Program in entrepreneurial skills and European projects management

Table of contents
Module I. European Projects Management ..................................................................................2 A. Project Management .........................................................................................................3 B. EU Structural and Cohesion Funds.................................................................................... 10 C. The Management of the Structural and Cohesion Funds .................................................... 17 D. EU funds for the financial period 2007-2013 .................................................................... 25 Module II. European Business Environment .............................................................................. 59 A. Business Goals and Strategies on the European Market .................................................... 60 B. The Component Factors of the European Business Environment ....................................... 74 C. Euro-marketing ................................................................................................................. 85 References ................................................................................................................................ 95

Module I. European Projects Management

A.

Project Management (planning, organizing, securing and

Anna MADAN Center for Studies in European Integration Academy of Economic Studies of Moldova Chisinau, Republic of Moldova

managing resources to achieve specific goals)

To start with I would like to attract your attention to the fact that the term "management" refers to the activities (and often the group of people) involved in the four general functions: planning, organizing, securing and coordinating of resources. Meantime, Project management is a carefully planned and organized effort to accomplish a successful project. Having acquainted with the subject of our conversation, there are several questions that should be raised. Precisely, what is a project? What is the Project Management Methodology? What does a project manager do? What skills does a project manager need? What tools and techniques are used? And, finally, what are those steps to succeed? In the next few minutes we will try to clarify questions we are interested in. Firstly, a project is generally defined as a programme of work to bring about a beneficial change. So it has: a start and an end; a multi-disciplinary team brought together for the project; constraints of cost, time and quality; a scope of work that is unique and involves uncertainty

In such a way, Project Management includes developing a project plan, which includes defining and confirming the project goals and objectives, identifying tasks and how goals will be achieved, quantifying the resources needed, and determining budgets and timelines for completion. It also includes managing the implementation of the project plan, along with operating regular 'controls' to ensure that there is accurate and objective information on 'performance' relative to the plan, and the mechanisms to implement recovery actions where necessary.

Secondly, if a project has a beginning and an end, what is its life cycle and how is it managed? To be effective and workable project methodologies should be appropriate to the task of organization. In order to understand the methodology we need to look at the project life cycle, which comprises next four stages: initiation, planning, execution and closure. Namely: Initiation involves starting up the project, by documenting a business case,

feasibility study, terms of reference, appointing the team and setting up a Project Office; Planning involves setting out the roadmap for the project by creating the

following plans: project plan, resource plan, financial plan, quality plan, acceptance plan and communications plan; Execution involves building the deliverables and controlling the project

delivery, scope, costs, quality, risks and issues; Closure involves winding-down the project by releasing staff, handing

over deliverables to the customer and completing a post implementation review. There are many groups of people involved in the project lifecycle. The Project Team is a group that is responsible for planning and executing the project. It consists of a Project Manager and a variable number of Team Project members, who are brought in to deliver their tasks according to the Project Schedule. The Project Manager is the person who is responsible for ensuring that the project team completes the project. The Project Manager develops the project plan with the team and manages the teams performance of project tasks. It is also the responsib ility of the Project Manager to secure acceptance and approval of deliverables from the project sponsor and stakeholders. Typically a project manager will be nominated to lead a project and will be expected to be fully accountable for meeting its objectives. The project manager will be the leader of the project team and will be responsible for ensuring the following are completed in a timely way: Gaining approval for the project aim and terms of reference; Selecting and leading the team and setting individual objectives; Ensuring a feasibility study is complete; Ensuring that the project is planned in appropriate detail; Allocating and monitoring the work and cost; Motivating the team; Reporting progress back to the organization; 4

Helping the team to solve project problems; Achieve, through the team, the goals; Reviewing and closing down

The Project Team Members are responsible for executing tasks and producing deliverables as outlined in the project plan and directed by the Project Manager, at whatever level of effort or participation has been defined for them. On larger projects, some Project Team Members may serve as team leaders, providing task and technical leadership. The Project Sponsor is a manager with demonstrable interest in the outcome of the project who is responsible for securing and spending authority and resources for the project. Ideally, the Project Sponsor should be the highest-ranking manager possible, in proportion to the project size and scope. The Project Sponsor initiates the Project Proposal process, champions the project in the Performing Organization, and is the ultimate decision-maker for the project. The Project Sponsor provides support for the Project Manager, approves major deliverables, and signs off on approvals to proceed to each succeeding project phase. The Project Sponsor may elect to delegate any of the above responsibilities to other personnel either on or outside the project team. We cannot ignore the fact that very broad skills and a deal of experience are needed to manage a large project successfully. They include business knowledge, technical skills and individual and team leadership skills. Individual skills are likely to include good presentation and persuasive skills, good written skills but allied to goal orientation, high energy and credibility. Team skills will appreciate the differing needs of both individuals and the project team at different stages of the project. And, technical skills are likely to cope with setting objectives, planning complex tasks, negotiating resource, financial planning, contract management, monitoring skills, managing creative thinking and problem solving, as well as their own specialist topic. Thirdly, and probably mainly, are those steps made to succeed in Project Management: 1. Define the project concept, then get support and approval - A series of

conversations, brainstorming sessions, and other formal or informal discussions about the project concept with your supervisor and key people whom you hope will provide project support;

2.

Get your team together and start the project - A series of conversations,

brainstorming sessions, and other formal/informal discussions about the project concept with all stakeholders. Commitments from stakeholders to play particular roles on the project team throughout or at specific times in the project. Written documentation that captures roles and responsibilities of all stakeholder; 3. Figure out exactly what the finished work products will be - A series of

conversations, brainstorming sessions, and other formal/informal discussions about specific project deliverable; 4. Figure out what you need to do to complete the work products. Identify

tasks and phases - A list or graphical collection of all project tasks that must be completed to create project deliverables. A network diagram showing the sequence and flow of all project tasks, including opportunities for stakeholders to review and approve deliverables as they evolve. Descriptions or illustrations of project phase; 5. Estimate time, effort, and resources - A detailed estimate of the duration,

effort, and resources required to complete each project task. A summary of duration, effort, and resources required for the entire project; 6. Build a schedule - One or more overview schedules showing the big picture of the project (i.e., showing all activities, phases, and major milestones. One or more detailed schedules that expand or zoom in on particular parts of the overview schedule. A strategy to revisit the schedule periodically in order to keep it up to data; 7. Estimate the costs - An estimate of project costs, including the costs of

labor, materials, supplies, and any other costs tracked by your organization, such as various overhead costs, etc. A description of all assumptions made in the cost estimate; 8. Keep the project moving - Periodic progress checks of each dimension of

the project as spelled out in the project. Project manager inspection and awareness of overall progress toward completion. Project manager interventions to correct problems, remove obstacles, and keep the project moving as planned; 9. Handle scope change - Adjustments to the project plan to deal with

additions, reductions or modifications to the deliverables or work process. Formal documentation of each scope change. Formal approval of each scope change;

10.

Close out phases, close out the project - Completion of typical project-

specific follow-up activities: Project Archive, Lessons Learned, hand-off/training, performance evaluations, etc. By following these steps the whole process of Project Management becomes an efficient and smart-built algorithm. Talking about Project Management we should obviously mention the question of Effective Project Team and Resource Allocation. Forming a project team should be a deliberate act where people are considered in terms of the skills and experience they bring and their motivation to participate and contribute to the project as an active member of the team. In addition, they must be committed to the project objectives and have a clear sense of urgency and accountability to get things done as and when needed. It means that effective project teams are made by combining skills, experience, motivation, teamwork and sense of urgency into a clear project structure. In such a way, there are several rules to follow: Project roles and responsibilities must be clearly defined, preferably with

no overlap of accountabilities. Only one person should be accountable for one thing or multiple things, although any number of people may contribute towards it. Two or more people should never be accountable for the same thing as this leads to confusion and potential problems; Roles must be organized into a project structure with clear lines of

accountabilities and if appropriate who reports to whom or who are the leaders with sub teams within the overall project; Individuals must be assigned to the roles, with the ideal being 100%

resource allocation. As the level of resource committed to the project falls the project manager must compensate for the time-splitting and therefore reduced level of productivity due to task switching or, worse, conflicting priorities. Usually, one individual is assigned to one role, but it is possible for one role to be performed by multiple people; A clear and current project organogram is created of the project team. It

must be updated if the project team changes;

Extended or external project team relationships should be drawn in

relation to the project team as a single entity and includes other entities such as vendors or third-party suppliers. In essence this is drawing the lines of communications between the project team and all stakeholders and is useful as an aid to transparency Understanding project time allocation and productivity and using that knowledge is essential to realistic project planning and creating a project schedule that has the best chance of project success. Factoring in the real world time allocation is about making adjustments to project estimating to include interruptions to work, personal productivity and natural delays. Project Planning and Estimation showed how to produce better project estimates, but there is an assumption there that needs to be understood. That assumption is one hundred per cent time allocation of working on the project task completely and without interruption. In some cases that assumption will be fine but if that is not true then project estimation needs to be revisited. So, Project managers should factor into schedules the differences between effort, duration and elapsed time. Time allocated for a project task typically assumes 100% time allocation and productivity. Nevertheless, project time allocation is rarely 100%. The key reasons why time allocation may not be realized include: o o o and lunches; o o completion; o manager; o Multi-tasking on too many project tasks that delays all of them Other distractions such as company meetings or interaction with line Waiting for others to provide necessary inputs; Helping other team members to complete their tasks but delaying own task Interruptions to work from other project team members or externally; Unproductive project meetings that are attended but do not help to

complete tasks; Natural delays such as social interactions with colleagues, coffee breaks

In such a way, we should always remember an old, but at the same time very actual proverb time is money, because its true.

Towards the end of the plan of activities the project is becoming complete. But before formally closing it, a final evaluation is necessary. Remember: A project needs both a beginning and the end. The final evaluation can be described as collecting of information dealing with project, such as: Analyzing the goals achieved Evaluating results and their impact on organization Drawing conclusions according future projects

To cut a long story short we must certainly revise the information above. So what is the so-called Project Management? Project management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value.

B. EU Structural and Cohesion Funds

Ihor YASKAL Associate Professor Yuriy Fedkovych Chernivtsi National University Chernivtsi, Ukraine

The Structural Funds and the Cohesion Fund are the financial instruments of European Union (EU) regional policy, which is intended to narrow the development disparities among regions and Member States. The Funds participate fully, therefore, in pursuing the goal of economic, social and territorial cohesion. The Structural funding period for 2007-2013 follows and thus enhances the Lisbon Strategy. The Lisbon Strategy, put down by the European Union in 2000, aims at making the EU "the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010". The Structural Funds are divided into three entities. These are: 1. The Cohesion Fund (CF) its main purpose is to reduce economic and social shortfall, as well as to stabilise the economy in Member States with a Gross National Income (GNI) per inhabitant which is 90 % less than the Community average. The Cohesion Fund therefore finances Trans-European Transport Networks and activities related to the environment1. 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. 2. European regional development fund (ERDF) its main purpose is to strengthen the economic and social cohesion within the EU by correcting imbalances between regions. The ERDF finances aid related to the creation of sustainable employment, infrastructure, financial instruments to support regional and local development and technical assistance measures. 3. European social fund (ESF) aims at improving employment and job opportunities in the EU. The ESF finances activities related to adapting workers and enterprises, helping job
1

http://ec.europa.eu/regional_policy/thefunds/cohesion/index_en.cfm

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seekers finding employment, combating discrimination, supporting social integration of disadvantaged people and strengthening human capital. For the period 2007-2013, the budget allocated to regional policy amounts to around 348 billion, comprising 278 billion for the Structural Funds and 70 billion for the Cohesion Fund. This represents 35% of the Community budget and is the second largest budget item. The Structural Funds have laid down three objectives for the period 2007-2013. These objectives are: Convergence Regional competitiveness and employment European territorial cooperation The Convergence aims to help the least-developed Member States and regions catch up more quickly with the EU average by improving conditions for growth and employment. It covers the Member States and regions whose development is lagging behind. The fields of action will be physical and human capital, innovation, knowledge-based society, adaptability to change, the environment and administrative effectiveness. It will be financed by the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund. The total resources allocated to this objective are EUR 251.163 billion, equivalent to 81.54 % of the total. The following are eligible: for the Structural Funds (ERDF and ESF): 1) regions where per capita GDP is below 75 % of the European average. They must be at NUTS II2 level3. They will receive 70.51 % of the funds allocated for this objective; 2) regions where per capita GDP has risen above 75 % of the European average (due to the statistical effect of EU enlargement including more deprived regions) will benefit from transitional, specific and degressive financing. They will receive 4.99 % of the total allocation; for the Cohesion Fund: Member States whose per capita Gross National Income (GNI) is below 90 % of the European average and which are running economic convergence programmes. They will receive 23.22 % of the resources allocated for this objective. Regions where per capita GNI has risen to above 90 % of the European
2

NUTS was created by the European Office for Statistics (Eurostat) in order to create a single and coherent structure of territorial distribution. It has been used in the Community legislation pertaining to the Structural Funds since 1988. 3 http://epp.eurostat.ec.europa.eu/portal/page/portal/nuts_nomenclature/introduction

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average (due to the statistical effect of EU enlargement including more deprived regions) will benefit from transitional, specific and degressive financing; for specific financing from the ERDF: the outermost regions. The aim is to facilitate their integration into the internal market and to take account of their specific constraints (such as compensation for excess costs due to their remote location). Some European regions would fall under NUTS 2 region criteria for the 2007-2013 period, if the average GDP was measured among the EU-15 members and not the EU-25. These regions will for the 2007-2013 period be categorized as phasing-out regions. A phasing-in region on the other hand, is a region which were covered by the convergence objective but whose GDP exceeds 75 percent of the EU-15 GDP average. These regions are eligible for the transitional support of the regional competitiveness and employment objective. The Structural Funds represent the EUs chief instrument for financing the convergence objective. The map below shows the regions which receives funding for the convergence objective for the 2007-2013 period. The regions marked with red are within the scope of the convergence objective. The orange regions are phasing out-regions, while the dark blue regions are phasing in. The blue coloured regions will receive funding under the regional competitiveness and employment objective.

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For this objective, the following ceilings apply to co-financing rates: 75 % of public expenditure co-financed by the ERDF or the ESF. The ceiling can be raised to 80 % where the eligible regions are located in a Member State covered by the Cohesion Fund, and even to 85 % in the case of the outermost regions; 85 % of public expenditure co-financed by the Cohesion Fund; 50 % of public expenditure co-financed in the outermost regions (a new additional allocation from the ERDF to compensate for excess costs). The Regional Competitiveness and Employment objective aims to strengthen the competitiveness, employment and attractiveness of regions other than those which are the most disadvantaged. It must help to anticipate economic and social changes, promote innovation, entrepreneurship, protection of the environment, accessibility, adaptability and the development of inclusive labour markets. It will be financed by the ERDF and the ESF. The eligible regions are: regions which fell under Objective 1 during the period 2000-06, which no longer meet the regional eligibility criteria of the Convergence objective, and which consequently benefit from transitional support. The Commission will produce a list of these regions. Once adopted, the list will be valid from 2007 to 2013; all other EU regions not covered by the Convergence objective.

With regard to the programmes financed by the ESF, the Commission proposes four priorities within the European Employment Strategy4 (EES): to improve the adaptability of workers and businesses, to increase social inclusion, to improve access to employment and to implement reforms in the fields of employment and inclusion. The resources intended for this objective total EUR 49.13 billion, equivalent to 15,95 % of the total and divided equally between the ERDF and the ESF. Of this amount: 78,86 % is intended for the regions not covered by the Convergence objective. 21,14 % is earmarked for transitional degressive support.

