximum ceiling for the ERDF. 1.6. In addition, the IMPs should be implemented at the right geographical level and should be  based on programme contracts between the parties concerned (Commission, Member States, regional  authorities or other authorities designated by the Member State) specifying their respective  obligations. For each IMP, a Monitoring Committee, set up by mutual agreement between the  Commission and the Member State concerned, assists the authorities responsible for implementing the  programme. 1.7. This report is the result of examinations carried out by the Court, both on the Commission's  premises and in several regions of the three Member States concerned (Crete, Central and Eastern  Greece, Languedoc-Roussillon, Tuscany and Calabria). It was drafted in response to a Resolution by  the European Parliament of 13 June 1985 which requested the Court of Auditors to submit, at the end  of the third year of implementation of the IMPs, a special report on the effectiveness of these  programmes (). 1.8. Part One of this report deals with the formulation and content of the decisions themselves,  whilst Part Two is devoted to the initial phase of implementation. >TABLE>2. Part One: the IMP decisions2.1. The general situation in  respect of IMP decisions2.1.1. The general situation of the 29 IMPs is shown in Table 1 (see page   3), which indicates, for each programme, the date on which it was submitted to the Commission, the  date of the latter's decision, the period covered, the date of the contract, the total amount of  the costs and the Community aid, together with the loans planned, as envisaged at 31 December  1989. 2.1.2. The estimates for costs, aid and loans per country were as follows as at 31 December 1989  (in Mio ECU): >TABLE>As regards the EIB loans reference should be made to the explanations provided  in paragraph  2.7 below. 2.1.3. The estimates of costs and aid are based on several series of decisions, a different type of  financial planning having, moreover, been adopted for each of the three countries. In the case of  the French IMPs, aid (360,6  Mio ECU) was initially only granted for the years 1986 to 1988. For  the subsequent period, new decisions were taken at the end of 1989 involving an amount of 422  Mio  ECU. The Greek IMPs received aid covering the whole period from the outset. Details of the  measures, however, were only recorded for the years 1986 to 1988 (1985 to 1987 in the case of  Crete), which necessitated a revision for the subsequent years. A revision was carried out in 1989  and resulted in supplementary aid of 159,2  Mio ECU. In the case of the Italian IMPs, the financing  operations are meant to cover the whole period, but with the possibility of supplementary measures  which are yet to be decided. 2.1.4. The total aid granted, amounting to 3  779,8  Mio ECU, corresponds to 92,2  % of the overall  amount of 4  100  Mio ECU provided for by Article 10 of Council Regulation (EEC) N° 2088/85. There  was a reserve of 320,2  Mio ECU as at 31 December 1989, i.e. 307,8  Mio ECU for the supplementary  measures for the Italian IMPs and 12,4  Mio ECU still to be allocated to the Greek IMPs. 2.1.5. On top of the periods, varying between 6 and 18 months, which elapsed between the adoption  of Regulation (EEC) N° 2088/85 and the submission of programmes by the Member States, there was  also the time required for the examination and approval of these programmes. The result was that  the implementation of the measure started late, as can be seen from the low utilization rate during  the financial years 1985 to 1987 of the budgetary appropriations allocated to Article 551 (see  paragraph 3.1 below), which was only very partially offset by the retroactive nature of the  decisions. 2.1.6. As a rule, each IMP is subdivided into about 50  measures, which are themselves reclassified  into several sub-programmes roughly corresponding to operations in the areas of agriculture,  tourism, industry and craft trades, internal areas and infrastructure. One sub-programme is also  devoted to aid for the organization and management of the IMP itself. 2.1.7. Each measure covers a variable number of projects or other operations, which are not usually  itemized in the programme and are selected and defined by the authorities responsible for carrying  out the IMP. For each measure there are data sheets providing information on the expected progress  of the operations (content, timetable, location, parties involved), the financing plan and the  appraisal (physical monitoring indicators and, in many cases, socio-economic impact indicators). 2.1.8. For each measure, the programme indicates the total cost anticipated, usually spread over  the year, the amount and source of Community financing, the proportion of national public financing  and the private financing. Each measure receives aid from one or more Community Funds, or from  Article 551, this latter taken singly or combined with aid from the Funds. With regard to the  resources under this heading, Article 12 of Council Regulation (EEC) N° 2088/85 stipulates that  they may be used in particular for the purpose of granting Community aid over and above the  thresholds laid down by the provisions governing the Funds, or for providing aid outside the  geographical scope of the Funds and in excess of their respective qualitative and quantitative  limits. 2.2. The operational autonomy of the various financial instruments2.2.1. According to the sources  of finance, the total Community aid provided for in the programmes may be broken down as follows,  as at 31 December 1989 (in Mio ECU): >TABLE>2.2.2. Article 3 of Council Regulation (EEC) N°  2088/85 lays down that use made  of the Funds must be in compliance with the rules peculiar to these sources of financing,  particularly as regards eligibility and priority criteria and financial participation rates.  Article  12 of the same Regulation stipulates that, where financial aid for IMPs is provided by the  Funds, it shall be granted in the forms laid down by the provisions governing each Fund. Article   14 adds that the budgetary commitments, advances and payments shall be made in accordance with the  rules governing each financial instrument (for the procedures applicable to Article  551, see  paragraph 3.2 below). 2.2.3. In this way, aid for the implementation of the IMPs has been supplied from the Funds whilst  maintaining the complete operational autonomy of the various financial instruments. As a result,  although it covers very varied situations, ranging from the coordination of activities to mere  exchanges of information between administrators, integration of resources never takes the form of a  hierarchical classification of the resources employed to achieve a given objective, either in the  planning or in the execution of the IMPs. 2.3. The IMP decisions and the decisions peculiar to each Fund2.3.1. The process of preparing  decisions and granting aid has proved to be complex, since it involves a global stage, concerning  the IMP, which is more specifically the responsibility of the Directorate-General for the  Coordination of Structural Instruments, and an individual stage peculiar to the administration of  each Fund. Given that each financial instrument functions independently of the others, this  individual stage has clearly differed from one Fund to another. 2.3.2. For the ERDF Section, each IMP Decision was completed, within a period varying from two  weeks to four months, by the approval of a corresponding national programme of Community interest  (NPCI). Approving the national programme in these cases was, therefore, mainly a matter of  satisfying the requirements of the regulations. 2.3.3. In the case of the Guidance Section of the EAGGF, the projects or other operations, even if  specified and laid down in the IMP, were subjected to separate appraisal and decision procedures,  which were often extended for over a year after approval of the complete programme. 2.3.4. As regards the Social Fund, separation of one operation from another within the IMPs has  been very vague, and projects have mainly been determined on a year-by-year basis, as part of the  traditional procedure of appraisal and decision-making in respect of aid from the Fund. With regard  to loans, see paragraph 2.7 below. 2.3.5. The adoption of the IMPs has thus not led to any attempts to devise more unified appraisal  and approval procedures. The collecting of financial information in respect of the IMPs, and the  processing of that information, varies according to the instruments, and in some cases concerns  data by project and in others data for the whole measure. The situation varies greatly from one  Fund to another and the Commission departments responsible for managing the Social Fund and the  EAGGF-Guidance do not have specific files for the IMP operations. It is, moreover, sometimes  difficult at Community level, and even at national level, to decide which operations are subject to  the integrated approach. In fact, the information needed in order to distinguish IMP measures from  non-IMP measures, in cases involving the same type of activity, coexisting in the same area and  sometimes in the same measure, is not always available. 2.4. Growth of aid to assist the IMP regions2.4.1. Article 11 of Regulation (EEC) N° 2088/85 lays  down that increases in real terms in the sums allocated to the Structural Funds during the period  1986-1992 are to help to finance the IMPs, but without adversely affecting transfers from the Funds  to other less prosperous or priority regions. Normally, the growth of aid in the IMP regions ought  to have been bigger than the growth of the Structural Funds, especially in view of the contribution  from the additional budget heading. 2.4.2. It is regrettable that the information available for each of the Funds is not very  homogeneous and is insufficiently broken down by region to allow an exact comparison of the total  amounts of aid allocated, prior to and during the IMP period, to the various regions which receive  aid for structural policy purposes. Data have been collated by the Commission and were included as  an annex to its 1987 IMP report. They are, however, too incomplete to be used as a basis for valid  comparisons. 