Space is added to the Title on research and technological development. The EU Treaty of Lisbon picks up some improvements from the Constitutional Treaty: the European research area and the free movement of researchers (fifth freedom).
***
Article 163 TEC
Article 163 TEC (ex Article 130f) sets out the research and technology aims of the European Community (European Union), namely to:
1. strengthen the scientific and technological bases of industry,
2. make industry more competitive internationally and
3. promote other research activities.
The second paragraph of Article 163 TEC presents a rough sketch of activities addressed at businesses, research centres and universities. Small and medium-sized enterprises (SMEs) are indicated specifically among the businesses (undertakings).
Research and technological development is mentioned alongside actions to open up the potential of the internal market (public procurement, common standards and the removal of legal and fiscal obstacles to cooperation).
The third paragraph presents the new concept ‘demonstration projects’, but otherwise it just refers the reader to the following Articles of the Title.
The current Article 163 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/120:
TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT
Article 163 TEC
1. The Community shall have the objective of strengthening the scientific and technological bases of Community industry and encouraging it to become more competitive at international level, while promoting all the research activities deemed necessary by virtue of other Chapters of this Treaty.
2. For this purpose the Community shall, throughout the Community, encourage undertakings, including small and medium-sized undertakings, research centres and universities in their research and technological development activities of high quality; it shall support their efforts to cooperate with one another, aiming, notably, at enabling undertakings to exploit the internal market potential to the full, in particular through the opening-up of national public contracts, the definition of common standards and the removal of legal and fiscal obstacles to that cooperation.
3. All Community activities under this Treaty in the area of research and technological development, including demonstration projects, shall be decided on and implemented in accordance with the provisions of this title.
***
Original Lisbon Treaty (ToL)
Article 2, point 135 of the Lisbon Treaty amended the Title and point 136 amended Article 163 TEC (OJEU 17.12.2007 C 306/85–86):
RESEARCH AND TECHNOLOGICAL DEVELOPMENT
135) The words ‘AND SPACE’ shall be added to the heading of Title XVIII.
136) Article 163 shall be amended as follows:
(a) paragraph 1 shall be replaced by the following:
‘1. The Union shall have the objective of strengthening its scientific and technological bases by achieving a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive, including in its industry, while promoting all the research activities deemed necessary by virtue of other Chapters of the Treaties.’;
(b) in paragraph 2, the words ‘enabling undertakings to exploit the internal market potential
to the full,’ shall be replaced by ‘permitting researchers to cooperate freely across borders
and at enabling undertakings to exploit the internal market potential to the full,’.
***
Renumbering the Treaty of Lisbon (ToL)
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and renumbered Title XIX Research and technological development and space in the consolidated version.
Article 163 TEC initially became Article 163 TFEU (ToL) before the renumbering of the treaty made it into Article 179 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).
***
Lisbon Treaty consolidated
Article 179 TFEU
After specific and horizontal amendments the Article 179 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/128–129):
TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE
Article 179 TFEU
(ex Article 163 TEC)
1. The Union shall have the objective of strengthening its scientific and technological bases by achieving a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive, including in its industry, while promoting all the research activities deemed necessary by virtue of other Chapters of the Treaties.
2. For this purpose the Union shall, throughout the Union, encourage undertakings, including small and medium-sized undertakings, research centres and universities in their research and technological development activities of high quality; it shall support their efforts to cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders and at enabling undertakings to exploit the internal market potential to the full, in particular through the opening-up of national public contracts, the definition of common standards and the removal of legal and fiscal obstacles to that cooperation.
3. All Union activities under the Treaties in the area of research and technological development, including demonstration projects, shall be decided on and implemented in accordance with the provisions of this Title.
***
What changes?
We have seen that space was added to the Title, which has been renumbered XIX. This corresponds with the heading of Section 9 in the Constitutional Treaty.
The first paragraph has taken over the substantial part of Article III-248(1) of the Constitution. The European research area and its description as one in which researchers, scientific knowledge and technology circulate freely can be interpreted to enhance the role of science and technology.
The objective of a more competitive (Union or European research area?) is now more general and less tied in with industry alone.
Permitting researchers to cooperate freely across borders adds a new element from Article III-248(2) of the Constitutional Treaty. The European Council has called for this “fifth freedom” – the free movement of researchers – to become a reality.
In my view, the changes mark a positive qualitative step towards recognition of the importance of knowledge and a more ‘global Europe’. Let us leave a dysfunctional EU budget to another year.
***
I wish all the readers of the Grahnlaw blawg a happy, secure and prosperous new year 2009!
Ralf Grahn
Wednesday, 31 December 2008
EU procurement: Threshold amounts for public contracts
Even if the EC (EU) treaty principles of free movement, equal treatment and transparency apply to all public procurement in the internal market, the detailed provisions of the Procurement Directive 2004/18/EC apply to contracts with more significance for the single market and relevant to the WTO Government Procurement Agreement (GPA).
The rough and ready answer has been to devise monetary thresholds for different types of public contracts, with the amounts originally defined in special drawing rights (SDR), but “translated” into euros in the Procurement Directive. These contract thresholds have to be adjusted from time to time to the changing values of the SDRs to comply with the GPA.
***
Revision of the thresholds
The thresholds in euros are set out in Article 7 of the Procurement Directive, based on the system for revision in Article 78. The references to Article 77(2) point to the advisory procedure (Advisory Committee for Public Contracts).
The thresholds are verified (and revised) every two years:
Article 78
Revision of the thresholds
1. The Commission shall verify the thresholds established in Article 7 every two years from the entry into force of this Directive and shall, if necessary, revise them in accordance with the procedure laid down in Article 77(2).
The calculation of the value of these thresholds shall be based on the average daily value of the euro, expressed in SDRs, over the 24 months terminating on the last day of August preceding the revision with effect from 1 January. The value of the thresholds thus revised shall, where necessary, be rounded down to the nearest thousand euro so as to ensure that the thresholds in force provided for by the Agreement, expressed in SDRs, are observed.
2. At the same time as the revision under paragraph 1, the Commission, in accordance with the procedure under Article 77(2), shall align:
(a) the thresholds established in (a) of the first subparagraph of Article 8, in Article 56 and in the first subparagraph of Article 63(1) on the revised threshold applying to public works contracts;
(b) the threshold established in Article 67(1)(a) on the revised threshold applying to public service contracts awarded by the contracting authorities referred to in Annex IV;
(c) the thresholds established in (b) of the first subparagraph of Article 8 and in Article 67(1)(b) and (c) on the revised threshold applying to public service contracts awarded by contracting authorities other than those referred to in Annex IV.
3. The value of the thresholds set pursuant to paragraph 1 in the national currencies of the Member States which are not participating in monetary union is normally to be adjusted every two years from 1 January 2004 onwards. The calculation of such value shall be based on the average daily values of those currencies expressed in euro over the 24 months terminating on the last day of August preceding the revision with effect from 1 January.
4. The revised thresholds referred to in paragraph 1 and their corresponding values in the national currencies referred to in paragraph 3 shall be published by the Commission in the Official Journal of the European Union at the beginning of the month of November following their revision.
***
Revised thresholds from 2008
The thresholds were revised by Commission Regulation (EC) No 1422/2007 of 4 December 2007 amending Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council in respect of their application thresholds for the procedures for the award of contracts (OJEU 5.12.2007 L 317/34).
The Regulation entered into force on 1 January 2008.
***
Amended Procurement Directive
Based on Commission Regulation 1422/2007, Article 7 of the Procurement Directive 2004/18/EC appears like this in the consolidated version (of 15 September 2008):
CHAPTER II
Scope
S e c t i o n 1
Thresholds
Article 7
Threshold amounts for public contracts
This Directive shall apply to public contracts which are not excluded in accordance with the exceptions provided for in Articles 10 and 11 and Articles 12 to 18 and which have a value exclusive of value-added tax (VAT) estimated to be equal to or greater than the following thresholds:
(a) EUR 133 000 for public supply and service contracts others than those covered by point (b), third indent, awarded by contracting authorities which are listed as central government authorities in Annex IV; in the case of public supply contracts awarded by contracting authorities operating in the field of defence, this shall apply only to contracts involving products covered by Annex V;
(b) EUR 206 000
— for public supply and service contracts awarded by contracting authorities other than those listed in Annex IV,
— for public supply contracts awarded by contracting authorities which are listed in Annex IV and operate in the field of defence, where these contracts involve products not covered by Annex V,
— for public service contracts awarded by any contracting authority in respect of the services listed in Category 8 of Annex IIA, Category 5 telecommunications services the positions of which in the CPV are equivalent to CPC reference Nos 7524, 7525 and 7526 and/or the services listed in Annex II B;
(c) EUR 5 150 000 for public works contracts.
***
Other threshold provisions
The thresholds appear in Article 8(1) on contracts subsidised by more than 50 % by contracting authorities, in Article 56 regarding public works concessions, in Article 63(1) on advertising public works concessions and Article 67(1) on design contests.
In addition, sums of EUR 80 000 and 1 000 000 with regard to lots are mentioned in Article 9(5)(a) and (b).
***
Thresholds in national currencies
The euro thresholds apply directly in the (from tomorrow) 16 eurozone countries, but this still leaves us with the amounts in national currencies of the countries outside the euro area (cf. Article 78(3) above).
The Commission has published the Corresponding values of the thresholds of Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council in the Official Journal of the European Union 13.12.2007 C 301/1. The sums were correct, but the reference bewildering.
After the corrigendum published in the OJEU 20.12.2007 C 310/77, the corresponding values in the national currencies other than euro of the thresholds of Directives 2004/17/EC and 2004/18/EC refer to the Directives as last amended by Commission Regulation (EC) No 1422/2007 (OJEU 5.12.2007 L 317/34).
When reading the Procurement Directive, you can easily find the corresponding value in the desired national currency:
EUR 80 000
BGN New Bulgarian Lev 156 464
CZK Czech Koruna 2 274 915
DKK Danish Krone 596 444
EEK Estonian Kroon 1 251 728
GBP Pound Sterling 54 327
HUF Hungarian forint 20 587 272
LTL Lithuanian Litas 276 224
LVL Latvian Lats 55 792
PLN New Polish Zloty 310 171
RON New Romanian Leu 276 865
SEK Swedish Krona 742 196
SKK Slovak Koruna 2 906 438
EUR 133 000
BGN New Bulgarian Lev 260 121
CZK Czech Koruna 3 782 045
DKK Danish Krone 991 589
EEK Estonian Kroon 2 080 998
GBP Pound Sterling 90 319
HUF Hungarian forint 34 226 339
LTL Lithuanian Litas 459 222
LVL Latvian Lats 92 755
PLN New Polish Zloty 515 660
RON New Romanian Leu 460 289
SEK Swedish Krona 1 233 901
SKK Slovak Koruna 4 831 953
EUR 206 000
BGN New Bulgarian Lev 402 894
CZK Czech Koruna 5 857 905
DKK Danish Krone 1 535 844
EEK Estonian Kroon 3 223 200
GBP Pound Sterling 139 893
HUF Hungarian forint 53 012 225
LTL Lithuanian Litas 711 277
LVL Latvian Lats 143 665
PLN New Polish Zloty 798 691
RON New Romanian Leu 712 928
SEK Swedish Krona 1 911 155
SKK Slovak Koruna 7 484 078
EUR 412 000
BGN New Bulgarian Lev 805 789
CZK Czech Koruna 11 715 810
DKK Danish Krone 3 071 689
EEK Estonian Kroon 6 446 399
GBP Pound Sterling 279 785
HUF Hungarian forint 106 024 450
LTL Lithuanian Litas 1 422 554
LVL Latvian Lats 287 331
PLN New Polish Zloty 1 597 381
RON New Romanian Leu 1 425 856
SEK Swedish Krona 3 822 309
SKK Slovak Koruna 14 968 156
EUR 1 000 000
BGN New Bulgarian Lev 1 955 798
CZK Czech Koruna 28 436 432
DKK Danish Krone 7 455 555
EEK Estonian Kroon 15 646 600
GBP Pound Sterling 679 090
HUF Hungarian forint 257 340 898
LTL Lithuanian Litas 3 452 800
LVL Latvian Lats 697 404
PLN New Polish Zloty 3 877 139
RON New Romanian Leu 3 460 816
SEK Swedish Krona 9 277 450
SKK Slovak Koruna 36 330 475
EUR 5 150 000
BGN New Bulgarian Lev 10 072 362
CZK Czech Koruna 146 447 623
DKK Danish Krone 38 396 109
EEK Estonian Kroon 80 579 990
GBP Pound Sterling 3 497 313
HUF Hungarian forint 1 325 305 627
LTL Lithuanian Litas 17 781 920
LVL Latvian Lats 3 591 633
PLN New Polish Zloty 19 967 267
RON New Romanian Leu 17 823 204
SEK Swedish Krona 47 778 869
SKK Slovak Koruna 187 101 944
***
Comments relevant to the subject are appreciated.
Ralf Grahn
The rough and ready answer has been to devise monetary thresholds for different types of public contracts, with the amounts originally defined in special drawing rights (SDR), but “translated” into euros in the Procurement Directive. These contract thresholds have to be adjusted from time to time to the changing values of the SDRs to comply with the GPA.
***
Revision of the thresholds
The thresholds in euros are set out in Article 7 of the Procurement Directive, based on the system for revision in Article 78. The references to Article 77(2) point to the advisory procedure (Advisory Committee for Public Contracts).
