9 EU enlargement: pre-accession finance
| (a)
(32295)
17052/10
+ ADD 1
COM(10) 687
(b)
(32197)
16293/10
COM(10) 640
|
Commission Communication: 2009 Annual Report on the Implementation of the Instrument for Pre Accession Assistance (IPA)
Commission Communication: Instrument for Pre-Accession Assistance (IPA): Multi-annual Indicative Financial Framework for 2011-2013
|
| Legal base | —
|
| Document originated | (a) 25 November 2010
(b) 10 November 2010
|
| Document deposited | (a) 1 December 2010
(b) 17 November 2010
|
| Department | International Development
|
| Basis of consideration | EM of 20 December 2010
|
| Previous Committee Report | None; but see (31255) 5271/10 and (31030) 14685/09 HC 5-x (2009-10), chapter 2 (9 February 2010); HC 19-vii (2008-09), chapter 1 (11 February 2009); (30162) 15620/08 and (30303) 17210/07: HC 19-vii (2008-09), chapter 1 (11 February 2009); also see (29154) 14862/07: HC 16-xvi (2007-08), chapter 9 (19 March 2008) and HC 16-viii (2007-08), chapter 18 (16 January 2008); (28022) 15122/06: HC 41-ii (2006-07), chapter 16 (29 November 2006); and (27653-55) HC 34-xxxvii (2005-06), chapter 52 (11 October 2006)
|
| Discussed in Council | (a) To be determined
(b) To be determined
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
9.1 From 1 January 2007, all pre-accession assistance has
been delivered by the Instrument for Pre-accession Assistance
(IPA) — one of a small number of new Instruments for EU
External Assistance (the other relevant ones being the European
Neighbourhood and Partnership Instrument, the Development Cooperation
Instrument and the Instrument for Stability) which replaced a
plethora of instruments and budget lines. The IPA replaces PHARE
(implementing the acquis communautaire, economic restructuring
and political capacity-building), ISPA (environmental and transport
projects) and SAPARD (agriculture and rural development). All
involved a staged, quality-assured process, which, over time,
seeks to ensure that candidate countries are prepared for and
finally enabled to access post-accession funding effectively and
efficiently on their own. This is called EDIS — Extended
Decentralised Management System.
9.2 The purpose of IPA is thus to provide financial
support for countries seeking EU membership. It is presently available
to candidates (Turkey, Croatia and Macedonia) and to pre-candidates
(Albania, Bosnia and Herzegovina, Montenegro, Serbia and Kosovo
under United Nations Security Council Resolution 1244). IPA assistance
helps to strengthen democratic institutions and the rule of law,
reform public administration, carry out economic reforms, promote
respect for human as well as minority rights and gender equality,
support the development of civil society and advance regional
co-operation, and contribute to sustainable development and poverty
reduction. The IPA consists of five different components:
i) Transition Assistance and Institution Building,
aimed at financing institution- building measures and associated
investment;
ii) Cross-Border Co-operation,
to support cross-border cooperation at borders between candidate/potential
candidate countries and between them and the EU countries. It
may also fund participation of beneficiary countries in Structural
Funds' trans-national co-operation programmes and the European
Neighbourhood and Partnership Instrument programmes, as appropriate;
iii) Regional Development,
which finances investments and associated technical assistance
in areas such as transport, environment and regional competitiveness;
iv) Human Resources Development,
designed to strengthen human capital and help combat exclusion;
v) Rural Development,
which emulates post-accession Rural Development programmes by
financing rural development-type measures that are similar in
nature though smaller in scale.
9.3 Components I and II are open to all beneficiary
countries. Components III, IV and V are open to candidate countries
only, and are designed to mirror Structural, Cohesion and Rural
Development funds in preparation for managing such funds upon
accession, through a learning-by-doing process. This requires
that the country has the administrative capacities and structures
to take responsibility for the management of assistance. For potential
candidate countries, regional, human resources and rural development-type
measures will be implemented through the Transition Assistance
and Institution Building component.
9.4 Components I and II are overseen by the IPA
Management Committee (made up of Member State representatives
and chaired by the Commission ), components III and IV by the
Structural Actions Management Committee (COCOF), component IV
by them and the European Social Fund Committee, and component
V by the Rural Development Committee.