2.4.3. More precise cross-checking is only possible in the case of Greece and, to a certain extent,  Italy, countries where the IMP programmes cover all, or a very large part, of the territory. In the  case of these two countries, changes in the level of Community Structural Fund commitments  (including Article 551), compared with the corresponding changes for the Community of Ten as a  whole, are as follows: >TABLE>2.4.4. In the regions concerned, therefore, the implementation of the integrated  programmes was not able to prevent a measure of stagnation in the amount of aid granted for  structural purposes during the period following the enlargement of the Community. An increase  greater than the overall trend for the Ten was observed in Greece only from 1988 onwards. In the  case of Italy the growth of commitments from the Community Structural Funds (including Article 551)  has continued to be significantly less than the increase in the corresponding commitments for the  Community of Ten as a whole. 2.5. Preparation of the programmes2.5.1. The conditions under which the programmes were prepared  in the Member States and examined at Community level were difficult. The IMPs involved  inter-sectoral management of an innovatory kind. Moreover, as the paragraphs below show, the  methods used for communicating information and organizing the programmes have sometimes been  inefficient. 2.5.2. The regions' hopes have not always been in keeping with financial realities. Taken together,  the requests submitted by the Member States anticipated total expenditure of 14  246  Mio ECU and  Community budgetary aid of 6  112  Mio ECU, compared with an estimate of 4  100  Mio ECU fixed by  Regulation (EEC) N° 2088/85. 2.5.3. It was therefore necessary to scale down the proposals submitted in order to end up with a  substantial reduction in the measures proposed. This reduction often came on top of a similar  adjustment which had already been carried out between the regional level and the central level in  the Member States: in Italy, all the regions' initial proposals, which would have contained  requests for nearly 5  000  Mio ECU in Community aid, had already been halved before they were sent  to the Commission. 2.5.4. This led to successive stages of work involving examination and appraisal, which in some  cases ought to have been done earlier at other administrative levels. 2.5.5. Admittedly, it would have been difficult to allocate an estimated amount to each of the IMPs  right from the outset. In fact, Article 6 of Regulation (EEC) N° 2088/85 specifies that, when  granting Community assistance, account must also be taken of various factors pertaining to the  qualitative aspects of the programmes and to the size of the national contribution. 2.5.6. However, if indicative ceilings had been set it would have been possible to avoid  unrealistic programmes being drawn up and this would have been more in keeping with the limited  resources available to the Commission, which was obliged to examine 29 IMPs at the same time.  Setting such amounts would have been all the more appropriate inasmuch as, in practice, concern  about the appropriations available, far more than the actual merits of the programmes, was the  basic criterion for fixing the aid. 2.5.8. The decisions approving the IMPs were backdated to the date on which the programme was  presented to the Commission by the Member State, and even to dates prior to that in the case of  some of the Greek programmes, which used a date proposed by the Member State. These periods of  retroactivity mitigated some of the adverse effects of the delays, but they did not help to make  the situation any clearer and, moreover, led to the implementation of those categories of projects  least dependent on Community financing, in preference to others. 2.6. The concept of the interaction and complementarity of the aid2.6.1. The purpose of the  objective of interaction and complementarity was to increase the effectiveness of the aid by  improving the coordination of the operations financed by the various Community instruments. This  objective has been interpreted differently by the Community, national and local authorities  involved. Progress has been made as regards providing improved information to each side on the  activities of the various management departments, but there has been little headway in seeking  forms of aid which help to make coordinated action more possible and which improve the  coordination, complementarity and hierarchical organization of the resources brought into play. 2.6.2. The main part of the programmes, especially in quantitative terms, is based on the  juxtaposition and continuation of measures which are already in existence. Efforts have been made,  at Community level and by the central authorities of the Member States, to improve the way in which  these measures are organized and to introduce new aspects. But these efforts have largely taken the  form of numerous meetings, discussions and facts and figures, which indicates that a partnership  has developed although it has had little real impact on the actual management conditions. 2.6.3. Even at Community level, not all the operations relating to the same area have been taken  into consideration in drawing up the IMP. This is the case, for the ERDF and for the STAR and  Valoren Regulations (), which have been disregarded, even where they concern the same recipients as  the IMPs. It is also true, in the agricultural sphere, for compensatory allowances for mountain  areas and other less-favoured areas, and, in the social field, for Regulation (EEC) N° 815/84 ()  intended to finance medical centres and vocational training centres in Greece, which is similar in  nature to some of the investments included in the IMP programmes. 2.6.4. The IMPs have not brought together all the operations relating to one area even those  financed by the traditional Funds. Financing not included in the IMPs has continued to be allocated  to areas which are the subject of an integrated programme, sometimes for amounts higher than those  of the IMPs. It is not uncommon for the same operation or the same infrastructure (roads,  water-supply work, etc.) to receive IMP Community aid and, at the same time, traditional Community  aid which has not been taken into consideration in the integrated approach. 2.6.5. At regional and local levels, the concepts of the interaction and complementarity of aid  have not been translated at operational level into clear aims and priorities. In practice, at local  level, the objective of the expenditure (infrastructures, industrial investments, research and  innovation, etc.) is that aimed at by the national scheme eligible for Community aid. They are  usually sectoral objectives which, until now, have been only slightly influenced by the integrated  programmes procedure. 2.6.6. The desire to increase the interaction and complementarity of the aid is an ambitious aim  and, in many cases, achieving this aim implies a change in the habits and mentality of the managing  departments. As things stand at present, the process has created greater awareness of the problem  of interaction, but has had only limited practical results. 2.7. Aid and loans2.7.1. Article 10 of Regulation (EEC) N° 2088/85 estimated that over the  seven-year period EIB loans could total a maximum of 2  500  Mio ECU. The utilization forecasts,  which, as at 31 December 1989, the programmes give as totalling 1  537,9  Mio ECU, are very  variable. In the case of the Greek IMPs, the forecasts are global estimates, but they are included  in financing plans which specify the proportion of the programmes to be financed by borrowings. In  the French and Italian IMPs, on the other hand, the borrowing forecasts appear only as global  amounts which do not appear in the financing plans, and there is no link between the cost of each  programme and the proportion to be financed out of borrowings, as the latter are not confined to  projects which form part of the overall programme. 2.7.2. As an indication, the Commission's 1988 report on IMP activity gives an estimated total of 1   542  Mio ECU for loan utilization: 180  Mio ECU for France (for the first phase of the programmes  only), 655  Mio ECU for Greece and 707  Mio ECU for Italy. The actual level of utilization as of 31  December 1988 was significantly less: 58,5  Mio ECU for France, compared with the 180  Mio ECU  forecast, and for Greece 35,1  Mio ECU, compared with a forecast of 254  Mio ECU for the period  1986 to 1988, whilst in Italy an amount of 40,3  Mio ECU was allocated to global loans. The role of  loans in the IMP programmes has, therefore, proved to be very insignificant. 2.7.3. The IMPs could have provided the opportunity for better integration of the various Community  managements concerned with aid and lending, but in fact there has been no progress in this  direction. When loans are included in programmes, even as an occasional measure, it is always on a  formal basis and does not result in any kind of joint approach in drawing up the criteria for the  granting of aid and loans respectively, nor to any search for a formula which would represent the  optimum combination of the two sources of finance. 2.7.4. Furthermore, many loans are granted as part of the existing systems of global loans, which  are managed by national or regional financial bodies which frequently do not know whether the  operation financed has or has not been included in an IMP. It is difficult to reconcile global  loans of this type with the concept of an integrated programme of the IMP type. 2.8. Periods specified for carrying out the programmes2.8.1. For every measure there is a schedule  which sets out the annual amount of Community expenditure envisaged in terms of commitments and  payments. This schedule covers at least the first phase of IMP implementation (1986 to 1988), since  for the subsequent period, as stated above, the situation varies from Member State to Member  State. 