Ex-Post Evaluation of Objective 1, 1994-1999

EX-POST EVALUATION OF OBJECTIVE 1, 1994-1999

National Report Austria

The Objective 1 Programme in Burgenland 1995-1999

Author: Dr. Thomas Stumm (EureConsult S.A., Luxembourg)

Date: November 2002 - 2 -

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY 4

II. MAIN REPORT 17

1. INTRODUCTION 17

2. METHODOLOGY 20

3. THE APPROPRIATENESS OF THE STRATEGY ADOPTED AND PURSUED IN THE OBJECTIVE 1-PROGRAMME 22

3.1. Key Issues in 1994 and their evolution until the end of the programming period 22 3.2. A Description of the Austrian Objective 1 SPD strategy and its implementation (1995-1999) 27

4. THE EFFECTIVENESS OF THE AUSTRIAN OBJECTIVE 1-PROGRAMME 43

4.1. Programme outputs and results 43 4.1.1. An assessment of programme effectiveness by Funds 44 4.1.2. An assessment of effectiveness by thematic priorities of the programme 58 4.1.3. A summary assessment of wider matters related to effectiveness 74 4.2. Programme effects 80 4.2.1 Programme effects on overall social and economic changes (thematic priorities) and on “horizontal issues” 80 (equal opportunities, environment) 4.2.2. Key influences on the effectiveness of the programmes and main factors causing this 86 4.3. An assessment of the “Community Added Value” 88 4.4. An assessment of changes to policy and practice 90

5. AN ANALYSIS OF THE IMPACT OF OBJECTIVE 1 INTERVENTIONS 91 - 3 -

6. THE MANAGEMENT AND IMPLEMENTATION SYSTEMS ESTABLISHED FOR OBJECTIVE 1-INTERVENTIONS 102

6.1. Institutional Arrangements 102 6.1.1. An overview on programme management structures 102 6.1.2. Other groups involved in the management of the programme 114 6.1.3. The vertical partnership 115 6.1.4. The horizontal partnership 116 6.1.5. An assessment of the capacity to manage the Objective 1 Programme 117 6.2. The project selection process 117 6.3. The financial management systems 120 6.4. The monitoring structures 123 6.5. Programme evaluation 125 6.6. Synergy effects 127 6.7. Equal opportunities and the environment 127 6.7.1. Equal Opportunities 127 6.7.2. Environmental priorities within the programmes 127 6.8. Conclusions: Achievements and improvements of the management, implementation and evaluation system between 1995-1999 128 6.9. Differences of the 1995-99 process to the current practice (2000-2006) 130

7. STRENGTHS AND WEAKNESSES OF THE OBJECTIVE 1 INTERVENTIONS 1994-99 133

7.1. Process related issues 133 7.2. Main achievements 133

8. CONCLUSIONS 134

9. RECOMMENDATIONS 141

9.1. Short-term recommendations for the current programming period (2000-2006) 141 9.2. Longer-term recommendations for the post 2006-period 142

10. BIBLIOGRAPHY 143

11. INTERVIEWEE LIST 145

12. STATISTICAL ANNEX 146 - 4 -

I. EXECUTIVE SUMMARY

The Objective 1 programme for Burgenland of the previous programming period (1995-1999) could generally achieve positive and valuable results both with regard to financial execution of the programme and with regard to the actual outputs achieved by the different types of interventions.

Appropriateness

Considering the implementation progress made during the lifetime of the programme, one can say that the individual measures of the Objective 1 programme had generally been appropriate instruments for tackling the initial needs identified. Both the main strategic orientations and the basic priorities of the Objective 1 programme 1995-1999 have remained the same over time. Especially the initial evaluation of the development potentials of tourism has proved to be valid. Although the Commission had initially wished more ambitious targets with regard to the number of new jobs created, the Burgenland government was largely confirmed in its more realistic position.

A more critical assessment has to be made for the "Fund-specific mix of interventions" within the Objective 1 programme. The financial balance was certainly the major critical issue for many actors involved in the programme implementation, as the initial budgeting of interventions was not fully consistent with the regional needs that had been identified in the programming document. According to the combination of funding under the various priorities of the Objective 1 programme, Funds-specific synergy effects were initially intended to take place mainly between the ERDF and the ESF. However, due to a lacking integration structure within the programme, synergy effects were mainly achieved at the level of individual projects.

Effectiveness of Funds interventions

Basic infrastructure investments supported by various ERDF-funded measures have significantly contributed to generally improve the basic framework conditions in Burgenland. The water infrastructure facilities were necessary to accompany the economic development process in the field of industry, crafts and tourism, whereas support to other basic infrastructure (telecommunication infrastructure, Institute for higher education, technology centres, professional training) have certainly increased the Land's research and development and educational capacity. An important other „lead project“ in the field of infrastructure investment was the establishment of a major business park in southern Burgenland. Although necessary, this activity has to be considered less efficient with regard to what was initially expected by the public authorities and what had actually been achieved by the end of the programming period. There is still the necessity to accompany this particular project in order to strengthen further its overall role as a development pole in the southern part of the Land. Enterprise based research and development support under was rather weak, which was mainly due to the relatively small amount of public funding available for these interventions and partly also a consequence of a lacking response from the enterprise level (especially as regards the SMEs).

Compared to the generally small share of public financial support available for ESF- funded interventions in the programme, their result-achievement can be judged generally positive. Especially if one compares the initial targets set for the most important measures implemented by the AMS as main end-beneficiary with what has been achieved, one can say that these traditional labour market interventions had been very effective. Training and counselling measures provided for under these measures were largely oriented towards the needs of the regional economy. They have achieved high participation and good integration rates and contributed to relieve pressure from the Burgenland labour market. The overall share of women that participated in qualification and employment activities carried out by the AMS was 47.5%, but the most important share of female participants can be observed in the framework of training, counselling and guidance of the labour force in SMEs and of those threatened by unemployment (measure 5.1: 53%). These overall results are clearly above the share of female employment that was registered in 1993. The financial amount of public support attributed to ESF-funded measures for which the Land Burgenland had been the main end-beneficiary was comparatively small. These interventions had been distributed among different programme priorities and experienced significant delays in their implementation during the first years of the programme. Only by the end of the programme, one could observe a slow improvement of this negative situation. In addition, some of these measures were complemented by new interventions (start up of enterprise initiative) or had been fused under one common heading (initial ESF-measures 2.4 and 2.5 2.4) in order to assure their full implementability. Once the implementation process has begun, most of the measures have however produced relatively good results. A good example is the Burgenland "start-up of enterprise initiative" launched by the Land government, which could support a considerable number of new start-ups between - 6 -

1998/1999.

With regard to the environmental impacts resulting from projects supported under the Objective 1 programme, interesting results have been revealed in a pilot study that has examined more than 600 projects. The qualitative rating exercise carried out for all those projects supported under the Objective 1 programme revealed that the positive impacts were largely dominant. Especially in the field of waste, energy and reduction of raw materials or the improvement of the quality of air and water, positive effects can be observed in a majority of projects that have also received the largest share of public funding. Unclear environmental impacts were mainly expected from projects that involve new construction or enlargement of buildings (environmental category nature and landscape). Only a small proportion of projects with a rather limited share of public support attributed had an assumptive negative impact on various environmental categories.

Impacts

The Objective 1 programme was not able to contribute significantly to change Burgenland’s share in the national GDP. However, the average annual impulse resulting from the total cost of ERDF- and EAGGF-funded measures between 1995- - 7 -

1999 have contributed with around 5% to the average annual GRP realised in Burgenland and could therefore help to stabilise the Land’s share of the overall Austrian GDP. The programme could also not significantly contribute to achieve a greater intra-regional balance in Burgenland: this was not a weakness of the programme itself, but rather a consequence of the relatively limited amount of financial support available compared to the real amount necessary to achieve such a progress.

Although one can observe a rather positive development in Burgenland as regards the convergence of income levels and the purchasing power during the years 1995-1999, it is difficult to clearly identify the economic impact of Structural Funds interventions on these variables. One can assume positive effects of the programme on wages and salaries that result mainly from ESF-funded training activities or from technical assistance (priority 6) and from income transfers to agricultural holdings, but also from expenditure that had been made in the framework of infrastructure equipment in all priorities and measures (ERDF-interventions).

The evolution of annual investment rates at Länder level in Austria shows that Burgenland has achieved a significantly positive development during the years 1995- 1999: Burgenland could constantly realise the second highest investment rates after Tirol during these years and occupied even the first place in 1997 with an investment rate of 28.9%. Within this wider context, the Objective 1 Programme has significantly contributed to raise the level of annual investment in Burgenland. The average annual impulse resulting from the total cost of projects supported under various ERDF- and EAGGF measures has contributed each year with 17.8% to the average gross fixed capital formation in Burgenland between 1995 and 1999. The average annual impulse resulting from total public funding committed for ERDF- and EAGGF- measures (EU, Federal level, Land) had alone represented 6.5% of the annual average gross fixed capital formation in Burgenland between 1995 and 1999 and the EU-contribution.

Due to the rather vague definition of employment objectives in the programme (7.300 jobs, not specified whether new or only preserved), it was difficult to precisely measure the goal-achievement rate for this indicator. If one puts the total amount of newly created and secured jobs (ERDF+EAGGF: 11,454) in relation to the initially defined overall target (7.300 jobs), the Objective 1 programme would have achieved an overall goal achievement rate of nearby 157%. If one focuses only on those jobs that are clearly identifiable as “newly created jobs” (2387), one can say that only the ERDF-interventions have reached a goal achievement rate of around 56%. By considering only the new jobs created under ERDF-programme interventions, on can calculate gross and net employment effects on the ground of a model approach with reduced complexity: During the years 1996-2000, the total number of new jobs created has contributed to lower each annual unemployment rate by a gross effect of nearby 0.6%. The absolute net employment effects of ERDF-interventions have to be located between an upper level of 2626 jobs created and a lower level of 2148 jobs created. Based on these figures, one can also identify the margin in which net effects of ERDF-interventions on unemployment have to be localised: ERDF- interventions have contributed to lower unemployment rates between 1996-2000 by an annual net effect between 0.5% and 0.63%. - 8 -

If one looks at the 3 major sectors that were dominantly targeted by the Objective 1 programme interventions, one can summarise their assumptive impact on labour productivity as follows: In Burgenland's primary sector, EAGGF-interventions have dominantly contributed to raise the overall level of labour productivity. The same observation can be made for ERDF-interventions, which have dominantly contributed to raise the overall labour productivity in the “production of goods” sub-sector. This general observation does not neglect the positive employment effects realised by ERDF-interventions, but their overall impact might have been more that of influencing a sector-internal substitution between “traditional” and “modern” segments of employment. In Burgenland’s sub-sector “hotel and restaurants”, ERDF-interventions have made both a decisive and very important contribution to raise the overall level of productivity and the level of total employment between 1995-99.

Management and implementation systems

The overall organisational framework for implementing the Objective 1 programme was rather complex but efficient over the time. Initial weaknesses in the administrative framework could be observed especially during the first years of the programme implementation, mainly due to Austria's situation as a "newcomer" and its recent integration into the Structural Funds system. The main factor causing a high degree of complexity was the implication of numerous national funding instruments to implement the programme, but the degree of fragmentation was significantly higher at the Federal level than at Land level. During the lifetime of the programme, various regional counselling structures had been implicated in or newly created for the programme‘s implementation (Regional Management Burgenland; ESF- and agricultural counselling structures). The newly created structures helped to overcome initial administrative weaknesses in the project launching or project selection phase (administrative handling) and therefore contributed to timely implement the programme's interventions.

The vertical inter-administrative partnership generally functioned well, but especially „within“ the vertical Fund-specific chains of relationships. One can also observe an increase in horizontal inter-administrative co-operation over different functional departments, especially at the Federal level. The horizontal partnership in Burgenland was broad, but characterised by rather conflictive mutual relations between the Land's administrative actors on the one hand and the social and economic partners on the other hand. One major reason for this was the Austria- specific position adopted by the Land government Burgenland to limit voting rights of social and economic partners within the Monitoring Committee.

Recommendations

Based upon the findings of the appropriateness- and effectiveness-analysis as well as of the implementation and management system analysis in the present ex-post evaluation, the most important recommendations for the current programming period 2000-2006 can be summarised as follows: a.) Due to the continuing north-south disparities within Burgenland and the forthcoming enlargement, the new Objective 1 programme for 2000-2006 should focus its priority actions more on the middle and southern parts of the Land. This general recommendation should apply for all types of interventions contained in the - 9 - new Objective 1 programme 2000-2006. b.) It is also recommendable to increase the programme support for human resources interventions, as more could be done in this direction. Within this context, one should however realise a stronger co-operation between the key actors on the Burgenland labour market (AMS, Land government) and deliberately create stronger synergies (and coherence) between the interventions. In addition, it is recommendable that a specific employment strategy for the middle and southern districts of Burgenland is elaborated that meets the needs of these parts of the Land (e.g. by differentiating interventions or through elaborating specific pilot projects). c.) During the programming period 2000-2006, new “lead projects” that involve significant financial amounts of programme support should not be launched. In contrary, it should be of foremost interest to strengthen the long-term viability of previously implemented lead projects in southern Burgenland (e.g. tourism, cross- border business park). One could think of further developing or improving their integration in the locally specific environment by specific “soft measures”. Only through such fine-tuned accompaignment measures, it is possible to stimulate their role as “development nodes” in these areas. d.) During the new programming period 2000-2006, measures that aim at strengthening endogenous development potentials in Burgenland should be further developed. Two important aspects could be a more targeted support for local SMEs (especially in future oriented sectors) and a further development of activities in Burgenland‘s technology centres. Within this context, it is also necessary to intensify and adapt the programme activities as regards the specific needs in the middle and southern parts of Burgenland. Thirdly, the health and spa tourism activities in southern Burgenland should be further developed (e.g. in direction of a "wellness competence centre"). A final aspect should be to stronger build development activities around the important natural and environmental assets in Burgenland. That dimension should be significantly fostered in an operational dimension, especially in the field of ERDF- and EAGGF-interventions.

Most of the above mentioned recommendations were however already addressed in the new Objective 1 programming document for the period 2000-2006, wherefore their value is mainly that of guiding the focus of the forthcoming mid-term evaluation.

There is little scope for long-term recommendations, as the Objective 1 area in Burgenland will surely be in a “phasing-out position” after 2006. With regard to the forthcoming enlargement process and new Structural Funds interventions in the accession countries, one important lesson that can however be learned from the Objective 1 experience 1995-1999 in Burgenland: It is strongly recommended to closely monitor the extent to which “lead-project” based approaches are adopted in future development strategies. Lead projects might certainly be necessary, but their dominance should be limited especially in those measures aiming at the development of indigenous potentials and SMEs. An option for a more transparent separation could simply be to establish distinct measures or priorities that contain clear implementation prescriptions with regard to the type of actors or projects. - 10 -

EXECUTIVE SUMMARY (German Version)

Das Ziel 1 Programm für Burgenland aus der vorherigen Programmplanungsphase (1995 bis 1999) konnte allgemeinen positiven und nützliche Resultate erreichen, sowohl was die finanzielle Durchführung des Programms betrifft als auch bezüglich der praktischen Ergebnisse, welche durch die unterschiedlichen Interventionsformen erreicht worden sind.

Angemessenheit

Wenn man den Fortschritt der Umsetzung in der Laufzeit des Programms berücksichtigt, so kann man sagen, daß die einzelnen Maßnahmen des Ziel 1 Programms generell angemessene Instrumente zur Behandlung der ursprünglich identifizierten (Entwicklungs-)Notwendigkeiten waren. Die wesentlichen strategischen Ausrichtungen und die grundlegenden Prioritäten des Ziel 1 Programms sind beide im Zeitverlauf gleichgeblieben. Insbesondere die ursprüngliche Bewertung der Entwicklungspotentiale im Bereich Tourismus hat sich bestätigt. Obwohl die Kommission ursprünglich ambitiösere Zielsetzungen bezüglich der zu schaffenden Arbeitsplätze gewünscht hatte, wurde die Burgenländische Landesregierung weitestgehend in ihrer realistischeren Position bestätigt.

Eine etwas kritischere Analyse ergibt sich jedoch für den fondsspezifischen Mix der Interventionen innerhalb des Ziel 1 Programms. Die finanzielle Verteilung war für viele im Programm involvierten Akteure sicherlich ein kritischer Aspekt, da die ursprüngliche Budgetierung der Interventionen nicht vollständig mit den im Programmplanungsdokument identifizierten regionalen Entwicklungsnotwendigkeiten konsistent war. Gemäß der Finanzierungskombination im Rahmen der einzelnen Prioritäten des Ziel 1 Programms, sollten ursprünglich fondsspezifische Synergieeffekte hauptsächlich zwischen dem EFRE und dem ESF stattfinden. Wegen des Fehlens einer integrativen Struktur innerhalb des Programms konnten jedoch Synergieeffekte hauptsächlich auf der Ebene von Einzelprojekte erzielt werden.

Effektivität der Fondsinterventionen

Die durch den EFRE finanzierten Interventionen im Bereich produktiver Investitionen oder grundlegender Infrastruktur konnten wichtige Ergebnisse erzielen, die vor dem Hintergrund der ursprünglichen Problemkonstellation im Burgenland benötigt wurden. Die Unterstützung produktiver Investitionen im Bereich von Industrie, Handwerk oder dem Tourismussektor hat in beträchtlichem Maße Unternehmen und speziell kleine und mittlere Betriebe gefördert. Diese Unterstützung hat auch zur Schaffung eines Großteils neuer Arbeitsplätze und zur Sicherung von bestehenden Beschäftigungsverhältnissen beigetragen. Die jährlichen finanziellen Impulse resultierend aus den förderfähigen Investitionskosten für - 11 -

Industrie, Handwerk und Tourismus haben in beträchtlichem Maße dazu beigetragen, die jährlichen Bruttoanlageinvestitionen von Burgenlands gesamtem sekundären Sektor (speziell der güterproduzierenden Branche) und des Hotel- und Gaststättensektors in den Jahren 1995 bis 1999 anzuheben. Im Rahmen dieser beiden EFRE-Maßnahmen wurden auch umfangreiche "Leitprojekte" durchgeführt, welche als Entwicklungspole in den Bereichen Unternehmensentwicklung und Tourismusentwicklung fungieren sollten. Obwohl sicherlich notwendig vor dem Hintergrund der ursprünglichen Schwächen im Burgenland, haben diese Leitprojekte einen Großteil der unter diesen Maßnahmen zur Verfügung stehenden öffentlichen Mittel absorbiert. Ihre dominante Position innerhalb dieser Maßnahmen muß deswegen nicht nur mit Bezug auf die übergeordnete Effektivität des Programms, sondern in einigen Fällen auch mit Bezug auf Ihre Effizienz (eingesetzte finanziellen Mittel für erzielte materielle Ergebnisse), hinterfragt werden.

Grundlegende Infrastrukturinvestitionen wurden durch mehrere EFRE- Maßnahmen unterstützt und haben beträchtlich dazu beigetragen die allgemeinen Rahmenbedingungen im Burgenland zu verbessern. Wasserwirtschaftliche Infrastrukturanlagen waren notwendig um den wirtschaftlichen Entwicklungsprozeß im Bereich Industrie, Handwerk und Tourismus zu begleiten, wohingegen die Unterstützung anderer grundlegender Infrastrukturen (Telekommunikation, Fachhochschule, Technologiezentren, berufliche Ausbildung) sicherlich die Kapazitäten des Landes im Bereich Forschung und Entwicklung oder Ausbildung erhöht haben. Ein wichtiges anderes Leitprojekt im Bereich der Infrastrukturinvestitionen war die Einrichtung eines großen Gewerbegebiets im Süden von Burgenland. Vergleicht man die ursprünglichen Erwartungen der öffentlichen Hand mit dem am Ende der Programmplanungsphase tatsächlich Erreichten, so muß diese Aktivität als weniger effizient eingestuft werden. Es gibt jedoch immer noch Bedarfe dieses besondere Projekt zu begleiten um seine generelle Rolle als Entwicklungspol im südlichen Teil des Landes weiter zu stärken. Die Unterstützung von Forschung und Entwicklung im Rahmen von Unternehmen war relativ schwach, was teilweise eine Folge der relativ geringen zur Verfügung stehenden öffentlichen Fördermittel für diese Interventionen und teils auf eine fehlende Annahme seitens der Unternehmen selbst zurückzuführen war (speziell im Bereich KMU).

