Proposal for a Council Regulation concerning Community financial contributions to the International Fund for Ireland (2007-2010) {SEC(2006) 1227}
Date: 2006-10-12
Institutions: European Commission
Subjects: EU financing, Ireland, Northern Ireland, financial aid, peacekeeping

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.10.2006 
COM(2006) 564 final 

2006/0194 (CNS) 

Proposal for a 

COUNCIL REGULATION 

concerning Community financial contributions to the International Fund for Ireland 
(2007-2010) 

(presented by the Commission) 

{SEC(2006) 1227} 

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EXPLANATORY MEMORANDUM 

The International Fund for Ireland (IFI) was established in 1986 in order to contribute to the 
implementation of Article 10(a) of the Anglo-Irish Agreement of 15 November 1985 which 
provides  that  "the  two  governments  shall  co-operate  to  promote  the  economic  and  social 
development of those areas of both parts of Ireland which have suffered most severely from 
the  consequences  of  the  instability  of  recent  years,  and  shall  consider  the  possibility  of 
securing international support for this work". 

The  objectives  of  the  IFI  are  "to  promote  economic  and  social  advance  and  to  encourage 
contact, dialogue and reconciliation between nationalists and unionists throughout Ireland"*. 

Following  early  contributions  from  the  United  States  and  other  countries,  the  European 
Community, recognising that the objectives of the IFI were a reflection of those pursued by 
itself,  wished  to  give  practical  support  to  the  initiative.  It  began  contributing  to  the  IFI  in 
1989. EC funding now represents approximately 48 % of annual contributions to the Fund and 
40 %  of  cumulative  contributions  to  date.  The  Commission  has  been  represented  by  an 
observer at all IFI Board meetings since the beginning of 1989. 

The  political  background  of  the  region  has  evolved  over  the  years:  in  1994,  the  main 
paramilitary  groups  announced  cease-fires;  in  April  1998,  the  Belfast  (“Good  Friday”) 
Agreement set a political settlement for a peace process, including the devolution of powers to 
a Northern Ireland Assembly and Executive Committee, which were set up at the end of 1999. 
However,  there  is  still  a  significant  level  of  security  related  incidents  with  sectarian 
motivation and psychological and physical division between the main communities is on the 
rise. The NI Assembly is currently suspended, which illustrates the threats and uncertainties 
surrounding the peace process in the region.  

In  this  context,  economic  and  social  development  in  support  of  peace  and  reconciliation  at 
grassroots  level  is  a  long  term  process.  As  an  instrument  towards  this  goal,  the  IFI 
complements  the  action  carried  out  by  the  EU Programmes  for  Peace  and  Reconciliation  in 
Northern  Ireland  and  the  Border  Region  of  Ireland  ("PEACE  "I  1995-1999,  "PEACE  II" 
2000-2006 and "PEACE III" 2007-2013).  

Nevertheless,  the  International  Fund  knowing  that  the  current  level  of  international  support 
cannot  be  maintained  indefinitely,  has  performed,  in  2005,  a  review  of  its  structures  and 
priorities  in  order  to  redefine  its  mission  in  light  of  the  new  realities  and  has  adopted  a 
strategic framework which will bring the life of the Fund to an end in 2010. This strategy is 
entitled  "Sharing  this  Space"  and  launches  the  final  phase  of  activities  of  the  Fund  (2006-
2010). During this closing period the Fund will target the areas of greatest need and will seek 
to ensure that its work is made sustainable in the longer term.  

In  accordance  with  the  current  round  of  contributions**,  the  European  Commission  has  also 
submitted  an  assessment  of  the  IFI’s  activities  to  the  Budgetary  Authority***.  This 

* 

** 
*** 

Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and 
the  Government  of  Ireland  concerning  the  International  Fund  for  Ireland,  18  September  1986  (last 
amended 10 October 2000) ; UK Treaty Series No 58 (1987) Cm 266 / Republic of Ireland No 1 (1986) 
Cmnd 9908. 
Council Regulation (EC) No 177/2005 of 24 January 2005 (OJ L 30, 3.2.2005, p. 1). 
COM(2006) 563, 12.10.2006. 

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acknowledges the IFI’s very valuable and positive actions for peace and reconciliation in the 
region,  and  thereby  the  fulfilment  of  its  objectives.  The  report  concluded  that  "the 
Commission  believes  that  funding  after  2006  should  be  provided  on  the  basis  of  the 
observations  made  in  this  report,  which  could  be  reflected  either  in  the  future  Council 
Regulation  on  the  EC  contribution  to  the  IFI,  or  through  other  appropriate  means  of  co-
operation between the Commission and the IFI". 

