Proposal for a Council Regulation (EC) amending Council Regulation (EC) No 1734/94 of 11 July 1994 on financial and technical cooperation with the Occupied Territories
Date: 1997-12-03
Institutions: European Commission
Subjects: EU financing, Palestine question, financial cooperation, occupied territory, technical cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 03.12.1997 
COM(97)  552  final 

97/0316  (SYN) 

Proposal  for a 

COUNCIL REGULATION (EC) 

amending Council Regulation  (EC) No 1734/94 of 11 July  1994 on financial and 

technical cooperation with the Occupied Territories 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

1.  In  accordance  with  Article  2.1  of  Regulation  1734/94,  the  setting  up  and 

improvement  of institutions necessary for  the working of the public administration is 

crucial to the development process in the West Bank and Gaza Strip. The Commission 

does not normally support the recurrent costs of such institutions, preferring to target 

grants  from  the  Community  budget  for  the  purpose  of  development,  to  invest 

expenditures.  There is therefore  no explicit  provision  made in  1734/94 for  recurrent 

cost-type support. 

However,  under  current  circumstances,  the  functioning  of  the  Palestinian  Authority 

and  indeed  of  other  Palestinian  public  institutions  is  severely  compromised  by 

budgetary difficulties.  This has required that the Community, along with other donors, 

support the budget of the Palestinian administration for a temporary period. 

The  present  Regulation  would  bring  Regulation  1734/94  on financial and  technical 

cooperation with the Occupied  Territories into line with this reality, thus providing a 

solid legal base for actions of recurrent cost  support to the Palestinian administration, 

out of the Community budget. 

The line of action has been recommended to the Commission by the Court of Auditors, 

in its 1995 report on financial and technical support to the Middle East Peace Process. 

2. The Council announced at the Donors Conference  of October  1993, following the 

Declaration  of Principles between  Israel  and the PLO, that  the  Commission  and the 

EIB would commit 500 MECU to the development  of the West Bank and Gaza Strip 

for  the years  1994-98, and that  half of this  commitment  would  be fulfilled  by loans 

from  the EIB.  To formalise this, the Council amended Regulation  1763/92 (which at 

the time was the Regulation governing EIB off-protocol  lending in the Mediterranean), 

to  allow  such  lending  in  the  West  Bank  and  Gaza  Strip  as  well  as  the  other 

Mediterranean  partners.  In its letter  of  11th July to the Bank, the Commission also 

stated that by the end of 1996, the Commission and the Council would examine 'what 

measures, if any, might be required  to  allow the Bank to  continue the  interventions 

^ 

foreseen  in favour  of the Territories  up to  the end of  1998'.  (The Council  formally 

adopted the renewal of EIB mandates on 14th April 1997 until 2000 - CD 97/256/EC) 

The 'Joint Commission/EIB report to the Council' on the 'situation of EIB lending' in 

the West Bank and Gaza  Strip, and on a possible  'extension  of the EIB mandate' to 

finance  projects  in these areas, sets out the constraints to fulfilling  the mandate given 

to the Bank by the Council in October  1993 (following  the Declaration of Principles 

between Israel and the PLO), to lend 250 MECU out of the Bank's own resources by 

1998. 

These constraints include: 

•  the substantial foreign  aid pledged for the West Bank and Gaza Strip being greater 

than the real absorptive capacity of the economy; 

•  the availability of donor grants, which tend to crowd out loan  finance; 

•  a relative lack of project preparation capacity on the part of Palestinian institutions; 

•  relatively limited private investment opportunities in the West Bank and Gaza Strip, 

even under normal conditions, 

•  the precarious budgetary position of the Palestinian Authority; and 

•  the  reluctance  of the  Palestinian  Authority  to  borrow  at  market  rates,  due  to  its 

limited debt-bearing capacity. 