The thresholds are verified (and revised) every two years:
Article 78
Revision of the thresholds
1. The Commission shall verify the thresholds established in Article 7 every two years from the entry into force of this Directive and shall, if necessary, revise them in accordance with the procedure laid down in Article 77(2).
The calculation of the value of these thresholds shall be based on the average daily value of the euro, expressed in SDRs, over the 24 months terminating on the last day of August preceding the revision with effect from 1 January. The value of the thresholds thus revised shall, where necessary, be rounded down to the nearest thousand euro so as to ensure that the thresholds in force provided for by the Agreement, expressed in SDRs, are observed.
2. At the same time as the revision under paragraph 1, the Commission, in accordance with the procedure under Article 77(2), shall align:
(a) the thresholds established in (a) of the first subparagraph of Article 8, in Article 56 and in the first subparagraph of Article 63(1) on the revised threshold applying to public works contracts;
(b) the threshold established in Article 67(1)(a) on the revised threshold applying to public service contracts awarded by the contracting authorities referred to in Annex IV;
(c) the thresholds established in (b) of the first subparagraph of Article 8 and in Article 67(1)(b) and (c) on the revised threshold applying to public service contracts awarded by contracting authorities other than those referred to in Annex IV.
3. The value of the thresholds set pursuant to paragraph 1 in the national currencies of the Member States which are not participating in monetary union is normally to be adjusted every two years from 1 January 2004 onwards. The calculation of such value shall be based on the average daily values of those currencies expressed in euro over the 24 months terminating on the last day of August preceding the revision with effect from 1 January.
4. The revised thresholds referred to in paragraph 1 and their corresponding values in the national currencies referred to in paragraph 3 shall be published by the Commission in the Official Journal of the European Union at the beginning of the month of November following their revision.
***
Revised thresholds from 2008
The thresholds were revised by Commission Regulation (EC) No 1422/2007 of 4 December 2007 amending Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council in respect of their application thresholds for the procedures for the award of contracts (OJEU 5.12.2007 L 317/34).
The Regulation entered into force on 1 January 2008.
***
Amended Procurement Directive
Based on Commission Regulation 1422/2007, Article 7 of the Procurement Directive 2004/18/EC appears like this in the consolidated version (of 15 September 2008):
CHAPTER II
Scope
S e c t i o n 1
Thresholds
Article 7
Threshold amounts for public contracts
This Directive shall apply to public contracts which are not excluded in accordance with the exceptions provided for in Articles 10 and 11 and Articles 12 to 18 and which have a value exclusive of value-added tax (VAT) estimated to be equal to or greater than the following thresholds:
(a) EUR 133 000 for public supply and service contracts others than those covered by point (b), third indent, awarded by contracting authorities which are listed as central government authorities in Annex IV; in the case of public supply contracts awarded by contracting authorities operating in the field of defence, this shall apply only to contracts involving products covered by Annex V;
(b) EUR 206 000
— for public supply and service contracts awarded by contracting authorities other than those listed in Annex IV,
— for public supply contracts awarded by contracting authorities which are listed in Annex IV and operate in the field of defence, where these contracts involve products not covered by Annex V,
— for public service contracts awarded by any contracting authority in respect of the services listed in Category 8 of Annex IIA, Category 5 telecommunications services the positions of which in the CPV are equivalent to CPC reference Nos 7524, 7525 and 7526 and/or the services listed in Annex II B;
(c) EUR 5 150 000 for public works contracts.
***
Other threshold provisions
The thresholds appear in Article 8(1) on contracts subsidised by more than 50 % by contracting authorities, in Article 56 regarding public works concessions, in Article 63(1) on advertising public works concessions and Article 67(1) on design contests.
In addition, sums of EUR 80 000 and 1 000 000 with regard to lots are mentioned in Article 9(5)(a) and (b).
***
Thresholds in national currencies
The euro thresholds apply directly in the (from tomorrow) 16 eurozone countries, but this still leaves us with the amounts in national currencies of the countries outside the euro area (cf. Article 78(3) above).
The Commission has published the Corresponding values of the thresholds of Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council in the Official Journal of the European Union 13.12.2007 C 301/1. The sums were correct, but the reference bewildering.
After the corrigendum published in the OJEU 20.12.2007 C 310/77, the corresponding values in the national currencies other than euro of the thresholds of Directives 2004/17/EC and 2004/18/EC refer to the Directives as last amended by Commission Regulation (EC) No 1422/2007 (OJEU 5.12.2007 L 317/34).
When reading the Procurement Directive, you can easily find the corresponding value in the desired national currency:
EUR 80 000
BGN New Bulgarian Lev 156 464
CZK Czech Koruna 2 274 915
DKK Danish Krone 596 444
EEK Estonian Kroon 1 251 728
GBP Pound Sterling 54 327
HUF Hungarian forint 20 587 272
LTL Lithuanian Litas 276 224
LVL Latvian Lats 55 792
PLN New Polish Zloty 310 171
RON New Romanian Leu 276 865
SEK Swedish Krona 742 196
SKK Slovak Koruna 2 906 438
EUR 133 000
BGN New Bulgarian Lev 260 121
CZK Czech Koruna 3 782 045
DKK Danish Krone 991 589
EEK Estonian Kroon 2 080 998
GBP Pound Sterling 90 319
HUF Hungarian forint 34 226 339
LTL Lithuanian Litas 459 222
LVL Latvian Lats 92 755
PLN New Polish Zloty 515 660
RON New Romanian Leu 460 289
SEK Swedish Krona 1 233 901
SKK Slovak Koruna 4 831 953
EUR 206 000
BGN New Bulgarian Lev 402 894
CZK Czech Koruna 5 857 905
DKK Danish Krone 1 535 844
EEK Estonian Kroon 3 223 200
GBP Pound Sterling 139 893
HUF Hungarian forint 53 012 225
LTL Lithuanian Litas 711 277
LVL Latvian Lats 143 665
PLN New Polish Zloty 798 691
RON New Romanian Leu 712 928
SEK Swedish Krona 1 911 155
SKK Slovak Koruna 7 484 078
EUR 412 000
BGN New Bulgarian Lev 805 789
CZK Czech Koruna 11 715 810
DKK Danish Krone 3 071 689
EEK Estonian Kroon 6 446 399
GBP Pound Sterling 279 785
HUF Hungarian forint 106 024 450
LTL Lithuanian Litas 1 422 554
LVL Latvian Lats 287 331
PLN New Polish Zloty 1 597 381
RON New Romanian Leu 1 425 856
SEK Swedish Krona 3 822 309
SKK Slovak Koruna 14 968 156
EUR 1 000 000
BGN New Bulgarian Lev 1 955 798
CZK Czech Koruna 28 436 432
DKK Danish Krone 7 455 555
EEK Estonian Kroon 15 646 600
GBP Pound Sterling 679 090
HUF Hungarian forint 257 340 898
LTL Lithuanian Litas 3 452 800
LVL Latvian Lats 697 404
PLN New Polish Zloty 3 877 139
RON New Romanian Leu 3 460 816
SEK Swedish Krona 9 277 450
SKK Slovak Koruna 36 330 475
EUR 5 150 000
BGN New Bulgarian Lev 10 072 362
CZK Czech Koruna 146 447 623
DKK Danish Krone 38 396 109
EEK Estonian Kroon 80 579 990
GBP Pound Sterling 3 497 313
HUF Hungarian forint 1 325 305 627
LTL Lithuanian Litas 17 781 920
LVL Latvian Lats 3 591 633
PLN New Polish Zloty 19 967 267
RON New Romanian Leu 17 823 204
SEK Swedish Krona 47 778 869
SKK Slovak Koruna 187 101 944
***
Comments relevant to the subject are appreciated.
Ralf Grahn
Tuesday, 30 December 2008
EU Law: Legal base Structural Funds and Cohesion Fund
Secondary legislation of the Structural Funds and the Cohesion Fund of the European Community (European Union) is based on two Articles of the Treaty establishing the European Community.
We look at the current Treaty establishing the European Community and the Lisbon Treaty (Treaty on the Functioning of the European Union) before presenting references to the legal acts, which govern the second largest tranche of EU spending (hopefully investment).
Both projects and administrators have a tough job to fulfil all the requirements of the detailed provisions.
As always, readers are invited to share their experiences in the comments section.
***
Articles 161 and 162 TEC
The two Articles strive to accomplish a certain hierarchy of norms.
According to Article 161 TEC (ex Article 130d), the Council shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds.
The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.
Article 161(2) TEC serves as the legal base for secondary legislation on the Cohesion Fund, aimed at the fields of environment and trans-European networks in the area of transport infrastructure (excluding energy and telecommunications networks).
The third paragraph of Article 161 TEC is now redundant.
Article 162 TEC (ex Article 130e) refers to implementing decisions relating to the European Regional Development Fund (ERDF), which indicates a difference between the general and coordinating norms issued pursuant to Article 161 TEC and these implementing decisions concerning the ERDF. It is less than clear where the more general norms end and where the more specific norms start.
Without distinguishing between more general and coordinating norms compared to implementing ‘decisions’, the second paragraph of Article 162 TEC states that there are separate legal bases for
· Article 37 TEC for the European Agricultural Guidance and Guarantee Fund, Guidance Section (now defunct or more precisely replaced and relocated)
· Article 148 TEC for the European Social Fund
.
Two things appear confusing for a reader. Article 159 TEC mentioned three Structural Funds, but they did not include the Cohesion Fund. Thus, the Cohesion Fund would seem to belong to the category ‘other financial existing instruments’, but the Cohesion Fund is actually treated as a structural fund.
On the other hand, the first of the three structural funds mentioned by Article 159 TEC was the European Agricultural Guidance and Guarantee Fund, Guidance Section (in addition to the European Social Fund and the European Regional Development Fund), but the European Agricultural Guidance and Guarantee Fund, Guidance Section has been replaced by the European Agricultural Fund for Rural Development (EAFRD) and fully integrated into the common agricultural policy (CAP).
Anyway, here are the current Articles 161 and 162 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/119–120:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 161 TEC
Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.
A Cohesion Fund set up by the Council in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.
From 1 January 2007, the Council shall act by a qualified majority on a proposal from the Commission after obtaining the assent of the European Parliament and after consulting the Economic and Social Committee and the Committee of the Regions if, by that date, the multiannual financial perspective applicable from 1 January 2007 and the Interinstitutional Agreement relating thereto have been adopted. If such is not the case, the procedure laid down by this paragraph shall apply from the date of their adoption.
Article 162 TEC
Implementing decisions relating to the European Regional Development Fund shall be taken by the Council, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions.
With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the European Social Fund, Articles 37 and 148 respectively shall continue to apply.
***
Original Lisbon Treaty (ToL)
Article 2, points 133 and 134 of the Lisbon Treaty amended Articles 161 and 162 TEC respectively 161 (OJEU 17.12.2007 C 306/85):
133) Article 161 shall be amended as follows:
(a) at the beginning of the first paragraph, first sentence, the words ‘Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament’ shall be replaced by ‘Without prejudice to Article 162, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure’. In the second sentence the words ‘The Council, acting by the same procedure, shall also define’ shall be deleted at the beginning and the words ‘shall also be defined by the same procedure’ added at the end;
(b) in the second paragraph the words ‘by the Council’ shall be deleted;
(c) the third paragraph shall be deleted.
134) In Article 162, first paragraph, the words ‘implementing decisions’ shall be replaced by ‘implementing regulations’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 161 TEC initially became Article 161 TFEU (ToL) before the renumbering of the treaty made it into Article 177 TFEU in the consolidated version.
Article 162 TEC initially became Article 162 TFEU (ToL) before the renumbering of the treaty made it into Article 178 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 177 and 178 TFEU
After specific and horizontal amendments the Articles 177 and 178 TFEU appear like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/128):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 177 TFEU
(ex Article 161 TEC)
Without prejudice to Article 178, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments shall also be defined by the same procedure.
A Cohesion Fund set up in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.
Article 178 TFEU
(ex Article 162 TEC)
Implementing regulations relating to the European Regional Development Fund shall be taken by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.
With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the
European Social Fund, Articles 43 and 164 respectively shall continue to apply.
***
Secondary legislation 2007–2013
Horizontal Regulations
General Regulation 1083/2006
General rules concerning the structural funds are set out in Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJEU 31.7.2006 L 210/25).
Article 161 TEC is cited as the principal legal base.
The 73 Recitals of Regulation 1083/2006 offer an overview of the aims of the structural funds from 2007 to 2013 and they highlight the changes compared to the previous programming period (2000–2006).
The General Regulation refers to the European Regional Development Fund (ERDF) and to the European Social Fund (ESF) and it integrates the Cohesion Fund ‘into the programming of structural assistance in the interest of greater coherence in the intervention of the various Funds’.
Rural development – through the European Agricultural Fund for Rural Development (EARDF) – and development of the fisheries sector – the European Fisheries Fund (EFF) – was integrated into the common agricultural policy and the common fisheries policy respectively.
In other words, there are differences between the classification (and naming) of the structural funds between the treaty level and the secondary (regulation) level, and this partial lack of similarity would persist under the Lisbon Treaty.
The detailed provisions of the General Regulation are essential for a deeper understanding of the main principles and how the structural funds work.
The Regulations together with a few corrigenda are available at:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm
A consolidated version (1 January 2007) of the General Regulation 1083/2006 is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2006R1083:20070101:EN:PDF
***
Implementing Regulation 1828/2006
The Implementing Regulation is clearly at a lower hierarchical level than the General Regulation and it is based on it and the ERDF Regulation, but it is horizontal in character.