Im Vergleich zum generell geringen Anteil der zur Verfügung stehenden öffentlichen Finanzmittel für ESF-Interventionen im Programm kann ihr Grad der Ergebniserreichung als allgemeinen positiv bezeichnet werden. Insbesondere wenn man die ursprünglichen Zielsetzungen für die wichtigsten vom AMS als Endbegünstigten durchgeführten Maßnahmen betrachtet und mit dem tatsächlichen Ergebnis vergleicht, kann man sagen, daß diese traditionellen Arbeitsmarktinterventionen sehr effektiv waren. Die unter diesen Maßnahmen geförderten Ausbildungs- und Beratungsaktionen waren stark am Bedarf der regionalen Wirtschaft orientiert. Sie haben hohe Teilnehmerzahlen und gute Integrationsraten erreicht und dazu beigetragen, den Druck auf dem Arbeitsmarkt im Burgenland zu vermindern. Der Gesamtanteil von Frauen, welche sich an Qualifizierungs- und Beschäftigungsaktivitäten des AMS beteiligten, belief sich auf 47,5%, aber der höchsten Anteil an weiblichen Teilnehmerinnen konnte im Bereich von Qualifizierungs-, Beratungs- und Hilfestellungsmaßnahmen für Arbeitnehmer in KMU und für durch Arbeitslosigkeit bedrohte Personen verzeichnet werden (Maßnahme 5.1: 53%). Diese allgemeinen Ergebnisse sind deutlich über dem Anteil - 12 - der weiblichen Beschäftigung in 1993. Die öffentlichen Mittel für ESF-Maßnahmen, welche das Land Burgenland als hauptsächlich Endbegünstigter umsetzte, hatten einen vergleichsweise relativ geringen finanziellen Umfang. Diese Interventionen waren über verschiedene Prioritäten des Programms verteilt und zeichneten sich während der ersten Jahre des Programms durch beträchtliche Verzögerungen in der Umsetzung aus. Nur gegen Ende des Programms konnte man eine langsame Verbesserung dieser negativen Situation beobachten. Zudem wurden einige dieser Maßnahmen durch neue Interventionen ergänzt ("Gründerinitiative") oder unter einem gemeinsamen "Dach" vereinigt (ursprüngliche ESF Maßnahmen 2. 4 und 2.5 2.4.) um die volle Umsetzungsfähigkeit zu gewährleisten. Die meisten dieser Maßnahmen hatten jedoch mit dem Beginn ihrer Durchführung relativ gute Resultate hervorgebracht. Ein gutes Beispiel hierfür ist die von der Landesregierung initiierte Burgenländische Gründerinitiative, die eine beträchtliche Anzahl von Unternehmensneugründungen zwischen 1998/99 unterstützen konnte.

Im Vergleich zum geringen Anteil der zur Verfügung stehenden öffentlichen Fördermittel für EAGFL-Interventionen im Bereich von Landwirtschaft, Forstwirtschaft und ländlicher Entwicklung (Maßnahmen 4.1.- 4.4) können der Grad der Ergebniserreichung sowie die Effekte auf den Sektor im Burgenland als sehr positiv bewertet werden. Die allgemeinen Effekte der großen Anzahl an unterschiedlichen, unter dieser Monofonds-Priorität vereinigten Förderaktivitäten sind jedoch höchst unterschiedlich und komplex in bezug auf ihre praktische Manifestation. Im Rahmen des Ziel 1 Programms haben ungefähr 7000 Bauern im Burgenland von den Ausgleichszahlungen für landwirtschaftliche Aktivitäten in benachteiligten Gebieten sowie von der damit verbundenen nationalen Förderung profitiert. Ungefähr 4000 Landwirte haben sich im Rahmen von Projekten beteiligt, welche sich auf Verarbeitung und Vermarktung, Diversifizierung, Biomasse und umweltbezogene Investitionen, Dorferneuerung oder Qualifizierung und Beratung bezogen. Die Unterstützung von Investitionen auf der Ebene von Einzelhöfen wurde sehr stark genutzt und konnte einen echten Investitionsboom initiieren, welcher zu einer Verbesserung der Effizienz der landwirtschaftlichen Produktion im Burgenland beigetragen hat. Eine sehr hohe Erfolgsquote wurde bei den sektorspezifischen Projekten im Bereich von Verarbeitung und Vermarktung erreicht, aber auch im Bereich der Weinproduktion. In diesen Bereichen hatte das Ziel 1 Programm eine wichtige Impulsfunktion und konnte einen beträchtlichen Schub an privaten Investitionen mobilisieren (besonders im Weinbausektor). Ein anderes Beispiel sind die sogenannten Gemeinschaftsprojekte, die durch ihren Kollektivansatz neue Verbindungen und Kooperationen initiieren konnten, welche über den landwirtschaftlichen und forstwirtschaftlichen Sektor hinausgehen. Diese Vernetzung hatte eine besonders positive Auswirkung auf die ländlichen Regionen. Gute Beispiele für neue Impulse in diesem Kontext sind die Projekte im Bereich erneuerbare Energien basierend auf der Nutzung von Biomasse. Alle im Rahmen der Programmpriorität 4 unterstützten Projekte haben dazu beigetragen, bestehende Beschäftigung in den ländlichen Gebieten zu erhalten und neue Arbeitsplätze im Bereich Landwirtschaft und Forstwirtschaft zu schaffen. Insgesamt erwähnen offizielle Quellen die Schaffung und Erhaltung von ungefähr 3000 Arbeitsplätzen. Betrachtet man die jährlichen finanziellen Impulse welche aus den förderfähigen Gesamtkosten der Unterstützung für die Land- und Forstwirtschaft resultieren (EAGFL-Maßnahmen 4.1-4.2), so kann man beobachten, daß ihr Anteil an den Bruttoanlageinvestitionen des primären Sektors im Burgenland sehr hoch war. - 13 -

Was die Umweltauswirkungen der durch das Ziel 1 Programm unterstützten Projekte betrifft, so konnte eine Pilotstudie, welche mehr als 600 Projekte untersuchte, interessante Resultate aufdecken. Die qualitative Bewertung aller durch das Ziel 1 Programm unterstützten Projekte hat gezeigt, daß die positiven Auswirkungen weitgehend vorherrschen. Speziell in den Bereichen Abfall, Energie und Reduzierung des Rohstoffverbrauchs oder Verbesserung der Luft- und Wasserqualität können in einer Mehrzahl von Projekten, die auch einen Großteil der öffentlichen Fördermittel erhalten haben, positive Effekte beobachtet werden. Unklare Umweltauswirkungen werden hauptsächlich von Projekten erwartet, die eine Neukonstruktion oder eine Erweiterung von Bauten beinhalten (Umweltkategorie Natur und Landschaft). Nur eine geringe Anzahl von Projekten mit einem begrenzten Anteil an öffentlichen Fördermitteln hatte eine annahmegemäß negative Auswirkung auf mehrere Umweltkategorien.

Auswirkungen

Das Ziel 1 Programm war nicht in der Lage einen signifikanten Beitrag zur Veränderung von Burgenlands Anteil am nationalen Bruttoinlandsprodukt zu erreichen. Gleichwohl haben die durchschnittlichen jährlichen Impulse der förderfähigen Gesamtkosten von EFRE- und EAGFL-Maßnahmen zwischen 1995 und 1999 mit ungefähr 5% zum durchschnittlichen jährlichen Bruttoregionalprodukt des Burgenlands beigetragen und konnten deswegen helfen, den Anteil des Landes am gesamtösterreichischen Bruttoinlandsprodukt zu stabilisieren. Das Programm konnte auch keinen signifikanten Beitrag zu einem größeren innerregionalen Ausgleich im Burgenland leisten. Dies war aber nicht eine Schwäche des Programms an sich, sondern vor allem eine Konsequenz des relativ begrenzten Umfangs der verfügbaren Finanzmittel im Vergleich zu den tatsächlichen Summen, welche nötig gewesen wären, um einen Fortschritt in dieser Hinsicht zu erzielen.

Obwohl man im Burgenland eine vergleichsweise positive Entwicklung bei der Annäherung des Einkommensniveaus und der Kaufkraft während der Jahre 1995-1999 beobachten kann, ist es schwierig, die genauen ökonomischen Auswirkungen der Strukturfondsinterventionen auf diese Variablen zu bestimmen. Man kann positive Effekte des Programms auf Löhne und Gehälter annehmen, welche vorwiegend von ESF-Qualifizierungsmaßnahmen oder von der technischen Hilfe (Priorität 6) und von Einkommenstransfers an landwirtschaftliche Betriebe, aber auch von Ausgaben im Bereich der Infrastrukturausstattung in allen Prioritäten und Maßnahmen (EFRE-Interventionen) herrühren.

Die Entwicklung der jährlichen Investitionsquote der Länder in Österreich zeigt, daß das Burgenland eine signifikant positive Entwicklung während der Jahre 1995 bis 1999 erreichen konnte. Das Burgenland hatte in diesen Jahren konstant die zweithöchste Investitionsquote nach Tirol und belegte 1997 mit einer Investitionsquote von 28,9% sogar den ersten Platz. In diesem weiteren Rahmen hatte das Ziel 1 Programm signifikant dazu beigetragen das jährliche Investitionsniveau in Burgenland anzuheben. Der durchschnittliche jährliche Impuls welcher sich aus den Gesamtkosten der unter den verschiedenen EFRE- und EAGFL-Maßnahmen geförderten Projekte ergibt, hatte zwischen 1995 und 1999 jedes Jahr mit 17,8% zu den durchschnittlichen Bruttoanlageinvestitionen im Burgenland beigetragen. Der durchschnittliche jährliche Impuls, welcher sich aus den für EFRE- und EAGFL-Maßnahmen gebundenen öffentlichen Mitteln (EU, Bund, - 14 -

Land) ergibt, belief sich zwischen 1995 und 1999 alleine auf 6,5% der jährlichen durchschnittlichen Bruttoanlageinvestitionen im Burgenland.

Wegen der relativ vagen Definition der Beschäftigungsziele im Programm (7300 Arbeitsplätze, nicht spezifiziert nach neugeschaffenen oder erhaltenen Arbeitsplätzen) war es schwierig, den genauen Zielerreichungsgrad für diesen Indikator zu bestimmen. Wenn man die Gesamtzahl der neugeschaffenen und erhaltenen Arbeitsplätze (EFRE und EAGFL: 11.454) in Beziehung zu der ursprünglich gesetzten Zielgröße bringt, so hätte das Ziel 1 Programm einen Zielerreichungsgrad von fast 157% erreicht. Wenn man sich jedoch nur auf diejenigen Arbeitsplätze beschränkt, welche eindeutig als neugeschaffene Arbeitsplätze identifizierbar sind (2387), so kann man sagen, daß nur die EFRE- Interventionen einen Zielerreichungsgrad von ungefähr 56% erreicht haben. Berücksichtigt man nur die durch EFRE-Programminterventionen neugeschaffenen Arbeitsplätze, so lassen sich die Brutto- und Nettobeschäftigungseffekte auf der Grundlage eines Modellansatzes mit reduzierter Komplexität berechnen. Während der Jahre 1996 bis 2000 hat die Gesamtzahl an neugeschaffenen Arbeitsplätzen dazu beigetragen, die jährliche Arbeitslosenrate mit einem Bruttoeffekt von ungefähr 0,6% zu senken. Die gesamten Nettobeschäftigungseffekte von EFRE-Interventionen bewegen sich zwischen einem oberen Niveau von 2626 neugeschaffenen Arbeitsplätzen und einem unteren Niveau von 2148 geschaffenen Arbeitsplätzen. Auf der Grundlage dieser Angaben kann man auch den Spielraum der Nettoeffekte von EFRE-Interventionen auf die Arbeitslosigkeit bestimmen. EFRE- Interventionen haben zwischen 1996-2000 mit einem jährlichen Nettoeffekt zwischen 0,5% und 0,63% dazu beigetragen, die Arbeitslosenrate zu senken.

Betrachtet man die 3 Wirtschaftssektoren auf welche die Ziel 1 Programminterventionen vorwiegend abzielten, so kann man deren vermutliche Auswirkungen auf die Arbeitsproduktivität wie folgt zusammenfassen: Im primären Sektor Burgenlands haben die EAGFL-Interventionen hauptsächlich dazu beigetragen den allgemeinen Grad der Arbeitsproduktivität zu steigern. Die gleiche Beobachtung kann man für EFRE- Interventionen machen, die vor allem die allgemeine Arbeitsproduktivität in den güterproduzierenden Branchen gesteigert haben. Diese generelle Beobachtung soll nicht die positiven Beschäftigungseffekte der EFRE-Interventionen vermindern, aber ihre allgemeinen Auswirkungen werden vor allem die der Beeinflussung einer sektorinternen Substitution zwischen eher "traditionellen" und "modernen" Beschäftigungssegmenten gewesen sein. Im Hotel- und Gaststättengewerbe Burgenlands haben die EFRE Interventionen zwischen 1995 und 1999 sowohl einen wichtigen Beitrag zur Erhöhung der allgemeinen Produktivität als auch des gesamten Beschäftigungsniveaus erbracht.

Verwaltungs- und Umsetzungssystem

Der gesamte organisatorische Rahmen zur Umsetzung des Ziel 1 Programms war relativ komplex aber effizient im Zeitverlauf. Anfängliche Schwachpunkte im administrativen Kontext konnten insbesondere während der ersten Jahre der Programmumsetzung beobachtet werden, die vor allem eine Folge der Situation Österreichs als "Neuling" und der erst kürzlich vollzogen Integration in das Strukturfondssystem waren. Hauptursachen für den hohen Grad an Komplexität war die Einbindung einer Vielzahl nationaler Finanzierungsinstrumente in die Umsetzung des Programms, wenngleich der Grad der Fragmentierung auf der Bundesebene - 15 - deutlich höher als auf der Landesebene war. Im Programmverlauf waren mehrere regionale Beratungsstrukturen in die Umsetzung des Programms involviert oder wurden für sie neu ins Leben gerufen (Regionalmanagement Burgenland, Beratungsstrukturen für den ESF und die Landwirtschaft). Die neugeschaffenen Strukturen halfen anfängliche administrative Schwächen in der Projektlancierungs- oder Projektauswahlphase zu beseitigen (administrativer Durchführung) und haben deswegen einen Beitrag zur termingerechten Umsetzung der Programminterventionen gemacht.

Die vertikale Partnerschaft zwischen den Verwaltungen hat generell gut funktioniert, aber speziell "innerhalb" der vertikalen und fondsspezifischen Beziehungsketten. Man kann auch eine Zunahme der horizontalen Kooperation zwischen den ressortspezifischen Verwaltungen beobachten, insbesondere auf Bundesebene. Die horizontale Partnerschaft im Burgenland war breit angelegt, sie zeichnete sich aber durch ein relativ konfliktgeprägtes Verhältnis zwischen den Akteure der Landesverwaltung einerseits und den Sozial- und Wirtschaftspartnern auf der anderen Seite aus. Eine Ursache hierfür war die durch das Land Burgenland eingenommene österreichspezifische Position, das Stimmrecht der Sozial- und Wirtschaftspartner innerhalb des Begleitausschusses zu beschränken.

Empfehlungen

Auf der Grundlage der Ergebnisse aus der Analyse der Angemessenheit, der Effektivität und des Verwaltungs- und Umsetzungssystems in der vorliegenden ex- post Evaluation, können die wichtigsten Empfehlungen für die laufende Programmplanungsphase 2000 bis 2006 wie folgt zusammengefaßt werden: a.) Wegen des fortbestehenden Nord-Süd Gefälles innerhalb Burgenlands und der künftigen Erweiterung sollte das neue Ziel 1 Programm für die Jahre 2000 bis 2006 seine Aktivitäten stärker auf den mittleren und südlichen Teil des Landes konzentrieren. Diese allgemeine Empfehlung sollte für alle Interventionsarten des neuen Ziel 1 Programms 2000 bis 2006 Anwendung finden. b.) Es ist ebenfalls empfehlenswert, die Programmunterstützung für Interventionen zur Entwicklung von Humanressourcen zu erhöhen, da in diese Richtung noch mehr getan werden kann. In diesem Rahmen sollte jedoch eine engere Kooperation zwischen den Schlüsselakteuren auf dem Arbeitsmarkt im Burgenland erreicht (AMS, Landesregierung) und sehr viel gezielter auf die Schaffung stärkerer Synergien (und Kohärenz) zwischen den Interventionen hingearbeitet werden. Zudem ist es empfehlenswert eine spezifische Beschäftigungsstrategie für die mittleren und südlichen Bezirke des Burgenlands auszuarbeiten, welche die Bedarfe dieser Teile des Bundeslandes berücksichtigt (z. B. durch differenzierte Interventionen oder durch eine Ausarbeitung spezifischer Pilotprojekte). c.) Während der Programmperiode 2000 bis 2006 sollten neue "Leitprojekte", welche einen signifikanten Anteil der Programmfördermittel in Anspruch nehmen, nicht auf den Weg gebracht werden. Im Gegenteil, das größte Interesse sollte sich auf eine Stärkung der längerfristigen Lebensfähigkeit von vorher durchgeführten "Leitprojekten" im südlichen Burgenland konzentrieren (z. B. Tourismus, grenzüberschreitender Gewerbepark). Hierbei wäre die Weiterentwicklung oder Verbesserung ihrer Integration in das spezifisch lokale Umfeld durch gezielte "weiche - 16 -

Maßnahmen" denkbar. Nur durch solch fein gesteuerte Begleitmaßnahmen ist es möglich, ihre Rolle als Entwicklungspole in diesen Gebieten zu stimulieren. d.) Während der neuen Programmperiode 2000 bis 2006 sollten Maßnahmen zur Verstärkung des endogenen Entwicklungspotentials im Burgenland weiterentwickelt werden. Zwei wichtige Bereiche könnten eine gezieltere Förderung von lokalen KMUs (insbesondere in zukunftsorientierten Sektoren) und eine Weiterentwicklung der Aktivitäten in den Burgenländischen Technologiezentren sein. In diesem Kontext ist es auch notwendig, Programmaktivitäten zu intensivieren und an die spezifischen Bedarfe des mittleren und südlichen Burgenlands anzupassen. Drittens sollten die Aktivitäten im Gesundheits- und Bädertourismus im südlichen Burgenland weiterentwickelt werden (z. B. in Richtung auf ein "Wellness-Kompetenzzentrum"). Ein letzter Aspekt wäre eine stärkere Konzeption von Entwicklungsaktivitäten "um" die wichtigen natürlichen und umweltbezogenen Ausgangsbedingungen im Burgenland. Diese Dimension sollte vor allem in operationeller Hinsicht deutlich gestärkt werden, insbesondere im Rahmen von EFRE- und EAGFL-Interventionen.

Die meisten der oben gemachten Empfehlungen wurden jedoch bereits durch das neue Ziel 1 Programmplanungsdokument für die Periode 2000-2006 berücksichtigt, weswegen sie vor allem einen eher begleitenden Wert für die Ausrichtung der künftigen Zwischenevaluierung haben.

Es gibt wenig Spielraum für längerfristige Empfehlungen, da das Ziel 1 Gebiet Burgenland nach 2006 sicherlich in einen "phasing-out" Status übergehen wird. Mit Bezug auf den künftigen Erweiterungsprozeß und die neuen Strukturfondsinterventionen in den Beitrittsstaaten läßt sich jedoch eine wichtige Lehre aus der Ziel 1 Erfahrung des Burgenlands in den Jahren 1995 bis 1999 ableiten. Es wird dringend empfohlen, den Umfang, welche künftige Entwicklungsstrategien auf sogenannte "Leitprojekt-Ansätze" legen werden, aufmerksam zu begleiten. Leitprojekte mögen sicherlich notwendig sein, aber ihre Dominanz sollte insbesondere im Rahmen von Maßnahmen zur Entwicklung endogener Potentiale oder KMUs begrenzt werden. Eine Option zur Herstellung einer transparenteren Trennung wäre einfach die Aufstellung unterschiedlicher Maßnahmen oder Prioritäten, welche genaue Durchführungsvorschriften bezüglich der Akteure oder Projekte enthalten. - 17 -

II. MAIN REPORT

1. INTRODUCTION

With Austria's accession to the European Union in January 1995 the country was also fully integrated into the Community's Structural Funds system, which itself had recently begun its second pluri-annual programming period (1994-1999) after the basic Treaty reforms launched back in the mid 1980ies.

At this time, the Community's regional policy was on 4 priority objectives that correspond also to 4 different types of regional problems: in the framework of Objective 1, the structural adjustment of regions whose development is lagging behind was supported. In the framework of Objective 2 and Objective 5b, the Structural Funds supported respectively the economic conversion of areas seriously affected by industrial decline and the economic diversification of vulnerable rural areas. Finally, a specific Objective 6 had been created with the second reform of the Structural Funds, which supported the development of sparsely populated regions especially in the Scandinavian countries Finland and Sweden that had also adhered to the European Union.

