Proposal for Council Decision concerning the Community position within the Association Council on the participation of Poland in the Community programme in the field of small- and medium-sized enterprises
Date: 1998-03-04
Institutions: European Commission
Subjects: Central and Eastern European countries, EU programme, Poland, competitiveness, economic growth, small and medium-sized enterprises

COMMISSION OF THE EUROPEAN  COMMUNITIES 

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Brussels, 04.03.1998 
COM(1998) 113 final 

98/0078 
98/0079 
98/0080 
98/0081 
98/0082 
98/0083 
98/0084 

(CNS) 
(CNS) 
(CNS) 
(CNS) 
(CNS) 
(CNS) 
(CNS) 

Proposals for 
COUNCIL  DECISIONS 

concerning the Community position within the Association Council 
on the participation of Bulgaria, the Czech Republic, Estonia, 
Hungary, Poland, Romania and the Slovak Republic in 
the Community programme in the field of small- and 
medium-sized  enterprises 

(presented by the Commission) 

•v;\ 

i .,<• 

Explanatory  Memorandum 

On several occasions, the European  Council  has recognised the opening up of Community 
programmes  to  the  participation  of  the  associated  countries  of  Central  Europe  as  an 
important  step  forward  in  their  preparation  for  accession. 
In  the  conclusions  of  its 
meeting  of  12  and  13 December  1997  in  Luxembourg,  the  European  Council  reiterated 
the importance  of such participation,  as a tool  for  making candidate  countries  acquainted 
with the Union's policies and working methods. 

In addition to the Community programmes in such fields as education,  training and youth, 
it  is  now  proposed  to  open  up  the  programme  in  the  field  of  small  and  medium-sized 
enterprises  for  the  participation  of  Bulgaria,  the  Czech  Republic,  Estonia,  Hungary, 
Poland, Romania and the Slovak Republic from 1998 onwards. 

The Third Multiannual Programme is the cornerstone of the Community's  SME Policy. It 
provides the basis for actions which aim at raising the awareness of a significant  number 
of SMEs to the challenges of a business strategy which increases their  competitive 
position towards improving their share of transnational and international trade. A positive 
effect  of this would be to generate employment opportunities. 

In line with the analysis presented  in the Commission's SME policy Paper for the Madrid 
European Council1, the following five priority policy objectives are set out together with 
an outline of the actions which need to be taken at Community level: 

1.  Simplify  and improve the administrative and regulatory business environment; 

2.  Improve the financial environment  for  enterprises; 

3.  Help  SMEs to Européanise and internationalise their strategies, in particular 

through better information  services; 

4. Enhance SMEs'  competitiveness  and improve their access to research,  innovation 

and training; 

5.  Promote entrepreneurship  and support special target groups. 

In view of maximising efficiency  in the support to the SME sector in Central Europe, the 
Community should  aim at a high degree of coherence between the opening up of the Third 
Multiannual Programme for  SMEs, the opening up of other Community Programmes that 
contain actions directed towards  SMEs, the national Phare Programmes, and other 
existing or planned  support  activities directed  towards SMEs in the candidate countries. 

The Third Multiannual Programme  is focused  on SMEs, irrespective of their sector, legal 
form  or location  within the European  Economic Area. After  the entry into force  of 
Association Council Decisions, the Programme will be extended to the candidate 
countries in Central Europe who have confirmed  their interest in participating. 

1 "SMEs: a dynamic source of employment, growth and competitiveness in the European Union", Report 
presented by the Commission to the Madrid European Council, CSE(95) 2087. 

The Third Multiannual Programme covers the period  1  January  1997 to 31 December 
2000. 

The associated countries are already acquainted with some areas of the programme, 
mainly the information  area (Euro Info  Correspondence Centres exist in all the associated 
countries) and the business co-operation measures (ad-hoc participation of many SMEs 
from these countries in Europartenariat  and INTERPRISE events and participation in the 
business co-operation networks BC-NET and BRE). The candidate countries were 
offered  a menu of different  alternatives for participation in the programme and the 
Association Council Decisions reflect  the choice made by each country. 

The number of small and medium-sized  enterprises and their share of employment is 
growing in the Central European  countries, and this development is likely to continue over 
the coming years. The governments in the candidate countries have begun to recognise the 
political and economic importance of supporting SMEs and, on the whole, policies to that 
effect  have become a significant  part of the transition process. 

Despite considerable progress,  SMEs in candidate countries are still a long way from 
having the level of support and resources that exist in the EU, e.g., in support services, 
policy co-ordination,  or in development of appropriate legal and regulatory  frameworks. 
The enterprises in the candidate countries need to prepare for EU membership and the 
increased  competitive pressures to which they are likely to be exposed. 

In this context,  the opening up  of Community  programmes  is an important  element of the 
pre-accession  strategy.  The  participation  in  this  particular  programme  can  in  a  positive 
manner  contribute  to  preparing  SMEs  and  their  SME  representative  organisations  for 
future  accession. 

According  to  the  provisions  of  the  Europe  Agreements  or  their  Additional  Protocols, 
participating  candidate  countries  will  meet  themselves  the  costs  resulting  from  their 
participation; they are, however,  entitled to use part of their National Phare allocations  for 
complementing their contributions from  their own budgets. Bulgaria, The Czech Republic, 
Estonia,  Hungary,  Poland,  Romania  and  the  Slovak  Republic  have  confirmed  to  the 
Commission in writing their willingness to participate in the Community programme in the 
field  of  small  and  medium-sized  enterprises  as  from  1998  and  to  make  available  the 
necessary  budgetary  appropriations,  as  calculated  by  the  Commission  services.  They 
»;£  envisage  paying  part  of  their  financial  contribution  from  their  national  budgets  and  part 
'"''  from  their Phare allocations. 

A  question  of  particular  importance  to  these  countries  is  the  way  in  which  they  will  be 
associated  to  the  management  and  decision  making  process  of  the  programme  to  which 
they  will  contribute  financially.  As  mentioned  in  the  Presidency  conclusions  of  the 
Luxembourg  European  Council  of  12 and  13 December  1997,  their  participation  will  be 
an opportunity to get acquainted  with the Community's legislation and proceedings. In the 
draft  Association  Council decisions, it is proposed that they will be closely involved  in the 
evaluation  of  their  participation  in  the  programme,  be  invited  to  co-ordination  meetings 
prior to the meetings of the Management  Committee, and informed  about its results. 

The  main  issues  addressed  in  the  annexed  draft  Decisions  of  the  Association  Councils 
adopting  the terms  and  conditions  for  the  participation  of  Bulgaria,  the  Czech  Republic, 

Estonia,  Hungary,  Poland,  Romania  and  the  Slovak  Republic  in  the  Community 
programme in the field of small and medium-sized  enterprises are the  following: 

-  the  seven  countries  concerned  shall  participate,  unless  otherwise  provided  in  the 
Decisions, in all actions of the Third Multiannual Programme for  SMEs (1997-2000); in 
practice, Hungary and Poland  expressed their wish to participate in all the actions of the 
Programme, while Bulgaria, the Czech Republic, Estonia, Romania and  Slovak Republic 
opted  for  a partial  participation;  conditions for  submission, assessment  and  selection  of 
applications  will  be  the  same  as  for  the  Member  States  of  the  Community  (Annex  I, 
paragraphs  1 and 2), up to the level of their financial contributions  (Annex H, paragraph 
2). 

- the financial contributions  of these  countries  and the rules governing  their  contributions 

are defined  in Annex I, paragraph 4 and in Annex II. 

-  these  countries  shall  be  associated  to  the  evaluation  of  their  participation* in  the 

Programme (Annex I, paragraph 6). 

- they  shall be invited  to  co-ordination  meetings prior to the meetings  of the  Programme 

Committee and will be informed  about its results (Annex I, paragraph  7) 

- the Decision  shall apply for  the duration  of the Programme (i.e. 31.12.2000,  Article 2 of 

the Association  Council Decision). 

The  adoption  of  Association  Council  Decisions  to  allow  Bulgaria,  the  Czech  Republic, 
Estonia,  Hungary,  Poland,  Romania  and  the  Slovak  Republic  to  participate  in  the 
Community  programme  in the field of  small  and  medium-sized  enterprises  as  from  1998 
will offer  these  countries  the opportunity  to  actively  integrate  in the  Community's  policy 
in  this  area,  in  the  framework  of  the  pre-accession  strategy.  It  is,  therefore,  of 
considerable political importance. 

Subject  to  their  capacity  to  fulfil  the  relevant  administrative  and  budgetary  requirements 
and,  in  the  case  of  Slovenia,  to  the  entry  into  force  of  its  Europe  agreement,  other 
applicant countries  should  also be able to join the programme in the course of 1998. 

In  order  to  allow  the  participation  of  Bulgaria,  the  Czech  Republic,  Estonia,  Hungary, 
Poland,  Romania  and  the  Slovak  Republic  in  the  Community  programme  in  the  field  of 
small  and  medium-sized  enterprises  as from  early  1998, the Council  is requested  to  adopt 
the annexed  draft  Decisions. 

Proposai for a 
Council  Decision 
of... 
concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Bulgaria  in  the  Community  programme  in  the  field  of  small  and 
medium-sized  enterprises 

^ 

~Q Og  (chl}s) 

THE COUNCIL OF TB[E EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130, paragraph  3, in conjunction  with Article 228, paragraph  3, first alinéa thereof, 

Having regard to the proposal  from  the Commission, 

Having regard to the opinion  of the European  Parliament, 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and 
Bulgaria,  of  the  other  part,  has  been  concluded  by  Decision  of  the  Council  and  the 
Commission of 4 December  1995. 

Whereas  according  to  Article  1 of  the  Additional  Protocol,  Bulgaria  may  participate  in 
Community  framework  programmes,  specific  programmes,  projects  or  other  actions 
notably in the field of small  and  medium-sized  enterprises  and,  according to  Article 2, the 
terms and conditions for  the participation  of Bulgaria in the activities referred  to in Article 
1 shall be decided by the Association  Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to  2000)1 and  in particular  Article 7(1)  thereof,  provides that  this  programme  shall 
be open to  the  participation  of  associated  Central  European  countries  in accordance  with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation in Community  programmes. 

HAS DECIDED  AS  FOLLOWS: 

The position to  be taken  by the Community  within the Association  Council  established  by 
the  Europe  Agreement  between  the  European  Communities  and  their  Member  States,  of 
the  one part,  and  Bulgaria,  of  the  other  part,  concerning  the  participation  of Bulgaria  in 
the  Community  programme  in  the  field  of  small  and  medium-sized  enterprises  is  the 
attached  draft  decision  of the Association  Council. 

Done at Brussels, 

For the Council, 

1  OJ No L 6/25  of  10.01.1997 

Draft  Decision  n°..../98  of  the  EC-Bulgarian  Association  Council  of. 
1998 
adopting  the  terms  and  conditions  for  the  participation  of  Bulgaria  in  the 
Community  Programme  in  the Held of small and  medium-sized  enterprises 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement establishing an association between the European 
Communities and their Member States, of the one part, and Bulgaria of the other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between  the European  Communities and their Member  States, of the one part, 
and  Bulgaria,  of  the  other  part,  concerning  Bulgaria's  participation  in  Community 
programmes2,  and in particular Article  1  and 2 thereof, 

Whereas  according to  Article  1 of the said  Additional Protocol,  Bulgaria  may  participate 
framework  programmes,  specific  programmes,  projects  or  other 
in  Community 
Community actions notably in the field of small and medium-sized  enterprises, 

Whereas  according to  Article  2 of the  said.Additional Protocol  the terms  and  conditions 
for  the participation  of Bulgaria  in the activities  referred  to  in Article  1 are to  be  decided 
by the Association  Council, 

HAS DECIDED  AS  FOLLOWS: 

Article  1 

Bulgaria  shall  participate  in  the  Third  Multiannual  Programme  for  Small  and  Medium-
sized  Enterprises  (SMEs)  in the European  Union  (1997 to  2000)  according  to  the  terms 
and  conditions  set  out  in  Annexes  I  and  II  which  shall  form  an  integral  part  of  this 
Decision. 

Article 2 

This Decision shall apply for the duration of the programme.-

Article  3 

This Decision  shall enter into force on the first day of the month following  its adoption. 

Done at 

The Chairman 

For the Association  Council 

1  OJN°L347of31.12.1993 

2  OJN°L317of30.12.1995 

ANNEX I 

Terms and conditions  for  the participation  of Bulgaria  in the Third  Multiannual 
Programme for  Small and  Medium-sized  Enterprises  (SMEs) in the European 
Union  (1997 to 2000) 

1. 
Bulgaria  will  participate  in  all  activities  of  the  Third  Multiannual  Programme  for 
Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000) 
(hereinafter  called "the Programme"), except the organisation of IBEX events in  1998 and 
1999,  in  conformity,  unless  otherwise  provided  in  this  Decision,  with  the  objectives, 
criteria,  procedures  and  timelimits  laid  down  in  Council  Decision  (97/15/EQ  of  9 
December  1996  on  a  Third  Multiannual  Programme  for  Small  and  Medium-sized 
Enterprises  (SMEs)  in the European  Union  (1997  to  2000)  and  in  particular  Article  7(1) 
thereof. 

The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
2. 
applications  related  to  eligible  institutions,  organisations  and  individuals  of Bulgaria  will 
be the same as those applicable to  eligible institutions, organisations and individuals of the 
Community. 

Where  appropriate, 

3. 
in  order  to  ensure  the  Community  dimension  of  the 
Programme,  transnational  projects  and  activities proposed  by Bulgaria will be required  to 
include a minimum  number  of partners  from  the Member  States  of the Community.  This 
minimum  number  will  be  decided  in  the  framework  of  the  implementation  of  the 
Programme,  taking  into  account  the  nature  of  the  various  activities,  the  number  of 
partners in a given project,  and the number of countries participating in the Programme. 

4. 
Bulgaria  will  pay  each  year  a contribution  to  the  general  budget  of the  European 
Communities  to  cover  the  costs  resulting  from  its  participation  in  the  Programme  (see 
Annex  II).  The  Association  Committee  is  entitled  to  adapt  this  contribution  whenever 
necessary. 

The Member  States of the Community and Bulgaria will make every effort,  within 
5. 
the framework of the existing provisions,  to facilitate  the free movement  and residence  of 
all eligible persons to the Programme moving between Bulgaria and the Member  States of 
the Community for the purpose of participating in activities covered by the Decision. 

6. 
Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises  (SMEs)  in-the European  Union (Article 6), the participation  of Bulgaria 
in the Programme will be continuously  evaluated  on a partnership basis involving Bulgaria 
and  the  Commission  of  the  European  Communities.  Bulgaria  will  submit  the  necessary 
reports  to  the  Commission  and  take  part  in  other  specific  activities  set  out  by  the 
Community in that context. 

i 1 

7. 
Without prejudice to the procedures referred to in Article 4 of the Decision on the 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  Bulgaria  will  be  invited  to  co-ordination  meetings  on  any  question 
concerning  the  implementation  of  this  Decision  prior  to  regular  meetings  of  the 
Programme  Committee.  The  Commission  will  inform  Bulgaria  about  the  results  of  such 
regular meetings. 

8. 
The language to be used as regards the application process,  contracts,  reports to 
be submitted and other administrative arrangements for the Programme, will be one of the 
official  languages of the Community. 

g 

ANNEX II 

FINANCIAL CONTRIBUTION  OF BULGARIA TO THE THIRD 
MULTIANNUAL  PROGRAMME FOR SMALL AND  MEDIUM-SIZED 
ENTERPRISES  (SMES) IN THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial contribution of Bulgaria will cover; 

- 

financial  support from the Programme to the participation of Bulgarian  entities 
in activities as defined  in Annex 1.1., 

-  supplementary  costs of an administrative nature related  to the management  of 
the Programme by the Commission stemming from Bulgaria's  participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received  from  the Programme by the Bulgarian beneficiaries  will not  exceed 
the  supplementary 
the  contribution  paid  by  Bulgaria,  after  deduction  of 
administrative costs. 

Should  the  contribution  paid  by  Bulgaria  to  the  general  budget  of  the  European 
Communities,  after  deduction  of  the  supplementary  administrative  costs,  be  higher 
than  the  aggregated  amount  of  subsidies  or  other  financial  support  received  by  the 
Bulgarian  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's contribution.  Should  such a balance be left  when the Programme  comes to an 
end, the corresponding amount will be reimbursed to Bulgaria. 

3.  Bulgaria's  annual  contribution  will  be  of  ECU  726,102  in  1998  and  1999  and  of 
ECU  833,102  in  2000.  From  these  sums,  an  amount  of  ECU  47,502  in  1998  and 
1999 and ECU  54,502 in 2000 will cover supplementary administrative costs related 
to the management  of the Programme by the Commission stemming from  Bulgaria's 
participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of Bulgaria. 
Upon  entry  into  force  of this Decision  and  at the  beginning  of each  following  year, 
the  Commission  will  send  to  Bulgaria  a  call  for  funds  corresponding  to  its 
contribution to the costs under this Decision. 

This  contribution  will  be  expressed  in  ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

Bulgaria  will  pay  its contribution  to the  annual  costs under  this  Decision  according 
to the call for  funds  and at the latest three months after  the call for  funds  is sent. Any 
delay  in the payment  of the contribution  shall give rise to the payment  of interest by 
Bulgaria on the outstanding  amount from  the due date. The interest  rate  corresponds 
to the rate applied  by the European  Monetary  Co-operation  Fund,  for  the month  of 
the due date, for its operations in ECU, increased by  1.5 percentage points. 

5.  Bulgaria  will  pay the  supplementary  administrative  costs referred  to  in paragraph  3 

from  its national  budget. 

Of the remaining costs of its participation in the Programme, Bulgaria will pay ECU 
0 in 1998, ECU 97,719  in 1999 and ECU 278,739  in 2000 from its national budget. 
Subject  to regular Phare programming  procedures, the remaining  ECU 678,600 in 
1998, ECU 580,881 in 1999 and ECU 499,861 in 2000 will be paid from  Bulgaria's 
annual Phare allocation. 

to 

FINANCIAL STATEMENT 

1.  TITLE  OF  OPERATION 

Participation  of Bulgaria in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING  INVOLVED 

B7-503  - Opening of Community Programmes to the associated  countries  of Central 
Europe 

3.  LEGAL  BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph  3, in conjunction  with Article 228, paragraph 3,  1st alinéa  thereof, 

Additional  Protocol  to  the Europe  Agreement  with Bulgaria  (Articles  228  and  238) 
of 30 December  1995,  providing  for  the opening-up  of Community  programmes  (OJ 
No 317/95, page 24), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the  European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF  OPERATION 

4.1.  General  objective 

The Third  Multiannual  Programme  for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment-; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial  environment for  enterprises; 
3.  Help  SMEs  to  Européanise  and 

internationalise 

their  strategies,  in 

particular through  better  information  and  co-operation; 

4.  Enhance  SME competitiveness  and  improve access to  research,  innovation 

and training; 

5.  Promote entrepreneurship and support specific target groups. 

Bulgaria's  participation  in  the  Community  programme  for  SMEs  will  further 
contribute to its preparation  for accession within the framework  of a reinforced 
preaccession  strategy.  It  will  also  enable Bulgaria  to  familiarise  itself with  the 
procedures  and  methods  used  in  the  Community  programme  in  the  field  of 
small and medium-sized  enterprises. 

w 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 
country.  This  decision  also  lays  down  the  practical  arrangements  for  opening 
up the programmes. 

The  Additional  Protocol  with  Bulgaria  entered  into  force  on  1 August  1996 
and  provides  for  Bulgaria's  participation  in  a  wide  range  of  areas,  amongst 
which small and medium-sized  enterprises. 

Bulgaria  confirmed  its  willingness  to  participate  also  in  other  Community 
programmes, notably in the fields of energy and human resources. 

4.2.  Period  covered  and arrangements for  renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare  contribution,  however,  is dependent  on decisions  concerning4he-budget 
after  1999. 

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory  expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph  of Article 3 of the Additional Protocol  stipulates that 
Bulgaria  itself  will  meet  the  costs  resulting  from  its  participation,  it  will  be 
invited  to  transfer  its  contribution  to  item  6091  of  the  EU's  budget  receipts. 
However,  as the second  paragraph  of Article 3 states that the Community may 
supplement  Bulgaria's  contribution  (through  its  national  Phare  allocation), 
Bulgaria will  contribute  only part  from  its national  budget,  with the  remainder 
being  charged  to  heading  B7-503.  A  transfer  from  the  relevant  Phare 
appropriations  (article B7-500)  to article B7-503  will be made upon  receipt  of 
the Bulgarian  contribution. 

6. TYPE OF EXPENDITURE OR REVENUE 

-  subsidy for  co-financing  with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments,  information 

-  no provision  for  all or part of the Community contribution to be reimbursed 

As  far  as  revenue  is  concerned,  provision  for  Bulgaria's  contribution  to  cover  the 
cost  of its participation  is made under item 6091. The revenue will be allocated to the 
items  for  expenditure  on  the  programme  in  question  and,  where  appropriate,  to  the 
relevant items of operating  expenditure. 

The total revenue expected  is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for  1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based on the following  preconditions: 

-  each partner country's contribution to the financing of the activities  referred 
to  in the  Protocol  is  calculated  according  to  the  principle  that  the  country 
bears  the cost  of  participation  itself. Heading  6091  has been  created  in the 
statement of budget revenue for that purpose; 

- 

the Community  may decide on a case-by-case basis to  pay a supplement  to 
the partner country's  contribution.  The  supplement  may be in the form  of a 
contribution  under the national PHARE programme. 