In this report, the Bank and the Commission conclude that the EIB will be unable to 

fulfill  the political mandate entrusted to it by the Council in October  1993, following 

the Declaration of Principles between Israel and the PLO, of lending 250 MECU in the 

West Bank and Gaza Strip by 1998 - unless the conditions applying to the fulfilment  of 

that mandate are altered on the basis of the following elements: 

3 

• 

the extension of its mandate in the West Bank and Gaza Strip to 2000; 

•  project-by-project  examination  of the  possibility  of  blending  grants  - for  feasibility 

studies, technical assistance and parallel financing  - out  of the resources available to 

the Community, with Bank lending; 

•  project-by-project  examination  of the possibility of extending  interest  rate  subsidies 

to loans made by the European  Investment  Bank to  all public  sector  projects  in the 

West  Bank  and  Gaza  Strip, not just  environmental  ones, to  be financed out  of  the 

budgetary resources available to the Community. 

The  latter  two  measures  could  make  EIB  loans  more  attractive  to  the  Palestinian 

Authority.  Although the Commission and the Bank are of the view that,  'in any event, 

...the Bank's commitment  in GWB up to  1999 will fall  short  of the original mandate to 

lend  up  to  250  MECU',  the  Report  states  that  were  such  actions  as the  above  to  be 

taken,  the  total  of  EIB  lending plus  the  additional  budgetary  resources  blended  with 

them, could amount to a total which may be 'acceptable to the Palestinian  Authority'. 

Only  the  latter  of  the  three  actions  recommended  in  the  Report  and  detailed  above 

would require regulation. 

On  14  April  1997  the  Council  adopted  new  EIB  lending  mandates.  As  far  as  the 

Mediterranean region is concerned, the new mandate does indeed cover the West Bank 

and Gaza Strip, and extends until end January 2000. 

The Commission is already engaged in project-by-project  examination of the possibility 

of blending  grants  - for  feasibility  studies, technical  assistance  and  parallel  financing  -

out of the resources available to the Community, with Bank lending, under  Regulations 

1488/96 and  1734/94. 

4 

However, legal provision would  need to be made to extend the possibility of interest 

rate subsidies to projects other than environmental in the West Bank and Gaza Strip. 

The minutes  of the  Council  meeting  of  11th July  1994  state:  'The  Council  and  the 

Commission declare that the possibility of applying interest rate subsidies for all of the 

EIB's  loans foreseen  in favour  of the  Occupied  Territories  will  be  examined  at  the 

appropriate time'.  The present  legal basis for  granting interest  rate  subsidies to EIB 

loans  in  the  Mediterranean  region  is  the  MEDA  Regulation  (1488/96).  However, 

under this Regulation the Commission may not extend interest rate subsidies  financed 

by the  budgetary  resources  of  the  Community  to  projects  undertaken  by the  Bank 

unless these are in the environmental sector. 

The Commission is unwilling to propose amendment to Regulation  1488/96 (MEDA) 

to allow extension of interest rate subsidies to projects  other than environmental.  To 

allow exception to the general principle enshrined in MEDA that  only environmental 

projects may be subject to interest rate subsidy, would, in the view of the Commission, 

set a dangerous precedent. 

Therefore the proposed amendment would therefore be made to 1734/94. 

At present this Regulation permits the Commission to  commit  Community  aid in the 

West  Bank  and  Gaza  Strip,  for  investment  projects,  feasibility  studies,  technical 

assistance  and  training  (Article  2.2),  in  the  following  priority  areas  (Article  2.1): 

infrastructure,  production,  urban  and  rural  development,  education,  health,  the 

environment,  services,  foreign  trade,  the  setting-up  and  improvement  of  institutions 

necessary for the proper working of the public administration and the advancement of 

democracy  and  human  rights.  The  Regulation  at  present  specifies  that  Community 

financing  for projects and operations covered by this Regulation will be in the form of 

grants. 

