Report from the Commission - Annual report on the cohesion fund (2007) [SEC(2008) 2816]
Date: 2008-11-14
Institutions: European Commission
Subjects: Cohesion Fund, activity report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.11.2008 
COM(2008) 752 final 

REPORT FROM THE COMMISSION 

ANNUAL REPORT ON THE COHESION FUND (2007) 

[SEC(2008) 2816] 

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REPORT FROM THE COMMISSION 

ANNUAL REPORT ON THE COHESION FUND (2007) 

Regulation  (EC)  No  1084/2006  establishing  a  Cohesion  Fund  and  repealing 
Regulation (EC) No 1164/94 does not require the presentation of an annual report on 
the Cohesion Fund. 

Therefore  this  report  is  presented  in  conformity  with  Article  14(1)  of  Regulation 
(EC)  No  1164/1994  and  thus  covers  the  implementation  during  2007  of  Cohesion 
Fund projects adopted under the 2000-2006 period. 

As  a  consequence,  this  report  covers  Cohesion  Fund  operations  in  the  thirteen 
beneficiary  Member  States  as  of  end-2006,  i.e.  Greece,  Spain,  Portugal,  Cyprus, 
Czech  Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Malta,  Poland,  Slovakia  and 
Slovenia. 

Details  on  the  implementation  in  2007  of  projects  adopted  under  the  2000-2006 
period for each Member State are presented in the Annex to this report. 

1. 

FINANCIAL  EXECUTION  OF  THE  2000-2006  PERIOD  IN  2007  AND  CLOSURE  OF 
PROJECTS 

In  2007,  fifteen  Member  States  (the  12  new  Member  States  plus  Greece,  Portugal 
and Spain) were eligible to receive assistance from the Cohesion Fund. Bulgaria and 
Romania became eligible at the time of their accession on 1 January 2007. However, 
as this report covers only the implementation during 2007 of Cohesion Fund projects 
adopted  under  the  2000-2006  period,  Bulgaria  and  Romania  are  not  included. 
Furthermore,  as  a  result  of  economic  growth,  Ireland  has  not  been  eligible  since  1 
January 2004. 

Given that all commitments for the Cohesion Fund projects financed under the 2000-
2006  programming  period  had  been  executed  by  31 December 2006,  the  financial 
resources  available  for  the  Cohesion  Fund  in  2007  consisted  only  of  payment 
appropriations. 

Payments made in 2007 for projects adopted under the 2000-2006 period 

The  2007  initial  budget  amounted  to  € 3,250 million.  However  in  September,  DG 
Regional  Policy  requested  a  €  500  million  reduction  of  payment  appropriations. 
Another € 172 million has been transferred 
to the Solidarity Fund. This reduction in 
credits was the result of an overall weak initial performance on the part of Member 
States and in particular of four significant beneficiaries for whom the total value of 
payment claims was less than 30% of their forecast by mid-September 2007. 

Towards the end of 2007, the submission pace of payment requests accelerated and 
finally resulted in a 100 % execution rate in respect of the available appropriations. 
At  the  end  of  December 2007,  following  late  adoption  of  2007-2013  operational 

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programmes  with  the  Cohesion  Fund  contribution,  unused  payment  appropriations 
amounting  to  € 167 million  had  been  executed  for  reimbursement  of  payment 
requests for 2000-2006 projects. 

At the end of 2007, the average absorption rate (payments vs.  commitments)  of  all 
current  beneficiary  countries  (excluding  Ireland)  for  both  the  Cohesion  Fund  and 
former  ISPA  projects  was  55 %.  Three  countries  (Bulgaria,  Romania  and  Poland) 
show  the  lowest  absorption  rates  (below  40%),  whereas  another  two  countries 
(Portugal and Spain) show the highest absorption rates of between 63 % and 68 % of 
the decided amount. 

Table 1: Implementation of the Cohesion Fund and ex-ISPA payments in 2007 (Euro) 

Payment 
Appropriations 

Initial 

Movements 

Final 
Resources 

Outturn 

Cancelled 

Carryovers 
2008 

2007 Budget 

3.880.000.000 

- 672.195.985 

3.374.559.114 

3.326.965.802 

Appropriations 
carried over 
from 2006 

Appropriations 
made available 
again 

Repayments 

60.776 

- 

- 

+166.755.099 

- 

- 

- 

- 

- 

- 

60.776 

- 

- 

TOTAL 

3.880.060.776 

-505.440.886 

3.374.559.114 

3.327.026.578 

- 

- 

- 

- 

- 

-

-

-

-

-

Table 2 shows the level of payments in 2007 for each Member State. The figures for 
the  new  Member  States  refer  only  to  payments  for  projects  adopted  under  the 
Cohesion Fund as of 1 May 2004 (i.e. not taking into account the pre-accession aid 
for  ISPA  projects).  The  implementation  of  payments  to  the  former  ISPA  projects 
adopted before accession is presented in Table 3. 

