The European Parliament,

- having regard to the Annual Report on the implementation of the reform of the structural funds (1989) (COM(90) 0516),

- having regard to Article 130a of the EEC Treaty which enjoins the Community to pursue its actions leading to the strengthening of economic and social cohesion so as to promote its overall harmonious development,

- having regard to Council Regulation (EEC) No. 2052/88 and Council Regulation (EEC) No. 4253/88,

- having regard to its resolutions of 14 February 1989, 21 November 1990 and 22 February 1991 on the Commission's guidelines for the management of the European Social Fund with regard to long-term unemployment and the occupational integration of young people (Objectives 3 and 4), on the Community initiatives EUROFORM, NOW and HORIZON and on the workings of the European Social Fund,

- having regard to the Court of Auditors' report concerning the financial year 1989 and to the opinion of the Committee on Social Affairs, Employment and the Working Environment on the 1989 discharge (the section concerning the European Social Fund),

- having regard to the report of the Committee on Regional Policy and Regional Planning and to the co-report of the Committee on Social Affairs, Employment and the Working Environment, the Committee on Agriculture, Fisheries and Rural Development, the Committee on Budgets and the Committee on Budgetary Control (A3-0192/91),

A. whereas the development of human resources, as a vital component of harmonious economic and social development and a determining factor in the strengthening of economic and social cohesion, will only be possible insofar as development models are adopted which view human resources as an essential element of investment,

B. recalling that the achievement of the five objectives of the Structural Funds will be largely dependent on efficient management and correct utilization of the ESF,

C. whereas the ESF, as a basic instrument for the development of human resources, must consequently be managed and utilized in such a way as to ensure fulfilment of vocational training needs, improvement of skills, restructuring and active measures against unemployment and the spread of insecure conditions of employment,

D. whereas, in the Objective 1 regions, the education and training systems are quantitatively and qualitatively insufficient and the number of vacancies cannot keep pace with the arrival of young workers on the labour market; and whereas the Objective 2 regions are characterized by a marked ageing of the workforce and by a lack of correlation between the existing skills pertaining to declining industries and the needs of the newer industries,

E. without prejudice to specific structural measures to develop and improve education, technical and vocational training systems in Objective 1 regions (and countries),

I. INTRODUCTION

1. Congratulates the Commission on the punctual submission of its report and on its comprehensiveness, clarity and excellent organization, as well as its evident sincerity;

2. Recognizes the effort represented by the submission within the deadline of the national plans, on the part of both the Member States and the Commission, in view of the large number of plans involved (140) and the substantial changes for the Commission and Member States embodied in the new regulation;

3. Expresses the hope that similar thoroughness will be evident in the reports to be submitted pursuant to Article 25(1) of the regulation governing the funds;

4. Expects a critical mid-term assessment of the reform of the structural funds by the end of 1991;

5. Notes that the total allocation to the funds for the five-year period 1988-1993 is 60 315 m ECU, and that the indicative breakdown is as follows:

- Objective 1 38 300

- Objective 2 7 205

- Objectives 3 and 4 7 450

- Objective 5(a) 3 415

- Objective 5(b) 2 795

- Transitional and innovatory

measures 1 150

6. Stresses that the total allocation to the funds will, by the end of the five-year period, amount to an increase of 1.6% in the combined GDP of the recipient Member States;

7. Expresses its agreement with the Commission's policy of concentrating the resources of the funds on a small number of regions and of taking into account both regional GDP and GNP when selecting those to be covered by Objective 1; calls for the introduction of new social and environmental indicators of public health, with a view to sustainable development;

8. Regrets that the Member States have not made full use of the opportunities provided by the regulation, with a view to concentrating Community aid on Objective 1 regions;

9. Notes the existence of a certain administrative slowness in implementing the funds on the part of certain Member States, often leading to a delay in payments by the Commission;

10. Considers, in view of the different administrative situations of the Member States, that it was not advisable to use identical procedures for Community support frameworks;

11. Expects, despite similar problems, the Community support frameworks for Objective 2 regions for 1992 and 1993 to take greater account this time of special regional features and therefore set differing priorities for development;