Based  on  the  Additional  Protocol  with  Bulgaria,  the  financial  and  budgetary 
.  arrangements  for  the  programme  concerned  are  as  follows:  Among  four 
alternatives,  Bulgaria  has  opted  for  a  contribution  based  on  the  estimation  of 
the real cost of participation  in all the strands of the SME programme. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Actions within the field of Distributive Trade (130,000 ECU) 
-  Actions within the field of Crafts and  Small Enterprises (20,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  10  centres  plus 
20,000 ECU for a decentralised information  campaign = 420,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of the  country  (41.86  enterprises/event  x 2  events/year x  700 
ECU  paid to  the National  Counsellor  per  SME for  costs, promotion,  etc. = 
58,600 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

-  For 

the  year  2000  only:  The  subvention 

IBEX  event 
(subcontracting).  The maximum contribution form the EU  is  100,000 ECU, 
and this must  not  exceed  25% of the total  budget  for  the event.  (However, 
given the size of these  events, it is a present  not foreseen  to  organise  more 
than one per year in Central Europe.) 

for  one 

The  cost  of  Bulgaria's  participation  in  the  Third  Multiannual  programme  for 
small  and  medium-sized  enterprises  (SMEs)  in  the  European  Union  (1997-
2000)  will  thus  in  1998  and  1999 be  ECU 726,102  per  year  and  in  the  year 
2000 ECU  833,102, including an additional 7% to cover administrative cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs  -  to  be  borne  exclusively  by Bulgaria  -  have  to  be  deducted,  is  divided 

• 

l3> 

per year  as follows  (subject  to the procedures  for  programming  the PHARE 
programme):  In  1998,  0%  of  the  operational  costs  will  be  covered  from 
Bulgaria's  national  budget  and  100% from the  annual PHARE allocation  for 
Bulgaria;  in  1999,  14.4%  of  the  operational  costs  will  be  covered  from 
Bulgaria's national budget  and 85.6% from the annual PHARE  allocation  for 
Bulgaria; in the year 2000, 35.8% of the operational costs will be covered  from 
Bulgaria's national  budget  and 64.2% from the annual PHARE allocation  for 
Bulgaria. 

7.2.  Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
Bulgaria 

of which 
Phare 

Small and 
medium-sized 
enterprises 

678,600 

678,600 

778,600 

2,135,800 

376,458 

1,759,342 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

Actions within die 
field of Distributive 
Trade 

Actions within  Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

130,000 

130,000 

130,000 

390,000 

20,000 

20,000 

20,000 

60,000 

Support to the EICCs 

420,000 

420,000 

420,000 

1,260,000 

Business Co-operation 

- Europartenariat 

-INTERPRISE 

Sub-contracting: 

IBEX 

58,600 
50,000 

58,600 
50,000 

58,600 
50,000 

175,800 
150,000 

-

-

100,000 

100,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

itv 

7.4.  Schedule  for  multiannual  operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
years-

TOTAL 

678,600 

580,881 

499,861 

0 

1,759,342 

Commitment 
appropriations 

Payment 
appropriations'** 

1998 

1999 

2000 

135,720 

407,160 

116,176 

135,720 

348,529 

99,972 

subsequent  years 

116,176 

399,889 

^  135,720 

523,336 

584,220 

516,065 

Total 

678,600 

580,881 

499,861 

1,759,342 

(*) Schedule based on the method of payment currently applying to this programme. 

The foreseeable annual receipts are as follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

0 

97,719 

278,739 

0 

376,458 

47,502 

47,502 

54,502 

0 

149,506 

Total 

47,502 

145,221 

333,241 

0 

525,964 

8.  FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

All the Commission's  contracts, agreements and  other legal commitments provide for 
on-the-spot  checks  by the  Commission  and  Court  of Auditors.  Among  other  things, 
the beneficiaries  of the operations are obliged to file reports and financial statements. 
These  are  analysed  from  the  point  of view  of their  content  and  the  eligibility  of the 
expenditure in line with the objective of Community  financing. 

m 

l>> 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific  and quantified  objectives; target  population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  fvill  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in  the  Internal  Market 
and promote their  internationalisation. 

In principle,  the  actions  in the Third  Multiannual  Programme  for  SMEs  could 
possibly  interest  all  the  SMEs  in  Bulgaria.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according  to  the typology  and the activity  of the enterprises  and  of the  nature 
of the actions developed. 

For  example,  among  the  15 million  SMEs in the European  Union,  1.5  million 
are most  likely to  be targeted  for  an  action  regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also  for  Bulgaria.  The  target  of the actions varying  according  to  the nature  of 
these actions. 

Furthermore,  the  actions  aim  at  the  professional  organisations,  the  Chambers 
of  Commerce  and  Industry,  the  Trade  Associations  and  other  intermediaries 
for the business  sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation  and growth.  Indeed,  the job  creation  rate of SMEs is higher than  that 
of the big enterprises. 

It  is, however,  necessary  to  recognise  the fact  that  SMEs  are  inherently  more 
vulnerable particularly  in the first years following their creation. This weakness 
stems, in particular from  the following five factors: 

• 
• 
• 

an increasingly  complex legal, fiscal and administrative  environment; 
difficulty  in participating in R&D programmes and in exploiting the results; 
structural  weakness of SMEs with regard tot theirs management  abilities as 
well as to the inappropriateness  of training programmes; 

•  difficulty  in obtaining finance at a reasonable cost; 
•  difficulty  in accessing markets for products and services. 

It is necessary to  underline - with regard to the subsidiarity approach - that  the 
actions  developed  at  Community  level  are taken  in a context  which  ensures  a 

16 

significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature,  to 
implement  networks  that  have  a""  Community 
dimension.  To  confine  such activities to  the national  level  would  not  only be 
impossible and less efficient,  but it would also distort competition to the extent 
that the level of support of each Member State would be extremely diverse. 

The  private  sector  share  in  production  and  employment  has  grown 
considerably  since  the  start  of  the  economic  restructuring  process.  A  large 
share of enterprises are SMEs, and it is likely that the Bulgarian economy will 
remain characterised by a large percentage of SMEs over coming years". These 
enterprises  will  need  to  prepare  for  EU  membership  and  the  increased 
competitive  pressures  this  is  likely  to  expose  them  to.  In  this  context,  the 
opening  up  of  Community  programmes  is  an  important  element  of  the  pre-
accession strategy,  complementing  other efforts to develop and strengthen the 
sector.  The participation in this particular programme can in a positive manner 
contribute to preparing  SMEs and SME representative organisation for future 
accession. 

-  Need for Community financial aid 

In view  of the substantial financial contribution of Bulgaria to  the programme 
and  Bulgaria's  precarious  budgetary  situation,  assistance  from  PHARE  as 
provided for in Article 3(2) of the Additional Protocol is essential. 

-  Choice of ways and means 

With  a  contribution  from  Bulgaria's  national  budget,  supplemented  by  one 
from PHARE,  Bulgaria's  participation  will  contribute  to  getting  acquainted 
with  the  internal  policies  and  proceedings  of  the  Community  in the  field  of 
Small and medium-sized  enterprises.  The integration of Bulgarian nationals in 
Community  networks  will  make  a definite  contribution  to  preparing Bulgaria 
for future membership. 

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

operation 

Since  projects will  be selected  according to  qualitative  criteria, it will  only be 
possible  to  measure  the  real  impact  on  the  basis  of  Bulgarian  citizens'  and 
SMEs'  capacity  to  respond  to  the  calls  for  proposal  to  be  launched  by  the 
Commission under the programme. 

9.3.  Evaluation of the operation 

The  evaluation  procedures  included  in the Third Multiannual  programme  for 
SMEs will also cover operations financed for Bulgarian beneficiaries. 

i> 

9.3.1 Performance  indicators 

The indicators are chosen in function  of the type of action undertaken. 

As  an  example,  in  the  field  of  Euro  Info  Centres  (EICs),  there  is  a  contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as  well  as  their  activity  in  relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other, "to  quality  is 
applied  and  the performance" of  each  EIC  is rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If  this  is  not  the 
case,  the  EIC  is  excluded  from  the  network  and  the  procedure  for  finding  a 
replacement  is initiated.  An evaluation report et published every six months. 

For the  business  co-operation  networks,  an annual  evaluation  of  the  network 
members  is based  on  the  number  of  co-operation  profiles  introdueedinto  the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured  by the participation  in conferences  and  seminars  organised  to  assure 
the implementation  of the foreseen  actions, the feed-back  in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution  of publications. 

In the case  of actions  specifically  in favour  of crafts  and  small  enterprises,  the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting from finance stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen  evaluation 

The  Council  Decision  of  9  December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of  the  Decision,  in  order  to  assess  whether 
the original objectives  have been met, including a cost-effectiveness  evaluation. 

9.3.3  Assessment  of results 

The  results  of  the  evaluations  are  generally  diffused 
to  the  concerned 
population  and  can  give  rise to  modifications  regarding  actions  undertaken  or 
new proposals for  actions. 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted  to the Management  Committee established  by the  Council Decision. 

18 

Reports  on the  results of the participation  of the associated  Central  European 
countries concerned  in the programme would in the same manner be  submitted 
to the Committee as well as to the countries concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff  and additional credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact  on the number of posts 

Type of post 

Staff required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

Source 

duration 

Additional 
resources 

3 years 

(1998-2000) 

Existing 
resources of 
the DG or 
department 
concerned 

0.5 
0.2 
0.2 

0.5 
0.2 
0.2 

Officials or 
temporary  staff 
A 
B 
C 
Other  resources 
(Technical 
assistance,  item 
A-7002) 
TOTAL 

0.3 

0.3 

0.9 

0.3 

0.9 

0.3 

from 1998 

10.2.  Overall financial impact of the human resources 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period 1998-2000) 

291,600 

0,9 * 108,000 ECU * 3 years 

90,000 

0,3 * 100,000 ECU * 3 years 

Officials 

Temporary staff 

Other resources (Technical 
assistance, item A-7002) 

TOTAL 

I 

381,600 

| 

The  expenditure  of  item  A-7002  (technical  assistance)  will  be  met from the  receipts 
(art.  4 §2,  third  indent  of  the  Financial  Regulation)  received  from  the  Bulgarian 
participation in Community Programmes (see 5.3. of the Financial Statement). 

2o 

10.3.  Increase in other administrative expenditure  as a result of the operation 

Budget heading 
(No and title) 

Total 

in ECU 

Method of calculation 
(total cost of the action 
for the period 1998-2000) 

A701 - missions 

A7030 - meetings 

A7031 - meetings of committees 

19,426  4  missions  per  year  for  the 
whole  Programme, 
to  be 
executed  within  the  different 
strands  opened 
Programme 
-of  missions 
(annual 
6475ECU). 

cost 

25,050  Participation  of  5  Bulgarian 
in 
representatives  per  year 
'meetings  organised  under  the 
different  Programme  strands 
(annual  cost  of  participation  in 
meetings 8,350 ECU). 

representative 

15,030  Cost  of  the  presence  of  1 
Bulgarian 
at 
consultative  meetings  (3/year)  -
exchange  about the Programme 
and  information  about  the  work 
in  the  Management  Committee 
(annual  cost  of  participation  in 
meetings 5,010 ECU). 

Total 

59,506 

The  above  expenditure  will  be  met  from  the  receipts  (article  4§2,  third  indent  of  the 
financial  regulation)  received  from  the Bulgarian  participation  in Community  Programme; 
(see § 5.3 of the financial  statement). 

X\ 

Proposal for a 
Council Decision 
of ... 
concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  the  Czech  Republic  in  the  Community  programme  in  the  field  of 
fcHS\ 
small and  medium-sized  enterprises 

3 ^ | n o ' V:\ 

THE COUNCIL OF THE  EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130, paragraph 3, in conjunction  with Article 228, paragraph 3,  1st alinéa thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and  the 
Czech Republic, of the other part,  has been concluded  by Decision  of the Council and the 
Commission of 4 December  1995. 

Whereas  according  to  Article  1  of  the  Additional  Protocol,  the  Czech  Republic  may 
participate in Community  framework  programmes,  specific  programmes, projects  or  other 
actions  notably  in  the  field  of  small  and  medium-sized  enterprises  and,  according  to 
Article  2,  the  terms  and  conditions  for  the  participation  of  the  Czech  Republic  in  the 
activities referred  to in Article  1 shall be decided by the Association Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to  2000)1 and  in particular  Article 7(1) thereof,  provides that  this programme  shall 
be open to  the participation  of associated  Central European  countries in accordance with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation  in Community programmes. 

HAS DECIDED  AS  FOLLOWS: 

The position to be taken  by the Community  within the Association  Council established by 
the Europe  Agreement  between  the European  Communities  and  their Member  States,  of 
the one part, and the Czech Republic, of the other part, concerning the participation  of the 
Czech  Republic  in  the  Community  programme  in  the  field  of  small  and  medium-sized 
enterprises is the attached  draft  decision of the Association Council. 

Done at Brussels, 

For the Council, 

1  OJ No L 6/25 of  10.01.1997 

XL 

Draft  Decision  n°..../98  of 
the  EC-Czech  Republic  Association  Council 
1998 adopting the terms  and  conditions  for the participation  of the  Czech 
of. 
Republic  in  the  Community  Programme  in  the  field  of  small  and  medium-sized 
enterprises 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement establishing an association between the European 
Communities  and  their  Member  States,  of  the  one  part,  and  the  Czech  Republic  of  the 
other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between  the European  Communities and their Member  States, of the one part, 
and the  Czech Republic,  of the  other  part,  concerning the Czech Republic's  participation 
in Community programmes2,  and in particular Article  1  and 2 thereof, 

Whereas  according  to  Article  1 of the said  Additional  Protocol,  the  Czech  Republic  may 
participate in Community framework  programmes,  specific programmes, projects  or  other 
Community actions notably in the field of small and medium-sized  enterprises, 

Whereas  according  to  Article  2  of the  said  Additional  Protocol  the  terms  and  conditions 
for  the participation  of the  Czech  Republic in the activities referred  to  in Article  1 are  to 
be decided by the Association  Council, 

HAS DECIDED AS FOLLOWS: 

Article  1 

The  Czech  Republic  shall  participate  in the Third  Multiannual  Programme  for  Small  and 
Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000)  according  to 
the terms  and  conditions  set  out  in Annexes I and  II  which  shall form  an  integral  part  of 
this Decision. 

Article  2 

This Decision shall apply for the duration  of the programme. 

Article  3 

This Decision  shall enter into force on the first day of the month following  its adoption. 

Done at 

The Chairman 

For the Association  Council 

1  OJN°L360/lof31.12.1994 

2  OJN°L317/44of30.12.1995 

25 

ANNEX I 

Terms and conditions for the participation  of the Czech Republic in the Third 
Multiannual Programme for Small and Medium-sized  Enterprises (SMEs) in the 
European Union (1997 to 2000) 

1. 
The  Czech  Republic  will  participate  in  all  activities  of  the  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997  to  2000)  (hereinafter  called  "the  Programme"),  except  the  organisation  of  IBEX 
events,  in  conformity,  unless  otherwise  provided  in  this  Decision,  with  the  objectives, 
criteria,  procedures  and  timelimits  laid  down  in  Council  Decision  (97/15/EC)  of  9 
December  1996  on  a  Third  Multiannual  Programme  for  Small  and  Medium-sized 
Enterprises  (SMEs)  in the European  Union  (1997 to  2000)  and  in particular "Article  7(1) 
thereof. 

The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
2. 
applications  related  to  eligible  institutions,  organisations  and  individuals  of  the  Czech 
Republic  will  be  the  same  as  those  applicable  to  eligible  institutions,  organisations  and 
individuals of the Community. 

3. 
Where  appropriate,  in  order  to  ensure  the  Community  dimension  of  the 
Programme,  transnational  projects  and  activities  proposed  by the  Czech  Republic will  be 
required  to  include  a  minimum  number  of  partners  from  the  Member  States  of  the 
Community. 
in  the  framework  of  the 
implementation of the Programme, taking into account the nature of the various activities, 
the number of partners in a given project,  and the number of countries participating  in the 
Programme. 

This  minimum  number  will  be  decided 

4. 
The Czech Republic will pay  each year a contribution to the general budget  of the 
European  Communities  to  cover  the  costs  resulting  from  its  participation  in  the 
Programme  (see  Annex  II).  The  Association  Committee  is  entitled  to  adapt  this 
contribution whenever  necessary. 

5.  . 
The  Member  States  of  the  Community  and  the  Czech  Republic  will  make  every 
effort,  within the framework of the existing provisions, to facilitate the free movement  and 
residence  of  all  eligible  persons  to  the  Programme  moving  between  the  Czech  Republic 
and  the  Member  States  of  the  Community  for  the  purpose  of  participating  in  activities 
covered by the Decision. 

Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
6. 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized  Enterprises  (SMEs)  in  the  European  Union  (Article  6),  the  participation  of  the 
Czech  Republic  in  the  Programme  will  be  continuously  evaluated  on  a  partnership  basis 
involving  the  Czech  Republic  and  the  Commission  of  the  European  Communities.  The 
Czech  Republic  will  submit  the  necessary  reports  to  the  Commission  and  take  part  in 
other specific activities set out by the Community in that context. 

I 

7. 
Without prejudice to the procedures referred to in Article 4 of the Decision on the 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  the  Czech  Republic  will  be  invited  to  co-ordination  meetings  on  any 
question concerning the implementation  of this Decision  prior to  regular meetings of the 
Programme Committee. The Commission will inform the Czech Republic about the results 
of such regular meetings. 

8. 
The language to be used  as regards the application process,  contracts,  reports  to 
be submitted and other administrative arrangements for the Programme, will be one of the 
official  languages of the Community. 

ANNEX II 

FINANCIAL CONTRIBUTION  OF THE CZECH REPUBLIC TO THE THIRD 
MULTIANNUAL PROGRAMME FOR SMALL AND  MEDIUM-SIZED 
ENTERPRISES  (SMES) IN THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial  contribution of the Czech Republic will cover; 

- 

financial  support from  the Programme to the participation  of Czech  entities  in 
activities as defined  in Annex I.I., 

-  supplementary  costs  of  an administrative  nature related  to  the  management  of 
the  Programme  by  the  Commission  stemming  from  the  Czech  Republic's 
participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received  from  the Programme by the Czech beneficiaries  will nof exceed the 
contribution  paid  by  the  Czech  Republic,  after  deduction  of  the  supplementary 
administrative costs. 

Should  the  contribution  paid  by  the  Czech  Republic  to  the  general  budget  of  the 
European  Communities,  after  deduction  of  the  supplementary  administrative  costs, 
be higher than the aggregated amount of subsidies or other financial  support received 
by  the  Czech  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's contribution.  Should  such a balance be left  when the Programme  comes to  an 
end, the corresponding amount will be reimbursed to the Czech Republic. 

3.  The Czech Republic's annual contribution will be of ECU 654,626 from  1998.  From 
this  sum,  an  amount  of  ECU  42,826  will  cover  supplementary  administrative  costs 
related to the management  of the Programme by the Commission  stemming  from  the 
Czech Republic's  participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of the Czech Republic. 

Upon  entry  into  force  of this  Decision  and  at the beginning  of  each  following  year, 
the  Commission  will  send  to  the  Czech  Republic  a call  for  funds  corresponding  to 
its contribution to the costs under this Decision. 

This  contribution  will  be  expressed  in ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

The Czech Republic will pay  its contribution to the annual costs under this  Decision 
according to the call for  funds  and at the latest three months after  the call for funds  is 
sent. Any  delay  in the payment  of the contribution  shall  give rise to  the payment  of 
interest  by  the  Czech  Republic  on  the  outstanding  amount  from  the  due  date.  The 
interest rate corresponds to the rate applied by the European Monetary  Co-operation 
Fund,  for  the  month  of  the  due  date,  for  its  operations  in  ECU,  increased  by  1.5 
percentage points. 

I 

2b 

5.  The Czech Republic will pay the supplementary  administrative  costs referred  to in 

paragraph 3 from its national budget. 

6.  Of the remaining  costs of its participation  in the Programme, the  Czech  Republic 

will pay ECU 411,800 from its national budget. 

Subject to regular Phare programming procedures, the remaining ECU 200,000 will 
be paid from the Czech Republic's annual Phare allocation. 

n 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Participation  of the Czech Republic in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING  INVOLVED 

B7-503  - Opening  of Community Programmes  to the associated  countries  of Central 
Europe 

3.  LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph  3, in conjunction  with Article 228, paragraph 3,  1st alineathereôf, 

Additional Protocol  to the Europe Agreement  with the Czech Republic (Articles 228 
and  238)  of  30  December  1995,  providing  for  the  opening-up  of  Community 
programmes  (OJ No 317/95, page 44), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the  European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General  objective 

The Third Multiannual  Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial environment  for  enterprises; 
3.  Help  SMEs  to  Européanise  and 

internationalise  their  strategies, 

in 

particular through better information  and  co-operation; 

4.  Enhance  SME competitiveness  and  improve access to research,  innovation 

and training; 

5.  Promote entrepreneurship  and support  specific target groups. 

The  Czech  Republic's  participation  in  the  Community  programme  for  SMEs 
will  come  in  addition  to  those  Community  programmes  in  which  it  already 
participates,  e.g.  Leonardo  da Vinci, Socrates  and  Youth  for  Europe,  and  will 
further  contribute  to  its  preparation  for  accession  as  a  key  feature  of  a 
reinforced  preaccession  strategy.  It  will  also  enable  the  Czech  Republic  to 
familiarise  itself  with  the  procedures  and  methods  used  in  the  Community 
programme in the field of small and medium-sized  enterprises. 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 

28 

country.  This decision  also  lays down the practical  arrangements  for  opening 
up the programmes. 

The  Additional  Protocol  with  the  Czech  Republic  entered  into  force  on  1 
February  1996  and  provides  for the  Czech Republic's  participation  in a wide 
range of areas, amongst which small and medium-sized enterprises. 