Table  2:  Payments  made  in  2007  to  the  Cohesion  Fund  projects  per  Member  State 
(including technical assistance) 

Environment 

Transport 

Technical 
Assistance 

TOTAL 

Member State 

Amount 

% 

Amount 

% 

Amount 

Amoun 

% of 
total CF 
payments 

Cyprus 

5.744.483,00 

48,7% 

6.039.770,69 

51,3% 

11.784.253,69 

0,5% 

 Czech 
Republic 

50.944.092,45 

47,7% 

55.805.709,38 

52,2% 

154.834,69 

106.904.636,52 

4,4% 

Estonia 

20.588.710,28 

44,5% 

25.648.095,12 

55,5% 

9.458,15 

46.246.263,55 

1,9% 

Greece 

142.007.398,85 

41,5% 

200.498.998,20 

58,5% 

342.506.397,05 

14,0% 

Hungary 

52.417.244,67 

42,8% 

70.048.195,27 

57,2% 

122.465.439,94 

5,0% 

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Environment 

Transport 

Technical 
Assistance 

TOTAL 

Member State 

Amount 

% 

Amount 

% 

Amount 

Amoun 

% of 
total CF 
payments 

Latvia 

46.795.684,41 

49,4% 

44.224.991,28 

46,7%  3.764.782,97 

94.785.458,66 

3,9% 

Lithuania 

43.673.969,15 

49,5% 

44.208.895,26 

50,1% 

290.280,00 

88.173.144,41 

3,6% 

Malta 

4.166.034,67 

43,0% 

4.946.842,98 

51,0% 

582.856,73 

9.695.734,38 

0,4% 

Poland 

200.750.047,49 

52,1% 

184.249.405,16 

47,8% 

512.396,12 

385.511.848,77 

15,7% 

Portugal 

205.426.616,57 

47,8% 

223.909.764,01 

52,2% 

429.336.380,58 

17,5% 

Slovakia 

24.185.556,67 

48,7% 

25.445.895,17 

51,3% 

49.631.451,84 

2,0% 

Slovenia 

14.064.896,65 

59,9% 

9.408.923,42 

40,1% 

23.473.820,07 

1,0% 

Spain 

535.761.824,69 

72,1% 

206.543.470,15 

27,8% 

339.638,00 

742.644.932,84 

30,3% 

TOTAL  1.346.526.559,55  54,9%  1.100.978.956,09 

44,9%  5.654.246,66  2.453.159.762,30 

100,0% 

Table 3: Payments made in 2007 to ex-ISPA projects per Member State (including 
technical assistance) 

Environment 

Transport 

Technical 
Assistance 

TOTAL 

Member State 

Amount 

% 

Amount 

% 

Amount 

Amount 

% of 
total CF 
payments 

Bulgaria 

56.284.491,71  65,9% 

22.055.005,42  25,8% 

7.109.024,52 

85.448.521,65 

9,0% 

Czech Republic 

21.174.558,40  83,3% 

4.243.770,33  16,7% 

25.418.328,73 

2,7% 

Estonia 

8.834.835,16  78,4% 

0,0% 

2.427.010,09 

11.261.845,25 

1,2% 

Hungary 

41.309.873,87  48,6% 

43.203.427,21  50,8% 

475.121,25 

84.988.422,33 

9,0% 

Latvia 

21.172.848,89  51,4% 

19.993.648,99  48,6% 

41.166.497,88 

4,4% 

Lithuania 

19.430.221,47  66,7% 

9.164.901,62  31,4% 

551.651,01 

29.146.774,10 

3,1% 

Poland 

208.493.213,57  59,1%  137.384.678,36  39,0% 

6.775.893,50  352.653.785,43 

37,3% 

Romania 

120.081.126,61  44,2%  124.352.547,81  45,8%  27.171.189,06  271.604.863,48 

28,7% 

Slovakia 

24.878.004,65  63,5% 

13.562.033,45  34,6% 

749.475,43 

39.189.513,53 

4,1% 

Slovenia 

3.554.814,46  80,9% 

841.530,00  19,1% 

4.396.344,46 

0,5% 

TOTAL  525.213.988,79  55,6%  374.801.543,19  39,7%  45.259.364,86  945.274.896,84 

100,0% 

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Outstanding commitments from the 2000-2006 period 

