[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 6.11.2007

SEC(2007) 1456

COMMISSION STAFF WORKING DOCUMENT

Annex to the REPORT FROM THE COMMISSION 18th Annual Report on Implementation of the Structural Funds (2006) {COM(2007) 676 final}

TABLE OF CONTENTS

Part 1: General analysis of activities 4

1. Introduction 4

2. Analysis of Implementation 9

3. Consistency and Coordination 15

4. Evaluations 19

5. Controls 21

6. Committees Assisting the Commission 26

Part 2: Analysis per Member State 28

7. Belgium 28

8. Cyprus 33

9. Czech Republic 35

10. Germany 39

11. Denmark 45

12. Greece 49

13. Spain 53

14. Estonia 61

15. France 64

16. Italy 68

17. Ireland 75

18. Latvia 80

19. Lithuania 83

20. Luxembourg 86

21. Hungary 88

22. Malta 91

23. Netherlands 94

24. Austria 97

25. Poland 101

26. Portugal 104

27. Slovakia 108

28. Slovenia 111

29. Finland 114

30. Sweden 119

31. United Kingdom 124

Part 3: List of Major Projects 130

Part 4: Financial Figures 165

Part 5: Use of Structural Funds in the 2000-2006 period by Objective and Field of Intervention 202

Part 6: Operational programmes in the 2000–2006 programming period 240

Part 7: Information on financial corrections and recoveries in the Structural Funds 258

Part 1: General analysis of activities

Introduction

In 2006 the legislative framework for the Structural Funds and the Cohesion Fund for the 2007–2013 programming period was finalised. After the new financial perspectives were agreed on 17 December 2005, the new cohesion policy package was adopted by the Council on 11 July 2006, followed by adoption of the Community strategic guidelines on 6 October 2006 and, finally, of the Commission implementing regulation on 8 December 2006.

The financial agreement setting the EU-27’s financial perspectives for the new programming period included an allocation to the Cohesion and Structural Funds of EUR 308.041 billion (2004 prices) in commitment appropriations, of which EUR 251.162 billion (81.5%) is for the “Convergence” objective (least developed regions, including those for which aid is being phased out), EUR 49.127 billion (16%) for “Regional competitiveness and employment” and EUR 7.75 billion (2.5%) for “Territorial cooperation”.

The Rural Development policy (financed by the EAFRD[1]) and the fisheries policies (financed by the EFF[2]) are henceforth organised independently of the Structural Funds on the basis of the European Agricultural Fund for Rural Development (aligning the rules of management and control with those of the first pillar of the Common Agricultural Policy) and the European Fisheries Fund. This requires an effective complementarity between the co-financed actions by all the financial instruments concerned (Cohesion, Rural Development and Fisheries policies).

The legal framework for the new generation of cohesion policy programmes includes:

- the general regulation[3] laying down the common rules on the strategic approach, programming, evaluation, financing, management, monitoring and control of programmes;

- four regulations laying down specific rules on the European Regional Development Fund (ERDF)[4], the European Social Fund (ESF)[5], the Cohesion Fund (CF)[6] and the European Grouping of Territorial Cooperation (EGTC)[7] plus the Commission regulation setting out rules for implementing them;

- the Community strategic guidelines on cohesion[8], which contain the principles and priorities of cohesion policy for the next seven years and suggest how European regions can use the cohesion budget to address regional issues, whilst also taking account of wider EU priorities. In line with the renewed Lisbon strategy, cohesion policy should focus to a greater extent on knowledge, research and innovation and human capital, pursue the objective of sustainable development, boost synergies between the economic, social and environmental dimensions, pursue the objective of equality between men and women and prevent any discrimination on grounds of gender, race or ethnic origin, religion or belief, disability, age or sexual orientation at all stages of preparation and implementation of programmes and projects. Operational programmes co-financed under the cohesion policy should seek to target resources on the following three main priorities:

- improving the attractiveness of Member States, regions and cities by improving accessibility, ensuring adequate quality and level of services and preserving their environmental potential;

- encouraging innovation, entrepreneurship and the growth of the knowledge economy by research and innovation capacities, including new information and communication technologies; and

- creating more and better jobs by attracting more people into employment or entrepreneurial activity, improving adaptability of workers and enterprises and increasing investment in human capital.

A series of reforms relating to management of the operational programmes have been introduced for 2007-2013. In terms of the delivery system, legislation has been streamlined and rules simplified for managing cohesion policy. In particular there is:

- One set of management rules

There is now a single Commission implementing regulation for the 2007-2013 programming period, which replaces 10 existing regulations for the 2000-2006 programming period. The rules for management of programmes financed by the Cohesion Fund have been aligned with those of the Structural Funds. The fact that there will now be only one set of rules will make management of the Funds easier and less costly for Member States.

- One set of eligibility rules for expenditure

Member States will be able to use national eligibility rules rather than European eligibility rules in addition to national eligibility rules, thus greatly simplifying project management for Member States.

- Simplification of financial management

The financial plans, the setting of the intervention rate and EU reimbursements will now be made at a higher level (at programme or priority axis level, instead of at measure level, as before). This will simplify management of the programmes by Member States and the Commission, and limit the cases where financial plans need to be modified, thus giving a wider autonomy to the national authorities in charge of the management of operational programmes.

- Increased proportionality and simplification for control systems

For smaller programmes (total eligible public expenditure under 750 million EUR and Community co-financing under 40 % of total public expenditure), certain requirements on control arrangements can be carried out by national bodies established according to national rules, thus reducing the need to comply with certain Community audit requirements.

- Clearer rules on information and communication

Citizens and potential beneficiaries of the Funds in all Member States will automatically have the same access to information on funding opportunities and awards from the Community budget for Cohesion Policy, thus reducing the time and effort they have to spend in finding such information.

- Electronic government in practice

Data exchange between the Member States and the Commission will be done only electronically. This marks the beginning of a new era in terms of electronic data exchange and e-Governance. With this new system now in place, 40 % of the EU budget will be electronically managed from A to Z, without paper. It will save much time in running programmes and will reduce the risk of disagreement between the Commission and Member States on the amount and type of information to be provided.

Greater importance has also been attached to the urban dimension of the cohesion policy. After several informal Council meetings and the March 2005 European Council recognised the contribution of cities and urban areas to regional development, on 13 July 2006 the European Commission released a Communication entitled “Cohesion Policy and cities : the urban contribution to growth and jobs in the regions”[9]. The Communication stresses the urban dimension in the context of the areas of activity defined by the Community Strategic Guidelines. These activities are of particular importance for developing new policy responses and innovative solutions as well as establishing common policy initiatives.

The Urban Community initiatives as well as Interreg and Equal and the innovative action will now be mainstreamed into the Structural Funds’ programmes.

In addition, for the implementation phase, and in order to bring in new sources of support and expertise, the Commission and the international financial institutions have prepared three joint initiatives: Jaspers (Joint Assistance to Support Projects in European Regions) to assist the twelve beneficiary countries with preparing major projects, Jeremie (Joint European Resources for Micro to Medium Enterprises) to improve access to finance for SMEs and develop micro-credit for the next programming period, known by the acronym and Jessica (Joint European Support for Sustainable Investment in City Areas) to support sustainable and recyclable urban investment and development in cities in the EU from the Structural Funds. JEREMIE and JESSICA represent a cultural shift for cohesion policy, seeking to move away from an exclusive dependence on grants towards greater use of repayable forms of assistance.

As an additional feature, a significant level of support in the new programming period will be directed towards strengthening public administrations and public services in Convergence Regions and Cohesion countries. This new priority will support the modernisation, the development of the public administrations and public services to better meet the expectations of citizens and business and also to strengthen its role as an important factor of social and economic development.

On 9 February 2006 Ministers responsible for the reform of public administration, management of Structural Funds, employment and education and senior officials from EU-27 met to discuss the challenges facing public administrations in modern society and the knowledge-based economy and the possibilities offered by the European Social Fund (ESF) to support the necessary reforms towards modernisation of public administrations.

On 8 November the European Commission adopted proposals for a new initiative to promote excellence in European regional development by supporting new advanced networks for mutual learning and exchange[10]. The new “Regions for economic change” initiative is being implemented by the interregional cooperation and urban development strand of the Territorial Cooperation Objective for 2007–13. Under the new initiative, interregional cooperation and the urban development network programme will continue to operate as at present. However, a new element for 2007–2013 is that the Commission itself offers the networks a number of themes focused on economic modernisation and the renewed Lisbon agenda. Member States, regions or cities which choose to pursue these themes have the possibility of working more closely with the Commission.

Another novelty is a “fast track” option, whereby the Commission establishes and steers volunteer networks around selected priority themes in order to provide a rapid testing ground for policy ideas. Two other new aspects include the introduction of an annual “Regions for economic change” conference and an annual award for the best projects in different categories of economic modernisation.

The first event, entitled “Innovating through EU regional policy”, took place already on 12-13 June 2006 in Brussels. The aim of the conference was to give interested parties, particularly authorities managing Structural Funds, an insight into successful strategies and practices for “improving knowledge and innovation for growth”, as recommended by the Community strategic guidelines on cohesion for 2007–2013.

The European Commission set up a Restructuring Forum to promote dialogue on economic change and restructuring. The 2nd Restructuring Forum, held on 18 July 2006, focused on the sectoral dimension of restructuring and looked at how best to optimise existing EU policies, dialogue and funding for manufacturing industry. On 4-5 December 2006, a Restructuring Forum was organised on “How dynamic regions face restructuring – The role of the European Social Fund and of the other Structural Funds”.

The 2006 European Week of Regions and Cities, open days which took place in Brussels between 9 and 12 October 2006, focused on “Investing in Europe’s regions and cities: Public and private partners for growth and jobs”. It was the biggest-ever annual event on EU regional policy attracting almost 4 000 participants. A further 1 500 people also took part in 70 decentralised events in regions and cities across Europe.

In October a European Social Fund and Disability Conference was organised by the European Commission to inform participants of the possibilities offered by the Structural Funds, and particularly the ESF, for the next programming period (2007-2013). It also highlighted what is new and what is changing in the Structural Funds regulations in relation to disability. A further aim of the conference was to present the EU toolkit for evaluating the accessibility of ESF projects to people with disabilities, in order both to inform participants and to request their feedback on this important toolkit which will be published in 2007.

An ESF Conference took place in Saariselkä (Lapland) on 16-17 November 2006 with the theme “ Visions for the Future – ESF innovations” . The objective of this event was to take stock of the best experience from the past and to build on it for the next programming round.

The fourth annual progress report on economic and social cohesion in the EU was also presented in 2006. The report showed that economic and social disparities in the EU are narrowing, with rapid and sustained growth in the least prosperous Member States. However, at regional level there is still enormous untapped potential, with the 10% of the population living in the poorest regions in the EU accounting for a mere 1.5% of gross domestic product (GDP). The report identified severe regional disparities in modern infrastructure and innovative capacity as a key contributory factor and a major challenge for EU regional policy. For example:

- in 47 out of 254 regions, expenditure on research and development is below 0.5% of GDP, compared with an EU-wide target of 3%;

- in regions where GDP is below 75% of the EU average, fewer than 15% of households have broadband internet access, compared with around 30% of households in other regions.

- On 1 August 2006 the Commission adopted the decision[11] laying down rules regarding closure of assistance from the Structural Funds (2000–2006).

Analysis of Implementation

Budget Implementation

This (2006) was the first year when the “n+2 rule” was applicable to EU-10 Member States.

ERDF

The implementation of the budget in 2006 was very satisfactory and for Objectives 1 and 2 and the Community initiatives, 100 % of the resources available were committed.

Concerning payment appropriations, 99.92 % of the resources available were used (99.65 % in 2005). The projected level of payment appropriations for 2006 ERDF was reduced by 2.8 billion EUR in the course of the year in order to take account of the temporary suspension of payment claims by Spain and the United Kingdom (amounting to 2.3 billion EUR) pending the implementation of action plans to improve aspects of management and control systems, and due to forecasting errors made by EU-10.

Commitments from previous years on which payments were still to be made[12] totalled EUR 45.8 billion at the end of 2006 (compared with EUR 39.1 billion in 2005).

It should be stressed that since the cohesion policy supports investments in major projects, it is normal for resources to be committed well in advance of payments, which reflect progress on the ground.

Concerning application of the n+2 rule, at the end of 2006 to the 2000, 2001, 2002, 2003 and 2004 commitments, 19 programmes were involved for which a total of EUR 129.31 million was proposed from the ESF (1.1 % from the corresponding amount committed in 2004). For those programmes the Commission opened negotiations ('the contradictory procedure') with the Member States. Only at the end of this procedure can the amounts to be decommitted be known.

ESF

Implementation of the budget in 2006 was also very satisfactory: 99.97 % of commitment appropriations were implemented in 2006 (against 99.93 % in 2005). Concerning payments, 99.87 % of the appropriations were executed (99.86 % in 2005). The total outstanding payments on commitments at the end of 2006 stood at EUR 22.96 billion (outstanding payments compared with EUR 20.74 billion in 2005), out of which EUR 22.76 billion were for the current ESF programming period (EUR 20.44 billion in 2005). The outstanding payments from earlier ESF programming periods decreased significantly from EUR 304.7 million at the end of 2005 to EUR 204.6 million at the end of 2006 (-32.8 %).

Concerning application of the n+2 rule, at the end of 2006 to the 2000, 2001, 2002, 2003 and 2004 commitments, 19 programmes were involved for which a total of EUR 129.31 million was proposed from the ESF (1.1 % from the corresponding amount committed in 2004). For those programmes the Commission opened negotiations ('the contradictory procedure') with the Member States. Only at the end of this procedure can the amounts to be decommitted be known.

EAGGF

The 2006 budget was fully used in terms of both the commitment and payment appropriations (respectively 99.3 % and 108.5 % of the budget initially voted). The figure for payments was achieved due to the fact that the payment appropriations budget was topped-up by EUR 360 million in December 2006.

Compared with 2005, an extra EUR 207 million was committed and an extra EUR 2 million paid.

The payments added up to EUR 3 589 million, of which EUR 3 562.1 million was for the 2000-2006 programmes (Objective 1: EUR 3 193.0 million; Leader+: EUR 361.1 million; Peace: EUR 8.1 million) and EUR 26.9 million for the closure of 45 programmes from the 1994-1999 programming period.

Outstanding EAGGF commitments at the end of 2006 totalled EUR 7 636 million (compared with EUR 7 085 million in 2005), of which EUR 7 288 million corresponded to 2000-2006 programmes.

Implementation of the n+2 rule for the 2003 commitments resulted in EUR 9.3 million being decommitted. 15 Leader programmes and four Objective 1 programmes were affected, mainly in France, Spain and Greece. Initial estimates of the impact of this rule on 2004 commitments, based on financial implementation per programme at the end of 2006, show a potential decommitment of EUR 53 million.

FIFG

In all, 99.58 % of commitment appropriations and 84.16 % of payment appropriations were implemented. The payment rate was 86.23 % in Objective 1 regions and 79.06 % in regions outside Objective 1. The total outstanding payments on commitments for the FIFG for the 2000-2006 programming period totalled EUR 1 336 million in 2006 (compared with EUR 1 111 million in 2005).

Concerning the application of the n+2 rule, at the end of 2006 and in relation to the 2000, 2001, 2002, 2003 and 2004 commitments, 9 programmes were involved for which a total of EUR 22 million was at risk. For these programmes the Commission opened the contradictory procedure with the Member States. Only by the end of this procedure the amounts to be decommitted will be definitively known.

Programme Implementation

Objective 1

Expenditure on the Objective 1 programmes followed the same path as in 2005. The Objective 1 programmes focused investment on basic infrastructure projects (41.6 %), with over half (54.4 %) of all investment in this category spent on transport infrastructure. More than one-third (33.5 %) of the Objective 1 resources were invested in productive environment, where the priority continues to be on assisting SMEs and the craft sector (30 %). Projects targeted at human resources took 23.2 % of resources in Objective 1 regions. The main fields of activity were, almost equally, labour market policies (31.6 %) and education and vocational training (31 %).

Objective 2

In Objective 2 regions, the main focus of the programmes continued to be on productive environment, with over half of all financial resources (56.3 %) allocated to this category. Within this field, assistance to SMEs and the craft sector predominated (56.5 %). The second most important field of activity was basic infrastructure, with 29.1 % of all Objective 2 resources. Unlike the Objective 1 programmes, the most important area in financial terms was planning and rehabilitation of industrial zones (44.6 %). In the human resources category (10.2 % of all investment in Objective 2 regions), workforce flexibility, entrepreneurial activity, innovation, information and communication technologies were the main fields of investment (31.6 %).

Objective 3

The main emphasis of the ESF programme in 2006 continued to be on support for the European Employment Strategy, particularly measures aimed at improving employability on the labour market (31 % of expenditure), lifelong learning (27 %) and equal opportunities (6 %), while measures to promote entrepreneurship remained stable (19 %) but below the level suggested by the programming documents (21 %). Furthermore, there was still a marked difference in financial implementation of programmes between EU-15, where long-established programmes continued to be implemented, and EU-10, where some Member States are experiencing considerable difficulties in getting some projects and measures underway.

Fisheries outside Objective 1

Take-up for structural improvements in the fisheries sector progressed in 2006. This was reflected in the financial implementation of the FIFG operational programmes, which contributed to achieving the objectives of the common fisheries policy.

Community initiatives

Interreg

The implementation of the 81 Interreg III/Neighbourhood programmes progressed well in 2006 in pursuit of their objective of reducing the negative economic impact of borders and promoting cooperation.

Over the period from 2000 to 2006, the 81 Interreg III/Neighbourhood programmes selected some 13 000 projects and networks. For some programmes, changes were necessary due to enlargement and/or the integration of the Union's new Neighbourhood programme concept. N+2 decommitments and updates of the mid-term evaluations contributed to further changes to the programme in the two following years.

The “n+2 rule” resulted in close to EUR 29 million being lost under Interreg, which is slightly more than the previous year.

Equal

In 2006, good progress continued to be made with implementation of the 27 programmes and more than 3 300 projects under Equal.

Almost 50 meetings of Equal monitoring committees were held during 2006. They focused on strategies and action to mainstream good practice that has been developed and validated. One of the most important administrative tasks for those meetings was to decide the final changes to the contents of the programmes and to the financial distribution between the priorities: nine Member States requested a duly justified final modification from the Commission in time (before the end of 2006). Three coordination meetings of the Equal managing authorities took place in Brussels during 2006.

As regards financial implementation, after bilateral discussions between the Commission and the national managing authorities to assess the situation and establish action plans to increase spending, six Member States were not able to use part (between 3% and 18%) of their 2004 budgetary commitment (“n+2 rule”).

In order to make maximum use of the results of the Equal programmes and projects by informing policy and practice, including the shape of the national and regional ESF programmes for the next programming period, the Commission and the Member States worked in partnership during 2006. This work covered relevant policy issues such as asylum seekers, diversity, youth employment, ex-offenders, social economy, inclusive business creation, media and discrimination, together with management principles (partnership, transnational cooperation, innovation and gender mainstreaming). This “mainstreaming” work concentrated on gathering and validating good practice on new methods of delivery, on supporting European events for mainstreaming the lessons learnt and on disseminating information about the achievements of Equal through the Equal website, Equal newsletter and a European database on Equal end-products.

Member States took the initiative of sharing the lessons learnt when drafting the plans for the new ESF programming period. Ad hoc groups of Member States drafted discussion papers on integration of the Equal management principles. Following two workshops with participants from all Member States, these papers were presented as guidance material for the forthcoming programming period to the members of the ESF Committee at their meeting in June 2006.

Seven workshops related to Equal were organised during the European Week of Regions and Cities (“Open Days”) in October 2006. A training seminar on “Preparing the Closure of Equal” was held in Brussels in September, with participants from all Member States, plus DG EMPL and OLAF.

Urban

In 2006, the twenty thematic networks and six working groups created within the framework of Urban continued their efforts to promote best practices and exchange information. Thirteen networks completed this work and a final conference was organised to present their results and recommendations. A report on the “role of the cities in the development of disadvantaged districts”, based on the experience of the cities, was produced under the auspices of the German Presidency.

The process of capitalisation (combining analyses and activities of the networks and groups of work, summarisation and regrouping on major questions) and the process of distribution have developed considerably: six thematic folders were created on the website and are regularly updated on the following topics: young people, local economic development, and participation of the inhabitants, safety, urban regeneration and immigrants.

Leader

73 Leader+ programmes have been approved for the period 2000-2006. Of the 938 Local Action Groups (LAGs) proposed, 892 have been finally selected.

The Community’s Leader+ initiative consists of three actions: implementation of local development strategies by public/private partnerships, cooperation between rural territories and networking.

Local development strategies

In some programmes most of the LAGs have committed the budget available for their projects. Indicators for some programmes already clearly show that the programmes have been a success, for example Ireland with 930 new enterprises assisted, 1935 new jobs created and 32 162 individuals trained, Finland with 2 191 new jobs created and Northern Ireland with 100 new enterprises created and 1 060 new jobs created.

Cooperation

In Ireland, which is among the best performers for cooperation, 100% of the funding was committed by the end of 2006 with 86 transnational projects and 124 interterritorial projects by 22 Local Action Groups. In many Member States, almost all the LAGs are participating in cooperation projects, which is a more meaningful indicator than the number of projects per programme. This is the case in Belgium (Flanders and Wallonia), Denmark and the UK. In Italy 87% of the LAGs are involved in cooperation and in France 75%. In some cases transnational cooperation is mainly neighbourhood cooperation, for example between Northern Ireland and the Republic of Ireland or between Italy and other Mediterranean countries.

Networking

Dissemination and transfer of know-how is a core element of most National Network Unit programmes. National Network Units are working on learning from Leader+, accumulating and carrying over knowledge from Leader+ bearing in mind the need to learn lessons and gather recommendations for the next programming period. The UK drafted a document considering achievements under Leader in terms of the new rural development regulation and demonstrating how Local Action Groups are already contributing to the three priorities by means of case studies at both project and LAG level.

The national networks have developed case studies and established data bases of good practices. They are also running more training schemes on the conceptual and methodological aspects, e.g. on the nature of pilot strategies, for instance on how to involve the local population and young people in local development, etc.

In 2006 the European Leader+ Observatory organised three decentralised seminars: “Adding value to local products” in Grosseto (Tuscany) in February, “Making best use of natural and cultural resources” in Schruns (Austria) in April and “Leader in the New Member States” in Tihany in Hungary in November, which focused on topics suggested by the new Member States beforehand, such as institution-building, capacity-building at LAG level, networking and good practice. The evaluation shows that these were a complete success.

Innovative action

ERDF

Some 181 regional programmes for innovative actions were approved for the period 2000-2006. By the end of 2006 fifty-nine programmes had been brought to a conclusion. This resulted in 40 projects being identified as best practice examples for dissemination to other regions (for example, through the Inforegio website). It should be recalled that the programmes are organised around the following themes: knowledge and technological innovation, information society and sustainable development.

ESF

During the year 37 projects relating to Local Employment Strategies were finalised. In 2006, 19 projects were selected under the third round of the call for proposals on “Innovative approaches to the management of change”. Together with the 61 ongoing projects selected in previous rounds, they address two priority issues: management of restructuring and management of demographic change. With a view to mainstreaming the results, six projects were selected under the second round of the call on “Transfer and dissemination of innovation from ESF Article 6 projects”.

FIFG

Three calls for proposals were launched in 2002 and 2003. In 2002 ten innovative action projects were selected under call 2002 – 02/C 132/11. In 2003 another 12 projects were selected under call 2003/C 115/08 – Générique, plus seven more focusing specifically on the needs of women and women’s associations operating in the fisheries sector (call 2003/C 115/07 – “Femmes”).

Nine projects were brought to conclusion in 2006.

Following the 2005 ex post evaluation of transnational projects for innovative action in the fisheries sector, no new call for proposals was launched in 2006. The evaluation showed that the overall EU added value of these projects was limited. The key characteristics of the innovative action - innovation, networking and transnational cooperation – have, however, been mainstreamed into the European Fisheries Fund Regulation.

Consistency and Coordination

Consistency with other Community policies

Although this report is concerned with implementation of the regulation related to the Structural Funds in 2006, it should be underlined that extensive work was done to further improve consistency with other policies in the context of adoption of the Community strategic guidelines on cohesion.

Competition

Under Regulation (EC) No 1260/99 Member States are required to verify that all operations comply with EC legislation, including the rules on State aid. Where the Commission is informed of, or audits demonstrate, any breach of EC legislation, appropriate action is taken. In order to provide full transparency, Member States indicate the State aid schemes for which assistance from the Structural Funds is used in their programmes. The majority of regional aid schemes expired on 31 December 2006. New guidelines apply as of 1 January 2007.

Internal market

Under Regulation (EC) No 1260/99 Member States are also required to verify that operations financed by the Funds comply with EU Public Procurement Directives. Where the Commission is informed of any breach of EC legislation or where audits demonstrate that this is the case, appropriate action is taken. In the programming context the Commission requires information from the Member States in the annual reports on the programmes.

The Directorates General for Regional Policy and for Internal Market have contributed to clarify the legal treatment of concessions dating before accession of new Member States, on 1st May 2004, and which were not in compliance with the EC-Acquis.

A new regulatory framework for public procurement law has been introduced in order to provide greater further legal certainty both for the private and the public sector.

Environment

The main focus has been on using appropriate actions under the cohesion policy programmes to support compliance with the Community Acquis in the field of urban wastewater, water supply and waste management. Other important areas of investment have been in eco-innovation and rehabilitation of polluted soil. The promotion of sustainable development has been achieved with investments in environmentally-friendly transport and energy, introducing environmental criteria into project selection, and by pro-actively ensuring compliance of projects with environmental legislation.

The application of the Strategic Environmental Assessment Directive to the future Operational Programmes 2007-13 as part of ex-ante evaluation is proving to be a particular challenge for Member States – this task has been eased by the use of the SEA handbook devised by the Interreg IIIC project on Greening of Regional Development Programmes (GRDP). The European Network of Environmental Authorities (ENEA) composed principally of environmental administrations in Member States continued its work during 2006 with meetings in Brussels, and two other meetings in La Coruña (Spain) and in Rome (Italy), hosted by the relevant national networks. For the list of major projects supported in this field by the ERDF, see Part 3 of the Annex.

Transport

Cohesion programmes continue to be the main source of Community support for the realisation of Community priorities in transport. Accordingly, the main focus has been on supporting investment in line with European transport policy. For a list of major projects supported in this field by the ERDF, see Part 3 of the Annex.

Gender equality

The Commission continued its work to promote gender equality in the Structural Funds and the Cohesion Fund.

In March 2006 the Commission adopted “A Roadmap for Equality between Women and Men”, covering the period 2006-2010, which reflects the Commission’s commitment to this issue and covers all external and internal EU policies. The roadmap outlines six priority areas for EU action on gender equality: equal economic independence for women and men, an area in which the SF are contributing to achieving the Lisbon employment targets; reconciliation of work and private life; equal representation in decision-making in politics, economics and science and technology; eradication of gender-based violence and trafficking; eliminating gender stereotypes in society; and promotion of gender equality in external and development objectives. The roadmap is designed to improve governance by exploring the possibilities to develop gender budgeting at EU level, particularly in the Structural Funds within the possibilities of shared management for the new period.

In the context of the Lisbon Strategy, on 24 March 2006 the European Council adopted the “European Pact for Gender Equality”. The objective was to encourage action at Member State and European Union level to achieve the objectives of the growth and jobs strategy.

The Regulation establishing the European Institute for Gender Equality was adopted by the Council on 20 December 2006. The Institute will provide technical support both for the Member States and for the European institutions – notably the Commission – to ensure optimum implementation of Community policy in the field of gender equality. The Institute will organise collection and analysis of data at Community level, develop appropriate methodological tools, in particular for integration of the gender dimension in all policy areas, facilitate exchanges of best practices and dialogue between stakeholders and raise awareness among EU citizens.

The High-Level Working Group on gender equality, set up in 2004, met once to exchange best practices.

Coordination of instruments

The Structural Funds and the Cohesion Fund

Aid granted by the Cohesion Fund provides financing for transport infrastructure projects in the fields of trans-European networks and the environment. The Cohesion Fund enables the beneficiary Member States to channel significant public investment into these two fields of common interest, while meeting the objectives for reducing the budget deficits set in the convergence and stability programmes drawn up as part of economic and monetary union.

As a result of the enlargement of the European Union in May 2004, ten new Member States are covered by the Cohesion Fund. In 2006, before the latest enlargement to Romania and Bulgaria on 1 January 2007, there were 13 Member States benefiting from these Funds. As a result of its economic growth, Ireland has no longer been eligible for aid from the Cohesion Fund since 1 January 2004.

The principal instrument for coordinating funding under the Cohesion Fund and the Structural Funds is the strategic reference framework (SRF), which covers the whole period from 2000 to 2006. Regulation (EC) No 1164/94 provides that “Member States shall also provide the results of the environmental impact in conformity with the Community legislation, and their consistency with a general environmental or transport strategy at administrative unit or sector level”.

The four “old” Member States benefiting from the Cohesion Fund presented their SRFs for the environment and transport at the end of 2000. The ten “new” Member States presented their SRFs during the first half of 2004. Since then, decisions to finance projects by the Cohesion Fund were verified to avoid duplication with programmes adopted under the Structural Funds. In addition, SRFs make for better complementarity between the two instruments.

In certain cases, these SRFs form an integral part of the programmes approved under the Structural Funds for the period 2000-2006; this strengthens coordination between funding under the Cohesion Fund and the Structural Funds.

The Structural Funds and the EIB/EIF

Jaspers

In 2005 the Commission agreed in principle with the EIB and EBRD to strengthen cooperation, especially in relation to the Member States which joined the EU in 2004 and to Romania and Bulgaria. Because of the inexperience of the national administrations with project preparation, agreement was reached to establish a new joint structure called Jaspers (Joint Assistance to Support Projects in European Regions) to assist the twelve beneficiary countries with preparing major projects. Jaspers headquarters are in the EIB in Luxembourg but it was agreed to post the majority of the new staff in regional offices in Warsaw, Vienna and Bucharest. In 2006 the new technical assistance facility came into operation.

A Memorandum of Understanding between the Commission, the EIB and the EBRD was signed in May followed by a grant agreement for the transfer of Commission technical assistance to the EIB to fund Jaspers, signed in July. Action plans (work programmes) for 2006 were agreed with eleven of the twelve beneficiary countries. Two framework contracts to assist with the work of Jaspers were put out to tender and the successful consultants were chosen in November.

Work began on these action plans as soon as they were agreed between Jaspers and the beneficiary countries, drawing first on the core teams of experts seconded to Jaspers by the EIB and EBRD (sixteen staff-years will be contributed each year by the EIB and five to eight by the EBRD). By the end of the year Jaspers had a portfolio of 98 projects or horizontal studies and three assignments had been completed.

Posts to be funded by the Commission were advertised in May. A total of 1 600 applications were received for the 32 new posts as Jaspers experts. From these, 110 applicants were interviewed and 29 were chosen as suitable to be offered posts. Lastly, the Jaspers regional office in Warsaw began operations in November.

Jeremie

The Commission and the EIB Group have also agreed to launch a joint initiative to improve access to finance for SMEs and develop micro-credit for the next programming period, known by the acronym Jeremie (Joint European Resources for Micro to Medium Enterprises). It is targeted especially at micro to medium-sized enterprises in the regions of the EU supported by the Structural Funds. Jeremie is a direct response to the challenge which continuous economic adjustment poses to these regions.

First in February and then in April 2006 the Commission presented the legislative package necessary to provide for Jeremie to the Structural Actions Working Party of the Council. This package was included in the new general Regulation No 1083/2006 of 11 July 2006 on the Structural Funds.

In parallel, over the period May-September 2006 the Commission prepared and discussed with the Member States the rules necessary to implement Jeremie. These provisions are included in Articles 43 to 46 of Commission implementing Regulation No 1828/2006 of 8 December 2006.

A Memorandum of Understanding was signed between the Commission and the EIF in May 2006 to organise their joint approach to Jeremie. On 3 October 2006, in Luxembourg, the Commission and the EIF signed the contribution agreement, which secured the financing for the Jeremie evaluation reports in the Member States or regions for 2006.

The Jeremie evaluations are led by the EIF evaluation team in Luxembourg, supported by local consultants recruited by the EIF, with local knowledge. By the end of 2006, 15 interim reports at Member State level and 10 interim reports at regional level in three other Member States (Spain, UK and France) had been prepared by the EIF. More interim reports and all the final reports will be made freely available to the Member States or regions concerned by the EIF at the end of 2007.

Jessica

Another initiative, Jessica (Joint European Support for Sustainable Investment in City Areas), has been put in place with the EIB and the Council of Europe Development Bank to support sustainable and recyclable urban investment and development in cities in the EU from the Structural Funds. The Commission presented the new Jessica initiative to the Council for the first time in February 2006, in cooperation with the EIB.

Under Jessica, managing authorities in the Member States have the opportunity to use some of their Structural Fund allocations – principally those supported by the European Regional Development Fund (ERDF) but also, where appropriate, from the European Social Fund (ESF) – to invest in Urban Development Funds (UDFs) and recycle these resources to further rounds of investment in urban areas.

A Memorandum of Understanding was signed between the Commission, the EIB and the CEB in May 2006 on a coordinated approach to financing urban renewal and development for the 2007-2013 programming period of the Structural Funds. A grant contribution agreement for the Jessica scoping study was signed between the Commission and the EIB in December 2006. The objective of the study, carried out by the EIB in cooperation with the CEB, is to make an initial estimate of the potential demand and existing structures for urban investment under Jessica for the programming period 2007-2013, including country-specific reports for some Member States (UK, Italy, Netherlands, Spain, Poland and Hungary). The scoping study will be available to DG REGIO in February 2007.

Evaluations

Evaluation (like management) of cohesion policy is a responsibility shared between the Commission and the Member States.

In 2006 the Commission carried out strategic and thematic evaluations to support decision-making under cohesion policy. In addition, its summary reports analysed the quality and the results of evaluations carried out by the Member States. Another important task for the Commission was to provide methodological guidance to the Member States and organise exchanges of experience. No ex post evaluation was finalised in 2006.

Thematic evaluations

The following thematic evaluation was undertaken to examine the role of a particular theme in the 2000-2006 programmes:

- Study on measuring employment effects

- Evaluation of information systems and monitoring arrangements for the programmes supported by the European Social Fund

- Evaluation of the ESF support to the administrative capacity building

- Evaluation of the ESF support to anticipation and management of economic change and restructuring

- EU wide evaluation of EQUAL Community Initiatives.

Strategic evaluations

Three strategic evaluations were carried out in 2006 to support the 2007-2013 programming exercise:

- Strategic evaluation on innovation and the knowledge-based economy in relation to the Structural and Cohesion Funds, for the programming period 2007-2013.

- Strategic evaluation on the environment and risk prevention under the Structural and Cohesion Funds for the period 2007-2013.

- Strategic evaluation on transport investment priorities under the Structural and Cohesion Funds for the programming period 2007-2013.

Summary reports

Synthesis report: the mid-term evaluation of Objective 1 and 2 regions “Growing evaluation capacity” – prepared by the Commission in consultation with the Member States – analysed the outcomes of the mid-term evaluations carried out under the responsibility of the managing authorities.

Concerning the ESF, an “Overview of the final evaluations of the ESF co-funded programmes – Objectives 1 and 3” summarised useful lessons learnt from the mid-term and final evaluations.

Methodological guidance on evaluation for Member States

Methodological working documents were drafted by the Directorate-General for Regional Policy and the Directorate-General for Employment, Social Affairs and Equal Opportunities to provide guidance on evaluations carried out by the Member States (e.g. ex ante evaluations, indicators, mid-term evaluations and updates).

Other examples :

- EVALSED: on-line interactive methodological guidance for evaluation of socio-economic development;

- Guide to cost-benefit analysis of investment projects.

Controls

ERDF

- 1994-1999 programming period – follow-up

Closure audits were completed on a sample of 56 programmes covering all EU-15 countries, bringing to an end the on-the-spot audit work under this enquiry. The programmes audited cover 20% to 60% of the ERDF contribution in all Member States, with one exception, and, overall, cover 35% of the ERDF contribution to mainstream programmes (31% of the total ERDF allocation). In 2006 the follow-up of all the audits was completed, final positions were reached on the corrections to be applied and financial correction procedures were launched, where applicable.

- Assurance on the functioning of the management and control systems for 2000-2006

EU-15

An audit enquiry was started in mid-2004 to examine the effective functioning of key elements of management and control systems in Member States for mainstream programmes. The audits comprise two phases: a systems review and an audit of a representative sample of projects. The on-the-spot audits initially planned had been concluded by the end of 2006 for EU-15 and will be concluded by the end of June 2007 for EU-10.

By the end of 2006 a total of 126 audit missions had been carried out under the EU-15 enquiry planning memorandum (EPM) - “verification of effective functioning of the systems for the 2000-2006 period” – and 61 programmes had been audited. They account for 22% of the number of mainstream and Urban programmes and 52.6% of the planned ERDF contribution.

Based on the audit work performed, the main specific risk areas identified affecting key elements of the systems concern insufficient management checks by management authorities and/or intermediate bodies and deficiencies in the certification and/or audit functions. Other key elements of the system also identified as weak include the separation of functions and inadequate audit trails. In the case of public procurement, the main issues concern irregular complementary works, misapplication of the selection criteria and problems with tender evaluation.

EU-10

By the end of 2006, 28 audit missions had been carried out and 9 programmes had been audited. They account for 45% of the number of mainstream programmes and 65.5% of the planned ERDF contribution. The audits carried out showed some of the same weaknesses as for EU-15.

Interreg

A separate audit enquiry for the Community’s Interreg III initiative was launched in 2006. The approach includes a review of the systems (phase I) and expenditure checks (phase II).

In 2006 five programmes were reviewed and will be further implemented in 2007. The particular challenge is that for most of the 81 Interreg III programmes the management and control systems are distinct. The main risk factors, confirmed before the on-the-spot audit work was launched, consist of the general risk factors identified for the ERDF plus the specific factors linked to the multi-national nature of the programmes and operations, to the type of expenditure co-financed and to the complex management and control systems put in place by Member States.

Other audit work during 2006 included the examination of the annual control reports received under Article 13 of Regulation 438/2001. By the end of 2006, a total of 122 reports (50 for mainstream and URBAN programmes and 72 for Interreg III programmes, as well as Cohesion Fund) had been analysed.

ESF

During 2006, 69 audit missions were organised by the Commission: 53 system audit missions for EUR-25 on 2000-2006 plus 16 closure audits on 1994-1999.

Out of a total of 237 European Social Fund programmes, 123 have been covered by the Commission, with the emphasis on those assessed as high-risk programmes. In all, 34 programmes assessed as high-risk were audited in 2006, including 10 new programmes. Every Member State except Luxembourg was visited. In five Member States a follow-up audit was performed.

Audits in EU-15 in 2000-2006

The systems audited by the Commission so far account for 81.84% of the EUR 62.6 billion allocated to EU-15 for the period 2000-2006 (3.13% more covered in 2006). Following the Structural Funds audit strategy for substantive tests and sample check audits, 402 desk reviews were performed and 158 projects were visited on the spot.

From the beginning of 2005, the conformity of national management and control systems is evaluated in a table for each Member State and programme. For 15 operational programmes major weaknesses in one or more key elements were detected and early-warning notes were sent.

The problems identified during the 2006 audits related to inadequate first-level checks, insufficient certification procedures, breaks in the audit trail, insufficient separation of duties and long delays in performing 5% controls.

Audits in EU-10

In 2006 the Commission completed the definitive evaluations of the last eight descriptions of management and control systems received in accordance with Article 6 of Regulation (EC) No 438/2001.

A total of 15 audit missions were conducted in the 10 new Member States, one of them a joint mission with the Directorate-General for Regional Policy. These audits covered three new programmes and expenditure totalling 92.45% of the entire EUR-10 allocation. In 2006 it was possible to conduct substantive tests to confirm the level of assurance obtained on the systems not fully operational in 2005. 98 desk checks were performed and 63 projects were visited on the spot. The audits performed on EUR-10 revealed a systemic error in four programmes in two Member States. Three early-warning notes were sent.

The problems encountered during the audits related to inefficient and cumbersome procedures in relation to Article 4 of Regulation (EC) No 438/2001, insufficient certification procedures, problems with reconciliation of expenditure, ineligible expenditure and inadequate information systems.

Financial corrections

In 2006, 12 financial correction procedures and 14 action plans were agreed.

