Proposal for a Council Regulation (EC) regarding the implementation of measures to intensify the EC-Turkey customs union
Date: 1998-10-21
Institutions: European Commission
Subjects: EU aid, Türkiye, customs union, economic development, social development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.10.1998 
COM(1998) 600  final 

98/0299 (CNS) 
98/0300 (SYN) 

Proposal for a 

COUNCIL REGULATION  (EC) 

REGARDING THE IMPLEMENTATION  OF MEASURES TO INTENSIFY 
THE EC-TURKEY CUSTOMS UNION 

Proposal for a 

COUNCIL REGULATION  (EC) 

REGARDING THE IMPLEMENTATION  OF MEASURES TO PROMOTE 
ECONOMIC AND SOCIAL DEVELOPMENT IN TURKEY 

(presented by the Commission) 

Explanatory  Memorandum 

Since  the EC-Turkey  customs union came into force  on 31  December  1995  Turkey has 
been pressing ahead with far-reaching reforms to improve its economic competitiveness, 
restructure  and increase  the  efficiency  of  its public  sector,  modernise  its  economic and 
social infrastructure and develop its manufacturing sector. At a meeting on 6 March 1995 
the  Council  agreed  to  provide  financial  backing  for  the  customs  union  in the  form  of 
ECU 375 million of special budget aid and ECU 750 million of EIB special loans. Turkey 
is also eligible for budget aid and EIB loans under the Meda programme. 

The  Luxembourg  European  Council  on  12/13  December  1997  confirmed  Turkey's 
eligibility for accession the European Union, and said it was important for a strategy to be 
drawn up to prepare it for accession by bringing it  closer to the European Union in every 
field.  The strategy was to consist of: 

development of the possibilities afforded by the Ankara Agreement; 

intensification of the customs union; 

implementation of financial cooperation; 

approximation of laws and adoption of the Union acquis; 

participation,  to be  decided  case  by case,  in certain Community  programmes and 
agencies. 

On 4 March the Commission presented a communication to prepare Turkey for accession 
entitled  the  European  Strategy  for  Turkey,  the  Commission's  initial  operational 
proposals. 

The  Cardiff  European  Council  on  15  and  16 June  welcomed  the  communication  as a 
platform  for  developing  relations  between the  European Union  and Turkey on a sound 
and evolutionary  basis,  calling  on the Commission to implement  the  strategy  and table 
any proposals  which  would  be  required to make  it effective.  It noted that the  strategy 
required financial support and invited the Commission to make the necessary proposals. 

In socio-economic terms Turkey is a country of stark contrasts, on the one hand pressing 
ahead with the approximation of its laws on those of the EU but on the other displaying 
severe regional economic disparities and a lack of the basic infrastructure needed to allow 
an even  spread  of  sustainable  development.  In some regions  and sectors  it  resembles a 
developed country, in others an LDC. 

Preparing the country for accession to the EU will  entail not only approximation of laws 
but  also,  simultaneously,  EU  aid  to  help  meet  the  basic  needs  of  the  population  as a 
whole. 

EU aid for implementation of the European strategy for Turkey will therefore be split into 
two parts, the first intended to help Turkey gradually take over the acquis communautaire 
and  hence  intensify  the  customs  union,  the  second,  a  response  to  the  regional 
development  inequalities  within  the  country,  earmarked  for  measures  to  strengthen  its 
economic  and  social  cohesion  and  allow  a  more  even  countrywide  spread  of 
development. 

To  enable  it  to  respond  to  the  request  made  by  the  Cardiff  European  Council  on 
15/16 June,  the  Commission  is  asked  to  approve  the  two  attached  draft  proposals  for 
Regulations. 

They  were  drawn  up  account  being  taken  of  the  fact  that,  as  pointed  out  by  the 
Luxembourg  European  Council,  the  strengthening  of  the  links  between  the  EU  and 
Turkey depends also on whether Turkey continues the political  and economic  reforms it 
initiated, in particular in aligning human rights standards and practices on those of the EU 
and respecting and protecting minorities. 

The draft proposals concern: 

-  measures  to  intensify  the  EC-Turkev  customs  union.  The  Regulation  would  provide 
Turkey with a total of ECU 15 million  in the form of grant aid during a three-year period 
(1991-2001); 

-  measures  to  promote  economic  and  social  development  in  Turkey.  The  Regulation 
would provide Turkey with a total of ECU 135 million  in the form of grant aid during a 
three-year period (1991-2001); 

COUNCIL REGULATION (EC) No. 

of. 

98/ 0299CCNS) 

REGARDING THE IMPLEMENTATION OF MEASURES TO INTENSIFY 
THE EC-TURKEY CUSTOMS UNION 

4 

h 

THE COUNCIL OF THE EUROPEAN 
UNION, 

1995, Turkey has been pushing ahead 
with economic reform; 

Having regard to the Treaty establishing 
the European Community and in 
particular Article 235 thereof, 

Having regard to the proposal from the 
Commission, 

Having regard to the Opinion of the 
European Parliament, 

Whereas the Luxembourg European 
Council on  12 and  13 December 1997 
confirmed  that Turkey was eligible to 
accede to the European Union; 

Whereas on 4 March 1998 the 
Commission presented to the Council a 
communication entitled the European 
strategy for  Turkey:  the Commission 's 
initial operational proposals to prepare 
Turkey for accession; 

