EU Integration. EU Structural Funds

After successful European Union membership negotiations and signing of the EU Accession Treaty in Athens on 16 April 2003 Lithuania along with other acceding countries was bestowed an observer's status for participation in the activities of the EU institutions and debate or adoption of EU legislation.

Starting on 16 April 2003, experts of the Ministry of Economy became active participants in the work of the EU working bodies by representing Lithuania in the European Council of Ministers (Competitiveness Council (Internal Market, Industry and Research) and Transport, Telecommunications and Energy Council, EU Council working groups and committees and in the European Commission executive (Commitology) and advisory committees.

In 2003, Ministry leaders participated in five sittings of the Competition Council and in two sittings of the Transport, Telecommunications and Energy Council. The Competition Council debated issues of implementation of internal market strategy, industrial and innovations policy, modernisation of company law, economic growth and competition, the concept of the Regulation Concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and other issues. The Transport, Telecommunications and Energy Council discussed promotion of cogeneration in the internal energy market, safety of the supply of natural gas and oil products, ecologic design of products consuming energy and other issues that also fell within the Ministry's capacity.

During the period comprising the signature of the Accession Treaty through the end of 2003 ministerial experts or attachés of the Ministry participated in the sittings of 77 working bodies of the European Council of Ministers (deciding issues in the areas of economic policy, competition, trade, energy, internal market, industry, public procurement, company law, technical harmonisation and other areas falling within the Ministry's capacity) Ministerial officials participated in European Commission committees discussing energy, internal market, trade, company policy management, technical regulation of products, customs union and other issues (43 sittings were attended).

Under the preliminary information and consulting procedure established in the Accession Agreement the Ministry submitted applications in 2003 initiating consulting concerning the following EU draft legislation:

•  European Parliament and Council Directive Amending Directive 76/769/EEC concerning restrictions on the marketing and use of nonyphenol, nonyphenol ethoxylate and cement (the EU rejected the request);

•  European Parliament and Council Directive Amending Directive 98/30/EC concerning common rules for the internal market in natural gas (it turned out during the consulting with the European Commission that the new schedule for opening the market as established by the directive should not pose any problems for Lithuania).

Throughout 2003 the Ministry was successful in implementing the obligations assumed during the negotiations for EU membership. The Comprehensive Monitoring Report of the European Commission announced on 5 November 2003 and dedicated to Lithuania 's readiness to become a member of the EU concluded that Lithuania had achieved a high level of compliance with EU requirements in many policies, including company law, energy and small and medium-sized business, all areas that were under the Ministry's supervision.

A lot was done in 2003 to implement the Lisbon strategy. In April, a working group was created to work on implementation of the Strategy and experts of the Ministry participated in the activities of this group. Employees of the EU Affairs Coordination Division along with the attachés for economy and energy delegated by the Ministry to the Lithuanian Mission to the European Communities coordinated the adjustment of policies in the areas within the Ministry's capacity with EU policies and implementation of those policies as well as implementation of obligations assumed by the EU Accession Treaty.

The priorities of Ministry attachés in 2003 were both new observer status in the European Council of ministers and continuity of the contacts with the European Commission. The most important work embraced Council guidelines in the areas of industry, encouragement of entrepreneurship and innovation policy, with the Commission getting ready to present respective action plans as well as development of an integrated approach to the increase of economic competitiveness and creation of procedures for analysis of its impact on business, adoption of the directive on official proposals (company management takeover), the beginning negotiations concerning regulation on encouragement of sales and REACH regulation, the so-called draft “nuclear energy package” project, review of trans-European energy network projects and creation of an internal market in the gas sector. Special mention should be made of work such as the inclusion of Lithuanian and Polish electricity transmission lines into the project list of the Quick Start Programme, consulting with the European Commission on the projects to be financed from the Ignalina NNP Decommissioning Fund, the start of negotiations with the European Investment Fund concerning the funding of guarantee schemes for small and medium-sized business under the EU multi-year programme for companies, and consistent consulting with the European Commission on the readiness to implement the acquis communautaire in public procurement.

In order to ensure adequate Ministry representation in the EU institutions and after the appraisal of different areas within the Ministry's capacity an internal market attaché position in the Lithuanian Mission to the European Communities was created by Resolution No. 1228 of the Lithuanian Government on 7 October 2003 .