Within this larger context, "single programming documents" had been elaborated in Austria for Structural Funds support in 3 of the above-mentioned regionalised objectives: • Within Austria, only a Federal land Burgenland was eligible for Structural Funds aid under Objective 1. This largely rural region had a population of roughly 270.000 inhabitants and is located in eastern part of the country at the borders with Hungary. • The Austrian regions covered by Objective 2 programmes contained a total population of 637.000 (8.2% of the countries preparation). • The total eligible population living in Objective 5b programme areas in Austria was 2.255 billion inhabitants, which is 28.9% of the total national population.

Since the adoption of the programmes in 1995, the implementation phase had begun and reached its end in the year 2002. At a very general level, the Austrian Institute for Spatial Planning (ÖIR) has drawn generally positive conclusions on the experiences gained with the Community's Structural Funds system between 1995- 1999: • The implementation of Austria's regional development programmes can be considered successful as they helped to initiate new economic impulses in the regions supported. • Without the inclusion into the EU-wide Structural Funds concept, Austria's regions would not have undertaken the systematic programming work that nowadays characterises each region supported. • Finally, the inclusion into the European wide dimension has raised pressure to - 18 -

increase inter-departmental co-operation between public administrations and also general interregional and international co-operation in the framework of regional development policy.

The overall result achieved by the Objective 1 programme and Burgenland at the end of the programming period can be considered very positive. The previously poorest region of Austria had developed towards a demanded and attractive economic location. Through all types of interventions supported by the programme, more than 2000 new jobs had been created and 8000 jobs had been preserved in their existence. During the programming period 1995-1999 one can also observe an increasing living standard in Burgenland, as the purchasing power per capita has further raised towards the overall Federal average. Despite these positive results, Burgenland still has the highest unemployment rate in Austria and could not significantly increase its share in the national GDP.

* * *

The present ex-post evaluation of the Objective 1 programme in Burgenland has the general aim to assess the appropriateness of the intervention strategy adopted back in 1995, to evaluate the effectiveness of the interventions carried out in the context of the programme and to perform an assessment of their overall impact, but also to examine whether the implementation and management structures for the programme had been adequate with regard to delivering the programmes objectives and targets. These basic tasks are accomplished in the framework of a general structure for the study that had been previously agreed with the main contractor:

Chapter 2 briefly summarises the approach adopted in the evaluation study and will make reference to the basic literature reviewed and the range and number of organisations or individuals interviewed.

Chapter 3 provides an introduction to the Objective 1 programme and sets out the context for the programme. It identifies key issues at a national and regional level in 1994 and describes the evolution of the regional economic and social situation during the programme period until 1999/2000. The chapter explains what choices were made in the approach taken to deliver the development goals and assesses whether this approach had been appropriate and relevant to national (or regional) circumstances (e.g. mix of programmes and the balance of resources). It also explores whether the implementation of the strategy differed from that initially proposed and looks at changes that were a result of strategic decision making (reacting to changing circumstances for example) or the result of unforeseen problems in implementing the planned strategy (such as absorption problems).

Chapter 4 evaluates the overall effectiveness of the Objective 1 programmes in achieving the initially set goals and targets. This chapter explores whether the objectives at priority level in the SPD had been clearly defined and quantified and how far they have been achieved. Within this context, one will explore how effective the Objective 1 interventions had been in delivering outputs and results as well as in achieving the strategic objectives of the programme. This assessment is carried out under a Funds-specific perspective and on the ground of a theme-specific perspective. One will also look at the factors influencing the - 19 -

effectiveness of different types of programme-interventions and describe reasons that might explain difficulties in the expenditure profile.

Chapter 5 evaluates the overall impact of the Objective 1 programme that might have resulted from its interventions. Mainly due to the relatively small size of the Austrian Objective 1 programme, the dimension chosen for such an impact assessment is that of a “bottom-up approach”: this approach will evaluate potential impacts at the level of more general cohesion indicators and deepen its focus by looking at more precise aspects in Burgenland such as investment behaviour, employment or labour productivity and other specific issues.

Chapter 6 evaluates the effectiveness of the management and implementation arrangements set up for the Objective 1 programme and explores whether they had been fit for purpose. In particular, the chapter explores how the partnerships (vertical and horizontal) did function in terms of membership and operating and how they affected the effectiveness with which the Structural Funds interventions were implemented. These issues are examined at different levels: the general administrative settings in Austria used for Structural Funds implementation, the partnership-based work process within the monitoring committee, the financial management structures, the monitoring and control system and the evaluation activities. Finally the chapter will also assess how management arrangements evolved between the 1995-1999 and 2000-2006 programming period and what lessons can be learnt from this.

Chapter 7 briefly highlights things the Structural Funds interventions did well in Burgenland, but also those aspects that the Objective 1 programme was unable to deal with in the period 1995-99. This brief summary assessment focuses on strengths and weaknesses in the implementation of the Objective 1 programme, but it reflects also on the “Community Added Value” (how far has Objective 1 supported the achievement of Community Objectives? ; to what extent have the operational procedures of Objective 1 provided added value?).

Chapter 9 draws together conclusions resulting from the overall analysis of the ex-post evaluation. It considers both the overall results from the 1995-1999 programming period and an assessment of the extent to which strengths and weaknesses have been built upon or addressed in 2000-2006 programming period. - 20 -

2. METHODOLOGY

The present country report Austria assessing the Objective 1 interventions in Burgenland during the years 1995-1999 is based both on a review of existing literature, documents and other sources and on extensive field research based on interviews with major stakeholders at the Federal and Land levels.

The type of documents consulted are mainly official sources on the programme such as the original Objective 1 programming document, the annual reports (1995- 2000), the minutes of the 6 monitoring committee meetings (1996-1999) and various documents annexed to these minutes. Other important official or semi-official sources dealing with the Objective 1 programme as a whole or with particular aspects of it were • the mid-term evaluation of 1997 and the ex-ante evaluation for the new Objective 1 programme 2000-2006, • various reports of the Austrian Court of Auditors, • a pilot study assessing the environmental impact of Objective 1 interventions • formal progress reports on the implementation of programme-specific interventions, which have been established by specific organisms involved in the programme implementation such as the Labour market service Burgenland, the Land division for agriculture and forestry and the Regional Management Burgenland etc., • additional documents or summary descriptions of material programme achievements, which have been transmitted to the evaluator by the Land division for agriculture and forestry, the BABBI, the Regional Management Burgenland/ERP-Funds-monitoring or the Labour market service Burgenland. Finally, other sources such as published articles or project descriptions had been used to complement the assessment of specific issues.

Macro-economic statistical information used to describe the evolution of socio- economic framework conditions in Austria and Burgenland are mainly derived from official sources such as Statistik Austria, the Burgenland Statistical Office, the AMS or the most recent „Green Report on agriculture and forestry“. In order to have a coherent overview on these data, a specific „statistical annex“ has been established in the present study.

With regard to data on the financial execution of Objective 1 interventions in Burgenland, the present study has considerable problems in having access to sound and coherent sets of data. In the most recent annual report (year 2000), complete figures were only available for ERDF-funded interventions and for EAGGF-funded interventions. For the ESF-funded interventions, in turn, coherent data on the financial execution of all measures were only contained in the annual report of 1999.

As already mentioned above, the method applied for the macro-economic impact assessment is mainly that of a “bottom-up approach”: due to the relatively small size of the Austrian Objective 1 programme (in financial terms), this approach will mainly evaluate potential impacts at the level of more specific aspects in Burgenland such as investment behaviour, employment or labour productivity and other specific issues. The bottom up assessment should generally be understood as a continuation and deepening of focuses that were already applied during the mid-term evaluation back in 1997. - 21 -

Literature review for the present ex-post evaluation report on the Objective 1 programme in Burgenland was complemented by a number of interviews with representatives of different Austrian administrative authorities at various levels and representatives of the social and economic partners in Burgenland. Such interviews (app. 1,5 to 3 hours each) have been carried out with • representatives of the Austrian Conference for Spatial Planning (ÖROK), • a representatives from the overall co-ordinating and ERDF-Fund-corresponding administration at Federal level, the Federal chancellery (Bundeskanzleramt), • representatives from other Fund-corresponding ministries at Federal level, such as the Federal ministry of economy and labour and the Federal ministry of agriculture, forestry environment and water resources, • representatives from administrations or specific organisms involved in the programme implementation in Burgenland such as the Land government, the Burgenland Labour Market Service or the Burgenland Chamber of agriculture, • representatives of the social and economic partners in Burgenland such as the Chamber of economy (Wirtschaftskammer Burgenland), the Chamber of employees and workers (Kammer für Arbeiter und Angestellte Burgenland) and the Chamber of agriculture (Burgenländische Landwirtschaftskammer)

The author is particularly grateful to the following persons for their decisive help in organising the interviews in Austria or in providing precious additional information/documentation to the evaluator: • The representative of the Austrian Conference for Spatial Planning, Mr Kunze. • The representatives of the Land government Burgenland, Mr. Wedral and Mr. Dreiszker. • The representative of the Labour Market Service Burgenland, Mr. Bencsics. • The representative of the Regional Management Burgenland, Mr. Sebestyén. - 22 -

3. THE APPROPRIATENESS OF THE STRATEGY ADOPTED AND PURSUED IN THE OBJECTIVE 1-PROGRAMME

3.1. Key Issues in 1994 and their evolution until the end of the programming period1

Even before entry into the European Community, the Austrian economy was in many ways closely aligned with the rest of the Union. Historic links to Germany and a central position on Europe's north-south and the east-west routes ensured that Austria was not left out of increasing prosperity in the post-war years.

Within this larger context, the relatively small Objective 1 region Burgenland had a particular situation of departure. It is located at the extreme east of Austria at the external EU-borders. In its length, the region extends to over 160 km, whereas it is only 4 to 60 km large. With 3966 sq. km and 270.888 inhabitants, its population density is below the Austrian average. In the north, the Eisenstadt area (capital city of Burgenland) and the district of Mattersburg have a quite central location with a distance Eisenstadt-Vienna of about 50 km. Northern Burgenland is generally an attractive area for industries, mainly due to the closeness to major high-ranking transport infrastructure (airports Vienna and Bratislava, highway Vienna-Budapest and Vienna-Graz). The other areas of Burgenland have to be considered peripheral and the southern part of Burgenland has even to be considered as extremely peripheral.

At the beginning of the programming period, considerable intra-regional disparities existed in Burgenland. The GDP per capita in southern Burgenland was about 15% lower than the GDP per capita in the northern part. The density of the working population in the southern part of Burgenland (jobs available compared to the total number inhabitants) reached only 70% of the overall Land average. Also with regard to infrastructure, significant weaknesses existed: Burgenland did not have direct access to major international air links or rail links towards the economic centres of Europe. Although basic provision infrastructures (gas, fresh water provision, sewage water treatment) were generally well developed in the northern parts of the Land, middle and southern parts generally suffered from partially important weaknesses (e.g. gas provision, fresh water provision). Also Burgenland’s telecommunication infrastructure had only been recently changed towards digital standards (1995) and was still not at the level of development required to meet the expectations of major companies. In addition, one could also observe a lack of research- and technology centres as well as of enterprise related counselling services. The most important socio-economic “key issues” identified in the Objective 1 programme were the following:

1 Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001). Working paper, Land government of Burgenland (Arbeitspapier, Amt der Burgenländischen Landesregierung: Ausgewählte Indikatoren der wirtschaftlichen Entwicklung 1995 bis 1995). Federal Statistical Office in Austria: www.oestat.gv.at/fachbereich_tourismus/txt.shtml. Amt der Burgenländischen Landesregierung, Landesstatistik: Burgenländische Statistiken, Tourismus 2001 (Neue Folge, Heft 87) . Eisenstadt 2002. Amt der Burgenländischen Landesregierung, Direktion Raumordnung und Statistik: Wohnbevölkerung, Beschäftigte, Pendler des Burgenlandes. Eisenstadt, 1994. Arbeitsmarktservice Burgenland/ESF: Pilotstudie zur Erstellung einer PendlerInnen Statistik. Oktober, 2000. - 23 -

Burgenland was the most agrarian Land in Austria, however characterised by a particularly fragmented primary production. Due to generally favourable natural production conditions and the closeness to major markets such as Vienna and Graz, the share of the agricultural and forestry sector in the Land's gross value added was still very high in 1991 (6%).2 The agricultural and forestry sector was strongly fragmented and characterised by a high number of agricultural holdings with a relatively small size (average agricultural surface 7.5 hectares). Nearby three-quarters of the existing holdings (74%) had been laboured at a part- time base, with a higher degree even in the southern part of Burgenland. In addition, one could observe other significant weaknesses such as the high number of part-time employment in the field of agriculture, underdeveloped marketing or processing, a low skill level of those owning agricultural holdings and a growing competition from CEEC countries.

Burgenland‘s secondary sector was still dominated by the construction branch and the textile industry, although significant job losses had taken place especially in the textile branch. The size of industrial enterprises in Burgenland was below the Austrian average size3 and strongly dependent upon a low-wage type of production. The performance of the industrial sector was characterised by a stagnating and low level of productivity that was roughly one- third below the average level for Austria.4 Varying degrees of industrial productivity (compared to the national average) could also be observed at sub- regional level, with northern Burgenland at 15.6% below the national average (in 1990) and middle or southern Burgenland with levels at respectively 39.2% and 44.4%.

Within the service sector, Burgenland was still struggling with major structural weaknesses of the tourism sector. The tourism branch had difficulties in meeting standard expectations of the international and national markets, which was mainly due to the small size of enterprises (an average of 33 beds) and to a dominant offer of cheap two-star and three-star hotels. Additional handicaps were the peripheral location of the Land and the strong concentration of arrivals during the summer season (68% overnight stay during 4 months). Other negative factors were the small size of enterprises, a lacking willingness of tourism enterprises to make necessary investments and a lack of qualified workforce.

Burgenland’s labour market was characterised by significant structural weaknesses: A major threat at the beginning of the 1990s was the trend of a decreasing labour potential, which was mainly due to an unfavourable age composition of the local workforce. In addition, the degree of qualification of the local workforce was weak. An important internal problem for the regional labour market was also the high degree of people commuting out of the region in order

2 Burgenland also accounted for the highest share of persons employed in agriculture and forestry (Burgenland: 11.4%. Austria: 6.2%). Within Burgenland, agricultural employment was higher in the south and in the northern part of the Land. 3 The average number of employees in industrial enterprises was 49 persons (68 in Austria) and in crafts enterprises only 5 persons. 4 Low levels of productivity could be observed for the textile and clothing industry (25% below the national average), but exceptions could be found in several branches of the productive sector (iron and metal branch, paper producing and the wood processing industry). - 24 -

to find employment in the neighbouring Austrian Länder. In 1991, around one third of the persons with an employment in Burgenland had migrated to Vienna (22.671), Niederösterreich (10.319) or Steiermark (3018).

In order to highlight the changes that took place in Burgenland during the programming period, the evolution of the above mentioned key issues between 1994 and 2000 will be assessed alongside a number of common indicators (where possible). A detailed overview on basic socio-economic indicators can be found in the statistical annex of the study.

The evolution of global indicators for social and economic cohesion in Burgenland between 1995-1999 (see statistical annex, table A-C): During the reference period, Burgenland has realised an annual growth of its gross regional product (3.6%) above the national average of 3.3% and occupied a third position in the Austrian wide context. In 1999, Burgenland could even reach a GRP increase rate of +4.3%.5 Burgenland’s share in the total gross national product of Austria has however remained unchanged (at 2.2%).6 The average evolution of the gross regional products per inhabitant7 of the Austrian Länder between 1995 in 1999 shows however that Burgenland could keep path with the national growth process (average GRP per capita growth of 3.3%). A look on the gross regional products per capita8 in year 1999 shows that Burgenland was still located in the group of Austrian Länder with the lowest levels. One can however observe an improvement of Burgenland’s position as regards the convergence of income levels.9 Within the national context, the Land’s per capita income level has reached 96.1% of the Austrian average and Burgenland now ranges among all Länder at a fourth position. With regard to the purchasing power, Burgenland has developed from a last place in 1995 among Austria’s Länder towards a third last place in 1999 with 91.6% of the national average (before Kärnten and Steiermark). The evolution of gross value added at basic prices by economic activities in Burgenland had been with +13.4% slightly above the national rate (+12.3%). The impression of a rather parallel development compared to the nation-wide figures of the latter two sectors is however only apparent, especially if one looks at specific sub-sectors of the secondary sector10 and the third sector.11 Another interesting feature was the significant increase of gross value added in Burgenland's primary sector (Burgenland: +1.9%, Austria: -4.9%).

The evolution of Burgenland’s overall economic fabric between 1995 and 1999 (see statistical annex, tables B, D, F G): In 1999, the primary sector contributed to

5 Niederösterreich had clearly occupied a leading position in the larger framework of economic development before other Austrian Länder (average annual growth of 4,8% of its gross regional product). 6 In 1999, Vienna pan occupied with 26.8% a first place and was followed by the Land Oberösterreich with 16.3% and Niederösterreich with 16%. 7 Niederösterreich experienced a significant growth (+ 4.5%) above the national average of 3.2%. Vienna was clearly below this level. The other Austrian Länder did not show any significant changes. 8 The Austrian Länder can be grouped into the different categories: (1) Vienna as the economic centre of the country ranks highest with 32.920 EURO per capita. (2) The western part of Austria (Oberösterreich, Salzburg, Tirol, Vorarlberg) had gross regional products per capita between 23.320 and 27.780 Euro. (3) The eastern and southern parts of Austria had gross regional products per capita between 15.650 and 20.760 Euros. 9 Between 1995 and 1999, one can observe that the gross annual income of the people living in Burgenland has increased from 278.000 Austrian shillings to 299.000 Austrian shillings. 10 The relative increase of the gross value added resulting from the production of goods in Burgenland (+20.3%) was clearly above the national rate (+16%) and the increase in the field of energy and water supply was even significantly higher (Burgenland: +10.5% ; Austria +3.1%). 11 The increase in gross value added resulting from the hotel and restaurant sector was with +38.1% very significantly above the national increase rate (+15.1%). This sector has made a significant contribution to the overall positive results achieved by the secondary sector. - 25 - the Land’s gross value added still with 5.4%, the secondary sector12 with around one third and the service sector13 with roughly 62%. The evolution of sector-specific levels of employment in Burgenland shows that general trends for the secondary and third sector have largely remained in line with the Austrian-wide development,14 however with some considerable exceptions at the level of individual sub-sectors.15 Only in the primary sector, employment has considerably stronger decreased in Burgenland (-15.1%) than in the national context (-9%). The Land's enterprise structure is largely dominated by SMEs (99% of the total number of enterprises existing).16 This enterprise category has experienced a positive and dynamic evolution between 1990 and 2001, especially those enterprises employing 50 to 299 persons (+29.3%) and enterprises employing 10 to 49 persons (+27.0%.). Most of the enterprises existing in 2001 concentrate on the service sector (70.7%), with a strong focus on 4 specific sub-branches.17

The evolution of Burgenland’s agriculture and forestry sector between 1995- 1999 (see statistical annex, tables N, O, P, Q): Burgenland is still characterised by a high share of agricultural and forestry activities. Between the years 1995 and 1999, Burgenland has experienced the strongest decrease in the total number of agricultural holdings (-20%) in the Austrian-wide context (-9%). Within Burgenland this negative trend18 was mainly sustained by smaller part-time holdings, whereas larger holdings mostly run at a full-time basis even experienced a growth process.19 In geographical terms, this decrease process comparatively stronger affected the southern parts of the Land than the north. In 1999, however, Burgenland still was the Austrian Land accounting with 23% for the smallest share of full time holdings (Austria wide: 37%) and had with 74% the highest proportion of part-time holdings in Austria (Austria wide: 59%). Despite this negative but necessary adaptation process, Burgenland has made good progress in assuring a future orientated agriculture through strengthening its position in new market segments such as biological/organic agriculture.20

12 With the “goods production sector” and the “construction and building sector” being in a leading position respectively 19.6% and 10.3%). 13 With a leading position for the sector “real estate/location/data processing/R&D/commercial services” (12.6% of the total regional gross value added). Other important private service activities are concentrated in the retail trade/commerce-branch (8.1%) and the banking/insurance-branch (6.2%). 14 Burgenland: secondary sector: -4%, third sector: +7.2%; Austria: secondary sector: -3.4%, third sector: +7% 15 Secondary sector: Employment in the sub-sector production of goods has stronger decreased in Burgenland (- 9.4%) than in the national context (-4.2%). A stronger increase compared to the national average can be observed for the energy and water supply sector (+9%) and the construction and building sub-sector (+6.5%). Third sector: The evolution of employment in the field of commerce, repairing of cars and consumer goods (+ 5.9%) and tourism (+ 8.6%) was positively above the national level. 16 Roughly one-third of the 8.008 enterprises existing in Burgenland in 2001 employ only one person (2774 enterprises) and about 72% do not employ more than 5 persons (absolute figures 5770 enterprises). The share of smaller enterprises employing less than 10 persons is at 83% and the share of middle sized enterprises (10 to 100 employees) at around 16%. In the Land, 85 bigger enterprises with 100 to 500 employees and 6 large companies with more than 500 employees do exist. 17 Only 4 branches account for around 56% of all Burgenland enterprises: these are the retail trade, commerce and repairing of cars or consumer goods branch (20.8%), the hotel and restaurant branch (13.1%), the construction and building branch (12.9%) and the branch of goods production goods (9.9%). 18 Decrease rates were significantly above the Land’s total rate (-20%) in the case of holdings without surface and holdings with a surface up to 2 ha (ranging from -43% to -31%). For agricultural holdings with a surface from 50 ha and more, one can even observe considerable increase rates (ranging from +10% to +33%). 19 Within Burgenland, around 72% of all 3700 full-time holdings have a surface between 10 ha up to 100ha, whereas 81% of the 12,000 part-time holdings have a surface from below 1 ha to 10 ha. The number of holdings with a legal personality (total 460) is rather well balanced if one exceeds the 2ha threshold. 20 Around 10% of Burgenland‘s agricultural surface are now laboured according to the principle of biological agriculture. Between these years, the number of holdings active in this segment has increased from 239 to 452 and the surface laboured has nearby tripled (from 4124 ha to 12.000 ha). - 26 -

The evolution of the tourism sector in Burgenland between 1995 and 2001: The tourism sector of Burgenland has experienced a very positive development, especially since 1997.21 With more than 2.44 million overnight stays in 2001 (2000/2001: +2.8%), Burgenland could achieve the highest level ever recorded.22 Commercial accommodation enterprises were by far the leading sector (1.5 million overnight stays in 2001), with a particularly dynamic segment made up by four-star and five-star hotels.23 In geographical terms, 58% of the total overnight stays in 2001 have taken place in the traditional tourism areas of northern Burgenland around the lake Neusiedl, however with a lower increase rate (+2.1%) that at Land-level. The most dynamic development had taken place in southern Burgenland (districts Güssing and Jennersdorf) and also in parts of middle Burgenland, mainly due to the booming health and spa tourism activities (increase rates between + 4% and +13%).