Whereas the Cardiff European Council 
on  15 and  16 June  1998 welcomed the 
Commission's communication as a 
platform for developing relations 
between the European Union and Turkey 
on a sound and evolutionary basis; 

Whereas the Commission was requested 
by the Cardiff European Council to table 
any proposals which would be required 
to implement the European strategy; 

Whereas the Cardiff European Council 
pointed out that the European strategy 
would require financial  support; 

Whereas, since the EC-Turkey customs 
union came into force on 31 December 

Whereas the provisions of this 
Regulation are based on respect for 
democratic principles, the rule of law, 
human rights and fundamental  freedoms 
and respect for international law, which 
underpin the policies of the European 
Community and its Member States; 

Whereas the Community attaches great 
importance to the process on which 
Turkey has embarked to improve its 
democratic practices, promote respect 
for fundamental human rights and more 
closely involve civil society in its 
development; 

Whereas a financial reference amount 
within the meaning of point 2 of the 
Declaration of the European Parliament, 
the Council and the Commission of 
6 March 1995 has been included in this 
Regulation for the period  1999-2001, 
although it does not affect  the 
competence of the budgetary authority as 
defined by the Treaty; 

Whereas the projects and programmes 
financed  on this basis must help achieve 
the objectives laid down in the 
Commission communication to the 
Council of 4 March  1998, and in 
particular approximation of legislation, 
the adoption by Turkey of the Union 
acquis and the institutional development 
connected with adopting the Union 
acquis; 

Whereas the Treaty does not provide any 
powers other than those pursuant to 
Article 235 for the adoption of this 
Regulation, 

1 

HAS ADOPTED THIS REGULATION: 

from  the Commission, may decide 
upon appropriate measures. 

Article 1 

Article 4 

The Community shall assist Turkey in 
preparing for accession by establishing 
closer links with the European Union in 
all fields connected with the 
intensification of the customs union. 

Article 2 

The financial reference amount for this 
Regulation is ECU  15 million for the 
period 1999-2001. 

The annual appropriations shall be 
authorised by the budgetary authority 
within the limits of the  financial 
perspectives. 

Article 3 

Cooperation projects and operations 
may be financed in the following 
indicative areas: 

- 

support for the alignment of 
Turkish legislation on that of the 
Community and assistance with 
the institutional development 
connected with that adjustment; 

-  access to the single market, 

including development of the 
requisite certification and quality 
instruments; 

-  assistance for the liberalisation of 
capital movements between the 
Community and Turkey; 

1.  The beneficiaries of cooperation 

- 

projects and operations may include 
not only the Turkish state and 
regions but also local authorities, 
regional organisations, public 
agencies, local or traditional 
communities, business support 
organisations, cooperatives and civil 
society, in particular associations, 
foundations and non-governmental 
organisations. 

2.  When an essential element for the 

continuation of assistance to Turkey 
is lacking, in particular in the case of 
violation of democratic principles, 
the rule of law, human rights and 
fundamental freedoms and 
international law, the Council, acting 
by qualified majority on a proposal 

cooperation to develop the 
customs union between the 
European Community and 
Turkey, in particular integrating 
Turkey into the pan-European 
rules of origin system and 
supporting its participation in the 
Transit and Single 
Administrative Document 
Conventions; 

-  helping Turkey to adapt its 

agricultural policy to incorporate 
the CAP measures needed to 
establish the free movement of 
agricultural goods; 

- 

cooperation in veterinary and 
plant health matters; 

Turkish participation in a number 
of Community programmes and 
agencies dealing with matters 
including the environment, 
research, education, training and 
youth; 

cooperation on competition 
policy and consumer policy, new 
technologies and the information 
society; 

cooperation on justice and home 
affairs; 

any form of cooperation seeking 
to defend and promote 
democracy, the rule of law, 
human rights and the protection 
of minorities. 

Article 5 

1.  Community assistance under this 
Regulation shall be in the form of 
grants. 

2.  The instruments to be employed in 
the course of the operations covered 
by this Regulation shall include 
technical assistance, training or other 
sendees, supplies and works, along 
with audits and evaluation and 
monitoring missions. 

3.  Community financing  may cover 

investment, with the exception of the 
purchase of buildings, and recurring 
costs (including administrative, 
maintenance and operational costs), 
taking account of the fact that the 
project must aim to have the 
recurring costs taken over by the 
beneficiaries. 

4.  A financial contribution from the 

partners defined in Article 3 shall be 
sought for each cooperation 
operation. The contribution 
requested shall be within the means 
of the partners concerned and shall 
depend on the nature of the 
operation. In specific cases where the 
partner is an NGO or a community-
based organisation, a contribution in 
kind may be made. 

5.  Opportunities may be sought for 

cofinancing with other providers of 
funds, especially with Member 
States. 

6.  The necessary measures shall be 

taken to emphasise the Community 
character of the aid provided under 
this Regulation. 

7.  The Commission, in conjunction 

with the Member States, may take 
any initiatives necessary for ensuring 
good coordination with the other 
providers of funds  involved. 

Article 6 

1.  The Commission shall appraise, 

approve and administer operations 
covered by this Regulation according 
to the budgetary and other 
procedures in force, and in particular 
those laid down in the Financial 
Regulation applicable to the general 
budget of the European Union. 