In 2003, the main document needed to claim support of the EU Structural Funds – the draft Single Programming Document of Lithuania 2004-2006 – was finalised. The Ministry participated within its capacity in the negotiations with the European Commission concerning the Single Programming Document, actively and efficiently participating in technical consulting that took place on 11-12 September 2003 in Vilnius and 1-3 October in Brussels . Following the negotiations and technical consulting the European Commission and the Lithuanian Government officially approved the Single Programming Document (Lithuanian Government Resolution No. 1679 of 24 December 2003 ).

The Ministry drafted four Single Programming Document measures: measures to increase the competitiveness of Lithuanian companies and provide favourable conditions to business, “Direct Support to Business” and “Improvement of the Business Environment”, the measure intended to encourage tourism, especially incoming tourism, “Public Tourism Infrastructure and Services”, and the measure to modernise the energy supply and distribution network and dependency on energy imports, “Ensuring Energy Supply Stability, Accessibility and Increased Efficiency.” The total budget of all of these measures for 2004-2006 (European Regional Development Fund and state budget money) is as follows: “Direct Support to Business” – 103.103 million euros, “Improvement of the Business Environment” – 44.187 million euros, “Public Tourism Infrastructure and Services” – 90.320 million euros, “Ensuring Energy Supply Stability, Accessibility and Increased Efficiency” – 82.232 million euros.

Along with the Single Programming Document, a draft annex to the document was adjusted. In 2003, the Ministry drafted the annex to the Single Programming Document under the measures of the Single Programming Document entrusted to it. The draft annex elaborated on the activities, supervision indicators and selection criteria, aid beneficiaries, the budget of each measure, application management as well as other issues important to applicants.

On 26 February 2003 , the Lithuanian Business Support Agency VšI was founded and appointed as one of the implementing institutions in the system of administering EU Structural Funds by Resolution No. 1166 of 11 September 2003 . The Ministry was appointed by the same resolution as an intermediary to administer EU Structural Funds in business, tourism and energy sectors. The Lithuanian Business Support Agency is responsible for administration and implementation monitoring of the Single Programming Document measures under the supervision of the Ministry.

In 2003, the Ministry drafted a number of other documents requisite for administration of the money received from the EU Structural Funds, including drafts of application forms, guidelines for applicants and state support schemes. The representatives of the Ministry participated in working groups headed by the Ministry of Finance working on the procedures of managing money from EU Structural Funds and creation of a single information system for management of structural funds.

Aiming at ensuring the adequate application of EU Structural Funds the Ministry was active in informing the public and especially businessmen. In 2003, the Ministry held over 20 seminars in the institutions of public information network – business information centres and business incubators –on the support offered by EU Structural Funds. Representatives of the Ministry also participated in more than 30 seminars on EU Structural Funds sponsored by different business organisations and municipalities.

In order to help prepare documentation for projects based on support of the EU Structural Funds, small companies were supported at the end of 2003 with funds of the European Regional Development Fund issued for the preparation of documentation of fundable projects (subsidy amount of up to 20,000 litas). 144 applications were received, with 67 applications for documentation subsidies worth 1.05 million litas being approved. These subsidies went to the most active small and medium-sized businesses that were already preparing to apply and compete for EU Structural Fund aid.

In November 2003, the first stage of the project Support to Business Development under the Phare Economic and Social Cohesion Programme for 2002 was launched – the first component of technical aid. Implementation of the project resulted in improvement of the capacity of the Ministry and the Lithuanian Business Support Agency to administer the most important parts of this project, i.e. subsidy schemes. Subsidies to business, business support institutions and tourism sector entities will start to flow in 2004. The total value of the subsidies stands at 8 million euros. Implementation of the project will bring support to companies and institutions and will result in the experience needed for administration of EU Structural Funds.

Implementation of the Phare project Innovation Capacity under the Phare Economic and Social Cohesion Programme for 2001 continued with the founding of an innovation support network, the Lithuanian Innovation Centre, with regional divisions in Alytus, Kaunas , Klaipeda , Panevežys and Šiauliai. The network prepared over 300 project concepts eligible for the funding of the subsidy scheme of the Support to Business Development project of the Phare Economic and Social Cohesion Programme for 2002 as well as for the EU Structural Funds.