The evolution of the labour market in Burgenland between 1995-2001(see statistical annex, tables B, K, L): Although one could still observe a slow decrease of total employment in Burgenland between 1995-1998, a significant increase in total employment has started in 1999. This positive development continued during the years 2000 and 2001 and has certainly also contributed to reduce the proportion of Burgenland’s outward-migrating labour force towards neighbouring labour markets (Wien, Niederösterreich).24 The dynamic situation on the labour market is also reflected in the considerable increase in the total number of employees between 1995 and 1999, which was in Burgenland (+4.4%) significantly above the national average (Austria +0.7%) and ranked second highest after the Land Steiermark (1994/1999: +4.9%).25 In a territorial perspective, this positive evolution also strongly benefited to some of the less developed districts in middle and southern Burgenland.26 Despite this positive trend, one can observe a still problematic situation as regards unemployment: Between April 1995 and April 1999 Burgenland had the second strongest increase ratio of total unemployment rates (+0.6%)27 in Austria after Länder Vienna.28 If one looks at the evolution between April 1999 / April 2000, one can see that Burgenland was the only Land to further increase its unemployment rate, whereas Austria as a whole and all other Austrian Länder experienced stabilisation reduction of total unemployment rates. In addition, women

21 During the years 1993 and 1997, the overall tourism sector in Austria was confronted with a decreasing number of overnight stays (1993: -2.6%; 1997: -3.4%). In more recent years, overnight stays started to increase again and have reached +1.4% in 1999. 22 The most important tourism locations are Bad Tatzmannsdorf in southern Burgenland (478.014 overnight stays in 2001) and Podersdorf am See in northern Burgenland (398.042 overnight stays in 2001), which both accounted together for more than one-third of all overnight stays recorded in Burgenland. 23 This segment accounts at date for more than 678.000 overnight stays (1999). Back in 1995, this category only accounted for 342.000 overnight stays. 24 A very recent pilot study on the issue shows that by 1999 at least the total number of employed persons in Burgenland outward-migrating towards the Vienna labour market has decreased: of the 17,000 employed persons migrating to Vienna, 10,000 lived in northern Burgenland, 2,400 in middle Burgenland and 4,600 in southern Burgenland. 25 As regards the average annual increase rate of the level of employees during the period 1995-1999, Burgenland was around 0.8% above the Austrian average of 0.2%. The second highest average increase rate can be observed for Niederösterreich and Steiermark (annual increases of 0.7%), but also Oberösterreich, Tirol and Vorarlberg had been above the national average. This positive trend observable for Burgenland in 1999 continued also during the years 2000 and 2001. 26 Between 1995 and 1999, the district Oberpullendorf in the middle of Burgenland accounted for the highest increase rate (+14%). The southern Burgenland district Güssing with the second highest level (+9.9%) and the northern Burgenland district Neusiedl (+7%) followed it. 27 Unemployment rates calculated on the ground of the EU-labour force concept. 28 In both years, however, Burgenland remained with unemployment rates of 2.8% and 3.4% below the absolute national unemployment rates of 3.9% and 4.1%. - 27 - in Burgenland have during the years 1994-2001 always been more affected by long- term unemployment than men, with shares in total long-term unemployment significantly above the 50% level (1994: 59% ; 1998: 60% ; 2001: 54%).29

3.2. A Description of the Austrian Objective 1 SPD strategy and its implementation (1995-1999)30

Even before Austria’s accession to the European Union, the country’s future “integration” into the Community Structural Funds system had been well prepared. In the context of the "Austrian Spatial Planning Concept" of 1991 (Österreichisches Raumordnungskonzept), the Federal government, the Länder and the local authorities agreed to elaborate partnership based "regional economic concepts" (Regionalwirtschaftliche Konzepte, RWK). The RWK should highlight the specific development needs of each region and lay the ground for a targeted employment of financial means.31 Subsequently, politicians as well as social and economic partners of the regions concerned participated in the related discussion process. Based upon these RWK, it was then possible to elaborate rather quickly the required programming documents for the Community's structural funds interventions within Austria.

Based upon an initial assessment32 of existing regional potentials in Burgenland, a „regional economic concept“ (RWK) was elaborated in 1994. The strategy of the RWK had mainly built upon external impulses and an approach of "lead projects", which should give additional impulses for specific sectors or for geographical sub- areas of the Land. The main strategic elements for the future Objective 1 programme were mainly based upon these preparational activities that took place in Burgenland previous to the initial EU-programming process. In addition, the strong political leadership within Burgenland as well as an informal agreement between the Burgenland head of government and the socialist Federal minister allowed mobilising substantial additional Federal resources for the development of the region. The joint intention was to elaborate a "big programme" that should allow for a substantial step forward in the economic development of the Land.

After the submission of the regional development plan for the Austrian Objective 1 programme Burgenland to the Commission in 1995, independent experts had been contracted by DG XVI to appraise the document submitted. The appraisal was finalised in autumn 1995 and highlighted a number of critical aspects.33 Due to that,

29 Data according to national concept (AMS registered unemployed) 30 Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001) European Commission: European Cohesion Forum, April 1997. Workshop J, contribution of Mr. Schicker entitled "Erfahrungen eines Mitgliedstaates - Österreich". 31 These „regional economic concepts“ had been elaborated mainly by the help of external experts. They contained a SWOT-analyse, objectives and strategic priorities for regional development and guidelines for specific measures. 32 Already in 1992, a specific working group was set up in Burgenland that was strongly led by the political head of the Land government. It aimed at discussing the principles for regional development in Burgenland and involved also the sub-regions existing within Burgenland (political districts). This process has led to the elaboration of a specific study, in which a detailed development scenario for Burgenland was developed (1994: study entitled "Land zum Leben"). 33 Although the overall statement of strategy was welcomed, it was however felt that there had been scope to further improve the coherence between the regional analyses, the preparation of strength and weaknesses and the definition of the development strategy. Regarding the financial weightings given to the different strategy - 28 - the Commission insisted on significantly altering the initial setting of priorities, wherefore the overall strategy of the final version of the Objective 1 programme considerably differed from the one initially planned in 1994. The Burgenland programme as approved by the Commission in 1995 contained some modifications that were in line with those suggested by the external appraisal of the initial development plan. Due to the significant work input, the intervention strategy for the Objective 1 programme Burgenland had been the best prepared all over Austria.34

3.2.1. The appropriateness assessment of the strategic programme dimension 35

The key aspects of the initial Objective 1 programme strategy as defined for Burgenland are the following: • A first main aim of the strategy was to create a middle-European region with a strong dynamic development in the fields of industry, commerce, tourism and agriculture. • Another important aim of the programme was to reduce internal economic disparities within Burgenland and to ensure a more homogenous standard of living throughout the entire Land. The main intention of the Objective 1 programme was to facilitate the transition of Burgenland as a currently peripheral border area towards an outward looking region located on the cross roads between East and West, mainly through developing existing endogenous potentials.

Due to the current framework conditions of Burgenland at the beginning of the programme, the Austrian authorities did not expect that the strategy could solely be based upon own initiative in order to generate a substantial progress in renewal and development. Therefore, an important underlying assumption of the SPD strategy was to count on external growth potentials of the neighbouring Austrian Länder, which will have a strong positive impact on the development perspective of the northern part of Burgenland. Middle and southern Burgenland would however not be able to profit from the same external impulses. They would need to make additional efforts in order to strengthen their local potentials (e.g. health and spa tourism), but also to fully exploit possibilities offered by cross-border co-operation with neighbouring CEEC countries.

The main choices made for delivering the global objectives of the Objective 1 programme strategy concentrated on the following 3 overarching issues: The strategy for further developing the economy of Burgenland in the field of agriculture,

elements, the evaluators argued, amongst other points, that the emphasis on grant assistance to firms may be too high and that the emphasis on environmental spending was less than one might have expected. The external experts also noted that the proportion of funding allocated to technical assistance was high. With regard to the implementation structures, the evaluators highlighted that no comprehensive statement was made of the organisational structures being planned to carry out to implementation of the Objective 1 programme. Source: Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996). 34 Interview with the Austrian Conference for Spatial Planning (ÖROK). 35 Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001). Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Rechnungshof Österreich (Austrian Court of Auditors): Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). - 29 - industry and crafts as well as tourism should support and create new and lasting jobs in competitive enterprises with a high level of labour productivity.36 The economic growth process should be underpinned by intensive activities in the field of initial training and ongoing training or re-training. Finally, the interventions during the years 1995 1999 were intended to significantly increase the indigenous potentials of the Land.37

The overall Objective 1 strategy was strongly relying on so-called "lead projects" (Leitprojekte). The basic aim of the "lead project-approach" in the field of industry, tourism and infrastructure was to radically change the economic structure of Burgenland and to stimulate a higher level of quality and gross value added. Each lead project was intended to play a "nucleus-“ or "development node-function", either by giving additional impulses for specific economic sectors and by stimulating further investments or by stimulating economic development in the area where is was implemented. Within Burgenland, these lead projects were also strongly co-ordinated and agreed upon at the highest political level. 38 Compared to the predominance of a supply-side orientated strategy in connection with the lead-project approach, measures that were oriented towards stimulating endogenous development potentials had a small weight in the Objective 1 programme.39

The basic strategic choices made for the Objective 1 programme were appropriate to tackle the structural challenges that Burgenland was confronted with at the beginning of the programming period. The initial orientation of the Objective 1 programme had been designed to counter a massive eastward- delocalisation of existing industries after the recent fall of the „Iron Curtain“: therefore, the main aim was to "hold" the existing potentials in Burgenland, to create new enterprises and to boost regional tourism.

At the end of the programme’s lifetime, one must however re-balance this positive impression by a number of more critical observations.

The real achievements compared to the 2 basic goals of the Objective 1 programme strategy are ambiguous: Concerning the first overall aim (creation of a region with a dynamic economic development in specific fields), one can say that good progress was made during the lifetime of the programme. With regard to the second overall aim (reduction of the intra-regional disparities), the actual results of the previous programming period 1995-1999 are clearly unsatisfactory. Southern Burgenland still remains far behind the other parts of the Land. The Austrian Court of Auditors observed however that the Objective 1 interventions have reached the middle and southern parts of Burgenland only in an unsatisfactory manner. The Court recommended to further improving the Structural Fund's impact in these sub-regions in the future. Other actors state that

36 The attraction of new enterprises that search for a location at the eastern borders of the European Union was considered an important element of that approach, as well as the attraction of enterprises from the neighbouring urban agglomerations Vienna and Graz wishing to enlarge their current activities (mainly by building upon the competitive advantages of Burgenland such as low wages or low real estate cost). 37 Within this larger context, specific measures to improve the environmental conditions or to support research and development and small and medium-sized enterprises should be given more priority, as it was the case until now. 38 Interview with the Federal Chancellery (BKA). 39 Such measures were however supported by the Burgenland government externally and in addition to the Objective 1 programme. One can therefore say that "external" and "endogenous" strategy elements had been in balance in the larger framework of the regional development approach. - 30 -

initially no clear labour market strategy was developed for the lagging behind southern parts of Burgenland.40 In evaluating the possibilities of the programme to achieve a re-balancing of intra-regional disparities, one must also consider that Burgenland can not be considered a "functionally cohesive region" in spatial or territorial planning terms. The northern parts of the Land are strongly orientated towards neighbouring inner-Austrian economic centres (e.g. Vienna, Niederösterreich), whereas the sparsely populated and lagging behind areas in the South of the Land had a strongly peripheral position with higher ranking urban centres only across the border in Hungary.

Questions regarding the dominant position of "lead projects" within the Objective 1 programme strategy. Although some actors argue that the "lead project approach" generally went into the right direction especially if one considers the initial problems existing in Burgenland,41 others highlight that the approach was certainly less problematic in northern Burgenland than in southern Burgenland.42 Over the lifetime of the programme, regional media and in particular political parties or other professional organisations in Burgenland have increasingly criticised the approach adopted by the Land government. Especially in the field of ERDF-support to productive investment, it is admitted that the approach had initially been overemphasised. 43 In addition, also the Commission highlighted that a strong concentration of support on individual enterprises could bear some risks.44 Despite the basic intention of the Land government to maintain the "lead project approach",45 actions in this field had been slightly corrected and adapted during the second half of the programme‘s lifetime.46

3.2.2. The appropriateness assessment of the operational programme dimension47

The main components for implementing the Objective 1 programme were 6 operational priorities, each consisting of a number of measures (see overview table below). The practical implementation of the strategy was based upon a three-step approach: The first step of the implementation process aimed at improving existing infrastructure or supplementing lacking infrastructure, especially in the southern parts of Burgenland. The second step of the implementation process aimed at creating jobs, especially in the productive sector and the tourism sector. In addition, the third

40 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 41 Interview with the Federal Chancellery (BKA). 42 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 43 Interview with the Federal Chancellery (BKA). 44 Minutes of Monitoring Committee meetings (5. Begleitausschußsitzung am 07. Oktober 1998). Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1998. 45 Mainly due to its visible results (through the attraction of lead enterprises one could also observe that many SMEs had settled and received corresponding funding from the programme). 46 Interview with the Federal Chancellery (BKA). 47Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Minutes of Monitoring Committee meetings (3. Begleitausschußsitzung am 29. September 1997, 5. Begleitausschußsitzung am 07. Oktober 1998, 6. Begleitausschußsitzung am 12. Juli 1999). Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1998. Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1999. Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1997, Jahresbericht 1999, Jahresbericht 2000). - 31 - step aimed at implementing qualification measures for the employed with the specific objective to adapt the newly created jobs in Burgenland. This third step was intended to come into effect only during the second phase of the programme implementation process.

In addition, a regionalisation-strategy was adopted for the Objective 1 programme (see overview table below). The fact that programme interventions have been regionally targeted was certainly an important issue that helped to make the initial strategy more transparent: In middle and southern Burgenland the main task was to put into place basic infrastructure that would allow further economic and social development (e.g. business parks, sewage treatment and water infrastructure) and to further develop new tourism activities (e.g. health spa tourism), whereas in the northern part existing local potentials should be further developed (agriculture, industry and crafts, tourism).

Priorities and measures of the Objective 1 Programme Burgenland (1995-1999) Priority Related measures • Measure 1.1 (ERDF), strengthening the economic development (+biomass). • Measure 1.2 (ERDF), infrastructure activities supporting the priority. Priority 1: • Measure 1.3 (ERDF), creating industry and business zones for the attraction of enterprises. Industry and • Measure 1.4 (ERDF), building or extension and improvement of infrastructure for initial crafts training or continuous training in specific centres for professional and economic training. • Measure 1.5 (ESF), training of the middle and higher levels of management in SMEs. • Measure 2.1 (ERDF), support to enterprises active in the field of technology and innovation • Measure 2.2 (ERDF), telecommunication networks and telecommunication application Priority 2: • Measure 2.3 (ERDF), creation and extension of centres for technology transfer and of Research institutions for higher education, and • Measure 2.4 (ESF), running of centres for technology and technology transfer on the basis of developmen a regionalised strategy t • Measure 2.5 (ESF), training of the unemployed with the perspective of creating jobs in R&D, the technology sector or young start-ups in the R&D business • Measure 3.1 (ERDF), extension and improvement of the tourist offer Priority 3: • Measure 3.2 (ERDF), extension of the tourist infrastructure Tourism: • Measure 3.3 (ERDF), extension of the organisational structures for tourism • Measure 3.4 (ERDF), cultural measures linked to tourism development, • Measure 3.5 (ERDF), infrastructure activities supporting the priority Priority 4: • Measure 4.1 (EAGGF), development of agriculture and forestry, processing and marketing of Agriculture local and regional production and forestry • Measure 4.2 (EAGGF), rural development, support to rural infrastructure, use of regional and energy and raw material potentials, diversification protection of • Measure 4.3 (EAGGF), protection of the environment and natural assets, preservation of natural cultural landscapes and diversification resources • Measure 4.4 (EAGGF), training and counselling in the field of agriculture and forestry, R&TD

• Measure 5.1 (ESF), general training, counselling and guidance of the labour force in SMEs, of Priority 5: those threatened by unemployment and of the unemployed, training of educational personnel Developing and training at the level of universities, training of administrative personnel economic • Measure 5.2 (ESF), integration of the long-term unemployed, of young people and of those growth and exposed to exclusion from the labour market, equal opportunities stability of • Measure 5.3 (ESF), adaptation of employees to the structural change in the industrial employment productive system • Measure 5.4 (ERDF), creation and extension of regional training and communication centres. Priority 6: (ERDF, ESF, EAGGF) Technical assistance - 32 -

“Regionalisation approach” as described in the Objective 1 programme (1995-1999) Districts Thematic focus

Northern Burgenland

Neusiedl am See Industry and crafts ; tourism (Lake Neusiedl) ; agriculture, forestry and nature protection (Lake Neusiedl) Eisenstadt and environments Mattersburg Cross-border approach: Industry and crafts ; research and development Middle and southern Burgenland

Oberpullendorf • Cross-border approach (northern part of the district): Industry and crafts; research and development. • Southern part of the district: Tourism (spa in Lutzmannsburg) Oberwart • Northern part of the district: Tourism (spa in Tatzmannsdorf). • Cross-border approach (Pinkafeld, Oberwart, Großpetersdorf): Industry and crafts ; research and development Güssing • Tourism (Stegersbach, Lower Pinka Valley, Stremtal) • Cross-border approach: Industry and crafts in Güssing and Heiligenkreuz Jennersdorf • Tourism (Jennersdorf)

Due to Austria's accession to the European Union in 1995 and the late approval of the programming document by Brussels (only close by the end of 1995), the implementation process began rather late. During the lifetime of the programme, the various priorities and measures experienced significant differences as regards their progress in financial implementation compared to planned expenditure profile for the years 1995-1999.

Already after the first two years of implementing the Objective 1 programme, it has become obvious that the degree of performance was significantly different between the individual funds (ERDF, ESF, EAGGF) and between the different priorities at measure level.