The Commission has issued and implementing Regulation 1828/2006 with detailed provisions relating to the General Regulation 1083/2006 and the ERDF Regulation 1080/2006.
Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJEU 27.12.2006 L 371/1) is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fsfc/ce_1828(2006)_en.pdf
***
Cohesion policy guide
This could be called a horizontal aid, which includes sectoral Regulations.
For people working with the administration of structural funds or with projects co-financed by one of the funds, the Commission’s guide with commentaries and official texts is a very useful resource.
The 164 page publication Cohesion policy 2007–13 Commentaries and official texts is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf
(Two caveats, nearly two years after the start of the 2007 to 2013 programme period: Look above for the remark on corrigenda concerning Regulations and notice that the Cohesion policy guide does not contain the Commission’s Implementing Regulation.)
***
Vertical Regulations
In addition to the reference to the Cohesion Guide, here are a few pointers to vertical or sector Regulations.
***
ERDF Regulation 1080/2006
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
European Social Fund (ESF)
The ESF Regulation 1081/2006 is primarily based on Article 148 TEC.
Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJEU 31.7.2006 L 210/12) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0018:EN:PDF
***
Cohesion Fund
As we have seen, the Cohesion Fund is in practice treated as a structural fund. The Regulation is based on Article 161(2) TEC.
Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJEU 31.7.2006 L 210/79) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0079:0081:EN:PDF
***
European grouping of territorial cooperation (EGTC)
Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC) (OJEU 31.7.2006 L 210/19) is based on Article 159(3) TEC (referring to specific actions).
The EGTC is an entity for cross-border cooperation, and the EGTC Regulation can be called a legal instrument. It is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0019:0024:EN:PDF
***
Rural development and fisheries
EAFRD Rural development
Rural development and fisheries are fully incorporated into the common agricultural policy and the common fisheries policy. In my understanding they fall outside the scope of the structural funds, despite Article 159 TEC (and Article 175 TFEU) referring to the European Agricultural Guidance and Guarantee Fund, Guidance Section, as one of the structural funds.
But they are important in their own spheres, so here are references to the current Regulations.
Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJEU 21.2.2005 L 316/10) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF
EFF Fisheries
Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund (OJEU 15.8.2006 L 223/1) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:223:0001:0044:EN:PDF
Ralf Grahn
We look at the current Treaty establishing the European Community and the Lisbon Treaty (Treaty on the Functioning of the European Union) before presenting references to the legal acts, which govern the second largest tranche of EU spending (hopefully investment).
Both projects and administrators have a tough job to fulfil all the requirements of the detailed provisions.
As always, readers are invited to share their experiences in the comments section.
***
Articles 161 and 162 TEC
The two Articles strive to accomplish a certain hierarchy of norms.
According to Article 161 TEC (ex Article 130d), the Council shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds.
The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.
Article 161(2) TEC serves as the legal base for secondary legislation on the Cohesion Fund, aimed at the fields of environment and trans-European networks in the area of transport infrastructure (excluding energy and telecommunications networks).
The third paragraph of Article 161 TEC is now redundant.
Article 162 TEC (ex Article 130e) refers to implementing decisions relating to the European Regional Development Fund (ERDF), which indicates a difference between the general and coordinating norms issued pursuant to Article 161 TEC and these implementing decisions concerning the ERDF. It is less than clear where the more general norms end and where the more specific norms start.
Without distinguishing between more general and coordinating norms compared to implementing ‘decisions’, the second paragraph of Article 162 TEC states that there are separate legal bases for
· Article 37 TEC for the European Agricultural Guidance and Guarantee Fund, Guidance Section (now defunct or more precisely replaced and relocated)
· Article 148 TEC for the European Social Fund
.
Two things appear confusing for a reader. Article 159 TEC mentioned three Structural Funds, but they did not include the Cohesion Fund. Thus, the Cohesion Fund would seem to belong to the category ‘other financial existing instruments’, but the Cohesion Fund is actually treated as a structural fund.
On the other hand, the first of the three structural funds mentioned by Article 159 TEC was the European Agricultural Guidance and Guarantee Fund, Guidance Section (in addition to the European Social Fund and the European Regional Development Fund), but the European Agricultural Guidance and Guarantee Fund, Guidance Section has been replaced by the European Agricultural Fund for Rural Development (EAFRD) and fully integrated into the common agricultural policy (CAP).
Anyway, here are the current Articles 161 and 162 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/119–120:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 161 TEC
Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments.
A Cohesion Fund set up by the Council in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.
From 1 January 2007, the Council shall act by a qualified majority on a proposal from the Commission after obtaining the assent of the European Parliament and after consulting the Economic and Social Committee and the Committee of the Regions if, by that date, the multiannual financial perspective applicable from 1 January 2007 and the Interinstitutional Agreement relating thereto have been adopted. If such is not the case, the procedure laid down by this paragraph shall apply from the date of their adoption.
Article 162 TEC
Implementing decisions relating to the European Regional Development Fund shall be taken by the Council, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions.
With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the European Social Fund, Articles 37 and 148 respectively shall continue to apply.
***
Original Lisbon Treaty (ToL)
Article 2, points 133 and 134 of the Lisbon Treaty amended Articles 161 and 162 TEC respectively 161 (OJEU 17.12.2007 C 306/85):
133) Article 161 shall be amended as follows:
(a) at the beginning of the first paragraph, first sentence, the words ‘Without prejudice to Article 162, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament’ shall be replaced by ‘Without prejudice to Article 162, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure’. In the second sentence the words ‘The Council, acting by the same procedure, shall also define’ shall be deleted at the beginning and the words ‘shall also be defined by the same procedure’ added at the end;
(b) in the second paragraph the words ‘by the Council’ shall be deleted;
(c) the third paragraph shall be deleted.
134) In Article 162, first paragraph, the words ‘implementing decisions’ shall be replaced by ‘implementing regulations’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 161 TEC initially became Article 161 TFEU (ToL) before the renumbering of the treaty made it into Article 177 TFEU in the consolidated version.
Article 162 TEC initially became Article 162 TFEU (ToL) before the renumbering of the treaty made it into Article 178 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 177 and 178 TFEU
After specific and horizontal amendments the Articles 177 and 178 TFEU appear like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/128):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 177 TFEU
(ex Article 161 TEC)
Without prejudice to Article 178, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organisation of the Structural Funds, which may involve grouping the Funds. The general rules applicable to them and the provisions necessary to ensure their effectiveness and the coordination of the Funds with one another and with the other existing Financial Instruments shall also be defined by the same procedure.
A Cohesion Fund set up in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.
Article 178 TFEU
(ex Article 162 TEC)
Implementing regulations relating to the European Regional Development Fund shall be taken by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.
With regard to the European Agricultural Guidance and Guarantee Fund, Guidance Section, and the
European Social Fund, Articles 43 and 164 respectively shall continue to apply.
***
Secondary legislation 2007–2013
Horizontal Regulations
General Regulation 1083/2006
General rules concerning the structural funds are set out in Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJEU 31.7.2006 L 210/25).
Article 161 TEC is cited as the principal legal base.
The 73 Recitals of Regulation 1083/2006 offer an overview of the aims of the structural funds from 2007 to 2013 and they highlight the changes compared to the previous programming period (2000–2006).
The General Regulation refers to the European Regional Development Fund (ERDF) and to the European Social Fund (ESF) and it integrates the Cohesion Fund ‘into the programming of structural assistance in the interest of greater coherence in the intervention of the various Funds’.
Rural development – through the European Agricultural Fund for Rural Development (EARDF) – and development of the fisheries sector – the European Fisheries Fund (EFF) – was integrated into the common agricultural policy and the common fisheries policy respectively.
In other words, there are differences between the classification (and naming) of the structural funds between the treaty level and the secondary (regulation) level, and this partial lack of similarity would persist under the Lisbon Treaty.
The detailed provisions of the General Regulation are essential for a deeper understanding of the main principles and how the structural funds work.
The Regulations together with a few corrigenda are available at:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm
A consolidated version (1 January 2007) of the General Regulation 1083/2006 is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2006R1083:20070101:EN:PDF
***
Implementing Regulation 1828/2006
The Implementing Regulation is clearly at a lower hierarchical level than the General Regulation and it is based on it and the ERDF Regulation, but it is horizontal in character.
The Commission has issued and implementing Regulation 1828/2006 with detailed provisions relating to the General Regulation 1083/2006 and the ERDF Regulation 1080/2006.
Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJEU 27.12.2006 L 371/1) is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fsfc/ce_1828(2006)_en.pdf
***
Cohesion policy guide
This could be called a horizontal aid, which includes sectoral Regulations.
For people working with the administration of structural funds or with projects co-financed by one of the funds, the Commission’s guide with commentaries and official texts is a very useful resource.
The 164 page publication Cohesion policy 2007–13 Commentaries and official texts is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf
(Two caveats, nearly two years after the start of the 2007 to 2013 programme period: Look above for the remark on corrigenda concerning Regulations and notice that the Cohesion policy guide does not contain the Commission’s Implementing Regulation.)
***
Vertical Regulations
In addition to the reference to the Cohesion Guide, here are a few pointers to vertical or sector Regulations.
***
ERDF Regulation 1080/2006
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
European Social Fund (ESF)
The ESF Regulation 1081/2006 is primarily based on Article 148 TEC.
Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJEU 31.7.2006 L 210/12) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0018:EN:PDF
***
Cohesion Fund
As we have seen, the Cohesion Fund is in practice treated as a structural fund. The Regulation is based on Article 161(2) TEC.
Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJEU 31.7.2006 L 210/79) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0079:0081:EN:PDF
***
European grouping of territorial cooperation (EGTC)
Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC) (OJEU 31.7.2006 L 210/19) is based on Article 159(3) TEC (referring to specific actions).
The EGTC is an entity for cross-border cooperation, and the EGTC Regulation can be called a legal instrument. It is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0019:0024:EN:PDF
***
Rural development and fisheries
EAFRD Rural development
Rural development and fisheries are fully incorporated into the common agricultural policy and the common fisheries policy. In my understanding they fall outside the scope of the structural funds, despite Article 159 TEC (and Article 175 TFEU) referring to the European Agricultural Guidance and Guarantee Fund, Guidance Section, as one of the structural funds.
But they are important in their own spheres, so here are references to the current Regulations.
Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJEU 21.2.2005 L 316/10) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF
EFF Fisheries
Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund (OJEU 15.8.2006 L 223/1) is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:223:0001:0044:EN:PDF
Ralf Grahn
EU procurement: Confidentiality
Trade secrets and other confidential information pose delicate problems in public procurement procedures geared towards undistorted competition, equal treatment, non-discrimination and transparency.
The European Community (European Union) Procurement Directive 2004/18/EC acknowledges the confidentiality of tenders, initially and possibly later.
Confidentiality, trade secrets, transparency, secrecy, disclosure and data security are some of the subjects briefly evoked in this blog post on obligations of contracting authorities.
***
Article 6
Under Title II Rules on public contracts, Chapter I General provisions, Article 6 of the Procurement Directive 2004/18/EC places on the contracting authority an obligation to respect the confidentiality of information from economic operators:
Article 6
Confidentiality
Without prejudice to the provisions of this Directive, in particular those concerning the obligations relating to the advertising of awarded contracts and to the information to candidates and tenderers set out in Articles 35(4) and 41, and in accordance with the national law to which the contracting authority is subject, the contracting authority shall not disclose information forwarded to it by economic operators which they have designated as confidential; such information includes, in particular, technical or trade secrets and the confidential aspects of tenders.
***
Transparency and secrecy
One of the principal aims of the Procurement Directive 2004/18/EC (or Classic Directive) is to ensure open, transparent and non-discriminatory award procedures, including reporting requirements and remedies. More generally, there is a body of law pertaining to freedom of information concerning public bodies.
On the other hand, tenders before they are opened and trade secrets beyond that oblige contracting authorities to respect the confidentiality of information communicated by tenderers.
Article 6 of the Procurement Directive tenderers have to designate information they regard as confidential. This does not mean a ‘carte blanche’ to withhold any information, since this would infringe upon the transparency of the award and the remedies available to unsuccessful competitors.
After indicating these conflicting interests and the respect for confidentiality, the Procurement Directive refers the detailed solutions to be sought in accordance with the national law to which the contracting authority is subject.
While the relevant national law has to be studied in each case, the problems encountered have many similarities across jurisdictions.
One example of a discussion of transparency versus secrecy is presented in Appendix III of the Irish guide Notifying Tenderers and Disclosure of Information, where the Information Commissioner’s views are summarised:
Appendix III
Summary of the Information Commissioner views regarding disclosure of records
relating to a tender competition given at conclusion of a ruling under Section 34(2)m of
the Freedom of Information Act 1997 in Case 98188.
· First, public bodies are obliged to treat all tenders as confidential at least until the time that the contract is awarded.
· Second, tender prices may be trade secrets during the currency of a tender competition, but only in exceptional circumstances, would historic prices remain trade secrets, As a general proposition, however, I accept that tender documents which “would reveal detailed information about a company's current pricing strategy” or about otherwise unavailable product information could fall within the scope of Section 27(I)(a) of the FOI Act even following the conclusion of a tender competition.
