Implementing MEDA - 1996-1997 report
Date: 1998-09-14
Institutions: European Commission
Subjects: EU financing, EU programme, Mediterranean third countries, activity report, cooperation policy

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels,  14.09.98 
COM(1998) 524 final 

IMPLEMENTING  MEDA 

1996-1997 REPORT 

(presented by the Commission) 

Table of Contents 

Introduction 

PART I 

RESULTS OF THE MEDA PROGRAMME 

1. 

Organisation  for implementation 

2. 

3. 

4. 

The programming process 

Commitments 

Payments 

PART II 

SUMMARY  OF THE COURSE OF COOPERATION 

1. 

2. 

Bilateral cooperation 

Regional  cooperation 

Annex 1: 

Publications 

Annex 2: 

MEDA Commitments and Payments 1995 -  1999 and 1995 - 2003 

Annex 3: 

Breakdown of financial execution 1996 - 1997 

I 

Introduction 

This  report  is  submitted  by  the  European  Commission  to  the  European  Parliament  and 
the Council  pursuant  to Article  15(1) of Council  Regulation  No  1488/% (MEDA),  which 
requires  an  annual  report  regarding  the  measures  financed  under  the  said  regulation.  It 
provides  information  on the measures financed  during  1996-97. 

The  MEDA  Programme  is  the  main  financial  instrument  of  the  Euro-Mediterranean 
Partnership.  It  forms  the  major  part  of  an  ECU  4,685  million  five-year  overall  financial 
package  decided  on  by 
The 
the  Euro-Mediterranean 
Euro-Mediterranean  Partnership 
Conference  of Foreign  Ministers held  in Barcelona  in November  1995. 

the  Cannes  Huropean  Council 
instituted  at 

in  June  1995. 

itself  was 

Part  I of the  report  sets out  the main  results achieved  by  the  MEDA  Programme  in  1997. 
Following  the  adoption  by  the  Council  of the  MEDA  Regulation  in July  1996 and  of  the 
Decision  on  guidelines  for  the  programming  of  MEDA 
in  December  1996,  the 
Commission  was  able  during  1997  to  put  into  place  the  resources  and  administrative 
procedures  necessary  for  the  implementation of the  MEDA  programme. 

1997  was  also  the  first  year  in  the  period  1995-1999  in  which  the  increased  financial 
resources  for  cooperation  with  the  Mediterranean  were  made  available  on  the  MEDA 
budget  line.  Thus  commitment  credits  allocated  to  the  MEDA  budget  line  reached 
almost  ECU  one  billion.  100%  of  available  commitment  credits  were  executed,  thus 
testifying  both  to  the  adequacy  of  the  programming  procedures  put  in  place  by  the. 
Commission  and  to  the  absorptive  capacity  of  the  beneficiary  Mediterranean  Partners. 
term 
Payment  credits  were  satisfactorily  disbursed 
implementation  period  of the  projects. 

into  account 

taking 

long 

the 

Part  II  of  the  report  traces  the  implementation  of  cooperation  over  the  year  both  at  the 
bilateral  level  and  at  the  regional  level.  Finally,  the  annexes  provide  an  analysis  of  the 
execution  of  commitment  and  payment  credits  over  1995-1999,  a  forecast  of  execution 
up  to  2003  and  a  detailed  report  of  the  financial  execution  of  the  MEDA  Programme  in 
1996 and  1997. 

?> 

PARI  I 

RESULTS OF HIE  MEDA  PROGRAMME 

1. 

Organisation for implementation 

Framework Financing Conventions 

MEDA progressively  replaces the twenty year old  Financial  Protocols  that had  provided 
the system  for cooperation  with  non  member Mediterranean  countries.  Therefore  a new 
administrative  architecture  was  required  to  enable  the  implementation  of  the  MEDA 
programme by the Commission services and the beneficiary  Mediterranean Partners. 

During  1997 this new structure was extensively  discussed, in a spirit of partnership, with 
each  Mediterranean  Partner  eligible  to  MEDA,  in  order  to  conclude  a  Framework 
Financing Convention.  These Conventions aim to link the MEDA  Regulation  with local 
legislations  and  to  improve  efficiency  by  decentralising  implementation  of  activities  as 
close  as  possible  to  the  level  of  the  beneficiaries  whilst  organising  the  overall 
programming  dialogue  in  a coherent  way.  The  conclusion  of these  Conventions  was  a 
prerequisite  for  the implementation  of the measures programmed  under MEDA, with the 
exception  of  structural  adjustment  operations  which  can  continue  to  be  implemented 
according  to  existing  specific  procedures. 
'The  adoption  of  the  Framework  Financing 
Conventions thus allows implementation of the measures taken under MEDA to progress 
beyond the stage of the financial  commitments to that of financial  disbursements  and the 
delivery of project outputs. 

The main features of the Framework  Financing Conventions include: 

-  the establishment  of a national  coordinator  for the beneficiary  partner  in order 

to oversee overall programming and  implementation. 

-  a wide field  of potential beneficiaries,  including private operators and members 

of civil society. 

- 

the granting  of "the most  favoured  donor" fiscal  treatment  and the  exemption 
of MEDA financing  from taxes and duties. 

By  the  end  of  1997  Framework  Financing  Conventions  were  agreed  with  Morocco, 
Tunisia and the Palestinian Authority and discussions were well advanced with the other 
Mediterranean Partners1. 

1 At the time of writing, Framework  Financing Conventions have since been agreed with Algeria, Egypt, 
Jordan,  Lebanon,  Syria and  Turkey whereas  Framework  Financing  Conventions  are not  applicable 
for Cyprus, Israel and Malta because they do not have MEDA bilateral programmes. 