2.  Project and programme appraisal 

shall take into account the  following 
factors: 
- effectiveness  and viability of 
operations, 

- cultural, social, gender and 
environmental aspects, 
- institutional development necessary 
to achieve project goals, 
- experience gained from operations 
of the same kind. 

Decisions relating to grants of more 
than ECU 2 million for  individual 
operations financed under this 
Regulation shall be taken under the 
procedure laid down in Article 7. 

The Commission shall inform  the 
Committee referred  to in Article 7 
succinctly of any financing  decisions 
it intends to take with regard to 
projects and programmes of less than 
ECU 2 million in value. The 
information  shall be made available 
at least one week before the decision 
is taken. 

4. 

The Commission is authorised to 
approve, without seeking the opinion 
of the Committee referred to in 
Article 7, any extra commitments 
needed for covering expected or real 
cost overruns in connection with the 
operations, provided that the overrun 
or additional requirement is not more 
than 20% of the initial commitment 
fixed by the financing  decision. 

Where the additional  commitment 
referred  to in the previous 
subparagraph is less than ECU 4 
million, the Committee referred to in 
Article 7 shall be informed of the 
decision taken by the Commission. 
Where the said additional 
commitment is more than ECU 4 
million but less than 20%, the 
Committee's opinion shall be sought. 

5.  All financing agreements or contracts 
concluded under this Regulation 
shall provide for the Commission 
and the Court of Auditors to conduct 
on-the-spot checks according to the 
usual procedures laid down by the 
Commission under the rules in force, 
and in particular those of the 
Financial Regulation applicable to 
the general budget of the European 
Union. 

6.  Where operations are the subject of 
financing agreements between the 
Community and Turkey, such 
agreements shall stipulate that the 
payment of taxes, duties or any other 
charges is not to be covered by the 
Community. 

7.  Participation in invitations to tender 
and the award of contracts shall be 
open on equal terms to natural and 
legal persons of the Member States 
and Turkey. 

8.  Supplies shall originate in the 
Member States or Turkey. 

Article 7 

The Commission shall be assisted by the 
committee set up by 
Regulation (EC) No  1488/96 of 
23 July  1996,' known as the MED 
Committee, composed of the 
representatives of the Member States and 
chaired by the representative of the 
Commission, in accordance with the 
following  procedure. 

The representative of the Commission 
shall submit to the Committee a draft  of 

1 

OJL 189, 30.7.1996, p i. 

Î 

the measures to be taken. The 
Committee shall deliver its opinion on 
the draft, within a time limit which the 
Chairman may lay down according to the 
urgency of the matter. The opinion shall 
be delivered by the majority laid down in 
Article  148(2) of the Treaty in the case 
of decisions which the Council is 
required to adopt on a proposal from the 
Commission. The votes of the 
representatives of the Member States 
within the Committee shall be weighted 
in the manner set out in that Article. The 
Chairman shall not vote. 

The Commission shall adopt the 
measures envisaged if they are in 
accordance with the opinion of the 
Committee. 

If the measures envisaged are not in 
accordance with the opinion of the 
Committee or if no opinion is delivered, 
the Commission shall without delay 
submit to the Council a proposal relating 
to the measures to be taken. The Council 
shall act by qualified majority. 

If, on the expiry of a period of three 
months from the date of referral to the 
Council, the Council has not acted, the 
proposed measures shall be adopted by 
the Commission. 

Within one month of taking a decision, 
the Commission shall inform the 
Member States of the measures and 
projects approved, describing their 
nature, the sums attached to them and 
the partners involved. 

Article 8 

An exchange of views shall take place, 
once a year, on the basis of a 
presentation by the Commission's 
representative of the general guidelines 
for the operations to be carried out in the 
year ahead, in a meeting of the 
committee referred to in Article 7. 

Article 9 

After each budget year, the Commission 
shall report to the European Parliament 
and the Council, summarising the 
operations financed in the course of that 
year and assessing the implementation of 
this Regulation in that period. 

The summary shall in particular contain 
information about those with whom 
implementation contracts have been 
concluded. 

The report shall also include a summary 
of the conclusions of any evaluations, 
including those relating to specific 
operations. 

Article 10 

The Commission shall regularly assess 
operations financed by the Community 
in order to establish whether the 
objectives of the operations have been 
achieved and to provide guidelines for 
improving the effectiveness of future 
operations. The Commission shall 
submit to the Committee referred to in 
Article 7 a summary of the assessments 
made, which the latter may, if necessary, 
examine. Assessment reports shall be 
made available to any Member States 
requesting them. 

.? 

Article 11 

Article 12 

Three years after this Regulation enters 
into force, the Commission shall submit 
to the European Parliament and the 
Council an overall assessment of 
operations financed by the Community 
under this Regulation, together with 
suggestions regarding the future of this 
Regulation and, where necessary, 
proposals for amending it. 

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

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

Done at Brussels, 

For the Council 
The President 

4,V 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Implementation of measures to intensify  the EC-Turkey customs union. 

2.  BUDGET HEADING INVOLVED 

New  heading  B7-4035  to  be  established  for  budget  1999,  by  an  amending  and 
supplementary  budget. 

3.  LEGAL  BASIS 

Draft  proposal  for a Council  Regulation  on measures  to  to  intensify  the  EC-Turkey 
customs union (attached). 

