Amended proposal for a COUNCIL REGULATION (EC) on financial and technical measures to support the reform of economic and social structures in Mediterranean non- member countries and territories
Date: 1996-03-25
Institutions: European Commission
Subjects: Mediterranean third countries, economic development, financial cooperation, free-trade area, social development

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  25.03.1996 
COM(96)  113  final 

95/0127  (CNS) 

Amended  proposal  for  a 

COUNCIL  REGULATION  (EC) 

on financial  and technical measures to support the reform of economic  and social 
structures in Mediterranean non-member countries and territories 

(presented  by  the  Commission  pursuant  to  Article  189  a (2) 
of  the  EC-Treaty) 

EXPLANATORY  MEMORANDUM 

1. 
On  14 December  1995 Parliament adopted 22 amendments under the consultation 
procedure  concerning  the  proposal  for  a Council  Regulation  on  financial  and  technical 
measures  to  support  the  reform  of  economic  and  social  structures  in  Mediterranean 
non-member countries and territories. 

The  Commission 

1. 
Parliament's amendments as follows: 

therefore  presents  an  amended  proposal 

incorporating 

Amendments 
adopted by the 
European 
Parliament 
Amendment 33 
(  1 ° whereas, 
preamble) 
Amendment  1 
(third whereas) 
Amendment 2 
( new third bis 
whereas) 
Amendment 4 
(14° whereas) 
Amendment 7 
(15° whereas bis 
new) 

Amendment 8 
(Article  1  para 2) 
Amendment 9 
(Article  1  bis) 

Amendment 34 
(Art 2, para  1) 

I Commission  position 

Modify:  should be added after the 5° 
preamble 

Reject: the reference to human rights also 
covers ethnic and religious minorities 
Reject: there should be no link with 
accession negotiations and implementation 
of cooperation measures 
Reject: the pluriannual nature of MEDA 
cannot be reduced to budgetary aspects 
Modify:  replace with "Whereas relations 
with third countries should pursue the 
principles referred  to in the Commission's 
Communication on "The inclusion of 
Respect for Democratic Principles and 
Human Rights in Agreements between the 
Community and Third Countries".  This 
preserves the spirit of the amendment but 
avoids a reference to other articles in the 
TEU which may contradict the legal basis 
of the Regulation 
Accept 

Reject: The Regulation provides the 
necessary mechanisms to suspend measures 
in the case of breaches of human rights and 
rights of ethnic and religious minorities and 
not too much visibility should be given to 
this delicate issue 
Accept 

I 

1 

; 

: 

:  : 

——  ~——"--—~——— 

Amendment  12 
(Article 2 para 2) 

Amendment  13 
(Art 2, para 3) 

Amendment  14 
(Article 2, para 4, 
third indent) 

Amendment  15 
(Article 2, para 5) 
Amendment  16 
(Art 2, para 8) 

Amendment 26 
(Article 2, para 8) 

Amendment  17 
( Art 3, para 2 bis) 

Amendment  18 
( Art 9) 

Amendment  19 
(Art  10, para 3) 

Accept 2° indent 
Accept 4° indent 
Reject  6° indent because this refers to a 
trade measure which concerns the 
Association Agreements, not the 
Regulation 
Reject  2° indent because self-sufficiency  in 
food is not an appropriate objective given 
scarce water resources and growing trade in 
agriculture 
Accept indents 3° to 11° 
Reject  12° indent because trade in human 
beings is not widely recognised to be a 
problem specific to the Mediterranean 
Modify:  replace with "other regional 
activities including the Euro-Arab 
Dialogue" because this gives more 
flexibility 
Accept 

Reject: The existing text provides an 
effective  mechanism for suspension of 
cooperation in case of abuses of human 
rights, as appropriate for an internal 
Regulation 
Reject: The institutional equilibrium 
should be maintained; the Commission may 
already transmit the requests of Parliament 
by using Art  138b of the TEU 
Reject:  Such an evaluation is appropriate 
in the context of the annual evaluation. 
The Commission is committed to regularly 
informing the relevant Committee of the 
Parliament on the implementation of the 
Regulation. 
Reject:  no fixed country  financial 
allocation is to be determined because the 
MEDA programme foresees more 
flexibility  than the old financial  protocol 
system.  Indicative country allocations will 
be used for internal programming purposes 
and will be based on population, absorption 
capacity and progress in negotiations 
concerning the establishment of an 
Association Agreement. 
Reject: the comitology proposed by the 
Commission provides the necessary 
flexibility 

