PROPOSAL FOR A COUNCIL REGULATION (EC) No ....... on financial and technical cooperation with the Occupied Territories
Date: 1994-01-10
Institutions: European Commission
Subjects: EU financing, Palestine question, economic development, occupied territory, social development, technical cooperation

COMMISSION  OF  THE  EUROPEAN  COMV1UNITIES 

C0MC93) 7 19f i naI 

(94)002(SYN) 

(9A)003(SYN) 

Brussels,  10 January  1994 

PROPOSAL FOR A 
COUNCIL REGULATION  (EC) No 

(94)002(SYN) 

on financial and technical cooperation with the Occupied  Territories 

PROPOSAL FOR 
COUNCIL REGULATION  (EC) No 

(94)003(SYN) 

on financial and technical cooperation with the Occupied  Territories 
and amending Council Regulation  (EEC) No 1763/92 concerning  financial 
cooperation  in respect of all Mediterranean non-member  countries 

(presented by the Commission) 

A 

EXPLANATORY  MEMORANDUM 

In view of the progress made  in the peace process, it has been agreed to 
step up considerably  Community  aid to the Palestinians  in the form of a 
five-year programme, through which will be channelled  ECU 250 million  in the 
form of grants.  This money will come from the Community  budget and will be 
supplemented  by an equivalent  amount  in European  Investment  Bank  loans from 
own resources, which will be underwritten by the Community.  The Commission 
notes that the subject of Community  support  for the Middle East peace 
process  is addressed  in its communication of 29 September  1993 to the 
Council and Parliament  (COM 458/93  final). 

The Commission has attached  a proposal  for a Regulation  laying down the 
detailed  arrangements and the rules for the administration of aid  financed 
by the Community budget. 

Furthermore, the arrangements  for "horizontal" financial  cooperation to 
implement the new Mediterranean policy made provision  for appropriate 
operations  in the Occupied  Territories.  The Commission  has therefore drawn 
up a proposal  for a Regulation amending Regulation  (EEC) No 1763/92 on 
financial  cooperation  in order to extend  its application to the Occupied 
Territories.  The Regulation provides  for a five-year programme  (1992-96) 
with  financing  from the Community budget and EIB  loans. Some loans 
(environment projects) qualify  for interest-rate subsidies. 

Proposal  for a 
Council Regulation  (EC) No 

(94)0Q2(SYN) 

on financial and technical cooperation with the Occupied  Territories 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal  from the Commission, 

In agreement with Parliament, 

Whereas, having  regard to the greater requirements that will be generated  in 
the territories of the West Bank of the Jordan and the Gaza Strip, 
hereinafter  referred  to as the "Occupied  Territories", as a result of recent 
developments  in the Middle East peace process, new measures  in the form of 
economic and social cooperation  should be implemented  in the said 
Territories  in order to foster sustainable economic and social development, 
taking account of the experience acquired by the Community  as a major 
provider of aid to the Palestinian people; 

Whereas to this end there should be a five-year programme  (1994-98); whereas 
this programme  should be implemented with  financing  from the Community 
budget  in the form of grants; 

Whereas it is necessary to lay down the detailed  arrangements and rules for 
administering the operations financed  from the budget, 

HAS ADOPTED THIS REGULATION, 

Article 1 

The Community  shall  implement  financial and technical  cooperation with the 
Occupied Territories under a five-year programme  (1994-98) with the aim of 
aiding their sustainable economic and social development. 

Article 2 

1. The priority areas for projects and measures  implemented  under the 
programme referred to in Article 1 shall be: 

infrastructure, production, urban and rural development, education, 
health, the environment, services, foreign trade, and the setting-up and 
improvement of  institutions necessary  for the proper working of the 
public administration. 

3 

2. Community  aid may be given  for investment projects, feasibility studies, 
technical  assistance and training. 

3. Community  financing  for operations covered by this Regulation  shall be in 
the form of grants. 

Article 3 

The aid referred  to in this Regulation may be combined with European 
Investment  Bank financing  from own resources and may used  for cofinancing 
with Member States, non-member countries  in the region, multilateral bodies 
or the Occupied Territories themselves.  Wherever possible, the Community 
nature of the aid shall be preserved. 

Article 4 

1. Financing  decisions on projects and operations under this Regulation 
shall be adopted  in accordance with the procedure  laid down  in Article 5. 

2. Financing  decisions on overall allocations  for technical  cooperation, 
training  and trade promotion  shall be adopted  in accordance with the 
procedures  laid down  in Article 5. 