12. Expects there to be less time pressure on the next Community support frameworks, thus enabling a prior assessment to be made;

13. Considers that the apparent resistance of certain Member States to the application of the principle of additionality is detrimental to efficiency and may even have adverse consequences; notes, however, that progress was made in 1990 in applying the principle;

14. Calls on the Commission to draw up a proposal laying down in more detail the way in which the Member States must implement the additionality principle, in order to regulate the distribution of co-funding at regional, national and Community level, and the conditions which the operational programmes must fulfil in order to guarantee the complementarity of the regional development measures fostered by these instruments;

15. Considers it essential that the regions should take part in the negotiations concerning the programmes which affect them, and calls on the Commission to be insistent on this principle, respecting the specific characteristics of each Member State and providing the technical or administrative instruments which they may lack to enhance the usefulness of such participation;

16. Supports the Commission's attempts to achieve a relative reduction in aid for infrastructural investment in favour of greater concentration on productive investment; considers, nevertheless, that improving basic equipment may, in some cases, be considered a necessary stage preceding development of whatever kind and that it is required to fulfil both large-scale state plans and regional plans;

17. Regrets that relatively few overall subsidies have been taken up for Objective 1;

18. Notes that the Member States have made little use of subsidies and even less use of EIB loans, despite the EIB's stated willingness to support cases of profitable investment;

19. Notes a certain reluctance on the part of the EIB to participate in the policy under consideration, despite its agreement with the Commission; is concerned at the EIB's low level of participation (15%) in Objectives 3 and 4;

20. Notes the inadequacy of the resources earmarked by the structural funds for this purpose; expresses its full support for the Commission in its insistence on respect for and protection and improvement of the environment in all actions in implementation of the funds, providing supplementary resources in cases requiring additional investment;

21. Shares the Commission's concern that the development measures co-funded from the structural funds may lead to increased pressure on the environment;

22. Considers that public contracts should conform scrupulously to the Community rules, even if this results in the Commission having to provide advice and technical support;

23. Believes it necessary that the social partners (unions, associations, specialists, etc.) should participate in the monitoring of the programmes, on a consultative basis, provided that this does not complicate the decision-making process and that they are shown to be representative in the region in question;

24. Considers it essential to undertake the most scrupulous monitoring possible of the use of resources allocated to the funds and the efficiency of their implementation;

25. Calls on the Commission and the Member States to encourage cooperation between regions, especially frontier regions, while also paying special attention to the most outlying regions;

26. Welcomes the fact that measures to promote technological potential are now possible also, but calls on the Commission to reinforce this field and, in particular, to ensure that more account is taken of Objective 1, 2 and 5b regions in the allocation of funds for Community research and technology programmes;

27. Believes that Community initiatives should include specific programmes aimed at overcoming the negative effects which the abolition of intra-Community frontiers will have on border regions;

II. THE EAGGF (Guidance Section)

28. Welcomes this report by the Commission which is intended to give an overall view of the initial implementation of the principles and guidelines of Structural Fund reform;29.Stresses that the report is predominantly descriptive in nature, which frequently means that there is in practice little assessment of the management of each of the Funds and the application and actual impact of the reform;

30. Points out, however, that a report on activities in 1989 is an inadequate basis for a precise judgment of the results and impact of structural policy in agriculture, since 1989 was a preparatory year for regional measures (formulation of the Community support frameworks) and a year which saw the introduction of major changes in the regulations governing across-the-board measures relating to agricultural structures with the aim of integrating these into the reform and coordinating them with the regional measures under Objectives 1 and 5b;

31. Is aware that reform of the Structural Funds involves greater application of the subsidiarity principle, i.e. increasing responsibility on the part of the Member States for the implementation of structural measures. As a result, differences in the rate of adoption and implementation of the various measures by the Member States and in the level of funding available in each country may seriously hinder progress towards better social and economic cohesion;

32. Regrets that the across-the-board nature of Objective 5a has been interpreted in such a way that the measures provided for thereunder have not been fully planned, which adversely affects the coherence and integration of such measures with other, not strictly agricultural, structural measures at both the geographical and the sectoral level;