H 

M I'D A  Teams 

(iiven  the  increase  in  the  volume  of  work  and  the  extra  technical  demands  flowing  from 
the new  objectives  of the MEDA  programme,  the Commission  services  require  additional 
human  resources  of  an  appropriate  level  of  expertise  because  (he  projects  are  of  a 
complex  nature and  are spread  across a wide range of sectors. 

line  (B7-410)  allows  for 

In  the  absence  of  the  possibility  of  recruiting  new  officials  or  detached  national  experts 
with  such  a required  level  of  expertise  the  Budgetary  Authority  provided  for  recruitment 
of  external  expertise  in  the  SAB  n°l/96.  To  this  effect  the  commentary  to  the  MEDA 
budget 
the  financing  of  technical  support  and  related 
administrative  costs  for  the  mutual  benefit  of  the  Commission  and  the  Mediterranean 
is  to  include  preparation  of  terms  of  reference  and 
partners. 
monitoring.  Up  to  3%  of  the  annual  MEDA  appropriations  entered  in  the  supporting 
budget  line  may  be  used. 

Technical  support 

This  will  allow  effective  control  of  the  utilisation  of  Community  financing  under  the 
direct  supervision  of  the  Commission  that  retains  responsibility  for  management  and 
financial  decisions. MEDA  Teams  staff  at professional  level  will  be about  39 persons  for 
Headquarters  and  54  for  the  Delegations.  Implementation  of the  measures  themselves  is 
undertaken  by  project  management  units  foreseen  within  the  structures  of  the  individual 
measures. 

To  implement  this provision  the Commission  has proposed  that  support  staff  be  recruited 
in  the  form  of  "MEDA  Teams".  The  Teams  will  be  deployed  "extra  -  muros"  as  the 
support  personnel  are  not  part  of  Commission  staff.  Each  team  is  to  be  recruited  via 
restricted  tender,  following  prequalilication  based  on  an  open  call  for  expressions  of 
interest  from  companies  and  associations  of  experts.  Both  European  and  Mediterranean 
experts  are  eligible.  Each  team  corresponds  to  a  particular  area  of  intervention  of  the 
MEDA  programme.  The  support  staff  will  provide  technical  expertise  throughout  the 
project  cycle  thus  helping  to ensure the effective  implementation  and  maximising  the  real 
impact of the  MEDA  programme. 

During  1997  the  tenders  for  the  MEDA  Teams  were  launched  and  the  offers  were  duly 
received  and  evaluated.  Of  the  10  MEDA  Teams  envisaged  for  support  to  the 
Commission  Headquarters  in  Brussels, eight  were  contracted  in the  last  quarter  of  1997. 
The recruitment  of the remaining  two teams was pursued  in  1998.  As regards the  MEDA 
Teams  attached  to  the  Commission  Delegations,  tendering  procedures  were  well 
advanced  by  the  end  of  1997  with  the  majority  of  contracts  being  concluded  in  1998 
following  agreement  on  the  framework  conventions  with^the  Mediterranean  Partner 
concerned. 

Information  activities 

The launching  of the  MEDA  Programme  has  generated  a great  amount  of  public  interest 
within,  in particular,  the media, professional  organisations,  cultural  associations  and  non 
governmental  organisations.  At  the  same  time  this  has  created  a  significant  increase  in 
the  demand  for  information  about  the  MEDA  Programme,  its  objectives  and  modalities, 
as well  as about the Euro-Mediterranean  Partnership  as a whole. 

r 

to  these  developments 

In  response 
the  Commission  services  have,  during  1997, 
developed  a  series  of  publications  in  order  to  allow  interested  parties  to  keep  abreast  of 
developments  and  to  participate  in  MEDA.  These  includes  brochures  which  illustrate 
through  concrete  examples  the  objectives  and  activities  of  the  Euro-Mediterranean 
Partnership  as  a  whole,  as  well  as  of  specific  policies.  Furthermore,  a  series  of 
information  notes  has  been  produced  allowing  speedy  diffusion  of  information  on  the 
progress  of  implementation  of  the  Euro-Mediterranean  Partnership  and  the  MEDA 
Programme.  A  list of these  documents  is given  in Annex  1.  Information  of this  nature  is 
also now available on the  following  Internet  website:  http://www.euromed.net. 

Information  on  procurement  opportunities  is published  on a quarterly  basis  in the  Official 
Journal  of  the  European  Communities  and  is  now  also  available  on  the  Internet  at  the 
following  address:  http://europa.eu.int/en/comm/dg 1 b/contract.html.  Information  on  the 
on: 
of 
financial 
http://europa.eu.int/en/comm/dg 1 b/budget/index.html. 

the  MEDA 

Programme 

execution 

available 

is 

2. 

The  programming  process 

MEDA  has  a  flexible  programming  process  in  order  to  respond  to  the  challenge  of 
significantly  intensified  cooperation.  This  is to avoid  dispersion  of the cooperation  effort 
and  to  give  an  incentive  for  efficient  implementation.  Equally,  MEDA  must  be  capable 
of  adaptation  over  time  as  lessons  are  learned  through  its  implementation  and  as  the 
needs  and  priorities  of the  Mediterranean  partners  evolve. 