· Third, tender prices generally qualify as commercially sensitive information for the purposes of Sections 27(I)(b) and (c) of the FOI Act, Depending on the circumstances, product information can also be considered commercially sensitive under Section 27(I)(b).
· Fourth, when a contract is awarded, successful tender information loses confidentiality with respect to price and the type and quantity of the goods supplied. The public interest also favours the release of such information, but exceptions may arise (see Telecom Eireann and Mr. Mark Henry, Case Number 98114, to be published (13 Jan 2000).
· Fifth, other successful tender information which is commercially sensitive (for example, details of the internal organisation of a tenderer's business, analysis of the requirements of the public body, or detailed explanations as to how the tenderer proposed to meet these requirements) may remain confidential. Disclosure in the public interest ordinarily would not be required, unless it were necessary to explain the nature of goods or services purchased by the public body.
· Sixth, unsuccessful tender information which is commercially sensitive generally remains confidential after the award of a contract, and the public interest lies in protecting that information from disclosure.
I must stress, however, that no tender-related records are subject to either release or exemption as a class. Therefore each record must be examined on its own merits in light of the relevant circumstances.
***
Notifying Tenderers and Disclosure of Information is available at the Irish Government’s eTenders Public Procurement web site:
http://www.etenders.gov.ie/guides/Guides_show.aspx?id=1122
***
OECD: Integrity in public procurement
The OECD Council has adopted a Recommendation on enhancing integrity in public procurement
[C(2008)105], which evokes some of the challenges related to public procurement. It serves as a reminder of why openness is the norm and secrecy has to be interpreted restrictively.
The October 2008 OECD Recommendation is available at:
http://www.oecd.org/dataoecd/62/24/41549036.pdf
***
Competitive dialogue
The third subparagraph of Article 29(3) of the Procurement Directive 2004/18/EC on the competitive dialogue reminds contracting authorities of the obligation to confidentiality in the context of a procedure where particularly complex contracts are discussed:
Article 29(3) third subparagraph
Contracting authorities may not reveal to the other participants solutions proposed or other confidential information communicated by a candidate participating in the dialogue without his/her agreement.
***
UK OGC/HMT guidance
The competitive dialogue is more prone to confidentiality problems than other award procedures. Again we look at an example of national guidance on problems common in nature.
Competitive Dialogue in 2008 – OGC/HMT joint guidance on using the procedure contains a section Equal Treatment and Commercially Confidential Information with advice to bidders and contracting authorities to agree on which parts of the solutions should be treated as confidential (page 19):
http://www.ogc.gov.uk/documents/OGC_HMT_2008_Guidance_on_Competitive_Dialogue.pdf
***
Information security
One obligation of contracting authorities is secure handling of confidential information (as seen in various provisions of the Procurement Directive). For a discussion of these topics in public (ICT) procurement, you can read the UK OGC Procurement Policy Note: Data Handling Review (Information Note 13/08 – 26 November 2008), especially Annex 2 Information Assurance in Procurement. The Information Note is available here:
http://www.ogc.gov.uk/documents/PPN13_08_Data_Handling.pdf
***
As always, I would appreciate your comments with views or experiences.
Ralf Grahn
The European Community (European Union) Procurement Directive 2004/18/EC acknowledges the confidentiality of tenders, initially and possibly later.
Confidentiality, trade secrets, transparency, secrecy, disclosure and data security are some of the subjects briefly evoked in this blog post on obligations of contracting authorities.
***
Article 6
Under Title II Rules on public contracts, Chapter I General provisions, Article 6 of the Procurement Directive 2004/18/EC places on the contracting authority an obligation to respect the confidentiality of information from economic operators:
Article 6
Confidentiality
Without prejudice to the provisions of this Directive, in particular those concerning the obligations relating to the advertising of awarded contracts and to the information to candidates and tenderers set out in Articles 35(4) and 41, and in accordance with the national law to which the contracting authority is subject, the contracting authority shall not disclose information forwarded to it by economic operators which they have designated as confidential; such information includes, in particular, technical or trade secrets and the confidential aspects of tenders.
***
Transparency and secrecy
One of the principal aims of the Procurement Directive 2004/18/EC (or Classic Directive) is to ensure open, transparent and non-discriminatory award procedures, including reporting requirements and remedies. More generally, there is a body of law pertaining to freedom of information concerning public bodies.
On the other hand, tenders before they are opened and trade secrets beyond that oblige contracting authorities to respect the confidentiality of information communicated by tenderers.
Article 6 of the Procurement Directive tenderers have to designate information they regard as confidential. This does not mean a ‘carte blanche’ to withhold any information, since this would infringe upon the transparency of the award and the remedies available to unsuccessful competitors.
After indicating these conflicting interests and the respect for confidentiality, the Procurement Directive refers the detailed solutions to be sought in accordance with the national law to which the contracting authority is subject.
While the relevant national law has to be studied in each case, the problems encountered have many similarities across jurisdictions.
One example of a discussion of transparency versus secrecy is presented in Appendix III of the Irish guide Notifying Tenderers and Disclosure of Information, where the Information Commissioner’s views are summarised:
Appendix III
Summary of the Information Commissioner views regarding disclosure of records
relating to a tender competition given at conclusion of a ruling under Section 34(2)m of
the Freedom of Information Act 1997 in Case 98188.
· First, public bodies are obliged to treat all tenders as confidential at least until the time that the contract is awarded.
· Second, tender prices may be trade secrets during the currency of a tender competition, but only in exceptional circumstances, would historic prices remain trade secrets, As a general proposition, however, I accept that tender documents which “would reveal detailed information about a company's current pricing strategy” or about otherwise unavailable product information could fall within the scope of Section 27(I)(a) of the FOI Act even following the conclusion of a tender competition.
· Third, tender prices generally qualify as commercially sensitive information for the purposes of Sections 27(I)(b) and (c) of the FOI Act, Depending on the circumstances, product information can also be considered commercially sensitive under Section 27(I)(b).
· Fourth, when a contract is awarded, successful tender information loses confidentiality with respect to price and the type and quantity of the goods supplied. The public interest also favours the release of such information, but exceptions may arise (see Telecom Eireann and Mr. Mark Henry, Case Number 98114, to be published (13 Jan 2000).
· Fifth, other successful tender information which is commercially sensitive (for example, details of the internal organisation of a tenderer's business, analysis of the requirements of the public body, or detailed explanations as to how the tenderer proposed to meet these requirements) may remain confidential. Disclosure in the public interest ordinarily would not be required, unless it were necessary to explain the nature of goods or services purchased by the public body.
· Sixth, unsuccessful tender information which is commercially sensitive generally remains confidential after the award of a contract, and the public interest lies in protecting that information from disclosure.
I must stress, however, that no tender-related records are subject to either release or exemption as a class. Therefore each record must be examined on its own merits in light of the relevant circumstances.
***
Notifying Tenderers and Disclosure of Information is available at the Irish Government’s eTenders Public Procurement web site:
http://www.etenders.gov.ie/guides/Guides_show.aspx?id=1122
***
OECD: Integrity in public procurement
The OECD Council has adopted a Recommendation on enhancing integrity in public procurement
[C(2008)105], which evokes some of the challenges related to public procurement. It serves as a reminder of why openness is the norm and secrecy has to be interpreted restrictively.
The October 2008 OECD Recommendation is available at:
http://www.oecd.org/dataoecd/62/24/41549036.pdf
***
Competitive dialogue
The third subparagraph of Article 29(3) of the Procurement Directive 2004/18/EC on the competitive dialogue reminds contracting authorities of the obligation to confidentiality in the context of a procedure where particularly complex contracts are discussed:
Article 29(3) third subparagraph
Contracting authorities may not reveal to the other participants solutions proposed or other confidential information communicated by a candidate participating in the dialogue without his/her agreement.
***
UK OGC/HMT guidance
The competitive dialogue is more prone to confidentiality problems than other award procedures. Again we look at an example of national guidance on problems common in nature.
Competitive Dialogue in 2008 – OGC/HMT joint guidance on using the procedure contains a section Equal Treatment and Commercially Confidential Information with advice to bidders and contracting authorities to agree on which parts of the solutions should be treated as confidential (page 19):
http://www.ogc.gov.uk/documents/OGC_HMT_2008_Guidance_on_Competitive_Dialogue.pdf
***
Information security
One obligation of contracting authorities is secure handling of confidential information (as seen in various provisions of the Procurement Directive). For a discussion of these topics in public (ICT) procurement, you can read the UK OGC Procurement Policy Note: Data Handling Review (Information Note 13/08 – 26 November 2008), especially Annex 2 Information Assurance in Procurement. The Information Note is available here:
http://www.ogc.gov.uk/documents/PPN13_08_Data_Handling.pdf
***
As always, I would appreciate your comments with views or experiences.
Ralf Grahn
Monday, 29 December 2008
EU Law: European Regional Development Fund (ERDF)
The European Union has nothing resembling a sizable federal budget enabling it to counter an economic recession effectively, but in good times and bad the EU’s structural funds strive to promote economic and social development in regions lagging behind.
In the face of the economic recession, the EU tries to accelerate cohesion spending.
Today we look at the legal framework of the European Regional Development Fund (ERDF).
***
Article 160 TEC
Article 160 TEC (ex Article 130c) sets out the existence of the European Regional Development Fund (ERDF) and its principal aim to help to redress the main regional imbalances in the European Community (European Union).
The ERDF participates in
1) the development and structural adjustment of regions whose development is lagging behind and
2) the conversion of declining industrial regions.
Here is the current Article 160 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/119:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 160 TEC
The European Regional Development Fund is intended to help to redress the main regional imbalances in the Community through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions.
***
Original Lisbon Treaty (ToL)
Article 2, point 132 of the Lisbon Treaty amended Article 159 TEC and point 133 Article 161 (OJEU 17.12.2007 C 306/85).
No specific amendment concerned Article 160 TEC.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 160 TEC initially became Article 160 TFEU (ToL) before the renumbering of the treaty made it into Article 176 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 176 TFEU
The Article has been renumbered. The Community has been replaced by the Union in line with the most common horizontal amendment.
Article 176 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 176 TFEU
(ex Article 160 TEC)
The European Regional Development Fund is intended to help to redress the main regional imbalances in the Union through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions.
***
European Regional Development Fund (ERDF)
You can access information about the European Regional Development Fund (ERDF) here:
http://ec.europa.eu/regional_policy/funds/feder/index_en.htm
The three regional policy objectives, where the ERDF intervenes are:
· Convergence
· Regional competitiveness and employment
· European territorial cooperation
***
Secondary legislation 2007–2013
General Regulation 1083/2006
General rules concerning the structural funds are set out in Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJEU 31.7.2006 L 210/25).
The 73 Recitals of Regulation 1083/2006 offer an overview of the aims of the structural funds from 2007 to 2013 and they highlight the changes compared to the previous programming period (2000–2006).
The detailed provisions are essential for a deeper understanding of how the structural funds work.
The Regulations together with a few corrigenda are available at:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm
***
ERDF Regulation 1080/2006
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
Implementing Regulation 1828/2006
The Commission has issued and implementing Regulation 1828/2006 with detailed provisions relating to the General Regulation 1083/2006 and the ERDF Regulation 1080/2006.
Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJEU 27.12.2006 L 371/1) is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fsfc/ce_1828(2006)_en.pdf
***
Cohesion policy guide
For people working with the administration of structural funds or with projects co-financed by one of the funds, the Commission’s guide with commentaries and official texts is a very useful resource.
The 164 page publication Cohesion policy 2007–13 Commentaries and official texts is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf
(Two caveats, nearly two years after the start of the 2007 to 2013 programme period: Look above for the remark on corrigenda concerning Regulations and notice that the Cohesion policy guide does not contain the Commission’s Implementing Regulation.)
***
Economic crisis and structural funds
For a brief topical look at the structural funds including the ERDF as a part of the European Economic Recovery Plan, you could read the Commission press release Investing in the real economy: Cohesion Policy at centre of Recovery Plan (Brussels, 16 December 2008, IP/08/1983), available here:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1983&format=HTML&aged=0&language=EN&guiLanguage=en
The Commission proposes measures to accelerate spending to counter the downturn.
Ralf Grahn
In the face of the economic recession, the EU tries to accelerate cohesion spending.
Today we look at the legal framework of the European Regional Development Fund (ERDF).
***
Article 160 TEC
Article 160 TEC (ex Article 130c) sets out the existence of the European Regional Development Fund (ERDF) and its principal aim to help to redress the main regional imbalances in the European Community (European Union).
The ERDF participates in
1) the development and structural adjustment of regions whose development is lagging behind and
2) the conversion of declining industrial regions.
Here is the current Article 160 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/119:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 160 TEC
The European Regional Development Fund is intended to help to redress the main regional imbalances in the Community through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions.
***
Original Lisbon Treaty (ToL)
Article 2, point 132 of the Lisbon Treaty amended Article 159 TEC and point 133 Article 161 (OJEU 17.12.2007 C 306/85).
No specific amendment concerned Article 160 TEC.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 160 TEC initially became Article 160 TFEU (ToL) before the renumbering of the treaty made it into Article 176 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 176 TFEU
The Article has been renumbered. The Community has been replaced by the Union in line with the most common horizontal amendment.
Article 176 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 176 TFEU
(ex Article 160 TEC)
The European Regional Development Fund is intended to help to redress the main regional imbalances in the Union through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions.