4.  DESCRIPTION  OF OPERATION 

4.1 .General  objective 

Financial  support  for measures to  intensify  the  EC-Turkey  customs  union, in 
particular  the  alignment  of  Turkish  legislation  on  Community  legislation, 
action on quality, the  integration of Turkey  into the pan-European  system  of 
rules of origin or participation in certain Community  programmes. 

4.2.Period covered and arrangements for renewal or extension. 

The programme will last three years ( 1999-2001 ). 

5.  CLASSIFICATION  OF EXPENDITURE  OR  REVENUE 

5.1.  Non-compulsory  expenditure. 

5.2.  Differentiated  appropriations 

5.3. Type of revenue  involved. 

None, except  the reimbursement  of risk capital  if the operation  financed  is an 
economic success. 

6.  TYPE  OF EXPENDITURE  OR REVENUE 

-  Subsidy:  yes 

-  Subsidy for joint financing  with other sources in the public and/or private sector: 

yes, for certain operations 

- 

Interest subsidy:  none 

-  Other 

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

of the Community contribution to be reimbursed?  no 

-  Will  (he proposed  operation  cause  any  change  in  the  level  of  revenue?  If  so. 

what sort of change and what type of revenue is involved?  none 

7.  FINANCIAL  IMPACT. 

7.1. Method of calculating total cost of operation (definition  of unit costs) 

Evaluation  of  the  funds  needed  to  implement  the  operations  essential  for 
intensifying  EC-Turkey customs union. 

7.2. Itemised breakdown of cost. 

EC ECU Million (current prices) 

Indicative 
breakdown 

- Technical 
assistance 
- "institution 
building" 
- training 
- equipment 
- other 

" 

Total 

Year 
n 

1 

1 
1 
1  , 
1 

5 

n+ 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
subs, 
yrs 

Total 

1 

1 
1 
1 
1 

5 

1 

1 
1 
1 
1 

5 

3 

.} 
3 
3 
3 

15 

11 

7.3. Operational expenditure on studies, experts, etc., included in Part B of Budget 

7.4. Indicative schedule of commitment/payment appropriations.3.  Indicative 
schedule of appropriations 

Year 
n 

N+ 1 

n + 2 

n + 3 

n + 4 

Commitment 
appropriation 

Payment 
appropriations 

yearn 
n +1 
n + 2 
n + 3 
n + 4 
n + 5 
n + 6 
n + 7 

5 

5 

5 

2 
2 
1 

2 
2 
I 

2 
2 
1 

Total 

5 

5 

5 

8. FRAUD PREVENTION MEASURES 

- Specific checks planned 

n  i 5 
and 
subs, 
yrs 

Total 

15 

| 
-

• 

; 
• 
4 

1 

» 

Checks will be carried out at all levels of implementation of projects (invitations to 
tender, selection, drawing-up of contracts, provision of services and payments) by 
Commission  staff and the Commission's  Representation  in  Turkey and  by the Court of 
Auditors. 

n 

The checks will take account of contractual obligations and the principles of sound and 
efficient  management. 

Provisions concerning supervision  (presentation of reports, coordination  with the 
Commission, etc.) will be included in all the agreements or contracts concluded  between 
the Commission and those receiving payment. 

9. ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1. Specific  and quantified  objectives; target population. 

Specific objectives: links with general objective 
Implementation  of objectives  set out in the Commission  Communication 
to the Council  of 4 March  1998 entitled  "European strategy  for Turkey: 
the Commission's initital operational  proposals" and in particular the 
approximation  of legislation and the adoption by  Turkey of the EU acquis 

Target population:  distinguish  as applicable for  each objective: indicate 
the  end-beneficiaries  of  the  Community's financial  contribution and the 
intermediaries involved. 

public administration 
socio-economic agents 
farmers 
industrialists 
research workers 
scientists 
civil society 

9.2. Grounds for the operation 

-  Need  for  Community  financial  aid,  having  particular  regard  to  the 
impact  of  operations,  economies  of  scale, 

principle  of  subsidiarity: 
visibility of EU aid 

-  Choice of ways and means 

The various ways and means used will depend on the situation of the 
country and of each sector involved.  The operations to be financed  will be 
preceded by identification  and feasibility  studies. 

advantages over possible alternatives (comparative advantages) 
explanatory reference to similar Community or national operations 
spin-off and multiplier effects expected 

ll> 

- development and progress of EU-Turkey relations; 
- harmonisation of legislation and practices with Community 

acquis 

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

operation 

Turkey's political and economic stability. 
Our partners' determination to implement the planned operations. 

9.3. Monitoring and evaluation of the operation 

-  Performance indicators selected 

•  output indicators (measuring activities used) 
the number of cooperation schemes conducted between Turkish and 
Community institutions 

• 

impact indicators (measuring performance against objectives) 

- harmonisation of Turkey's legislation and standards with the Ell's 
- increase in trade 
- access to new technologies 
- transfer of know-how 
- impact on European investment in Turkey 
- impact on trade balance and balance of payments 

-  Details and frequency of planned evaluations 

The projects will be monitored and evaluated at regular intervals by the 
bodies implementing them, Commission staff and independent experts. 

On completion of an operation an evaluation report will be produced on its 
content and on the consequences and follow-up. 