Under this objective, measures can be co-financed up to 50 % of public expenditure. The ceiling is 85 % for the outermost regions.
4

http://europa.eu/legislation_summaries/employment_and_social_policy/community_employment_policies/index_en.ht m

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The European Territorial Cooperation objective aims to strengthen cross-border, transnational and inter-regional cooperation. It is based on the old European INTERREG5 initiative and will be financed by the ERDF. It aims to promote common solutions for neighbouring authorities in the fields of urban, rural and coastal development, the development of economic relations and the creation of networks of small and medium-sized enterprises (SMEs). Cooperation will be based around research, development, information society, the environment, risk prevention and integrated water management. 13 Regions eligible for funding are those regions at NUTS III6 level which are situated along internal land borders, certain external land borders and certain regions situated along maritime borders separated by a maximum of 150 km. The Commission will adopt a list of eligible regions. In the case of networks of cooperation and exchange of experience, the entire EU territory is eligible. The ceiling for co-financing is 75 % of public expenditure. The resources intended for this objective total EUR 7.75 billion, equivalent to 2.52 % of the total, fully covered by the ERDF. This amount will be distributed between the different components as follows: 73.86 % for financing cross-border cooperation; 20.95 % for financing transnational cooperation; 5.19 % for financing interregional cooperation.

The total budget for the Structural funds for 2007-2013 is amounting to 308,041 billion euro (in 2004 prices) or 347,41 billion euro (current prices).This is the largest investment ever made by the EU. The total budget is distributed between the different funds where 81,5 % allocated for the convergence objective, 16% competitiveness and employment objective and 2,5 % for European territorial cooperation objective. is allocated to the concerned countries. Of this 20,8 % or risk prevention and 1,9 % or 3,149 billion on culture.

5 6

http://europa.eu/legislation_summaries/regional_policy/provisions_and_instruments/g24204_en.htm http://europa.eu/legislation_summaries/regional_policy/management/g24218_en.htm

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Figure 1 Distribution of funding

Poland (40%) Czech Republic (16%) Hungary (14%) Romania (11%) Slovakia (7%) Bulgaria (4%) Latvia (3%) Estonia (2%)

Table 1. Total funding by country Total funding Country Bulgaria Amount in 6 673 628 244 Culture Amount in 133 million 605 million 78 million 50 million 74 million 458 million 1 198 million 234 million 261 million 103 million 3 149 million Environmental protection and risk Percent Amount in 2.0 2.3 2.3 1.1 3.2 2.0 1.8 1.3 2.3 2.5 1.9 1 862 million 4 997 million 854 million 902 million 376 million 6 455 million 10 515 million 5 429 million 2 147 million 943 million 33 678 million Percent 27.9 19.0 25.1 19.9 16.3 28.2 15.8 30.2 18.9 23.0 20.8

Czech Republic 26 302 604 484 Estonia Latvia Lithuania Hungary Poland Romania Slovakia Slovenia Total 3 403 459 881 4 530 447 634 2 305 235 743 22 890 071 092 66 553 157 091 17 976 384 517 11 360 619 950 4 101 048 636 162 062 485 149

The Council Regulation (EC) No 1083/2006, Annex III sets the ceilings applicable to cofinancing rates, in other words how much the respective country has to contribute in percentage of the total costs of the projects set forth in the NSRF and OPs. For the ten concerning countries the ceiling for funding from the three funds are 85 % of the total costs. 15

Structural Fund and Cohesion Fund support for the three objectives always involves cofinancing. The rates of co-financing may be reduced in accordance with the "polluter pays" principle or where a project generates income. All projects must of course comply with EU legislation, particularly with regard to competition, the environment and public procurement.

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C. The Management of the Structural and Cohesion Funds

Ihor YASKAL Associate Professor Yuriy Fedkovych Chernivtsi National University Chernivtsi, Ukraine Systems for ensuring effective implementation and management of EU Funds are crucial to the success of Cohesion policy. For the Member States, increasing control over the management and implementation of EU Cohesion policy is associated with both opportunities and challenges, particularly in the key areas of programme management and delivery, partnership and cooperation, and monitoring and evaluation. The scope for diversity in the implementation and management of Cohesion policy is considerable. However, it is still possible to highlight shared experience, common challenges and potential for learning across programmes, regions and Member States. Within the framework of the three objectives, the principles of intervention are the same as for the period 200006, which is to say: complementarity, coherence, coordination, conformity and additionality. Furthermore, the following principles are introduced: proportionality, equality between men and women and non-discrimination, sustainable development and using the funds to focus on the Lisbon strategy priorities. The principle of additionality: for those regions covered by the convergence objective the Commission and the Member States verify the level of public expenditure. The Structural Funds must not substitute a States infrastructural spending. For the new programming period, there moreover exists a financial corrective mechanism in the event of this principle not being respected, which was not the case in 2000-06. The Funds must now target the European Union priorities in terms of the promotion of competitiveness and employment creation (as defined by Annex 4 of the General Regulation). The Commission and the Member States see to it that at least 60% of the spending of all the Member States on the convergence objective and at least 75% of the expenditure on the regional competitiveness and employment objective are assigned to these priorities.

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The principle of proportionality: newly introduced, this consists of modulating the obligations attributed to the Member States, contingent on the total amount of expenditure on an operational programme. This rule concerns: the choice of indicators used to measure up a programme, the obligations in terms of evaluation, management and reports (Article 13.1); control and monitoring: if the programme does not exceed EUR 750 million and if the contribution of the Commission does not exceed 40% of public expenditure, the State has less obligations. The auditing authority is not obliged to present an auditing strategy to the Commission (Article 74). The principle of partnership is widened, which is to say that any appropriate organisation representing civil society, environmental partners, non-governmental organisations and organisations responsible for promoting equality between men and women can participate in negotiations concerning the use of Structural Funds. It not only participates in management but is involved at every programming stage (setting up, follow-up and evaluation). Documents and activities connected to the Funds are evaluated in order to improve their quality, efficiency and the coherence of their intervention. These evaluations are the responsibility of the Member State or the Commission, according to their contribution, and are carried out in the principle of proportionality. They are carried out by independent evaluators and their results are made public. The regulation offers greater flexibility by reducing the number of obligatory evaluations. Efficiency evaluation

2000-06

2007-13
Ex-ante evaluation for each convergence objective programme For each regional competitiveness and

Obligatory ex-ante, mid-term and post-ante evaluation for each intervention

employment and European territorial cooperation objective, the Member States choose the level of evaluation according to needs (programme, theme, funds ) Mid-term evaluation according to needs 18

The institutional infrastructure for implementing EU Cohesion policy is primarily determined by the Member States. The EU lays down the principles of Cohesion policy concentration, partnership, programming etc and the detailed requirements for management and accountability, but the institutional structures and administrative systems are established according to national practice (or, in some countries, regional practice). The influence of the EU is, however, clearly evident. There has been a progressive regionalization of Structural Fund management in many EU 15 countries, while in the EU 10, the European Commission strongly encouraged centralized management of EU Cohesion policy. At the apex of the implementation system is the managing authority. Member States are required to designate a managing authority with responsibility for the assistance provided and ensuring compliance with the Council Regulations (planning and management of programmes, monitoring of assistance, communication with beneficiaries etc). In some Member States, there may be a managing authority with overall responsibility for EU Cohesion policies as well as separate managing authorities with specific responsibility for the individual Funds or individual Structural Fund programmes. Member States are also required to designate one or more paying authorities to draw up and submit payment applications and receive payments from the Commission. Among the new Member States, the overall responsibility for EU Cohesion policy is allocated to several different types of ministry: Ministries of finance Estonia, Latvia, Lithuania Ministry of economics Poland Ministries or government offices for regional development Czech Republic (Ministry of Regional Development), Hungary (Ministry of Agriculture & Regional Development), Slovak Republic (Ministry of Construction & Regional Development), Slovenia (Government Office for Structural Policies & Regional Development) Prime Minister offices or agencies Cyprus (Planning Bureau), Malta (Office of the Prime Minister) In the smaller countries, all the managing authority functions are handled by the ministries of finance, with the exception of INTERREG in some cases (e.g. Lithuania, where 19

INTERREG III is managed by the Ministry of the Interior). With increasing country size, and scale of EU Cohesion policy, there tends to be a greater spread of programme-specific management responsibilities. For example: in the Czech Republic, the industry and enterprise programme is managed by the Ministry of Trade & Industry, and the infrastructure programme by the Ministry of the Environment; in Hungary, the environmental and infrastructure OPs are managed by the Ministry of Economy & Transport, and the regional development programme by the National Office for Regional Development; and in Poland, the transport OP is managed by the Ministry of Infrastructure. The distinctive feature of EU Cohesion policy management in the new Member States is the degree of centralization. In theory, sub-national participation in EU Cohesion policy programmes can involve several functions. o Programme development: Sub-national levels are generally expected to input into national programming documents through formal consultation processes. In some cases, regional administrations coordinated the development of individual operational programmes. o Programme management: For example, sub-national bodies participate in the management of regional elements of programming documents or regional operational programmes. o Implementation: Sub-national administrations may act as implementing bodies, administering regional grant schemes. o Beneficiary: Sub-national authorities have potentially important roles to play as project applicants and end beneficiaries of EU Cohesion policy. In the new Member States, sub-national participation in the management and implementation of EU Cohesion policy is generally limited to a few key areas, including inputs during programme development and activities as end beneficiaries of funds. Notable exceptions are the Czech Republic, Hungary and Poland, which have some form of joint, or integrated Regional Operational Programmes (ROPs). In Slovakia, the OP for Basic Infrastructure also incorporates a regional element. In these cases, regional administrations have a slightly greater involvement in programming activities. In the Czech Republic, Poland and Slovakia, regional authorities participated in the preparation of ROPs, which were used as the basis for subsequent joint programming documents. 20

In the Czech Republic, Regional Councils participate in the management of the Joint Regional Operational Programme. Regional offices are involved in the administration of the Polish Integrated Regional Operational Programme, and, in Hungary, Regional Development Agencies are involved in project implementation. Lastly, in Malta, a Regional Project Committee is involved in implementing special measures for the development of the island of Gozo. The limited sub-national involvement in EU Cohesion policy management is comparable to the approach taken in several EU 15 countries when Structural Fund programmes were first implemented. Since then, however, there has been extensive regionalization of management responsibilities to devolved levels of government (eg. Italy, UK) or to deconcentrated offices of the State (France, Sweden). In federal countries Austria, Belgium, Germany regionalized management has always been the case. The degree of sub-national involvement depends on the constitutional arrangements and institutional structures of individual countries, in particular the existence and status of regional institutions, and the type/scale of EU funding. Over time, it is evident that EU policies and programmes have also played an influential role in the development of sub-national participation in Structural Fund management, in several ways. First, the implementation of Cohesion policy based on the principles of subsidarity and partnership has provided political legitimacy and economic resources for sub-national authorities to be involved in regional development where previously their role may have been minimal. Second, the implementation of Structural Funds has stimulated the creation of specific frameworks and institutions that, in some Member States, has filled an institutional void at regional level and boosted regional capacity to steer economic development processes. Third, EU accession negotiations motivated a range of sub-national administrative reforms in the new Member States. Finally, EU programmes have offered direct support for institution-building at the sub-national level, e.g. Phare funding for Regional Development Agencies. However, the influence of the EU on sub-national participation in the management and delivery of Cohesion policy is not uniform. First, EU legislation does not compel the Member States to decentralize decisions to regions and municipalities. Indeed, in the larger new Member States expectations of a significant decentralization in the implementation of EU Cohesion policy have not been fulfilled so far. National governments rather than sub-national bodies of the new Member States are largely responsible for management of the Cohesion funds in the 21

programming period. Second, in countries with weak, or non-existent, regional administrative structures, centralized, sectoral policy-making offers a more robust platform from which to develop and deliver EU programmes. Even in countries with comparatively well-established regions, the administration of highly complex EU Funds could easily overload regional administrations, undermining what authority they have. Monitoring and evaluation of Cohesion policy Monitoring has been one of the most challenging aspects of EU Cohesion policy implementation for all Member States. EU Regulations stress the need for rigorous financial and physical monitoring to ensure the transparency accountability of expenditure to the Council, Parliament and Court of Auditors, as well as a pre-requisite for effective programming in providing critical intelligence to inform programme planning and delivery. Among the EU 15 Member States, monitoring has progressively improved over successive programming periods with respect to the development of hierarchies of indicators (from programme to measure level), the setting of relevant benchmarks and targets, investment in data collection and analysis systems to ensure the input and collation of accurate data, effective IT infrastructure, and human resources for managing monitoring systems. Notwithstanding the improvements over time and particularly in the current programming period there are still significant problems in obtaining data with respect to physical outputs, results and impacts. In the EU 10 Member States, the focus of programme monitoring committees and monitoring systems has been on financial management issues, in particular to ensure adequate oversight of the absorption of funding. Although there has been substantial investment in monitoring, programming authorities face a range of challenges, notably: delays in establishing effective monitoring systems (eg. Latvia, Poland); problems with IT (Poland); inadequate of human resources (Slovenia); indicators with insufficiently clear definition and focus; poor coordination and data-gathering systems (Poland, Slovak Republic, Slovenia); and difficulties in dealing with the differing requirements if ERDF, ESF and EAGGF. Complementing programming monitoring, evaluation is a further vital component of the programming process, helping to assess the effectiveness and efficiency of policy, guide the design of new policies, and support the implementation of policy programmes and instruments.

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Evaluations of EU programmes are required to be undertaken at an ex-ante, mid-term and expost stage, which are stringent requirements compared to national policy standards. Evaluation analyses focus on three main areas: 1. Achievements: identifying outputs and results achieved and using this information consider future impacts and programme effectiveness. 2. Context: assessing the impact of wider economic trends and institutional and policy change on the programme, which provides insights into how a programme has performed and an assessment of the continuing relevance of the programmes. 3. Process and systems analysis: analysing the effectiveness and efficiency of the programmes processes and systems. In the EU 15 evaluation experience, techniques and skills have developed and become increasingly embedded in the programming process, although there are still significant variations in the approach and attitudes of Member States and in terms of the extent to which they are embedded in national policy practices. For example, some countries have explicit and coordinated frameworks for evaluation, which extend beyond regulatory requirements for EU funds, e.g. in Finland, Ireland, the Netherlands and the UK. In other countries, evaluation is evolving from a previously limited focus on what is required by the European Commission, e.g. in Austria, Greece and Portugal. In most of the EU 10 countries, policy evaluation is a relatively recent phenomenon. Some experience of the evaluation of EU programmes was gained through pre-accession aid programmes and the ex-ante evaluations of the countries National Development Plans (NDPs). Many countries have now established specially-designated evaluation units and adopted extensive programmes of evaluation activity, in order to learn as much as possible from the current of programmes and to prepare for the next round of programming, e.g. in the Czech Republic. At the same time, programme evaluation is an area of potential weakness, mainly due to the limited experience and lack of qualified evaluators. Pressures on nascent evaluation structures are likely to increase in the future. First, finding enough evaluators could be a problem, particularly in smaller Me mber States, where everyone in the Structural Funds community in the country knows everyone else. Second, evaluators are likely to face the prospect of presenting controversial assessments of high status, high profile programmes. Third, 23

the quality of evaluations could be negatively affected by weaknesses in monitoring systems and evaluation experience. Finally, problems could be encountered with ensuring that evaluations play a constructive role in improving programmes. Relevant authorities have to be prepared to feed into the evaluation process, as opposed to taking a defensive stance against evaluators, and authorities have to be sufficiently flexible and open to acknowledging the results of evaluation.