9.5 The overall political priorities for pre-accession
are set out in the Accession and European Partnerships, the annual
progress reports and the enlargement strategy paper contained
in the enlargement package presented by the Commission to the
Council and European Parliament each year.
9.6 The Multi-Annual Indicative Financial Framework
(MIFF), which is established and presented annually to the Council
and the European Parliament, in accordance with Article 5 of IPA
Regulation (EC) No 1085/2006, is a breakdown of the overall IPA
envelope — €11.47 billion (£10.18 billion) over
the financial perspective 2007-2013 — by country and by
component, for a three year rolling period. The Commission describes
it as the link between the political framework within the enlargement
package and the budgetary process. The Multi-Annual Indicative
Planning Documents (MIPD) established for each beneficiary country
and for the multi-beneficiary programme, through which pre-accession
aid is delivered, take into account the indicative breakdown proposed
in the MIFF. For the first time for 2011-2013 there will also
be a separate MIPD for cross-border cooperation.
9.7 The Commission explains that, as 2013 represents
the last budgetary year of IPA, this MIFF covers the same years
as the previous MIFF, i.e. 2011-2013. It indicates the allocation
of the envelope for pre-accession assistance by country and by
component for these years, and also gives an indication of the
multi-beneficiary programme envelope and support expenditure.
The Commission also notes that, as in previous years, the MIFF
is published based on the current status of the countries concerned
and so does not at this stage pre-empt any decision by the Council
on the Opinions presented with the enlargement package or a likely
date of accession for any candidate country. It also notes that,
for the first time, Iceland is included as a beneficiary country.
9.8 At the outset, allocations were set out
for each country under each component, as well as allocations
to regional programmes and to administrative costs. The main criteria
used included:
— no
country would receive less funding under IPA in 2007 than they
did under previous instruments in 2006;
— for
pre-candidate countries in the Western Balkans, the MIFF set out
to reach €23 per capita (in 2004 prices) by 2010;
— as candidate countries, Croatia and Macedonia
were to receive at least €30 per capita (ditto) by 2008;
and
— a gradual increase in per capita levels
for Turkey over 2007-2011, taking into account the size of the
country and the ability of its institutions to make good and timely
use of IPA funding.
9.9 In determining the allocations between components,
the Commission says that due account is taken of the readiness
of the decentralised management systems necessary for the implementation
of components III, IV and V in the current candidate countries.
9.10 The figures are subject to change, according
to how countries move through the enlargement process towards
accession. For example, as and when Croatia accedes to the EU,
it would then receive Structural Funds rather than IPA, and Croatia's
allocation would be shared among the remaining IPA recipients.
Previous consideration
9.11 In his Explanatory Memorandum of 6 December
2007, the then Parliamentary Under-Secretary at the Department
for International Development (Mr Gareth Thomas) welcomed the
IPA's objectives and the support thus provided to candidate and
pre-candidate countries, and was content with the approach taken
by the Commission on the basis for the allocations between countries
and components.
9.12 He also noted, as "a key challenge
in the region", that many of the beneficiary governments
were still in the process of developing the necessary systems
to programme, spend and monitor IPA assistance. This, he said,
had been taken into consideration by the Commission in preparing
the MIFF; the IPA also provided support to governments to develop
these systems and make effective use of IPA funding; he would
continue to work with the Commission to ensure that IPA assistance
was allocated and spent in order to achieve maximum impact.
9.13 For its part, the previous Committee noted
that a theme common to a variety of development-related topics
that it had considered was the effectiveness of the assistance
provided, which in turn depended not just on developing the necessary
systems, but also on:
—
a determination and capacity to make changes where experience
showed this to be necessary; and
— ensuring that this overall process was
subject to regular parliamentary scrutiny, since it was British
and other European taxpayers' money, as well as their expectations,
that were at stake.
9.14 The previous Committee accordingly looked
forward to hearing from the Minister in due course on how this
requirement would be met in the case of the IPA (and the other
new financial instruments).
