Proposal for a Council Decision concerning the Community position within the Association Council on the participation of Latvia in the multiannual Community programme for energy efficiency, SAVE II
Date: 1999-11-12
Institutions: European Commission
Subjects: EU programme, Latvia, association agreement (EU), energy policy, productivity

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.11.1999
COM(1999) 575 final

Proposal for a

COUNCIL DECISION

Concerning the Community position within the Association Council on the
participation of Latvia in the multiannual Community programme for energy
efficiency, SAVE II

(presented by the Commission)

EXPLANATORY MEMORANDUM

In the conclusions of its meeting of 12 and 13 December 1997 in Luxembourg, the
European Council stressed the importance of the participation of candidate countries
in Community programmes, which will help these countries to familiarise themselves
with the Union’s policies and working methods.

The Europe Agreements or their Additional Protocols concerning the participation in
Community programmes explicitly mention the field of energy as an eligible area.
Moreover, they convey the task to define terms and conditions for participation to the
Association Councils. Therefore, in preparation of Association Council decisions, the
Commission services concerned have held exploratory discussions with the 10
associated countries from central Europe in Brussels in December 1996 and the
beginning of 1997 concerning their future participation in the SAVE II programme,
which was adopted 16 December 1996, and provides for the participation of
associated CEC's and Cyprus.

During these discussions, information was provided on the content of the programme
and on conditions and modalities for these countries' participation, including the cost
of participation. More particularly, taking into account that, as provided in the Europe
Agreements or their Additional Protocols, the CEC's will themselves meet the costs
resulting from their participation, they were invited to make the necessary provisions
in their budgets for 1998, 1999 and 2000 on the basis of cost estimates provided by
the Commission. Furthermore, the possibility for the CEC's to draw on their national
Phare allocation for complementing the contribution from their own budget has been
reiterated.

In March 1999, Latvia confirmed to the Commission its willingness to participate in
SAVE II and provided the necessary information for its participation as from 1999.

The main issues addressed in the annexed draft Association Council Decision
adopting the terms and conditions for the participation of Latvia in SAVE II
programme are the following :

• Latvia will participate in all activities of SAVE II,

in conformity with the

objectives, criteria and procedures of the Programme (Annex I, point 1).

•

terms and conditions for the submission, assessment and selection of applications
will be the same as for Member States (Annex I, point 2).

• A minimum number of partners from EC Member States will be required for all

transnational projects proposed by Latvia (Annex I, point 3).

• Latvia will ensure national co-ordination and organisation of participation in

SAVE II (Annex I, 4).

• Financial contributions are defined in Annex I, point 5 and in Annex II to the
Decision; in accordance with Article 109 of the Europe Agreement with Latvia,
this country will pay an annual contribution to cover the cost of its participation,
which will be financed from its own national budget in 1999, but which can be
partly financed from its Phare allocation.

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• Latvia will participate in the monitoring of its participation in the Programme

(Annex I point 7).

• Latvia will be invited to co-ordination meetings prior to the meetings of the SAVE

Committee; it will also be informed of their results (Annex I, point 8).

• The Decision shall apply for the duration of the programme (Article 2 in the

Decision).

The adoption of an Association Council decision to allow Latvia to participate in
SAVE II from 1999 will offer an opportunity to participate actively in this internal
is,
Community instrument, as part of the re-inforced pre-accession strategy. It
therefore, of considerable political importance.

To promote effctive participation of Latvia in 1999 and to avoid any discouraging
effect upon prospective partners, arising from the fact that the Association Council
Decision will not be in force until the second half of this year, the Commission
services will evaluate project proposals involving Latvian partners as if this Decision
was already in force. The eligibility criterion will be considered at the latest possible
moment before decisions are taken on the projects. This should normally occur after
the entry into force of the Association Council Decision.

In order to allow Latvia to join SAVE II in the near future, the Council is invited to
adopt the annexed proposal for a decision concerning the Community position within
the Association Council with Latvia on their participation in SAVE II.

