CELEX: 51995PC0730
Language: en
Date: 1995-12-22
Title: Proposal for a COUNCIL REGULATION (EURATOM, EC) amending Regulation (EURATOM, EEC) N° 2053/93 of 19 July 1993 concerning the provision of technical assistance to economic reform and recovery in the Independent States of the former Soviet Union and Mongolia

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                             COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                 Brussels, 22.12.1995
 HP»!                                                            COM(95) 730 final
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                                                                 95/0366 (CNS)
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                                                Proposal for a
                              COUNCIL REGULATION (EURATOM EC)
                   amending Regulation (EURATOM, EEC) N° 2053/93 of 19 July 1993
           concerning the provision of technical assistance to economic reform and recovery in the
                        Independent States of the former Soviet Union and Mongolia
   m
                                    (presented by the Commission)
il-
 MBŒ*
UN
 ---pagebreak---  ---pagebreak---                            EXPLANATORY MEMORANDUM
Regulation (EURATOM, EC) N° 2053/93 of 19 July 1993 provides technical assistance
to economic reform and recovery in the independent States of the former Soviet Union
and Mongolia. This Regulation will expire on 31 December 1995. Although the
transition process in the NIS and Mongolia is now underway, the latter still need further
assistance. The Commission therefore, in February 1995, adopted a proposal for a new
Regulation, which will provide the legal basis for the provision of assistance in the years
to come. The Commission proposal was submitted to the Council on 18 April. The latter
consulted the European Parliament on 20 June.
The E.P. delivered its opinion on 16 November and adopted thirty-seven amendments, out
of which twenty-nine are acceptable to the Commission.
In spite of efforts made, the Council has so far failed to reach unanimity on the new
Regulation, the most contentious issue being the opportunity to incorporate the
implementation modalities of the Tacis programme into the Regulation and its Annexes.
Given this situation, it is necessary to fully ensure the continuation of Community
assistance to the NIS which would constitute a positive political signal to our partner
States. Therefore, the Commission proposes an extension of the duration of the present
Regulation until 31 December 1996. This extension will be repealed the moment the new
Regulation enters into force.
                                        &
 ---pagebreak---  ---pagebreak---                                                    Proposal for a
                                 COUNCIL REGULATION (EURATOM EC)
                    amending Regulation (EURATOM, EEC) N° 2053/93 of 19 July 1993
          concerning the provision of technical assistance to economic reform and recovery in the
                         Independent States of the former Soviet Union and Mongolia
        THE COUNCIL OF THE EUROPEAN UNION
       Having regard to the Treaty establishing the European Community, and in particular Article 235
                                                      v
       thereof,
       Having regard to the Treaty establishing the European Atomic Energy Community, and in
       particular Article 203 thereof,
       Havuig-reganHo-nie-proposal frbm-theCommission,
       Having regard to the opinion of the European Parliament,
       Whereas pursuant to the European Council in Dublin and in Rome in 1990 the European
        Community introduced a technical assistance programme in favour of economic reform and
       recovery m me former Union of Soviet Socialist Republics,
       Whereas Council Regulation (EURATOM, EC) N° 2053/93 of 19 July 1993 concerning the
       provision of technical assistance to economic reform and recovery in the New Independent States
        of the Former Soviet Union and Mongolia^ laid down the conditions for the provision of this
       technical assistance and foresaw such an operation from 1 January 1993 to 31 December 1995,
       Whereas the Council has not been able to decide on the adoption of a new Regulation for 1996
        onwards, and it is necessary to ensure the continuity of Community assistance to guarantee the
        sustainabihty of economic reforms,
       Whereas it is therefore necessary to extend the duration of Council Regulation (EURATOM, EC)
       N° 2053/93 of 19 July 1993 until its replacement by a new Regulation, and not later than 31
        December 1996,
        Whereas the continued provision of assistance will contribute to the attainment of the Community's
        objectives, notably in the context of the Partnership and Co-operation Agreements,
        Whereas the Treaties have not provided, for the adoption of this Regulation, powers other than
        those of Article 235 of the EEC Treaty and Article 203 of the EAEC Treaty,
        HAS ADOPTED THIS REGULATION:
                                                        Article 1
        In. Article 1, paragraph 1 of Council Regulation (EURATOM, EC) N° 2053/93 of 19 July 1993,
        the date 31 December 1995 is replaced by 31 December 1996.
<•> OJL 187/1 of 29.7.1993
 ---pagebreak---                                                Article 2
The Regulation shall enter into force on the third day following its publication in the Official
Journal of the European Communities.
The Regulation shall be binding in its entirety and directly applicable in all Member States.
                                                  3
 ---pagebreak---                                 FINANCIAL S T A T E M E N T
1 TITLE OF OPERATION
        Technical assistance to economic reform and recovery in the Independent States
        of the former Soviet Union and Mongolia (Tacis programme).