9.15 In line with its thoughts on other related
documents in this Report, the previous Committee also drew this
matter to the attention of the International Development Committee.[37]
9.16 In a subsequent letter of 12 March 2008
the then Minister provided information on "the specific issues
of effectiveness, evaluation and future scrutiny", as follows:
EFFECTIVENESS
Changes had been made to the IPA that built on the
lessons learnt from previous instruments and addressed the concerns
raised by the Court of Auditors, which should result in a significant
improvement in the effectiveness of the instrument. Significant
changes include:
- Better project design, monitoring,
evaluation and lesson learning, to be scrutinised by an internal
Quality Support Group;
- Increased recognition of the role of beneficiary
governments, e.g. through greater involvement in the development
of projects; supporting projects aimed at improving the policy
and planning capacity of beneficiary governments, to ensure that
they can make good use of assistance from the EU and other donors;
- Increased emphasis on ensuring that IPA assistance
complements rather than duplicates the work of other donors.
In response to EM 10984/06,[38]
where the previous Committee had sought assurance that lessons
had been learned on specific issues raised by the Court of Auditors
— "ensuring sustainability"; "supporting
co-financing"; "improving contracting rates" and
"promoting additionality and catalytic effects": the
design of the new instrument incorporated strengthened procedures
on all these issues.
The UK would continue to work closely with the Commission
to extend good practice and maximise the effectiveness of IPA
assistance. The Commission's commitment to improve donor coordination
in-country and across the region was particularly welcome.
EVALUATING THE EFFECTIVENESS OF IPA
The IPA Implementing Regulation included a number
of measures to promote monitoring, evaluation and lesson learning.
Each year, the Commission would formally monitor their programmes
and carry out audits and evaluations. These programmes should
promote effective implementation and evaluation of projects, as
well as ensure appropriate external scrutiny. The evaluation reports
would also be a vital basis for ensuring that lessons are learned
for future projects.
The 2007 evaluation programme would include an ex-ante
evaluation of the IPA with a focus on the three year forward plans
known as Multi-Annual Indicative Planning Documents. There would
also be evaluations of a selection of projects funded under previous
instruments in Albania, Bosnia and Herzegovina and in the wider
region.
FUTURE REPORTING TO PARLIAMENT
The UK would continue to work hard to support the
Commission to improve the delivery of the IPA. This would include
strengthening the DFID presence in Brussels. The Commission would
prepare annual reports on IPA, and the Minister's accompanying
Explanatory Memoranda would provide the Committee with "regular
reports on the progress that has been made on the IPA, including
the outcome of evaluations as these become available."
9.17 In reporting the Minister's letter to the
House, the Committee observed that the challenges facing the IPA
were in many ways more daunting than those handled by its predecessor
financial instruments, in that those who were to be assisted included
the first prospective Muslim member country and the war-torn and
ethnically-riven countries of the western Balkans. The Committee
also noted that there was much in the Minister's letter that sounded
encouraging, particularly the fact that €5 million had been
allocated to monitoring, audit and evaluation (though it was not
clear if that is for the IPA alone, or all the Commission's technical
assistance work) and that the UK presence in Brussels was to be
strengthened in order to support the Commission in the delivery
of the IPA. It looked forward to receiving the annual reports
to which the Minister referred, and in the meantime drew his letter
to the attention of the International Development Committee.[39]
9.18 Two years ago, the previous Committee considered
Commission Communication 17210/08, which updated the IPA MIFF
to include the period 2010-2012 and included a breakdown of allocations
for the whole of 2007-12 by country and component.
9.19 At the same meeting they also considered
the Commission's IPA Annual Report for 2007 (15620/08), which
outlined how the money allocated to IPA 2007 would be spent in
the beneficiary countries and described the main developments
in, and the December 2007 General Affairs and External Relations
and European Council Conclusions concerning, the enlargement process,
which provides the IPA with its strategic framework.
9.20 The Communication also set out the mechanisms
for monitoring and evaluation. It noted that no monitoring of
IPA projects was carried out during 2007, as the IPA 2007 programmes
were generally only adopted at the end of the year and the actual
implementation only started in 2008. There was correspondingly
limited evaluation.
9.21 Finally, it looked at donor coordination
with Member States bilateral programmes, the European Investment
Bank and other International Financial Institutions, and drew
attention to agreement amongst them that:
— enhanced
coordination between the Commission, EU Member States and non-EU
donors was a priority and essential for greater effectiveness;
— ownership of assistance by beneficiary
countries was vital in order to maximize the impact;
— the capacities of the beneficiary countries
to assume ownership needed to be strengthened.
