Special Report No 5/2006 concerning the MEDA programme, together with the Commission's replies
Date: 2006-05-31
Institutions: European Court of Auditors
Subjects: EU aid, EU financing, EU programme, European neighbourhood policy, Union for the Mediterranean, cooperation policy, economic reform, project management, social development

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I

(Information)

COURT OF AUDITORS

SPECIAL REPORT No 5/2006

concerning the MEDA programme, together with the Commission’s
replies

(presented pursuant to Article 248(4), second subparagraph, of the EC Treaty)

(2006/C 200/01)

CONTENTS

Paragraph

Page

LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit scope and approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-VII

1-11

1-5

6-11

OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12-49

Does the MEDA programme contribute to economic reforms and social development in
the participating Mediterranean countries? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Projects relevant to MEDA and country objectives but not always sufficiently con-
centrated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ownership helps to achieve better results and is being encouraged through direct
budget support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capacity-building is a significant element in MEDA programme . . . . . . . . . . . . . . .

Limited results from the aid so far . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Is the Commission’s management of the MEDA programme adequate? . . . . . . . . . . . . . .

Programming, preparation and implementation have all improved . . . . . . . . . . . . .

Monitoring and evaluation have become more systematic . . . . . . . . . . . . . . . . . . . .

Donor coordination efforts have intensified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contribution of the MEDA programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commission management

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12-31

12-16

17-23

24-26

27-31

32-49

32-41

42-47

48-49

50-57

50-52

53-57

58

ANNEX I — MEDA commitments/disbursements 1995 to 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX II — Projects/programmes included in the audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Commission’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

3

4

4

4

5

5

5

5

7

7

8

8

10

10

10

10

11

11

12

13

16

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LIST OF ABBREVIATIONS

CSP

EC

ECU

EIB

ENP

Country Strategy Paper

European Community

European Currency Unit

European Investment Bank

European Neighbourhood Policy

ENPI

European Neighbourhood and Partnership Instrument

EuropeAid

EuropeAid Cooperation Office

GDP

Gross Domestic Product

MEDA

Measures to accompany the economic and social reforms in the Mediterranean non-
member countries

MED-Committee Advisory Committee of Member States for the Mediterranean region

NIP

SAF

TA

National Indicative Programme

Structural Adjustment Facility

Technical assistance

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SUMMARY

I.
In 1995 the EU and 12 Mediterranean countries decided on a new phase in their relationship, called the
‘Barcelona Process’ or the ‘Euro-Mediterranean Partnership’. The main aim is to develop different aspects of the
partnership, including the political, economic and financial, and social and cultural dimensions (see para-
graphs 1 and 2).

II.
The MEDA programme is the EC’s main financial instrument for the implementation of the Euro-
Mediterranean Partnership, with more than 8 000 million euro allocated for the period 1995 to 2006. At the
end of 2005 about 7 000 million euro had been committed for different projects and programmes, and some
4 000 million euro had been spent (see paragraphs 3 to 5).

III.
The Court has audited the MEDA programme, to determine whether it actually contributes to eco-
nomic reform and social development in the partner countries, and whether the Commission’s management
of the programme is adequate (see paragraphs 6 to 11).

IV.

Regarding the MEDA programme’s contribution, the EC support has:

— been relevant to the needs of the countries concerned,

— focused on a limited number of sectors in two of the three countries examined,

— encouraged ownership by an increasing use of budget support,

— systematically included capacity-building measures (see paragraphs 12 to 26).

Concrete results, after more than 10 years of MEDA, are so far rather limited as many projects have not
V.
yet been completed. For most MEDA countries the impact of the EC support is to be found not so much in its
financial importance as in its attempts to address sensitive policy reform issues and support poorer segments
of populations (see paragraphs 27 to 31).

VI.
The Commission’s management of the MEDA programme has clearly improved since the early
years and can be considered as satisfactory, as programming efforts now result in a more even allocation of
resources over time, preparation periods are becoming shorter and disbursements have increased significantly.
Contributing factors to these improvements are an increase in the number of projects and programmes, a larger
share of budget support in the total programme and the overall positive effect of devolution on project prepa-
ration and implementation by delegations. Other improvements include more systematic monitoring and
evaluation and more intensive dialogue and coordination with local counterparts and other donors. The most
common cause of implementation delays remains procurement problems (see paragraphs 32 to 49).

VII.
Partnership Instrument coming into effect in 2007, the Court recommends that the Commission should:

With the MEDA Regulation coming to an end in 2006 and the new European Neighbourhood and

— ensure a smooth and quick transition to the new country programmes, to avoid negative consequences
for future implementation; define more clearly in the new country programming documents its strategic
objectives and establish appropriate indicators, to allow for better monitoring and evaluation of impact,

— continue to focus its support on a limited number of intervention areas to ensure coherence and to keep

the programmes manageable,

— continue to search for best practices in managing projects to avoid delays.

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INTRODUCTION

Background

and social structures and mitigate any negative consequences
which may result from economic development. A total reference
amount of 3 424,5 million ECU was provided by the Regulation
for the period 1995 to 1999.

1.
After some 20 years of increasing cooperation, on trade
and development issues in particular, between the EU, its Mem-
ber States and the 12 Mediterranean countries concerned, the
Conference of EU and Mediterranean foreign ministers held
in Barcelona (November 1995) decided on a new phase of
‘partnership’, also called the
the
Euro-Mediterranean Partnership (1).

‘Barcelona Process’ or

4.
Following an evaluation of the Regulation in 1999, it was
amended by Council Regulation (EC) No 2698/2000 (3), which is
generally referred to as the MEDA-II Regulation. This Regulation
provides a reference amount for the period 2000 to 2006 of
5 350 million euro. The amendment also added another area of
activities to be supported (Improvement of conditions for the
underprivileged), and it streamlined certain decision-making
procedures.

2.
The Declaration adopted at the Barcelona Conference for-
mulated three domains for the partnership, with the related key
objectives, as follows:

5.
Total actual commitments made for the years 1995 to
2005 amount to some 6 900 million euro, and actual disburse-
ments for the same period to some 4 000 million euro. A more
detailed overview of commitments and disbursements by coun-
try for the period 1995 to 2005 is included in Annex I.

— a political and security partnership, to establish a common
area of peace and stability, based on fundamental principles
including respect for human rights and democracy,

Audit scope and approach

— an economic and financial partnership, to create an area of
shared prosperity through the progressive establishment of a
free-trade area, accompanied by substantial EC financial sup-
port for economic transition in the partner countries and for
the negative social and economic consequences of this
reform process,

— a social, cultural and human partnership, to develop human
resources, promote understanding between cultures and
develop free and flourishing civil societies.