It  is already  stated  at  Article  3 that  'The  aid  referred  to  in this  Regulation  may be 

combined  with  the Bank  financing from own  resources...'.  This  amendment  would 

enable the Commission to  grant  interest  rate  subsidy  to  Bank  loans  made to  public 

sector projects in the areas set out in the Regulation and recalled above. 

5" 

The procedures pertaining to the granting of interest rate subsidies to loans accorded 

by the  Bank  in the  West  Bank  and  Gaza  Strip  shall  be those  laid  down  under  the 

Regulation 1488/96 (MEDA).  These ensure that the Mediterranean Committee is duly 

consulted on the project on which it is proposed to grant an interest rate subsidy.  The 

subsidy rate shall be 3%. 

To summarise, the purpose of the proposed  amendment is to  allow the possibility of 

applying interest  rate subsidies to  all public sector loans in the West Bank  and Gaza 

Strip. 

FINANCIAL ANNEX 

Relevant articles of the Community budget 

B7-420 

Description of action 

Amendment of Council Regulation  1734/94 to provide the legal base for recurrent cost 

support out of the Community budget for the Palestinian administration. 

Amendment of Council Regulation  1734/94 to provide the legal base for interest rate 

subsidy out of the budgetary resources available to the Community, to loans made out 

of EIB own resources for projects in the West Bank and Gaza Strip. 

Financial implications 

None (the Decision will have no bearing on financial allocations already made to the 

budget Article concerned). 

G 

PROPOSAL FOR A COUNCIL REGULATION (EC) 

amending Council Regulation (EC) No  1734/94 of 11 July  1994 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 13 Ow thereof, 

Having regard to the proposal from the Commission, 

Acting in accordance with the procedure referred to in Article 189c of the Treaty, 

Whereas  Council  Regulation  (EC)  No.  1734/94  of  11th July  1994  on  financial  and 

technical cooperation with the Occupied Territories, recognises that the setting up and 

improvement  of institutions necessary for  the working of the public administration is 

crucial to the development process in the West Bank and Gaza Strip, 

Whereas temporary support is necessary for the recurrent cost of the Palestinian public 

sector, 

Whereas is necessary to  amend Council Regulation  1734/94 to  provide  explicitly  for 

such support, 

Whereas  Article  3  of  Council  Regulation  (EC)  No.  1734/94  of  11  July  1994  on 

financial and  technical  cooperation  with  the  Occupied  Territories  extends  the 

possibility  of  the  combination  of  Community  measures  in the  West  Bank  and  Gaza 

Strip with Bank financing from own resources, 

7 

Whereas  it  is  considered  desirable  that  the  possibility  of  interest  rate  subsidy  is 

extended to projects in the West Bank and Gaza Strip in the priority areas laid down in 

Article 2( 1 ) of that Regulation,  , 

Whereas  it  is necessary  to  amend  Council  Regulation  1734/94  to  allow  for  such a 

possibility, 

HAS ADOPTED THIS REGULATION. 

Article 1 

1. 

Article  2(2)  of  Council  Regulation  (EC)  No.  1734/94  of  11  July  1994  on 

financial  and technical  cooperation  with  the  Occupied  Territories  is replaced  by the 

following: 

'Community  aid  may  be  given  for  investment  projects,  feasibility  studies,  technical 

assistance  and  training,  and  for  temporary  support  for  the  recurrent  costs  of  the 

Palestinian public administration.' 

2. 

Article 2(3) is amended as follows: 

'Community financing for projects and operations covered by this Regulation shall be 

in the form of grants or interest rate subsidies on lending by the Bank out of its own 

resources.  The subsidy rate shall be 3%.' 

Article 2 

Article 4 of Council Regulation  (EC) No.  1734/94 of  11 July  1994 on financial and 

technical cooperation with the Occupied Territories is replaced by the following: 

' 1. 

Financing decisions on projects and operations to which grants are made 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 keep the Committee referred to in Article 5 regularly informed 

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. 

'4. 

Financing  decisions  on interest  rate  subsidies  shall be  adopted  in  accordance 

with the procedure laid down in Article  12 of Council Regulation No  1488/96 of 23 

July 1996.' 