The ERDF participated in financing the majority of measures contained under the priorities 1 to 3 of the programme as well as in the framework of one measure contained in priority 5. Despite the late approval of the Objective 1 programme, a very good degree of implementation could be achieved in the ERDF-funded measures already during the years 1995/1996, as already 75% of the planned eligible investment had been initiated and 50.2% of the ERDF funding was committed. Compared to the very successful performance of priority 1 (industry and crafts)48, the progress in implementing priority 2 (research and development) during the years 1995/1996 cannot be considered very successful.49 The same was true for priority 3 (tourism), which was with 35.3% of the eligible investments and an ERDF- commitment rate of 25.4% significantly under the overall average. For all measures co-financed by the ERDF under the different priorities of the Objective 1 programme, the payment rate has only reached 13.1% at the end of 1996. For some measures, one could even observe that no payments had been made during this time although the implementation of projects had progressed very well (e.g. measure 1.3, measure

48 105.3% of the initially planned investment had already been achieved and 74% of the ERDF means had been committed during the years 1995/1996. Measure 1 that accounted for the highest ERDF-share was with 110.9% of the planned investment and an ERDF-commitment rate of 83.4% already considerably above the planned thresholds. But also measure 3 (109.7% of the planned investment) and measure 4 (91.8% of the planned investment) had achieved a very good degree of performance. 49 The entire priority had realised only 39.1% of the planned investment and a commitment rate of 27.9% for the ERDF-contribution. - 33 -

1.4, measure 2.3, measure 5.4).

The ESF-part of the programme was characterised by implementation delays after the first two years, which were mainly due to the late approval of the Objective 1 programme (only 18% of the ESF contribution committed by the end of 1996). In addition, all ESF-funded measures within priority 5 contained specific innovative measures that had still to be developed tested and fine-tuned over the time. Initial implementation delays were rather insignificant in the framework of the traditional labour market measures implemented by the Burgenland labour market service (measures 5.1 and 5.2), as the AMS core business was characterised by routine based and professional execution. Delays were already more significant in the framework of measure 5.3 that accounted for a relatively slow start. A very problematic situation could initially be observed in the framework of the ESF co- financed measures for which the Land Burgenland had been the main end beneficiary (measures 1.5, 2.4 and 2.5), as no significant activities could be observed during the first two years. This overall situation is also reflected in the payment rates of national co-financing, which have been highest for the Federal level (23%) and significantly lower for the Land level (12.3%).

The EAGGF participated in the financing of all measures under priority 4 of the Burgenland Objective 1 programme and also partly contributed to technical assistance (priority 6). Despite the late approval of the programme and the delayed start of the implementation process, the entire EAGGF-section of priority 4 could reach a commitment rate of the Community contribution of 28.9% by the end of 1996. After the first two years, the level of commitment was particularly high in the case of measure 4.4 and in the field of technical assistance (EAGGF share of priority 6), whereas measures 4.1 and 4.2 had been closely to the average commitment rate for priority 4. Only for measure 4.3, no commitments had been made at that date, which was however not considered problematic mainly due to the small financial amount attributed to this measure.

Due to a generally positive degree of implementation at date of the mid-term evaluation, no fundamental changes of the programme had been necessary. The significant differences between Funds and priorities as regards the implementation performance during the years 1995/1996 were mainly due to varying working methods and funding practices adopted.50

At the beginning of the second half of the Objective 1 programme period by mid- 1997, the most important delays in the progress of financial implementation could be observed in the field of ESF-funded measures. The overall degree of ESF implementation in Burgenland was ranking at the second worst position of all 14 Austrian Objective programmes. Based upon a modification that was approved by the monitoring committee already in October 1996, the corresponding means had been transferred to 1997. During the third monitoring committee meeting in September 1997, a proposal to change the financial tables of ESF measures for

50 The largest share of ERDF means had been committed to investment projects that have a comparatively longer duration in the implementation process. Due to this, high commitment rates could be observed during the first years, whereas payment rates only grew over the time according to the effective progress of implementation (e.g. low payment rates at the beginning of the implementation phase). For ESF-interventions, annual action budgets were committed and paid (commitment and payment rates are nearby similar). EAGGF-interventions cover both investment and current transfer operations, wherefore commitment and payment rates are closer together than in the case of ERDF-interventions. - 34 -

1996 was therefore presented and agreed upon.51 The Commission through its decision of 8th of December 1997 approved the changes adopted by the third monitoring committee.

The financial implementation of during the years 1998-199952 has progressed well. For ERDF-funded measures, one could observe increasing commitment rates and also slowly progressing payment rates (at least in 1998). By mid 1998, nearby 93% of the planned public financial support had been committed for the various ERDF- measures included in the Objective 1 programme. In the middle of 1999, the level of planned public funding committed has further raised at around 96.1%. In the same time, also the degree of financial implementation achieved in the context of ESF- measures for which the Land Burgenland was acting as main end beneficiary (measure 1.5, measures 2.4 and 5.1, technical assistance) has improved.53 Finally, also the degree of implementation for EAGGF-measures under priority 4 and 6 (measures 4.1 -4.4, technical assistance) progressed very well and had been in time compared to the initial planning. At date of the sixth monitoring committee meeting in July 1999 (and also by use of the written procedure), final modifications of the financial tables had been made (minor shifts, financial means resulting from the indexation) that were approved by the Commission decisions of September 1999 and April 2000.54 By the end of the year 2000, the programme has reached a very satisfactory degree of implementation.

If one considers the progress made during the second half of the programme’s lifetime and the results achieved by the end of the year 2000, one can say that the Objective 1 programme Burgenland had been delivered as planned. No programme priority was characterised by an unsatisfactory degree of implementation. The financial shares of individual actors contributing to the overall cost of the Objective 1 programme have however considerably changed compared to the initial situation in 1995.55 Also the individual measures of the Objective 1 programme had generally been appropriate instruments for tackling the initial needs identified. Both, the main strategic orientations and the basic priorities of the Objective 1 programme 1995-1999, have remained the same. Especially the initial evaluation of the development potentials of tourism has proved to be valid. Although the Commission had initially wished more ambitious targets with regard to the number of new jobs created, the Burgenland government was largely confirmed in its more realistic position.56

51 The main consequence of the changes was a transfer of unspent financial ESF-means from 1996 to the budgetary year 1997 (end beneficiary AMS, BMAGS and Federal Ministry of research: related activities under measures 5.1, 5.2, 5.3 and 6) or to the years 1998/99 (end beneficiary Land: related activities under measures 1.5, 2.4, 2.5, 5.1 and 6). 52Results by mid-1998: version of financial tables according to the changes made by the monitoring committee in 16.12.1997, approved by the Commission 20.05.1998. Results by mid-1999: version of financial tables according to the changes made by the monitoring committee in 08.10.1998, approved by the Commission 16.12.1998. 53 By mid-1998, the overall commitment rate for these measures (96.7%) had made significant progress, whereas the overall payment rate (25.7%) has remained at a very low level. By mid-1999, all public funding means available for these measures could be committed and also the payment rates had now been above the average. 54 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland,) 55 The share of the Community contribution in the total cost of the programme has decreased to 19% (1995: 20.6%) and the same development can also be observed for the Federal level (1995: 15.9%; 1999: 13.8%) and the Land level (1995: 13.4%; 1999: 12.6%). The most significant changes have taken place in the field of local authorities (their share has fallen from 5.1% in 1995 to 0.4% in 1999) and in the field of the private sector contribution that have nearby increased by 10% (1995: 45%; 1999: 54.2%). 56 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 35 -

Apart from the above-made critical remarks with regard to the “lead project approach”, the appropriateness of ERDF-funded measures interventions can not be basically questioned. Already during the first years, the Land government had relatively quick success in attracting larger volumes of new investments in the field of industry and tourism and also the "lead projects" were expected to function as "development nodes" the areas concerned. Tourism support has improved the quality of bathing areas around the lake Neusiedl in the north of Burgenland and extended health and spa tourism in the middle and southern parts of the Land. The initial tourism development boost in the South needs however to be stabilised in the future. A positive but somehow uncompleted first step for business development was made in southern Burgenland with the establishment of the business park in Heiligenkreuz. The successful attraction of a major new company (Lyocell) to this site could contribute stopping outward migration of the labour force. Despite these achievements, one cannot deny that much is left to due in middle and southern Burgenland as regards the stimulation of economic and social development.

Although the implementation progress of ESF-funded interventions under the various priorities of the Objective 1 programme (measure 1.5., measures 2.4 and 2.5, measures 5.1-5.3) had been very different according to the individual measures, their appropriateness can not be basically questioned. Several points of criticism need however to be highlighted. Firstly, more Community support could have been attributed to ESF-measures.57 In this context, especially the Chamber of employees criticised that too little funding had been available for specific long-term orientated qualification measures that focus on disadvantaged groups of the labour market (e.g. integration of women into the labour market).58 Finally, the former Federal ministry for labour and social affairs highlighted that several labour market measures of the Objective 1 programme in Burgenland (measure 1.5, measures 2.4 and 2.5) should have been summarised under one heading from the beginning on. In fact, only measure 2.4 and 2.5 had been fused, but the financial means are not expected to be fully used by the end of the programme.59

The EAGGF-funded interventions for agriculture, forestry and rural development summaries under priority 4 can generally be considered appropriate. In the view of the Burgenland Chamber of agriculture, the programme strategy was well prepared although it was not directly participating in the programme elaboration process. The basic objectives had been known to the regional actors and focussed on recognised needs such as stimulating quality orientated agriculture (e.g. wine producing sector and fruit sector), creating links between the agricultural sector and the tourism sector and fostering sustainability in the framework of agriculture.60 Already the mid-term evaluation has considered the

57 During the elaboration phase, the Burgenland Chamber of employees had made a proposal that aimed at realising an „Irish-model approach“ in the framework of the Objective 1 programme (a strong ESF part). Based on a vision of an active structural change, the intended focus of the proposal was to develop qualifications that could help to further boost the sector of enterprise related services and of information technologies. As the Chamber was not included in the initial programme drafting process, its specific statements on the issue were not introduced. 58 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 59 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 60 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 36 -

thematic and regional concentration of interventions as very fruitful: it allowed to adapt projects according to regional specificities and helped to strongly motivate the population concerned. In addition, the funding approach chosen strengthens local economic units and initiates new small-scale economic processes. Compared to other Austrian Länder, the Objective 1 programme Burgenland has constituted a major advantage for the Land's agricultural sector, even if the horizontal measures had been a new approach within the Austrian context.61

A more critical assessment has to be made for the “Fund-specific mix of interventions” within the Objective 1 programme. Already the mid-term evaluation has observed that the initial budgeting of priorities was not fully consistent with the regional needs that had been identified in the programming document.62 The relatively unbalanced situation can also be highlighted if one looks at the "thematic spread" of committed public funding (EU, Federal level, Land level) for approved or recommended projects between 1995 and 1999 (see below).63 The issue is also a major critical issue for many actors involved in the programme implementation:

In the context of ERDF-funded interventions, the most important share of public support was intended to be spent for measures supporting the industrial and crafts sector and tourism development (59% of public support), dominantly through stimulating investment that should come mainly from outside the region and through improving the economically related infrastructure. Within this larger context, already the mid-term evaluation had questioned whether the issue of raising the attractiveness of the region, especially by mobilising regional resources in the field of research & development and innovation or initial training and ongoing training, was sufficiently paid attention to by the Land actors.

Compared to the overemphasised economic development side of the Objective 1 programme, ESF-interventions had a rather low share. This can be considered as not appropriate, especially due to the weaknesses in the regional structure of qualification that had already been identified in the SWOT-analyses. The most recent statements of major actors involved in the programme also confirm this assessment. In the view of the former Ministry of Labour and social affairs (BMAGS), the relatively modest ESF-share did not allow to develop a broad and comprehensive labour market policy strategy that could be supported by the programme.64 In the light of today's experience, the deficiencies resulting from a too weak ESF-part in the Objective 1 programme are strongly criticised by the Burgenland Chamber of employees65 and also the Burgenland Chamber of economy recognises these shortcomings.66

Also the share of EAGGF-interventions in the programme was very low,

61 Interview with the Federal ministry for agriculture, forestry, environment and water management. 62 In the initial version of the programme, the ERDF-funded interventions accounted for 68% of the total public financial support foreseen (EU, Federal level, Land). ESF-funded interventions of the programme roughly accounted for around 14% of the total public financial support foreseen (EU, Federal level, Land). EAGGF-funded interventions of the programme had a share of 16% in the total public financial support foreseen (EU, Federal level, Land). 63 The thematic categories mentioned below do however not necessarily follow the specific priorities of the Objective 1 programme Burgenland. 64 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 65 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 66 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 37 -

especially if one considers the importance of the agriculture and forestry sector in Burgenland as a source of employment and income. According to the Ministry of agriculture, this initial choice had only left open a small margin of manoeuvre for activities in the field of agriculture, forestry and rural development, wherefore the EAGGF-support was mainly concentrated on maintaining the inner-Austrian support level for the agricultural sector and on ensuring a broad spatial coverage of agricultural activity within Burgenland.67

Evolution of the “thematic spread” of public support committed under the Objective 1 programme (situation from 1995 to mid-1999) Public support under the Objective 1 programme was attributed • To 23.9% for projects in the field of industry and crafts, • to 17.5% for projects in the field of agriculture and forestry, • to 16.2% for infrastructure projects, • to 13.6% for projects in the field of tourism, • to 12.4% for projects in the field of human resources, • to 10.8% to projects in the field of research and development, • to 3.7% for projects in the field of renewable energy • to 1.9% for technical assistance. Source: Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1999.

As regards the main factors that sometimes enhanced or hindered the implementation the Objective 1 programme (without however questioning the overall appropriateness of the programme), one can identify several aspects that have had a positive or negative impact:68 • Within the ERDF-section of the programme, one could observe initial delays in the implementation of some "tourism lead projects" and of projects with an innovative approach. • Negative factors affecting the implementation of ESF-measures were mainly the late approval of the programme, the late start of specific measures69 and related administrative problems70 or difficulties in mobilising the nationals shares of co- financing for ESF-activities implemented by the Burgenland labour market service AMS in 1996 (Land or local authorities). Another factor was an initial lack of political willingness at Land level to discuss fundamental labour market problems. A positive aspect that helped to resolve major implementation problems of ESF- funded labour market activities implemented by the Land had been the launching of a "start-up of enterprise initiative". The initiative had been closely co-ordinated and agreed upon between the Land government and the Burgenland labour market service. However, also in this context, one could observe initial negative effects and implementation problems. • Initial problems related to the implementation of the EAGGF-funded priority of the Objective 1 programme were mainly due to the support structure of the

67 Interview with the Federal ministry for agriculture, forestry, environment and water management. 68Interview with the Austrian Conference for Spatial Planning (ÖROK). Minutes of Monitoring Committee meetings (2. Begleitausschußsitzung am 14. Oktober 1996). Interview with the Federal ministry for economy and labour affairs (former BMAGS). 69 ESF-measures that were implemented by the Land Burgenland as end beneficiary (measures 1.5, 2.4, 2.5 and parts of measure 5.1 and priority 6) AMS implemented Measure 5.3. on training for employees and workers was a new support scheme characterised by initial delays in the implementation process. 70 For new support schemes in the case of AMS: time-consuming administrative implementation of the related technical directives and work-intensive handling of funding dossiers, which in turn was caused by a lack of structures and human resources. - 38 -

Federal Ministry for agriculture and forestry and related problems as regards the provision of co-financing. In fact, implementation delays at project level were dominantly caused by the necessity to annually approve funding guidelines between the different Federal ministries involved (Ministry of agriculture and Ministry of Finance). Expenditure profile of the Austrian Objective 1 Programme 1995-1999

Priorities Status Total cost Public Expenditure Private and 2+8 Total public EU Contribution National Public expenditure measures expenditure Total EU ERDF ESF EAGGF Expenditure *****) ****) 3+7 3+4+5 12 3 45678 Priority 1 Planned *) 393,316 186,557 61,851 58,582 3,269 - 124,705 206,760 Revised **) - 154,825 57,807 54,421 3,386 - 97,018 - Actual ***) 512,616 164,856 57,807 54,421 3,386 - 107,049 354,665 M 1.1. Planned 238,829 79,631 32,485 32,485 - - 47,119 159,216 Revised - 90,764 36,244 36,244 - - 54,520 - Actual 413,417 90,145 34,873 34,873 - - 55,272 323,272 M 1.2 Planned 70,689 70,689 14,395 14,395 - - 56,294 0,00 Revised - 37,375 10,167 10,167 - - 27,208 - Actual 59,070 38,301 10,167 10,167 - - 28,133 20,769 M 1.3. Planned 64,848 24,017 9,611 9,611 - - 14,406 40,831 Revised - 17,655 6,953 6,953 - - 10,702 - Actual 35,848 27,379 8,324 8,324 - - 19,055 8,469 M 1.4. Planned 9,143 5,699 2,081 2,081 - - 3,618 3,443 Revised - 2,127 1,057 1,057 - - 1,070 - Actual 4,281 2,127 1,057 1,057 - - 1,070 2,154 M 1.5. Planned 9,807 6,538 3,269 - 3,269 - 3,269 3,269 Revised - 6,905 3,386 - 3,386 - 3,519 - Actual ? 6,905 3,386 - 3,386 - 3,519 ? Priority 2 Planned 90,000 46,171 16,879 13,610 3,269 - 29,291 43,828 Revised - 51,205 21,360 18,252 3,108 - 29,844 - Actual 106,892 52,003 21,360 18,252 3,108 - 30,642 60,920 M 2.1. Planned 18.024 7,214 3,607 3,607 - - 3,607 10,810 Revised - 9,063 4,595 4,595 - - 4,468 - Actual 30,696 9,101 4,595 4,595 - - 4,507 21,595 M 2.2 Planned 37,398 11,213 3,999 3,999 - - 7,214 26,185 Revised - 13,020 5,289 5,289 - - 7,731 - Actual 37,880 13,020 5,289 5,289 - - 7,731 24,860 M 2.3 Planned 26,403 21,205 6,004 6,004 - - 15,201 5,198 Revised - 23,091 8,369 8,369 - - 14,722 - Actual 38,316 23,850 8,369 8,369 - - 15,481 14,466 *) Initially planned public and private expenditure according to data of the EPPD (in 1000 EUR and 1999 prices), rounding differences possible. **) Revised public expenditure, last changes of the financial tables (13.12.1999, in 1000 EUR), rounding differences possible. ***) Committed public expenditure by 31.12.1999 and related private expenditure (in 1000 EUR), rounding differences possible. ****) Without total cost from ESF-measures. *****) No complete data available for private funding related to ESF-measures. - 40 -

Priorities Status Total cost Public Expenditure Private and 2+8 Total public EU Contribution National Public expenditure measures *****) expenditure Total EU ERDF ESF EAGGF Expenditure 3+7 3+4+5 ******) 12 3 45678 M 2.4. *) Planned 2.4 **) 1,635 1,090 545 - 545 - 545 545 Planned 2.5 **) 6,538 5,448 2,724 - 2,724 - 2,724 1,090 Revised 2.4 ***) - 6,031 3,108 - 3,108 - 2,923 - Actual 2.4 ****) ? 6,031 3,108 - 3,108 - 2,923 ? Priority 3 Planned 208,721 111,040 42,182 42,182 - - 68,858 97,681 Revised - 86,333 40,035 40,035 - - 46,299 - Actual 198,109 87,072 40,035 40,035 - - 47,037 111,038 M 3.1. Planned 111,149 37,050 18,525 18,525 - - 18,525 74,100 Revised - 37,983 18,978 18,978 - - 19,005 - Actual 114,584 38,804 19,020 19,020 - - 19,784 75,780 M 3.2. Planned 32,364 11,333 5,666 5,666 - - 5,666 21.031 Revised - 8,801 4,400 4,400 - - 4,400 - Actual 25,544 8,738 4,369 4,369 - - 4,369 16,806 M 3.3. Planned 2,288 1,438 719 719 - - 719 850 Revised - 1,291 645 645 - - 645 - Actual 2,104 1,268 634 634 - - 634 836 M 3.4. Planned 12,248 10,548 4,326 4,326 - - 6,222 1,700 Revised - 8,703 3,681 3,681 - - 5,021 - Actual 10,377 8,705 3,681 3,681 - - 5,024 1,672 M 3.5. Planned 50,671 50,671 12,946 12,946 - - 37,725 0,00 Revised - 29,556 12,330 12,330 - - 17,226 - Actual 45,500 29,556 12,330 12,330 - - 17,226 15,944 Priority 4 Planned 136,180 78,905 26,392 - - 26,392 52,513 57,275 Revised - 73,778 25,584 - - 25,584 48,194 - Actual 213,501 79,473 25,584 - - 25,584 53,889 134,029 M 4.1. Planned 77,074 48,971 14,210 - - 14,210 34,761 28,103 Revised - 44,940 13,040 - - 13,040 31,900 - Actual 140,736 46,309 13,040 - - 13,040 33,269 94,427 M 4.2. Planned 53,635 24,693 10,134 - - 10,134 14,558 28,942 Revised - 25,348 11,182 - - 11,182 14,164 - Actual 63,960 28,593 11,182 - - 11,182 17,411 35,367 *) The initial measures 2.4. and 2.5 were fused during the implementation phase into one single measure 2.4. **) Initially planned public and private expenditure according to data of the EPPD (in 1000 EUR and 1999 prices), rounding differences possible. ***) Revised public expenditure, last changes of the financial tables (13.12.1999, in 1000 EUR), rounding differences possible. ****) Committed public expenditure by 31.12.1999 and related private expenditure (in 1000 EUR), rounding differences possible. *****) Without total cost from ESF-measures. ******) No complete data available for private funding related to ESF-measures. - 41 -

