91997E3625

WRITTEN QUESTION E-3625/97 by Luciano Vecchi (PSE) to the Commission (13 November 1997)

Subject: Guarantees required in respect of participation in the employment initiative in Belgium

As has already been pointed out in earlier questions, the Italian authorities' decision to require non-profit-making undertakings to provide bank guarantees in order to participate in employment initiatives has proved costly and punitive for undertakings which obviously have difficulty in providing financial guarantees of their own.

Given that such matters are subject to different regulations in the various Member States of the Union, would the Commission state whether Belgium requires non-profit-making undertakings (and, in general, firms in the cooperative, mutual and non-profit sector) to provide financial or bank guarantees and, if so, on what terms?

Joint answer to Written Questions E-3624/97, E-3625/97, E-3626/97, E-3627/97, E-3628/97, E-3629/97, E-3630/97, E-3631/97, E-3632/97, E-3633/97, E-3634/97, E-3635/97, E-3636/97 and E-3637/97 given by Mr Papoutsis on behalf of the Commission (30 January 1998)

The Commission has no information on the obligation imposed by Member States on non-profit organisations to provide a bank guarantee in order to gain access to funding under the various Community programmes. This is a matter of national law.

As regards the granting of subsidies under the Employment initiative, it is up to the national authorities which sign the agreements with the project promoters to require bank guarantees in accordance with the national rules in force. In Austria, Germany, Greece, Portugal and Spain, such guarantees are not normally required from potential promoters to gain access to the Employment initiative.

While it is true that the provision of a bank guarantee may be an additional burden, particularly for enterprises operating in the context of the social economy, it is nonetheless true that this is essential when the consequences of failing to fulfil a contractual obligation may exceed the debtor's financial means.

The Financial Regulation applicable to the general budget of the European Communities of 21 December 1977 ((OJ L 356, 31.12.1977. )), as last amended ((OJ L 240, 7.6.1995. )), requires the provision of security by contractors when very large contracts are awarded or when subsidies are granted for the performance of projects involving high sums. However, the majority of non-profit associations are rarely affected by this obligation, given the small scale of the projects they propose.