The MEDA programme is the EC’s main financial instru-
3.
ment for the implementation of the Euro-Mediterranean Partner-
ship, the legal basis for which was provided by Council Regula-
tion (EC) No 1488/96 of 23 July 1996 (2). The Regulation
describes a wide array of support measures to be undertaken in
support of efforts by Mediterranean partners to reform their eco-
nomic

(1) The partner countries in 1995 were: Morocco, Algeria, Tunisia, Egypt,
Israel, Jordan, the Palestinian Authority, Lebanon, Syria, Turkey,
Cyprus and Malta. Of these Cyprus, Malta and Turkey no longer
receive bilateral assistance under MEDA, as Cyprus and Malta have
become EU Member States, while Turkey receives special pre-accession
assistance. Israel is considered to have too high a national income to
qualify for bilateral assistance. All four countries may still benefit from
the MEDA regional programme.

(2) Council Regulation (EC) No 1488/96 of 23 July 1996 on financial and
technical measures to accompany (MEDA) the reform of economic
and social structures in the framework of the Euro-Mediterranean
partnership (OJ L 189, 30.7.1996, p. 1). The term ‘MEDA’ actually
comes from the French ‘mesures d’accompagnement’, but in practice,
and also in this report, the programme as a whole is called ‘MEDA’.
Since Regulation (EC) No 1488/96, which covered the period 1995 to
1999, was amended and extended by Regulation (EC) No 2698/2000,
covering the period 2000 to 2006, the two periods and the respective
programmes are also referred to as MEDA-I and MEDA-II.

6.
In the period August to December 2005 the Court carried
out an audit of the MEDA programme, on the basis of the fol-
lowing questions.

(a) Does the MEDA programme actually contribute to economic
reform and social development in the participating Mediter-
ranean countries?

(b)

Is the Commission’s management of the MEDA programme
adequate?

7.
The main aspects examined under the first question
include programme relevance and focus, degree of ownership,
capacity-building and results achieved.

8.
The main aspects considered for the second question are
speed and efficiency of programming, preparation and imple-
mentation, monitoring and evaluation, and donor coordination.

9.
Economic reform and social development include support
for economic transition and the establishment of a Euro-
Mediterranean free-trade area (e.g. trade improvements, job cre-
ation and private sector development), operations in support of
reform programmes (e.g. in financial services and public admin-
istration), upgrading of economic infrastructures, particularly in
the sectors of transport, energy, rural and urban development,
and improvements to social services, especially in the areas of
health, family planning, water supplies, sanitation and housing.

(3) OJ L 311, 12.12.2000, p. 1.

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The audit work included visits to Egypt and Morocco,
10.
where a selection of projects and programmes was audited and
discussions were held with Delegation staff, local authorities,
project managers, technical assistants and other donors. In addi-
tion a desk review of projects and programmes in Jordan was car-
ried out. The audit focused on projects funded under MEDA I
and II. Projects funded through the old Protocols (1), the regional
component of the MEDA programme, or through horizontal and
thematic budget lines were not included in this audit. The com-
plete list of projects and programmes examined under the audit
is included in Annex II.

Finally, the audit also examined relevant evaluation
11.
reports, prepared on behalf of the Commission, including the
Mid-term evaluation of the MEDA-II programme, which was
completed in 2005. This evaluation has concentrated on two
main questions, i.e. how relevant is the MEDA II programme and
how effective/efficient are MEDA II management and implemen-
tation arrangements. These questions were divided into several
sub-questions, for each of which an appropriate evaluation
approach was designed,
including an extensive documentary
review and numerous interviews in the Commission’s Headquar-
ters and in the two countries visited (Tunisia and Egypt). The
Court has analysed this evaluation in relation to its own audit and
has concluded that it provides sufficient basis to use the evalua-
tion results as corroborative evidence for its own audit findings
(see also paragraphs 46 and 47). Where relevant reference is
therefore made to this mid-term evaluation.

OBSERVATIONS

Does the MEDA programme contribute to economic reforms
and social development in the participating Mediterranean
countries?

Projects relevant to MEDA and country objectives but not
always sufficiently concentrated

12.
All projects examined in the three countries covered by
the audit were relevant to the MEDA objectives (2) and in line
with the respective country’s national development objectives.
Confirmation of this observation can be found in the Commis-
sion’s own mid-term evaluation of the MEDA-II programme,
which concluded that the relevance of the programme was satis-
factory.

In all three countries the complete portfolio of EC sup-
13.
port has been a mix of interventions aiming at economic reforms
and social development, with Egypt and Morocco showing a fair
balance between these two different areas, while in the case of Jor-
dan the emphasis has been more on economic reforms.

14.
However, because the MEDA objectives and possible
support measures are rather widely defined in the MEDA Regu-
lations, the question is whether in practice the Commission has
focused its support, which could increase the coherence of the
support.

15.
In two of the three countries examined (Egypt and Jor-
dan) there has been a clear tendency to focus support on a lim-
ited number of sectors and through a limited number of interven-
tions. In the third country, Morocco, this has not really been the
case, as EC support has been spread over a larger number of inter-
ventions covering many different sectors, particularly during the
MEDA-I period and with a slight
improvement during
MEDA-II (3).

16.
Meanwhile the Commission has formulated a new exter-
nal relations policy towards the neighbouring countries called the
European Neighbourhood Policy (ENP). Under this policy a new
financial instrument (the European Neighbourhood and Partner-
ship Instrument) should become effective in 2007, replacing sev-
eral other instruments including MEDA. As a first step towards
implementing the ENP, specific Action Plans are being drawn up
for all the partner countries. Given that these Action Plans set out
a full set of priorities covering all areas of cooperation (4), the
forthcoming series of country strategy papers (covering the
period 2007 to 2013) may have to focus on a more limited num-
ber of areas of intervention.

Ownership helps to achieve better results and is being
encouraged through direct budget support

17.
One of the generally accepted principles for effective aid
is the encouragement of ownership (i.e. that the intended benefi-
ciaries should have responsibility and control over projects and
programmes at all stages) (5). Therefore, in considering whether
the MEDA programme actually contributes to economic reform
and social development in the participating Mediterranean coun-
tries, a second point of attention in the audit was whether the
Commission has encouraged ownership of its programmes by the
recipient governments.

(1) During the period 1979 to 1995 financial and technical cooperation
with the Mediterranean countries was based on a series of bilateral
Financial Protocols.