In light of the above assessment, it is proposed that EU contributions of € 15 million per year 
to the IFI continue for a further period of 4 years. The proposed new period will therefore end 
in 2010, which would coincide with the end of the life of the IFI. 

The  new  Council  Regulation  should  also  reflect  the  observations  made  in  the  Commission 
report, in particular those reinforcing synergy of objectives and co-ordination with Structural 
Funds  interventions,  in  particular  with  the  new  PEACE  Programme  and  the  provisions  on 
closure. 

The package of proposals for adoption include: 

•  a proposal for a Council Regulation concerning Community financial contributions to the 

International Fund for Ireland (2007-2010); 

•  a  Communication  from  the  Commission  on  the  Report  on  the  International  Fund  for 

Ireland pursuant to Article 5 of Council Regulation (EC) No 177/2005.  

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2006/0194 (CNS) 

Proposal for a 

COUNCIL REGULATION 

concerning Community financial contributions to the International Fund for Ireland 
(2007-2010) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
308 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas: 

(1) 

(2) 

(3) 

The International Fund for Ireland (hereinafter “the Fund”) was established in 1986 by 
the  Agreement  of  18  September  1986  between  the  Government  of  Ireland  and  the 
Government of the United Kingdom of Great Britain and Northern Ireland concerning 
the  International  Fund  for  Ireland  (hereinafter  “the  Agreement”)  in  order  to  promote 
economic  and  social  advance,  and  to  encourage  contact,  dialogue  and  reconciliation 
between nationalists and unionists throughout Ireland, in implementation of one of the 
objectives specified by the Anglo-Irish Agreement of 15 November 1985. 

The Community has provided financial contributions to the Fund from 1989. For the 
period 2005 to 2006 EUR 15 million was committed from the Community budget for 
each  of  the  years  2005  and  2006  in  accordance  with  Council  Regulation  (EC)  No 
177/2005  of  24  January  2005  on  Community  financial  contributions  to  the 
International Fund for Ireland3. That Regulation will expire on 31 December 2006. 

The  assessments  carried  out  in  accordance  with  Article  5  of  Regulation  (EC)  No 
177/2005 have confirmed the need for further support for activities of the Fund, while 
continuing reinforcing synergy of objectives and co-ordination with Structural Funds 
interventions, in particular with the Special Programme for Peace and Reconciliation 
in  Northern  Ireland  and  the  Border  Counties  of  Ireland  (hereinafter  “the  PEACE 

1 
2 
3 

OJ C p. 
OJ C p.  
OJ L 30, 3.2.2005, p. 1. 

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programme”) set up in accordance with Council Regulation (EC) No 1260/1999 of 21 
June 1999 laying down general provisions on the Structural Funds4. 

The peace process in Northern Ireland requires a continuation of Community support 
to  the  Fund  beyond  31  December  2006.  In  recognition  of  the  special  effort  for  the 
peace process, the PEACE programme has been allocated additional support from the 
Structural Funds for the period 2007 to 2013 pursuant to paragraph 22 of Annex II to 
Council  Regulation  (EC)  No  1083/2006  laying  down  general  provisions  on  the 
European  Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion 
Fund and repealing Regulation (EC) No 1260/19995. 

At its meeting in Brussels on 15 and 16 December 2005, the European Council called 
on the Commission to take the necessary steps with a view to continued Community 
support for the Fund as it enters the crucial final phase of its work up to 2010. 

The  Community  contribution  to  the  Fund  should  take  the  form  of  financial 
contributions  for  the  years  2007,  2008,  2009  and  2010,  thus  terminating  at  the  same 
time as the life of the Fund. 

In allocating the Community contribution, the Fund should give priority to projects of 
a  cross-border  or  cross-community  nature,  in  such  a  way  as  to  complement  the 
activities funded by the PEACE programme for the period 2007 to 2010. 

In accordance with the Agreement, all financial contributors to the Fund participate as 
observers at the meetings of the Board of the International Fund for Ireland. 

It is vital to ensure proper co-ordination between the activities of the Fund and those 
financed  under  the  Community  Structural  Funds  provided  for  by  Article  159  of  the 
Treaty, in particular the PEACE programme. 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10)  Assistance  from  the  Fund  should  be  regarded  as  effective  only  in  so  far  as  it  brings 
about sustainable economic and social improvement and is not used as a substitute for 
other public or private expenditure. 

(11)  An  assessment  reviewing  the  closure  provisions  of  the  Fund  should  be  carried  out 

before 1 July 2008. 