***
European Regional Development Fund (ERDF)
You can access information about the European Regional Development Fund (ERDF) here:
http://ec.europa.eu/regional_policy/funds/feder/index_en.htm
The three regional policy objectives, where the ERDF intervenes are:
· Convergence
· Regional competitiveness and employment
· European territorial cooperation
***
Secondary legislation 2007–2013
General Regulation 1083/2006
General rules concerning the structural funds are set out in Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (OJEU 31.7.2006 L 210/25).
The 73 Recitals of Regulation 1083/2006 offer an overview of the aims of the structural funds from 2007 to 2013 and they highlight the changes compared to the previous programming period (2000–2006).
The detailed provisions are essential for a deeper understanding of how the structural funds work.
The Regulations together with a few corrigenda are available at:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm
***
ERDF Regulation 1080/2006
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
Implementing Regulation 1828/2006
The Commission has issued and implementing Regulation 1828/2006 with detailed provisions relating to the General Regulation 1083/2006 and the ERDF Regulation 1080/2006.
Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJEU 27.12.2006 L 371/1) is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fsfc/ce_1828(2006)_en.pdf
***
Cohesion policy guide
For people working with the administration of structural funds or with projects co-financed by one of the funds, the Commission’s guide with commentaries and official texts is a very useful resource.
The 164 page publication Cohesion policy 2007–13 Commentaries and official texts is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf
(Two caveats, nearly two years after the start of the 2007 to 2013 programme period: Look above for the remark on corrigenda concerning Regulations and notice that the Cohesion policy guide does not contain the Commission’s Implementing Regulation.)
***
Economic crisis and structural funds
For a brief topical look at the structural funds including the ERDF as a part of the European Economic Recovery Plan, you could read the Commission press release Investing in the real economy: Cohesion Policy at centre of Recovery Plan (Brussels, 16 December 2008, IP/08/1983), available here:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1983&format=HTML&aged=0&language=EN&guiLanguage=en
The Commission proposes measures to accelerate spending to counter the downturn.
Ralf Grahn
EU procurement: WTO GPA standards
Public procurement within the European Community (European Union) has international dimensions through the plurilateral Agreement on Government Procurement (GPA), negotiated in parallel with the Uruguay Round negotiations leading to the establishment of the World Trade Organisation (WTO).
***
Background on WTO GPA
General information about the Government Procurement Agreement can be found on the WTO’s web page:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The GPA entered into force on 1 January 1996. The EC and all the 27 member states of the European Community are bound by the agreement, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom (EU-15) from the beginning, the ten accession countries Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovak Republic and Slovenia since 1 May 2004 and the latest EU-entrants Bulgaria and Romania since 1 January 2007.
The other GPA states are Canada, Hong Kong (China), Iceland, Israel, Japan, Korea, Liechenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland and the United States.
Although the GPA covers only a fraction of the WTO members, it includes many of the most important states in world trade terms. From an EU viewpoint it can be noted that the members of the European Economic Area (EEA), namely Iceland, Liechtenstein and Norway are parties to the GPA, as well as Switzerland surrounded by EU member states.
The WTO offers an overview of the Government Procurement Agreement on:
http://www.wto.org/english/tratop_e/gproc_e/gpa_overview_e.htm
***
European Union and GPA
The European Community approved, among other things, the Government Procurement Agreement by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (published on the Official Journal 23.12.2994 L 336/1).
***
Procurement Directive and GPA
The relationship between the Procurement Directive 2004/18/EC and the WTO Government Procurement Agreement is explained in Directive Recital 7. The Recital refers to the Council Decision and it states that the GPA does not have direct effect.
The Procurement Directive has been drafted with the GPA in mind. The contracting authorities applying the Procurement Directive should therefore be in conformity with the GPA.
What about the opposite? The last sentence of Recital 7 brings a lingering doubt to the fore: What if the GPA is more favourable to tenderers from third countries than the Procurement Directive?
Recital 7 wants to prevent cases of reverse discrimination, stating that the coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement:
Recital 7 (WTO GPA)
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
***
Article 5 Procurement Directive
Article 5 of the Procurement Directive 2004/18/EC sets out the principle mentioned in Recital 7. The conditions between the EC (EU) member states shall be as favourable as with regard to economic operators from third countries under the GPA.
The member states shall consult (if problems occur) within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken:
(TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I
General provisions)
Article 5
Conditions relating to agreements concluded within the World Trade Organisation
For the purposes of the award of contracts by contracting authorities, Member States shall apply in their relations conditions as favourable as those which they grant to economic operators of third countries in implementation of the Agreement on Government Procurement (hereinafter referred to as ‘the Agreement’), concluded in the framework of the Uruguay Round multilateral negotiations. Member States shall, to this end, consult one another within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken pursuant to the Agreement.
***
Advisory Committee
Article 77 of the Procurement Directive is the basic provision on the Advisory Committee for Public Contracts:
Article 77
Advisory Committee
1. The Commission shall be assisted by the Advisory Committee for Public Contracts set up by Article 1 of Decision 71/306/EEC (1) (hereinafter referred to as ‘the Committee’).
2. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply, in compliance with Article 8 thereof.
3. The Committee shall adopt its rules of procedure.
***
Council Decision 71/306/EEC
The consolidated version (15 January 1977) of Council Decision 71/306/EEC of 26 July 1971 setting up an Advisory Committee for Public Works Contracts (OJ 16.8.1971 L 185/15) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1971D0306:19770115:EN:PDF
Since 1977 the Advisory Committee for Public Works Contracts is known as the Advisory Committee for Public Contracts.
***
Council Decision 1999/468/EC
The consolidated version (23 July 2006) of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ 17.7.1999 L 184/23) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1999D0468:20060723:EN:PDF
Article 3 of the Decision sets out the rules concerning the advisory procedure (advisory committee), Article 7 general rules concerning implementing committees and Article 8 refers to implementing measures potentially exceeding the powers of the Commission.
Ralf Grahn
***
Background on WTO GPA
General information about the Government Procurement Agreement can be found on the WTO’s web page:
http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The GPA entered into force on 1 January 1996. The EC and all the 27 member states of the European Community are bound by the agreement, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom (EU-15) from the beginning, the ten accession countries Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovak Republic and Slovenia since 1 May 2004 and the latest EU-entrants Bulgaria and Romania since 1 January 2007.
The other GPA states are Canada, Hong Kong (China), Iceland, Israel, Japan, Korea, Liechenstein, the Netherlands with respect to Aruba, Norway, Singapore, Switzerland and the United States.
Although the GPA covers only a fraction of the WTO members, it includes many of the most important states in world trade terms. From an EU viewpoint it can be noted that the members of the European Economic Area (EEA), namely Iceland, Liechtenstein and Norway are parties to the GPA, as well as Switzerland surrounded by EU member states.
The WTO offers an overview of the Government Procurement Agreement on:
http://www.wto.org/english/tratop_e/gproc_e/gpa_overview_e.htm
***
European Union and GPA
The European Community approved, among other things, the Government Procurement Agreement by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (published on the Official Journal 23.12.2994 L 336/1).
***
Procurement Directive and GPA
The relationship between the Procurement Directive 2004/18/EC and the WTO Government Procurement Agreement is explained in Directive Recital 7. The Recital refers to the Council Decision and it states that the GPA does not have direct effect.
The Procurement Directive has been drafted with the GPA in mind. The contracting authorities applying the Procurement Directive should therefore be in conformity with the GPA.
What about the opposite? The last sentence of Recital 7 brings a lingering doubt to the fore: What if the GPA is more favourable to tenderers from third countries than the Procurement Directive?
Recital 7 wants to prevent cases of reverse discrimination, stating that the coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement:
Recital 7 (WTO GPA)
(7) Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994), approved in particular the WTO Agreement on Government Procurement, hereinafter referred to as the ‘Agreement’, the aim of which is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade.
In view of the international rights and commitments devolving on the Community as a result of the acceptance of the Agreement, the arrangements to be applied to tenderers and products from signatory third countries are those defined by the Agreement. This Agreement does not have direct effect. The contracting authorities covered by the Agreement which comply with this Directive and which apply the latter to economic operators of third countries which are signatories to the Agreement should therefore be in conformity with the Agreement. It is also appropriate that those coordinating provisions should guarantee for Community economic operators conditions for participation in public procurement which are just as favourable as those reserved for economic operators of third countries which are signatories to the Agreement.
***
Article 5 Procurement Directive
Article 5 of the Procurement Directive 2004/18/EC sets out the principle mentioned in Recital 7. The conditions between the EC (EU) member states shall be as favourable as with regard to economic operators from third countries under the GPA.
The member states shall consult (if problems occur) within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken:
(TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I
General provisions)
Article 5
Conditions relating to agreements concluded within the World Trade Organisation
For the purposes of the award of contracts by contracting authorities, Member States shall apply in their relations conditions as favourable as those which they grant to economic operators of third countries in implementation of the Agreement on Government Procurement (hereinafter referred to as ‘the Agreement’), concluded in the framework of the Uruguay Round multilateral negotiations. Member States shall, to this end, consult one another within the Advisory Committee for Public Contracts referred to in Article 77 on the measures to be taken pursuant to the Agreement.
***
Advisory Committee
Article 77 of the Procurement Directive is the basic provision on the Advisory Committee for Public Contracts:
Article 77
Advisory Committee
1. The Commission shall be assisted by the Advisory Committee for Public Contracts set up by Article 1 of Decision 71/306/EEC (1) (hereinafter referred to as ‘the Committee’).
2. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply, in compliance with Article 8 thereof.
3. The Committee shall adopt its rules of procedure.
***
Council Decision 71/306/EEC
The consolidated version (15 January 1977) of Council Decision 71/306/EEC of 26 July 1971 setting up an Advisory Committee for Public Works Contracts (OJ 16.8.1971 L 185/15) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1971D0306:19770115:EN:PDF
Since 1977 the Advisory Committee for Public Works Contracts is known as the Advisory Committee for Public Contracts.
***
Council Decision 1999/468/EC
The consolidated version (23 July 2006) of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ 17.7.1999 L 184/23) is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1999D0468:20060723:EN:PDF
Article 3 of the Decision sets out the rules concerning the advisory procedure (advisory committee), Article 7 general rules concerning implementing committees and Article 8 refers to implementing measures potentially exceeding the powers of the Commission.
Ralf Grahn
Sunday, 28 December 2008
EU Law: Structural Funds
Cohesion may be a concept difficult to understand, but the structural funds and related policy instruments of the European Community (European Union) are readily comprehended in terms of euros.
The resources are managed by the European Commission (Regional policy) and spent or invested in the EU member states.
This blog post offers information about both EU law and policy.
***
Article 159 TEC
Article 159 TEC (ex Article 130a) sets out the means to achieve the strengthening of economic and social cohesion.
The member states are primarily responsible for economic policies, but they have undertaken to coordinate them. Article 159 TEC adds the cohesion objectives to the factors to take into account when conducting and coordinating economic policies.
Article 159 lays down a horizontal requirement to take into account the cohesion objectives in Community actions and policies generally as well as the implementation of the internal market.
The European Community (European Union) supports the achievement of cohesion objectives through the Structural Funds. The following Structural Funds are specifically mentioned:
· European Agricultural Guidance and Guarantee Fund, Guidance Section
· European Social Fund
· European Regional Development Fund
In addition, the first paragraph mentions:
· the European Investment Bank
· the other existing Financial Instruments
The second paragraph of Article 159 TEC sets out an obligation for the Commission to report on economic and social cohesion every three years, if appropriate with proposals.
Other measures can be adopted according to the co-decision procedure.
Here is the current Article 159 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/118–119:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 159 TEC
Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 158. The formulation and implementation of the Community's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 158 and shall contribute to their achievement. The Community shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.
The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.
If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Community policies, such actions may be adopted by the Council acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions.
***
Original Lisbon Treaty (ToL)
Although the Treaty of Lisbon is unreadable on its own, it spells out how or if the current treaties are amended.
Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.
Article 2, point 132 of the Lisbon Treaty amended Article 159 TEC (OJEU 17.12.2007 C 306/85):
132) In Article 159, second paragraph, the words ‘economic and social’ shall be replaced by ‘economic, social and territorial’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 159 TEC initially became Article 159 TFEU (ToL) before the renumbering of the treaty made it into Article 175 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 175 TFEU
Territorial was added to the Title and the preceding Article and consequently to Article 159 TEC. The Article has been renumbered. The Community has been replaced by the Union and the procedure referred to in Article 251 (co-decision) has been renamed the ordinary legislative procedure.
Article 175 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 175 TFEU
(ex Article 159 TEC)
Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 174. The formulation and implementation of the Union's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 174 and shall contribute to their achievement. The Union shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.
The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic, social and territorial cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.
If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Union policies, such actions may be adopted by the Council acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.
***
General EU aims
The third subparagraph of Article 3(3) of the amended Treaty on European Union (TEU) states that the EU shall promote economic, social and territorial cohesion, and solidarity among member states.
***
EU powers in general
The powers of the European Union are attributed or conferred by the member states through the treaties (including their aims). The Treaty of Lisbon makes an effort to present the different categories of powers (modestly called competences) in a systematic manner.
The taxonomy of EU competence is set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):
Article 2 TFEU
1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.
2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.
5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.
Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.
6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.