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Proposal for a

COUNCIL DECISION

Concerning the Community position within the Association Council on the
participation of Latvia in the multiannual Community programme for energy
efficiency, SAVE II

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Articles 174 and 175 (1) in conjunction with Article 300 (2), second indent thereof,

Having regard to the proposal from the Commission,

(1) Whereas the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the
Republic of Latvia, of the other part, has entered into force on 01.02.1998,

(2) Whereas, according to Article 109 of the Europe Agreement, Latvia may
participate in Community framework programmes, specific programmes,
projects or other actions including those in the field of energy and the terms
and conditions for the participation of Latvia in the activities referred to in the
said Article shall be decided by the Association Council,

(3) Whereas Council Decision (96/737/EC)1 of 16 December 1996 establishing a
multiannual programme for
the promotion of energy efficiency in the
Community and in particular Article 10 thereof, provides that this programme
shall be open to the participation of associated Central European countries in
accordance with the conditions set out in the Association Agreements on
participation in Community programmes..

HAS DECIDED AS FOLLOWS:

1

OJ L 335/50 of 24.12.1996.

4

The position to be taken by the Community within the Association Council
established by the Europe Agreement between the European Communities and their
Member States, of the one part, and the Republic of Latvia, of the other part,
concerning the participation of Latvia in the Community programme for energy
efficiency, SAVE II, is that set out in the attached draft decision of the Association
Council.

Done at Brussels,

For the Council
The President

5

Draft

Decision n° /99 of the Association Council between the European Communities
and their Member States of the one part, and Latvia, of the other part of ........
1999

adopting the terms and conditions for the participation of Latvia in the
Community programme for energy efficiency, SAVE II

THE ASSOCIATION COUNCIL

Having regard to the Europe Agreement establishing an association between the
European Communities and their Member States, of the one part, and the Republic of
Latvia, of the other part, and in particular Article 109 thereof2;

Whereas according to Article 109 of the said Europe Agreement, Latvia may
participate in Community framework programmes, specific programmes, projects or
other actions including those in the field of energy and the terms and conditions for
the participation of Latvia in the activities referred to in the said Article are to be
decided by the Association Council.

HAS DECIDED AS FOLLOWS:

Article 1

Latvia shall participate in the European Community programme SAVE II according
to the terms and conditions set out in Annexes I and II which shall form an integral
part of this Decision.

This Decision shall apply for the duration of the SAVE II programme.

Article 2

Article 3

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

Done at,

For the Association Council
The Chairman

2

OJ L 26, 2.2.1998, p.1.

6

ANNEX I

Terms and conditions for the participation of Latvia
in the multiannual Community programme for energy efficiency, SAVE II

1.

2.

Latvia will participate in all actions of the multiannual Community programme
for energy efficiency, SAVE II (hereinafter called "SAVE II") in conformity,
unless otherwise provided in this Decision, with the objectives, criteria,
procedures and time limits laid down in Council Decision (96/737/EC)
establishing a five-year programme for the preparation and implementation of
measures and actions in a cost-effective manner in order to promote energy
efficiency within the Community.

The terms and conditions for the submission, assessment and selection of
applications related to eligible institutions, organisations and individuals of
Latvia will be the same as those applicable to eligible institutions, organisations
and individuals of the Community, set within the limits of the financial
contribution of Latvia less administrative costs as provided in Annex II.

3. Where applicable,

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

4.

5.

6.

Latvia will pay the total contribution from its national budget, since Phare
assistance has not been requested for this purpose.

Latvia will
organisation of participation in SAVE II.

take all necessary steps to ensure national co-ordination and

Latvia will pay each year a contribution to the general budget of the European
Communities to cover the costs resulting from its participation in SAVE II (see
Annex II).

The Association Committee is entitled to adapt this contribution whenever
necessary.

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

7. Without prejudice to the responsibilities of

the Commission and the
Community's Court of Auditors of the European Communities in relation to the
monitoring and evaluation of SAVE II pursuant to Article 5 of the Council

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Decision on SAVE II, the participation of Latvia in the programme will be
continuously monitored on a partnership basis involving Latvia and the
Commission of the European Communities. Latvia will submit the necessary
reports to the Commission and take part in other specific activities set out by the
Community in that context.