Article 3 

This Regulation shall enter into force  on the third day following 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. 

Done at Brussels, 

FINANCIAL  STATEMENT 

Article B7-420  :  Community operations connected with the Israel/PLO peace agreement 

Outturn  1996 

Appropriations 

Appropriations 

% change 

authorised  1997 

requested  1998 

ECU '000 000 

Commits 

Payments 

Commits 

Payments 

Commits 

Payments 

Commits 

Payments 

1 

52 

2 

3 

4 

5 

6 

7=5/3 

8=6/4 

49.4 

50.0 

50.0 

50.0 

50.0 

0 

0 

1. 

TITLE OF OPERATION 

See below 

2. 

BUDGET HEADING  INVOLVED 

See below 

3. 

LEGAL BASIS 

Council Regulation (EC)  1734/94 of  11 July 1994 

4. 

DESCRIPTION  OF OPERATION: 

4.1 General  objective 

The  economic  and  social  effects  of  a  long  occupation  are  to  be  seen  in  the 

territories  of  the  West  Bank  and  Gaza  Strip.  The  social  and  economic 

infrastructure  is weak  and  ineffective,  and  the  economic  indices fall  far  below  the 

levels reached  by neighbouring  countries.  Before  the West  Bank  and  Gaza  Strip 

can actually be properly integrated  into the regional  economy  and  particularly  into 

the  Euro-Mediterranean  area,  donors  must  aim  towards  the  rehabilitation  and 

institutional, social and economic development of the Palestinian people. 

•7 

The general objective of this budget heading is therefore to finance basic social and 

economic  infrastructure  projects,  with  the  emphasis  on  education. 

The 

Commission  also  considers  it  particularly  important  to  secure  the  institutional 

development of the Palestine administration, in order to restore infrastructure  and 

services to the inhabitants and raise their standard of living.  Economic growth may 

also be promoted  through the  support  provided  under  this  same heading  for  the 

private sector. 

The Commission, among other donors, has already been asked to contribute over a 

temporary period to the operating costs of the Palestine administration, in order to 

maintain services for the Palestine people while the new administration is being set 

up. 

The  Community's  efforts  are  being  carried  out  not  only  in  the  context  of  the 

Middle East peace process, but also in the context of the efforts  of all the donors 

involved  in  developing  the  West  Bank  and  Gaza  Strip.  These  donors  are  all 

working in accordance with the priorities communicated to them by the Palestinian 

Authority. 

4.2  Period covered and arrangements for renewal or extension 

5 years (1994-98) 

At  the  end  of  this  period,  account  being  taken  of  the  advice  given  by  the 

Commission's  Technical Assistance Office  (ECTAO) in the West Bank and Gaza 

Strip, a decision will be taken, if necessary, to continue the Community's  financial 

aid.  The Commission might seek to change the legal basis and present its proposal 

for an amount to the budgetary authority. 

5. 

CLASSIFICATION OF EXPENDITURE OR REVENUE 

5.1 Non-compulsory expenditure 

5.2 Differentiated appropriations 

5.3 Type of revenue involved: none 

6.  TYPE OF EXPENDITURE OR REVENUE 

I 

-  100% grant 

-  Grant  for  cofmancing  with  other  sources  in  the  public  and or  private  sector: 

financing  in  parallel  with  the  European  Investment  Bank  could  possibly  be 

considered for certain projects, particularly infrastructure  projects. 

-  Interest subsidies 

-  Other: none. 

-  Should  the operation prove  an economic success, is there provision for  all  or part 

of the Community contribution to be reimbursed? No. 

-  Will the proposed  operation cause any change in the level of revenue?  If  so, what 

sort of change and what type of revenue is involved?  No. 

-  Redeployment:  in  cases  where  the  Commission  could  set  up  revolving  funds  for 

certain projects. 

7. 

