Proposal for a Council decision concerning the adoption of the guidelines for MEDA indicative pragrammes
Date: 1996-09-12
Institutions: European Commission
Subjects: EU financial instrument, Mediterranean third countries, economic reform, free-trade area, social change

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  12.09.1996 
COM(96) 441  final 

-Proposal  for  a  Council  decision  concerning  the  adoption  of  the  guidelines 
for  MEDA  indicative  programmes 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 
Following  adoption  by  the  Council,  the  MEDA  Regulation,  concerning 
financial  and  technical  measures  to  accompany  the  reform  of  economic  and 
social structures in the framework  of the Euro-Mediterranean  Partnership, came 
into  force  on 2 August  1996. 

The MEDA programme thus has a legal basis which sets out the rules for 
2. 
management of the implementation of measures to be taken, in particular,  in the 
areas  of  economic  transition,  sustainable  social  and  economic  development, 
regional  and trans-frontier  cooperation  and  support  for  civil  society. 

3. 
The  MEDA  Regulation  foresees  a three  stage  programming  procedure. 
It requires the Commission  to propose to the Council a set of general guidelines 
indicative 
for 
programmes  and  the financing  proposals  are to be adopted  by  Commission  on 
the  basis  of  the  opinion  of  a management  committee. 

indicative  programmes. 

Subsequently, 

the  MEDA 

the 

4. 
The proposed general guidelines explain that the purpose of the indicative 
programmes is to provide an instrument for strategic management of the MEDA 
programme.  They  should,  in particular,  allow  for  identification  of  priorities 
with the Mediterranean partners  and for  coordination with the Member  States. 

5. 
The  Commission  has communicated  to the Council  the  overall  financial 
programming  for  the MEDA programme  for  the period  1996-98 through other 
channels. 

6. 

The  Council  is to adopt these guidelines  by  qualified  majority 

L 

Proposal for a Council decision concerning the adoption of the guidelines for MEDA 
indicative programmes 

The Council of the European Union, 

Having regard to the Treaty establishing the European Community, 

Having regard to regulation (EC) No  1488/96 of the Council of 23 July  1996 concerning 
financial and  technical  measures  to  accompany  (MEDA)  the  reform  of  economic  and 
social structures in the framework  of the Euro-Mediterranean Partnership, and notably its 
article 9§1, 

Whereas Article 9 of the MEDA Regulation foresees that the Council shall, on a proposal 
from the Commission, adopt guidelines for the indicative programmes which are to  define 
the main objectives of cooperation with the Mediterranean partners, 

Whereas the Commission presented  a Communication  on 8.3.95 entitled  "  Strengthening 
the Mediterranean  Policy  of the European  Union:  proposals  for  the implementation  of a 
Euro-Mediterranean Partnership", 

Whereas,  in  the  Barcelona  declaration,  the  Euro-Mediterranean  Partnership  has  been 
adopted to meet the challenges facing the region, 

Whereas it is necessary to determine guidelines for the MEDA indicative programmes, 

HAS ADOPTED THE FOLLOWING DECISION: 

Article 1 

The guidelines for the indicative programmes concerning financial  and technical  measures 
to accompany the reform of economic and social structures in the framework of the Euro-
Mediterranean  Partnership  (hereinafter  referred  to  as MEDA indicative programmes),  as 
shown in annex to the present decision, are adopted. 

This decision shall take effect from the date of its adoption. 

Article 2 

3 

COUNCIL  GUIDELINES  FOR MEDA INDICATIVE  PROGRAMMES 

Annex 

1. 
The  MEDA  programme  represents  the  European  Community's  main  financial 
instrument  for  the implementation  of the Euro-Mediterranean partnership.  The programme 
has  the  purpose  of  encouraging  and  supporting  the  reform  of  the  economic  and  social 
structures  of  the  Mediterranean  Partners,  notably  in  preparation  for  free  trade  with  the 
European  Community. 

2. 
MEDA is founded  on the respect for democratic principles and the rule of law, as well 
as  the  respect  for  human rights  and fundamental  freedoms,  of  which  they  are an essential 
element  and  whose  violation  would justify  the taking of appropriate measures. 