(12)  A financial reference amount, within the meaning of Point 38 of the Interinstitutional 
Agreement  of  17  May  2006  between  the  European  Parliament,  the  Council  and  the 
Commission on  budgetary discipline  and  sound  financial  management6 is inserted in 
this  Regulation  for  the  entire  duration  of  the  programme,  without  the  powers  of  the 
budgetary authority as defined by the Treaty being affected thereby.  

(13)  The amount of the Community contribution to the Fund should be EUR 15 million for 

each of the years 2007, 2008, 2009, and 2010, expressed in current values. 

4 

5 
6 

OJ  L  161,  26.6.1999,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No 173/2005  (OJ  L  29, 
2.2.2005, p. 3) and repealed and replaced by Regulation (EC) No 1083/2006 (OJ L 210, 31.7.2006, p. 
210) as of 1 January 2007. 
OJ L 210, 31.7.2006, p. 25. 
OJ C 139, 14.6.2006, p. 1. 

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(14)  That support will contribute to reinforcing solidarity between the Member States and 

between their peoples. 

(15)  The Treaty provides no powers other than those in Article 308 for the adoption of this 

Regulation, 

HAS ADOPTED THIS REGULATION: 

Article 1 

The financial reference amount for the implementation of the International Fund for Ireland 
(hereinafter “the Fund”) for the period 2007-2010 shall be EUR 60 million. 

Annual appropriations shall be authorised by the budgetary authority within the limit of the 
financial framework. 

Article 2 

The  contribution  shall  be  used  by  the  Fund  in  accordance  with  the  Agreement  of  18 
September  1986  between  the  Government  of  Ireland  and  the  Government  of  the  United 
Kingdom of Great Britain and Northern Ireland concerning the International Fund for Ireland 
(hereinafter “the Agreement”).  

In  allocating  the  contribution  the  Fund  shall  give  priority  to  projects  of  a  cross-border  or 
cross-community  nature,  in  such  a  way  as  to  complement  the  activities  financed  by  the 
Structural  Funds,  and  especially  those  of  the  PEACE  programme  operating  in  Northern 
Ireland and the Border Counties of Ireland. 

The  contribution  shall  be  used  in  such  a  way  as  to  bring  about  sustainable  economic  and 
social improvement in the areas concerned. It shall not be used as a substitute for other public 
and private expenditure. 

Article 3 

The Commission shall represent the Community as an observer at the meetings of the Board 
of the Fund (hereinafter "the Board").  

The  Fund  shall  be  represented  as  an  observer  at  the  Monitoring  Committee  meetings  of  the 
PEACE programme, and of other Structural Funds interventions as appropriate. 

Article 4 

The  Commission  shall,  in  co-operation  with  the  Fund’s  Board,  determine  appropriate 
procedures to foster co-ordination at all levels between the Fund and the managing authorities 
and  implementing  bodies  set  up  under  the  Structural  Funds  interventions  concerned,  in 
particular under the PEACE programme. 

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Article 5 

The  Commission  shall,  in  co-operation  with  the  Fund’s  Board,  determine  appropriate 
publicity  and  information  procedures  in  order  to  publicise  the  Community’s  contribution  to 
the projects financed by the Fund. 

Article 6 

By  30  June  2008  at  the  latest,  the  Fund  shall  submit  to  the  Commission  its  strategy  for  the 
closure of the activities of the Fund, including: 

(a) 

(b) 

(c) 

an action plan with projected payments and a foreseen winding up date; 

a de-commitment procedure; 

the  treatment  of  any  residual  amounts  and  interest  received  at  the  closure  of  the 
Fund. 

Subsequent payments to the Fund are conditional on the Commission's approval of the closure 
strategy. If the strategy for closure is not submitted by 30 June 2008, payments to the Fund 
shall be interrupted until the strategy is received. 

1. 

The Commission shall administer the contributions.  

Article 7 

Subject to paragraph 2 the annual contribution shall be paid in instalments as follows: 

(a) 

(b) 

(c) 

a first advance payment of 40% shall be made after the Commission has received an 
undertaking, signed by the Chairman of the Fund’s Board, to the effect that the Fund 
shall  comply  with  the  conditions  for  the  grant  of  the  contribution  set  out  in  this 
Regulation;  

a second advance payment of 40% shall be made six months later;  

a  final  payment  of  20%  shall  be  made  after  the  Commission  has  received  and 
accepted  the  Fund’s  annual  activity  report  and  audited  accounts  for  the  year  in 
question. 

