Opinion of the Committee of the Regions on the "Annual Report on the Cohesion Fund (1999)"
Date: 2001-11-15
Institutions: European Committee of the Regions
Subjects: Cohesion Fund, activity report, management

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13.
having also observed the lack of urgency in adopting
the regulation, which must be in force when the first new
accessions occur, therefore suggests that its members and
more generally regional and local authorities and their official
statistical bodies throughout the EU, together with the Euro-

pean Parliament, national statistical bodies and the relevant
Commission departments, assess whether the current NUTS
classification is appropriate to the emerging challenges and
demands of EU institutional reform and renewal of Community
policies in the run-up to 2006 and beyond.

Brussels, 15 November 2001.

The President

of the Committee of the Regions

Jos CHABERT

Opinion of the Committee of the Regions on the ‘Annual Report on the Cohesion Fund (1999)’

(2002/C 107/18)

THE COMMITTEE OF THE REGIONS,

having regard to the Commission’s Annual Report on the Cohesion Fund (1999) — COM(2000) 822
final — C5-0109/2001;

having regard to Council Regulation (EEC) No 1164/1994 of 16 May 1994 establishing the Cohesion
Fund;

having regard to the sixth periodic report on the social and economic situation and the development of
the regions of the EU (SEC(1999) 66 final);

having regard to the European Spatial Development Perspective, as adopted by the informal Council in
Potsdam on 10-11 May 1999;

having regard to the second report on economic and social cohesion (COM(2001) 24 final);

having regard to the Commission’s decision of 11 January 2001 to consult the Committee of the Regions
for an opinion on this subject, in accordance with Article 265 (1) of the Treaty establishing the European
Community;

having regard to the decision taken by its President on 6 March 2001 to assign the preparation of an
opinion to Commission 1 — Regional Policy, Structural Funds, Economic and Social Cohesion and Cross-
border and Inter-Regional Cooperation;

having regard to the draft opinion adopted by Commission 1 on 4 October 2001 (CdR 183/2001 rev. 2,
rapporteur: Mr Bree, Member of Sligo County Council, Member of Border Regional Authority IRL/PES);

whereas according to Article 2 of the EC Treaty, economic and social cohesion is one of the principal
objectives of the European Union (EU);

whereas Article 158 of the EC Treaty commits the EU to strengthening economic and social cohesion,
reducing disparities between levels of development of the various regions and promoting the development
of the least-favoured regions;

whereas in order to pursue this objective more effectively, Article 130d (now Article 161) of the
Maastricht Treaty established a Cohesion Fund;

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whereas this Fund was formally established by Council Regulation (EEC) No 1164/1994, having been
preceded by a provisional cohesion financial instrument;

whereas the principal aim of this Fund is to help countries with GDP per capita of less than 90 % of the
Community average to meet the challenges posed by economic and monetary union, by providing
financial contributions to the development of environmental and transport infrastructure;

whereas compliance with the economic and stability programmes is a condition for access to the
Cohesion Fund;

whereas Article 154(2) of the EC Treaty on Trans-European Networks (TENs) calls for special emphasis
on linking peripheral areas with the EU’s central regions;

whereas environmental projects supported by the Cohesion Fund are intended to help the four
beneficiaries meet the objectives of agreed EU environmental objectives;

whereas evidenced by the results it has achieved, the Cohesion Fund is an effective means of cohesion;

whereas in 1999, the Commission submitted proposals to revise two major environmental Directives
which affect projects supported by the Cohesion Fund, the Environmental Impact Assessment Directive
and the Habitats Directive;

whereas 1999 was the last year of the operation of the Cohesion Fund for the 1993-1999 programming
period;

whereas the Commission’s Annual Report covers the Cohesion Fund’s activities in 1999 as required by
the 1994 Regulation as well as providing an overall assessment of the entire programming period;

whereas by the end of 1999, the Commission had committed all of the financial appropriations of the
Cohesion Fund for 1999 and 91,6 % of payment appropriations had been implemented in 1999;

whereas the Berlin Council in 1999 decided that the current cohesion countries would continue to be
eligible for Cohesion Fund support after 2000 and that eligibility would be reviewed in 2003;

whereas the EU has established a Pre-Accession Structural Instrument (ISPA) to help the applicant
countries achieve EU transport and environmental objectives;

whereas the cohesion countries and the Commission have agreed Strategy Reference Documents setting
out the principal projects to be funded under the current programming period (2000-2006),

unanimously adopted the following opinion at its 41st plenary session on 14 and 15 November 2001

(meeting of 15 November).