(2) The first MEDA Regulation states that the Community will support the
Mediterranean partners’ efforts to reform economic and social struc-
tures and mitigate any negative consequences which may result from
economic development. The MEDA-II Regulation added to these areas
a third one, namely to improve conditions for the underprivileged.
The more detailed list of possible support measures is given in
Annex II of the MEDA Regulation.

(3) As an indication, the number of projects/programmes approved under
MEDA-I (support to EIB-interventions excluded) for Egypt was 4, for
Jordan 6, and for Morocco 26. For the MEDA-II period up to 2005 the
numbers are 14 for Egypt, 8 for Jordan and 19 for Morocco.

(4) The Action Plans for Morocco and Jordan which have already been
adopted, include 85 and 68 different actions respectively to be under-
taken.

(5) Organisation for Economic Cooperation and Development, DAC Prin-

ciples for Effective Aid, 1992.

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One way of doing that is to replace the traditional project
18.
support by general budget support, whereby the recipient gov-
ernment and the donor agree on certain activities to be imple-
mented (often policy reform measures) but instead of being used
to cover specific expenditure the donor funds are paid directly
into the government treasury. The decision to use budget support
also depends, of course, on fulfilment of certain conditions, such
as the existence of a certain standard of public finance manage-
ment (1). This method of delivering aid funds is generally consid-
ered to encourage a sense of ownership on the part of the recipi-
ent government, although it cannot ensure this (for an example
of a budget support programme and the type of conditions
involved, see Box 1).

Box 1
Example of budget support

The audit showed that in all three countries there had
19.
been a clear increase in the use of the budget support instrument,
and the statistical data included in the mid-term evaluation also
confirmed that this was the case for all MEDA countries com-
bined (2). However, in Morocco there are also a large number of
traditional projects, including a number of projects providing
infrastructure and equipment, that by their very nature do not
really encourage ownership, contrary to projects which are more
concerned with training and institution-building.

20.
As for the budget support operations completed so far,
measures were implemented satisfactorily and disbursements
were made without major delays or problems. From this one can
conclude that in these cases local authorities have actually
‘assumed ownership’ of the reform programmes.

Trade Enhancement Programme, Egypt (40 million euro)

Programme objectives

— Reduction of deadlines and costs associated with Customs
import and export formalities and other checks and standards,

21.
However budget support is not the only instrument for
providing support. Policy reforms often need complementary
actions, such as training or certain types of equipment, for which
the traditional project approach is better suited, as is also the case
when the objective is to provide targeted support for a certain
population group or region, e.g. through rural development.

— strengthening of export incentives.

Implementation mechanism

In the Financing Agreement these objectives have been translated into
a number of actions to be undertaken by the Egyptian authorities. In
addition to sector-specific actions, a budget support programme may
also contain some conditions relating to macro-economic policies or
to public finance management performance. For every action the
agreement specifies further details of the action, plus the indicators,
documents and other sources of information that will be used to verify
whether all the actions have actually been completed. Disbursement
of the EC funds, in two tranches, is dependent on a positive assess-
ment of whether actions have been completed.

Activities achieved

Before the first
in
August 2005, actions undertaken and completed included the follow-
ing:

tranche of 20 million euro was released,

22.
In such a project situation ownership can also be encour-
aged, not only ownership by local authorities, but also by the
people benefiting from aid-supported activities. A positive
example was found during the audit in Morocco, in the case of a
rural development project in the Central Atlas mountains. A par-
ticipative approach was followed vis-à-vis the local population,
which meant that all local partners were fully involved in the
whole process of preparing and implementing the local develop-
ment plans. It was evident that this approach was contributing to
the success of the project activities (see Box 2).

Box 2
Example of project support

Rural Development in the Central Atlas Mountains, Morocco

— maintained prudent macro-economic policies in order to safe-
guard internal and external balances according to planned 2005-
2007 objectives,

(Khénifra Project, 15 million euro)

Project objectives

— achieved significant progress in fiscal consolidation and budget

accounting,

— Contribute to the reduction of regional disparities in Morocco

regarding social and economic development,

— introduced an electronic clearance system in Customs,

— contribute to the promotion of the role of rural women,

— allowed Customs processing on a 24-hour basis,

— published a consolidated Customs compendium of all rules and

procedures,

— opened a single window in Customs Offices to lodge complaints.

— contribute to the sustainable management of natural resources,
the fight against erosion and the reduction of the effects of
droughts.

(1) See also Special Report No 2/2005 concerning EDF budget aid to ACP
countries: the Commission’s management of the public reform aspect
(OJ C 249, 7.10.2005).

(2) The mid-term evaluation report, Table 2.3, shows that, when the
MEDA-I and II periods are compared, the proportion of budget sup-
port has increased from 29 % to 40 %, while the proportion of project
support has decreased from 53 % to 35 %. The balance is made up of
regional projects and support to EIB activities.

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Implementation mechanism

After the project’s Financing Agreement has been signed, project
management prepares a detailed work plan. When this is approved
the Delegation will pay an advance to the project and implementa-
tion can start. Project accounts will be prepared, audited and submit-
ted to the Delegation on a regular basis, after which a new advance
can be released to the project.

Example of activities

During the first half of 2005 the main activities included:

— the Project Management Unit received computer and office

equipment,

— contracts were signed with local management associations. 33

of these associations were operational,

— more than 250 000 fruit trees were distributed,

— six beekeeping units were supplied with equipment and training

was given,

— poultry farming by women was encouraged by the provision of

10 000 chicks,

— work began on the irrigation of 468 hectares,

— work on 52,6 km for eight tracks to connect villages was com-
pleted and work on five other tracks was being carried out,

— 271 hectares had been re-forested,

— vaccinations of cattle for 200 owners were carried out,

— the project collaborated with two local management associa-

tions to set up livestock feeding centres.

23.
In the end the decisive factor for increasing ownership
lies not just in the aid delivery modality, but in local authorities
openness to the idea and process of reform. This was also dem-
onstrated by several projects/programmes included in the audit,
where progress clearly improved after a beneficiary institution
became fully involved or a new minister took a stronger interest
in a particular programme.

Capacity-building is a significant element
programme

in MEDA

24.
Another important factor that will affect whether the
MEDA programme actually contributes to economic reform and
social development in the participating Mediterranean countries
is that of local institutional capacity to plan and implement
reform programmes and other development activities. The audit
examined whether the Commission contributes to the building
up of this capacity.

Practically all projects/programmes audited in the three
25.
countries included capacity-building measures or components. In

a number of cases capacity-building within the participating insti-
tutions is even the main objective of the intervention (1).

