EU Pledges Billions for Eco-Projects in Candidate Countries

By Alexandru R. Savulescu

BRUSSELS, Belgium, December 11, 2000 (ENS) - The European Commission is sticking to its promise to provide billions of euros to 10 Central and Eastern European countries that hope to join the 15 countries that are now members of the European Union. The funding will help the candidate countries adapt to the environment and transport laws now in effect across the European Union.

At an information meeting with non-governmental organizations, organized last week in Brussels, Marc Franco, director of the the European Commission's Regional Policy Directorate General, said that the Instrument for Structural Policies for Pre-accession (ISPA) has committed euros 1.04 billion for projects starting this year.


Historic center of Prague, capital of the Czech Republic (Photo courtesy UNESCO)
In the period 2000-2006, the European Union has decided to offer approximately three billion euros a year in financial assistance to Central and Eastern European accession countries through different programs such as PHARE and SAPARD as well as ISPA.

PHARE, a continuation of previous aid, covers institution building, community programs, social development, and industrial restructuring. ISPA, launched this April, covers transport and environment. SAPARD (Special Action for Pre-accession Measures for Agriculture and Rural Development) is delayed in most countries. Start up of the fund, which covers agriculture and rural development, is postponed to next year.

Over the period 2000 to 2006, an yearly amount of approximately euros 1.058 billion is to be split among the 10 candidate countries: Bulgaria, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, Slovak Republic, and Slovenia.

In addition to these 10 Central and Eastern European (CEE) accession countries, three other countries have applied for EU membership: Cyprus, Malta, and Turkey. Separate financial instruments are available for them.

The European Commission decided to allocate the ISPA resources according to a set of criteria including population, per capita Gross Domestic Product, and land surface.

With 49 percent for environment and 51 percent for transport, ISPA almost succeeded this year in reaching the proposed 50-50 target for division of funds between environmental and transport projects. "We were afraid that we will find a better pipeline for transport than for environment," says Franco, "but this didn't happen."


Srebarna Nature Reserve in Bulgaria is listed by UNESCO as World Heritage in Danger. The freshwater lake fed by the Danube River is the breeding home of 100 species of rare or endangered birds. (Photo by Ivan Yanchev courtesy Srebarna Biosphere Reserve)
The environment money is committed for large infrastructure projects covering the "heavy investment directives" of the European Union - drinking water, wastewater, solid waste management, and air pollution.

The transport money is intended to promote the concept of "sustainable mobility," giving advantage to rails, with 52 percent of the money, against road, with 40 percent, and air with only eight percent.

ISPA tried to avoid the past mistakes of other European Union programs, such as approving money which laid idle for years before actually being used. To this end, it followed a multi-annual budgeting pattern with the funds approved for several years in advance, in addition to what was committed for the year 2000.

According to Franco, the annual amount approved for environmental projects is 1.5 more than the amount committed for this year, and the ratio is twice as high for transportation projects.

The ISPA provides an average grant of 65 percent of a project's funding. The rest must be covered by each country, primarily with money received as loans from international financial institutions, such as the European Investment Bank.


The Skocjan Caves in Slovenia are an exceptional system of limestone caves with about five kilometres of underground passages, caves more than 200 metres deep and many waterfalls. (Photo courtesy UNESCO)
This arrangement concerns non-governmental organizations who fear that ISPA projects will block financial resources that could be utilized more effectively, for "dozens of smaller projects instead of large centralized projects." Friends of the Earth and CEE Bankwatch Network, issued this warning in a recent report, "Billions for Sustainability."

The environmental groups argue that the minimum grant size of five million euros will favor large infrastructure projects that may be environmentally unfriendly. The European Commission, aware of this criticism, tackled the issue by grouping smaller projects together, or even accepting smaller individual ones, says Marco.

Still, the average size of the year 2000 grants was 12 million euros. The largest approved grant was 231 million euros, for the rehabilitation and upgrading of Romanian railways, says Didier Bouteiller, ISPA senior administrator.

But even if these are really large amounts, warns Fernando Hervas Soriano of the Environment Directorate, the ISPA funds will only cover approximately five percent of all the needed investment for environment in the 10 Central and Eastern European accession countries.

In the case of Romania, confirms Erich Unterwurzacher, ISPA adviser, ISPA can only provide around 800 million euros in grants, while the total amount needed is estimated at 15 billion.

The NGO report is also concerned by "the lack of public participation and difficult access to information" on ISPA projects in the Central and Eastern European countries. "Lack of information and/or contradictory information" often exists, the report points out.

Franco confirms this. He has already proposed that the European Union authorities improve their communication with NGOs and local populations next year. "Building public awareness is one of our objectives," says Franco. "We will make sure that financial investment always comes with an environmental message," he says.


The waters of the Danube flow into the Black Sea, forming the largest and best preserved of European deltas. The Danube Delta, in Romania, hosts over 300 species of birds as well as 45 freshwater fish species. (Photo courtesy UNESCO)
A system of information meetings known as the "EU-NGOs Dialogue" administered by the Regional Environmental Center, will continue Franco assured the NGO representatives gathered in Brussels.

Yet there are concerns about delays in the process of setting up the pre-accession funding mechanisms in each candidate country. "Countries are currently in a different stage of creating bodies responsible for implementing funds from the EU," says the NGO report.

"As the institutional framework is in the process of being established, the division of responsibilities is still vague in many countries, many newly created bodies still lack a legal framework, and the same goes for the strategies and plans required by the European Commission," the NGOs point out.

In response, the European Commission's Regional Policy Directorate General and the ISPA will improve the selection process for the next year, says Franco, "starting with a closer look to country strategies, some only half good."

The quality of approved projects also has to be further improved, mainly on the Environmental Impact Assessment (EIA) side. EIAs "were generally a problem in 2000," complains Franco.

The new European Union financial mechanisms for pre-accession aid were established after the Copenhagen decision of the European Council, in 1993, which stated that "the associated countries of Central and Eastern Europe that so desire, shall become members of the European Union."