COMMON POSITION (EC) No 64/98 adopted by the Council on 13 October 1998 with a view to adopting Council Regulation (EC) No /98 of ... amending Regulation (EC) No 1734/94 on financial and technical cooperation with the Occupied Territories
Date: 1998-10-13
Institutions: Council of the European Union
Subjects: EU aid, Palestine question, financial cooperation, occupied territory, technical cooperation

14.12.98

EN

Official  Journal  of  the  European  Communities

C 388/7

COMMON  POSITION  (EC)  No  64/98

adopted  by  the  Council  on  13  October  1998

with a view to adopting Council Regulation (EC) No 

/98 of . . . amending Regulation (EC)

No  1734/94  on  financial  and  technical  cooperation  with  the  Occupied  Territories

(98/C 388/03)

THE  COUNCIL  OF  THE  EUROPEAN  UNION,

Having  regard  to  the  Treaty  establishing  the  European
Community,  and  in  particular  Article  130w  thereof,

Having  regard  to  the  proposal  from  the  Commission (1),

Acting  in  accordance  with  the  procedure  referred  to  in
Article  189c  of  the  Treaty (2),

Whereas Council Regulation (EC) No 1734/94 of 11 July
1994  on  financial  and  technical  cooperation  with  the
Occupied  Territories (3)  lays  down  detailed  arrangements
and  rules  for  administering  the  Community  programme
for aid and assistance to the Palestinian population in the
West  Bank  and  Gaza  Strip;

Whereas, according to that Regulation, the Community is
to implement financial and technical cooperation with the
West Bank and Gaza Strip under a five-year programme;
whereas  this  programme  expires  at  the  end  of  1998;

Whereas the persistent deadlock in the peace process that
prevails  is  the  worst  crisis  since  the  Middle  East  peace
process  was  launched  in  1991;  whereas  international
economic  assistance  has  nevertheless  succeeded 
in
maintaining  the  peace  process  alive  and  providing
support  for  the  Palestinian  Authority;

the  objective 

to  prevent  any 

Whereas 
further
is 
deterioration  of  the  Palestinian  economy  by  minimising
and  cancelling  out  the  effects  of  closures  and  other
obstacles  to  development  as  well  as  to  contribute  to  a
sound  management  and  fiscal  balance  of  the  Palestinian
Authority  and  to  consolidate  it  by  means  of  institutional
reinforcement;

the  ultimate  aim 

Whereas 
the  achievement  of
sustainable  economic  and  social  development  and  to
foster  democracy,  human  rights  and  the  development  of
civil society;

is 

Whereas,  given  the  present  situation,  the  Community
should  pursue  its  aid  effort;  whereas  to  this  end  a
five-year  period  of  assistance  (1999  to  2003)  should  be
launched  and  Regulation  (EC)  No  1734/94  amended
accordingly;  whereas  this  Regulation  should  be  reviewed
by  the  Council  within  two  years  and  not  later  than
31  December  2000  in  order  to  take  into  account  recent
development  and  bring  it  into  line  with  the  reviewed
Council Regulation (EC) No 1488/96 of 23 July 1996 on
financial  and  technical  measures  to  accompany  (MEDA)
the  reform  of  economic  and  social  structures  in  the
framework  of  the  Euro-Mediterranean  partnership (4);

Whereas  the  words  ‘the  Occupied  Territories’  should  be
replaced  by 
‘the  West  Bank  and  the  Gaza  Strip’
throughout  the  text  of  Regulation  (EC)  No  1734/94;

Whereas  Article  4  of  Regulation  (EC)  No  1734/94
provides  that  all  financing  decisions  on  projects  and
operations  are  to  be  adopted  in  accordance  with  the
procedure  laid  down  in  Article  5  thereof;  whereas,  in
order  to  allow  for  rapid  and  flexible  reactions  and  to
increase  expediency,  only  financing  decisions  exceeding
ECU  2 000 000  other  than  those  relating  to  interest-rate
subsidies on Bank loans should be adopted in accordance
with  that  procedure;

Whereas  Council  Decision  No  97/256/EC  of  14  April
1997  granting  a  Community  guarantee  to  the  European
Investment  Bank  against  losses  under  loans  for  projects
outside  the  Community  (Central  and  East  European
countries,  Mediterranean  countries,  Latin  America  and
Asian  countries  and  South  Africa) (5)  covers  guarantees
also  in  this  region  for  the  period  to  the  year  2000,

(1) OJ  C  253,  12.8.1998,  p.  15.
(2) Opinion  of  the  European  Parliament  of  16  September  1998
(OJ C 313, 12.10.1998, p. 66), Council Common Position of
13  October  1998,  and  Decision  of  the  European  Parliament
of  . . .  (not  yet  published  in  the  Official  Journal).

(3) OJ  L  182,  16.7.1994,  p.  4.