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D. EU funds for the financial period 2007-2013

Olesea SIRBU Center for Studies in European Integration Academy of Economic Studies of Moldova Chisinau, Republic of Moldova

EU's funding structure and the associated instruments and programmes have been modified for the new 2007-2013 budgetary period. While some of the previous programmes will continue to run in this new period, some programmes have been merged for simplification and some entirely new ones have been launched. EU provides financial aid for all types of organisations including -companies, public bodies, universities and NGOs situated mainly in the Member States, however certain programmes target also Non-Member States. Small, medium and large sized projects can be financed by the EU in various fields from agriculture to education, from environment to transport. This section introduces the funding opportunities of the EU for the 2007-2013 financial period structured in five categories: A. Pre-Accession Assistance: EU provides funding for candidate countries and potential candidate countries in order to support their efforts to enhance political, economic and institutional reforms. This comprises a broad range of financial support for various types of projects in the fields of agriculture, environment, transport, IT, human rights, civil society, media, etc. B. External Assistance: EU's external assistance target other countries than the Member States and aims to support various types of reforms, political and economic stability, as well as countries or regions in crisis. C. Regional Assistance: The regional assistance accounts for a larger portion of the expenditures and finances regional development within the Member States in order to obtain economic and social prosperity and to reduce the gaps in development between regions.

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D. Natural Resources: The Natural Resources section comprises several funding opportunities in the fields of agriculture, rural development, environment and fisheries. E. Community Programmes: EU provides financial assistance through various community programmes in a broad range of fields such as research, competitiveness and innovation, media, education, health, youth, culture, etc. Different organisations, bodies and companies from all Member States can participate, as well as participants from NonMember States according to their agreements with the EU.

A. Pre-Accession Assistance

The European Union provides specific targeted financial aid for Acceding Countries, Candidates and Potential Candidate Countries in order to support their efforts to enhance political, economic and institutional reforms. This implies a broad range of Community funding for various types of projects in the fields of agriculture, environment, transport, IT, human rights, civil society, media, etc. This section presents the structure of EU Pre-Accession Assistance in the 2007-2013 budgetary period by focusing on the new funding instruments, as well as the instruments that continue to exist. Funding is available through the following instruments: IPA - Instrument for Pre-Accession Assistance Period: 2007-2013 Budget: EUR 12 900 million The Instrument for Pre-Accession Assistance is designed to create a single framework and to unite under the same instrument both Candidate and Potential Candidate Countries, thus, facilitating the transfer from one status to another. IPA replaces the 2000-2006 pre-accession financial instruments PHARE, ISPA, SAPARD, the Turkish pre-accession instrument, and the financial instrument for the Western Balkans; CARDS. The main objectives of IPA are; Strengthening democratic institutions

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Promotion and protection of human rights and fundamental freedoms and enhanced

respect for minority rights Development of civil society Regional and cross-border cooperation

In accordance with its objectives, IPA comprises five components: a. Transition Assistance and Institution Building b. Cross-Border and Regional Co-operation c. Regional Development Component d. Human Resources Development Component e. Rural Development Component Candidate Countries Croatia, Turkey, and the Republic of Macedonia benefit from all the five components, the last three of which aim at preparing them to manage EU funds after accession. Potential Candidate Countries Albania, Serbia, Montenegro, and Bosnia and Herzegovina are eligible for the first two components of IPA, which concentrate on institution building, in particular to strengthen the Copenhagen political criteria, enhance administrative and judicial capacity and encourage some alignment with the acquis communautaire. Types of assistance under IPA will include finance investments, procurement contracts, grants, including interest rate subsidies, special loans, loan guarantees and financial assistance, budgetary support, and other specific forms of budgetary aid, and the contribution to the capital of international financial institutions or the regional development banks. Any natural or legal person based in the eligible countries (under the eligible component) will be able to apply for funding under IPA. TAIEX - Technical Assistance and Information Exchange Instrument Period: 1996Budget: NA (Technical assistance is provided free of charge upon the approval of the request by the TAIEX Head Office) The aim of TAIEX is to provide to the New Member States, acceding countries, candidate countries, and the administrations of the Western Balkans, short-term technical assistance, in line with the overall policy objectives of the European Commission, and in the

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field of approximation, application and enforcement of EU legislation. Assistance is also provided to those countries included in the EU's European Neighbourhood Policy, as well as Russia. The main objectives of TAIEX are defined as: To provide technical assistance and advice on the transposition of the acquis communautaire into the national legislation of beneficiary countries and on the subsequent administration, implementation and enforcement of such legislation. To provide technical training and peer assistance to the officials of the administrations of the 10 New Member States who remain beneficiaries of TAIEX assistance To provide programmed technical assistance to the countries of the Western Balkans To be an information broker by gathering and making available information on the Community Acquis To provide database tools for facilitat ing and monitoring the approximation progress as well as to identify further technical assistance needs.

The following countries are eligible for funding under TAIEX: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic, Slovenia Bulgaria, Romania Republic of Croatia, Republic of Macedonia and Turkey Turkish Cypriot Community in the northern part of Cyprus Bosnia and Herzegovina, Republic of Albania, Serbia and Montenegro and Kosovo (as defined in UN Security Council Resolution 1244 of 10 June 1999) Morocco, Algeria, Tunisia, Syria, Lebanon, Libya, Egypt, Jordan, Israel, the Palestinian Authority, Moldova, Ukraine, Belarus, Armenia, Azerbaijan, Georgia Russia The main areas covered by TAEIX: Agriculture - veterinary and phytosanitary legislation and rural development etc 28

 Freedom, Liberty and Security - judicial co-operation in criminal &law latters, organised crime, fight against money-laudering, human traffcking, environmenal crime, vehicle crime, asylum and migration issues etc Internal market - customs, public procurement, state aids, social policy, patent, trade markets, health and saftey in workplaces etc Transport, Energy and Environmental Sectors - maritime and aviation saftey, energy data management, waste package rules and noise legislation, environmental liability, road transport, groundwater medelling etc The following bodies make up the target group for funding under TAIEX: Civil servants working in public administrations Civil servants working in administrations at sub-national level and in associations of local authorities Members of Parliaments and civil servants working in Parliaments and Legislative Councils Professional and commercial associations representing social partners, as well as representatives of trade unions and employers associations Judiciary and Law Enforcement authorities Interpreters, revisers and translators of legislative texts. Types of assistance under TAIEX include: 1. Experts sent to a beneficiary country 2. Study visits to understand how Member States deal with practical issues 3. Seminars and Workshops to present and explain issues 4. Training to provide necessary technical skills 5. Monitoring and analysis of progress 6. Database and information products 7. Translation 29

TAIEX's Official website: www.taiex.cec.eu.int TWINNING Period: 1998 Budget: EUR 157 million / year The Twinning programme aims to help beneficiary countries in building their institutional and administrative capacity to implement the acquis communautaire to the same standards as Member States. Twinning provides the framework for administrations and semipublic organisations in the beneficiary countries to work with their counterparts in Member States. Together they develop and implement a project that targets the transposition, enforcement and implementation of a specific part of the acquis communautaire. The main feature of a Twinning project is that it sets out to deliver specific and guaranteed results and not to foster general co-operation. It involves the secondment of experts from the Member States to the administrations of the candidate countries and within limits, to the administrations of potential candidate countries. Twinning can only work, if the Beneficiary Country is fully determined to carry out the reforms and reorganization needed in accordance with the policy priorities set in the context of enlargement or other fields of co-operation with the EU. The key features of the Twinning programme are; 1. Projects are built around jointly agreed EU policy objectives 2. Beneficiary country retains ownership of the project 3. Projects yield concrete operational results linked to adoption of the EU acquis 4. Projects involve a peer-to-peer exchange of hands-on public sector expertise and experience 5. Projects are genuine partnerships fostering close co-operation EU Member States, Acceding Countries, Candidate Countries and Potential Candidate Countries are the target countries for the Twinning programme. Local and regional authorities, training centers, federations and unions are eligible for funding. Twinning's website: www.ec.europa.eu/enlargement/financial_assistance/institution_building/twinning_en.htm 30

B. External Assistance

The protection of European citizens, and the stability and prosperity of countries beyond the EU borders is of crucial importance. In view of this fact, the EU has been one of the major actors in international co-operation and development assistance, as well as a major donor in the world as far as humanitarian aid is concerned. This section presents the structure of EU External Assistance in the 2007-2013 budgetary period by focusing on the new funding instruments, as well as the instruments that continue to exist. Funding will be available through the following instruments: Instrument for Cooperation with Industrialised Countries

Period: 2007-2013 Budget: EUR 172 million The instrument for cooperation with industrialised and other high-income countries and territories (ICI) aims to strengthen the Community's relationships with other developed countries. The rational behind is to develop long lasting political and trading ties, which is especially important in an increasingly globalised era and strengthen the EU's role as a global player. Objectives: The ICI programme supports economic, financial and technical cooperation with industrialised and other high-income countries with the aim to develop the Community's relations with these countries and to foster the Community's interests. Actions undertaken within the frame of ICI should contribute to develop and consolidate the principles of democracy, the rule of law, good governance, respect for human rights and fundamental freedoms. In order to promote cooperation with other developed countries, the EU has concluded a vide range of cooperation agreements covering subjects that are of mutual interest. Following cooperation actions are financed by the ICI: Promotion of cooperation, partnership and joint undertakings between economic, academic and scientific actors in the EU and the partner countries Stimulation of bilateral trade, investment flows and economic partnership 31

 Promotion of dialogues between political, economic and social actors and NGOs Promotion of people-to-people links, education and training programmes and intellectual exchanges and enhancement of mutual understanding between cultures and civilisations Promotion of cooperative projects in the areas of research, science and technology, energy, transportation and environmental matters The enhancement of awareness about and understanding of the European Union and of its visibility in partner countries Support for specific initiatives, including research work, studies, pilot schemes or joint projects Implementation The Commission draws up multi-annual cooperation programmes on the basis of which annual action programmes are adopted. The annual action programmes describe the operations to be financed, the amount and gives an indicative timetable. Funding is available through grant agreements (including scholarships), procurement contracts, employment contracts and financing agreements. The following 17 countries are eligible for funding under the ICI: Australia, Bahrain, Brunei, Canada, Chinese Taipei, Hong-Kong, Japan, Republic of Korea, Kuwait, Macao, New Zealand, Oman, Quatar, Saudi Arabia, Singapore, United Arab Emirates, United States. DCI - Development Cooperation and Economic Cooperation Instrument Period: 2007-2013 Budget: EUR 16.897 million Development Cooperation Instrument is financing the European Community development cooperation policy, which aims to reduce poverty, strive for sustainable economic and social development as well as a gradual integration of development countries into the world economy. The instrument is implemented through geographic and thematic programmes and provides support to 18 countries in Latin America, 29 in Asia, 5 in Central Asia, 5 in the Middle East and South Africa. The Geographic programmes support the development of and reinforce the cooperation with countries and regions in Latin America, the Middle East and South Africa. Thematic programmes complement the Geographical Programmes and supports projects that

32

are not geographically specific mainly in developing countries. The overall objective is to eliminate poverty in partner countries and regions and help them to reach the Millennium Development Goals.

This should be achieved through cooperation aiming to: Support democracy, the rule of law, human rights and fundamental freedoms, good governance, gender equality and related instruments of international law Foster the sustainable development by all aspects; political, economic, social and environmental Promote partner countries smooth and gradual integration into world economy Help develop international measures to preserve and improve the quality of the environment and the sustainable management of global natural resources, in order to ensure sustainable development Reinforce the relationship between the Community and partner countries and regions Sugar Protocol Countries - The 18 countries from Latin America and Africa that are affected by the reform of the Common Market Organisation for sugar should also be provided and aim at supporting their adjustment process. Thematic programmes The thematic programmes complement the geographical programmes in DCI, in ENPI and cooperation activities under the European Development Fund. They address specific activities of interest for a group of countries that is not determinate by geography. Thematic programmes also serve to help to develop Community policies externally and to ensure sectorial consistency and visibility. Investing in people Environment and sustainable management of nat ural resources, including energy Non state actors and local authorities in development Food security

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 Migration and asylum Implementation For the implementation of geographical programmes, the Commission draws up strategy papers in dialogue with the partner country. The strategic paper serves as a base for the development of multiannual indicative programmes, which is adopted for each partner country or region. The thematic programmes are implemented on the base of strategy papers and annual action programmes drawn up by the Commission for each partner country or region Budget allocation Of the total budget of 16.897 million euro, the Geographical Programmes have been allocated 10.057 million euro, the Thematic programmes 5.596 million euro and the support to the Sugar Protocol countries amounts to 1.244 million euro.

Financing instrument for the promotion of democracy and human rights worldwide Period: 2007-2013 Budget: EUR 1 104 000 000 The financial instrument for the promotion of democracy and human rights worldwide is new created instrument supports the promotion, development and consolidation of democracy and the rule of law as well as the respect for human rights. It aims to contribute to an increased respect for human rights and fundamental freedoms and to promote democratic reforms in third countries through support to civil society organisations support. Furthermore to support and enhance the international framework for the protection, promotion and monitoring of human rights, the promotion of democracy and the rule of law and reinforce an active for civil society within these frameworks. This instrument is implemented through Strategy papers setting out the priorities and specific objectives and through Annual Action Programmes which are based on the Strategy papers. In case of exceptional circumstances, the Commission can adopt Special measures which are not included in the Strategy papers. Funding is also available by Support measures and Ad hoc

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measures. Ad hoc measures are used to support human right defenders responding to urgent needs. Funding under this instrument is awarded to the following types of activities: Projects and programmes Grants to projects submitted by international and regional intergovernmental

organisations Grants to human rights defenders to finance urgent protection measures Grants to support operating costs of the Office of the UN High Commissioner for Human Rights Grants to support operating costs of the European Inter-University Centre for Human Rights and Democratisation Following types of entities are eligible for funding Civil society organisations Public sector non profit agencies, institutions and organisations and networks at a local, regional and international level National, regional and international parliamentary bodies International and regional inter-governmental organisations Natural persons when it is necessary for the achievement of this instruments objectives Exceptionally even other bodies and actors can receive funding if it is justified in order to achieve the objectives of this instrument

ENPI - European Neighbourhood and Partnership Instrument Period: 2007-2013 Budget: EUR 11 181 million The ENPI will target to achieve sustainable development and will introduce a radical change in supporting cross-border cooperation along the EU's external borders. The main objective is to avoid new dividing lines. The ENPI will replace MEDA and TACIS and other existing instruments 35

such as the European Initiative for Democracy and Human Rights (EIDHR). The ENPI is a policy driven instrument. The framework of this instrument is provided by the existing bilateral agreements between the EU and the neighbouring countries. It will focus on supporting the implementation of the European Neighbourhood Policy (ENP) Action Plans. It will go beyond promoting sustainable development and fighting against poverty: progressive participation in the EU's internal market. Legislative approximation, regulatory convergence and institution building will be supported through exchange of experience, long-term twinning arrangements with Member States or participation in Community programmes. Following countries are concerned by funding from ENPI: MEDA countries: Algeria, Egypt, Gaza/West Bank (Palestine Authority), Israel, Jordan, Lebanon, Morocco, Syria,* Tunisia, Libya,* Turkey NIS countries: Ukraine, Belarus*, Moldova, Georgia, Azerbaijan, Armenia * The full benefits of the European Neighbourhood Policy cannot currently be extended to Belarus, Libya or Syria. Belarus and the EU will be able to develop contractual relations when Belarus has established a democratic government, following free and fair elections. Libya would need to first become part of the Barcelona Process before having an Association Agreement and eventually an ENP Action Plan. For Syria, the Association Agreement would have to be ratified before an ENP Action Plan could be considered. A specific and innovative feature of the European Neighbourhood Partnership Instrument (ENPI) is its Cross-Border Cooperation (CBC) component. Under this component, the ENPI will finance joint programmes bringing together regions of Member States and partner countries sharing a common border. This component will be co-financed by the European Regional Development Fund (ERDF) . An estimated amount of EUR 233 million per year (in 2004 prices) will be allocated from ERDF to CBC between the Member States and neighbour countries covered by the ENPI and by the IPA. Types of actions under ENPI-CBC should center on the following four axes: Promoting sustainable economic and social development in border areas Working together to address common challenges Ensuring efficient and secure borders

