WRITTEN QUESTION E-3091/02 by Ilda Figueiredo (GUE/NGL) to the Commission. Implementation of the Structural Funds and the n+2 rule.
Date: 2002-10-28
Institutions: European Parliament, Provisional data
Subjects: EU financing, Structural Funds, aid system, development aid, regional aid, use of aid

3.7.2003

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Official Journal of the European Union

C 155 E/89

(2003/C 155 E/100)

WRITTEN QUESTION E-3082/02

by Jonas Sjöstedt (GUE/NGL) to the Council

(28 October 2002)

Subject: Failure in Sweden of EIB preferential loans for small businesses

There is much talk from political quarters in the European Union of protecting and promoting small and
medium-sized enterprises. Preferential loans for such businesses is one method of assisting them. Because
of its high standing, the EIB is able to lend money on preferential terms. The overriding objective of the
EIB is to promote development in the EU and integration between the Member States.

In 2001, Föreningssparbanken became the first Swedish bank to conclude an agreement with the EIB to
offer preferential loans to small and medium-sized businesses. Within the framework of a ‘global loan’,
Föreningssparbanken had the facility to lend some SEK 400 million, which was primarily intended to
finance small businesses’ investments in infrastructure and industry.

A year later, however, in May 2002, it was noted that the EIB’s partner had not lent a single krona of the
amount earmarked. The bank had had numerous inquiries but the customers thought that the benefits
were poor in relation to the terms. The bank in Sweden had hoped to be able to deliver something of
benefit to its corporate customers. The idea was that the EIB loan would be cheaper than the commercial
banks’ but in May 2002 it was observed that compared with Föreningssparbanken’s normal business loans,
the difference in interest rates was not even half a percent but rather 10 to 20 percentage points, which
was not particularly advantageous for borrowers.

Another reason for entrepreneurs’ lack of interest was the additional administrative work. The involvement
of the EIB means that yet another party demands scrutiny of the company, which may be reasonable but is
also a source of irritation. As the EIB is a participating party, it must in some way take part in the lending
process but, at the same time, the risk remains with Föreningssparbanken.

In what way will the Council take this experience from Sweden into account when it discusses setting up
preferential loans for small and medium-sized businesses and the terms and conditions for them?

Reply

(20 February 2003)

It is true that in some cases the EIB loans may be less competitive than in others. On the one hand, the EIB
obtains its resources in the market and on the other, interest rates in Sweden are relatively low at this
moment for small and medium-sized businesses. The Council will consider all relevant experiences if and
when considering a possible proposal by the Commission.

In any case it is always the intermediary bank that decides on terms and conditions of its loans to the final
beneficiary since it takes the ultimate risk.

(2003/C 155 E/101)

WRITTEN QUESTION E-3091/02

by Ilda Figueiredo (GUE/NGL) to the Commission

(28 October 2002)

Subject: Implementation of the Structural Funds and the ‘n+2’ rule

in
The current period of economic slowdown and the constraints imposed on public expenditure,
particular public investment, by the Stability Pact are creating problems for the correct and full
implementation of the Structural Funds. The situation is all the more serious for countries such as
Portugal, which need more capital and investment, as the questioner has discovered during various visits
and meetings. Furthermore, the level of co-financing and the existing regulatory procedures, especially after
the changes brought in by Agenda 2000, do not seem to have helped to improve the situation. In this

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3.7.2003

context the ‘n+2’ rule, also known as the ‘guillotine clause’ is creating serious concern regarding cuts in
structural expenditure. Commissioner Michel Barnier, when talking to the European Parliament’s
Committee on Regional Policy on 9 October 2001, called the rule a ‘time-bomb’ and more recently, in
July 2002, he presented figures showing that more than EUR 3 000 million under the Structural Funds was
covered by the ‘n+2’ rule, that the implementation rate for 45 operational programmes was less than 50 %
and that, although there is no substantial threat of appropriations being lost in 2002, the situation will
become worse in 2003.

1.
Does the Commission not consider that the ‘n+2’ rule is undermining the expenditure aims of the
Structural Funds and should therefore be eliminated? What is the situation in 2002 and what are the
prospects for 2003 as regards the application of this rule?

2. What is the Commissions view of the review of the procedures for refunds and payments for the
Structural Funds introduced in Agenda 2000? What measures does it intend to introduce to improve the
implementation of the Structural Funds, in particular by revising or simplifying the refund and payment
procedures?