(4) OJ  L  189,  30.7.1996,  p.  1.  Regulation  as  amended  by
Regulation  (EC)  No  780/98  (OJ  L  113,  15.4.1998,  p.  3).
(5) OJ  L  102,  19.4.1997,  p.  33.  Decision  as  amended  by
Decision  No  98/348/EC  (OJ  L  155,  29.5.1998,  p.  53).

C 388/8

EN

Official  Journal  of  the  European  Communities

14.12.98

HAD  ADOPTED  THIS  REGULATION:

Article  1

Regulation  (EC)  No  1734/94  is  amended  as  follows:

1. The  title  shall  be  replaced  by  the  following:  ‘Council
Regulation  (EC)  No  1734/94  of  11  July  1994  on
financial  and  technical  cooperation  with  the  West
Bank  and  the  Gaza  Strip’.

‘The said projects and operations shall aim, inter
alia,  at  the  promotion  of  employment  and  the
creation  of  employment  by  improving  the  social
services  and  combating  poverty.’;

(c)

in  paragraphs  5  and  6  ‘the  Occupied  Territories’
shall be replaced by ‘the West Bank and the Gaza
Strip’.

4.

In  Article  3  ‘the  Occupied  Territories’  shall  be
replaced  by  ‘the  West  Bank  and  the  Gaza  Strip’.

2. Article  1  shall  be  replaced  by  the  following:

5. Article  4(1) 
following:

to 

(3)  shall  be  replaced  by 

the

‘Article  1

economic, 

the  aim  of  aiding 

The  Community  shall  implement  financial  and
1.
technical  cooperation  with  the  West  Bank  and  the
Gaza  Strip  under  a  five-year  period  (1999  to  2003)
their  achievement  of
with 
sustainable 
social
and 
development.  Should  new  financial  perspectives  be
adopted for the period after 2000, the amount of this
cooperation  shall  be  determined  in  accordance  with
the  financial  perspectives  and  conditional  on  the
budgetary  authority  deciding  the  amount  in  the
annual  budgetary  procedure.

political 

later 

shall  also 

2. Within 
than
two  years  and  not 
31  December  2000,  the  Council  shall  review  this
Regulation on the basis of  an  independent  evaluation
of  the  programmes  as  envisaged  in  Article  6.  This
review 
recent
take 
developments  in  the  area  and  might  also  consider
bringing  the  Regulation 
line  with  Council
Regulation  (EC)  No  1488/96  of  23  July  1996  on
financial  and 
to  accompany
technical  measures 
(MEDA) the reform of economic and social structures
the  Euro-Mediterranean
in 
partnership (*).

framework  of 

into  account 

into 

the 

(*) OJ  L  189,  30.7.1996,  p.  1.  Regulation  as
amended  by  Regulation  (EC)  No  780/98  (OJ
L  113,  15.4.1998,  p.  3)’.

3. Article  2  shall  be  amended  as  follows:

(a)

the  words  ‘and  the  development  of  civil  society’
shall  be  added  after  ‘human  rights’  at  the  end  of
paragraph  1;

‘1.
Financing  decisions  on  projects  and  operations
under  this  Regulation  exceeding  ECU  2 000 000
other  than  those  relating  to  interest-rate  subsidies  on
bank  loans  shall  be  adopted  in  accordance  with  the
procedure  laid  down  in  Article  5.

2.
Financing  decisions  on  overall  allocations  for
technical  cooperation,  training  and  trade  promotion
shall  be  adopted  in  accordance  with  the  procedure
laid  down  in  Article  5.  Within  an  overall  allocation,
the  Commission  shall  adopt  financing  decisions  not
exceeding  ECU  2 000 000.

The  Committee  referred  to  in  Article  5  shall  be
informed  systematically  and  promptly,  and  in  any
event  before  the  next  meeting,  of  financing  decisions
for  measures 
than
ECU  2 000 000.

involving  more 

not 

Decisions  amending  financing  decisions  adopted
3.
in  accordance  with  the  procedure  laid  down  in
Article  5  shall  be  taken  by  the  Commission  where
they  do  not  entail  any  substantial  amendments  or
additional  commitments  in  excess  of  20 %  of  the
original  commitment.  The  Commission  shall  inform
the Committee referred to in Article 5 immediately of
any  such  decisions’.

6. Article  5(1)  shall  be  replaced  by  the  following:

(b)

the  following  subparagraph  shall  be  added  to
paragraph  3:

The  Commission  shall  be  assisted  by  the  MED
to  Article  11  of

‘1.
Committee  set  up  pursuant 
Regulation  (EC)  No  1488/96’.

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C 388/9

7. Article  6(1)  shall  be  replaced  by  the  following:

Article  2

‘1.
The  Commission  shall  examine  the  state  of
implementation  of  cooperation  under  this  Regulation
and  shall  report  annually  in  writing  to  the  European
Parliament  and  the  Council’.

This Regulation shall enter into force on the third day
following its publication in the Official Journal of the
European  Communities.

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  all  Member  States.

Done  at  . . .