2.8.2. The value of the data on time limits given in the programme is very relative, because each  Fund sets the period of eligibility itself, according to its own particular rules. Consequently, it  is possible that this period may not correspond to the duration of the IMP. In practice, this is  especially true of financings under Article 551 of the budget, the role of which is examined in a  later part of this report. 2.8.3. For all the Greek and French programmes, and bearing in mind the extensive back-dating  discussed in paragraph 2.5.8, the contracts, which constitute the act whereby the authorities  concerned commit themselves to carrying out the IMP, were not signed until approximately one and a  half years after the beginning of the implementation period. Inasfar as implementation had taken  place in the mean time, it was, therefore, not formally governed by the IMP provisions from the  outset. Similar delays and backdating can be found in the transition to the second phase, which,  although planned for 1 January 1988 in the case of the Cretan programme and 1 January 1989 for the  other Greek programmes and the French programmes, was not formalized until the end of 1989, the  transition being effected in a pragmatic fashion in the interim. 2.8.4. Nor was the end of the contractual period uniformly defined. In the case of the French and  Italian programmes, the contracts expire at the moment when the Commission reports that Community  budgetary assistance is at an end, whereas for the Greek programmes it is the point at which the  budgetary commitments under the IMP are validated. Both formulae are ambiguous and do not link the  end of the contract to the proper carrying-out of the programmed operations. 2.8.5. As regards budget cover, Article 11 of Regulation (EEC) N° 2088/85 states that from 1986 to  1992 financial assistance from the Funds is to be taken from their annual budgetary allocations.  Article 19 of the Regulation further states that the Regulation 'shall expire on 31 December 1993,  the final date for commitment for expenditure under IMPs`. There are no arrangements for the period  after 1993, notably as regards appropriations and payment deadlines, which indicates that the  difficulties which might arise during the period of decision implementation have not been fully  envisaged. 2.8.6. There is also a risk that the deadlines referred to in the previous paragraph may have no  practical effect on the commitments to be borne by the Funds, because for them the period of  validity of the aid is subject to the operating rules of the individual Funds. On the other hand,  Regulation (EEC) N° 2088/85 does not specify a similar deadline for entry in the budget in the case  of the Article 551 appropriations. 2.8.7. A much stricter definition of the implementation periods and of the consequences of  exceeding them would probably have helped to bring the implementation of the IMPs under firmer  control. The experience acquired from the preparatory pilot schemes, which are examined in the  following paragraphs, shows that it is essential not to underestimate the risk that, at the end of  the period set for implementation of the IMPs, commitments against the still unutilized portion of  the overall funding may continue to be borne by the various Funds, instead of being grouped  together as part of the implementation of the integrated programme. 2.9. Experience acquired from IMP preparatory pilot schemes2.9.1. During 1983 and subsequent  financial years the Community carried out various surveys and set up a number of experimental  operations, the IMP preparatory pilot schemes, which were intended to help resolve the difficulties  inherent in the design and implementation of the IMPs. 2.9.2. In principle, the pilot schemes should have ended in 1985, in good time for the lessons  learnt from them to be used in the preparation of the IMPs. In fact, in 16 out of a total of 25  schemes, the financial situation had not been clarified by the end of 1989 and, in the case of the  schemes that were deemed to have ended in 1988 and 1989, decisions were taken on the basis of  evidence supplied by the competent regional authorities only in respect of expenditure against the  special article that had been opened in the budget to provide for an additional contribution  (Article 550). Such a procedure flatly negates the integrated nature of the pilot scheme. The  latter was in effect deemed to have ended, even though the required information on the realization  of the various components financed by each of the Funds was not available. 2.9.3. There was practically no exchange of information between the Commission managers about the  pilot schemes, and, in its Special report on the integrated approach (), the Court pointed out that  the management of these measures was increasingly being confined to management of the  appropriations against the additional article only. 2.9.4. Whether at the level of integrated action, the way in which statistics were obtained by  Community, national, regional or local authorities, the accuracy of data and the exchange of  information, the lengthy nature of procedures and deadlines and compliance with them, the  complexity of the system whereby decisions were taken, or the financial system involving advances,  repayments and budgetary cover, the preparatory pilot schemes revealed a whole set of difficulties  that were to reappear on a much larger scale in the management of the IMPs. 2.9.5. These difficulties were not, however, taken into account as a way of improving the  conditions of integrated management by introducing the necessary measures in good time at the  appropriate level. All too often, the task of taking measures at IMP level was entrusted to  monitoring committees, which were not really in a position to act in a way which would produce a  marked change in the situation. 3. Part Two: the initial phase of IMP implementation3.1. Community commitments  and payments3.1.1. Tables 2 and 3 summarize commitments entered into and payments made up till the  end of 1989 for Community aid to the IMP. At the end of 1986 commitments amounted to 33,1  Mio ECU.  At the end of the following year they had reached 441,33  Mio ECU, or 86  % of the amount expected  by 31 December 1987. By the end of 1988 they had risen to a grand total of 1  077,31  Mio ECU,  slightly less than 91  % of the commitments the programmes had envisaged for that date. At the end  of 1989 total commitments amounted to 1  546,86  Mio ECU, or 77  % of the corresponding estimate. 3.1.2. In the case of payments, the amount was 14,86  Mio ECU as of 31 December 1986 and 235,72   Mio ECU as of 31 December 1987 - 81  % of the payments forecast for that date; by 31 December 1988  the amount had risen to 606,04  Mio ECU and 949,89  Mio ECU at 31 December 1989, 80  % and 72  %  respectively of the total payments forecast for end-1988 and end-1989 in the various IMPs. 3.1.3. The forecasts of both commitments and payments were compiled when the programmes were being  prepared and appear in the schedules for the various contracts. Comparison of forecast and actual  figures is not, therefore, a significant indication of the delays which occurred in starting the  IMP. These delays are illustrated by the under-utilization of the Article 551 budgetary  appropriations, mainly during the first two financial years in which they were entered (1985 and  1986 in the case of commitment appropriations, 1986 and 1987 for payment appropriations - see Table  4). 3.1.4. Table 4 shows how, out of a total of 360  Mio ECU of commitment appropriations opened  against Article 551 in the 1985 and 1986 budgets, an amount of 30  Mio ECU was transferred to other  articles of the budget, 104,5  Mio ECU were cancelled and 210  Mio ECU were still outstanding at  the end of 1986, only 15,5  Mio ECU having been used. In the case of payment appropriations against  the same article, compared with a total of 285,7  Mio ECU opened in the 1986 and 1987 budgets,  transfers amounted to 100  Mio ECU, cancellations to 6,5  Mio ECU and payments, as of 31 December  1987, to 111,5  Mio ECU, whilst 67,7  Mio ECU were carried forward to 1988. 3.1.5. As of 31 December 1989, commitments and payments respectively represented approximately 37,7   % and 23,2  % of the total aid of 4  100  Mio ECU provided for in Regulation (EEC) N° 2088/85 for  the entire duration of the IMPs. They were distributed between the various financial instruments as  follows (in Mio ECU): >TABLE>3.1.6. For 1989 IMP commitments and payments amounted to a total of 469,6  Mio  ECU and 343,9  Mio ECU respectively, a reduction on the previous year, when they amounted to 636,0   Mio ECU and 370,3  Mio ECU. The situation gives rise to considerable concern in the case of the  Italian IMPs, for which, for the period from the beginning of the IMP up to 31 December 1989,  totals of only 193,9  Mio ECU and 91,6  Mio ECU had been committed and paid. 3.2. The incidence of commitment and payment procedures3.2.1. The rates at which payments are made  in relation to the corresponding programme commitments are influenced by the accounting procedures  employed for Article 551 and the ERDF programmes, the figures relating to these two financing  instruments representing approximately 74  % of commitments and 73  % of payments at 31 December  1989. 3.2.2. In fact, under the current provisions for both Article 551 and the ERDF programmes, the  procedure is for commitments to be passed to the accounts on the basis of the global annual  tranches fixed by the programmes. These provisions also allow the possibility of substantial  payments by way of advances, which may be as much as 50  % of the commitment in the case of Article  551 and even 80  % in some cases where the ERDF is concerned. As a result of the extension, in  1989, of the system of advances to all the Structural Funds, the amounts passed to the accounts are  sometimes markedly out of alignment with the true state of the project on the ground, particularly  at the beginning of capital projects. 