(€ 11,259,182,886.39 

At the end of 2007, the outstanding commitments (RAL) corresponding to the 2000-
2006 period (including two new Member States: Bulgaria and Romania) amounted to 
€ 14,800,243,181.27 
€ 3,541,060,294.88  for  ex-ISPA  projects).  The  cu rrent  regulatory  framework  for 
commitments  and  payments  implies  a  relatively  large  stock  of  outstanding 
commitments.  They  are  equal  to  the  amount  corresponding  to  approximately  three 
years  of  commitments,  which  may  be  caused  in  part  by  the  fact  that  the  rule  of 
automatic decommitment ("N+2" rule) does not apply to the Cohesion Fund for the 
2000-2006 period. 

the  Cohesion  Fund 

and 

for 

Table 4.1: Cohesion Fund accepted amounts in 2000-2006 (including RAL) 

Member State 

Net Committed 
(until 12/2007) 

Paid  
(until 12/2007) 

RAL 

Greece 

Spain 

Ireland 

3.623.591.038,72 

2.255.055.185,63 

1.368.535.853,09 

12.935.250.808,79 

9.198.976.311,34 

3.736.274.497,45 

625.755.408,00 

570.010.222,71 

55.745.185,29 

Portugal 

3.505.110.859,45 

2.239.884.294,52 

1.265.226.564,93 

TOTAL EU-4 

20.689.708.114,96  14.263.926.014,20 

6.425.782.100,76 

Cyprus 

54.014.695,00 

22.844.221,33 

31.170.473,67 

Czech Republic 

748.976.735,00 

248.036.041,09 

500.940.693,91 

Estonia 

Hungary 

Latvia 

242.449.651,00 

86.011.929,46 

156.437.721,54 

976.865.860,00 

373.703.305,54 

603.162.554,46 

388.206.109,00 

181.497.966,25 

206.708.142,75 

Lithuania 

521.392.688,00 

188.680.965,59 

332.711.722,41 

Malta 

Poland 

Slovakia 

Slovenia 

21.966.289,00 

12.287.371,40 

9.678.917,60 

3.369.015.816,00 

768.422.849,76 

2.600.592.966,24 

410.520.447,00 

128.052.263,94 

282.468.183,06 

172.654.702,00 

63.125.292,01 

109.529.409,99 

TOTAL EU-10 

6.906.062.992,00 

2.072.662.206,37 

4.833.400.785,63 

TOTAL 

27.595.771.106,96  16.336.588.220,57  11.259.182.886,39 

Table 4.2: Accepted amounts for ex-ISPA projects (including RAL) 

Member State 

Net Committed
(until 12/2007) 

Paid 
(until 12/2007) 

RAL 

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Member State 

Net Committed
(until 12/2007) 

Paid 
(until 12/2007) 

RAL 

Bulgaria 

879.908.118,00 

296.570.622,32 

583.337.495,68 

Czech Republic 

479.117.989,65 

376.462.763,84 

102.655.225,81 

Estonia 

Hungary 

Latvia  

184.709.389,40 

132.834.958,14 

51.874.431,26 

505.736.480,16 

326.977.250,88 

178.759.229,28 

325.781.346,52 

217.958.178,74 

107.823.167,78 

Lithuania 

304.015.168,61 

187.355.758,57 

116.659.410,04 

Poland 

Romania 

Slovakia 

Slovenia  

TOTAL 

2.265.523.798,03 

1.318.714.851,29 

946.808.946,74 

2.042.727.117,78 

720.467.042,46  1.322.260.075,32 

355.729.850,36 

256.174.389,45 

99.555.460,91 

81.543.400,50 

50.216.548,44 

31.326.852,06 

7.424.792.659,01 

3.883.732.364,13  3.541.060.294,88 

Closure of projects from the 2000-2006 period 

During 2007, 40 Cohesion Fund projects with payments totalling € 911 million were 
closed. This comprised 26 Spanish, 7 Portuguese and 7 Greek projects. As a result, 
the total number of closed CF projects for the 2000-2006 period reached 117 and the 
number  of  projects  still  to  be  closed  is  721.  Table  5.1  provides  information  on  the 
projects closed up to the end of 2007. 