33. Considers that the lack of planning in respect of Objective 5a measures gives rise to financial unpredictability. This is particularly true in the case of areas which are not covered by Objective 1, in respect of which an Objective 5a financial plan should perhaps be established in the future where non-compulsory expenditure in an established budgetary allocation is involved;

34. Notes the new approach to structural policy in agriculture which emerges from the Commission's Communication to the Council on the development and future of the CAP, and considers that, in any event, reform of the CAP and application of the principles of the Structural Fund reform should be parallel and coherent processes which respect the objective of social and economic cohesion and the principles and objectives enshrined in the CAP under the Treaty of Rome;

35. Calls on the Commission to reconsider the Community's share of funding in respect of the across-the-board measures under Objective 5a on the basis of the impact which any restrictive measures adopted in connection with the reform of the CAP may have on certain predominantly agricultural regions with few alternative resources, so as not to increase the imbalance between these areas and the rest of the Community;

36. Reaffirms the principles stated in the Stevenson report (A2-0027/91) regarding the need for a genuine Community rural policy as an entity in its own right, in which the various measures adopted as a result of the Structural Fund reform would be fully integrated and coordinated;

37. Emphasizes the need to incorporate the common fisheries policy in the Structural Funds, thereby rectifying the error of its exclusion from the previous reform, as is appropriate in the case of a sector which is required to adjust its capacity to diminished catch opportunities and in view of the strong social and regional impact of the required adjustments;

38. Points out that to this end an Objective 5c, devised specifically for fishing zones, should be created to cover structural fisheries policy with regard to both fleets and the processing industry;

39. Stresses that, in view of developments such as the integration of the east German Länder, progress towards Economic and Monetary Union and the urgency of CAP reform, the aim of doubling the Structural Funds between 1989 and 1993 seems out of date and inadequate; in this respect, it should be remembered that doubling the Funds was regarded as the minimum desirable increase and not a maximum;

40. Supports some of the recommendations made by the Court of Auditors in the Court's aforementioned annual report on the 1989 financial year, especially that concerning the need to improve and clarify the definition of objectives and selection criteria which would enable aid to be targeted on certain types of products or farms, which would make it easier to assess the effectiveness of the measures;

41. Reiterates its view that the regulation of agricultural structures should be simplified to make it easier for the various administrations and interested parties to understand and apply them, and that studies should be promoted with a view to rationalizing procedures and increasing administrative efficiency; also believes that the Member States' public administrations, in cooperation with local and regional bodies, should have an efficient public service for advising farmers and for administering and monitoring the financial aid;

42. Considers that the system of checks and measures against fraud should be reorganized to ensure that they are better suited to current Community support instruments, are not limited to a traditional form of fiscal supervision and favour the commitments obtained by farmers themselves;

43. Awaits the assessment and, where appropriate, fresh proposals on the structural policies which the Commission has undertaken to submit before the end of 1991.

III. THE EUROPEAN SOCIAL FUND (ESF)

Management of the European Social Fund and its coordination with other Community instruments

44. Protests at the Commission's failure, in its dealings with the Member States at the stage of negotiation of the Community Support Frameworks and the relevant operational programmes, to lay greater emphasis on the development of human resources as a priority for structural policies, which would have meant a contribution to the doubling of the ESF by 1992 and would ensure full use of the financial resources placed at the disposal of the ESF by the budgetary authority;

45. Stresses, in this context, that the Structural Funds must give equal importance to stimulating human resources and to financing the infrastructure in order to take account of the importance of the human component of investment; draws attention, once more, to the high financial costs of retraining and optimum utilization of the ageing workforce in the declining regions covered by Objective 2 and of providing suitable training for the expanding workforce in the Objective 1 regions;

46. Supports, in the same spirit, the creation of infrastructures for technical education, teaching and vocational training in the regions covered by Objective 1;

47. With regard to infrastructure, despite the high level of investment, condemns the continued existence of great difficulties in access to interior and mountainous areas of less developed regions, and insufficient communications with island areas, and regrets that in the future such regions especially those in Objective 1 should be given priority in the drafting of the operational programmes;