V\ 

11 

I 

Amendment 20 
(Art  10, para 6) 

Amendment 21 
(Art  14, para  1) 

Amendment 22 
(Art  14, para 2 bis 
new) 

Amendment 27 
(Art  14a (new)) 

1 

1 
Reject: The MED Committee is the 
appropriate forum for discussion of 
technical matters concerning routine project 
implementation.  The Commission is 
committed to regularly informing the 
relevant Committee of the Parliament on 
the implementation of the Regulation 
Reject:  implementation of measures to 
strengthen democracy will be evaluated. 
The Regulation is not the appropriate basis 
for judging the necessity of excluding 
certain Mediterranean partners; this should 
be decided in the framework  of the bilateral 
agreements 
Reject: the annual evaluation will be 
conducted after the termination of the 
calendar year whereas the budget proposal 
is submitted the year before; thus the 
proposal is not feasible. 
Modify:  Highly detailed information on 
contracts is very costly to produce in terms 
of human resources and is only interesting 
to the operators concerned with 
implementation and para 1  should read, 
"The results of invitations to tender shall be 
published in the Official  Journal of the 
European Communities. Twice a year the 
Commission shall submit to the Committee 
referred  to in Article  10 detailed and 
specific  information  on the contracts 
concluded in furtherance  of MEDA 
programmes and projects." 

Amendment 24 
(Art  16, 2° line new)  1999, the Council will proceed to re 

Accept paragraphs 2, 3, 4 and 5. 
Modify:  replace with "Before the 30 June 

examine the Regulation.  To this end, the 
Commission will submit before 31 
December  1998, an evaluation report 
containing proposals concerning the future 
of the Regulation and, as necessary, 
modifications  to the Regulation." 

The amended proposal  is attached. 

it 

Amended  proposal  for  a 

COUNCIL  REGULATION  (EC) 

on financial  and technical measures to support the reform of economic and social 
structures in Mediterranean non-member countries and territories 

The Council of the European Union, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 235 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas the stability  and prosperity  of the Mediterranean  region  require a new phase of 
relations  to be established  which  foresee  the establishment  of  a free  trade  area between 
the  European  Community  and  Mediterranean  non-member  countries  and  territories  as 
well  as  the  associated  applicant  countries  Cyprus  and  Malta  and  a customs  union  with 
Turkey; 

Whereas  the  Essen  European  Council  of  9-10  December  1994  affirmed  that  the 
Mediterranean  constitutes  a priority  area of  strategic  importance  to the European  Union 
and adopted the aim of establishing a Euro-Mediterranean partnership; 

Whereas  it  is  necessary  to  pursue  efforts  to  ensure  that  the  Mediterranean  becomes  an 
area  of  political  stability  and  security  founded  on  respect  for  democracy,  good 
governance and respect for human rights; 

Whereas for the Mediterranean  non-member countries and territories the establishment of 
a free trade area will involve profound  structural  reform; 

Whereas  it  is therefore  necessary  to support  the efforts  that Mediterranean  non-member 
countries and territories will undertake to reform their economic and social structures; 

Whereas  there  is  a  need  to  devise  an  integration  strategy  in  which  the  regions  of  the 
Union can participate, and whereas it is therefore essential to encourage interregional and 
cross-border cooperation between the two shores of the Mediterranean; 

Whereas  intensified  regional  cooperation  and in particular the development  of economic 
links and trade flows between Mediterranean  non-member countries and territories which 
are conducive to economic reform  and restructuring should be encouraged; 

Whereas  the bilateral  protocols  on financial  and  technical  cooperation  concluded  by the 
Community  with Mediterranean  non-member countries provided a useful  initial basis for 
cooperation  and now  it is necessary to build  on the experience  which  has been  acquired 
and to enter into a new partnership within a unified  framework; 

Whereas rules for the administration of such partnership have to be determined; 

Whereas to this end the present Regulation  will apply to the range of measures contained 