9.22 In his accompanying Explanatory Memorandum
of 29 January 2009, the then Parliamentary Under-Secretary at
the Department for International Development (Mr Michael Foster)
said that a single coherent pre-accession funding instrument was
"a huge step forward." But, the IPA having been launched
only in 2007 and having encountered some delays in project development,
the 2007 Annual Report was produced too early to judge the performance
of IPA and was therefore largely descriptive. The UK was working
closely with the Commission and the recipient countries to ensure
that the funds were put to the best possible use. DFID currently
had four offices in the Western Balkans, all of whom worked closely
with the Commission delegations, and had also created a new post
based in UKREP Brussels devoted to monitoring the IPA. He had
encouraged the Commission to reduce the number of projects in
each successive annual programme, as he expected that concentration
on fewer larger projects would have more transformative impact;
the trend had been positive in 2008 and looked set to continue
in 2009. The prospective allocation of IPA funds showed a steady
rise across all countries. The EC was by far the biggest donor
to the region. The size of the EC budget made it more important
than ever for DFID country offices "to engage actively with
the Commission and for the UK to play an active role on the IPA
Management Committee."
Our previous Committee's assessment
9.23 The previous Committee felt that there should
be sufficient evidence regarding performance of the IPA by the
time the next Annual Report was prepared for it to be analytical
as well as descriptive, and said that it would accordingly expect
a somewhat more substantial Explanatory Memorandum, with a full
assessment of how the outcomes compared with the template —
what was going well and less well, and why; and what steps were
being taken to address any failings. Though the mechanisms were
seemingly in place, the importance of ensuring that they worked
as intended was highlighted by the experience in Romania and,
particularly, Bulgaria, which had been the subject of several
Committee Reports and three European Committee debates in the
previous year.
9.24 In the meantime, in view of the experience
hitherto, the degree of interest in the next stage of the enlargement
process, the sums involved and the present economic challenges
and budgetary pressures facing the Union, the previous Committee
felt that a debate in the European Committee would be appropriate.[40]
That debate took place on 23 March 2009.[41]
9.25 The previous Committee also, as before,
drew this chapter of its Report and the documents to the attention
of the International Development Committee.
9.26 A year later, the previous Committee found
what they described as "a disturbing pro forma ring"
about the then Minister's comments on the MIFF report. Having
been told a year earlier that a new post had been created in Brussels,
the previous Committee felt that there should have been indications
of the difference it had made, not a repetition of the previous
year's words. They also found it curious that, it being now as
much as it was a year earlier, "more important than ever
for DFID country offices to engage actively with the Commission",
the Minister's Department had reduced its presence in the region
by 25%. Three and a half years after the IPA had been introduced,
only now was the then Minister described as "the first comprehensive
official document that details how the IPA has worked so far".
The previous Committee found odd that there was no mention of
the country seen as being nearest to accession, Croatia, in which
there was plainly much that was not going according to plan; the
previous Committee's concern being not with Croatia per se,
but with the need to be sure that the situation that was allowed
to develop in Bulgaria, even after accession, with regard to the
proper use of EU funds could not recur.
9.27 Though conceivable that the mid-2010 evaluations
referred to by the then Minister would show that great strides
had been made in 2009, the previous Committee felt that a debate
in the European Committee was appropriate, so as to enable the
then Minister to provide the House with the level of assurance
that they felt there should have been by then, that all was on
the right track, but which they felt was not yet apparent.