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 People-to-people cooperation More information: www.ec.europa.eu/world/enp/funding_en.htm Instrument for Stability Period: 2007-2013 Budget: EUR 2 062 million Instrument for Stability is designed to provide an adequate response to instability and crises and to longer term challenges with a stability or security aspect. It will be complementary to the IPA, ENPI and the DCECI , and will provide assistance to establish the necessary conditions for the implementation of the policies supported by these three instruments. The Instrument for Stability will be an effective, immediate and integrated response to situations of crisis and instability in third countries. The Instrument for Stability will: Address global and regional trans-border challenges with a security or stability dimension arising in third countries, including issues such as nuclear safety, as well as the fight against trafficking, organised crime and terrorism and unforeseen major threats to public health Enable the Community to deliver a timely response to future urgent policy challenges faced by the Union, by piloting measures unforeseen under the three policy-driven instruments, until such time as they can adequately be integrated within the policy framework of those instruments The target groups for the Instrument for Stability are: Partner countries and regions and their institutions Decentralised bodies in the partner countries (e.g. regions, departments, provinces and municipalities) Joint bodies set up by the partner countries and regions and the Community International organisations (regional organisations, UN bodies, departments,

international financial institutions) and development banks

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Humanitarian Aid Period: NA Budget: NA The European Commission Directorate-General for Humanitarian Aid (DG ECHO) is responsible for managing funds provided by the EU for humanitarian assistance to victims of conflicts or disasters (both natural and man-made) in countries outside the EU. The purpose is to save and preserve life, reduce or prevent suffering in non-EU countries hit by humanitarian crises. DG ECHO is committed to providing this assistance solely on the basis of needs. DG ECHO pays special attention to cross-cutting issues such as the link between emergency and development aid, disaster preparedness, HIV/AIDS and children. To make sure that DG ECHO's operations are driven by needs, DG ECHO's work programme is based on a global needs assessment (GNA) methodology. This provides a cross-country assessment comparing the situation across some 130 developing countries on the basis of nine humanitarian indicators: Human development Human poverty Natural disaster risk Conflicts Refugees Internally displaced persons (IDPs) Malnutrition Mortality Other donors' contributions

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Macro Financial Assistance Period: 1990 Budget: NA Macro-financial assistance (MFA) supports the political and economic reform efforts of the beneficiary countries and is implemented in association with support programmes from the IMF and the World Bank. It has promoted policies that are tailored to specific country needs with the overall objective of stabilising the financial situation and establishing market-oriented economies. MFA typically offers long-term loans, but in some cases has been made available as a grant or as a combination of loan and grant. It has also been combined with PHARE, TACIS or CARDS programmes to strengthen the capacity of institutions that were essential to the success of the necessary structural reform measures. EC macro-financial assistance concentrates in the Balkan countries (Albania, Bosnia and Herzegovina, and Serbia and Montenegro) particularly those that formerly comprised the Republic of Yugoslavia. Elsewhere, the Council decided on operations for some Newly Independent States (Ukraine, Belarus, Armenia, Azerbaijan, Tajikistan, Kazakhstan, Georgia, Tajikistan, Kyrgyz Republic, Moldova, Russia) and a few countries of the Mediterranean, a region that also receives other forms of macroeconomic support from the EU, notably under the MEDA Structural Adjustment Facilities.

European Development Fund Period: 2008-2013 Budget: EUR 22 700 million The European Development Fund (EFD) was established in the Treaty of Rome as a way for Member States to provide financial assistance to their former African colonies. The objective of the Fund is to provide support and funds to improve the economic and social situation in the African, Caribbean and Pacific (ACP) States and those Overseas Countries and Territories (OCTs) with EU connections, focusing on fighting poverty and spurring development.

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The main aim is to encourage economic, political, cultural and social development of the ACP countries by promoting peace, security and democratic principles. The partnership lays down the main objectives of sustainable development and poverty reduction, by integrating ACP countries into the world economy. Achieve economic growth Support human and social development Promote cultural values of communities Support institutional reforms Ensure environemental sustainability Reinforce gender issues Help institutional development and capacity building

Each ACP country prepares a Country Strategy Paper describing how the EDF Funds will be used; the funindng priorities will vary depending on the Country Strategic Paper. The National Authorising Officier manages the funds. EDF is implemented via grants, the size and maximum cofinancing rate is country specific. The European Development Fund provides grants that last for five years and can be extended to provide long-term support, particularly in the fight against poverty. The European Development Fund's resources is actually not based on the Community budget and this the EDF has its own set of rules. Every five years Member State's representatives pledge their contribution from their public funds and the Commission then manages the Fund. Since Member States have their own development and aid policies in addition to the Union wide policies, the Member States must coordinate their policies with the EU to ensure they are complementary.

Alan Period: 2002-2010 Budget: EUR 75 million 40

The Alan Programme is run together by the EuropeAid Co-operation office of the European Commission and a group of 45 EU Universities and Higher Education Institutions with the goal of building cooperation between the EU and Latin America in the field of Higher Education. The programme name is an acronym in Spanish and Portuguese that stands for "Latin America, High Level Scholarships," as the programme grants two types of Scholarships for Latin American citizens to study or train in the EU: 1. Postgraduate education scholarships for qualified Latin American students to obtain a Masters or Doctorate education at an university or educational institution in the EU in all subject areas outside of language study 2. Specialisation scholarship for experienced Latin American professionals to obtain professional training in the European Union for 6 to 18 months.

Besides building another link of cooperation between Europe and Latin America, the programme also aims to allow the young people of Latin America to experience the European educational system and culture in hopes of continuing the positive and close relationship between the two regions into the future. The scholarships and education abroad, will also allow the young people to improve their skills and thus positively impacting their career opportunities and impact on Latin American economies. To be eligible for the Postgraduate scholarship, participants must fulfil the following requirements and submit an application online on the Alan website: Citizen of Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela, having lived there since September 1st, 2005 Completed the required educational requirements for their programme of choice and have the support of one of the institutions recognized by the Alan programme Be accepted to study at a educational institution in the EU Explain how they plan to use their education or training in their home country upon completion of the programme

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To be eligible for the specialisation scholarship, participants must fulfil the following requirements and submit an application online on the Alan website: Citizen of Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela, having lived there since September 1st, 2005 Possess at least 7 years professional experience and currently working at a recognised public or private organisation in one of the Latin American countries listed above Explain how they plan to use their education or training in their home country upon completion of the programme After the participants return home, they can continue to share and live their experiences with other Alan participants as well as ALFA alumni and participants of other Latin AmericanEurope co-operation programmes through the Alumni network.
C. Regional Assistance

More than a third of the budget of the Union is devoted to regional development and economic and social cohesion through a series of European funds. The objective of EU funding under regional policy is to promote solidarity and to reduce the gaps in development among the regions and disparities among the citizens in terms of well-being. Regional assistance aims to help lagging regions to catch up, restructure declining industrial regions, diversify the economies of rural areas with declining agriculture and revitalise declining neighbourhoods in the cities. It sets job creation as its primary concern and it seeks to strengthen the economic, social and territorial cohesion' of the Union. The three new objeectives for the period 2007-2013 are: Convergence: Support emplyment and job creation in the Member States and least developed regions Regional competitiveness and employment: Anticipate and encourage the changes in a globalised world European territorial cooperation: Ensure a harmonius and balanced development throughout the entire Union This section presents the structure of EU Regional Assistance, namely the Structural Funds and the Cohesion Fund, in the 2007-2013 budgetary period. 42

Funding will be available through the following instruments: European Regional Development Fund (ERDF) Period: 2007 - 2013 Budget: NA The ERDF contributes to the financing of assistance towards the reinforcement of economic, social and territorial cohesion by reducing regional disparities and supporting the structural development and adjustment of regional economies, including the conversion of declining industrial regions. The ERDF will focus on financing in the following areas: Productive investment Infrastructure Other development initiatives including services to enterprises, creation and development of financing instruments such as venture capital, loan and guarantee funds and local development funds, interest subsidies, neighbourhood services, and exchange of experience between regions, towns, and relevant social, economic and environmental actors Technical assistance The type and range of actions to be financed within each priority shall reflect the different nature of the Convergence , Regional competitiveness and Employment and European Territorial Cooperation objectives. Under the Convergence objective, the ERDF shall focus its assistance on supporting sustainable integrated regional and local economic development by mobilising and strengthening endogenous capacity through programmes aimed at the modernisation and diversification of regional economic structures, primarily in the following areas: R&D in technology, innovation and entrepreneurship Information technology Environment Risk prevention

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 Tourism Investment in transport Energy Education Health Direct assistance for investment in small businesses Under the Regional Competitiveness and Employment objective, the ERDF shall focus its assistance, in the context of regional sustainable development strategies, on the following priorities: Innovation and the knowledge economy, through support to the design and

implementation of regional innovation strategies conducive to efficient regional innovation systems Environment and risk prevention Access, outside major urban centres, to transport and telecommunication services of general economic interest ERDF assistance under the European Territorial Cooperation objective also targets three key areas: Developing cross-border economic and social activities through joint strategies. This mainly involves encouraging entrepreneurship, collaboration in the field of environmental protection, and reducing isolation. The Fund can also help promote the integration of cross-border labour markets, local employment initiatives, equal opportunities, training and measures to combat social exclusion, as well as the sharing of human resources and facilities for technology R&D Establishing and developing transnational cooperation, including bilateral cooperation between maritime regions. Priorities will be managing water resources, improving accessibility, risk prevention and creating science and technology networks Making regional policy more effective, i.e. encouraging regional and local authorities to form networks and share know-how 44

The eligible countries for funding under ERDF are the EU Member States (EU 27). Regional Policy- Info Regio: www.ec.europa.eu/regional_policy/index_en.htm

European Social Fund (ESF) Period: 2007 - 2013 Budget: NA The European Social Fund (ESF) is the EU's financial instrument for investing in people. The ESF channels European funds into helping Member States meet the goals they have agreed together to create more and better jobs. Its mission is to help prevent and fight unemployment, to make Europe's workforce and companies better equipped to face new challenges, and to prevent people losing touch with the labour market. The ESF provides support for anticipating and managing economic and social change. It will be implemented in line with the European Employment Strategy and will focus on four key areas: Increasing adaptability of workers and enterprises Enhancing access to employment and participation in the labour market Reinforcing social inclusion by combating discrimination Facilitating access to the labour market for disadvantaged people, and promoting partnership for reform in the fields of employment and inclusion As one of the EU's two Structural Funds the other being ERDF the ESF aims to reduce the differences in living standards between the people and the regions of the EU by pursuing the following Objectives: Convergence objective aims to strengthen human resources so as to increase employment prospects, boost labour productivity and stimulate growth, as well as to support good governance and the strengthening of the institutions and administrative capacities. Regional Competitiveness and Employment objective - the actions will concentrate on the ability of workers and firms to adapt to change, access to job market, social inclusion of the most disadvantaged, fight against discrimination and development of partnerships and networks for employment and social inclusion. 45

The ESF will finance up to 75% of public spending in areas covered by the "Convergence" objective and 50% in those covered by "Regional competitiveness and employment". The eligible countries for funding under ERDF are the EU Member States (EU 27).

Cohesion Fund Period: 2007 - 2013 Budget: EUR 61.6 billion The Cohesion Fund is a structural instrument that helps the less developed Member States to reduce economic and social disparities and to stabilise their economies. The assistance is focused to cover major transport and environmental protection infrastructures. The Cohesion Fund supports the following types of projects: a) Environment projects helping to achieve the objectives of the EC treaty and in particular projects in line with the priorities conferred on Community Environmental policy by the relevant Environment and Sustainable Development action plans. The Fund gives priority to drinking-water supply, treatment of wastewater and disposal of solid waste. Reforestation, erosion control and nature conservation measures are also eligible. In this context, the Fund may also intervene in areas related to sustainable development which clearly present environmental benefits, namely energy efficiency and renewable energy and, in the transport sector outside the trans-European networks, rail, river and sea transport, intermodal transport systems and their interoperability, management of road, sea and air traffic, clean urban transport and public transport. b) Transport infrastructure projects establishing or developing transport infrastructure as identified in the Trans-European Transport Network (TEN-T) guidelines (railways, road traffic, inland waterways, civil air transport, etc.). The priority measures concern: Completion of the connections needed to facilitate transport Optimization of the efficiency of existing infrastructure Achievement of interoperability of network components

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 Integration of the environmental dimension in the network The eligible countries for Cohesion Fund are the least prosperous Member States of the Union whose gross national product (GNP) per capita is below 90% of the EU-average. This currently includes the 12 new Member States as well as Greece and Portugal. INITIATIVES: Jeremie Period: 2007 - 2013 JEREMIE is a joint initiative by the European Commission and the European Investment Fund, created to support improved access to finance for Small and Medium Sized Enterprises (SME) and development of micro-credit in regions supported by the European Regional Development Fund. It aims to enable EU Member States and Regions to use their structural fund allocations more efficiently and flexibly. JEREMIE is the acronym for Joint European Resources for Micro to Medium Enterprises. The JEREMIE initative foresees 3 main financial instruments: Advisory and technical assistance Equity and venture capital Guarantees (both for micro credit and SME loans) The JEREMIE imitative aims to: Increase funding opportunities for business development through loans, equity, venture capital, guarantees and technical assistance Improve national and regional cooperation to allow for better management of public resources and exchange of good practices Improve the use of public resources under EU-programmes. The initiative also allows for national and regional authorities can to utilize funds from the European Regional Development Fund (ERDF) as market- driven financial instruments, rather than just offering grants. Therefore, the fund can be reinvested several times, thereby improving smaller companies access to finance.

