Switzerland has approved a total of 210 projects in the ten Eastern European countries that joined the European Union in 2004, according to a government report released at the end of the first of two phases.
The SFr1 billion ($1.05 billion) payment was approved by Swiss voters in December 2006. Five-and-a-half years later, it is clear which projects are being supported to help transform the states into market economies.
In approving the projects, Switzerland has fulfilled the objective set down for the first phase of the enlargement contribution, namely that of agreeing – by the deadline of June 14, 2012 – on how they would spend the billion francs.
Following the five-year funding commitment period is the five-year implementation phase. This is scheduled to end in June 2017, by which time the agreed projects have to have been completed.
On Monday, representatives from the State Secretariat for Economic Affairs (Seco) and the Swiss Agency for Development and Cooperation (SDC) presented a “half-time” report at a press conference in Bern.
It revealed that so far, only SFr160 million had been given out. The remaining amount, around SFr790 million, will go into 210 projects by 2017. SFr50 million is available for Switzerland to cover the administrative expenses.
The reason that not more money had been spent was that choosing and developing projects had taken more time than expected, according to Hugo Bruggmann, head of cohesion at Seco.
The projects were being set up and implemented in a difficult environment, the report said. Also, the worsening economic situation and personnel changes in the various countries could have negative effects on how the projects were handled.
Good news?
However, the report also said there were grounds to be confident that the chosen projects would meet the high quality requirements.
What’s more, Switzerland would continue to work closely with the projects, not least to ensure that the money was being used effectively.
The main beneficiary of the cohesion money is Poland, with SFr489 million, followed by Hungary, the Czech Republic, Lithuania, Slovakia, Latvia, Estonia, Slovenia, Cyprus and Malta. The amount depends on the size of the population and per capita income.
For Romania and Bulgaria, which did not join the EU until 2007, Switzerland has made SFr257 million available.
Reducing inequality
Switzerland’s aim in making the contributions is to support the reduction of economic and social inequality inside the EU, said Kurt Kunz, head of cooperation with Eastern Europe at the SDC. (For other official reasons, see link.)
The largest part of the funds – SFr371 million – is going into 58 environmental projects. Of that, SFr155 million is being invested in promoting energy efficiency and renewable energies.
Money is also being channelled into public transport (SFr69 million), waste water treatment (SFr44 million) and schemes to boost the economic growth of structurally weak countries (SFr258 million).
Around SFr145 million has also been set aside for measures to strengthen social security, for example by investing in the infrastructure of the health system.
In addition, Switzerland wants to contribute to public safety in the ten Eastern European countries. Money is also being spent on fighting corruption and organised crime as well as modernising legal systems.
The projects must be completed by 2017. Until then, the government will keep an eye on whether the projects are having the desired effect. Unspent money can be returned.
Switzerland has been granting financial aid to countries in eastern Europe to help them transform into market economies.
As part of the second set of bilateral treaties with Brussels, non-EU member Switzerland pledged to provide SFr1 billion to ten new EU member states mainly in eastern Europe.
Parliament gave the green light in March 2006, but the rightwing Swiss People’s Party forced a referendum.
Voters endorsed the SFr1 billion package in a nationwide ballot in November 2006.
A further SFr257 million was granted in 2009.
Switzerland paid about SFr3.45 billion towards the transition of eastern and central European states between 1990 and 2006.