Opinion of the Economic and Social Committee on the "Annual Report of the Cohesion Fund (1999)"
Date: 2001-07-11
Institutions: European Economic and Social Committee
Subjects: Cohesion Fund, activity report

17.9.2001

EN

Official Journal of the European Communities

C 260/51

Opinion of the Economic and Social Committee on the ‘Annual Report of the Cohesion Fund
(1999)’

(2001/C 260/09)

On 11 January 2001 the Commission decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the ‘Annual Report of the Cohesion
Fund (1999)’.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 26 June 2001.
The rapporteur was Mr Pezzini.

At its 383rd plenary session on 11 and 12 July 2001 (meeting of 11 July), the Economic and Social
Committee adopted the following opinion by 110 votes to two, with no abstentions.

1.

Introduction

1.1.
In accordance with Article 14 of the Cohesion Fund
Regulation, the Economic and Social Committee has been
asked, as it is every year, to issue an opinion on the Annual
Report of the Cohesion Fund. As is well known, the Cohesion
Fund is responsible for financing environment and transport
infrastructure projects in Member States whose per capita GDP
is under 90 % of the Community average, namely Greece,
Ireland, Portugal and Spain (in 1992).

1.2.
This report is especially significant as it concerns the
last year of the 1993-1999 period (including the transitional
financial instrument for cohesion), for which the Edinburgh
European Council granted EUR 15 150 million, and it comes
at the end of the first year of operation of the new Fund
regulation for the 2000-2006 programming period. The
Commission has therefore been able to draw up a schematic
overview of the Fund’s entire life span.

2. General comments

In the light of the information contained in the report,
2.1.
the Committee welcomes the positive results of the activities
under the Cohesion Fund, but also:

The Committee welcomes the fact that Cohesion Fund
2.2.
activites have contributed indirectly,
in the four countries
concerned, to meeting the targets for reducing budget deficits
as set in the EMU convergence programmes. This is especially
true of Greece which, having started the programming period
with a deficit considered to be excessive, exceeded its objective
in 1999 with a deficit of 1,6 % of GDP.

2.3.
The Committee is also pleased to note that at the end
of the programming period, the criteria for allocating resources
among the countries and keeping a balance between the
transport and environment sectors were largely met.

2.4.
Inflation fell sharply during the 1990s, especially in
Greece and Portugal, and the rate settled at around 2,5 %.
During the second half of the 1990s, the GDP growth rate was
higher than the Union average.

2.4.1.
In the EU, disparities in per capita income between
Member States, and even more so between regions, were still
very high. Nevertheless, according to the Second Report on
Economic and Social Cohesion, the differences have lessened
over the years, owing not least to Structural Fund intervention.
For instance, in Greece, Spain and Portugal, average per capita
income rose from 68 % of the Union average in 1988 to 79 %
in 1999. In the same period, there were clear improvements
in the infrastructures of the less prosperous regions, paving
the way for further development.

— reiterates its dissatisfaction, while already knowing the
Commission’s answer, at having to give its opinion on
the year concerned at such a late stage, in an age of real-
time communication;

3. Specific comments

— believes that this time the delay could have been justified,
had the opportunity been taken to conduct a more in-
depth review of the entire 1993-1999 period, which
would have had the added benefit of enabling useful
lessons to be learned for the new 2000-2006 program-
ming period.

3.1. Coordination with the other Community policies

3.1.1.
Coordination with the Structural Funds in countries
that fall almost entirely under the various objectives and

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Official Journal of the European Communities

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especially under Objective 1, is extremely important, both to
avoid overlaps — none were recorded — and above all to
generate synergy with separate but related projects. The
environmental protection and transport infrastructure sectors
lend themselves well
to furthering regional development
programmes. It would have been interesting if the report had
included an assessment of the capacity of administrations to
achieve such synergy.

the development of the agriculture and tourism sectors. It
should however be noted that the investments made enable a
less intense use of existing resources and thus limit the damage
caused by drought.

3.2. Budget implementation

Better coordination should be provided both by
3.1.1.1.
the strategic reference frameworks, which cover all
the
measures taken under the funds, and by the Commission’s
move to group funds by geographical unit.

The Committee welcomes the fact that the budget
3.2.1.
objectives were met. At the end of 1999, all appropriations for
the 1993-1999 period had been committed and 91,6 % of
payments made; and the guidelines for distribution among the
countries and between sectors were applied.

3.1.2.
The report states that the national authorities adhere
exhaustively to Community requirements for the openness
of public procurement, which are a precondition for the
achievement of the Community environmental objectives, and
very important in the transport infrastructure sector.

3.3.