Programming period 1994-1999

In 2006, 15 missions were conducted to verify the procedures used by the independent body to establish the statement in accordance with Article 8 of Regulation (EC) No 2064/1997. The audit covered 60 programmes in 12 Member States (10 for first-phase closure audits and 50 for second-phase closure audits). The first phase aims at reviewing the process to establish the statement in accordance with Article 8 of Regulation (EC) No 2064/1997. In the second phase a sample of projects already subject to a 5% control is selected for re-performance.

The problems encountered in the first-phase closure audits mostly concerned the quality and representativeness of the 5% controls. In 2006 the second phase of closure started with the participation of an external contractor.

Integrated audit approach

As part of its audit strategy, since 2004 the Commission has applied a mutualisation concept with national ESF bodies aiming at putting into practice the single audit approach by sharing audit results with Member States and drawing part of its assurance on systems from the national audit results.

The Article 13 reports were reviewed and a response was sent to every Member State.

Generally, the Directorate-General for Employment, Social Affairs and Equal Opportunities is ready to give an opinion on 169 of the 212 EU-15 programmes. This opinion is based either on its own audits or on the national audit results received in application of the mutualisation concept.

EAGGF

DG AGRI followed the same basic approach as DG REGIO and shared the same general objectives.

By the beginning of 2006 the planned ex post audit programme for 1994-1999 had been completed. Programmes accounting for 32% of total expenditure were audited in this programme. A number of financial correction procedures are underway: bilateral meetings were held with the Member States in 2006 on 18 programmes. Four financial correction decisions covering five programmes were adopted by the Commission in the course of the year.

A total of 21 programmes, covering 38% of the planned expenditure, were audited over the year for the period 2000-2006 (EU-25). By the end of 2006 a total of 73 of the 152 programmes approved for the EAGGF-Guidance Section had been audited. Typical problems identified were: inadequate management controls, failure to verify eligibility criteria in accordance with the provisions of the agricultural legislation and a low level of independent controls. These findings are being followed up with the Member States concerned in bilateral proceedings.

FIFG

A total of six on-the-spot checks were carried out in 2006 for the FIFG. Three of these missions were to verify and follow up the effective functioning of management and control systems for the period 2000-2006, combined with sample checks in Italy (for two operational programmes), Poland and Sweden where DG FISH is “ chef de file ”. These four programmes were allocated a budget of EUR 496.6 million for the period.

Another two missions – one in France (Ile de la Réunion), the other in Portugal (Açores) – concerned system audits combined with sample checks to verify effective functioning of the management and control systems for operational programmes under Objective 1 where DG REGIO is “ chef de file ”. These two missions together with the part of the audit performed in Sweden for the “Norra” operational programme under Objective 1 implemented action No 2 (“Reliance on other DGs’ work for the assessment of Member States’ management and control systems”) of the action plan agreed between DG FISH and the IAS following its in-depth audit. These three programmes were allocated a budget of EUR 49.2 million for the period.

The last mission, in Spain, essentially concerned checking the specific measure for the conversion of fishing vessels which, up to 1999, were dependent on the fishing agreement with Morocco (EUR 128.2 million) and following up implementation of the recommendations made during a previous audit of the management and control systems for the two Spanish FIFG programmes (EUR 1 787.5 million).

A total of 83 projects, worth a total eligible amount of EUR 21.9 million with an FIFG contribution of EUR 14.3 million, were checked by desk review and on site. A total of EUR 1.9 million was identified as potentially ineligible. The follow-up to the audits has not yet been finalised as the findings are still being discussed internally within DG FISH and externally with Member States.

Closure of the 1994-1999 programming period

By the end of 2006, 38 out of the 52 FIFG programmes for the period 1994-1999 had been closed. Four are in the process of being closed (for three a recovery order has been launched and for one consultations are in progress with the Legal Unit on a draft financial correction decision) and for eight the reply from the Member State is awaited or being examined by DG FISH. Several weaknesses were identified for which flat-rate or net financial corrections were applied. The last two closure proposals are being prepared. 80% of the total number of programmes have been, or are in the process of being, closed.

OLAF

During 2006, OLAF undertook 44 missions in the Member States relating to measures co-financed by the Structural Funds. Some 30 of these missions concerned on-the-spot checks[13], while 14 were conducted for other purposes, e.g. to gather information or to assist either national administrations or judicial authorities. Among problems identified were cases of false declarations, false invoicing and failure to respect public procurement rules.

In 2006, Member States reported to the Commission, in accordance with Regulation (EC) No 1681/94[14], some 2 853[15] cases of irregularities involving EUR 461 650 245 affecting measures co-financed during the 1994-1999 and 2000-2006 programming periods. Both the number of cases and the amounts involved showed a slight decrease compared with 2005[16], probably as a result of the changes made by Regulation (EC) No 2035/2005[17], particularly the raising of the threshold for reporting irregularities from EUR 4 000 to EUR 10 000. The financial figures demonstrate increased awareness of their obligations and better reporting by the Member States.

Further simplification of the legal framework on reporting irregularities for the new generation of cohesion policy programmes (2007-2013) is provided for by the Commission implementing Regulation laying down detailed rules on management and control of the operational programmes[18].

Committees Assisting the Commission

Committee on the Development and Conversion of Regions (CDCR)

The CDCR was consulted on:

- the fields of technical assistance on the initiative or on behalf of the Commission;

- the amendment of Commission Regulation (EC) No 448/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the procedure for making financial corrections to assistance granted under the Structural Funds as regards reporting on cancellation proceedings and on re-use of the funds cancelled.

A new Coordination Committee of the Funds (COCOF) was established under Article 103 of Regulation (EC) No 1083/2006 which entered into force on 1 August 2006.

The Committee was consulted as a management committee on:

- the rules for implementing Council Regulation (EC) No 1083/2006 laying down general rules on the ERDF, the ESF and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 and Regulation (EC) No 1080/2006 on the ERDF; and

- the method for calculating the structural public and equivalent expenditure for additionality purposes.

The Committee was consulted as an advisory committee on:

- the list of areas eligible under the European Territorial Cooperation Objective;

- the cost-benefit analysis methodology;

- the guidelines concerning the evaluation methodology; and

- the allocation of technical assistance on the initiative or on behalf of the Commission.

- Before it was formally consulted, the Committee, whether the CDCR or the COCOF, held technical discussions on most of the above-mentioned issues.

A subgroup of the Committee was set up on spatial planning and urban issues.

ESF Committee

The Committee set up pursuant to Article 147 of the Treaty (ESF Committee) met three times in plenary session and its Technical Working Group met six times. It discussed a wide range of issues relating to both implementation of the 2000-2006 programming period of the ESF and preparations for the 2007-2013 programming period.

The ESF Committee examined issues concerning the new regulations for 2007-2013, including ESF support for education and training, health, anticipation, management of change and restructuring, social partners, migrants and mainstreaming Equal principles. It was informed of ESF information and communication activities at national and EU levels.

It was also kept informed of progress on the Community strategic guidelines for 2007-13, the European employment strategy, the European Globalisation Fund, the Gender Equality Pact and the reforms of the sugar sector.

Committee on Agricultural Structures and Rural Development (STAR)

The STAR Committee met 12 times in 2006 and gave favourable opinions on 31 amendments to rural development programmes under Article 44(2) of Council Regulation (EC) No 1257/1999 and six amendments to rural development programmes under Article 4 of Council Regulation (EC) No 1268/1999.

Committee on Structures for Fisheries and Aquaculture (CSFA)

In 2006, the Committee was consulted on a number of issues: the draft working paper on ex ante evaluation for the European Fisheries Fund Operational programmes; the draft working paper on indicators for monitoring and evaluation for the European Fisheries Fund Operational programmes; discussion on draft Commission regulation laying down detailed rules for the implementation of Council Regulation (EC) No 1198/2006 on the European Fisheries Fund; draft Codification of Commission Regulation (EC) No 908/2000 of 2 May 2000 laying down detailed rules for calculating aid granted by Member States to producer organisations in the fisheries and aquaculture sector.

Part 2: Analysis per Member State

Belgium (

THE YEAR 2006 WAS THE LAST YEAR FOR COMMITMENTS FOR THIS PROGRAMMING PERIOD. IT WAS VERY IMPORTANT TO COLLECT ALL THE INFORMATION NECESSARY FOR THE FINAL MODIFICATIONS TO THE PROGRAMMES BEFORE THE END OF THE YEAR. AT THE END OF DECEMBER, THE MONITORING COMMITTEES APPROVED THE MODIFICATIONS TO ALL THE PROGRAMMES.

Preparations for the 2007-2013 period

On top of the ongoing management of the 2000-2006 programmes in Belgium, the preparations for 2007 – 2013 were intense in 2006.

A bilateral meeting with the Belgian authorities was organised on the preparation of the Community Strategic Guidelines. The coherence with the revived Lisbon strategy was also an important topic in 2006. A follow-up exercise was held to examine the level of implementation of the Belgian National Reform Programme in order to prepare the Commission’s annual report to be communicated to the Council.

The first phase in the preparation of the NSRF plans was completed. After a first draft of the NSRF was received in July 2006, a first meeting with the national and regional authorities was organised in that month.

A new draft was submitted in October 2006, on the basis of which the Commission issued some observations to the authorities. A new meeting took place at the end of November, which was followed by a letter with observations sent to the Belgian authorities.

Objective 1

For the only Belgian programme (Hainaut) under Objective 1, almost the entire budget envisaged until the end of the period had been assigned to measures and/or projects.

One new modifying decision was adopted, on 28 December 2006, for the transfer of funds from the EAGGF to the FIFG for the Hainaut Objective 1 programme and, on 18 December, the Monitoring Committee approved the adjustment of the financing plan to ensure optimum utilisation of the budget still available.

The level of expenditure under the ERDF amounted at the end of 2006 to EUR 346 540 429.57, i.e. 81.05% of the ERDF appropriation. Overall execution for EAGGF-Guidance at the end of 2006 amounted to EUR 22 631 009, i.e. 52.53% of the EAGGF appropriations. For one of the four funds (EAGGF), the n+2 rule was applied in 2006. For the ESF, the payment claims transmitted to the Commission at the end of 2006 amounted to EUR 139 480 595.44 (69.67% of the total ESF appropriation).

Objective 2

For the seven programmes under Objective 2 from which Belgium benefits, the annual reports were all approved by the corresponding Monitoring Committee and transmitted to the Commission for examination. For each programme, two Monitoring Committee meetings were organised in June and in December 2006

The main subjects dealt with by the Monitoring Committees were:

- the approval of the 2005 Annual Implementation Reports,

- the programme modifications,

- the follow-up of the n+2 situation;

- the preparation of the 2007-2013 programmes.

For the Objective 2 SPD in the Walloon Region (Meuse-Vesdre and Rural), the December 2006 Monitoring Committees ratified modifications to ensure the sound management of each programme, requiring adjustment of the financing plan and the adoption of new modifying decisions in 2007. However, the transfer of funds between ESF and ERDF for two Objective 2 programmes in Wallonia was not possible.

The levels of ERDF expenditure were EUR 95 132 842.06 and EUR 36 762 348.62, respectively, which corresponds to 68.58% and 67.02% of the ERDF appropriation. For the ESF, the payment claims transmitted to the Commission at the end of 2006 amounted to EUR 16 589 497 and EUR 3 656 156, respectively, corresponding to 64.47% and 64.92% of the ESF contribution.

For all four Objective 2 programmes in Flanders, the allocated funds have been nearly fully committed. The level of payments fully met the required n+2 level for the ERDF (total ERDF payments: EUR 126 754 529, i.e. average expenditure of 71.67% of the total ERDF contribution). For the three Objective 2 programmes involving the ESF, payment claims transmitted to the Commission amounted to EUR 12 119 265, corresponding to 70.72% of the ESF appropriation.

For Antwerpen, the Monitoring Committee decided in June 2006 on an amended financial plan to take account of an ESF n+2 decommitment of EUR 142 596. The corresponding Commission Decision was adopted on 25 October 2006.

The Monitoring Committee for Oost-Vlaanderen decided in June 2006 to amend the Programme Complement to make minor financial adjustments between measures within priority 1 to ensure efficient management of the programme.

At the end of 2006, as this was the last opportunity to amend the SPD financial tables for the programmes, the Monitoring Committees for Limburg and West-Vlaanderen decided on changes in the financial plan. For Limburg, ERDF funds were transferred between priorities 1 and 2 and between measures within priority 1, and there were small shifts between public and private expenditure within various measures. For West-Vlaanderen, the modifications also included such shifts and a small increase in private expenditure. Indicators were adapted to these shifts. At the same time, technical revisions to a number of indicators were made.

For Antwerpen, the Monitoring Committee decided in December 2006 on a revision of the financial plan of the Programme Complement in order to bring it in line with the modification of the SPD as mentioned above.

For Oost-Vlaanderen, the Monitoring Committee decided in December 2006 to modify the financial plan of the Programme Complement to make financial transfers between private and public national expenditure, and between measures, within priority 1.

For Bruxelles Capitale, expenditure under the ERDF (only an intervening fund) continued to make progress in 2006 and was concentrated at the end of the year, avoiding a decommitment under the n+2 rule.

The level of expenditure under the ERDF amounted at the end of 2006 to EUR 31 996 771.57, i.e. 69.73% of the ERDF allocation.

Objective 3

The total ESF appropriation for Objective 3 is EUR 798.4 million, divided over five operational programmes. All five programmes are performing according to plan.

For the Federal SPD, the total ESF budget amounts to EUR 72.1 million. The level of expenditure declared to the Commission in 2006 amounts to EUR 29.8 million (41% of the total ESF appropriation). Under the n+2 rule, a decommitment of EUR 1 967 006 was to be applied at the end of 2006.

The Flemish programme has a total ESF budget of EUR 392.5 million. The entire budget has been allocated to projects, which can run until 2007. The declared expenditure at the end of 2006 amounted to EUR 294.1 million or 75% of the total ESF budget.

The programme for Wallonia has a total ESF budget of EUR 297.9 million. At the end of 2006, the level of expenditure came to EUR 211.8 million or 71% of the budget. The programme is being implemented as anticipated.

The ESF budget for the Brussels region amounts to EUR 24.7 million. At the end of 2006, 89% of this budget (EUR 21.9 million) had already been claimed from the Commission.

The German-Speaking Community has a separate Objective 3 programme with a total ESF budget of EUR 11.2 million. At the end of 2006, the expenditure claimed from the Commission amounted to EUR 9.5 million or 85% of the total budget. The implementation of this programme is well-advanced.

Fisheries outside Objective 1

The total FIFG allocation to the fisheries programme is EUR 36.050 million. The main measures, in line with the common fisheries policy, are the scrapping of vessels, modernisation of the fleet, processing and marketing, collective investments and innovative measures.

Implementation has been rather slow and the FIFG allocation has been reduced to EUR 24.140 million.

Due to the corrective measures put in place by the authorities with the aim of improving implementation, the programme was close to meeting its n+2 target for 2006.

Community Initiatives

Equal

There are two EQUAL programmes in Belgium: one for the French- and German-speaking communities, and one for the Dutch-speaking community.

The French- and German-speaking programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme was 67%. Automatic decommitment under the n+2 rule was avoided for 2006. The programme’s Monitoring Committee approved one modification to the financial tables, changing the balance between priorities (basically, a higher proportion of the budget for the themes employability, life-long learning and asylum seekers and a decrease for the business creation theme).

The Dutch-speaking EQUAL programme also proceeded without major difficulties in 2006. At the end of 2006, the rate of execution of the ESF part of the programme was 56%. There will be an automatic decommitment of EUR 1.237 million under the n+2 rule.

The two EQUAL programmes supported around 125 projects, mainly in fields such as employability, adaptability, life-long learning and social economy.

The success of EQUAL was due mainly to the fact that a very broad partnership was developed. Indeed, each EQUAL project involved the participation of a large number of partners such as the regional authorities, public employment services, NGOs, companies and social actors such as the trade unions. By working with such a variety of partners, EQUAL was able to respond more adequately and effectively in the fight against discrimination and inequalities on the labour market. Disadvantaged people also became involved. This broad partnership applied throughout all stages of programming, starting with the analysis of needs through to the design and definition of activities. The participation of the private and public sectors and the NGOs made it possible to set up a forum facilitating dialogue and consensus.

Leader Belgium has two Leader+ programmes: one for Flanders, involving a total public expenditure of EUR 7 984 200, and one for Wallonia, involving a total public expenditure of EUR 20 669 294. For both programmes, the allocated funds have been fully committed. The Flemish programme was amended in 2006 to modify the financial table.

At the end of 2006, total financial execution came to EUR 6 552 995, i.e. 45.74% of total EAGGF-Guidance expenditure earmarked for the period 2000-2006

Urban

There are three URBAN II programmes in Belgium. The programmes for Brussels, Antwerp and Sambreville were all approved on 12 November 2001 and two of them were modified in 2006 (Antwerp, Sambreville). Each programme originally received EUR 7.173 million from the ERDF, but due to the n+2 rule this contribution was reduced at end of 2005 to 7.130 million for Antwerp. The total budget for Brussels is EUR 14.9 million, for Antwerp EUR 22.9 million and for Sambreville EUR 17.1 million.

Annual reports for 2005 were submitted for all three programmes and approved.

For all three programmes, the management authority is the region. The Monitoring Committees for the programmes have met at least once.

All three programmes reached the n+2 goals for 2006.

Overall comments concerning the 2000-2006 period in Belgium

The Sambreville programme is the strongest in Belgium and has already reached a significant number of its targets. Many of the projects have been completed or have been started. Some tangible benefits are starting to become visible in terms of jobs created, unemployed trained, SMEs started, companies expanding, etc. The added value of URBAN II is that it has made a big difference by starting a dynamic that has changed the image of Sambreville, allowing it to attract some high-value companies and work in a stronger partnership with the private sector and the local population. The Antwerp programme had a very slow start, although the projects currently being developed should make the impact more tangible. The Brussels-Capital URBAN II programme has been seen more as a small appendix to the Objective 2 programme, but it has been successful in complementing the latter and the municipal “contrats de quartier”.

Closure of the 1994 – 1999 programming period

At the end of 2006, 2 ESF interventions remained open, with a RAL of EUR 10.608 million.

CYPRUS(

Preparations for the 2007-2013 period

The preparations for the 2007-13 funding period are well under way. The NSRF was discussed at several meetings throughout the year. The official submission took place on 22 December 2006 and its acceptance has been communicated to the Cypriot authorities.

Objective 2

For the programming period 2004-2006 Cyprus has one SPD 2 financed by the ERDF with a total of EUR 28.022 million.

For the SPD 2, two rural areas and two urban zones are eligible. In terms of ERDF expenditure, the year 2006 was marked by good progress. As a result of substantial efforts to accelerate implementation, the payment rates for the ESF and ERDF reached 36% at the end of the year, thus avoiding automatic decommitment.

One Joint Monitoring Committee meeting was held for all Operational Programmes. The Annual Review Meeting was postponed, but finally took place in February 2007.

The contracting rate at the end of 2006 reached 115% and certified expenditure 40%. The monitoring of the programmes is now very tight and the risk of automatic decommitment has decreased.

Objective 3

The Single Programming Document for Objective 3 for the period 2004-2006 covers a total budget of EUR 43.8 million, of which the ESF contributes EUR 21.9 million.

In 2004 activities centred mainly on the necessary administrative and institutional preparations for implementation, while 2005 saw the launch of concrete implementation. In 2006, the progress of implementation was considerable.

With regard to the current period 2004-2006, a Monitoring Committee meeting was held in Nicosia for the SPD 3 in April 2006. The 2005 Annual Implementation Report was submitted to the Commission on 30 June 2006 and discussed at the Annual Review Meeting for Objective 3.

The issue of strengthening further the management capacity of the final beneficiaries was discussed with the Cypriot authorities on various occasions during 2006. Though the Cypriot authorities seemed aware of the potential risk of an automatic n+2 decommitment, as all ESF projects were running on a very tight financial implementation schedule, the Commission services nevertheless held two technical meetings with the Planning Bureau and the final beneficiaries to consider the progress made and the potential n+2 risks. Following these meetings, the Cypriot authorities adopted additional administrative measures to simplify and accelerate effective financial implementation.

Subsequently, three interim payment requests were presented and processed within the reporting period, ensuring the timely absorption of financial resources and avoiding an n+2 decommitment for 2006, while minimising the n+2 risk for the subsequent years 2007-2008.

Fisheries outside Objective 1

Cyprus’ Fisheries Operational Programme, adopted by the Commission in 2004, entered its third year of implementation. At the end of 2006 a good part of the programme resources had been allocated by the managing authority and payments reached nearly 50% of the total available FIFG funds, thus avoiding the risk of losing funds under the n+2 Rule.

The Monitoring Committee met in 2006 to discuss the following items: the measures to be financed; the tasks of the managing authority and final beneficiaries; the monitoring and evaluation of progress; communication and awareness-raising; and approval of changes to the Programme Complement. At the end of the year 2006, the Operational Programme was modified (Commission Decision C(2006) 7270, 27 December 2006) in order to maximise the prospects for better implementation. The amount of the Community contribution remained unchanged.

Community Initiatives

Equal

The Cyprus EQUAL programme has three priority axes: employability, equal opportunities between women and men, and asylum seekers. Under these axes, seven projects were selected under Action 1, which also included a transnational cooperation dimension. Action 1 has been fully implemented. Some delays occurred in implementing the programme in 2006 due to a lack of resources.

The ESF contribution for Cyprus amounts to EUR 1 808 793, and at the end of 2006 expenditure came to EUR 496 596. Utilisation was above the 2006 target, so automatic decommitment under the “n+2 rule” was avoided for 2006.

Key activities undertaken during Action 1 were partnership development and establishing systems for operation, the development of an equal opportunities policy and strategy, the formation of a transnational partnership and preparation of a transnational cooperation agreement, and the preparation of a development partnership agreement. Cyprus was awarded an EQUAL grant in 2006 for an exchange event on youth employability to take place in the latter half of 2007.

Finally, delays also occurred in producing a mid-term evaluation report for the period 2004-2006.

Czech Republic (

THE CZECH REPUBLIC SHOWED A RELATIVELY SLOW START IN ABSORBING THE STRUCTURAL FUNDS DURING THE PROGRAMME PERIOD 2004-2006. FOR MOST OPERATIONAL PROGRAMMES, HOWEVER, A SOLID PROJECT PIPELINE HAS BEEN DEVELOPED, ALTHOUGH THE IMPLEMENTATION OF THE PROJECTS ON THE GROUND IS STILL CLEARLY LAGGING BEHIND.

The absorption of the Structural Funds accelerated in the second half of 2006, so the risk of losing money by the end of 2006 due to the n+2 rule was resolved for all programmes, including SPD Prague Objective 2 and SPD Prague Objective 3, the programmes facing the most serious absorption problems. The year 2007 will show whether absorption has really taken off since the second half of 2006.

In comparison with the other new Member States, the Czech Republic is still in the slower group of countries where absorbing the Structural Funds is concerned, but signals (contracting levels) are indicating an upward trend. To improve the situation, the Commission has strongly recommended an action plan to establish a basic harmonised monitoring and forecast system.

The 2005 Annual Implementation Reports were submitted for each Operational Programme in due time. For the most part, they were complete and of good quality, often providing very detailed information. All of them were deemed admissible and thus accepted by the Commission without significant objections.

Objective 1

The Community Support Framework (CSF) for the period 2004-2006 covers a total budget of EUR 1 954 million, of which EUR 1 454 million is contributed by the Structural Funds (63% ERDF, 25% ESF, 11.5% EAGGF and 0.5% FIFG). Five Operational Programmes are implemented under the CSF.

The CSF managing authority, at the Ministry for Regional Development, is responsible for the effectiveness, correct management and delivery of the support provided by the Structural Funds in the Czech Republic.

The Monitoring Committee for the CSF met on 15 June 2006. The annual report for 2005, the modifications to the CSF, the evaluation of CSF implementation and the structural policy after 2006 were discussed. The evaluation paid special attention to the reasons for the low absorption of funds. Its conclusions and recommendations should provide the basis for a list of action points to improve Structural Fund implementation.

The Joint Regional Operational Programme (JROP) is the largest Czech OP with a share of 31.2% (EUR 454 million) of the total Objective 1 allocation (28% ERDF and 3.2% ESF). Two Monitoring Committee meetings took place in 2006: on 19 April and 14 November 2006. The implementation of the JROP had progressed compared to the year 2005: 100% of the budget was approved by the end of 2006, although only 54% of that budget was contracted and 39% of the amount was spent, of which 26% was certified. The best performing measures in the JROP are the schemes supporting regional business infrastructure and the development of services in tourism. Two interim payment claims of EUR 73 429 237 were submitted by the end of the year, which represented 16% of the total budget for 2004 – 2006. The amount of payments was sufficient to avoid the application of n+2 rule for the 2004 commitment.

The Industry and Enterprise Operational Programme is the third largest OP with 17.9% (ERDF only) of the total Objective 1 allocation. Two Monitoring Committee meetings were organised for this OP in 2006: on 17 May and 23-24 November. The managing authority opted for the continuous submission of applications, and by the end of December 2006 1 002 individual projects were contracted, corresponding to EUR 315 million (91% of the total budget). The most popular measures remain schemes to support small and medium-sized enterprises, innovation schemes and two loan schemes aimed at starting entrepreneurs and firms in the initial development stage, whereas schemes aimed at energy savings and renewable sources of energy are lagging behind for the moment. By the end of 2006, interim payments had reached an amount of EUR 55 072 317, which is the highest figure for all Operational Programmes in the Czech Republic. This Operational Programme had attained the threshold for the n+2 rule for the 2004 commitment.

The Infrastructure Operational Programme is the fourth largest OP, with almost 16.9% (ERDF only) of the Objective 1 budget allocation. Two Monitoring Committee meetings were held for this programme in 2006: on 8 June and 11 December. Progress with this OP, in comparison to the year 2005, is good especially for priority 1 — “Modernisation and development of Transport infrastructure” and priority 3 — “Environmental infrastructure improvement”. Six interim payment requests representing an amount of EUR 133 599 665 in total expenses have been submitted to DG REGIO. This amount corresponds to 40% of the total allocation for 2004 – 2006.

The Human Resource Development Operational Programme accounts for a share of 21.2% (EUR 422.4 million, ESF contribution) of the total Objective 1 allocation. Two Monitoring Committee meetings took place in 2006: on 13 June and 14 December 2006. Implementation caught up during 2006, with about 95% of the total budget of the OP being contracted, although in terms of spending the OP is still clearly lagging behind. The best performing measures are 3.1 (Enhancing the quality of education at school and school facilities) and 1.1 (Strengthening active employment policy for job seekers and job applicants). Interim payment claims totalling EUR 28 786 967.93 were submitted by the end of the year 2006, which represents 9% of the total budget for 2004–2006. The amount of payments was sufficient to avoid the application of the n+2 rule for the 2004 commitment.

The Agriculture and Rural Development Operational Programme saw two meetings of its Monitoring Committee, one in June and one in November 2006. The 2005 annual implementation report was submitted to the Commission in June, but was missing mandatory information. It was resubmitted in August and subsequently approved. The implementation of the programme is progressing satisfactorily, the most popular measure being investment in agricultural holdings (constituting 51.05% of the OP, with 41% having been paid). 27.06% of the allocated funds had been utilised by the end of 2006. During the year the Czech authorities submitted a proposal to the Commission for the reallocation of funds in several areas. Four interim payment requests amounting to a total of EUR 39 455 945 were submitted to DG AGRI during 2006. This corresponds to 23.24% of the total EAGGF allocation for 2004-2006 for this OP.

Fisheries

The implementation of the FIFG allocation for 2004–2006 was very low in the Czech Republic. Consequently, unused 2006 funds (covering a total amount of EUR 3 140 617) were transferred from the FIFG (i.e. from measure 2.3 Fisheries and 3.1 Technical Assistance) to the EAGGF (sub-measures 2.1.2 Restoring the potential of agricultural landscapes and its conservation and 2.1.3 Management of agricultural water resources and providing for their functioning; measure 1.1 Investment in agricultural holdings).

Objective 2

Single Programming Document Prague Objective 2 receives EUR 71.3 million from the Structural Funds (ERDF only). Two Monitoring Committee meetings were organised for this programme in 2006: on 31 May and 15 November. The progress of the SPD 2 is still clearly lagging behind the other Operational Programmes in the Czech Republic. The ratio of approved budget to total available budget is only 81% and the rate of realised expenditure is only 33%. This programme ran a high risk of running foul of the n+2 rule for the 2004 commitment, but in the end succeeded in submitting a sufficient amount in payment claims. Following the Commission recommendations, the managing authority has undertaken several corrective measures to improve absorption in 2007.

Objective 3

Single Programming Document Prague Objective 3 receives EUR 58 793 363 from the Structural Funds (ESF only). One Monitoring Committee meeting took place in 2006 on 14 June and the second was postponed to 13 January 2007. Implementation caught up during 2006, with about 83% of the total budget contracted, although in terms of spending the SPD is still clearly lagging behind. The best performing measures are 3.1 (Development of initial education as a basis for lifelong learning) and 2.1 (Integration of specific groups at risk of social exclusion). Interim payment claims totalling EUR 9 938 770.59 were submitted by the end of the year 2006, which represents 17% of the total budget for 2004–2006. This programme ran a high risk of running foul of the n+2 rule for the 2004 commitment, but finally, at the very last moment, it succeeded in submitting a sufficient amount in payment claims to avoid decommitment.

Community Initiatives

Equal

The Czech EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme was 30%. Automatic decommitment under the n+2 rule was avoided for 2006.

A major evaluation of the ongoing results of the programme was carried out.

As a result, the Monitoring Committee approved modifications to the financial tables of the programme in order to maximise the effectiveness of funds allocated to the programme by reallocating resources among the priorities, based on the two years of practical experience with managing and implementing CIP EQUAL.

The Czech Republic leads at EU level the following communication and learning platforms:

- Learning Seminar on Evaluation in Prague, November 2006

- Community of Practice on Evaluation

GERMANY(

Preparations for the 2007-2013 period

The first German draft NSRF was received by the Commission on 1 February 2006. On 27 September the Commission services received the final draft NSRF following a joint meeting on 27 July in Berlin. After consultation of all competent Commission services, an assessment of the document was sent to the German authorities on 23 October.

The NSRF was drafted in a process of dialogue including different partners at regional and federal level. In the final version, major observations and suggestions set out by the Commission were taken into account. 10 proposals for ERDF Operational Programmes reached the Commission before the end of the year, of which 2 were formally acceptable.

In summer 2006 the Federal Employment Ministry (BMAS) decided in favour of separate Länder OPs in the West, as had been decided earlier for the Eastern Länder , in addition to a single multi-objective federal ESF OP.

Objective 1

On 18 May the Monitoring Committee for the Community Support Framework had its last meeting in Eisenach. Questions relating to the closure of the 2000-2006 programmes were among the main issues discussed at this meeting. The representatives of two working groups — on Equal Opportunities and Environmental Monitoring — reported on their activities. The results of these working groups are a good example of cooperation between the East German Länder .

Three programme modifications were necessary to adjust the structure of the programmes to changing socio-economic conditions and shifts in demand. 16 modifications to the Programming Complements were necessary in order to fine-tune the implementation process.

The follow-up of the mid-term evaluation showed once again that refinement of regional policy instruments is crucial to achieve optimal development results in the next programming period. As far as support for the competitiveness of businesses is concerned, a reduction in intervention rates might be indicated to avoid over-financing. Research and development activities should be fostered more actively. Infrastructure investment should be better focused on already existing economic potential.

The individual regions face different implementation problems with the ERDF. In Sachsen-Anhalt, slow execution of infrastructure projects was reported. In other cases the project selection criteria were not yet sufficiently clearly defined.

A big step forward was taken with the establishment of ‘risk capital funds’, especially in Thüringen and Berlin. This instrument is designed to foster entrepreneurship and innovation in general. In addition, Mecklenburg-Vorpommern and Saxony established ‘micro-lending funds’ under the ESF to support newly established small businesses. The risk-capital approach may become a valuable tool for the creation of self-employment as a way out of unemployment.

21 major projects have been proposed by the managing authorities and accepted by the Commission, mostly coming under the “Transport Infrastructure” and Sachsen-Anhalt programmes. Some other cases are still under examination. One project was rejected.

The financial and physical implementation of most of the Objective 1 ESF OPs is well advanced. There were no n+2 decommitments in 2006 except for Saxony, and there are low n+2 risks for 2007. More than 90% of the resources for 2000-2006 have been committed at national level and 82% of the ESF allocation has been paid out (including payment on account).

In 2006, EAGGF commitments for the six Objective 1 programmes in Germany amounted to EUR 500.124 million. The payments made in 2006 by the Commission to the regions totalled EUR 526.880 m.

In 2006 17.57% of the commitments for the year 2006 were used and the cumulative EAGGF contribution during 2000-2006 reached 86.25% of the amount committed for the programmes at the end of 2006. The total eligible costs foreseen for 2006 were EUR 635.565 million.

The FIFG programme for Germany under Objective 1 performed well enough to avoid any decommitment at the end of 2006. Legally binding commitments by then amounted to EUR 85 824 318.48, while payments to ultimate beneficiaries had reached EUR 77 367 143.34 . The present programme cover is EUR 91 495 213. The commitment and payment rates are 93.8% and 84.55%, respectively.

Objective 2

In 2006, the meetings of the Monitoring Committees for the 11 West German Länder combined reporting on programme implementation with discussions on the possible future budget distribution between the Länder and the advantages that the new Structural Fund regulations offered them.

Seven programmes had adjustments made to their priority structure — with Baden-Württemberg introducing two requests — with the aim of preventing loss of funding at the end of the programming period. A large number of modifications to the Programming Complements (11) were also notified to the Commission.

Special ESF priorities are only implemented in seven programmes. Despite the complex and scattered eligibility area, only one programme lost a small amount of funding under the n+2 rule. The eleven Länder had different experiences and faced different problems in the implementation of the programmes, which are not easy to summarise here. A common theme was a certain weakness in demand for business support, given the muted economic development. Long-term national planning processes for infrastructure projects also had to be taken into account. Niedersachsen reported that “local activation” (with networking) was not easy to achieve, so money had to be shifted to other priorities. Hessen on the other hand reported difficulties with technology transfer institutions and support for technology activities. Other regions complained of a lack of innovative ideas. Saarland went on the offensive here and organised a seminar on that theme in Saarbrücken in May. In Bremen the combination of technology-oriented infrastructure with the management and marketing of technology and start-up centres was very successful.

Five major projects have been proposed by the managing authorities and accepted by the Commission.

In 2006, payment requests for EUR 35.2m were received. For the whole period 2000-2006, a total of 51% was paid out following payment requests (58% including payment on account).

Objective 3

Germany presented a modification request for the Objective 3 Programme at the very end of 2006, which is under consideration and will be decided in 2007.

The modification is prompted by changes in German labour market policy and calls for a shift of funds in favour of measures for young people, lifelong learning and local social capital.

Two meetings of the Monitoring Committee were organised with the participation of the Commission. During these meetings, particular emphasis was given to the n+2 risk for the year 2007 and to the final deadline for modifications to the financial tables. The main issues for programme closure were presented and discussed.

Fisheries outside Objective 1

The Fisheries programme for Germany outside Objective 1 faces another decommitment of EUR 9 015 404 at the end of 2006.

Accumulated payments amount to EUR 36 194 321.12 and legally binding commitments total EUR 44 814 392, or 46.14% and 57.13%, respectively, of the remaining programme cover of EUR 78 441 931.

Community Initiatives

Equal

The German EQUAL programme proceeded without difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme was 68%. Automatic decommitment under the n+2 rule was avoided for 2006.

After the amendment of the Decision in 2004, no further modifications have been made. The Monitoring Committee for the programme met twice. At both meetings, the managing authority informed the members about the mainstreaming activities. The first meeting was held in connection with a symposium on regional labour market development ( Thinking European – acting regionally ). EQUAL projects had already provided considerable input to e.g. regional development in the area of Dessau.

Further mainstreaming activities were pursued. Germany was active in organising national thematic networks and events such as the “Netzwerk Gründungsunterstützung” and the “Kooperationsnetzwerk Migranten”.

Here, the most active thematic networks were in the field of entrepreneurship, combating racism, the ageing society (“initiative 50+”), lifelong learning, reconciling family and professional life, and migrants

In 2006 Germany was already very much focusing on the German presidency from January 2007. In order to improve mainstreaming activities in 2007, there will be closer collaboration with the press office of the ministry concerned.

Leader

Thirteen German regions ( Länder ) and the national network are participating in the Community Initiative Leader+. The total eligible costs foreseen for 2006 were EUR 89.421 million, including an EAGGF Guidance contribution of EUR 52.5 million. In 2006 EUR 73.288 million were paid, of which EUR 0.457 million were from the 2006 commitment.

All German regional programmes underwent modifications in 2006 due to the fact that this was the final opportunity to make any before programme closure. No Leader+ funding had to be decommitted under the n+2 rule, and the implementation of the programmes progressed satisfactorily. For all programmes, an annual report for 2005 was received and accepted in 2006.

The annual meeting between the managing authorities and the Commission was postponed until February 2007 for practical reasons.

Urban

There are twelve URBAN II programmes in Germany with a total ERDF contribution of EUR 150.9 million (Berlin, Bremerhaven, Dessau, Dortmund, Gera, Kassel, Kiel, Leipzig, Luckenwalde, Mannheim/Ludwigshafen, Neubrandenburg and Saarbrücken). The six programmes in the new Länder each receive EUR 15.1 million with the exception of Leipzig, which receives EUR 14.9 million. The six programmes in the western part of Germany each receive an ERDF contribution of EUR 10.1 million. The total eligible costs of the twelve programmes come to EUR 276.8 million.

For all programmes an annual report for 2005 was received and accepted in 2006. For nine programmes, the managing authority is at the level of the Land where they are implemented. In the case of three cities, the managing authority was transferred from Land to city level during the programming period.

In general, the Monitoring Committees met once or twice in 2006, usually in spring and autumn. Those that met only once sent all the relevant information by written procedure to the members of the Monitoring Committees along with updated information on the state of implementation of the projects.

All German and Austrian URBAN II cities met regularly as part of the German/Austrian URBAN II Network. In 2006, three network meetings took place: Graz/Maribor in March, Neubrandenburg in May and Leipzig in October. The Graz/Maribor meeting was organised as a European urban conference (in cooperation with URBACT), attended by more the 300 urban actors from all EU Member States. The programme managements, the Federal Ministry for Economy and Technology and the Commission use such occasions to meet and discuss programme management issues.

An annual review meeting was held between the programme managements and the Commission in October 2006 in Brussels.

All German URBAN II programmes met the n+2 rule for 2004 in 2006.

Overall comments concerning the 2000-2006 period

The performance of the German URBAN II Programmes can be described as “very successful”, both in implementation and management. The main focus of the programmes was on improving the economic performance of distressed urban areas. Following the integrated approach towards sustainable urban development, the economic measures had been successfully combined with social, environmental and cultural activities. In addition, new forms of governance and the active involvement of citizens in the implementation of the programmes contributed to meeting the (sometimes very) ambitious goals of the programmes.

Equally, good management also contributed to the success of the URBAN II programmes. The management of all German programmes has been effective and successful. A very innovative management approach was adopted for the Mannheim-Ludwigshafen programme, where one joint programme for two cities (situated in two different Länder ) led to new forms of cooperation between the cities, both within and outside the programme context. In the cases of Kassel, Kiel and Saarbrücken, the role of managing authority had been successfully sub-delegated to local (city) level.

Another European best practice is the bilateral “German-Austrian URBAN Network” — a platform for information and thematic exchange of experience. Established back in the 1994-1999 period, the network now includes the twelve German and two Austrian URBAN II cities as well as several other interested cities/partners. As part of this network, several high-ranking international URBAN conferences have been organised throughout this Structural Fund period (Strasbourg 2003, Saarbrücken 2005 and Graz/Maribor 2006).

Closure of the 1994 – 1999 programming period

As regards the programming period 1994-1999, 18 out of a total of 138 programmes with an ERFD contribution were not yet closed at the end of 2006. For the Sachsen programmes a decision on EUR 85m is still pending, while for Brandenburg the outstanding amount is EUR 11m.

14 programmes were closed in the course of 2006. Nordrhein-Westfalen took legal action against 4 closure decisions by the Commission. Two other programmes that had already been closed were reopened to allow financial corrections following audit observations.