3.2.3. At the end of 1989, out of total payments of 339,6  Mio ECU charged to Article 551, a sum of  only 85,2  Mio ECU, less than 25  %, was for completed annual tranches, whilst the remainder  consisted of advances. In the case of the ERDF portion, the percentage was slightly more than 56   %, for total payments of 356,4  Mio ECU. 3.2.4. The Court has repeatedly criticized the procedure of making commitments by annual tranches,  particularly in its Special report on non-quota measures (). The practical result of this  procedure is that when the financial documents are compiled they do not contain all the expenditure  that relates to the approved programmes, since the annual tranches are taken into account only as  and when they are called down. 3.2.5. The anomaly of the present situation regarding the passing of commitments to the accounts is  also illustrated by the case of the IMP regions which, following the reform of the Structural  Funds, are, since 1 January 1989, no longer considered to be underdeveloped regions (the regions in  question are Latium in Italy and the French IMP areas, excluding Corsica). Because of the current  programmes, the Commission has continued to pass commitments to the accounts against the ERDF in  respect of these areas after 1 January 1989 and regards them as commitments for the 'development of  rural areas`, where the region is eligible under such an objective, or classifies them as unzoned  where the region does not qualify under any of the ERDF objectives. In reality these are  commitments that were incurred before 1 January 1989 and should have given rise to a corresponding  commitment entry at that point in time. 3.3. The difficulties encountered by the Monitoring Committees and problems of setting up the  monitoring system3.3.1. The monitoring system gives an important role to the Monitoring Committees  that are set up for each programme. Each Monitoring Committee meets in the region concerned by the  programme. Its composition is determined in the programme contract and includes, in particular, one  person in charge of each sub-programme, one Commission representative and, where appropriate, one  EIB representative. The Committee makes use of the region's administrative structures to carry out  its work. 3.3.2. This Committee is the main forum that brings together the various authorities which take  part in the implementation of the IMPs, and, as such, has an important role to play in the exchange  of information and in the management of both the whole programme and each of the measures that make  it up. It is supposed to provide an immediate impetus and promote the sound implementation of the  IMPs, as well as delivering opinions and drawing up proposals. 3.3.3. However, since the Monitoring Committees were conceived of as advisory authorities  responsible for drawing up proposals, they do not always have the means or the powers needed to  arrive at an accurate and complete picture of the progress of the operations, nor can they really  influence, beyond taking part in discussions, the work of the various authorities concerned.  Responsibility for the implementation of IMPs devolves upon many departments and is often the  successive responsibility of a range of levels of authority, whose participation in the work of the  Committees usually proves to be different from one authority to the other. 3.3.4. The information flow and the transmission of documents between these authorities and  departments are factors that often depend upon habits and circumstances, and even on statutory  provisions governing the bodies concerned and determining the type, frequency and contents of the  supporting documents to be supplied. Such procedures, even when they are incompatible with the  requirements of the IMPs, are slow to change and are barely influenced by the work of the  Monitoring Committees, even if the latter do encourage joint examinations and discussions. After  the initial meetings, various Committees allowed some time to elapse between their subsequent  meetings, at a moment when coordination should, on the contrary, have been strengthened. The  minutes of the meetings reveal the increasing difficulty of obtaining information on the operations  and making them progress, even in cases where the cause of these difficulties has been pinpointed. 3.3.5. As the authority which collates information from the various administrative departments, the  Monitoring Committee plays a significant role in the running of the monitoring system. In this  connection, the programme contracts stipulate that at the end of each quarter a statement of  commitments and payments is to be drawn up by the various persons in charge of the sub-programmes.  A similar statement has to be sent to the Monitoring Committee at the end of each six-month period  showing, for each measure, any changes in relation to estimates and justifying large discrepancies.  Physical indicators of progress and an assessment of the economic and social impact of the  operations should also be included in the monitoring system. 3.3.6. This system, which, thanks to data-processing techniques, should have made it possible for  all persons involved to carry out almost instantaneous monitoring, has only been partly implemented  so far. The computer programmes made available to the regions for monitoring purposes have had to  be adapted in order to take account of local requirements, equipment and organization, which has  delayed or limited their utilization. Moreover, the part of the monitoring that concerns the  physical progress and economic and social impact of the operations has not yet been started and so  nothing has been done, up till now, about the obligation to collect and send data on this subject. 3.4. The rather unreliable nature of the data available3.4.1. With regard to all of the programmes  subject to on-the-spot audits by the Court, the data available, whether acquired manually or by  data-processing techniques, proved to be unsatisfactory. The number and diversity of the measures,  related to the various levels of management, the length of the delays and the periods of  retroactivity and the possibility of amending, to limited extents and under certain conditions, the  choice and contents of the projects to be financed, are all factors that tend to make the data  rather unreliable and inconsistent as regards the subjects covered. 3.4.2. For water supply and road network projects in Central and Eastern Greece, it was not  possible during the Court's on-the-spot audits to compare the data sent by the Monitoring Committee  and the Ministerial Departments responsible with the accounts held by the municipal authorities  concerned, which were supposed to justify them. The same was true of certain categories of  expenditure for the benefit of small and medium-sized undertakings in the same regions. For work of  a continuous or repetitive nature, the volume and duration of the work taken into consideration may  differ from authority to authority or may give rise to estimates that are not justified by  documentary evidence. 3.4.3. Still in Greece, the Court's on-the-spot audits revealed a case where certain sums were  considered to have been paid out, although they were advances paid to a port authority and had  remained unused for over a year at the time of the audit (Port of Chania: 20  Mio drachmas as at 31  December 1986; 29,2  Mio drachmas as at 31 December 1987). For projects in the innovation sector,  the total cost was considered to be public expenditure, for which a reimbursement of 70  % was  borne by the Community, whereas 30  % of the costs had been financed by private beneficiary firms  (Crete: 30  % of 22,9  Mio drachmas for 1986 and 1987. Similar sums were spent for the other  financial years and the other Greek IMPs). In the case of a project for the building and  fitting-out of laboratories, it turned out that a considerable share of the expenditure related to  the running of these laboratories (Crete: 128,7  Mio drachmas out of 344,8  Mio drachmas). In  various Greek IMPs, under the head of expenses, and more particularly 'expenditure in respect of  providing information to the final beneficiaries`, the Court noted the purchase of a radio  retransmitter (3,9  Mio drachmas), car repair costs (0,6  Mio drachmas) and even the granting of  subsidies. In another case, in Italy, an item of investment expenditure (2  000  Mio LIT) in fact  corresponded to a purchase by the regional authorities of a share-holding in an organization with a  view to improving the financial structure. 3.4.4. The documents available at Community level do not make it possible to carry out checks in  the area. As for the Commission's on-the-spot audits, they are very limited. There are no combined  audits of the various administrations, either organized by the Commission's authorizing departments  or by those of the Member States. As of the beginning of 1990 the Commission's Financial Controller  had carried out proper on-the-spot audits of the expenditure charged to Article 551, but none of  the managing departments had done so. Moreover, the responsibilities assigned to the Commission's  Directorates-General for coordinating the IMPs have been greatly altered. In fact, coordination was  entrusted to DG XXII (Coordination of Structural Instruments) until the end of 1988, and has been  the responsibility of DG XVI (Regional Policy) since 1989. 3.4.5. The Court also noted that, for the French IMPs, the expenditure shown as having been  effected at the end of 1988 had actually been calculated by the Commission on the basis of  estimated percentages of the operations. Such methods, combined with the diverse nature of the  situations, the stages in the transmission of documents and their global nature, the shortcomings  of control, the periods which lapse between the time of on-the-spot management and that of the  examination of this management at Commission level, are not conducive to the compilation of  accurate data. 3.5. Additional contribution from the specific budget article3.5.1. The additional contribution  from Article 551, which accounts for almost 40  % of the total Community aid, is an essential  element in the IMP. This is because its complementary nature means it is likely to increase the  integration and efficiency of the measures taken. 