48. Would welcome closer involvement of the social partners in the preparation and negotiation of the Community Support Frameworks and considers that their participation is essential to the preparation, accompaniment and evaluation of those instruments and the related operational programmes; calls on the Commission to promote the inclusion of the social partners in the monitoring committees;

49. Considers that the principles of decentralization, subsidiarity and joint management which underlie the reform of the ESF imply that the Commission should take greater responsibility for ensuring managerial efficiency and the full use of the budgetary appropriations allocated to the Fund; calls on the Commission, therefore, to improve its ex ante and ex post evaluation arrangements and to extend and develop its activities of accompaniment and on-the-spot monitoring, through the work of the monitoring committees and through spot checks by experts;

50. Recalls that efficient management of the ESF will only be possible if sanctions are imposed by the Community in the case of irregularities or abuses;

51. Considers it necessary to implement, within the Commission, new internal coordination and evaluation mechanisms, which will make it possible, during negotiation/implementation of the CSFs and of the operational programmes, to take account of the results of other Community actions and instruments related to human resources, such as the FORCE, EUROTECNET, COMETT, LEDA, ERGO, HANDYNET, HELIOS, PETRA, ERASMUS and MATTHAEUS programmes;

52. Considers, in addition, that the new coordination units should be equipped with resources enabling them to harmonize the different evaluation methods used by the Commission for the various instruments related to human resources; such harmonization is essential with a view to enhancing the efficiency of the ex ante evaluation, the accompaniment and the ex post evaluation of the implementation of the Community Support Frameworks and the related operational programmes;

53. Considers that, although 1989 and 1990 were the first years of implementation of the reform of the Structural Funds, the results of the monitoring and evaluation studies related to the implementation of the CSFs, the operational programmes and the ESF in general should be made public, with utmost haste, with a view to determining whether the desired synergies are being obtained;

54. Regrets the fact that the Commission's report on the implementation of the Structural Funds fails to refer to some of the deficiencies identified in the implementation of the European Social Fund, especially:

(a) the fact that, in certain cases, the ESF has effected its outstanding payments despite the continued suspension of the national public contributions in 1990, in contrast to the Community contribution, which has been paid for several years;

(b) the strong tendency to concentrate the ESF contribution in the field of restructuring on large industrial undertakings;

(c) the absence of methods of ensuring close links between the restructuring of undertakings and the proposed training arrangements;

(d) the existence of an excessive number of intermediaries, coming between the financier and the direct agent of the action and adding extra costs to the jointly funded actions (the excessive level of payments by SMUs to intermediate structures - in some cases as high as 30% of the Community contribution to the ESF - is a further cause for alarm and exemplifies the existing distortions);

(e) the variations in the different concepts applied in the national legislations of the Member States, as in the case of such notions as 'long-term unemployment', 'restructuring' and 'retraining';

(f) the fact that, in some cases, large undertakings account for their training costs by using invoices passed through their in-house training organizations, with the result that the Commission has no control over the training actually carried out or the costs thereof, which means that it is providing production subsidies rather than aid for training, given the nature of the costs included;

(g) the low level of ESF financing earmarked for the long-term unemployed, which, in most Member States, amounts to only about 10% net of the relevant national expenditure and is insufficient to the vocational training requirements of this social group;

55. Calls on the Commission, accordingly, to adopt or propose measures with a view to preventing the practices referred to in paragraph 11, which are not only in breach of the principles of additionality, financial concentration and transparency, but also lead to significant distortions in the workings of the ESF; calls on the Commission, furthermore, to improve its arrangements in respect of technical assistance and information, especially for SMUs; and recalls that the existing 'Euroguichets' must play an important role in this context; considers that the development of human resources must also consist of managerial training for small enterprises and handicraft industries to avoid the recourse to intermediaries in the field of access to, and use of, Structural Fund money;

56. Protests at the Commission's failure to take account of the aforementioned opinion of Parliament on the guidelines for the management of the ESF (objectives 3 and 4), especially paragraphs 2 and 3;

Community initiatives in the field of human resources

57. Protests vehemently at the Commission's failure to take account of the aforementioned opinion of Parliament on the Community initiatives EUROFORM, NOW and HORIZON;