The  Czech  Republic  confirmed  its  willingness  to  participate  also  in  other 
Community  programmes,  notably  in  the  fields  of  culture,  energy  and 
environment. 

4.2.  Period covered and arrangements for renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare contribution, however,  is dependent on decisions concerning the budget 
after 1999. 

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory  expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph of Article 3 of the Additional Protocol  stipulates that 
the Czech Republic itself will meet the costs resulting from its participation, it 
will  be  invited  to  transfer  its  contribution  to  item  6091  of  the  EU's  budget 
receipts.  However,  as  the  second  paragraph  of  Article  3  states  that  the 
Community  may  supplement  the  Czech  Republic's  contribution  (through  its 
national  Phare  allocation),  the  Czech  Republic  will  contribute  only  part,  from 
its national  budget,  with  the  remainder being  charged  to  heading B7-503.  A 
transfer from the relevant Phare appropriations (article B7-500)  to article B7-
503 will be made upon receipt of the Czech Republic's contribution. 

6.  TYPE OF EXPENDITURE OR REVENUE 

.  -  subsidy for co-financing  with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments, information 

-  no provision for all or part of the Community contribution to be reimbursed 

As far as  revenue  is  concerned,  provision  for the  Czech Republic's  contribution  to 
cover  the  cost  of  its  participation  is  made  under  item  6091.  The  revenue  will  be 
allocated  to  the  items  for  expenditure  on  the  programme  in  question  and,  where 
appropriate, to the relevant items of operating expenditure. 

29 

The total revenue expected  is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for  1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based on the following  preconditions: 

-  each partner country's contribution to the financing of the activities  referred 
to  in the Protocol  is  calculated  according  to  the  principle that  the  country 
bears the cost  of participation  itself. Heading  6091  has been  created  in  the 
statement of budget revenue for that purpose; 

- 

the Community may decide on a case-by-case basis to  pay a supplement  to 
the partner  country's contribution.  The  supplement  may be in the form  of a 
contribution under the national PHARE programme. 

Based  on  the  Additional  Protocol  with  the  Czech  Republic,  the financial and 
budgetary arrangements for  the programme concerned  are as follows:  Among 
four alternatives, the Czech Republic has opted for  a contribution based on the 
estimation  of  the  real  cost  of  participation  in  all  the  strands  of  the  SME 
programme except IBEX. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated  within parenthesis): 

-  Actions within the field of Distributive Trade (130,000 ECU) 
-  Actions within the field of Crafts  and Small Enterprises (100,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  7  centres  plus 
20,000 ECU for a decentralised information  campaign = 300,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of the  country  (22.71  enterprises/event x  2  events/year x  700 
ECU paid to the National  Counsellor per SME for  costs, promotion, etc.  = 
31,800 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

The  cost  of  the  Czech  Republic's  participation  in  the  Third  Multiannual 
programmé for  small  and  medium-sized  enterprises  (SMEs)  in  the  European 
Union  (1997-2000)  from  1998  will  thus  be  ECU 654,626  per  year  including 
7% administrative costs. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs - to be borne exclusively by the Czech Republic - have to be deducted,  is 
divided  per  year  as  follows:  411,800  ECU  of  the  operational  costs  will  be 
covered  from  the  Czech  Republic's  national  budget  and  -  subject  to  the 

30 

procedures  for  programming  the  Phare  programme  -  200,000  ECU  from  the 
annual Phare allocation for the Czech Republic. 

7.2. 

Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
the Czech 
Republic 

of which 
Phare 

Small and 
medium-sized 
enterprises 

611,800 

611,800 

611,800 

1,835,400 

1,235,400 

600,000 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

Actions within the 
field of Distributive 
Trade 

Actions within Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

130,000 

130,000 

130,000 

390,000 

100,000 

100,000 

100,000 

300,000 

Support to the EICCs 

300,000 

300,000 

300,000 

900,000 

Business Co-operation 

- Europartenariat 

-INTERPRISE 

31,800 
50,000 

31,800 
50,000 

31,800 
50,000 

95,400 
150,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

31 

7.4.  Schedule for multiannuàl operations 

Amounts to be charged  to item B7-503 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

200,000 

200,000 

200,000 

0 

600,000 

40,000 

- 

40,000 

• 

-

120,000 

40,000 

40,000 

120,000 

40,000 

Commitment 
appropriations 

Payment 
appropriations^ 

1998 

1999 

2000 

subsequent  years 

40,000 

160,000 

Total 

200,000 

200,000 

200,000 

(*) Schedule based  on the method  of payment currently  applying to this  programme. 

160,000 

200,000 

200,000 

600,000 

The foreseeable  annual  receipts are as  follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

411,800 

411,800 

411,800 

42,826 

42,826 

42,826 

Total 

454,626 

454,626 

454,626 

0 

0 

0 

1,235,400 

128,478 

1,363,878 

8.  FRAUD PREVENTION  MEASURES;  RESULTS  OF MEASURES  TAKEN 

All the Commission's contracts,  agreements and other legal commitments provide  for 
on-the-spot  checks by the  Commission  and  Court  of Auditors.  Among  other  things, 
the beneficiaries  of the operations  are obliged to file reports and financial  statements. 
These  are  analysed  from  the  point  of view  of their  content  and  the  eligibility  of  the 
expenditure in line with the objective of Community financing. 

32 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific  and quantified  objectives; target  population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in  the  Internal  Market 
and promote their  internationalisation. 

In principle,  the actions in the Third  Mutliannual  Programme  for  SMEs  could 
possibly interest  all the SMEs in the Czech Republic. However,  the number  of 
SMEs  which  benefit  from  transnational  actions  will  necessarily  be  more 
reduced  according to the typology and the activity of the enterprises and of the 
nature of the actions developed. 

For  example,  among the  15 million  SMEs  in the  European  Union,  1.5  million 
are most  likely to be targeted  for  an  action  regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also for  the Czech Republic. The target of the actions varying according to  the 
nature of these actions. 

Furthermore,  the  actions  aim  at  the  professional  organisations,  the  Chambers 
of  Commerce  and  Industry,  Trade  Associations,  and  other  intermediaries  of 
the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation  and growth.  Indeed,  the job  creation  rate of SMEs is higher than  that 
of the big enterprises. 

It  is, however,  necessary  to  recognise  the fact  that  SMEs  are  inherently  more 
vulnerable particularly in the first years following  their creation.  This weakness 
stems, in particular from  the following five factors: 

• 
• 
• 

an increasingly complex legal, fiscal  and administrative  environment; 
difficulty  in participating in R&D programmes and in exploiting the results; 
structural weakness of SMEs with regard tot theirs management  abilities as 
well as to the inappropriateness of training programmes; 

•  difficulty  in obtaining finance at a reasonable cost; 
• 

difficulty  in accessing markets for products and services. 

33 

It is necessary to underline - with regard to the subsidiarity approach  - that  the 
actions  developed  at  Community  level  are taken  in a context  which  ensures  a 
significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity  and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature, 
that  have  a  Community 
implement  networks 
dimension.  To  confine  such  activities  to  the  national  level  would  not  only  be 
impossible and less efficient,  but it would also distort competition to the extent 
that the level of support of each Member State would be extremely diverse. 

to 

The vast majority  of enterprises in the  Czech Republic are  SMEs and  close to 
90%  of  them  are  very  small.  Important  modifications  in  the  employment 
structure have taken place, in particular the absorption  of part  of the  redundant 
labour  force  from  agriculture  and  large state firms by small  and  medium  sized 
enterprises,  especially  in  the  service  sector.  The  support  since  1991  for  the 
small and medium enterprises  (SME) as part of the private sector  development 
has been  an important  key to  economic and employment  growth  in the  Czech 
Republic. 

The  Czech  economy  will  remain  characterised  by a large percentage  of  SMEs 
over  the  coming  years.  These  enterprises  will  need  to  prepare  for  EU 
membership  and  the  increased  competitive  pressures  this  is  likely  to  expose 
them  to.  In  this  context,  the  opening  up  of  Community  programmes  is  an 
important  element  of  the  pre-accession  strategy.  The  participation  in  this 
particular  programme  can  in a positive  manner  contribute  to  preparing  SMEs 
and  SME representative organisation for future  accession. 

-  Need for Community financial aid 

In  view  of the  substantial financial contribution  of the  Czech  Republic  to  the 
programme  and 
the  Czech  Republic's  precarious  budgetary  situation, 
assistance  from  PHARE  as  provided  for  in  Article  3(2)  of  the  Additional 
Protocol  is essential. 

-  Choice of ways and means 

With a contribution  from  the  Czech  Republic's  national  budget,  supplemented 
by  one  from  PHARE,  the  Czech  Republic's  participation  will  contribute  to 
the 
getting  acquainted  with 
Community  in the field of Small and medium-sized  enterprises. The integration 
of Czech nationals in Community networks will make a definite contribution  to 
preparing the Czech Republic for future  membership. 

internal  policies  and  proceedings  of 

the 

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

operation 

34 

Since  projects  will  be  selected  according  to  qualitative  criteria,  it will  only  be 
possible to measure the real impact on the basis of Czech  citizens'  and  SMEs' 
capacity to respond  to the calls for proposal to be launched  by the Commission 
under the programme. 

9.3.  Evaluation of the operation 

The  evaluation  procedures  included  in  the  Third  Multiannual  programme  for 
SMEs will also cover operations financed for Czech  beneficiaries. 

9.3.1 Performance  indicators 

The indicators are chosen in function  of the type of action  undertaken. 

As  an  example,  in  the  field  of  Euro  Info  Centres  (EICs),  there  is  a  contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as  well  as  their  activity  in  relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and  the  performance" of  each  EIC  is  rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If  this  is  not  the 
case,  the  EIC  is  excluded  from  the  network  and  the  procedure  for  finding  a 
replacement is initiated. An evaluation report et published every six months. 

For  the  business  co-operation  networks,  an  annual  evaluation  of  the  network 
members  is based  on  the  number  of  co-operation  profiles  introduced  into  the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured  by the participation  in conferences  and  seminars  organised  to  assure 
the implementation  of the foreseen  actions, the feed-back  in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating  in pilot actions, and the distribution  of publications. 

In the  case  of actions  specifically  in favour  of crafts  and  small  enterprises,  the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting  from  finance  stemming from  the action. 

9.3.2 Modalities and periodicity of the foreseen  evaluation 

The  Council  Decision  of  9 December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of  the  Decision,  in  order  to  assess  whether 
the original objectives  have been met, including a cost-effectiveness  evaluation. 

35 

9.3.3  Assessment  of results 

The  results  of  the  evaluations  are  generally  diffused 
to  the  concerned 
population  and  can give rise to  modifications  regarding  actions  undertaken  or 
new proposals for actions. 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted  to the Management  Committee established  by the Council  Decision. 
Reports  on the  results of the participation  of the  associated  Central  European 
countries concerned  in the programme would in the same manner be  submitted 
to the Committee as well as to the countries  concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff  and additional  credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact on the number of posts 

Type of post 

Staff  required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

Officials or 
temporary  staff 
A 
B 
C 

Other  resources 
TOTAL 

0.5 
0.2 
0.2 

0.9 

including 

duration 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

0.5 
0.2 
0.2 

0.9 

from 1998 

3>t 

10.2.  Overall financial impact of additional human resources 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period  1998-2000) 

~ 

Officials 
Temporary  staff % 
Other  resources  (indicate  budget 
heading) 

TOTAL 

I 

0 

I 

10.3.  Increase in other operating expenses as a result of the operation 

Budget heading 
(No and title) 

Total 

in ECU 

Method of calculation 
(total cost of the action 
for the period  1998-2000) 

A1178/A238 - technical  assistance 

71,898  Technical 

assistance 

23,966 

ECU per year. 

A1300-missions 

A2500 - meetings 

A2510 - meetings of committees 

16,500  5  missions  per  year 

Programme, 

the 
for 
be 
to 
whole 
the  different 
executed  within 
Programme 
opened 
(annual  cost  of  missions  5,500 
ECU). 

strands 

25,050  Participation 

5 

of 

Czech 
in 
representatives  per 
year 
the 
meetings  organised  under 
different  Programme 
strands 
(annual  cost  of  participation  in 
meetings 8,350 ECU). 

15,030  Cost of the  presence  of  1 Czech 
representatives  at  consultative 
meetings  (3/year)  -  exchange 
and 
the  Programme 
about 
information  about the work  in the 
Management  Committee  (annual 
cost  of  participation  in  meetings 
5,010 ECU). 

Total 

128,478 

s\ 

The  above  expenditure  will  be  met  from  the  receipts  (article  4§2,  third  indent  of  the 
financial regulation)  received  from  the  Czech  participation  in  Community  Programmes 
(see  § 5.3  of  the financial  statement). 

3& 

Proposal for a 
Council  Decision 
of... 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Estonia  in  the  Community  programme  in  the  field  of  small  and 
medium-sized  enterprises 

<^<£  OO^O  (^cKS^ 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130, paragraph 3, in conjunction  with Article 228, paragraph.3,  1st alinéa thereof, 

Having regard to the proposal  from  the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Europe  Agreement  establishing  an  association  between  the  European 
Communities and their Member  States, of the one part, and Estonia,  of the other part,  has 
been concluded  by Decision  of the Council and the Commission of. 

, 

Whereas  according  to  Article  108  of  the Europe  Agreement,  Estonia  may  participate  in 
Community  framework  programmes,  specific  programmes,  projects  or  other  actions 
notably in the field  of small and medium-sized  enterprises and the terms and  conditions  for 
participation  of Estonia in the activities shall be decided by the Association  Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997  to  2000)1  and  in  particular  Article  7(1) thereof,  provide that  this  programme  shall 
be open to the  participation  of associated  Central  European  countries  in accordance  with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation in Community programmes, 

HAS DECIDED AS FOLLOWS: 

The position to be taken by the Community  within the Association  Council  established  by 
the Europe  Agreement  between  the  European  Communities  and  their  Member  States,  of 
the one part,  and  Estonia,  of the other  part,  concerning the participation  of Estonia  in the 
Community  programme  in the  field  of small  and  medium-sized  enterprises  is the  attached 
draft  decision of the Association  Council. 

Done at Brussels, 

For the Council, 

ÏOJ  No L 6/25 of  10.01.1997 

Draft  Decision  n°..../98  of  the  EC-Estonia  Association  Council  of. 
adopting  the  terms  and  conditions  for  the  participation  of  Estonia 
Community Programme in the field  of small and  medium-sized  enterprises 

1998 
in  the 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their Member  States,  of the  one  part,  and  the Republic  of Estonia,  of 
the other part,  and in particular Article  108 thereof,1 

Whereas  according  to  Article  108  of  the  Europe  Agreement,  Estonia  may  participate  in 
Community  framework  programmes,  specific  programmes,  projects  or  other  Community 
actions notably in the field  of small and medium-sized  enterprises, 

Whereas  according to Article  108 of the Europe  Agreement  the terms  and  conditions  for 
the  participation  of Estonia  in the  activities  referred  to  in  Article  1 are  to  be  decided  by 
the Association  Council, 

HAS DECIDED AS FOLLOWS: 

Article  1 

Estonia shall participate in the Third Multiannual Programme for  Small and Medium-sized 
Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000)  according  to  the  terms  and 
conditions set out in Annexes I and II which shall form  an integral part of this Decision. 

Article  2 

This Decision  shall apply for  the duration of the programme. 

Article  3 

This Decision shall enter into force  on the first  day of the month following  its adoption. 

Done at 

The Chairman 

For the Association  Council 

1  OJN°L 

I 

4o 

ANNEX I 

Terms and conditions  for the participation  of Estonia  in the Third Multiannual 
Programme for Small and Medium-sized  Enterprises (SMEs) in the European 
Union (1997 to 2000) 

1. 
Estonia  will  participate  in  all  activities  of  the  Third  Multiannual  Programme  for 
Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000) 
(hereinafter  called  "the  Programme"),  except  the  organisation  of  IBEX  events,  in 
conformity,  unless  otherwise  provided  in  this  Decision,  with  the  objectives,  criteria, 
procedures  and timelimits laid  down  in Council Decision (97/15/EC)  of 9 December  1996 
on  a  Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises^ (SMEs)  in 
the European Union (1997 to 2000) and in particular Article 7(1) thereof. 

2. 
The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
applications related to eligible institutions, organisations and individuals of Estonia will be 
the  same  as  those  applicable  to  eligible  institutions,  organisations  and  individuals  of  the 
Community. 

Where  appropriate, 

in  order  to  ensure  the  Community  dimension  of  the 
3. 
Programme,  transnational  projects  and  activities  proposed  by Estonia  will be  required  to 
include a minimum  number  of  partners  from  the Member  States  of the  Community.  This 
minimum  number  will  be  decided  in  the  framework  of  the  implementation  of  the 
Programme,  taking  into  account  the  nature  of  the  various  activities,  the  number  of 
partners in a given project,  and the number of countries participating in the Programme. 

Estonia  will  pay  each  year  a  contribution  to  the  general  budget  of  the  European 
4. 
Communities  to  cover  the  costs  resulting  from  its  participation  in  the  Programme  (see 
Annex  H).  The  Association  Committee  is  entitled  to  adapt  this  contribution  whenever 
necessary. 

5. 
The Member  States  of the  Community  and Estonia will make  every  effort,  within 
the  framework  of the existing provisions, to facilitate  the free  movement  and residence  of 
all eligible persons to  the Programme  moving between  Estonia  and  the Member  States  of 
the Community for the purpose of participating in activities covered by the Decision. 

Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
6. 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises  (SMEs)  in the  European  Union  (Article  6), the  participation  of  Estonia 
in the Programme will be continuously  evaluated  on a partnership  basis  involving  Estonia 
and  the  Commission  of  the  European  Communities.  Estonia  will  submit  the  necessary 
reports  to  the  Commission  and  take  part  in  other  specific  activities  set  out  by  the 
Community in that  context. 

7. 
Without  prejudice  to  the  procedures  referred  to  in Article  4  of the Decision  on a 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  Estonia  will  be  invited  to  co-ordination  meetings  on  any  question 

4-1 

concerning  the  implementation  of  this  Decision  prior  to  regular  meetings  of  the 
Programme  Committee.  The  Commission  will  inform  Estonia  about  the  results  of  such 
regular meetings. 

The language to be used  as regards the application process,  contracts, reports  to 
8. 
be submitted and other administrative arrangements for the Programme, will be one of the 
official languages of the Community. 

4Z. 

ANNEX II 

FINANCIAL CONTRIBUTION  OF ESTONIA TO THE THIRD  MULTIANNUAL 
PROGRAMME FOR SMALL AND MEDIUM-SIZED ENTERPRISES  (SMES) IN 
THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial  contribution of Estonia will cover; 

- 

financial  support  from  the Programme to the participation  of Estonian  entities 
in activities as defined  in Annex 1.1, 

-  supplementary  costs  of an  administrative  nature  related  to the management  of 
the Programme by the Commission stemming from  Estonia's  participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support  received  from  the  Programme  by the Estonian  beneficiaries  will  not  exceed 
the contribution paid by Estonia, after  deduction of the supplementary  administrative 
costs. 

Should  the  contribution  paid  by  Estonia  to  the  general  budget  of  the  European 
Communities,  after  deduction  of  the  supplementary  administrative  costs,  be  higher 
than  the  aggregated  amount  of  subsidies  or  other  financial  support  received  by  the 
Estonian  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's  contribution.  Should  such a balance be left  when the Programme  comes to an 
end, the corresponding amount will be reimbursed to Estonia. 

3.  Estonia's annual contribution will be of ECU 368,294 from  1998.  From this sum, an 
amount of ECU 24,094 will cover supplementary  administrative  costs  related to the 
management  of  the  Programme  by  the  Commission  stemming  from  Estonia's 
participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of Estonia. 

Upon  entry  into  force  of this  Decision  and  at the  beginning  of  each  following  year, 
the  Commission  will  send  to  Estonia  a  call  for  funds  corresponding  to  its 
contribution to the costs under this Decision. 

This  contribution  will  be  expressed  in ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

Estonia will pay its contribution to the annual costs under this Decision according to 
the  call  for  funds  and  at the  latest  three months  after  the  call  for  funds  is  sent.  Any 
delay  in the payment  of the contribution  shall give rise to the payment  of interest by 
Estonia  on  the  outstanding  amount  from  the  due  date. The  interest  rate  corresponds 
to the rate applied  by the  European  Monetary  Co-operation  Fund,  for  the  month  of 
the due date, for its operations in ECU, increased by  1.5 percentage points. 

5.  Estonia  will  pay  the  supplementary  administrative  costs  referred  to  in  paragraph  3 

from  its national  budget. 

4-2 

6.  Estonia  will  pay  ECU  288,200  of  the  remaining  costs  of  its  participation  in  the 

Programme from its national budget. 

Subject  to regular Phare programming procedures, the remaining  ECU 56,000 will 
be paid from Estonia's annual Phare allocation. 

A4-

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Participation of Estonia in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING  INVOLVED 

B7-503 - Opening of Community Programmes  to the associated  countries of Central 
Europe 

3.  LEGAL BASIS 

Treaty establishing the European  Community,  and in particular Article  130, article 3, 
in conjunction  with Article 228, article 3,  1st alinéa  thereof, 

Article  108 of the Europe  Agreement with Estonia  (Articles 228  and 238)  of 
providing for the opening-up  of Community programmes (OJ No 

), 

, 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in  the European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General  objective 

The Third.Multiannual Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial  environment for  enterprises; 
3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in 

particular through better information  and co-operation; 

4.  Enhance  SME competitiveness  and  improve access to  research,  innovation 

and training; 

5.  Promote entrepreneurship and support  specific target groups. 

Estonia's  participation  in the Community programme for  SMEs will  contribute 
to  its  preparation  for  accession  as  a  key  feature  of  a  reinforced  preaccession 
strategy. It will also enable Estonia to familiarise  itself with the procedures  and 
methods used  in the Community  programme in the field of small  and  medium-
sized enterprises. 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 

I 
4-^ 

country.  This  decision  also  lays  down  the  practical  arrangements  for  opening 
up the programmes. 