FINANCIAL  IMPACT 

7.1  Method of calculating total cost of operation for  1997 

At the  1993 donors'  conference  the  sum of ECU 250 million from the Community 

budget was announced for the five years  1994-98, i.e. about ECU 50 million a year 

from this budget heading, up to  1998 inclusive. 

The Palestinian  people of the West Bank  and Gaza  Strip suffer  from  a shortage  of 

social facilities,  with  an unacceptable  level of basic  infrastructure  such  as schools, 

medical  services and other  social  support  systems.  There is therefore  an unlimited 

call  for  expenditure  on  infrastructure  and  the  establishment  of  government  and 

public administration institutions. 

Out  of  its package  of  ECU 50  million,  the  Commission  intends  to  commit  some 

15%  in  1997  in  order  to  make  up  the  public-sector  budget  deficit,  65%  for 

infrastructure  projects,  especially  at  municipal  level  and  more  especially  in 

education,  leaving  another  10%  for  institutional  support  operations. 

The 

Commission  will  also  commit  some  ECU 5 million  for  technical  assistance,  which 

includes  not  only operations  involving the  management  and  monitoring,  including 

I 

financial  monitoring, of projects, but also the preparation of its major  infrastructure 

projects (e.g. feasibility  studies). 

7.2 

Itemised breakdown of cost 

CA/PA in ECU '000 000 

Breakdown 

Budget 97 

PDB98 

CA  public deficit 

C A  infrastructure 

CA institutional  support 

C A technical assistance 

EC  TOTAL 

7.5 

32.5 

5 

5 

50 

7.5 

32.5 

5 

5 

50 

% 

change 

0 

0 

0 

0 

0 

8. 

FRAUD PREVENTION MEASURES: RESULTS OF MEASURES TAKEN 

The  Commission  is  aware  of  the  fact  that  the  Palestinian  administration  is  relatively 

inexperienced,  and  that  its financial monitoring  rules  and  procedures  were  established 

only  recently.  The  ECTAO  technical  assistants  monitor  the  Commission  projects,  on 

the  basis  of  advice  from  European  consultants  paid  by  means  of  commitments  under 

this budget item (under the heading of technical  assistance). In the case of Community 

contributions to operating costs, the Commission  places the main emphasis on  financial 

monitoring and audit. 

These  measures  do  not  in  any  way  undermine  the  normal  checks  by the  Commission 

and  the  Court  of  Auditors,  it  being  laid  down  in  all  the  financial  agreements  for 

Commission  projects  that  the  right  of  subsequent  access  by  the  Commission  and  the 

Court is guaranteed for all projects. 

9. 

ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific quantifiable  objectives, target  population 

Ai 

-  Specific quantifiable objectives, target population: 

The target  population group is still the Palestinian people of the West Bank and 

Gaza Strip, which have some 2.3 million inhabitants (a number likely to  increase 

in  the  next  few  years  with  the  return  of  many  exiles  to  these  territories),  and 

especially the poorest  among them.  These people  live mainly in the Gaza  Strip 

(where  almost  three-quarters  of  the  population  are  refugees,  but  also  in  the 

municipalities  and  rural  regions  of  the  West  Bank,  where  the  infrastructure  is 

often  rudimentary and in any event generally  ineffective). 

The Commission's intervention  strategy  has been laid  down  in accordance with 

the  priorities  of  the  Palestinian  Authority.  Like  all  donors,  the  Commission 

depends  on the  priorities  laid  down  by the Palestinian  Authority,  which  always 

follows the advice of the World Bank in this matter. 

The Palestinian  Authority  is expected  to  make  known  a list  of its priorities  for 

1997,  and  its  long-term  development  strategy  (at  present  in  the  course  of 

preparation),  at  the  next  meeting  of  the  Consultative  Group  chaired  by  the 

World Bank, expected to take place in autumn  1996.  (It  should nevertheless be 

borne  in  mind  that  the  new  Palestinian  Authority,  which  is  being  set  up  on  a 

permanent  basis  following  the  January  1996  elections,  may  still  not  have 

definitively  determined its priorities by that  date.) 