1c 

in  Council  Regulation  (EEC)  No  1762/92  on  the  implementation  of  the  protocols  on 
financial  and  technical  cooperation  concluded  by  the  Community  with  Mediterranean 
non-member  countries,  in  Council  Regulation  (EEC)  No  1763/92  concerning  financial 
cooperation  in  respect  of  all  Mediterranean  non-member  countries  for  measures  whose 
scope  extends  beyond  the  scope  of  a  single  country,  in  Council  Regulation  (E  C) 
No  1734/94  on financial  and technical  cooperation  with  the Occupied  Territories  and in 
proposal  COM  (94)  289  final  for  a  Council  Regulation  in  the  field  of  employment 
creation and support to small and micro-enterprises in the Maghreb countries; 

Whereas  therefore,  the  present  Regulation  replaces  the  abovementioned  Regulations  as 
from  1  January  1997,  while  it  is  necessary  to  maintain  Council  Regulation  (EEC) 
No  1762/92 in force for the management of financial  protocols still applicable at this date 
and for the commitment of funds remaining under the expired financial  protocols; 

Whereas  in  respect  of  environmental  projects  the  loans  granted  by  the  European 
Investment  Bank,  hereinafter  referred  to  as  "the  Bank",  from  its  own  resources  under 
conditions  laid  down  by  it,  in  accordance  with  its  Statute,  may  receive  an  interest-rate 
subsidy; 

Whereas in loan operations involving interest-rate subsidies, the granting of a loan by the 
Bank from  its own resources  and the granting of  an interest-rate  subsidy financed  by the 
budgetary  resources  of  the  Community  must  be  linked  and  are  conditional  upon  each 
other;  whereas  the  Bank  may,  in  accordance  with  its  Statute,  and  in  particular  by  a 
unanimous decision of its Board of Directors in the presence of an unfavourable  opinion 
by the Commission,  decide to grant a loan from  its own resources, subject  to granting of 
the interest-rate  subsidy; whereas, on account of this aspect, it is necessary to ensure that 
the  procedure  adopted  for  granting  interest-rate  subsidies  results  in  every  case  in  an 
express decision, whether to grant the subsidy or to refuse  it, where appropriate; 

Whereas  it is necessary  to make provision  for  a Committee consisting of  representatives 
of  the  Member  States  to  assist  the  Bank  in  the  tasks  attributed  to  it  to  implement  this 
Regulation; 

Whereas to  allow  for  effective  management  of the measures foreseen  in this  Regulation 
and to facilitate  policy  dialogue with the beneficiary  countries a multiannual  approach  is 
required; 

Whereas  relations  with  third  countries  should  follow  the  principles  referred  to  in  the 
Commission's  communication  on  "the inclusion  of  respect  for  democratic  principles  and 
human rights in agreements between the Community and third countries"; 

Whereas  the  measures  foreseen  by the  present  Regulation  go beyond  the  framework  of 
development  cooperation  and  are  destined  to  apply  to  countries  which  cannot  be 
classified  as developing  countries;  whereas  therefore  this  Regulation  cannot  be  adopted 
other than on the basis of the competences foreseen by Article 235 of the EC Treaty, 

HAS ADOPTED THIS REGULATION: 

Article 1 

The  Community  shall  implement  measures  to  support  the  efforts  that  the 
Î. 
Mediterranean  non-member  countries  and  territories  listed  in  Annex  1  (hereinafter 

2. 

to  as  "Mediterranean  partners")  will  undertake  to  reform  their  economic  and  social 
structures. 

The beneficiaries  of  support  measures  may  include  not  only  states  and regions but 
2. 
also  local  authorities,  regional  organizations,  public  agencies,  education  and  training 
structures,  local  or  traditional  communities,  organizations  supporting  business,  trade 
unions,  private  operators,  cooperatives,  mutual  societies,  associations,  foundations  and 
non-governmental  organizations. 

Article  2 

1. 
Support  measures  shall  be  undertaken  in coherence  with  the objective  of  achieving 
long-term  stability  and  prosperity  and  in  particular  in  the  fields  of  economic  transition, 
achieving  socioeconomic  equilibrium,  sustainable  management  of  natural  and  cultural 
resources  and  regional  and  cross-border  cooperation,  including  cooperation  with  the 
regions  of  the  European  Union. 