The  Europe  Agreement  with  Estonia  entered  into  force  on 
,  Article.... 
provides  for  Estonia's  participation  in  a  wide  range  of  areas,  amongst  which 
small and medium-sized  enterprises. 

Estonia  has  confirmed  its  willingness  to  participate  also  in  other  Community 
programmes,  notably  in  the  fields  of  education,  vocational  training,  youth, 
environment, health and research and  technicaldevelopment. 

4.2.  Period  covered  and arrangements for  renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare  contribution,  however,  is dependent  on decisions  concerning  the  budget 
after  1999. 

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory  expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since  Article  108  of  the  Europe  Agreement  stipulates  that  Estonia  itself  will 
meet  the costs  resulting  from  its participation,  it will be invited  to  transfer  its 
contribution to item 6091 of the EU's budget receipts. However,  as Article  108 
states  that  the  Community  may supplement  Estonia's  contribution  (through  its 
national  Phare  allocation),  Estonia  will  contribute  only  part  from  its  national 
budget,  with the remainder being charged to  heading B7-503.  A transfer  from 
the  relevant  Phare  appropriations  (article  B7-500)  to  article  B7-503  will  be 
made upon receipt  of Estonia's  contribution. 

6.  TYPE OF EXPENDITURE OR REVENUE 

-  subsidy for  co-financing  with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments,  information 

-  no provision for all or part of the Community contribution to be reimbursed 

As far  as revenue is concerned,  provision for Estonia's contribution to  cover the  cost 
of  its  participation  is  made  under  item  6091.  The  revenue  will  be  allocated  to  the 
items for  expenditure  on  the  programme  in question  and,  where  appropriate,  to  the 
relevant items of operating expenditure. 

The total revenue expected  is given under item 7.4. 

4k 

7.  FINANCIAL  IMPACT 

. 7.1.  Method of calculating total cost of operation for  1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based  on the following  preconditions: 

-  each partner country's contribution to the financing of the activities  referred 
to  in the Protocol  is  calculated  according  to  the  principle  that  the  country 
bears the  cost  of participation  itself. Heading  6091  has been  created  in the 
statement of budget revenue for that purpose; 

- 

the Community  may decide on a case-by-case basis to  pay a supplement  to 
the partner  country's  contribution.  The supplement  may be in the form  of a 
contribution under the national PHARE programme. 

Based  on  the  Europe  Agreement  with  Estonia,  the  financial  and  budgetary 
arrangements  for  the  programme  concerned  are  as  follows:  Among  four 
alternatives,  Estonia  has  opted  for  a  contribution  based  on  the  estimation  of 
the real cost of participation  in all the strands of the SME programme. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Actions within the field of Distributive Trade (130,000 ECU) 
-  Actions within the field of Crafts  and Small Enterprises (30,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  2  centres  plus 
20,000 ECU for  a decentralised  information  campaign =  100,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of the  country  (24.43  enterprises/event  x  2  events/year  x  700 
ECU paid to the National  Counsellor  per  SME for  costs, promotion,  etc. = 
34,200 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

The  cost  of  Estonia's  participation  in  the  Third  Multiannual  programme  for 
small  and  medium-sized  enterprises  (SMEs)  in  the  European  Union  (1997-
including  7% 
2000)  from  1998  will  thus  be  ECU 368,294  per  year, 
administrative  cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs - to be borne exclusively by Estonia - have to be deducted,  is divided per 
year  as  follows:  288,200  ECU  of  the  operational  costs  will  be  covered  from 
Estonia's national  budget  and  - subject  to the procedures for  programming  the 
Phare  programme  -  56,000  ECU  from  the  annual  PHARE  allocation  for 
Estonia. 

A1 

7.2. 

Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
Estonia 

of which 
Phare 

Small and 
medium-sized 
enterprises 

344,200 

344,200 

344,200 

1,032,600 

864,600 

168,000 

Breakdown  of costs per strand  where financial  contributions can be received: 

Programme 
strand 

Actions within the  * 
field  of Distributive 
Trade 

Actions within Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

130,000 

130,000 

130,000 

390,000 

30,000 

30,000 

30,000 

90,000 

Support to the EICCs 

100,000 

100,000 

100,000 

300,000 

Business Co-operation 

- Europartenariat 

- INTERPRISE 

33,925 
50,000 

33,925 
50,000 

33,925 
50,000 

101,775 
150,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

W 

7.4.  Schedule for multiannual operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
years -

TOTAL 

56,000 

56,000 

56,000 

0 

168,000 

Commitment 
appropriations 

Payment 
appropriations" 

1998 

1999 

2000 

11,200 

33,600 

11,200 

11,200 

33,600 

11,200 

subsequent  years 

11,200 

44,800 

Total 

56,000 

56,000 

56,000 

-  --

-  11,200 

44,800 

56,000 

56,000 

168,000 

(*) Schedule based  on the method  of payment currently  applying to this  programme. 

The foreseeable  annual  receipts art  as  follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

288,200 

288,200 

288,200 

0 

864,600 

24,094 

24,094 

24,094 

0 

72,282 

Total 

312,294 

312,294 

312,294 

0 

936,882 

8.  FRAUD PREVENTION  MEASURES; RESULTS  OF MEASURES  TAKEN 

All the Commission's contracts,  agreements and other legal commitments provide  for 
on-the-spot  checks  by the  Commission  and  Court  of Auditors.  Among  other  things, 
the beneficiaries  of the operations are obliged to file reports and financial statements. 
These  are  analysed  from  the  point  of view  of their  content  and  the  eligibility  of  the 
expenditure in line with the objective of Community  financing. 

*rt 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific  and quantified  objectives; target  population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in  the  Internal  Market 
and promote their  internationalisation. 

In principle, the actions  in the Third  Multiannual  Programme  for  SMEs  could 
possibly  interest  all  the  SMEs  in  Estonia.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according to  the typology  and  the activity  of the  enterprises  and  of the  nature 
of the actions developed. 

For  example,  among  the  15 million  SMEs  in the European  Union,  1.5  million 
are most  likely to be targeted  for  an action  regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also  for  Estonia.  The  target  of the  actions  varying  according  to  the  nature  of 
these actions. 

Furthermore,  the  actions  aim  at  the  professional  organisations,  the  Chambers 
of Commerce and Industry,  the Trade Associations and other intermediaries  of 
the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation  and growth.  Indeed,  the job  creation  rate of  SMEs is higher  than  that 
. of the big enterprises. 

It  is, however,  necessary  to  recognise  the  fact  that  SMEs  are  inherently  more 
vulnerable particularly  in the first years following  their creation. This weakness 
stems, in particular from  the following five factors: 

an increasingly complex legal, fiscal and administrative  environment; 

• 
•  difficulty  in participating in R&D programmes and in exploiting the results; 
structural weakness of SMEs with regard tot theirs management  abilities as 
• 
well as to the inappropriateness of training programmes; 
difficulty  in obtaining finance at a reasonable cost; 
difficulty  in accessing markets for products and services. 

• 
• 

SO 

It is necessary to underline - with regard  to the subsidiarity approach  - that  the 
actions  developed  at  Community  level  are taken  in a  context  which  ensures  a 
significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed,  the objectivity  and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature, 
that  have  a  Community 
implement  networks 
dimension.  To  confine  such  activities  to  the  national  level  would  not  only  be 
impossible and less efficient,  but it would also distort competition to the extent 
that the level of support of each Member State would be extremely diverse. 

to 

As a result  of the  reform  policy creating  a market  economy  and  supported  by 
the  privatisation  process,  the  number  of  private  companies  has  grown 'rapidly 
since  the  late  1980s.  The  SMEs'  contribution  to  employment  has  increased 
annually.  The  Estonian  economy  is  likely  remain  characterised  by  a  large 
percentage  of  SMEs  over  the  coming  years.  These  enterprises  will  need  to 
prepare  for  EU  membership  and  the  increased  competitive  pressures  this  is 
likely  to  expose  them  to.  In  this  context,  the  opening  up  of  Community 
programmes  is  an  important  element  of  the  pre-accession  strategy.  The 
participation  in this  particular  programme  can  in a positive  manner  contribute 
to preparing SMEs and SME representative organisation  for future  accession. 

-  Need for Community financial  aid 

In  view  of the  substantial financial contribution  of Estonia  to  the  programme 
and  Estonia's  precarious  budgetary  situation,  assistance  from  PHARE  as 
provided  for in Article  108 of the Europe Agreement is essential. 

-  Choice of ways and means 

With a contribution  from  Estonia's national budget,  supplemented  by one  from 
PHARE,  Estonia's  participation  will contribute to getting  acquainted  with  the 
internal  policies  and  proceedings  of  the  Community  in  the  field  of  Small  and 
medium-sized  enterprises.  The integration  of Estonian  nationals in  Community 
networks  will  make  a  definite  contribution  to  preparing  Estonia  for  future 
membership. 

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

operation 

Since  projects  will  be  selected  according  to  qualitative  criteria,  it  will  only be 
possible  to  measure  the  real  impact  on  the  basis  of  Estonian  citizens'  and 
SMEs'  capacity  to  respond  to  the  calls  for  proposal  to  be  launched  by  the 
Commission under the programme. 

SI 

9.3.  Evaluation  of the operation 

The  evaluation  procedures  included  in the  Third  Multiannual  programme  for 
SMEs will also cover operations financed for Estonian  beneficiaries. 

9.3.1 Performance  indicators 

The indicators are chosen in function  of the type of action undertaken. 

As  an  example,  in the  field  of  Euro  Info  Centres  (EICs),  there  is  a  contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as  well  as  their  activity  in  relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and  the  'performance" of  each  EIC  is  rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If  this  is-not  the 
case,  the  EIC  is  excluded  from  the  network  and  the  procedure  for  finding  a 
replacement is initiated. An evaluation report et published  every six months. 

For  the  business  co-operation  networks,  an  annual  evaluation  of the  network 
members  is based  on  the  number  of  co-operation  profiles  introduced  into  the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured  by the participation  in conferences  and  seminars  organised  to  assure 
the implementation  of the foreseen  actions, the feed-back  in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution  of publications. 

In the  case of actions  specifically  in favour  of crafts  and  small  enterprises,  the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting from finance stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen  evaluation 

The  Council  Decision  of  9  December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of  the  Decision,  in  order  to  assess  whether 
the original objectives  have been met, including a cost-effectiveness  evaluation. 

9.3.3  Assessment  of results 

The  results  of  the  evaluations  are  generally  diffused 
to  the  concerned 
population  and  can give rise to  modifications  regarding  actions  undertaken  or 
new proposals for actions. 

*l 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted to the Management  Committee established by the Council Decision. 
Reports on the results of the participation  of the  associated  Central  European 
countries concerned  in the programme would in the same manner be submitted 
to the Committee as well as to the countries  concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff  and additional credits authorised by the budget authority. The supplementary needs 
can not. in any case, prejudge the decision that the Commission will need to take œnœming: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact on the number of posts 

Type of post 

Staff required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

including 

d u r a t i on 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

Officials or 
temporary  staff 
A 
B 
C 

Other  resources 
TOTAL 

•0.5 
0.2 
0.2 

0.9 

0.5 
0.2 
0.2 

0.9 

from  1998 

10.2.  Overall financial impact of the additional human resources 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period  1998-2000) 

" 

Officials 
Temporary  staff 
Other  resources  (indicate  budget 
heading) 

TOTAL 

J 

0 

I 

si 

10.3.  Increase in other operating expenses as a result of the operation 

Budget heading 
(No and title) 

Total 

In ECU 

Method of calculation 
(total cost of the  action 
for the period  1998-2000) 

A1178/A238 - technical assistance 

33,222  Technical assistance  11,074 

ECU/year. 

A1300-missions 

A2500 - meetings- 

A2510-meetings of committees 

9,000  2  missions  per  year 

the 
whole  Programme "(annual  cost 
3,000  ECU). 

for 

15,030  Participation  of  3  Estonian 
in 
representatives  per 
meetings  organised  under  the 
different  Programme 
strands 
(annual  cost  of  participation  in 
meetings 5,010  ECU). 

year 

representative 

the  presence  of  1 
15,030  Cost  of 
Estonian 
at 
consultative  meetings  (3/year)  -
exchange  about  the  Programme 
and  information  about  the  work 
in  the  Management  Committee 
(annual  cost  of  participation  in 
meetings 5,010  ECU). 

Total 

72.282 

The  above  expenditure  will  be  met  from  the  receipts  (article  4§2,  third  indent  of  the 
financial  regulation)  received  from  the Estonian  participation  in  Community  Programmes 
(see § 5.3 of the financial  statement). 

5iv 

Proposal for a 
Council Decision 
of... 

concerning  the  Community  position  within  the  Association  Council  on the 
participation  of Hungary  in the Community  programme  in the field  of small  and 
^£100%l  fcKtS^ 
medium-sized  enterprises 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having  regard  to the Treaty  establishing  the European  Community,  and in  particular 
Article  130, paragraph 3 in conjunction  with Article 228, paragraph 3,  1st alinéa thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the Additional  Protocol  to the Europe  Agreement  establishing  an association 
between  the European  Communities  and their  Member  States,  of the one part, and 
Hungary,  of the  other  part,  has been  concluded  by Decision  of the  Council  and  the 
Commission of 4 December  1995. 

Whereas  according  to Article  1 of the  Additional  Protocol,  Hungary  may  participate in 
Community  framework  programmes,  specific  programmes,  projects  or  other  actions 
notably in the field  of small and  medium-sized  enterprises  and,  according to Article 2, the 
terms and  conditions for participation  of Hungary  in the activities  referred  to in Article 1 
shall be decided by the Association  Council, 

Whereas,  Council  Decision  (97/15/EC)  of 9  December  1996  on a  Third  Multiannual 
Programme  for  Small  and Medium-sized  Enterprises  (SMEs)  in the European  Union 
(1997 to 2000)l  and  in particular  Article  7(1) thereof,  provide that  this  programme  shall 
be open to  the  participation  of associated  Central  European  countries in accordance  with 
the  conditions  set out in the Additional  Protocols  to the Association  Agreements on 
participation in Community programmes. 

HAS DECIDED AS FOLLOWS: 

The position to be taken  by the Community  within the Association  Council  established  by 
the Europe  Agreement  between  the European  Communities  and  their Member  States, of 
the  one part,  and  Hungary,  of the  other  part,  concerning  the  participation  of Hungary in 
the  Community  programme  in the field  of small  and medium-sized  enterprises  is  the 
attached draft  decision  of the Association Council. 

Done at Brussels, 

For the Council, 

1 OJ No L 6/25 of 10.01.1997 

î>^ 

Draft  Decision  n°..../98  of  the  EC-Hungary  Association  Council  of. 
adopting  the  terms  and  conditions  for  the  participation  of  Hungary 
Community Programme in the field of small and medium-sized  enterprises 

1998 
in  the 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their Member  States,  of the  one  part,  and  the  Republic  of Hungary  of 
the other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between the European  Communities and their Member States, of the one part, 
and  the  Republic  of  Hungary,  of  the  other  part,  concerning  Hungary's  participation  in 
Community programmes2,  and in particular Article  1 and 2 thereof, 

Whereas according  to  Article  1 of the  said  Additional  Protocol, Hungary  may  participate 
in  Community 
framework  programmes,  specific  programmes,  projects  or  other 
Community actions notably in the field  of small and medium-sized  enterprises, 

WTiereas according  to  Article  2  of the  said  Additional  Protocol  the  terms  and  conditions 
for the participation  of Hungary  in the activities referred  to  in Article  1 are to  be  decided 
by the Association  Council, 

HAS DECIDED AS FOLLOWS: 

Article  1 

Hungary  shall  participate  in  the  Third  Multiannual  Programme  for  Small  and  Medium-
sized  Enterprises  (SMEs)  in the  European  Union  (1997 to  2000)  according  to  the  terms 
and  conditions  set  out  in  Annexes  I  and  II  which  shall  form  an  integral  part  of  this 
Decision. 

Article  2 

This Decision  shall apply for the duration of the programme. 

Article  3 

This Decision  shall enter into force  on the first  day of the month following  its adoption. 

Done at 

The Chairman 

For the Association  Council 

1  OJN°L347  of 31.12.1993 

2  OJN°L317of30.12.1995 

% 

ANNEX I 

Terms and conditions for the participation  of Hungary in the Third  Multiannual 
Programme for Small and Medium-sized  Enterprises (SMEs) in the European 
Union (1997 to 2000) 

1. 
Hungary  will  participate  in  all  activities  of  the  Third  Multiannual  Programme  for 
Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000) 
(hereinafter  called  "the  Programme")  in  conformity,  unless  otherwise  provided  in  this 
Decision,  with  the  objectives,  criteria,  procedures  and  timelimits  laid  down  in  Council 
Decision  (97/15/EC)  of 9 December  1996 on  a  Third  Multiannual  Programme  for  Small 
and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000)^ and  in 
particular Article 7(1) thereof. 

2. 
The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
applications  related  to  eligible  institutions,  organisations  and  individuals  of Hungary  will 
be the same as those applicable to eligible institutions, organisations and individuals of the 
Community. 

3. 
Where  appropriate,  in  order  to  ensure  the  Community  dimension  of  the 
Programme,  transnational  projects  and  activities proposed  by Hungary will be required  to 
include a minimum  number of partners from the Member  States of the  Community.  This 
minimum  number  will  be  decided  in  the  framework  of  the  implementation  of  the 
Programme,  taking  into  account  the  nature  of  the  various  activities,  the  number  of 
partners in a given project,  and the number of countries participating in the Programme. 

4. 
Hungary  will  pay each year  a contribution  to  the general  budget  of the  European 
Communities  to  cover  the  costs  resulting  from  its  participation  in  the  Programme  (see 
Annex  H).  The  Association  Committee  is  entitled  to  adapt  this  contribution  whenever 
necessary. 

5. 
The Member  States of the Community and Hungary will make every effort,  within 
the  framework  of the existing provisions, to facilitate  the free movement  and residence of 
all eligible persons to the Programme  moving between Hungary and the Member  States of 
the Community for the purpose of participating in activities covered by the Decision. 

Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
6. 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises  (SMEs) in the European  Union (Article 6), the participation  of Hungary 
in the Programme will be continuously  evaluated  on a partnership basis involving Hungary 
and  the  Commission  of  the  European  Communities.  Hungary  will  submit  the  necessary 
reports  to  the  Commission  and  take  part  in  other  specific  activities  set  out  by  the 
Community in that  context. 

7. 
Without  prejudice  to  the  procedures  referred  to  in Article 4  of  the Decision  on  a 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  Hungary  will  be  invited  to  co-ordination  meetings  on  any  question 
1? 

concerning  the  implementation  of  this  Decision  prior  to  regular  meetings  of  the 
Programme  Committee.  The Commission will  inform  Hungary  about  the  results  of  such 
regular meetings. 

The language to  be used  as regards the application process,  contracts,  reports  to 
8. 
be submitted and other administrative arrangements for the Programme, will be one of the 
official  languages of the Community. 

ANNEX II 

FINANCIAL CONTRIBUTION  OF HUNGARY TO THE THIRD 
MULTIANNUAL PROGRAMME FOR SMALL AND  MEDIUM-SIZED 
ENTERPRISES  (SMES) IN THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial contribution of Hungary will cover; 

- 

financial  support  from  the  Programme  to  the  participation  of  Hungarian 
entities in activities as defined  in Annex LI, 

-  supplementary  costs  of  an  administrative  nature  related  to  the  management  of 
the Programme by the Commission stemming from  Hungary's  participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received from the Programme by the Hungarian beneficiaries  will not exceed 
the  contribution  paid  by  Hungary,  after  deduction  of 
supplementary 
administrative costs. 

the 

Should  the  contribution  paid  by  Hungary  to  the  general  budget  of  the  European 
Communities,  after  deduction  of  the  supplementary  administrative  costs,  be  higher 
than  the  aggregated  amount  of  subsidies  or  other  financial  support  received  by  the 
Hungarian  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's  contribution.  Should  such a balance be left  when the Programme  comes to an 
end, the corresponding  amount will be reimbursed to Hungary. 

3.  Hungary's  annual  contribution  will be of ECU  896,981  from  1998.  From  this  sum, 
an amount  of ECU  58,681 will  cover  supplementary  administrative  costs  related  to 
the  management  of  the  Programme  by  the  Commission  stemming  from  Hungary's 
participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of Hungary. 

Upon  entry  into  force  of this  Decision  and  at the beginning  of  each  following  year, 
the  Commission  will  send  to  Hungary  a  call  for  funds  corresponding  to  its 
contribution to the costs under this Decision. 

This  contribution  will  be expressed  in  ECU  and  paid  into  an  ECU  bank  account  of 
the Commission. 

Hungary  will  pay  its  contribution  to the  annual  costs  under  this  Decision  according 
to the call for funds  and at the latest three months after  the call for  funds  is sent. Any 
delay  in the payment  of the contribution  shall give rise to the payment  of interest by 
Hungary  on the outstanding  amount  from  the due date. The interest  rate  corresponds 
to the rate applied  by the European  Monetary  Co-operation  Fund,  for  the month  of 
the due date, for its operations in ECU, increased by  1.5 percentage points. 

5.  Hungary  will pay the  supplementary  administrative  costs referred  to  in paragraph  3 

from  its national budget. 

6.  Hungary will pay 50% of the remaining costs of its participation  in the Programme 

from  its national budget. 

Subject  to  regular Phare programming procedures, the remaining  50% will be paid 
from  Hungary's annual Phare allocation. 

•  . 