The Commission shall  inform the Committee referred  to in Article  5 of the 
use made of these overall allocations. 

3. Decisions amending decisions adopted  in accordance with the procedure 
provided  for in Article 5 shall be taken by the Commission where they do not 
entail any substantial  amendments or additional  commitments  in excess of 20% 
of the original commitment. 

Article 5 

1. The Commission  shall be assisted by the MED Committee  set up under 
Article 6 of Council Regulation  (EEC) No 1762/92 of 29 June 1992 on the 
implementation of the protocols on financial and technical  cooperation 
concluded by the Community with Mediterranean non-member countries. 

2. The Commission representative  shall submit to the Committee a draft text 
setting out measures to be taken.  The Committee  shall deliver  its opinion 
on the draft within a time-limit  set by the Chairman taking  into account the 
urgency  of the matter.  The opinion shall be delivered  by the majority  laid 
down  in Article  148(2) of the Treaty  in the case of decisions  adopted by 
the Council on a proposal  from the Commission.  The votes of the 
representatives of the Member States within the Committee shall be weighted 
in the manner  set out  in the Article referred to above.  The Chairman shall 
not vote. 

3.  (a)  The Commission  shall adopt the proposed measures  if they  are in 

accordance with the opinion of the Committee; 

M 

(b)  If the proposed measures are not  in accordance with the opinion of 

the Committee, or  if no opinion  is delivered, the Commission shall, 
without delay, send the Council a proposal on the measures to be 
taken.  The Council shall act by a qualified  majority. 

If the Council has not acted within three months  from the date on 
which the matter was referred to it, the proposed measures shall be 
adopted by the Commission. 

Article 

1. The Commission shall take stock of the implementation of cooperation 
pursuant to this Regulation and report to Parliament  and the Council once a 
year. 

2. The Commission  shall evaluate the main projects completed  in order to 
establish whether the objectives  fixed during the appraisal of these 
projects have been achieved  and to establish guidelines  for making  future 
aid more effective.  These evaluation reports shall be sent to the Member 
States. 

Article 7 

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

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

For the Council 
The President 

r 

PROPOSAL FOR A 
COUNCIL REGULATION  (EC) No 

-*r:g- 

(94)003(SYN) 

on  financial and technical cooperation with the Occupied  Territories 
and amending Council Regulation  (EEC) No 1763/92 concerning  financial 
cooperation  in respect of all Mediterranean  non-member  countries 

THE COUNCIL OF THE EUROPEAN UNION 

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

Having regard to the proposal  from the Commission, 

In agreement with Parliament, 

Whereas Council Regulation  (EC) No 
and technical cooperaion with the territories of the West Bank of the Jordan 
and the Gaza Strip, hereinafter  referred to as "the Occupied Territories"; 

established  a programme of  financial 

Whereas, with a view to promoting the economic and  social development of the 
Occupied  Territories on a sustainable basis and  in view of the considerable 
requirements  likely to be generated by recent developments  in the Middle 
East peace process, this programme should be supplemented  by  additional 
measures, namely those provided  for in Council Regulation  (EEC) No  1763/92 
concerning  financial cooperation  in respect of all Mediterranean  non-member 
countries;* 

Whereas the application of the said Regulation  should be extended  to cover 
the Occupied Territories, 

HAS ADOPTED THIS REGULATION: 

Council Regulation(^EC) No 1763/92 shall apply to the Occupied Territories. 

Article 1 

Article 2 

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

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

1  OJ L 181, 1.7.1992, p. 5. 

For the Council 
The President 

<r 

FINANCIAL  STATEMENT 

1.  TITLE OF OPERATION 

Financial  assistance to the West Bank and Gaza 

2.  BUDGET HEADING: 

Article B7-406 

3.  LEGAL BASIS: not applicable 

4.  DESCRIPTION OP OPERATION: 

4.1  General objective 

Community  support for the Middle East peace process. 

4.2 

Period  covered 

1994 - 1998 

5. 

CLASSIFICATION OF EXPENDITURE 

5.1 

Non-compulsory expenditure 

5.2 

Differentiated  appropriations 

6.  TYPE OF EXPENDITURE OR REVENUE 

(a)  Financing 

-  100% grant 
- Possible cofinancing with EIB, Member States, non-member 

countries of the region and multilateral  bodies 

(b)  Terms and  conditions 

Selection of projects and operations  in agreement with relevant 
Palestinian organizations. 

(c)  Any changes  in the level of revenue 

- The proposed  operation does not  involve any change  in revenue. 
- There  is no provision  for reimbursement. 