2. 

Support to economic transition and the establishment of a Euro-Mediterranean  free 
trade  area shall  include  notably: 

- private sector development  and employment  creation, including  improvement  of 
the  business  environment  and  support  to  SME; 

-  development  of  the  financial  system; 

-  promotion  of  European  private  investment,  including  industrial  cooperation; 

-  upgrading  of  economic  infrastructure; 

-  restructuring  and privatization  of  industrial  sectors  and  infrastructure; 

-  operations  in  support  of  structural  adjustment  programmes. 

3. 

Support  to  achieving  a better  socioeconomic  balance  shall  include  notably: 

-  the  improvement  of  social  services; 

-  harmonious  and  integrated  rural  development; 

-  development  of  water  resources; 

-  development  of  basic  infrastructure,  particularly  in  the  energy,  transport  and 
telecommunications  sectors; 

-  reinforced  cooperation  concerning  fisheries; 

-  environmental  cooperation; 

-  participation  of  civil  society  in  development; 

-  modernization  of  public  administration; 

3 

- integrated development of human resources, notably in education  and vocational 
training,  as  well  as  improving  the  potential  for  scientific  and  technological 
research; 

-  strengthening  democracy  and  respect  for  human  rights  and  the  rights  of  ethnic 
and religious minorities; 

- cultural cooperation, including the strengthening of audiovisual media; 

-  through  the  above  measures,  cooperation  and  technical  assistance  in  order  to 
reduce illegal immigration, drug trafficking  and international crime. 

4. 

Regional and cross-border cooperation shall be supported notably by: 

-  establishing  structures  and  improving  infrastructure  for  regional  cooperation 
between Mediterranean partners; 

-  establishing  the  infrastructure  necessary  for  regional  trade, including  transport, 
communications  and  energy,  improvement  of  the  regulatory  framework  and 
small-scale  infrastructure  projects  in  the  context  of  border-crossing  facilities: 
particular  attention  will  be paid  to border-crossing  facilities  on  borders  between 
the  Mediterranean  partners  and  the  Union,  to  cooperation  on  the  level  of  large 
geographic  regions  as well as to measures complementary  to those undertaken  in 
this field  within the Union; 

- other regional activities including the Euro-Arab Dialogue 

Good  governance  shall  be  promoted  by  supporting  key  institutions,  including 
5. 
local  government,  trade  unions,  media  and  organizations  supporting  business  and  by 
assisting  in  the  improvement  of  the  capacity  of  the  public  administration  to  develop 
policies  and manage  implementation.  Good governance  shall  also be promoted  through 
support for projects aimed at encouraging cooperation between local and regional bodies. 

6. 
Measures taken under this Regulation shall pay due regard to the promotion of the 
participation  of  women.  Special  importance  shall be  attached  to the creation  of jobs  for 
women and young people. 

7. 
The  activities  financed  under  this  Regulation  shall  mainly  take  the  form  of 
technical  assistance, training, institution building, policy  dialogue, information,  seminars, 
studies, investment projects in companies, micro-enterprises,  SME and infrastructure  and 
actions to ensure the visibility of Community projects  and programmes. Recourse  should 
be  made  to  decentralized  cooperation  where  this  may  prove  effective.  Risk  capital 
operations  and  interest-rate  subsidies  may  be financed  notably  in  collaboration  with  the 
European  Investment  Bank.  Costs  incurred  by  the  beneficiaries  as  a  result  of  the 
preparation,  implementation,  monitoring,  audit  and  execution  of  support  measures  may 
also be  covered. 

When an essential element for the continuation  of support measures is missing, in 
8. 
particular  in  cases  of  violation  of  democratic  principles  and  human  rights,  the  Council 
may,  on  a proposal  from  the  Commission,  acting  by  a  qualified  majority,  decide  upon 
appropriate measures concerning the assistance to a Mediterranean partner. 

Article 3 

Measures  to be  financed  under  this  Regulation  shall  be  selected  taking  account, 
1. 
inter alia, of the beneficiaries'  priorities, evolving  needs and progress  towards  structural 
reform  as well as on the basis of an assessment  of the effectiveness  of those measures in 
achieving  the objectives  aimed  at by Community  support,  in line  with  the provisions  of 
association or cooperation agreements where applicable. 