Priorities Status Total cost Public Expenditure Private and 2+8 Total public EU Contribution National Public expenditure measures expenditure Total EU ERDF ESF EAGGF Expenditure ****) 3+7 3+4+5 *****) 12 3 45678 M 4.3. Planned *) 2,463 2,234 872 - - 872 1,362 229 Revised **) - 730 285 - - 285 445 - Actual ***) 3,992 1,751 285 - - 285 1,467 2,241 M 4.4. Planned 3,007 3,007 1,177 - - 1,177 1,831 0,00 Revised - 2,760 1,076 - - 1,076 1,684 - Actual 4,813 2,819 1,076 - - 1,076 1,743 1,994 Priority 5 Planned 68,629 57,754 28,637 719 27,918 - 29,117 10,875 Revised - 62,119 27,712 631 27,081 - 34,407 - Actual 2,084 61,323 27,881 631 27,253 - 34,413 292 M 5.1 Planned 36,799 34,042 17,021 - 17,021 - 17,021 2,757 Revised - 34,161 13,793 - 13,793 - 20,367 - Actual ? 33,229 13,302 - 13,302 - 19,927 ? M. 5.2. Planned 23,701 17,435 8,718 - 8,718 - 8,718 6,266 Revised - 23,058 11,737 - 11,737 - 11,322 - Actual ? 22,986 11,777 - 11,777 - 11,208 ? M 5.3. Planned 5,808 4,359 2,179 - 2,179 - 2,179 1,449 Revised - 3,216 1,551 - 1,551 - 1,666 - Actual ? 3,316 1,661 - 1,661 - 1,655 ? M 5.4. Planned 2,321 1,918 719 719 - - 1,199 403 Revised - 1,683 631 631 - - 1,052 - Actual 2,084 1,792 631 631 - - 1,161 292 Priority 6 Planned 9,099 9,099 4,511 2,201 1,635 676 4,588 0,00 Revised - 8,108 3,824 - - - 4,284 - Actual 6,772 8,931 4,054 1,959 1,241 854 4,877 ? Total Planned 905,944 489,526 180,454 117,295 36,091 27,068 309,072 416,418 Revised - 436,366 176,321 - - - 260,016 - Actual 1,039,974 454,629 176,723 115,298 34,987 26,438 277,907 661,113 *) Initially planned public and private expenditure according to data of the EPPD (in 1000 EUR and 1999 prices), rounding differences possible. **) Revised public expenditure, last changes of the financial tables (13.12.1999, in 1000 EUR), rounding differences possible. ***) Committed public expenditure by 31.12.1999 and related private expenditure (in 1000 EUR), rounding differences possible. ****) Without total cost from ESF-measures. *****) No complete data available for private funding related to ESF-measures.

- 43 -

4. THE EFFECTIVENESS OF THE AUSTRIAN OBJECTIVE 1- PROGRAMME

4.1. Programme outputs and results

Besides the broad over-arching strategic goals described above (see chapter 3.2.), the Objective 1 programme contains a number of operational sub-objectives that were of a very general nature and could not be derived directly from the SWOT analyses that had been developed in the programme.

At measure level, the indicators that specify expected outputs of the initial Objective 1 programme71 are dominantly of a qualitative nature (exceptions are measure 4.1., development of agriculture and forestry and measures 5.1-5.3 human resources). A more precise set of quantitative (and qualitative) targets had only been developed at the level of the overall strategic goals (see below). An interesting aspect is however that the quantification of the overall outputs had been slightly adapted during the lifetime of the programme. During the 4th monitoring committee meeting in December 1997, several changes of the programming document had been decided upon. One interesting aspect of these changes had been that the initially precise quantification of job creation objectives in the programming document according to specific sectors had been given up (e.g. 6000 permanent jobs in the field of the industry and commerce, 1000 jobs in technology intensive SMEs and 300 jobs in technology centres) and was adapted towards a more general formulation that maintained however the overall quantitative target for job creation (7.300 jobs).

Strategic targets as defined in the initial Objective 1 Programme

• Create 7300 employments, of which 6000 are lasting employments in the field of crafts and industry, 1000 employments in the context of technology intensive SMEs and 300 employments in technology centres. • Create 4 business parks including the infrastructure. • Create 1000 additional beds in the 3-star and 4-star hotel segment. • Reduce the Burgenland unemployment rate (1993: 8.1%). • Increase the share of higher qualified employments on the labour market. • Increase the overall living standard of Burgenland from currently 70% to over 75% of the European Union average. • Stimulate female employment by 2% (1993: 44% of the employees). • Reduce the internal sub-regional disparities within Burgenland (GDP per head in southern Burgenland 61% of the EU average; middle Burgenland: 62%; northern Burgenland 72%). • Stimulate Burgenland's share within the overall Austrian GDP (1991: 2.2%, share of population 3.47%). • Increase the export activities of the Burgenland industry (1993: 4.438 million Austrian shillings). • Stabilise the population development in border regions. • Stimulate and strengthen private initiative through public investment. • Sustainably secure natural living conditions as a basis for economic and social development.

71 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001). Minutes of Monitoring Committee meetings (4. Begleitausschußsitzung am 16. Dezember 1997). - 44 -

The following sections will now assess, whether and how these overall outputs had been achieved during the lifetime of the Objective 1 programme. This assessment covers the following perspectives: • Firstly, the effectiveness will be assessed from a Funds-specific perspective (chapter 4.1.1.): this assessment covers both more general aspects at the level of the Funds and a more detailed summary for the results to date achieved by measure compared to the initial targets (where possible): • This first step is then followed by an assessment of effectiveness on a theme- specific background (chapter 4.1.2.): this cross-Funds assessment aims at highlighting the achievements of programme interventions on the ground of a particular perspective and deepens further the appropriateness analysis. • A final section will then provide a summary assessment of wider matters related to the effectiveness (chapter 4.1.3.).

4.1.1. An assessment of programme effectiveness by Funds

4.1.1.1. The ERDF 72

Within the Objective 1 programme Burgenland 1995-1999, the most important ERDF- funded measures adopted to support internally generated development were “direct aid to investment” in the field of industry, crafts and tourism (mainly under measure 1.1 and 3.1) and the provision of basic infrastructure such as business zones (measure 1.3.) and the creation/extension of training facilities (measure 1.4.) or technology centres (measure 2.3.). Compared to these measures, targeted financing of technology transfer and innovation at the level of enterprises only played a minor role in the overall funding profile (measure 2.1.). One reason for these choices might be seen in the initial intention of actors in Burgenland to counter a massive „eastward delocalisation“ of existing enterprises right after the fall of the Iron Curtain: the main aim was therefore to "hold" the existing productive potentials in Burgenland, to attract new enterprises to the Land and to boost the regional tourism sector.73

The most effective ERDF-funded measures with regard to job growth promotion had certainly been the direct support to investment in the field of industry and crafts (measure 1.1: 5.384 jobs secured and 1.631 planned new jobs) and in the tourism sector (measure 3.1: 683 jobs secured and 398 planned new jobs), but also to a lesser extent the support provided to telecommunication networks & applications (measure 2.2: 358 planned new jobs). According to the Land authorities74, the overwhelming majority of the projects funded under priority 1.1. continue operating over /and after the lifetime of the programme (only two or three projects failed). Despite this positive picture, the significant financial support attributed to “lead projects” especially within measures 1.1 and 3.1. does not necessarily follow a strict efficiency logic (if one looks at the degree of new job-created and the financial means employed to achieve these outputs). In addition, the Burgenland Chamber of

72 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000). Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 73 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 74 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). - 45 - employees and workers75 stresses that support in the field of economic development should have been linked more closely to employment guarantees. Especially with regard to the high degree of outward migration in the framework of the labour market, this would have been an important signal. Within the new programming phase 2000 to 2006, this aspect was however improved.

ERDF-support to productive investment under measure 1.1 (strengthening the economic development and the biomass sector)76 has contributed to create 2 new enterprises, to attract 7 new enterprises, to extend the production (48) or to improve the structure (118) and to carry out enterprise-level environmental projects. The different projects supported could help to secure 5384 jobs and to create 1631 new jobs. In this context, a total of 155 SMEs had been supported. Under this measure, also 5 “major projects” had been supported that aimed mainly at the establishment of new production units but also at the extension of existing production units or the introduction of new production processes. For these five larger projects, about 50% of the public support committed under this priority77 had been approved. Of the total public support committed for these larger projects, again nearby the half went to one single project in southern Burgenland: the establishment of a new production unit in the field of chemical fibre production, the "Lenzing Lyocell Gesellschaft" (public support of 314.99 million Austrian shillings).

Within the context of priority 1, the ERDF had also supported a number of infrastructure measures. Under measure 1.2 (environmental infrastructure supporting priority 1), a total of 3 projects were realised in the field of sewage water treatment and water provision78 (2 sewage treatment plants in southern Burgenland/Heiligenkreuz and around the lake Neusiedl in northern Burgenland, as well as the enlargement of a station for water provision). These projects contributed to increase the amount of inhabitants units of sewage water treated (by 182.000 inhabitants units) and the provision units of fresh water (by 72.000 fresh water provision units). ERDF-support under79 measure 1.3 (creation of industry and business zones for the attraction of enterprises) has contributed to realise 2 infrastructure projects that made available 488.000 sq m. of new space for businesses. One project was the lead project "Business Park Heiligenkreuz" in southern Burgenland at the Hungarian border, which alone has received 95.2% of the committed public funding under measure.80 The expectations linked to the business park in Heiligenkreuz were however not satisfied as initially planned, mainly due to a strong Hungarian partner on the other side of the border and to delayed implementation during the initial phase (complex construction work on the Austria side with regard to flooding prevention and waste water recycling). Another factor might also be the lack of an efficient transport infrastructure connection, which according to a report of the Austrian Court of Auditors,81 should be improved in the future. Measure 1.4 aimed at building, extending or improving infrastructure for

75 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 76 A total of 175 different projects had been adopted under this measure, for which public support of around 1.24 billion Austrian shillings had been committed that could contribute to finance project costs of around 5.56 billion Austrian shillings. 77 A total of 677.81 million Austrian shillings. 78 Around 526 million Austrian shillings. 79 With committed public funding of around 377 million Austrian shillings 80 National public support: 251.6 million Austrian shillings; EU-contribution: 107.4 million Austrian shillings 81 Rechnungshof Österreich (Austrian Court of Auditors): Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). - 46 - initial training or continuous training in specific centres for professional and economic training. With committed public funding of around 29 million Austrian shillings, one single project had been financed and useable surface of 5821 sq.m. has been created.

ERDF-interventions under priority 2 mainly focussed on improving Burgenland’s basic R&D-infrastructure. The most important interventions concentrated on the creation and extension of centres for technology transfer or of institutions for higher education (measure 2.3)82 and on supporting telecommunication networks and telecommunication applications (measure 2.2).83 Compared to the above-mentioned aspects, the support to enterprises active in the field of technology and innovation (measure 2.1) has only played a minor role.84

An important focus of ERDF-interventions had also direct investment support that aimed at enlarging and improving the tourist offer in Burgenland (measure 3.1).85 Within this context a number of „tourism lead projects” had been realised in southern Burgenland, while other tourism projects concentrated on the traditional tourism zone in the northern part of Burgenland (the area of the lake Neusiedl and the national park). The large majority of projects supported under this measure concentrate on “modernisation” or “capacity extension of the existing hotel and restaurant sector (90 projects). A total of 13 projects concentrated on establishing new hotel or restaurant capacities. These projects where mainly benefiting to the SMEs of Burgenland (105 SMEs supported) and contributed to secure 683 jobs and to create 398 new jobs. In addition, 2149 quality beds had been assured and 914 new beds created. The “tourism lead projects” supported helped to improve the health and spa tourism infrastructure in southern Burgenland (e.g. the spa in Lutzmannsburg ; spa and Rogner's Golfschaukel in Stegersbach). One can observe that less hotel capacities have been created than initially planned at the spa in Lutzmannsburg (4 instead of 5 hotels) and at the spa in Stegersbach (1 instead of 2 hotels ; 172 beds instead of 700 planned). Within this context, the “Golfschaukel-lead project” was the financially most important project: it has received alone more than half of the committed public funding support available under this measure (national public spending: 135 million Austrian shillings; EU contribution: 135 million Austrian shillings).

Another very important focus of ERDF-interventions under this priority of the Objective 1 programme concentrated on an enlargement of basic environmental infrastructures in order to support tourism development (measure 3.5).86 These water-related projects had contributed to increase the amount of inhabitants units for sewage water treated (by 61.000 inhabitants units) and the units of fresh water

82 With committed public funding of around 327 million Austrian shillings, 5 different projects had been carried out that contributed to establish 30.470 sq.m. of newly useable surface. In this context, also the establishment of a technology centre in Eisenstadt with 7.700 sq.m. had been supported. 83 In total, 5 different projects had been supported with a total of committed public funding of around 179 million Austrian shillings. Two projects had been infrastructure projects and the remainder concentrated on industry and crafts (two projects on a new location of enterprises, one on extending the production). With these projects, 358 new jobs were planned to be created. 84 With committed public funding of around 125 million Austrian shillings, a total of 26 project had been financed: One had been an environmental project at enterprise level, 10 had been specific projects in the field of research and development (of which 3 were implemented in SMEs) and 15 had been specific counselling projects. 85 With around 535 million Austrian shillings of committed public funding, a total of 107 different projects had been carried out until the end of the year 2000 that mobilised insvestments of around 1582 million Austrian shillings. 86 4 projects in the field of sewage water treatment and water provision had been supported with committed public funds of around 407 million Austrian shillings. - 47 - provided (by 115.000 fresh water provision units). In addition, other ERDF- interventions focussed at the initiation of cultural activities linked to tourism (measure 3.4)87 and at the extension of tourism infrastructures in Burgenland (measure 3.2). Some of the tourism infrastructure projects of measure 3.288 aimed improved the quality of the traditional tourism infrastructure in the area of the lake Neusiedl, while others created additional sports or leisure facilities for other tourism centres in order to diversify the local offer. Finally, a number of “soft-activities” had been carried out that focussed on an extension of organisational structures for tourism promotion (measure 3.3).89

ERDF-support in the field of human resources development (measure 5.4) contributed to create and extend regional facilities for initial training and the creation of communication centres.90

An analysis of the sector-specific spread of financial flows resulting from projects supported under ERDF-measures91 (see overview table below) shows that most of the interventions have concentrated on Burgenland’s third sector.92 The particular sub-sectors most affected by ERDF-interventions had been the “other public and private services-sector”, the “R&D/data processing/technology and IT- sector” and finally the “hotels and restaurant sector”. Of the 167 projects implemented in the secondary sector,93 the most important share of programme interventions has focussed on the ”production of goods sector”. At sub-sectors making up the entire ”production of goods sector”, one can observe a larger number of smaller projects were implemented in a broad variety of different sub-sectors and that a small number of projects concentrated on the “chemical/pharmaceutics/rubber branch” (chemical fibre production branch see “lead project” Lenzing Lyocell).

87 With around 120 million Austrian shillings of committed public funding, 10 projects had been supported: 3 had been tourism related infrastructure projects and 7 "other" infrastructure projects. 88 With a total of around 120 million Austrian shillings of committed public funding support under this measure, 9 tourism infrastructure projects had been carried out. 89 The committed public funding of around 17.4 million Austrian shillings has contributed to carry out 4 "soft- measures" in the field of tourism. 90 With a total of around 24.7 million Austrian shillings, 2 different projects had been supported that create usable surface in the framework of educational and training units of about 495 sq.m. 91 By July 2002, a total of 376 projects have received approved public funding of around 3,926 billion Austrian shillings (EU, Federal level, Land) and mobilised a volume of total eligible cost of around 11,061 billion Austrian shillings. 92 The 208 projects implemented in the service sector received 55% of the approved public support for all ERDF- measures and mobilised around 42% of the total eligible cost. The 3 categories that were affected most by the ERDF-interventions had been the “other public and private services-sector” (25% of total public support ; 16% of total eligible cost), the “R&D/data processing/technology and IT-sector” (16% of total public support ; 10% of total eligible cost) and finally the “hotels and restaurant sector” (10% of total public support ; 12% of total eligible cost). 93 167 projects have been carried out in total. They received 45% of the approved public support for all ERDF- measures and mobilised around 58% of the total eligible cost. Within the secondary sector, the overwhelming majority of programme interventions have concentrated on the ”production of goods sector” (35% of total public support ; 50% of total eligible cost). - 48 -

Overview Table: Sector-specific distribution of financial flows resulting from the ERDF-interventions of the Objective 1 programme Burgenland (1995-1999) Public Total eligible Total Sector (ÖNACE ) support, cost, number Main sectors Sector-specific focus of funding in % of total in % of total of *) *) projects Total, -- Primary sector Plant growing 1 Total, - 45.2 57.6 167 Secondary sector: Coal mining, mining, Extraction of gravel, sand etc - - 3 gas extraction etc Production of goods, 35.3 49.8 131 total Food production, beverage 1,8 2.8 26 Production of goods, Textile production, cloths production, leather 4.2 5.0 9 individual sub-sectors manufacturing Processing of wood, paper and cardboard 3.1 5.9 12 Printing 3.9 5.3 12 Production of basic chemical material and 17.6 21.7 16 pharmaceutics, production of chemical fibres, production of rubber and plastics Production and processing of glass, ceramics or 0.8 3.3 9 concrete-materials, processing of stones Production of metal goods 0.6 1.3 17 Productions of industrial and office machines, 2.4 3.3 20 material for control and telecommunication, optical material, car supply Production of furniture and sports material or 1.0 1.1 9 other goods Recycling - - 1 Energy and water -9.16.57 supply Construction and -1.01.226 building Total, - 54.8 42.4 208 Third sector: Retail trade, -0.10.417 commerce, repairing of cars and consumer goods Hotels and - 10.4 12.3 101 restaurants Transport and news -1.92.63 transmission (telecommunication) Banking and -1.01.01 insurance, related activities Real Estate, location, Software shops, data-processing services, 16.0 9.9 28 data processing R&D, databases, R&D, technology centres etc. enterprise related services Public administration, -0.30.116 national defence, social insurance Educational activities Institutes of higher education 0.4 0.2 1

Services in the field of Social services - - 1 health, veterinary and social affairs Other public or private Sewage water treatment, economic associations 24.7 16.0 40 services and other civic organisations, tourism associations, sports, cultural services, leisure services, other services Private households - - - -

Total, Objective 1 - 100 100 376 Burgenland Source: Own calculations on the ground of ERP-funds monitoring data (July 2002), rounding differences possible Total public funding: 3925.7 million Austrian shillings ; Total eligible cost: 11060.8 million Austrian shillings - 49 -

Overview Table; Results achieved by the ERDF-funded measures of the Objective 1 Programme Burgenland Priorities / Indicator Measures / Quantification of the material indicators Funds Planning Implementation Implementation (absolute) (absolute) (relative) Priority 1: Industry and crafts M 1.1 Jobs secured * 5.384 - Planned new jobs * 1.631 - SMEs * 155 - Settlement of enterprises * 7 - Enlargement of production * 48 - Improvement of structures * 118 - M 1.2. Planned amount of fresh water provision * 72.000 - Planned amount of sewage water treated * 182.000 - M 1.3. Planned surface of business parks in sq.m. * 488.000 -

M 1.4. Planned usable surface in sq.m. * 5.821 -

Priority 2: Research and development M 2.1. Environmental projects in enterprises * 1 - R&D projects (of which in SMEs) * 10 (3) - Counselling projects * 15 - Creation of sustainable jobs 1.000 ** - M 2.2 Infrastructure projects * 2 - Industry and commercial projects * 3 - Planned new jobs * 358 - M 2.3. Planned usable surface in sq.m. 10.000 30.470 304,7% Number of enterprises in technology centre 60 ** - People working in the technology centre 300 ** - Students at institutes for higher education 1.000 ** - Priority 3: Tourism M 3.1. Jobs secured * 683 - Planned new jobs * 398 - Secured quality beds * 2.149 - Planned new quality beds * 914 - Creation of new businesses * 13 - Modernisation * 93 - SMEs * 105 - Hotels at the spa in Lutzmannsburg 5 4 80% Beds in hotels at the spa in Lutzmannsburg 350 306 87.4% Hotels at the spa in Stegersbach 2 1 50% Beds in hotels at the spa in Stegersbach 700 172 24.6 % M 3.2. M 3.3. M 3.4. Tourism infrastructure projects * 3 - Other infrastructure projects * 7 - M 3.5. Planned amount of fresh water provision * 115.000 - Planned amount of sewage water treated * 61.000 - Priority 5: Developing economic growth and stability of employment M 5.4. * 496 - ERDF Priority 6: Technical assistance and evaluation ERDF General counselling projects covering several *5- enterprises Programme implementation (Technical *26- assistance) Source: Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000) *) no objective available at measure level **) not registered by the monitoring system ***) only partly registered for the ERDF. - 50 -

4.1.1.2. The ESF

Within the Objective 1 programme, the most important ESF-funded interventions were included in priority 5 (measures 5.1-5.3). In the initial programming document, precise quantitative targets had been defined for these measures (see overview table below). In addition, also other ESF-funded interventions with smaller amounts of public support were included in other priorities of the programme (measure 1.5. ; initial measures 2.4 and 2.5 later fused under one heading 2.4).