Therefore,  instead  of  fixing  the  financial  allocations  for  the  period  1995-99  during  a 
single  programming  exercise  at the  start  of the  period,  as  under  the  old  financial  protocol 
system  (1978-96), a three-year  rolling  programming  exercise  takes  place  every  year,  with 
indicative  amounts  for  both  bilateral  and  regional  cooperation.  As  there  is  no  bilateral 
contractual  agreement,  funds  can be adjusted  within the budgetary  period  both within  and 
between  bilateral  and  regional  cooperation. 

the  traditional  criteria  (population  size;  per  capita 

The  criteria  applied  to  establish  the  initial  indicative  country  allocations  are,  over  and 
above 
in 
implementation  as  well  as  progress  in  structural  reform  and  foremost  progress  towards 
the  conclusion  of  the  Iiuro-Mediterranean  Association  Agreements.  This  latter  criterion 
is  particularly  important  since  it  effectively  justifies  a  substantial  increase  in  fund 
allocation,  with  the aim  of accompanying  the transition  process  to  an economy  integrated 
with  the  EU-market. 

income),  efficiency 

Thus National  Indicative  Programmes  (NIPs) have been  adopted  for  bilateral  cooperation 
and  a  regional  indicative  programme  has  been  proposed  for  regional  cooperation,  in 
accordance  with  Article  5(2)  of  the  MEDA  Regulation.  These  documents  establish  the 
priority  areas  for  intervention  for  the  MEDA  Programme,  within  the  scope  of the  MEDA 
Regulation,  and  are  therefore  a tool  for  maintaining  a  strategic  and  targeted  cooperation 
effort.  On  this  basis  the  Commission  subsequently  adopts  financing  decisions  for  the 
initiation  of  projects,  to  be  implemented  on  the  basis  of  financing  conventions  agreed 
with the beneficiary  institutions. 

6 

National  Indicative  Programmes  were  first  adopted  by  the  Commission  in  1996  for  the 
period  1996-1998,  following  the  positive  opinion  of  the  Member  States  at  the  Med 
Committee.  In  1997 these were updated  on the basis of the experience  of  implementation 
of the each NIP  over the previous year.  Also  in  1997 the Regional  Indicative  Programme 
(RIP)  was  proposed  by  the  Commission  to  provide  for  the  launching  of  cooperation 
involving  several  countries  across  the  Mediterranean  region. 
It  received  a  favourable 
opinion  of  the  Committee  on  3  December  1997 and  was  adopted  by  the  Commission  on 
24  March  1998.  Subsequently  it was presented  to the Euro-Mediterranean  Committee  for 
the  Barcelona  Process  for  information  and  comment  by the Mediterranean  Partners. 

It  is expected  that  approximately  90% of the  MEDA  programme  will  be directed  towards 
bilateral  cooperation  and  approximately  10% towards  regional  cooperation.  The activities 
undertaken  at  bilateral  and  regional  level  are  complementary  to  enable  the  political  and 
economic  impact  of  the  MEDA  programme  to  be  sustained  and  the  objectives  jointly 
adopted  in  the  Barcelona  Declaration  more  effectively  reached.  Regional  activities 
should  not displace funding  of bilateral  activities. 

'The National  Indicative  Programmes  set  out  the  strategic  priorities  for  cooperation  with 
each  of the eligible  Mediterranean  Partners, taking  into  account  the. stage  of  development 
of  its  economy  and  society  as  well  as  the  capacity  of  its  institutions.  'The  main  axes  of 
cooperation  to  be  pursued  by  the  MEDA  programme,  in  the  light  of  the  Barcelona 
Declaration  adopted  by  all  the  Partners,  are  support  for  economic  transition  and  for  the 
strengthening  of  the  socio-economic  balance.  Support  to  economic  transition  has  the 
overall  objective  of  helping  the  Partners  prepare  for  free  trade  with  the  Community  and 
to  raise  the  standard  of  living;  thus  the  Community's  interventions  aim  to  increase  the 
competitiveness  of  the  partners1  economies,  with  a  view  to  achieving  sustainable 
economic  growth.  1 lowever,  it  is also  important  to alleviate  the  possible  short-term  costs 
ol* economic  transition  through  measures  to  strengthen  the  socio-economic  balance. 
'These  aim  to  improve  the  standards  of  living  of  the  populations  of  the  Partners  by 
reducing  unemployment  and  increasing  access  to  social  services  as  well  as  safeguarding 
the  environment. 

The  regional  indicative  programme  reflects  the  progress  made  in  the  framework  of  the 
Barcelona  process  in  taking  action  at  a  multilateral  level  on  issues  of  common  concern, 
and  strengthens  the  activities  in  support  of  the  involvement  of  civil  society  in  the 
Partnership. 

Commitments 

In  1995  and  1996,  the  MEDA  Programme  progressively  replaced  the  existing  financial 
instruments,  mainly  the  Financial  Protocols,  and  in  1997  represented  about  90  %  of  the 
total  financial  commitments  from  the  EU  Budget  in  the  Mediterranean.  The  MEDA 
Programme  is mostly  made up of grants as well as risk capital  and  interest rate  subsidies. 

Commitment  credits  were  fully  utilised  (100  %  commitment)  in  1995,  1996  and  1997 
with  ECU  173  million,  ECU  403  million  and  ECU  981  million  being  committed  in  the 

«f 

respective  years.  Over  the  period  1995-1997, commitments  went  to  four  main  types of 
operations: 

support to structural adjustment:  14 % of total; 

support to economic transition and private sector development: 27 % of total; 

socio-economic development and environmental projects: 46 % of total; 
regional projects:  14 % of total2. 

The  strategic  axes  of  cooperation  established 
in  Council  Decision  96/706  on 
programming  guidelines  for  the  MEDA  Programme  have  been  fully  respected.  The 
Council  Decision  requests  the  Commission  to  concentrate  resources  on  support  to 
economic  transition,  including  structural  adjustment,  strengthening  the  socio-economic 
equilibrium and promoting regional cooperation. 