""' 

60 

FINANCIAL STATEMENT 

1.  TITLE OF  OPERATION 

Participation  of Hungary in the Third Multiannual Programme for SMEs. 

2.  BUDGEf  HEADING INVOLVED 

B7-503  - Opening of Community Programmes to  the associated  countries of Central 
Europe 

3.  LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph  3, in conjunction  with Article 228, paragraph 3, 1st alinéa thereof, 

Additional  Protocol  to  the Europe  Agreement  with Hungary  (Articles  228  and  238) 
of 30 December  1995, providing  for  the opening-up  of Community programmes  (OJ 
No 317/95, page 30), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General  objective 

The Third Multiannual  Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial  environment for  enterprises; 
3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in 

particular through better information  and  co-operation; 

4.  Enhance  SME competitiveness  and improve access to  research,  innovation 

and training; 

5.  Promote entrepreneurship and support specific target groups. 

Hungary's  participation  in the Community  programme  for  SMEs will  come  in 
addition to those Community programmes in which it already participates,  e.g. 
Leonardo da Vinci, Socrates and Youth for Europe, and will further  contribute 
to  its  preparation  for  accession  as  a  key  feature  of  a  reinforced  preaccession 
strategy.  It  will  also  enable  Hungary  to  familiarise  itself  with  the  procedures 

% 
61 

and  methods  used  in  the  Community  programme  in  the  field  of  small  and 
medium-sized  enterprises. 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 
country.  This  decision  also  lays  down  the  practical  arrangements  for  opening 
up the programmes. 

The Additional  Protocol  with Hungary  entered  into force  on  1  February  1996 
and  provides  for  Hungary's  participation  in  a  wide  range  of  areas,  amongst 
which small and medium-sized enterprises. 

Hungary  confirmed  its  willingness  to  participate  also. in  other  Community 
programmes, notably in the fields of culture and the audio-visual  sector,  health 
and social policy and research and technical  development. 

4.2.  Period  covered and arrangements for  renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare  contribution,  however,  is dependent  on decisions  concerning the  budget 
after  1999. 

5.  CLASSIFICATION  OF EXPENDITURE  OR  REVENUE 

5^ 1.  Non-compulsory  expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph  of Article 3 of the Additional Protocol  stipulates that 
Hungary  itself  will  meet  the  costs  resulting  from  its  participation,  it  will  be 
invited  to  transfer  its  contribution  to  item  6091  of the  EU's  budget  receipts. 
However,  as the second  paragraph  of Article 3 states that the Community may 
supplement  Hungary's  contribution  (through  its  national  Phare  allocation), 
Hungary  will contribute  only part from  its national budget,  with the  remainder 
being  charged  to  heading  B7-503.  A  transfer  from  the  relevant  Phare 
appropriations  (article B7-500) to  article B7-503 will be made upon  receipt  of 
Hungary's  contribution. 

6. TYPE OF EXPENDITURE OR REVENUE 

-  subsidy for co-financing  with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments,  information 

-  no provision for all or part of the Community contribution to be reimbursed 

As  far  as  revenue  is  concerned,  provision  for  Hungary's  contribution  to  cover  the 
cost of its participation is made under item 6091. The revenue will be allocated to  the 
items  for  expenditure  on  the  programme  in  question  and,  where  appropriate,  to  the 
relevant items of operating expenditure. 

The total revenue expected  is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for  1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based  on the following  preconditions: 

-  each partner country's contribution to the financing of the activities ^referred 
to  in the  Protocol  is  calculated  according  to  the  principle  that  the  country 
bears the  cost  of participation  itself.  Heading  6091  has  been  created  in  the 
statement  of budget revenue for that purpose; 

- 

the Community  may decide on a case-by-case basis to. pay  a supplement  to 
the partner  country's  contribution.  The supplement  may be  in the form  of a 
contribution under the national PHARE programme. 

Based  on  the  Additional  Protocol  with  Hungary,  the  financial  and  budgetary 
arrangements  for  the  programme  concerned  are  as  follows:  Among  four 
alternatives,  Hungary  has  opted  for  a  contribution  based  on  the  estimation  of 
the real cost of participation  in all the strands of the SME programme. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Actions within the field of Distributive Trade (130,000 ECU) 
-  Actions within the field of Crafts  and Small Enterprises (100,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  10  centres  plus 
20,000 ECU for a decentralised  information  campaign = 420,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of the  country  (27.71  enterprises/event  x 2  events/year  x  700 
ECU  paid to the National  Counsellor  per  SME for  costs, promotion,  etc. = 
38,800 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

-  The  subvention  for  one  IBEX  event  (subcontracting).  The  maximum 
contribution  form  the EU  is  100,000  ECU,  and  this  must  not  exceed  25% 
of the total  budget  for  the event.  (However,  given  the  size of these events, 
it  is  a  present  not  foreseen  to  organise  more  than  one  per  year  in  Central 
Europe.) 

The  cost  of  Hungary's  participation  in  the  Third  Multiannual  programme  for 
small  and  medium-sized  enterprises  (SMEs)  in  the  European  Union  (1997-

L2> 

2000)  from  1998  will  thus  be  ECU 896,981  per  year,  including  7% 
administrative cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs - to be borne exclusively by Hungary - have to be deducted,  is divided 
per  year  as  follows:  50%  of  the  operational  costs  will  be  covered  from 
Hungary's national budget and - subject to the procedures for programming the 
Phare programme - 50% from the annual PHARE allocation for Hungary. 

7.2.  Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
Hungary 

of which 
Phare 

Small and 
medium-sized 
enterprises 

838.300 

838.300 

838.300 

2.514.900 

1.257.450 

1.257.450 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

Actions within the 
field  of Distributive 
Trade 

Actions within Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

130,000 

130,000 

130,000 

390,000 

100,000 

100,000 

100,000 

300,000 

Support to the EICCs 

420,000 

420,000 

420,000 

1,260,000 

Business Co-operation 

- Europartenariat 

- INTERPRISE 

Sub-contracting: 

IBEX 

38,800 
50,000 

38,800 
50,000 

38,800 
50,000 

116,400 
150,000 

100,000 

100,000 

100,000 

300,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

6^ 

7.4.  Schedule for multiannual operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

419.150 

419.150 

419.150 

0 

1.257.450 

Commitment 
appropriations 

Payment 
appropriations" 

1998 

1999 

2000 

83,830 

251,490 

83,830 

83,830 

251,490 

83,830 

subsequent  years 

83,830 

335,320 

~ 

83,830 

335,320 

419,150 

419,150 

Total 

419.150 

419.150 

419.150 

1.257.450 

(*) Schedule based on the method of payment currently applying to this programme. 

The foreseeable  annual receipts are as  follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

419.150 

419.150 

419.150 

58.681 

58.681 

58.681 

Total 

477.831 

477.831 

477.831 

0 

0 

0 

1.257.450 

176.043 

1.433.493 

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

All the Commission's contracts, agreements and other legal commitments provide for 
on-the-spot  checks by the Commission and Court of Auditors.  Among  other things, 
the beneficiaries  of the operations are obliged to file reports and financial statements. 
These are analysed  from the point of view  of their content  and the  eligibility  of the 
expenditure in line with the objective of Community  financing. 

Ls 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific and quantified  objectives; target  population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in  the  Internal  Market 
and promote their  internationalisation. 

In principle,  the  actions  in the Third  Multiannual  Programme  for  SMEs  could 
possibly  interest  all  the  SMEs  in  Hungary.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according  to  the typology  and the activity  of the  enterprises  and  of the  nature 
of the actions developed. 

For  example,  among the  15 million  SMEs  in the European  Union,  1.5  million 
are most  likely to  be targeted  for  an  action  regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also for  Hungary.  The target  of the  actions varying  according  to the nature  of 
these actions. 

Furthermore,  the  actions  aim  at  the  professional  organisations,  the  Chambers 
of  Commerce  and  Industry,  the  Trade  Associations  and  other  intermediaries 
for the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation  and growth.  Indeed,  the job  creation  rate of SMEs is higher than  that 
of the big enterprises. 

It  is, however,  necessary  to  recognise  the  fact  that  SMEs  are  inherently  more 
vulnerable particularly  in the first years following  their creation. This weakness 
stems, in particular from  the following five factors: 

an increasingly complex legal, fiscal  and administrative  environment; 

• 
•  difficulty  in participating in R&D programmes and in exploiting the results; 
structural weakness of SMEs with regard tôt theirs management  abilities as 
• 
well as to the inappropriateness  of training programmes; 

•  • difficulty  in obtaining finance at a reasonable cost; 
•  difficulty  in accessing markets for products and services. 

It is necessary to underline - with regard to the subsidiarity approach  - that  the 
actions  developed  at  Community  level  are taken  in  a context  which  ensures  a 

4G 

significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity  and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature, 
that  have  à"  Community 
implement  networks 
dimension.  To  confine  such  activities  to  the  national  level  would  not  only  be 
impossible and less efficient,  but it would  also distort competition to the extent 
that the level of support  of each Member State would be extremely diverse. 

to 

Since  the  start  of  the  economic  restructuring  process,  the  share  of  SMEs  in 
production,  employment,  export  and  investment  has  grown  dramatically  in 
Hungary.  This  is  not  only  the  result  of  the  creation  of  many  new  micro-
businesses, but also of the disappearance  of many large, state-owned  industrial 
and  mining  companies.  Given  its  structure  and  comparative  advantages,  the 
Hungarian* economy will remain  characterised  by a large percentage  of SMEs. 
These  enterprises  will  need  to  prepare  for  EU  membership  and  the  increased 
competitive  pressures  this  is  likely  to  expose  them  to.  In  this, context,  the 
opening  up  of  Community  programmes  is  an  important  element  of  the  pre-
accession  strategy.  Thé  participation  in  this  particular  programme  can  in  a 
positive  manner  contribute  to  preparing  SMEs  and  SME  representative 
organisation for future  accession. 

-  Need for  Community financial aid 

In view  of the  substantial  financial  contribution  of Hungary  to  the  programme 
and  Hungary's  precarious  budgetary  situation,  assistance  from  PHARE  as 
provided for  in Article 3(2) of the Additional Protocol is essential. 

-  Choice of ways and means 

With  a  contribution  from  Hungary's  national  budget,  supplemented  by  one 
from  PHARE,  Hungary's  participation  will  contribute  to  getting  acquainted 
with  the  internal  policies  and  proceedings  of  the  Community  in  the  field  of 
Small and  medium-sized  enterprises. The integration  of Hungarian  nationals in 
Community  networks  will  make  a  definite  contribution  to  preparing  Hungary 
for future  membership. 

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

operation 

Since  projects  will  be  selected  according  to  qualitative  criteria,  it  will  only  be 
possible  to  measure  the  real  impact  on  the  basis  of  Hungarian  citizens'  and 
SMEs'  capacity  to  respond  to  the  calls  for  proposal  to  be  launched  by  the 
Commission under the programme. 

(^ 

9.3.  Evaluation  of the operation 

The  evaluation  procedures  included  in  the  Third  Multiannual  programme  for 
SMEs will also cover operations financed for Hungarian  beneficiaries. 

9.3.1 Performance  indicators 

The indicators are chosen in function  of the type of action undertaken. 

As  an  example,  in  the field of  Euro  Info  Centres  (EICs),  there  is  a  contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as  well  as  their  activity  in  relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and  the  'performance" of  each  EIC  is  rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If  this  is- not  the 
case,  the  EIC  is  excluded  from  the  network  and  the  procedure  for  finding  a 
replacement is initiated. An evaluation report et published  every six months. 

For  the  business  co-operation  networks,  an  annual  evaluation  of the  network 
members  is based  on  the  number  of  co-operation  profiles  introduced  into  the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured  by the participation  in conferences  and  seminars  organised  to  assure 
the implementation  of the foreseen  actions, the feed-back  in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution of publications. 

In the  case of actions  specifically  in favour  of crafts  and  small  enterprises,  the 
indicators  include  the  -number  of  craft  enterprises  and  micro-enterprises 
benefiting from  finance  stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen  evaluation 

The  Council  Decision  of  9  December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of  the  Decision,  in  order  to  assess  whether 
the original objectives  have been met, including a cost-effectiveness  evaluation. 

9.3.3  Assessment of results 

The  results  of  the  evaluations  are  generally  diffused 
to  the  concerned 
population  and  can give rise to  modifications  regarding  actions  undertaken  or 
new proposals for actions. 

<°<Z 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted  to the Management  Committee established  by the  Council  Decision. 
Reports  on the results  of the participation  of the  associated  Central  European 
countries concerned  in the programme would in the same manner be submitted 
to the Committee as well as to the countries concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff and additional credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact on the number of posts 

Type of post 

Staff required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

including 

duration 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

Officials or 
temporary  staff 
A 
B 
C 
Other  resources 
TOTAL 

0.5 
0.2 
0.2 

0.9 

0.5 
0.2 
0.2 

0.9 

10.2.  Overall financial impact of the additional human resources 

from  1998 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period 1998-2000) 

Officials 
Temporary  staff 
Other  resources  (indicate  budget 
heading) 

TOTAL 

J 

0 

| 

~ 

«9 

10.3.  Increase in other operating expenses as a result of the operation 

Budget heading 
(No and title) 

Total 

in ECU 

Method of calculation 
(total cost of the action 
for the period 1998-2000) 

A1178/A238 - technical assistance 

116,688  Technical assistance 38,896 

ECU per year. 

A1300-missions 

A2500 - meetings 

A2510-meetings of committees 

19,275  5  missions  per  year  for  the 
to  be 
Programme, 
whole 
executed  within  the  different 
Programme 
strands  opened 
(annual  cost  of  missions  6,425 
ECU). 

25,050  Participation  of  5  Hungarian 
representatives  per  year 
in 
meetings  organised  under  the 
different  Programme  strands 
(annual  cost  of  participation  in 
meetings 8,350 ECU). 

15,030  Cost  of  the  presence  of  1 
Hungarian 
representative  at 
consultative  meetings  (3/year)  -
exchange  about the Programme 
and  information  about  the work 
in  the  Management  Committee 
(annual  cost  of  participation  in 
meetings 5,010 ECU). 

Total 

176,043 

The  above  expenditure  will  be  met from  the  receipts  (article  4§2,  third  indent  of the 
financial  regulation)  received 
in  Community 
Programmes (see § 5.3 of the financial  statement). 

the  Hungarian  participation 

from 

To 

Proposal for a 
Council Decision 
of... 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Poland  in  the  Community  programme  in  the  field  of  small  and 
^ l o o S ^ N s) 
medium-sized  enterprises 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130, paragraph 3, in conjunction  with Article 228, paragraph 3,  1st alinéa thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and 
Poland,  of  the  other  part,  has  been  concluded  by  Decision  of  the  Council  and  the 
Commission of 4 December  1995. 

Whereas  according  to  Article  1  of  the  Additional  Protocol,  Poland  may  participate  in 
Community  framework  programmes,  specific  programmes,  projects  or  other  actions 
notably in the field of small and  medium-sized  enterprises  and, according to  Article 2,  the 
terms and conditions for the participation  of Poland in the activities referred  to in Article 1 
shall be decided by the Association Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to  2000)l  and  in particular  Article 7(1) thereof,  provides that this programme  shall 
be open to  the participation  of associated  Central European  countries in accordance  with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation in Community  programmes. 

HAS DECIDED AS  FOLLOWS: 

The position to be taken by the Community within the Association  Council  established by 
the Europe  Agreement  between  the European  Communities  and  their Member  States,  of 
the  one part,  and Poland,  of the  other  part,  concerning the  participation  of Poland  in  the 
Community  programme  in the field of  small and  medium-sized  enterprises  is the  attached 
draft  decision of the Association  Council. 

Done at Brussels, 

For the Council, 

1 OJ No L 6/25 of  10.01.1997 

*1 

Draft  Decision  n°..../98  of  the  EC-Poland  Association  Council  of. 
1998 
adopting the terms and conditions for the participation  of Poland  in the  Community 
Programme in the field  of small and medium-sized  enterprises 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement establishing an association between the European 
Communities and their Member  States, of the one part,  and the Republic of Poland  of the 
other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between the European  Communities and their Member  States, of the one part, 
and  the  Republic  of  Poland,  of  the  other  part,  concerning  Poland's  participation  in 
Community programmes2,  and in particular Article  1 and 2 thereof, 

Whereas according to Article  1 of the said Additional Protocol, Poland  may participate in 
Community  framework  programmes,  specific  programmes,  projects  or  other  Community 
actions notably in the field of small and medium-sized  enterprises, 

Whereas  according  to  Article  2  of the  said  Additional  Protocol  the  terms  and  conditions 
for the participation of Poland  in the activities referred  to in Article  1 are to be decided by 
the Association Council, 

HAS DECIDED AS FOLLOWS: 

Article  1 

Poland  shall participate in the Third  Multiannual  Programme for  Small and  Medium-sized 
Enterprises  (SMEs)  in the  European  Union  (1997  to  2000)  according  to  the  terms  and 
conditions set out in Annexes I and II which shall form an integral part of this Decision. 

Article  2 

This Decision shall apply for the duration of the programme. 

Article  3 

This Decision shall enter into force  on the first day of the month following its adoption. 

Done at 

The Chairman 

For the Association Council 

1  OJN°L348/lof31.12.1993 

2  OJN°L317/34of30.12.1995 

}2 

ANNEX I 

Terms and conditions for the participation  of Poland in the Third Multiannual 
Programme for Small and Medium-sized Enterprises (SMEs) in the European 
Union (1997 to 2000) 

Poland  will  participate  in  all  activities  of  the  Third  Multiannual  Programme  for 
1. 
Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000) 
(hereinafter  called  "the  Programme")  in  conformity,  unless  otherwise  provided  in  this 
Decision,  with  the  objectives,  criteria,  procedures  and  timelimits  laid  down  in .Council 
Decision  (97/15/EC)  of 9 December  1996 on  a  Third  Multiannual  Programme  for  Small 
and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000)  and  in 
particular Article 7(1) thereof. 

2. 
The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
applications  related to  eligible institutions, organisations and individuals  of Poland  will be 
the  same  as  those  applicable  to  eligible  institutions,  organisations  and  individuals  of  the 
Community. 

3. 
Where  appropriate,  in  order  to  ensure  the  Community  dimension  of  the 
Programme,  transnational  projects  and  activities  proposed  by Poland  will  be  required  to 
include a minimum number of partners from the Member  States of the Community.  This 
minimum  number  will  be  decided  in  the  framework  of  the  implementation  of  the 
Programme,  taking  into  account  the  nature  of  the  various  activities,  the  number  of 
partners in a given project,  and the number of countries participating in the Programme. 

4. 
Poland  will  pay  each  year  a  contribution  to  the  general  budget  of  the  European 
Communities  to  cover  the  costs  resulting  from  its  participation  in  the  Programme  (see 
Annex  II).  The  Association  Committee  is  entitled  to  adapt  this  contribution  whenever 
necessary. 

5.- 
.  The Member  States  of the  Community  and  Poland  will  make  every  effort,  within 
the framework of the existing provisions, to facilitate  the free movement  and residence  of 
all eligible persons to the Programme  moving between Poland  and  the Member  States  of 
the Community for the purpose of participating in activities covered by the Decision. 

6. 
Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  programmes 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises (SMEs) in the European Union (Article 6), the participation  of Poland in 
the Programme will be continuously evaluated on a partnership basis involving Poland  and 
the  Commission  of the European  Communities.  Poland  will  submit  the  necessary  reports 
to the Commission  and  take  part  in other  specific  activities  set  out  by the  Community  in 
that  context. 

9-3 

Without prejudice to the procedures referred to  in Article 4  of the Decision  on a 
7. 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  Poland  will  be  invited  to  co-ordination  meetings  on  any  question 
concerning  the  implementation  of  this  Decision  prior  to  regular  meetings  of  the 
Programme  Committee.  The  Commission  will  inform  Poland  about  the  results  of  such 
regular meetings. 

The language to  be used as regards the application process,  contracts,  reports to 
8. 
be submitted and other administrative arrangements for the Programme, will be one of the 
official  languages of the Community. 

ANNEX II 

FINANCIAL CONTRIBUTION  OF POLAND TO THE THIRD  MULTIANNUAL 
PROGRAMME FOR SMALL AND MEDIUM-SIZED ENTERPRISES  (SMES) IN 
THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial  contribution of Poland will cover; 

- 

financial  support  from  the Programme to the participation  of Polish  entities  in 
activities as defined  in Annex 1.1, 

-  supplementary  costs of an  administrative  nature related  to  the management  of 
the Programme by the Commission stemming from  Poland's participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received from  the Programme by the Polish bénéficiaires  will not exceed the 
contribution  paid  by  Poland,  after  deduction  of  the  supplementary  administrative 
costs. 

Should  the  contribution  paid  by  Poland  to  the  general  budget  of  the  European 
Communities,  after  deduction  of  the  supplementary  administrative  costs,  be  higher 
than  the  aggregated  amount  of  subsidies  or  other  financial  support  received  by  the 
Polish  beneficiaries  from  the  Programme, the  Commission  will  transfer  the  balance 
to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following  year's 
contribution.  Should  such  a balance  be  left  when  the  Programme  comes  to  an  end, 
the corresponding amount will be reimbursed to Poland. 

3.  Poland's  annual  contribution  will be of ECU  1,006,014 from  1998.  From this  sum, 
an amount  of ECU  65,814 will  cover  supplementary  administrative  costs  related  to 
the  management  of  the  Programme  by  the  Commission  stemming  from  Poland's 
participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of Poland. 

Upon  entry  into  force  of this Decision  and  at the beginning  of  each  following  year, 
the  Commission  will  send  to  Poland  a  call  for  funds  corresponding  to  its 
contribution to the costs under this Decision. 