-  Assessment of the results obtained (in the event of continuation or repeat 

of an existing operation) 

10.  ADMINISTRATIVE  EXPENDITURE  (PART  A  OF  SECTION  III  OF  THE 
GENERAL BUDGET).. 
(PART  A  OF  THE 
BUDGET) 

ADMINISTRATIVE  EXPENDITURE 

This section of the financial  statement must be sent to DGs IX and XIX; DC IX will then 
forward  it to DG XIX with its opinion. 

Actual  mobilisation of the necessary administrative resources will result  from the annual 
Commission decision on the allocation of resources, account being taken of the staff and 
additional  amounts granted  by the budgetary  authority. 

0.1 Impact on the number of posts 

Types of post 

Staff to be allocated to 
managing the operation 
Temporary 
posts 

Permanent 
posts 

Posts supplied 

time 

by using 
additional 
resources 

by using 
resources 
existing 
within the DG 
or department 
concerned 
0.25 

0.25 

0.25 

0.25 

3 years 

3 years 

Officials  or 
temporary  staff 

A 
B 
C 

Other resources 
Total 

0.25 

0.25 

0.50 

3 years 

For additional resources, indicate at what rate they are to be made available. 

// 

10.2 Overall financial impact of additional human resources 

Amounts 
81 000 
81 000 

Method of calculation 

0.25 X  108 000 X 3 years 
0.25 X 108 000 X 3 years 

(ECU) 

Officials 
Temporary staff 
Other resources (indicate 
budget heading) 

Total] 

162 000 

| 

Using the existing resources needed to administer the operation. 
The calculation is based on A-l, A-2, A-4, A-5, A-7 

The amounts express the total cost of the additional posts for the total length of the 
operation if it is of a specific duration, or for 12 months if it is of unspecified duration. 

10.3 Increase in other operating expenditure arising from the operation 

/? 

COUNCIL REGULATION (EC) No 

of. 

98/  0300(SYN) 

REGARDING THE IMPLEMENTATION  OF MEASURES TO PROMOTE 
ECONOMIC AND SOCIAL DEVELOPMENT IN TURKEY 

n 

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, 

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

Whereas relations between the European 
Union and Turkey are based mainly on 
the Association Agreement of 12 
September  1963 and the decisions of the 
Association Council which the 
Association Agreement set up; 

Whereas Turkey is engaged in 
substantial reform to improve its 
economy, restructure and increase the 
efficiency  of its public sector, modernise 
its economic and social  infrastructure 
and develop its manufacturing  sector; 

Whereas the Cardiff European Council 
on  15 and  16 June  1998 affirmed  the 
importance it attached to the 
implementation of the European strategy 
for Turkey and requested the 
Commission to table proposals 
(including proposals on financial 
matters) in that connection; 

Whereas income is unequally distributed 
across 'Turkey's provinces; whereas it 
will not be possible to act on the 
conclusions of the Cardiff  European 
Council unless these disparities are 
remedied by backing the development of 
regions which are lagging behind and by 
strengthening economic and social 
cohesion; 

Whereas the provisions of this 
Regulation are based on respect for 
Communication  6 +  1er pilier & fiche  -  version 6 

democratic principles, the rule of law, 
human rights and fundamental  freedoms 
and respect for international law, which 
underpin the policies of the European 
Community and its Member States; 

Whereas the Community attaches great 
importance to the process on which 
Turkey has embarked to improve its 
democratic practices, promote respect 
for fundamental  human rights and more 
closely involve civil society in its 
development; 

Whereas a financial reference amount 
within the meaning of point 2 of the 
Declaration of the European Parliament, 
the Council and the Commission of 6 
March  1995 has been included in this 
Regulation for the period  1999-2001, 
although it does not affect  the 
competence of the budgetary authority as 
defined by the Treaty; 

Whereas the projects and programmes 
financed  on this basis must  further 
Turkey's development, the reform  of its 
development policies and the 
restructuring of its institutional 
framework 

Whereas the projects and programmes 
financed on this basis must benefit the 
entire population affected  by Turkey's 
development lag, 

HAS ADOPTED THIS REGULATION: 

Article I 

The Community shall assist Turkey in its 
efforts to achieve economic and social 
development. 

Article 2 

The financial reference amount for this 
Regulation is ECU 135 million for the 
period 1999-2001. 

The annual appropriations shall be 
authorised by the budgetary authority 
within the limits of the financial 
perspectives. 

Article 3 

1.  The beneficiaries  of cooperation 

projects and operations may include 
not only the Turkish state and 
regions but also local authorities, 
regional organisations, public 
agencies, local or traditional 
communities, business support 
organisations, cooperatives and civil 
society, in particular associations, 
foundations  and non-governmental 
organisations. 

2.  When an essential element for the 

continuation of assistance to Turkey 
is lacking, in particular in the event 
of the violation of democratic 
principles, the rule of law, human 
rights and fundamental  freedoms, 
and international law, the Council, 
acting by qualified  majority  on a 
proposal from the Commission, may 
decide upon appropriate measures. 

