Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EC) No 1267/1999 establishing an Instrument for structural policies for pre-accession"
Date: 2001-05-30
Institutions: European Economic and Social Committee
Subjects: EU financial instrument, Structural Funds, accession to the European Union, enlargement of the Union, third country

C 221/166

EN

Official Journal of the European Communities

7.8.2001

The following is a summary of some of the main

7.9.
points made by the ESC in this opinion:

Initially,

7.9.1.
the ‘aims of society’ are an intangible
abstract concept. A more tightly structured, if still diverse and
not necessarily contradiction-free set of views can be gained
only through complicated democratic condensing processes.

7.9.2.
This uncertainty with regard to the basis of decision-
making, does not however, absolve politicians of their duty to
act. Politics means acting on behalf of society and inevitably
also includes experimenting with society. This dilemma affect-
ing political action cannot be eliminated, but merely defused:

— by an awareness of the limited predictability of future
developments and a readiness to take corrective action
where necessary, and

— by developing the best possible knowledge base (‘research
policy’) for political decisions and recognising not only
the conditions under which science operates but also its
potential and limitations.

7.9.3.
base include, inter alia:

The prerequisites for the best possible knowledge

— an ongoing dialogue between the players representing

science and society;

— an economic, political and cultural environment in which
science enjoys broad public support and where creativity
and inventiveness can develop most effectively;

— the best possible internal operating environment for

science;

— enough people who are ready and able to choose science

as a profession.

Brussels, 30 May 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
amending Regulation (EC) No 1267/1999 establishing an Instrument for structural policies for
pre-accession’

(2001/C 221/26)

On 18 April 2001, the Council decided to consult the Economic and Social Committee, under Article 262
of the Treaty establishing the European Community, on the above-mentioned proposal.

The Economic and Social Committee decided to appoint Mr Walker as rapporteur-general to prepare its
opinion.

At its 382nd plenary session on 30 and 31 May 2001 (meeting of 30 May) the Economic and Social
Committee adopted the following opinion by 48 votes to one with two abstentions.

1.

Introduction

1.1.
Council Regulation (EC) No 1267/1999 established an
Instrument for Structural Policies for Accession (ISPA) in 1999
to assist the central and eastern European countries (CEEC)
which were candidates for membership of the European Union
in meeting the requirements of the acquis communautaire in
the fields of transport infrastructure and the environment. The
in the following year
implementation of
resulted in the grant of Community assistance to a total of
around 80 measures.

this instrument

Pursuant

1.2.
to this regulation, measures eligible for
Community assistance must be of a sufficient scale to have a
significant impact in the relevant field. Experience acquired by
the Commission in appraising applications for financing
submitted by the beneficiary countries shows that they often
have difficulties in part-financing such measures from available
public resources.

1.2.1.
Accordingly, to ensure that ISPA has more impact in
the beneficiary countries, as much funding as possible must be
obtained from the European Investment Bank (EIB) or other
institutions (the European Bank for
international financial

7.8.2001

EN

Official Journal of the European Communities

C 221/167

Reconstruction and Development (EBRD), the World Bank
etc.) and, where appropriate, from private-sector sources. In
2000, ISPA obtained funding from international institutions
in around 40 % of approved measures and was thus able to
achieve a multiplier effect of about 25 %.

However, finding such funding is proving difficult due
1.3.
to the absence in the Regulation establishing ISPA of specific
provisions allowing a derogation from the rule laid down in
Article 114(1) of the Financial Regulation applicable to the
General Budget of the European Communities. Under the
terms of this rule, which applies to external aid, invitations to
tender for contracts financed by the Community are open only
to natural and legal persons in the Member States of the
European Union and the ISPA beneficiary countries.

1.3.1.
The problem arises because the basic framework of
ISPA was modelled on the Cohesion Fund which, being an
instrument for Community assistance, required tenders to be
open to all comers, regardless of nationality, whereas ISPA is,
in fact, an instrument for external assistance and is therefore
governed by Article 114(1) of the Financial Regulation which
restricts tenders to nationals of the Member States and the
CEEC and companies registered therein.