3. What does the Commission think of the increase in the rate of Community co-financing for the
Objective 1 regions as a way of improving the absorption capacity and full
implementation of the
Structural Funds?

Answer given by Mr Barnier on behalf of the Commission

(9 December 2002)

that

the ‘n+2’

The Commission would remind the Honourable Member
rule on the automatic
decommitment of appropriations is to be found in Article 31(2) of Council Regulation (EC) No 1260/
1999 laying down general provisions on the Structural Funds (1), which was adopted unanimously. It is
designed to impose year-on-year discipline on the management of the Structural Funds, which should
encourage the Member States to ensure that implementation of the programmes progresses at an adequate
and sustained rate,
instead of delays emerging only at the end of the period, as happened in earlier
the Ministers responsible for regional policy on
programming periods. When the Commission met
7 October 2002, a meeting to which Parliament was invited, the Member States confirmed their adherence
to this rule on the automatic decommitment of appropriations, which ensures the sound management of
the funds allocated to structural policy.

As regards 2002, the first year to which this rule has applied, there is a risk of loss at the end of the year
for a limited number of programmes. The applications for payment submitted to the Commission by the
end of 2002 will certainly reduce these figures very substantially.

The number of programmes which could be affected by application of the ‘n+2’ rule at the end of 2003
cannot be estimated at this juncture.

The payment procedures introduced by the new Regulation on the Structural Funds have strengthened the
link between payments made by the Funds and the financial needs of the operations.

Before 2000, payments from the Funds were based mainly on a system of advances calculated on the
programme implementation plans which, only too frequently, did not correspond to actual progress on the
spot. This system was criticised by Parliament, which pointed to the weak correlation between budget
implementation and the progress of Structural Funds programmes.

As regards the payments system, the Commission believes that a better rate of programme implementation
depends on an improved rate of payments to beneficiaries. Here, the system seems well adapted to needs,
in view of the substantial amount of the initial payment on account and the time normally required for the
payment of reimbursements (60 days). The Commission is continuing its efforts to reduce the time needed
for payments as far as possible.

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Regulation (EC) No 1260/1999 allows the Member States substantial scope as regards modulation of the
rates of contribution of the Funds. Determination of the real rate of aid may vary depending, for example,
on the multiplier effect required for a project to be carried out. The Commission would stress that an
increase in the rate of Community part-financing would, for a given level of finance, reduce the number of
projects which could receive Community aid. Such a measure would not solve the difficulties experienced
in implementing the Structural Funds, which do not lie in the rates of part-finance applied but rather in
the capacity of the Member States to implement the programmes in the time allowed by the rules. That is
why, at the meeting on 7 October referred to above, the Commission made specific proposals designed to
simplify, clarify, coordinate and make more flexible the management of the Structural Funds, all of which
represent ways of improving their implementation.

(1) OJ L 161, 26.6.1999.

(2003/C 155 E/102)

WRITTEN QUESTION E-3104/02

by Nelly Maes (Verts/ALE) to the Council

(29 October 2002)

Subject: Ban on Batasuna

In early September the Basque political party Batasuna was outlawed. Many Basques,
irrespective of
whether or not they support Batasuna, see this as a political and strategic move to suppress the aspirations
of many democratic and peaceful Basques. Human rights are being restricted in an unacceptable way. So
far no evidence has been produced that would justify a ban.

Does the Council share the view that the only way of finding a solution is through democratic political
negotiations? If so, who does the Council see as the negotiating partner on the Basque side in this road to
a peaceful settlement? If not, does the Council support the chosen path of confrontation, conflict and
violence?

Reply

(3 March 2003)

The Council would remind the Honourable Member that, although, under Article 33 of the TEU, the
maintenance of law and order and the safeguarding of internal security remain an area for which Member
States alone are responsible, combating terrorism is in the Union’s common interest. The Council would
draw attention here to the anti-terrorist legislation adopted by the Union.

The Council would point out that, under Article 6(1) of the TEU, the Union is founded on the principles of
liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles
which are common to the Member States.

(2003/C 155 E/103)

WRITTEN QUESTION E-3110/02

by Camilo Nogueira Román (Verts/ALE) to the Council

(29 October 2002)

Subject: Crimes committed by the Israeli Prime Minister, Ariel Sharon

During the last few days the Israeli Army has killed dozens of people, including children, in the Occupied
Territories on the orders of the Israeli Prime Minister, Ariel Sharon. When will the Council unequivocally
politically condemn the Israeli
leader for these crimes against humanity and impose the necessary
sanctions?