7.  FINANCIAL  IMPACT 

7.1  Method of calculating total cost of operation 

The amount proposed  for commitments takes  into account past 
experience, obvious needs and absorptive capacity of the 
institutions concerned.  It is also the expression of the 
Community's commitment to step up its support  for the Occupied 
Territories  in line with the declaration of the Strasbourg 

? 

European Council of 7 and 8 December  1989 and the guidelines 
issued by the informal meeting of Foreign Ministers at Aeden 
Biesen on  11-12 September 1993. 

7.2 

Itemized breakdown of cost  in ECU million 

BREAKDOWN 

Budget 
1994 

Budget 
1995 

Budget 
1996 

Budget 
1997 

Budget 
1998 

Total 

50 

50 

50 

50 

50 

250 

The  amounts are expressed  in current ecus. 

7.3 

Indicative schedule of  appropriations 

Budget 
1994 

Budget 
1995 

Budget 
1996 

Budget 
1997 

Budget 
1998 

Total 

Commitment  appropriations 

50 

50 

50 

50 

50 

250 

Payment  appropriations 

1994 budget 

1995 budget 

1996 budget 

1997 budget 

1998 budget 

Total 

30 

15 

5 

PM 

PM 

50 

25 

15 

10 

PM 

50 

25 

15 

10 

50 

25 

15 

40 

35 

35 

30 

40 

45 

50 

60 

225 

s 

8.  FRAUD PREVENTION MEASURES PROVIDED FOR IN THE PROPOSED OPERATION 

Standard Commission  checks 

9.  COST-EFFECTIVENESS  ANALYSIS 

9.1 

(a)  Specific  objectives 

The  aim  of  the  operation  is to  improve  the  living  conditions 
of the Palestinian population  and to support the peace process 
in  the  region  by  financing  investment  and  operating  costs  in 
the  following  areas:  infrastructure,  production  (agriculture, 
fisheries,  industry), services  (incl. tourism),  foreign trade, 
urban  and  rural  development,  health,  the  environment, 
institutional  and  administrative  development,  training  and 
education. It also covers the technical assistance required to 
implement  aid  of  this  type  and  the  cost  of  appraising  and 
monitoring projects. 

(b)  Target  population 

The aid  is for the Palestinian population of the West Bank and the 
Gaza Strip.  It will be implemented  by a variety of bodies: 
chambers of commerce, cooperatives, specialized  institutions, etc. 

^•2  Grounds  for the operation 

9.2.1 

Grounds or need  for Community  action  (subsidiarity) 

The Community  needs to step up its long-standing efforts to aid the 
Palestinian people by throwing  its weight behind the Middle East 
peace process.  The Community  has also acquired  unequalled 
experience as a result of  its past aid. 

9.2.2 

Approach  chosen 

Spin-off effects: the aim of the operations  financed  is to develop 
and  strengthen economic  and  institutional  autonomy, thereby 
reducing the Territories' dependence on external  financing. 

-  Multiplier effects  (ability to mobilize other  sources of  finance): 
the effectiveness of operations under this budget heading  could be 
further  increased by the boost they will provide to the economy of 
the Territories, so attracting  local and  international capital. 
Coordination with other donors will redound to the benefit of the 
operations  financed under this budget heading. 

Js 

9.2.3 

Grounds  for choice of target population  and proposed  level of 
expenditure 

The aim  is to provide sufficient aid to a population  not covered by 
the cooperation  agreements with  neighbouring  countries to achieve 
the overall objective, namely Community  support  for the peace 
process. 

9.2.4 

Main  factors of uncertainty  that may  affect  the results of the 
operation 

The political situation  is very  uncertain. 

9.3 

Monitoring  and evaluation of the operation 

9.3.1 

Performance  indicators  selected 

Performance  indicators have been  set  for each project  (e.g.: 
increase  in agricultural production  and  in the degree of self-
sufficiency  in food,  level of exports by the territories 
concerned). 

9.3.2 

Details and  frequency  of planned  evaluations 

The main  sectors  financed will be subject to annual  evaluation. 

9.3.3 

Assessment  of the results obtained 

Results  so far show that the Community's  previous operations have 
slowed down the social and economic decline. 

9.4 

Consistency  with  financial  programming 

The purpose  is to help achieve economic objectives  and to promote 
political  stability  in the region. 

ISSN 0254-1475 

COM (93) 719 final 

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Catalogue number : CB-CO-93-770-EN-C 

ISBN 92-77-63825-7 

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