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During the preparatory phase from 2006 to 2007, the European Investment Fund and the Commission evaluated the access to financial capital in the regions, utilizing during the preparation of operational programmes for the 2007-2013 period. How does JEREMIE function? The Member States are responsible for the implementation of the programmes and they have to select a holding fund. The Member State and the holding fund must sign a funding agreement specifying the terms and conditions. The Jeremie holding fund conducts an open call for expression of interest offering concerned financial intermediaries the possibility to participate in the imitative. The call for expression is open for at least the first half of the programming period. The holding fund chooses and accredits the intermediaries before providing equity, guarantees or loans to the accredited financial intermediaries. The financial intermediaries then make these equity, loans or guarantees available to Micro, Small and Medium Sized Enterprises. Special emphasis is given to technology transfer, start-ups, technology, innovation and micro credits. The financial intermediaries monitor the investments. The reimbursement of loans and resources returned to the holding fund are reused by the Member State for the benefit of micro to medium enterprises. The reuse of resources is a key point in improving the access to finance for small enterprises. Jessica Period: 2007 - 2013 JESSICA is a joint initiative for financing sustainable urban development, operated by the European Commission in cooperation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB). JESSICA aims to coordinate their approach with the objective of providing financing for urban renewal and development actions as well as for social housing, using a combination of grants and loans. JESSICA is the acronym for Joint European Support for Sustainable Investment in City Areas. The EIB and CEB have been financing urban development through different types of loans. Within JESSICA, target loans will complement public resources (Community and national) for actions within the Operational programmes supported by the Structural Funds. By 48

coordinating the approaches from the two banks and the Commission, Jessica aims to help the authorities in the Member States efficiently use public resources from national and Community sources. The Operational Programmes financed by the Structural Funds and the Cohesion Fund are negotiated between the national or regional authorities and the Commission before the programmes are adopted. These Operational Programmes contain, when necessary, urban development and renewal plans. When these plans already exist, the EIB and CEB will identify projects that are eligible for their support or for support from other financial sources, including private sector contributions. How JESSICA functions: The initiative allows for two possible management options: In the first option, a managing authority launches a call for expression to development funds. A funding agreement will then be signed between the managing authority and the selected urban development fund. The urban development fund then provides public private partnerships and other urban projects with loans, equity or guarantees. The second possibility is that Jessica is organised through holding funds. Holding funds are those investing in more than one urban development fund, provides them with equity, loans or guarantees. Also in this case, a funding agreement is signed between the Member State and the Holding Fund. The urban development fund then provides public private partnerships and other urban projects with loans, equity or guarantees. The JESSICA initiative allows managing authorities the possibility of providing funding for public-private partnership or other urban development projects that are capable of repaying in the long-term. JESSICA is also expected to: Attract contributions from international financial institutions, banks, the private sector, thereby achieving greater leverage from scarce grant resources. JESSICA also allows managing authorities access to expertise as well as greater accessibility to loans in the field of urban development. Jasper Period: 2007 - 2013

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JASPERS, an acronym for " Joint Assistance to Support Projects in European Regions, is a technical assistance partnership to prepare major projects between the Regio Directorate General, the European Investment Bank (EIB) and the European Bank for Rural Development. JASPERS will provide a pool of expertise, free of charge, to assist structural fund managing authorities with the preparation of major projects. The assistance covers the technical, economic and financial aspects and is available from the early stages of project preparation. JASPERS' main aim is to ensure high quality projects and to increase the impact of fund transfers on growth and jobs. By using JASPERS, project managers should be able to secure additional sources of funding. For administrative purposes however, JASPERS is considered a unit within the EIB. JASPERS will focus on projects supported by the Cohesion Fund and the ERDF, and mainly on the sectors most likely to receive assistance, such as roads, rail, public transport, water supply, waste water treatment and solid waste but other types of projects will not be excluded. JASPERS is provided free of charge and Member States are not required to take part in JASPERS. Those Member States, which do participate in Jasper, are also not required to borrow from the EIB or the EBRD. Furthermore, both the EIB and the EBRD can choose not to lead JASPERS' projects. Regions for Economic Change Period: 2007 - 2013 Budget: EUR 375 million The Regions for Economic Change is a new initiative encouraging regions and cities to test best practices for increasing competitiveness and economic modernisation. Falling under the European Territorial Co-operation Objective, the initiative Regions for Economic Change will work alongside the two existing instruments of the European Regional Policy- the Interregional Co-operation and the Urban Development network programmes, setting economic development themes to encourage economic modernisation. In addition to linking European Cohesion Policy with the renewed Lisbon Agenda, the initative further support the Community's strategic guidelines on cohesion by establishing a voluntary network for regions, Member States and regions to share effective development schemes.

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Structure Regions for Economic Change consists of four components to encourage projects for economic modernisation and competitiveness Fast Track Option Two-way bridge approach Consistent and open communication network Themes for action In addition to providing cities and regions the initiative to start networks, the fast track option gives the Commission initiative to develop networks. Working with Member States, the Commission decides a theme, establishes a network around this theme and encourages regions and cities to join, for which the Commission oversees the projects implemented by the network. In return for joining the network, the participating regions and cities may utilize the Commission for advice and expertise regarding testing and evaluating best practices as well as receive administrative support if needed. The two-way bridge provides for the follow of ideas and examples throughout the Union by allowing regions to submit examples of best practice for possible distribution to other Member States. The bridge also refers to the connection regions, Member States and cities make between their Regions for Economic Change network and regular programmes, to allow for the Regions for Economic Change ideas and effective tactics to reach other States through mainstream programmes. A key component of the Regions for Economic Change is an effective and open communication network to share ideas, information and best practices. The Regions for Economic Change will also hold seminars and create publications to spread best practices and information as well as hold a yearly conference analyzing progress made towards economic modernisation and thus the Lisbon objectives. During the conference, annual innovation awards will be handed out to exemplary projects from each theme, as another way of communicating effective projects and ideas. While Member States and regions may decide a theme to steer their actions, the Commission provides four thematic options:

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 Improve Member States, cities and region's attractiveness and accessibility while preserving the environment Innovation, entrepreneurship and knowledge Creation of more and higher quality jobs Improve the growth potential and allow for equal regional development
D. Natural Resources

With an aim to contribute to the attainment of the objectives of the Common Agricultural Policy (CAP), the Common Fisheries Policy (CFP), and the Community environment policy, the European Union allocates a significant share of the total Community budget.

This section presents the newly structured financial assistance in support of agriculture, fisheries and environment fields for the 2007-2013 budgetary period. Funding will be available through the following instruments:

European Agricultural Guarantee Fund (EAGF) Period: 2007-2013 Budget: NA The financial system for the Common Agriculture Policy has been simplified and brought into a new single legal framework establishing two funds the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development ( EAFRD). These two funds replace, from 2007, the European Agricultural Guidance and Guarantee Fund. The EAGF finances expenditure origin from application of the market and price policy. The Commission and the Member States manage these expenditures jointly. Direct payments to farmers under the CAP Refunds for export to third countries granted under the Common Organisation of Markets (CMO) Intervention payments to regularise agricultural markets 52

 Certain informational and promotional measures It also finances measures, which are not strictly related to the management of agricultural markets. The Commission manages these expenditures centrally. Specific veterinary and plant health measures, inspections of food stuffs and animal feed, animal disease eradication and control programmes Instruments intended to provide information on the common agricultural policy including evaluation actions Promotion of farm production Measures to conserve, characterise, collect and use genetic resources in farming Farm survey system Single payment scheme (SPS) The single payment scheme introduces an annual payment with the main aim of guarantying more stable incomes for farmers. The support is based on the entitlements from the 2000 - 2002 period (except for New Member States) and is granted to farmers who hold eligible hectares. Eligible hectares normally include all types of agricultural land except land used for permanent crops. This new system cuts the link between support and production and the main difference is that the aid no longer depends on the type of production. Since 2005 or 2006, this system applies to the majority of the common market organisations. The Member States could opt for a transitional period ending 1 December 2005 or 31 December 2006. To receive aid, the farmers must comply with the cross compliance standards, which mean they must prove that they keep their land in a good agricultural condition and they comply with public health, animal and plant health, the environment and animal welfare standards. If the farmer fails to comply with these rules, the direct payments may be reduced by 515 % and by at least 20 % in the longer run and the producer might be excluded from receiving aid. The farmers must also set aside part of their land, except land used for organic production or for materials not intended for human or animal consumption. The entitlements may be transferred, but only after the system is introduced and only within the Member States and in some cases only within regions. 53

The main reasons for the introduction of the Single Payment Scheme was to: Allow farmers to produce according to the market demand Promote environmentally and economically sustainable farming Simplify CAP application for farmers and administrators Strengthen the EU's position in WTO agricultural trade negotiations

European Agricultural Fund for Rural Development (EAFRD) Period: 2007-2013 Budget: EUR 96 billion European Agriculture Fund for Rural Development (EAFRD) is one of the two instruments financing the Common Agricultural Policy ( CAP) It will finance actions in the field of rural development in the Member States in line with the rural development plans submitted by each country. The main objectives of EAFRD are: Improvement of the competitiveness of agriculture and forestry by supporting reconstruction, development and innovation, Improvement of the environment and the countryside by supporting land management, Improvement of the quality of life in rural areas and encouraging the diversification of economic activities. EAFRD comprises four axes: Axis 1 Competitiveness. Measures aimed at promoting knowledge and improving human potential, and restructuring and developing physical potential and promoting innovation Axis 2 Land management. Measures aiming to improve the environment and the countryside including measures targeting the sustainable use of agricultural and forestry lands. Payment for Natura 2000 is included in this axis Axis 3 Wider rural development. Actions aiming to improve the quality of life in rural areas and the diversification of the rural economy

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Axis 4 Leader axis. The Leader approach is a bottom-up approach aiming to build local capacity for employment and diversification of the rural economy. It has a multi-sector design and the implementation of the strategy is based on the interaction between actors from different sectors of the local economy. Local action groups (LAGs) implement the local development strategy. Of these, the Leader axis will contribute to the priorities of the other axes and will also play an important role for improving governance and mobilising the endogenous development potential of rural areas. Eligible areas for funding under EARDF are all rural areas for the first three axes, and only selected territories under the Leader axis. European Fisheries Fund (EFF) Period: 2007-2013 Budget: EUR 4 963 million The European Fisheries Fund shall grant financial aid to the European fishery sector in order to reach the main objectives of the Common Fisheries Policy ( CFP) and to help the sector to adapt to the evolving needs. It will replace the Financial Instrument for Fisheries Guidance (FIFG) and promote a sustainable European fishery and aquaculture industry. EFF aims at strengthening the competitiveness and the viability of the operators in the sector, to promote environmentally friendly fishing and production methods and to foster sustainable development of fisheries areas. EFF has five priorities: Adapting fishing capacity and effort to available fish resources Supporting the various industry branches Aid for organizations, which represent the collective interest of the sector Sustainable development of fisheries-dependent areas Technical assistance to Member States to facilitate the delivery of aid As regards the implementation of the fund, each Member States establish a National strategic plan, which present an overall strategic vision and the medium term development policy of the fisheries and aquaculture sector. This plan covers all areas of CFP and forms the 55

background for actions selected to be financed by the EFF. The measures financed by the Fund, are parts of the National operational programmes submitted by each Member State. The Member States will decide how they allocate the financial support between the priorities of the fund. The Commission does the initial breakdown by Member state on the basis of the EFF regulation. This breakdown indicates separately the earmarked amounts for the Convergence areas. The methodology used for the allocation of funds to convergence areas is the same for all Structural Funds and based on historical shares of each fund compared to the overall envelope for all structural funds per Member State. For the non-convergence budget of the EFF, the Commission allocates it between Member States on the base of the objective criteria set out in the EFF regulation.

LIFE+ (Financial Instrument for the Environment) Period: 2007-2013 Budget: EUR 2 143 million LIFE+ aims to contribute to the implementation, updating, and development of Community environmental policy and legislation, and support the implementation of the 6th Environmental Action Programme. LIFE+ replaces the LIFE, Urban, NGO and Forest Focus programmes managed by DG Environment. LIFE+ comprises three components: LIFE+ Nature and Biodiversity: focuses on the implementation of the EU directives on the conservation of habitats and of wild birds, as well as further strengthening the knowledge needed for developing, assessing, monitoring and evaluating EU nature and biodiversity policy and legislation; LIFE+ Environment Policy and Governance: covers the other 6th EAP priorities besides nature and biodiversity, as well as strategic approaches to policy development, implementation and enforcement; LIFE+ Information and Communication: supports information dissemination and awareness raising activities, communication actions and campaigns, and organization of conferences and trainings.

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Public and/or private bodies, actors and institutions may receive financing through LIFE+. Member States, and provided that supplementary appropriations are received, the following countries are eligible to receive funding through LIFE+: (a) EFTA States which have become members of the European Environment Agency in accordance with Council Regulation (EC) No 933/1999 of 29 April 1999 amending Regulation (EEC) No 1210/90 on the establishment of the European Environment Agency and the European environment information and observation network (b) Candidate Countries to the EU (c) Western Balkan countries included in the Stabilisation and Association Process. Funding may be in the form of grant agreements or public procurement contracts. For action grants, the maximum rate of co-financing shall be 50%, whereas, the maximum co-financing rate for LIFE+ Nature and Biodiversity may be up to 75%.
E. Community Programmes

The Community Programmes are a series of integrated measures accepted by the European Commission aiming to strengthen the co-operation among the Member States regarding Community policies for a period of time. The Community Programmes are financed from the general budget of the Community. All Acceding and Candidate countries have the opportunity to participate in the programmes, although, as a main condition of participation, an annual fee has to be paid to the budget. Community Programmes can be tied to almost every Community policy. The Community decides on the type of programmes, their budgets and their durations. Any legal entity (sometimes individuals, too) can submit a proposal. The submission, evaluation and settlement of the accounts along with the full administration belong to the Administration of the Directorate Generals (DGs) of the European Commission. The proposals can be submitted in a consortium with the participation of minimum two or more organisations from the EU Member States (specified in the Calls for Proposals). The applicants are directly in contact with EC officers, from the submission till the closure of the project. However, each participating country opens a national programme office or agency (either within a competent Ministry or within a separate organisation) whose task is the collection of information and mediation in order to assist the national applicants. In some cases the national programme coordinators have higher responsibility and competence. 57

This section presents the Community Programmes for the 2007-2013 budgetary period through focusing on the new programmes, as well as the programmes that continue to exist. 1. Civil Protection Instrument 3. Customs 2007 5. eContentplus Programme 7. Erasmus Mundus 9. FP7 11. IDABC 13. LIFE + 15. Media 2007 17. Public Health 19. Security Liberties and Safeguarding Financial 2. CIP 4. Consumer programme 6. Culture Programme (2007-2013) 8. Europe for Citizens 10. Fiscalis 12. Fundamental Rights and Justice 14. Integrated Action in Lifelong Learning 16. Marco Polo II 18. Progress 20. Safer Internet plus 22. Solidarity and Management of Migration Flows Programme

21. Youth in Action

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Module II. European Business Environment

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A. Business Goals and Strategies on the European Market

Liviu MAHA, lecturer PhD. Centre of European Studies Alexandru Ioan Cuza University of Iasi, Romania

The business strategy is the process that defines the long and middle term goals of a company and the way these goals are accomplished.7 Although each European business has its own goals, they will always depend on things like: the nature, the structure and the size of the business, the mix of the products and the managers dynamism. At corporate level, the company begins its strategical planning process by defining the purpose and the general mission. This mission is then translated as detailed goals to achieve the mission, which lead the whole organization. The Strategy shows the way that should be followed in order to achieve a goal. In order to achieve this goal, every company must give an answer to 4 questions: what does this company want to achieve, why does it follow these goals, how does the company think that these goals are going to be achieved and when these goals are going to be achieved. Although there is no settled period, a strategy will always refer to a period between 1 and 5 years. To go further than 5 years is almost impossible because of the foreseeing and anticipation difficulties of the economic evolution (some people consider that the anticipations accuracy will be lost if a strategy is elaborated for a period longer than 2 years). Strategical problems: Every business has 4 main strategical problems8: 1. the nature of the industry, of the market on which the company operates (it can be an oligopoly, there can be different entry barriers, or there can be a differentiation of the products according to advertisement or branding, etc.); For example, in the European automobile industry is a type of oligopoly dominated by a small number of producers with great entry barriers (great costs in the field of research and

7 8

Harris, N., European Business, second edition, MacMillan Press LTD, 1999 Ibidem

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development, Common External Tariffs against foreign products). The fierce competition imposes acquisitions and fusions so that the great producers to have the market position. 2. the nature of the company will influence the strategy adopted by the company. The size of the company in terms of capitalization is included here, also the market share, the number of the employees, the structure and the shareholders. The market on which the company activates local or international affects significantly the implemented strategy. 3. the companys present situation refers especially to the phase of the business cycle in which the company finds itself at that particular moment. Very important are also the phases of the products life cycle. If they are in the decl ine phase without new development perspectives, then the company has great strategical problems. 4. the type of the economy. Europe is characterized by a great diversity regarding the proportion of the public and private sector, and the level of intervention of a state, etc. The level of prosperity is different from one country to another placing Albania at the end of the hierarchy and Switzerland at the top of the hierarchy. The biggest problem that the European countries have to face with is the change that takes place very fast. This is reflected by the fast way in which the technological innovations are implemented, especially when they replace the work force with the capital in the production of goods and services, not only in public but also in the private sector. Taking into account the economic, political, and social changes in the new world order after the fall of the communism, it is also reflected in the development of new goods and services. One century before most Europeans never traveled more than 100 kilometers from their houses in their whole life. Now it is measured in time: 8 hours from Paris to New York, 23 hours from Rome to Australia. The changes affect the life of people, their estates and their expectations towards the future. It cannot be anticipated how our life in 2050 will look like but it will surely be different from the life in 1950 compared with the present time. Goods and services that we now consider very common like the microwave, PCs, mobile phones, cable television or the Internet did not exist 35 years before. The holidays spent in places like Disneyworld Florida or Africa by the employees raised the standard, taking into account the fact that 2 decades before, the people did not afford to travel. In the last years, a market that developed very much is the one that organizes marriages and honeymoons in exotic places like Kenya, The Dominican Republic or West Indies. These

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changes represent real challenges for every European business and can be easily resumed as choice between the adoption of a reactive or proactive attitude. Reactive businesses are the ones that wait for the change to develop and then they adapt. Even if the expected situation proves to be wise sometimes, it leads most of the time to a strategical delay, to the idea of remaining behind the competitors with more initiative. The alternative strategy to the change is the proactive attitude: to initiate the change inside an existing business so that the other companies to accept the challenge. On the other hand, the proactive attitude is characterized by the fact that the marketing mix is conceived either to anticipate a new trend in the environment or soon after this environment appears. 9 In reality, taking care of the strategic change is a combination between the reactive and the proactive attitude.