It should  be noted that the Commission  has given a mandate to the European Investment 
Bank  to manage certain  operations  financed  under MEDA.  These consist of risk  capital 
operations  to  support  the  process  of  economic  transition  and  interest  rate  subsidies  for 
loans made by the EIB on its own resources in favour of the environment. 

Also, other types of cooperation with the Mediterranean have been financed  during  1996-
1997 from  other budget lines and which are therefore  not covered by this report.  Whilst 
the  MEDA  budget  line  is  the  biggest  in  chapter  B7-40  (Mediterranean)  of  the 
Community budget there are others, namely the financial  protocols for Cyprus and Malta, 
a  special  budget  line  for  Turkey, the  residue  of the  financial  protocols  for  the  Maghreb 
and  the  Mashreq  and  a budget  line  in  support  of  the Middle  East  Peace  Process.  Also, 
the  MEDA  Democracy  programme  is  financed  from  outside  chapter  B7-40  of  the 
Community  budget. 

The  end  of  the  1997  budget  year  saw  the  adoption  by  the  budgetary  authority  of 
supplementary  commitment credits of ECU  144.7 million (adding up to the total of ECU 
981  million)  which  were fully  used.  This was possible due to the flexible  programming 
procedure  used  by  the  Commission  which  consists  of  "over  programming"  of  projects 
vis-à-vis the available credits thus allowing extra  funds  to be absorbed.  Conversely, this 
late  addition  of  commitment  credits  substantially  depleted  the  pipeline  of  operations 
scheduled  for  commitment  in  the  first  half  of  1998,  thus  causing  a  "back  loaded" 
commitment profile  in 1998. 

4. 

Payments 

As in any international  financial  cooperation activity, the rate of payments of the MEDA 
Programme  is  a  direct  function  of  the  type  of  operation  for  which  commitments  are 
made. 

2  This tolal  includes the commitments made in  1995 for decentralised  cooperation  and the financing of the 
MEDA Teams as well  as the activities under the Regional  Indicative Programme.  However,  over the 
period  1997-1999  it  is expected that the  RIP will  represent  10% of the financial  envelope  of  MEDA 
remaining after the financing  of the MEDA Teams. 

In fact, some operations such as support to structural adjustment  result  in payments over 
a short time span, generally  two years, provided however that conditions agreed  between 
the Commission and the beneficiary  Government are met. 

Economic  transition  and  private  sector  development  operations  generally  consist  in 
technical  assistance  operations  over  a  3-4  year  period,  which  determines  the  payment 
period. 

Classical  development  operations  (rural  development,  basic  health  care,  education, 
drinking  water,  sewage,  etc)  require  works  and  services  as  well  as  procurement  of 
equipment  following  tendering  procedures.  The  implementation  period  is  longer, 
generally 4 to 6 years. 

Finally,  regional  projects  financed  under  the  Euro-Mediterranean  Partnership  often 
consist  in completely  novel  forms of cooperation,  necessitating  innovative financial and 
legal frameworks  of a complex nature. It is estimated that payments are spread over a 3-5 
year period. 

Taking  into  account  the  current  mix  of  operations  within  the  MEDA  Programme  (a 
breakdown  is  given  in  part  1.3),  it  is  estimated  that  the  average  implementation  (i.e. 
payment) period for each of the annual tranches of the MEDA Programme is 4 years. 

For  the  period  1995-1997  cumulative  payments  have  reached  ECU  417  million,  or 
26.7% of commitments made over the same period. 

The graphics and tables in Annex 2 illustrate these facts. 

PART II 

SUMMARY OF THE COURSE OF COOPERATION 

1. 

Bilateral cooperation 

The Maghreb 

In Algeria financial  co-operation  is still suffering  from  delays, mainly  due to the security 
situation in the country.  Whilst the National Indicative Programme  1996-98 continues to 
provide  the  framework  for  cooperation  with  Algeria,  only  two  project  preparation 
missions were realised  and it has not been possible to present financing  proposals to the 
Implementation  of  several  ongoing  projects  from  the  Financial 
MED  Committee. 
Protocols  continued,  in  particular  on  a  small-scale  fisheries  project.  However,  the 
financing  convention of a 30 million  ECU agricultural import programme (funded  by the 
Fourth  Financial  Protocol)  expired  before  its  implementation  could  begin.  Finally, 
discussions on the MEDA Framework  Financing  Convention  were well  advanced  by the 
end of 1997. 

The  Framework  Financing  Convention  with  Tunisia  for  financial  co-operation  under 
MEDA  was  signed  in  September  1997.  Commitments  from  the  MEDA  programme 
reached  258.25 million ECU over the period  1996-97 which  means that the  funds  for the 
triennial  period  1996-98  were  already  fully  committed  by  the  end  of  1997.  Another 
71.75  million  ECU  where  programmed  for  MEDA  projects  during  a  programming 
mission  that  took  place  in  December  1997.  One  financing  convention  was  signed  in 
April  1997 concerning the 45 million  ECU MANFORM programme  for the upgrading of 
the  vocational  training  system  in  Tunisia.  Other  projects  under  preparation  concern 
notably  the strengthening  of the productive  system  and the private  sector, as well as the 
preservation  of  the  socio-economic  equilibrium 
through  rural  development  and 
employment  creation. The update  of the National  Indicative  Programme  for  1997-99  in 
essence provides for a continuation of  support in these main priority areas. 