Article 4 

1.  Cooperation projects and operations 
may be financed in the  following 
indicative areas: 

-  modernising  manufacturing, 
improving institutional and 
infrastructure  capacity in areas 
including the environment, 
energy and transport; 

-  promotion of industrial 
cooperation by methods 
including support for 
diversification  in industry and 

Communication  6+ premier pilier & fiche- version 6 

the establishment of small and 
medium-sized enterprises; 

- 

cooperation in 
telecommunications, 
infrastructure, rural development 
and social services; 

-  boosting the capacity of the 

Turkish economy, inter alia by 
measures to  encourage the 
restructuring of the country's 
private sector and private 
initiative; 

- 

- 

- 

- 

- 

cooperation in protecting health; 

regional and cross-border 
cooperation; 

any form of cooperation seeking 
to defend and promote 
democracy, the rule of law, 
human rights and the protection 
of minorities; 

cooperation on humanitarian 
issues; 

all forms of assistance aimed at 
promoting the development of 
relations between the European 
Union and Turkey. 

2. 

Where appropriate, measures could 
be taken to underpin a structural 
adjustment  programme on the basis 
of the following principles: 

- support programmes must be 
tailored to Turkey's particular 
circumstances and take account 
of economic and social 
conditions; 

- support programmes must 

include measures to alleviate any 

2^o 

negative impact of the structural 
adjustment process in social and 
employment terms, in particular 
for the most disadvantaged 
sectors of the population; 

account must be taken of 
Turkey's economic situation, and 
in particular its level of 
indebtedness, debt servicing 
charges, balance of payments and 
foreign currency supply, 
monetary situation, per capita 
gross domestic product and 
unemployment level. 

Article 5 

1.  Community assistance under this 
Regulation shall be in the form of 
grants. 

2.  The instruments to be employed in 
the course of the operations covered 
by this Regulation shall include 
technical assistance, training or other 
services, supplies and works, along 
with audits and evaluation and 
monitoring missions. 

3.  Community financing may cover 

investment, with the exception of the 
purchase of buildings, and recurring 
costs (including administrative, 
maintenance and operational costs), 
taking account of the fact that the 
project must aim to have the 
recurring costs taken over by the 
beneficiaries. 

4.  A financial contribution from the 

partners defined in Article 3 shall be 
sought for each cooperation 
operation. The contribution 
requested shall be within the means 
of the partners concerned and shall 

Communication  6+ premier pilier & fiche- version 6 

depend on the nature of the 
operation. In specific cases where the 
partner is an NGO or a community-
based organisation, a contribution in 
kind may be made. 

5.  Opportunities may be sought for 

cofinancing with other providers of 
funds, especially with Member 
States. 

6.  The necessary measures shall be 

taken to emphasise the Community 
character of the aid provided under 
this Regulation. 

7.  In order to achieve the objectives of 
coherence and complementarity 
referred to in the Treaty and with the 
aim of guaranteeing optimum 
efficiency  for these action as a 
whole, the Commission will take all 
necessary coordination measures, 
notably: 

(a) the establishment of a system for 
systematic exchange and analysis 
of information on operations 
financed  or for which  financing 
is foreseen by the Community 
and the Member States; 

(b)on-the-spot coordination of these 
operations by means of regular 
meetings and exchange of 
information between the 
representatives of the 
Commission and Member States 
in the beneficiary country. 

8.  The Commission, in conjunction 

with the Member States, may take 
any initiatives necessary for ensuring 
good coordination with the other 
providers of funds involved. 

Article 6 

1.  The Commission shall  appraise, 

approve and administer  operations 
covered by this Regulation according 
to the budgetary and other 
procedures in force, and in particular 
those laid down in the Financial 
Regulation applicable to the general 
budget of the European Union. 

2.  Project and programme appraisal 

shall take into account the  following 
factors: 
- effectiveness  and viability of 
operations, 
- cultural, social, gender and 
environmental aspects, 
- institutional  development necessary 
to achieve project goals, 
- experience gained from  operations 
of the same kind. 

3.  Decisions relating to grants of more 
than ECU 2 million for  individual 
operations financed under this 
Regulation shall be taken under the 
procedure laid down in Article 7. 

The Commission shall inform the 
Committee referred  to in Article 7 
succinctly of any financing  decisions 
it intends to take with regard to 
projects and programmes of less than 
ECU 2 million in value. The 
information  shall be made available 
at least one week before the decision 
is taken. 

4.  The Commission is authorised to 

approve, without seeking the opinion 
of the Committee referred  to in 
Article 7, any extra commitments 
needed for covering expected or real 
cost overruns in connection with the 
operations, provided that the overrun 
or additional requirement is not more 

than 20% of the initial commitment 
fixed by the financing decision. 

Where the additional commitment 
referred to in the previous 
subparagraph is less than ECU 4 
million, the Committee referred to in 
Article 7 shall be informed  of the 
decision taken by the Commission. 
Where the said additional 
commitment is more than ECU 4 
million but less than 20%, the 
Committee's opinion shall be sought. 

5.  All financing agreements or 

contracts concluded under this 
Regulation shall provide for the 
Commission and the Court of 
Auditors to conduct on-the-spot 
checks according to the usual 
procedures laid down by the 
Commission under the rules in force, 
and in particular those of the 
Financial Regulation applicable to 
the general budget of the European 
Union. 

6.  Where operations are the subject of 
financing agreements between the 
Community and  Turkey, such 
agreements shall stipulate that the 
payment of taxes, duties or any other 
charges is not to be covered by the 
Community. 

7.  Participation in invitations to tender 
and the award of contracts shall be 
open on equal terms to natural and 
legal persons of the Member States 
and Turkey. 