2. 
Indicative programmes covering three-year periods shall be established at national 
and  regional  level,  taking  into  account  the  priorities  identified  with  the  Mediterranean 
partners, including the conclusions of economic dialogue, and shall be updated  annually, 
as  necessary.  These  programmes  shall  define  the  principal  objectives  of  and  guidelines 
for  Community  support  in the indicative areas referred  to in Article 2 and may include a 
financial  estimate.  These  programmes  may  be  amended  during  the  period  of  their 
application  taking into account the experience accumulated in the implementation  of this 
Regulation  as  well  as  progress  in  structural  reform,  macroeconomic  stabilization  and 
social progress achieved by the Mediterranean partners. 

Financing  decisions  based  notably  on  these  indicative  programmes  shall  be 

3. 
adopted in accordance with the procedure provided for in Article 10. 

Article 4 

1. 
The Commission  shall, together  with  the Member  States  and  on  the basis  of  the 
information  supplied  by them, ensure the effective  coordination  of  the assistance  efforts 
undertaken  by the  Community  and  individual  Member  States. In  addition,  coordination 
and  cooperation  with  international  financial  institutions  and  other  donors  shall  be 
encouraged. 

2. 
The  measures  referred  to  in  this  Regulation  may be  granted  by the  Community, 
either  independently  or  in  the  form  of  co-financing  with  the  Mediterranean  partners 
themselves  or with, on the one hand, public or private bodies of  the Member  States and 
the  European  Investment  Bank  or,  on  the  other  hand,  third  countries  or  multilateral 
bodies. 

Article 5 

Community  financing  shall  notably  be  in  the  form  of  grants  or  risk  capital. 
1. 
Concerning cooperation measures in the field of the environment, it may equally take the 
form of interest-rate subsidies for loans granted by the Bank from its own resources. 

Grants  may  be  used  to  finance  or  co-finance  activities,  projects  or  programmes 
2. 
which  contribute  to  the  realization  of  the  objectives  defined  in  Article  2. The  extent  to 
which  activities, projects  or programmes  will be financed  by grants shall  also depend on 
their capacity to yield financial  return. 

3. 
Financing  decisions  and  any  financing  agreements  and  contracts  resulting 
therefrom  shall expressly provide, inter alia, for  supervision  and financial  control by the 
Commission and audits by the Court of Auditors to be carried out on the spot. 

Article 6 

-

Measures  under  this Regulation  may cover expenditure  on  imports  of  goods and 
1. 
services  and  local  expenditure  needed to carry out  the projects  and programmes. Taxes, 
duties and charges shall be excluded from Community  financing. 

Contracts  for  the implementation  of Community-funded  measures under this  Regulation 
shall enjoy,  in the Mediterranean partners concerned, fiscal  and customs arrangements no 
less favourable  than those applied by such partners in respect of the most favoured  state 
or most favoured  international development organization. 

2. 
Maintenance  and  operating  costs  may  be  covered  for  training,  communications 
and  research  programmes  and for  other projects;  however, for  the latter,  such  costs may 
be covered only in the start-up stage on a declining scale. 

3. 
For  investment  projects,  Community  financing  shall  be  combined  with  own 
resources of the promoter or with financing  at market conditions, taking into account the 
nature  of  the  project.  However,  Community  financing  may  not  exceed  80%  of  total 
investment cost. 

Article 7 

Invitations to tender and contracts shall be open on equal  terms to all natural and 

1. 
legal persons of the Member States and of Mediterranean partners. 

2. 
In the case of co-financing,  participation  in invitations to tender and contracts by 
nationals of countries other than the Mediterranean partners concerned may be authorized 
by the Commission  on a case-by-case basis. In these cases, participation  of  undertakings 
from third countries shall be acceptable only if reciprocity is granted. 

Article 8 

Financing  decisions  exceeding  ECU  2  000  000  other  than  those  relating  to 
1. 
interest-rate  subsidies  on  European  Investment  Bank  loans  and  risk  capital  shall  be 
adopted in accordance with the procedure laid down in Article 10. 