The Indicative Programme drawn up with Morocco for the period  1996-98 was amended 
at  the  request  of  the  Moroccan  authorities  in  the  course  of  1997,  which  caused  some 
delay  in preparing  and starting up cooperation  projects.  However, the main emphasis  of 
cooperation is still on support for economic transition and improving the  socio-economic 
balance.  Since  it  was  signed  in  March  1996, five  operation's have  been  approved  for  a 
total of ECU 235.58 million (52.3%).  The following  financing decisions have been taken 
in the context  of support  for  achieving a better  socio-economic  balance: rural  water and 
sanitation  (ECU  40.00 million); rural roads and tracks (ECU 30.00 million); support  for 
professional  training  (ECU  38.00 million); interest-rate  subsidies  on an  EIB loan  (ECU 
7.58  million).  Technical  and financial  cooperation and programming  are expected  to be 
up to speed by the end of 1997. 

Ao 

The Mashreq 

During  1997  the  presentation  of  Financing  Agreements  was  delayed  pending  the 
conclusion  of  a  Framework  Financing  Convention  between  the  European  Commission 
and  Egypt.  However, considerable work was undertaken on the preparation  of  Financing 
Agreements  for  two  large  and  previously  approved  programmes;  the  155  million  ECU 
EU contribution  to the multi-donor  Social  Fund  II programme  and the  100 million  ECU 
EU  contribution  to  the  Ideational  Enhancement  Programme  (EEP).  Also,  an  interest 
subsidy of ECU 2.7 million for an E1B loan (Grey Cement) was funded. 

Planning and  project  preparation  began on a further  two programmes  for  presentation  in 
1998.  The  lirst  is  the  Industrial  Modernisation  Programme  (IMP)  at  250  million  ECU 
which  will  be. the  centrepiece  of  the  EU's  economic  co-operation  with  Egypt.  The  110 
million  ECU  contribution  to  the  Health  Sector  Reform  Programme  (IISRP)  will  assist 
radical reforms leading to universal access to basic health and health insurance cover. 

In Jordan, implementation  of M EDA was pursued along a number of tracks.  Negotiated 
in  the  second  semester  of  1997,  the  Framework  Financing  Convention  covering  the 
M EDA  Programme  was  signed  in  February  1998.  The  Private  Sector  Development 
Programme  (Business  Service  Team-Business  Centre)  of  ECU 7  million  had  been 
decided  upon  in  1995.  The  implementation  started  with  the  setting  up  of the  Business 
Service Team in Amman on 8 September 1997. 

A Programming mission took place on 3-4 December  1997 in order to review and update 
the  Indicative  Programme  and  technical  and  financial  cooperation  for  1997-1999.  A 
Memorandum  of Understanding  was  signed  allocating  the  future  available  resources  to 
support  industrial  modernisation,  development  of  the  private  sector  and  environment 
policy.  Also,  ECU  10  million  on  risk  capital  resources  were  made  available  in 
December 1997 
the  EIB  project  "Jordan-Industrial  Development 
Bank(IDB)-VI  operation". 

in  support  of 

Negotiations  on  the  MEDA  Framework  Financing  Convention  with  Lebanon  continued 
in  1997.  The copy  of  the  Framework  Financing  Convention  signed  by  the  Commission 
was sent to the Lebanese authorities for signing in October  1997. 

The preparation of the following  approved MEDA projects was largely  finalised,  but was 
held  up  because  Lebanon  had  not  yet  signed  the  MEDA  Framework  Financing 
Convention: 

-  support  for  the  Lebanese  administration  (ECU  38  million):  convention  and  tender 
documents  finalised  subject  to minor amendments  and the signing  of the Framework 
Agreement; 

- 

investment  planning  programme  (ECU  25  million): technical  negotiations  were  well 
advanced; 

-  standardisation  (ECU  6  million):  negotiations  on  an  agreement  with  the  European 

Committee for Standardisation  (CEN) got under way. 

Interest-rate subsidies totalling  ECU  30.8 million  were granted  on  EIB  loans relating  to 
the environment. 

M 

For  Syria,  a  project  to  modernise  the  Finance  Ministry  (ECU  10.5  million)  and  a 
management  school  project  (ECU  14 million)  were  approved.  In  the  course  of  the  year  a 
study  was  undertaken  on  "Technical  Education  and  Vocational  Training"  with  a  view  to 
drafting  a programme  to  suit  Syria's  transition  to a free  market  economy.  Implementation 
of  four  MEDA  projects  approved  in  1996  could  not  go  ahead  because  the  MEDA 
Framework  Financing  Convention  with  Syria  had  not  been  signed. 

During  1997,  the  Framework  Financing  Convention  was  agreed  with  the  Palestinian 
National  Authority  and  three  projects  were  approved  for  the  West  Bank  and  Gaza  Strip 
under  the  MEDA  budget-line.  Firstly,  funding  for  provision  of  equipment  and  related 
training  in  the  framework  of  the  EU  Special  Adviser  on  Counter-terrorism  (ECU  3.6 
million):  this  project  was  decided  as  part  of  a  CFSP  Joint  Action  aiming  to  assist  the 
Palestinian  Authority  on  its fight  against  terrorism.  Secondly,  establishment  of a  Special 
Cash  Facility  (ECU  25  million  from  which  ECU  21  million  is  an  advance  on  the  1998 
budget).  The  Israeli  authorities  blocked  the  transfer  of  tax  revenues  to  the  Palestinian 
Authority  creating  a serious  financial  crisis.  In order  to avoid  this  situation  in the  future, 
the  EC  decided  to  create  a  fund  that  will  cover  such  financial  crises.  Thirdly,  following 
an  identification  mission  to  the  area,  the  EC. designed  a  ECU  1.2  million  programme  of 
assistance  on  Customs  Administration  for  the  Palestinian  Authority.  In  addition  a  risk 
capital  operation  of  liCU  1 million  in favour  of the  Gaza  Industrial  Estates  and  ECU  7.4 
million  in  respect  of  an  interest  subsidy  for  the  Gaza  Sanitation  loan  of  the  EIB  were 
financed. 

