WRITTEN QUESTION No. 307/97 by Amedeo AMADEO to the Commission. Joint venture programmes
Date: 1997-02-13
Institutions: AMADEO, European Parliament
Subjects: EU financing, EU programme, European undertaking, consortium, feasibility study, third country













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91997E0307

WRITTEN QUESTION No. 307/97 by Amedeo AMADEO to the Commission. Joint venture programmes  


Official Journal C 319 , 18/10/1997 P. 0058 





WRITTEN QUESTION E-0307/97 by Amedeo Amadeo (NI) to the Commission (13 February 1997)Subject: Joint venture programmesIn the chapter on financial instruments and banking activities of the Court of Auditors' report for the financial year 1995 ((OJ C 340, 12.11.1996. )), the Court notes that the EU has a large range of financial instruments at its disposal. These include loan operations, direct participations in common-interest bodies or indirect investments in the capital of companies through special operations such as joint ventures.The aim of joint venture programmes is to encourage the creation of mixed enterprises based on cooperation between local companies in third countries and EU companies and, in some cases, to encourage direct investment by Community firms in these countries. The provisions vary in accordance with the programmes but share the same aims. This is particularly true for the start-up phase, which covers feasibility studies for the JOPP (countries of eastern Europe and the former Soviet Union) and ECIP (developing countries in Latin America and Asia) programmes.What is the current situation and what are the future prospects for joint ventures between EU firms and local companies in third countries?Answer given by Mr Marín on behalf of the Commission (11 April 1997)The first instrument designed to encourage joint ventures between EU and third-country businesses was the ECIP (European Community Investment Partners) programme, launched in 1988. Between then and the end of last year, 2 750 applications had been made to the Commission, 1 900 of which had been approved. 60% of these came under facility 2 (feasibility studies), 30% under facility 1 (cofinancing of seminars and business meetings), 7% under facility 3 (cofinancing in the form of equity and guarantees), and 3% under facility 4 (training and technical assistance schemes). All in all, the Commission had approved over ECU 220 million for the programme by the end of last year, ECU 120 million of which was given for 1 100 feasibility studies. As for the economic impact, the Commission has worked out from a sample of 300 reports on facility 2 operations that ECU 30 million has generated ECU 600 million in investment (i.e. a twenty-fold return) and that 168 joint ventures are being set up.Given the success of the programme, the Council (in agreement with the Parliament under the cooperation procedure)last year approved Regulation No 213/96 to keep it going until the end of 1999 and including in it sixty countries in Asia, Latin America, the Mediterranean and South Africa. Budget commitments for this year total ECU 50.5 million.Similarly, in 1991 the Commission created a sister programme to the ECIP: JOP. Between start-up and the end of last year, 1 429 applications had been made to the Commission, 1 243 of which had been accepted. Most of the approved projects (74%) were for feasibility studies (facility 2). Facilities 1, 3 and 4 (which likewise mirror those in the ECIP), have grown significantly since new rules were adopted in November 1995. In total, JOP has led to over ECU 93 million being committed. Of the 200 facility 2 projects now wound up, 126 have led to new joint ventures. The investments already made in these projects are anywhere between one and nine times higher than the Community financing given. All the programme's facilities bar facility 3 were extended to Russia in 1994. A further extension to include all the Tacis countries and all facilities is now in the pipeline.During talks with the Council and Parliament between 1994 and 1996 on renewal of the ECIP Regulation, the Commission offered a detailed comparison of the financial conditions for various facilities and those for other instruments for PHARE and TACIS regions. It proposed to extend the conditions (interest-free advances) for facility 2 operations covering joint ventures in Asia, Latin America, the Mediterranean and South Africa. The Council approved the new Regulation (see above) after consulting Parliament under the cooperation procedure. Article 2(2) of the Regulation sets out the financial conditions.Since 1988, applications for feasibility studies have used up the total ECIP budget earlier and earlier each year despite the fact that funding must be repaid. These repayments back into the general budget ease the net budgetary cost of the programme and ensure financial discipline in the use made of it.