This  contribution  will  be  expressed  in ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

Poland will pay  its contribution  to the annual  costs under this Decision  according to 
the  call  for  funds  and  at the  latest three months  after  the  call  for  funds  is  sent.  Any 
delay in the payment  of the contribution  shall  give rise to the payment  of interest by 
Poland on the outstanding amount from the due date. The interest rate corresponds to 
the rate applied  by the European Monetary  Co-operation Fund, for the month  of the 
due date, for its operations in ECU, increased by  1.5 percentage points. 

5.  Poland  will  pay  the  supplementary  administrative  costs  referred  to  in  paragraph  3 

from  its national budget. 

}5 

6.  Poland will  pay 3% (1998),  13% (1999)  and 23% (2000)  of the remaining  costs  of 

its participation in the Programme from its national budget. 

Subject  to  regular  Phare  programming  procedures,  97%  (1998),  87%  (1999)  and 
77% (2000) will be paid from Poland's annual Phare allocation. 

?6 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Participation of Poland in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING  INVOLVED 

B7-503 - Opening of Community Programmes to the associated  countries of Central 
Europe 

3.  LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph  3, in conjunction  with Article 228, paragraph 3,  1st alinéa thereof, 

Additional Protocol to the Europe Agreement with Poland  (Articles 228 and 238)  of 
30  December  1995,  providing  for  the  opening-up  of  Community  programmes  (OJ 
No 317/95, page 34), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the  European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General  objective 

The Third Multiannual  Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial  environment for  enterprises; 
3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in 

particular through better information  and  co-operation; 

4.  Enhance  SME competitiveness and  improve access to  research,  innovation 

and training; 

5.  Promote entrepreneurship  and support  specific target groups. 

Poland's  participation  in the Community  programme for  SMEs  will  contribute 
to  its  preparation  for  accession  as  a  key  feature  of  a  reinforced  preaccession 
strategy. It will also enable Poland to  familiarise  itself with the procedures  and 
methods used  in the Community programme in the field of  small  and  medium-
sized enterprises. 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 

I 

country.  This decision  also  lays down the practical  arrangements  for  opening 
up the programmes. 

The Additional Protocol  with Poland entered into force  on  1 March  1997 and 
provides  for  Poland's  participation  in  a wide  range  of  areas,  amongst  which 
small and medium-sized enterprises. 

Poland  has  confirmed  its  willingness  to  participate  also  in  other  Community 
programmes,  notably  in  the  fields  of  education,  vocational  training,  youth, 
culture and the audio-visual  sector, energy, and research and technology. 

4.2.  Period covered and arrangements for renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare contribution, however,  is dependent on decisions  concerning the budget 
after  1999. 

-

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph of Article 3 of the Additional Protocol  stipulates that 
Poland  itself  will  meet  the  costs  resulting  from  its  participation,  it  will  be 
invited  to  transfer  its  contribution  to  item 6091  of the  EUs  budget  receipts. 
However,  as the second paragraph of Article 3 states that the Community may 
supplement  Poland's  contribution  (through  its  national  Phare  allocation), 
Poland  will  contribute  only  part from its  national  budget,  with the remainder 
being  charged  to  heading  B7-503.  A  transfer  from  the  relevant  Phare 
appropriations (article B7-500) to article B7-503  will be made upon receipt of 
Poland's contribution. 

6. TYPE OF EXPENDITURE OR REVENUE 

-  -  subsidy for co-financing with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments, information 

-  no provision for all or part of the Community contribution to be reimbursed 

As far as revenue is concerned,  provision for Poland's contribution to cover the cost 
of  its  participation  is  made  under  item  6091.  The  revenue  will  be  allocated  to  the 
items for expenditure  on the programme in question and, where  appropriate,  to the 
relevant items of operating expenditure. 

The total revenue expected is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for  1998,  1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based  on the following  preconditions: 

-  each partner country's contribution to the financing of the activities  referred 
to  in the  Protocol  is  calculated  according  to  the  principle  that  the  country 
bears the cost  of  participation  itself. Heading  6091  has been  created  in  the 
statement of budget revenue for that purpose; 

- 

the Community  may  decide on a case-by-case basis to  pay a supplement  to 
the partner  country's  contribution.  The supplement  may be in the form  of a 
contribution under the national PHARE programme. 

Based  on  the  Additional  Protocol  with  Poland,  the  financial  and  budgetary 
arrangements  for  the  programme  concerned  are  as  follows:  Among  four 
alternatives, Poland  has opted for a contribution based on the estimation of the 
real cost of participation  in all the strands of the SME programme. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Actions within the field of Distributive Trade (130,000 ECU) 
-  Actions within the field of Crafts and Small Enterprises (100,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  12 centres  plus 
20,000 ECU for  a decentralised information  campaign = 500,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of  the  country  (43  enterprises/event  x  2  events/year  x  700 
ECU paid to the National  Counsellor  per SME for  costs, promotion,  etc.  = 
60,200 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

-  The  subvention  for  one  IBEX  event  (subcontracting).  The  maximum 
contribution  form  the EU  is  100,000 ECU,  and  this  must  not  exceed  25% 
of the total  budget  for  the event.  (However,  given the  size of these  events, 
it  is  a  present  not  foreseen  to  organise  more  than  one  per  year  in  Central 
Europe.) 

The  cost  of  Poland's  participation  in  the  Third  Multiannual  programme  for 
small  and  medium-sized  enterprises  (SMEs)  in  the  European  Union  (1997-
2000)  from  1998  will  thus  be  ECU  1,006,014  per  year,  including  7% 
administrative cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs  - to  be borne  exclusively by Poland  - have to  be  deducted,  is divided  as 
follows: 

IF 

-  in  1998,  3% of the operational  costs will  be covered from Poland's national 
budget  and - subject to the Phare procedures for programming item B7-503  -
97% from the annual PHARE allocation for Poland; 

- in  1999,  13% of the operational  costs will be covered from Poland's national 
budget  and - subject to the Phare procedures for programming item B7-503  -
87% from the annual PHARE allocation for Poland; 

- in the year 2000, 23% of the operational costs will be covered from Poland's 
national  budget  and  -  subject  to  the  procedures  for  programming  the  Phare 
programme - 77% from the annual PHARE allocation for Poland. 

7.2. 

Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in  ECU 

ofwhich 
Poland 

ofwhich 
Phare 

Small  and 
medium-sized 
enterprises 

940,200 

940,200 

940,200 

2,820,600 

366,678 

2,453,922 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

Actions within the 
field  of Distributive 
Trade 

Actions within Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

130,000 

130,000 

130,000 

390,000 

100,000 

100,000 

100,000 

300,000 

Support to the EICCs 

500,000 

500,000 

500,000 

1,500,000 

Business Co-operation 

- Europartenariat 

- INTERPRISE 

Sub-contracting: 

IBEX 

60,200 
50,000 

60,200 
50,000 

60,200 
50,000 

180,600 
150,000 

100,000 

100,000 

100,000 

300,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

So 

7.4.  Schedule for multiannual operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
_  years 

TOTAL 

911,994 

817,974 

723,954 

0 

2,453,922 

Commitment 
appropriations 

Payment 
appropriations^ 

1998 

1999 

2000 

182,398.8 

-

547,196.4 

163,594.8 

182,398.8 

490,784.4 

144,790.8 

182,398.8 

710,791.2 

817,974 

742,758 

subsequent  years 

163,594.8 

579,163.2 

Total 

911,994 

817,974 

723,954 

2,453,922 

(*) Schedule based on the method of payment currently applying to this programme. 

The foreseeable annual receipts are as follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

28,206 

122,226 

216,246 

0 

366,678 

65,814 

65,814 

65,814 

0 

197,442 

Total 

94,020 

188,040 

282,060 

0 

564,120 

8.  FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

All the Commission's contracts, agreements and other legal commitments provide for 
on-the-spot  checks by the Commission and Court of Auditors. Among other things, 
the beneficiaries of the operations are obliged to file reports and financial statements. 
These are analysed from  the point of view of their content and the eligibility of the 
expenditure in line with the objective of Community  financing. 

S\ 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific  and quantified  objectives; target population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in the  Internal  Market 
. and promote their  internationalisation. 

In principle, the actions in the Third Multiannual  Programme  for  SMEs could 
possibly  interest  all  the  SMEs  in  Poland.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according to the typology  and the activity  of the enterprises  and  of the  nature 
of the actions developed. 

For example, among the  15 million  SMEs in the European Union,  1.5  million 
are most  likely to be targeted  for  an action regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also  for  Poland.  The  target  of the  actions  varying  according  to  the  nature  of 
these actions. 

Furthermore, the  actions  aim  at the professional  organisations,  the  Chambers 
of  Commerce  and  Industry,  the  Trade  Associations  and  other  intermediaries 
for the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation and growth. Indeed, the job  Creation rate of SMEs  is higher than that 
of the big enterprises. 

It is, however,  necessary  to recognise  the fact  that  SMEs  are  inherently  more 
vulnerable  particularly  in  the  first  years  following  their  creation.  This 
weakness stems, in particular from the following  five  factors: 

an increasingly complex legal, fiscal  and administrative  environment; 
• 
•  difficulty  in  participating  in  R&D  programmes  and  in  exploiting  the 

• 

results; 
structural  weakness  of  SMEs  with  regard  tot  theirs  management  abilities 
as well as to the inappropriateness  of training programmes; 

•  difficulty  in obtaining finance  at a reasonable cost; 
•  difficulty  in accessing markets for products and services. 

^2-

It is necessary to underline - with regard to the subsidiarity approach - that  the 
actions  developed  at  Community  level are taken  in  a  context  which  ensures  a 
significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity  and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature, 
that  have  a  Community 
implement  networks 
dimension.  To  confine  such  activities  to  the  national  level  would  not  only  be 
impossible and less efficient,  but it would also distort competition to the extent 
that the level of support of each Member State would be extremely diverse. 

to 

Polish  SMEs  play  an  important  role  in  the  economy.  The  number  of  people 
employed in SMEs has increased in recent years and is expected to grow as the 
privatisation  process is carried  further.  A specific  SME policy programme was 
adopted  by  the  Polish  Government  in  1995,  aiming  at  the  development  of 
SMEs,  and  recognising  that  SMEs have a positive, influence  on  the  industrial 
structure. 

The Polish  economy  is likely to remain characterised  by  a large percentage  of 
SMEs  over  coming  years.  These  enterprises  will  need  to  prepare  for  EU 
membership  and  the  increased  competitive  pressures  this  is  likely  to  expose 
them  to.  In  this  context,  the  opening  up  of  Community  programmes  is  an 
important  element  of  the  pre-accession  strategy.  The  participation  in  this 
particular  programme  can  in a positive  manner  contribute  to  preparing  SMEs 
and SME representative organisation for future  accession. 

-  Need for Community financial aid 

In  view  of  the  substantial  financial  contribution  of  Poland  to  the  programme 
and  Poland's  precarious  budgetary  situation,  assistance  from  PHARE  as 
provided for in Article 3(2) of the Additional Protocol  is essential. 

-  Choice of ways and means 

With a contribution  from  Poland's national budget,  supplemented  by one from 
PHARE,  Poland's  participation  will  contribute  to  getting  acquainted  with  the 
internal  policies  and  proceedings  of the  Community  in  the  field  of  Small  and 
medium-sized  enterprises.  The  integration  of  Polish  nationals  in  Community 
networks  will  make  a  definite  contribution  to  preparing  Poland  for  future 
membership. 

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

operation 

Since  projects  will  be  selected  according  to  qualitative  criteria,  it  will  only  be 
possible to  measure the real  impact  on the basis of Polish  citizens'  and  SMEs' 
capacity to respond to the calls for proposal to be launched by the Commission 
under the programme. 

S3 

9.3.  Evaluation of the operation 

The evaluation  procedures  included  in the  Third Multiannual  programme  for 
SMEs will also cover operations financed for Polish beneficiaries. 

9.3.1 Performance indicators 

The indicators are chosen in function of the type of action undertaken. 

As an example,  in the field of  Euro  Info  Centres  (EICs),  there  is  a  contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as well  as  their  activity  in relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and the '{performance" of  each EIC  is rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If  this  is  not  the 
case,  the EIC is  excluded  from  the network  and the  procedure  for finding a 
replacement is initiated. An evaluation report et published every six months. 

For the business  co-operation  networks,  an annual evaluation  of the network 
members is based  on  the number of co-operation  profiles  introduced  into  the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured by the participation in conferences and seminars organised to assure 
the implementation of the foreseen actions, the feed-back  in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution of publications. 

In the case of actions specifically  in favour of crafts  and small enterprises, the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting from finance stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen evaluation 

The Council  Decision  of  9  December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of the Decision,  in order  to  assess  whether 
the original objectives have been met, including a cost-effectiveness  evaluation. 

9.3.3 Assessment of results 

The  results  of  the  evaluations  are  generally  diffused  to  the  concerned 
population and can give rise to  modifications  regarding  actions undertaken or 
new proposals for actions. 

<sv 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted  to the Management  Committee established  by the Council Decision. 
Reports  on the results of the participation  of the  associated  Central  European 
countries concerned  in the programme would in the same manner be submitted 
to the Committee as well as to the countries concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff  and additional credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in die framework of the APB 

b)  the resources allocation 

10.1.  Impact on the number of posts 

Type  of  post 

Staff  required  to 
manage  the 
operation 

Permanent 
posts 

Temporary 
posts 

including 

duration 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

Officials or 
temporary staff 
A 
B 
C 

Other resources 
TOTAL 

0.5 
0.2 
0.2 

0.9 

0.5 
0.2 
0.2 

0.9 

10.2.  Overall financial impact of the additional human  resources 

from 1998 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period  1998-2000) 

Officials 
Temporary  staff 
Other  resources  (indicate  budget 
heading) 

TOTAL 

J 

0 

I 

&S~ 

10.3.  Increase in other operating expenses as a result of the operation 

VI 

in ECU 

Budget heading 
(No and title) 

Total 

Method of calculation 
(total cost of the action 
for the period 1998-2000) 

A1178/A238 - technical assistance 

139,362  Technical assistance 46,454 

A1300-missions 

A2500 - meetings 

A2510 - meetings of committees 

ECU per year. 

18,t)00  5  missions  per  year  for  the 
whole  Programme, 
to  be 
executed  within  the  different 
strands  opened 
Programme 
(annual  cost  of  missions  6,000 
ECU). 

25,050  Participation 

5 

of 

Polish 
in 
representatives  per  year 
meetings  organised  under  the 
different  Programme  strands 
(annual  cost  of  participation  in 
meetings 8,350 ECU). 

15,030  Cost of the presence of 1 Polish 
representatives  at  consultative 
meetings  (3/year)  -  exchange 
about 
the  Programme  and 
information about the work in the 
Management Committee  (annual 
cost of participation  in meetings 
5,010 ECU). 

Total 

197,442 

The  above  expenditure  will  be  met from  the  receipts  (article  4 §2,  third  indent  of the 
financial regulation)  received  from  the Polish  participation  in  Community  Programmes 
(see § 5.3 of the financial  statement). 

Sk 

Proposal for a 
Council Decision 

of... 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of  Romania  in  the  Community  programme  in  the  field  of  small  and 
a g  0 0 ^^  ^£LMs\ 
medium-sized  enterprises 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130, paragraph 3, in conjunction  with Article 228, paragraph 3, 1st alinéa thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between  the  European  Communities  and  their  Member  States,  of  the  one  part,  and 
Romania,  of  the  other  part,  has  been  concluded  by  Decision  of  the  Council  and  the 
Commission of 4 December  1995. 

Whereas  according  to  Article  1 of  the  Additional  Protocol,  Romania  may  participate  in 
Community  framework  programmes,  specific  programmes,  projects  or  other  actions 
notably in the field  of small and medium-sized  enterprises and,  according to  Article 2, the 
terms and conditions for  participation  of Romania  in the activities  referred  to  in Article 1 
shall be decided by the Association Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to 2000)1 and  in particular  Article 7(1) thereof,  provides that this programme  shall 
be open to the participation  of associated  Central European  countries in accordance  with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation in Community programmes. 

HAS DECIDED AS FOLLOWS: 

The position to be taken by the Community within the Association  Council  established by 
the Europe  Agreement  between  the European  Communities  and  their Member  States,  of 
the one part,  and  Romania,  of the other  part,  concerning  the  participation  of Romania in 
the  Community  programme  in  the  field  of  small  and  medium-sized  enterprises  is  the 
attached draft  decision  of the Association Council. 

Done at Brussels, 

For the Council. 

1 OJ No L 6/25 of 10.01.1997 

Draft  Decision  n°..../98  of  the  EC-Romania  Association  Council  of. 
1998 
adopting  the  terms  and  conditions  for  the  participation  of  Romania  in  the 
Community Programme in the field  of small and medium-sized  enterprises 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement  establishing an association between the European 
Communities  and  their Member  States,  of the  one part,  and the Republic  of Romania  of 
the other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between the European  Communities and their Member  States, of the one part, 
and  the  Republic  of  Romania,  of  the  other  part,  concerning  Romania's  participation  in 
Community programmes2,  and in particular Article  1 and 2 thereof, 

Whereas according to Article  1 of the said  Additional  Protocol, Romania may  participate 
in  Community  framework  programmes,  specific  programmes,  projects  or  other 
Community actions notably in the field of small and medium-sized  enterprises, 

Whereas  according  to  Article  2  of the  said  Additional  Protocol  the terms  and  conditions 
for the participation  of Romania  in the activities referred  to in Article  1 are to  be  decided 
by the Association Council, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Romania  shall  participate  in  the  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises  (SMEs)  in the European  Union  (1997 to  2000)  according  to  the  terms 
and  conditions  set  out  in  Annexes  I  and  II  which  shall  form  an  integral  part  of  this 
Decision. 

Article 2 

This Decision shall apply for the duration of the programme. 

Article 3 

This Decision shall enter into force  on the first day of the month following  its adoption. 

Done at 

The Chairman 

For the Association  Council 

1  OJN°L357/lof31.12.1994 

2  OJN°L317/39of30.12.1995 

as 

ANNEX I 

Terms and conditions for the participation of Romania in the Third Multiannual 
Programme for Small and Medium-sized Enterprises (SMEs) in the European 
Union (1997 to 2000) 

1. 
Romania will participate in all activities of the Third Multiannual Programme  for 
Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union  (1997  to  2000) 
(hereinafter  called  "the  Programme"),  except  Distributive  Trade,  Crafts  and  Small 
Enterprises,  and  the  organisation  of  IBEX  events,  in  conformity,  unless  otherwise 
provided  in this  Decision,  with  the  objectives,  criteria,  procedures  and  timelimit's laid 
down  in  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

2. 
The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
applications related to eligible institutions, organisations and individuals of Romania will 
be the same as those applicable to eligible institutions, organisations and individuals of the 
Community. 

3.  Where  appropriate,  in  order  to  ensure  the  Community  dimension  of  the 
Programme, transnational projects and activities proposed by Romania will be required to 
include a minimum number of partners from the Member States of the Community.  This 
minimum  number  will  be  decided  in  the  framework  of  the  implementation  of  the 
Programme,  taking  into  account  the  nature  of  the  various  activities,  the  number  of 
partners in a given project, and the number of countries participating in the Programme. 

4. 
Romania will pay each year a contribution to the general budget of the European 
Communities to  cover  the  costs  resulting from its  participation  in the Programme  (see 
Annex II).  The  Association  Committee is entitled  to  adapt  this  contribution  whenever 
necessary. 

5. 
The Member States of the Community and Romania will make every effort, within 
the framework of the existing provisions, to facilitate the free movement and residence of 
ail eligible persons to the Programme moving between Romania and the Member States of 
the Community for the purpose of participating in activities covered by the Decision. 

6.  Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
Auditors  of  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the  Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized Enterprises (SMEs) in the European Union (Article 6), the participation of Romania 
in the Programme will be continuously evaluated on a partnership basis involving Romania 
and the  Commission  of the European  Communities. Romania  will  submit  the  necessary 
reports  to  the  Commission  and  take  part  in  other  specific  activities  set  out  by  the 
Community in that context. 

sn 

Without prejudice to  the procedures  referred  to  in Article 4  of the Decision  on a 
7. 
Third  Multianriual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  Romania  will  be  invited  to  co-ordination  meetings  on  any  question 
concerning  the  implementation  of  this  Decision  prior  to  regular  meetings  of  the 
Programme  Committee.  The Commission will  inform Romania about the results of  such 
regular meetings. 

The language to be used  as regards the application process,  contracts,  reports to 
8. 
be submitted and other administrative arrangements for the Programme, will be one of the 
official languages of the Community. 

3D 

ANNEX II 

FINANCIAL CONTRIBUTION  OF ROMANIA TO THE THIRD 
MULTIANNUAL  PROGRAMME FOR SMALL AND  MEDIUM-SIZED 
ENTERPRISES  (SMES) IN THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial  contribution of Romania will cover; 

- 

financial  support from the Programme to the participation of Romanian  entities 
in activities as defined  in Annex 1.1, 

-  supplementary  costs of an administrative  nature related  to  the management  of 
the Programme by the Commission stemming from  Romania's  participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received  from the Programme by the Romanian beneficiaries  will not exceed 
the  supplementary 
the  contribution  paid  by  Romania,  after  deduction  of 
administrative costs. 

Should  the  contribution  paid  by  Romania  to  the  general  budget  of  the  European 
Communities,  after  deduction  of  the  supplementary  administrative  costs,  be  higher 
than  the  aggregated  amount  of  subsidies  or  other  financial  support  received  by  the 
Romanian  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's  contribution.  Should  such a balance be left  when the Programme comes to  an 
end, the corresponding amount will be reimbursed to Romania. 