Turkey 

Under  the  MEDA  Indicative  Programme  for  Turkey,  the  European  Commission 
committed  ECU  70,2 million  in  1997  to  strengthen  civil  society  and  human  rights, 
promote  small  and  medium  enterprises  and  improve  living  standards  among  the  most 
needy  parts  of  the  population.  The  1997  projects  include  a  drinking  water  supply 
network  in  South  Eastern  Turkey,  a  cancer  prediagnosis  project  and  several  non 
governmental  organisation  (NGO)  initiatives  related  to  human  rights  and  civil  society  as 
well  as  several  vocational 
to  finance  private 
investments -- mainly  in joint  ventures. 

training  activities  and  risk  capital 

These  initiatives  make  a  positive  contribution  because  it  is  clear  that  the  human  rights 
problems  in  South  Eastern  Turkey  are  in  part  linked  to  the  lack  of  economic  prospects 
there.  Thus  by  working  together  with  Turkish  organisations  to  strengthen  civil  society 
and  create  a chance  for  a better  future,  it  is hoped  to  stimulate  economic  development  in 
the region which  in turn can contribute to improving  the human rights  situation 

Twenty  NGOs  have  been  awarded  grants  for  actions  in the  field  of consumer  protection, 
women's  status  and  education,  empowerment  and  management  of  NGOs,  children's 
rights  and  protection,  education  and  training  on  human  rights,  as  well  as  administrative 
reform  and  migration. 

The  total  amount  committed  by  the  EU  for  Turkey  under  MEDA  for  the  period  1996-
1997  amounts  to  ECU  103.3 million  (ECU 33.1  million  in  1996;  ECU  70.2 million  in 
1997).  At  the  end  of  1997  discussions  were  commenced  with  the  Turkish  authorities 
regarding  the  framework  convention. 

At 

Structural  adjustment 

In both the Maghreb  and the Mashreq, support  for  structural  adjustment  remains  one of 
the key instruments through which the European Union supports the process of economic 
transition  in preparation of the creation of a Euro-Mediterranean  liée trade area.  As 1996 
was  the  first  full  year  of  implementation  of  the  MEDA  programme,  the  emphasis  was 
initially  on  the  negotiation  of  new  programmes  with  partners.  As  a  result,  four 
programmes  were approved  in  1996 for  a total  amount  of  ECU  445  million  (ECU 350 
million MEDA funds, and the remaining ECU 95 million protocol  funds). 

In  1997  more  emphasis  was  given  to  the  implementation  of  the  programmes, 
necessitating  frequent  policy  dialogues  with  partners,  as  well  as  the  Bretton  Woods 
Institutions. 

Overall, good progress has been made in the implementation of the structural  adjustment 
programmes,  although  in  some  cases  delays  have  been  encountered  mainly  due  to 
insufficient  compliance with the mutually agreed performance  criteria. 

Table: Support for structural adjustment in the MEDA programme. 

-

Morocco 

Algeria 

Jordan 

Tunisia 

Year of approval 

Amount 

(tZCU  m) 

Status as at end 1997 

1996 

1996 

1996 

1996 

120 

1st  tranche (ECU 30 m) disbursed in 1997. 

125  1/ 

Policy dialogue ongoing. 1st tranche yet to be disbursed. 

100 

100 

Programme  completed.  1st  tranche 
disbursed in 1996, 2™* tranche (ECU 40 m) in 1997. 

(ECU  60  m) 

Programme  completed 
disbursed in 1996, 2™* tranche (ECU 60 m) in 1997. 

tranche 

(ECU  40  m) 

1st 

1/. Of which ECU 95 million from protocol funds. 

Ah 

2. 

Regional  cooperation 

The  regional  indicative  programme  complements  and  reinforces  the  bilateral  indicative 
programmes  and  foresees  the  implementation  of  activities  in  all  three  domains  of  the 
Barcelona  Declaration,  namely  the  political  and  security  dimension;  the  economic  and 
financial  dimension;  the social, cultural  and human  dimension. 

In  the  political  and  security  dimension,  activities  will  contribute  to  the  creation  of  a 
region  of  peace  and  stability.  They  include,  for  example,  a  network  of  foreign  policy 
institutes  and  a  prevention  and  management  pilot  scheme  for  disasters  of  natural  and 
human  origin. 

In the economic  and  financial  dimension, the objectives  at a regional  level  are to:  conduct 
a  dialogue  on  the  alignment  of  sectoral  economic  policies;  foster  cooperation  between 
non-governmental  entities  such  as  chambers  of  commerce,  economic  institutes  and  trade 
promotion  bodies;  carry  out  regional  projects  which  usefully  complement  bilateral 
measures. 

Activities  undertaken  up to  the end  of  1997  include  the creation  of a  Euro-Mediterranean 
investment  and 
network  of  economic 
developing  capital  markets  and  a  programme  to  promote  private  sector  investment  in 
infrastructure.  Sectoral  projects  implemented  include  maritime  transport  and  statistical 
cooperation. 

institutes,  conferences  on 

increasing 

inward 

The  aim  of the  social, cultural  and  human  dimension  of the  Partnership  is to bring  people 
closer,  promote  understanding  between  them  and  improve  their  perception  of  each  other. 
These  goals  apply  in  a  variety  of  areas  including  education,  youth,  the  media,  the 
development  of civil  society  and the dialogue  between  cultures  civilisations. 

