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EU: Candidates Slow To Spend Development Aid Money

EU officials in Brussels said today that candidate countries have been slow to spend the billions of euros' worth of development aid made available to them from the year 2000. They say this is largely due to a lack of expertise and shortfalls in what they call "administrative capacity." However, the officials insist the candidates are learning fast.

Brussels, 14 February 2002 (RFE/RL) -- European Union officials today said the candidate countries have so far spent a very small part of the more than 1 billion euros per year available to them since 2000.

This appears to lend credibility to arguments advanced by France and some other EU member states who say that the enlargement funding proposals of the European Commission two weeks ago are too generous. Specifically, France has indicated that the EU should reduce the 25 billion euros earmarked for structural development aid to new member states between 2004 and 2006.

This criticism was tacitly supported today by Erich Unterwurzacher, a European Commission official responsible for the ISPA fund that provides the candidates with more than 7 billion euros between 2000 and 2006 to spend on infrastructure and environment projects. For candidate countries, the ISPA is the counterpart of the structural and cohesion funds available to members.

Taking stock of IPSA's work so far, Unterwurzacher said the speed with which the candidates are able to implement the 169 projects authorized by the European Commission so far leaves a lot to be desired.

"Absorption capacity is a concern. However, we have committed the full allocation for 2000, we have committed the full allocation for 2001, which is around 1 billion euros [a year]. Implicitly, for projects which are spanning over more than one or two years, we have already committed almost four billion euros," Unterwurzacher said.

While the European Commission continues to pile up spending commitments, it was able to authorize practically no payments to candidates at all in 2000, and only 200 million euros in 2001 -- or 20 percent of the allocation. The figure looks even less impressive given that the commission routinely advances 10 percent of project costs without waiting for specific requests from the candidate spending authorities. The 200 million euros thus represents the 10 percent advance rolled over from 2000, added to a similar, instantaneous 10 percent credit line available for 2001.

Speaking privately, other commission officials say the fact that the candidates must put up 25 percent of the total project costs themselves has so far not been a problem.

Rather, they say, the candidates simply lack the administrative ability, expertise, and sometimes the resources to cope with the complex workings of the funding exercise. Although the Commission formally limits its role to approving projects -- and the tendering, implementation and monitoring of projects is undertaken by the candidates -- the procedures applied by the candidates often fall short of EU standards. The candidates lack sufficient knowledge of EU rules, the officials say -- a predicament which has already forced the commission to overrule quite a few of the contract tenders authorized by candidate countries.

However, officials say, the candidate countries are learning fast, adding that even the current member states receiving development aid are unable to process much of the aid immediately.

One official told RFE/RL on condition of anonymity that the Commission expects this year's aid payments to reach 700 million euros, or nearly 70 percent of what is available. This expected "exponential leap," the official says, also reflects a leap in the preparedness of the candidate countries for enlargement.