8.  Supplies shall originate in the 
Member States or Turkey. 

Article 7 

Communication  6+ premier pilier & fiche- version 6 

*2*L 

The Commission shall be assisted by the 
committee set up by 
Regulation (EC) No  1488/96 of 
23 July  1996,2 known as the MED 
Committee, composed of the 
representatives of the Member States 
and chaired by the representative of the 
Commission, in accordance with the 
following procedure. 

The representative of the Commission 
shall submit to the Committee a draft of 
the measures to be taken. The 
Committee shall deliver its opinion on 
the draft, within a time limit which the 
Chairman may lay down according to 
the urgency of the matter. The opinion 
shall be delivered by the majority  laid 
down in Article  148(2) of the Treaty in 
the case of decisions which the Council 
is required to adopt on a proposal  from 
the Commission. The votes of the 
representatives of the Member States 
within the Committee shall be weighted 
in the manner set out in that Article. The 
Chairman shall not vote. 

Within one month of taking a decision, 
the Commission shall inform the 
Member States of the measures and 
projects approved, describing their 
nature, the sums attached to them and 
the partners involved. 

Article 8 

An exchange of views shall take place, 
once a year, on the basis of a 
presentation by the Commission's 
representative of the general guidelines 
for the operations to be carried out in the 
year ahead, in a meeting of the 
committee referred  to in Article 7. 

Article 9 

After  each budget year, the Commission 
shall report to the European Parliament 
and the Council, summarising the 
operations financed in the course of that 
year and assessing the implementation of 
this Regulation in that period. 

The Commission shall adopt the 
measures envisaged if they are in 
accordance with the opinion of the 
Committee. 

The summary shall in particular contain 
. information about those with whom 
implementation contracts have been 
concluded. 

If the measures envisaged are not in 
accordance with the opinion of the 
Committee or if no opinion is delivered, 
the Commission shall without delay 
submit to the Council a proposal relating 
to the measures to be taken. The Council 
shall act by qualified  majority. 

If,  on the expiry of a period of three 
months from the date of referral to the 
Council, the Council has not acted, the 
proposed measures shall be adopted by 
the Commission. 

OJL  189, 30.7.1996,  p i. 

The report shall also include a summary 
of the conclusions of any evaluations, 
including those relating to  specific 
operations. 

Article 10 

The Commission shall regularly evaluate 
operations financed by the Community 
in order to establish whether the 
objectives of the operations have been 
achieved and to provide guidelines for 
improving the effectiveness  of  future 
operations. The Commission shall 
submit to the Committee referred to in 

Communication  6+ premier pilier & fiche- version 6 

2,1 

Article 7 a summary of the evaluations 
made, which the latter may, if necessary, 
examine. Evaluation reports shall be 
made available to any Member States 
requesting them. 

Article 11 

Three years after this Regulation enters 
into force, the Commission shall submit 
to the European Parliament and the 
Council an overall evaluation of 
operations financed by the Community 
under this Regulation, together with 
suggestions regarding the future of this 
Regulation and, where necessary, 
proposals for amending it. 

Article 12 

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

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

Done at Brussels, 

Communication  6+ premier pilier & fiche- version 6 

Zt, 

FINANCIAL STATEMENT 

1.  TITLE  OF OPERATION 

Implementation  of  measures  to  promote  economic  and  social  development  in 
Turkey. 

2.  BUDGET HEADING(S)  INVOLVED 

New  heading  B7-4036 to  be established  for  the  1999 budget,  by  an  amending  and 
supplementary  budget. 

3.  LEGAL  BASIS 

Draft  proposal  for  a  Council  Regulation  on  the  implementation  of  measures  to 
promote economic and social development in Turkey (attached). 

4.  DESCRIPTION  OF OPERATION 

4.1 .General  objective 

Financial  support  for measures to promote economic and social  development 
in  Turkey,  in  particular  increased  cooperation  in  the  following  areas: 
industry, 
telecommunications,  health  protection,  environment,  energy, 
transport and democracy and human rights. 

4.2. Period covered and arrangements for renewal or extension. 

The programme will last three years (1999-2001 ). 

5. CLASSIFICATION  OF EXPENDITURE  OR  REVENUE 

5.1. Non-compulsory  expenditure. 

5.2. Differentiated  appropriations 

5.3.  Type of revenue  involved: 

None, except the reimbursement of risk capital  if the operation financed is an 
economic success. 

> 

i 

6.  TYPE  OF EXPENDITURE  OR  REVENUE 

-  Subsidy:  yes 

-  Subsidy for joint  financing  with other sources in the public and/or private sector: 

yes, for certain operations 

- 

Interest subsidy:  none 

-  Other 

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

of the C 'ommunily contribution to be reimbursed?  no 

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

what sort of change and what type of revenue is involved?  none 

7.  F I N A N C I AL  I M P A CT 

7.1.  Method of calculating total cost of operation (definition  of unit costs) 

Evaluation  of  the  funds  needed  to  implement  the  operations  essential  for 
assisting economic and social development in Turkey. 