2. 
Before paying out an instalment the Commission shall carry out an assessment of the 
Fund’s financial needs on the basis of the Fund’s cash balance at the time scheduled for each 
payment. If following that assessment, the Fund’s financial needs do not justify payment of 
one of those instalments, the payment concerned shall be suspended. The Commission shall 
review that decision on the basis of new information provided by the Fund and shall continue 
payments as soon as they are considered justified. 

A  contribution  from  the  Fund  may  be  allocated  to  an  operation  which  receives  or  is  due  to 
receive  financial  assistance  under  a  Structural  Funds  intervention,  only  if  the  sum  of  that 

Article 8 

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financial assistance plus 40% of the contribution from the Fund does not exceed 75% of the 
operation’s total eligible costs. 

Article 9 

A final report should be submitted to the Commission six months before the winding up date 
foreseen in the strategy for closure referred in point (a) of the first paragraph of Article 6 or 
six months after the last Community payment, whichever happens first, and should include all 
the necessary information that would enable the Commission to evaluate the implementation 
of the assistance and the attainment of the objectives.  

Article 10 

The final year contribution shall be paid following the financial needs analysis referred to in 
Article 7(2) and provided the Fund's performance respects the closure strategy provided for in 
Article 6.  

The final date of eligibility of expenditure is 31 December 2013.  

Article 11 

Article 12 

This Regulation shall enter into force on 1 January 2007. 

It shall expire on 31 December 2010. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

Policy area:  REGIO 

Activity: 

Other regional actions 

TITLE  OF  ACTION:  COMMUNITY  FINANCIAL  CONTRIBUTIONS  TO  THE  INTERNATIONAL  FUND 

FOR IRELAND (2007-2010) 

1. 

BUDGET LINE(S) + HEADING(S) 

13.03.12 

2. 

OVERALL FIGURES  

2.1. 

Total allocation for action (Part B): 

€ 60 million for commitment 

2.2. 

Period of application: 

2007-2010 

2.3. 

Overall multiannual estimate of expenditure: 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1) 

(financial 

€ million (to three decimal places) 

Year 
[n] 
2007 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

2008 

2009 

2010 

[n+5 
and 
subs. 
Year] 

Commitments 

15 

Payments 

15 

15 

15 

15 

15 

15 

12 

3 

Total 

60 

60 

(b) 

Technical and administrative assistance and support expenditure(see point 6.1.2) 

Commitments 

Payments 

Subtotal a+b 

Commitments 

15 

Payments 

15 

15 

15 

15 

15 

15 

12 

3 

60 

60 

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(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure 
(see points 7.2 and 7.3) 

0,042 

0,042 

0,042 

0,042 

Commitments/ 
payments 

TOTAL a+b+c 

Commitments 

15,042  15,042  15,042  15,042 

Payments 

0,042 

15,042  15,042  15,042  12 

3 

60,168 

60,168 

2.4. 

Compatibility with financial programming and financial perspective 

Proposal is compatible with existing financial programming. 

2.5. 

Financial impact on revenue: 

Proposal  has  no  financial  implications  (involves  technical  aspects  regarding 
implementation of a measure) 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
form applicant 
countries 

Heading in 
financial 
perspective 

Non-comp 

Diff 

NO 

NO 

NO 

1A 

4. 

LEGAL BASIS  

Article 308 (EC) 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention  

5.1.1.  Objectives pursued 

To encourage contact, dialogue and reconciliation between nationalists and unionists 
throughout  Ireland  and  to  promote  the  economic  and  social  advance  of  the  two 
communities. 

5.1.2.  Grounds for the operation 

The  European  Community,  recognising  that  the  objectives  of  the  Fund  are  a 
reflection  of  those  pursued  by  itself,  has  given  practical  backing  (€15  million  p.a. 
since 1989; €20 million for each of the years 1995, 1996, 1997; €17 million for the 

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years 1998 and 1999; €15 million for the years 2000, 2001, 2002 2003, 2004, 2005 
and 2006).  

At its meeting in Brussels on 15 and 16 December 2005, the European Council called 
on the Commission to take the necessary steps with a view to continued EU support 
for the Fund as it enters the crucial final phase of its work up to 2010. 

Continuation of this contribution for another four years until the end of the life of the 
IFI illustrates the clear EU support for the peace process in Northern Ireland. 

5.2. 

Action envisaged and budget intervention arrangements 

– 

– 

– 

Objectives: to promote economic and social advance, and to encourage contact, 
dialogue  and  reconciliation  between  nationalists  and  unionists  throughout 
Ireland.  