The experience  gained  through  the Bilateral  Protocols 

The MEDA programme is to build on the experience gained through the operation of 
3. 
the  instruments  of  the  Redirected  Mediterranean  Policy,  namely  the  bilateral  financial 
protocols  and  a facility  for  regional  cooperation.  After  4 generations of financial protocols 
with  the  Mediterranean  partners  it  has  become  necessary  to  seek  an  improvement  in  the 
system of delivery  of cooperation  activities.  If MEDA is to be capable of responding to the 
challenge  of significantly  intensified  cooperation, both in new and existing domains, then  it 
is necessary  to  increase  flexibility  in the  programming.  This  is to  avoid  dispersion  of  the 
cooperation  effort  over  too  wide  a  number  of  activities  and  beneficiaries  and  to  give  an 
incentive  for  rapid  and  efficient  implementation  of  commitment  and  payment  credits. 
Equally, MBDÀ  must  be  capable  of  adaptation  over  time  as lessons are  learned  through  its 
implementation  and  as  the  needs and  priorities  of the  Mediterranean  partners  evolve  in the 
light of socio-economic challenges.  In particular, a sufficiently  high degree of flexibility  for 
the  amounts  allocated  to  untied  budgetary  support  in  the  indicative  programmes  should  be 
maintained in order to adapt the financial  allocations to the pace of reform  and to the progress 
achieved  in macroeconomic  stabilisation. 

Multi-annual  programming 

4. 
The extra flexibility of the MEDA programme  needs to be complemented  by a clear 
programming methodology in order to enhance effectiveness  of planning and implementation. 
In particular it is necessary to give the partners an indication of the resources which are to be 
made  available  over  the  coming  years.  Such  multi-annual  programming  will  increase  the 
possibilities  for  interventions  having  a medium-term  policy  impact.  The MEDA  Regulation 

Y 

contains a financial  reference  figure  of ECU  3.424 billion  for  the period  1995-99', which  is 
to  be  partitioned  between  bilateral  programmes  and  a  regional  programme.  The  MEDA 
indicative  programmes  should  identify  activities  which  contribute  to  the  attainment  of  the 
wider objectives of the Partnership. These may be revised, in accordance with implementation 
performance,  together  with the accompanying  indicative bilateral  financial  allocations.  Care 
will be taken to ensure transparency and overall consistency of action undertaken using budget 
appropriations. 

Strategic  interventions 

5. 
Ultimately  the successful  socio-economic development  of the Mediterranean  partners 
will  depend  on their  own  efforts.  Thus, to be  effective  the indicative  programmes  must  be 
based on a shared  understanding of the economic, social  and  political  challenges  facing  each 
Partner and  the region as a whole.  A regular and  rich dialogue both at bilateral  and  regional 
level  is therefore  a pre-condition  for the success of MEDA.  The indicative programmes shall 
concentrate  on  those  areas  where  the  European  Community  can  make  the  most  positive 
contribution  by  drawing  on  its  stores  of  experience  and  know-how.  With  this  aim  the 
Commission shall take care to provide for the necessary coordination with the Member  States 
and  other  donors  in its programming  and programme  implementation. 

6. 
As  it  pursues  the  goal  of  sustainable  development  the  Commission  shall,  in  its 
identification  and  design  of  programmes  of  cooperation,  carefully  consider  the  issues  of 
environmental  equilibrium,  financial  and economic  viability,  gender repercussions  and  local 
institutional  capacity,  including  those  for  research  and  technological  development  and 
technology transfer  to replicate or continue activities which have been initiated.  At a bilateral 
level,  the MEDA  programme  will  provide  support  to the partners  in the fields of  economic 
transition  and  strengthening  of  socio-economic  equilibrium. 
Environmental  Impact 
Assessment  forms  will  be  required  for  the  relevant  projects  of  bilateral  and  regional 
programmes,  according  to the  European  Union  legislation  in this field. 

7.i) 
The  economies  of  the  region  face  the  common  challenge  of  creating  employment 
opportunities and an increased standard of living in the context of rapid demographic  growth. 
The  necessary  acceleration  in  economic  growth  can  only  be  reached  through  greater 
competitiveness within the global economy.  This requires an improvement,  inter alia, of the 
capacity  for  innovation  of  the  partners.  As  free  trade  is  gradually  established  so  the 
governments  must  leave  room  for  private  sector  led  growth  and  for  foreign  investment. 
Sound  macro-economic  management  must  be complemented  by pro-growth  and  investment 
friendly  economic policies and regulatory  framework.  The indicative programmes  will  take 
into account  the characteristics  of  each  economy  when  planning  interventions. 

