The financing agreements: ready, steady, go!

Six Partner Countries have already signed it, and all the others must comply with this requirement before June 2024. We are talking about the financing agreements, indispensable tool for the implementation of Interreg NEXT programmes. But what are they, exactly?

A legal tool to apply EU laws

The key feature of Interreg NEXT programmes is the cooperation across external borders of the European Union (EU). This implies that beneficiaries from Member States and Partner Countries implement joint projects both inside and outside the territory of the Union. Moreover, all the actors concerned by the programme – programme bodies, national authorities and project beneficiaries – work under a common EU legal framework.

But how can public and private institutions outside the EU apply its legislation? Through the financing agreements – signed by the European Commission, the National Authority of the Partner Country and the programme’s Managing Authority – the EU legislation is applied in Partner Countries.

Thanks to this instrument, all concerned stakeholders can work together within the same legal framework, which makes programme and project implementation much more efficient and, at the same time, ensures an adequate control of the EU’s tax-payer money.

Which provisions? The rules for procurement among others

The type of provisions included in the financing agreements are related to programme and project implementation, such as the identification and role of the programme bodies and national authorities, the audit and checks to the projects, the budget allocated to the programme, the commitment on prevention, detection and correction of irregularities and fraud, recoveries, or visa facilitation. They also include the mutual rights and obligations between the Member State hosting the Managing Authority and the Partner Country.

For the period 2021-2027, the Annex II of the agreements establishes the rules for procurement by project beneficiaries: this is the most relevant part for them, as it applies EU standards to the acquisition of works, supplies and services. This annex ensures equal conditions for beneficiaries and contractors inside and outside the EU in terms of basic principles, such as open competition or transparency.

A long negotiation

The process for the negotiation and signature of the agreements is a long one, as all parties must ensure the compliance with the respective legislation and the modalities for programme implementation, as set out in the Programme Document and agreed between the Managing Authority and the Partner Country. While the legal value of the Programme Document within the EU stems from the Commission Decision, its legality in Partner Countries can only be obtained through the financing agreement.  

The lengthy negotiation is due to the need to brief all concerned authorities in the Partner Countries about the novelties in Interreg NEXT, such as the new provisions on procurement, management verifications or audit, even though the most common blocking points have been the rules for conversion of national currencies into Euro, and the liabilities of the countries regarding unsuccessful recoveries from project beneficiaries. In any case, financing agreements are full of cross-references with EU legislation, and need a thorough revision and understanding by the authorities in the Partner Countries. Additionally, most of these countries require a further step: the ratification of the document by the national Parliament.

First deadline: end of the year

One good reason to accelerate the signature process is that we are in the last weeks to ensure that all programmes are operational. As set out in the Interreg Regulation, all the programmes need to have at least one financing agreement signed before the end of 2023 or, otherwise, the programme will be cancelled. In case of multi-country programmes, once one agreement is signed, the other Partner Countries have the possibility to sign until 30 June 2024: without this commitment the beneficiaries from a Partner Country cannot participate in the programme. However, this doesn’t prevent the possibility of the programmes to launch the calls and select the projects.

Pending ratification (except for Türkiye) the process has been concluded for Tunisia, the Republic of Moldova, Georgia, Jordan, Türkiye and Ukraine. With the signature by the latter, all seven Interreg NEXT programmes have covered this key requirement for implementation. All the remaining agreements are still under negotiation, but their signature is expected soon, to allow for a prompt project launching in 2024.