The  Fund  operates  mainly  in  Northern  Ireland  and  in  the  Border  Region  of 
Ireland; it targets designated disadvantaged areas. 

For a detailed analysis of Fund activities : see Commission Report and Annex 
COM(2006) 563 / SEC(2006) 1226 of 12.10.2006. 

5.3.  Methods of implementation 

Subject to an assessment of the Fund’s financial needs, the annual contribution shall 
normally be paid in instalments as follows: a first advance payment of 40% shall be 
made after the Commission has received an undertaking, signed by the Chairman of 
the Fund’s Board complying with the Council Regulation; a second advance payment 
of  40%  shall  be  made  six  months  later  and  a  final  payment  of  20%  shall  be  made 
after  the  Commission  has  received  and  accepted  the  Fund’s  annual  activity  report 
and audited accounts for the year in question. 

6. 

FINANCIAL IMPACT 

6.1. 

Total financial impact on Part B - (over the entire programming period) 

6.1.1.  Financial intervention 

Commitments (in € million to three decimal places) 

Breakdown 

[Year 
n] 

2007 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

2008 

2009 

2010 

Total 

[n+5 
and 
subs. 
Years] 

15 

15 

15 

15 

Action 1 

Action 2 

etc. 

TOTAL  15 

15 

15 

15 

60 

60 

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6.1.2.  Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure 

(commitment appropriations) 

Not applicable. 

6.2. 

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire 
programming period) 

Not applicable. 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

7.1. 

Impact on human resources 

Staff to be assigned to management of the 
action using existing and/or additional 
resources 

Number of 
permanent posts 

Number of 
temporary posts 

0,2  

0,1  

0,3 

Description of tasks deriving from the 
action 

If necessary, a fuller description of the 
tasks may be annexed. 

Total 

0,2 

0,1 

0,3 

Types of post 

Officials 
temporary staff 

or 

A 

B 

C 

Other human resources 

Total 

7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

32400 

0,3 * €108000 

(specify budget line) 

Total  32400 

The amounts are total expenditure for twelve months. 

7.3. 

Other administrative expenditure deriving from the action 

Budget line 

(number and heading) 

Amount € 

Method of calculation 

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Overall allocation (Title A7) 

A0701 – Missions 

A07030 – Meetings 

A07031 – Compulsory committees 

A07032 – Non-compulsory committees 

A07040 – Conferences 

A0705 – Studies and consultations 

8000 

€800  *  10  p.a.  (5  missions  of  2  days 
each on average) 

Other expenditure (specify) Audit 

1600 

€800 * 2 p.a. 

Information systems (A-5001/A-4300) 

Other expenditure - Part A (specify) 

The amounts are total expenditure for twelve months. 

Total  9600 

I. 

II. 

Annual total (7.2 + 7.3) 

Duration of action 

III. 

Total cost of action (I x II) 

42000€  

4 years 

168000€ 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

The Commission will monitor the Fund’s activities through its continuing presence 
on  the  Board  as  an  observer.  It  is  informed  of  all  the  Fund’s  proposed  decisions 
before  they  are  put  to  the  Board.  The  Fund  operations  are  moreover  controlled  by 
DG REGIO audit and control services. The result indicators will be the number and 
value of projects approved by the IFI. 

8.2. 

Arrangements and schedule for the planned evaluation 

Every year the IFI presents to the Commission its annual accounts and activity report 
which  must  satisfy  the  Commission  in  order  for  the  payments  to  the  Fund  to 
continue.  Moreover,  the  payments  to  the  Fund  are  also  subject  to  an  assessment  of 
the Fund’s financial needs to be carried out by the Commission on the basis of the 
Fund’s cash balance at the time scheduled for each payment.  

Given that the Fund will come to an end in 2010 it must submit to the Commission 
by  June  2008  at  the  latest,  its  strategy  for  the  closure  of  the  Fund's  activities  and 
subsequent  payments  to  the  Fund  are  conditional  on  the  Commission's  approval  of 
the closure strategy. 

A  Final  Report  should  be  submitted  to  the  Commission  six  months  before  the 
winding up date foreseen in the strategy for closure in Article 6(a) of this Regulation 
or six months after the last Community payment, whichever happens first and should 
include all the necessary information that would enable the Commission to evaluate 
the implementation of the assistance and the attainment of the objectives.  

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9. 

ANTI-FRAUD MEASURES 

The  Commission  is  represented  on  the  Board  of  the  Fund  and  the  final  annual 
contribution is only paid over after receipt and acceptance of the Fund's annual report 
and audited accounts. The Fund operations are moreover controlled by DG REGIO 
audit and control services. 

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