3.5.2. About 70  % of the additional contribution (in France and Italy, 95  %) was allocated to  operations which, owing to their nature or the locality, could not be funded by other financial  instruments. The remainder, particularly in Greece, was used to top up aid from one or more Funds,  either to increase the level of assistance or to cover categories of costs other than those  eligible for traditional forms of funding. 3.5.3. When the programme decisions were taken, a certain degree of integration was sought in the  manner in which the instruments were organized. However, at the implementation stage, this aspect  was given less consideration. Article  551 payments, which have so far taken the form of general  advances, were paid independently of the Funds. Furthermore, it was not established that the  advances paid were being properly utilized for measures to be funded by Article  551. In Italy, the  Court's on-the-spot investigations revealed the case of advances (4,9  Mio ECU as at 31 December  1988) granted chiefly for productive investments which had been used mainly for forestry protection  measures. 3.5.4. The increase in subsidy rates, the extension of eligible areas and the watering-down of the  conditions determining entitlement to Community aid also entail risks and may, in particular, go  against the general objective of increasing the concentration of aid. Such changes, of limited  duration, may have a negative effect on how the Funds operate. For instance, in France, aid for  farm modernization, granted against Article 551 appropriations to recipients who did not fulfil the  conditions required by the EAGGF-Guidance Section for the granting of such facilities, is likely to  make the traditional system less attractive, even when the temporary IMP measures have ended. The  result is a situation that is far from homogenous and requires careful attention. 3.5.5. Among the possible uses of the special Article  551 resources, Article 12  (2) of Regulation  (EEC) N° 2088/85 provides for the possibility of 'granting repayable aid for the financing of  investment in the productive sector`. As yet, these provisions have not been implemented. 3.6. Financing difficulties3.6.1. The implementation of the IMPs has encountered significant  financial difficulties. Although Community advances were paid within the normal period of time  following the dates of the decisions, the delay and the retroactive effect of the adoption of the  decisions usually meant that a year, and sometimes even two years, elapsed before the first funds  were received from the Community. Futhermore, the roundabout route by which aid is transmitted at  regional level is generally unreasonably long, often taking more than six months. 3.6.2. In Greece, the implementation of the IMPs took place at a time when attempts were being made  to reduce the national budget deficit and, therefore, when there were severe cuts in funds,  particularly if the annual depreciation of the drachma is taken into account. However, the  additional Community intervention that the IMPs represent requires an increase in the corresponding  national funds allocated to the projects. As things stand at present, the immediate effect of the  implementation of the IMPs in Greece is more like that of a budgetary transfer, and does not result  in any real increase in the structural investment sector. In the period between 1985 and 1988,  Greece's public investment programme only increased by an amount comparable to the depreciation of  the drachma. 3.6.3. Serious financing difficulties also appeared in Italy in regions other than the Mezzogiorno.  This was because there was no clear definition of the source of the non-Community public funds  necessary for the implementation of the IMPs. The regional authorities in question are of the  opinion that the funds are exceptional, additional funds which are to be placed at their disposal  under the national budget. The central authority, on the other hand, is of the opinion that, to a  large extent at least, the funds are to be deducted from the sums usually allocated for the  financing of the regional budgets. 3.6.4. The problem was not settled, nor, apparently, had it even been tackled, when the programmes  were drawn up. It has seriously hampered the launching of operations, given also the delays in the  adoption of the national and regional budgets. The final decision that 55  % should be chargeable  to the regions and 45  % to the State was not reached until the end of 1989. 3.7. The effectiveness of the IMPs3.7.1. One of the objectives of financing by programmes, in  general, and of the IMPs in particular, is the enhancement of the effectiveness of the aid, and  evaluation procedures have therefore been laid down for verifying the results of the measures.  Since the responsibility for the decisions on the operations and projects to be carried out lies  with the national and regional authorities, the action of the Community services is, by  implication, more concerned with, and therefore concentrated on, knowledge of the changes produced  by these operations and projects and on their impact in terms of development. 3.7.2. For each IMP measure, the programme includes at least one rough model of impact indicators.  These are often limited to the physical aspect of what the measure is meant to achieve, but, once  they have been made more specific and added to, they can provide an initial approach to the  assessment of results. In practical terms, however, and as already indicated in paragraph 3.3.6,  the collation of such data has still to be organized and the system is not therefore being applied,  thus depriving the Commission and the administrations in the Member States of an essential means of  appraising the implementation of the operations. 3.7.3. Each IMP also provided for the appointment of an independent assessor, designated by common  agreement by the partners in the programme, whose task it would be to draw up an annual report on  the implementation of the measures and their effects. For the Greek IMPs, the evaluation  authorities were appointed in March, April and May 1989, and for the French IMPs these appointments  were staggered from August 1988 to June 1989. For the Italian IMPs, seven assessors were appointed  in 1989 and a further eight appointments were pending on 31 December 1989. On the latter date, an  initial report was available for the Greek IMPs and for certain French IMPs. 3.7.4. The time lag between the appointment of the assessors and the date on which the programmes  got under way deprived the system of some of its utility, particularly with regard to the  difficulties in the initial period and the measures which had to be taken in good time to allow the  adjustments necessary for the work to continue. In the light of the initial reports, it is clear  that particular attention must be paid to the contents of the documents, so as to make sure that  they are indeed geared to evaluation and are not merely limited to an analysis of the financial  management. 3.7.5. Particularly when carrying out its on-the-spot checks, the Court took pains to examine  whether the programmes were being carried out in conditions which met the objectives which were  laid down. The observations made in this regard indicate that new measures, or those which entail  more innovative re-orientation aspects, often come up against difficulties which may jeopardize the  expected results. Traditional infrastructure operations are making more progress, while the  accompanying measures planned by the integrated approach are marking time. 3.7.6. Major irrigation programmes in Crete were aimed at crop conversion, with a view to reducing  production of olive oil, of which there was a glut on the market, in favour of competitive fruit or  horticultural production which could find better commercial outlets. The water offtakes and  irrigated land examined by the Court were being used mainly for olive groves, which risks producing  the opposite effect to that which the programme set out to achieve. For avocado plantations,  initially estimated at more than 2  000 hectares for the period 1986 to 1992, the forecasts were  subsequently reduced by nearly 40  %; at the end of 1987, the figures achieved were evaluated at  roughly 40 hectares and the prospects continued to be not very encouraging. 3.7.7. Also in Crete, one of the programme measures provided for aid for the construction or  modernization of hotels in areas with tourist potential which were not already overdeveloped.  However, the projects which the Court examined were only occasionally situated in the interior and  contributing to the development of new forms of activity; the majority were located on the coast,  in areas where there was already extremely intense tourist activity, where they risked accentuating  the short-term speculative tendencies concomitant with this type of investment. 3.7.8. In the case of a plant for the processing of oilseeds and oil cake for cattle feed which was  built in Languedoc-Roussillon, the programme laid down that the oilseed for processing ought to be  locally produced, or at least of Community origin. The aim was not to increase imports into the  Community and to avoid competing unduly with the considerable processing capacities which already  existed in the surrounding area, which used mainly imported products as their raw material. At the  time of the Court's visit, there was no prospect of increased oilseed production in the region and,  in fact, there was every indication that the investment could not be used in compliance with the  conditions which were initially laid down. 3.7.9. The measures on behalf of small and medium-sized undertakings include aid for economic  operators to develop new forms of financial relations, such as franchising or factoring. Various  Italian regions have assigned, and even restricted, the implementation of such aid to para-regional  public bodies. Such an initiative may well provide yet more support for the constitution of a  protected sector of financial operations, rather than contributing to the general development of  the market, thanks to increased use by the various financial operators of the new forms of  financial activity that are open to them. 3.7.10. One of the Greek IMP measures for information technologies aimed to set up an IT network  involving several hundred agricultural cooperatives. The programme also provided for the  corresponding training of the staff to use the equipment, with the aid of the Social Fund. At the  cooperative which the Court visited, the equipment was still unused several months after delivery  because the staff had not received the training necessary to operate it, and there were no  immediate plans to provide such training. When informed of this finding, the central authority  responsible for implementation of the measure explained that, in certain cases, in an attempt to  tackle problems of this kind, it had tried to transfer the unused equipment to other bodies which  could make use of it, but that this had led to a legal dispute regarding the ownership of the  equipment. 