Table 5.1: Number of CF projects closed in 2007 and in previous years 

Member State 

Czech 
Republic 

Estonia 

Greece 

Spain 

Ireland 

Cyprus 

Total 
number of 
2000-2006 
CF projects  Number of 
Projects 

Projects closed in 2007 

Projects closed in 2002-2006 

Total Paid 
in Euro 

Number of 
Projects 

Total Paid 
in Euro 

31 

12 

124 

407 

10 

2 

7 

26 

279.014.171,23 

370.739.722,09 

17 

46 

3 

305.593.888,69 

1.717.885.020,70 

250.368.797,00 

Number  
of open 
projects as 
of end 2007 

31 

12 

100 

335 

7 

2 

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Number  
of open 
projects as 
of end 2007 

22 

22 

10 

3 

65 

91 

11 

10 

Total 
number of 
2000-2006 
CF projects  Number of 
Projects 

Projects closed in 2007 

Projects closed in 2002-2006 

Total Paid 
in Euro 

Number of 
Projects 

Total Paid 
in Euro 

Member State 

Latvia 

Lithuania 

Hungary 

Malta 

Poland 

Portugal 

Slovenia 

Slovakia 

22 

22 

10 

3 

65 

109 

11 

10 

838 

7 

261.667.677,57 

11 

272.118.226,90 

40 

911.421.570,89 

77 

2.545.965.933,29 

721 

There were 14 ex-ISPA projects with payments totalling € 89 million closed during 
2007.  The  total  number  of  closed  ex-ISPA  projects  for  the  2000-2006  period  thus 
reached 50 and the number of projects still to be closed is 304. Table 5.2 provides 
information per country on closed ex-ISPA projects. 

Table 5.2: Number of ex-ISPA projects closed in 2007 and in previous years 

Member State 

Bulgaria 

Czech Republic 

Estonia 

Latvia 

Lithuania 

Hungary 

Poland 

Romania 

Slovenia 

Total 
number of 
2000-2006 
Ex-ISPA 
projects 

Projects closed in 2007 

Projects closed in 2002-
2006 

Number 
of 
Projects 

Total Paid  
in Euro 

Number 
of 
Projects 

Total Paid 
in Euro 

Number of 
open projects 
as of end 2007 

7 

8 

2 

5 

7 

1 

0 

4 

124.496.115,65 

45.070.156,40 

18.416.589,32 

66.724.564,61 

2.526.165,16 

5.377.712,03 

1.794.821,78 

11.159.700,50 

38 

18 

15 

20 

23 

30 

61 

61 

13 

38 

27 

25 

24 

29 

37 

65 

63 

17 

2 

2 

2 

1 

3 

2 

36.838.453,19 

3.487.155,90 

17.530.155,17 

19.816.800,00 

4.673.775,30 

1.794.821,78 

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Member State 

Total 
number of 
2000-2006 
Ex-ISPA 
projects 

Projects closed in 2007 

Projects closed in 2002-
2006 

Number 
of 
Projects 

Total Paid  
in Euro 

Number 
of 
Projects 

Total Paid 
in Euro 

Number of 
open projects 
as of end 2007 

Slovakia 

29 

354 

2 

14 

4.726.875,55 

2 

6.880.841,36 

88.868.036,89 

36 

282.446.666,81 

25 

304 

2. 

ECONOMIC ENVIRONMENT AND CONDITIONALITY 

Council Regulation (EC) No1164/94, which governs the Cohesion Fund for projects 
approved prior to the end of 20061, attaches macro-economic conditions to the use of 
the Fund. It provides that "no new projects or, in the event of important projects, no 
new project stages shall be financed by the Fund in a Member State in the event of 
the  Council,  acting  by  a  qualified  majority  on  a  recommendation  from  the 
Commission, finding that the Member State […] has not implemented [its stability or 
convergence  programme]  in  such  a  way  as  to  avoid  an  excessive  deficit".  This 
reflects  the  role  of  the  Cohesion  Fund  as  an  instrument  of  budgetary  support  at 
national level helping Member States to maintain macro-economic rigour. 