For all programmes during the programming period, the national authorities declared their payments on the ground in accordance with the n+2 rule, under which expenditure is accepted for reimbursement up to the end of two years following the year n. The ERDF commitments for Germany between 2000 and 2004 were EUR 10.746bn, the amount for the year 2004 alone being EUR 2.278bn. Due to insufficient expenditure in individual cases, the decommitment for the 2004 tranche will be EUR 13m or 0.57%. The Objective 1 regions (one case) will lose EUR 2m (0.12%), while the Objective 2 regions (four cases) will lose EUR 11m (2.21%).

In addition, about 3 000 individual projects were investigated by DG REGIO auditors and OLAF. The reasons were irregularities on the part of the project promoters, a large number of insolvencies, and deficiencies in the management and control systems established by the German authorities. Financial corrections and recoveries by the Commission will be unavoidable.

For EAGGF Guidance, 15 programmes, involving 11 payments and 4 recoveries, were closed with EUR 5.124 million paid and 0.573 million recovered in 2006. All German programmes for the period 1994-1999 are now closed.

Of the original 48 ESF OPs for 1994-99, 18 are now fully closed. Two further ESF programmes could be closed in 2006 and the RAL was reduced by EUR 4.6m. However, the ESF closures for 1994-99 remain a concern, given the German objections to the Commission’s proposals in several cases, combined with the high number of “irregularities” (open cases) declared.

The commitments for the ESF programmes in Germany between 2000 and 2004 were EUR 8.124bn, with the amount for the year 2004 alone totalling EUR 1.658bn. End-2006 n+2 losses could not be avoided in the Sachsen programme (EUR 44m) and the Rheinland-Pfalz Objective 2 programme (EUR 0.2m). Whereas the further risk for Sachsen is reduced because of the transfer of 2005/2006 funds to the ERDF in 2005, the risk is quite considerable for other programmes. The overall implementation rate in Germany thus needs to accelerate until the end of the period.

DENMARK(

Preparations for the 2007-2013 period

The work during 2006 was dominated by the preparations for the programming period 2007-2013, on which a number of formal and informal meetings were held between the national authorities and the Commission.

Objective 2

For the programming period 2000-2006 there was one Objective 2 programme for Denmark. The funding initially totalled EUR 617 million, of which EUR 197 million came from the Structural Funds (with EUR 29 million for phasing-out regions), EUR 217 million from the national public sector (an increase of EUR 9 million compared to the initial allocation) and EUR 194 million from the private sector (a decrease of EUR 30 million).

The programme aimed to create the conditions for self-sustained growth in the regions of Denmark which were facing structural difficulties. It combined actions under the European Regional Development Fund (ERDF) (71%) and the European Social Fund (ESF) (29%).

The eligible areas consisted of five geographical sub-regions: Bornholm (Objective 2), Lolland, Falster and Møn (Objective 2), Nordjylland (Objective 2 and phasing-out), parts of the counties of Viborg, Århus, Ringkøbing and Sønderjylland (Objective 2 and phasing-out), and Sydfyn and islands not in the above regions (Objective 2).

During 2006 two Programme Monitoring Committee (PMC) meetings were organised, one in May and one in November. The meetings focused primarily on the state of play with implementation, including the n+2 rule, closure procedures for the programme and the future of the Structural Funds in Denmark.

The annual meeting between the managing authorities and the Commission was postponed until January 2007 for practical reasons.

ERDF

By the end of 2006 the Commission had paid out EUR 87.7 million, approximately 62% of the total allocation. In addition, around EUR 16.3 million was in the pipeline for payment, which was enough to meet the requirements under the n+2 rule.

The actual realisation of the ERDF part of the programme was as follows:

1359 ERDF projects received grants totalling approx. EUR 140.7 million, including technical assistance, accounting for around 99% of the total ERDF allocation to the programme. The payments to projects amounted to approx. EUR 95.7 million, including technical assistance. Almost one third of all projects concerned support for investment in businesses. The measure that has absorbed the largest amount of money is infrastructure investment in the development of the regions.

ESF

By the end of 2006, the Commission had paid out EUR 31.7 million, which was approximately 57% of the total allocation. In addition, EUR 7.7 million was in the pipeline for payment, but unfortunately this fell slightly short of the requirements under the n+2 rule. There will therefore be an automatic decommitment of EUR 0.16 million. The ESF has supported 739 projects, under which 20184 people have participated in competence development actions.

The ESF part of the programme has contributed to creating new education and training courses and strengthened cooperation between education institutions in the regions. Furthermore, the ESF projects have contributed to making company training planning more systematic and to developing new courses and new ways of cooperation between education institutions and enterprises.

Objective 3

For the programming period 2000-2006 there is one Objective 3 programme for Denmark. Funding initially totalled EUR 757.9 million, with EUR 378.9 million from the ESF. After allocation of the performance reserve, the Structural Fund contribution amounts to EUR 394.8 million, plus EUR 294.3 million from the national public sector (an increase of EUR 9.5 million compared to the initial allocation) and EUR 100.9 million from the private sector (an increase of EUR 6.7 million).

The programme aims to support active labour market policies, the labour market integration of vulnerable unemployed persons, and the development of employee competences and entrepreneurship.

During 2006 two Programme Monitoring Committee (PMC) meetings were organised (in April and September). The meetings focused primarily on the state of play of implementation, including the n+2 rule, modification of the programme in the interest of sound financial management, and the future of the Structural Funds in Denmark.

The annual meeting between the managing authorities and the Commission was postponed until January 2007 for practical reasons.

By the end of 2006, the Commission had paid out EUR 219.0 million from the ESF, which was 55% of the total allocation. Moreover, a payment of approx. EUR 57.9 million was in the pipeline and, since this was more than the allocation for the years 2000-2004, n+2 could be avoided.

The ESF Objective 3 programme has supported 3452 projects with 112.790 participants, of whom around 50% are women. The priorities absorbing the largest shares of funding are support for competence development and support for entrepreneurship.

Fisheries outside Objective 1

The total FIFG allocation, including the reserve, to the country-wide Danish fisheries programme is EUR 213.3 million. The main measures, in line with the reform of the common fisheries policy, are the scrapping of vessels, processing and marketing, collective investments and innovative measures.

Implementation has been rather slow and the n+2 rule had to be applied in 2004 and 2005. In total, the programme was reduced by EUR 24.1 million. Due to the corrective measures put in place by the Danish authorities with the aim of improving implementation, the programme met its n+2 target for 2006.

Community Initiatives

Equal

The Danish EQUAL programme proceeded without any major difficulties in 2006. The programme has supported 50 projects in total. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme was 66.2%. Automatic decommitment under the n+2 rule was avoided for 2006.

The Monitoring Committee selected a consultancy firm to prepare a mainstreaming strategy for EQUAL. The objective of the strategy is to assist and connect projects and policy-makers through training, workshops, and the creation of homepages for Development Partnerships. The strategy covers both national activities and activities between Member States.

Leader

The total public allocation for the Danish Leader+ Programme 2000-2006 was increased in 2004, following indexation, and now amounts to EUR 34.6 million, including an EU contribution of EUR 17.3 million. The programme was modified in 2006, when a transfer of funding between priorities was approved in order to ensure more efficient use of funds.

The programme is progressing well. The payments in 2006 totalled EUR 2.8 million, which corresponds to an execution rate of 56.2% of the amount available for the programming period 2000–2006.

Urban

The Århus URBAN II programme is the only one in Denmark. The ERDF will contribute a total of EUR 5.38 million to this programme, for which the total eligible costs amount to EUR 12.1 million.

The managing authority for the programme is the Danish Agency for Trade and Industry, while the functional day-to-day management is delegated to the URBAN Secretariat in Århus. The Monitoring Committee met once during 2006.

The n+2 rule was met in 2006.

Overall comments concerning the 2000-2006 period

The URBAN programme successfully contributes to all three dimensions of the Lisbon Strategy. On the economic side, it has helped to initiate and stimulate entrepreneurial culture, education and IT development. Along the social dimension, the programme contributes to employment efforts, equality and social protection through citizen involvement, empowerment and crime prevention. Its environmental contribution is exemplified by the project “Hasle Bakkelandskab”.

Closure of the 1994-1999 programming period

All programmes were closed before the end of 2004.

Greece (

Preparations for the 2007-2013 period

The preparations for the next programming period were discussed during the technical meetings and the Monitoring Committee meetings that took place throughout 2006 with the Greek authorities. Where the National Strategic Reference Framework is concerned, several technical meetings have taken place with the Greek authorities and with other Commission services, and the progress to date is in line with the timetable set by the Regulation. A preliminary draft was sent by the Greek authorities in August 2006 and was commented upon informally by the Commission services. The first draft was sent in October 2006. DG REGIO and DG EMPL, following consultation of other DGs, have drafted their position paper, which will be discussed at the beginning of 2007 with the Greek authorities in Athens, when the latter will officially submit the NSRF.

Objective 1

The year 2006 was a challenging one for Greece, with efforts to accelerate the absorption of Community funding, the revision of the Community Support Framework (CSF) and its operational programmes (OPs), and the implementation of the conclusions from the audit of the management and control system for the ERDF in Greece.

In the spirit of good partnership and cooperation with the Greek authorities, the Commission decided on 7 December 2006 to modify the Third Community Support Framework (2000-2006) in order to allow Greece to make the best possible use of available Community funds. The revision of the Greek Community Support Framework (CSF) 2000-2006 and of 25 Operational Programmes (OPs) was part of a package of measures discussed between the Greek authorities and the Commission services with a view to improving the prospects for absorption of the allocated Community funds. The package included an increase in the Community co-financing rates, but also provided for a general clean-up by excluding failed projects, including some new projects, and determining which projects can be accepted for continued financing under the 2007-2013 period.

In 2006 annual reports for all OPs were adopted by the Monitoring Committees by written procedure and were transmitted to the Commission. In general, the reports were satisfactory and the Commission did not need to ask for additional information.

Due to the weaknesses identified prior to the issuing of the Article 6 letter and the lengthy procedure that followed, leading to Decision 1731(2005), audits in Greece started in late 2006 and will continue in 2007. According to the reports to date, however, the management and control systems in place as of 31 December 2006 are functioning effectively and in compliance with the applicable regulations (Council Regulation 1260/1999 and Commission Regulation 438/2001), except for some material deficiencies that affect key elements of the systems. The Commission continues to monitor and closely follow these matters.

Despite the efforts of the Greek authorities, the Third CSF 2000-2006 (EUR 22.7 billion EU contribution and EUR 9.7 billion national contribution) has been slow to progress over the years, although the situation has somewhat improved since 2004. The Greek CSF is structured into 7 priorities, with 12 horizontal operational programmes and 13 regional operational programmes. The Greek CSF was modified in 2004 and 2005, and was also the subject of modification in 2006 as indicated above. The modifications have tended to increase the share of the European Social Fund and the share of the regional programmes vis-à-vis some national programmes.

As far as implementation is concerned, in the field of transport infrastructure the development of motorways and the construction of the Athens metro are relatively well on track. The same goes for employment and vocational training. In other areas, particularly the railways, environment and information society, the main targets of the Third CSF risk not being met by the end of the programming period. In some policy areas, such as education and lifelong learning, environment, health and energy, the implementation of operational programmes has been compromised, among other things, by the absence or delayed development of a comprehensive national strategy.

Although it is too early to measure the impact of the different programmes, some good performances and practices may be discerned. This is the case, for example, with the Egnatia motorway project and the construction of the Athens metro. Part of this success can be attributed to the creation of bodies to run the projects on private-sector management principles.

Over the past three years, the Greek government has put in considerable efforts to speed up the implementation of the Third CSF. At the end of 2006, real expenditure stood at EUR 12 102 million (53.3%), of which 52.4% was ERDF and 22.48% was ESF. This implies an annual average absorption rate for all Funds of 8.9% from 2001 onwards. In 2006, it reached 13.2%. The n+2 risk for the remaining years is expected to be significant due to: the higher CSF instalment in 2005/2006 and the need to start absorbing amounts exempted in 2006 and the advance of EUR 1.062 billion paid in 2001.

The national mono-fund EAGGF Guidance Section programme for Greece was approved by the Commission on 6 April 2001. The Community contribution to this programme is EUR 1 233.4 million out of a total cost of EUR 3 010.2 million. On 24 November 2004, the Commission approved a decision on a mid-term revision of this programme to include an additional amount of EUR 250 000 from the programming and performance reserves. An additional modification was made to the programme on 7 December 2006, without however any impact on total EU co-funding.

The thirteen regional multi-fund programmes, approved during the first half of 2001 and last amended on 7 December 2006, represent a total EAGGF contribution of EUR 1 069 million. All the programming complements were adopted by the Monitoring Committees by written procedure.

In 2006, payments came to EUR 353.148 million. Total payments under the EAGGF Guidance Section (EUR 1 617 363.363 million) since the beginning of the 2000-2006 programming period account for 63.42% of the allocated budget.

The implementation of the FIFG Objective 1 Fisheries Operational Programme (OP) for Greece continued in 2006. Payment claims have been submitted regularly, albeit peaking towards the end of the year. The programme in 2006 had no n+2 decommitments (for FIFG or ERDF) and, generally speaking, implementation has been proceeding smoothly. The contracting level at the end of 2006 was 78% and the payments level was 56% of total public expenditure.

Late in 2006, the Commission adopted a revision of this OP (Decision E (2006) 6421 of 7 December 2006) and the other OPs of the Greek CSF.

Community Initiatives

Equal

CIP EQUAL for Greece is structured around 5 priority axes: employability, development of entrepreneurship, adaptability, equal opportunities for women and men, and asylum seekers. Under each of these axes, there are measures covering the nine EQUAL thematic fields.

The ESF contribution amounts to EUR 105.9 million. The total ESF contribution has been committed and approximately EUR 69 million of the amount committed was paid by mid-January 2007. This raised the ESF execution rate to 65%, so the n+2 objective for 2006 was reached.

The considerable effort made in 2005 to simplify EQUAL management and monitoring procedures delayed, to some extent, implementation in 2006. The majority of the 64 second-round projects started implementing Action II by the end of 2005, while the eight second-round national thematic networks (NTNs) started operating in November 2006. The second-round NTNs cover the following themes: managing diversity at the workplace, age management, innovative methods for employment promotion, reconciliation of family and working life, reducing gender gaps and desegregation, the social economy, and targeted action to promote entrepreneurship.

In June 2006 over 100 participants from nearly all Member States attended an EQUAL Exchange Event on getting asylum seekers into employment, which aimed to provide an opportunity for first- and second-round EQUAL projects to discuss successful practices and identify lessons and key messages emerging in the area of employment and employer relations to inform a Policy Forum to be held in Sweden in June 2007. Moreover, a dissemination event in October 2006 brought together Greek EQUAL projects working with victims of human trafficking and agencies active in the field to exchange views and experiences on this issue.

Leader

There is only one Leader+ programme for Greece, which was approved on 19 November 2001 with a total cost, following the 2004 indexation, of EUR 368.7 million, of which EUR 186.13 million is the EAGGF Guidance Section contribution. The programme was last amended in November 2006. For 2006, the payments amounted to EUR 28.210 million. Total EAGGF payments (EUR 117.941 million) since the beginning of the 2000-2006 programming period account for 63.36% of the total budget of the programme.

Urban

There are three URBAN II programmes in Greece. The programmes for Perama, Komotini and Iraklio were approved at the end of 2001. Recent modifications have been made to the programmes of Perama (approved in November 2006) and Komotini (approved in October 2006), while Iraklio obtained approval in September 2006 for a modification to the programme complement. The total eligible costs for the three programmes amount to EUR 34.1 million. The total EDRF contribution is EUR 25.6 million. Perama (which has not benefited from indexation) receives EUR 9.25 million from the ERDF, Komotini receives EUR 8.15 million and Iraklio EUR 8.185 million. The total budget for Perama is EUR 12.34 million, for Komotini EUR 10.867 million and for Iraklion EUR 10.914 million.

Annual reports on implementation for the year 2005 were submitted in June 2006 in accordance with the General Regulation (1260/1999).

For all three programmes, the managing authority is the national government (Ministry for Environment, Physical Planning and Public Works). The Monitoring Committees for the three programmes met once in 2006.

Two programmes met n+2 for 2006, while a decommitment of EUR 131 538 will apply to Perama.

Overall comments concerning the 2000-2006 period in Greece

The programmes have already contributed substantially to improvements in the regions of intervention and the quality of life of their inhabitants, who are aware of the programmes and their contribution to the upgrading of cities, in particular Komotini (East Thrace) and Iraklion (Crete). The learning process under the Urban II integrated approach is seen positively in Greece and could contribute in future to significant changes in national urban policy-making.

Closure of the 1994-1999 programming period

Concerning ERDF interventions in Greece, one programme remains to be closed from the period 94-99. This is OP Roads, for which an audit report has been sent to the Greek authorities for their final comments. In the meantime, an additional payment of EUR 22 043 105 has been already executed.

All EAGGF programmes and initiatives for 1994-99 have been successfully closed.

Spain (

Preparations for the 2007-2013 period

The informal negotiation process started in late 2005 and involved over 30 Commission meetings with national and regional authorities. The basis for the Commission’s negotiations has been the document “Strategic Objectives and Key Issues for Spain for the programming period 2007-2013”, officially transmitted to the Spanish authorities on 17 March 2006 and jointly prepared by DG REGIO and DG EMPL, following wide-ranging inter-service consultation. The informal negotiation process started in late 2005. During 2005-2006 the Commission services held over 30 information sessions on the strategic priorities for Community cohesion policy and attended numerous negotiation meetings with Spanish regional and national administrations, including key economic and social players.

These meetings focused in particular on policy approaches to key Lisbon fields such as innovation promotion, information society and sustainable development, along with social inclusion, equal opportunities, employability, entrepreneurship and investment in human capital. The Commission approached the negotiations proactively by issuing an official negotiation position, a “Key Issues” paper (March 2006) and a “Position Paper” on the NSRF, to the Spanish authorities (November 2006). The Commission also co-organised a high-level conference in Madrid (October 2006), which was attended by two national Ministers and all regional administrations. The debate focused on shifting the cohesion policy strategy towards the knowledge economy. Since then, negotiations with the Spanish Ministries of Finance and Economy and of Labour and Social Affairs, who draft the NSRF and coordinate the preparation of the Operational Programmes, have involved frequent interactions.

The important progress made in pushing forward the Commission’s line is illustrated by the substantial change in strategic focus towards the Lisbon objectives in the new cohesion policy in Spain: 1) making Spain an attractive place to invest and work; 2) improving knowledge and innovation for growth; and 3) creating more and better jobs. These targets have been articulated into the following priority themes, which will be supported by the Funds:

Knowledge economy development: research, development and innovation; information society; communication technologies.

Entrepreneurial development and innovation.

Environment; natural environment; water resources management; risk prevention.

Transport and energy.

Local and urban sustainable development.

Social infrastructure.

Fostering entrepreneurship and employers’, enterprises’ and entrepreneurs’ adaptability.

Fostering employability, social inclusion and equal opportunities between men and women.

Increasing and improving human capital

Transnational and interregional cooperation.

Some of the main achievements so far include:

- Doubling of resources earmarked for R&D compared to the current period (over EUR 6-8 billion for 2007-13 compared with less than EUR 4 billion in the current period). This is despite having 40% less funding compared to the period 2000-2006. Some actions are flagged as EU pilot initiatives, for instance the new “Technology Fund” with EUR 2 billion.

- A new urban policy approach to follow up the current Urban Community Initiative. This includes a nationwide action for integrated urban development with project selection based on a competitive call for proposals. There is also a commitment to sub-delegate management of part of the actions to the cities concerned.

- As compared to 2000-2006, a stronger support to the Lisbon strategy, in particular as regards research, innovation and information society, whose total allocation has doubled to reach nearly € 8 billion . In addition, more than € 8 billion is set aside for the development of human capital, through actions expected to directly benefit more that 14 million people. (it is foreseen that around 4 million workers will engage in lifelong learning; more than 2 million people will get into employment after taking training and 250.000 new companies will be created). This effort is especially important in full Convergence regions, where Lisbon-related expenditure has increased from circa 53% to almost 70%. A similar effort has been undertaken in full Competitiveness and Employment regions, where this percentage approaches 88%.

- Besides, a strong link to the National Reform Programme (NRP), with Lisbon earmarking targets well above the ones established in the Regulation nº 1083/2006 for the combined operation of the 22 ERDF and the 22 ESF Operational Programs. Some of the most substantial priorities of the NRP are those related to the need of increasing the employment rate (specifically the female employment rate), improving the share of workers participating in long-life training and reducing the alarming rate of early school-drop out.

- A more strategic planning role for the national authorities, over and above sound financial and administrative management, in the form of the establishment of six “thematic” networks in key intervention areas (innovation, R&D, urban policy, equal opportunities, environment and social inclusion) for the exchange of good practice among national and regional administrations and reinforced institutional collaboration.

- A further step towards a regional approach with greater emphasis on partnerships and public-private collaboration. Accordingly, the number of multi-regional programmes managed by central government is being reduced from currently six to three for the ERDF (two on the knowledge economy and one for technical assistance) and from five to three for the ESF (adaptability and employment, fight against discrimination, and technical assistance). Innovative actions for financial engineering planned (Jeremy and Jessica).

Objective 1

The average financial execution for Objective 1 as a whole is quite positive. The current execution rate, compared to the amount programmed for 2000-2006, is 78.24% (including advance payments). This execution rate is slightly lower than the average rate for the Spanish Community Support framework as a whole (78.76%), but remains above the average EU execution rate for the ERDF (70.58%). The execution rate for the ESF has been 82.83%. The Cantabria OP, the only one under the transitional support scheme in Objective 1, reached an absorption rate of 95% at the beginning of 2006.

Where EAGGF Guidance is concerned, the official monitoring data provided by the Commission services on 31 December 2005 for Objective 1 in the EUR-25 rank Spain in third place in terms of execution (81.82%). The regions with the best-performing programmes are Castilla Leon (86.5%), Cantabria (86.3%) and Murcia (85.0%).

Looking at the level of performance by priority axes, “Infrastructures for human resources development”, “Transport and energy”, “Local and urban development” and “Competitiveness” have an execution rate higher than the average for all the programmes, while “R&D and Information society”, “Environment and natural resources”, and “Rural development” are slightly below the average.

As far as major projects are concerned, 19 decisions were approved in 2006. In addition, the initial decisions on 6 other major projects were revised. A total of 4 aid requests for major projects remained under study by the Commission at the end of 2006.

As regards the n+2 rule, no decommitments were made by 31 December 2006. This is the result of a series of measures taken in those programmes where a risk situation was noted following the midterm reviews and the subsequent measures taken by the managing authority to minimise the risks of losses under the n+2 rule. In addition to the allocation of the performance reserve, practically all the OPs were substantially reprogrammed in 2004.

Where the ESF is concerned, there was an automatic decommitment of EUR 761 025 under the n+2 rule from the 2004 annual commitment for the OP “Sistemas de Formación Profesional”.

As in previous years, a total of 18 monitoring committee meetings were held in 2006, as well as meetings of the CSF Committee. These meetings were essential to discuss the relevant aspects of each programme, to examine the potential problems and to take appropriate measures, including financial transfers between priority axes within the amount committed for 2006.

A total of 18 annual reports (with ERDF participation) were submitted by the managing authority in 2006. In many cases, the Commission made comments in order to improve the quality of the initial versions. After analysing their contents, the Commission accepted all of them.

In early 2006, the annual meetings for the year 2005 were held in Brussels with the participation of representatives from the central and regional administrations. Particular attention was given to the situation of those priority axes with a below-average execution rate. As regards the annual examination of the reports submitted during 2006, this has been postponed to 2007 due to the intense preparations for the 2007-2013 programming period in the second half of 2006.

Looking at the global impact of the Community Support Framework since 2000, recent evaluations indicate that its contribution to real growth is estimated at 0.28 percentage points per year, equivalent to 2.03% for the whole period 2000-2006. In terms of employment, the CSF is estimated to have contributed to the creation or maintenance of about 255 thousand jobs over the same period. The ERDF, which represents 60.84% of the CSF, can thus be said to have contributed 62.14% of the increase in the real growth and 58.04% of the impact on employment.

For the FIFG in Objective 1 regions, a modification of the OP was adopted by the Commission on 26 September 2006. This was intended to adapt programming to the negative impact of the sudden increase in oil prices on fishing profitability and on ship-building, and thus on the actual use of committed funds for fleet renewal (measure 21). An additional modification to the same OP was later proposed by the management authority but could not be adopted before the end of the year as it was submitted just before 31 December 2006. It was intended to adapt the programmed funding rates to actual practice in anticipation of the application of recently adopted closure guidelines.

Financial execution was slightly more than 72.3% by the end of the year with no n+2 automatic decommitment, since payments during 2006 exhausted the funds committed before the end of 2004.

The OP Monitoring Committee met only once on 13 June 2006 in Gijon (Asturias) to approve the annual execution report, which was then forwarded in due time to the Commission.

Implementation problems of specific relevance to the FIFG were discussed in a number of technical meetings and at an annual meeting in Brussels on 17 January 2007, while issues of general relevance to OPs for Objective 1 regions were dealt with during the annual meeting for the Spanish CSF.

Objective 2

The average financial execution for Objective 2 is very positive. The current execution rate, compared to the amount programmed for 2000-2006, is 78.03% (including the advance payment), above the EU average for this Objective (72.67%). The execution rate for the ESF was 83.38%. For the ERDF, there was no automatic decommitment under the n+2 rule on 31 December 2006.

As in previous years, the Monitoring Committees of the seven SPDs met once in 2006. These meetings were concluded by written procedure in several cases, in particular for the modifications of the SPDs and Programming Complements. A meeting was also held with the Spanish central and regional authorities on 8 March 2006 to coordinate the execution of the SPDs.

The annual reports for the seven interventions have been submitted in time and been examined by the Commission and the Monitoring Committees. As for the Objective 1 reports, the quality of the initial reports was acceptable, but the Commission services made comments in order to ensure that the content of the final versions was complete.

Objective 3

The CSF for Objective 3 is implemented through twelve operational programmes (seven regional programmes and five thematic and multi-regional programmes). The total Community contribution for these twelve programmes is EUR 2 316m for the period 2000-2006. Of this amount, EUR 919m is for the regional OPs and EUR 1 397m for the thematic and multi-regional programmes.

These programmes are intended to support the development and improvement of vocational training systems, the integration and reintegration of unemployed people within the labour market, the promotion of the participation of women in the labour market, the fight against sexual discrimination, the promotion of the integration of disadvantaged people within the labour market, as well as the promotion of entrepreneurship and lifelong learning for employed people.

The global balance for implementation in 2006 is quite positive. Both the physical and financial execution may be considered acceptable, except for the OP “Sistemas de Formación Profesional”.

As far as financial execution is concerned, the execution rate for the seven years 2000-2006 was 81.04% for the twelve programmes (execution rate of 86.97% for the regional OPs and 77.12% for the five multi-regional programmes), out of the total amounts programmed for 2000-2006. There was an automatic decommitment of around EUR 1.5 million under the n+2 rule from the 2004 annual commitment for the OP “Sistemas de Formación Profesional”.

As in previous years, the Monitoring Committees for each of the 12 programmes met in 2006 to examine the annual execution reports in particular. Once analysed by the different Monitoring Committees, they were then presented to the Commission in due time and accepted.

At the end of 2006 the annual meetings for the multi-regional and thematic programmes were conducted following written procedure.

The meeting of the Monitoring Committee for the CSG was postponed to 2007, due to the intense preparations in the final months of 2006 for the ESF 2007-2013 programming period.

Fisheries outside Objective 1

For regions outside Objective 1, financial execution was 58.5% by the end of 2006. There was no automatic decommitment under the n+2 rule as the last payment request that arrived just before the end of 2006 exhausted all the funds committed before the end of 2004.

A modification to the Single Planning Document (SPD) for regions outside Objective 1 was adopted by the Commission on 26 September 2006. This was intended to adapt programming to the negative impact of the sudden increase in oil prices on fishing profitability and on ship-building, and thus on the actual use of committed funds for fleet renewal (measure 21). An additional modification to the same SPD was later proposed by the management authority but could not be adopted before the end of the year as it was submitted just before 31 December 2006. It was intended to adapt the programmed funding rates to actual practice in anticipation of the application of recently adopted closure guidelines.

Community Initiatives

Equal

The Spanish EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 62.5% of the total. However, the programme could not avoid automatic decommitment, as at the end of 2006 only 96% of the ESF funding committed in 2004 had been executed. This will lead to the decommitment of the remainder of EUR 13.3m.

At the beginning of the year 2006, the European Court of Auditors performed an audit of the programme and in its preliminary report highlighted some weaknesses in the control systems. As a result, during the second part of 2006, Spain implemented an action plan for Article 4 verification visits covering all 2005 expenditure and has undertaken to reinforce and improve the control mechanisms for the remainder of the period.

The financial tables of the Spanish programme remained unchanged in 2006, and the Monitoring Committee has only modified some financial allocations to activities for the mainstreaming of results (Action 3). The main emphasis is on the theme of equality between men and women, more specifically on women’s access to the labour market, as this aspect has significant weaknesses (the activity and employment rates of women in Spain are significantly lower than those of men).

During 2006, a reviewed Mainstreaming Plan for the second round was presented at a nationwide conference held in Madrid on 27 February. Considerable work also went into evaluation, including a training seminar on evaluation for all projects held in Madrid on 14 November 2006.

Leader

By the end of 2002, the Commission had approved 18 Leader+ programmes (one horizontal programme and 17 regional programmes) with an EU contribution of EUR 502.06 million planned for 2000-2006 (after the indexation exercise).

Seventeen programmes are currently implemented under global grants, and one (Basque Country) as a common Operational Programme with a programme complement. 145 Local Action Groups (LAGs) have been created. The total area covered by the LAGs is 251 186 km2, corresponding to 14% of the national population.

On the basis of the official monitoring data available at the end of 2006, the level of interim payments is 48.2% of forecast expenditure.

Eighteen Annual Reports were submitted in 2006 and examined by the Commission services and the Monitoring Committees (18). The quality of the reports was considered acceptable.

During 2006, the Commission amended 14 programmes, 9 in order to decommit that part of the funding committed in 2003 and not settled at the end of 2005 (n+2 Rule), while the other 4 were financially reprogrammed. The main reason for the decommitment was the late start of the programmes. Five other programmes were also amended to make use of the final opportunity to amend programmes.

Urban

There are 10 Community Initiative Programmes in Spain (see below) with an EU contribution of EUR 114.1 million, which represents 15% of the total URBAN II budget for the period 2000-2006.

The Spanish URBAN II CI programmes are being implemented smoothly in accordance with the original programming. All 10 programmes submitted admissible annual implementation reports for 2005 in May 2006. All programmes met the level of payments for avoiding the application of the n+2 rule at the end of 2006.

The managing authority for the programmes is the Ministry of Finance. Management and implementation has been delegated to the local authorities.

Overall comments for the 2000-2006 period

The targeted focus on a single area, the strong local partnership and the participation of several agencies in the decision-making procedure have ensured the smooth running and sustainability of URBAN projects. The experience gained has demonstrated that a local authority-led project is a successful model for locally based regeneration.

Project monitoring is being carried out effectively.

Closure of the 1994-99 programming period

At the beginning of 2006, 22 interventions still remained open, with a RAL of EUR 136 605 954.24. During 2006, 12 programmes were closed completely, with a RAL totalling EUR 98 456 257.23:

- Objective 1: PO Fomento de I+D+I, SG FEDER – ICO and SG – FEDER- IDAE

- Objective 2: PO País Vasco (97-99) and PO Cataluña (97-99)

- Interreg: Interreg España-Portugal

- Community Initiatives: IC Empleo España, IC Leader II Murcia, IC Pesca, IC Leader II Galicia, IC Leader II Baleares, IC PYMES España.

At the end of 2006, 10 interventions remained open, with a RAL of EUR 38 149 697.02.

Five ESF co-funded programmes were closed during the year 2006.

At Fund level, 3 EAGGF programmes were closed in 2006 (INTERREG ES-PT, (ES-part), SPD Cataluña and OP Galicia). Of the 10 programmes still to close at the end of 2006:

- 1 was awaiting the outcome of a national judicial procedure,

- 5 were in a very advanced stage of closure (pre-closure letter ready, draft flexibility calculation made, payment or decommitment executed)

- 4 were still to be examined.

The 9 latter programmes are the subject of a financial corrections procedure under Article 24 of Council Regulation 4253/88, requiring thorough analysis before closure. At the end of 2006, the EAGGF RAL came to some EUR 135 million.

Estonia (

Estonia, an Objective 1 NUTS II country, has been able to finance eligible operations from the Structural Funds since 1 January 2004, with an ERDF participation of EUR 226m and an ESF share of EUR 69m out of EUR 371m in total. The SPD identifies the core problems of Estonia (low GDP, structural unemployment, disparities) and sets out the overall objective of “fast, socially and regionally balanced sustainable economic development”, mainly by shifting into higher value-added production. The SPD strategy is based on four priorities (excluding Technical Assistance): Human Resource Development; Enterprise Competitiveness; Agriculture, Fisheries and Rural Development; and Infrastructure and Local Development.

Preparations for the 2007-2013 period

The preparation process for 2007-2013 started early in 2006 after the decision taken by the Cabinet of Ministers (February 2006). The first draft version of the National Strategic Reference Framework (NSRF) was adopted by the Estonian government in March 2006. From December 2005, the representatives of the main partners (social partners, entrepreneurs, local governments, non-profit organisations, environmental organisations, representatives of the scientific community and universities, and agricultural organisations) have been involved in the activities of the inter-ministerial working group and participated in common discussions and working meetings.

A first meeting between the Estonian authorities and the Commission on the preparation of the NSRF was held on 14 November 2005 to deal with macro-economic issues and the themes and priorities. The envisaged strategic objectives and thematic priorities were presented to the Commission services in February 2006.

A first draft NSRF was submitted by the Estonian authorities in March 2006. The first informal inter-service consultation was launched in June 2006 and the Estonian authorities presented the Commission with an updated draft NSRF in August 2006. The draft, together with the joint assessment, was submitted to a second inter-service consultation on 22 September and a final joint position paper was forwarded to Estonia on 17 October 2006. The informal negotiations for Estonia’s NSRF were concluded with the submission of the official NSRF by the Estonian authorities on 1 March 2007

Objective 1

The Estonian 2004-06 Objective 1 programmes have contributed to an increased growth rate in Estonia (currently at around 10% per year), to the creation of 3000 jobs (net job impact) and 500 new enterprises, to the training of 30 000 unemployed and to municipal infrastructure investments benefiting over 280 000 people in Estonia (20% of the total population). In addition, the programmes have had an effect on ‘softer’ issues as well, e.g. the introduction of an evaluation culture, an improved audit quality, increased management and project planning capacity, and increased administrative capacity at sub-national level.

As regards financial performance, commitment levels (in terms of approved applications in the Estonian monitoring system) were reassuring for both the ERDF and ESF in 2006 and increased steadily during the year. Payment levels (ERDF) to beneficiaries were satisfactory and, in January 2007, accounted for around 47% of the programme. For the ESF, payments were slightly lower. It should be noted that Estonia has no n+2 issues and the necessary levels of funding utilisation were reached by the end of 2006. There are no n+2 early warnings issued for the end of 2007. The early warning system put in place by the Commission (and used mainly by the Monitoring Committees) has contributed positively to this achievement.

The demand for support under the EAGGF is greater than supply. The financial execution for the Fund is 72%.

Monitoring Committee meetings

Two Monitoring Committee meetings were held in 2006 and the conclusions were largely positive in terms of implementation, quality of spending, financial progress and publicity actions. Certain issues were raised such as delays in RTD spending or low local authority expenditure (one specific measure), together with some initial difficulties in project generation as well as a lower than average level of payments for certain ERDF/ESF measures. More positive issues were also discussed such as the good management of SME development, e.g. well-managed start-up programmes or larger business infrastructure investments that were mature (in project pipeline terms) and advancing well. NGO representatives sit in on committee or priority working group meetings and are starting making their voices heard at different levels in the programme.

Annual meeting

The annual meeting between the Commission and the Estonian managing authority for 2006 was held in January 2007, due to the heavy workload in preparing for the new period at the end of the year, and dealt with the progress of programme implementation, preparations for the 2007-13 period, and management and audit issues. Separate discussions between the Commission and the Estonian authorities were organised in 2006 to consider the main challenges facing Estonia in the fields of employment and lifelong learning.

The quality of implementation and the administrative capacity of the Estonian management authority as well as implementing bodies have been monitored regularly, while also being the subject of several technical discussions. Three main elements have been identified as important to monitor in preparation for the new period: staffing and mobility, procurement rules, and the project pipeline. Another issue is the technical capacity of final beneficiaries.

Modifications

A Commission decision on the modification of the Estonian SPD was taken at the end of 2006, concerning mainly changes to the third priority (EAGGF and FIFG measures).

Fisheries

The Objective 1 SPD includes four FIFG measures with an allocation of EUR 12.5m. The implementation of the FIFG measures progressed well in 2006: the payment rate reached 60% of the total allocation by the end of the year, while the commitment rate remained high at 95%. There were therefore no n+2 problems in 2006. At the SPD Monitoring Committee meeting of 7 November 2006 the results of a study assessing the effects of FIFG support on the fisheries sector were presented, concluding that the impact was in general positive.

Community Initiatives

Equal

The Estonian EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme was 24% — exactly 100% of the commitment for 2004. Automatic decommitment under the “n+2 rule” was thus avoided for 2006.

A mainstreaming strategy for EQUAL was adopted. This includes the setting up of a network. One of the objectives is to carry out training, seminars and workshops to prepare proposals for the policy-making level.

Leader

There is no separate Leader + Community Initiative Programme in Estonia, but the activity is mainstreamed under the SPD as a measure for ‘Local Initiative-Based Development Projects – Leader’. The measure applied as from autumn 2006 and includes strategies for both acquisition of skills and integrated rural area development. As of August 2006, there were 24 action groups in Estonia intending to apply for support under ENDP measure 3.6 “Local initiative based development projects – Leader”. The planned LAGs covered approximately 320 000 inhabitants, or 24% of the total population. The total area of activity of these action groups covers 85% of the area of Estonia. By the beginning of 2007, 24 LAGs had been selected, 3 of which had started to implement their strategies.

France (

Preparations for the 2007-2013 period

To prepare the programmes for the 2007-2013 period, five working groups have been set up on the initiative of the Commission in close collaboration with the French authorities on the following themes: research and innovation; information technologies; environment and risk prevention; regional integration, and competitiveness of the French outermost regions (the last two groups being solely for the outermost regions). The results of these working groups were discussed in two seminars (Convergence / Regional competitiveness and Employment) during 2006. All the groups produced reports with conclusions and recommendations, which were largely included in the programme proposals for 2007-2013.

The Commission has been closely associated with the overall preparatory work for the National Strategic Reform Framework (NSRF) and has commented on the development of the NSRF proposal.

Objectives 1 and 2

In France, Objective 1 for 2000-2006 covers the four French outermost regions[19] and, under transitional support, Corsica and three districts of the North/Pas de Calais region. Objective 2 includes 21 of the 22 regions of metropolitan France. There are four national programmes for technical assistance and IT management in addition to the 27 regional programmes.

After a year (2005) devoted to implementation, several modification decisions (decommitments, financial modifications) were taken in 2006 in order to prepare for closure of the current period. All the regions worked on the preparation of the programmes for the new period.

Average programming at the end of December 2006 (all Structural Funds together) increased up to 108.2% for the Objective 1 regions but decreased slightly (-0.2%) to 95.5% for the Objective 2 regions, with a rather considerable disparity between regions since the range is from 77.3% to 104.3%. In terms of executed payments, the rates were 66.98% from the ERDF, 78.25% from the ESF, 67.2% from EAGGF-G and 60% from the FIFG in Objective 1, and 75.04% from the ERDF and 71.54% from the ESF in Objective 2.

Decommitments of the 2004 allocation (up to 31 December 2006) have been limited for the ERDF to the Objective 1 national programme for IT management. No decommitments have been registered under the ESF, EAGGF Guidance Section or FIFG Objective 1.

Concerning ESF Objective 2, one regional programme did not meet the n+2 target and has seen a decommitment of EUR 1.1 million (PACA).

The annual review meeting between the Commission, the French authorities and the managing authorities for Objectives 1 and 2 was held in Brussels on 10 November 2006.

The 31 annual reports on the execution of Objectives 1 and 2 in 2005 have been declared admissible. Their analysis confirms the overall improvements in their contents, though significant differences remain between regions. Accounting and financial information are complete, but the qualitative analyses of the programmes need to be improved, in particular through the use of quantified indicators.