Irregularities

3.1.3.
In the transport sector, special attention was given in
1999 to the implementation of projects of common interest
in the sphere of the trans-European networks, coordinating
activities with those of the EIB (which is concentrating its
investment on rail transport), the ERDF and the TENs budget.
The proportion of transport sector investment channelled into
rail made a qualitative leap from 14,0 % in the 1993-1998
period to 25,8 % in 1999. This responds pleasingly to the
recommendations made by the European Parliament and the
Economic and Social Committee, although the figure is still too
low. The emphasis was placed on improving communications
between the peripheral regions and the major economic
centres, and also on the high-priority projects approved by the
Essen European Council.

3.1.3.1.
Savings in journey times, achieved by projects co-
financed by the Structural Funds and the Cohesion Fund,
ranged from 20 % in Spain, through the modernisation of the
motorway network, to 70 % in Portugal for rail freight (1).

3.1.4.
In the environment sector, the ex-post evaluations
carried out on a representative sample were satisfactory in
general, with the exception of problems relating to water
resource management. In the cohesion countries (and others)
there are significant disparities with regard to drinking water
supply and sewage treatment systems, which have a major
impact on the quality of life of the local populations and on

(1) Second Report on Economic and Social Cohesion, COM(2001)

24 final, p. 19.

3.3.1.
The few irregularities recorded concerned the rules
on public procurement and ineligible expenditure and can be
considered to be totally normal. There was no need for OLAF
to launch any investigations. It should be added that the report
does not offer very much information on this matter. The
next report should provide more details about the checks
conducted, bearing in mind that the new regulations give
Member States more responsibility for financial control.

3.4.

Evaluations

3.4.1.
The report reveals Commission dissatisfaction with
the quality of prior appraisals, especially in the area of the
environment, where they are more difficult. In view of their
importance, the Committee shares the Commission’s hopes
improve. Member
that economic analysis techniques will
States should step up their investment in this area.

The national authorities often fail to appreciate the
3.4.1.1.
real role played by a proper prior appraisal methodology. Not
only should it help to clarify and quantify objectives, but
it should also mean higher quality planning and sounder
strategies.

3.4.1.2.
In 1995 the Commission began financing research
and training activities designed to sharpen up evaluations of
economic and social cohesion policy. This work, which
continued until the end of 1998, was included in the Means
programme (Méthodes d’E´ valuation des Actions de Nature
Structurelle). The aim of this programme — which is particu-
larly well suited to the transport and environmental impact
sector — is to boost the effectiveness of evaluation methods
when devising or assessing funding-related activities.

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3.4.2.
An ex-post evaluation for the whole period is not yet
available, but the Commission’s evaluation of the 45 projects
assessed in 1999 is very positive in both sectors — environ-
ment and transport:

— the effectiveness of the projects was in line with the initial

objectives;

— the environmental impact was satisfactory;

— the projects generated positive economic spin-off;

— the accessibility of vast areas improved, as did cross-

border communications;

— road congestion decreased in the large metropolitan

areas.

A total of 120 projects will be assessed by the end of 2001.

4.2.
The new regulation strengthens the link between the
granting of aid, respect for the stability and growth pact and
the need for sound management of the public deficit.

4.3.
Transport infrastructure projects must be consistent
with Community guidelines on the development of the trans-
European transport network.

4.4. Member States now take primary responsibility for the
financial control of projects, and verify that management and
control arrangements have been set up and are implemented
in such a way as to ensure that Community funds are being
used efficiently and correctly.

4.5.
The new regulation includes provision for reducing the
rate of assistance in tandem with greater use of private sources
of funding. The rate can also be adjusted as a result of
application of the polluter-pays principle.

3.5.

Interinstitutional dialogue

5. Conclusions

3.5.1.
The Committee is pleased to note the detail in which
the Commission responded to the comments it made in its
1998 (1) opinion and the fact that it shared some of its
concerns.

4. The new 2000-2006 programming period

4.1.
The new regulation was approved in 1999. For the
period 2000-2006, the Berlin Council allocated EUR 18 billion
(at 1999 prices). It also decided to review each country’s
eligibility at mid-term in 2003, on the basis of per capita GDP
at that time.

(1) OJ C 140, 18.5.2000, p. 14.

Brussels, 11 July 2001.

5.1.
The Committee trusts that the Cohesion Fund will
continue to help the four target countries to achieve its
intended aim, namely full respect for the stability and growth
pact and avoidance of an excessive public deficit.

5.2.
The success achieved hitherto justifies the fact that the
new regulation has made only a few alterations and has in
effect retained the existing legal machinery.

5.3.
The projects funded have made it possible to raise the
application thresholds of the environment directives and to
improve access to the trans-European networks. Much remains
to be done, especially as regards rail transport.

5.4.
The Committee recommends that in future the Fund
should revert to its initial purpose, i.e. the financing of major
projects, so that assistance does not become too fragmented.

The President

of the Economic and Social Committee

Göke FRERICHS