The nature and the goals of organizing European businesses

The European businesses exist due to a variety of reasons. Each organization has its own goals which should be common to all the employees. The settled goals determine the main activity of the company, which is to combine the available resources space, capital, labor with capital including technologies in order to produce goods and services to obtain profit. The nature of organizing businesses deals with the way in which every business is organized in order to achieve its goals. This implies an analysis of different types of European businesses which exist on the market, of their organizational structure, of the causes which lead to their modification. The managerial decision process also needs to be taken into account because it deals with the human resources management (especially when the work force is known to be a valuable and expensive resource which is replaced by the automation of production processes). The main goal of the business is the growth of the profit but this goal is not the dominant one. The nature of the companys activities and the size of the profit depend on some internal and external factors. The internal factors which affect the company are: the size of the business, its owners, the organizational structure, the informational systems, the culture, the attitude towards the change, the management policy of the human resources. The European businesses are also affected by external factors with impact on the profitability: the markets structure, the competition (has influence over the companys possibility to fix barriers to enter a specified area,
9

Prutianu, ., Munteanu, C., Caluschi, C., Inteligena Marketing Plus, Editura Polirom, Iai, 1998

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to fix the market price, to create strong marks and to fidelize the customers), the phase of the business within the economy of the country, the national legislation or the one of the European Union. There is a lack of balance in Europe between the types of businesses according to their impact on the economy. On the other hand there is a large number of small and medium businesses, which hire the biggest part of labor force from the European Union. There is also a smaller number of very big organizations, which considerably influence the economic and political trends, which developed through acquisitions and fusions and which became global players. Generally associated with the heavy industry, they include the aeronautic and defense industry, assembly lines for products like the automobiles and white goods, the business sector (for example, the financial services).

Types of organizations of the European businesses a. Sole trader10 This type of business is characterized by the presence of an owner even if he hires a certain number of assistants. The typical examples can be a constructor who works in Barcelona, Spain, a person who rents holiday houses in Algarve, Portugal or a woman who sells newspapers in the North Station in Paris. The development of the software industry during the last years, especially the one of the computer games brought many software designers to surface, who started working as exclusive merchants although after a while, when the the profits began to grow, they transformed their business in limited liability companies. Starting a business as a unique merchant is simple enough and needs a minimum capital and the capacity to move the business from a sector into another depending on the circumstances and economical opportunities. The services suppliers like the constructors, the electricians, the plumbers usually work as unique merchants although the regional and national industries can coexist next to them. The liberty to act is normally the reason for which a person woks by herself in order to keep the entire profit. The exclusive merchant has limited liability.

10

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b. The partnership There are different types of partnerships in Europe. On the one hand there are the ones made of professionals doctors, dentists, architects, lawyers etc. This type of organization implies limited liability and if the other partners do not have funds to pay the debts, the other one has to assume this responsibility. Compared with the previous organization form (sole trader), the decisions are taken by all the partners in a partnership and this can lead to a delay of the decisional process. The invested capital is bigger. At a larger scale, the partnerships can exist as agreements between two or more organizations in order to develop new products and services or to enter on new markets. c. The limited company The European businesses couldnt develop so much without the experience of the companies from the private sector. Its importance in the production process from Western Europe has clearly distinguished in comparison with the production from the Central and Eastern Europe after the Second World War. This sector is important for some reasons like: 11 It is a legal self-standing entity with the capacity to sue at law or to be sued, to own properties or other assets, to hire people. It has limited liability the shareholders who invested money in the company by buying shares are responsible, according to the owned percentage of shares, for the debts that the company has. If the company goes bankrupt, they lose only the initial value of the investment but not the personal assets, as it happens in the case of exclusive merchants. The company helps the investors to form a group of interests, to bring together their resources in order to fulfill the work that they cannot do alone. This is very important especially for the privatizations that took place in Europe during the 1990s. The main type of limited liability company in Frana is the SA socit anonyme, whose shares can be listed or not on the stock exchange. In Spain is the SA sociedad anonima, which can be public or private, with different sizes from very big to very small. For smaller businesses, in France also exists SARL - socit responsabilit limite, with 2 to 50 shareholders. It is an ideal form for family businesses, which become more numerous not only in France but also in
11

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the whole Europe. The correspondent in Spain is SRL- sociedad de responsabilidad limitada, which does not need a minimum capital and this makes it attractive for small businesses like the constructions, retailing and tourism. c.1 The public limited liability company This type of organization uses the shares of the company to buy or sell on the stock market from Paris, London, Frankfurt, Prague or any other European city. Although the private and individual shareholders are important as a capital source, the majority of shares in Western Europe are owned by institutions like the banks, the insurance companies, the pension funds and other commercial organizations. Not only in Central and Eastern Europe but also in Western Europe, a great number of companies were owned by the central governments and their agencies although the privatization programmes try to diversify these types of property. c.2 The private limited liability company A private limited liability company is not listed on the stock market. The majority of businesses in Germany are organized as exclusive merchants, as partnerships, and as private limited liability companies because there are very strict restrictions regarding the organization of the public limited liability companies. This form of organization represents a series of advantages: a bad year for the company from the financial point of view is not reflected in a drop the shares value, in a reduced value of the capital or in the incapacity to sell new shares. There is no risk of conflicts between the shareholders regarding the companys control or the change of its strategical direction.
12

Although the European businesses are considered to be multinational corporations, most of them are small and medium companies (there are more than 6 million families in Europe, which have their own business: in Germany - 1,5 million, Italy - more than 1 million). This organization form is very common in Spain, Italy, Germany and Greece. Nowadays, the number of family businesses in Europe decreases. The new generation, who should normally take over the business, doesnt want this. As a consequence, many family businesses become public or need to accept managers from the outside in order to survive. It is also the case of Italy, where companies like Fiat, Marzotto (textile), Pirelli (tires and cables) were forced to transfer the control to other people from outside.

12

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To become part of the public sector or to accept a foreign management is not a situation that the companies want, taking into account the fact that the families can lose the control of the business (this is different from country to country). For example, in Germany, more than a half of the family businesses didnt give up to the majority of the shares, compared to Great Britain, where this was possible only 10% of the businesses. The European Union considers the small and medium companies as a way to make money and to create workplaces (nowadays, they hire more than 66% of the workforce from the European Union). This has a major impact especially because the governments try to reduce the budgetary deficit by minimizing the funds given by the state for the large scale initiatives to create workplaces. The European Union has proposed the creation of a new pan-European market of risk capital in order to sustain the development of new small and medium companies by facilitating an easier and more efficient way to finance them. One million new businesses appear every year inside the EU and among them, the most important are the small and medium companies. Although half of them have gone bankrupt in the last 7 years, the other ones are developing and creating new workplaces. d. The conglomerate The term conglomerate is used to describe a company or more exactly a group of companies, which operates in different fields, sometimes without a direct connection between them. The mother company will have subsidiaries although each one will have its own council of directors in order to take decisions regarding the day to day activities. The strategic or the longterm will be taken by the mother company. 13 e. Joint venture Is a form similar to the partnership except for the fact that the involved companies do not hold shares reciprocally. Most often, two companies form a separate company, each of them holding capital in the new business. The advantages are the same with the ones of the partnership but the risk is also shared. f. The corporation Is a form very common to the joint venture except for the fact that more than two companies are involved.
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The advantages of creating the joint ventures and the corporation: At microeconomic level, it gives the companies the chance to enter the markets, which the involved companies cannot conquer alone. At macroeconomic level, the need for competition, not only on the unique European market but also worldwide, means a necessary minimum critical size of the company. g. The cooperative Is a form of organizing the business, developed and owned by a group of people, who have common goals, who share the risks and also the profits. An example here could be a group of farmers from France, who brought the resources together to build barns and to buy grape crushers. They commonly use these facilities and share the costs of the invested capital. The profit is shared according to the investment made by each of them.
14

Establishing the global European objectives

Despite the new competitive liberties allowed by the European Single Market, on account of resources or other restraints, certain companies don't aspire to developing activities across the border or to extending abroad. Their main challenges pertain to defending the local market (national). This consists in a series of efforts and actions meant to render difficult and expensive the entrance of new foreign competitors on the inland market. Many companies realize part of their sales (some companies even entirely) on the inland market and, for that reason, defending their territory is a critical short term objective. In most cases, this objective is more certain than the expansion to foreign markets. If the customers show a high degree of loyalty and the investment recovery rates are elevated, the companies' objectives may be focused on preserving the existent customers and fulfilling their needs in a greater measure than drawing new customers. 15 In these cases, maintaining and improving their position on the inland market may be more lucrative than expanding on new geographical markets, which may be more competitive and harder to seize. The efforts need to be focused on enhancing the competitive position on the current market and avoiding the strategy named: "No change".
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Regardless of the purpose of implementing the defensive strategy, the dependency on a single inland market make it impossible to avoid the risks of business by expanding to other markets, some even potentially lucrative. The war among companies by means of price and advertising policies - which may protect the company from competitors for a short term - is not sustainable for a long term without cost reductions. However, the defensive attitude may be a preferred objective and companies don't just need to line up to the competition, but also increase their competitive advantages. In this context, the strategic options may include acquisitions and fusions, joint ventures and alliances. Although many of the analyses of these agreements emphasize their role as powerful mechanisms of expansion on the market, the decision to become an ally with the competitors rather than fighting them may often contribute to defending the existent markets. These partnerships lead to sharing risks, improving capabilities, a better use of the resources, all of them resulting in an increase of the market competitiveness. For a company, there are four large critical aspects for defining the proactive strategies of European business expansion: 16 1. the nature of market opportunities abroad 2. the basis on which the competitive position of a company is consolidated on a market or on a group of foreign markets (competitive strategies) 3. the orientation chosen by the organization (for example, the expansion on new geographical markets with existent products or the diversification on the market with new products) 4. the methods used for realizing the expansion on the market

The nature of the basic competencies of a company often dictate the ways it choses to compete on a foreign market (competitive strategies) and the methods of entering the market (the entry strategy). A. Competitive strategies The competitive strategies are the ways of gaining advantages on the market over the company's rivals. In this sense, a company looks to compete on the foreign markets (and to ensure its competitive advantages) on the basis of one of the three generic strategies: the cost leadership strategy, the differentiation strategy, the market niche strategy. The choice of the
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strategy is influenced by the target market structure and dynamics, the source of the comparative advantage, the time horizon of the interests on the foreign market. After reanalyzing the SWOT analysis of the strategic audit, the managerial team in charge of the European business is prepared to take decisions concerning the future strategies. At the center of attention there must always be the objectives established at the beginning, and the ways these can be reached considering the internal structure of the organization and the external environment within which the company operates. Usually, there are several ways of fulfilling the same objective, some less efficient than others, therefore the need for a decision taking process. Such a model may have the following phases 17: 1. clear definition of the objectives 2. identification of the main strategic alternatives for reaching the objectives 3. evaluation of each strategy according to criteria such as: the necessity of deploying a marketing research, the need for investment, training, financial and time costs, development of new products, post-sale services, legal aspects, growth potential. 4. selection of a strategy, upon the information analyzed during phase 3 5. implementation of the chosen strategy 6. monitoring for the evaluation of the current performances relatively to those forecast 7. correction of the activities to improve the current performances, starting for the initial objectives There are a great number of strategies which may be implemented, depending on the individual business and the specific objectives. These include 18: 1. the strategy named: "No change" things carry on just as before 2. the growth on the existent markets by own financing, using the company's resources or by external loans 3. the diversification on other markets selling the same products on foreign markets before the competition does 4. diversification of the products portfolio 5. cost leadership (lowest cost) - as the cheapest producer on the market, there's a risk of obtaining very reduced profit margins. This strategy is successfull where there's a big

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demand for standard products, where a company may exploit the scale economie in production and distribution. 19 6. differentiation of the product - realizing differentiated products to answer the varied needs of the customers. These products have unique characteristics, and are difficult to copy. By offering uniqueness by means of product, service, delivery, the producers may ask for higher prices. 7. specialization by creating a market niche (niche strategy) focusing on a small market segment, which is neglected by the competition. On a certain niche (on a market segment), the company may be leader by means of costs (cost leader) or may exploit the advantages of the differentiation (focus on differentiation). The companies working on market niches have specialized technologies (know-how) which give them long term competitive advantages. B. Strategies of entry on the market A business looking to expand on other markets than the national one, may choose from a number of different ways to entry the targeted markets. In this sense, a method needs to be established starting form three generic groups:20 export entry modes contractual entry modes investment entry modes From the view point of the methods of entry on the international market , characteristic to the international marketing literature, we may distinguish (Figure 2.5): (direct and indirect) exports; cooperation operations (contracts), also called collaborative arrangements; direct foreign investments21. From the view point of organizing international businesses, characteristic to the international
19 20 21

management

literature,

we

distinguish

several

stages/phases

of

the

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internationalization. As the company accumulates resources and experience, it develops its human capital and its products; it raises the managerial control degree and, finally, internalizes all the production and distribution phases. Graphically, the methods of entry on the international market of a company may be presented the following way:
Export companies INDIRECT Export agents Piggy-back mark. EXPORT Sale directly to the customer External agents DIRECT INTERNATIONAL BUSINESSES Distributors-pack. Sale subsidiary Complex exp. Discharge COOPERATION CONTRACTS Franchise Prod. under contract Manag. contract Strategic alliances Compensation comp.

Minority part. JOINT-VENTURE Majority part.

DIRECT INV. ABROAD PERSONAL SUBSIDIARIES

Sale subsidiaries

Prod. subsidiaries Acquisitions Fusions Greenfield invest.