9.28 On 9 March 2010, at the end of that debate
(which incorporated a number of related documents on earlier pre-accession
assistance), the European Committee approved the following motion:
"That the Committee takes note of European Union
Documents No. 5271/10 and Addendum 1, 2008 Commission Annual Report
on the Implementation of the Instrument for Pre-accession Assistance,
No. 14685/09, Commission Communication on Instrument for Pre-accession
Assistance (IPA) Multi-Annual Indicative Financial Framework for
2011-2013, No. 15365/09 and Addendum 1, Commission Annual Report
of the Instrument for Structural Policy for Pre-accession (ISPA)
2008, No. 5226/10 and Addendum 1, Commission 2008 Annual Report
on PHARE, Turkey Pre-accession Instruments, CARDS and Transition
Facility and No. 5516/10 Court of Auditors Special Report 16-2009,
the European Commission's Management of Pre-accession Assistance
to Turkey; and urges the Commission to learn lessons from previous
Enlargements, in particular the need to ensure IPA is well managed
and effective."[42]
The Commission's 2009 Annual Report on the IPA
9.29 This report presents the activities undertaken
for the implementation of the IPA during the year 2009 and provides
a general overview of developments, including some considerations
on future perspectives. The Commission says that, in 2009, it
has made concrete steps towards improving the IPA instrument's
effectiveness, impact and sustainability by paving the way for
a sector-based approach to strategic planning and programming,
by enhancing donor coordination and by increasing beneficiaries'
ownership; and that better policy design and implementation will
improve policy dialogue and help achieve better results in the
EU integration process of the Western Balkans, Turkey and Iceland.
9.30 Details on programming and implementation
activities for IPA beneficiary specific or multi-beneficiary programmes
during the reporting period are available in the background document
(Sections I and II), followed by financial data (Section III).
9.31 By way of general background, the Commission
describes 2009 as a year of stability and security in the Western
Balkans and in Turkey, with positive evolutions concerning mobility
and neighbourly relations. In the wake of the world-wide financial
and economic crisis, the Commission says that it contributed to
ensuring macro-economic stability in the region, inter alia by
introducing a financial crisis package for the region, including
direct budgetary support for Serbia, funded by IPA. The Commission
notes that, during the reporting period, new EU membership applications
were submitted by Albania (in April), Iceland (in July) and Serbia
(in December) while Croatia "made more progress" towards
reaching the final stages of accession negotiations. Montenegro,
Serbia, and the former Yugoslav Republic of Macedonia achieved
visa-free travel to the Schengen area, having fulfilled the conditions
set in the visa liberalisation roadmaps. However, the Commission
says, challenges remained: the countries of the Western Balkans
and Turkey had still, to varying degrees, substantial work ahead
in meeting the established criteria and conditions for accession;
the pace of reform was often slow; and the international economic
crisis added to the strains.
The Commission Communication on the MIFF 2011-13
9.32 Referring to the 2007 per capita income
"benchmarks", the Commission says that:
— per
capita levels for each of the potential Western Balkans candidates
increase during the course of the current financial framework
to above the 2004-2006 per capita average of €23 (in 2004
prices);
— for Montenegro, the per capita levels
of funding are higher than for other potential candidate countries,
reflecting a minimum level of funding needed for adequate administrations,
irrespective of the size of the country;
— the global breakdown of funds between
countries has been respected with the exception of Kosovo, which
received increased IPA funding of €60 million as part of
a wider mobilisation of new funds to support its stability and
development of Kosovo, supplemented by a transfer of a further
€60 million from unused macro-financial assistance (MFA)
appropriations; and
— an additional €40 million was committed
as a follow up of the Donor's conference which took place in July
2008.
The Government's view
9.33 In his Explanatory Memorandum of 20 December
2010, the Parliamentary Under-Secretary at the Department for
International Development (Mr Stephen O'Brien) welcomes the replacement
of the five different earlier EU financial instruments with the
IPA, describing this single instrument as "far more coherent
than its predecessors."
9.34 He says that the Commission is working to
improve IPA's effectiveness, impact, sustainability and ownership
by beneficiaries, through a series of lesson-learning conferences
and workshops over the past years; that the Department for International
Development (DFID) attended two conferences in 2009 with other
Member States and beneficiary countries that paved the way for
a sector-based approach to strategic planning, and away from piecemeal
programming on a project basis; and that this approach was endorsed
by the General Affairs Council in December 2009, which emphasised
the link between priorities for enlargement policy and the focus
of IPA funding. While this shift "has still not been fully
embedded" at country level, "steps have been taken during
2010 to ensure that the multi-annual planning processes do emphasise
a sector-based approach." One consequence, the Minister then
says, is fewer, larger IPA projects designed to make implementation
easier and increase impact. He notes that the level of IPA funds
successfully contracted and paid are now on the rise and says
that this should continue (though noting, however, that 2009 figures
"are somewhat flattered by Serbia, which became the first
country to use IPA funds for budgetary support, linked to an IMF
economic crisis response package").