A specific area of an administrative nature where local
26.
institutional capacity has been in need of strengthening is pro-
curement by government bodies, but applying EC procedures. As
will be further discussed in paragraph 39, problems with procure-
ment have been a major cause of delays in the implementation of
projects.

Limited results from the aid so far

27.
The audit has examined a sample of projects from the
three countries (see Annex II) in order to assess whether the
intended results, as defined in individual financing agreements,
were being achieved.

28.
Overall, the results after more than ten years of MEDA
are so far rather limited, because many projects/programmes,
including a substantial number of MEDA-I projects/programmes,
were still ongoing at the time of the audit, and their final results
could not yet be determined (2).

29.
For those projects and programmes that started under
MEDA-I (1995 to 1999), and had been completed or were near-
ing completion, the intended results are generally being achieved,
although not 100 % in all cases. Most projects/programmes under
MEDA-I got off to a very late start, partly because the regulatory
framework for MEDA-I was only ready at a late stage, but also
because many projects experienced delays during their start-up
phase as a result of long tendering procedures. They subsequently
ran out of time, and needed one or more extensions to the origi-
nal project duration (10 out of 11 projects/programmes exam-
ined) in order to accomplish (most of) the planned activities. Ten
of the 11 MEDA-I projects/programmes examined were still being
implemented at the time of the audit (end of 2005).

30.
For most of the MEDA-II projects/programmes it was still
too early to make a proper assessment of their results at the time
of the audit. The budget support operations were usually proceed-
ing according to schedule, but projects, that needed to procure
technical assistance services, and sometimes also equipment or
works, were easily susceptible to delays. Several projects exam-
ined were already expecting time constraints to develop as a result
of the so-called D+3 rule, which restricts the period during which
contracts can be signed (see further information in paragraph 41).

(1) Examples are the vocational training project in Morocco, the trade
enhancement programme in Egypt, the Institutional support to the
Aqaba Special Economic Zone Authority in Jordan, and the support
to the implementation of the Association Agreement in all three coun-
tries.

(2) For example, in the case of Egypt, three of the four MEDA-I pro-
grammes (on health, education, and industrial modernisation) were
still ongoing, with their project durations extended, at the time of the
audit.

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For most of the MEDA countries, the impact of EC sup-
31.
port cannot be attributed to its financial importanceas- the total
EC support is only very limited in comparison with these coun-
tries’ GDP and usually represents less than 1 % of the govern-
ment’s budget. This is certainly the case for two of the three coun-
tries covered by this audit (1). The impact of the EC support lies
more in its attempts to address and support reform issues (e.g.
health finance system, industrial modernisation, banking sector
reform, Customs improvement) and to encourage Governments
to tackle such issues, as well as in its willingness to support the
poorer, underprivileged segments of a populations. The EC sup-
port is therefore often of a qualitative and innovative nature, the
impact of which is difficult to quantify.

Is the Commission’s management of the MEDA programme
adequate?

Programming, preparation and implementation have all improved

Programming

For the MEDA-I period programming and project prepa-
32.
ration started late. The MEDA Regulation itself was only adopted
indicative programmes covered the
in 1996, and the first

years 1996 to 1998. As a result, the commitments were concen-
trated in a few years, and sometimes in a few large projects or
programmes only, e.g. the four MEDA-I commitments for Egypt
ranged from 100 to 250 million euro, commitments for Jordan
included two structural adjustment
facilities (SAF) of 100
and 80 million euro respectively, and Morocco’s commitments
included a SAF of 120 million and a road project of 80 million
euro.

The MEDA-II Regulation, which came into effect in
33.
2001, included new programming rules. These rules were meant
to speed up the process of programming, by allowing the pro-
posed commitments for a particular year to be submitted to the
MED-Committee once a year, in an annual financing plan with
short project summaries attached (instead of individual project
proposals submitted at various points in time).

34.
In addition a new series of Country Strategy Papers (CSP)
was produced in 2001, covering the period 2002 to 2006, as well
as new National Indicative Programmes (NIP) for 2002 to 2004.
Since 2002 the actual commitments have followed these pro-
gramming documents closely. In particular, from the 2002 to
2004 NIPs onwards project proposals have been formulated in a
much more continuous manner, as can be seen in the Table. Total
commitments for all countries together also show a more even
distribution from 2000 onwards.

Commitments and disbursements for Egypt, Jordan, Morocco, and all countries (including regional
programmes), 1995 to 2005

Table

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Total

(in million euro)

Egypt

Commitments

Disbursements

Jordan

Commitments

Disbursements

Morocco

Commitments

Disbursements

All countries

Commitments

Disbursements

—

—

7

—

30

—

75

—

203

397

2

88

11

67

100

60

10

45

8

2

129

2

13

64

15

84

—

62

20

11

— 236

219

176

141

120

1

31

42

54

40

41

173

50

370

155

911

213

809

217

797

240

569

318

603

318

78

26

92

50

122

102

612

454

104

57

159

151

110

133

1 150

650

42

47

143

102

615

498

35

51

152

158

698

801

58

43

135

213

735

781

516

393

1 472

783

6 888

4 043

Source: EuropeAid and Delegation data (minor differences are due to rounding).

(1) See ‘Evaluation of the European Commission’s Country Strategy for
Egypt’, Volume 1, Final report February 2004, paragraph 2.3; and
‘Evaluation de la Stratégie de la Commission européenne pour le
Maroc’, final report, July 2003, paragraph 4.1.

24.8.2006

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Official Journal of the European Union

C 200/9

Preparation

The whole project preparation process involves a num-
35.
ber of steps, starting from first identification, through detailed
preparation, presentation to the Member States’ advisory commit-
tee (the MED-Committee) to the Financing Decision taken by the
Commission and up to the signing of the Financing Agreement
by the Commission and the beneficiary authorities. The review of
the projects/programmes included in the audit (see Annex II)
showed that for the MEDA-II period this process was generally
completed faster than it had been before (1). Contributing factors
are the Commission’s devolution of responsibilities from Head-
quarters in Brussels to its delegations, which has certainly
increased their involvement in the preparation process, the whole
streamlining of the programming process as described in para-
graphs 33 and 34, and also a number of other management
the overall external aid
changes which have been part of
reform (2).