In  the  light  of  the  priorities  established  in  this  way,  the  Palestinian  Authority 

presents to the Commission its requirements for the use of Community  funds. 

In  terms  of  investment,  the  Commission  could  bear  the  cost  of  providing 

infrastructure  in the areas of health, education, and production, for  example, but 

it  is probable  that  in  1997  -  provided  this  fits  into  the  long-term  development 

strategy  of the  Palestinian  Authority  and  in  its  list  of  priorities  -  the  emphasis 

will be placed  on the one hand  on  primary,  secondary  and  university  education 

and  on vocational  training,  and  on the  other  on  the  development  of  urban  and 

rural infrastructure  (sanitation, sewerage, solid waste and energy). 

•1 v 

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The  establishment  of  the  Palestinian  Authority's  institutions,  including  its 

ministries, the municipalities,  the  Council  and  other  central  bodies, will  also be 

given priority. 

The  Commission  will  also  provide  the  technical  assistance  required  for 

implementing  aid  of  this  kind,  and  the  cost  of  drawing  up,  managing  and 

monitoring projects (from  the financial  and other aspects). 

It should also be said that the preparation  of projects,  and their  implementation, 

takes  place  in  accordance  with  the  Commission's  "Logical  Framework 

Approach".  This  approach  is  aimed  not  only  at  the  proper  preparation  of 

projects  and the effectiveness  of their  implementation,  but  consequently  also  at 

the  observance  of  the  criterion  of  cost-effectiveness  and  sustainability  as 

compared with the alternatives. 

The  success  of  the  Commission's  objectives  can  be  measured  against  the 

attainment  of  the  Palestinian  Authority's  priorities  and,  more  specifically,  the 

projects  which  come  under  the  specified  development  strategy.  If  account  is 

also taken  of the  activities  of  other  donors,  the  Commission  will  consider  that 

its objectives  have been attained  in so far  as basic social infrastructure  has been 

established  or replaced, where the (above-mentioned)  services to the Palestinian 

population  are  improved,  becoming  more  effective  and  better  targeted,  and 

where  the Palestinian  administration  is better  equipped  to  operate  and  plan  its 

services. 

As regards  a  possible  Community  contribution  for  covering  the  public  sector's 

budget  deficit,  the  Commission  will  take  account  of the  progress  made  by  the 

Authority towards balancing the budget through efficient  revenue collection and 

above all strict control of expenditure. 

During the entire implementation  period, the Commission  Representative  in the 

West Bank and Gaza  Strip will take charge of coordinating  projects  with  other 

donors, through the "Local Aid Coordination  Committees" set up by the donors 

and  the  Palestinian  Authority,  and  with  the  support  of  the  team  of  technical 

assistants  in  the field and  possibly  consultants  funded  by  this  budget  heading. 

Consultations can reduce the danger - arising from the large number of donors -

1Ç 

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of  duplication  of  effort. 

Furthermore,  these  consultations  can  ensure  that 

maximum  benefit  is  derived from the  activities  of  all  concerned,  especially  if 

each donor sets his priorities in the sectors in which he is most experienced and 

best placed to ensure the most effective  action possible. 

9.2. Grounds for the operation 

-  Need for  Community financial aid 

The  Community  assistance  given  to  the  Palestinian  people  forms  part  of the 

funds earmarked for the development of the Mediterranean area.  This  financial 

support policy involves strengthening the political, economic and social  balance 

of the Mediterranean  region and hence the southern frontiers of the European 

Union. 

The Palestinian  population  has undergone a lengthy process, during which the 

social  and economic infrastructure  has been  declining,  and  there  is  a need  to 

replace  this  infrastructure  and  to  set  up  a  viable,  efficient  Palestinian 

administration  which can cope with rebuilding these territories. 

