A4-0211/96

Resolution on the Sixth Annual Report of the Commission on the Structural Funds in 1994

The European Parliament,

- having regard to the Commission's Sixth Annual Report on the implementation of the Structural Funds in 1994 (COM(95)0583 - C4-0009/96),

- having regard to the annual report of the Court of Auditors on the 1994 financial year and, in particular, chapter 4 thereof,

- having regard to Regulation (EC) No 2052/88 and, in particular, Article 16 thereof and Regulation (EC) No 4253/88 and, in particular, Article 31 thereof,

- having regard to the seventh annual report on protecting the European Union's financial interests and on the fight against fraud,

- having regard to the report of the Committee on Regional Policy and the opinions of the Committee on Agriculture and Rural Development, the Committee on Budgets, the Committee on Social Affairs and Employment and the Committee on Fisheries (A4-0211/96),

A. whereas the Sixth Annual Report covers the first year of the Structural Fund implementation period (1994-1999),

B. whereas the Structural Funds constitute the most important instrument used by the Union to strengthen social and economic cohesion,

C. whereas the economy of Europe is in a period of low growth placing greater strains on disparities between the Union's regions,

D. whereas the current multi-annual period of structural funding is approaching its half-way stage,

E. stressing that structural funding must be easily understandable in terms of access and use,

F. whereas it is absolutely essential for fraud and irregularities in Structural Fund operations to be reduced to a minimum,

G. whereas the effective implementation of structural policies requires full respect for the principles of subsidiarity and partnership,

H. whereas the causes of the persistent application of irregular procedures in Member States and the regions should be sought both in the lack of clarity and simplification of the initiatives proposed by the Commission and in the inadequate professional training of personnel in national administrations,

I. whereas the approach of Economic and Monetary Union requires a strengthening of cohesion policies,

1. Welcomes, in overall terms, the comprehensive and detailed nature of the annual report; strongly regrets, however, its publication a year after the end of the period under consideration and that the novel elements of the revised Structural Fund Regulation, such as measures being geared to sustainable development, attainment of the goal of equal treatment for women, involvement of environmental authorities in setting up projects in Member States, are represented inadequately or not at all;

2. Welcomes the substantial and increased resources of ECU 141 billion being committed to structural funding for the period 1994-1999;

3. Regrets the lack of involvement of Parliament in the setting of the 1994/1999 financial perspective for the Structural Funds and the division of these resources between Objective 1 and the other objectives behind the closed doors of the Edinburgh Council, ignoring the budgetary powers of the European Parliament;

4. Underlines the need for proper European Parliament involvement in such decisions in the future;

5. Points out that it is vital for future rules governing the Structural Funds to be adopted under the codecision procedure instead of the assent procedure;

6. Draws attention to the need to ensure continued, complete application of the Code of Conduct of 13 July 1993 on the implementation of structural policies by the Commission (( OJ C 255, 20.9.1993, p. 19.)) in order to guarantee the availability to Parliament of the necessary information on the management of the Funds and the opportunity to express its position;

7. Considers the official aims and targets of the structural funds to be too vague and unquantified for adequate evaluation of the programme in total, and sees this as a major flaw in terms of their establishment;

8. Considers that the Member States in cooperation with the Commission should provide fully accessible and transparent information to local and regional authorities on the availability and nature of funds and their contribution to economic and social cohesion;

9. Notes, however, the progress made as regards the participation of local and regional authorities as well as the social partners but considers that, as far as the planning stage is concerned, such participation has at times been too limited; calls, therefore, for efforts to be stepped up at the level of support for the implementation stages;

10. Deplores the level of complexity of the funds and their administration, which renders them incomprehensible to the majority of Union citizens and potential beneficiaries; calls for a major simplification of future programmes in terms of the number of Commission DGs involved, the number of funds, and the overlaps between objectives, Community initiatives, and other instruments; urges the Commission to undertake what short-term measures it can to improve the current programme in this regard; welcomes recent moves by the Commission and the Council to address the problem;

11. Hopes for closer cooperation between the Commission and national and regional governments with a view to guaranteeing more efficient actions, not least through strict compliance with all time-limits laid down, and the laying-down of more specific criteria for access to the Funds; calls on the Commission and the Member States to implement immediately the proposal on optimal use of the funds presented by the Commissioner responsible for Regional Policy at the informal meeting of ministers held in Venice on 3 and 4 May 1996;

12. Hopes for a close link between the programmes of the various structural funds and between the latter and other Community intervention policies which cover the same ground, with a view to maximizing the effects on the ground, particularly as regards the essential requirement of an increase in work and occupational opportunities;

13. Considers, however, that, in the future, it will not be possible to lay down any conditional links between the implementation of regional policies and the current nominal convergence procedures;

14. Encourages the Commission aim of increasing experience of intervention in the cultural sector by also exploiting a closer relationship between cultural life and the economy relating to it;