36.
The audit has shown that procurement of services at the
start of a project, usually for technical assistance (TA), takes nec-
essarily a minimum of eight months from issuing the call for ten-
der to signing the contract, but can sometimes take up to two or
even three years (3). This can be the case when the tender fails, e.g.
for lack of a sufficient number of valid offers, and has to be
repeated. Start-up of TA-related projects therefore remains a time-
consuming process, which is easily susceptible to delays. In this
respect there is not much difference between MEDA-I and
MEDA-II.

Implementation

37.
Overall disbursements under the MEDA programmehave
improved as from 2000, and even more clearly from 2002
onwards (see Table). The annual average disbursements over the
MEDA-I period 1995 to 1999 reached 175 million euro per year,
a figure which has tripled to an average of some 528 million euro
for the six-year period 2000 to 2005. For 2004 and 2005 total
disbursements were higher than the total new commitments
made in these years, which means that from 2004 for the first
time since the start of MEDA the cumulative total of outstanding
commitments (4) has been reduced. For MEDA-I, after six years

(1) The MEDA-II mid-term evaluation presents data, compiled by Euro-
peAid, showing that one step in the whole preparation process, i.e. the
time between the Financing Decision and the signing of the Financing
Agreement, has been shortened, from some ten months on average for
1995 to 1999 to about six months for the period 2000 to 2004.
(2) These include for example the establishment of EuropeAid, the estab-
lishment of Quality Support Groups in EuropeAid, preparation of
guidelines and standard formats for project documents.

(3) For example the Trade Enhancement Programme-A in Egypt, where it
took about two years and the Support for Regulatory Reform and Pri-
vatisation project in Jordan where it took three years after the signing
of the Financing Agreement before the TA contracts were signed.

(1995 to 2000) cumulative disbursements reached 38 % of cumu-
lative commitments, while for MEDA-II this percentage had
increased to 46 %, also after six years (2000 to 2005). This is an
indication that the speed of implementation has improved under
MEDA-II. The MEDA-II Mid-term evaluation comes to a similar
conclusion when it states that ‘the programme is reaching matu-
rity in terms of its level of operations’ (5).

Explanatory factors for this improved implementation

38.
are:

(a)

the total portfolio of MEDA projects/programmes under
implementation has steadily increased;

(b) many MEDA-I projects/programmes experienced a slow start
and really only started to disburse funds from 2000 onwards.
For the years 2004 and 2005, some 40 % and 30 % respec-
tively of
total disbursements were still resulting from
projects/programmes which started under MEDA-I. The
devolution process has certainly been a contributory factor
in getting these projects to speed up implementation, thereby
increasing overall disbursements. There is therefore a certain
element of ‘catching up’ involved;

(c) under MEDA-II, as mentioned in paragraph 19, a larger per-
centage of new projects/programmes apply the budget sup-
port instrument, which generally allows for a quicker first
disbursement, as well as larger disbursements than tradi-
tional projects.

39.
This overall positive assessment does not mean that
implementation is always without problems. Procurement prob-
lems are the main cause for delays in implementation. Of the
projects/programmes examined in the audit, practically every one
that includes a procurement component (for works, supplies
or services), has experienced problems, and often delays, in this
respect, for a variety of reasons. Many calls for tenders have had
to be cancelled and repeated for lack of a sufficient number of
technically valid offers. Procurement procedures are generally
considered to be complicated and local project management units
and tenderers are not always fully acquainted with them. In Egypt,
for instance, small local contractors had problems complying
with the administrative requirements for tenders, because all ten-
der documents were in English. The rule that supplies have to be
of European or Mediterranean origin poses another regular prob-
lem, especially when computer or electronic equipment
is
involved.

40.
The audit has shown that as a result of devolution Del-
egations, with their specialised finance and contracts staff now on
the spot, can and do play an important role by helping project
managers and local administrations to deal with the procedural
aspects of procurement. For example, it was found that the Del-
egation in Morocco now organises information meetings prior to

(4) The so-called RAL = reste à liquider.

(5) See Mid-term evaluation, paragraph 6.2.

C 200/10

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Official Journal of the European Union

24.8.2006

launching calls for tenders and has provided support to various
parties concerned at different stages of the procedure. In Egypt
the Delegation also helped to supervise and guide the tender pro-
cess for an important construction component, which might oth-
erwise have been cancelled for lack of time within the remaining
project period. In addition the Delegation in Egypt was in the pro-
cess of examining the possibility of having tender documents
translated into Arabic.

41.
For most of the MEDA-II projects the so-called D+3 rule
applies, which requires contracts for works, supplies or services
to be concluded not later than three years after the date of the
budgetary commitment (1). As a result of this rule several new
projects that were about to start implementation at the time of
the audit and include considerable procurement components
and/or calls for proposals, appear to have only limited time left
to complete these activities.

Monitoring and evaluation have become more systematic

42.
Systematic appraisals are carried out at the macro-level
by the EC’s Delegations (e.g. quarterly macro-economic reports,
regular trade reports, assessments for budget support pro-
grammes) and by others (World Bank, IMF), using standard
macro-economic indicators, but it is difficult to assess the impact
of the Commission’s own support at this level.

43.
It is also very difficult to assess the Commission’s impact
at the level of the EU’s strategic objectives as defined in the indi-
vidual country strategy papers (CSPs), particularly when these
objectives are described in fairly general terms, such as support-
ing the process of economic transition and supporting sustain-
able and balanced socio-economic development, and when
no concrete indicators of achievement have been determined.

44.
The main monitoring by the Commission is at the level
of individual projects/programmes, where systematic monitoring
and evaluation efforts are undertaken and indicators are often
used in the logical frameworks. The system of external monitor-
ing visits now covers the majority of projects/programmes and
provides a regular, external, assessment of project design, results,
impact and chances for sustainability. Mid-term reviews and end-
of-project evaluations are also carried out systematically for most
projects/programmes.

A good initiative has been to carry out evaluations of
45.
individual country strategies, as was done for Morocco in 2003
and for Egypt in 2004. This has provided useful information that
can be taken into account in preparing the next country strategy
papers and indicative plans. However, this exercise was so far lim-
ited to these two countries only.

According to the MEDA Regulation the Commission has
46.
to evaluate the programme every three years. A mid-term evalu-
ation for the MEDA II programme was therefore commissioned
in early 2004, and a final report produced in July 2005 (2). A final
evaluation for the MEDA programme is now scheduled for the
second half of 2007.

The main conclusions of the study, which coincide with

47.
the Court’s own findings in most respects, are:

(a)

the relevance of the MEDA programme as the Community
assistance instrument supporting the Barcelona Process and
the bilateral Association Agreements is judged to be satisfac-
tory. It has improved from the MEDA-I to the MEDA-II
period;

(b)

the effectiveness and efficiency of MEDA management
and implementation arrangements are improving but are still
not fully satisfactory.