8. Without prejudice to the procedures referred to in Articles 4 and 5 of the
Decision on SAVE II, Latvia will be invited to co-ordination meetings on any
question concerning the implementation of this Decision prior to the regular
meetings of the SAVE Committee. The Commission will inform Latvia about
the results of such regular meetings.

9.

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

for

8

ANNEX II

Financial Contribution of Latvia to
SAVE II

1.

The financial contribution of Latvia will cover:

-

-

subsidies or any other financial support from the programme to Latvian
participants,

supplementary administrative costs related to the management of the
programme by the Commission of the European Communities stemming
from Latvia's participation.

2. For every financial year,

the aggregated amount of subsidies or any other
financial support received from the programme by Latvian beneficiaries will not
exceed the contribution paid by Latvia, after deduction of the supplementary
administrative costs.

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

3. Latvia’s annual contribution will be of 57 942 EUR from 1999. From this sum, an
amount of 3 942 EUR will cover supplementary administrative costs related to the
management of the programme by the Commission stemming from Latvia’s
participation.

Latvia will pay the total contribution from its national budget, since Phare
assistance has not been requested for this purpose.

4. The financial regulation applicable to the general budget of the European
Communities will apply, notably to the management of the contribution of Latvia.

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

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

9

Latvia will pay its contribution to the annual costs under this Decision according
to the call for funds and at the latest three months after the call for funds is sent.
Any delay in the payment of the contribution shall give rise to the payment of
interest by Latvia on the outstanding amount from the due date. The interest rate
corresponds to the rate applied by the ECB for the month of the due date, for its
operations in EURO, increased by 1,5 percentage points.

10

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Opening of Community Programmes in the field of energy to Latvia (SAVE II)

2. BUDGET HEADING INVOLVED

Latvia has decided to cover the costs of its participation entirely from its own national
budget. Latvia will be invited to transfer its contribution to item 6091 of the EU’s
budget receipts.

3. LEGAL BASIS

Treaty establishing the European Community, and in particular Articles 174 and
175 (1), in conjunction with Article 300 (2), second indent thereof,

Article 109 of the Europe Agreement with Latvia providing for the opening-up of
Community programmes (OJ L 26, 2.2.98, p. 1), entered into force on 01.02.1998,

Council Decision (96/737/EC) establishing a five-year programme for the preparation
and implementation of measures and actions in a cost-effective manner in order to
promote energy efficiency within the Community, and Article 10 thereof, which
provides that this programme shall be open to the participation of associated Central
European countries in accordance with the conditions set out in the Association
Agreements on participation in Community programmes.

4. DESCRIPTION OF OPERATION

4.1 General objective

Latvia’s participation in SAVE II will contribute to assist Latvia in preparing its
future accession to the Union, which was the aim set by the Copenhagen European
Council of June 1993 and confirmed by subsequent European Councils.
Its
participation will not only contribute towards the implementation of the provisions
relating to economic and technical co-operation in the Europe Agreement but will also
enable Latvia to familiarise itself with the procedures and methods used in
Community programmes. The “Agenda 2000” communication from the Commission
reiterates the importance of participating in Community programmes as a key feature
of a reinforced pre-accession strategy.

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

11

The Europe Agreement with Latvia entered into force on 01.02.1998 and provides for
Latvia’s participation in Community programmes, notably in the field of energy.

SAVE II is one of a number of programmes opening up for the countries of Central
and Eastern Europe from 1998 onwards. Latvia’s participation is expected from 1999
onwards.

4.2 Period covered and arrangements for renewal

For the duration of SAVE II, i.e. until 31 December 2000.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 Types of expenditure involved:

1. Non-compulsory expenditures (NCE)

2. Disassociated credits

5.2 Type of revenue involved:

Since Article 109 of the Europe Agreement stipulates that the Republic of Latvia
itself will meet the costs resulting from its participation, it will be invited to transfer
its contribution to item 6091 of the EU's budget receipts.

