Opinion of the Committee of the Regions on the "Information Note from the Commission: Common Financial Framework 2004-2006 for the Accession Negotiations"
Date: 2002-05-16
Institutions: European Committee of the Regions
Subjects: common agricultural policy, financial legislation, reform of the CAP, regional policy

C 278/40

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Official Journal of the European Communities

14.11.2002

Opinion of the Committee of the Regions on the ‘Information Note from the Commission:
Common Financial Framework 2004-2006 for the Accession Negotiations’

(2002/C 278/12)

THE COMMITTEE OF THE REGIONS,

having regard to the Information Note issued by the Commission on 30 January 2002: Common
Financial Framework 2004-2006 for the Accession Negotiations (SEC(2002) 102 final);

having regard to its Bureau’s decision of 12 March 2002, under the fifth paragraph of Article 265 of the
Treaty establishing the European Community, to instruct the Commission for External Relations to draw
up an own-initiative opinion;

having regard to the draft opinion (CdR 71/2001 rev.) adopted by the Commission for External Relations
on 3 April 2002 [rapporteur: Lord Hanningfield, Essex County Council (UK/EPP)];

having regard to the Issues paper published by the Commission on 30 January 2002: Enlargement and
Agriculture: Successfully Integrating the new Member States into the CAP (SEC(2002) 95 final);

having regard to the Commission Communication published on 30 January 2002: First Progress Report
on Economic and Social Cohesion (COM(2002) 46 final);

having regard to the Presidency Conclusions of the Berlin European Council, 24 and 25 March 1999;

having regard to its opinion on The Regional Implications of the Common Agricultural Policy on
Enlargement of the EU (CdR 416/2000 fin) (1);

having regard to its opinion on Supporting the Development of Institutional Structures at Local and
Regional Level in the Applicant Countries (CdR 102/2001 fin) (2);

having regard to its opinion on the Second Report on Economic and Social Cohesion (CdR 74/2001
fin) (3);

having regard to its opinion on Reform of the CAP — Developing Rural Competitiveness (CdR 526/1999
fin) (4);

having regard to its opinion on the Regional Impact of European Agriculture and Rural Policy (CdR 253/
2000 fin) (5);

having regard to its opinion on Agenda 2000: the Financing of the European Union after 1999 Taking
Account of Enlargement Prospects and the Challenges of the 21st Century (COM(97) 2000 final — CdR
303/97 fin) (6);

having regard to the report of the CoR-EU Applicant States Liaison Group 1998-2001 [R/CdR 448/2001
item 13a)];

whereas this wave of the enlargement of the European Union represents a challenge that will shape the
face of Europe for generations and that has an impact on all areas of the debate on the future nature and
structure of the European Union;

(1) OJ C 107, 3.5.2002, p. 3.
(2) OJ C 107, 3.5.2002, p. 32.
(3) OJ C 107, 3.5.2002, p. 27.
(4) OJ C 317, 6.11.2000, p. 7.
(5) OJ C 357, 14.12.2001, p. 29.
(6) OJ C 64, 27.2.1998, p. 40.

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whereas local and regional government as the implementers of much of the acquis legislation will have a
key role to play in the success of enlargement,

adopted the following opinion unanimously at its 44th plenary session of 15 and 16 May 2002 (meeting
of 16 May).

VIEWS AND RECOMMENDATIONS OF
THE COMMITTEE OF THE REGIONS

2. Agriculture

The Committee of the Regions

1. General comments on the information note’s con-

tents

The Committee of the Regions

1.1.
notes that in recent months attitudes towards EU
membership in some of the candidate countries have begun to
harden. There is a danger that in the run up to accession these
attitudes could worsen if the negotiations with the candidate
countries generate the perception that they are not entering
the EU on fair terms;

2.1.
believes there is a need for further reform of the CAP
that takes into account the role played by farming in sustaining
the rural economy and that takes particular account of the
difficulties faced by farmers in regions suffering natural
handicaps whilst at the same time promoting sustainable,
environmentally-friendly farming practices that should be
promoted as the European model;