15. Regrets that very little structural funding has a trans-national element, and regards this as a missed opportunity in terms of economic development synergy benefits between regions, and the bringing together of the regions of Europe and their citizens;

16. Regrets that the current 10% of Structural Funds allocated to inter-regional cooperation is not adequate to foster increased cooperation in economic developments between the EU regions;

17. Notes that the long-term task of the structural funds is to reduce considerably the large gap between the richest and poorest regions; regrets, however, that so far there has not been the hoped for degree of success in combining productivity gains with increases in production so as to increase employment and reduce unemployment; notes that this task of the Community is proving to be an extremely difficult challenge;

18. Welcomes the fact that 90% of appropriations for the year were committed during 1994 and 75% paid; notes with extreme concern, however, the low level of commitments for Community initiatives (12%), and that a large proportion of all commitments were made at the very end of the year in December;

19. Notes with great concern that the Commission has no comprehensive information as to when European funding in terms cash reaches the targeted regions, and that there is extensive evidence that there are severe delays in terms of such payments by the Member States, thus severely retarding economic development; consequently demands that payment to final beneficiaries is monitored in the same way as payment by the Commission to the Member States; urges the Member states to produce regular bulletins of payment schedules to establish clear audit trails as deemed necessary in the Court of Auditors' Declaration of Assurance;

20. Condemns the difficulties, and on occasion obstruction, still encountered by the Commission from Member States not providing adequate information to prove additionality;

21. Considers that strengthening regional powers could contribute to improving and significantly simplifying the management and control of Community funds, on the one hand reducing the Commission's workload and on the other hand guaranteeing transparency at the level closest to the taxpayer;

22. Welcomes the improvement to programmes and their rate of approval by the successful introduction of Single Programming Documents; is concerned, however, that the Commission makes no formal comparative assessment of the efficiency and effectiveness of the project approval systems established between Member States and their regions; believes that in future it should do so;

23. Calls on the Commission to develop further the system of subsequent, interim and prior evaluation in order to demonstrate the contribution made by structural intervention measures to the substantial development of the regions;

24. Congratulates the Commission on its analysis of the interrelationships with other EU policies, and welcomes the coordination between Structural Funds, Cohesion Funding, the EIB and other instruments; notes however that the financing capacity of the EIB is not geared to the requirements and possibilities of SMEs and so SMEs often cannot be place in a position to make use of the EU structural aid intended for them;

25. Believes that it is unacceptable that there are continuous areas of conflict with EU environmental policy in specific projects and programmes, and calls on the Commission and the Member States to ensure that in future projects will be implemented in line with EU environmental policy, for example through the correct application of environmental impact reports and through the preventive and actual involvement of environmental authorities in programme implementation and assessment;

26. Expresses the wish that there will be a constructive cooperative coordination of Structural Fund financing mechanisms (under the common European policy processes) and regional planning policies (currently under intergovernmental procedure) to ensure maximum benefit and success to the various regional policy objectives;

27. Condemns the continued irregular application of procedures at Member State and regional level which was subject to severe criticisms in the Court of Auditors' report; welcomes the Commission's further steps to coordinate action against the misuse of funds and against the limitations on the use of funds through practices in the Member States which do not channel European structural intervention directly and to the fullest possible extent to the regions but subjects them to national review; therefore calls on the Commission to intervene directly and demand funds be used in accordance with the European economic and social context pursuant to the structural fund regulation; calls on the Commission to increase as soon as possible on-the- spot checks to ensure the correct implementation of projects;

28. Urges the Member States to ratify as swiftly as possible the convention on the protection of the EC's financial interests;

29. Laments the fact that the spreading of experience gained in the use of Structural Funds across the regions of Europe, and encouraging the use of best practice, does not appear to be a priority or mentioned in the Commission's report;

30. Considers that within the framework of the Structural Fund the Commission and Member States should set up activities on networking and exchange of experience to ensure models of best practice in Structural Fund implementation and improve inter-regional cooperation;

31. Demands a greater effort be made to increase the involvement of the private sector in regional development funding, and that the funds are allowed to be used for a greater range of financial engineering instruments for the benefit of the SME sector in particular;

32. Calls on the Commission to address urgently the problem of cash flow in regard to participating voluntary sector organizations, cooperatives and small businesses (SMEs);

33. Calls on the Commission to submit to Parliament as soon as possible the final report of the 1989-1993 programme, to enable Parliament to undertake a thorough examination of the programming period, before the mid-term of the current programming period;

34. Calls on its Committee on Regional Policy to explore different mechanisms for a more thorough scrutiny of the annual report of the Commission on Structural Funds and with hearings and field visits to explore the possibility of a temporary all-party working group, and to assess the costs of such an exercise;

Agricultural aspects:

35. Considers that more information must be provided to all potential beneficiaries of the funds, particularly in the more deprived and remote regions, which receive information either with difficulty or too late; widespread dissemination of information will prevent those at whom the initiatives are mainly aimed from being the only ones not to benefit from them;

