13 EU enlargement: pre-accession finance
| (35309)
13649/13
COM(13) 625
| Commission Report: 2012 Annual Report on Financial Assistance for Enlargement (IPA, PHARE, CARDS, Turkey Pre-accession instrument, Transition Facility)
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| Legal base | —
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| Department | International Development
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| Basis of consideration | EM of 8 October 2013
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| Previous Committee Reports | None; but see (34446)16841/12: HC 86-xxvii (2012-13), chapter 9 (16 January 2013)
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| Discussed in Council | To be determined
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
13.1 Between 2007 and 2013, €11.47 billion of EU assistance
is programmed for the Western Balkans, Turkey and Iceland through
the Instrument for Pre-Accession (IPA). The IPA is the principal
funding instrument to support their efforts to strengthen democratic
institutions, reform public administration, develop civil society
and advance regional cooperation — all with the ultimate
aim of acceding to the EU. The IPA covers potential EU candidate
countries (Albania, Bosnia & Herzegovina and Kosovo) and current
candidate countries (Croatia prior to 1 July 2013, Turkey, Iceland,
Montenegro, Macedonia and Serbia). According to the OECD definition,
it is estimated that approximately 90% of IPA funding counts as
ODA.
13.2 The IPA is divided into five components. Potential candidate
countries are only eligible for funding under components 1 and
2 (transitional assistance and cross border cooperation), while
candidate countries also receive funds from components 3-5 (regional
development, human resource development and rural development).
13.3 We considered the Commission's draft Regulation
on a revised IPA for the period 2014-20 at our meeting on 25 January
2012. The Commission had said at that point that, though soundly-based,
the IPA could be significantly improved without substantial restructuring
by, for example:
· simplifying the regulatory environment;
· introducing a new comprehensive format
of country strategy documents;
· a more sector-based, and less project-based,
approach, with more tailoring to the needs of each beneficiary;
and
· tailoring management systems better to
the needs of beneficiary countries.
13.4 The then Minister (Mr Stephen O'Brien) had said
that the UK had proposed a range of measures for the revised IPA,
in particular the need for closer focus on the circumstances of
the beneficiary country and greater flexibility to reward progress
where achieved and reduce country allocations in circumstances
where progress was not made; and also improvements to IPA management
systems, particularly monitoring and evaluation arrangements that
could better highlight the direct impact of IPA funding in the
relevant countries. Areas where the Minister would push for
greater clarity included:
· Performance Management: more detail
on how funding allocations will be managed flexibly according
to progress achieved by beneficiary countries to implementing
reforms; and
· Monitoring and Evaluation: the
then Minister would be following progress carefully to ensure
the proposed three-tier approach would be applied in practice,
which he regarded as a key part of the UK aim to improve results
management.
13.5 The then Minister also noted that much of the
detail of how the Regulation would be managed would be covered
in the implementing rules; he would examine the draft rules closely
to ensure that the spirit of the Regulation was incorporated into
the day to day management of the revised IPA.
13.6 We retained the draft Regulation under scrutiny,
and asked the then Minister to keep the Committee informed of
developments.[63] We
did likewise with regard to the over-arching Joint Communication,
"A new approach to financing EU external action", and
to similar draft Regulations revising the (related) Development
Cooperation Instrument and the Instrument for Stability.[64]
Now that a year had passed, we took the opportunity to ask his
successor to update the Committee.
13.7 In the meantime, we cleared the 2011 Commission
report from scrutiny, which we drew to the attention of the House
because of the IPA's purpose and the amount of EU taxpayers' funds
involved.[65]
13.8 The Parliamentary Under-Secretary of State at
the Department for International Development (Lynne Featherstone)
then wrote to us on 20 February 2013, saying that the IPA-II Regulation
was currently under trilogue negotiations between the Council,
European Parliament and the Commission. She noted one major
area of disagreement common across the trilogue deliberations
of the draft Regulations of all the External Action financial
instrument — that the European Parliament wanted strategies
and programming to be subject to delegated acts under the Lisbon
Treaty: the effect of this would be to give the European Parliament
a power of veto over programming decisions. The Commission and
the Council were resisting this push by the European Parliament,
arguing that such documents should be implementing acts subject
to agreement by Member State committees. The Commission was seeking
to define options for addressing this point in an effort to overcome
the impasse. The Minister supported the Commission's position.
13.9 The Minister went on to say that, in parallel,
DG Enlargement continued to work on improving the focus and accountability
of IPA-II, and looked forward to the IPA-II conference to which
she now refers (see paragraph 13.18 below). She concluded by
explaining that Member States would be consulted again in May
and October 2013 as the Country Strategy Papers started taking
shape and undertook to keep the Committee informed of developments.
The 2012 Report
13.10 This report covers the most significant developments
on the implementation of pre-accession assistance in 2012. It
states that the enlargement countries advanced their path towards
the European Union, referring to examples such as Croatia's accession,
new impetus injected to relations with Turkey and progress with
the Belgrade-Pristina dialogue. However, it also notes that work
in most countries on key priorities such as good governance and
organised crime remain major challenges. The socio-economic outlook
is described as mixed, with Turkey and Iceland deemed to be on
a path to recovery in contrast to the majority of western Balkan
countries where economies contracted.