It  would be 

impossible  for  the Palestinian  people to  fit  into  the  regional  economy  or  the 

Euro-Mediterranean  area unless they achieved economic development more on 

a  par  with  the  economic  levels  already  attained  by  neighbouring  countries. 

There  is  no  point  in  aiming  at  development  of  this  kind  until  the  basic 

infrastructure is in place and an efficient  administration has been set up. 

Furthermore, given that  the rehabilitation  of the territories  is the  focus  of an 

unprecedented  international  effort  involving  at  least  40  donors, the  European 

Union could hardly fail to join in this effort. 

-  Choice of ways and means 

In the form of grants. 

-  Main factors  of  uncertainty  which could affect  the  specific results of the 

operation 

Even if the political  situation  is still  precarious, the main risks stem from the 

Palestinian administration's relative lack of capacity and experience.  In view of 

1e 

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the large volume  of  international financial aid,  and the number of  sectors and 

projects  to  which  donors  are  required  to  contribute,  the  danger  is  that  the 

inexperienced  Palestinian  Authority,  despite  the  support  of  the  Local  Aid 

Coordination  Committees,  might  be  unable  to  programme  this  aid  effectively 

and in a targeted manner. 

In  order  to  minimise  the  dangers  of  poorly  targeted  aid,  the  Commission  is 

taking care to ensure the closest possible coordination with other donors and of 

course with the Authority itself. 

9.3  Monitoring and evaluation of the operation 

-  Performance indicators selected 

The Commission applies the Logical Framework Approach to all its projects.  It 

ensures that these projects are monitored by consultants in all the major sectors, 

and  that,  where  appropriate,  they  are  also  evaluated  in  order  to  determine 

whether it is worth continuing or extending an operation. 

-  Details and frequency of planned évaluation operations 

In  1997,  an  overall  evaluation  of  aid  was  undertaken,  following  the  Council 

resolution of  1  June  1995.  It takes in all the operations financed under heading 

B7-420 over the last ten years.  It is due to be completed in June 1998. 

-  Assessment of the results obtained 

The  Commission 

is  aiming  not  only  to  slow  down  the  process  of 

socio-economic  deterioration,  but also  to  improve  the basic  infrastructure and 

the  establishment  of government  institutions,  in order to  raise the  standard  of 

living  of  the  inhabitants  of  the  West  Bank  and  Gaza  Strip,  and  promote 

economic growth.  It is still difficult,  however, to measure the results obtained, 

given the inability of the Palestinian bodies to provide reliable statistics. 

This having  been  said,  and  given  that  the  Commission  is  already  entering  the 

second  stage of infrastructure  operations in the West Bank and Gaza  Strip, its 

operations  in these  areas will  be  carried  out  on the  basis  of  evaluation  of  the 

•n 

operations completed, and the results of the evaluation will become a factor in 

the decision-making process. 

The  European  objective  for  the  Mediterranean  region  is  to  integrate  the 

countries around Europe in a Euro-Mediterranean  area.  Three objectives will 

be set for integration: peace, democracy, rule of law;  sustainable economic and 

social  development;  sociocultural  dialogue  and  civil  society  (objectives  of 

MEDA  heading  B7-410).  Although  certain  aspects  of  the  Commission 

programme  are  aimed  in  these  three  directions,  and  although  the  territories 

concerned  can  receive  some  of  the  funds  from  heading  B7-410,  it  is 

nevertheless  necessary  for  the  basic  social  infrastructure  and  the  government 

institutions to be established.  The Commission will use this separate heading to 

place the emphasis, particularly for the next few years, on the rehabilitation  of 

West Jordan and Gaza Strip, so that these territories can truly become a part of 

the Euro-Mediterranean area. 

)  % 

ISSN 0254-1475 

COM(97) 552  final 

DOCUMENTS 

EN 

11  02  09 

Catalogue number  :  CB-CO-97-611-EN-C 

ISBN  92-78-27517-4 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

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