58. Reiterates its request to the Commission, as expressed in its resolutions of 21 November 1990 referred to above on the Community initiatives EUROFORM, NOW and HORIZON, calling on it to increase by ECU 200 m the financial envelope allocated by it to Community initiatives in the field of human resources, (the financial burden of which must not be borne in the future by the Structural Funds) and to submit, as a matter of urgency and pursuant to Article 11 of Regulation (EEC) No. 4253/88, two new Community initiatives in favour of disadvantaged persons and of workers and their dependants who arrive and move within the Community;

59. Regrets the fact that the Commission has not as yet submitted, pursuant to Article 11 of Regulation (EEC) No. 4253/88, any Community initiative concerning the long-term unemployed, in accordance with its undertaking to the Social Affairs Council of 29 May 1990, and calls on the Commission, once again, to do so as a matter of urgency;Financial allocation and budgetary implementation of the ESF

60. Notes a lack of clarity in the criteria used by the Commission in the breakdown of the resources available for the period 1989-1993 among the various objectives of the Structural Funds, regrets that these criteria have proved inadequate in the light of the needs expressed by the Member States (the requests submitted by the Member States in their plans under objectives 3 and 4 amount to 289% of the sums allocated exclusively to those objectives);

61. Considers, therefore, that it is essential that decisions such as those referred to in the previous paragraph, which are eminently political in nature, should be taken on the basis of cooperation and in accordance with Parliament's opinion;

62. Regrets the failure of the Commission's report on the implementation of the Structural Funds to draw attention to the large number of cancellations of both commitment and payment appropriations and to the consequent waste of resources; and expresses the hope that this situation will not recur and that steps will be taken to ensure greater reliability in respect of the authorizations granted;

63. Draws attention to the increasing tendency, which has been noticeable for some time and was confirmed in 1989 and 1990, towards the cancellation or non-utilization of the budgetary appropriations placed at the Commission's disposal by the budgetary authority (in the case of commitment appropriations, ECU 509.5 m were cancelled in 1989 and ECU 590.6 m were not utilized in 1990); hopes that this tendency will not prevent the ESF from benefiting from the principle of the doubling of the Structural Funds; points out, in this connection, that should that happen, the Commission will be responsible;

64. Expects the Commission to keep its promises and make available the financial resources promised for preliminary financing of projects at the start of the financial year rather than in the middle of the year, as this causes delays to or jeopardizes the completion of projects;

65. Reminds the Commission that national budgets are also subject to the principle of annuality, which means that matching funds entailed by higher Commission payments cannot, because of the deflator, be provided if they are only made available during the financial year;

66. Criticizes the large volume of work involved in drawing up statistics which the Member States are now required to provide as a result of the reform of the structural funds but which appear to be of questionable value as the figures are out of date;

67. Expects the Commission to simplify the procedural rules governing the structural funds as quickly as possible, so that delays caused by obscure, excessively complicated procedures are eliminated;

68. Requests the Commission to produce the review of the three Structural Funds in good time before the final decisions on Economic and Monetary Union is taken at the forthcoming Intergovernmental Conference;

69. Requests the Commission to produce a report within six months on what actions it has taken on the proposals concerning the ESF set out in this report;

IV. BUDGETARY ASPECTS

70. Points out that the decision taken by the budgetary authority in the 1991 budget to disperse the budget headings for the Structural Funds will make it possible to monitor application of the reform more closely;

71. Points out that the Structural Funds have been doubled in real terms in order to achieve the economic and social cohesion that should go hand in hand with construction of the internal market;

72. Considers that in order to double the Structural Funds in real terms the real rather than the estimated annual deflator should be applied to the amounts earmarked;

73. Notes that application of the deflator for the years 1989-1991 produces a difference of ECU 577 m between estimated expenditure and actual expenditure; points out however that during the revision of the financial perspective in May 1990 ECU 90 m were added, leaving ECU 487 m to be made up;

74. Calls on the Commission forthwith to put forward proposals as part of a revision of the financial perspective for ways of making up this amount (ECU 487 m) in order to double the Structural Funds in real terms;