In the course of 2007  three  Member  States eligible for support under the  Cohesion 
Fund (the Czech Republic, Hungary and Poland) were involved in additional steps of 
the  excessive  deficit  procedure  (EDP)  which,  according  to  the  aforementioned 
Regulation,  may  under  certain  conditions  be  associated  with  the  suspension  of 
transfers from the Fund. There was, however, no need to adopt such a measure for 
any of these countries. In 2008 the Council decided to abrogate the EDP for Poland 
and the Czech Republic. 

The Czech Republic has been subject to the EDP since the Council decision in July 
2004. The deadline for the excessive deficit correction was set to 2008. In July 2007 
the Council decided that the Czech Republic had not adopted adequate measures in 
response  to  its  July  2004  recommendations.  Since  the  Czech  Republic  is  not  a 
member of the euro area, it has a specific derogation from the application of further 
steps  of  the  EDP.  In  October  2007  the  Council  issued  only  a  new  set  of 
recommendations under Article 104(7) of the Treaty2. There has been no subsequent 
suspension of support from the Cohesion Fund. The Council delivered its opinion on 
the latest update of the Czech convergence programme on 4 March 2008. The overall 
conclusion was that the programme is consistent with a correction  of the excessive 
deficit in 2008. In June 2008 the Council issued the decision to abrogate the EDP for 
the  Czech  Republic.  The  excessive  deficit  procedure  for  Hungary  started  in  2004. 
Since  then,  Hungary's  failure  to  take  effective  action  in  response  to  Council 
recommendations  has  been  noted  on  two  occasions,  in  January  2005  and  in 
November  2005.  However,  on  neither  of  these  occasions  did  the  Commission 

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2 

Based on Article 6 of Council Regulation (EC) No 1164/94, as in the codified version presented by the 
Commission 
Treaty establishing the European Community, Article 104 on excessive government deficits 

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recommend a suspension of Cohesion Fund commitments to the Council. The latest 
set of recommendations concerning the Hungarian excessive deficit was adopted by 
the Council on the basis of a new Article 104(7)  decision in October 2006. In July 
2007 
the 
recommendations. 

that  Hungary  had  been  complying  with 

the  Council  decided 

In November  2006, Poland was the subject of an Article 104(8)  decision  issued  by 
the Council, establishing that the action taken to correct its excessive deficit in line 
with  the  2004  Council  recommendations  was  proving  to  be  inadequate.  New 
recommendations were issued for this country in February 2007. In December 2007 
the  Council  decided  that  the  measures  taken  by  Poland  were  consistent  with  these 
latest recommendations. In July 2008 the excessive deficit procedure for Poland was 
abrogated by the Council. 

At the end of 2007 two other Member States eligible for support under the Cohesion 
Fund (Portugal and Slovakia) remained subject to an excessive deficit procedure. No 
action associated with the EDP was, however, taken in regard to these countries in 
the course of 2007. Neither of the countries was subject to a suspension of transfers 
from the Cohesion Fund. In June 2008 the Council issued a decision to abrogate the 
EDP for both Member States. 

Council  Regulation  (EC)  No  1084/2006,  which  governs  the  Cohesion  Fund  for  the 
period  2007-20133,  has  cleared  up  several  uncertainties  that  surrounded  the 
application of Cohesion Fund conditionality in the past. It foresees that, following an 
Article  104(8)  decision  the  Commission  may  propose  the  suspension  of  Cohesion 
Fund  support.  In  turn,  the  Council  may  decide  to  suspend  all  or  part  of  the 
commitments,  with  effect  from  1  January  of  the  year  following  the  decision.  If  the 
Council  subsequently  finds,  in  the  context  of  the  EDP,  that  the  Member  State  has 
taken the necessary corrective action, this automatically implies a decision to lift the 
suspension  of  Cohesion  Fund  commitments.  Rules  for  re-budgeting  the  suspended 
commitments have been laid down. 

3. 

INSPECTIONS 

The Cohesion Fund closure enquiry concerning the period 1994-1999 covered 10% 
of  Cohesion  Fund  projects  representing  20%  of  the  co-financed  expenditure  during 
this  period.  The  fieldwork  was  finalised  in  2003  and  the  main  deficiencies  found 
were  insufficient  management  verifications  resulting  in  ineligible  expenditure  and 
numerous  breaches  of  public  procurement  rules.  In  2007,  for  Spain  the  procedures 
for  three  projects  were  concluded  by  Commission  decisions  and  for  Portugal  the 
procedure for one project was concluded following acceptance by the Member State. 
The  remaining  financial  correction  procedures  (8  projects:  4  in  Spain,  1  in  Greece 
and 3 in Portugal) resulting from this audit enquiry will be completed in 2008. 