'The Cannes European  Council of  12 June  1995 gave its agreement to a global financial 
envelope for Mediterranean  third countries for the period  1995-99 of ECU 4.685 billion. The 
MEDA  programme  of  approximately  ECU  3.424  billion  constitutes  the  largest  part.  The 
remainder  is made  up of  specific  country  protocols and  thematic  budget  lines. 

vT 

ii) 
Economic  growth  needs to be  accompanied  by  greater  social  cohesion.  Inequalities 
in access  to essential  services  such  as education,  health  and  water  persist  which  reduce  the 
life-chances  of  significant  portions  of  the  population  of  the  Partners  and  which  have  a 
negative  effect  on  long  term  growth  prospects.  These  needs  should  be  addressed  urgently 
through  improvements  in  the  quality  of  services  and  greater  efficiency  in  their  delivery. 
Strategic interventions are required for the development of human resources in general as they 
represent the region's greatest asset for the future.  In particular, the integration  of the young 
and  of women  into  the workplace  constitutes  an  important  factor  of  social  development  for 
the  region. 

The  bilateral  and  regional  programmes are to be  complementary 

Support  will  be  given  through  the  measures  set  out  in  the  MEDA  Regulation. 
8. 
Furthermore, from  the ongoing dialogue with the Partners it has been possible to develop the 
following  general  guidelines. 

The  activities  undertaken  at  bilateral  and  regional  level  are  to  be  complementary  to 
9. 
enable the political  and  economic  impact  of the MEDA programme  to be sustained  and  the 
objectives jointly  adopted  in the Barcelona  Declaration  more effectively  reached.  Drawing 
from  its own  experience  it is the Union's  view that the future  prosperity  and  stability  of  its 
partners  rests  on  increased  cooperation  between  themselves  in  the  economic,  social  and 
political  spheres.  The  elimination  of  barriers  will  foster  economies  of  scale  and  greater 
market  opportunities  thus  encouraging  investment,  facilitating  the  exchange  of  ideas  and 
increasing mutual understanding.  The regional indicative programme will reflect  the progress 
made  in  the  framework  of  the  Barcelona  process  in  taking  action  at  a  multilateral  level  on 
issues  of  common  concern,  as  laid  down  in  the  agreed  declaration,  and  will  strengthen  the 
activities  in  support  of  decentralised  cooperation.  However,  regional  activities  shall  not 
displace  funding  of  bilateral  activities. 

Decentralized  approach 

10. 
In order to reach target populations more effectively  and to widen the participation  in 
the MEDA  programme to the different  parts of civil  society that are  included  in the scope of 
the Euro-Mediterranean  Partnership, the Commission shall strive to design and implement its 
activities  together  with  the  actors  who  are  directly  concerned  and  who  have  the  expertise 
necessary  for  successful  design  and implementation  of interventions. 

Bilateral  indicative  programmes 

II. 
Concerning  the  bilateral  programmes  the  priorities  are  to  be  decided  taking  into 
account  the  stage  of  development  of  each  country's  economy  and  society  as  well  as  the 
capacity  of  its  institutions.  In  the  light  of  the  conclusion  or  implementation  of  association 
agreements, the indicative programmes are to be decided taking into account the needs of the 

G 

Mediterranean  partners,  their  capacity  to  absorb  funds  and  the  progress  made  in  structural 
reform  process,  as well  as the  priorities  identified  with  them,  in  particular  those  emerging 
from  the  conclusions  of the economic  dialogue. 

In  the  Maghreb,  support  to  Morocco  is  to  be  given  to  improve  fundamental  social 
12. 
services (in particular in education and health care, with special regard to rural areas), as well 
as to  measures  enhancing  enterprise  competitiveness.  In  parallel,  the  programme  provides 
budgetary  support  to  underpin  a medium-term  strategy  of  macroeconomic  stabilisation  and 
broad  structural  reforms.  In  Tunisia,  support  is  to  be  given  to  the  process  of  economic 
liberalisation and enhancement of competitiveness, incentivating progress in the privatisation 
process and in financial sector reform; this is to be complemented  by measures address  areas 
of social and environmental concern.  As regards Algeria, interventions should address critical 
social  needs and employment  creation in the short term, while supporting  SME development, 
the restructuring of loss-making public enterprises and encouraging the adoption  of  measures 
to develop  the financial  sector  and to reform  the country's  trade  regime. 