The views and recommendations of the Committee of the
Regions concerning the 1999 Annual Cohesion Fund
Report:

main developments in the four cohesion countries, Spain,
Portugal, Greece and Ireland, in 1999;

1. The Cohesion Fund in 1999

1.1.
The Committee acknowledges and congratulates the
Commission for its efforts in producing the 1999 Report and
sees this report as an essential tool in assessing the operation
of the Cohesion Fund and EU and Member State cohesion
policies. It notes with satisfaction the detailed coverage of the

1.2.
the Committee congratulates the Commission for
successfully overseeing the operation of the Cohesion Fund in
the four cohesion countries in 1999. The Cohesion Fund
clearly is a success and has been of undoubted benefit both to
the countries concerned and to the EU as a whole though
much remains to be done, both before and after enlargement,
in terms of improving transport and environmental infrastruc-
tures and achieving real convergence among the Member
States and all regions of the EU;

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1.3.
the Committee is aware that in 1999, the strategy
adopted in previous years was not substantially altered and
that the emphasis was very much on finalising projects rather
that starting new ones, that particular efforts were made in
1999 to ensure overall compliance with objectives for the
entire 1993-99 period, particularly achieving an equal balance
between transport and infrastructure projects and allocating
funding among the cohesion countries in accordance with the
ranges specified in Annex I of the 1994 Regulation establishing
the Fund.

2. Managing, monitoring and evaluating the Cohesion

Fund

2.1.
The Committee notes that the failure to utilise all
payment appropriations available in 1999 was attributed by
the Commission to a large number of applications for
payments reaching the Commission late in 1999 and to the
heavy work-load of the Commission services at the end of
1999. It would ask the Commission to provide more detailed
information on such outstanding commitments in future
Annual Reports as well as calling on the Member States to
ensure projects are submitted in time. It emphasises that the
Commission services responsible for the Cohesion Fund have
to be fully resourced if the Cohesion Fund is to achieve its
objectives;

2.2.
the Committee welcomes the fact that no cases of
fraud were reported by the four cohesion countries in 1999 to
the Commission’s anti-fraud unit UCLAF and reiterates the
importance it attaches to stepping up anti-fraud checks both
at Member State level and at EU level;

the Committee welcomes the fact that no case of
2.3.
‘double-financing’ by the Cohesion Fund and other EU funding
sources was detected in 1999 and emphasises the need to fully
respect the additionality principle;

2.4.
in relation to monitoring, checking and irregularities,
the Committee notes that the Commission’s report refers to ad
hoc committees operating in one Member State (Greece) and
seven sub-committees of the monitoring committee in another
(Spain) and stresses the importance of ensuring overall coher-
ence among the monitoring committees if Cohesion Fund
projects are to be managed, monitored and evaluated correctly;

2.5.
in view of the fact that compliance with the economic
stability and convergence programmes is a condition for
accessing the Cohesion Fund, the Committee would urge the
the
Commission to provide a more detailed analysis of
budgetary performance of the cohesion countries;

the Committee does question the Commission’s state-
2.6.
ment that some of the 18 environmental projects evaluated in
1999 ‘indirectly increased land values within the impacted

area and stimulated economic development, so prompting
new activities and employment’. The Committee believes the
Commission should be wary of suggesting that increased land
values are always of benefit to peripheral regions.