9.35 Noting that a key objective of the Commission
is to prepare beneficiary countries for the decentralised structures
they will use to manage EU funds on accession, the Minister comments
as follows:
"Progress of countries in gaining accreditation
to use decentralised management structures to manage IPA funds
has varied. Again, lessons are being learned. DFID has been advocating
for greater alignment of decentralised management with the beneficiaries'
own systems, in order to strengthen ownership and capacity, and
avoid parallel implementation systems."
9.36 On the question of evaluation, the Minister
says:
"The Commission is also making significant efforts
to further enhance evaluation as a tool to support decision-making,
as well as a means to monitor and report on results. Results Orientated
Management system (ROM) is being applied to all IPA programmes.
ROM is an objective and systematic monitoring tool that is managed
by an independent agency and, together with retrospective evaluations
and thematic evaluations, should lead to better monitoring and
a sharper and more useful assessment of impact. Furthermore, a
meta-evaluation of IPA is under preparation and will be the first
comprehensive document that details how IPA has worked so far.
It is due to be finalised in early 2011 and will inform preparations
for the next Financial Perspectives covering the period beyond
2013."
9.37 With regard to the UK's role in this process,
the Minister says:
"The UK continues to work closely with the Commission
and beneficiary countries to ensure that the IPA funds are put
to best possible use. As the largest donor, the Commission is
a key player in co-ordination and consultation with governments
and with other donors, especially international financial institutions
such as the World Bank. DFID has invested in helping governments
play a leading role in managing the process by providing technical
assistance for improved aid effectiveness.
"As previously announced, DFID's bilateral programmes
in Bosnia & Herzegovina and Serbia will close early 2011,
leaving Kosovo as the sole remaining DFID programme in the region.
Nonetheless, the UK will remain active, through British Embassies
in the region, and in Brussels, through staff in the UK Representation
and secondments in the Commission (DG Enlargement). The size of
the EU budget in the Western Balkans, Turkey and Iceland makes
it more important than ever for DFID to join with the FCO in monitoring
IPA in countries where DFID is no longer present, and for the
UK to play an active monitoring role on the IPA Management Committee."
9.38 Finally, the Minister says that a meta-evaluation[43]
of IPA is due to be finalised in early 2011 and will inform preparations
for the next Financial Perspectives covering the period beyond
2013, and that he will update the Committee when this is ready.
Conclusion
9.39 It is notable that, this year, the Minister
has some encouraging words to say about improvements in effectiveness
and evaluation, which we welcome.
9.40 However, the proof of improvement will
be in the meta-evaluation to be carried out this year. We presume
that this will result in a depositable document, and look forward
to hearing more about it from the Minister in due course.
9.41 In the meantime, we clear these documents
from scrutiny.
37 See headnote: (29154) 14862/07: HC 16-viii (2007-08),
chapter 18 (16 January 2008). Also see chapters 12-17 inclusive
of that same Report. Back
38
European Court of Auditors' Special Report on the PHARE programme
in Bulgaria and Romania: (27641) 10984/06: see HC 34-xxxvi (2005-06),
chapter 16 (19 July 2006). Back
39
See headnote: (29154) 14862/07: HC 16-xvi (2007-08), chapter 9
(19 March 2008). Back
40
See headnote: (30162) 15620/08 and (30303) 17210.07: HC 19-vii
(2008-09), chapter 1 (11 February 2009). Back
41
Gen Co Debs, European Committee
B, 23 March 2009, cols 3-6. See http://www.publications.parliament.uk/pa/cm200809/cmgeneral/euro/090323/90323s01.htm
for the record of the debate. Back
42
Gen Co Debs, European Committee
B, 9 March 2010, cols. 3-7. See http://www.publications.parliament.uk/pa/cm200910/cmgeneral/euro/100309/100309s01.htm
for the record of the debate. Back
43
Meta evaluation is "an evaluation of other evaluations";
see "META EVALUATION" by the Carol Scott Powerhouse
Museum 1998 at http://archive.amol.org.au/evrsig/pdf/meta.pdf
for a concise explanation of the process. Back
| 