2.2.
supports the unequivocal statement in SEC(2002) 95
final that in the longer term a two tier agricultural policy is
not sustainable. Further reform of the CAP must ensure there
is a Common Agricultural Policy for all Member States;

notes that within the financial framework the key
1.2.
issues are the Common Agricultural Policy and cohesion
funding. 80 % of the European Union’s current budget is spent
on funding for farmers and the poorest regions;

supports the adjustment of the Berlin scenario to
2.3.
ensure progressive access for farmers in the new Member
States to direct payments within the overall financial ceiling of
the Berlin framework;

1.3.
recognises that simply extending current policies in
full and with no transition period or phasing to the new post-
accession Member States would impose a heavy financial
burden on existing Members in the current support period.
Against this background, the CoR stresses the need to keep the
discussions on reform of the EU separate from the accession
negotiations;

agrees with the Commission that the urgent need for
2.4.
the restructuring of the agricultural
industry in the new
Member States would not be best served by immediate access
to full direct payments and that immediate access to full direct
payments might distort the position of agriculture in relation
to other sectors of the economy and the position of rural areas
in relation to urban ones;

1.4.
believes that a transitionary period for full access to
the Common Agricultural Policy and to the Structural Funds
is also in the best interests of the candidate countries. The
forthcoming accession of new countries once again underlines
the long overdue reform of the CAP;

2.5.
considers that transition periods must go hand in hand
with reforms of relevant EU policies on the basis of a clearly
defined timetable, which must be the product of broad
agreement between the 15 existing Member States;

supports the position adopted by the Commission that
1.5.
the expenditure ceilings agreed in Berlin for the period until
2006 should be adhered to and adjustments made to the Berlin
Framework on the basis of an assumption that up to ten new
member states will join in 2004;

notes the risk set out in SEC(2002) 95 final that in the
2.6.
early years after accession the restructuring process might be
associated with rural unemployment and poverty and therefore
that measures undermining semi-subsistence farming (1) and
its welfare function could be counter-productive if no other
safety net is available;

1.6.
requests that in this case adjustments to the overall
financial framework be reviewed to ensure that there are no
disproportionately negative effects on regions either in the
existing Member States or in the new post-accession Member
States.

(1) In Poland national statistics suggest there are 350 000 semi-

subsistence farms — 3-15 hectares in size.

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2.7.
supports the proposal set out in SEC(2002) 95 final
that in order to cushion semi-subsistence farms against the
effects of the Single Market, flat rate income support should
be paid for a transitionary period;

welcomes the proposal to simplify the basis upon
2.8.
which the new Member States might access funding in view of
the relatively high administrative costs of processing a large
number of payments for small farms (1);

2.9.
acknowledges the concerns that have been expressed
in some candidate countries that the effect of these proposals
will be to maintain funding disequilibriums within the Euro-
pean Union that will benefit richer regions at the expense of
poorer;

2.10.
recommends, in view of the above, that in accordance
with the qualitative argument put forward by the Commission
for not fully extending the CAP to acceding countries and the
statement in SEC(2002) 95 final that the EU positions ‘should
be designed so as to support in the best possible way the
efforts undertaken by the candidate countries to restructure
and modernise’, a qualitative determinant should be in place
for access to full CAP;

endorses the proposals of the Commission to increase
2.11.
social development expenditures up to 80 % of CAP payments
within the Berlin financial framework.

3. Structural actions

The Committee of the Regions

recognises that in all the applicant countries effective
3.1.
regional policy and administration will be of the greatest
importance in implementing the acquis and in enabling those
countries to fully benefit from EU membership;

3.2.
supports the adaptation of the profile of funding under
the Berlin Framework to take into account the possibility of
ten new Member States joining in 2004;

3.3.
agrees with the Commission that capacity for absorp-
tion of such funding needs to be taken into account and that
in order to boost absorption capacity more funding should be
focused on cohesion fund expenditure;

( 1) In most of the countries, at least half of the farms are less than

five hectares (SEC(2002) 95 final).