Objective 3

The total appropriation for Objective 3 is EUR 4 918 million. At the end of 2006, 70.41% of this budget (EUR 3 462 million) had been paid out by the Commission.

As with the 2005 annual meeting, the 2006 annual meeting between the Commission and the managing authorities for Objective 3 was postponed to the first quarter of 2007.

The year 2006 was important for the reprogramming exercise, motivated mainly by the need to optimise the allocation of funds to eliminate any n+2 risks over the remaining years, as well as to allow optimal reprogramming of the agreed financial correction.

Fisheries outside Objective 1

In France, the FIFG was well implemented in 2006 in line with the objectives of the reform of the common fisheries policy and the crucial needs for improvement in this sector. It was a good year both in terms of realisation and in terms of projects committed. All the French maritime regions are thus making good progress with the implementation of the fisheries structural policy. The expenditure declarations by the end of 2006 represent a total expenditure of EUR 700 million, of which EUR 157 million was from the FIFG, i.e. 71% of the FIFG part reserved for France. Altogether almost EUR 960 million have been invested or committed in 8136 projects with the support of the FIFG, with near to a third of projects being situated in Brittany.

In spending more than 70% of its FIFG allocation, France was thus not far behind the leading group of Member States (Austria, Spain, Finland and Portugal) with a very good overall execution rate.

At the end of 2006, the number of projects with FIFG support was 185% up on the number of projects for the entire previous programming period 1994-99.

Community Initiatives

Urban

The URBAN II programme in France consists of nine programmes in the following cities/groups of cities: Bastia, Bordeaux/Cenon/Floirac, Clichy-sous-bois/Montfermeuil, Grenoble, Grigny/Viry-Chatillon, Le Havre, Le Mantois, Les Mureaux/Val-de-Seine, Strasbourg. Four of the nine (Clichy, Le Mantois, Grigny and Val-de-Seine) are located in the Ile de France region, with an ERDF contribution of EUR 51 million. In total, the nine programmes received an amount of EUR 284.6 million, with EUR 102 million from the ERDF.

Six of the nine URBAN II programmes were amended in 2006. All the Monitoring Committees met at least once in 2006, except those for Grigny/Viry-Chatillon and the Mantois, which carried out a written consultation of their Monitoring Committees. The annual reports for the nine programmes for 2005 were submitted to the Commission. All the programmes met the n+2 rule.

In general, the French programmes made good use of URBAN II funding. They explored and supported the participation of citizens, local associations and municipal groupings. In addition, the nine French URBAN II programmes, supported by the partners representing the state (the Interministerial Delegation for Urban Affairs – DIV, the Interministerial Delegation for Planning and Competitiveness of Territories – DIACT, the Deposit Bank – CDC) had already created the ‘URBAN Network France’ in 2002, with the aim of pooling and sharing good practices, knowledge and experiences in order to optimise the management of URBAN II programmes in France.

Equal

The French EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 60% of the total. However, the programme could not avoid an automatic decommitment, as at the end of 2006 only 95% of the ESF commitment in 2004 had been executed. This will lead to the decommitment of the remainder of EUR 10.3m.

During 2006, the French authorities undertook on their own initiative a review of EQUAL certification. The results showed a low error rate, which provides reasonable assurance of the control systems for this programme.

The Monitoring Committee approved one modification to the financial tables of the programme, mainly to maximise effectiveness and improve financial management. Accordingly, it has been proposed to increase technical assistance from 5% to 7% of the ESF allocation and to reallocate some resources among the priorities.

During 2006, France, in partnership with Germany and Sweden, launched a European platform on the theme of employability and combating racism. This platform seeks to identify and present at European level the lessons learnt from EQUAL Development Partnerships that have tackled ethnic discrimination in employment and to address gaps in current policies to combat discrimination. The work is structured around five different peer groups:

- actors in public and private employment and training services,

- social partners

- non-profit making/non-governmental organisations

- employers and human resources managers

- local and regional actors

Leader

The French National Programme for the Community Initiative Leader+ was adopted on 8 August 2001, taking the form of a global grant. Accordingly, the National Centre for Farm Planning (CNASEA) was designated as management authority. The total Community contribution before the 2005 decommitment amounted to EUR 263.6 million.

Implementation is the responsibility of 140 Local Action Groups (LAGs), which were selected in 2002. Their action plans were established in 2003, after signature of the bilateral conventions with CNASEA.

Payments came to EUR 39.2 million in 2006, but this could not prevent a n+2 decommitment. By Commission Decision C(06)2039 of 16 May 2006 the EAGGF-Guidance contribution to the programme was reduced by EUR 5.5 million. Financial implementation since 2000 has reached EUR 137.3 million, which represents 52.1% of the total budget appropriations for 2000-2006.

Closure of the 1994-99 programming period

The processing of the requests for final payment continued into the year 2005. The RAL of the ERDF was reduced to zero during the year 2006 (compared to EUR 693.9 million before examination of the final reports and final payment requests on 1 January 2003).

For the ESF, the RAL was EUR 473 912 on 31 December 2006.

For EAGGF-Guidance, the RAL was reduced by EUR 10.5 million during the year to EUR 3.41 million on 31 December 2006.

ITALY(

Preparations for the 2007-2013 programming period

The kick-off meeting between the Commission services and the Italian authorities to discuss the 2007-2013 programming period was held in Rome on 11 January 2006. A first incomplete draft NSRF was handed over to the Commission in May 2006. Following informal comments by the Commission services in June 2006, the Commission was not involved in further discussions until a second draft NSRF was made available informally on 4 December, and subsequently submitted informally on 22 December. This third draft NSRF went through an informal joint assessment procedure by DG REGIO and DG EMPL and a position paper was issued and sent to the Italian authorities in early 2007.

Informal negotiations on the OP drafts have been ongoing since the summer of 2006, with some very early drafts having been transmitted already at the beginning of 2006. The quality of these drafts being variable, they have been examined informally by the Commission services and informal position papers have been discussed jointly with the regional authorities concerned at a number of technical meetings.

Objective 1

According to the official monitoring data as of 31.12.2006 provided by the Italian Ministry of Economic Affairs and Finance, the average commitment rate on total eligible expenditure (at CSF level) is 93.4% and the average payment rate on total eligible expenditure is 63.1% (all Structural Funds together). As far as the ERDF is concerned, the financial performance is slightly better: the commitment rate is 96.2% and the payment rate 63.4%. Concerning the EAGGF Guidance section, according to the official monitoring data as of 31.12.2006 provided by the Italian Ministry of Economic Affairs and Finance, the commitment rate is 87.3% and the payment rate 63.1%.

The programmes performing best in financial terms are the national programmes for “Local development” (payment rate: 89.1%) and “Transport” (77.2%). At regional level, the best performing programmes in financial terms are “Molise” (71.2%) and “Calabria” (64.1%). Insofar as the EAGGF is concerned, according to data as of 31.12.2006, the three regional programmes for Molise (69.2%), Campania (65%) and Calabria (64.4%) show the best performance. The programmes performing the poorest in financial terms are the national programme for “Fisheries” (52.1%), financed by the FIFG, and the regional programmes for “Sicilia” (50.9%) and “Campania” (54.8%).

With respect to the n+2 rule at the end of 2006, a decommitment is proposed for ERDF funding of the programme “Sicilia”, amounting to around EUR 111m. As far as the other Funds are concerned, more decommitment proposals are made for the ESF (around EUR 28m for the programme “Sicilia” and around EUR 1m for the programme “Local development”), the EAGGF (around EUR 33m for the programme “Sardegna”) and the FIFG (less than EUR 1m for both programmes “Molise” and “Puglia”). A decommitment of EUR 450 000 for the national programme for “Fisheries” (PON Pesca) is also being proposed, notwithstanding the substantial use of derogations for judicial proceedings.

In particular, the ERDF decommitment proposal for Sicily is due to the effect of declared expenditure on existing exemptions for large projects. It has to be underlined that the financial performance of the “Sicilia” programme is the lowest among all Italian Objective 1 OPs.

During the 2006 annual meetings special attention was devoted to the initial results achieved in the programming period. An analysis of the distribution of expenditure by area of assistance as compared to the planned distribution revealed interesting features, such as a greater than planned concentration of resources on aid schemes to businesses, transport and training. The difference in concentration shows that the speed of financial implementation has up to now been higher for generalist and traditional operations, while the more integrated and complex projects have slower overall execution rates. Concerning the EAGGF Guidance section, substantial progress has been made in the implementation of measures for the setting-up of young farmers and the development and improvement of infrastructure linked to agriculture.

Information on results and their link with outputs is nevertheless still scarce. In the environmental services sector, for instance in the case of separate waste collection, significant progress has been made (4 780 000 inhabitants of Objective 1 regions had access to separate waste collection thanks to SF support). In other sectors, such as R&TD, the most recent available data (end-2005) show that although there has been an improvement, the gap between Objective 1 and non-Objective 1 areas is still wide (0.19% of GDP invested in R&TD by businesses in Objective 1 against 0.64% for the other regions).

The most significant progress in Objective 1 has been made in the field of administrative capacity and governance, which is a pre-condition for improving results in other sectors.

Programme modifications

Nine proposals for programme modifications have been submitted by Italy for Objective 1 programmes (“Basilicata”, “Sicilia”, “Puglia”, “Local development”, “Molise”, “Campania”, “Calabria” and “Sardegna”); of these, five decisions have been adopted to date. The main reason for modifying programmes was sound management and financial implementation at the end of the programming period (modification of allocations by priority). The allocation between funds and programmes was left unchanged. No programme modification was proposed for the national Objective 1 “fisheries” programme.

Annual meetings

The annual meetings for Objective 1 took place in Palermo in October 2006, with the following agenda: annual reports 2005 and application of the n+2 rule at the end of 2006; guidelines for the closure of 2000-2006 programmes; initial results for 2000-2006; preparation of the 2007-2013 programming period. Only bilateral meetings for the ESF in Sicily and Calabria were organised.

Meetings of monitoring committees

Monitoring committees for all programmes met once or twice during the year: while they all examined the usual questions linked to implementation, the main issue was the modification of programmes (financial reprogramming) for sound management reasons (complete absorption of funds at the end of the programming period). More emphasis was also placed on results of SF assistance.

ESF

In 2006 the performance of Objective 1 Operational Programmes was variable. The average financial execution shows a commitment rate of 88% and a payment rate of 62.8% (respectively 81.5% and 57.2% for the regional OPs, 106.4% and 78.7% for the national OPs).

The OP Sicilia and the Local Development OP did not manage to avoid application of the n+2 rule at the end of 2006.

The difficulties faced by certain regional programmes in respecting the commitments within programming are still quite significant, and the massive use of “coherent projects” (projects that were initially financed by the Member State) has given rise to considerable eligibility problems.

Following the financial corrections adopted on the basis of the systems audit reports, some Objective 1 Regions (Sicilia and Calabria) have reorganised the departments responsible for the management of ESF resources.

Objective 2

Budgetary execution

According to the official monitoring data as of 31.12.2006 provided by the Italian Ministry of Economic Affairs and Finance, the average commitment rate on total eligible expenditure is 101.8% and the average payment rate on total eligible expenditure is 71.2%.

The SPDs performing the best in financial terms are “Valle d’Aosta”, which is virtually closed (125.1%), and “Veneto” (88.6%). The SPDs performing the poorest in financial terms are “Abruzzo” (55.9%) and “Liguria” (64.7%).

With respect to the n+2 rule at the end of 2006, no decommitment is being proposed, confirming the positive financial absorption record of 2005.

Overall results of programme implementation throughout the programming period

As for Objective 1, part of the discussions held at the 2006 annual meetings focused on the initial results achieved in the programming period. An analysis of the distribution of expenditure by area of assistance as compared to the planned distribution revealed interesting features, such as a greater than planned concentration of resources on aid schemes to businesses rather than on R&TD. The difference in concentration shows that the speed of financial implementation has up to now been higher for generalist and traditional operations, while the more innovative sectors have slower overall execution rates. As for infrastructure, a higher implementation rate was recorded for environmental infrastructure than for transport. Expenditure in the field of R&TD has been mainly oriented towards businesses and the private sector, while for energy most investment has been allocated to Renewable Energy Sources.

Programme modifications

Ten proposals for programme modifications have been submitted by Italy for Objective 2 SPDs (“Umbria”, “Liguria”, “Toscana”, “Bolzano”, “Abruzzo”, “Emilia-Romagna”, “Veneto”, “Marche” and “Friuli-Venezia Giulia”). The main reason for modifying Objective 2 programmes was also sound management and financial implementation at the end of the programming period (modification of allocations by priority). The allocation between programmes was left unchanged.

Annual meetings

The annual meetings for Objective 2 took place in Perugia in October 2006, with the following agenda: annual reports 2005; application of the n+2 rule at the end of 2006; guidelines for the closure of 2000-2006 programmes; initial results for 2000-2006; preparation of the 2007-2013 programming period. Informal bilateral meetings, mainly focusing on 2007-2013 programme preparation, were held with Valle d’Aosta, Veneto and Marche.

Meetings of monitoring committees

Monitoring committees for all programmes met once or twice during the year: while they all examined the usual questions linked to implementation, the main issue was the modification of programmes (financial reprogramming) for sound management reasons (complete absorption of funds at the end of the programming period). More emphasis was also placed on the results of SF assistance.

Objective 3

In 2006, employment trends remained positive, with employment rates stable and the unemployment rate below 4% in many Objective 3 regions and autonomous provinces. All Objective 3 OPs performed quite well and avoided the n+2 rule in 2006. The average financial execution shows a commitment rate of 95.2% and a payment rate of 74.6%.

Progress under all programming priorities (measures for the prevention of and fight against adult and youth unemployment, fight against exclusion, lifelong learning, etc., labour market flexibility, gender equality) is comparable, showing that implementation has become more even.

As for the operational results, steady progress has been made in the area of the Employment Public Services, and the employment centres represent a big success within the ongoing programming; while the “Borsa Lavoro”, the nationwide electronic labour market system, despite some improvement, doesn’t always include all the regional systems.

The fight against social exclusion and the equal opportunities initiative show good results. Summarising, the ESF continues to play an essential role within the efforts to modernise the Employment Public Services, in implementing corrective and preventive measures against long-term unemployment, and in improving training systems.

For the regions, the ESF remains the main financial instrument for implementing active labour market policies. During 2006, the annual meetings also gave the opportunity to exchange views on the 2007-2013 programming period.

Fisheries outside Objective 1

According to the official monitoring data as of 31.12.2006 provided by the Italian authorities, the FIFG mono-fund Single Programming Document (SPD) commitment rate on total eligible expenditure is 89.3% and the payment rate on total eligible expenditure is 56.8%.

As far as the n+2 rule is concerned, no decommitment was made for the programme.

Two monitoring committee meetings were held (June and December) and dealt mainly with analysing implementation levels, the findings of the mid-term evaluation, updating reports and approving a final modification of the programme so as to align it with the reality of implementation.

Community Initiatives

Equal

The Italian EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006 the rate of execution of the ESF part of the programme represented 103% of the total. Automatic decommitment under the n+2 rule was thus avoided for 2006.

On 6 December 2006, the Commission adopted a new decision modifying the financial tables for the programme, mainly to achieve maximum effectiveness and improve financial management.

The programme is aimed at innovating approaches and policies to fight discrimination and inequalities in connection with the labour market, by acting as a transnational laboratory to test new practices for policy delivery.

EQUAL Italy continues to play a significant role in the socio-economic context by intervening on themes that are on the national agenda, such as the integration of social and labour policies or the development of local partnerships, and by highlighting the value of employment centres and testing new approaches as regards innovative policies designed for specific groups.

During 2006 Italy made particular efforts and took an active part in mainstreaming activities at European level by leading the European Thematic Group on Social Economy and by leading a Community of Practice on Project Cycle Management (grant-funded by the EC).

Leader

There are 22 Leader+ programmes in Italy, comprising 21 regional programmes and one national programme concerning the Leader network, with a Community contribution totalling EUR 289.1 million for the 2000-2006 period.

On the basis of official monitoring data received from the Italian authorities by 31.12.2006, the level of commitments is 75.7% of the eligible expenditure and the actual payments made represent 54.6% of the forecast expenditure. Lombardia, Piemonte, Emilia-Romagna and Veneto are the best performing programmes, with a spending rate of more than 65% of the allocated financial resources.

With respect to the n+2 rule at the end of 2006, the most recent data available show that no decommitments will be made for the Leader programme.

In 2006 four programmes were modified by Commission decisions (Abruzzo, Campania, Umbria and Puglia). The modifications related to the implementation conditions for some measures in the programmes and to financial programming adjustments.

In 2006 a total amount of EUR 0.444 million of EAGGF contribution (amounts committed in 2003 and not declared as expenditure before the end of 2005) for the Puglia and Abruzzo programmes was decommitted by Commission decisions under the n+2 rule.

The 2006 annual reports for all programmes were received. The main achievements in implementing the programmes were reviewed by the Commission with the managing authorities in the framework of the annual review in 2006. The Commission requested the Member State and the managing authorities of the Lazio, Calabria, Puglia, Sicilia and Molise programmes to speed up programme implementation, and made a recommendation for improving the quality of the annual reports and the controls.

Concerning implementation of the measures, all programmes show significant progress, particularly in relation to the implementation of Priority 1, support to rural development strategies, integrated and pilot actions. As for Priority 2, inter-territorial and trans-national cooperation, some progress has been made, but the implementation is still lagging behind owing to technical difficulties.

Monitoring committees (MCs) for the programmes convened regularly. During the MC meetings the programmes and related programme complements were reviewed and updated, so that correct implementation of the programmes was ensured.

Urban

All ten URBAN II programmes for Italy were adopted by the European Commission in November 2001 and were modified in 2006. The total eligible cost of all the ten URBAN II programmes amounts to EUR 268 010 837, with an EU contribution of EUR 116 535 331 and EUR 17 006 545 from the private sector.

The managing authority of each Italian URBAN II programme is the municipality of the city. The Monitoring Committees, chaired by the town council, are therefore organised at local level, one for each programme, and include both institutional bodies and environmental, social-economic partners. Consequently, inhabitants and local partners are often directly involved in programme design and implementation.

Annual reports on implementation in the year 2005 were submitted in June 2006 in accordance with the General Regulation (1260/1999).

All the Italian programmes complied with the n+2 rule for 2006.

Overall comments for the 2000-2006 period

Most of the Italian URBAN programmes have been very successful in their achievements and management. However, some of them faced serious problems which delayed implementation. There were no problems with meeting the programme outputs and yearly n+2 targets. The experience has demonstrated that a local authority-led project is a successful model for locally based regeneration.

Closure of the 1994-99 programming period

Ten ERDF programmes from the 1994-1999 period were closed in 2006. At the end of the year, only four programmes still remained open. The RAL was reduced accordingly, from EUR 88m to EUR 47m.

In particular, two “Article 24” decisions were taken in 2006 for the following operations: global grant “BIC Basilicata” and global grant “Area di crisi di Siracusa”.

Regarding the ESF, as part of the process of closure of the 1994-99 programming period, a total of 59 files were processed. Currently, the RAL (outstanding commitments) amounts to approximately EUR 41 million and is entirely due to legal and/or administrative disputes, which considerably delayed the winding-up process. It will be possible to reduce this RAL gradually as soon as the legal action is resolved.

As regards the EAGGF, at the end of the year, only seven programmes still remained open.

Ireland (

Preparations for the 2007-2013 programming period

In the 2007-2013 period Ireland will have no further eligibility for assistance under Objective 1/Convergence. The Border, Midland and Western Regions are “natural effect” regions as their GDP per capital already exceeds the EU 15 average. They will have “phasing-in” status, i.e. to the new Competitiveness and Employment objective. The Southern & Eastern Region, having already completed the transition from Objective 1 in the 2000-2006 programming period, will be eligible as an ordinary region for the purpose of the Competitiveness and Employment objective.

The first Member State/inter-DG meeting on the Irish National Strategic Reference Framework (NSRF) took place in January 2006 and two unofficial information meetings (including all DGs involved) were held with the Member State in 2006. The organisation surrounding the NSRF in Ireland is based on a bottom-up approach with the regional authorities organising local/regional meetings with the local partnerships and drafting the ERDF OPs. The Department of Enterprise, Trade and Employment, responsible for the ESF, has widely consulted with social, equality and labour market institutions to draw up first drafts of the ESF OPs. The two regions, as well as the DETE in the framework of the ex-ante evaluation, have also commissioned extensive needs analyses and various foresight studies to prepare the new period.

The strategic focus of NSRF operations is on the following themes and priorities for the European Regional Development Fund (ERDF):

- Innovation, knowledge and entrepreneurship; and

- Improved access to quality infrastructure and environmental and sustainable development.

For the ESF, the NSRF indicates one priority which will be implemented through two corresponding priorities in the ESF OP:

- Human Capital Investment through upskilling the workforce and increasing the participation and activation of groups outside the workforce.

These themes will be implemented through three Operational programmes: S&E, BMW and the ESF-funded Human Capital Investment OP, together amounting to EUR 750m of structural funds.

Objective 1

The implementation of the ERDF in the five Irish Objective 1 programmes – Economic & Social Infrastructure, Productive Sector (PSOP), Technical Assistance (TAOP), Border, Midland & Western (BMW) Region, and Southern & Eastern (S&E) Region – continued at a satisfactory pace in 2006. Equally, the implementation of the ESF-funded EHRD OP and the ESF-funded childcare measures in the two regional OPs were on schedule.

The impact of the first two CSFs (EU funding alone from 1989 to 1999) is estimated to have raised GNP by 3-4%. The 2000-2006 CSF will have an impact on the level of GDP estimated at 1.8% in 2006. The Structural Funds 2000-2006 play an important role in Ireland, both in S&E and BMW regions, in the fostering of its research, development, and innovation and information society capacity. In the period 2000-2006, the ERDF will have spent an estimated amount of about EUR 260m on research, technical development, and innovation and the information society. During the 2000-2006 period Irish research and innovation capacity increased significantly, in particular in the S&E region, setting the basis for technology-based economy developments in the future.

Similarly strong impacts can be seen in the field of Human Resources, which has been a vital area of ESF assistance since 1989. While in the early years investment boosted education and skills levels, with strong focus on young people but also enhancing the employment prospects of the unemployed, the current funding has an increased emphasis on responding to shortages through targeted supply-side initiatives in education and training. A good example for this development is the emphasis on in-company training and the support for a number of life-long learning schemes.

Payments were submitted with a peak towards the end of the year. For the ESIOP, a single payment claim, for EUR 119m, represents two thirds of the total ERDF amount paid to Ireland in 2006. No Irish programme in 2006 suffered n+2 decommitments (for the ERDF and FIFG) and, generally speaking, the implementation of the funds was fluid.

EC payments were 93.88% (ESIOP), 92.39% (PSOP) and 84.28% (TAOP) of the total ERDF allocation at end-2006. For the BMW and S&E regions, the payments represent 75% (71% of ERDF allocation) and 84% (87% of ERDF allocation) of commitments respectively.

For the FIFG, by 31.12.2006, expenditure on the PSOP amounted to 88% of the total FIFG allocation for the programme. For the aquaculture measures of the S&E and BMW programmes, FIFG expenditure came to 78% and 71% respectively.

In general terms, the management does deliver on the projects and the concomitant spending although certain important cost overruns have been identified over this period and certain measures – Waste Management, E-Commerce (Local Infrastructure Priority) and Tourism – under the regional programmes have been progressing more slowly than other measures.

The situation in relation to payments is similar as regards the ESF: payments amounted to 83.43% of the total Social Fund allocation to the EHRD OP and the two regional OPs. The ESF payments for 2006 amounted to EUR 148m. This and the achievement of all annual n+2 targets so far demonstrate that financial implementation is on track.

Monitoring committee meetings

Monitoring committees met for all programmes with participation from the Commission. Several horizontal working groups (environment, equal opportunities, etc.) have been put in place with the objective to measure the themes’ inclusion in the programmes. Participants from all the OPs are involved.

Annual reports and annual meeting

All Irish Annual Implementation Reports were received and analysed by the Commission within the regulatory deadlines. The Annual Review Meeting covering all programmes under the Objective 1 CSF, planned for April/May 2007, will consider the ongoing implementation of the programmes with special reference to the various audits that have been undertaken by the Commission and the internal audit services in Ireland in order to address certain weaknesses found.

The ARM will also consider reporting, preparations for the next period and issues for closure of programmes and projects (Cohesion and Structural Funds).

Modifications

During 2006, Ireland modified the programme complements for PSOP, TAOP and the EHRD OP. Two decision-making procedures were successfully completed for both BMW and S&E (four decisions in total, two per region – EAGGF measures). In order to prepare the additional EU funding of EUR 12 million for the Irish Republic’s part of the PEACE II OP, the Irish CSF had to be amended accordingly (cf. PEACE II OP in the UK part of this report).

EAGGF

The revised EAGGF Guidance section amounts to EUR 153.6 million. Cumulative EAGGF Guidance payments to the end of 2006 amount to EUR 105.3 million or 68.5% of the amounts earmarked for the programming period 2000-2006. Both regional operation programmes were amended to account for increased funding under the EAGGF part-financed Farm Waste Management Scheme. Drawdown under the Agriculture & Rural Development priority for both programmes has increased significantly as a result.

EAGGF Guidance will not contribute to the two-year extension of the PEACE II operational programme, jointly managed with Northern Ireland. Therefore the EUR 12.6 million EU contribution to the programme was not increased. To the end of 2006, total expenditure for the PEACE II programme was EUR 38 million, 86% of the envelope of EUR 44 million for the years 2000-2004.

Community Initiatives

Equal

The Irish EQUAL programme proceeded without any major difficulties in 2006. There are 43 Development Partnerships funded under the EQUAL Community Initiative in Ireland, of which 21 DPs are Round 1 and 22 DPs are Round 2. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 66.4% of the total. Automatic decommitment under the n+2 rule was avoided for 2006.

The Monitoring Committee decided to reduce the Entrepreneurship and Adaptability pillars by EUR 300 000 respectively and to increase the Employability and Equal Opportunities pillars by EUR 300 000 respectively.

Among mainstreaming activities on national developments, the most significant development was the thematic network on Accommodating Equality and Diversity in the Workplace. The network has secured additional funding from the MA, and has issued a tender for a consultant to assist in gathering appropriate content for the publication, envisaged in June 2007. Ireland has taken a lead in the platform Community of Practice (CoP) for Quality Programme Management and Support, which seeks to develop a CoP that will describe, collate and analyse experience and good practice regarding the programme management and support functions that have been developed under EQUAL.

Leader

The EU contribution for 2000-2006 amounts to EUR 48.745 million. At the end of 2006, expenditure amounted to EUR 26.4 million, 54.2% of the initial programme budget. The mid-term evaluation of Leader+ was received by the Commission in November 2005 and reported that there have been significant advances in progress since phase 1 of the programming period. The n+2 target was reached in 2006.

Urban

The Dublin-Ballyfermot URBAN II programme is the only URBAN II Programme in Ireland. It was approved in December 2001, and modified in 2004 as a result of indexation. The ERDF will contribute a total of EUR 5.38 million to this programme, whose total cost amounts to EUR 11.58 million. In 2006 there was a modification of the Programme Complement with no changes to the financial tables. The Monitoring Committee met twice during 2006. The n+2 criterion for 2006 was met with ease.

According to the information provided by the Audit Unit, the appropriate management and control systems have to be developed so as to give satisfactory assurance on the legality and regularity of the programme operations. Especially Article 4 on-the-spot checks and the reporting of irregularities have to be improved.

Overall comments concerning the 2000-2006 period

The Ballyfermot URBAN II programme has been very successful both in its achievements and management. There were no problems with meeting the programme outputs and yearly n+2 targets. The success and legacy of the URBAN II programme was a good basis for the planning of the next Structural Funding period in Ireland where integrated urban development will be of considerable importance in the future Operational Programmes.

Closure of the 1994-99 programming period

The RAL is zero for ERDF 1994-99 and there are no outstanding closures.

At the end of 2006, the ESF 1994–99 was closed and the RAL was at zero. With regard to the EAGGF, one programme was closed in 2006 and two remained open at the end of the year.

LATVIA(

Preparations for the 2007-2013 programming period

In 2006, there were extensive preparations and discussions with the Latvian authorities for the next programming period before any official submission to the Commission. In October 2006 the NSRF and three operational programmes, namely one for Human Resources and Employment (ESF), another for Innovation and Entrepreneurship (ERDF) and the third for Infrastructure and Services (ERDF/CF), were officially submitted by the Latvian authorities.

The ESF OP contained five priorities: Improving Quality of Education and Development of Science, Promotion of Employment and Public Health Measures, Promotion of Social Inclusion, Administrative Capacity Building, and lastly Technical Assistance. The first reactions from the Commission on both the NSRF and the three OPs were transmitted in December.

As regards the European Fisheries Fund, Latvia continued its preparations for the programming period 2007-2013. The first draft NSP for fisheries was received in August 2006 and the Commission sent Latvia its initial comments in October 2006. During the course of 2006 no submission of the operational programme for fisheries took place.

Objective 1

Latvia, which comprises a single NUTS II region, has a single programming document (SPD) under Objective 1 with a financial allocation of EUR 626 million (current prices) and five priorities. National public financing is approximately EUR 220 million. The programme was modified on 29 December 2006 to transfer EUR 6.9 million from the third priority, Human Resources to the first priority, which is part-financed by ERDF and covers territorial cohesion. The move was required for reasons of sound financial management.

The principal objectives of the programme are:

- the creation of 10 000 new jobs;

- a 10% increase in the number of companies per 1 000 inhabitants;

- a 7% increase in disposable income per household in rural areas.

The SPD monitoring committee has met twice, adapting the programme complement, defining selection criteria, modifying the programme and approving the annual report. Commitment levels are very high (96% for ERDF, 96.9% for ESF, 87% for FIFG), but payments are delayed. Payments in 2006 for the EDRF amounted to EUR 32 million, for the ESF EUR 3.9 million, and for the FIFG EUR 3.5 million.

In terms of financial performance, by the end of 2006 FIFG 2004 commitment has been absorbed completely and 2005 commitment absorbed by 88%. Therefore, there is no risk for FIFG programme with regard to the N+2 targets.

The measures under EAGGF have progressed well. No risk for N+2 related reimbursements exists. Financial execution is 74 % of the fund.

The Annual Review Meeting between the Commission and the Latvian Authorities held on 8 November, 2006 provided the opportunity to discuss the implementation and management of the Latvian Objective 1 programme and the preparations for the programming period 2007-2013.

The measures under the EAGGF have progressed well. No risk of n+2-related reimbursements exists. Financial execution is 74% of the fund.

Programme implementation was in line with the relevant strategies, placing the emphasis on infrastructure renovation and modernisation of the economy for the ERDF, and on active labour market measures, social inclusion and education and training for the ESF. Programme implementation is on track, but slower than expected, for the ERDF and ESF, and the measures that had a slow start caught up during 2006. Within the currently favourable economic environment in Latvia the objectives seem to have been reached. Inflation and labour shortages cause concern. The participation of non-metropolitan projects is to be encouraged.

The main focus of the FIFG programme continues to be on scrapping of fishing vessels, investments in fish processing and aquaculture sectors, and fishing port infrastructure.

Community Initiatives

Equal

The Latvian EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 35% of the total and 148% of the commitment for 2004. Automatic decommitment under the n+2 rule was thus avoided for 2006.

The Monitoring Committee approved one modification of the financial table of the programme, representing a shift in the balance between priorities (transfer from the theme of employability to the theme of equal opportunities).

A mainstreaming strategy for EQUAL was adopted. This includes setting up a network with high-level representatives. Provision for continuing the approach of EQUAL was made in the draft ESF operational programme for 2007-2013.

Leader

A Leader+-type measure has been included in the Objective 1 programme under Priority 4: “Promotion of Development of Rural areas and Fisheries”. The start of Leader+-type measures was delayed owing to administrative and legal difficulties. The Monitoring Committee finally approved the modifications on 9 November and Leader+-type measures could then be implemented. In August 2006 the selection procedure for Local Action Groups’ development strategies was announced. 19 proposals for development strategies were submitted and assessed by the Selection Committee within the Latvian Ministry of Agriculture. In December 2006, 17 Local Action Groups were selected.

LITHUANIA(

Preparations for the 2007-2013 programming period

As regards the programming period 2007-2013, the Commission met with the Lithuanian authorities on 6 April and 13 July 2006 to discuss the preparation of the Lithuanian National Strategic Reference Framework. Emphasis was also placed on the synergies between the NSRF and the Lithuanian National Reform Programme.

Objective 1

The Lithuanian Objective 1 Programme (Single Programming Document for Lithuania 2004-2006) covers the whole of Lithuania as a single NUTS II region. The programme was adopted by Commission Decision C(2004) 2120 of 18 June 2004 and is part-financed by the ERDF (EUR 583.9 million), the ESF (EUR 176.2 million), the EAGGF (EUR 122.9 million), and the FIFG (EUR 12.1 million). The national counterpart consists of EUR 309.5 million of public funding and EUR 2.3 million of private financing. Thus, the Structural Funds provide EUR 895 million out of a total budget of EUR 1 207 million. The managing authority of the programme is the Lithuanian Ministry of Finance.

The programme consists of five priorities: Socio-economic infrastructure (EUR 347.1 million, ERDF), Human resources development (EUR 163.8 million, ESF), Productive sector and services (EUR 222.4 million, ERDF), Rural and fisheries development (EUR 122.9 million, EAGGF and EUR 12.1 million, FIFG), and Technical Assistance (EUR 14.5 million, ERDF and EUR 12.4 million, ESF).

In 2006, the Commission adopted two decisions amending the programme.

Programme Monitoring Committee

Two programme monitoring committee meetings were held in 2006. The progress in programme implementation, the territorial balance of Structural Funds assistance, changes to the Single Programming Document and the programme complement as well as information and publicity measures were among the items discussed.

Annual implementation report and annual review

The annual implementation report for 2005 was duly submitted by Lithuania and accepted by the Commission. An annual review meeting was held on 13 October 2006. The main discussion items were the contents of the annual implementation report for 2005, implementation and management of the programme (including cooperation between the Commission and Lithuania, progress in implementation and the n+2 situation, and the results in relation to the strategic objectives set for the programme), as well as preparations for the programming period 2007-2013.

Information and publicity

A publicity strategy for the entire programming period has been adopted by the Lithuanian authorities, and annual priorities are set each year. The information and publicity activities have shifted towards a more targeted approach, including measures such as selection and presentation of best practice projects. A national information event on Structural Funds assistance was held on 17 May 2006. The managing authority has also taken a welcome initiative by launching a public internet portal providing up-to-date information on the implementation of the Structural Funds in Lithuania.

ERDF and ESF payments progress and programme results

By the end of 2006, 38.6% of the total ERDF allocation decided and 26% of the total ESF allocation, including the advance, had been paid out from the Commission to the Member State.

By the end of 2006, more than 950 operations had been granted assistance from the ERDF and more than 700 for the ESF. As to the results achieved throughout the programming period, it is as yet difficult to assess the actual impact of the assistance and attainment of the general objectives of the programme since the programme started only in 2004. Nevertheless, in the context of the programme monitoring committee and the annual reviews, efforts are being made to monitor and ensure the quality of the assisted operations and their contribution to the achievement of the programme’s overall objectives.

The absorption rate of the total EAGGF allocations by the end of 2006 reached 45.2%.

Fisheries

The Objective 1 SPD includes three FIFG measures with a total EUR 12.2m allocation. FIFG implementation in general progressed well during 2006, in particular for the fleet withdrawal measures and related socio-economic compensations, with less success in the investment-type measures. By the end of the year 43% of total FIFG allocations was paid, while 58% was committed. There were no n+2 problems in 2006.

Community Initiatives

Equal

The Lithuanian EQUAL programme proceeded without any major difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 28% of the total and 119% of the commitment for 2004. Automatic decommitment under the n+2 rule was thus avoided for 2006.

The Monitoring Committee for the programme approved one modification of the financial table, representing a shift in the balance between priorities. The change will result in a transfer from the theme of employability to the theme of technical assistance in order to improve the mainstreaming of the results. This is in line with a mainstreaming strategy adopted during 2006.

Leader

The Leader+-type measure is mainstreamed in the Objective 1 programme under Priority 4: Rural and Fisheries development.

LUXEMBOURG(

Preparations for the 2007-2013 programming period

A bilateral meeting was organised on the preparation of the Community Strategic Guidelines with Luxembourg. The coherence with the process of re-launching the Lisbon strategy was also an important topic in 2006. The NRP presented by Luxembourg in November 2005 was updated in order to examine the level of implementation of the planned activities.

A first draft of the Luxembourg NSRF was sent to the Commission in October 2006 and a meeting between the Commission and representatives of the Ministries involved took place in November 2006. Luxembourg will propose two Operational programmes for the 2007-2013 period, both in the framework of the “Competitiveness” Objective: one supported by the ESF, the other supported by the ERDF.

Objective 2

2006 was devoted to finalising the allocation of funds because it was the last year during which substantial modifications could be made.

Overall, 100% of the budgetary resources of the programme was allocated through grant agreements.

The programme monitoring committee met twice in 2006, at the initiative of the Ministry of Economic Affairs and Transport, the managing authority of the programme. The Commission took an active part in the work of this committee.

At the June meeting of the monitoring committee, the annual report was adopted. In December, the decision was modified to ensure total allocation of funds.

Regarding payments, the intermediate payment requests which were submitted to the Commission in 2006 for an ERDF amount of EUR 7 187 295.61 enabled the financial situation to progress regularly and to comply with the n+2 rule for the programme’s annual commitment for 2004.

The other major activity concerning the improvement of ERDF assistance was oriented towards the theme “growth and employment” in order to prepare the 2007-2013 period.

Objective 3

There was no change in the content of the Objective 3 programme in 2006. A new call for expressions of interest was sent out in May, thanks to which around 50 projects will be created or continued in 2007 and 2008.

The annual report for 2005 was adopted by the Steering Committee at its June 2006 meeting and approved by the Commission in August.

Four requests for payment were presented to the Commission in 2006 for a total amount of EUR 2 066 645.24.

However, at the end of 2006, the budget of the Objective 3 programme had to be reduced, according to the n+2 rule: EUR 3.3 million will have to be decommitted. The same situation is likely to arise in 2007.

Community Initiatives

Equal

The Luxembourg EQUAL programme is fairly small-scale and there are only three projects. The programme functions well, but often as a complement to the Objective 3 programme. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 62% of the total. The programme was, however, unable to avoid automatic decommitment as at the end of 2006, which represented an amount of EUR 124 000.

Integration of the results of projects into national policies is sought, especially through the active cooperation of the representatives of the government departments in matters tackled by means of the development partnerships part-financed under the EQUAL programme. Dissemination of results to the general public is guaranteed by regular publications on the Internet site managed by the managing authority of the programme.

Leader

The programme involves total public expenditure of EUR 8.42 million including EUR 2.14 million for the EAGGF contribution. In Luxembourg, 4 LAGs were selected, covering 90 000 inhabitants, and a fifth one is financed by national funds.

At the end of 2006, after six years of implementation, the total financial execution is 41.8% in relation to the total amount of EAGGF-Guidance expenditure scheduled for the period 2000-2006, that is EUR 0.89 million out of a total of EUR 2.1 million.

The National Leader network unit became fully operational in 2004. The implementation of the programme is currently satisfactory for all stakeholders.

Hungary (

Preparations for the 2007-2013 programming period

The Commission met the Hungarian authorities several times to discuss the Hungarian NSRF and the 15 Operational Programmes for the 2007-2013 period funded by the ESF, ERDF and the Cohesion Fund. Both the NSRF and the Operational Programmes were formally submitted to the Commission before the end of the year.

Objective 1

The Hungarian Community Support Framework 2004-2006 consists of five Operational Programmes covering the whole country, since all seven Hungarian NUTS II level regions correspond to Objective 1 in the 2004-2006 period. The Structural Funds’ contribution to the CSF is EUR 1.995 billion in current prices. Assistance from the Structural Funds breaks down as follows: ERDF 62.1%; ESF 22%; EAGGF Guidance Section 15.68%; FIFG 0.22%.

The 2004-2006 Hungarian Community Support Framework achieved good results. The overall payment rate was 51.26% of the total public funding (including 16% of advance payments). All the programmes accomplished their decommitment targets. This was possible to a large extent thanks to the steps taken by the Hungarian authorities to simplify procedures, by reducing the number of documents to be submitted by applicants, contracting procedures and the payment process.

The managing authorities in charge of different operational programmes under the guidance of the CSF managing authority closely monitor compliance of programmes with the n+2 rule.