Fig. 2.5 International business typology in relation to the market entry methods
Source: Olav J. Sorensen - Alternative Ways of Choosing International Market Entry Models, Aaborg University, Centre for International Studies, 1996, p. 9

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In choosing the method of entry on the international market, it is important to know, firstly, the impact that a certain type of transaction will have on the company's activities.
Table 1. General characteristics of international businesses Type of business Duration Capital participation Transfer of other resources and rights Limited Limited consulting and assistance Limited Reduced Limited in time Limited and mutual Limited Total Total Transfer method Market Mixed Market Mode of compensation Payment of value Royalties Royalties

Export Discharge Franchise

Short term Limited by contract Limited by contract Limited by contract Limited by contract Limited Limited Unlimited Unlimited Unlimited

Management contract Outsourcing the production Complex exports Strategic alliances Joint-venture Acquisitions/fusions New investments (Greenfield investment)

Partial Total Total

Market Market Market Mixed Companyinternal Companyinternal Companyinternal

Total amount Royalties Trade margin Total amount Dividends Profits Profits

Source: Vasile Ian - Tranzacii comerciale internaionale, vol. I, Sedcom Libris, Iai, 2005, p. 104 Usually, the costs and benefits involved by a certain method are measured. These are represented synthetically in the following table:

Table 2. Advantages and disadvantages of the methods of entry on the international market. Entry method Advantages Disadvantages Export Capacity to realize cost Transport costs economies from localization and Commercial and uncommercial cost economies from the experience barriers curve Issues with the marketing local agents Discharge Reduced capital expenditures Absence of control on technology Operational expenditures less

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than incomes Minor financial and commercial risks

Reduced development expenditures (investments) Supplementary incomes relatively large related to the operational costs Minor risks Turnkey projects Capacity of elevated profit over Creation of efficient competitors technological qualifications in Absence of long-term control on countries where ISD are restricted business Setting-up of mixed companies Access to the knowledge and the Absence of control on (joint-ventures) other intangible actives of the local technology partner Incapacity of global strategic Sharing costs and risks coordination Political acceptability in the host country Setting-up wholly owned Protection of technology Large development expenditures subsidiaries Capacity of global strategic Elevated risk degree coordination Capacity to realize substantial economies from localization and from experience Source: J. Hough, E.W. Neuland - Global Business Environments and Strategies, Oxford University Press, 2001, p. 282 Franchise

Incapacity to realize substantial economies from localization and from the experience curve Impossibility to engage in global strategic coordination Absence of control on quality Weak global strategic coordination

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B. The Component Factors of the European Business Environment

Liviu MAHA, lecturer PhD. Centre of European Studies Alexandru Ioan Cuza University of Iasi, Romania

The business environment refers to the conditions in which the European companies are operating, involving a great number of forces which compose this environment, and on which companies base their strategy, tactics and day-to-day activities.22 These factors may include political, economic, cultural, religious and linguistic aspects. A main characteristic of the European business environment in the IIIrd millennium is the dynamism. An explanation of the permanent change of the environment is the rapid integration or the Europeanization of the market and of the economic structures in Europe. Key features of the European political economy, in the context of the modifications appeared in the European business environment: the Europeanization character of the European and political decision taking; the enhancement and expansion of the European Single Market; the continuation of the monetary unification process; the tightening of the rules of the inland and international competition; the intensification of the competition on the industrial and services markets; the development of the pan-European labor market; the apparition of new forms of commerce and distribution (the Internet); the modification of the consumers' preferences and the formation of pan-European market segments; the globalization of the markets and of the competition; the increase of the concern for the environment. Each of the elements presented may be perceived as an extremely significant external factor of the European business environment. Companies are not all affected in the same way or degree by these influences, but the later will have consequences on companies at all the level of the European economy.
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A. The external environment is composed of the collective forces or the business activities outside the company which may affect the way of functioning and the realization of the objectives, which influences an economic branch, along with all the component companies.
23

The external environment comprises 24: the political environment; the cultural and social environment; the national and European legislation; the impact of the globalization; the phases of the economic cycle in the said country, EU respectively; the market structure; the modification of the information ald communicational technologies; the economic and monetary unification. B. The internal environment is composed of factors and influences with immediate or short term effect, and which directly influence an organization's capacity to compete with its rivals. The internal environment comprises internal activities, relations, resources, whose use creates the conditions for the company's integration in the external environment. 25 Its components are mostly controllable, may be adapted by managers in order to reach the objectives. The internal environment comprises26: the patronage; the financing sources; the company's size; the organizational structure; the management; the human resources policy. Political factors

Legislative factors

Custom ers

Providers

Technologic al factors

Natural factors

The internal environment of the company

Competitors Human ressources

Sociocultura l factors

Economic factors

Fig. 1. The European business environment27

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The power of each component and the way they mutually interact vary from one country to the other. For that reason, the behavior of companies will have to adapt to the specific conditions. The individual characteristics of each business, such as the patronage, the management ability, the human resources policy, and so on, will singularize each company's success.

The external environment

The evaluation of the external business environment is achieved by the so-called PESTLE technique28: The political factors which influence the business environment; The economic factors which influence the business environment; The sociological factors which influence the business environment; The technological influences which influence the business environment; The legal factors which influence the business environment; Issues related to the environment, ethics in business etc. The basic idea is that a number of aspects of these influences need to be identified and analyzed so that companies will be aware of the opportunities and threats on the market and implement a strategic plan for the future. Once the impact of the external environment factors (current or anticipated) on the company is established, managers may decide if they want to adopt defensive or offensive strategies. Identifying the opportunities and the threats on the market is usually synthesized in a SWOT analysis matrix. By identifying the Strenghts and the Weaknesses of a company, the Opportunities and the Threats in the external environment, the strategic planning may be sustained by a clearer image of the organization's performances and resources and by a simple modeling of the environment influences. It's certain that many of the opportunities and threats appeared for the European businesses are generated by the creation of the European Single Market and by the evolution related to the monetary unification. Taking into account their role of agents of change, indentifiying the opportunities and the threats that they generate is an elementary step in the strategic analysis of the new European business environment.
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1. Political factors - The public beliefs of governments and the policies by means of which they put them into practice have a major impact on the European business environment. They are mainly reflected in the economic policies, especially those targeting the economic growth. But there are also other policies with major effects on the economic climate. For example, it may be mentioned the extreme case of the Soviet block, which, by planning at the central level, has had a major influence on the property form, the organizational structure, the lack of turnover and efficiency of the economic activities. Similarly, the Thatcher government in the 80s has lead a policy with stimulating effects on the business environment, an example also taken by other European countries. 2. Economic factors - The economic policies promoted by governments have an evident influence on the companies' environment of activity. Since the signing of the Maastricht Treaty, the EU's economic policy has been focused on adopting the single currency. In this sense there have been attempt to fulfill the convergence criteria the budget deficit (not more than 3% of the GDP) and the public debt (not more than 60% of the GDP). It must be mentioned, to this end, the control of the inflation rates by the policies of the central Banks and the control of the interest rate to eliminate the risk of emerging differences among countries, destabilizing factors for the common monetary policy. 29 Another aspect refers to the capacity of countries of synchronizing the phases of the economic cycle (especially, to make it convergent with the one of the German economy economy of reference). It may be noted, by analyzing the difference between the real and the potential GDP, that during the period 1985-1999 the convergence between the French and the German economic cycle has increased, while the British one has been divergent. Among the European policies with impact on the economic environment, it may be mentioned: CAP (Common Agricultural Policy), Regional Policy and Social Policy. 3. Cultural factors By culture we can understand the assembly of values, beliefs, attitudes, social conventions, and so on, of a nation. They are passed on from generation to generation, especially by means of the family.

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There's no doubt that the cultural differences contribute to the diversity of people living in Europe, which results in an even greater complexity, but also the advantage of an experience that gets more and more generous. Still, the cultural differences also mean the creation of certain barriers, with special implications on the European businesses, which, if they want to survive outside the internal market, must take them into account. The cultural differences exist in aspects such as 30: Organization of companies: The companies in Germany are somewhat rigid, everything needs to be realized using the established bureaucratic ways. Meanwhile, those in Great Britain are more flexible, they respond easier to the needs of the market. The existence of a spirit of affiliation to a class is important, which affects the relations between employees, the labor climate. There are also differences concerning the way the information is made public. For example, in Germany the announcement of a product's release and its actual apparition on the market is realized on the same day. In Spain and Greece the terms are more relaxed, more flexible. The look and the behavior: The French business people emphasize the way they look and they expect their partners to do the same; the Spanish consider it important to dress elegantly, but conservatively, and to show you're an expert in fields like cooking and wines, and so on. The programs of cultural education: When they're employing, some companies don't take into account only the knowledge of a foreign language, but also the knowledge related to the culture of that country. There are companies which offer special courses in order to obtain a better integration of the employees in the respective environment. Companies need to take into account the cultural differences in public relations, publicity and current activity.

4. Technological factors - It's difficult to imagine day-to-day life without the informational technologies: from the automatic pilot to the automatic systems of controlling of the traffic in big cities, from the industrial robots to the automatic lines of assembly, the financial, exchange and exchange rate markets, the electronic commerce, the e-banking, the e-mail, and so on.

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5. Legislative factors - legal systems may vary significantly from country to country, as concerns the content, and the way the laws are interpreted as well. The main influences of the legal system on businesses refer to the impact on the marketing mix (product, price, promotion, distribution) and to the laws regulating the competition. The articles 81-89 of the Rome Treaty define rules regarding the competition in the EU, although these were substantially modified by the Single European Act. There have been approached several main domains: 31 restrictive practices (sharing the market, establishing prices, production quotas) National governments intend to use the legislation in order to stop the creation of monopolies or private cartels which should block the entry of other companies on the market. Yet, this doesn't stop them from letting public monopolies work through their massive subventions (France Crdit Lyonnais). For example, Article 81 in the Rome Treaty forbids the setting-up of cartels, the establishment of prices or other forms restricting the competition on the common market. dominant positions (article 82). The dominance itself is not forbidden, but only the abuse of power, in case it affects the commerce between the member states. Article 82 offers examples of abusive practices: practicing low prices in order to eliminate the competition discriminatory prices among or within the member states retaining the customers by guaranteeing discounts for loyalty limiting the production, the technical development to the detriment of the consumers unjustified refusal of the provision

concentration (by acquisitions and fusions) in case it has as purpose to create or consolidate the cominant position on the market to hinder the efficient competition state aid (articles 87-89). Although the European Union has an active role in sustaining some industries and regions

by financial assistance, the European Commission has a responsibility more, that of forbidding the state aid in case it affects the EU in any way possible. The Commission needs to ensure that the national governments don't unjustly favor their own national businesses to the detriment of
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the other European countries, by means of direct payments, easy loans, tax relief, and other forms of aid. These aids may frustrate the free competition in the EU not just by obstructing the most efficient way of assigning resources, but also by offering substantial competitive advantages to the inland producers. Examples of types of aids allowed by law: aids with social character, attributed without discrimination based on product origin aids to cover the damages caused by natural calamities aids to sustain the economic development of areas with very low life standards, with very elevated rates of unemployment aids to sustain the execution of a project important for the common European interests

The internal environment

The competitive environment The competition may be defined as a situation of market within which companies dispute their customers without restrictions and, hence, the resources necessary to satisfy the demand. 32 The more successfully the company competes on the market, the bigger is its need for resources. By competing with each other, the businesses exploit costs and, therefore, the price differences, the product design, the quality of goods and services, the marketing campaigns. On a competitive market, new businesses are not discouraged by entry barriers like the capital costs, the loyalty towards the brand or by the operations deployed by the cartels. The mergers between previously competitor companies, the acquisitions or other similar agreements between companies may be frustrating in a competitive environment. This may lead to a business which guarantees a dominant, or even a monopolistic position in an industry, which hinders the competition. Moreover, the agreements between companies for the control on prices of on the offer (the cartels) may block the competition. Even the governments may favor the local companies by giving them contracts in constructions or in other fields, to the detriment of other companies in the EU. 33

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For an efficient development of the activities on the European Single Market, there's a need for very efficient national and transnational competitive rules. There are reduces advantages in eliminating the tariff and non-tariff barriers within the internal commerce if companies are confronted with restrictive practices or with other anticompetitive activities allowed by the absence of efficient anti-trust rules. In this sense, the EU has established compulsory legal rules and obligations: to prevent the clash between companies by establishing the price, setting-up cartels, other collaborative strategies (with the purpose of stimulating the competition) to stop the companies from abusing their dominant position on the market (with the purpose of controlling actions such as practicing monopolistic prices, discriminatory prices, loyalty discounts, which may affect the competition) to control the size of the companies' growth by acquisitions and fusions (to ensure that the acquisitions don't seriously affect the competition) to restrict the state aid given to the inland companies (limitation of the competitive advantages earned by the "sustained" companies) In order to achieve these objectives, the EU by the agency of the European Commission, has a "double mandate". On one side, it needs to work with the national authorities of the competition to ensure that the restrictive and anti-competitive practices are forbidden and to prevent the setting-up of regional oligopolies which hinder the competition. On the other side, its actions need to reflect the realities of the global competition and the necessity that Europe possesses larger enterprises, expanded across the border, to compete on the global markets.

The market structure and the competitive forces The economic theory distinguishes between four great types of market structure: the perfect competition, the monopolistic competition, the oligopoly and the monopoly 34. On one extreme there's the theoretical model of the perfect competition, used as a reference in the analysis of the less competitive markets. The best example, in the context of the European businesses within the EU, is the foreign exchange market for buying and selling foreign currencies. This is where we meet, as much as possible, the market transparency, the perfect knowledge of the market, a great number of buyers and sellers, a reduced or absent entry
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and exit barriers, the lack of transport costs, homogeneous products, the independence of the companies' shares related to the others. Although the national currencies are different, the units of the same currency are homogeneous. 35 At the other extreme there's the monopolistic market, where a business or a group exercises a substantial or total control. It may be a restrained company or one from the public sector, for example the state controlled provision of landline telephone services until the liberalization of the telecommunications market in the EU in 1998. (Deutsche Telekom, France Telecom). There were entry barriers too elevated, impossible to cross, and the refusal to offer licenses to other providers. In the case of the state monopoly, the inefficiency is a serious problem, as the production costs largely exceed the theoretical operation costs allowed. This was a frequently encountered situation in the state monopolies in the EU and it is the reason for the waves of privatization in the last years. The monopolies have the tendency of working with high costs and may be less inovative. Furthermore, they use the product differentiation and create loyalty towards the brand by advertising to elevate the entry barriers. However, in the context of the single market and of the need to be competitive with the providers in the USA and Japan, the monopolies have the potential of becoming global players due to their size. This allows them to obtain considerable economies and, hence, to practice lower prices. The monopolies are surely a domain of interest for the competitive policy in the EU. Between the two extremes there are placed the structures of the monopolistic competition and of the oligopoly type. The monopolistic competition doesn't bring any threat to the consumers. Due to the fact that the entry and exit barriers are reduced, the number of the deployed businesses is very large, the product differentiation by brand and advertising doesn't create nay issues. The competition by price and quality of products and of services is more important. An example of this type of market structure is a pastry shop in Bologna or a coffee shop in Vienna. The oligopoly is characterized by a small number of big which leads to fixating the price, sharing the market, big entry barriers for the new comers in the branch (for ex., discounts for the loyal customers). The customers have fewer options and pay higher prices for the products. Recently the theory of games was used to explain the behavior on a market with an oligopoly35

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type competition. There are examples: the European industry of automobiles (dominated by a small number of major producers), the aviation or paper European industry.

Why is the competition important? The competition, even if not perfect, offers significant advantages to buyers and to offerers. For the consumers, the advantages are: lower prices, more offers for one product, an increasing quality for the bought products, more power and growing attention form the offerers. For the producers, the advantages are lower costs (by the scale economies) and offers at lower prices (technical efficiency), a greater efficiency in organization and operation (by technological changes), a greater preoccupation for research-development, in order to deal with the competition (dynamical efficiency), growing interest and expansion on new markets. For the economy, at a global level, the advantages offered by the competition are a more efficient use of the insufficient resources, avoinding the monopoly, a more elevated level of the GDP.36 The EU leads a policy of encouraging the competition by creating an optimal environment, sustained by the legislative system, in which companies will freely deploy their activities, without any incorrect, unfair restrictions being imposed.37

The capacity of the European Unions' businesses to compete efficiently within the global economy is crucial fro the long term economic growth. The competitiveness of the European businesses depends on many factors, controllable or not. The external factors, which cannot be controlled, are: The internal inflation rate and its relation with other countries' inflation rate the bigger it is, the less competitive the exported goods will be. The exchange rate the bigger the value of a national currency, the more expensive the exports, the harder to sell the goods, while the imports will be cheaper, thus encouraging the national economy.