recognises

3.4.
that promoting economic and social
cohesion is a key element in the success of the EU. Enlargement
to 25 would mean a widening of regional and territorial
disparities unparalleled by any previous enlargement (2). A
balance must be struck between the needs of the new Member
States and the needs of existing Member States who have not
yet achieved convergence with EU standards. Likewise, all
reforms or reviews of objectives and procedures concerning
structural actions must take account not only of all the
applicant States, but also of
the poorest regions of the
15 existing Member States and those with structural deficien-
cies, given that considerable interregional differences will
continue to exist among them;

3.5.
believes that cohesion policy benefits the whole Union.
It stimulates the demand for goods and services and increases
the competitiveness of the Union providing opportunities for
sustainable growth. The success of cohesion policy can be seen
in the four cohesion countries (Spain, Ireland, Portugal and
Greece) who have all moved closer to the community average
for per capita GDP. In Ireland per Capita GDP has risen from
64 % of the Community average in 1988 to 119 % in 2000.
In the other three countries the movement has been, on
average, from 68 % to 79 % of the Community average;

3.6.
supports the position set out in COM(2002) 46 final
that no region should see its Objective 1 structural funds
support suddenly cut. The Commission must make clear,
that this support must not have the effect of
however,
increasing Member States’ budgetary commitments (3);

3.7.
wishes to see greater decentralisation of cohesion
policy so that partnerships are managed at the local and
regional level. Building up partnerships at the local level and
involving local stakeholders is the key to the success of

(2) In a Union of 25 the ratio between the richest 10 % of regions
and the least developed 10 % would rise to 4.5 compared to 2.6
in the present EU. The richest 10 % of regions would have GDP
at 170 % of the Community average, for the least developed 10 %
of regions GDP would be at 38 % of the Community average.
(3) In a Union of 25 the regions whose per capita GDP is less than
75 % of the Union average (threshold for Objective 1) will have a
population of 115 million, 25 % of the total. 4 out of 10 inhabi-
tants would be in the regions of existing EU Member States, the
other 6 would be in the regions of candidate countries. The
regions currently eligible for Objective 1 which after enlargement
will be above the 75 % threshold contain 37 million people.
Approximately 25 million of these people live in regions that will
cease to be eligible because of the statistical fall in GDP average
consequent upon enlargement. 12 million of these people live in
regions that would have ceased to be eligible, regardless of
enlargement, because of the success of convergence.

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regional development strategies. The Commission should be
more receptive to regional and local
initiatives designed to
promote cross-border cooperation at transnational and inter-
regional level.

4.

Internal policies

The Committee of the Regions

4.1.
welcomes the Commission’s recognition of the priority
to be laid on institution building. The work of the CoR’s
Enlargement Group has demonstrated the key role that
local and regional authorities have to play in the successful
functioning of the candidate countries within the EU. These
countries still require a great deal of support to build up their
local and regional governance structures. The successful future
application of the acquis and the Union’s agricultural and
structural policies rely upon building up expertise, competence
and capacity at the local and regional level;

4.2.
The difficulties experienced by the candidate countries
in benefiting from accessible resources through the Structural
Funds now deserve close attention. Special measures must be
taken to improve, as quickly as possible,
the candidate
countries’ opportunities to receive support in an effective way.
The Commission should take this into consideration — inter

Brussels, 16 May 2002.

alia — when deciding how Phare resources are to be used. An
important question in the accession negotiations should be
how EU resources can make a better contribution to building
up stable local and regional structures in the candidate
countries;

4.3.
supports the additional funding for the safe decom-
missioning of nuclear power plants in Slovakia and Lithuania.

5. Cyprus

The Committee of the Regions

supports

5.1.
intention to make
additional funding available to the northern part of Cyprus
were it to form part of the accession process.

the Commission’s

6. Transitional arrangements

The Committee of the Regions

6.1.
supports the establishment of transitionary arrange-
ments to ensure that no acceding Member State has a
worse net budgetary position than it had in the year before
enlargement.

The President

of the Committee of the Regions

Albert BORE