Donor coordination efforts have intensified

48.
The audit has shown that the Delegations in the three
countries are all quite active in the process of coordination with
other donors as well as with the beneficiary authorities. This is
undoubtedly a result of the increase in staff capacity provided as
part of the devolution process. In all the countries concerned
regular meetings take place between the Commission and EU
Member States. In addition there are similar systems of donor
group meetings with thematic sub-groups, in which the Commis-
sion’s Delegations often play an active role by chairing one or
more such donor groups, depending on the specific sectors of
interest.

49.
So far many of the coordination activities consist mainly
of exchanging and compiling information on individual donor
interventions and considerable scope exists for further coordina-
tion efforts in areas such as programming, implementation, moni-
toring and evaluation. However the Delegations have taken vari-
ous initiatives to develop donor coordination and harmonisation
activities further.

CONCLUSIONS

Contribution of the MEDA programme

50.
The EC support provided through the MEDA programme
to economic reform and social development in the Mediterranean
partner countries has been relevant to the specific needs of the
for the Euro-
countries concerned and the objectives set
Mediterranean Partnership. In two countries, Egypt and Jordan,
support has been clearly focused on a limited number of sectors,

(1) See Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002
on the Financial Regulation applicable to the general budget of the
European Communities (OJ L 248, 16.9.2002, p. 1), Article 166.

(2) Mid-term evaluation of the MEDA II programme. Final report. Rotter-

dam, 18 July 2005.

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Official Journal of the European Union

C 200/11

but this was not the case in Morocco. As the new Action Plans
under the European Neighbourhood Policy cover all areas of
cooperation, further focusing will be necessary at the level of the
country programming documents. The Commission has encour-
aged ownership through its increased use of budget support, but
the project support modality will still be needed when a more
specific, targeted type of assistance is required. Capacity-building
measures are systematically included (see paragraphs 12 to 26).

51.
The overall results after more than ten years of MEDA are
so far rather limited, as many of the early projects had a slow
start, needed extensions and are not yet completed, while for
most of the MEDA-II projects it is still too early to be able to
assess their potential results (see paragraphs 27 to 30).

52.
Even when the total MEDA funds available are substan-
tial, for most of the MEDA countries the impact of the EC sup-
port derives less from its financial importance and more from its
attempts to address sensitive policy reform issues and support
poorer segments of populations, where its impact is difficult to
quantify (see paragraphs 31 and 43).

Commission management

53.
The Commission’s management of the MEDA pro-
gramme has clearly improved since the early years and can now
be considered as satisfactory, also taking into account procedural
and external constraints. Programming efforts have resulted in a
more even allocation of resources over time, preparation periods
have become shorter, and overall disbursements have increased to
a significantly higher level compared to the early MEDA period
(see paragraphs 32 to 37).

54.
Contributing factors to these improvements are an over-
all increase in the number of projects/programmes under imple-
mentation, a larger share of budget support within the total pro-
gramme, and the generally positive effect of devolution on the
process of project preparation and implementation by delegations
(see paragraph 38).

The most common cause of implementation delays
55.
remains procurement problems, although Delegations have been
actively looking for ways to contain such problems (see para-
graphs 39 and 40).

Because the Commission’s management of the MEDA
56.
programme has exercised both patience and flexibility, by allow-
ing project extensions and changes to designs where necessary,
MEDA-I projects and programmes have generally achieved or will
in the end achieve satisfactory results. The so-called D+3 rule,
which has applied to projects since 2003, may prevent such long
term commitment and flexibility, thereby reducing the chances of
economic reform and social development producing sustainable
results (see paragraphs 29, 30 and 41).

57.
Other improvements in the Commission’s overall project
management consist of more systematic monitoring and evalua-
tion efforts and more intensive dialogue and coordination
between Delegations and local counterparts and other donors (see
paragraphs 42 to 49).

RECOMMENDATIONS

58.
With the MEDA Regulation coming to an end in 2006
and the new European Neighbourhood and Partnership Instru-
ment coming into effect in 2007, the Commission should:

— ensure a smooth and quick transition to the new country
programmes, to avoid negative consequences for future
implementation; define more clearly in the new country pro-
gramming documents its strategic objectives and establish
appropriate indicators, to allow for better monitoring and
evaluation of impact,

— continue to focus its support on a limited number of inter-
vention areas to ensure coherence and to keep the pro-
grammes manageable,

— continue to search for best practices in managing projects to
avoid delays, e.g. through further capacity-building efforts in
the area of procurement, by simplifying procurement proce-
dures where possible and by allowing more decentralised
management of projects by national authorities.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 31 May 2006.

For the Court of Auditors
Hubert WEBER
President

C 200/12

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Official Journal of the European Union

24.8.2006

ANNEX I

MEDA COMMITMENTS/DISBURSEMENTS 1995 to 2005

(million euro)

1995 to 1999

2000 to 2005

1995 to 2005

Commitments Disbursements Commitments Disbursements Commitments

Disbursements

Bilateral

Algeria

West Bank/Gaza

Egypt

Jordan

Lebanon

Morocco

Syria

Tunisia

164

111

686

254

182

660

101

428

Total bilateral

2 586

Regional

471

Total

3 057

30

59

157

108

1

128

0

168

651

223

874

273

430

463

262

101

812

158

447

2 946

884

3 831

114

421

493

285

131

656

64

400

2 564

606

3 169

437

541

1 150

516

283

1 472

259

875

5 533

1 355

6 888

144

480

650

393

132

783

64

568

3 214

829

4 043

The total amount available under MEDA I + II = 3 424 + 5 350 = 8 774 million euro. From this an amount of about
852 million euro has been committed for Turkey during 1996 to 2002 (minor differences are due to rounding).

Source: EuropeAid.

24.8.2006

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Official Journal of the European Union

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ANNEX II

PROJECTS/PROGRAMMES INCLUDED IN THE AUDIT

EGYPT

Title

Type of
Intervention

Status end 2005

Year of
Financing
Decision

Amount
allocated
(million
euro)

Amount (1)
disbursed
(million
euro)

MEDA-I

(total commitments 686 million euro)

Education Enhancement Programme (EEP)

Industrial Modernisation Programme (IMP)

Health Sector Reform Programme (HSRP)

Mixed

Mixed

Mixed

Ongoing

Ongoing

Ongoing

1997

1998

1998

Total MEDA-I

MEDA-II

(total commitments up to 2005: 463 mil-
lion euro)

Trade Enhancement Programme — A
(TEP-A)

Trade Enhancement Programme — B
(TEP-B)

Trade Enhancement Programme — C
(TEP-C)

Financial and Investment Sector Coopera-
tion — agricultural component (FISC Rural)

Social Development and Civil Society: Chil-
dren at Risk

South Sinai Regional Development Pro-
gramme

Spinning and Weaving Sector Support Pro-
gramme

(1)

Includes disbursements up to end 2005.