3.  Romania's  amiual contribution will be of ECU 419,440  from  1998.  From this  sum, 
an amount  of ECU 27,440 will  cover supplementary  administrative  costs  related  to 
the  management  of  the  Programme  by  the  Commission  stemming  from  Romania's 
participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 

apply, notably to the management of the contribution of Romania. 

Upon  entry  into  force  of this  Decision  and  at  the  beginning  of  each  following  year, 
the  Commission  will  send  to  Romania  a  call  for  funds  corresponding  to  its 
contribution to the costs under this Decision. 

This  contribution  will  be expressed  in  ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

Romania  will  pay  its contribution  to the annual  costs under  this  Decision  according 
to the call for funds  and at the latest three months after  the call for  funds  is sent. Any 
delay  in the payment  of the contribution  shall  give rise to the payment  of interest by 
Romania on the outstanding  amount from  the due date. The interest rate  corresponds 
to  the rate  applied  by the European  Monetary  Co-operation  Fund,  for  the month  of 
the due date, for its operations in ECU, increased by 1.5 percentage points. 

5.  Romania  will pay  the supplementary  administrative  costs referred  to in paragraph 3 

from  its national budget. 

6.  Romania will  pay 50% of the remaining costs  of its participation  in the Programme 

from  its national budget. 

Subject  to  regular Phare programming  procedures,  the remaining  50% will  be paid 
from  Romania's annual Phare allocation. 

• 

^2 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Participation of Romania in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING  INVOLVED 

B7-503  - Opening of Community Programmes to the associated  countries  of Central 
Europe 

3.  LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph 3, in conjunction  with Article 228, paragraph 3,  1st alinéa  thereof, 

Additional Protocol  to  the Europe  Agreement  with Romania  (Articles 228  and  238) 
of 30 December  1995, providing for the opening-up of Community programmes  (OJ 
No 317/95, page 39), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General  objective 

The Third Multiannual  Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial environment for enterprises; 
3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in 

particular through better information  and co-operation;  . 

4.  Enhance  SME competitiveness  and improve access to research,  innovation 

and training; 

5.  Promote entrepreneurship and support specific target groups. 

Romania's  participation  in the Community  programme  for  SMEs  will  come in 
addition to those Community  programmes in which it already participates,  e.g. 
Leonardo da Vinci, Socrates and Youth for Europe, and will further  contribute 
to  its  preparation  for  accession  as  a  key  feature  of  a  reinforced  preaccession 
strategy.  It  will  also  enable  Romania  to  familiarise  itself  with  the  procedures 

% 

^3 

and  methods  used  in  the  Community  programme  in  the  field  of  small  and 
medium-sized enterprises. 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 
country.  This decision  also  lays down the practical  arrangements for  opening 
up the programmes. 

The Additional  Protocol  with Romania  entered  into force  on  1 August  1996 
and provides  for  Romania's  participation  in  a wide  range  of  areas,  amongst 
which small and medium-sized enterprises. 

Romania  confirmed  its  willingness  to  participate  also  in  other  Community 
programmes,  notably  in  the  fields  of  culture  and  the  audio-visual  sector, 
energy, environment, health and social policy. 

4.2.  Period covered and arrangements for renewal 

Until  the  end of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare contribution, however, is dependent on decisions concerning the budget 
afterl999. 

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph of Article 3 of the Additional Protocol  stipulates that 
Romania  itself  will  meet  the  costs  resulting from its  participation,  it  will  be 
invited  to  transfer  its  contribution  to  item  6091  of the  ELTs budget  receipts. 
However, as the second paragraph of Article 3 states that the Community may 
supplement  Romania's  contribution  (through  its  national  Phare  allocation), 
-  Romania will contribute only part from its national budget, with the remainder 
being  charged  to  heading  B7-503.  A  transfer  from  the  relevant  Phare 
appropriations (article B7-500) to article B7-503  will be made upon receipt  of 
Romania's contribution. 

6.  TYPE OF EXPENDITURE OR REVENUE 

-  subsidy for co-financing with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments, information 

-  no provision for all or part of the Community contribution to be reimbursed 

9U. 

As  far  as  revenue  is  concerned,  provision  for  Romania's  contribution  to  cover  the 
cost of its participation is made under item 6091. The revenue will be allocated to  the 
items for  expenditure  on the  programme  in  question  and,  where  appropriate,  to  the 
relevant items of operating expenditure. 

The total revenue expected is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for  1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based on the following  preconditions: 

-  each partner country's contribution to the financing of the activities  referred 
to  in the  Protocol  is  calculated  according  to  the  principle  that  the  country 
bears the cost  of participation  itself. Heading  6091  has been  created  in the 
statement of budget revenue for that purpose; 

- 

the Community  may decide on  a case-by-case basis to  pay a supplement  to 
the partner  country's contribution.  The  supplement  may be in the form  of a 
contribution under the national PHARE programme. 

Based  on  the  Additional  Protocol  with  Romania,  the financial and  budgetary 
arrangements  for  the  programme  concerned  are  as  follows:  Among  four 
alternatives,  Romania  has  opted  for  a contribution based  on the  estimation  of 
the real cost of participation in the strands Europartenariat,  INTERPRISE,  and 
Euro Info  Correspondence Centres of the SME programme. 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  6  centres  plus 
20,000 ECU for a decentralised  information  campaign = 260,000 ECU) 
-  Participation  in  Europartenariat  events  based  on  the  current  average 
participation  of the  country  (58.57  enterprises/event  x 2  events/year x  700 
ECU  paid to the National  Counsellor  per  SME for  costs, promotion,  etc. = 
82,000 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per  year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed  50% of the total budget for the event) 

The  cost  of  Romania's  participation  in  the  Third  Multiannual  programme  for 
small  and  medium-sized  enterprises  (SMEs)  in  the  European  Union  (1997-
including  7% 
2000)  from  1998  will  thus  be  ECU 419,440  per  year, 
administrative cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs  - to  be borne  exclusively  by Romania  -  have  to  be  deducted,  is  divided 

per  year  as  follows:  50%  of  the  operational  costs  will  be  covered  from 
Romania's  national  budget  and  -  subject  to  the  procedures  for  programming 
the Phare programme - 50% from the annual PHARE allocation for Romania. 

7.2.  Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
Romania 

of which 
Phare 

Small and 
medium-sized 
enterprises 

392,000 

392,000 

392,000 

1,176,000 

588,000 

588,000 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

1998 

1999 

2000 

Total 

Support to the EICCs 

260,000 

260,000 

260,000 

780,000 

Business Co-operation 

- Europartenariat 

- INTERPRISE 

82,000 
50,000 

82,000 
50,000 

82,000 
50,000 

246,000 
150,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part B:  None 

it 

7.4.  Schedule for multiannual operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

196,000 

196,000 

196,000 

0 

588,000 

Commitment 
appropriations 

Payment 
appropriations^ 

1998 

1999 

2000 

39,200 

117,600 

39,200 

39,200 

117,600 

39,200 

subsequent  years 

39,200 

156,800 

Total 

196,000 

196,000 

196,000 

-  39,200 

156,800 

196,000 

196,000 

558,200 

(*) Schedule based on the method of payment currently applying to this programme. 

The foreseeable annual receipts are as follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

196,000 

196,000 

196,000 

0 

588,000 

27,440 

27,440 

27,440 

0 

82,320 

Total 

223,440 

223,440 

223,440 

0 

670,320 

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

All the Commission's contracts, agreements and other legal commitments provide for 
on-the-spot  checks by the Commission and Court of Auditors. Among other things, 
the beneficiaries of the operations are obliged to file reports and financial statements. 
These are analysed from  the point of view of their content and  the eligibility of the 
expenditure in line with the objective of Community financing. 

^ 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

IA/574-RV1/97-EN 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific and quantified  objectives; target  population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number  of  SMEs  participating  in the  Internal  Market 
and promote their  internationalisation. 

In principle, the actions  in the Third  Multiannual  Programme  for  SMEs  could 
possibly  interest  all  the  SMEs  in  Romania.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according  to the typology  and  the activity  of the enterprises  and  of the  nature 
of the actions developed. 

For  example,  among the  15 million  SMEs  in the European  Union,  1.5  million 
are most  likely to  be targeted  for  an  action  regarding  Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also for Romania.  The target  of the actions varying according to the nature  of 
these actions. 

Furthermore,  the  actions  aim at  the  professional  organisations,  the  Chambers 
of  Commerce  and  Industry,  the  Trade  Associations  and  other  intermediaries 
for the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium 
sized  enterprises  (SMEs)  represent  a  key  element  in  the  efforts  towards  job 
creation  and growth.  Indeed,  the job  creation rate of SMEs is higher than  that 
of the big enterprises. 

It  is, however,  necessary  to  recognise  the  fact  that  SMEs  are  inherently  more 
vulnerable particularly  in the first years following  their creation. This weakness 
stems, in particular from  the following five factors: 

• 
• 
• 

an increasingly complex legal, fiscal and administrative environment; 
difficulty  in participating in R&D programmes and in exploiting the results; 
structural weakness of SMEs with regard tot theirs management  abilities as 
well as to the inappropriateness of training programmes; 

•  difficulty  in obtaining finance at a reasonable cost; 
•  difficulty  in accessing markets for products and services. 

•  is 

It is necessary to underline - with regard to the subsidiarity approach - that the 
actions developed  at Community level  are taken in a context  which ensures a 
significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature,  to 
implement  networks  that  have  a  Community 
dimension.  To  confine  such activities to the national  level  would  not  only be 
impossible and less efficient,  but it would also distort compétition to the extent 
that the level of support of each Member State would be extremely diverse. 

The  majority  of  Romanian  enterprises  can  be  classified  as  SMEs.  SMEs  are 
already  making  a  significant  contribution  to  economic  recovery  in  Romania 
and they have the potential to play an increasingly important role in generating 
growth  and  employment.  The  Romanian  economy  is  likely  to  remain 
characterised  by  a  large  percentage  of  SMEs  over  coming  years.  These 
enterprises  will  need  to  prepare  for  EU  membership  and  the  increased 
competitive  pressures  this  is  likely  to  expose  them  to.  In  this  context,  the 
opening  up  of  Community  programmes  is  an  important  element  of  the  pre-
accession  strategy.  The  participation  in  this  particular  programme  can  in  a 
positive  manner  contribute  to  preparing  SMEs  and  SME  representative 
organisation for future accession. 

-  Need for Community financial aid 

In view of the substantial financial contribution  of Romania to the programme 
and  Romania's  precarious  budgetary  situation,  assistance  from  PHARE  as 
provided for in Article 3(2) of the Additional Protocol is essential. 

-  Choice of ways and means 

With  a  contribution  from  Romania's  national  budget,  supplemented  by  one 
from PHARE,  Romania's  participation  will  contribute  to  getting  acquainted 
with  the  internal  policies  and  proceedings  of  the  Community  in  the  field  of 
Small and medium-sized  enterprises. The integration of Romanian nationals in 
Community  networks will  make a definite  contribution to  preparing Romania 
for future membership. 

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

operation 

Since projects will  be selected  according to  qualitative criteria,  it will  only be 
possible  to  measure  the  real  impact  on  the  basis  of  Romanian  citizens'  and 
SMEs'  capacity  to  respond  to  the  calls  for  proposal  to  be  launched  by  the 
Commission under the programme. 

*?\ 

9.3.  Evaluation of the operation 

The  evaluation  procedures  included  in the  Third Multiannual  programme  for 
SMEs will also cover operations financed for Romanian beneficiaries. 

9.3.1 Performance indicators 

The indicators are chosen in function of the type of action undertaken. 

As  an example,  in the field of Euro  Info  Centres (EICs),  there  is  a contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as well  as their  activity  in  relation  to  set  objectives.  For  each  EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and the performance" of  each EIC is rated  on  a  scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or not  it  satisfies  the  minimum  criteria.  If this  is" not  the 
case,  the EIC  is  excluded  from  the  network  and  the  procedure  for finding a 
replacement is initiated. An evaluation report et published every six months. 

For the business co-operation  networks,  an annual  evaluation  of the network 
members is based  on the  number of co-operation  profiles  introduced into the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured by the participation in conferences and seminars organised to assure 
the implementation of the foreseen actions, the feed-back in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution of publications. 

In the case of actions specifically  in favour of crafts and small enterprises, the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting from finance stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen evaluation 

The  Council  Decision  of  9  December  1996  regarding  the  Third Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of the  implementation  of the Decision,  in order to  assess  whether 
the original objectives have been met, including a cost-effectiveness  evaluation. 

9.3.3  Assessment of results 

The  results  of  the  evaluations  are  generally  diffused  to  the  concerned 
population and can give rise to  modifications  regarding actions undertaken or 
new proposals for actions. 

loo 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted to the Management  Committee established  by the Council Decision. 
Reports  on the results of the participation  of the  associated  Central  European 
countries concerned  in the programme would in the same manner be submitted 
to the Committee as well as to the countries concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff and additional credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact on the number of posts 

Type of post 

Staff required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

including 

duration 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

Officials or 
temporary  staff 
A 
B 
C 

Other  resources 
TOTAL 

0.5 
0.2 
0.2 

0.9 

0.5 
0.2 
0.2 

0.9 

10.2.  Overall financial impact of the additional human resources 

from 1998 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period 1998-2000) 

Officials 
Temporary staff 
Other  resources (indicate  budget 
heading) 

TOTAL 

I 

0 

I 

vo\ 

10.3.  Increase in other operating expenses as a result of the operation 

Budget heading 
(No and title) 

Total 

in ECU 

Method of calculation 
(total cost of the action 
for the period '1998-2000) 

A1178/A238 - technical assistance 

45,060  Technical assistance  15,020 

ECU per year. 

A1300-missions 

7,200  2  missions  per  year  for  the 
whole  Programme, 
to 
be 
executed  within 
the  different 
strands  opened 
Programme 
(annual  cost  of  missions  2,400 
ECU). 

A2500 - meetings 

15,030  Participation of  3 Romanian 

A2510-meetings of committees 

representatives per year in 
meetings organised under the 
different Programme strands 
(annual cost of participation in 
meetings  5,010  ECU). 

representative 

15,030  Cost  of  the  presence  of  1 
at 
Romanian 
consultative  meetings  (3/year)  -
exchange  about the  Programme 
and  information  about  the  work 
in  the  Management  Committee 
(annual  cost  of  participation  in 
meetings 5,010 ECU). 

Total 

82,320 

The  above  expenditure  will  be  met  from  the  receipts  (article  4§2,  third  indent  of  the 
financial  regulation) received from  the Romanian participation  in Community  Programmes 
(see § 5.3 of the financial  statement). 

102 

Proposal for a 
Council Decision 
of... 

concerning  the  Community  position  within  the  Association  Council  on  the 
participation  of the Slovak Republic in the Community  programme  in the field  of 
small and medium-sized enterprises 

I 

/ 

\ 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 130, paragraph 3, in conjunction with Article 228, paragraph 3,  1st alinéa thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Whereas  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an  association 
between the European  Communities  and  their Member  States,  of the one part,  and the 
Slovak Republic, of the other part, has been concluded by Decision of the Council and the 
Commission of 4 December 1995. 

Whereas  according  to  Article  1 of  the  Additional  Protocol,  the  Slovak  Republic  may 
participate in Community framework programmes, specific programmes, projects or other 
actions  notably  in  the  field  of  small  and  medium-sized  enterprises  and,  according  to 
Article  2,  the terms  and  conditions  for  the  participation  of the  Slovak  Republic  in  the 
activities referred to in Article 1  shall be decided by the Association Council, 

Whereas,  Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997 to 2000)1 and in particular Article 7(1) thereof) provides that this programme shall 
be open to the participation of associated  Central European countries in accordance with 
the  conditions  set  out  in  the  Additional  Protocols  to  the  Association  Agreements  on 
participation in Community programmes. 

HAS DECIDED AS FOLLOWS: 

The position to be taken by the Community within the Association Council established by 
the Europe Agreement between the European Communities and their Member States, of 
the one part,  and the Slovak Republic, of the other  part,  concerning the participation of 
the Slovak Republic in the Community programme in the field of small and medium-sized 
enterprises is the attached draft  decision of the Association Council. 

Done at Brussels, 

For the Council, 

1  OJ No L 6/25 of  10.01.1997 

i o3 

I 

the  EC-Slovak  Republic  Association  Council 
Draft  Decision  n°..../98  of 
of. 
1998 adopting the terms and conditions for the participation  of the Slovak 
Republic  in  the  Community  Programme  in  the  field  of  small  and  medium-sized 
enterprises 

THE ASSOCIATION  COUNCIL 

Having regard to the Europe Agreement establishing an association betweehlhe European 
Communities  and  their  Member  States,  of the  one  part,  and  the  Slovak  Republic  of  the 
other part,1 

Having  regard  to  the  Additional  Protocol  to  the  Europe  Agreement  establishing  an 
association between the European  Communities and their Member  States, of the one part, 
and the Slovak Republic, of the other part, concerning the Slovak Republic's participation 
in Community programmes2,  and in particular Article  1  and 2 thereof, 

Whereas according to Article  1 of the said Additional Protocol,  the  Slovak Republic may 
participate in Community framework  programmes, specific programmes, projects  or  other 
Community actions notably in the field of small and medium-sized  enterprises, 

Whereas  according  to  Article 2  of the  said  Additional  Protocol  the terms  and  conditions 
for the participation  of the Slovak Republic in the activities referred  to  in Article  1 are  to 
be decided by the Association  Council, 

HAS DECIDED AS FOLLOWS: 

Article  1 

The  Slovak Republic  shall participate  in the Third Multiannual Programme  for  Small  and 
Medium-sized  Enterprises  (SMEs)  in the European  Union  (1997  to  2000)  according  to 
the terms  and  conditions  set out  in Annexes I  and  II which  shall form  an  integral  part  of 
this Decision. 

Article 2 

This Decision shall apply for the duration of the programme. 

Article  3 

This Decision shall enter into force  on the first day of the month following  its adoption. 

Done at 

The Chairman 

For the Association Council 

1  OJN°L359/lof31.12.1994 

2  OJN° LI 15 of 9.5.1996 

10^ 

ANNEX I 

Terms and conditions for the participation of the Slovak Republic in the Third 
Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the 
European Union (1997 to 2000) 

The  Slovak  Republic  will  participate  in  all  activities  of  the  Third  Multiannual 
1. 
Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the  European  Union 
(1997  to  2000)  (hereinafter  called  "the  Programme"),  except  Distributive  Trade,  in 
conformity,  unless  otherwise  provided  in  this  Decision,  with  the  objectives,  criteria, 
procedures and timelimits laid down in Council Decision (97/15/EC) of 9 December 1996 
on a Third Multiannual  Programme for  Small and Medium-sized  Enterprises  (SMEs) in 
the European Union (1997 to 2000) and in particular Article 7(1) thereof. 

2. 
The  terms  and  conditions  for  the  submission,  assessment  and  selection  of 
applications  related  to  eligible  institutions,  organisations  and  individuals  of  the  Slovak 
Republic will be the  same  as those  applicable  to  eligible  institutions,  organisations  and 
individuals of the Community. 

3.  Where  appropriate,  in  order  to  ensure  the  Community  dimension  of  the 
Programme, transnational projects and activities proposed by the Slovak Republic will be 
required  to  include  a  minimum  number  of  partners  from  the  Member  States  of  the 
Community.  This  minimum  number  will  be  decided  in  the  framework  of  the 
implementation of the Programme, taking into account the nature of the various activities, 
the number of partners in a given project, and the number of countries participating in the 
Programme. 

The Slovak Republic will pay each year a contribution to the general budget of the 
4. 
European  Communities  to  cover  the  costs  resulting  from  its  participation  in  the 
Programme  (see  Annex  II).  The  Association  Committee  is  entitled  to  adapt  this 
contribution whenever necessary. 

5. 
The Member  States of the Community and the Slovak Republic will make every 
effort,  within the framework of the existing provisions, to facilitate the free movement and 
residence of all eligible persons to the Programme moving between the  Slovak Republic 
and  the Member  States  of the  Community  for  the purpose  of participating  in  activities 
covered by the Decision. 

6.  Without  prejudice  to  the  responsibilities  of  the  Commission  and  the  Court  of 
Auditors  ôf  the  European  Community  in  relation  to  the  evaluation  of  the  Programme 
according  to  the Decision  on  a  Third  Multiannual  Programme  for  Small  and  Medium-
sized  Enterprises  (SMEs)  in  the  European  Union  (Article  6),  the  participation  of  the 
Slovak Republic in the Programme will be continuously evaluated  on a partnership basis 
involving the Slovak Republic  and  the  Commission  of the European  Communities.  The 

I 

to? 

Slovak  Republic  will  submit  the  necessary  reports  to  the  Commission  and  take  part  in 
other specific activities set out by the Community in that context. 

7. 
Without prejudice to  the procedures  referred to  in Article 4  of the Decision  on a 
Third  Multiannual  Programme  for  Small  and  Medium-sized  Enterprises  (SMEs)  in  the 
European  Union,  the  Slovak  Republic  will  be  invited  to  co-ordination  meetings  on any 
question concerning the implementation  of this Decision  prior to  regular meetings  of the 
Programme  Committee.  The  Commission  will  inform  the  Slovak  Republic  about  the 
results of such regular meetings. 

8. 
The language to be used  as regards the application process,  contracts,  reports to 
be submitted and other administrative arrangements for the Programme, will be one of the 
official  languages of the Community. 

I 

{OS? 

ANNEX II 

FINANCIAL CONTRIBUTION  OF THE SLOVAK REPUBLIC TO THE THIRD 
MULTIANNUAL  PROGRAMME FOR SMALL AND  MEDIUM-SIZED 
ENTERPRISES  (SMES) IN THE EUROPEAN UNION (1997 TO 2000). 