6. TYPE OF EXPENDITURE OR REVENUE AND DEGREE OF
SUBVENTION FOR ACTIVITIES PROPOSED

100% (maximum) subsidy will be allowed on total eligible expenses for the following
actions:

-

-

-

-

information dissemination and other actions aimed at

for studies,
the
implementation and completion of Community measures such as voluntary
agreements, co-operative procurements, mandates to standardisation bodies,
legislation, etc. taken to improve energy efficiency.

for studies on the effects of energy pricing on energy efficiency and studies
undertaken with a view to establishing energy efficiency as a criterion within
Community programmes.

for measures proposed by the Commission to foster
the exchange of
experience aimed at promoting better co-ordination between international,
Community, national, regional and local activities by appropriate means for
information dissemination.

for monitoring of energy efficiency progress in the Community, in individual
Member States and in Latvia; and for the evaluation and monitoring of actions
and measures undertaken under the programme.

12

For the above actions with 100% subsidy, the Council Decision of 16 December
1996 (96/737/EC) may in and of itself be considered a call for tender.

50% (maximum) subsidy on total eligible expenses will be allowed for joint
financing with other sources for the following actions:

- for sectoral targeted pilot actions aimed at accelerating energy efficiency
investment, and/or improving energy use patterns including specific actions in
favour of energy management at the regional and urban level and in favour of
greater cohesion between Member States and Latvia, and regions thereof, in
the field of energy efficiency.

-

-

for measures proposed to promote better co-ordination of activities for
information dissemination.

to foster the
for measures, proposed otherwise than by the Commission,
exchange of experience aimed at promoting better co-ordination between
international, Community, national, regional and local activities by appropriate
means for information dissemination.

For the above actions, activities may be carried out by organisations or public and
private enterprises as well as by existing Community-wide networks or temporary
groupings of organisations and/or enterprises formed to accomplish the projects.

For the above actions with 50% subsidy, a call for tender will be published in the
Official Journal at the beginning of each year.

The balance of the funding of the actions and measures with a 50% allowable
subvention may be made up from either public or private sources or from a
combination of the two.

It is understood that all actions undertaken will have a clear and visible European
dimension.

As far as revenue is concerned, provision for Latvia’s contribution to cover the cost of
its participation is made under item 6091. The revenue will be allocated to the items
for expenditure on SAVE II and, where appropriate, to the relevant items of operating
expenditure.

The total revenue expected is given under item 7.4.

7. FINANCIAL IMPACT

7.1 Method of calculating total cost of operation for 1999 and 2000 financial years
(link between individual costs and total cost).

The calculation is based on the following preconditions:

13

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

-

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

Based on the Europe Agreement with Latvia,
the financial and budgetary
arrangements for SAVE II are as follows: the costs have been calculated on the basis
of various parameters inherent in the programme, i.e. GDP, population, and total
inland energy consumption.

The cost of Latvia ´s participation in SAVE II from 1999 will be 57 942 EUR per
year. Latvia shall pay 100% of the operational costs of its participation from its
national budget.

above-mentioned figure,

an
from which the
The
administrative nature amounting to 3 942 EUR - to be borne exclusively by Latvia -
have to be deducted, are divided per year as follows:

supplementary costs of

7.2 Itemized breakdown of cost (in EUR) after the administrative costs have been
deducted.

SAVE II

1999

2000

Total

of which
Latvia

of which
Phare

54 000

54 000

108 000

108 000

0

7.3 Operational expenditure on special studies, expert meetings, etc., included in

10.2.

14

7.4 The foreseeable annual receipts are as follows (in EUR):

Item 6091

1999

2000

Total

Operational part

54 000

54 000

108 000

Administrative part

3 942

3 942

7 884

Total

57 942

57 942

115 884

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN

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

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

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

9.1. Specific and quantified objectives

The aim of opening up SAVE II to Latvia is to bring it the same benefits as the
Member States of the Community already enjoy from this programme. The essential
aim of Community action on energy efficiency should be to enable all participating
countries to achieve in a cost-effective manner a prudent and rational use of energy
resources in all sectors,
to reduce the negative impact of energy use on the
environment and to contribute to a better security of energy supply and to sustainable
economic development.