Due to the rather complex system of labour market activities supported under the programme and the different bodies acting as main end-beneficiaries for ESF- interventions (AMS, Land Burgenland, others), an assessment of the interventions will be made only for the most important types of action, (1) ESF-measures for which mainly the AMS was acting as the main end beneficiary and (2) smaller ESF- interventions, for which the Land Burgenland was acting as the main end beneficiary.94

ESF-measures, mainly implemented by the AMS as end beneficiary95

The AMS as end beneficiary mainly implemented the ESF-measures with the largest amount of public financial support. The most important measures were 5.1 and 5.2, whereas measure 5.3 covered a comparatively smaller proportion of funding. Within this context, different activities had been supported. Especially measure 5.1 was a very large measure that covered different actors of the labour market policy (AMS, Land, socio-economic enterprises etc).

Measure 5.1 generally aimed at training, counselling and guidance of the labour force in SMEs and of those threatened by unemployment or the unemployed, but also at training of educational personnel and training at the level of universities or at training of administrative personnel. Within this context, targeted courses had been offered to unemployed persons or those threatened by unemployment in collaboration with established training institutions for adults. In addition, specific activities for continuous training in selected job fields and courses on specific social and cultural techniques had been implemented. The mid- term evaluation highlighted that training measures provided for under this measure were largely oriented towards the needs of the regional economy. More concrete examples for specific qualification activities supported under measure 5.1. are „skilled worker qualification courses“ (Facharbeiterausbildung) that had been offered for specific crafts branches, the tourism sector (provision of qualified workforce), social care or office employees. These activities were constantly reviewed by the Burgenland AMS in order to adapt them to the requirements of the labour market. In this larger framework, also specific projects had been implemented by the Land Burgenland such as the development of adequate human resources potentials in the

94 The overall assessment of results achieved by ESF-funded measures at the end of the Objective 1 programming period is however complicated by a considerable data gap. The most recent annual report on the Objective 1 programme Burgenland (year 2000) does not contain details for the entire ESF-section. 95 Minutes of Monitoring Committee meetings (3. Begleitausschußsitzung am 29. September 1997). AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1-Gebiet Burgenland. Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1- Programms Burgenland. Wien, April 1998. Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1998) - 51 - field of information technology and telecommunications or the adaptation of the local workforce to changing structural conditions by supporting enterprises based qualification measures in strategically important companies within the Land. In the framework of an employment charity (Arbeitsstiftung) in middle Burgenland, 80 jobless were supported in their efforts to re-integrate into normal worklife through training, counselling and other activities. Measure 5.1 also supported pluri-annual academic courses on information, library and documentalist jobs in an institute for higher education in Eisenstadt (Fachhochschule), which included practical internships at the end of the studies (60 places). In addition, specific academic courses have been supported in an institute for higher education in southern Burgenland (Fachhochschule Pinkafeld), where 40 out of 45 places have received ESF-assistance. During the lifetime of the programme, one can observe a significant learning process within measure 5.1: activities tended more and more towards larger actions involving a greater number of target groups (compared to the initially dominant individual support approach) and towards a stronger differentiation of the intervention approach.96

Measure 5.2 generally aimed at the integration of long-term unemployed, young people and those exposed to exclusion from the labour market. Targeted courses for persons with particular handicaps on the labour market were carried out97 and practical internships had been organised. Other activities helped to integrate disabled persons, women and the long-term unemployed into the labour market. At the beginning of the programme, the main end beneficiary AMS (and the BSB) had to begin from "0", as no adequate intervention structures were existing. Due to the worsening of the overall labour market situation in Burgenland during the first two years, one expected an increase of demand for such activities and an increase of related funding. Already after two years, one could observe a multiplication of labour market projects carried out in Burgenland that was mainly due to the support provided by the ESF. During the programme’s lifetime, considerable progress towards a stronger professionalisation of the interventions has been made.98 ESF- support under this measure has clearly facilitated the access of specific target groups to the labour markets. A particular focus of the support provided under this measure concentrated on young people, wherefore specific activities for apprenticeships-seeking young people have been carried at several places in the Land. In addition, ESF-support given to 3 specific socio-economic enterprises has permitted to enlarge specific qualification possibilities close to the job market for handicapped, women and the long-term unemployed. Finally, the Federal office for social affairs has supported qualification, employment and support measures for 153 handicapped persons. Through the "enterprise based employment subsidy" (BEB), jobs could be made available in the private sector for persons that are facing handicaps on the labour market.

An interesting example, which can even be considered a „best practice project“ especially for rural areas, was the establishment of a non-profit making service for labour force transfer (gemeinnützige Arbeitnehmerüberlassung), which had been supported under measure 5.2. Non-profitmaking job transfer companies are mainly concentrated in urban centres or industrial areas. Within Burgenland, the

96 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 97 In fields such as job preparation, general cultural techniques or job-related orientation and on the development of self-help potentials. 98 Interview with the Federal ministry for economy and labour affairs (former BMAGS). - 52 -

general approach of job transfer companies was only realisable with difficulties, as the majority of companies in the area are SMEs and no dense urban centres do exist. Within Burgenland the company "Context" has developed the idea of a non-profitmaking job transfer model (Trendwerk), which was been realised in co- operation between the company and the Land level AMS-office.99 The target groups of the model are exclusively people with significant integration problems on the labour market (long-term unemployment, persons affected by lacking mobility or alcoholism, drug addicts, measures to psychological problems). The approach of the project is in very simple terms a combination between job orientation and activation, integration support and job assistance (integration accompaignment). As a legal implementation model, the form of the socio- economic enterprise had been chosen. After the usual steps for project preparation, the concept was implemented by mid-1999 at two locations with 40 transfer jobs in the southern Burgenland districts Oberpullendorf, Güssing and Jennersdorf. Only after the good experiences gained during the start phase, the new location of the job transfer model had been set up in northern Burgenland (Eisenstadt) later in 2000. Currently, the project "Trendwerke" operates in all districts of Burgenland. The results achieved100 after the first years of operation show that it is possible to realise non-profitmaking job transfer exclusively with the target group "people with significant integration problems on the labour market".

Measure 5.3 aimed at activities that help to adapt employees and workers to the challenges resulting from changes of the industrial and productive systems. This measure contains similar actions as those included in the previous Objective 4 programme in Austria, such as activities supporting higher qualification or key qualifications and innovative qualification. As the type of activities supported in this context had been new for the Austrian context and the AMS, an effective start of the implementation could only be observed by the end of 1996 (mainly due slow administrative-technical handling of the support dossiers). Since then, one could observe a strong interest of regional SMEs that was greater than initially expected. Around the mid-term period of the programme, one can however observe that activities of this measure had mainly concentrated on the male segment of the Burgenland labour market. Due to this one-sided effect, Burgenland had strongly tried to counter this development in 1998 and successfully realised a positive shift in favour of the female workforce (see also below). Of the 315 enterprises projects supported up to the end of 1998, 312 had been implemented in SMEs.

As a first overall result, one can observe that ESF-interventions implemented by the AMS as end beneficiary have achieved results that are very significantly above the initially defined objectives (see overview table below): • The total number of persons participating in qualification and employment activities that were carried out under the above-mentioned measures has reached 12,369 by the year 1999/2000. If one adds the participants in specific counselling activities (e.g. for pupils leaving schools etc), the total number of registered persons concerned by the various AMS-activities raises to 14,312.

99 Based on the project documentation provided to the evaluator by the AMS-Burgenland. 100 During the first two years, 552 persons participated in the preparation phase with the duration of 3 to 8 weeks. Of those people that have stayed more than the preparation phase in the project (208), around 67% could obtain an unsupported job or had been integrated into the relevant enterprises, whereas 32% had again became jobless and 1% had retired. Their most significant success can be observed in the category "long-term unemployed" or people having been absent from the normal worklife for a longer time period. The concept has been less successful in the category of those unemployed that accumulate various integration handicaps. - 53 -

• Measures 5.1 and 5.2 had been most successful, as the number of participants in qualification and employment activities had been nearby four times higher than the expected targets. Measure 5.3 has “only” reached more than twice of the initially planned participants.

Due to the fact that the Objective 1 programme had identified specific problems or needs regarding the situation of women on the labour market (e.g. SWOT- analysis: to provide more targeted training for women) and has set itself the overall goal to stimulate female employment by 2% (1993: 44% of the employees), it is interesting to check whether the outputs achieved also had an impact on this particular category of the labour market: • The overall share of women that participated in qualification and employment activities carried out under the 3 above mentioned measures was 47.5%. This overall result is clearly above the share of female employment that was registered in 1993. The most important share of female participants at measure level can be observed in the framework of training, counselling and guidance of the labour force in SMEs and of those threatened by unemployment (measure 5.1: 53%), whereas measures 5.2 and 5.3 have achieved overall female participation rates of respectively 43% and 46%. Especially the relatively low share of female participants in measure 5.2. (also aiming at equal opportunities!) is noteworthy. • An interesting aspect is also the development of female participation over the lifetime of the programme: During the first 2 years, nearby all measures were characterised by a male participation over 50%. In the case of measure 5.1., female participation significantly increased over 50% already in 1997 and has remained above this level until the end of the programming period. In the case of measures 5.2 and 5.3, significant female participation rates above 50% could only be achieved in the last year of the programming period. Within the latter measure, more attention should have been put on this particular issue from the beginning on. In the framework of measure 5.3., the successful shift in 1998 could be achieved by an adaptation of the funding guidelines (since the beginning of 1998, salary-subsidies were only attributed to women). These changes aimed at mobilising SMEs to offer more qualification measures for women and to contribute by this to a raising of the overall qualification level of the female workforce in Burgenland. The significant increase in female participants in 1998/1999/2000 has proved that the differentiation of funding guidelines was very effective.

The most important indicator that allows to evaluate the access to labour markets and the more general labour market effects of the above-mentioned programme measures is the “labour market status after 6 months” of those having undergone specific training or integration measures (people still integrated into the job/people out a job). The indicator provides however only a static picture of the situation at a given time and does not allow to make comments on the sustainability of the employment opportunities created. Already after the first two years, the mid-term evaluation has observed relatively high integration rates for 1996 in the framework of measure 5.1 and measure 5.2 and concluded that the labour market policy carried out in the framework of the Objective 1 interventions can be considered very effective. The integration rates available for 1997 show the following picture: • For measure 5.1, around 66% of the participants had been employed six months after the end of the measure or have taken part in higher level training measures - 54 -

(62% of independents and employees). If one does not consider the category „others“, the integration rate raises up to 70%. Less than a quarter of the participants had been unemployed. • For measure 5.2, around 65% of the participants had been employed six months after the end of the measure or were integrated into higher level training activities. If one does not consider the category „others“, the integration rate is even at 67%.

More recent data on integration rates for 1999 are currently not available from the Burgenland AMS (a specific monitoring approach is only set up under the new programming phase). Considering the important participation rates in AMS-measures and the high integration rates observed during previous years, one can however conclude – by extrapolation – that the very effective labour market policy under these parts of the Objective 1 programme has continued up to the end of the programming period.

ESF-interventions for which the Land Burgenland was the main end beneficiary101

Other parts of the study have shown that ESF-funded measures for which the Land Burgenland had been the end-beneficiary (measure 1.5. ; initial measures 2.4 and 2.5 later fused under one heading 2.4) experienced significant delays in implementation during the first years of the programme.

In parallel to the support for employee-qualification provided for by the Burgenland AMS, measure 1.5. of the Objective 1 programme aimed at adapting entrepreneurs and leading employees to the structural change of the economy, which should in turn contribute to strengthen the competitive position of local enterprises. During the second phase of the programme implementation period (1998/1999), a newly initiated programme intervention was included into measure 5.1. that provided support for qualification, counselling and coaching in the field of business start ups in Burgenland (see more in detail section 4.1.2.2.). The launching of the "Burgenland initiative for start-up of enterprises” was partly motivated by specific recommendations formulated in the mid-term evaluation, a growing demand for a re-orientation of the enterprise support policy and the possibility to find a solution to ongoing implementation problems of this particular ESF-measure implemented by the Land government.

Measure 2.4 of the Objective 1 programme explicitly supported projects for innovative actions and technology orientated enterprises. One project aimed at higher improving qualification levels with regard to Geographical Information Systems and provided support for their implementation/application in the context of the Land administration and the municipalities. In supporting the running of the technology centre in Eisenstadt, a closer connection between vocational training centres, institutes for higher education and enterprises as well as activities in relation to technology transfer were enhanced. Within this context, however, the level of female participants was very low (16%).

101 Minutes of Monitoring Committee meetings (5. Begleitausschußsitzung am 07. Oktober 1998). Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1998. Minutes of Monitoring Committee meetings (6. Begleitausschußsitzung am 12. Juli 1999). Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1999. Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1998) - 55 -

Overview Table: Results achieved through ESF-interventions implemented by the AMS as end beneficiary (1995-1999/2000) 1. Participants 2. Participants, 3. Participants, 4. 5. in qualification / female male Participants in Total persons employment specific registered measures, total counselling (2+3+4) (2+3) measures Measure 5.1. (initial target:1200 participants) 1995 1074 318 756 - 1074 1996 532 256 276 70 602 1997 1300 821 479 63 1363 1998 643 348 295 451 1094 1999/2000 1113 730 383 162 1275 Total 5.1. 4662 2473 2189 746 5408 Measure 5.2, (initial target:1200 participants) 1995 459 148 311 - 459 1996 381 138 243 200 581 1997 1559 638 921 479 2038 1998 1278 524 754 150 1428 1999/2000 1055 581 474 368 1423 Total 5.2. 4732 2029 2703 1197 5929 Measure 5.3, (initial target:1136 participants) 1995 14 - 14 - 14 1996 105 55 50 - 105 1997 656 206 450 - 656 1998 1064 493 571 - 1064 1999/2000 1136 620 516 - 1136 Total 5.3. 2975 1374 1601 - 2975 Total, For measures 5.1.-5.3 1995 1547 466 1081 - 1547 1996 1018 449 569 270 1288 1997 3515 1665 1850 542 4057 1998 2985 1365 1620 601 3586 1999/2000 3304 1931 1373 530 3834 Total 12369 5876 6493 1943 14312 Source: Labour market service Burgenland, 2002 - 56 -

4.1.1.3. The EAGGF102

In order to assess the effectiveness in achieving the programme's quantitative targets with regard to agriculture (and forestry), it would be necessary to evaluate substantial sector-specific output data from the monitoring system. This information was however not available in the provided documentation, as the most recent annual report on the Objective 1 programme Burgenland (year 2000) only gives a summary overview on the general degree of implementation of EAGGF-interventions funded under the Objective 1 programme.

Due to the lacking data, it is also very difficult to precisely assess the effects resulting from EAGGF-interventions. A more in depth assessment of general effects resulting from EAGGF-interventions will also be provided in the chapter on “rural development” (see section 4.1.2.5. below).

The mid-term evaluation provides however a first orientation on the type of effects (direct and indirect effects, employment effects, structuring effects etc.) that might result from an implementation of different EAGGF-funded measures of the Objective 1 programme Burgenland.103 • Direct and indirect positive effects on the basic socio-economic conditions of the agriculture and forestry sector, but also employment effects, mainly result from the compensation subsidy for less favoured areas, from support measures for investment at the level of individual agricultural holdings and from sector- specific measures, but also from the implementation of diversification measures (the Objective 5b-alike measures). • Structuring effects on the agriculture and forestry sector and on rural areas in general mainly result from support to measures such as the re-parcelling of agricultural land and the related accompanying measures (e.g. greening measures, reconstruction of hedges or biotops) or the construction of local heating units based on renewable raw material (biomass). All these activities tend to improve the rural infrastructure, the attractivity of rural areas and to preserve the natural living conditions.

Due to the relatively modest share of EAGGF-funding attributed to support activities in the field of agriculture, forestry and rural development, a rather limited scope for action was available. The programme support was mainly designated to maintain the inner-Austrian support level for the agricultural sector and to ensure a broad spatial coverage of agricultural activities within Burgenland. The Objective 1 programme has however constituted a major advantage for the Land's agricultural sector compared to other Austrian Länder (Objective 5b-programmes), even if the Objective 5b-alike interventions within the programme had been a new approach in the Austrian context.

Measure 4.1 aimed at the development of agriculture and forestry and in

102 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000). Minutes of Monitoring Committee meetings (6. Begleitausschußsitzung am 12. Juli 1999). Regionalmanagement Burgenland: Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1999. Minutes of Monitoring Committee meetings (5. Begleitausschußsitzung am 07. Oktober 1998). Agrarabteilung des Amtes der Burgenländischen Landesregierung: Stand der Umsetzung des Programmplanungsdokumentes, Prioritätsachse Landwirtschaft und Naturschutz. 103 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. - 57 - particular at improving processing and marketing of the local and regional production. This measure provided support for compensation payments, for investments at the level of individual agricultural holdings, for sector specific measures and for producers associations.104 Whether EAGGF-support under measure 4.1 had contributed to maintain stable agricultural holdings and viable rural communities is difficult to say: At least with regard to the first aspect, one can observe that the support could not stop the necessary structural adaptation process in Burgenland (reduction of the overall number of holdings; decrease of small-sized holdings frequently based upon part-time activity). Support might however have contributed to the trend of preserving larger-sized and more profitable agricultural holdings, mainly based upon full time occupation. As regards the support to producers associations (mainly in the field of cereals, tobacco plantation and vegetables), the region has particularly succeeded in establishing an efficient marketing association for local products (which was however mainly a result of a pre- existing initiative launched at Land level). 105

Measure 4.2 aimed at rural development in Burgenland and provided support to rural infrastructures, the use of regional energy and raw material potentials or diversification. With committed public funding of around 394 million Austrian shillings, 205 individual projects were supported. In addition, 10 "collective approvals" for small scale biomass projects (local heat provision) as well as 5 "collective approvals" for projects in the field of re-parcelling of agricultural land had been supported. Infrastructure support mainly covered projects that aim at extending the rural road network resulting from the re-parcelling of Land. Through these measures, the programme had contributed to raise the competitiveness of the agricultural sector in Burgenland. In addition, greening measures such as the establishment or preservation of biotops or biotop-systems have made a contribution to raise the ecological value of the rural landscape.

The financially very small measure 4.3 aimed at protecting the environment and natural assets in Burgenland or at the preservation of cultural landscapes and at diversification.106 The projects funded helped to preserve groundwater reserves in agriculturally intensively used areas. The activities covered targeted counselling and accompanying investment measures. The measure "protection of natural assets and cultural landscapes" was however less successful than other EAGGF-measures of the Objective 1 programme. The initial aims defined in the programming document had been too broad, wherefore individual projects could not significantly contribute to their overall realisation. Another reason might also be that some of the projects submitted were not fully up to the overall requirements to fulfil such expectations. A final reason was certainly also of a political nature, as the support policy for the agricultural sector is generally highly politicised in Austria. Due to a certain opponent situation in this area (agriculture is considered a more conservative domain, whereas the environment is an issue of more left wing or "green" orientations), one could observe that such activities have not been actively supported.107

104 With committed public funding of around 637 million Austrian shillings, 126 individual projects and 5 "collective measures" in the field of compensation payments as well as 7 "collective measures" for investment support to individual agricultural holdings (small-scale projects) had been supported. 105 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 106 With a total of 18.6 million Austrian shillings of committed public funding, 7 projects had been supported. 107 Interview with the Federal ministry for agriculture, forestry, environment and water management. - 58 -

The financially very small measure 4.4 aimed at training and counselling or R&TD in the field of agriculture and forestry. With committed public funding of around 44 million Austrian shillings, 30 different projects in the field of agricultural training and counselling as well as research and development could be supported.108 Activities in the field of training and counselling improve the direct know-how of those participating in the courses and generally contribute - as an indirect effect - to improve the management or investment planning capacities of agricultural or forestry holdings.109 Despite the relatively small amount available for these actions, the Burgenland Chamber of agriculture considers the focus on quality and counselling, but also the business orientated training of individual agricultural holdings, as being one of the most important elements that contributed to an effective and high degree of programme implementation.110

4.1.2. An assessment of effectiveness by thematic priorities of the programme

4.1.2.1. Transport

The Burgenland Objective 1 programme for 1995-1999 did not foresee specific interventions in the field of transport infrastructure.