Monitoring Committee meetings were held for each OP and for the CSF. The Annual Review Meeting was postponed to the beginning of 2007 owing to the workload linked to the preparation of the new programming period.

Economic Competitiveness Operational Programme

The ECOP payment rate was 54.5% of the total public cost by end-2006. The most successful priority in terms of payments to final beneficiaries was Investment Promotion, and in terms of contracting the Research & Development/Innovation priority. The least successful in terms of absorption was the Information Society priority, because of the quality of the calls for proposals concerned and the relative underdevelopment of this sector in Hungary.

Human Resources Development Operational Programme

The overall contracting rate reached 94% by end-2006. Nearly 30% of the Structural Funds allocation was paid by the Commission. In terms of payments, the best performing is the “Supporting active labour market policies” priority. At the same time, the financial implementation of a few measures (i.e. “Training promoting job-creation and the development of entrepreneurial skills”, “Developing the system of adult training”, “Promoting social inclusion through the training of professionals working in the social fields” and “IT development in health care in the regions lagging behind”) has progressed modestly so far.

Environmental Protection and Infrastructure Operational Programme

The Operational Programme for Environment and Infrastructure progressed well in 2006. The overall contracting rate exceeded 100% and the overall level of payments reached 49%. Although the best performing measure is linked to road construction, progress in the various environment measures was significant, and also the public transport measures finally started to be implemented.

Operational Programme for Regional Development

The contracting rate reached 106.13%. The public expenditure approved by the managing authority was 33.97% and the payments made by the Commission were 19.89% (without advanced payments). The measure linked to the development of tourism accommodation capacities in the regions continues to perform below expectations.

Operational Programme for Agriculture and Rural Development

The contracting and payment rate showed remarkable progress in 2006, more marked for Priority 1, Establishment of competitive basic material production in agriculture, and relatively less for Priority 3, Development of rural areas. As of 31.12.2006, total payments made under EAGGF Guidance part-financed measures (including advances) amounted to EUR 220 million, or 70% of the total Fund allocation for the period 2004-2006. The target for the n+2 rule to be met by 31.12.2007 has already been reached for the EAGGF.

On 30.5.2006 the Commission approved, through decision No C(2006)2204, an adjustment to the OP. It concerned the implementation structure for the Leader+-type measure, further to the reorganisation of the Ministry of Agriculture.

The Annual Review Meeting with the managing authority was held on 17.11.2006 in Brussels. The main issues discussed were the implementation of the FIFG part-financed measure and of the measures under Priority 3, Development of rural areas, and the use of technical assistance, including information and publicity activities.

Fisheries

The total FIFG allocation to the measure “Fisheries” within the Agriculture and Rural Development Operational Programme for Hungary (2004-2006) is EUR 4 389 862. Up to the end of 2006 payments amounting to EUR 1 421 882.99 altogether had been certified.

The bulk (70%) of the programme cover was earmarked for aquaculture.

Community Initiatives

Equal

The Hungarian EQUAL programme has priorities centred on the themes of employability, equal opportunities between women and men, and asylum seekers. Some delays in implementing the EQUAL programme occurred in 2006 owing to several staff changes and overlapping of the preparation and implementation phases. However, these delays were kept under control and there was no n+2 problem.

The ESF contribution amounts to EUR 30 292 135 and at the end of 2006 the commitment of expenditure for Hungary amounts to EUR 11 796 557. The programme is consuming beyond the 2006 target.

Hungary’s mainstreaming policy was late in getting started as a result of its restructuring; however, at the end of 2006 the authorities began the mainstreaming of EQUAL results.

Owing to the delay in procurement procedures, the evaluation report for 2006 has not yet been produced.

Leader

Under Article 33f of Council Regulation (EC) No 1257/1999 on support for rural development, as amended by the Act of Accession, Leader-type activities may be supported through the Leader+-type measure incorporated into the rural development programming documents of the new Member States. Hungary has chosen to implement the Leader+-type measure and included it in the Agriculture and Rural Development Operational Programme under Priority 3, Development of rural areas.

Malta (

Preparations for the 2007-2013 programming period

The NSRF for Malta was the first one successfully adopted by the Commission in 2006.

Informal negotiation of the two OP s (OP1 – ERDF and CF, OP2 – ESF) went on during the year, leading to a detailed definition of the contents of the two operations.

The National Strategic Plan for fisheries (first draft available at the end of 2005) was the subject of a number of consultations at national level and also revised to include informal comments and suggestions made by DG FISH. A mature and revised draft was then transmitted to DG FISH in December 2006.

Objective 1

Financial execution and procedures for SPD implementation

Malta’s Objective 1 SPD, adopted by the Commission in June 2004, entered its third year of implementation with good results:

- 100% commitment following a detailed identification of each project included in the SPD;

- N+2 thresholds easily passed within May for all funds except the FIFG - reached in September.

The overall financial execution as of 31.12.2006 is as follows: commitments 100%; payments 39.7%.

A minor technical modification to the Programme Complement was made during 2006 in order to optimise the allocation of savings from projects already started. The second Annual Report was also received and included all the elements required by Regulation 1260/1999.

Regarding the fisheries measure (No 3.3), 2006 may be considered as the first real year of implementation. The latest available data shows that at the end of 2006, commitments had reached 100%, while actual payments made to ultimate beneficiaries represented 30.5% of the total eligible cost.

Main outcomes and subjects covered in monitoring committee meetings

Though not obliged to undertake a mid-term evaluation for the 2004-2006 period, Malta nonetheless committed itself to do so and presented the main results of this exercise in January 2006. The main effects of the SF implementation identified are:

- Institutional capacity-building;

- Stakeholder involvement;

- Enhancing public investments (additionality).

Moreover, the ex ante evaluation carried out during 2006 for the NSRF 2007-2013 period highlighted the following progress in 2004-2006 implementation:

- (Partial) achievement of objectives on training, life-long learning and improving the employability of the unemployed (ESF);

- Aid schemes implemented by Malta Enterprise and the Malta Tourism Authority aimed at supporting enterprises (ERDF) and schemes implemented by the Ministry for Rural Affairs and Environment (EAGGF/FIFG);

- Continuing implementation of Malta’s waste management strategy in the areas of infrastructure, training, creation of public awareness, and reduction of emissions from disused landfills (ERDF, CF and ESF);

- Ongoing developments with regard to infrastructure projects in the transport, tourism and environmental sectors, as well as in the creation and upgrading of the physical business infrastructure (ERDF, CF and FIFG);

- Addressing Gozo’s special needs in the areas of transport, tourism, and vocational training (ERDF, CF and ESF).

The Monitoring Committee met four times in 2006, twice for information purposes, and twice (May and October) as a decision-making MC involving the Commission desks. The main subjects treated were:

- Implementation update;

- Ongoing evaluation 2000-2006;

- Approval of and changes to the Programme Complement;

- 2007-2013 preparation: Ex Ante Evaluation and Strategic Environmental Assessment, draft texts, IT tool for monitoring and computerised data exchange with the Commission (recommendation from evaluation process);

- Thematic evaluations.

Community Initiatives

Equal

The Maltese EQUAL programme proceeded without any major difficulties in 2006. Malta’s first n+2 was reached in October 2006 without using the advance in time, so there was no automatic decommitment.

During 2006, there were no significant changes of relevance to implementation and the Monitoring Committee did not need to approve any modifications.

All EQUAL projects registered significant progress and are all on schedule. Each project continued with the planned training courses and schemes, the disbursement of funds continued to pick up momentum, and by the end of December all projects were on track.

In November 2006, Northern Ireland, together with Malta, Latvia and other Member States, applied to the Commission for a grant to be able to organise an Exchange Event in June 2007 and a Policy Forum in December 2007 entitled “EQUALising the Workplace – Diversity in Action”. The Commission accepted the application and signed the grant in December 2006.

Malta, together with Austria, Portugal and the Czech Republic, is also a partner in an activity that will be carried out in October 2007. The Lead Partner in this event is Belgium and the event is entitled “Partnership Community of Practice – Exchange Event”. This activity will be carried out thanks to the grant that was applied for by Belgium and approved by the Commission. The organisation of this event started in 2006.

In 2006 Malta joined the Czech Republic, Latvia, Hungary, Spain and Poland in a Steering Committee towards the submission and setting-up of a Mainstreaming Platform titled EQUAL e-CIP. This Platform encourages the dissemination and exchange of evaluation best practices and working methods.

NETHERLANDS(

Preparations for the 2007-2013 programming period

In a series of meetings, the Commission discussed with the relevant authorities the successive drafts for the NSRF, the four regional ERDF Operational Programmes (North, West, South, and East) and the ESF national Operational Programme. Near-final drafts were ready in the summer, after completion of the national approval processes; their formal submission took place in December with the exception of the ESF Operational Programme (which was submitted in January 2007).

Objective 1

The Flevoland province receives phasing-out support under Objective 1 amounting to EUR 131.9m (of which ERDF: 81.7m, ESF: 33.6m, EAGGF: 10.4m and FIFG: 6.3m). Programme implementation continued relatively smoothly; by-end 2006, some EUR 68 million or 83% of the ERDF allocation had been effectively spent and certified.

Global execution for EAGGF Guidance at the end of 2006 amounted to EUR 7 173 312, i.e. 68.3% of the EAGGF appropriations.

Objective 2

Implementation of the four Objective 2 programmes continued without major problems; financial execution was quite satisfactory, with decommitment targets at end-2006 exceeded by a wider margin than in earlier years. The available funds have essentially been committed. For all four programmes, the managing authorities used the last possibility to decide on final minor adjustments to the financing plans.

Coordination within the Netherlands and cooperation between central and regional authorities improved further. The Annual Review Meeting (covering Objectives 1 and 2) was held on 27 October in Enschede. The major issue concerned the follow-up to the audits by the Commission under the national action plan.

After her visit to East Netherlands at the end of 2005, Commissioner Hübner visited two more regions, the West (June) and the North (December).

Objective 3

The total ESF funding available for the SPD is EUR 1.5 billion.

In 2006 the managing authority continued its analysis of project applications received in 2005. This avalanche of applications prompted the decision to be taken on 28 October 2005 to no longer accept project applications as the complete ESF 3 budget for the 2000-2006 period had been committed.

In December 2006, the Commission received a further request to shift amounts between priorities. Approximately 69% of the budget is being used for projects in the priority "Adaptability of workers", 15% for the priority “Reintegration” and 13% for projects under the priority “Life-long learning”.

Payment applications received up to 31 December 2006 exceed the available budget of the 2004 tranche and no decommitment is therefore envisaged.

The Monitoring Committee met twice and the annual Implementation Report was received on time.

Fisheries outside Objective 1

The total FIFG allocation to the fisheries programme is EUR 33 500 million. The most important measures, in line with the common fisheries policy, are scrapping of vessels, processing and marketing, collective investments and innovative measures.

Implementation has been good on the whole and the programme has met its n+2 target for 2006.

Community Initiatives

Urban

Three URBAN II programmes are being implemented in the Netherlands between 2000 and 2006 in the cities of Amsterdam, Rotterdam and Heerlen.

Annual reports for 2005 have been received and accepted, giving accounts of satisfactory implementation for all three programmes. This development was confirmed by the fact that all three programmes managed to reach the n+2 target for 2004 at the end of 2006.

In the case of all three URBAN II programmes, the city itself is the Management as well as Payment Authority. The Ministry of the Interior provides informal coordination of information.

Overall comments concerning the 2000-2006 period

The programmes are running very well and their impact can be seen in terms of improved security, economic development and jobs for young people with low qualifications. In general the projects forming part of these programmes were assessed as being innovative. The management and implementation structure allowed for swift implementation of projects.

Equal

The EQUAL programme in the Netherlands proceeded without any major difficulties in 2006, except in financial terms, because the programme could not avoid automatic decommitment at the end of 2006, which represented an amount of almost EUR 19m.

Five national thematic networks were active in 2006: Integration and Labour Market, Learning and Working, Activation, Equal Opportunities, and Entrepreneurship. Recognised thematic experts chaired these networks. During 2006, the activities of the national networks focused on getting the projects to know each other and acquiring expertise on the EQUAL themes. In this way, they gained knowledge about what can be classed as “promising” cases.

Some European mainstreaming events were also organised by the Netherlands, such as the EQUAL Exchange event on Business Creation, in Amsterdam (March 2006).

Leader

Four Leader+ programmes are implemented in the Netherlands for the period 2000-2006. These four programmes are funded by EAGGF Guidance for a total of EUR 83.7 million. There were no amendments in the programmes during 2006; amendments to two programme complements were submitted (Leader+ East and Leader+ South). Implementation of all programmes is satisfactory.

At the end of 2006, total financial execution came to EUR 48 565 112, i.e. 58% of total EAGGF expenditure earmarked for the period 2000-2006.

Closure of the 1994-99 programming period

During 2006, four more programmes from the 1994-99 period were closed, of which two through an Article 24 procedure as no agreement could be reached on the final balance. Only one programme has not been closed yet; the unsettled commitment involved is very small.

As regards the ESF, three programmes from the 1994-99 period have not yet been closed owing to ongoing judicial procedures.

For the EAGGF the open programmes were closed during 2006.

AUSTRIA(

AUSTRIA RECEIVED A TOTAL STRUCTURAL FUND CONTRIBUTION OF EUR 1 782 million between 2000 and 2006 from the ERDF, the ESF, the EAGGF and the FIFG.

Preparations for the 2007-2013 programming period

The programming period 2007-2013 entailed a series of bilateral contacts with the Austrian Objective 1 (Burgenland) and Objective 2 authorities in 2006. The OP Objective convergence Burgenland was officially submitted on 30 October 2006, and the National Strategic Reference Framework (NSRF) on 31 October 2006.

Objective 1

In 2006, commitments of ERDF appropriations for the Objective 1 programme for Burgenland amounted to EUR 27.6m and the payments made in 2006 by the Commission to the region amount to EUR 14.5m. In the period 2000–2006 a total of EUR 181.5m was committed to the Burgenland Objective 1 programme, whereas EUR 129.8m was paid to Burgenland by the Commission.

Regarding the ESF, the Commission committed EUR 8.7m to Burgenland, with payments amounting to EUR 6.1m in 2006. In the period 2000–2006 a total of EUR 57.4m was committed and EUR 44.8m was paid by the Commission.

In relation to the EAGGF, EUR 6.7m was committed to Burgenland and EUR 4.9m was paid to Burgenland. For the total programming period 2000–2006, EUR 43.7m was committed and EUR 36.3m was paid to Burgenland.

Following the mid-term evaluation, the monitoring committee meeting was held in June 2006, where the changes to be made to the programme were discussed. The 2005 annual implementation reports for both ERDF and ESF programmes were formally submitted to the Commission in June 2006 and approved in September 2006.

In the period 2000–2006, 71.5% of the planned expenditure for the entire period was spent. In 2006, 8% of the planned expenditure for the whole period was spent.

In 2006, commitments of EAGGF funds for the Objective 1 programme for Burgenland amounted to EUR 15.107 million. The payments made in 2006 by the Commission to the region totalled EUR 4.93 million.

In 2006 0% of the committed amount for the year 2006 was spent and the cumulative EAGGF contribution during 2000-2006 reached 65.83% of the programme commitment at the end of 2006.

For the FIFG, for Burgenland as an Objective 1 region no payments could be made in 2006, as the remaining programme cover had been transferred to other Funds respectively decommitted after 31 December 2004.

Objective 2

As regards ERDF appropriations, the Commission committed EUR 91.6m and paid a total of EUR 99.4m to eight Objective 2 programmes in 2006. During the total programming period 2000–2006 an amount of EUR 706 million was committed and EUR 507.3 million was paid out.

Total commitments for the three ESF programmes amounted to EUR 3.9m, while payments reached EUR 2.6m in 2006. Regarding the total programming period, an amount of EUR 27.5m was committed and EUR 20.7m was paid.

In 2006, three Single Programming Documents were modified. Five programme complements were also notified in the same period.

The monitoring committee meetings were held in June in Upper Austria (Geinberg), dealing with all programmes together – Objective 1 programme for Burgenland and all eight Objective 2 programmes. This allowed a fruitful joint discussion of the state of play of these operational programmes. Furthermore, the development of the Austrian NSRF (STRAT.AT) was discussed to assure a smooth launch of the new programming period.

In November 2006, a best-practice seminar was held in Graz; Commissioner Hübner participated in this event. The annual meeting was organised during the same week in Graz. At this occasion the state of play of all Structural Funds programmes was presented. Consequently, the official version of the NSRF was discussed and comments were given to the Austrian authorities.

Regarding the n+2 rule, it has to be mentioned that for the SPD 2 Vienna an amount of about EUR 1.1m has to be decommitted. As far as the ESF is concerned, an initial risk of n+2 loss by Carinthia was avoided.

Fisheries outside Objective 1

Within the Fisheries Operational Programme for Austria outside Objective 1, two priorities are being part-financed, “Aquatic resources, aquaculture, fishing ports, processing and marketing, inland fisheries” and “Other measures”. Their respective shares of the programme cover are EUR 4 489 000 and EUR 11 000.

Objective 3

Total commitments for the ESF programme amounted to EUR 86.64 million, while payments reached EUR 81.22 million in 2006. Regarding the total programming period, an amount of EUR 571.97 million was committed and EUR 531.37 million was paid.

A series of ESF-related meetings and conferences were held in 2006. They referred both to the current and the new period (2007-2013). In Vienna in April one meeting was held on the future ESF with the Federal Ministry of Economic Affairs and Labour and another one with experts from social partners on life-long learning. An ESF Conference in Vienna (“ESF Enquête”) in December, organised by the Federal Ministry of Economic Affairs and Labour, reviewed the current programming period 2000-2006 and presented prospects for the forthcoming period 2007-2013 as far as the ESF in Austria is concerned. To this end, presentations from the Federal Ministry of Economic Affairs and Labour and the European Commission (DG EMPL), a panel discussion with representatives from ministries, the Labour Market Service (AMS) and the two sides of industry and a round of discussions with practitioners from implementing structures and support recipients were offered.

As in previous years, implementation went ahead smoothly and without any problems.

Community Initiatives

Urban

There are two URBAN II programmes for Austria. The Vienna programme receives EUR 4.2 million and the Graz programme EUR 4.3 million from the ERDF. The total budget for Vienna is EUR 13.9 million and for Graz EUR 20.7 million. For both programmes annual reports have been received each year, found satisfactory and adopted.

The managing authority for both programmes is the city. The programmes coordinate their Monitoring Committees and are each represented in the other one. They meet each year in the autumn.

Both programmes have consistently met the n+2 rule.

Overall comments concerning the 2000-2006 period

The programmes have contributed to the economic regeneration of inner-city areas where in an integrated approach old industrial sites have been provided with new infrastructures, facilities and access links creating the pre-conditions for a new cycle of post-industrial economic activity, particularly in the area of technological innovation.

Equal

The Austrian programme proceeded without difficulties in 2006. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented approx. 70% of the total. Automatic decommitment under the n+2 rule was avoided for 2006.

The managing authority did not hold any Monitoring Committee meeting. Austria has in any case decided to run down the programme one year earlier than the other Member States.

No modification was made to the programme.

Leader

The Leader+ programme for Austria was approved by Decision C(2001) 820 of 26 March 2001 and amended by Decision C(2006) 4830 of 6 December 2006. During the period 2001-2006, the total expenditure under the programme is EUR 164.30 million. This includes an EU contribution of EUR 76.80 million and a contribution of EUR 59 million from the private sector (these figures already include the indexation amounts).

The Austrian Leader+ programme covers eight regions of Austria with the exception of the urban area of Vienna.

The EAGGF amount paid for the Leader+ programme summed up to EUR 19.546 million in 2006 and rose to EUR 50.581 million in total, which corresponds to 65.83% of the amount for the period 2000-2006. 79.41% of the EAGGF funds for 2005 and 100% of the funds for 2006 have not yet been used.

Closure of the 1994-99 programming period

Concerning the ERDF contribution to the Austrian 1995–99 programmes, all the Objective 2, Objective 5b and Community initiatives (except one INTERREG programme) were closed before 2006. For the INTERREG programme the final decision procedure based on Article 24 is still ongoing.

All ESF programmes are closed.

POLAND(

Preparations for the 2007–2013 programming period

Poland continued its extensive preparations for the 2007-2013 programming period in 2006 with two versions of the NSRF adopted by the government in February and August 2006. The final version was adopted on 29 November and submitted to the Commission on 7 December 2006. The first OPs were also submitted before the end of 2006: the Innovative Economy OP, the Human Capital OP, the Technical Assistance OP and the Infrastructure & Environment OP.

The Commission was actively involved in preparations for the next programming period: a series of meetings was held with the Polish authorities (e.g. macroeconomic meeting on 16 February 2006, general meetings on 17 February and 13 June, and thematic meetings on administrative preparations on 29 September, 18 October and 6 December 2006). Two informal Commission position papers were drafted and sent to the Polish authorities on 16 May and 30 October 2006. One of the issues that attracted the Commission’s attention was a new legal set-up for the next period: the Development Policy Law was considered non-compliant with Council Regulation No 1083/2006; the Commission therefore requested that it be revised accordingly. The issue will be followed closely in 2007.

A first draft National Strategic Plan for the fisheries sector was submitted by the end of 2005. Following the adoption of the EFF Regulation an amended version was submitted in April 2007, along with a draft Operational Programme. The NSP will be the subject of a formal dialogue meeting in May 2007.

Objective 1

2006 was the first year in which the n+2 rule applied to Poland. Thanks to the concerted efforts of the Commission and the Polish authorities all mainstream programmes avoided any decommitments of funds; however, the Transport OP is a major concern. The Integrated Regional OP was the most advanced in terms of financial execution of the ERDF. Further efforts need to be made to improve the efficiency of payment flows for the ESF under this programme.

Taking all the Operational Programmes together, a total of EUR 2.150 billion was committed (2000-2006: EUR 4.972 billion) and EUR 974 million was paid out (2000-2006: EUR 1.893 billion) from the ERDF. Under the two Operational Programmes co-funded by the ESF, EUR 825.5 million was committed (2000-2006: EUR 1.908 billion) and EUR 286.4 million (2000-2006: EUR 641.4 million) was paid out from the ESF (including advances). For the EAGGF, total payments in 2006 came to EUR 292.4 million (including advances) (2000-2006: EUR 548.7 million). Total payments for all Structural Funds up to the end of 2006 came to EUR 3.175 billion (including advances).

The total FIFG allocation to the fisheries programme is EUR 201.8 million, of which 64% has already been committed and 37% has been paid to final beneficiaries. Consequently, in terms of financial performance, there was no need to apply the n+2 rule in 2006.

The most important measures, in line with the common fisheries policy, are the scrapping of fishing vessels, processing, marketing and aquaculture. In 2006, there were four meetings of the Monitoring Committee, which decided on two amendments to the financial plan for the programme. The aim of the reallocations was to better utilise Community assistance.

The Polish authorities use a developed version of the HERMIN model to assess the impact of cohesion policy on the Polish economy and it is estimated that in 2006 structural funds will help generate 2.8% of GDP, and the number of jobs created will be a quarter of million. That shows that the massive inflow of EU funding (accounting in 2005 for 21% of total public investment) will bring visible results for the Polish economy, even if supply side effects are not yet fully taken into account.

Throughout 2006 the Polish authorities implemented a special action plan aiming to simplify the legal environment and procedures for cohesion policy implementation. The National Development Law was amended and rules for financial management improved (handling of advances, co-financing). In addition, in November 2005 the Ministry for Regional Development was created as the main coordinator of cohesion policy issues in Poland. This ministry became the managing authority for all programmes, except for the Restructuring and modernisation of agriculture and rural development SOP and the Fishery and fish processing SOP , while line ministries act as intermediate bodies.

The Commission participated in the CSF and the OP monitoring committees. Items discussed included approval of the quarterly and annual reports and modifications (some financial) to the programme complement of the respective OPs. 2006 was the last year to make changes in the financing plans for the OP and a number of OPs have been amended accordingly to improve their financial execution.

The annual review meeting was held on 6 October 2006 in Poland as a joint meeting for all OPs and Funds. The meeting focused on qualitative assessment of programme implementation so far and on practical measures to improve performance in the near future. The main issues discussed were the impact of roads on economic development, the low score on the R+D expenditure target set by the Polish authorities, and the reduction of inter-regional differences due to investment co-financed by EU funds. The joint meeting allowed scope for better synergies between various funds, e.g. in relation to rural areas. A special session on the closure guidelines was also held to familiarise the managing authorities with the relevant rules.

Community Initiatives

Equal

The EQUAL programme for Poland proceeded without any major difficulties. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 28% of the total. Automatic decommitment related to the n+2 rule was avoided.

The Monitoring Committee for the programme approved amendments to the financial tables for the programme reallocating funds to the priorities Facilitating access and return to the labour market and Supporting the adaptability of firms and employees . Some technical adjustments to the programme were also approved.

Mainstreaming and networking activities during 2006 included meetings of the five National Thematic Networks and preparatory work for three EU-wide mainstreaming events (social economy, ex-offenders and adaptability). Poland is fully involved in EU-wide thematic activities and hosted two events in 2006. On 10-12 May, the Polish Ministry of Regional Development Poland hosted a learning seminar on The social economy – a model for inclusion, entrepreneurship and local development , and on 3-4 October the Polish EQUAL managing authority organised the peer review EQUAL Solutions to Challenges on Adaptability 2006, which provided an opportunity to pool experience and examples of good practice on adaptability.

Leader

A Leader+-type measure is mainstreamed in the EAGGF Objective 1 programme Restructuring and modernisation of agri-food sector and rural development .

Portugal (

For the period 2000-2006, with 5 mainland regions and 2 outermost regions, almost the whole of Portugal was considered eligible for funding under Objective 1, except for one region, Lisbon and Vale do Tejo, which qualifies for transitional support under Objective 1.

The Community Support Framework III (CSF III) is implemented through 20 OPs (19 before the reprogramming exercise in 2004): 7 regional and 13 thematic, multi-regional programmes.

The CSF III for Portugal was implemented satisfactorily in 2000-2006. For the full programming period, total payments made on the ground came to 75% of total commitments made. In absolute terms, this means that out of EUR 20 516 million allocated for the CSF III for 2000-2006, EUR 15 333 million was spent by the Portuguese authorities on the ground.

Preparations for the 2007–2013 programming period

The first draft National Strategic Reference Framework (NSRF) was presented in September 2006 during Commissioner Hübner’s visit to Portugal. The draft NSRF contains three thematic agendas (competitiveness, human resources, and territorial development) to be translated into 14 operational programmes (3 thematic, 9 regional, and 2 technical assistance).

After an inter-service consultation, the Commission’s assessment was conveyed to the Portuguese authorities by means of a joint letter from the Regional Policy DG and the Employment, Social Affairs and Equal Opportunities DG dated 31 October 2006. The joint letter highlights the need for greater concentration and selectivity and better focused policy instruments, the paramount importance of promoting internationalisation, the upgrading of the specialisation pattern of the Portuguese economy, and the need for significant improvements in the human capital domain. In 2006 no NSRF or operational programmes (OPs) were formally submitted.

Objective 1

2006 was a challenging year for operations, with a major reprogramming exercise designed to maximise efforts to absorb the resources allocated for 2000-2006 and to comply with the n+2 rule, plus negotiations for the new programming period.

The 2005 annual reports on (OPs) and on the CSF III were submitted, and accepted by the Commission. Occasionally, the approval of the annual report was accompanied by observations or additional information requested.

The 2006 annual meeting between the Commission and the managing authorities for CSF III interventions, like the 2005 annual meeting, was postponed due to work pressure at the end of the year, in this case to the first quarter of 2007. The main items on the agenda were the arrangements for closure of the 2000-2006 programming period and the follow up to the action plan on public procurement.

It was not considered necessary for most of the OPs to hold a specific annual meeting in 2006. Nonetheless for the Economy OP and the Accessibility and Transport OP, an annual meeting was held on the same date as the annual CSF meeting.

The Monitoring committee meeting for the CSF III was also postponed and held after the annual meeting in the first quarter of 2007. The main points of discussion were the 2005 CSF annual implementation report, the execution of the CSF III up to 31 December 2006, the reprogramming of the CSF III in 2006 and the audit and control of the CSF III.

As usual the Portuguese OPs held the first series of Monitoring Committee meetings in the first half of the year. The second round of Monitoring Committee meetings was considered unnecessary. In many cases the annual reports and the reprogramming exercises for OPs and Programme Complements were dealt with using the written procedure.

As mentioned, the reprogramming exercise was motivated mainly by a need to maximise execution of appropriations and minimise the n+2 risk in future years. The proposed transfers between Funds meant net increases for the ESF (EUR 88.7 million, 1.85%) and the FIFG (EUR 13.2 million, 5.53%) and reductions for the ERDF (EUR 70.9 million, 0.54%) and the EAGGF (EUR 31.0 million, 1.37%). The extra allocation of funds to the ESF is consistent with the new political priority given to human capital development and the need to support the main national initiative in this domain (termed Novas Oportunidades) . This global reprogramming exercise was set out in a Decision amending the CSF III. Still, at the end of the year further final reprogramming for many OPs was proposed for technical adjustments.

The general implementation of the CSF in Portugal continued at a satisfactory pace with the vast majority of payments concentrated at the end of the year. Total payment claims for the CSF III transmitted to the Commission in 2006 amounted to EUR 2 155 million, or 76% of the forecast in September 2006 of EUR 2 854. The ERDF reached 67% of forecast expenditure, the ESF 74%. The EAGGF almost spent the forecast expenditure (93%) by the end of 2006 and the FIFG spent more than forecast (129%).

The total FIFG allocation to the fisheries programme is EUR 239 million, of which 91% has been committed and 66% has been paid to final beneficiaries. Consequently there was no need to apply the n+2 rule in 2006.

The most important measures, in line with the common fisheries policy, are fleet renewal, processing, marketing, aquaculture and the scrapping of fishing vessels. In 2006, there was one meeting of the Monitoring Committee for each operational programme, which decided upon two amendments to the financial plan of the mainland programme and one amendment to each one of the other programmes. The aim of the reallocations was to better utilise the Community assistance.

In 2006 almost all Portuguese programmes complied with the n+2 rule. No ERDF or ESF programme suffered n+2 decommitments in 2006. However, discussions with the national authorities concerning the potential decommitment of unused derogations granted in 2002 and 2003 to the PRIME OP are still ongoing. Two EAGGF programmes suffered n+2 decommitments in 2006, the Algarve and Centro OPs. The quality of forecasts for the forthcoming financial years continues to need improvement.

Community Initiatives

Equal

The Portuguese EQUAL programme proceeded without any major difficulties in 2006. At the end of 2006, the rate of financial execution of the ESF part of the programme was 68%. Automatic decommitment under the “n+2 rule” was avoided.

The Monitoring Committee approved two amendments to the financial tables for the programme, changing the balance between priorities (increasing the budget for adaptability and asylum seekers and decreasing the budget for equal opportunities).

Serious work was done on mainstreaming the results of the programme. Portugal has developed an extensive methodology for validating outcomes. Portugal has also been active in organising national thematic networks and events, notably in the fields of combating racism and ethnic discrimination, business creation, the social economy, lifelong learning, the information and knowledge society, and reconciling family and professional life. The EQUAL programme also held a European exchange event on policies and practices for the resettlement of ex-offenders, Passport to Freedom, which took place in Lisbon, in October 2006, with almost 150 participants from several Member States. With the support of EQUAL, Portugal also chaired a European Community of Practice on socially innovative actions in 2006.

Leader

Portugal has one single national Leader+ Programme. The total costs are set at EUR 272.625 million for the period 2001-2006. This includes a contribution from the EAGGF Guidance Section of EUR 164.454 million. At the end of 2006, payments totalled EUR 114.288 million, which represents 69.5% of the planned EAGGF amount for the whole programming period.

In 2006, the Leader+ Programme was amended once to transfer the total amount programmed for Action 3 for 2006 to Action 1, also for 2006, and the amount corresponding to the 2% indexation of Action 2 also to Action 1 in 2006.

Urban

There are three URBAN II programmes in Portugal: Amadora (Damaia-Buraca), Lisboa (Vale de Alcântara) and Porto-Gondomar. Amadora receives EUR 3.7 million, Lisboa EUR 5.7 million and Porto-Gondomar EUR 10.1 million from the ERDF. The total budget for Amadora is EUR 10.6 million, Lisboa EUR 10.3 million and for Porto-Gondomar is EUR 14.5 million. For all three programmes, draft annual reports have been received each year, amended in the light of comments from the European Commission and adopted.

The managing authorities for the programmes are the Regional Coordination and Development Commissions. In the case of Amadora and Lisboa this is the Lisboa and Vale do Tejo Region and in the case of Porto-Gondomar the Norte Region. The Monitoring Committees have met once or twice each year.

Lisboa did not meet the n+2 rule for 2003 in 2005. A major re-programming of Amadora took place in 2004 after the Mid-Term Review, with a substantial increase in national co-financing.

Closure of the 1994-1999 programming period

As regards the closure of the 1994-1999 programming period for the CSF II, three programmes were unclosed as of 1 January 2007, with a global outstanding commitment of EUR 5.86 million, which will likely be decommitted and give rise to recovery. In addition there are ongoing audit procedures which may also result in some additional financial corrections.

Four FIFG programmes were closed in 2006, which means a reduction of EUR 5.5 million.

For the EAGGF, substantial work was done in 2006, as all seven programmes that have yet to close are the subject of a financial corrections procedure under Article 24 of Council Regulation (EC) No 4253/88. At the end of the year, four programmes were in a very advanced stage (pre-closure letter ready or draft flexibility calculation made) and could be closed in early 2007. The remaining commitments amount to some EUR 93 million.

SLOVAKIA(

SLOVAKIA RECEIVED TOTAL EU FUNDING OF OVER EUR 1 041 MILLION BETWEEN 2004 AND 2006 THROUGH A COMMUNITY SUPPORT FRAMEWORK (CSF), I.E. FUNDING FROM THE ERDF, ESF, EAGGF AND FIFG. THIS IS SPLIT INTO THREE MONO-FUND OPERATIONAL PROGRAMMES (OPS) AND ONE OPERATIONAL PROGRAMME FUNDED FROM THE EAGGF AND FIFG AS DESCRIBED BELOW. THERE ARE ALSO OBJECTIVE 2 AND OBJECTIVE 3 SINGLE PROGRAMMING DOCUMENTS FOR THE BRATISLAVA REGION.

The CSF Monitoring Committee held six meetings in total (two meetings in 2006) to address horizontal issues in the implementation of Structural Funds in Slovakia. The discussion focused on horizontal themes – coordination, administration capacities and use of technical assistance, Roma issues, evaluation, simplification of procedures and regional aspects in thematic OPs. The CSF annual report for 2005 was submitted in June 2006 and evaluated. The working group on Roma issues under the CSF met regularly, focusing on how to better address the Roma issue, using technical assistance to increase administrative capacity in this area.

Objective 1

Two Monitoring Committee meetings on the Basic Infrastructure OP took place in 2006 (six in the period 2004-2006). The 2005 annual implementation report for the programme was formally submitted to the Commission in June 2006 and approved. In 2006 the last part of the funds were committed (EUR 182.6 million), thus all finances for the 2004-2006 period were committed, totalling EUR 422.3 million. EUR 64 million was paid out in 2006 and another EUR 67 million requested (paid in 2007). For the first time, the programme was checked against the n+2 rule and progress enabled all 2004 commitments to be spent and a start to be made on spending 2005 commitments, so no appropriations were decommitted. One amendment to a Programme Complement was approved, reallocating money within the programme. The projects financed include local infrastructure, environmental, road and railway projects.

The Industry and Services OP held two Monitoring Committee meetings to evaluate progress. Two changes to the Commission Decision and four changes to the programme complement were approved in 2006. The 2005 annual implementation report for the programme was formally submitted to the Commission in June 2006 and approved in August. In 2006 the last part of the funds were committed (EUR 65.4 million), thus all finances for the 2004-2006 period were committed, totalling EUR 151.2 million. EUR 13.9 million was paid in 2006 and another EUR 32 million requested (to be paid in 2007). For the first time, the programme was checked against the N+ 2 rules and progress enabled all 2004 commitments to be spent and a start to be made on spending 2005 commitments, so no appropriations were decommitted. The projects financed include investments in private companies and public infrastructure to support innovation, business incubators, industrial parks, research and development, energy efficiency and tourism.

The ESF Human Resources OP held three Monitoring Committee meetings in 2006. The Annual Implementation Report for 2005 was formally delivered in June 2006 and approved by the Commission. The annual meeting took place in December 2006. The Paying Authority received EUR 54 million following the submission of two payment requests (2006 ESF allocation: EUR 123 million), which represented 19% of the total ESF 2004-2006 allocations (EUR 284.5 million). By the end of 2006, 42% of the total ESF allocations for 2004-2006 had been paid. The new decision approved on 17 July 2006 introduced changes to the wording of the Programming Document and financial table which included financial reallocations and clarification of the decision to calculate the ESF co-financing rate in relation to total public expenditure. The programme complied with n+2 rule, which was applied for the first time at the end of 2006. The whole 2004 ESF allocation and half of the 2005 allocations have been paid by the Commission. Projects financed include demand-driven and national projects in relation to employment services, improving the employability of groups threatened with social exclusion, and support for equal opportunities in the labour market.

The Agriculture and Rural Development OP held two Monitoring Committee meetings, one in March and one in November 2006. The 2005 annual implementation report was submitted to the Commission in May and subsequently approved. The programme was being implemented satisfactorily, the most popular measure being investment in agricultural holdings (62% of all funds). Almost half of the allocated funds had been utilised by the end of 2006. The Slovak authorities submitted a proposal to the Commission for a number of reallocations of funds. Three interim payment requests amounting to a total of EUR 39 961 917 were submitted to the Agriculture DG in 2006. This represents 15.6% of the total EAGGF allocation for 2004-2006 for this OP.

Fisheries

The total FIFG allocation to measure 2.2, Fisheries, in the Rural Development and Multifunctional Agriculture OP is EUR 1 829 065. In 2006 no calls for applications were made for this measure. Two reimbursement claims (covering a total of EUR 277 705 from the FIFG) were paid.

Objective 2

The Monitoring Committee for the SPD 2 programme Bratislava held three meetings. An amendment to the Commission Decision on the programme was approved in December 2006. The 2005 annual implementation report for the programme was formally submitted to the Commission in June 2006 and approved in August. In 2006 the last part of the funds were committed (EUR 12.6 million), thus all finances for 2004-2006 period were committed, totalling EUR 37.2 million. Payments totalling EUR 6 million were requested (to be paid in 2007). For the first time, the programme was checked against the N+ 2 rules and EUR 135 000 was decommitted as payments did not cover the whole 2004 commitment. Attention must be paid in 2007 to increase spending so as to avoid further decommitments.

Objective 3

Three meetings of the SPD 3 Bratislava monitoring committee were held in 2006. In June 2006, the managing authority submitted the 2005 Annual Implementation Report, which was assessed and approved by the Commission; the annual meeting took place in December 2006. On the basis of changes to the financial plan and the text of the programming document approved by the Monitoring Committee, a new Commission Decision was approved on 29 June 2006. The new decision included financial reallocations and clarification of the decision to calculate the ESF co-financing rate in relation to public expenditures.

The Bratislava Programme under Objective 3 was among the programmes that were unable to obey the n+2 rule by the end of 2006, and EUR 1 254 600 was decommitted (8.54% of the 2004 ESF allocation). Although the whole 2004 ESF allocation was contracted and used by final beneficiaries, the expenditure was not fully certified on time. Up to 31 December 2006, the Commission paid EUR 7 190 360 as advance payments and received acceptable intermediate payment requests for EUR 6 239 314. The total amount including advance payments and intermediate payment requests paid by the Commission to the PA was EUR 13 429 675, which represents 29.88% of the total 2004-2006 ESF allocation (EUR 44 939 754).

Community Initiatives

Equal

The Slovak EQUAL programme proceeded without any major difficulties in 2006. At the end of 2006, the rate of financial execution of the ESF part of the programme was 28%. Automatic decommitment under the n+2 rule was avoided.

The Monitoring Committee approved a minor amendment to the programme complement, which detailed some management and audit competences and issues. There were almost 100 active EQUAL projects in Slovakia. The greatest number were on employability, the smallest number were on asylum seekers.

A serious effort was made to mainstream the results of the programme nationally. Thematic networks have been set up for employability, entrepreneurship, adaptability and equal opportunities (the latter with two Task Forces, forequal opportunities between men and women and the integration of disadvantaged groups).