More specific strategies and aims of the programme are:

- to strengthen the energy efficiency infrastructure in participating countries and to
encourage investments in energy efficiency by private and public consumers and
by industry.

15

-to stabilize and reduce CO2 emissions in accordance with Community goals

- to develop and pursue actions leading to the strengthening of Community
economic and social cohesion, and in particular to reduce disparities between
levels of development of the various regions, wherein, energy should be an
integral part of that effort.

- to complement other programmes for the use and promotion of new energy
technologies.

- to improve the energy intensity of final consumption by a further one percentage
point per annum over that which would have been otherwise attained.

- to support local energy management programmes.

- to ensure that actions and projects are subject to thorough prior appraisal and
systematic monitoring and evaluation.

-to insure that directives on energy efficiency such as those concerning labelling,
minimum efficiency standards, CO2 reduction (93/76/EEC), etc. are implemented
in accordance with procedures set forth in said directives.

9.2. Grounds for the operation

- Need for Community financial aid

Given the magnitude of the cost of Latvia’s participation in SAVE II

(under 100 000 EUR per year), financing of Latvia’s financial contribution by means
of its Phare allocation is not required for the present.

- Choice of ways and means

Latvia’s integration in SAVE II will put it on a basis similar to the current EU
Member States. The integration of Latvian nationals in Community networks will
make a definite contribution to preparing Latvia for future membership.

- Main factors of uncertainty which could affect

the specific results of

the

operation

Since projects will be selected according to qualitative criteria, it will only be possible
to measure the real impact on the basis of Latvian institutions´ and firms' capacity to
respond to the calls for proposal for actions to be launched by the Commission under
the programme as set out in Section 6 of this financial statement.

9.3 Monitoring and evaluation of the operation

The monitoring and evaluation procedures included in SAVE II (notably in respect of
evaluation, as included in the Article 5, Paragraph 2 of the Decision establishing the
programme) will also cover operations financed for Latvian beneficiaries. This
includes the submission by the selected beneficiaries of a report to the Commission on
a six-monthly basis and on completion of the project. As described in Article 6 of this

16

document, certain monitoring and evaluation actions and measures are also eligible
for programme subsidies.

10. ADMINISTRATIVE EXPENDITURE

The administrative resources required will actually be mobilised following the annual
Commission Decision on the allocation of resources, taking account in particular of
manpower and additional amounts granted by the budgetary authority.

10.1 Effect on the number of posts (in man/years)

Type of post

Staff required to manage
the operation

Source

duration

Permanent
posts

Temporary
posts

Existing
resources of
the DG or
department
concerned

Additional
resources

1999-2000

Officials
temporary staff

or

A

B

0.01

0.01

0.01

0.01

Other
(Technical
assistance,
A-7002)

resources

item

0.01942

TOTAL

0.02

0.02

0.01942

from 1999

17

10.2 Overall financial impact of the human resources

(in EUR)

Total

Method of calculation (total cost of the
action for the period 1999-2000)

Officials *

4 320

0.02 man/year x 108,000 EUR x 2 years

Temporary staff

Other
assistance, item A-7002)

resources

(Technical

3 884

0.01942 man/year x 100,000 EUR x 2
years

TOTAL

8 204

* By using existing resources required to manage the operation (calculation based on
A-1, A-2, A-4, A-5, A-7).

The expenditure of item A-7002 (technical assistance) will be met from the receipts
(art. 4§2,
received from the Latvian
participation in Community programmes (see § 5.3 of the financial statement).

third indent of

the financial

regulation)

18

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

(in EUR)

Budget heading (No and title)

Total

Method of calculation (total cost of
the action for the period 1999-2000)

A-7031
meetings

-

compulsory

4 000

Participation in 2 annual meetings

2 meetings x 1 000 EUR/meeting x 2
years = 4 000 EUR

Total

4 000

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

regulation)

19