13.11 The report notes that work has continued on
development of the IPA II regulation, the IPA-specific Rules of
Application and strategic planning documents. It says that management
of IPA during 2012 to achieve better results and impact was enhanced
by the gradual implementation of the sector approach, alignment
of IPA to international standards on aid transparency and development
of a framework of indicators, at the level of country strategies,
for monitoring evaluation and review of progress and performance.
13.12 The main features of country programmes during
2012 were continued work on strengthening Croatia's capacity to
meet EU membership obligations, a fresh dynamism in Turkey's accession
process after a period of stagnation and good progress being achieved
in securing conferral of management of IPA funding for components
I to V for Montenegro and Serbia. EU assistance to Kosovo exceeded
its financial targets. The report notes that parliamentary elections
in Iceland have put accession negotiations on hold, limited capacity
in the Former Yugoslav Republic of Macedonia is contributing to
delays in procurement and low contracting and disbursement rates
and internal difficulties in Bosnia and Herzegovina are leading
to significant programming delays.
13.13 The report also describes important work being
undertaken by OECD/SIGMA (Support for Improvement in Governance
and Management) complemented by ReSPA (Regional School of Public
Administration) on promoting good public governance and support
for public administration reform.
13.14 Tables attached to the report show the financial
situation of IPA support to IPA partner countries by commitment,
amount contracted and value paid according to implementing Directorates
General.
The Government's view
13.15 The Minister reaffirms the Governments support
for EU enlargement, saying:
"It has helped create stability, security and
prosperity across Europe. It also gives the UK stronger influence
globally in promoting our values in human rights, rule of law
and fair rules for workers and businesses. The UK firmly supports
a European perspective for all the countries of the Western Balkans
as the best way to move the region forward from the conflicts
of the 1990's to greater stability and prosperity."
13.16 The Minister notes that many of the provisions
of the Commission's Agenda for Change, which is designed to increase
the impact of EU Development Policy, are equally important to
IPA to develop a comprehensive results mechanism and to demonstrate
value for money. She then comments as follows:
"The UK considers IPA to be broadly effective
in supporting the accession objectives of its partner countries.
Overall the 2012 report maintains this opinion. The priorities
identified for EC assistance are appropriate for a region still
in transition characterised by institutions that need significant
policy and capacity support. Regionally, the improving quality
of governance and promotion of work across borders under the Cross-Border-Cooperation
programme is helping to ease tensions between countries that were
in conflict 20 years ago."
13.17 However, the Minister says:
"Despite the overall favourable tone of the
report the UK propose to consult the Commission about progress
of IPA with particular partner countries. For example we are concerned
at references to procurement delays in Former Yugoslav Republic
of Macedonia and delays to programme implementation in Bosnia
and Herzegovina. The decision by Icelandic authorities to put
accession negotiations on hold will be followed closely albeit
the impact on IPA will be relatively small given the modest funding
allocation of €12 million (£10.12million) in April 2012
and €10.8 million (£9.11 million) in November 2012."
13.18 Looking ahead, the Minister then says:
"Preparation for the successor to IPA (IPA-II)
from 2014 continues. As explained in previous EM 16841-12 ('Report
from the Commission to the European Parliament, the Council and
the European Economic and Social Committee on 2011 Annual report
on financial assistance for enlargement') of 17 December 2012,
the UK believes IPA could be made better suited to the needs of
the region, for example, by ensuring programmes are better aligned
to the capacity of governments to absorb funding and the introduction
of a results system to identify the impact of IPA support provided.
"The consultation process carried out by DG
Enlargement was maintained during 2012 with the publication of
an Orientations paper on Planning and Programming of IPA-II assistance
that proposed an analysis of the capacity of each partner country
and introduced the concept of establishing the progress to have
been achieved by each beneficiary country by 2020. An IPA conference
was organised on 25 January 2013 with 400 participants to help
frame priorities post 2014. The production of country strategy
papers in draft form will be an opportunity for Member States
to consider how far the Commission has taken on board the comments
received and to influence how IPA is managed. The UK will continue
to push for IPA to be results focused, more directly conditional
on improved governance and managed as part of a sector wide approach
(SWAP) to improve donor coordination."
13.19 Finally, the Minister says that the report
will be discussed at the IPA Management Committee during this
month.
Conclusion
13.20 We seem not to have heard anything from
the Minister about the trilogue discussions on this or the other
EU external action instruments since the beginning of the year.
13.21 We therefore ask the Minister to bring us
up to date on the state of play. We also take this opportunity
to remind her that we expect there to be sufficient time for the
revised Regulations to be debated, if necessary, prior to any
further agreement in Council stemming from the trilogue negotiations.
13.22 In the meantime, we now clear this report,
which we are also drawing to the attention of the International
Development Committee.
63 See (33537) 18520/11: HC 428 xlviii (2010-12),
chapter 9 (25 January 2012). Back
64
See (33559) 18726/11, (33529) 18429/11 and (33553)18657/11 at
HC 428 xlviii (2010-12), chapters 8, 10 and 11 respectively (25
January 2012). Launched in January 2007, the Development Co-operation
Instrument (DCI) replaced a wide range of geographic and thematic
instruments which had been created over time, and was designed
to increase the effectiveness of the EU development cooperation
outside the "enlargement" area. Measures financed by
the Instrument for Stability are designed to contribute to preparedness
for responding to natural or man-made disasters, and to rehabilitating
countries following a disaster or a situation of instability. Back
65
See headnote: HC 86-xxvii (2012-13), chapter 9 (16 January 2013). Back
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