***
Article 4 TFEU: Shared competence
Economic, social and territorial cohesion is mentioned among the competences listed as shared in Article 4 TFEU:
Article 4 TFEU
1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(e) environment;
(f) consumer protection;
(g) transport;
(h) trans-European networks;
(i) energy;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
***
Protocol (No 28)
The intergovernmental conference attached a Protocol (No 28) on economic, social and territorial cohesion to the treaties, perhaps indicating a growing willingness to take the capacity of less prosperous (new) member states into account both as contributors to the common coffers and as recipients of funds, when coming long term budgets (fiancial perspectives) are prepared and implemented:
PROTOCOL (No 28)
ON ECONOMIC, SOCIAL AND TERRITORIAL COHESION
THE HIGH CONTRACTING PARTIES,
RECALLING that Article 3 of the Treaty on European Union includes the objective of promoting economic, social and territorial cohesion and solidarity between Member States and that the said cohesion figures among the areas of shared competence of the Union listed in Article 4(2)(c) of the Treaty on the Functioning of the European Union,
RECALLING that the provisions of Part Three, Title XVIII, on economic, social and territorial cohesion as a whole provide the legal basis for consolidating and further developing the Union's action in the field of economic, social and territorial cohesion, including the creation of a new fund,
RECALLING that the provisions of Article 177 of the Treaty on the Functioning of the European Union envisage setting up a Cohesion Fund,
NOTING that the European Investment Bank is lending large and increasing amounts for the benefit of the poorer regions,
NOTING the desire for greater flexibility in the arrangements for allocations from the Structural Funds,
NOTING the desire for modulation of the levels of Union participation in programmes and projects in certain countries,
NOTING the proposal to take greater account of the relative prosperity of Member States in the system of own resources,
REAFFIRM that the promotion of economic, social and territorial cohesion is vital to the full development and enduring success of the Union,
REAFFIRM their conviction that the Structural Funds should continue to play a considerable part in the achievement of Union objectives in the field of cohesion,
REAFFIRM their conviction that the European Investment Bank should continue to devote the majority of its resources to the promotion of economic, social and territorial cohesion, and declare their willingness to review the capital needs of the European Investment Bank as soon as this is necessary for that purpose,
AGREE that the Cohesion Fund will provide Union financial contributions to projects in the fields of environment and trans-European networks in Member States with a per capita GNP of less than 90 % of the Union average which have a programme leading to the fulfilment of the conditions of economic convergence as set out in Article 126,
DECLARE their intention of allowing a greater margin of flexibility in allocating financing from the Structural Funds to specific needs not covered under the present Structural Funds regulations,
DECLARE their willingness to modulate the levels of Union participation in the context of programmes and projects of the Structural Funds, with a view to avoiding excessive increases in budgetary expenditure in the less prosperous Member States,
RECOGNISE the need to monitor regularly the progress made towards achieving economic, social and territorial cohesion and state their willingness to study all necessary measures in this respect,
DECLARE their intention of taking greater account of the contributive capacity of individual Member States in the system of own resources, and of examining means of correcting, for the less prosperous Member States, regressive elements existing in the present own resources system,
AGREE to annex this Protocol to the Treaty on the European Union and the Treaty on the Functioning of the European Union.
***
Structural Funds
Information about the Structural Funds can be found through the web page of the Directorate-General for Regional Policy, stating that in the period 2007-2013, cohesion policy will benefit from 35.7% of the total EU budget or 347.41 billion euros (current prices):
http://ec.europa.eu/regional_policy/policy/fonds/index_en.htm
The key objectives are presented on the web page:
http://ec.europa.eu/regional_policy/policy/object/index_en.htm
***
European Agricultural Guidance and Guarantee Fund, Guidance Section
We turn to the Structural Funds specifically mentioned by Article 159 TEC and Article 175 TFEU. In order of appearance the first one we encounter is the European Agricultural Guidance and Guarantee Fund, Guidance Section.
Instead we find the Directorate-General Agriculture and Rural Development responsible for Rural Development Policy 2007–2013, in other words outside the scope of Structural Funds managed by the Directorate-General Regional Policy.
http://ec.europa.eu/agriculture/rurdev/index_en.htm
Even the consolidated Lisbon Treaty seems to behind the times, when we see that the current legal act has created a fund with a new name:
Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJEU 21.10.2005 L 277/1).
The EAFRD Regulation is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF
***
Some have argued that structural funds spending is the biggest item on the EU budget, ahead of agriculture, but that would require the “second pillar” of the common agricultural policy (CAP) to be counted as part of the structural funds.
Arguably, during the period 2007–2013 structural measures within the context of rural policy are even more tied to the administration of agricultural policy than previously.
Accordingly, my view is still that agriculture is the greatest expense in the EU budget, ahead of the structural funds, and that this will be the case in 2009.
***
European Social Fund (ESF)
Basic information about the European Social Fund (ESF) can be found here:
http://ec.europa.eu/regional_policy/funds/fse/index_en.htm
The ESF Regulation, officially Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJEU 31.7.2006 L 210/12), is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fse/ce_1081(2006)_en.pdf
***
European Regional Development Fund (ERDF)
You can access information about the European Regional Development Fund (ERDF) here:
http://ec.europa.eu/regional_policy/funds/feder/index_en.htm
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
European Investment Bank
The European Investment Bank (EIB) is mentioned as one of the actors supporting the cohesion objectives.
More information can be found on the web pages of the EIB:
http://www.eib.org/
The latest version of the legal framework of the European Investment Bank, although not in force, is Protocol (No 5) on the statute of the European Investment Bank, annexed to the Lisbon Treaty TEU and TFEU (OJEU 9.5.2007 C 115/251).
***
Cohesion Fund
Among other existing Financial Instruments we find the important Cohesion Fund, designed for the poorer member states. For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. Spain is eligible to a phase-out fund only as its GNI per inhabitant is less than the average of the EU-15.
Introductory information about the Cohesion Fund, important for infrastructure projects and the environment, can be found here:
http://ec.europa.eu/regional_policy/funds/cf/index_en.htm
Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJEU 31.7.2006 L 210/79) can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/cohesion/ce_1084(2006)_en.pdf
***
European Union Solidarity Fund (EUSF)
The Member States and countries negotiating accession can request aid from the European Union Solidarity Fund (EUSF) in the event of a major natural disaster. Basic information is found here:
http://ec.europa.eu/regional_policy/funds/solidar/solid_en.htm
The legal act setting up the EUSF is Council Regulation (EC) No 2012/2002 of 11 November 2002 establishingthe European Union Solidarity Fund (OJEC 14.11.2002 L 311/3), which is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:311:0003:0008:EN:PDF
***
European Grouping for Territorial Cooperation (EGTC)
According to the Inforegio web page, the EGTC is a new European legal instrument designed to facilitate and promote cross-border, transnational and interregional cooperation. Unlike the structures which governed this kind of cooperation before 2007, the EGTC is a legal entity and as such, will enable regional and local authorities and other public bodies from different member states, to set up cooperation groupings with a legal personality.
Information about this new legal instrument is accessible here:
http://ec.europa.eu/regional_policy/funds/gect/index_en.htm
The establishment of the new legal instrument has required a legal instrument of its own. Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC) (OJEU 31.7.2006 L 210/19) is accessible here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/gect/ce_1082(2006)_en.pdf
***
Instrument for Pre-Accession Assistance (IPA)
If we cast our net somewhat wider than the internal cohesion of the European Union, the work can be said to commence in advance with regard to candidate countries and potential candidate countries.
From January 2007 onwards, the Instrument for Pre-Accession Assistance (IPA) replaces a series of European Union programmes and financial instruments for candidate countries or potential candidate countries, namely PHARE, PHARE CBC, ISPA, SAPARD, CARDS and the financial instrument for Turkey.
Information is found here:
http://ec.europa.eu/regional_policy/funds/ipa/index_en.htm
The basic legal instrument is Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA) (OJEU 31.7.2006 L 210/82), available here:
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_210/l_21020060731en00820093.pdf
Implementing rules have been issued by the Commission, Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA) (OJEU 29.7.2007 l 170/1), published here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:170:0001:0066:EN:PDF
***
Financial engineering
The Commission offers a web page on financial engineering with various combinations aiming at promoting development in EU regions:
http://ec.europa.eu/regional_policy/funds/2007/jjj/index_en.htm
Ralf Grahn
The resources are managed by the European Commission (Regional policy) and spent or invested in the EU member states.
This blog post offers information about both EU law and policy.
***
Article 159 TEC
Article 159 TEC (ex Article 130a) sets out the means to achieve the strengthening of economic and social cohesion.
The member states are primarily responsible for economic policies, but they have undertaken to coordinate them. Article 159 TEC adds the cohesion objectives to the factors to take into account when conducting and coordinating economic policies.
Article 159 lays down a horizontal requirement to take into account the cohesion objectives in Community actions and policies generally as well as the implementation of the internal market.
The European Community (European Union) supports the achievement of cohesion objectives through the Structural Funds. The following Structural Funds are specifically mentioned:
· European Agricultural Guidance and Guarantee Fund, Guidance Section
· European Social Fund
· European Regional Development Fund
In addition, the first paragraph mentions:
· the European Investment Bank
· the other existing Financial Instruments
The second paragraph of Article 159 TEC sets out an obligation for the Commission to report on economic and social cohesion every three years, if appropriate with proposals.
Other measures can be adopted according to the co-decision procedure.
Here is the current Article 159 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/118–119:
(TITLE XVII
ECONOMIC AND SOCIAL COHESION)
Article 159 TEC
Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 158. The formulation and implementation of the Community's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 158 and shall contribute to their achievement. The Community shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.
The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.
If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Community policies, such actions may be adopted by the Council acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee and the Committee of the Regions.
***
Original Lisbon Treaty (ToL)
Although the Treaty of Lisbon is unreadable on its own, it spells out how or if the current treaties are amended.
Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.
Article 2, point 132 of the Lisbon Treaty amended Article 159 TEC (OJEU 17.12.2007 C 306/85):
132) In Article 159, second paragraph, the words ‘economic and social’ shall be replaced by ‘economic, social and territorial’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 159 TEC initially became Article 159 TFEU (ToL) before the renumbering of the treaty made it into Article 175 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 175 TFEU
Territorial was added to the Title and the preceding Article and consequently to Article 159 TEC. The Article has been renumbered. The Community has been replaced by the Union and the procedure referred to in Article 251 (co-decision) has been renamed the ordinary legislative procedure.
Article 175 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
(TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION)
Article 175 TFEU
(ex Article 159 TEC)
Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 174. The formulation and implementation of the Union's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 174 and shall contribute to their achievement. The Union shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.
The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic, social and territorial cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.
If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Union policies, such actions may be adopted by the Council acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.
***
General EU aims
The third subparagraph of Article 3(3) of the amended Treaty on European Union (TEU) states that the EU shall promote economic, social and territorial cohesion, and solidarity among member states.
***
EU powers in general
The powers of the European Union are attributed or conferred by the member states through the treaties (including their aims). The Treaty of Lisbon makes an effort to present the different categories of powers (modestly called competences) in a systematic manner.
The taxonomy of EU competence is set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):
Article 2 TFEU
1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.
2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.
5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.
Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.
6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.
***
Article 4 TFEU: Shared competence
Economic, social and territorial cohesion is mentioned among the competences listed as shared in Article 4 TFEU:
Article 4 TFEU
1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(e) environment;
(f) consumer protection;
(g) transport;
(h) trans-European networks;
(i) energy;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
***
Protocol (No 28)
The intergovernmental conference attached a Protocol (No 28) on economic, social and territorial cohesion to the treaties, perhaps indicating a growing willingness to take the capacity of less prosperous (new) member states into account both as contributors to the common coffers and as recipients of funds, when coming long term budgets (fiancial perspectives) are prepared and implemented:
PROTOCOL (No 28)
ON ECONOMIC, SOCIAL AND TERRITORIAL COHESION
THE HIGH CONTRACTING PARTIES,
RECALLING that Article 3 of the Treaty on European Union includes the objective of promoting economic, social and territorial cohesion and solidarity between Member States and that the said cohesion figures among the areas of shared competence of the Union listed in Article 4(2)(c) of the Treaty on the Functioning of the European Union,
RECALLING that the provisions of Part Three, Title XVIII, on economic, social and territorial cohesion as a whole provide the legal basis for consolidating and further developing the Union's action in the field of economic, social and territorial cohesion, including the creation of a new fund,
RECALLING that the provisions of Article 177 of the Treaty on the Functioning of the European Union envisage setting up a Cohesion Fund,
NOTING that the European Investment Bank is lending large and increasing amounts for the benefit of the poorer regions,
NOTING the desire for greater flexibility in the arrangements for allocations from the Structural Funds,
NOTING the desire for modulation of the levels of Union participation in programmes and projects in certain countries,
NOTING the proposal to take greater account of the relative prosperity of Member States in the system of own resources,
REAFFIRM that the promotion of economic, social and territorial cohesion is vital to the full development and enduring success of the Union,
REAFFIRM their conviction that the Structural Funds should continue to play a considerable part in the achievement of Union objectives in the field of cohesion,
REAFFIRM their conviction that the European Investment Bank should continue to devote the majority of its resources to the promotion of economic, social and territorial cohesion, and declare their willingness to review the capital needs of the European Investment Bank as soon as this is necessary for that purpose,
AGREE that the Cohesion Fund will provide Union financial contributions to projects in the fields of environment and trans-European networks in Member States with a per capita GNP of less than 90 % of the Union average which have a programme leading to the fulfilment of the conditions of economic convergence as set out in Article 126,
DECLARE their intention of allowing a greater margin of flexibility in allocating financing from the Structural Funds to specific needs not covered under the present Structural Funds regulations,
DECLARE their willingness to modulate the levels of Union participation in the context of programmes and projects of the Structural Funds, with a view to avoiding excessive increases in budgetary expenditure in the less prosperous Member States,
RECOGNISE the need to monitor regularly the progress made towards achieving economic, social and territorial cohesion and state their willingness to study all necessary measures in this respect,
DECLARE their intention of taking greater account of the contributive capacity of individual Member States in the system of own resources, and of examining means of correcting, for the less prosperous Member States, regressive elements existing in the present own resources system,
AGREE to annex this Protocol to the Treaty on the European Union and the Treaty on the Functioning of the European Union.