The  main  activity  undertaken  was  the  "Euromed  Heritage"  programme  on  cultural 
heritage. 

Also  under  the  MEDA  Regional  Indicative  Programme  the  European  Commission  has 
provided  grant  financing  for  small  activities  (less  than  ECU  500,000)  pertaining  to  the 
Euro-Mediterranean  Partnership.  This type  of  financing  concerned  in  1997  120  activities 
for  almost  ECU  14 million. These activities  are divided  into  5 categories: activities  of  the 
Barcelona  Process  (18  activities  for  ECU  3.0  million);  economic  cooperation  (12 
activities  for  ECU  1.8  million);  information  and  culture  actions  (7  activities  for  ECU  2.1 
million); micro-actions  (73  actions  for  4.5  million);  Euro-Arab cooperation  (10  activities 
for  ECU 2.35  million). 

Ak 

Annex 1 

Publications 

-  The Barcelona Declaration and Work Programme 

-  The Euro-Mediterranean  Partnership with an illustration of the concrete measures being 
implemented 

-  Support for structural  adjustment 

-  Private sector development 

-  Economic transition 

- 36 information  notes on implementation of the Euro-Mediterranean  Partnership 

A6 

Annex 2 

M EDA  COMMITMENTS AND PAYMENTS 

1995-1999, in ECU millions 

1995 

1996 

1997 

1998 

1999 

1.  Commitments 

1.1  Available credits 

1.2  Actual commitments 

- Structural  adjustment 

- Economic transition 

- Development 

- Regional 

(976) 

173 

173 

0 

37 

37 

99 

403 

403 

200 

13 

158 

32 

981 

981 

150 

100 

623 

108 

943 

(943) 

(0) 

(513) 

(338) 

(92) 

2.  Actual  payments 

50 

155 

212 

(315) 

Total commitments  1995-1999; ECU 3,476 million 

N.B. figures between brackets are forecasts 

> 

Forecast  of commitment  credits  / Project  payments 

MEDA 

1995 

1996 

19S8 

2000 

200T1 

2002 

2003 

S SI  Committed 

j | | | ||  Commitment forecast 

paid 

Payment forecast 

Total commitments 1995 -1999:3.475,5 
Total payments 1995 - 2003:3.475,5 
Project payment forecasts assume an average project duration of 4 to 5 years. 

Annex  3 

BREAKDOWN OF FINANCIAL EXECUTION  1996-1997 

Pays 

.  Projet 

Algerie 

Ajustement  structurel 

Total a 
engager 
sur  MEDA 
30.000.000 

Algerie 

BEI - bonification  d'interets  : environnement 

10.750.000 

Engage  en 
1996 

Paye  en 
1996 

Engage  en 
1997 

Paye en 
1997 

30.000.000 

10.750.000 

Chypre 

BEI - bonification  d'interets 

2.960.000 

2.960.000 

560.219 

Cisjordanie 

Appui au ministere de  I'education 

20.000.000 

20.000.000 

20.000.000 

X 

Cisjordanie 

BEI - Capitaux  a risques  (real  estate) 

1.000.000 

Cisjordanie' 

BEI - bonification  d'interets  : environnement 

7.400.000 

Cisjordanie 

Cooperation  aveo les douanes 

Cisjordanie 

Developpement du secteur  prive 

Cisjordanie 

Fonds de  stabilisation 

1.200.000 

3.000.000 

25.000.000 

Cisjordanie 

Soutien a I'Autorite palestinienne  (COTER) 

3.600.000 

Egypte 

BEI - Bonification  d'interets (ECC  Grey  Cement) 

2.700.000 

1.000.000 

7.400.000 

1.200.000 

3.000.000 

25.000.000 

25.000.000 

3.600.000 

2.700.000 

Egypte 

BEI - bonification  d'interets  : environnement 

19.880.000 

19.880.000 

1.930.389 

Egypte 

Fonds  social 

155.000.00 

55.000.000 

100.000.00 

Egypte 

Education 

jJordanie 

/ \ ; I ':  k 

:i'-  i  •"  :-'LJ  ."  '.'C' 

L  , 
•  -
iJordanie 
jLiban 

6Q1 

'  . 

l~"  r 

-v 

0 

100.000.00 

0 

100,000.00 

0 
10.000.000 

0 

100.000.00 

0 

100.000.00 
0 

60.000.000 

40.000.000 

10.000.000 

5.000.000 

1 

Liban 

' 

i 

r  ?,  <i  lOconsiruction 

21.000.000 

21.000.000 

_

,

/

.

.. 

MS3istan«,,e ieriabmialion administration  libanaise 

38.000.000 

10.000.000 

28.000.000 

-C 

''Liban 
1 
j Liban 

i 

Maite 

Liban 

BEI - bonification  d'interets  : environnement 

10.325.000 

JBEl - bonification  d'interets  : Tripoli  Wastewater 
i 
Normalisation 

20.785.000 

6.000.000 

BE! - bonification d'interets 

Maroc 

Ajustement  structure! 