13. 
In the  Mashraq,  support to  Egypt  is to be mainly  in the areas of  basic education  and 
social development through poverty alleviation and assistance to key social sectors: this should 
be complemented  by appropriate interventions  in the fields of economic reform,  training  and 
environmental  protection.  Cooperation  with  Jordan  should  initially  contribute  to  providing 
the budgetary support which is necessary to stabilise the serious macro-economic  imbalances 
which exist and, at a second stage, to improving the employment  situation.  For the Lebanon, 
as reconstruction efforts  are fully underway, emphasis should now be placed on  strengthening 
the  public  administration  at  all  levels  whilst  intervening  in  a  targeted  manner  to  develop 
economic  competitiveness.  Regarding  Syria,  in  order  to  accompany  progressive  economic 
liberalisation, cooperation should focus on upgrading of public services and administration  in 
order  to  both  provide  a more  favourable  environment  for  the  private  sector  and  to  improve 
the  living  conditions  of  the  population.  Concerning  the  West  Bank  and  the  Gaza  Strip 
assistance  will  continue  to  be  given  to  the  reconstruction  and  rehabilitation  of  basic 
infrastructure,  as well as in support  of the process of Palestinian  institution  building  and  the 
development  of the private  sector. 

14. 
The  programme  for  Turkey  will  have  the  overall  objective  of  supporting  the 
establishment  of a customs union and will prioritise interventions related,  on the one hand to 
the necessary  economic  adaptation  and, on the other hand,  support to  social  services and the 
environment. 

Support  to economic  transition 

15. 
The  Mediterranean  partner  countries  need  help  to  prepare  for  free  trade  with  the 
European  Union  and  to  raise  the  standard  of  living.  The  wider  objective  of  European 
community  interventions  will be to increase the competitiveness  of the partners'  economies, 
with a view to achieving sustainable economic growth , in particular through improved  export 
performance. 

"} 

To this end assistance  will be given in particular  in the following  fields: 

.  The  creation  of  an  enabling  environment  through  the  reinforcement  of  the  macro-
economic  framework  and  the development  of the legislation  and  institutions  necessary  for a 
competitive  market  economy.  For  this  purpose,  structural  adjustment  operations  should  be 
supported  in close cooperation with the Bretton Woods institutions, for those partners who are 
ready to  implement  the necessary  reforms. 

.  Trade facilitation,  including assistance  in the field of customs and indirect  taxation, 
harmonization  of  standards  and  veterinary  and  phyto-sanitary  regulations,  as  well  as 
development  of trade  promotion  instruments. 

.  Harmonization  of legislation  and  standards in the field of the  environment. 

. Development of the financial  sector through support at the policy level and assistance 
to  strengthen  the  Central  Banks, to develop the commercial  banks and to widen  and  deepen 
the financial markets; particular attention will be given to the stimulation of domestic savings 
and  investment,  as well  as promotion  of  investment  into the region,  especially  European. 

. Improvement  of business performance,  in particular by the modernization  of SMEs, 

through  business consultancy,  training  and  information. 

.  Business  collaboration  between  European  and Mediterranean  companies,  especially 
SMEs,  through,  for  example,  networking,  joint-ventures,  licensing,  franchising  and  sub 
contracting. 

. Promotion of privatization to ensure the effective  transfer of ownership, management 

and  control  to the private  sector. 

. Cooperation in the energy, transport and telecommunications sectors regarding policy, 
interconnection and interoperability of infrastructure and networks, the improvement of quality 
and  reduction  of  cost  of  service  provision,  industrial  cooperation  and  research  and 
technological  development. 

.  Support to micro-enterprises  with a view to promoting entrepreneurs and helping to 

integrate  all  segments  of  society  in the process of economic  growth. 

. Human resource development through the improvement of the management, targeting 

and  quality  of  vocational  and management  training. 

.  Enhancing  the  innovation  systems  of  the  partners  through  improved  research  and 
technological development capacities and technology transfer mechanisms and supporting the 
development  of appropriate  national  innovation policies. 

Strengthening  the  socio-economic  balance 

16. 

in  order  to  alleviate  the  short  term  costs  of  economic  transition  and  better  prepare 

? 

societies  for  the  future,  it  is particularly  important  that  this  process  should  be accompanied 
by appropriate  measures  in  the field of  social  policy. 

. Integrated rural development remains an essential strategy for combating poverty and 
large 
avoiding  a  widening  welfare  gap  between  rural  and  urban  populations  because  a 
proportion  of the populations  of the Mediterranean  partners  remains attached  culturally  and 
economically to the countryside.  Agricultural production has a social role over and above its 
economic value and an increased exodus towards urban areas could have socially,  politically 
and environmentally  serious consequences. Targeted programmes are also required to address 
essential  needs  (such  as water  supply  and  sewage  as well  as energy). 

.  Particular  attention should be accorded to preserving the environmental  equilibrium 
in the partner countries through supporting the capacity building in the field of environmental 
assessment and management.  Interest rate subsidies may be granted on loans of the  European 
Investment  Bank  for  environmental  projects. 