2. 
Financing decisions on overall allocations shall be adopted in accordance with the 
procedure laid down in Article  10. The Commission shall inform the Committee referred 
to in Article  10 of the use made of these overall allocations. 

3. 
Decisions amending decisions adopted in accordance with the procedure provided 
for  in  Article  10  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. 

Financing  decisions  relating  to  interest-rate  subsidies  on  Bank  loans  shall  be 
4. 
adopted in accordance  with the procedure  laid down  in Article  11.  Financing  decisions 
relating  to risk  capital  shall  be adopted  in  accordance  with  the procedure  laid  down  in 
Article 12. 

Article 9 

Measures referred to in this Regulation which are financed from the general budget of the 
European  Community  shall  be  appraised,  decided  upon  and  administered  by  the 
Commission, without prejudice to the management by the Bank of interest-rate subsidies 
and risk capital operations under authority conferred on it by the Commission  on behalf 
of the Community pursuant to Article 105(3) of the Financial Regulation of 21 December 
1977 applicable to the general budget of the Community. 

Article 10 

1. 
The  Commission  shall  be  assisted  by  a  Committee  composed  of  the 
representatives  of  the  Member  States  and  chaired  by  the  representative  of  the 
Commission  (hereinafter  referred  to  as  the  'Committee')  to  be  known  as  the  "MED 
Committee". A representative of the Bank shall take part in the proceedings. 

2. 
The representative  of  the Commission  shall  submit  to the Committee  a draft  of 
the measures to be taken. The Committee  shall  deliver its opinion  on the draft within a 
time limit the chair may lay down according to the urgency of  the matter. The opinion 
shall be delivered by the majority laid down in Article  148(2) of the EC Treaty in the case 
of decisions which the Council  is required to adopt 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 that Article. The chair shall not vote. 

The Commission shall adopt measures which shall apply immediately. However, 
3. 
if these measures are not in accordance with the opinion of the Committee, they shall be 
communicated  by  the  Commission  to  the  Council  forthwith.  In  that  event,  the 
Commission  shall defer application of the measures which it has decided for a period of 
six weeks. 

The  Council,  acting  by  a qualified  majority,  may  take  a different  decision  within  the 
period laid down in the first subparagraph. 

4. 
The Committee may examine any other question relating to the implementation of 
this  Regulation  which  may  be  put  to  it  by  its  chair,  possibly  at  the  request  of  the 
representative  of  a  Member  State  and,  in  particular,  any  question  relating  to  general 
implementation, the administration  of the programme, co-financing  and the coordination 
referred to in Article 4. 

5. 

The Committee shall adopt its rules of procedure by qualified  majority. 

The  Commission  shall  keep  the  Committee  regularly  informed  and  will  supply 

6. 
information  on the implementation of measures under this Regulation. 

The European  Parliament  shall  be kept regularly  informed  of the  implementation 

7. 
of this Regulation. 

Article 11 

1. 
As  regards  the  projects  to  be  financed  by  subsidized  loans  in  the  field  of  the 
environment,  the  Bank  shall  draw  up  the  financing  proposal  in  accordance  with  its 
Statute. The Bank  shall  seek  the opinion  of the Commission,  in accordance  with  Article 
21 of the Statute, and of the Committee referred to in Article  13. 

That  Committee  shall  issue an opinion  on the Bank's proposal. The  Commission 
2. 
representative  shall  convey  to  the  Committee  the  Commission's  position  on  the  project 
concerned,  and in particular  on its conformity  with the objectives  of this Regulation  and 
with  the  general  guidelines  adopted by the Council. In addition, the Committee  shall be 
informed  by  the  Bank  of  the  non-subsidized  loans  which  the  Bank  envisages  granting 
from  its own resources. 

On  the  basis  of  that  consultation,  the  Bank  shall  ask  the  Commission  to  take  a 

3. 
financing  decision to grant the interest-rate subsidy for the project concerned. 

The Commission  shall submit to the MED Committee a draft  decision  authorizing 

4. 
or, if appropriate, refusing  the financing of the interest-rate subsidy. 