36. Stresses the difficulties encountered in implementing the Community Initiatives (Leader); only 12% of the available appropriations were committed, with the 'Employment' initiative taking the lion's share (ECU 200 m out of a total of approximately ECU 230 m for all the initiatives) while only about ECU 24 m were committed for Leader; a detailed examination of the situation will be required in order to determine why Leader is lagging behind, and whether it is due to difficulties in setting up Local Action Groups, in tracking down funds at regional or national level, or in the technical preparation of projects;

37. Underlines the differences in utilization of the three funds in the different Member States; taking as an example the appropriations under Objective 5(b), which amounted to a total of approximately ECU 609 m in 1994 for nine Member States (excluding Greece, Ireland and Portugal), the rate ranged from ECU 262.7 m in France to almost ECU 126 m in Germany, ECU 75.5 m in Italy and ECU 73.5 m in Spain; here again, an in-depth analysis is required in order to determine the reasons for such disparities in the rate of utilization and to find appropriate remedies, in the same way as with the Leader initiative;

Budgetary and financial aspects:

38. Notes that achieving the economic and social approximation and convergence of the various regions of the Union is a slow, long-term process, which will only be possible if the principles of economic and social cohesion and financial solidarity are implemented;

39. Notes that, as far as budgetary implementation is concerned, 1994 reflects the difficulties experienced by the Member States in applying the new arrangements; the delayed approval of the relevant Community support frameworks (second half of 1993) and the first package concerning the Community Initiatives (June 1994) also created a situation which has contributed to the fact that the financial allocations budgeted for have not been fully taken up;

40. Draws the attention of the Commission and the Member States to the fact that the difficulties experienced in 1994 were repeated in 1995, causing the Financial Perspective to be adjusted twice; for this reason, the Budgetary Authority decided that between 1996 and 1999, the ceiling for heading 2 of the Financial Perspective should be raised to a total of ECU 3.811 million in commitments (ECU 1.738 + 2.073 million);

41. Considers that this approach could produce a snowball effect leading to major budgetary and administrative bottlenecks in the last two years of the new financial programming period 1998 and 1999;

42. Recalls therefore its resolution of 17 April 1996 giving discharge to the 1994 budget (( OJ C 141, 13.5.1996, p. 113.)), and stresses the need for the Commission to make the technical and administrative adjustments required to allow the Structural Funds to be implemented more efficiently, and make viable the financial allocations to the various regions of the EU which were envisaged in Edinburgh;

43. Confirms that the breakdown of resources, as decided pursuant to Article 12(4) of the Framework Regulation on the Structural Funds, is merely indicative, both with reference to the Community support frameworks and the Community Initiatives;

44. Recalls, in this connection, its resolution of 28 March 1996 on the allocation of the Community initiatives reserve (( OJ C 117, 22.4.1996, p. 70.)); confirms that the principles therein mentioned should apply to the Structural Funds as a whole (Community support frameworks, transitional and innovative measures and Community Initiatives), particularly with regard to:

- the submission to the EP of an annual Commission report on the state of implementation of each Community support framework and Community Initiative, when the preliminary draft budget is being adopted,

- the submission of a report before July 1998 on the general state of implementation of the various aspects of the Structural Funds, putting forward for the consideration of the Budgetary Authority the adjustments and possible strengthening acquired in the various financial programmes originally approved,

- informing the budgetary authority as to the transfers of appropriations which the Commission intends to make within each chapter;

Social aspects:

45. Reiterates its call to the Commission in its resolution of 19 January 1996 on the Commission's Fifth Annual report on the Structural Funds in 1993 ((OJ No C 32, 5.2.1996, p. 131, paras 24 and 25.)) better to evaluate in forthcoming reports the quality of employment created by EU structural intervention with particular regard to job stability;

46. Regrets that,despite specific requests by Parliament ((idem, para. 30.)), data on women's participation in ESF financed projects are still totally unsatisfactory; expects future reports to provide adequate information on this subject;

47. Reminds the Commission that future reports should provide accurate data on placement rates and drop-out figures with regard to ESF measures; expects that better qualitative and quantitative objectives in CSFs/SPDs will facilitate this task;

48. Reminds the Commission of the need to estimate ESF contributions on the basis of indicators relating to the situation on the labour market, the level of qualifications achieved, the contents of the schemes co-financed and developments in terms of incomes and wages;

49. Regrets that the report does not provide information on the impact that EMU convergence criteria and additionality requirements are having on financial implementation rates and expects future reports to give consideration to this problem;

Fisheries sector:

50. Calls on the Commission to submit formally to Parliament a report on structural policy to assist fisheries and aquaculture;

51. Reiterates its call to the Commission to draw up a report on the implementation of the PESCA programme, once the initiative has run half its total duration;

52. Instructs its President to forward this resolution to the Commission and Council.