In general terms, EQUAL’s operation in Slovakia is similar to that in other new Member States. Project implementation and transnational cooperation are generally good; there have been some difficulties implementing the programme, but some were solved in 2006.

Slovenia (

Preparations for the 2007–2013 programming period

There have been extensive preparations and informal discussions with the authorities with a view to drafting and adopting the National Strategic Reference Framework (NSRF) and the three operational programmes (ERDF, ESF and CF OPs) in 2007.

Objective 1

The pace of programme implementation has been satisfactory. After an initial slow start, project implementation improved noticeably towards the second half of 2005, when the allocation of funds accelerated and administrative absorption capacity improved.

From 2004 to 2006, a total of EUR 124 271 114 was paid out for all four funds, which corresponds to roughly 52% of the total structural funds’ contribution (including advance payments).

During 2006, overall implementation of the Structural Funds in Slovenia, based on the Single Programming Document (SPD) 2004-2006, continued at a satisfactory pace. The total financial contribution from the four funds (ERDF, ESF, EAGGF, FIFG) for the 2004-2006 period amounts to EUR 237.5 million of which 57.5% is covered by the ERDF, 31.8% by the ESF, 9.9% by the EAGGF and 0.8% by the FIFG. Total planned public expenditure is EUR 334.5 million.

The SPD covers four main priorities for support from the Structural Funds:

- the competitiveness of the productive sector;

- the development of human resources and employment (creation of new jobs and securing existing jobs);

- the restructuring of the agricultural sector, forestry and fisheries;

- the improvement of competitiveness in the different regions and areas and balanced regional development.

The SPD was amended once in 2006, mainly because the national authorities introduced some changes to the programme management structure in the managing authority and some of the bodies to whom management functions had been delegated. Also, it was made explicit that the contribution from the Funds (except the FIFG) is calculated in relation to total public or similar expenditure, whereas for the FIFG it is in relation to total eligible expenditure.

The SPD Monitoring Committee meeting was held in Slovenia in June 2006 and provided an opportunity to review project implementation, the financial management of the programme and the main outcomes. At the meeting, the managing authority presented the specific activities undertaken to increase absorption capacity in 2006 and reported a steady improvement in the implementation of the SPD, especially in financial terms. As a result, the overall allocation to approved projects had reached 94% of available structural funding by mid-2006. The Monitoring Committee approved the Annual Implementation Report 2005 and agreed to adjustments to its rules of procedures and to the programme complement, mainly concerning a financial reallocation within the third priority of the SPD. In 2006, the programme complement was amended three times.

As in previous years, several projects were presented to the Monitoring Committee to illustrate what had been achieved with support from the Structural Funds. Members also had the opportunity to visit a Community-funded project as part of the agenda for the meetings, which allowed them to obtain a first-hand impression of the programme’s activities and outcomes.

The Annual Implementation Report for 2005 was received on time and approved.

Since SPD implementation was progressing at a good pace during 2005 and no major problems required particular attention, the Commission and the national authorities agreed not to hold a formal Annual Meeting.

Budgetary execution

A considerable effort was made to increase the level of absorption of Community Structural Fund contributions. Compared with 2005, the number of ERDF payment claims submitted to the Commission more than doubled (to seven). Together with the advances paid, payments authorised by the Commission by the end of 2006 came to 63% of the total ERDF contribution to the Programme.

Six ESF payment claims were submitted, but the amounts were relatively small. Therefore, together with the advances paid, payments authorised by the Commission by the end of 2006 came to 37% of the total ESF contribution for the overall period.

Although the absorption rate for some measures under the third priority (which relates to the EAGGF and the FIFG) was rather slow in the first half of the year, the cumulative total paid out by the end of 2006 (including advance payments) for all four funds corresponded to roughly 52% of the total structural fund contribution to the programme. This enhanced financial implementation meant there were no automatic decommitments under the n+2 rule for the ERDF, ESF, EAGGF or FIFG at the end of 2006.

The amount paid for the Objective 1 programme came to EUR 5.180 million in 2006 and to EUR 9.152 million for the period 2004-2006, representing financial execution of 38.83% of total EAGGF funds.

The use of technical assistance

One of the specific priorities of the operational technical assistance programme is to ensure appropriate conditions for effective implementation of development strategy, and to facilitate the implementation, management, follow-up, control and evaluation of the programme. This priority is co-financed both by the ERDF and ESF.

On several occasions, the Commission highlighted the importance of using ESF technical assistance to set up an ESF monitoring system with adequate IT support. ESF technical assistance should also be used to cover control-related needs.

Fisheries

The total FIFG allocation committed to Modernisation of existing vessels and small scale coastal fisheries and Aquaculture, processing and marketing by the SPD for structural assistance in Slovenia under Objective 1 (2004-2006) amounts to EUR 1 781 040, against which payments of EUR 637 799.70 were certified by the end of 2006. Legally binding commitments amounted to EUR 2 011 731.89.

Community Initiatives

Equal

The Slovenian EQUAL programme proceeded with some difficulties and, at the end of 2006, the rate of financial execution of the ESF part of the programme was only 44.31%, at EUR 0.24 million. This will lead to a decommitment of EUR 0.298 million.

An internal audit report highlighted some problems, serious work was done to try to improve the situation through changes to the status of the Monitoring Committee, the staff and the system of management and control.

An Evaluation Steering Group was also set up to follow the work of the external evaluator.

Important work was done on mainstreaming the best results of the programme. Slovenia has been active in organising national thematic networks, particularly in the field of combating ethnic discrimination, business creation, the social economy, lifelong learning, and the information and knowledge society.

Finland (

FOR THE 2000-2006 PERIOD FINLAND WAS ALLOCATED EUR 2 120 MILLION FROM THE STRUCTURAL FUNDS. THE FUNDS HAVE BEEN ALLOCATED TO FIVE REGIONAL OBJECTIVE 1 AND 2 PROGRAMMES, TWO OBJECTIVE 3 PROGRAMMES, ONE FIFG PROGRAMME, NINE INTERREG PROGRAMMES, ONE URBAN PROGRAMME, ONE LEADER AND ONE EQUAL COMMUNITY INITIATIVE PROGRAMME.

Preparations for the 2007–2013 programming period

For the 2007-2013 programming period, all of Finland is covered by the regional competitiveness and employment objective, with Eastern Finland as a phasing-in region. The total Structural Fund allocation for Finland in 2007-2013 is EUR 1 716 million (current prices). The Finnish Structural Fund strategy will be implemented through five regional ERDF operational programmes and two ESF programmes. The main strategic priorities will be support for entrepreneurship, strengthening of innovation activity and networking, reinforcing knowledge structures, support for increasing competence and employment, improving regional accessibility and operational environments, and the development of larger urban areas. In 2006 the Finnish national and regional authorities drafted the Finnish Structural Fund Strategy and operational programmes for 2007-2013, which were approved by the Government in February 2007.

Objective 1

In 2006, the Northern and Eastern Finland Objective 1 programmes progressed as planned. At national level, by the end of 2006, over 90% of the EU funds had been committed to projects and nearly 70% of EU funding had been paid to final beneficiaries. The aim of the Finnish authorities is 100% implementation, which seems realistic. Quantitative objectives set for the programmes have already been achieved or will be achieved before the closure of programmes.

The Commission had committed 100% of the programme funds and paid around 75% of the programme funds to Finland by the end of 2006. There were no n+2 problems for the programmes in 2006.

Financial execution for the EAGGF is progressing as expected and the execution rate is 69% of the budget.

Achievement of objectives

The Finnish 2000-2006 Objective 1 programmes have contributed to the creation of nearly 37 000 jobs, the safeguarding of more than 54 000 jobs, and the creation of almost 7000 enterprises. In addition, the programmes have increased the role of the regions in the centralised Finnish administrative system; fostered regional identity and responsibility for local prosperity and wellbeing; improved multi-annual strategic planning at regional level, promoted partnership between the different levels of public administration and a variety of social partners and created networks between municipalities, enterprises and universities. New methods and models have been created for employment and education and training policies.

Monitoring Committee meetings

Two joint Monitoring Committee meetings were held for the two Objective 1 programmes in 2006. The main issues dealt with were the progress of programme implementation, approval of the annual reports for 2005, programme changes, the evaluation of information and publicity activities, preparations for closure of 2000-2006 programmes, and preparations for the 2007-2013 programming period.

Annual meeting

The annual meeting between the Commission and the Finnish managing authority for 2006 dealt with progress on programme implementation, preparations for the 2007-2013 period, and management and audit issues, including an action plan proposed to improve the operation of the Finnish management and control system.

Modifications

A Commission decision amending the SPD for Eastern Finland was taken in 2006, transferring EUR 635 million from EAGGF Guidance funds to the FIFG. In addition, minor amendments to both the North and East Finland programmes and programme complements were approved at the November 2006 Monitoring Committee and submitted to the Commission in December 2006.

Fisheries

FIFG implementation in the Objective 1 programmes is progressing well. For the Northern programme the commitment rate at the end of the year was 91%, while 79% had been paid out. The Objective 1 East programme had a 90% commitment rate and a 74% payment rate. No decommitments were necessary under the n+2 rule for the FIFG.

Objective 2

In 2006, the Finnish Objective 2 programmes Southern Finland, Western Finland and Åland Islands progressed as planned. At the end of 2006 over 90% of EU funds had been committed to projects and close to 70% of EU funding had been paid to final beneficiaries in Southern and Western Finland; for the Åland Islands, the funds have been virtually fully committed and payment levels are at 65%. The aim of the Finnish authorities is 100% implementation, which seems realistic.

The Commission had committed 100% of the programme funds and paid over 70% of programme funds to the national authorities by the end of 2006. There were no n+2 problems for the programmes in 2006.

Achievement of objectives

The Southern and Western Finland Objective 2 programmes have contributed to the creation of nearly 37 000 jobs and of almost 5 700 enterprises. The targets for equality, environmental sustainability and the information society have already been reached for both programmes, apart from shares for gender equality projects in Southern Finland, where only 50% of the target has been met. The target for creating new enterprises will only partly be met: 50% for Western Finland and 40% for Southern Finland. This is mainly due to over-ambitious target setting. The mid-term evaluation updates concluded that the programmes have brought added value to the regions, improved competitiveness in the area and helped to decentralise research and development. The Åland Islands Objective 2 programme has contributed to the creation of 200 new jobs and 30 new enterprises.

Monitoring Committee meetings

Two joint Monitoring Committee meetings were held for the two mainland Objective 2 programmes in 2006. The main issues dealt with were the progress of programme implementation, approval of the annual reports for 2005, programme changes, preparations for the closure of 2000-2006 programmes, and preparations for the 2007-2013 programming period.

For the Åland Islands, two Monitoring Committee meetings were held in 2006, mainly dealing with the progress of programme implementation, project eligibility, the annual reports for 2005 and programme changes, together with preparations for the 2007-2013 period.

Annual meeting

The annual meetings for 2006 were held on 18 January 2007 for mainland programmes and on 15 March 2007 for the Åland programme.

Modifications

Programme modifications were proposed by the November Monitoring Committee meetings for both Southern and Western Finland programmes. The justification was the aim of 100% financial implementation of all Structural Funds funding. For the Åland Islands, an amendment to the decision was made in early 2006 to allow better drawdown of funding and to reinforce the business development priority.

Objective 3

ESF funding for Finland’s Objective 3 SPD (including the Åland Islands) totals EUR 436.6 million. The programme has progressed well. The measures to speed up implementation should, however, be further tightened. By the end of 2006, commitments totalled 100% and payments 73.47%.

Altogether 401 000 persons had participated in the activities of the mainland Objective 3 programme by the end of 2005. The programme has contributed to the creation of 6 200 new enterprises and created 15 000 new jobs.

Monitoring Committee meeting and Annual meeting

One Monitoring Committee meeting and an Annual Review meeting were held on 14-15 September 2006 in Porvoo for the mainland programme. The main issues discussed in the Annual Review meeting were the implementation of the programme, the new programming period, and follow-up of the audit reports.

Modifications

The Monitoring Committee proposed some minor programme modifications, with the aim of 100% financial implementation of all Structural Funds funding. Some amendments to the annexes were proposed, in line with administrative and legislative changes in the Ministry of Labour.

The implementation of the Åland Islands Objective 3 programme continues to progress very well. By the end of 2006, everything had been committed and the Commission had paid out 75% of the total budget. Two Monitoring Committee meetings for Objective 3 and Objective 2 were held together during 2006. The Annual Review was dealt with under the written procedure.

Fisheries outside Objective 1

The programme progressed better than in the previous year, however in the Ǻland islands progress was slightly slower than in the rest of the country.

The overall commitment rate at the end of the year was 92%, while 73% of FIFG financing had been paid out.

Community Initiatives

Equal

The Finnish EQUAL programme proceeded without any major difficulties in 2006. At the end of 2006, the rate of financial execution of the ESF part of the programme was 63%. Automatic decommitment under the n+2 rule was avoided for 2006.

The Monitoring Committee for the programme approved the redistribution of technical assistance, and the final report on the mid-term evaluation.

An important event in 2006 was the ESF Conference in Saariselkä as part of the Finnish presidency programme, with a substantial component linked to EQUAL. Finland prepared the Conference on Social Enterprises, which took place in Helsinki in 2007, with Sweden, Poland and Italy as co-organisers.

Leader

In 2001, the Commission approved one Leader+ programme for Finland; 25 local action groups (LAGs) were selected and are supported by a national network.

After five years of implementation, EUR 37.14 million (65.88%) has been paid out, of the EUR 56.38 million committed for 2001-2006.

Urban

The Helsinki-Vantaa URBAN II programme is the only one in Finland. The ERDF will contribute a total of EUR 5.38 million to this programme, whose total eligible cost is EUR 20.37 million. The managing authority for the programme is the City of Helsinki and day-to-day management is delegated to URBAN Helsinki-Vantaa. The Monitoring Committee met once in 2006.

The n+2 rule was met in 2006.

Overall comments concerning the 2000-2006 period

The programme has increased the social capital in the area, and the participation of citizens has become more evident. New networks have been established between authorities, citizens, home and school, giving a new approach to different players, especially in social issues.

Closure of the 1994-1999 programming period

All Finnish Structural Fund programmes from the 1994-1999 programming period were closed by 2006.

SWEDEN(

Preparations for the 2007–2013 programming period

For the 2007-2013 programming period all of Sweden falls under the regional competitiveness and employment objective. The total Structural Fund allocation for Sweden in 2007-2013 is EUR 1 891 million (current prices). The Swedish Structural Fund strategy will be implemented through eight regional ERDF operational programmes and one ESF operational programme. In 2006 two unofficial meetings were held with the Swedish authorities to discuss the draft NSRF. One meeting was cancelled when the government changed. The official NSRF and the eight Regional OPs were received in February 2007. The ESF OP was received in March 2007.

Annual Review meeting

The Annual Review meeting between the Commission and the Swedish authorities and the managing authorities for Objectives 1 and 2 was held in Stockholm on 24 October 2006. The meeting was devoted to an exchange of information on the continued development of the programmes (and information on procedures for closing the programmes).The participants concluded that the programmes were progressing well and the Commission did not request any additional information or follow up.

By the end of December 2006, the Swedish programmes (all funds) had created or preserved more than 86 000 jobs and created more than 19 000 new companies. Studies performed in 2005 for a couple of programmes indicate that a majority of these jobs and companies still remain a year after the projects ended.

Objective 1

There are two Swedish Objective 1 programmes, Norra Norrlandsregionen and Södra Skogslänsregionen, which together cover 65% of Sweden’s land area but have a population of less than one million (11% of total population). Total support from the Structural Funds for the period 2000–2006 is EUR 780 million, of which the ERDF share is almost EUR 490 million, or 63%, the ESF share EUR 164 million, the EAGGF share EUR 116 million and the FIFG share EUR 10 million. Including national public and private participation, the Structural Funds will generate assistance of EUR 2.1 billion. Execution of the EAGGF stands at 77% of the funds available.

The implementation of Objective 1 programmes is running smoothly. By the end of 2006, approximately 102% of the total 2000–2006 Structural Fund budget had been allocated to projects and approximately 83% had been paid out to projects. Payment claims presented to the Commission by the end of 2006 came to 84% of the total budget and were large enough to avoid any automatic decommitments. However, a decommitment of EUR 129 274 could not be avoided in the Södra Skogslänsregionen programme.

For the ESF, the payment claims presented to the Commission by the end of 2006 represented 78% of the total budget and were large enough to avoid any automatic decommitments.

So far, more than 12 000 projects have been started.

In 2006 one Monitoring Committee meeting was held for each programme. The agenda of the April meetings included a presentation of three reports: creating attractiveness through a living environment; structural funds, entrepreneurship and the conditions for businesses; and regional conditions for innovation, all commissioned by the Swedish Business Development Agency.

The annual implementation reports for 2005 were received on 30 June 2006, and after a review, the Commission accepted the reports on 31 August, 2006. The reports were also discussed at the annual review meeting, where some proposals for improvements were made.

Information and publicity

The focus of information and publicity activities continued to shift from promotion of the programmes (to create demand) to promotion of results and examples of good practice. In 2006, this was done, for instance, through an exhibition at the Committee of the Regions in Brussels. In 2005 an advertising campaign and EU fairs were held.

Objective 2

There are four Objective 2 programmes, the North, West, South and the Islands programmes, with total Structural Funds support of EUR 440 million for the period 2000–2006 (EUR 385 or 88% from the ERDF, and EUR 55 or 12% from the ESF). The programmes cover approximately 16% of the Swedish population. Including national public and private participation, the Structural Funds will generate assistance of EUR 1.5 billion.

All four ERDF programmes are progressing very well. At the end of 2006 approximately 101% (93% in 2005) of the total 2000–2006 budget for the ERDF and approximately 81% (68% in 2005) had been paid out to projects. At year end the Commission had paid out between 71% and 95% of the funds for the four programmes, which was large enough to avoid any automatic decommitments. For ESF, at the end of the year the Commission had paid out 81% for the all four Objective 2 programmes, which was large enough to avoid any automatic decommitment. So far, more than 2 100 projects have been started under Objective 2, and since 2005 a number of venture capital and mutual guarantee projects have been approved. These projects have attracted a lot of attention and interest.

Each programme held one monitoring committee meeting in 2006, which included project visits. For each meeting a press release was prepared. At the April/May meetings, the annual reports for 2005 were adopted and thematic studies on regional innovation, entrepreneurship and attractiveness were discussed.

The annual implementation reports for 2005 were received by the Commission on 30 June and 7 July 2006 and accepted on 23 August 2006. The reports this year showed that the programmes were progressing well but that the analysis of the programmes’ cost-effectiveness could be strengthened. These issues were later discussed at the Annual Review meeting on 24 October 2006, where some proposals for improvements were made.

Information and publicity

At the end of the programme period, the focus of the programmes is now shifting toward measures to present and promote good results and good examples (for instance, an evaluation has shown that the positive effects of the programme remain more than a year after the projects have finished: 100% of the new jobs, 90% of the new companies and more than 100% of new networks are still there). One Objective 2 project, Fibre Optic Valley, was represented at the Best Practice seminar in Graz in November 2006.

Some of the regions and special interest groups actively participated in the debate on the future cohesion policy over the year.

Objective 3

ESF funding for Sweden’s Objective 3 SPD for the period 2000-2006 totalled EUR 779 962 700.

The focus has been speeding up implementation of the programme, e.g. strengthening marketing and shortening the time taken by administrative procedures. Dissemination of results and information has also been intensified. These measures have been successful, leading to a 100% commitment rate by the end of 2006.

So the programme is progressing well, including financial implementation, so that no decommitment took place under the n+2 rule. By the end of 2006, the Commission had paid out 72% of the budget.

The annual implementation reports for 2005 were received on 4 July 2006, and after a review, the Commission accepted the updated report in October 2006.

Fisheries outside Objective 1

The total FIFG allocation to the Swedish fisheries programme outside objective 1 is EUR 57.8 million for the period 2000-2006. Because of the rather low implementation rate, applying the n+2 rule for the third consecutive year, a decommitment of EUR 3 496 280 was unavoidable by 31 December 2006. All in all, the programme has been reduced by EUR 7.2 million. The Swedish authorities have put in place certain corrective measures with the aim of improving programme implementation.

The most important measures planned in line with the recent reform of the common fisheries policy included scrapping vessels, processing and marketing, innovative measures/pilot projects, fishing port equipment, protection of aquatic resources, collective investments, and renewal and modernisation of the fleet.

Two meetings of the Monitoring Committee were held in 2006.

Community Initiatives

Equal

The Swedish EQUAL programme proceeded without any major difficulties in 2006. At the end of 2006, the rate of financial execution of the ESF part of the programme was 65%. Automatic decommitment under the n+2 rule was avoided for 2006.

Important work was done on mainstreaming (phase 3) the results of the programme. Sweden was also active in organising national thematic networks and events. Thematic Groups are continuing the work of the National Thematic Networks as projects of phase 3.

Sweden is leading the following EU-wide communication and learning platforms:

- the Media and Diversity learning seminars,

- the Policy Forum on Asylum seekers,

- the Community of Practice on Transnationality.

Sweden participates in two other platforms’ steering groups: the Policy Forum on Diversity (led by France) and the Policy Forum on Business Creation and Social Economy (led by Germany).

The main organisational challenge for EQUAL’s management, announced in November 2006, is the drastic reduction of ESF Council staff in 2007, which will entail concentrating staff on the main ESF programme. EQUAL results have been incorporated in the National Strategic Reference Framework for the new programming period 2007-2013 and will be reflected in the new ESF operational programme.

Leader

In 2001 the Commission approved one Leader programme. In total, 12 local action groups have been selected.

The implementation of the programme is running smoothly. By the end of 2006, approximately 90% of the total 2000-2006 Structural Fund budget had been allocated to projects. During the six years of implementation no automatic decommitment had to be executed. The payment claims presented to the Commission by the end of 2006 were EUR 25 473 111 from the EAGGF, which equals 62% of the total budget.

Urban

The Göteborg URBAN II programme is the only one in Sweden. The ERDF contributes a total of EUR 5.38 million to this programme, whose total cost amounts to EUR 16.08 million. The annual implementation report for 2005 was submitted to the Commission in June 2006.

The managing authority for the programme is the County Administrative Board in Örebro and day-to-day management is delegated to the URBAN Secretariat in Göteborg. The Monitoring Committee met twice during the year.

The n+2 rule was met in 2006.

Overall comments concerning the 2000-2006 period

The programme combines entrepreneurship, infrastructure improvement and equal opportunities.

Implementation is satisfactory . There were no problems with meeting the programme’s yearly n+2 targets.

Closure of the 1994 – 1999 programming period

The last programmes from the 1994-1999 budget period was closed in 2004 .

UNITED KINGDOM(

Preparations for the 2007–2013 programming period

There have been extensive preparations and informal discussions with the UK for the preparation of the negotiations and eventual adoption in 2007 of the National Strategic Reference Framework (NSRF) and the 22 Operational Programmes (16 ERDF and 6 ESF).

The official NSRF for the United Kingdom was sent to the Commission on 11 December 2006 following its publication on 23 October. The Commission sent its observations on the NSRF to the UK on 21 December 2006. The NSRF considers the five factors influencing productivity: competition, enterprise, innovation, investment and skills, in order to identify areas of relative weakness and priority for action. It states as overall economic objective of the UK government to raise the rate of sustainable growth and achieve increasing prosperity and a better quality of life with economic and employment opportunities for all. With regard to the ESF, the objective across all UK nations will be on removing barriers of disadvantaged groups to enter the labour market as well as raising the skills level of the workforce.

The first Operational Programme submitted by the UK for negotiations was the ESF Convergence OP for West Wales and the Valleys. It was officially submitted to the Commission on 15 December 2006.

Objective 1

The ERDF provided a total of €3981 million to Objective 1 programmes in the United Kingdom during the programming period. FIFG support is available in five objective 1 programmes with a total amount of € 96 million. The ESF provided a total of €1881 million to Objective 1 programmes in the United Kingdom during the programming period (including the Northern Ireland BSP programme).

The total ERDF amount (excluding PEACE II) paid in 2006 was €438 million. Further claims for payment were made before the end of December 2006 and these will be paid in 2007. The total ESF amount paid in 2006 (excluding PEACE II) was €425 million. For EAGGF, the total amount (excluding PEACE II) paid by the end of 2006 was € 260 million (72.8 % of the total budget foreseen for the 2000-2006 programming period, i.e. € 357 million. Further claims for payment were made before the end of December 2006 and these will be paid in 2007.

With regard to N+2, two programmes did not meet the 2006 target: South Yorkshire did not meet the ERDF N+2 target and the Highlands and Islands programme missed the N+2 target for FIFG by € 1.5 million. All other Programmes for all funds met the N+2 targets in 2006.

Assistance is provided through five Single Programming Documents and two Operational Programmes. Three of the Single Programming Documents concern the English regions of Cornwall and the Isles of Scilly, Merseyside and South Yorkshire; the other two Single Programming Documents concern Wales (West Wales and The Valleys) and Scotland (transitional programme for Highlands and Islands). Each programme covers four to six priority areas, grouped around five main themes: support for small and medium-sized business, support for business modernisation, community economic regeneration, human resource development and development of strategic infrastructure.

The two Operational Programmes under the Northern Ireland Community Support Framework are funded by all four Structural Funds. They are: “Building Sustainable Prosperity” (BSP), a transitional Objective 1 programme, and the EU Programme for Peace and Reconciliation in Northern Ireland and the Border Region of Ireland (“PEACE II” programme 2000–2006). The ESF for the BSP OP amounts to € 285 million

PEACE II

The “PEACE II” programme, builds on the experience of the special support programme “PEACE I” (1995–1999) and exemplifies the practical support given by the EU to the peace process after the Belfast Agreement. Initially PEACE II covered the period 2000-2004 but in 2004 it was decided to provide additional funding and extend the programme to 2006, bringing it in line with the other Structural Funds programmes in the rest of the European Union.

On 13 December 2005 the Budgetary Authority agreed to increase the EU contributions to the PEACE Programme by €12 million for 2006 and accordingly the Commission adopted on 22 December 2006 a decision to allocate the additional support to the programme.

For the PEACE II programme, ERDF provided € 368 million. The ESF in PEACE amounts to € 147 million – another € 46 million come from the Irish part of the programme which brings the total to amounts to € 193 million. The total amount paid in 2006 was €42 million. Payment claims submitted in December 2006 will be paid in 2007. The total ERDF amount paid in 2006 was €42 million. In the case of ESF, overall payments for the whole period have reached close to 90 % of the total ESF allocation, i.e. €33 million. The total amount paid out of EAGGF-Guidance for the PEACE II Programme managed jointly with Ireland was € 38 million ( 86% of the envelope of € 44 million for the years 2000-2004). The N+2 target for 2006 was met for all funds

Objective 2

The ERDF provides a total of €4325 million for Objective 2 programmes in the United Kingdom. The ESF provides a total of €528 million for Objective 2 programmes in the United Kingdom. The funds are implemented through 14 Single Programming Documents. Nine programmes cover the English regions of West Midlands, Yorkshire and the Humber, East Midlands, North East of England, North West of England, East England, South East England, South West England and London; three cover the regions of South of Scotland, East of Scotland and Western Scotland, one concerns East Wales and one concerns Gibraltar. Each programme covers an average of three priority areas, grouped around three main themes: developing diverse, dynamic and competitive business bases, strategic spatial development; and community regeneration and economic and social development. The UK Objective 2 programmes were adopted in 2001, so it was not until 2003 that increasing levels of activity and progress were registered.

The total amount paid in 2006 was €428 million for ERDF and €127 million for the ESF. Payment claims submitted in December 2006 will be paid in 2007. With the exception of South West of England all other Programmes met the ERDF N+2 target in 2006.

As for the ESF, the Objective 2 programme Yorkshire and the Humber did not meet the N+2 target. An amount of €1.13 million was decommitted from the ESF commitment. The remaining thirteen Objective 2 programmes claimed sufficient expenditure to meet the N+2 target set by Article 31(2) of Council Regulation 1260/1999.

Overall summary of the 2000-2006 period

The programme implementation was in line with the relevant strategies at local level across the UK placing the emphasis upon economic restructuring and regeneration, based on the development of key sectors and community economic development. Monitoring indicators reveal that all Operational Programmes meet their targets and achieve their objectives. In addition, evaluations confirm that Structural Funds interventions have had successful impact in the areas of intervention in promoting economic convergence and cohesion between the regions as well as employment and social inclusion.

Objective 3

The ESF provides a total of €4948 million for Objective 3 programmes in Great Britain, implemented through one Community Support Framework and three Operational Programmes: England (€4290 million), Scotland (€520 million) and East Wales (€138 million).

The total amount paid in 2006 was €1381 million: England (€1194 million), Scotland (€156 million) and East Wales (€31 million).

All three programmes met their N+2 targets for 2006.

In 2006, the GB authorities requested modifications to the CSF financial tables to all 3 programmes to ensure the optimal use of the remaining allocations to the programmes.

For the Scottish and Welsh OP, two and for England, three, Programme Monitoring Committees were organised during the year 2006 for each Programme.

Fisheries outside Objective 1

The UK Fisheries programme covers all areas of the UK which are not in objective 1. It covers most of England, all of Scotland except Highland and Islands and a very small part of Wales. The total FIFG amount allocated over the period 2000-2006 is € 125.5 million with almost 50% foreseen for Scotland.

Implementation of the programme has been slow and for the fourth consecutive year the programme will have to be reduced due to the application of the N+2 rule. At the end of 2006, the N+2 target was missed by € 6.3 million. Due to N+2, the programme has lost about 25% of its initial allocation.

The corrective measures put in place by the U.K. authorities with the aim of improving implementation have only had little effect.

Community Initiatives

Equal

The UK has two EQUAL programmes: Great Britain (gb) and Northern Ireland (ni).

The UKgb EQUAL programme proceeded without any major difficulties in 2006. The programme had 174 projects in total. In financial terms, at the end of 2006, the rate of execution of the ESF part of the programme represented 65,4 % of the total. Automatic decommitment related to the "n+2 rule" was avoided for 2006.

UKgb was chairing the Steering Group of Ex-Offenders Events in Lisbon in October, and the coming Policy Forum in Warsaw. UKgb was actively involved in organising Adaptability Peer Review in Warsaw in October. The work was started to produce new practice guides focusing on Mainstreaming, Equal Opportunities & Empowerment, to be finalised in 2007. Monitoring Committee prepared GB Communications Action Plan, which brought together the publicity plan, a summary of mainstreaming for the second call and a strategy for end of programme activities. This defined framework for communications could maximise the sustainable outcomes of the programme, and would benefit the mainstreaming activities of Development Partnerships themselves.

The implementation of the UKni programme continued with no major difficulties. The N+2 target for 2006 was achieved. The Monitoring Committees have approved the following modifications to the financial tables of the programme:

- on 7th April 2005: allocation of indexation money to the Technical Assistance priority;

- on 14th September 2006: movement of uncommitted funds from the Equal Opportunities Priority 4 to the Employability Priority 1.

During 2006 the Development Partnerships in UKni were heavily involved with their partners in the delivery of Transnational Co-operation Agreements. At Managing Authority level UKni has developed informal links with new member states and has provided assistance in the delivery of the programme in those countries. The NTN has been active in 2006 assisting DPs with the development and refinement of mainstreaming strategies. A major mainstreaming event was organised by the Managing Authority in May 2006 at which key policy makers were in attendance.

During 2006 the UKni Managing Authority made lots of efforts to disseminate the best practices and, in partnership with Latvia, Malta, Flemish speaking Belgium and Portugal, agreed to collaborate in the organisation of an Exchange Event and subsequent Policy Forum on diversity in the workplace. The working title being “EQUALising the workplace – Diversity in Action”.

Leader

The UK has four Leader+ programmes: England, Northern Ireland, Scotland and Wales with 55 Local Action Groups. The total cost of the four programmes amounts to EUR 266 million, of which the EAGGF contributes EUR 115 million.

By the end of 2006 a total amount EUR 72 million was paid (63 % of the total budget for the 2000-2006 programming period).

All the programmes reached their respective N+2 targets.

Urban

English Programmes

From the 8 English programmes 6 submitted requests for programme modification affecting the decision's financial tables in 2006 – the exceptions were Bristol and Halifax. However, Bristol submitted minor changes to the Programme Complement.

Broadly speaking, the English URBAN II programmes are better in meeting the socially related targets than the business related ones. The programmes, respectively the programme complements had to be adjusted to mirror this fact.

All the English Programmes made improvements towards meeting the recommendations of the Updated Midterm Evaluation. By the second half of 2006 the focus of the legacy and the closure of the programmes became stronger. The results of this will be discussed in the UK Network Event held in North Belfast in 2007 March.

All 8 programmes submitted receivable annual implementation reports for 2005 in the course of summer 2006.

The Managing Authorities for the programmes are the regional Government Offices in England and the appropriate Government Department in other parts of the UK. In most cases, however, functional responsibility has been delegated to the local authority most concerned.

There were regular Monitoring Committee meetings for every programme. All the UK programmes met n+2 for 2006.

Northern Ireland

In the North– Belfast URBAN II programme there has been no modification need to the Programme or to the Programme Complement in 2006.

There have been 2 Monitoring Committee meetings. N+2 targets were met for 2006. Annual implementation report 2005 was submitted in July 2006. From the second semester of 2006 concentration is more and more on the legacy of the Programme.

According to the Country Fiche 2006 of the Audit Unit there are deficiencies in case of this programme as well regarding sound management and control systems. Especially Article 4 and 10 checks have to be improved. There is a lack of systems audit reported regarding the Managing Authority and the Intermediate Body due to which it is hard to assess the management and control systems in Northern Ireland.

Wales

In the case of the only URBAN II programme in Wales, West Wrexham, there was a minor Programme Complement modification in 2006 in order to meet the Programme's targets and n+2.

This programme is also focussing now on legacy and closure from the second half year of 2006.

There were 2 Monitoring Committee meetings in 2006. Annual implementation report for 2005 was submitted in summer 2006. N+2 2006 was met.

Scotland

In 2006 both the Programme and the Programme Complement was modified in connection with the Clyde Waterfront URBAN II Programme in Glasgow. There were 2 Monitoring Committee meeting in 2006. N+2 2006 was met.

The Annual Implementation report was submitted in June 2006.

In case of Scotland there are also problems with the management and control systems because of serious deficiencies of Article 4 and 9 checks in the West of Scotland.

Overall comments for the 2000-2006 period in the United Kingdom

The UK URBAN II programmes were very innovative and successful, especially in meeting the strategic aims about social inclusion, partnership and concentration on the younger generations. Presumably these will be of the strongest impacts on URBAN II legacy in the UK.

The UK urban network and the regularly held network events based on URBAN II activities are also noteworthy. These connections are very strong and effective which the programmes want to sustain in the future as well for best practice and experience exchange in the field of urban development policy.

For the proper closure of the programmes it is of high importance to tackle the problems in the management and control systems which are overall present in the UK. For this several action plans are being prepared by the British Authorities.

Closure of the 1994-99 programming period

Concerning the ESF, four programmes remained partially open for treatment at the end of 2006 due to judiciary procedures or irregularities.

