Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund Annual Meeting of ISPA Partners 2003: From ISPA to Cohesion & Structural Funds Colin Walker European Commission DG Regional Policy

ISPA to Cohesion Fund ISPA based closely on the Cohesion Fund 21/04/2019 ISPA to Cohesion Fund ISPA based closely on the Cohesion Fund To help candidate countries (CEECs) prepare for accession By financing major transport and environment infrastructure needs Introduction to procedures of Cohesion Fund (& EU Structural Actions more generally) Transition ISPA to CF relatively straightforward

The Cohesion Fund: Origin and Objectives 21/04/2019 The Cohesion Fund: Origin and Objectives Introduced by the Treaty on European Union To promote economic and social cohesion (reduce disparities in economic development) By helping to finance major transport and environment infrastructure needs Linked to EMU and control of budget deficits Cohesion Fund accounts for 35% of 2004-06 allocations

ISPA to Cohesion Fund Common Features: 21/04/2019 ISPA to Cohesion Fund Common Features: Project-based approach (not programmes) High rates of assistance Focus on transport and environment Whole territory of member state Indicative allocations by country (ranges) Project application, appraisal & monitoring procedures

ISPA to Cohesion Fund Points of difference: Eligibility of countries 21/04/2019 ISPA to Cohesion Fund Points of difference: Eligibility of countries Conditionality (convergence programmes) Scale (overall & by project) Decision procedures Implementation procedures Expenditure eligibility (timing & type) Other (commitments & payments)

ISPA to Cohesion Fund (Art. 2.4) (Art. 6) 21/04/2019 ISPA to Cohesion Fund Eligibility & conditionality: Cohesion Fund ISPA MS with GNP under 90% CEEC candidate Convergence programme (Art. 2.4) Conditional assistance (Art. 6) Mid-term review

ISPA to Cohesion Fund Scale (overall allocations): Cohesion Fund ISPA 21/04/2019 ISPA to Cohesion Fund Scale (overall allocations): Cohesion Fund ISPA € 2.8 billion p.a. 2004-06 € 1.14 billion p.a. € 38 per capita p.a. € 11 per capita p.a. E.g. Poland: 2003 (ISPA) € 372 million 2004 (CF) € 1415 million

ISPA to Cohesion Fund Assistance rates & min. project size: 21/04/2019 ISPA to Cohesion Fund Assistance rates & min. project size: Cohesion Fund ISPA Grant rate 80-85 % 75% (85% as exception) subject to revenue-generation & financing from other sources € 10 million min. size € 5 million min. size except in “duly justified cases”

ISPA to Cohesion Fund Expenditure eligibility: Cohesion Fund ISPA 21/04/2019 ISPA to Cohesion Fund Expenditure eligibility: Cohesion Fund ISPA On receipt of (complete) Date of signature of FM application Land purchase eligible VAT in limited cases Commission Regulation 16/2003

Information meeting Favourable opinion of management committee 21/04/2019 ISPA to Cohesion Fund Decision procedures: Cohesion Fund ISPA Commission decision Commission decision & financing memorandum Information meeting Favourable opinion of management committee

ISPA to Cohesion Fund Implementation procedures: Cohesion Fund ISPA 21/04/2019 ISPA to Cohesion Fund Implementation procedures: Cohesion Fund ISPA Fully decentralized to MS Part decentralized National law based on - External aid rules: EC procurement directives Ex-post control by Commission * EU+ preference * Ex-ante approval

Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund Accession of 10 countries by May 2004 (of which 8 are ISPA beneficiaries) ISPA will cease for these countries, but they become eligible for CF and SFs 2003 will be last year for ISPA in acceding countries Ongoing ISPA projects to be completed under CF rules

Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund Problem: Continuation of projects after accession ISPA projects Commitments carried out over several years based on financial plan in many cases commitments are distributed over the period 2004-2006

Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund The Legal and Budgetary contraints: Article 15 of the ISPA regulation : « On accession to the EU, a country shall lose its entitlement to support under this Regulation » no new ISPA commitments possible after accession of a country ( i.e. 2004) EU Budget financial perspectives : pre-accession grants for candidate countries structural actions (SF + CF) for EU Member States = a clear break between « before accession » // « after accession »

Transition from ISPA to Cohesion Fund 21/04/2019 The solution: As the ISPA Regulation is an adapted copy of the Cohesion Fund Regulation… … on accession of a country: All non-completed ISPA measures shall be considered as Cohesion Fund projects Any subsequent annual commitment = under the Cohesion Fund The provisions governing these measures = those of the Cohesion Fund [unless otherwise stated]

Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund Some specific provisions: Public procurement rules Assistance rates Expenditure eligibility date items of expenditure Payments

Transition from ISPA to Cohesion Fund 21/04/2019 Transition from ISPA to Cohesion Fund Conclusions: Close similarity between CF and ISPA Differences outweighed by common features ISPA therefore provides good introduction to CF If ISPA a success…... then CF will also be a success! Transition arrangements relatively straightforward CF part of wider “family” of Structural Actions