Total MEDA-II

Project

Budget
Support

Ongoing

2002

Ongoing

2003

Project

Ongoing

2003

Project

Ongoing

2003

Project

Ongoing

2003

Project

Budget
Support

Ongoing

2004

Ongoing

2004

100

250

110

460

20

40

6

18

20

64

80

248

85

220

56

361

7

20

1

0

1

0

20

49

C 200/14

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Official Journal of the European Union

24.8.2006

JORDAN

Title

Type of
Intervention

Status end 2005

Year of
Financing
Decision

Amount
allocated
(million
euro)

Amount (1)
disbursed
(million
euro)

MEDA-I

(total commitments: 254 million euro)

Industrial Modernisation Programme (IMP)
(additional commitment made in 2003:
5 million euro)

Project Management Unit (PMU) for
the Greater Amman Water Sector Improve-
ment Programme (additional commitment
made in 2003: 2 million euro)

Protection and Promotion of Cultural Heri-
tage in the Hashemite Kingdom of Jordan

Total MEDA-I projects selected

MEDA-II

(total commitments up to 2005: 262 mil-
lion euro)

Support for Regulatory Reform and Privati-
sation (SRRP)

Support to the implementation of the asso-
ciation agreement (SAAP I)

Institutional Support to Aqaba Special Eco-
nomic Zone Authority (AZESA)

Structural Adjustment Facility III — SAF III

Support to Poverty Reduction through
Local Development — Jordan

Total MEDA-II projects selected

(1)

Includes disbursements up to end 2005.

Project

Ongoing

1999

40

34

Project

Ongoing

1999

Project

Ongoing

1999

Project

Ongoing

2001

Project

Ongoing

2002

Project

Budget
Support

Budget
Support

Ongoing

2002

Ongoing

2002

Ongoing

2004

5

4

49

20

20

10

60

30

140

5

1

40

5

13

3

60

6

87

24.8.2006

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Official Journal of the European Union

C 200/15

MOROCCO

Title

Type of
intervention

Status end 2005

Year of
Financing
Decision

Amount
allocated
(million
euro)

Amount (1)
disbursed
(million
euro)

MEDA-I

(commitments total: 660 million euro)

Appui à la mise à niveau de l’enseignement
technique et de la formation professionnelle
au Maroc

Appui à la gestion du secteur de la santé
(PAGSS)

Appui aux institutions financières de garan-
tie aux PME (PAIGAM)

Eau et assainissement en milieu rural —
PAGER

Routes et pistes rurales au Nord du Maroc

Project

Ongoing

1998

Project

Ongoing

1998

Project

Ongoing

1998

Project

Project

Ongoing

Closed

1997

1997

38

20

30

40

30

30

10

27

25

27

Total MEDA-I

158

119

MEDA-II

(commitments up to total jusque 2005:
812 million euro)

Développement rural et participatif dans le
Moyen Atlas Central — KHENIFRA

Programme d’appui Budgétaire à la réforme
du secteur des Transports au Maroc (PAB
Transports)

Programme d’appui à la réforme de
l’Administration Publique au Maroc

Appui à la mise en oeuvre de l’Accord
d’Association

(1)

Includes disbursements up to end 2005.

Total MEDA-II

Project

Ongoing

2000
2005

Budget
Support

Budget
Support

Ongoing

2003

Ongoing

2004

Project

Ongoing

2002

9
6

96

79

5

195

5

76

60

3

144

C 200/16

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Official Journal of the European Union

24.8.2006

THE COMMISSION’S REPLIES

SUMMARY

OBSERVATIONS

V.
In spite of the delays which occurred at the start of the
programme, partly because the regulatory framework for MEDA-I
was only ready at a late stage, the situation under MEDA-II has
improved considerably since 2000. Accordingly concrete results
cannot yet be fully gauged as many projects have not been com-
pleted. While the EC financial support to Mediterranean partner
countries is limited in relation to the government’s overall bud-
get, it is often very significant in relation to the budget for social
policy reforms to address basic needs.

its support

The Commission acknowledges that

15.
to
Morocco has been allocated to a larger number of projects than
in Egypt and Jordan. Nevertheless, also in Morocco the Meda pro-
gramme has been focused although it sought to meet a wider area
of recognised and agreed needs. The new programming exercise
building upon the experience and results of the past will focus
specifically on the social and economic dimension clearly referred
to in the Action Plan.

VI.
The occasional implementation delays observed are in
fact often attributable to the need to comply with the procedural
rules for public procurement. The rules vary, and the average
duration depending on the nature of the operation is six to eight
months. The corollary of this is strict compliance with the prin-
ciples of equality and non-discrimination. The Commission
recently undertook a major simplification exercise resulting in the
production of a practical guide to contract procedures in the field
of external aid that came into force on 1 February 2006.

The Commission takes note of the Court’s suggestion as
16.
regards the forthcoming generation of Country Strategy Papers.
The definition of priorities under the European Neighbourhood
and Partnership Instrument (ENPI) will be based on the objectives
of the European Neighbourhood Policy (ENP) and the priorities of
the ENP Action Plan. The coherence will be ensured by the focus
on the reforms of policies, legislation and regulation in selected
areas of political, economic and social spheres in the partner
countries. Support will be provided through a limited number of
programmes.

VII.

26.

See the reply to paragraph 39.

(First indent) The Commission agrees with the Court’s recommen-
dation. Under the European Neighbourhood and Partnership
Instrument (ENPI) programming exercise, the strategic objectives
as defined in the Country Strategy Papers will be in line with the
Action Plans.

28.
In spite of the delays which occurred at the start of the
programme, partly because the regulatory framework for MEDA-I
was only ready at a late stage, the situation under MEDA-II has
improved considerably since 2000. Accordingly concrete results
cannot yet be fully gauged as many projects have not been
completed

At the stage of programming, indicators are generally linked to
the government reform agenda. Specific results indicators are
defined at the identification phase and form the basis for moni-
toring and evaluations.