1.  The financial  contribution of the Slovak Republic will cover; 

- 

financial  support from  the Programme to the participation  of Slovak entities in 
activities as defined  in Annex 1.1, 

-  supplementary  costs  of an administrative  nature  related to the  management  of 
the  Programme  by  the  Commission  stemming  from  the  Slovak  Republic's 
participation. 

2.  For  every  financial  year,  the  aggregated  amount  of  subsidies  or  any  other  financial 
support received from the Programme by the Slovak beneficiaries  will not exceed the 
contribution  paid  by  the  Slovak  Republic,  after  deduction  of  the  supplementary 
administrative costs. 

Should  the  contribution  paid  by  the  Slovak  Republic  to  the  general  budget  of  the 
European  Communities,  after  deduction  of  the  supplementary  administrative  costs, 
be higher than the aggregated amount of subsidies or other financial  support received 
by  the  Slovak  beneficiaries  from  the  Programme,  the  Commission  will  transfer  the 
balance  to  the  next  budgetary  exercise,  and  it  will  be  deducted  from  the  following 
year's contribution.  Should  such a balance be left  when the Programme  comes to an 
end, the corresponding amount will be reimbursed to the Slovak Republic. 

3.  The  Slovak  Republic's  amiual  contribution  will  be  of  ECU  288,900  from  1998. 
From  this  sum,  an  amount  of ECU  18,900 will  cover  supplementary  administrative 
costs  related  to  the  management  of the  Programme  by  the  Commission  stemming 
from the Slovak Republic's participation. 

4.  The  financial  regulations  applicable  to  the  general  budget  of  the  Community  will 
apply, notably to the management of the contribution of the Slovak Republic. 

Upon  entry  into  force  of this Decision  and  at the beginning  of each  following  year, 
the  Commission  will  send to the  Slovak Republic  a call  for  funds  corresponding  to 
its contribution to the costs under this Decision. 

This  contribution  will  be expressed  in ECU  and  paid  into  an  ECU  bank  account  of 
the  Commission. 

The Slovak Republic will pay its contribution to the annual costs under this  Decision 
according to the call for funds  and at the latest three months after the call for funds  is 
sent.  Any  delay  in the payment  of the contribution  shall  give rise to the  payment  of 
interest  by  the  Slovak  Republic  on  the  outstanding  amount  from  the  due  date.  The 
interest rate corresponds to the rate applied by the European Monetary  Co-operation 
Fund,  for  the  month  of  the  due  date,  for  its  operations  in  ECU,  increased  by  1.5 
percentage points. 

1 

V C> 

5.  The  Slovak  Republic  will  pay the  supplementary  administrative  costs  referred  to  in 

paragraph 3 from its national budget. 

6.  The  Slovak Republic  will  pay 50% of the remaining costs  of its participation  in the 

Programme from its national budget. 

Subject to  regular Phare programming  procedures,  the  remaining  50% will  be paid 
from  the Slovak Republic's annual Phare allocation. 

| 

[OK 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Participation of the Slovak Republic in the Third Multiannual Programme for  SMEs. 

2.  BUDGET HEADING INVOLVED 

B7-503  - Opening of Community Programmes to the associated  countries  of Central 
Europe 

3.  LEGAL BASIS 

Treaty  establishing  the  European  Community,  and  in  particular  Article  130, 
paragraph 3, in conjunction  with Article 228, paragraph 3,  1st alinéa thereof, 

Additional  Protocol  to  the  Europe  Ajgreement  with  the  Slovak  Republic  (Articles 
228  and  238)  of  30  December  1995,  providing  for  the  opening-up  of  Community 
programmes (OJ No  115/96), 

Council  Decision  (97/15/EC)  of  9  December  1996  on  a  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the European  Union 
(1997 to 2000) and in particular Article 7(1) thereof. 

4.  DESCRIPTION  OF OPERATION 

4.1.  General objective 

The Third Multiannual  Programme for  SMEs has the following  priority  policy 
objectives: 

1.  Simplify  and 
environment; 

improve 

the  administrative  and 

regulatory  business 

2.  Improve the financial environment for enterprises; 
3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in 

particular through better information  and  co-operation; 

4.  Enhance  SME competitiveness  and  improve access to  research,  innovation 

and training; 

5.  Promote entrepreneurship and support  specific target groups. 

The  Slovak  Republic's  participation  in  the  Community  programme  for  SMEs 
will contribute to  its preparation  for  accession  as a key feature  of a  reinforced 
preaccession  strategy.  It  will  also  enable  the  Slovak  Republic  to  familiarise 
itself with the  procedures  and  methods  used  in the  Community  programme  in 
the field of small and medium-sized  enterprises. 

\o*\ 

The  decision-making  process  for  the  opening-up  of  programmes  involves  a 
decision  by  the  Association  Council  between  the  Union  and  the  associated 
country.  This decision  also  lays down the practical  arrangements  for  opening 
up the programmes. 

The Additional Protocol  with the Slovak Republic entered into force on  1 July 
1996  and provides for the  Slovak Republic's participation  in a wide  range  of 
areas, amongst which small and medium-sized enterprises. 

The  Slovak  Republic  confirmed  its  willingness  to  participate  also  in  other 
Community  programmes,  notably  in  the  fields  of  education,  vocational 
training, youth, culture and the audio-visual sector, and energy. 

4.2.  Period covered and arrangements for renewal 

Until  the  end  of the  Community  programme  concerned,  i.e.  31.12.2000.  The 
Phare contribution,  however,  is dependent on decisions concerning the budget 
after  1999.  ..' 

5.  CLASSIFICATION  OF EXPENDITURE OR REVENUE 

5.1.  Non-compulsory expenditure 

5.2.  Differentiated  appropriations 

5.3.  Type of revenue involved 

Since the first paragraph of Article 3 of the Additional Protocol  stipulates that 
the Slovak Republic itself will meet the costs resulting from its participation, it 
will  be  invited  to  transfer  its  contribution  to  item  6091  of  the  ElTs  budget 
receipts.  However,  as  the  second  paragraph  of  Article  3  states  that  the 
Community  may  supplement  the  Slovak  Republic's  contribution  (through  its 
national Phare allocation),  the  Slovak  Republic will  contribute only part from 
its national  budget,  with the remainder being charged to  heading B7-503.  A 
transfer from the relevant Phare appropriations (article B7-500)  to  article B7-
503 will be made upon receipt of the Slovak Republic's contribution. 

6.  TYPE OF EXPENDITURE OR REVENUE 

-  subsidy for co-financing with other sources in the public and/or private sector 

-  studies, training sessions, running costs of instruments, information 

-  no provision for all or part of the Community contribution to be reimbursed 

As far as  revenue  is  concerned,  provision  for  the  Slovak  Republic's  contribution  to 
cover  the  cost  of  its  participation  is  made  under  item  6091.  The  revenue  will  be 

tvo 

allocated  to  the  items  for  expenditure  on  the  programme  in  question  and,  where 
appropriate, to the relevant items of operating expenditure. 

The total revenue expected is given under item 7.4. 

7.  FINANCIAL  IMPACT 

7.1.  Method of calculating total cost of operation for 1998, 1999 and 2000 financial years 

(link between individual costs and total cost) 

The calculation is based on the following preconditions: 

-  each partner country's contribution to the financing of the activities referred 
to  in the Protocol  is calculated  according to  the principle that the country 
bears the cost  of participation itself. Heading 6091  has been created in the 
statement of budget revenue for that purpose; 

-  the Community may decide on a case-by-case basis to pay a supplement to 
the partner country's contribution. The supplement may be in the form of a 
contribution under the national PHARE programme. 

Based  on the Additional  Protocol  with the  Slovak Republic,  the financial and 
budgetary arrangements for the programme concerned are as follows:  Among 
four  alternatives,  the  Slovak  Republic  has  opted  for  a contribution  based  on 
the  estimation  of  the  real  cost  of  participation  in all  the  strands  of  the  SME 
programme except Distributive Trade. 

t 

This  allows  for  financial  contributions  in  the  following  areas  (guideline  for 
maximum levels indicated within parenthesis): 

-  Actions within the field of Crafts and Small Enterprises (50,000 ECU) 
-  Support  to  the  Euro  Info  Correspondence  Centres  (EICC),  based  on  the 
current  number  (EICC  and  substructures)  (40,000  ECU  x  2  centres  = 
80,000 ECU) 

-  Participation  of  Slovakian  SMEs  in Europartenariat  events  (2 events/year, 
700  ECU  paid to  the National  Counsellor  per  SME for  costs,  promotion, 
etc. = 40,000 ECU) 

-  The  subvention  for  one  INTERPRISE  event  per year  in  the  country  (the 
maximum  contribution  form  the  EU  is  50,000  ECU,  and  this  must  not 
exceed 50% of the total budget for the event) 

-  The subvention for one IBEX event (subcontracting,  50,000 ECU). 

The  cost  of  the  Slovak  Republic's  participation  in  the  Third  Multiannual 
programme  for  small  and  medium-sized  enterprises  (SMEs)  in the  European 
Union  (1997-2000)  from  1998  will  thus be ECU 288,900  per year,  including 
7% administrative cost. 

The  above-mentioned  figure,  from  which  the  supplementary  administrative 
costs - to be borne exclusively by the Slovak Republic - have to be deducted, is 
divided per year as follows: 50% of the operational costs will be covered  from 
the  Slovak  Republic's  national  budget  and  -  subject  to  the  procedures  for 

programming the Phare programme - 50% from the annual Phare allocation for 
the Slovak Republic. 

7.2.  Itemised breakdown of cost 

Programme 

1998 

1999 

2000 

Total 

in ECU 

of which 
Slovakia 

of which 
Phare 

Small and 
medium-sized 
enterprises 

270,000 

270,000 

270,000 

810,000 

405,000 

405,000 

Breakdown of costs per strand where financial contributions can be received: 

Programme 
strand 

Actions within Crafts 
& Small Enterprises 

1998 

1999 

2000 

Total 

50,000 

50,000 

50,000 

150,000 

Support to the EICCs 

80,000 

80,000 

80,000 

80,000 

Business Co-operation 

- Europartenariat 

-INTERPRISE 

Sub-contracting: 

IBEX 

40,000 
50,000 

40,000 
50,000 

40,000 
50,000 

120,000 
150,000 

50,000 

50,000 

50,000 

150,000 

7.3.  Operational expenditure on studies, expert meetings, etc., included in Part &:  None 

112-

7.4.  Schedule for multiannual operations 

Amounts to be charged to item B7-503 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

135,000 

135,000 

135,000 

0 

405,000 

Commitment 
appropriations 

Payment 
appropriations" 

1998 

1999 

2000 

27,000 

81,000 

27,000 

27,000 

81,000 

27,000 

subsequent  years 

0 

27,000 

108,000 

Total 

135,000 

135,000 

135,000 

27,000 

108,000 

135,000 

135,000 

405,000 

(*) Schedule based on the method of payment currently applying to this programme. 

The foreseeable annual receipts are as follows: 

Item 6091 

1998 

1999 

2000 

subsequent 
years 

TOTAL 

operational 
part 

administrative 
part 

135,000 

135,000 

135,000 

0 

405,000 

18,900 

18,900 

18,900 

0 

56,700 

Total 

153,900 

153,900 

153,900 

0 

461,700 

8.  FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

All the Commission's contracts, agreements and other legal commitments provide for 
on-the-spot checks by the Commission and Court of Auditors. Among other things, 
the beneficiaries of the operations are obliged to file reports and financial statements. 
These are analysed from the point of view of their content and the eligibility of the 
expenditure in line with the objective of Community  financing. 

u2> 

The  anti-fraud  provisions  of  the  basic  budget  headings  apply  to  this  heading  too 
when adapted to the case of the countries of Central and Eastern Europe. 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1.  Specific and quantified  objectives; target population 

The  Third  Multiannual  Programme  for  SMEs  is  the  cornerstone  of  the 
Community's  SME  Policy.  It  provides  the  basis  for  concrete  actions  which 
help  to  exploit  the  SMEs'  full  potential  for  job  creation,  in  particular  by 
helping  to  increase  the  number of  SMEs  participating  in the Internal Market 
and promote their internationalisation. 

In principle, the actions in the Third Multiannual Programme for  SMEs could 
possibly  interest  all  the  SMEs  in  Slovakia.  However,  the  number  of  SMEs 
which  benefit  from  transnational  actions  will  necessarily  be  more  reduced 
according to the typology  and the activity of the enterprises and of the nature 
of the actions developed. 

For example, among the  15 million SMEs in the European Union,  1.5  million 
are most likely to be targeted for an action regarding Community  information 
(compared  to  the  450  000  enterprises  that  are  currently  involved).  As  a 
second  example,  one  million  SMEs  in  the  EU  could  be  targeted  by  the 
partnership  actions.  The  same  proportions  could  be  taken  as  an  orientation 
also for Slovakia. The target of the actions varying according to the nature of 
these actions. 

Furthermore,  the actions  aim at the professional  organisations,  the Chambers 
of  Commerce  and  Industry,  the  Trade  Associations  and  other  intermediaries 
for the business sector. 

9.2.  Grounds for the operation 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and medium 
sized  enterprises  (SMEs)  represent  a key  element  in the  efforts  towards job 
creation and growth. Indeed, the job creation rate of SMEs is higher than that 
of the big enterprises. 

It is, however,  necessary to  recognise the fact that  SMEs are inherently more 
vulnerable particularly in the first years following their creation. This weakness 
stems, in particular from the following five factors: 

•  an increasingly complex legal, fiscal and administrative environment; 
•  difficulty  in participating in R&D programmes and in exploiting the results; 
structural weakness of SMEs with regard tot theirs management abilities as 
• 
well as to the inappropriateness of training programmes; 

•  difficulty in obtaining finance at à reasonable cost; 
•  difficulty  in accessing markets for products and services. 

It is necessary to underline - with regard to the subsidiarity approach - that the 
actions developed  at Community level  are taken in a context  which ensures a 
significant  added-value,  resulting  in  particular  form  the  dimension  of  the 
networks and of the actions developed, the objectivity and the neutrality of the 
decisions  taken  at  central  level  as  well  as  of  the  attention  paid  to  regional 
equilibrium. 

In  particular,  if  most  actions  in  favour  of  enterprises  are  developed  by  the 
Member  States,  it  is  up  to  the  Community  to  take  measures  having  a 
transnational  nature,  to 
implement  networks  that  have  a  Community 
dimension.  To  confine  such  activities to  the national  level  would  not  only  be 
impossible and less efficient,  but it would also distort competition to the extent 
that the level of support of each Member State would be extremely diverse. 

Since  1989 the increase  in the  number and importance  of  SMEs,  not  least  in 
terms  of  share  of  employment,  in  the  Slovak  Republic  has  been  impressive. 
Much  of  the  growth  in  the  number  of  SMEs  has  been  spurred  on  by  the 
privatisation  process.  A  majority  of  enterprises  are very  small  entities  of  self 
employed people.  The Slovakian economy is likely to remain characterised by 
a large percentage of SMEs over coming years. These enterprises will need to 
prepare  for  EU  membership  and  the  increased  competitive  pressures  this  is 
likely  to  expose  them  to.  In  this  context,  the  opening  up  of  Community 
programmes  is  an  important  element  of  the  pre-accession  strategy.  The 
participation  in this particular programme can in a positive  manner contribute 
to preparing SMEs and SME representative organisation for future accession. 

-  Need for Community financial aid 

In view  of the substantial financial contribution  of the Slovak Republic to the 
programme  and  the  Slovak  Republic's  precarious  budgetary  situation, 
assistance  from  PHARE  as  provided  for  in  Article  3(2)  of  the  Additional 
Protocol is essential. 

-  Choice of ways and means 

With a contribution from the Slovak Republic's national budget,  supplemented 
by  one from PHARE,  the  Slovak  Republic's  participation  will  contribute  to 
getting  acquainted  with  the  internal  policies  and  proceedings  of  the 
Community in the field of Small and medium-sized enterprises. The integration 
of  Slovakian  nationals 
in  Community  networks  will  make  a  definite 
contribution to preparing the Slovak Republic for future membership. 

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

operation 

Since projects will  be selected  according to  qualitative criteria,  it will  only be 
possible  to  measure  the  real  impact  on  the  basis  of  Slovakian  citizens'  and 
SMEs'  capacity  to  respond  to  the  calls  for  proposal  to  be  launched  by  the 
Commission under the programme. 

US' 

9.3.  Evaluation of the operation 

The  evaluation  procedures  included  in the  Third  Multiannual  programme  for 
SMEs will also cover operations financed for Slovakian beneficiaries. 

9.3.1 Performance indicators 

The indicators are chosen in function of the type of action undertaken. ' 

As  an example,  in the field of Euro  Info  Centres  (EICs),  there  is  a contract 
with an external audit firm that evaluates the quality systems set in place by the 
EICs  as well  as their  activity  in relation  to  set  objectives.  For  each EIC,  an 
evaluation  grid  containing  13  criteria  relating,  among  other,  to  quality  is 
applied  and the 'JDerformance" of  each EIC  is  rated  on  a scale  of  1 to  4  for 
each  criteria.  In  adding  up  the  points  for  each  EIC,  it  is  then  possible  to 
determine  whether  or  not  it  satisfies  the  minimum  criteria.  If this  is-not  the 
case,  the EIC is  excluded  from  the  network  and the  procedure  for finding a 
replacement is initiated. An evaluation report et published every six months. 

For the business  co-operation  networks,  an annual  evaluation  of the network 
members is based  on the  number of co-operation  profiles  introduced  into the 
databases,  the  respect  of  the  code  of  professional  conduct  ,  promotional 
activities  in  the  network,  rate  of  participation  in  events  organised  by  the 
Commission  (e.g.  monitoring,  annual  conference),  and  the  contributions  of 
members to the working groups. 

• 

For  other  actions,  the  immediate  impact  of  the  activities  undertaken  can  be 
measured by the participation in conferences  and seminars organised to assure 
the implementation of the foreseen actions, the feed-back in media, the interest 
of  professional  organisations,  reactions  from  entrepreneurs,  the  number  of 
enterprises participating in pilot actions, and the distribution of publications. 

In the case of actions specifically  in favour of crafts  and small enterprises, the 
indicators  include  the  number  of  craft  enterprises  and  micro-enterprises 
benefiting from finance stemming from the action. 

9.3.2 Modalities and periodicity of the foreseen evaluation 

The  Council  Decision  of  9  December  1996  regarding  the  Third  Multiannual 
Programme  for  SMEs  (Article  6)  obliges  the  Commission  to  submit  to  the 
European  Parliament,  the  Council,  the  Economic  and  Social  Committee  and 
the  Committee  of  the  regions,  no  later  than  the  end  of  1999,  an  external 
evaluation  of  the  implementation  of  the Decision,  in order to  assess  whether 
the original objectives have been met, including a cost-effectiveness  evaluation. 

9.3.3  Assessment of results 

The  results  of  the  evaluations  are  generally  diffused  to  the  concerned 
population and can give  rise to  modifications  regarding  actions undertaken or 
new proposals for actions. 

(\L> 

A  report  on  the  execution  of  the  Multiannual  Programme  is  every  year 
submitted  to the Management  Committee established  by the Council Decision. 
Reports  on the results of the participation  of the associated  Central  European 
countries concerned  in the programme would  in the same manner be submitted 
to the Committee as well as to the countries concerned. 

10.  ADMINISTRATIVE  EXPENDITURE 

-

The  allocation  of  required  administrative  resources  for  this  action  will  depend  on  the 
Commission's annual decision on the allocation of resources, taking into account the number 
of staff and additional credits authorised by the budget authority. The supplementary needs 
can not, in any case, prejudge the decision that the Commission will need to take concerning: 

a)  the request of new posts in the framework of the APB 

b)  the resources allocation 

10.1.  Impact  on the number of posts 

Type of post 

Staff required to 
manage the 
operation 

Permanent 
posts 

Temporary 
posts 

including 

duration 

using existing 
resources of 
the 
departments 
concerned 

using 
additional 
resources 

1998-2000 

Officials or 
temporary  staff 
A 
B 
C 

Other  resources 
TOTAL 

0.5 
0.2 
0.2 

0.9 

0.5 
0.2 
0.2 

0.9 

10.2.  Overall financial  impact of the additional human resources 

from  1998 

in ECU 

Total 

Method of calculation 
(total cost of the action for 
the period  1998-2000) 

Officials 
Temporary  staff 
Other  resources  (indicate  budget 
heading) 

TOTAL 

I 

0 

I 

, 

u^ 

10.3.  Increase in other operating expenses as a result of the operation 

Budget heading 
(No and title) 

Total 

in ECU 

Method of calculation 
(total cost of the action 
for the period 1998-2000) 

A1178/A238 - technical assistance 

19,440  Technical assistance 6,480 ECU 

A1300-missions 

A2500 - meetings 

A2510-meetings of committees 

per year. 

7,200  2  missions  per  year  for  the 
whole  Programme  (annual  cost 
2,400 ECU). 

15,030  Participation  of  3  Slovakian 
representatives  per  year 
in 
meetings  organised  under  the 
different  Programme  strands 
(annual  cost  of  participation  in 
meetings 5,010 ECU). 

15,030  Cost  of  the  presence  of 

representative 

1 
at 
Slovakian 
consultative  meetings  (3/year)  -
exchange  about the Programme 
and  information  about  the  work 
in  the  Management  Committee 
(annual  cost  of  participation  in 
meetings 5,010 ECU). 

Total 

56,700 

The  above  expenditure  will  be  met from  the receipts  (article  4§2,  third  indent  of  the 
financial regulation)  received  from  the Slovakian participation in Community  Programmes 
(see § 5.3 of the financial  statement). 

Ufc" 

ISSN 0254-1475 

COM(98) 113 final 

DOCUMENTS 

EN 

08  01  11 

Catalogue number  :  CB-CO-98-117-EN-C 

ISBN 92-78-31420-X 

Office  for  Official  Publications of the European  Communities 

L-2985 Luxembourg Lto 

tn