3. Projects Supported by the Cohesion Fund

3.1.
The Committee is pleased to note that many of its
detailed comments and recommendations made in response
to previous Annual Reports on the Cohesion Fund have
subsequently been taken up by the Commission but again
reiterates the importance it attaches to the Cohesion Fund
giving greater priority to nature conservation and improving
the urban environment;

3.2.
the Committee notes that the Commission has ‘never
ceased’ asking the cohesion countries to submit non-road
proposals, welcomes the increase in investment in rail projects
in Spain, Portugal and Greece in 1999, and urges Ireland to
similarly increase investment in rail transportation, particularly
to disadvantaged areas;

the Committee welcomes the increase in investment in

3.3.
solid waste in Portugal and Greece in 1999;

the Committee urges greater investment in the port
3.4.
sector, given the importance of sea transport in the four
beneficiary countries;

3.5.
the Committee is convinced that, despite the need to
finance large-scale projects and to ensure a strategic approach
to project development,
to fund
small-scale flagship projects, particularly in the area of the
environment and nature conservation;

is equally important

it

3.6.
the Committee calls on the Commission to fully assess
the environmental impact of projects financed by the Cohesion
Fund and in full consultation with local communities affected.

4. Transparency and Accountability

4.1.
The Committee notes that the 1999 Annual Report
was published only in January 2001 and urges the Commission
to make greater efforts to ensure that the Annual Report is
published earlier;

the Committee notes that

4.2.
in 1999 meetings and
seminars were held between the Member States and the
Commission, but that no specific meeting was held with the
social partners (though the social partners were informed
about the Cohesion Fund during a meeting on the Structural
Funds), and asks the Commission to ensure that the social
partners are fully involved with, and fully informed about, the
Cohesion Fund;

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4.3.
the Committee requests that the Commission’s evalu-
ation currently underway of the results of the three-year ex-
post evaluation programme, which was launched in 1998 and
continued through 1999, be made publicly available. The
results of the 120 or so evaluations carried out in this process
should likewise be made available;

the Committee requests that

the current Strategy
4.4.
Reference Documents agreed by the cohesion countries and
the Commission be made publicly available;

the Committee has already welcomed the findings of
4.5.
the London School of Economics study of the operation of the
Cohesion Fund and asks that reactions to this study be made
publicly available;

the Committee notes that approximately 0,05 % of
4.6.
cohesion funding under the 1993-99 programming period
was allocated to technical assistance and that two major calls
for tender were published in June 1999 and two consortia of
consultants chosen to commence work in June, and requests
that additional information about technical assistance and the
terms of reference of the appointed consultants be made
available.

5. Compliance with EU legislation

5.1.
The Committee urges the eligible Member States to
fully honour their commitments undertaken in connection
with the nature conservation programme, Natura 2000;

5.2.
the Committee notes that the Commission states that
the Member States are ‘cooperating increasingly well and

Brussels, 15 November 2001.

responding exhaustively to its questions’ as regards compliance
with EU public procurement legislation, reiterates the import-
ance it attaches to compliance with existing public procure-
ment legislation.

6. Role of sub-national levels of government

6.1.
The Committee takes note of the code of conduct on
implementation of cohesion policies agreed by the Com-
mission and the European Parliament on 6 May 1999 and
believes that a strengthening of the role of the Committee of
the Regions in the operation of the Cohesion Fund is necessary;

6.2.
the Committee recalls that a number of projects
supported by the Cohesion Fund originated with local and
regional authorities and recommends that the Commission
take greater account of the views of local and regional levels
of government when assessing which projects are to be
supported;

the Committee notes in relation to monitoring, check-
6.3.
ing and irregularities, that the Commission states that in one
Member State (Greece) meetings were attended by representa-
tives of associations of local authorities whereas in another
(Ireland), the meetings were attended by representatives of
local authorities ‘responsible for the design, implementation
and management of road, water-treatment and water-supply’.
The CoR emphasises that such meetings involve the real
participation of democratically-elected representatives;

6.4.
the Committee believes that decisions on the revenue-
generating potential of projects and their suitability for private
sector involvement should be made following consultation
with the local and regional authorities involved.

The President

of the Committee of the Regions

Jos CHABERT