(Second indent) The definition of priorities under the European
Neighbourhood and Partnership Instrument (ENPI) will be based
on the objectives of the European Neighbourhood Policy (ENP)
and the priorities of the ENP Action Plan. The coherence will be
ensured by the focus on the reforms of policies, legislation and
regulation in selected areas of political, economic and social
spheres in the partner countries. Support will be provided through
a limited number of programmes.

(Third indent) The search for best practices in managing projects
remains a priority for the Commission. The Commission will
continue to promote a growing role of partner countries in the
selection of the most appropriate cooperation instruments and
activities. At implementation level, the Commission will continue
and, where possible, accelerate the transition from traditional
projects to sector support operations as well as increase coopera-
tion with civil society.

30.
The d+3 rule laid down in Article 166 of the Financial
Regulation brings in a time constraint for the management of
external aid in that the individual contracts and agreements (with
the exception of audit and evaluation) implementing financing
agreements must be concluded no later than three years after the
date of the budgetary commitment (the n+1 time limit is included
in the d+3 limit). The consequences of this rule will be felt for the
first time this year as the Financial Regulation came into force on
1 January 2003.

31.
In general terms, the EC financial support to Mediterra-
nean partner countries is limited in relation to the government’s
overall budget but is often very significant in relation to the bud-
get for social policy reforms to address basic needs.

Public procurement procedures in connection with exter-
39.
nal aid can be completed within six to seven months for service
and supply contracts and seven to eight months for works con-
tracts. But as these are procedures involving open competition
governed by the strict rules of the Financial Regulation, its imple-
menting rules and the case law of the CJEC, they require a degree

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Official Journal of the European Union

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of formality that guarantees application of the principles of equal-
ity and non-discrimination. The Commission has accordingly
made a substantial effort to simplify understanding of the proce-
dures. A practical guide to contract procedures in the field of
external aid has accordingly been produced by Commission
departments and came into force on 1 February 2006. This guide
sets out all the relevant rules and clarifies their implications: for
example, a valid offer must now be considered to be one that
arrived on time and satisfies the formal tendering requirements.
On the issue of origin, it should be pointed out that even if the
principle is still that origin determines eligibility for the contract,
derogations are possible, in particular when products and equip-
ment are not available on the market in question.

41.
It is true that the d+3 rule is sometimes seen as posing a
number of problems in the management of external aid. How-
ever, to change this rule would mean amending the Financial
Regulation, which is a Council act. The Commission departments
concerned are looking at the matter from that angle.

43.
Under the European Neighbourhood and Partnership
Instrument (ENPI) programming exercise, the strategic objectives
defined in the Country Strategy Papers will be in line with the
Action Plans.

In spite of the delays which occurred at the start of the
51.
programme, partly because the regulatory framework for MEDA-I
was only ready at a late stage, the situation under MEDA-II has
improved considerably since 2000. Accordingly concrete results
cannot yet be fully gauged as many projects have not yet been
completed.

55.
The occasional implementation delays observed are in
fact often attributable to the need to comply with the procedural
rules. The rules vary, and the average duration depending on the
nature of the operation is six to eight months. It should be borne
in mind that the corollary of what is sometimes seen as an exces-
sive duration is strict compliance with the principles of equality
and non-discrimination. The Commission recently undertook a
major simplification exercise resulting in the production of a
practical guide to contract procedures in the field of external aid
that came into force on 1 February 2006.

56.
The d+3 rule laid down in Article 166 of the Financial
Regulation brings in a time constraint for the management of
external aid in that the individual contracts and agreements (with
the exception of audit and evaluation) implementing financing
agreements must be concluded no later than three years after the
date of the budgetary commitment (the n+1 time limit is included
in the d+3 limit). The consequences of this rule will be felt for the
first time this year as the Financial Regulation came into force on
1 January 2003.

At the stage of programming, indicators are generally linked to
the government reform agenda. Specific results indicators are
defined at the identification phase and form the basis for moni-
toring and evaluations as described by the Court in paragraph 44.

It is true that the d+3 rule is sometimes seen as posing a number
of problems in the management of external aid. However,
to change this rule would mean amending the Financial Regula-
tion, which is a Council act. The Commission departments con-
cerned are looking at the matter from that angle.

47.

(b) The mid-term evaluation of MEDA by independent
experts in 2005 was positive on important aspects of
the programme, in particular the political relevance, the
policy orientation, the financial performance during the
last five years, the instrument switch to sector opera-
tions, the success of the devolution process and the revi-
sion of the MEDA regulation in 2000. Nevertheless, the
Commission is aware that certain aspects need attention.
This concerns the relatively low level of financial ressou-
rces, the task division in the programming cycle, ensur-
ing the appropriate profile of staff and the feedback from
lessons learnt. These necessary improvements must be
addressed in the general framework of the transition to
the new ENPI instrument which will replace MEDA as
from 2007.

CONCLUSIONS

50.
Also in Morocco the Meda programme has been focused
although it sought to meet a wider area of recognised and agreed
needs. The new programming exercise built upon the experience
and results of the past will focus specifically on the social and eco-
nomic dimension clearly referred to in the Action Plan.

RECOMMENDATIONS

58.

(First indent) The Commission agrees with the Court’s recommen-
dation. Under the European Neighbourhood and Partnership
Instrument (ENPI) programming exercise, the strategic objectives
will be in line with the Action Plans.

At the stage of programming, indicators are generally linked to
the government reform agenda. Specific results indicators are fur-
ther defined at the identification phase and form the basis for
monitoring and evaluations.

(Second indent) The definition of priorities under the European
Neighbourhood and Partnership Instrument (ENPI) will be based
on the objectives of the European Neighbourhood Policy (ENP)
and the priorities of the ENP Action Plan. The coherence will be
ensured by the focus on the reforms of policies, legislation and
regulation in selected areas of political, economic and social
spheres in the partner countries. Support will be provided through
a limited number of programmes.

C 200/18

EN

Official Journal of the European Union

24.8.2006

(Third indent) The Commission recently undertook a major sim-
plification exercise resulting in the production of a practical guide
to contract procedures in the field of external aid that came into
force on 1 February 2006.

The search for best practices in managing projects remains a
priority for the Commission. An analysis of best practice gave the
following insights for project success: the project provides a
holistic approach, has a very solid operational partnership and is

well managed. It also provides ex-post follow-up in order to build
sustainability and provides advocacy actions. To reach these
objectives, the Commission will continue to promote a growing
role of partner countries in the selection of the most appropriate
co-operation instruments and activities. At implementation level,
the Commission will continue and, where possible, accelerate the
transition from traditional projects to sector support operations
as well as increase cooperation with civil society.