The  Commission  shall  forward  the  decision  referred  to  in  paragraph  4  to  the 

5. 
Bank, which, where the decision grants the subsidy, may grant the loan. 

Article 12 

l.The  Bank  shall  submit  to  the  Committee  referred  to  in  Article  13,  for  its  opinion, 
projects  concerning risk capital  operations. The Commission  representative  shall convey 
to the Committee the Commission's position on the project concerned and in particular on 
its  conformity  with  the  objectives  of  this  Regulation  and  with  the  general  guidelines 
adopted by the Council. 

2.On the basis of this consultation, the Bank shall forward the project to the Commission. 

3.The  Commission  shall  take  the  financing  decision  within  a period  appropriate  to  the 
characteristics of the project. 

4.The  Commission  shall  forward  the  decision  referred  to  in  paragraph  3  to  the  Bank, 
which shall take the appropriate measures. 

ArtideJi 

1. 
A Committee consisting of the representatives  of  the Member States,  hereinafter 
referred to as the 'Article 13 Committee', shall be set up at the Bank. The Committee shall 
be chaired by the representative of the Member State currently holding the presidency of 
the  Board  of  Governors  of  the  Bank;  its  secretariat  shall  be  provided  by  the  Bank.  A 
representative of the Commission shall take part in its proceedings. 

The  rules  of  procedure  of  the  Committee  shall  be  adopted  unanimously  by the 

2. 
Council. 

The Committee shall act by a qualified majority in accordance with Article  148(2) 

3. 
of the Treaty. 

4.  Within the Committee, the votes of the representatives of the Member States shall 
be weighted in accordance with Article 148(2) of the Treaty. 

Article 14 

1. 
The results of invitations to tender shall be published in the Official  Journal of the 
European  Communities.  Twice  a year the  Commission  shall  submit  to  the  Committee 
referred to in Article  10 detailed and specific  information  on the contracts concluded in 
furtherance of MEDA programmes and projects. _ 

2. 
By  1 September of each year, a comprehensive  report evaluating the progress of 
projects and their impact on the progress  of  development  in each  of  the Mediterranean 
partners  shall  be  prepared  by  the  Commission  together  with  the  European  Investment 
Bank and addressed to the Member States, the European Parliament, the Council and the 
Economic and Social Committee. 

3. 
In 1997, this report shall be replaced by an interim report on the implementation 
of the programme during the whole period until that date, which shall be submitted by the 
Commission by 30 June 1997. 

Both the annual and the interim reports shall be the basis for decisions concerning 

4. 
the continuation of the programmes within the annual budgetary procedure. 

The  Commission  and the Bank  shall  evaluate  the projects  that concern  each of 
5. 
them, in order to determine  whether the objectives  have been achieved  and to establish 
guidelines  for  stepping  up the effectiveness  of  future  activities.  The evaluation  reports 
shall be forwarded to the Council and Parliament. 

6. 
Before  30 June  1999, the Council  will proceed to re-examine the Regulation. To 
this end,  the  Commission  shall  submit  before  31  December  1998  an evaluation  report 
containing  proposals  concerning  the  future  of  the  Regulation  and,  as  necessary, 
amendments to the Regulation. 

Article 15 

Council Regulation (EEC) No  1763/92 and Council Regulation (EC) No  1734/94 

1. 
are repealed as from 31 December 1996. 

2. 
As from 31 December 1996 Council Regulation (EEC) No  1762/92 shall apply to 
the management of the protocols still in force at that date and to the commitment of funds 
remaining under the expired protocols. 

Article 16 

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. 

10 

ANNEX I 

Partner countries and territories referred to in Article 1 

The People's Democratic Republic of Algeria 
The Republic of Cyprus 
The Arab Republic of Egypt 
The State of Israel 
The Kingdom of Jordan 
The Republic of Lebanon 
The Republic of Malta 
The Kingdom of Morocco 
The Syrian Arab Republic 
The Republic of Tunisia 
The Republic of Turkey 
The Occupied Territories of Gaza and the West Bank of the River Jordan 

11 

ISSN 0254-1475 

COM(96) 113  final 

DOCUMENTS 

EN 

11 

Catalogue number  :  CB-C0-96-126-EN-C 

ISBN 92-78-01776-0 

Office  for Official  Publications  of the European  Communities 

L-2985  Luxembourg 

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