Part 3: List of Major Projects

List of major projects: 2006

Total | 557 | 225 093 933 377 | 100.00% | 143 646 619 048 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

Objective 1 | 145 | 162 008 103 748 | 71.97% | 103 554 391 065 | 72.09% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

10. Productive Environment | 34 568 782 | 0.06% | 19 918 765 | 0.06% |

1. Productive Environment | 34 568 782 | 100.00% | 19 918 765 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

11. Agriculture | 8 693 517 429 | 15.35% | 5 184 276 670 | 14.96% |

11. Agriculture | 608 727 905 | 7.00% | 436 464 036 | 8.42% |

111. Investments in agricultural holdings | 3 860 665 645 | 44.41% | 2 257 592 701 | 43.55% |

112. Setting up young farmers | 1 141 041 438 | 13.13% | 859 287 291 | 16.57% |

114. Improving processing and marketing of agricultural products | 2 849 485 959 | 32.78% | 1 516 653 731 | 29.25% |

113. Agriculture-specific vocational training | 194 794 116 | 2.24% | 86 771 435 | 1.67% |

1182. Meeting standards: use of farm advisory services | 38 802 367 | 0.45% | 27 507 475 | 0.53% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

12. Forestry | 1 980 049 142 | 3.50% | 1 333 549 188 | 3.85% |

12. Forestry | 504 174 182 | 25.46% | 401 490 673 | 30.11% |

122. Improving harvesting, processing and marketing of forestry products | 87 015 848 | 4.39% | 41 529 246 | 3.11% |

123. Promoting new outlets for the use and marketing of forestry products | 38 296 085 | 1.93% | 22 023 589 | 1.65% |

124. Establishment of associations of forest holders | 15 388 792 | 0.78% | 10 328 991 | 0.77% |

125. Restoring forestry production potential damaged by natural disasters and fire and introducing appropriate prevention instruments | 449 849 678 | 22.72% | 338 476 796 | 25.38% |

121. Investments in forest holdings | 458 889 097 | 23.18% | 317 462 251 | 23.81% |

128. Forestry-specific vocational training | 79 198 987 | 4.00% | 18 582 053 | 1.39% |

126. Planting of non-farm land | 248 112 552 | 12.53% | 104 209 001 | 7.81% |

127. Improving and maintaining the ecological stability of protected woodlands | 99 123 921 | 5.01% | 79 446 588 | 5.96% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

13. Promoting the adaptation and the development of rural areas | 10 503 497 362 | 18.55% | 6 933 487 186 | 20.00% |

13. Promoting the adaptation and the development of rural areas | 895 734 939 | 8.53% | 640 997 382 | 9.24% |

1301. Land improvement | 191 069 162 | 1.82% | 111 007 870 | 1.60% |

1302. Reparcelling | 537 946 950 | 5.12% | 398 690 420 | 5.75% |

1303. Setting up of farm relief and farm management services | 159 832 227 | 1.52% | 122 929 214 | 1.77% |

1304. Marketing of quality agricultural products | 190 502 599 | 1.81% | 108 279 530 | 1.56% |

1305. Basic services for the rural economy and population | 332 315 581 | 3.16% | 183 159 318 | 2.64% |

1306. Renovation and development of villages and protection and conservation of the rural heritage | 2 081 620 743 | 19.82% | 1 554 815 718 | 22.42% |

1307. Diversification of agricultural activities and activities close to agriculture, to provide multiple activities or alternative incomes | 537 419 634 | 5.12% | 255 312 632 | 3.68% |

1308. Agricultural water resources management | 2 103 356 058 | 20.03% | 1 259 466 194 | 18.16% |

1309. Development and improvement of infrastructire connected with the development of agriculture | 1 599 800 852 | 15.23% | 1 159 621 129 | 16.72% |

1310. Encouragement for tourist activities | 373 035 460 | 3.55% | 239 348 346 | 3.45% |

1311. Encouragement for craft activities | 474 748 168 | 4.52% | 273 691 904 | 3.95% |

1312. Preservation of the environment inconnection with land, forestry and landscape conservation as well as with the improvement of animal welfare | 706 641 171 | 6.73% | 469 576 409 | 6.77% |

1313. Restoring agricultural production potential damaged by natural disaters and introducing appropriate prevention instruments | 245 874 132 | 2.34% | 136 299 470 | 1.97% |

1314. Financial engineering | 59 232 799 | 0.56% | 19 802 798 | 0.29% |

1399. Leader+ | 14 366 887 | 0.14% | 488 853 | 0.01% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

14. Fisheries | 2 939 815 215 | 5.19% | 84 909 018 | 0.24% |

14. Fisheries | 56 362 620 | 1.92% | 2 351 282 | 2.77% |

141. Adjustment of the fishing effort | 447 107 703 | 15.21% |

142. Renewal and modernisation of the fishing fleet | 549 417 508 | 18.69% |

143. Processing, marketing and promoting of fisheries products | 583 717 344 | 19.86% |

144. Aquaculture | 337 725 572 | 11.49% | 813 813 | 0.96% |

145. Equipment of the fishing ports and protection of the coastal marine zones | 384 140 464 | 13.07% | 40 131 055 | 47.26% |

146. Socio-economic measures (including aids to the temporary stopping and compensation for technical restrictions) | 353 903 133 | 12.04% |

147. Actions by professionals (including vocational training, small coastal fishing) | 121 371 746 | 4.13% |

148. Measures financed by other Structural Funds (ERDF, ESF) | 106 069 125 | 3.61% | 41 612 867 | 49.01% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

15. Assisting large business organisations | 4 375 247 223 | 7.73% | 2 893 517 838 | 8.35% |

15. Assisting large business organisations | 425 591 770 | 9.73% | 328 257 322 | 11.34% |

151. Investment in physical capital (plant and equipment, cofinancing of state aids) | 2 846 435 804 | 65.06% | 1 872 463 021 | 64.71% |

152. Environment-friendly technologies, clean and economical energy technologies | 397 799 315 | 9.09% | 196 650 716 | 6.80% |

153. Business advisory services (including internationalisation, exporting and environmental management, purchase of technology) | 490 084 441 | 11.20% | 330 691 098 | 11.43% |

154. Services to stakeholders (health and safety, providing care for dependants) | 56 409 517 | 1.29% | 41 261 537 | 1.43% |

155. Financial engineering | 158 926 376 | 3.63% | 124 194 144 | 4.29% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

16. Assisting SMEs and the craft sector | 15 107 723 164 | 26.68% | 10 397 718 841 | 30.00% |

16. Assisting SMEs and the craft sector | 745 580 147 | 4.94% | 557 562 779 | 5.36% |

161. Investment in physical capital (plant and equipment, cofinancing of state aids) | 7 893 032 340 | 52.25% | 5 731 515 617 | 55.12% |

162. Environment-friendly technologies, clean and economical energy technologies | 857 452 834 | 5.68% | 509 910 885 | 4.90% |

163. Business advisory services (information, business planning, consultancy services, marketing, management, design, internationalisation, exporting, environmental management, purchase of technology) | 1 750 066 339 | 11.58% | 1 110 435 946 | 10.68% |

164. Shared business services (business estates, incubator units, stimulation, promotional services, networking, conferences, trade fairs) | 1 998 975 004 | 13.23% | 1 244 408 846 | 11.97% |

165. Financial engineering | 1 117 598 988 | 7.40% | 853 799 976 | 8.21% |

166. Services in support of the social economy (providing care for dependents, health and safety, cultural activities) | 315 048 363 | 2.09% | 172 491 983 | 1.66% |

167. Vocational training | 429 969 150 | 2.85% | 217 592 809 | 2.09% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

17. Tourism | 5 142 986 510 | 9.08% | 2 836 562 404 | 8.18% |

17. Tourism | 559 056 421 | 10.87% | 424 369 298 | 14.96% |

171. Physical investment (information centres, tourist accommodation, catering, facilities) | 3 131 010 234 | 60.88% | 1 612 066 615 | 56.83% |

172. Non-physical investments (development and provision of tourist services, sporting, cultural and leisure activities, heritage) | 680 625 632 | 13.23% | 360 284 595 | 12.70% |

173. Shared services for the tourism industry (including promotional activities, networking, conferences and trade fairs) | 599 619 068 | 11.66% | 342 227 340 | 12.06% |

174. Vocational training | 172 675 155 | 3.36% | 97 614 555 | 3.44% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 56 628 435 901 | 34.95% | 34 660 373 659 | 33.47% |

18. Research, technological development and innovation (RTDI) | 7 851 031 073 | 13.86% | 4 976 433 750 | 14.36% |

18. Research, technological development and innovation (RTDI) | 565 184 216 | 7.20% | 347 913 349 | 6.99% |

181. Research projects based in universities and research institutes | 1 972 592 027 | 25.13% | 1 276 065 032 | 25.64% |

182. Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes | 2 661 349 271 | 33.90% | 1 588 583 188 | 31.92% |

183. RTDI Infrastructure | 2 300 976 266 | 29.31% | 1 480 764 232 | 29.76% |

184. Training for researchers | 350 929 293 | 4.47% | 283 107 948 | 5.69% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

20. Human Resources | 104 190 638 | 0.29% | 55 411 935 | 0.23% |

2. Human Resources | 104 190 638 | 100.00% | 55 411 935 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

21. Labour market policy | 11 037 566 663 | 30.30% | 7 601 580 324 | 31.64% |

21. Labour market policy | 11 037 566 663 | 100.00% | 7 601 580 324 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

22. Social inclusion | 4 916 819 990 | 13.50% | 3 328 996 382 | 13.86% |

22. Social inclusion | 4 916 819 990 | 100.00% | 3 328 996 382 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

23. Developing educational and vocational training (persons, firms) | 11 097 357 627 | 30.46% | 7 443 861 149 | 30.98% |

23. Developing educational and vocational training (persons, firms) | 11 097 357 627 | 100.00% | 7 443 861 149 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 7 288 176 559 | 20.01% | 4 306 553 150 | 17.92% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 7 288 176 559 | 100.00% | 4 306 553 150 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 36 430 521 281 | 22.49% | 24 026 667 169 | 23.20% |

25. Positive labour market actions for woman | 1 986 409 806 | 5.45% | 1 290 264 230 | 5.37% |

25. Positive labour market actions for woman | 1 986 409 806 | 100.00% | 1 290 264 230 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

30. Basic Infrastructure | 1 497 238 | 0.00% | 93 463 | 0.00% |

3. Basic Infrastructure | 1 497 238 | 100.00% | 93 463 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

31. Transport infrastructure | 32 425 296 188 | 49.80% | 23 424 855 177 | 54.40% |

31. Transport infrastructure | 491 388 107 | 1.52% | 396 669 139 | 1.69% |

311. Rail | 7 423 711 513 | 22.89% | 4 973 557 826 | 21.23% |

3121. National roads | 2 263 795 501 | 6.98% | 1 729 118 685 | 7.38% |

3122. Regional/local roads | 2 752 987 833 | 8.49% | 2 321 835 863 | 9.91% |

3123. Cycle tracks | 37 627 833 | 0.12% | 25 558 297 | 0.11% |

312. Roads | 9 301 299 863 | 28.69% | 7 347 004 864 | 31.36% |

313. Motorways | 4 263 444 266 | 13.15% | 2 982 906 538 | 12.73% |

314. Airports | 853 063 235 | 2.63% | 615 450 373 | 2.63% |

315. Ports | 1 445 706 841 | 4.46% | 882 828 191 | 3.77% |

316. Waterways | 81 958 935 | 0.25% | 42 766 609 | 0.18% |

317. Urban Transport | 2 098 952 926 | 6.47% | 1 354 454 727 | 5.78% |

318. Multimodal Transport | 962 541 010 | 2.97% | 627 074 907 | 2.68% |

319. Intelligent Transport Systems | 448 818 325 | 1.38% | 125 629 159 | 0.54% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

32. Telecommunications infrastructure and information society | 5 664 285 255 | 8.70% | 3 139 714 148 | 7.29% |

32. Telecommunications infrastructure and information society | 348 644 837 | 6.16% | 250 092 796 | 7.97% |

321. Basic infrastructure | 1 022 280 735 | 18.05% | 519 190 423 | 16.54% |

322. Information and Communication Technology (including security and safe transmission measures) | 1 486 735 132 | 26.25% | 779 208 718 | 24.82% |

323. Services and applications for the citizen (health, administration, education) | 1 810 331 630 | 31.96% | 1 061 440 943 | 33.81% |

324. Services and applications for SMEs (electronic commerce and transactions, education and training, networking) | 996 292 920 | 17.59% | 529 781 266 | 16.87% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

33. Energy infrastructures (production, delivery) | 1 485 520 483 | 2.28% | 773 563 715 | 1.80% |

33. Energy infrastructures (production, delivery) | 402 058 761 | 27.07% | 293 283 755 | 37.91% |

331. Electricity, gas, petrol, solid fuel | 364 177 066 | 24.52% | 189 888 646 | 24.55% |

332. Renewable sources of energy (solar power, wind power, hydro-electricity, biomass) | 461 012 667 | 31.03% | 202 371 705 | 26.16% |

333. Energy efficiency, cogeneration, energy control | 258 271 989 | 17.39% | 88 019 608 | 11.38% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

34. Environmental infrastructure (including water) | 10 392 283 584 | 15.96% | 5 995 920 763 | 13.92% |

34. Environmental infrastructure (including water) | 2 250 120 404 | 21.65% | 921 966 894 | 15.38% |

341. Air | 302 704 171 | 2.91% | 142 113 246 | 2.37% |

342. Noise | 40 824 134 | 0.39% | 15 491 339 | 0.26% |

343. Urban and industrial waste (including hospital and dangerous waste) | 1 335 663 196 | 12.85% | 642 446 828 | 10.71% |

344. Drinking water (collection, storage, treatment and distribution) | 2 798 038 313 | 26.92% | 1 654 853 992 | 27.60% |

345. Sewerage and purification | 3 664 933 366 | 35.27% | 2 619 048 464 | 43.68% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

35. Planning and rehabilitation | 8 804 457 163 | 13.52% | 5 128 797 042 | 11.91% |

35. Planning and rehabilitation | 211 096 377 | 2.40% | 136 256 745 | 2.66% |

351. Upgrading and Rehabilitation of industrial and military sites | 1 168 729 793 | 13.27% | 679 048 702 | 13.24% |

352. Rehabilitation of urban areas | 3 286 040 667 | 37.32% | 2 020 088 478 | 39.39% |

353. Protection, improvement and regeneration of the natural environment | 2 370 883 557 | 26.93% | 1 255 469 564 | 24.48% |

354. Maintenance and restoration of the cultural heritage | 1 767 706 771 | 20.08% | 1 037 933 553 | 20.24% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 65 113 990 724 | 40.19% | 43 064 102 291 | 41.59% |

36. Social infrastructure and public health | 6 340 650 814 | 9.74% | 4 601 157 984 | 10.68% |

36. Social infrastructure and public health | 6 340 650 814 | 100.00% | 4 601 157 984 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscelllaneous | 3 835 155 842 | 2.37% | 1 803 247 945 | 1.74% |

40. Miscelllaneous | 254 238 266 | 6.63% | 114 024 483 | 6.32% |

4. Miscelllaneous | 254 238 266 | 100.00% | 114 024 483 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscelllaneous | 3 835 155 842 | 2.37% | 1 803 247 945 | 1.74% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 3 079 025 670 | 80.28% | 1 427 549 228 | 79.17% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 566 475 501 | 18.40% | 253 859 776 | 17.78% |

411. Preparation, implementation, monitoring, publicity | 1 195 171 798 | 38.82% | 610 789 685 | 42.79% |

412. Evaluation | 226 203 578 | 7.35% | 118 336 883 | 8.29% |

413. Studies | 710 623 835 | 23.08% | 301 181 763 | 21.10% |

414. Innovative actions | 184 700 859 | 6.00% | 42 212 131 | 2.96% |

415. Information to the public | 195 850 099 | 6.36% | 101 168 989 | 7.09% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscelllaneous | 3 835 155 842 | 2.37% | 1 803 247 945 | 1.74% |

49. | 501 891 906 | 13.09% | 261 674 234 | 14.51% |

499. Data not available | 501 891 906 | 100.00% | 261 674 234 | 100,00% |

Source: Database of Commission services SFC, data as of March 2007

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

Objective 2 | 100 | 24 305 468 229 | 10.80% | 16 477 236 384 | 11.47% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

10. Productive Environment | 8 173 426 | 0.06% | 7 797 192 | 0.08% |

1. Productive Environment | 8 173 426 | 100.00% | 7 797 192 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

11. Agriculture | 29 687 803 | 0.22% | 17 837 215 | 0.19% |

11. Agriculture | 6 298 307 | 21.22% | 4 173 098 | 23.40% |

112. Setting up young farmers | 8 503 531 | 28.64% | 3 625 619 | 20.33% |

113. Agriculture-specific vocational training | 14 885 966 | 50.14% | 10 038 498 | 56.28% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

12. Forestry | 9 981 793 | 0.07% | 6 324 322 | 0.07% |

123. Promoting new outlets for the use and marketing of forestry products | 301 442 | 3.02% | 209 824 | 3.32% |

128. Forestry-specific vocational training | 5 447 397 | 54.57% | 3 761 437 | 59.48% |

127. Improving and maintaining the ecological stability of protected woodlands | 4 232 955 | 42.41% | 2 353 060 | 37.21% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

13. Promoting the adaptation and the development of rural areas | 584 602 092 | 4.35% | 400 984 239 | 4.32% |

13. Promoting the adaptation and the development of rural areas | 78 470 582 | 13.42% | 57 285 198 | 14.29% |

1301. Land improvement | 2 647 122 | 0.45% | 2 206 272 | 0.55% |

1302. Reparcelling | 7 697 289 | 1.32% | 3 696 208 | 0.92% |

1304. Marketing of quality agricultural products | 1 141 974 | 0.20% | 1 033 685 | 0.26% |

1305. Basic services for the rural economy and population | 59 084 371 | 10.11% | 41 689 736 | 10.40% |

1306. Renovation and development of villages and protection and conservation of the rural heritage | 200 241 707 | 34.25% | 132 542 889 | 33.05% |

1307. Diversification of agricultural activities and activities close to agriculture, to provide multiple activities or alternative incomes | 12 327 619 | 2.11% | 9 292 251 | 2.32% |

1308. Agricultural water resources management | 9 976 201 | 1.71% | 6 624 603 | 1.65% |

1309. Development and improvement of infrastructure connected with the development of agriculture | 34 636 501 | 5.92% | 22 854 160 | 5.70% |

1310. Encouragement for tourist activities | 52 186 742 | 8.93% | 35 757 667 | 8.92% |

1311. Encouragement for craft activities | 16 512 224 | 2.82% | 8 850 166 | 2.21% |

1312. Preservation of the environment in connection with land, forestry and landscape conservation as well as with the improvement of animal welfare | 107 339 034 | 18.36% | 77 163 658 | 19.24% |

1314. Financial engineering | 2 340 726 | 0.40% | 1 987 745 | 0.50% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

14. Fisheries | 13 389 967 | 0.10% | 8 361 748 | 0.09% |

14. Fisheries | 4 573 486 | 34.16% | 3 278 092 | 39.20% |

145. Equipment of the fishing ports and protection of the coastal marine zones | 2 571 662 | 19.21% | 1 137 245 | 13.60% |

148. Measures financed by other Structural Funds (ERDF, ESF) | 6 244 819 | 46.64% | 3 946 410 | 47.20% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

15. Assisting large business organisations | 555 859 703 | 4.13% | 392 348 100 | 4.23% |

15. Assisting large business organisations | 41 948 866 | 7.55% | 28 305 284 | 7.21% |

151. Investment in physical capital (plant and equipment, cofinancing of state aids) | 427 025 420 | 76.82% | 296 747 546 | 75.63% |

152. Environment-friendly technologies, clean and economical energy technologies | 27 484 851 | 4.94% | 17 043 175 | 4.34% |

153. Business advisory services (including internationalisation, exporting and environmental management, purchase of technology) | 31 954 245 | 5.75% | 22 798 936 | 5.81% |

154. Services to stakeholders (health and safety, providing care for dependants) | 437 732 | 0.08% | 195 718 | 0.05% |

155. Financial engineering | 27 008 589 | 4.86% | 27 257 441 | 6.95% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

16. Assisting SMEs and the craft sector | 7 589 809 445 | 56.43% | 5 239 934 184 | 56.51% |

16. Assisting SMEs and the craft sector | 1 100 824 641 | 14.50% | 795 508 002 | 15.18% |

161. Investment in physical capital (plant and equipment, cofinancing of state aids) | 2 007 825 126 | 26.45% | 1 404 781 337 | 26.81% |

162. Environment-friendly technologies, clean and economical energy technologies | 303 658 822 | 4.00% | 203 885 443 | 3.89% |

163. Business advisory services (information, business planning, consultancy services, marketing, management, design, internationalisation, exporting, environmental management, purchase of technology) | 1 400 528 786 | 18.45% | 898 184 093 | 17.14% |

164. Shared business services (business estates, incubator units, stimulation, promotional services, networking, conferences, trade fairs) | 1 656 432 388 | 21.82% | 1 101 431 523 | 21.02% |

165. Financial engineering | 509 663 450 | 6.72% | 414 331 566 | 7.91% |

166. Services in support of the social economy (providing care for dependents, health and safety, cultural activities) | 372 509 586 | 4.91% | 268 267 704 | 5.12% |

167. Vocational training | 238 366 645 | 3.14% | 153 544 516 | 2.93% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

17. Tourism | 2 260 603 433 | 16.81% | 1 567 376 439 | 16.90% |

17. Tourism | 287 961 515 | 12.74% | 206 055 481 | 13.15% |

171. Physical investment (information centres, tourist accommodation, catering, facilities) | 1 378 541 750 | 60.98% | 941 875 568 | 60.09% |

172. Non-physical investments (development and provision of tourist services, sporting, cultural and leisure activities, heritage) | 364 050 177 | 16.10% | 256 019 121 | 16.33% |

173. Shared services for the tourism industry (including promotional activities, networking, conferences and trade fairs) | 195 705 504 | 8.66% | 138 240 739 | 8.82% |

174. Vocational training | 34 344 486 | 1.52% | 25 185 530 | 1.61% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 13 449 018 769 | 55.33% | 9 272 022 821 | 56.27% |

18. Research, technological development and innovation (RTDI) | 2 396 911 107 | 17.82% | 1 631 059 384 | 17.59% |

18. Research, technological development and innovation (RTDI) | 240 812 600 | 10.05% | 171 686 058 | 10.53% |

181. Research projects based in universities and research institutes | 628 136 015 | 26.21% | 451 639 116 | 27.69% |

182. Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes | 846 594 148 | 35.32% | 554 297 602 | 33.98% |

183. RTDI Infrastructure | 664 334 855 | 27.72% | 442 709 776 | 27.14% |

184. Training for researchers | 17 033 489 | 0.71% | 10 726 832 | 0.66% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

20. Human Resources | 128 437 384 | 5.04% | 83 257 306 | 4.94% |

2. Human Resources | 128 437 384 | 100.00% | 83 257 306 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

21. Labour market policy | 432 769 507 | 17.00% | 280 939 101 | 16.68% |

21. Labour market policy | 432 769 507 | 100.00% | 280 939 101 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

22. Social inclusion | 490 159 138 | 19.25% | 322 143 127 | 19.12% |

22. Social inclusion | 490 159 138 | 100.00% | 322 143 127 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

23. Developing educational and vocational training (persons, firms) | 536 316 228 | 21.06% | 374 984 485 | 22.26% |

23. Developing educational and vocational training (persons, firms) | 536 316 228 | 100.00% | 374 984 485 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 825 659 280 | 32.43% | 532 764 592 | 31.62% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 825 659 280 | 100.00% | 532 764 592 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 2 546 165 031 | 10.48% | 1 684 706 578 | 10.22% |

25. Positive labour market actions for woman | 132 823 494 | 5.22% | 90 617 966 | 5.38% |

25. Positive labour market actions for woman | 132 823 494 | 100.00% | 90 617 966 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

30. Basic Infrastructure | 210 223 382 | 2.97% | 147 672 160 | 3.07% |

3. Basic Infrastructure | 210 223 382 | 100.00% | 147 672 160 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

31. Transport infrastructure | 1 404 027 543 | 19.82% | 975 798 128 | 20.30% |

31. Transport infrastructure | 206 063 939 | 14.68% | 122 622 317 | 12.57% |

311. Rail | 183 750 178 | 13.09% | 128 285 566 | 13.15% |

3121. National roads | 87 077 623 | 6.20% | 64 026 084 | 6.56% |

3122. Regional/local roads | 109 610 245 | 7.81% | 93 572 410 | 9.59% |

3123. Cycle tracks | 17 431 821 | 1.24% | 9 819 346 | 1.01% |

312. Roads | 149 544 194 | 10.65% | 116 961 846 | 11.99% |

313. Motorways | 11 879 583 | 0.85% | 6 423 500 | 0.66% |

314. Airports | 14 284 406 | 1.02% | 12 617 995 | 1.29% |

315. Ports | 263 008 659 | 18.73% | 180 664 631 | 18.51% |

316. Waterways | 18 326 031 | 1.31% | 12 026 204 | 1.23% |

317. Urban Transport | 90 444 127 | 6.44% | 56 560 750 | 5.80% |

318. Multimodal Transport | 245 906 509 | 17.51% | 168 972 229 | 17.32% |

319. Intelligent Transport Systems | 6 700 227 | 0.48% | 3 245 249 | 0.33% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

32. Telecommunications infrastructure and information society | 782 315 166 | 11.05% | 490 816 554 | 10.21% |

32. Telecommunications infrastructure and information society | 166 792 452 | 21.32% | 107 460 435 | 21.89% |

321. Basic infrastructure | 126 949 053 | 16.23% | 84 315 842 | 17.18% |

322. Information and Communication Technology (including security and safe transmission measures) | 141 644 344 | 18.11% | 85 483 678 | 17.42% |

323. Services and applications for the citizen (health, administration, education) | 141 696 011 | 18.11% | 84 750 669 | 17.27% |

324. Services and applications for SMEs (electronic commerce and transactions, education and training, networking) | 205 233 307 | 26.23% | 128 805 930 | 26.24% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

33. Energy infrastructures (production, delivery) | 215 691 690 | 3.05% | 139 299 138 | 2.90% |

33. Energy infrastructures (production, delivery) | 36 414 070 | 16.88% | 26 306 822 | 18.89% |

331. Electricity, gas, petrol, solid fuel | 29 391 724 | 13.63% | 23 680 179 | 17.00% |

332. Renewable sources of energy (solar power, wind power, hydro-electricity, biomass) | 86 852 039 | 40.27% | 50 556 125 | 36.29% |

333. Energy efficiency, cogeneration, energy control | 63 033 857 | 29.22% | 38 756 012 | 27.82% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

34. Environmental infrastructure (including water) | 978 078 216 | 13.81% | 702 809 266 | 14.62% |

34. Environmental infrastructure (including water) | 298 429 546 | 30.51% | 222 423 156 | 31.65% |

341. Air | 45 061 093 | 4.61% | 30 555 614 | 4.35% |

342. Noise | 7 531 837 | 0.77% | 5 240 251 | 0.75% |

343. Urban and industrial waste (including hospital and dangerous waste) | 156 485 029 | 16.00% | 93 209 806 | 13.26% |

344. Drinking water (collection, storage, treatment and distribution) | 206 200 805 | 21.08% | 140 644 278 | 20.01% |

345. Sewerage and purification | 264 369 906 | 27.03% | 210 736 161 | 29.98% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

35. Planning and rehabilitation | 3 209 838 445 | 45.32% | 2 144 202 184 | 44.61% |

35. Planning and rehabilitation | 343 977 718 | 10.72% | 236 519 887 | 11.03% |

351. Upgrading and Rehabilitation of industrial and military sites | 965 126 623 | 30.07% | 639 071 685 | 29.80% |

352. Rehabilitation of urban areas | 1 242 812 729 | 38.72% | 809 740 092 | 37.76% |

353. Protection, improvement and regeneration of the natural environment | 372 200 224 | 11.60% | 248 205 175 | 11.58% |

354. Maintenance and restoration of the cultural heritage | 285 721 150 | 8.90% | 210 665 346 | 9.82% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 7 082 787 889 | 29.14% | 4 806 394 211 | 29.17% |

36. Social infrastructure and public health | 282 613 446 | 3.99% | 205 796 780 | 4.28% |

36. Social infrastructure and public health | 282 613 446 | 100.00% | 205 796 780 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 227 496 540 | 5.05% | 714 112 773 | 4.33% |

40. Miscellaneous | 37 001 109 | 3.01% | 25 442 810 | 3.56% |

4. Miscellaneous | 37 001 109 | 100.00% | 25 442 810 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 227 496 540 | 5.05% | 714 112 773 | 4.33% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 508 715 842 | 41.44% | 287 532 804 | 40.26% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 170 117 645 | 33.44% | 89 982 193 | 31.29% |

411. Preparation, implementation, monitoring, publicity | 196 260 543 | 38.58% | 113 464 969 | 39.46% |

412. Evaluation | 34 437 143 | 6.77% | 16 480 312 | 5.73% |

413. Studies | 69 219 169 | 13.61% | 45 252 762 | 15.74% |

414. Innovative actions | 16 400 254 | 3.22% | 10 638 225 | 3.70% |

415. Information to the public | 22 281 088 | 4.38% | 11 714 343 | 4.07% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 227 496 540 | 5.05% | 714 112 773 | 4.33% |

49. | 681 779 589 | 55.54% | 401 137 159 | 56.17% |

499. Data not available | 681 779 589 | 100.00% | 401 137 159 | 100,00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

Objective 3 | 47 | 25 873 260 489 | 11.49% | 17 044 064 942 | 11.87% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

11. Agriculture | 27 082 039 | 18.95% | 21 484 124 | 22.26% |

113. Agriculture-specific vocational training | 27 082 039 | 100.00% | 21 484 124 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

12. Forestry | 27 834 379 | 19.47% | 21 742 772 | 22.53% |

128. Forestry-specific vocational training | 27 834 379 | 100.00% | 21 742 772 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

1303. Setting up of farm relief and farm management services | 752 340 | 0.53% | 258 648 | 0.27% |

1303. Setting up of farm relief and farm management services | 752 340 | 100.00% | 258 648 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

14. Fisheries | 752 340 | 0.53% | 258 648 | 0.27% |

148. Measures financed by other Structural Funds (ERDF, ESF) | 752 340 | 100.00% | 258 648 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

15. Assisting large business organisations | 5 961 988 | 4.17% | 1 846 967 | 1.91% |

153. Business advisory services (including internationalisation, exporting and environmental management, purchase of technology) | 5 961 988 | 100.00% | 1 846 967 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

16. Assisting SMEs and the craft sector | 36 053 388 | 25.22% | 24 365 683 | 25.25% |

163. Business advisory services (information, business planning, consultancy services, marketing, management, design, internationalisation, exporting, environmental management, purchase of technology) | 5 961 988 | 16.54% | 1 846 967 | 7.58% |

164. Shared business services (business estates, incubator units, stimulation, promotional services, networking, conferences, trade fairs) | 752 340 | 2.09% | 258 648 | 1.06% |

165. Financial engineering | 752 340 | 2.09% | 258 648 | 1.06% |

166. Services in support of the social economy (providing care for dependents, health and safety, cultural activities) | 752 340 | 2.09% | 258 648 | 1.06% |

167. Vocational training | 27 834 379 | 77.20% | 21 742 772 | 89.24% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

17. Tourism | 28 586 719 | 20.00% | 22 001 419 | 22.80% |

173. Shared services for the tourism industry (including promotional activities, networking, conferences and trade fairs) | 752 340 | 2.63% | 258 648 | 1.18% |

174. Vocational training | 27 834 379 | 97.37% | 21 742 772 | 98.82% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 142 939 959 | 0.55% | 96 497 666 | 0.57% |

18. Research, technological development and innovation (RTDI) | 15 916 766 | 11.14% | 4 539 406 | 4.70% |

181. Research projects based in universities and research institutes | 9 743 497 | 61.22% | 3 961 672 | 87.27% |

182. Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes | 3 252 557 | 20.43% | 191 452 | 4.22% |

184. Training for researchers | 2 920 712 | 18.35% | 386 282 | 8.51% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

20. Human Resources | 37 610 300 | 0.15% | 15 057 442 | 0.09% |

2. Human Resources | 37 610 300 | 100.00% | 15 057 442 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

21. Labour market policy | 7 521 691 554 | 29.95% | 5 317 204 005 | 32.01% |

21. Labour market policy | 7 521 691 554 | 100.00% | 5 317 204 005 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

22. Social inclusion | 5 312 039 926 | 21.15% | 3 383 722 005 | 20.37% |

22. Social inclusion | 5 312 039 926 | 100.00% | 3 383 722 005 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

23. Developing educational and vocational training (persons, firms) | 5 544 917 314 | 22.08% | 3 693 957 422 | 22.24% |

23. Developing educational and vocational training (persons, firms) | 5 544 917 314 | 100.00% | 3 693 957 422 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 5 002 393 526 | 19.92% | 3 100 201 512 | 18.67% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 5 002 393 526 | 100.00% | 3 100 201 512 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 25 111 432 116 | 97.06% | 16 609 193 575 | 97.45% |

25. Positive labour market actions for woman | 1 692 779 496 | 6.74% | 1 099 051 190 | 6.62% |

25. Positive labour market actions for woman | 1 692 779 496 | 100.00% | 1 099 051 190 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 91 243 217 | 0.35% | 68 537 912 | 0.40% |

32. Telecommunications infrastructure and information society | 83 503 137 | 91.52% | 65 228 315 | 95.17% |

322. Information and Communication Technology (including security and safe transmission measures) | 27 834 379 | 33.33% | 21 742 772 | 33.33% |

323. Services and applications for the citizen (health, administration, education) | 27 834 379 | 33.33% | 21 742 772 | 33.33% |

324. Services and applications for SMEs (electronic commerce and transactions, education and training, networking) | 27 834 379 | 33.33% | 21 742 772 | 33.33% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 91 243 217 | 0.35% | 68 537 912 | 0.40% |

36. Social infrastructure and public health | 7 740 080 | 8.48% | 3 309 597 | 4.83% |

36. Social infrastructure and public health | 7 740 080 | 100.00% | 3 309 597 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 527 645 198 | 2.04% | 269 835 789 | 1.58% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 527 645 198 | 100.00% | 269 835 789 | 100.00% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 442 750 834 | 83.91% | 220 730 756 | 81.80% |

411. Preparation, implementation, monitoring, publicity | 42 788 453 | 8.11% | 29 297 846 | 10.86% |

412. Evaluation | 6 142 600 | 1.16% | 2 046 803 | 0.76% |

413. Studies | 5 945 565 | 1.13% | 2 317 115 | 0.86% |

414. Innovative actions | 12 624 646 | 2.39% | 5 221 826 | 1.94% |

415. Information to the public | 17 393 100 | 3.30% | 10 221 443 | 3.79% |

Source: Database of Commission services SFC, data as of March 2007

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

Objective F | 12 | 1 102 697 438 | 0.49% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 1 019 124 151 | 92.42% |

14. Fisheries | 1 019 124 151 | 100.00% |

141. Adjustment of the fishing effort | 202 733 728 | 19.89% |

142. Renewal and modernisation of the fishing fleet | 181 290 152 | 17.79% |

143. Processing, marketing and promoting of fisheries products | 264 584 859 | 25.96% |

144. Aquaculture | 62 261 350 | 6.11% |

145. Equipment of the fishing ports and protection of the coastal marine zones | 156 545 681 | 15.36% |

146. Socio-economic measures (including aids to the temporary stopping and compensation for technical restrictions) | 30 192 881 | 2.96% |

147. Actions by professionals (including vocational training, small coastal fishing) | 121 515 500 | 11.92% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 83 573 287 | 7.58% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 83 573 287 | 100.00% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 15 572 517 | 18.63% |

411. Preparation, implementation, monitoring, publicity | 7 656 748 | 9.16% |

413. Studies | 2 515 727 | 3.01% |

414. Innovative actions | 57 513 829 | 68.82% |

415. Information to the public | 314 466 | 0.38% |

Source: Database of Commission services SFC, data as of March 2007

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

IC | 253 | 11 804 403 473 | 5.24% | 6 570 926 657 | 4.57% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

10. Productive Environment | 915 220 | 0.02% | 478 509 | 0.02% |

1. Productive Environment | 915 220 | 100.00% | 478 509 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

11. Agriculture | 48 306 694 | 1.15% | 28 301 434 | 1.23% |

11. Agriculture | 1 141 727 | 2.36% | 550 859 | 1.95% |

111. Investments in agricultural holdings | 14 790 961 | 30.62% | 8 198 400 | 28.97% |

114. Improving processing and marketing of agricultural products | 27 646 659 | 57.23% | 17 513 356 | 61.88% |

113. Agriculture-specific vocational training | 4 727 347 | 9.79% | 2 038 819 | 7.20% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

12. Forestry | 42 667 182 | 1.02% | 25 406 164 | 1.10% |

12. Forestry | 3 210 182 | 7.52% | 1 802 142 | 7.09% |

122. Improving harvesting, processing and marketing of forestry products | 6 611 202 | 15.49% | 4 800 392 | 18.89% |

123. Promoting new outlets for the use and marketing of forestry products | 793 863 | 1.86% | 447 102 | 1.76% |

124. Establishment of associations of forest holders | 21 339 | 0.05% | 14 859 | 0.06% |

125. Restoring forestry production potential damaged by natural disasters and fire and introducing appropriate prevention instruments | 11 656 975 | 27.32% | 7 162 179 | 28.19% |

121. Investments in forest holdings | 1 765 192 | 4.14% | 1 015 289 | 4.00% |

128. Forestry-specific vocational training | 3 136 330 | 7.35% | 1 664 001 | 6.55% |

126. Planting of non-farm land | 3 650 966 | 8.56% | 1 991 881 | 7.84% |

127. Improving and maintaining the ecological stability of protected woodlands | 11 821 132 | 27.71% | 6 508 319 | 25.62% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

13. Promoting the adaptation and the development of rural areas | 2 473 985 200 | 58.86% | 1 407 982 027 | 60.99% |

13. Promoting the adaptation and the development of rural areas | 51 853 451 | 2.10% | 30 223 127 | 2.15% |

1301. Land improvement | 9 154 053 | 0.37% | 5 665 739 | 0.40% |

1302. Reparcelling | 223 820 | 0.01% | 123 868 | 0.01% |

1303. Setting up of farm relief and farm management services | 1 230 808 | 0.05% | 638 275 | 0.05% |

1304. Marketing of quality agricultural products | 20 830 067 | 0.84% | 11 716 687 | 0.83% |

1305. Basic services for the rural economy and population | 85 307 960 | 3.45% | 50 152 690 | 3.56% |

1306. Renovation and development of villages and protection and conservation of the rural heritage | 124 669 138 | 5.04% | 71 728 734 | 5.09% |

1307. Diversification of agricultural activities and activities close to agriculture, to provide multiple activities or alternative incomes | 24 928 373 | 1.01% | 13 957 505 | 0.99% |

1308. Agricultural water resources management | 13 448 708 | 0.54% | 7 864 418 | 0.56% |

1309. Development and improvement of infrastructure connected with the development of agriculture | 2 233 398 | 0.09% | 1 480 429 | 0.11% |

1310. Encouragement for tourist activities | 92 816 557 | 3.75% | 54 134 521 | 3.84% |

1311. Encouragement for craft activities | 23 786 734 | 0.96% | 10 997 871 | 0.78% |

1312. Preservation of the environment in connection with land, forestry and landscape conservation as well as with the improvement of animal welfare | 110 950 010 | 4.48% | 54 096 808 | 3.84% |

1313. Restoring agricultural production potential damaged by natural disasters and introducing appropriate prevention instruments | 21 584 983 | 0.87% | 12 074 060 | 0.86% |

1314. Financial engineering | 301 706 | 0.01% | 39 754 | 0.00% |

1399. Leader+ | 1 410 651 751 | 57.02% | 808 980 995 | 57.46% |

1318. Leader+ National networks | 5 375 626 | 0.22% | 2 113 773 | 0.15% |

1317. Leader+ Transnational co-operation | 23 567 964 | 0.95% | 3 514 041 | 0.25% |

1316. Leader+ Inter-territorial co-operation | 24 872 841 | 1.01% | 6 378 362 | 0.45% |

1315. Leader+ LAG overhead and animation costs | 426 197 251 | 17.23% | 262 100 371 | 18.62% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

14. Fisheries | 20 989 617 | 0.50% | 11 304 248 | 0.49% |

14. Fisheries | 719 685 | 3.43% | 316 783 | 2.80% |

141. Adjustment of the fishing effort | 889 780 | 4.24% | 572 303 | 5.06% |

142. Renewal and modernisation of the fishing fleet | 1 090 124 | 5.19% | 557 445 | 4.93% |

143. Processing, marketing and promoting of fisheries products | 9 253 916 | 44.09% | 4 995 103 | 44.19% |

144. Aquaculture | 2 173 248 | 10.35% | 1 165 606 | 10.31% |

145. Equipment of the fishing ports and protection of the coastal marine zones | 1 090 124 | 5.19% | 557 445 | 4.93% |

146. Socio-economic measures (including aids to the temporary stopping and compensation for technical restrictions) | 1 090 124 | 5.19% | 557 445 | 4.93% |

147. Actions by professionals (including vocational training, small coastal fishing) | 868 440 | 4.14% | 557 445 | 4.93% |

148. Measures financed by other Structural Funds (ERDF, ESF) | 3 814 177 | 18.17% | 2 024 674 | 17.91% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

15. Assisting large business organisations | 30 344 224 | 0.72% | 15 999 807 | 0.69% |

15. Assisting large business organisations | 4 670 367 | 15.39% | 1 995 138 | 12.47% |

151. Investment in physical capital (plant and equipment, co financing of state aids) | 3 607 750 | 11.89% | 1 625 936 | 10.16% |

152. Environment-friendly technologies, clean and economical energy technologies | 10 409 898 | 34.31% | 5 875 296 | 36.72% |

153. Business advisory services (including internationalisation, exporting and environmental management, purchase of technology) | 8 557 433 | 28.20% | 4 749 670 | 29.69% |

154. Services to stakeholders (health and safety, providing care for dependants) | 3 007 296 | 9.91% | 1 673 793 | 10.46% |

155. Financial engineering | 91 480 | 0.30% | 79 974 | 0.50% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

16. Assisting SMEs and the craft sector | 732 370 778 | 17.42% | 381 502 187 | 16.53% |

16. Assisting SMEs and the craft sector | 85 592 164 | 11.69% | 53 158 189 | 13.93% |

161. Investment in physical capital (plant and equipment, co financing of state aids) | 62 226 422 | 8.50% | 29 975 944 | 7.86% |

162. Environment-friendly technologies, clean and economical energy technologies | 78 824 299 | 10.76% | 46 472 838 | 12.18% |

163. Business advisory services (information, business planning, consultancy services, marketing, management, design, internationalisation, exporting, environmental management, purchase of technology) | 205 931 186 | 28.12% | 106 272 404 | 27.86% |

164. Shared business services (business estates, incubator units, stimulation, promotional services, networking, conferences, trade fairs) | 150 065 255 | 20.49% | 69 728 714 | 18.28% |

165. Financial engineering | 19 298 075 | 2.64% | 11 166 823 | 2.93% |

166. Services in support of the social economy (providing care for dependents, health and safety, cultural activities) | 64 697 080 | 8.83% | 31 431 166 | 8.24% |

167. Vocational training | 65 736 298 | 8.98% | 33 296 109 | 8.73% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

17. Tourism | 559 451 154 | 13.31% | 283 435 332 | 12.28% |

17. Tourism | 120 009 879 | 21.45% | 71 366 446 | 25.18% |

171. Physical investment (information centres, tourist accommodation, catering, facilities) | 103 592 415 | 18.52% | 56 718 594 | 20.01% |

172. Non-physical investments (development and provision of tourist services, sporting, cultural and leisure activities, heritage) | 169 126 747 | 30.23% | 77 358 759 | 27.29% |

173. Shared services for the tourism industry (including promotional activities, networking, conferences and trade fairs) | 116 563 588 | 20.84% | 52 972 901 | 18.69% |

174. Vocational training | 50 158 525 | 8.97% | 25 018 632 | 8.83% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

1. Productive Environment | 4 203 204 706 | 35.61% | 2 308 565 011 | 35.13% |

18. Research, technological development and innovation (RTDI) | 294 174 637 | 7.00% | 154 155 304 | 6.68% |

18. Research, technological development and innovation (RTDI) | 57 449 834 | 19.53% | 32 902 911 | 21.34% |

181. Research projects based in universities and research institutes | 73 224 442 | 24.89% | 34 182 877 | 22.17% |

182. Innovation and technology transfers, establishment of networks and partnerships between businesses and/or research institutes | 116 879 905 | 39.73% | 62 499 165 | 40.54% |

183. RTDI Infrastructure | 35 065 063 | 11.92% | 20 499 374 | 13.30% |

184. Training for researchers | 11 555 394 | 3.93% | 4 070 977 | 2.64% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

20. Human Resources | 224 468 472 | 6.44% | 128 009 377 | 6.49% |

2. Human Resources | 224 468 472 | 100.00% | 128 009 377 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

21. Labour market policy | 641 253 243 | 18.38% | 372 274 337 | 18.87% |

21. Labour market policy | 641 253 243 | 100.00% | 372 274 337 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

22. Social inclusion | 812 994 160 | 23.31% | 467 694 122 | 23.71% |

22. Social inclusion | 812 994 160 | 100.00% | 467 694 122 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

23. Developing educational and vocational training (persons, firms) | 479 313 658 | 13.74% | 250 645 094 | 12.70% |

23. Developing educational and vocational training (persons, firms) | 479 313 658 | 100.00% | 250 645 094 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 911 137 857 | 26.12% | 525 814 616 | 26.65% |

24. Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies (persons, firms) | 911 137 857 | 100.00% | 525 814 616 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

2. Human Resources | 3 487 956 432 | 29.55% | 1 972 883 785 | 30.02% |

25. Positive labour market actions for woman | 418 789 040 | 12.01% | 228 446 239 | 11.58% |

25. Positive labour market actions for woman | 418 789 040 | 100.00% | 228 446 239 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

30. Basic Infrastructure | 915 495 | 0.04% | 478 652 | 0.03% |

3. Basic Infrastructure | 915 495 | 100.00% | 478 652 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

31. Transport infrastructure | 840 207 100 | 32.17% | 489 199 798 | 32.45% |

31. Transport infrastructure | 82 347 231 | 9.80% | 47 884 858 | 9.79% |

311. Rail | 46 843 887 | 5.58% | 24 992 469 | 5.11% |

3121. National roads | 58 496 387 | 6.96% | 24 760 397 | 5.06% |

3122. Regional/local roads | 27 172 265 | 3.23% | 12 968 609 | 2.65% |

3123. Cycle tracks | 22 531 723 | 2.68% | 12 505 257 | 2.56% |

312. Roads | 216 213 193 | 25.73% | 121 269 031 | 24.79% |

313. Motorways | 95 678 695 | 11.39% | 84 776 630 | 17.33% |

314. Airports | 20 189 751 | 2.40% | 11 272 281 | 2.30% |

315. Ports | 64 462 205 | 7.67% | 34 519 400 | 7.06% |

316. Waterways | 48 141 823 | 5.73% | 30 130 951 | 6.16% |

317. Urban Transport | 51 732 888 | 6.16% | 29 985 329 | 6.13% |

318. Multimodal Transport | 60 548 368 | 7.21% | 31 969 436 | 6.54% |

319. Intelligent Transport Systems | 45 848 686 | 5.46% | 22 165 152 | 4.53% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

32. Telecommunications infrastructure and information society | 541 575 668 | 20.73% | 327 991 235 | 21.76% |

32. Telecommunications infrastructure and information society | 73 950 191 | 13.65% | 46 915 609 | 14.30% |

321. Basic infrastructure | 86 349 662 | 15.94% | 54 403 762 | 16.59% |

322. Information and Communication Technology (including security and safe transmission measures) | 133 223 834 | 24.60% | 87 337 203 | 26.63% |

323. Services and applications for the citizen (health, administration, education) | 144 638 254 | 26.71% | 83 166 014 | 25.36% |

324. Services and applications for SMEs (electronic commerce and transactions, education and training, networking) | 103 413 727 | 19.09% | 56 168 648 | 17.13% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

33. Energy infrastructures (production, delivery) | 82 936 806 | 3.18% | 46 952 838 | 3.11% |

33. Energy infrastructures (production, delivery) | 4 108 935 | 4.95% | 1 675 630 | 3.57% |

331. Electricity, gas, petrol, solid fuel | 8 134 036 | 9.81% | 5 300 386 | 11.29% |

332. Renewable sources of energy (solar power, wind power, hydro-electricity, biomass) | 58 315 636 | 70.31% | 34 489 249 | 73.46% |

333. Energy efficiency, cogeneration, energy control | 12 378 199 | 14.92% | 5 487 573 | 11.69% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

34. Environmental infrastructure (including water) | 264 368 531 | 10.12% | 142 399 542 | 9.45% |

34. Environmental infrastructure (including water) | 27 262 581 | 10.31% | 8 726 380 | 6.13% |

341. Air | 12 302 463 | 4.65% | 6 588 815 | 4.63% |

342. Noise | 8 392 409 | 3.17% | 4 869 478 | 3.42% |

343. Urban and industrial waste (including hospital and dangerous waste) | 77 214 522 | 29.21% | 37 899 177 | 26.61% |

344. Drinking water (collection, storage, treatment and distribution) | 77 798 601 | 29.43% | 49 260 006 | 34.59% |

345. Sewerage and purification | 61 397 957 | 23.22% | 35 055 686 | 24.62% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

35. Planning and rehabilitation | 719 649 519 | 27.55% | 409 162 961 | 27.14% |

35. Planning and rehabilitation | 136 287 942 | 18.94% | 78 111 664 | 19.09% |

351. Upgrading and Rehabilitation of industrial and military sites | 49 456 145 | 6.87% | 27 913 242 | 6.82% |

352. Rehabilitation of urban areas | 288 542 075 | 40.09% | 190 233 096 | 46.49% |

353. Protection, improvement and regeneration of the natural environment | 131 819 633 | 18.32% | 65 680 686 | 16.05% |

354. Maintenance and restoration of the cultural heritage | 113 543 723 | 15.78% | 47 224 274 | 11.54% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

3. Basic Infrastructure | 2 612 112 351 | 22.13% | 1 507 477 426 | 22.94% |

36. Social infrastructure and public health | 162 459 233 | 6.22% | 91 292 399 | 6.06% |

36. Social infrastructure and public health | 162 459 233 | 100.00% | 91 292 399 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 501 129 985 | 12.72% | 782 000 434 | 11.90% |

40. Miscellaneous | 1 315 401 | 0.09% | 785 213 | 0.10% |

4. Miscellaneous | 1 315 401 | 100.00% | 785 213 | 100.00% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 501 129 985 | 12.72% | 782 000 434 | 11.90% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 1 433 240 295 | 95.48% | 745 778 332 | 95.37% |

41. Technical assistance and innovative actions (ERDF, ESF, EAGGF, FIFG) | 199 508 519 | 13.92% | 99 560 910 | 13.35% |

411. Preparation, implementation, monitoring, publicity | 221 282 808 | 15.44% | 107 116 693 | 14.36% |

412. Evaluation | 43 369 805 | 3.03% | 16 373 427 | 2.20% |

413. Studies | 361 651 003 | 25.23% | 212 865 040 | 28.54% |

414. Innovative actions | 471 862 711 | 32.92% | 238 951 439 | 32.04% |

415. Information to the public | 135 565 450 | 9.46% | 70 910 822 | 9.51% |

Prog. complement | Total (%) | Cert. Expenditure | Total (%) |

4. Miscellaneous | 1 501 129 985 | 12.72% | 782 000 434 | 11.90% |

49. | 66 574 288 | 4.43% | 35 436 890 | 4.53% |

499. Data not available | 66 574 288 | 100.00% | 35 436 890 | 100.00% |

Source: Database of Commission services SFC, data as of March 2007.

P art 6: Operational programmes in the 2000–2006 programming period

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Source: Database of the Directorate-General for Regional Policy.

Part 7: Information on financial corrections and recoveries in the Structural Funds

Table of Contents

1. Introduction 260

2. Terminology 260

2.1. Shared management of the Structural Funds 261

2.2. Irregularity 262

2.3. Fraud……………………………………………………………… 263

2.4. Financial corrections 263

2.5. Execution of financial corrections: withdrawals and recoveries 264

3. Financial correction activity and Recoveries by Member States 266

3.1. Reported irregularities 266

3.2. Execution of financial corrections (withdrawals and recoveries) by Member States for the 2000-06 period 267

3.2.1. Withdrawals and recoveries deducted from statements of expenditure for year 2006 and pending recoveries as at 31.12.2006 268

3.2.2. Cumulative totals of withdrawals and recoveries 2000 - 2006 269

4. Financial correction activity and recoveries by the Commission 271

4.1. Financial corrections 271

4.1.1. Financial corrections for 2000-2006 programming period 272

4.1.2. Financial corrections for 1994-1999 programming period 273

4.2. Recovery orders issued by the Commission 274

5. Conclusion 275

INTRODUCTION

It is important for the Commission to have reliable information on all types of financial corrections and recoveries. Such information is necessary for the Commission to perform its supervisory role and provides evidence that the multi-annual control system is working, as financial corrections and recoveries are generally carried out in years subsequent to that in which the related payments from the Community budget were made.

For its 2005 Annual Report the European Court of Auditors audited the procedures for financial corrections and recoveries in the Structural Funds and found weaknesses in particular in the procedures for Member States' reporting of recoveries. The Court's observations triggered a debate during the discharge procedure for the 2005 financial year. As a result, both the European Parliament's discharge report and the Council's recommendation on the discharge call for further information on financial corrections and recoveries to be published and regularly updated.

The European Parliament has asked the Commission to provide "an explicit definition of the different concepts grouped under the term 'financial correction', as well as the amounts actually involved in the corrections of 2005", and to "submit in future a detailed annual report including the amounts actually involved in financial corrections". The Council has asked the Commission to "update constantly the information and guidance to be provided to the Member States in the field [of financial corrections]" and to "present a detailed report on the exact amounts paid by Member States because of the financial corrections of the Commission concerning the financial years 2000-2006 and to provide regular updates."

The Commission undertook to provide a report explaining the concepts and procedures for financial corrections and giving updated figures for 2006, as an annex to the Annual Report on the Structural Funds for 2006.

It has already provided figures on corrections and recoveries by the Commission in the explanatory notes to the Commission's accounts for 2006 and in the 2006 Annual Activity Reports of the Directorates General responsible for the Structural Funds. This annex presents both information on the corrections and recoveries by the Commission and in addition data on withdrawals, recoveries and pending recoveries of Structural Funds by the Member States. The latter information has been collected as a result of the action taken by the Commission to improve compliance with the regulatory reporting requirements.

TERMINOLOGY

A number of different terms are used concerning the treatment of ineligible expenditure in the Structural Funds, including irregularity, fraud, error, financial correction, withdrawal and recovery.

All these terms, which are explained in the following paragraphs, have to be understood in the framework of "shared management", the management mode applicable to Structural Funds. Under Article 53 of the Financial Regulation[20], when the Commission implements the budget under this management mode, implementation tasks and responsibilities, including the correction of ineligible expenditure, are delegated to Member States.

Shared management of the Structural Funds

The Communication from the Commission to the European Parliament and the Council on "The respective responsibilities of the Member States and the Commission in the shared management of the Structural Funds and the Cohesion Fund" (COM(2004) 580 final) sets out in detail how responsibilities are allocated for the 2000-2006 period.

After the adoption by the Commission of an Operational Programme, the Member State is responsible for the implementation and financial management and control, from the initial stage of selection of operations to be co-financed under the programme, through the monitoring of the execution of the operations, and the verification of expenditure declared, up to programme closure. Three levels of control are required.

Firstly the eligibility of expenditure declared by the final beneficiary to be charged to the Operational Programme budget is verified by the managing authority, on the basis of the expenditure claim and supporting documents. As well as documentary checks, the services of the managing authority must carry out visits at least on a sample basis to operations, during the implementation of the action financed, to verify the delivery of the project outputs and compliance with all the conditions of funding. Secondly the paying authority checks the aggregated statements of expenditure before they are submitted to the Commission, to satisfy itself that it can certify the legality and regularity of the total amount to be declared for reimbursement. Thirdly, a sample of operations is subject of audit each year by the designated audit bodies. In addition, at closure of the programme, an independent audit body provides a winding-up declaration on the validity of the final expenditure claim on the basis of the system audits carried out together with the audits of the sample of operations. Where irregularities are detected in the course of these control processes, the Member State is responsible for making the corrections required.

Expenditure certified as legal and regular by the paying authority is declared to the Commission for reimbursement at the level of an Operational Programme. Here, after verifying the formal eligibility of the expenditure claim to be reimbursed, the Commission services pay the Community contribution to the Member State at the applicable co-financing rate. Throughout the implementation period the Commission carries out system audits with substantive testing at the level of operations and requires Member States to correct any system weaknesses and irregular expenditure found. In the event of failure by a Member State to take such measures, the Commission uses its powers to suspend payments for the programmes concerned and to claw back incorrectly paid funds from the Member State.

Irregularity

Article 1(2) of Regulation (EC) No 2988/95[21] defines " irregularity " as:

"any infringement of a provision of Community law resulting from an act or omission by an economic operator which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure".[22]

It should be noted that an irregularity must:

- directly or indirectly prejudice the Community budget or have the potential to do so. Prejudice to the Community budget means that any item of expenditure co-financed by the Community budget is not in conformity with the applicable Community rules and regulations;

- involve an infringement of Community law, including the specific rules of the Structural Funds, the Financial Regulation, Community legislation on public procurement, State aid, the environment and transport or any other secondary Community law, and applicable national provisions.

To monitor irregularities affecting the Community budget, the Commission has set up systems for the reporting of irregularities to the Commission (OLAF). For the Structural Funds the reporting requirements are set out in Commission Regulation (EC) No 1681/94 amended by Regulation (EC) No 2035/2005.[23] Member States are required to report new irregularities once every quarter, and at the same time to inform the Commission (OLAF) of progress in following up cases reported previously, such as the institution of legal proceedings and recoveries. The information is recorded in a system maintained by OLAF called ECR (for "External Communications Registry").

Not all irregularities detected by Member States are registered in the OLAF system because the Regulation provides a threshold under which reporting is not compulsory and contains other exceptions.[24]

In the Structural Funds context the term " error "[25] is sometimes used synonymously with irregularity, although strictly speaking it is wider and includes clerical and technical errors that are not irregularities as defined above.

Irregularities can be "systemic". A systemic irregularity is a recurrent error due to serious failings in management and control systems designed to ensure correct accounts and compliance with rules and regulations. For example, poor guidance or lax controls may give rise to widespread inclusion of ineligible VAT in claims or failure to keep supporting documents for the required period.

Fraud

The term "irregularity" is to be distinguished from fraud .

Article 1(1)(a) of the Convention of 26 July 1995 on the protection of the European Communities' financial interests[26] defines fraud in respect of expenditure as:

"any intentional act or omission relating to:

- the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities;

- non-disclosure of information in violation of a specific obligation, with the same effect; [or]

- the misapplication of such funds for purposes other than those for which they were originally granted."

Fraud is thus a specific type of intentional irregularity.

Since 2006 the Member States have been required to specify in their quarterly reports to OLAF on irregularities which of them involve suspected fraud.[27]

Financial corrections

Expenditure not meeting the conditions of funding, because of irregularity, must be excluded from co-financing by the EU budget. This exclusion is called a " financial correction ". The purpose of financial corrections is to restore a situation where 100% of the expenditure declared for co-financing from the Structural Funds is in line with the applicable national and Community rules and regulations.

Only the exclusion of amounts because of irregularities within the above definition is considered to be a "financial correction", not adjustments made because of clerical or technical errors, although these must also be corrected by the Member State.

Financial corrections can result from controls and audits at any level of the control system in the Member State[28] or from audits by the Commission or the European Court of Auditors or OLAF enquiries.

Member States are primarily responsible for making financial corrections in relation to irregularities committed by beneficiaries (Article 39(1) of Council Regulation (EC) No 1260/1999). These corrections may arise from their own controls and audits or may result from audits by the Commission or the European Court of Auditors (ECA) or from OLAF enquiries. Where the Member State agrees to make a correction as a result of its own or EC control and audit activity, it may re-use the Community funding released for other expenditure under the programme concerned not related to the operation or operations that were the subject of the correction.

The Commission may take a formal decision to apply financial corrections to the Member State where the Member State has failed itself to make the required corrections or where there are serious failings in the management and control system which could lead to systemic irregularities (Article 39(3) of Regulation (EC) No 1260/1999). A financial correction applied by Commission decision involves a net reduction of the EC funding of the programme concerned.

The Commission has the power to apply extrapolated or flat-rate corrections in certain cases where it is not possible or practicable to quantify the amount of irregular expenditure precisely, or when it would be disproportionate to cancel the expenditure in question entirely. Extrapolation is used when there are results of a representative sample of files available in relation to a systemic irregularity. Flat rate corrections are applied in the case of individual breaches or systemic irregularities where the financial impact is not precisely quantifiable because it is subject to too many variables or diffuse in its effects.[29]

Execution of financial corrections: withdrawals and recoveries

Action to execute financial corrections is taken both by

- Member States, and by the

- Commission.

Member States may execute financial corrections in two ways. Either they:

- withdraw the expenditure affected from the programme immediately by deducting it from the next statement of expenditure submitted to the Commission, thereby immediately releasing the EC funding for commitment to other operations; or they

- leave the expenditure for the time being in the programme pending the outcome of proceedings to recover the unduly paid amount from the beneficiaries. Recovery is effected either by obtaining repayment of the sums concerned or setting off the sums to be repaid against further payments due to the same beneficiary.

Member States are required to supply the Commission with data on financial corrections in the form of both the amounts withdrawn from co-financing and the amounts recovered. The two sets of data are distinct and complementary, as only expenditure withdrawn without waiting for the outcome of recovery proceedings[30] is included in withdrawals , and only expenditure which has not been withdrawn at the outset, but has been left in the declared expenditure until it is recovered, is included, once recovery has taken place, in recoveries . In addition, Member States are required to report the amounts awaiting recovery (i.e., subject to a recovery procedure but not yet recovered), or " pending recoveries ". The legal bases for these obligations are as follows:

- information on withdrawals is required by Article 2(3) of Commission Regulation (EC) No 448/2001, as amended by Regulation (EC) No 1978/2006[31], which obliges Member States to send to the Commission, in an annex to the last quarterly irregularities report of each year supplied under Commission Regulation (EC) No 1681/94,[32] a statement identifying, by measure, the total amounts of public funding withdrawn, following cancellation of all or part of the Community contribution to operations, from statements of expenditure submitted during the preceding years for the programme concerned;

- information on recoveries is required with every payment claim to the Commission under Annex II to Regulation (EC) No 438/2001;[33] and

- information on pending recoveries is required under Article 8 of Regulation (EC) No 438/2001 which obliges Member States to inform the Commission of the state of pending recoveries in an annex to the last quarterly irregularities report of each year supplied under Commission Regulation (EC) No 1681/94.

For programmes of the 2007-13 period a single report per year covering all the information concerned - withdrawals, recoveries and pending recoveries - will be required (Article 20 and Annex XI of Commission Regulation (EC) No 1828/2006).

The Commission issues recovery orders to execute financial corrections resulting from its own or the European Court of Auditors' audits or OLAF investigations in the following cases:

- after all formal Commission financial correction decisions, whether before, at or after closure of a programme;

- for financial corrections at closure of a programme that are accepted by the Member State but which give rise to a repayment by the Member State because the Community contribution already paid exceeds the amount due on the basis of the closure documents submitted; and

- any repayment by the Member State, after programme closure, following recovery from a beneficiary under national proceedings.

No recovery order is issued by the Commission in other cases of financial corrections resulting from its own or the European Court of Auditors' audits or OLAF investigations. As set out above, where the Member State accepts the financial correction and makes the correction itself, no recovery order is issued. Similarly, at closure, where financial corrections are agreed by the Member State, they can be deducted from the balance still payable where the final balance due is sufficient without issue of a recovery order.

On the other hand, recovery orders may be issued by the Commission in some cases not because of financial corrections, but to obtain repayment of pre-financing where the Member State has not subsequently declared sufficient expenditure.

The result is that the figures for recovery orders issued and recoveries made by the Commission represent only a part of the total volume of financial corrections resulting from its own and other EC bodies' control and audit activities.

* * * *

The Commission will undertake a global analysis of all types of recoveries and financial corrections currently in use with a view of defining under the current legislative framework a solution able to provide reliable and complete information in the accounts on recoveries and financial corrections.

FINANCIAL CORRECTION ACTIVITY AND RECOVERIES BY MEMBER STATES

Reported irregularities

The 2006 report of OLAF on irregularities in the Structural Funds contains figures for the total irregularities reported by Member States for the 1994-99 and 2000-06 programming periods and the current state of financial correction and recovery procedures regarding them.[34]

For the entire 1994-99 programming period, the Member States communicated 11,573 cases of irregularities with a potential financial impact (Community contribution) of approximately €1,452 million.

Of these cases, 5,488 have been closed and financial corrections totalling €600 million have been taken into account during final payment. Member States have informed the Commission that administrative and judicial procedures have been concluded at national level for a further 2,016 cases relating to the same period worth €173 million. The Commission departments are currently reconciling the data from the OLAF database with those submitted in Member States' closure documentation and carrying out a validation process with Member States with a view to closing the remaining cases.

Concerning the 2000-06 programming period, the Member States have so far communicated 8,733 irregularities with a potential financial impact (Community contribution) of approximately €1,156 million.

Member States have informed the Commission that administrative and/or judicial procedures have been concluded at national level for 3,686 of these and that €345 million has been recovered.

Execution of financial corrections (withdrawals and r ecoveries) by Member States for the 2000-06 period

As noted at point 2.5 above, Member States are required to submit regular reports to the Commission on withdrawals and recoveries of Community contributions, and on amounts recoverable ("pending recoveries"). In order to improve the communication of this data, the Commission in 2006 published a guidance note on the information required on recoveries and in response to observations in the European Court of Auditors' 2005 Annual Report amended Commission Regulation (EC) No 448/2001.

In January 2007, the Commission wrote to Member States reminding them of their obligations to provide the information under the various legal provisions and requesting them to do so for 2006 in a single communication, covering withdrawals, recoveries and pending recoveries both for 2006 and cumulatively for the whole 2000-06 period, and all four funds (ERDF, ESF, EAGGF and FIFG). A reminder was sent to Member States on 2 August 2007. The Commission has encoded the information which has been received before 1 October 2007.

Some information has been supplied by all the Member States, but there are many gaps and inconsistencies. The data are particularly incomplete for Germany and Spain, which have supplied almost no figures in the requested single communication except for pending recoveries; for Ireland, which only provided figures for withdrawals from one regional programme as an example; for the Netherlands, which has only supplied ERDF figures; and for France, which has supplied data for only a few of its regional programmes. Anomalies have also been identified in some data, such as an incorrect relationship between the figures for total public funding and EC contribution. The Commission will ask the Member States to complete and correct gaps and apparent inaccuracies in the information and will follow up these requests. It will also remind Member States of the continuing obligation to provide the same data for 2007 during the first quarter of 2008. The Commission will also include testing of the reliability of the data in forthcoming audits in Member States.

The situation regarding the data received is shown in the following tables:

Withdrawals and recoveries deducted from statements of expenditure for year 2006 and pending recoveries as at 31.12.2006

Total by Member State (all Funds) and for INTERREG/PEACE

€ millions

Member State | Withdrawals | Recoveries | Pending recoveries |

Total public funding* | EC contribution | Total public funding* | EC contribution | Total public funding* to be recovered | ECU contribution to be recovered |

BE | 4.98 | 1.72 | 0.21 | 0.72 | 3.58 | 2.13 |

CZ | 0 | 0 | 0 | 0 | 0 | 0 |

DK | 0 | 0 | 0.17 | 0.11 | 0.15 | 0.12 |

DE | 0 | 0 | 0.03 | 0.92 | 52.34 | 76.54 |

EE | 0 | 0 | 0 | 0 | 0 | 0 |

IE | 1.06 | 0 | 0 | 0 | 0 | 0 |

EL | 151.18 | 106.00 | 0 | 0 | 0 | 0 |

ES | 0 | 0 | 0 | 0 | 298.37 | 0 |

FR | 0.30 | 1.52 | 0 | 0.22 | 0.00 | 0.01 |

IT | 83.38 | 45.84 | 22.37 | 11.06 | 28.48 | 13.20 |

CY | 0 | 0 | 0 | 0 | 0 | 0 |

LV | 0 | 0 | 0 | 0 | 0.13 | 0.09 |

LT | 0 | 0 | 0.01 | 0.01 | 0 | 0 |

LU | 0.37 | 0.18 | 0 | 0.05 | 0 | 0 |

HU | 0 | 0 | 0 | 0 | 0 | 0 |

MT | 0 | 0 | 0.01 | 0.01 | 0.52 | 0.39 |

NL | 0.30 | 0.07 | 0.75 | 0.03 | 0 | 0.02 |

AT | 0 | 0 | 9.57 | 0.82 | 0.04 | 5.81 |

PL | 0 | 0 | 1.04 | 1.01 | 0.03 | 0.03 |

PT | 0 | 0 | 48.10 | 35.03 | 59.84 | 45.53 |

SI | 0 | 0 | 0 | 0 | 0 | 1.43 |

SK | 0 | 0 | 0.06 | 0.03 | 0.09 | 0.04 |

FI | 0 | 0 | 1.02 | 0.41 | 1.22 | 0.75 |

SE | 0.06 | 0.03 | 0.17 | 0.07 | 0.01 | 0.01 |

UK | 86.29 | 32.55 | 15.00 | 6.79 | 101.26 | 50.55 |

INTERREG and PEACE | 5.53 | 3.84 | 3.04 | 1.84 | 3.05 | 1.54 |

Total | 333.45 | 191.75 | 101.55 | 59.13 | 549.11 | 198.19 |

Source: Member States

* Total public funding includes national public funding and EC contributions. However, in some cases the data supplied by Member States contains figures for total public funding and EC contribution which are inconsistent or only one figure is given, without specifying which.

Totals by Fund

€ millions

Fund | Withdrawals | Recoveries | Pending recoveries |

Total public funding* | EC contribution | Total public funding* | EC contribution | Total public funding* to be recovered | EC contribution to be recovered |

ERDF | 290.10 | 166.34 | 81.50 | 45.53 | 500.76 | 168.38 |

ESF | 37.20 | 16.20 | 17.75 | 12.32 | 34.86 | 21.93 |

EAGGF | 5.63 | 8.69 | 2.02 | 1.11 | 11.41 | 6.50 |

FIFG | 0.52 | 0.52 | 0.28 | 0.17 | 2.08 | 1.38 |

Total | 333.45 | 191.75 | 101.55 | 59.13 | 549.11 | 198.19 |

Source: Member States

Cumulative totals of withdrawals and recoveries 2000 - 2006

Total by Member State (all Funds) and INTERREG/PEACE

€ millions

Member State | Cumulative total of withdrawals | Cumulative total of recoveries |

Total public funding* | EC contribution | Total public funding* | EC contribution |

BE | 6.08 | 2.64 | 0.31 | 2.13 |

CZ | 0 | 0 | 0 | 0 |

DK | 0 | 0 | 0.20 | 0.14 |

DE | 0 | 0 | 1.07 | 0.70 |

EE | 0.37 | 7.85 | 0 | 0 |

IE | 22.46 | 0 | 0 | 0 |

EL | 240.31 | 165.96 | 0 | 0 |

ES | 0 | 0 | 0 | 0 |

FR | 1.73 | 0.24 | 0 | 0 |

IT | 170.42 | 90.61 | 18.29 | 9.66 |

CY | 0 | 0 | 0 | 0 |

LV | 0 | 0 | 0.02 | 0.01 |

LT | 0 | 0 | 0.02 | 0.01 |

LU | 13.08 | 2.26 | 0 | 0 |

HU | 0 | 0 | 0 | 0 |

MT | 0 | 0 | 0.53 | 0.40 |

NL | 0 | 0 | 0 | 0 |

AT | 0 | 0 | 11.38 | 5.45 |

PL | 0 | 0 | 1.14 | 1.10 |

PT | 0 | 0 | 124.75 | 87.13 |

SI | 0 | 0 | 0 | 0 |

SK | 0 | 0 | 0.06 | 0.03 |

FI | 0.78 | 0.39 | 2.05 | 0.90 |

SE | 0 | 0 | 0.16 | 0.08 |

UK | 66.60 | 48.24 | 31.50 | 14.76 |

INTERREG and PEACE | 10.77 | 7.24 | 3.41 | 2.06 |

Total | 532.60 | 325.43 | 194.89 | 124.56 |

Source: Member States

Total by Fund

€ millions

Fund | Cumulative total of withdrawals | Cumulative total of recoveries |

Total public funding* | EC contribution | Total public funding* | EC contribution |

ERDF | 502.15 | 270.71 | 157.20 | 94.01 |

ESF | 21.61 | 36.82 | 33.48 | 28.25 |

EAGGF | 7.51 | 16.87 | 2.41 | 1.35 |

FIFG | 1.33 | 1.03 | 1.80 | 0.95 |

Total | 532.60 | 325.43 | 194.89 | 124.56 |

Source: Member States

Financial correction activity and recoveries by the Commission

Financial corrections

The financial corrections (EC contribution) made to Structural Fund programmes over the last four years (2003 to 2006), resulting from Commission audit work, audit work by the Court of Auditors, OLAF investigations and the closure process for 1994-99 programmes are given below for each programming period.

The Commission published figures for financial corrections in the Structural Funds resulting from its own and other EC bodies' audit work for the first time in the 2006 accounts, distinguishing between corrections by formal Commission decision and those accepted by Member States without a decision.[35] See section 2.4 for further explanation on financial corrections.

In relation to financial corrections proposed by the Commission on the basis of its own or other EC bodies' audit work, but accepted and executed by Member States, there is a potential overlap between the data on " withdrawals " by Member States presented in section 3 and the figures for " Financial corrections without a Commission decision " presented here.

Financial corrections for 2000-2006 programming period

€ millions

Fund | Financial Corrections without Commission Decision (accepted by MS) | Financial Corrections by Commission Decision | Total Financial Corrections | 2006 only |

ERDF | 857 | 518 | 1.375 | 262 |

ESF | 433 | 6 | 439 | 165 |

EAGGF Guidance | 0 | 1 | 1 | 1 |

FIFG | 0 | 0 | 0 | 0 |

TOTAL | 1290 | 525 | 1815 | 428 |

Source: Commission services

Note: Compared with the Commission's final accounts – Volume II, p. 61, the Cohesion Fund (total corrections of €100 million and €93 million in 2006) is not included.

The breakdown of the financial corrections per Member State is as follows:

€ millions

Member State | Cumulative amount 2000-2006 | Total |

Financial Corrections without Commission Decision | Financial Corrections by Commission Decision |

BE | 0 | 0 | 0 |

DK | 0.16 | 0 | 0.16 |

DE | 0.29 | 0 | 0.29 |

IE | 3.40 | 0 | 3.40 |

EL | 319.61 | 518 | 837.61 |

ES | 565.43 | 0 | 565.43 |

FR | 158.10 | 6.30 | 164.40 |

IT | 45.40 | 0 | 45.40 |

LU | 0 | 0 | 0 |

NL | 0 | 1.12 | 1.12 |

AT | 0 | 1.54 | 0 |

PT | 28.30 | 0 | 28.30 |

FI | 70.16 | 0 | 70.16 |

SE | 11.30 | 0 | 11.30 |

UK | 46.12 | 0 | 87.50 |

Total | 1,289.65 | 525.42 | 1,815.07 |

Financial corrections for 1994-1999 programming period

€ millions

Fund | Financial Corrections without Commission Decision (accepted by MS) | Financial Corrections by Commission Decision | Total Financial Corrections |

ERDF | 951 | 93 | 1,044 |

ESF | 0 | 330 | 330 |

EAGGF Guidance | 20 | 10 | 30 |

FIFG | 13 | 0 | 13 |

TOTAL | 984 | 433 | 1,417 |

Source: Commission services

Notes:

1. Compared with the Commission's final accounts – Volume II, p. 61, the difference is due to the deduction of the Cohesion Fund (corrections totalling €260 million made by or without Commission decision).

2. As indicated in the notes to the Commission's final accounts, Vol. II, p. 61, the figures for ERDF corrections without a Commission decision include some estimated amounts, namely 1) amounts established in initial letters to Member States launching financial corrections procedures (These amounts may change subsequently in the course of the procedure.), and 2) amounts based on the ERDF contribution rate for the programme concerned.

3. There are no ESF figures for financial corrections without formal Commission decision.

The breakdown of financial corrections for the 1994-99 per Member State is as follows:

€ millions

Member State | Financial Corrections without Commission Decision | Financial Corrections by Commission Decision | Total Financial Corrections |

BE | 1.86 | 2.32 | 4.18 |

DK | 0.22 | 0.78 | 1.00 |

DE | 154.53 | 6.3 | 160.83 |

IE | 5.43 | 18.84 | 24.27 |

EL | 301.94 | 57.90 | 359.84 |

ES | 150.41 | 9.67 | 160.08 |

FR | 19.30 | 34.27 | 53.57 |

IT | 254.46 | 120.62 | 375.08 |

LU | 0.40 | 0.43 | 0.83 |

NL | 1.57 | 150.52 | 152.09 |

AT | 0.03 | 1.5 | 1.57 |

PT | 45.71 | 0 | 45.71 |

FI | 0.85 | 0 | 0.85 |

SE | 0.92 | 0.04 | 0.96 |

UK | 44.12 | 29.59 | 75.71 |

Total | 983.75 | 432.82 | 1,416.57 |

The Commission audit work on the 1994-99 closure is ongoing and may give rise to additional financial corrections in 2007 and 2008. These financial corrections will be reported in 2008 and 2009.

Recovery orders issued by the Commission

Recoveries by the Commission were also disclosed in the 2006 accounts and are included in this annex for completeness. There is necessarily an overlap between this data and the figures related to financial corrections that are included in the preceding tables in section 4, in the figures "financial corrections by Commission Decision" and, for the 1994-99 programming period, also in the figures for "financial corrections without Commission Decision".

The recovery figures published by the Commission distinguish recoveries of pre-financing from recoveries of expenditure, but have so far not precisely identified recoveries resulting from financial corrections. Recoveries of pre-financing can nevertheless be excluded when considering financial corrections (see point 2.5 above), and they are therefore disregarded in the following table.

The amounts of recoveries made in 2006 and of recovery orders issued in 2006 and in the period 2003-2005 to recover expenditure previously paid by the Commission are as follows:

€ millions

Fund | Total amounts recovered in 2006 * | Total recovery orders issued in 2006 | Total recovery orders issued in 2003-2005 | Total recovery orders issued in 2003-2006 | Recovery orders issued for 1994-1999 period | Recovery orders issued for 2000-2006 period |

ERDF | 176 | 144 | 608 | 752 | 552 | 200 |

ESF | 102 | 95 | 332 | 427 | 421 | 6 |

EAGGF Guidance | 3.3 | 3.3 | 5.8 | 9.1 | 8 | 1.1 |

FIFG | 9 | 8.6 | 10 | 18.6 | 18.6 | 0 |

TOTAL | 290.3 | 250.9 | 955.8 | 1,206.7 | 999.6 | 207.1 |

Source: Commission services

Note:Compared with the Commission's final accounts – Volume II, p. 59, the difference for recovery orders issued in 2006 is essentially due to the deduction of the Cohesion Fund (€56 million), recoveries of pre-financing (€70 million) and €318 million of a 2005 financial correction decision concerning Greece, which under an agreement with the Member States is in fact only to be recovered in 2007 and 2008. The difference for recoveries made in 2006 is mainly due to deduction of the Cohesion Fund (€52 million) and recoveries of pre-financing (€50 million).

* Includes amounts from recovery orders issued in 2006 and prior years.

CONCLUSION

The actions undertaken by the Commission services have led to a substantial improvement in the level of information on financial corrections and recoveries that is available in the Commission. In summary, the figures for corrections by Member States for the 2000-06 programming period show total withdrawals (EC contribution) of approximately €325 million, recoveries of approximately €125 million and pending recoveries at the end of 2006 of approximately €200 million, while financial corrections by formal Commission decision for the 2000-06 programming period have amounted so far to €525 million.

Nevertheless, further efforts are needed to attain an acceptable level of completeness and quality in the data, sufficient to provide an accurate overview on financial corrections and recoveries. The Commission is taking further steps to improve the information available to the discharge authority and the European Court of Auditors by:

- Completing and correcting the data gathered so far, by requiring Member States to supply the missing data and provide explanations for anomalies;

- Verifying the data, including checking, on a sample basis, the accuracy of the data through its audit work;

- Continuing efforts to reduce the overlap in reporting by providing additional guidance to the Member States on the completion of the forms sent to the Commission, and by adapting its own reporting tools; and

- Launching under the responsibility of DG Budget, in collaboration with the relevant Directorates General, a global analysis of all types of recovery and financial corrections currently in use, as well as their related problems, with the aim of finding solutions for the capture of missing information and amounts in a reliable and complete manner.

[1] Regulation (EC) No 1698/2005, OJ L277, 21.10.2005, p. 1.

[2] Regulation (EC) No 1198/2006, OJ L223, 15.8.2006, p. 1.

[3]Regulation (EC) No 1083/2006, OJ L 210, 31.7.2006, p. 25.

[4] Regulation (EC) No 1080/2006, OJ L 210, 31.7.2006, p. 1.

[5] Regulation (EC) No 1081/2006, OJ L 210, 31.7.2006, p. 12.

[6] Regulation (EC) No 1084/2006, OJ L 210, 31.7.2006, p. 79.

[7] Regulation (EC) No 1082/2006, OJ L 210, 31.7.2006, p. 19.

[8] Council Decision 2006/702/EC of 6 October 2006, OJ L 291, 21.10.2006, p. 11.

[9] COM(2006) 385 final of 13 July 2006.

[10] COM(2006) 675 final of 8 November 2006.

[11] Commission Decision No 3424 of 1 August 2006.

[12] “RAL” (restes à liquider). Open commitments from previous years.

[13] Regulation (EC) No 2185/1996, OJ L 292, 15.10.1996, p. 2.

[14] OJ L 178, 12.7.1994, p. 43.

[15] The cases relating to the fourth quarter of 2006 have yet to be added.

[16] 2005: number of cases reported: 3 356; overall amount reported: EUR 466 617 940.

[17] OJ L 328, 15.12.2005, p. 8.

[18] Section 4, Articles 27-36 of Commission Regulation (EC) No 1828/2006.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

[19] Guadeloupe, Guyane, Martinique, Réunion.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

( For the list of operational programmes see Annex Part 6.

[20] Council Regulation (EC, Euratom) No. 1995/2006 of 13 December 2006 amending Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ L 390, 30.12. 2006, p. 1).

[21] Council Regulation of 18 December 1995 on the protection of the European Communities' financial interests (OJ L 312, 23.12.1995, p. 1).

[22] For the Structural Funds a slightly adapted definition is reproduced in the regulations on the reporting of irregularities. For the 2007–13 programme period, the same definition has been taken over in Regulation 1083/2006, Article 2(7).

[23] Commission Regulation (EC) No 1681/94 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of structural policies and the organisation of an information system in this field, OJ L 178, 12.7.1994, p. 43, amended by Regulation (EC) No 2035/2005, OJ L 328, 15.12.2005, p. 8.

[24] ¬ 4,000 under Regulation 1681/94 until €4,000 under Regulation 1681/94 until the end of 2005, then raised to €10,000 by the amending Regulation 2035/2005 from 2006 onwards. Bankruptcies leading to non-attainment of operations' objectives are no longer reportable, except where associated with other irregularities or suspected fraud.

[25] "Error" is not defined in the regulations.

[26] OJ C 316, 27.11.1995, p. 49.

[27] The following definition of "suspected fraud" is given in Regulation (EC) No 2035/2005 amending Regulation (EC) No 1681/94: “'Suspected fraud' means an irregularity giving rise to the initiation of administrative and/or judicial proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud, such as is referred to in Article 1(1), point (a), of the Convention on the protection of the European Communities' financial interests”. For the 2007-13 period, this definition is reproduced in Article 27(c) of Regulation (EC) No 1828/2006.

[28] While some corrections are made by Member States before they declare expenditure to the Commission for reimbursement, for the purposes of the data on withdrawals and recoveries presented in section 3.2 below only corrections made to expenditure which has been declared to the Commission, and which therefore has an impact on the Community budget, are taken into account.

[29] Regulation (EC) No 448/2001 of 2 March 2001 on financial corrections (OJ L 64, 6.3.2001, p. 13). See also Commission guidelines on the principles, criteria and indicative scales to be applied by Commission departments in determining financial corrections in the Structural Funds under Article 39(3) of Regulation No 1260/1999 (C(2001) 476 of 2 March 2001).

[30] When the Member State opts for withdrawal of the irregular expenditure, it may still go on to recover the unduly paid sums from the beneficiary. Member States are obliged under the regulations to pursue recoveries wherever possible and appropriate (Article 38(1)(h) of Regulation 1260/1999 and Article 7(3) of Regulation 448/2001).

[31] Regulation (EC) No 1978/2006 of 22 December 2006, OJ L 368, 23.12.2006, p.89.

[32] Amended by Regulation (EC) No 2035/2005.

[33] Regulation 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Regulation (EC) No 1260/1999 regarding the management and control systems for assistance granted under the Structural Funds, OJ L 62, 3.3.2001, p. 21.

[34] Report from the Commission to the European Parliament and Council - Protection of the financial interests of the Communities – Fight against fraud – Annual report 2006 COM(2007) 390 final of 6.7.2007 and related Commission services documents SEC(2007) 930 and SEC(2007) 938.

[35] The figures for accepted corrections are incomplete for some of the Structural Funds, as this data has not been systematically recorded.