1.4.
The problem also relates to the question of co-
financing; this may take the form of joint co-financing or
parallel co-financing. Under joint co-financing, there is one
tender, one control and one supervisory authority. Under
parallel co-financing, there may be two or more separate
tenders which combine to form a single project.

Under the existing regulations,

1.4.1.
joint co-financing
which incorporated international financial institutions would
be open to tender by any persons; in this context, the EBRD is
deemed to be an international financial institution rather than
a European one by virtue of the fact that it has shareholders
from third countries. Under parallel co-financing, each tender
is treated as a separate entity and where the Community was
involved in financing for one tender, that tender would be
limited to natural and legal persons of the Member States and
the CEEC, although other tenders forming part of the same
overall project could be awarded under different rules if there
were no Community financial involvement.

Brussels, 30 May 2001.

1.4.2.
This means, in effect, that, under the existing regu-
lations, the ISPA fund cannot be used for Community partici-
pation in either joint co-financing or parallel co-financing of a
tender, although it could participate in parallel financing of
one or more tenders in a single project provided that those
tenders were subject to the requirements of the Financial
Regulation.

1.5.
The Commission proposes to remove this restriction
by inserting into this Regulation an article which mirrors the
existing provisions of the Phare programme.

2.

The Commission’s proposals

2.1.

The Commission’s proposals are set out in Appendix.

3. Comments

The Committee notes that the application of Article
3.1.
114(1) of the Financial Regulation constitutes an insurmount-
able barrier in some cases to the participation of international
financial institutions in the funding of measures eligible for
assistance under ISPA.

3.2.
The Committee signifies its approval of the Com-
mission’s proposal to insert a basic condition in the instrument
allowing Article 114(2) to be applied. It considers that this
would increase the scope for co-financing by international
financial institutions and facilitate the achievement of a higher
multiplier effect in ISPA financing.

The Committee approves the proposal that the Com-
3.3.
mission be assisted by a committee on the terms set out in the
Commission’s proposals.

3.4.
The Committee believes that eligibility for participation
in ISPA should be extended to the other candidate countries of
Cyprus, Malta and Turkey.

3.5.
The Committee considers that there are certain aspects
of the way in which the ISPA fund is structured and operated
which warrant more detailed examination. It therefore pro-
poses to draw up an own-initiative opinion on this subject in
the near future.

The President

of the Economic and Social Committee

Göke FRERICHS

C 221/168

EN

Official Journal of the European Communities

7.8.2001

APPENDIX

to the Opinion of the Economic and Social Committee

Extract from the Proposal for a Council Regulation amending Regulation (EC) No 1267/1999 establishing an
Instrument for structural policies for pre-accession COM(2001) 110 final — 2001/0058 (CNS)

Article 1

Regulation (EC) No 1267/1999 is hereby amended as follows:

(1) The following Article 6a is inserted:

‘Article 6a

Award of contracts

1.
In the case of measures for which the Community is the sole source of external aid, participation in invitations
to tender and contracts shall be open on equal terms to all natural and legal persons of the Member States and of the
countries referred to in the second subparagraph of Article 1(1).

2.
Paragraph 1 shall also apply to co-financing. In the case of co-financing, however, the participation of third
countries in invitations to tender and contracts may be authorised by the Commission, after examination on a case-
by-case basis.’

(2) The following paragraph 8 is added to Article 7:

‘8. Where a measure is co-financed together with international financial institutions, expenditure meeting the rules
for eligibility referred to in paragraph 7 but carried out in accordance with procedures appropriate to external
sources of financing other than Community assistance and borne by those financial institutions may be used in
calculating total eligible expenditure for that measure.’

(3)

Paragraphs 1, 2 and 3 of Article 14 are replaced by the following:

‘1. The Commission shall be assisted by a committee, composed of representatives of the Member States and
chaired by the representative of the Commission (hereinafter referred to as “the Committee”). The European
Investment Bank shall appoint a non-voting representative.

2. Where reference is made to this paragraph, the management procedure laid down in Article 4 of Decision
1999/468/EC shall apply, in compliance with Article 7 thereof.

3. The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.’