4. Conclusions4.1. The IMPs have certainly provided a useful framework for  reference, contact and information, and have made the managing departments more aware of the need  to increase the effectiveness of the aid, to give thought to the objectives to be attained and to  make efforts in this direction. 4.2. The programmes bear witness to some effort to ensure organization, complementarity and even  innovation, in order to go further than the straightforward juxtaposition of pre-existing measures.  The integration of the whole of the resources brought into play, so as to increase their  effectiveness, was one of the essential objectives of the IMPs. From this point of view, however,  there has been little change, particularly where the link between the Funds and between the  combination of fund aid and EIB loans is concerned. 4.3. Such inadequacies were not even partially compensated for by starting operations promptly,  since there were substantial delays before the IMPs were implemented. Moreover, the financial  execution was again delayed in 1989 and it should be noted that the duration of implementation  periods is laid down ambiguously and, from certain points of view, in contradictory terms. 4.4. Some of the problems are due to the complexity of the IMP system, since procedures overlap and  the number of programmes and measures is excessive, which would seem to indicate that the  difficulties of implementing the system have been underestimated. The choice of a more restricted  number of measures would have allowed greater concentration of the action and the results would  have been more solidly guaranteed. There would have been all the more call for such a choice since,  according to the Commission's interpretation of the matter, the IMPs are not a substitute for the  management of the various traditional instruments, under which operations are continuing in the  same areas as those concerned by the IMP programmes and entirely independently of them. 4.5. At the implementation stage, the progress expected to be achieved with the IMPs is barely  perceptible to date, since the system laid down has been applied very inadequattely. The follow-up  of operations is slow, and is not performed uniformly and, hitherto, it has not been adequately  monitored by the Commission's managing departments. Substantial progress remains to be made if a  sound knowledge of the operations and projects which are being financed, and in particular of their  exact nature and their location, is to be achieved in good time. 4.6. The system for evaluating the programmes, depending as it does on a sound knowledge of the  operations, still has to be set up and conditions for its satisfactory operation, that is, the  impact indicators and their use and the role of the assessors, have to be established. 4.7. A genuine partnership between the Commission and the regional authorities requires better  definition of their relationships and real cooperation, if differences are to be avoided in the  approach and thinking of the Community and the local management authorities, since such differences  may in time diminish the effectiveness of the Community instruments. 4.8. Nearly five years after the last enlargement of the Community, a significant proportion of the  measures, and all the Italian programmes in particular, are still at the start-up stage, whereas  the IMPs were supposed to contribute to solving the problems linked to this enlargement. 4.9. The essential elements provided for the management of the IMPs, such as monitoring, evaluation  and partnership, are to be found, mutatis mutandis, in the system established by the reform of the  Structural Funds. A prompt solution to the difficulties encountered in implementing the IMPs is  therefore essential if the reform is to succeed. This report was adopted by the Court of Auditors in Luxembourg at the Court  Meeting of 27 September 1990. For the Court of Auditors Aldo ANGIOI President >TABLE>>TABLE>>TABLE  POSITION>THE REPLIES OF THE COMMISSIONPRELIMINARY REMARKThe Commission would take  this opportunity to point out that, as compared with the past, the implementation of the IMPs  represents a qualitative leap forward and an innovation in the structural aid context.The mechanisms employed are designed to ensure transparent management and thus make it possible to  find appropriate solutions to the problems encountered. At the same time they throw light on the  implementation problems affecting the IMPs. The Commission would stress that the IMPs provided an opportunity to try out the approach  officially recommended in the reform of the Structural Funds and that they were initiated before  the new legislative framework was defined and implemented. The experience gained with the IMPs has  enabled the new rules governing the Structural Funds to be adjusted more closely in line with the  problems encountered in that context. The IMPs have thus given invaluable guidance on how to  implement the reform of the Structural Funds. 2. Part One: The IMP decisions2.1. The general situation in respect of IMP  decisions2.1.5. The Commission's examination of the programmes was delayed by the fact that  certain programmes were incomplete and that national and regional correspondents were slow to  answer the Commission's requests for additional particulars. The Commission, having set strict requirements for the quality and innovative character of  programmes, was unable to examine them rapidly in every case. The Commission's decision on the  content of a programme was sometimes taken several months before the completion of the formal  procedures (programme contracts). The regional and national authorities were duly informed of these  decisions, as cooperation on the examination of programmes was extremely close. 2.2. The operational autonomy of the various financial instruments2.2.2     2.2.3. The Commission  takes note of the Court's observation concerning the consequences which the independent operation  of the various financial instruments (as provided for in Article  12 of Regulation (EEC) N°   2088/85) will have for the integration of resources. Despite this drawback, however, the addition  of Article  551 of the general budget has made for a greater degree of integration by reinforcing  or supplementing the measures relating to a particular objective. 2.3. The IMP decisions and the decisions peculiar to each Fund2.3.2     2.3.4. The Commission  would point out that there have been no rules for the coordination of the Funds other than those  laid down for the reform of the latter, and that the points to which the Court draws attention  arise from the normal application of the rules in force. 2.3.5. The IMP rules have not altered the decision-making processes followed for the purposes of  each Fund and Community instrument, although the provisions laid down for the reform of the Funds  do apply to the second phase of the IMPs. As regards the failure to devise more unified appraisal  and approval procedures, the Commission would point out that: - the appraisal of each programme was the responsibility of the supervising department, - coordination structures (IMP Technical Group of the ICG) have been established, - each programme was negotiated jointly with all the departments concerned, - the measures financed by the various Funds were presented in a standardized form. IMP operations, although not tailored to individual projects or beneficiaries (the approach is  based on the programme as a whole), are nevertheless identified by the ESF and the EAGGF Guidance  Section irrespective of the actual form of presentation. The Monitoring Committees also make  regular checks on the physical and financial implementation of the operations covered by a given  measure, thus making it easier to distinguish between IMP and non-IMP operations. 2.4. Growth of aid to assist the IMP regionsThe Commission considers that the progress reports on  the IMPs and the aid provided by each of the Structural Funds, supplemented where necessary by the  information available to its departments, make it possible to assess the development of Community  structural aid to the IMP regions. It takes the view that, quite apart from any resources made available under Article  551, an  increase in the aid to the IMP regions, if greater than the increase in the Structural Funds for  the Community of Ten, would have adversely affected transfers from the Funds to other less  prosperous or priority regions, and that this would have been contrary to Article  11 of the IMP  Regulation. As regards Greece, the Commission notes that aid from the Structural Funds has been increasing more  rapidly than the overall trend for the said Funds, despite the Greek stabilization plan for the  period 1985-1987, which influenced the level of national expenditure and, consequently, the use  made of Community appropriations. 2.5. Preparation of the programmes2.5.1     2.5.6. The financial adjustments made during the  preparation and negotiation of the programmes resulted in some delays and discretionary decisions.  