.  Programmes addressing  the  improvement  of  living conditions  in  urban  areas should 
be supported  including, where appropriate the development of social safety  nets through pro 
active employment  policies and  anti-poverty  measures.  This  may  take  the  form  of  a  social 
fund  which promotes employment for disadvantaged social sectors  and also supports targeted 
health and education measures.  Assistance may be given to the formulation  of social policy, 
particularly  in the fields of health  and unemployment  insurance  and pension  schemes. 

. Improvements in the social infrastructure  and in the delivery of social services should 
be  supported.  Primary  health  may  be  financed  also  as  part  of  the  strategic  objective  of 
reducing  population  growth. 

. Improvements in the delivery of services in the field of education and training  should 
be  supported,  particularly  as  regards  primary  education  and  initial  training  for  girls  and 
notably  in rural  areas. 

The  development  of civil  society 

The  development  of  civil  society  should  be  supported,  in  particular  through 
17. 
decentralized  cooperation  and  the deployment  of enabling  technologies.  Cooperation  in the 
field of research  and technological  development  and technology  transfer  is to be  stimulated, 
bringing  in  contact  private  and  public  actors.  Cultural  activities  are  to  be  supported  which 
promote  dialogue  and  exchange  between  cultural  associations  and  networks.  Trans 
Mediterranean  information  and  communication  activities  should  be  strengthened  in  the 
framework  of  the  development  of  a  truly  Euro-Mediterranean  information  society.  Social 
partners  and  non-governmental  organisations  should  be encouraged  to  play  an active role. 

e> 

Guidelines  for  the  regional  indicative  programme 

18. 
Regional cooperation shall be complementary  to bilateral cooperation and shall  address 
the  three  main  areas  of  the  Euro-Mediterranean  Partnership.  Account  shall  be  taken  of  the 
progress  made  at  the  meetings  organized  in  the  context  of  the  follow  up  to  the  Barcelona 
inter-ministerial  conference.  The  overall  aim  shall  be  to  encourage  better  understanding 
between  the  Partners  through  increased  knowledge  of  regional  problems  in  the  political, 
economic,  social  and  cultural  fields,  facilitating  the  exchange  of best  practice  and  transfer  of 
know  how  and  promotion  of joint  projects  of  common  interest. 
Furthermore,  the  European  Community  will  continue  to  provide  support  to  the  Middle  East 
Peace  Process. 

19 
In  the  political  field,  as  in  the  case  of  bilateral  programmes,  through  measures 
falling  within  the  scope  of  the  MEDA  Regulation,  support  may  be  given  to  the 
development  of democracy  and the respect of human rights as well  as to  improvement  of 
the transparency  and efficiency  of governmental  institutions.  Support  may also be  given 
to promote the building of confidence in the security  field. 

20.  In  the  economic  and  financial  fields  assistance  will  be  given  to  facilitate  free  trade,  in 
particular  in the  fields  of customs  regulations,  rules of origin,  statistics, norms  and  veterinary 
and  phyto-sanitary  regulations. 

Appropriate  measures  will  be  taken  in  the  fields  of  transport,  energy  (where  the  Euro-
Mediterranean  Energy  Forum  will  act as a coordinating  instrument), telecommunications  and 
information 
the  environment,  science  and 
technology,  water  and  fishing.  Networking  among  research  and  development  centres  and 
economic  operators  to  facilitate  the  transfer  of  know-how  and  the  development  of  joint-
ventures  will  also  be  supported. 

technology,  regional  cooperation, 

tourism, 

In  Ihe social  and  cultural  spheres, decentralized  programmes of exchanges  between  the 
21 
civil  societies  of  the  European  Union  and  the  Mediterranean  partners  will  be  implemented  in 
the  fields  of  academia,  media,  local  government,  technology  and  other  fields  of  mutual 
interest. 

Further  measures  such as dialogues, projects  of common  interest  or networking  will be  taken, 
as  identified  in  the  framework  of  the  Euro-Mediterranean  partnership,  to  support  local 
government,  cultural  dialogue,  media,  youth  exchanges,  exchanges  between  civil  society. 
Research  and  technology  development,  technology  transfer,  information  and  communication 
activities  will  be  strengthened  through  recourse  to  modern  information  technology. 

Finally,  technical  assistance  may  be  given  with  the  aim  of  combating  drugs,  terrorism  and 
international  crime.  Measures  could  address  the  exchange  of  information,  the  compatibility 
of  data,  and  the  strengthening  of  legal  systems. 

4o 

ISSN 0254-1475 

COM(96) 441 final 

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