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The rate of economic growth of the country/countries from which the business is launched. The economic policies sustained by the government to ensure a stable economic environment. The power of the trade unions and their capacity to ensure elevated rates of the salary, bonuses, less working days per week - especially in case these may be re-negotiated nationally.

The economic situation of the main export markets the surface on which operate the protectionist barriers, the state of the local offerers on the foreign markets. For example, South Asia is currently not able to buy goods from the EU countries as much as before.

The degree in which the EU, the national government or other public institutions ensure training and support for businesses.

The internal factors which influence the competitiveness of businesses are: 38 the activities of research-development, the production costs of the goods and, hence, the final prices, the productivity registered by the business (production/employee), the investments in new capital equipments, the quality of the produced goods, the compliance with the delivery dates, the quality and promptitude of the post-sale services, the types of the good produces in the European companies.

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C. Euro-marketing
The construction of the marketing mix determines the development of competitive advantages on the foreign markets. A company deciding to enter on a foreign market needs to adapt to the new realities, to the progresses registered by the information technology and by the mass-media, needs to formulate coherent international marketing strategies. It needs to formulate the marketing mix so that the products arrive in due time to the customers and optimally satisfy their needs39. The four traditional components of the marketing mix are - the 4 "P"s: product; price promotion; distribution/placing; More recent approaches add another two new elements40: the human resource and the internal and external processes of the company.

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Fig. 3.1 Components of the marketing mix of export

MARKETING - MIX

Product - Area - Portfolio - Packaging - Size variants - Product variants (color, taste, and so on) - Brand name - Quality - Guarantees (standards) - Post-sale services - Specifications (availability, use, and so on)

Price - Positioning in relation to the comparable products - Catalogue price - Discounts - Sale and payments terms - Dealers' margins - Value added elements for users

Promotion - Marketing communication - Personal promotion (sale, demonstrations, design, and so on) - Promotion of sales (short term tactics) - Public relations and brand advertising - Direct marketing

Distribution Commercializatio n channels - Distribution infrastructure - Distribution costs - Product differentiation by segmented distribution - Modification of the distribution models - Market dynamics

Personnel - Impact of the personnel on the marketing activ. - Relation of the personnel with the customers - Personnel recruiting - Company's culture and image - Training and competences - Remuneration and motivation

Source: Ch. Noonan - The CIM Handbook of Export Marketing, Butterworth Heineman, 1996, p. 150

Processes - Ensuring that al the processes are managed to satisfy the customers - Strategic planning - Re-engineering of the business process - Information and product technology - Research and development - Distribution logistics - Documentation processing

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Product policy The product is the key element of the marketing mix. If it does not satisfy the consumers needs, none of the other elements of the ma rketing mix will be able to improve product performance. The most important product-related decision in marketing refers to the types of products that sell in EU countries. In this sense, a company has four alternatives at its disposal: a. selling the product on foreign markets without modifying it b. modifying the products according to the specific needs of each country c. creating new products for foreign markets d. incorporating all differences in a single product and introducing a global product. When deciding what products to sell on the international market, the company does not only consider physical products, but also the users or the external customers perception on what they buy; not only the technical utility or consumption, but also the status, image, symbols, etc., all the features that pertain to the psychology of the buyer, be it individual or institutional. First, each product or service needs to separately analyzed, if the aim is to launch it in another European country, so as to identify the reasons that render standardization impossible or inefficient: different consumer needs, national technical standards imposed special demands of customers or distributors (e.g. package), legal restrictions logistic requirements (frequency and just in time delivery, requested quantities of products, etc.), different product placements, linguistic requirements according to the country where the product is launched. The product policy includes a set of decisions, the most important being: the decision to develop the product; the decision of standardization/ adaptation; the decision of the brand for export, the decision of product packaging.

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Management issues

Decision on the product line Products Features Brands Package Guarantee Service Calitate Obstacles in the way of adaptation Decisions on the international product

Product lifecycles Services Service plan Service type Delivery system Places Quality levels

General policies on the international product Obstacles in the way of standardization

Adjusted products

Standardized products

Fig. 2. Strategies on international products

Product standardization remains the most debated subject in international marketing. A relevant example is the one given by the company manufacturing agricultural machinery Case IH. In 1988, this company commercialized 17 different versions of Case Magnum tractors on the European market. The norms on lights and breaks varied according to each country. At the end of the 90s, a single version was enough: the Case MX Magnum model which had different options for some accessories in various countries.

Pricing policy Setting the right price is one of the most difficult marketing tasks. The technical factors and the investment recovery rate have to be taken into account.

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There are serious reasons to use a unique pricing policy on European markets. There is a higher degree of susceptibility when distinct contractual terms are negotiated with different customers, especially when there are reasons to suspect differences of price. But on the other hand, each local distributor may use its negotiation power to obtain a better price which affects product placement strategy on that market. Pricing strategies 1. Strategy of price stratification This implies the strategy of obtaining the highest price possible based on the distinct feature of the product, without considering the long-term position of the company on the external market. The higher price is used until the market is saturated at that price level. Then the price may be diminished to capture a second market or a second level of income. This strategy is used for products with inelastic demand, an increased level of differentiation or those that require higher costs. Moreover, it is used for products with a high degree of novelty or without substitutes, in which cases the price level is not a decisive factor in taking the decision to purchase. Advantages of the strategy: generates high profits (maximum amounts can be reached for every segment); ensures quick recovery of the invested capital; helps to limit demand when the company is not capable of dealing with a high volume of orders; affords price diminution without any problems in competitive conditions. The major disadvantage of the strategy is generated by the high profits of the business which quickly attract other competitors to the branch. This strategy is frequently used in the case of products from high technology industries (the IT industry, the mobile phones industry) 2. Step by step strategy This resembles the previous one except for the fact that the company lowers prices quicker than if they were determined by potential competitors. A company that adopts this strategy aims at becoming stable on the external market before the competitors penetration of the market. Innovative companies usually adopt such a strategy. At first, the price is set based on how much the market can take, then a constant rhythm is adopted towards the cost-based price. The rhythm has to be weak enough to gain 89

profit, but strong enough to discourage competitors to enter the market. One of the companies concern when they adopt such a price strategy, is to recover research and development expenses.41

3. Penetration strategy It consists in setting a price which is slow enough to rapidly create a mass market. The stress rather falls on the utility for new customers, than on the production cost. When using this strategy, the aim is to quickly open big mass markets. It is used when: There are no chances to maintain product superiority There are few obstacles preventing competitors from penetrating the market Demand is very elastic The high volume of production attracts the diminution of unitary prices The main disadvantage of the penetration strategy is that it does not generate profit on the short term. 4. Pre-emption price" The price set is so low that competition is discouraged. The price will be closer to the total unitary cost. As the increase of sales generates the decrease of the average cost, a lower price will be established for the exported products. If necessary to discourage potential competitors, the price can be temporarily established below the total unitary cost. The hypothesis is that profits on the long term will be reached by dominating the market. 5. Extinction (eviction) price The purpose of the eviction price is to eliminate the existing competitors on the international market. It can be adopted by big producers with low production costs as a deliberate means to eliminate business competitors. Eviction price strategy is associated with dumping on the international market. Alternatives to setting prices

41

Isan, V., Mixul de marketing al exporturilor, Suport de curs, Iai, 2006

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a. Standard prices to be more precise, using the same price on all EU markets. It is a method used in the case of standardized products and starts from the hypothesis that the differences between national markets are insignificant. In the case of mass production, the unitary price for the product concerned decreases as a result of the effect of scale economy. Although theoretically this price is fixed at a psychological level accepted by consumers, in practice this level has to ensure the maintenance of company productivity on a large potential market. b. Differentiated prices according to the peculiarities of each market. The company may thus profit from the facilities created on certain markets, being able to obtain a higher profit so as to counterbalance the lower profit obtained on more competitive markets. The price can be adjusted according to the other elements of the marketing mix 42. Prices for identical products may vary between EU neighbour states. c. The relation between export price and internal price The differences in price occur between export prices and internal prices 43. In order to facilitate the purchase on a foreign market where the brand is unknown or to increase the sales volume and diminish average costs, the company establishes the export price of the product that is to be launched below the price adopted in the country of origin. In case the costs for penetrating a new EU market are very high, a higher price than the internal one may be established. Possible causes of price differences44: a. demand depends on the conditions of the local market b. prices are closely connected to the legal and fiscal system c. consumers preferences are different for various countries d. the competitive and legal system varies according to each European country Indeed, the prices of some identical products may vary among EU neighbouring markets. The price differences for consumers show differences within distribution channels. But on the other hand, there are three factors that may force price alignement on EU markets45 :
42 43

Sasu, C-tin., Marketing Internaional, Editura Polirom, 1998 Ian, V., Mixul de marketing al exporturilor, Suport de curs, Iai, 2006 44 Verdin, P., Heck, N., "Strategy and the Euro: The Impact of the Single Currency on Company Strategy," in EMU: The Challenge, H. Ooghe and F. Heylen and R. Vander Vennet, Eds., 2000

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1. international acquisitions by means of big retailers with strong negotiation skills which influence business-to-business relations with these retailers. In the context of the panEuropeanization of large distributors, if they demand the lowest price possible for a product, a rapid price alignment is necessary46. 2. parallel imports: a price uniformization on EU markets discourages parallel imports; 3. Euro, the unique currency: even if the unique currency did not eliminate price differences, it generated a high level of transparency that helped end consumers and industrial buyers to make comparisons between prices. A study carried out in 2005 with the managers of a series of EU companies shows that they consider the uniformization of price structures and procedures to have a major impact on the unique European market. One of the managers of a construction company in Germany with international work area claims that fixing prices in Euro is a practice much more convenient and stable than the use of the German mark. 47

Promotion policy
The purpose of promotion is to influence potential consumers to purchase the products or services of a company. The forms of promotion worldwide are no different than the generic ones except for addressability and proportions. These forms are the following: 1. Advertising the paid and impersonal form of communication with the market; in carrying out an advertising campaign, it is compulsory to take the cultural factor into account which may influence the chosen theme of the advertisement, the connotation of words and symbols, and the selection of media vehicles. 2. Sales promotion is carried out by means of two types of PULL and PUSH techniques; PULL techniques include: temporary price reductions, coupons, reimbursement, offers,

45

Aistrich, M., Saghafi, M., Sciglimpaglia, D., Strategic Business Marketing Developments in the New Europe:Retrospect and Prospect, ISBM Report 5, 2005 46 Simon, H., & Kucher, E., Pricing in the New Europe -- A Time Bomb?, Pricing Strategy & Practice, 3 (1), 1995 47 Aistrich, M., Saghafi, M., Sciglimpaglia, D., Strategic Business Marketing Developments in the New Europe:Retrospect and Prospect, ISBM Report 5, 2005

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raffles and the free sample and PUSH techniques include displays, fairs and commercial expositions, commercial meetings and awards. 3. Public relations do not stimulate purchase directly, but give information to the public, and maintain a favourable public image; e.g.: press releases (may inform on products launched or new technologies), press conferences, supporting noble causes and sponsoring various cultural or sports events. 4. Personal sale allows direct focus on persons that are very likely to purchase, as well as the adaptation and adjustment of messages so that they meet the specific needs of each customer. The management of the international company or the export department has to choose an appropriate combination of the four forms of promotional instruments, constituting what the literature of the field entitles promotional mix. Choosing a promotional mix depends on the targeted audience, the companys objectives, the product or service for sale, the available resources for the promotional strategy (not just the financial ones) and the availability of instruments on the market concerned.48 In order to develop a European brand strategy, a clear vision on the persons that the respective brand addresses to needs to be imposed as far as its personality and brand management are concerned. A brand represents a name, a term, a symbol, design or their combination which identifies the product and differentiates it from those of the competitors. Using the same brand name and similar packages throughout Europe even if product adaptations have been made is a technique commonly used in business. However, using the same brand name in Europe and having a European brand strategy are two different things. In order to promote the product in Europe, the same vision needs to be projected on all markets.

Distribution policy
Establishing satisfying arrangements for sales and distribution on another market is difficult for small enterprises especially when the products and services are completely unknown and the resources are limited.

48

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The orientation of companies in the EU influences the strategy of sales channels. Companies that practice indirect export do not use multiple channels but typically indirect sales channels. The companies that want to gain control on their own exports use direct channels.49 On the markets with a small number of direct purchasers where advertisements and other promoting activities are not demanded, direct control may be applied. This is not a satisfactory solution in all cases, especially when no element of post-sale service is involved. The solution of setting a branch or subsidiary may be considered, but their supervising and control may be an additional burden for the existing management. In case the company does not have enough time, this may be a fatal mistake. Anyway, the branch has to be managed by an experienced person (an employee of the company or a person recruited from the country of launch). The legal aspect should also be considered; there can be legal consequences still unknown to the company. Other solutions include the hiring of an exclusive agent or a distributor that physically sells and distributes the products. The problem is to choose a proper agent or distributor, considering the EU legislation on the rights of sales agents. Employment contract termination equals to the payment of considerable compensation by the company. But even the most competent agents/ distributors may only focus on the products of a limited number of bosses. The challenge is for the offer proposed to be as attractive as possible so that agents get involved in this activity until the end, and not just when the product is launched. But on the other hand, distributors no longer assume the costs incurred by advertising and promotion and this is an important aspect when price structure is established. The manufacturer concretely contributes to sales efforts (by organizing the training of the distribution team), which represents a key success factor. A difficult decision is that of the amount that can be invested before knowing the sales volume. The company and any of the potential distributors need to reach an agreement on the most appropriate manner of delivery of goods/ services, the sales target, the service standards and the requirements on quality, the duration of agreement and the promotional programme.

49

Gabrielsson, M., Kirpalani, V. H., & Luostarinen, R., Multiple Channel Strategies in the European Personal Computer Industry, Journal of International Marketing, 10 (3), 2002

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References
1. Harris, N., European Business, second edition, MacMillan Press LTD, 1999 2. J. Hough, E.W. Neuland - Global Business Environments and Strategies, Oxford University Press, 2001 3. Mercado, S., Welford, R., Prescott, K., European Business, fourth edition, Pearson Education Limited, 2001 4. Munteanu, C., Marketing Strategic, Stef, 2006 5. Olav J. Sorensen, Alternative Ways of Choosing International Market Entry Models, Aaborg University, Centre for International Studies, 1996 6. Prutianu, ., Munteanu, C., Caluschi, C., Inteligena Marketing Plus, Editura Polirom, Iai, 1998 7. Ian, V., Tranzacii comerciale internaionale, vol. I, Sedcom Libris, Iai, 2005 8. Aistrich, M., Saghafi, M., Sciglimpaglia, D., Strategic Business Marketing Developments in the New Europe:Retrospect and Prospect, ISBM Report 5, 2005 9. Zai, A., Anton, O, Olaru, O., Marketing direct, Editura Sedcom Libris, Iai, 2006 10. Gabrielsson, M., Kirpalani, V. H., & Luostarinen, R., Multiple Channel Strategies in the European Personal Computer Industry, Journal of International Marketing, 10 (3), 2002 11. Seitz, V., Direct Response Advertising in the US and European Market: A Content Analysis of Fashion Products, European Business Review, 98 (5), 1998 12. Verdin, P., Heck, N., "Strategy and the Euro: The Impact of the Single Currency on Company Strategy," in EMU: The Challenge, H. Ooghe and F. Heylen and R. Vander Vennet, Eds., 2000 13. Chung, H., An investigation of crossmarket standardisation strategies: Experiences in the European Union, Journal: European Journal of Marketing, vol 39, issue: 11/12, 2005

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