***
Structural Funds
Information about the Structural Funds can be found through the web page of the Directorate-General for Regional Policy, stating that in the period 2007-2013, cohesion policy will benefit from 35.7% of the total EU budget or 347.41 billion euros (current prices):
http://ec.europa.eu/regional_policy/policy/fonds/index_en.htm
The key objectives are presented on the web page:
http://ec.europa.eu/regional_policy/policy/object/index_en.htm
***
European Agricultural Guidance and Guarantee Fund, Guidance Section
We turn to the Structural Funds specifically mentioned by Article 159 TEC and Article 175 TFEU. In order of appearance the first one we encounter is the European Agricultural Guidance and Guarantee Fund, Guidance Section.
Instead we find the Directorate-General Agriculture and Rural Development responsible for Rural Development Policy 2007–2013, in other words outside the scope of Structural Funds managed by the Directorate-General Regional Policy.
http://ec.europa.eu/agriculture/rurdev/index_en.htm
Even the consolidated Lisbon Treaty seems to behind the times, when we see that the current legal act has created a fund with a new name:
Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJEU 21.10.2005 L 277/1).
The EAFRD Regulation is found here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF
***
Some have argued that structural funds spending is the biggest item on the EU budget, ahead of agriculture, but that would require the “second pillar” of the common agricultural policy (CAP) to be counted as part of the structural funds.
Arguably, during the period 2007–2013 structural measures within the context of rural policy are even more tied to the administration of agricultural policy than previously.
Accordingly, my view is still that agriculture is the greatest expense in the EU budget, ahead of the structural funds, and that this will be the case in 2009.
***
European Social Fund (ESF)
Basic information about the European Social Fund (ESF) can be found here:
http://ec.europa.eu/regional_policy/funds/fse/index_en.htm
The ESF Regulation, officially Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJEU 31.7.2006 L 210/12), is available here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/fse/ce_1081(2006)_en.pdf
***
European Regional Development Fund (ERDF)
You can access information about the European Regional Development Fund (ERDF) here:
http://ec.europa.eu/regional_policy/funds/feder/index_en.htm
The ERDF Regulation, officially Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJEU 31.7.2006 L 210/1), can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/feder/ce_1080(2006)_en.pdf
***
European Investment Bank
The European Investment Bank (EIB) is mentioned as one of the actors supporting the cohesion objectives.
More information can be found on the web pages of the EIB:
http://www.eib.org/
The latest version of the legal framework of the European Investment Bank, although not in force, is Protocol (No 5) on the statute of the European Investment Bank, annexed to the Lisbon Treaty TEU and TFEU (OJEU 9.5.2007 C 115/251).
***
Cohesion Fund
Among other existing Financial Instruments we find the important Cohesion Fund, designed for the poorer member states. For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. Spain is eligible to a phase-out fund only as its GNI per inhabitant is less than the average of the EU-15.
Introductory information about the Cohesion Fund, important for infrastructure projects and the environment, can be found here:
http://ec.europa.eu/regional_policy/funds/cf/index_en.htm
Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJEU 31.7.2006 L 210/79) can be found here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/cohesion/ce_1084(2006)_en.pdf
***
European Union Solidarity Fund (EUSF)
The Member States and countries negotiating accession can request aid from the European Union Solidarity Fund (EUSF) in the event of a major natural disaster. Basic information is found here:
http://ec.europa.eu/regional_policy/funds/solidar/solid_en.htm
The legal act setting up the EUSF is Council Regulation (EC) No 2012/2002 of 11 November 2002 establishingthe European Union Solidarity Fund (OJEC 14.11.2002 L 311/3), which is available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:311:0003:0008:EN:PDF
***
European Grouping for Territorial Cooperation (EGTC)
According to the Inforegio web page, the EGTC is a new European legal instrument designed to facilitate and promote cross-border, transnational and interregional cooperation. Unlike the structures which governed this kind of cooperation before 2007, the EGTC is a legal entity and as such, will enable regional and local authorities and other public bodies from different member states, to set up cooperation groupings with a legal personality.
Information about this new legal instrument is accessible here:
http://ec.europa.eu/regional_policy/funds/gect/index_en.htm
The establishment of the new legal instrument has required a legal instrument of its own. Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006 on a European grouping of territorial cooperation (EGTC) (OJEU 31.7.2006 L 210/19) is accessible here:
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/gect/ce_1082(2006)_en.pdf
***
Instrument for Pre-Accession Assistance (IPA)
If we cast our net somewhat wider than the internal cohesion of the European Union, the work can be said to commence in advance with regard to candidate countries and potential candidate countries.
From January 2007 onwards, the Instrument for Pre-Accession Assistance (IPA) replaces a series of European Union programmes and financial instruments for candidate countries or potential candidate countries, namely PHARE, PHARE CBC, ISPA, SAPARD, CARDS and the financial instrument for Turkey.
Information is found here:
http://ec.europa.eu/regional_policy/funds/ipa/index_en.htm
The basic legal instrument is Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA) (OJEU 31.7.2006 L 210/82), available here:
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_210/l_21020060731en00820093.pdf
Implementing rules have been issued by the Commission, Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA) (OJEU 29.7.2007 l 170/1), published here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:170:0001:0066:EN:PDF
***
Financial engineering
The Commission offers a web page on financial engineering with various combinations aiming at promoting development in EU regions:
http://ec.europa.eu/regional_policy/funds/2007/jjj/index_en.htm
Ralf Grahn
EU procurement: Economic operators
The internal market rules of the European Community (European Union) require equal and objective treatment of potential bidders and actual tenderers in public procurement.
The treaty principles are set out in a more concrete manner in secondary legislation, here the Procurement Directive 2004/18/EC. We take a look at a basic Directive provision on economic operators, i.e. firms and individuals (potentially) participating in public contracts procedures.
The European Commission has shown interest in the opportunities for small and medium-sized enterprises (SMEs) to compete successfully in tender procedures. We add a few references for interested readers.
***
Article 4
The EC (EU) Classic Directive or Procurement Directive 2004/18/EC starts Title II Rules on public contracts, with Chapter I General provisions. Article 4 Economic operators concerns some aspects of equal treatment of tenderers from different member states:
TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I
General provisions
Article 4
Economic operators
1. Candidates or tenderers who, under the law of the Member State in which they are established, are entitled to provide the relevant service, shall not be rejected solely on the ground that, under the law of the Member State in which the contract is awarded, they would be required to be either natural or legal persons.
However, in the case of public service and public works contracts as well as public supply contracts covering in addition services and/or siting and installation operations, legal persons may be required to indicate in the tender or the request to participate, the names and relevant professional qualifications of the staff to be responsible for the performance of the contract in question.
2. Groups of economic operators may submit tenders or put themselves forward as candidates. In order to submit a tender or a request to participate, these groups may not be required by the contracting authorities to assume a specific legal form; however, the group selected may be required to do so when it has been awarded the contract, to the extent that this change is necessary for the satisfactory performance of the contract.
***
Economic operator
We start by returning to the definition of economic operator.
Economic operator is a convenient term to cover the concepts of contractor, supplier and service provider, as described in Article 1(8):
8. The terms ‘contractor’, ‘supplier’ and ‘service provider’ mean any natural or legal person or public entity or group of such persons and/or bodies which offers on the market, respectively, the execution of works and/or a work, products or services.
The term ‘economic operator’ shall cover equally the concepts of contractor, supplier and service provider. It is used merely in the interest of simplification.
An economic operator who has submitted a tender shall be designated a ‘tenderer’. One which has sought an invitation to take part in a restricted or negotiated procedure or a competitive dialogue shall be designated a ‘candidate’.
***
Latest consolidation
The latest consolidated version of the Procurement Directive 2004/18/EC, found on Eur-Lex under legislation in force, is of 15 September 2008.
***
Equal treatment, non-discrimination and transparency
We are reminded of the general rules concerning equal treatment of companies and individuals vying for business contracts and of transparent procedures, in Article 2 of the Procurement Directive 2004/18/EC:
Article 2
Principles of awarding contracts
Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.
***
Mutual recognition
Article 4(1) evokes the principle of mutual recognition. To require domestic qualifications in the awarding member states tends to favour domestic bidders at the expense of firms or individuals from other member states and consequently against the internal market principles of free movement.
The Community rules on mutual recognition of diplomas and professional qualifications apply.
***
Professional qualifications
Legal persons can be required to show that they have suitably qualified individuals, who can fulfil the contract.
The Community rules on mutual recognition of diplomas and professional qualifications apply.
Under Freedom of establishment, the Commission’s Guide to the Community rules on public works contracts (based on the old Directive 93/37/EEC) explains some of the treaty provisions on professional qualifications (page 2 to 3):
However, the taking-up and pursuit of certain self-employed activities may be conditional on complying with certain provisions laid down by law, regulation or administrative action justified by the general good, such as rules relating to organization, qualifications, professional ethics, supervision and liability. Such provisions may stipulate in particular that pursuit of a particular activity is restricted to holders of a diploma, certificate or other evidence of formal qualifications, to persons belonging to a professional body or to persons subject to particular rules or supervision, as the case may be.
Where the taking-up or pursuit of a specific activity is subject to such conditions in the host Member State, a national of another Member State intending to pursue that activity must in principle comply with them. It is for this reason that Article 57 provides that the Council is to issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications or, as the case may be, for the coordination of national provisions concerning the taking-up and pursuit of activities as self-employed persons.
It follows, however, from the Court’ s case-law that national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it.”
***
Joint bids
Article 4(2) allows companies to leave joint bids as groups. Only if necessary, can a group be demanded to assume a specific legal form.
The Commission’s Guide to the Community rules on public works contracts (based on the old Directive 93/37/EEC) explains how a group of companies can submit a tender without assuming a particular legal form. A successful group may be required to assume a certain legal form, indicated in advance (page 54):
6.4.3 Groups of contractors
Groups of contractors must be allowed to submit a tender or to negotiate without having to assume a particular legal form. However, a group may be required to assume a particular legal form if it is awarded the contract. In such a case, the contracting authority must have indicated beforehand, in the contract notice, the legal form required.
As was pointed out in connection with the definition of the contractor (point 1.2), the Court has stated that a company which has neither the intention nor the resources to carry out the works itself may participate in a procedure for the award of a public works contract. However, in order to prove that it has the required financial and economic standing and technical capability, it must establish that it actually has available to it the resources of the contractors by whom it intends to have the contract carried out and that those resources meet the requirements specified by the contracting authority.
***
SMEs: “Small Business Act” for Europe
Groups of contractors are important, because they offer small businesses opportunities to participate in joint bids for public contracts too large for them to handle on their own.
One of the ten principles of the “Small Business Act” for Europe is Principle V Adapt public policy tools to SME needs: facilitate SMEs’ participation in public procurement and better use State Aid possibilities for SMEs.
Source: Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: “Think Small First” A “Small Business Act” for Europe (Brussels, 25.6.2008 COM(2008) 394 final).
The Member States committed to implement the SBA by adopting the Competitiveness Council Conclusions of 1 December 2008.
The SBA Action Plan, annexed to the Competitiveness Council Conclusions, focuses on short and medium-term measures to improve SMEs’ access to finance, to improve the regulatory environment and to enhance market access for SMEs. These priority measures are an integral part of the Commission’s response to alleviate the negative impact of economic and financial crisis on enterprises, especially SMEs.
The European Council on 11-12 December 2008 supported the full implementation of the Action Plan for the SBA adopted by the Competitiveness Council on 1 December 2008.
***
Code of Best Practice(s)
The European SBA refers to the Code of Best Practice. Readers interested in improving the opportunities for small and medium-sized enterprises in public procurement are invited to look at the suggestions made by the Commission Staff Working Document: European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts (Brussels, 25.6.2008 SEC(2008) 2193).
You can look at the proposals directly or read the earlier blog posts with summaries.
Ralf Grahn
The treaty principles are set out in a more concrete manner in secondary legislation, here the Procurement Directive 2004/18/EC. We take a look at a basic Directive provision on economic operators, i.e. firms and individuals (potentially) participating in public contracts procedures.
The European Commission has shown interest in the opportunities for small and medium-sized enterprises (SMEs) to compete successfully in tender procedures. We add a few references for interested readers.
***
Article 4
The EC (EU) Classic Directive or Procurement Directive 2004/18/EC starts Title II Rules on public contracts, with Chapter I General provisions. Article 4 Economic operators concerns some aspects of equal treatment of tenderers from different member states:
TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I
General provisions
Article 4
Economic operators
1. Candidates or tenderers who, under the law of the Member State in which they are established, are entitled to provide the relevant service, shall not be rejected solely on the ground that, under the law of the Member State in which the contract is awarded, they would be required to be either natural or legal persons.