2 BUDGET HEADING INVOLVED
        B7-620: Technical co-operation with the Independent States of the former
        Soviet Union
3 LEGAL BASIS
                Article 235 of the Treaty of Rome
                Article 203 of the Euratom Treaty
                Council Regulation (Euratom, EEC) No 2053/93 of 19/7/93 (OJ N° L
                187/1 of 29/7/93) on the provision of technical assistance to economic
                reform and recovery in the independent states of the former Soviet
                Union and Mongolia (replaces Council Regulation (Euratom, EEC) No
                2157/91 of 15/7/91);
                Partnership and Co-operation Agreements signed with Russia
                (24/06/94), Ukraine (14/06/94), Moldova (28/11/94) Kazakhstan
                (23/01/95); Kyrgyzstan (09/02/95), and Belarus (06/03/95).
4DESCRD7TION OF OPERATION
       4.1      General objective
                Backing for the process of reform, notably by financing or part-
                financing of assistance to achieve the transition to a market economy and
                to bolster the democratic process. The focus will be on human resources
                (tndning, job-finding and social security, civil society, etc.), developing
                and restructuring companies (SME, conversion, restructuring, etc.),
                energy and nuclear safety, infrastructure and production and distribution
                of food.
                                             u
 ---pagebreak---        4.2       Period covered and arrangements for renewal or extension
                 Council Regulation (EURATOM, EEC) N° 2053/93 expires in
                 December 1995. The Commission had submitted a new proposal to the
                 Council on 18 April. However, the Council has so far failed to reach a
                 consensus on the new regulation. It is imperative to avoid any disruption
                 of Community assistance to the New Independent States (NIS) and
                 Mongolia which would constitute a negative political signal to our
                 partner States, as well as a serious risk for the sustainability of economic
                 reforms in these countries. Therefore, it is now proposed to extend the
                 duration of Council regulation N° 2053/93 until 31 December 1996,
                 unless a new regulation enters into force before.
5 CLASSIFICATION OF EXPENDITURE
       5.1       Non-compulsory expenditure
       5.2       Differentiated appropriations
6TYPE OF EXPENDITURE
        The Tacis financing will usually be a 100% subsidy, but in some cases co-
         financing may be arranged with partners such as the EBRD or the Member
        States.
        The projects to be financed will be selected on the basis of the recipient
        countries'proposals.
        The programmes drawn up by the Commission departments will be forwarded
        to the Tacis committee (which consists of representatives of the Member States)
        for its opinion.
7 FINANCIAL IMPACT
       7.1      Method of calculating total cost of operation
                 The budget authority will determine the appropriations available for each
                 financial year.
                Commitment appropriations amounting to 528 Mecu have been requested
                for the 1996 budget.
                                           (fWtf
 ---pagebreak---     The attached multiannual indicative programme for financing reflects the
    options adopted at the Edinburgh Council and is in conformity with the
    Copenhagen Council declaration. Indeed, the Community shall continue
    to grant an important part of its funds to external actions, namely
    towards the newly independent states through the Tacis programme.
    Even though, given the needs of the newly independent states, the
    financial aid which can be provided by the Tacis programme until the
    end of the Financial Perspectives of the Budget seems limited, the Union
    plans to grant, under the provision of the yearly budget procedure, for
    the period 1995-1999 2,725 MECU to implement chapter B7-62 "Co-
    operation with the newly independent States from the former Soviet
    Union". This represents an average nominal growth per year of about
    3.5 % for the same period of time.
7.2  Itemised breakdown of cost
     A rough breakdown by programme group is as follows:
                                                                        in %
              National programmes                                       60
              Multi-Country programmes                                  30
              Other programmes (Multidisciplinary, EBRD,                10
              et__                                             1
     The programmes aim namely at the following sectors: human resources,
    enterprise development, transport and telecommunications, nuclear safety
    and environment, energy, food production and distribution and
    government institutions. The effective sharing within the frame of the
    programmes takes account of the priorities of each partner country.
     An indicative breakdown of interventions per sector is given below:
     (derived from interventions under 1991-1994. budgets)
                               Sector                          Share in %
               Government Advice                                  5,4
              Food Production & Distribution                      12,3
              Energy                                              10,6
              Nuclear Safety and Environment                      18,4
               Transport & Telecommunication                       9,0
               Support to Enterprises                             16,5
              Human Resources              '                      16,1
               Other                                 1            11,7
                                    5
 ---pagebreak--- 8       FRAUD PREVENTION MEASURES
The administrative side of contract and financial affairs is still concentrated in
the hands of the Commission. Progressively more decentralised management is
a possibility but depends on the circumstances and abilities of the recipient
countries. A monitoring system is in place with three teams based in Moscow,
Kiev and Almaty and co-ordinated by a central Tacis M&E section from
Brussels. The monitoring teams are responsible for making a detailed follow-up
of the implementation of projects and activities. In the Commission
headquarters, sector and programme evaluations are carried out on the basis of
the information gathered by the monitors. The Commission delegations in
Moscow, Kiev, Almaty and Tblissi also assist in follow-up of the project
implementation. These checks are backed up by audit teams sent by the
Commission departments to examine work done under contract.
ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
        9.1      Specific and quantified objectives; target population
       The aim of the programme of assistance for the countries of the former
        Soviet Union and for Mongolia is:
                 to support the transition to a market economy in the partner
                 States;
                 to modernise the countries' economies;
                 to back the process of démocratisation.
       Within the frame of the main objective (purpose) under point 4.1 above,
       the actions undertaken aim at a part or full financing of projects in the
       field of:
       - human resources training
       - restructuring of the public administration
       - employment and social security services
       - backing and reinforcement of civil company
       - assistance to macro-economic policy
       - legal assistance, namely the unification of legislative systems
       - support to the development of SMEs
       - military industry conversion
       - support to enterprises privatisation and restructuring
       - financing system modernisation
       - reforms linked with the rehabilitation and modernisation of basic
         infrastructures, namely within the transport and telecommunications
          sector
       - modernisation of energy-producing companies, including improvement
         of nuclear safety
       - food manufacturing, transformation, distribution and safety.
       The environmental dimension shall be integrated in the programmes'
      design and implementation.
                                        C
 ---pagebreak---     The final recipient of the Tacis projects will be policy decision makers,
    government officials, in particular economic and legal advisers, public
    administration staff, professionals in all sectors concerned (agriculture,
    energy, nuclear safety, transport, telecommunication, financial services,
    SME, conversion etc.) and finally, as far as measures aiming at the
    creation of a pluralist and democratic society are concerned, all citizens
    of the beneficiary countries.
9.2 Grounds for the operation
    The operation is in line with the decisions of the European Council
    (December 1990) of Rome.
    As the economic situation of the beneficiary countries does not allow
    them to direct themselves towards a pluralist democracy and a market
    economy independent from any external assistance, and as it is in the
    interest of the EU to complete the above-mentioned objectives as soon as
    possible, the Community is dedicated to these actions, including from a
    financial point of view.
    The aim of Community assistance is to use knowledge and know-how to
    produce a multiplier effect in the sectors involved and establish the
    framework and institutions for a market economy operating in a
    democratic society.
    The programme offers the advantage of genuinely European sourcing,
    with a very wide choice of systems and economic partners.
    The Community element is designed to back up the Member States'
    programmes of bilateral assistance.
    Spin-off effects
    By concentrating on key areas of economic infrastructure (energy,
    transport and finance), the programme is seeking to create a suitable
    climate for internal economic activity and investment from public and
    private sources.
    Multiplier effects
    Community financing for a project often draws in financing from other
    sources, either because co-financing from the Community is a condition
    for the involvement of other institutions or because funds from the
    Commission create the climate needed for other privately or publicly
    financed projects to succeed.
                                  \
 ---pagebreak---                Factors of uncertainty
               The main uncertainty which could influence the results of the operation
               is the continuity and speed of reform in the partner countries.
      9.3 Monitoring and evaluation of the operation
               Performance indicators
               The success of the operations will be measurable by the ability of the
               recipient countries to take over rapidly from European experts in
               projects started with Community backing. Everything will be done to
               achieve a gradual replacement of those experts with experts from the
               countries themselves in the sectors involved.
               The "demand-driven" nature of the operations and the recipients'
               undertakings that they will accept the assistance provided will ensure that
               they have an impact.
               European experts will be recruited under service contracts containing
               detailed terms of reference setting out the goals and duration of the
               functions in question, in order to allow subsequent evaluation.
               Procedure for evaluation and assessment of results
               The Commission departments will draw up annual reports on the
               progress of the operations, difficulties encountered and proposed
               solutions. These will be put to the Member States, the Council of the
               European Union, the European Parliament and the Economic and Social
               Committee.
               The projects will be run and evaluated regularly in accordance with the
               Logical Framework. The experts in charge of the projects will
               themselves produce half-yearly reports on their work (see also 8. above)
               The Commission will give the Member States (as represented on the
               Tacis Committee) and the European Parliament regular updates on the
               programme's progress.
10 A D M I N I S T R A T I V E E X P E N S E S ( P A R T A O F T H E B U D G E T )
               none.
                                                          Ï
 ---pagebreak---               Community assistance to economic reform and recovery in the Newly Independent States of the former Soviet
              Union and In Mongolia (Tacis programme)
              Indicative multiannual programming of commitment appropriations
                                                                                              (million ECU, current prices)
                                1993            1994           1995        1996  1997  1998  1999               total
                                                                                                            1995-1999
_JD
      Ceiling on heading 4 of   4.120          4.311           4.895       5.264 5.743 6.345 7.064         29.311
      the            Financial
      Perspectives (EUR 15)
      Indicative programming    510            460            506,85       528   546   565   585           2.730,85
      for Chapter B7.62 <1)
    (1)    For 1995 = 470 (Budget) + 36,85 MECU (APBRS N° 1/95)
           For 1996-1999, following a growth of approximately 3.5% a year.
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                     ISSN 0254-1475
                                                             COM(95) 730 final
                                              DOCUMENTS
EN                                                                             11
                                    Catalogue number : CB-CO-95-764-EN-C
                                                              ISBN 92-77-98713-8
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