As  regards  the  period  2000-2006,  the  audit  work  carried  out  in  2007  focused  on 
follow-up  audits 
implementation  of  system-related 
recommendations  made  in  2005  and  further  compliance  testing  of  projects 

the  effective 

to  verify 

3 

Council Regulation (EC) No 1084/2006 of 11 July 2006, establishing a Cohesion Fund and repealing 
Regulation (EC) No 1164/1994 

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expenditure.  Priority  was  also  given  to  reviewing  the  work  of  the  national  audit 
bodies  including  checking  the  quality  of  system  audits,  sample  checks  and  other 
issues in relation to the work of preparing the winding-up declaration. Some 20 audit 
missions  were  carried  out:  7  missions  under  the  EU-14  Cohesion  Fund  enquiry;  2 
missions  under  the  public  procurement  enquiry;  3  missions  under  the  winding-up 
body enquiry and 8 missions concerning Romania and Bulgaria. 

Financial correction procedures resulting from Cohesion Fund project audits carried 
out before 2007 were followed up. For Spain, final position letters were sent out for 
all  14  projects  outstanding.  For  Portugal,  the  procedures  for  3  projects  were 
concluded  with  acceptance  of  corrections  by  the  Member  State  and  there  are 
procedures  for  3  projects  outstanding.  For  Greece  the  procedure  for  a  flat-rate 
correction for a horizontal issue on public procurement completed the hearing stage, 
and there are two further projects outstanding. All the remaining procedures will be 
completed in 2008. 

In  2007,  other  audit  work  included  examination  of  winding-up  declarations 
submitted for the closure of 2000-2006 Cohesion Fund projects, the examination of 
the  annual  control  reports  under  Article  12  of  Regulation  (EC)  No  1386/2002,  and 
participation in the relevant annual bilateral meetings with national audit bodies. 

In the Directorate General's Annual Activity Report for 2007, for the functioning of 
the  management  and  control  systems,  an  unqualified  opinion  was  given  for  the 
systems  in  seven  Member  States  (Cyprus,  Estonia,  Hungary  –  transport  sector, 
Latvia, Malta, Portugal and Slovenia). 

For six Member States the opinion was qualified as a result of material deficiencies 
with  a  moderate  impact  affecting  key  elements  of  the  systems  (Bulgaria  – 
environment sector, Greece, Ireland, Lithuania, Romania and Spain). 

For  the  remaining  five  Member  States  the  opinion  was  qualified  with  significant 
impact  as  a  result  of  material  deficiencies  affecting  key  elements  of  the  system 
(Bulgaria – transport sector, Czech Republic, Hungary – environment sector, Poland 
and Slovakia). In line with the criteria set out by the Directorate General in view of 
the  material  deficiencies  to  the  systems  giving  rise  to  an  unacceptable  risk  for 
payments in 2007, the Directorate General made a reservation for these five Member 
States. 

4. 

IRREGULARITIES  

In  2007,  OLAF  undertook  two  missions  to  conduct  controls  on  the  spot  under 
Regulation  (EC)  No  2185/964  in  connection  with  four  external  investigation  cases 
open  in  relation  to  Cohesion  Fund  matters.  As  these  cases  are  ongoing,  it  is  not 
possible to comment further upon them for operational and possible judicial reasons. 

4 

O.J. L 292, 15.10.1996, p. 2 

EN 

10 

   EN 

 
                                                 
a 

by 

and 

sum 

involving 

In  2007,  the  Member  States  communicated  to  the  Commission,  in  accordance  with 
Regulation (EC) No 1831/945, 92 notifications of irregularities affecting co-financed 
projects 
of  
€  110.222.823.  Out  of  this  amount,  €  63.68 6.298  has  been  recovered,  and  the 
remainder is to be recovered. The Member States reporting the majority of cases are 
Greece  and  Spain  (26  and  34  respectively,  more  than  50%  of  the  total).  The  cases 
reported 
of  
€ 67.259.450 out of which € 57.788.966 has been 
recovered. Ireland communicated 
to  the  Commission  only  one  case  but  its  financial  impact,  amounting  to  
€ 6.638.190, is significant in rela tion to the average amount of the notifications. The 
number  of  notifications  showed  a  decrease  compared  to  the  previous  year6.  The 
figures  demonstrate  a  better  reporting  in  conformity  with  the  legal  obligations  by 
“old  beneficiaries  Member  States”.  However,  taking  into  account  the  Community 
contribution involved in the projects co-financed by the Cohesion Fund, the reporting 
discipline of the Member States has to be improved. 

involved 

amount 

Greece 

an 

The main types of irregularity reported are: ineligible expenditure and infringements 
of  public  procurement  rules.  These  two  categories  cover  almost  75%  of  all  cases 
reported. 