The Commission would point out, however, that the assessment of the programmes involved not only  financial adjustments but also a clearer definition of objectives, and the identification of those  measures which had the merits and timing best suited to achieve the said objectives. It was essentially on this basis that the overall financial allocation was fixed for each IMP. If  an indicative ceiling had been set for each programme from the outset, as advocated by the Court in  paragraph  2.5.6, this would have restricted the qualitative scope of the programmes. Their overall  character was maintained by concentrating the available resources on certain priorities and on  certain geographical areas. 2.5.7     2.5.8. The approval of programmes was backdated beyond the date of submission only in the  case of certain measures financed by the ERDF and in accordance with the provisions of the  Regulation concerned. In the other cases, retroactive approval to cover the period between  submission and adoption was in accordance with the Regulation (and in particular the provisions of  Article  12 in the case of the Regulations relating to the EAGGF Guidance Section's 'Mediterranean  package`) and had no significant financial impact, since the Commission ensured that the  instalments concerned were duly reduced, while still compatible with the actual launching of the  programmes. The Commission had no choice but to comply with the complicated provisions of the IMP Regulation  adopted by the Council, even if some of these rules, particularly those relating to appraisal and  implementation, had undesirable consequences for the financial year in question. At the Commission's instigation the second phase of the IMPs will be adopted in accordance with  harmonized procedures which reflect the reform of the Funds. 2.6. The concept of the interaction and complementarity of the aid2.6.2. The Commission notes that  the Court acknowledges the endeavours made at Community level and by the central authorities of the  Member States to improve arrangements and to introduce new aspects. It would point out that the  various meetings, discussions and briefings have helped to bring about such improvements, both at  management level and elsewhere. 2.6.3     2.6.4. The IMPs have not encompassed all the other forms of aid for the regions concerned  but have rather, given their financial limitations, represented one form of aid granted alongside  the other traditional types of assistance provided by the Structural Funds and the Community  instuments. As regards the cases specifically mentioned by the Court, it should be pointed out that  Regulation (EEC) N°  815/84 relates to the construction of vocational training centres for the city  of Athens and improvements to psychiatric hospitals not covered by the IMP objectives. The STAR and  Valoren schemes were designed to achieve specific sectoral objectives which do not overlap with the  IMPs. As a rule, the IMPs have mentioned, as related measures, any other schemes financed through  the normal operation of the Funds and helping to achieve the objectives of the IMPs themselves. The  Commission has taken every precaution to ensure the complementarity of the various aids whilst  guarding against any duplication. 2.6.5     2.6.6. The integrated approach does not rule out the pursuit of sectoral objectives, but  for the purposes of the programmes such objectives have been redefined (assistance for financial  infrastructures) and tailored to local requirements (definition of core areas). It is true that  enhancing the complementarity of aids calls for a change of mentality. In the Commission's opinion,  this would be facilitated by a single decision-making process and by the coordination of regional  and national work on the preparation of programmes, with a view to ensuring consistency between  resources and priorities. Such consistency has been difficult to achieve because of the large  number of decision-taking authorities and the fact that each managing department has its own  specific areas of competence. 2.7. Aid and loansThe forecasts for the utilization of EIB loans were examined, in respect of each  individual measure, in the course of the appraisal of the programmes. Wider recourse to the EIB is  hampered by practical difficulties arising from the attractiveness of EIB loans, the covering of  exchange risks and interest-rate subsidies on national loans. Moreover, the availability of EIB  loans (for which the IMP Regulation merely forecast a figure) would appear to have been  overstated. There are several reasons for the lack of interest in loans under the IMP arrangements: - investments on a particularly small scale, - specific nature of IMP programmes, which are largely concerned with certain types of local  development schemes (vocational training, counselling services for small businesses, etc.) where  EIB assistance would be difficult to handle, since genuinely eligible investments cannot always be  identified, - nature of the projects financed, which usually necessitate substantial budget subsidies. 2.8. Periods specified for carrying out the programmes2.8.4     2.8.5. The maximum duration  referred to in Article  1 of Regulation (EEC) N°  2088/85 relates to the scheduled duration of the  programme. Thus, the last budget year for which there is an allocation under the Structural Funds  and/or Article  551 is 1992, in accordance with Article  11 of the said Regulation. The 1992 time  limit does not therefore apply to eligible expenditure or to commitments and payments. Under  Article  19 the deadline of 31  December 1993 is the final date for commitments for expenditure,  whilst payments will be made under the rules governing the Funds and under the Financial Regulation  in force. The Commission has made it known that it does not intend to extend the validity of the  programmes. As regards the duration specified in the programme contracts, this relates to the  arrangements for monitoring the IMPs. 2.9. Experience acquired from IMP preparatory pilot schemesThe Commission has already explained to  the Court its position as regards the preparatory schemes. It would reiterate the following  points: (a)the pilot schemes must not be confused with the IMPs themselves since they were trial runs for  the integrated approach and lacked any ad hoc legal basis; (b)on the basis of the experience thus gained, specific steps were taken to remedy, as far as  possible, the imperfections noted in the course of the pilot schemes namely: - the creation of an IMP Technical Group under the umbrella of the Interdepartmental Coordination  Group, - the establishment of the Monitoring Committee and its machinery (monitoring and assessment), - the establishment of a Unit in DG XX with responsibility for the control of IMPs, - stricter and more transparent management of programmes. As regards the gathering and processing of financial data in particular, the Commission has  established a system of monitoring at local level and has recently developed a system for the  exchange of information to keep track of IMP operations and thus make for coordinated management. As regards new programmes and the reform of the Funds, efforts are being made to improve the  provision of information, drawing on the experience gained so far (pilot schemes and IMPs),  including: - the establishment of an interdepartmental data-exchange system, for which responsibility is borne  by the supervisory department. This computerized system will provide the departments concerned with  access to all the data concerning each aid operation, - the establishment of coordination arrangements for each Member State. This is the responsibility  of the supervisory department, which takes all the necessary precautions in respect of  environmental matters, public contracts, etc. 2.9.5. The Commission cannot agree with the Court's conclusion that little or no account was taken  of the difficulties encountered as a means of improving the situation. As regards the Monitoring  Committees, the Commission would refer the Court to paragraph 3.3 below. 3. Part Two: the initial phase of IMP implementation3.2. The incidence of  commitment and payment procedures3.2.2     3.2.4. As regards the commitment and payment  procedures, it should be pointed out that the instalments already paid were for the first two years  of the programmes' implementation (1986 and 1987) and involved relatively small amounts. The Commission would disagree with the Court's remarks concerning the procedure for the commitment  of annual instalments and would point out that, when approving programmes, it publicly announces  the level of aid which it is setting aside for each programme and the fact that it intends to  commit appropriations for this purpose. After the initial commitment on the basis of the approval  decision, subsequent commitments are made at administrative stages corresponding to the progress  made on implementing the programmes. At national level, however, some difficulties have cropped up  because of budgetary procedures which do not always ensure that the national contribution continues  to be made available from one year to the next. 3.2.5. As regards the anomalies in the passing of commitments to the accounts, the Commission would  point out that the rules for the reform of the Funds do not affect the continuation of multiannual  operations approved before the reform came into force. Consequently, operations financed by the  Funds in areas eligible under Objectives  1, 2 and 5b after 1  January 1989 are charged to the  overall budget for these objectives, since the contribution of the Funds to the implementation of  the IMPs does not represent an additional burden. Any operations carried out in areas which are no  longer eligible are financed as transitional measures. 3.3. The difficulties encountered by the Monitoring Committees and in the setting-up of the  monitoring system3.3.3     3.3.4. When setting up the Monitoring Committees, the Commission was  not trying to superimpose a new administrative structure or to alter the existing structure. The  composition of the Committees and the powers with which they were endowed have made them invaluable  as steerage instruments which not only provide the necessary impetus but also have the power to  take decisions and adjust programmes within certain limits. At the Commission's instigation and in  the context of technical assistance, specific resources have been made available to these  Committees so that they can perform their tasks. These include the computer equipment for the  secretariat of each Committee, a system of monitoring and installation assistance, and the joint  designation of a body for the independent assessment of programmes. In addition, the Commission has  taken steps to broaden the role and the powers of the Chairman and members of the Monitoring  Committees (particularly in Greece), to provide them with training and to keep the final  beneficiaries informed (back-up). 