EC ECU Million (current 
n +5 
and 
subs, 
yrs 

n + 3 

n + 4 

7.2. Itemised breakdown of cost. 

Indicative 
breakdown 

Year 
n 

n +1 

n + 2 

- Technical 
assistance 
- "institution 
building" 
- training 
- equipment 
- other 

Total 

9 

9 
9 
9  N 
9 

9 

9 
9 
9 
9 

9 

9 
9 
9 
9 

45 

45 

45 

prices) 

Total 

27 

27 
27 
27 
27 

135 

;v 

7.3. Operational expenditure on studies, experts, etc., included in Part B of Budget 

7.4. Indicative schedule of commitment/payment appropriations..3. Indicative schedule of 
appropriations 

7.3.1.  Schedule for proposed new operation 

Year 
n 

N+ 1 

n + 2 

n + 3 

n + 4 

45 

45 

45 

n  i 5 
and 
subs. 
yrs 

Total 

135 

Commitment 
appropriation 

Payment 
appropriations 

yearn 
n+1 
n + 2 
n + 3 
n + 4 
n + 5 
n + 6 
n + 7 

9 
12.5 
14.5 
9 

9 
12.5 
14.5 
9 

9 
12.5 
14.5 
9 

Total 

45 

45 

45 

8. FRAUD PREVENTION  MEASURES 

- Specific checks planned 

9 
21.5 
36 
36 
23.5 
<) 

135 

Checks will be carried out at all levels of implementation of projects (invitations to 
tender, selection, drawing-up of contracts, provision of services and payments) by 
Commission staff and the Commission's Representation in Turkey and by the Court ol 
Auditors. 

The checks will take account of contractual obligations and the principles of sound and 
efficient  management. 

Provisions concerning supervision (presentation of reports, coordination with the 
Commission, etc.) will be included in all the agreements or contracts concluded between 
the Commission and those receiving payment. 

9. ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1. .Specific and quantified  objectives; target population.. 

Specific objectives: links with general objective 
Promoting sustainable development  in  Turkey, ensuring greater economic 
and social cohesion and reducing regional disparities. 

-  Target population:  distinguish as applicable  for  each objective; indicate 
the  end-beneficiaries  of  the  Community's financial  contribution and  the 
intermediaries involved. 

public administration 
socio-economic agents 
farmers 
industrialists 
research workers 
scientists 
civil society 

9.2. Grounds for the operation 

-  Need  for  Community  financial  aid,  having  particular  regard  to  the 

principle  of subsidiarity 

Community  aid:  greater impact of operations, economies of scale, 
visibility  of EU aid 

-  Choice of ways and means 

The various ways and means used will depend on the situation of the 
country and of each sector involved.  The operations to be financed  will be 
preceded by identification  and feasibility  studies. 

?X 

•  advantages over possible alternatives (comparative advantages) 
•  explanatory reference to similar Community or national operations 
•  spin-off and multiplier effects expected 

- socio-economic development of Turkey; 

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

operation 

Turkey's political and economic stability. 

Our partners' determination to implement the planned operations. 

9.3. Monitoring and evaluation of the operation 

-  Performance indicators selected 

•  output indicators (measuring activities used) 
the number and diversity of infrastructure, economic sectors, 
administrations and citizens concerned by the projects 

• 

impact indicators (measuring performance against objectives) 

- impact on the trend in per capita income 
- impact on infrastructure and in particular its modernisation and 
conformity with EU standards 
- reduction in regional economic disparities 
- improvement of management of administrations 
- access to new technologies 
- transfer of know-how 
- improved conservation of the environment 
- impact on agriculture 
- impact on job creation 

-  Details and frequency of planned evaluations 

The projects will be monitored and evaluated at regular intervals by the 
bodies implementing them. Commission staff and independent experts. 

On completion of an operation an evaluation report will be produced on its 
content and on the consequences and follow-up. 

-  Assessment of the results obtained (in the event of continuation or repeat 

of an existing operation) 

10.  ADMINISTRATIVE  EXPENDITURE  (PART  A  OF  SECTION  III  OF  THE 
GENERAL BUDGET).. 

This section of the financial  statement must be sent to DGs IX and XIX; DGIX  will then 
forward  it to DG XLX with its opinion. 

Actual  mobilisation  of the necessary administrative resources will result  from  the annual 
Commission decision on the allocation of resources, account being taken of the staff and 
additional  amounts granted by the budgetary  authority. 

0.1 Impact on the number of posts 

Types of post 

Staff to be allocated to 
managing the operation 
Temporary 
posts 

Permanent 
posts 

Posts Sll 

pplicd 

time 

by using 
additional 
resources 

by using 
resources 
existing 
within the DG 
or department 
concerned 
0.25 

0.25 

0.25 

0.25 

3 years 

3 years 

Officials  or 
temporary 
staff 

A 
B 
C 

Other 
resources 

Total 

0.25 

0.25 

0.50 

3 years 

For additional resources, indicate at what rate they are to be made available. 

10.2 Overall financial impact of additional human resources 

Amounts 
81000 
81 000 

Method of calculation 

0.25 X108 000X3 years 
0.25 X 108 000 X 3 years 

(ECU) 

Officials 
Temporary staff 
Other resources (indicate 
budget  heading) 

Total 

162 000 

I Jsing the existing resources needed to administer the operation. 
The calculation  is based on A-l, A-2, A-4, A-5, A-7 

The amounts express the total cost of the additional posts for the total length of the 
operation if it is of a specific duration, or for  12 months if it is of unspecitled duration. 

10.3 Increase in other operating expenditure arising from the operation 

3 

ISSN 0254-1475 

COM(98) 600 final 

DOCUMENTS 

EN 

11  01  06 

Catalogue  number  :  CB-CO-98-600-EN-C 

Office  for Official  Publications of the European Communities 

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