Maroc 

Developpement pistes / routes  rurales 

Maroc 

Eau en zones  rurales 

.  2.800.000 

120.000.00 

0 
30.000.000 

40.000.000 

10.325.000 

20.785.000 

6.000.000 

2.800.000 

120.000.00 

30.000.000 

0 
30.000.000 

40.000.000 

Maroc 

BEI - bonification d'interets : assainissement 

7.575.000 

Maroc 

Formation professionnelle 

38.000.000 

Syrie 

Syrie 

Syrie 

Syrie 

Syrie 

Syrie 

Programme de soutien au secteur  forestier 

3.500.000 

3.500.000 

Developpement du tourisme culturel 

3.000.000 

3.000.000 

Modernisation des administrations locales 

18.000.000 

6.000.000 

Soutien Telecommunications 

Ecole de management 

Reforme du Ministere des Finances 

5.500.000 

14.000.000 

10.500.000 

7.575.000 

38.000.000 

12.000.000 

5.500.000 

14.000.000 

10.500.000 

Tunisie 

Ajustement structurel 

0 

Tunisie 

Amelioration de la competitivite 

100.000.00 

0 
10.000.000 

100.000.00 
0 
10.000.000 

40.000.000 

60.000.000 

Tunisie 

Tunisie 

Tunisie 

Tunisie 

v 

Appui a la formation professionnelle 
(MANFORM) 
BEI: capitaux a risques : privatisation des 
entreprises publiques 
Appui au programme de privatisation 

Appui a la promotion des investissements 
exterieurs 

45.000.000 

10.000.000 

35.000.000 

700.050 

15.000.000 

10.000.000 

4.000.000 

15.000.000 

10.000.000 

4.000.000 

Tunisie 

BEI  : capitaux  a risques  : industrie 

15.000.000 

Tunisie 

Tunisie 

Programme  de developpement  rural et de 
gestion des  ressources  naturelles 
B E I:  bonification d'interets  (Lac  Sud) 

50.000.000 

9.250.000 

Turquie 

Food  inspection  services 

10.123.000 

10.123.000 

Turquie 

Jean  Monnet  Fellowships  programme 

5.000.000 

5.000.000 

Turquie 

Creation  of business  and  innovation  centres 

3.165.000 

3.165.000 

Turquie 

Turquie 

Mobilisation for economic  and  social 
development (IULA  ONG) 
Modernization  project  in  education 

855.000 

855.000 

14.000.000 

14.000.000 

Turquie 

Magazine  Anadolu 

Turquie 

Urban community  empowerment 

Turquie 

BEI - capitaux  a^ risques 

Turquie 

Turquie 

Turquie 

Environment  standard for equipment  in the 
textile sector  (Kosgeb) 
Women  Cancer  prediagnosis 

BEI - bonification d'interets - Izmit  industrial 
wastewater  project 

250.000 

1.025.650 

12.000.000 

1.000.000 

1.900.000 

11.395.000 

15.000.000 

50.000.000 

9.250.000 

250.000 

1.025.650 

12.000.000 

1.000.000 

1.900.000 

11.395.000 

3.208.862 

Turquie 

Turquie 

Turquie 

Turquie 

Turquie 

Industrial zone for SME's of the auto 
components sector (Kosgeb) 
Information network for SME's 

Vocational training center in the shoes sector 
(Kosgeb) 
Vocational training center in the clothing sector 
(Kosgeb) 
Formation de femmes entrepreneurs 

1.245.000 

773.000 

1.962.000 

1.490.000 

1.040.000 

Turquie 

Sanliurfa drinking water supply project 

21.300.000 

Turquie 

Forming consummer awareness 

Turquie 

Turquie 

Turquie 

Turquie 

BEI - bonification d'interets  - Adana wastewater 
project 
EC studies center 

17 projets pour la promotion des droits de 
I'homme (ONGs) 
Cultural integration of Turkish society 

Turquie 

Euro-Turkish dialogue 

Turquie 

Program on state reform in Turkey 

410.000 

10.800.000 

300.000 

2.100.000 

150.000 

500.000 

600.000 

1.245.000 

773.000 

1.962.000 

1.490.000 

1.040.000 

21.300.000 

410.000 

10.800.000 

300.000 

2.100.000 

150.000 

500.000 

600.000 

Regional 

Cooperation statistique (MEDSTAT) 

20.000.000 20.000.000 

209.952 

1.744.597 

Regional 

Regional  projects  (Middle  East peace  process) 

15.000.000 

15.000.000 

390.250 

Regional 

Icarda-Research  support (CGIAR)  1996 

1.190.000 

Regional 

Icarda-Research  support  (CGIAR)  1997 

1.320.000 

Regional 

MEDA  TEAMS 

Regional 

BEI - capitaux  a  risques 

Regional 

CIHEAM 

Regional 

Transports  maritimes 

Regional 

Patrimoine  culturel 

Regional 

Programme  population 

70.000.000 

10.000.000 

6.000.000 

8.409.651 

17.164.673 

7.000.000 

1.190.000 

1.320.000 

22.000.000 

1.466.400 

10.000.000 

6.000.000 

8.409.651 

17.164.673 

7.000.000 

Regional 

Allocation globale  regionale  1996 +  1997 

40.000.000 

12.477.000 

5.984.978 

20.666.466 

13.910.739 

Regional 

Paiements  divers sur engagements  anterieurs a 
1996 

28.437.877 

27.673.051 

Total 

1.439.192.9 
74 

403.000.00 
0 

154.632.80 

981.336.44 

211.584.55 

7 

0 

7 

Crédits 
disponibles 

403.000.00 
0 

202.000.00 

981.400.00 

314.700.00 

0 

0 

0 

Pourcentag 

es 
d'exécution 

100,0% 

76,6% 

100,0% 

67,2% 

™^ 

ISSN 0254-1475 

COM(98) 524 final 

DOCUMENTS 

EN 

11  01  06  17 

Catalogue  number  :  CB-CG-98-532-EN-C 

ISBN  92-78-34775-2 

Office  for  Official  Publications of the European Communities 

L-2985 Luxembourg