3.3.5     3.3.6. The computerization of the monitoring systems, although well advanced, will take  some time, and the resulting difficulties are of course compounded by the backwardness of the IMP  regions. The introduction of computer techniques has met with some resistance, since they represent an  innovation and will ensure the transparent management of funds. 3.4. The rather unreliable nature of the data available3.4.1     3.4.4. The Commission notes that  the on-the-spot audits revealed discrepancies between the documentary evidence provided by certain  Monitoring Committees and the actual measures implemented. The Commission would point out that the  checks made on the IMPs are at least as numerous as those on aid from the Funds. In the case of  Article  551, a special control unit has been set up within DG XX and has carried out numerous  audits which are taken into account by the administrative departments with a view to improving the  quality of the system. 3.4.5. The Commission would stress that although, in the context of the report, certain data  relating to the French IMPs were calculated on the basis of estimated percentages of operations,  these date have no financial or accounting significance. The data in question were subject to  adjustment at a later date. 3.5. Additional contribution from the specific budget article3.5.3. In the case mentioned here,  the use of aid from Article  551 to finance forestry protection operations eligible for EAGGF  assistance was the result of an administrative error at national level; the IMPs provide for a  recovery procedure to deal with such situations. In addition, the programmes include adjustment  clauses so that changes can be made if the progress on the implementation of the various measures  does not keep pace with the original financial estimates. 3.5.4     3.5.5. Increasing the rate of subsidy makes it possible to adjust the aid according to  the priority of the measure concerned and the financing capabilities of the Member State and the  sponsor. Thus, the subsidy rate may vary from 10 to 70  %. The Commission considers that the 'watering down of the conditions determining entitlement to  Community aid` allows for the inclusion of measures which are complementary and contribute more  directly towards the achievement of a given objective. The Commission and its partners have found,  for example, that the diversification of agricultural crops sometimes calls for the modernization  of small farms and for marketing and promotion schemes which would not be eligible for aid from the  EAGGF Guidance Section. In such cases, aid from the additional budget heading (Article  551) has made for the optimum  integration and enhanced effectiveness of measures contributing towards the achievement of  redeployment objectives. The reform of the Structural Funds makes provision, in any case, for the modulation of subsidy  rates and for the relaxation of the eligibility conditions. 3.6. Financing difficultiesOn several occasions the Commission, concerned at the delays in  implementing a number of IMPs, has reminded the national authorities concerned of their obligations  under the IMP contracts, in which the Member States undertake to adopt the necessary administrative  and financial measures to facilitate the effective and prompt implementation of the IMPs. The Commission would also point out that the additionality question did not specifically arise  until after the adoption of the rules for the reform of the Funds. As regards the 'roundabout route` (3.6.1), the Commission would recall the steps which it has taken  to improve the transmission of aid and the operation of the said routes: - in Italy and France, recourse to the use of such mechanisms as revolving funds or cash reserves, - transcription of each IMP measure into the budget for the public works programme in Greece and  into the regional budgets in Italy, - establishment, with the French Ministry of the Interior of a budget heading to ensure the rapid  transfer of aid to the regions, - numerous approaches to the Italian authorities, even at the appraisal stage, concerning the  availability of the national contribution. 3.7. The effectiveness of the IMPs3.7.1     3.7.2. The Commission takes the view that the impact  of the IMPs in terms of development cannot be assessed until three to five years after the  completion of the programmes. On the other hand, programmes are subject to ongoing assessment  during their implementation, essentially for the purposes of identifying discrepancies between the  schedule and the actual rate of implementation and suggesting any corrective measures which need to  be taken. Alongside the monitoring system, which operates on the basis of certain physical and financial  indicators, a system of ongoing assessment has gradually evolved. It represents a significant new  breakthrough in the management of the IMPs and there is considerable evidence pointing to its  usefulness in the effective implementation of the IMPs. 3.7.3     3.7.5. The appointment of an independent assessment body in the structural policy context  called for a change of mentality at both national and local levels. The specialized bodies in  question are appointed following the issue of public invitations to tender. As regards the reports, the Commission took the initiative, once the first documents were  available, of holding a seminar in each country to work out the methods of assessment to be used. 3.7.6     3.7.10. The Commission can provide the full facts and figures concerning the five  measures in question. Generally speaking, the Court's findings should also be placed in a wider  context, given that the projects concerned are geared to the achievement of objectives scheduled  over a seven-year perod. It is only in the longer term that it will be possible to pass any final  judgement on whether these measures were justified and consistent with the objectives of the  programme. 4. ConclusionsIn addition to the answers given to the various points raised by  the Court, the Commission wishes to make the following observations. Like the Court, the Commission is concerned by the substantial delays affecting the implementation  of several IMPs, particularly in the Mezzogiorno. It is taking the steps which it deems appropriate  to improve this situation. As regards the remarks made by the Court in paragraph  4.9, the Commission must draw attention to  the following points: The IMPs introduced such ideas as partnership, programming, monitoring and assessment, which were  then adopted for the purposes of the reform of the Funds. Admittedly, the ambitious and innovatory  approach followed by the IMPs and the introduction of more transparent and rational management have  given rise to certain difficulties because of the time needed to change administrative attitudes at  Community, national and regional levels. The Commission would stress that the IMPs represent a  break with tradition in the provision of aid at these various levels, and that the IMPs were  launched without a legislative basis as specific or advanced as that laid down for the reform of  the Funds. The Commission feels, however, that the solutions which are gradually being found to the  difficulties encountered will help with the implementation of the IMPs and will facilitate the  reform of the Funds. These solutions have included additional assessment procedures (ex-ante,  ongoing and ex-post), monitoring at two levels (Community support frameworks and operational aid),  the coordinated management of structural aid, the exchange of information between management  departments, and the development of more sophisticated management systems for the DGs administering  the Funds. It should also be mentioned that the provision for monitoring, assessment and  partnership has been placed on a firmer legislative footing. Lastly, the Commission would point out that the principle of subsidiarity, to which it is  particularly attached both for political reasons and because of its economic effectiveness, calls  for a definition of the role and responsibility of each partner. The implementation of the  programmes is the responsibility of the national and regional authorities and consequently, the  Commission cannot take the place of these authorities in the event of any failures or shortcomings  which may affect the achievement of the objectives or the implementation of the measures originally  planned. The procedures now in use (such as the monitoring and assessment procedures) draw  attention to these difficulties, with the result that those in charge of the implementation of  programmes are reminded of their responsibilities. () Council Regulation (EEC) N° 2088/85 of 23 July 1985, OJ L 197, 27.  7.   1985, p.  1.  () Resolution of 12 June 1985 setting out the opinion of the European Parliament on the proposal  from the Commission of the European Communities to the Council for a regulation instituting  integrated Mediterranean programmes (section 18), OJ C 175, 15.  7.  1985, p. 261.  () Council Regulations (EEC) Nos 3300/86 and 3301/86 of 27 October 1986, instituting the STAR and  Valoren programmes, OJ L 305, 31.  10.  1986, p.  1 and p.  6.  () Council Regulation (EEC) N° 815/84 of 26 March 1984 on exceptional financial support in favour  of Greece in the social field, OJ L 88, 31.  3.  1984, p.  1.  () Special report N° 2/88 on the integrated approach to Community financing of structural measures,  OJ C 188, 18.  7.  1988, p.  1.  () Special report N° 2/86 on the ERDF's specific Community regional development measures (non-quota  measures), OJ C 262, 20.  10.  1986, paragraphs 2.11 to 2.13.