For  the  Council

The  President

C 388/10

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Official  Journal  of  the  European  Communities

14.12.98

STATEMENT  OF  THE  COUNCIL’S  REASONS

I.

INTRODUCTION

1. On 23 June 1998 the Commission submitted to the Council a proposal for a Regulation
amending  Council  Regulation  (EC)  No  1734/94  on  financial  and  technical  cooperation
with  the  Occupied  Territories.  This  proposal  is  based  on  Article  130w  of  the  EC
Treaty.

2. The  European  Parliament  delivered  its  opinion  at  first  reading  on  16  September

1998 (1).

3.

In accordance with Article 189c of the Treaty, the Council adopted a Common Position
on  13  October  1998.

II. OBJECTIVE

In  the  light  of  the  persistent  deadlock  in  the  peace  process  and  the  part  played  by
international  economic  assistance  in  preventing  the  deterioration  of  the  Palestinian
economy, the Council adopted on 23 February 1998 conclusions approving the principle of
a  renewal  of  financial  assistance  to  the  Palestinian  Authority  and  inviting  the  Commission
to  submit  proposals  as  soon  as  possible.  The  Council  noted  that  the  Commission  had
evaluated  the  aid  provided  under  the  1994  to  1998  programme  and  considered  that  the
in  the
lessons 
implementation of future assistance. The Council shared the Commission’s concern that the
Palestinian  Authority  should  comply  in  full  with  its  commitments  on  transparency  and
accountability. The Commission proposal therefore meets this main objective of providing a
legal  framework  for  continued  financial  assistance  for  the  West  Bank  and  the  Gaza  Strip
taking  into  account  the  Council’s  conclusions.

learned  from  this  evaluation  should  be  taken  fully 

into  account 

A  review  is  to  be  carried  out  in  two  years,  and  not  later  than  31  December  2000,  to  take
account  of  recent  developments  in  the  area,  assess  the  implementation  of  cooperation  and
finish bringing this Regulation into line with the MEDA Regulation. The Common Position
also contains committee procedure provisions aligning the procedure on that laid down for
the MED Committee, notably as regards relating projects involving less than ECU 2 million.
In  addition,  certain  details  to  the  objectives  of  and  procedures  for  granting  financial
assistance have been added. The name ‘Occupied Territories’ has been replaced by ‘the West
Bank  and  the  Gaza  Strip’.

III. ANALYSIS  OF  THE  COMMON  POSITION

GENERAL  OBSERVATIONS

Regarding the period for which financial assistance is to be renewed, the Common Position
includes  an  amendment  requested  by  the  European  Parliament  and  adopted  by  the
Commission providing for a five year period (1999 to 2003) instead of eight years. This is
reflected  in  amendments  to  the  recital  and  in  the  new  Article  1  of  the  1994  Regulation.

(1) OJ  C  313,  12.10.1998,  p.  66.

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The Council did not include amendments 4 and 5 requested by the European Parliament in
its  Common  Position,  taking  the  view  that  interinstitutional  discussions  on  committee
procedure  should  be  dealt  with  in  a  wider  framework.

SPECIFIC  OBSERVATIONS

Recitals

The  sixth  recital  has  been  amended  to  take  account  of  the  Regulation’s  new  period  of
validity.

The  Common  Position  includes  the  last  recital  proposed  by  the  Parliament  referring  to
Decision  No  97/256/EC  granting  a  Community  guarantee  for  EIB  loans.

Article  1

— Article  1(1)

The Common Position incorporates amendment 6 proposed by the European Parliament
referring  to  the  new  financial  perspectives  for  the  period  after  2000,

— Article  1(2)

The  Council  felt  it  necessary  to  amend  the  text  of  the  Commission  proposal  to  include
in  the  two-year  review  clause  a  broader  reference  to  the  evaluation  provided  for  in
Article  6  of  the  1994  Regulation,  as  the  outcome  of  that  evaluation  should  not  be
prejudged,

Amendments  proposed  by  the  European  Parliament  concerning  Article  4

(i)

second  subparagrah  of  paragraph  2

The  Commission  rejected  Parliament’s  amendment  4  suggesting  that  the  Commission
inform  the  Budget  Authority  of  financing  decisions.  The  Council  concurred,  the
Commission’s  approach  being  consistent  with  current  practice  regarding  committee
procedure.

(ii)

third  subparagraph  of  paragraph  2

Parliament’s  amendment  4  requesting  deletion  of  this  subparagraph  was  rejected  by
the  Commission  and  the  Council  concurred  as  this  subparagraph  corresponds  to  the
procedure  actually  applied  in  the  MED  Committee  set  up  by  the  MEDA  Regulation
(Article  9(5)).

(iii) paragraphs  1a  and  1b

The  Commission  rejected  the  additions  requested  by  the  Parliament  (amendment  5).
The  Council  concurred,  on  the  grounds  that  one  of  the  proposal’s  objectives  was  to
align  the  1994  Regulation  on  the  provisions  laid  down  in  the  MEDA  Regulation,
particularly  as  regards  the  MED  Committee.