However, in the case of public service and public works contracts as well as public supply contracts covering in addition services and/or siting and installation operations, legal persons may be required to indicate in the tender or the request to participate, the names and relevant professional qualifications of the staff to be responsible for the performance of the contract in question.
2. Groups of economic operators may submit tenders or put themselves forward as candidates. In order to submit a tender or a request to participate, these groups may not be required by the contracting authorities to assume a specific legal form; however, the group selected may be required to do so when it has been awarded the contract, to the extent that this change is necessary for the satisfactory performance of the contract.
***
Economic operator
We start by returning to the definition of economic operator.
Economic operator is a convenient term to cover the concepts of contractor, supplier and service provider, as described in Article 1(8):
8. The terms ‘contractor’, ‘supplier’ and ‘service provider’ mean any natural or legal person or public entity or group of such persons and/or bodies which offers on the market, respectively, the execution of works and/or a work, products or services.
The term ‘economic operator’ shall cover equally the concepts of contractor, supplier and service provider. It is used merely in the interest of simplification.
An economic operator who has submitted a tender shall be designated a ‘tenderer’. One which has sought an invitation to take part in a restricted or negotiated procedure or a competitive dialogue shall be designated a ‘candidate’.
***
Latest consolidation
The latest consolidated version of the Procurement Directive 2004/18/EC, found on Eur-Lex under legislation in force, is of 15 September 2008.
***
Equal treatment, non-discrimination and transparency
We are reminded of the general rules concerning equal treatment of companies and individuals vying for business contracts and of transparent procedures, in Article 2 of the Procurement Directive 2004/18/EC:
Article 2
Principles of awarding contracts
Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.
***
Mutual recognition
Article 4(1) evokes the principle of mutual recognition. To require domestic qualifications in the awarding member states tends to favour domestic bidders at the expense of firms or individuals from other member states and consequently against the internal market principles of free movement.
The Community rules on mutual recognition of diplomas and professional qualifications apply.
***
Professional qualifications
Legal persons can be required to show that they have suitably qualified individuals, who can fulfil the contract.
The Community rules on mutual recognition of diplomas and professional qualifications apply.
Under Freedom of establishment, the Commission’s Guide to the Community rules on public works contracts (based on the old Directive 93/37/EEC) explains some of the treaty provisions on professional qualifications (page 2 to 3):
However, the taking-up and pursuit of certain self-employed activities may be conditional on complying with certain provisions laid down by law, regulation or administrative action justified by the general good, such as rules relating to organization, qualifications, professional ethics, supervision and liability. Such provisions may stipulate in particular that pursuit of a particular activity is restricted to holders of a diploma, certificate or other evidence of formal qualifications, to persons belonging to a professional body or to persons subject to particular rules or supervision, as the case may be.
Where the taking-up or pursuit of a specific activity is subject to such conditions in the host Member State, a national of another Member State intending to pursue that activity must in principle comply with them. It is for this reason that Article 57 provides that the Council is to issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications or, as the case may be, for the coordination of national provisions concerning the taking-up and pursuit of activities as self-employed persons.
It follows, however, from the Court’ s case-law that national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it.”
***
Joint bids
Article 4(2) allows companies to leave joint bids as groups. Only if necessary, can a group be demanded to assume a specific legal form.
The Commission’s Guide to the Community rules on public works contracts (based on the old Directive 93/37/EEC) explains how a group of companies can submit a tender without assuming a particular legal form. A successful group may be required to assume a certain legal form, indicated in advance (page 54):
6.4.3 Groups of contractors
Groups of contractors must be allowed to submit a tender or to negotiate without having to assume a particular legal form. However, a group may be required to assume a particular legal form if it is awarded the contract. In such a case, the contracting authority must have indicated beforehand, in the contract notice, the legal form required.
As was pointed out in connection with the definition of the contractor (point 1.2), the Court has stated that a company which has neither the intention nor the resources to carry out the works itself may participate in a procedure for the award of a public works contract. However, in order to prove that it has the required financial and economic standing and technical capability, it must establish that it actually has available to it the resources of the contractors by whom it intends to have the contract carried out and that those resources meet the requirements specified by the contracting authority.
***
SMEs: “Small Business Act” for Europe
Groups of contractors are important, because they offer small businesses opportunities to participate in joint bids for public contracts too large for them to handle on their own.
One of the ten principles of the “Small Business Act” for Europe is Principle V Adapt public policy tools to SME needs: facilitate SMEs’ participation in public procurement and better use State Aid possibilities for SMEs.
Source: Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: “Think Small First” A “Small Business Act” for Europe (Brussels, 25.6.2008 COM(2008) 394 final).
The Member States committed to implement the SBA by adopting the Competitiveness Council Conclusions of 1 December 2008.
The SBA Action Plan, annexed to the Competitiveness Council Conclusions, focuses on short and medium-term measures to improve SMEs’ access to finance, to improve the regulatory environment and to enhance market access for SMEs. These priority measures are an integral part of the Commission’s response to alleviate the negative impact of economic and financial crisis on enterprises, especially SMEs.
The European Council on 11-12 December 2008 supported the full implementation of the Action Plan for the SBA adopted by the Competitiveness Council on 1 December 2008.
***
Code of Best Practice(s)
The European SBA refers to the Code of Best Practice. Readers interested in improving the opportunities for small and medium-sized enterprises in public procurement are invited to look at the suggestions made by the Commission Staff Working Document: European Code of Best Practices Facilitating Access by SMEs to Public Procurement Contracts (Brussels, 25.6.2008 SEC(2008) 2193).
You can look at the proposals directly or read the earlier blog posts with summaries.
Ralf Grahn
Saturday, 27 December 2008
EU Law: Cohesion: Economic and social plus territorial
Economic and social cohesion represents the second largest object of EU expenditure (after the common agricultural policy). Still, it is harder to find a definition of cohesion than descriptions of its components and policy instruments.
The policies are heavily weighted to combat regional disparities, and the Treaty of Lisbon would make express mention of the territorial dimension of cohesion.
Here is a treaty level introduction to the world of economic, social and territorial cohesion.
***
Article 158 TEC
Article 158 TEC (ex Article 130a) builds on the concept cohesion without defining it.
This takes the form of efforts to reduce the disparities between various regions. The backwardness of the least favoured regions or islands, including rural areas, is emphasised.
Here is the current Article 158 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/118:
TITLE XVII
ECONOMIC AND SOCIAL COHESION
Article 158 TEC
In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.
In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including rural areas.
***
Original Lisbon Treaty (ToL)
Although the Treaty of Lisbon is unreadable on its own, it spells out how or if the current treaties are amended.
Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.
Article 2, points 130 and 131 of the Lisbon Treaty amended the Title heading and Article 158 TEC (OJEU 17.12.2007 C 306/84–85):
ECONOMIC, SOCIAL AND TERRITORIAL COHESION
130) The heading of Title XVII shall be replaced by: ‘ECONOMIC, SOCIAL AND TERRITORIAL COHESION’.
131) Article 158 shall be amended as follows:
(a) in the first paragraph, the words ‘economic and social cohesion’ shall be replaced by ‘economic, social and territorial cohesion’;
(b) in the second paragraph, the words ‘or islands, including rural areas’ shall be deleted;
(c) the following new paragraph shall be added:
‘Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 158 TEC initially became Article 158 TFEU (ToL) before the renumbering of the treaty made it into Article 174 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 174 TFEU
Territorial has been added to the Title, which has been renumbered. The Article has been renumbered. The Community has been replaced by the Union. The specific amendments have been inserted.
Article 174 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION
Article 174 TFEU
(ex Article 158 TEC)
In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion.
In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions.
Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.
***
Main changes
Cohesion will henceforth evoke the economic, social and territorial dimensions of a concept not immediately clear to non-French readers. (But the concrete manifestations are measurable in euros.)
The new paragraphs 2 and 3 add up to the corresponding paragraphs of Article III-220 of the Constitutional Treaty.
***
EU aims
The third subparagraph of Article 3(3) of the amended Treaty on European Union (TEU) states that the EU shall promote economic, social and territorial cohesion, and solidarity among member states.
***
EU powers in general
The powers of the European Union are attributed or conferred by the member states through the treaties (including their aims). The Treaty of Lisbon makes an effort to present the different categories of competence (as they are modestly called) in a systematic manner.
The taxonomy of EU competence is set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):
Article 2 TFEU
1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.
2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.
5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.
Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.
6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.
***
Article 4 TFEU: Shared competence
Economic, social and territorial cohesion is mentioned among the competences listed as shared in Article 4 TFEU:
Article 4 TFEU
1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(e) environment;
(f) consumer protection;
(g) transport;
(h) trans-European networks;
(i) energy;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
***
Declaration 33
The intergovernmental conference approved a Declaration (33) on island states:
33. Declaration on Article 174 of the Treaty on the Functioning of the European Union
The Conference considers that the reference in Article 174 to island regions can include island States in their entirety, subject to the necessary criteria being met.
***
Cohesion
The concept cohesion seems to be rather elusive, but concrete policy instruments and budget lines are easier to come by. Here is the description offered by the Scadplus (Europa Glossary) web page Economic, social and territorial cohesion (no date given):
http://europa.eu/scadplus/glossary/economic_social_cohesion_en.htm
Ralf Grahn
The policies are heavily weighted to combat regional disparities, and the Treaty of Lisbon would make express mention of the territorial dimension of cohesion.
Here is a treaty level introduction to the world of economic, social and territorial cohesion.
***
Article 158 TEC
Article 158 TEC (ex Article 130a) builds on the concept cohesion without defining it.
This takes the form of efforts to reduce the disparities between various regions. The backwardness of the least favoured regions or islands, including rural areas, is emphasised.
Here is the current Article 158 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/118:
TITLE XVII
ECONOMIC AND SOCIAL COHESION
Article 158 TEC
In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.
In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including rural areas.
***
Original Lisbon Treaty (ToL)
Although the Treaty of Lisbon is unreadable on its own, it spells out how or if the current treaties are amended.
Sometimes there are no specific amendments, although most of the times one or more of the horizontal amendments apply.
Article 2, points 130 and 131 of the Lisbon Treaty amended the Title heading and Article 158 TEC (OJEU 17.12.2007 C 306/84–85):
ECONOMIC, SOCIAL AND TERRITORIAL COHESION
130) The heading of Title XVII shall be replaced by: ‘ECONOMIC, SOCIAL AND TERRITORIAL COHESION’.
131) Article 158 shall be amended as follows:
(a) in the first paragraph, the words ‘economic and social cohesion’ shall be replaced by ‘economic, social and territorial cohesion’;
(b) in the second paragraph, the words ‘or islands, including rural areas’ shall be deleted;
(c) the following new paragraph shall be added:
‘Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.’.
***
Renumbering ToL
The Table of equivalences of the original Treaty of Lisbon tells us that Title XVII first became Title XVII with the addition of territorial in the TFEU (ToL), and renumbered Title XVIII Economic, social and territorial cohesion in the consolidated version.
Article 158 TEC initially became Article 158 TFEU (ToL) before the renumbering of the treaty made it into Article 174 TFEU in the consolidated version (OJ 17.12.2007 C 306/217).
***
Lisbon Treaty consolidated
Article 174 TFEU
Territorial has been added to the Title, which has been renumbered. The Article has been renumbered. The Community has been replaced by the Union. The specific amendments have been inserted.
Article 174 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJ 9.5.2008 C 115/127):
TITLE XVIII
ECONOMIC, SOCIAL AND TERRITORIAL COHESION
Article 174 TFEU
(ex Article 158 TEC)
In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion.
In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions.
Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.
***
Main changes
Cohesion will henceforth evoke the economic, social and territorial dimensions of a concept not immediately clear to non-French readers. (But the concrete manifestations are measurable in euros.)
The new paragraphs 2 and 3 add up to the corresponding paragraphs of Article III-220 of the Constitutional Treaty.
***
EU aims
The third subparagraph of Article 3(3) of the amended Treaty on European Union (TEU) states that the EU shall promote economic, social and territorial cohesion, and solidarity among member states.
***
EU powers in general
The powers of the European Union are attributed or conferred by the member states through the treaties (including their aims). The Treaty of Lisbon makes an effort to present the different categories of competence (as they are modestly called) in a systematic manner.
The taxonomy of EU competence is set out in Article 2 TFEU. The three main or general categories are exclusive competence in 2(1), shared competence in 2(2) as well as supporting, coordinating or supplementing competences in 2(5), although the exact scope and arrangements are laid out in the various treaty provisions as stated in 2(6):
Article 2 TFEU
1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.
2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.
3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.
4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.
5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.
Legally binding acts of the Union adopted on the basis of the provisions of the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.
6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.
***
Article 4 TFEU: Shared competence
Economic, social and territorial cohesion is mentioned among the competences listed as shared in Article 4 TFEU:
Article 4 TFEU
1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(e) environment;
(f) consumer protection;
(g) transport;
(h) trans-European networks;
(i) energy;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
***
Declaration 33
The intergovernmental conference approved a Declaration (33) on island states:
33. Declaration on Article 174 of the Treaty on the Functioning of the European Union
The Conference considers that the reference in Article 174 to island regions can include island States in their entirety, subject to the necessary criteria being met.
***
Cohesion
The concept cohesion seems to be rather elusive, but concrete policy instruments and budget lines are easier to come by. Here is the description offered by the Scadplus (Europa Glossary) web page Economic, social and territorial cohesion (no date given):
http://europa.eu/scadplus/glossary/economic_social_cohesion_en.htm
Ralf Grahn
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