5. 

EVALUATION 

The Commission and the Member States carry out appraisal and evaluation of all co-
financed  projects. The  projects  to  be  financed  by  the  Fund  are  adopted  by  the 
Commission in agreement with the beneficiary Member States. 

Each request for assistance is accompanied by a cost-benefit analysis (CBA) of the 
project. The CBA has to demonstrate that the socio-economic benefits in the medium 
term  are  proportionate  to  the  financial  resources  mobilised. The  Commission 
examines this CBA on the basis of the principles set out in the guide to cost-benefit 
analysis. The guide, first published in 2003, was recently updated to incorporate the 
development  of  Community  policies,  financial  instruments  and  the  new  regulatory 
framework  under  which  major  projects  will  be  financed  during  the  2007-2013 
programming period. During 2007, the Commission assisted Member States through 
capacity-building  measures  aiming  to  improve  the  consistency  of  the  ex-ante 
financial and economic analysis of projects. To this end, dedicated software is fully 
operational, and a guidance document, adopted in 2006, sets out the methodology to 
be  used  in  carrying  out  CBA. The  document  presents  some  general  principles  of 
CBA along with a set of working rules and encourages the Member States to develop 
their own CBA guidelines. 

In addition, the Commission carries out ex-post evaluation on samples of projects co-
financed  by  the  Cohesion  Fund. The  last  evaluation  was  published  in  2005  and 
looked at a sample of 200 projects implemented over the 1993-2002 period. The next 

5 

6 

O.J. L 191, 29.07.94, p. 1, as amended by Regulation (EC) No 2168/2005, O.J. L 345, 21.12.2005, p. 
15. 

2006:  Number  of  communicated  cases  228;  overall  amount  related  to  the  communications 
€ 186.604.797 

EN 

11 

   EN 

 
                                                 
ex-post  evaluation  is  scheduled  to  be  launched  for  2009  and  will  look  at  projects 
implemented during the 2000-2006 period. 

6. 

INFORMATION AND PUBLICITY 

As  indicated  in  the  2006  annual  report,  discussions  with  the  Member  States  on 
Cohesion  Fund  issues  are,  as  from  1  January  2007,  dealt  within  the  Coordination 
Committee of the Funds (COCOF), according to Regulation (EC) No 1083/2006. 

Apart from issues of common interest for the ERDF and Cohesion Fund ( technical 
assistance,  audits,  budget  matters,  etc.),  some  issues  of  specific  interest  for  the 
Cohesion  Fund  were  presented  or  discussed  during  the  following  meetings  of  the 
Coordination  Committee  of  the  Funds:  in  January  "Implementation  of  transitional 
provisions  (Article  5(2)  of  Council  Regulation  (EC)  No  1084/2006)";  in  February 
"Complementarities  between  funding  for  actions  under  Structural  and  Cohesion 
Funds  and  other  community  instruments";  in  May  "Updating  at  midyear  of  the 
various  types  of  measures  of  technical  assistance";  and  in  July  "Guidelines  for  the 
determination of financial corrections in relation to infringements of rules concerning 
public  procurement"  and  "Study  on  Regional  expenditure  of  ERDF  and  Cohesion 
Fund". 

As regards the Commission measures on information and publicity, the focus in 2007 
was on implementation of the publicity requirements for the 2007-2013 period. 

The  Commission  also  organised  a  major  conference  in  Brussels  on  25  and  26 
November on: "Telling the Story. Communicating Cohesion Policy Together". Over 
500  communication  officers  from  all  over  Europe  participated  (proceedings  of  that 
event  are  available  on  DG  REGIO's  website7).  For  the  new  programmes,  enhanced 
networking between the Commission and the Member States and regions will be based 
on  a  network  ("INFORM")  which  will  permit  the  exchange  of  best  practice  in 
communicating the Structural and Cohesion Funds. 

7 

http://ec.europa.eu/regional_policy/country/commu/conferences/november07/sources_en.cfm  

EN 

12 

   EN