75. Proposes that during revision of the interinstitutional agreement a mechanism be created to make up the amounts in the light of the final inflation rate figures;

76. Points out that Community structural appropriations should supplement and not replace Community investments, so that genuine influence can be exerted in the regions concerned;

77. Notes that at present there is no mechanism to guarantee application of this principle of the reform and calls on the Commission to make the necessary adjustments to ensure that it is applied;

78. Considers it desirable for all the forms of assistance provided for in Regulation No. 2052/88 to be used, particularly interest rebates;

79. Calls on the Commission and the European Investment Bank to improve coordination of their assistance in order to guarantee better use of all the financial resources. Calls on the Commission, as part of the reform of the Structural Funds, to coordinate the policies implemented under the auspices of those Funds more effectively with Community environment policy, and asks the Commission, in that connection, to develop and employ macroeconomic indicators which show how lasting the impact of structural policy is;

80. Calls on the Commission to increase the total appropriation for Community initiatives;

81. Calls on the Commission to put forward proposals for reform of the Structural Funds at the same time as proposals for the future financing of the Community and revision of the 1988 interinstitutional agreement.

V. BUDGETARY CONTROL

82. Stresses that in 1989 the basic operational instruments for the reform of the Structural Funds, such as the plans and the Community support frameworks, were finalized, but the reform has not yet been put into operation and thus it is not possible to deliver a full judgment on the implementation of the reform in respect of the 1989 financial year;

83. Considers, however, that there were disturbing signs in 1989 of possible obstacles to the proper implementation of the reform, for example:

- delays occurred in the partnership between the Community and the national authorities with regard to the Community support frameworks, and the problems which emerged during the integrated Mediterranean programmes, such as the low take-up of technical assistance, could arise again in this context;

- the lack of applications for EIB loans and the fact that the Bank and the Commission have differing procedures and arrangements for assistance bear witness to problems of coordination between the Funds and the loan instruments and imply that there is a more general problem as regards coordination of the Funds between themselves and with the other financial instruments;

- there was no improvement in budget management as expected as a result of the programming approach introduced by the reform: the commitments remaining to be settled have continued to increase as have cancellations of commitments, and the implementation of appropriations in fact suffered a setback in the 1990 financial year, with a rate of non-utilization of around 8%;

- the work of the Monitoring Committees could run up against the same obstacles as occurred in the IMPs, and it is still unclear whether on-the-spot checks necessary to compensate for the failure to identify the individual projects funded within the programmes have been extended far enough;

84. Considers, therefore, that an in-depth analysis of the operation of the reform of the Structural Funds in the first phase of implementation should be carried out as a matter of urgency in view of the further difficulties which occurred in 1990, and instructs its committee responsible to submit a report on the matter.

VI. FINAL CONSIDERATIONS

85. Recognizes the desirability of an external audit of the efficiency of the funds, which would evaluate, over the five-year period, their success in reducing the inequalities between rich and poor regions, with a view to achieving sustainable economic development;

86. Notes the difficulty of implementing the reform of the structural funds in view of the absence of decentralized or other suitable regional structures;

87. Views as a serious deficiency the fact that, as the Commission observes, the rules governing the correct implementation of the funds remain incomplete in all the Member States, and therefore calls on the Member States to institute suitable rules and bodies for managing the aids and taking full advantages of the experiences obtained, in accordance with the similar views expressed by the Court of Auditors in its report on the 1989 financial year;

88. Agrees with the Commission that Community support is unequal to the task of providing impetus for economic development, and that what is needed is an improvement in the macro-economic fabric in which the structural funds are to intervene, plus micro-economic reforms to enhance the efficiency of the economy;

89. Notes with concern that the endeavours of the Community and the Member States to reduce the gap between rich and poor regions may prove insufficient, despite the doubling of the funds, and therefore calls on the Commission to propose to the budgetary authority the desirability of further increases as soon as the accumulated experience permits the effective use of the funds concerned;

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90. Instructs its President to forward this resolution to the Commission, the Council, the Economic and Social Committee and the representatives of the social partners at European level.