4.1.2.2. Small and medium sized enterprises

During the first implementation phase of the Objective 1 programme (1996/1997), support to endogenous economic potentials was intended to be achieved essentially by attracting new enterprises and supporting their installation. The main orientation in this context was to motivate and support existing SMEs in the region to create "their" link with “lead projects” implemented under the Objective 1 programme.

SMEs within major ERDF-funded measures111

The most important direct benefits for SMEs resulted from the programme’s ERDF-funded measures on investment support for businesses, both in the field of industry and crafts (measure 1.1: 155 SMEs supported) and especially in the field of tourism (measure 3.1. 105 SMEs supported). These 2 measures have also contributed to create most of the new jobs (85%) and have assured the total number of preserved existing jobs that are indicated for all ERDF-interventions. To what extent these results are directly attributable to SMEs supported can not be identified on ground of existing monitoring data. In this larger context it must however be questioned, whether the dominant share of public support committed under these two

108 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000) 109 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 110 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 111 Minutes of Monitoring Committee meetings (2. Begleitausschußsitzung am 14. Oktober 1996). Amt der Burgenländischen Landesregierung, Landesstatistik: Burgenländische Statistiken, Tourismus 2001 (Neue Folge, Heft 87). Eisenstadt 2002. Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000). - 59 - measures for so called “lead projects” (roughly around 50% in each of the measures) was very effective with regard to a stimulation of endogenous economic potentials (SMEs). Especially in the context of measure 1.1, most of the public funding provided for such “lead projects” concerned the attraction of new external investors (3 of 5 projects), whereas the remainder 2 projects covered already existing companies in Burgenland. Due to the initially dominant position of larger projects, demands for a stronger focus on SMEs have increased “within” and “outside” the programme. Already during a monitoring committee debate in 1997, the representative of the Burgenland Chamber of economy asked the public responsibles to focus ERDF- support more towards the Burgenland SME sector. But also the “Green” party in Burgenland considerably criticised the lacking focus on regional SMEs within the economic development approach.112

It is difficult to precisely determine whether ERDF-support for productive investment (especially measure 1.1) could raise the competitiveness of SMEs or achieve their long-term growth/viability. Under measure 1.1, about 155 crafts and industry SMEs had been supported. If one looks at the number of enterprises existing in Burgenland in the year 2001 (see statistical annex, table G), the industry and crafts SMEs supported represent around 20% of the total number of existing enterprises in the “production of goods sub-sector” (all size types). The majority of projects supported (175 projects) concern structural improvements or an enlargement of production (166), but the existing sources do not allow to define more precisely which type of intervention has dominantly been carried out within the SMEs. Based on the high proportion of SMEs reached and the dominant type of investment made, one can assume that programme interventions had very positive effects on competitiveness and long term growth/viability of SMEs in this sub-sector. In addition, significant private contributions to these types of investments are only mobilised in companies where additional or new market opportunities for products are in sight. At this point of the assessment it becomes also clearer why a rather critical judgement was made on the significant amount of financial support attributed to “lead projects” in the field of productive investment. More could have been done for SMEs in Burgenland !

Structural Funds support in the field of tourism (measure 3.1) had a very positive impact on the competitiveness of SMEs supported and permitted Burgenland to significantly increase its overall profile as a quality tourism destination. A total of 105 SMEs had been supported under measure 3.1, which represents around 10% of the total number of enterprises existing in the “hotel and restaurant sub- sector” in Burgenland in the year 2000 (see statistical annex, tables F and G). Most of the projects concentrated on modernising or enlarging existing hotel or restaurant facilities (93 out of a total of 107 projects implemented). Structural Funds support has permitted to create more than 1,300 additional new beds in the category of four-star and five-star hotels and more than 1,700 beds in the three-star hotel segment. The achievements in the three-star hotels segment must however partly be attributed to a quality improvement in existing one-star and two-star hotels, where beds have decreased in recent years by around 3000. If one considers the very positive development of tourism arrivals in Burgenland during the years 1997-2001 (see:

112 As an alternative to the ongoing practice, they proposed to put more focus on local SMEs, especially by using modern technology potentials and by further qualifying the regional workforce. New enterprises should only be supported in future orientated economic branches that are in line with the main regional development objectives such as energy- and environmental technology or the food and wood processing industry. Source: http://burgenland.gruene.at/Themen/umwelt.htm - 60 - appropriateness section), the programme support to quality improvements has definitively contributed to raise the competitiveness and long-term growth/viability of SMEs supported and of the entire sector. This is especially true for the higher quality segment of the hotel sector (four-star and five-star hotels), which could nearly double its registered overnight stays between 1995 (342.000 overnight stays) and the year 2001 (678.000 overnight stays).

Against the results achieved under the ERDF-funded measures 1.1 and 3.1, one has to consider the support provided to SMEs in the context of the programme’s priority 2 on research & development as being marginal. In fact, the official data available show that only 3 SMEs were supported under measure 2.1 out of a total of 26 projects. For measure 2.2 on telecommunication networks and application, no specifications are made. One explanation for the weak results might be that SMEs had been hindered mainly due to lacking own assets (capital base) and human resources. Both factors have contributed to the general fact that only a small number of projects where forwarded to the programme authorities. In addition, the dynamics in implementing these measures was higher in northern Burgenland, whereas sometimes significant delays could be observed in middle and southern Burgenland.113

The direct effect of ERDF-funded measures for investment support to enterprises on enhancing environmental protection has to be considered negligible, as only 3 environmental projects had received support under measures 1.1 and 2.1. (not specifiable for SMEs).

SMEs in the framework of ESF-funded measures114

In parallel to the ERDF funded measures under the programme priorities 1, 2 and 3, one could also observe a positive impact of ESF-funded measures on SMEs (priority 5). • In the framework of measure 5.1, general training, counselling and guidance of the labour force in SMEs was supported. As a complement to the “traditional” training activities, this measure also supported start-ups that were founded by unemployed people. The AMS together with a research institute on economic development (Wirtschaftsförderungsinstitut) implemented these counselling and coaching activities. The Burgenland AMS has observed quite early that the ESF- funded counselling and coaching activities had been very successful: since the start until the end of 1997, the activity registered 281 counselling cases, 116 new start-ups founded and 154 newly created jobs. • A very positive reaction of local SMEs can also be observed in the context of measure 5.3. (support to the adaptation of employees to the structural change in the industrial productive system), as the real interest in activities supported was greater than initially expected. Of the 315 enterprises projects supported by the end of 1998, 312 projects had been implemented in SMEs.

113 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 114Minutes of Monitoring Committee meetings (3. Begleitausschußsitzung am 29. September 1997, 4. Begleitausschußsitzung am 16. Dezember 1997, 5. Begleitausschußsitzung am 07. Oktober 1998, 6. Begleitausschußsitzung am 12. Juli 1999). AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1-Gebiet Burgenland. Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1998, Jahresbericht 1999) - 61 -

An interesting success story is also the launching of a of a “softer” type of intervention in the field of enterprise support (compared to the “lead project approach”) during the second phase of the programme implementation period, which aimed at stimulating the creation of new businesses in Burgenland via targeted ESF-support (measure 1.5, implemented by the Land government as main end- beneficiary). A first debate on launching the new “initiative for start-ups of enterprises” (Existenzgründerinitiative) within the Objective 1 programme took place during the MC-meeting in December 1997.115 During the first half of 1998, all necessary legal and technical preconditions for implementing this initiative had been created.116 The thematic focus of the initiative was broad as no economic branch should be excluded and in geographic terms, the initiative should concentrate on the middle and southern parts of Burgenland. But also at the target group of people addressed by the new initiative was larger than the group of people addressed by start-up support under measure 5.1. (not only jobless people were supported but also all those generally wishing to set up an own enterprise based professional existence). Finally, the start of new business was not only supported by seed capital, but also by targeted qualification measures linked to the setting up of an enterprise and by accompanying coaching.117

The first implementation progress report of July 1999 showed that from the beginning on a considerable demand could be observed in Burgenland.118 With regard to the geographical distribution of projects approved or recommended for approval (339 demands) under the start-up initiative, one can see that the majority comes from districts in middle or southern Burgenland (198), whereas the northern part of the Land accounted for a total of 141 demands. The highest number of new start-up enterprises created can be observed in the district Oberwart. The sector-specific focus of projects approved or recommended for approval mainly concentrates on commerce (81) and tourism (69), but also on the construction sector (48). A fairly equal share can be observed for demands in the productive or reparation sector (34), enterprise related services (32) and other types of services (32).

If one looks at the quantitative indicators available on the evolution of the absolute number of start ups in Burgenland (see statistical annex, tables I) and considers that

115 The Land representatives highlighted that initial steps have already been taken, but that a Funds transgressing bundling of existing instruments would be necessary in order to achieve the relevant objectives. The Federal ministry of economy suggested however to implement such measures on the ground of a demand and supply side oriented approach. According to the decision on the monitoring committee, the „start up of enterprise initiative“ initiated by the Land Burgenland should be implemented under the Objective 1 programme by using the existing funding instruments and without changing the financial tables. 116 Jointly with the Burgenland Chamber of economy, some limitations had been defined and support guidelines adapted. The initiative combined support instruments from the Federal level (BÜRGES-Fund, the Federal ministry of economy) and the Land level (start-up of enterprises subsidy). The Burgenland economic service (WiBAG) was charged by the Land government with the implementation of the initiative. 117 In the framework of the Burgenland initiative, the creation of each start-up enterprise by a young entrepreneur was supported with funding between 160.000 and 200.000 Austrian shillings (in the form of a "start-up subsidy", Gründungsbeihilfe), and a complementary counselling and coaching measure with a value of about 50.000 Austrian shillings. Support had only been given when the entrepreneur took the economic risk of a project in charge. 118 By the end of June 1999, a total of 537 demands for support had been received. Of these, a total of 339 demands had been approved or were recommended for approval by the co-ordination meeting (176 demands already approved; 112 demands on a reserve list; 51 recommended for approval). Another 127 demands had still been in the administrative procedure and only 71 demands had been refused. The total number of demands approved or still pending in the administrative process by mid-1999 mobilised public support of around 90.5 million Austrian shillings, wherefore the initiative significantly contributed to implement the ESF-part of the programme. - 62 - the total increase of start ups in Burgenland between 1998/1999 had been at 180, it becomes clear that programme support has very significantly contributed to achieve the overall increase in these two years (the total number projects by mid 1999: 176). Despite the rather positive initial results of the first years, the intervention only begins to produce significantly positive results after the year 2000.119 This is also confirmed by the quantitative indicators available on the evolution of start up of enterprises in Burgenland (see statistical annex, table H).120 As a conclusion, one can assume that the programme support for start-ups has been an important factor that helped to assure Burgenland‘s strong position in an Austrian-wide context. For the future, however, a stronger focus of the initiative should be achieved by further streamlining the support guidelines and – according to the a suggestion of Commission’s DG V – by stronger considering the principle of equal opportunities through favouring women.

Overview Table: The start-up of enterprise initiative: geographical distribution of demands approved or recommended for approval District Number of demands by district Number of demands according to north / south Eisenstadt 61 Northern Burgenland: Neusiedl am See 46 141 Mattersburg 34 Oberpullendorf 41 Southern Burgenland: Oberwart 94 198 Güssing 40 Jennersdorf 23 Total 339 339

4.1.2.3. Research and Development121

Within the general architecture of the initial Objective 1 programme, measures in the field of research and development (R&D) had only been attributed a minor share of the total public expenditure planned (EU, Federal level, Land): The whole public expenditure planned for priority 2 accounted for only 9.4% of the programme total, with a dominant share for ERDF-funded interventions (measures 2.1-2.3: 86% of the priority total) and a smaller part for ESF-funded interventions (initial measure 2.4 and 2.5: 14% of the priority total). The planned public expenditure for enterprise based R&D activities in the field of measure 2.1. accounted for only 1.5% of the programme total and 15.6% of the priority total. In contrary, most of the financial emphasis within priority 2 was put on realising basic infrastructures such as

119 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 120 Firstly, one can observe a significant increase in the total number of start-ups in Burgenland between 2000 and 2001 (from 753 to 948). If one compares, secondly, the relative evolution of the Austrian Länder‘s share of start ups in a national wide context between 1993 and 2001, one can – secondly - observe that Burgenland could increase its share from an average rate of 3.1% (1993-2001) to 3.5% in the year 2001. Finally, Burgenland is in the top group of those Austrian Länder that has a start-up intensity above the national average (year 2001: Burgenland: 8.8% ; Austria: 8.2%). 121Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001). Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Minutes of Monitoring Committee meetings (4. Begleitausschußsitzung am 16. Dezember 1997, 5. Begleitausschußsitzung am 07. Oktober 1998). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1998, Jahresbericht 2000). - 63 - the establishment of a telecommunication network or the creation/extension of facilities for higher education and technology transfer (measures 2.2 and 2.3: 70% of priority total). Already in 1997, the mid-term evaluation had questioned whether the issue of mobilising regional resources in the field of research & development and innovation was sufficiently paid attention to by the Land actors.

During the second half of the programme implementation phase (1997-1999), the profile of Burgenland’s R&D activities has however been made more explicit, mainly through designing a specific regional strategy and by putting more financial weight on specific measures contained in priority 2. • The R&D strategy of the Land Burgenland mainly builds upon the measures contained in the Objective 1 programme that shall help to create specific regional R&D-focus in this area. Based upon this, the regional strategy aims at cluster- building for specific economic or thematic sectors (telecommunication, techniques in the field of energy and production material), at creating competitive advantages and at using synergies. Further steps in the strategy would then be to create competent centres in the field of economy, science and transfer management and to stimulate international networking. With regard to the basic infrastructure, the regional strategy mainly builds upon the existing business and innovation centre in Eisenstadt (BIC-Eisenstadt) and intends to create new "satellites" in other areas of the Land (e.g. Oberwart, Güssing, Heiligenkreuz, Parndorf etc.). • In parallel, the programme authorities have decided to put relatively more emphasis on the support of R&D activities in Burgenland: Slight changes of the initial Objective 1 programming document had been adopted by the monitoring committee meeting in December 1997, which have also led to an inclusion of new funding guidelines for the support of innovative and technology orientated enterprises (inclusion of guidelines for the ERP fund technology programme and the ERP infrastructure programme). In addition, the monitoring committee has decided upon the use of indexation means for 1996/1997, which has led to change of the financial tables for various ERDF-measures.122

The main results achieved through Objective 1 support for R&D in Burgenland by the end of the programming period (December 2000) can be summarised as follows:

123 Of 26 enterprise-based projects in the field of technology and innovation (measure 2.1.) supported, one project had been an environmental project at enterprise level, 10 others had been specific projects in the field of research and development (of which 3 were implemented in SMEs) and 15 had been specific counselling projects. Due to the relatively small amounts of support available under this measure, one can not expect that RTD support has succeeded in generating broad positive spin-offs in Burgenland. Support might however have created punctual positive impacts within the individual enterprises supported such as the development of higher value added activities. In the opinion of the Land

122 Of the total indexation means designated to the ERDF (4.65 million ECU), the bulk had however been attributed to the support of industry and business and to tourism (measures 1.1, 1.3 and 3.1.), whereas only 16.5% had been attributed in favour of measure 2.1. supporting technology and innovative orientated enterprises. A stronger emphasis on R&D support during the second phase could also be observed for the decision taken during the fifth monitoring committee, as ERDF-indexation means for 1999 have mainly been spent on measures 1.1 and 2.1. 123 Within measure 2.1, a total of 26 enterprise-based projects in the field of technology and innovation had been supported with an amount of committed public financial support of around 125 million Austrian shillings: - 64 -

government authorities,124 the rather poor results achieved especially at the level of SMEs can mainly be explained by their lacking own assets (capital base) or their lacking human resources. Both factors have contributed to the general fact that only a small number of projects where forwarded to the programme authorities. In addition, the dynamics in implementing R&D measures was higher in northern Burgenland, whereas sometimes significant delays could be observed in middle and southern Burgenland.

Burgenland’s basic R&D capacity has however been enhanced through infrastructure support. Within this context, the Burgenland technology centre approach was launched that has proved to be a very successful activity. ERDF- support under measure 2.3 has contributed to implement 5 different projects (establishment of 30.470 sq.m. of newly useable surface), of which one has been the establishment of a technology centre in Eisenstadt with 7.700 sq.m. The ESF- support for the day-to-day running of the technology centre in Eisenstadt (measure 2.4) has enhanced a closer connection between vocational training centres, institutes for higher education and enterprises as well as activities in relation to technology transfer. An unexpected aspect was certainly the very positive development of the technology centre that could not be foreseen at the start of the programme. In fact, Burgenland now accounts for the biggest technology centre in Austria and continues to plan further extensions of the centre.125 A good progress in implementing the measures that aim at research and development could be achieved with projects implemented in the field of telecommunication (data highway).

4.1.2.4. Education and Training126

The Objective 1 programme has provided targeted support to education and training mainly through a broad range of ESF-funded interventions (e.g. measures 1.5., 5.1, 5.2 and 5.3)127, but also in the context of several smaller ERDF-funded interventions in (measures 1.4, 2.3. and 5.4). A relatively small amount has also been mobilised by the EAGGF for education in the field of agriculture and forestry (measure 4.4., see EAGGF-section).

ESF-interventions

A overall positive impact of ESF-funded interventions in the field of education and training had certainly been to increase the planning security and the independence of the Austrian labour market policy, which was mainly a direct effect of the multiannual

124 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 125 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 126Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1998). Minutes of Monitoring Committee meetings (3. Begleitausschußsitzung am 29. September 1997). AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1-Gebiet Burgenland. Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 127 Due to a lack of more recent quantitative data and qualitative reporting, the general evaluation of the overall effectiveness of ESF-interventions in the field of education and training will have to be based on the information contained in the 1998 annual report of the Objective 1 programme. - 65 - programming process. The Structural Funds programmes also supported the decentralisation process of the Austrian labour market service that was launched back in 1994. With regard to the Objective 1 programme, one can observe that the above mentioned positive effects had been stronger developed in Burgenland than in other Austrian Länder.128

Among all ESF-interventions of the Objective 1 programme, the following forms of intervention had been the most actively supported (financially nearby at an equal share): • Measure 5.1: targeted courses to unemployed persons or those threatened by unemployment in collaboration with established training institutions for adults ; specific activities for continuous training in selected job fields and courses on specific social and cultural techniques. • Measure 5.2: for persons with particular handicaps on the labour market, targeted courses on job preparation, on general cultural techniques or job-related orientation, on the development of self-help potentials and practical internships had been carried out. In addition, specific activities had been supported that aimed at integrating the disabled, women and the long-term unemployed into the labour market. Over the lifetime of the programme, one can observe that ESF-interventions within this broader context have operated a shift away from supporting individual cases towards more funding attributed for collectively orientated activities such as training courses or framework actions.129

It is difficult to assess precisely how far investment in “human resources” has removed constraints on economic development, reduced problems of social exclusion, improved overall levels of human capital (skills and qualifications) or improved levels of employability. A general problem that had a considerable influence on the overall impact of the ESF-interventions was the relatively low share of public support attributed to these measures. This has already been highlighted in different parts of previous chapters. Some qualitative statements from major stakeholders might however help to partly answer these issues. Some actors consider that the first programming period had missed a chance to prepare the population with regard to future challenges,130 but the Land government highlights that it was very difficult at an early stage to precisely define where the actual focus of qualification measures should be laid at. The lack of financial support had also complicated a really effective tackling of specific problems existing on the regional labour market. Within the Objective 1 programme context, only standard measures such as initial training or ongoing training where possible. In contrary to that, too little funding had been available for specific long-term orientated qualification measures that focus on specific disadvantaged groups on the labour market (e.g. integration of women into the labour market). In some cases, even traditional measures should have been designed more effectively. As an example is quoted the case of an accompanying measure for the Nokia-plant settlement: in this context the Burgenland

128 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 129 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 130 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 66 -

AMS had trained around 40 to 50 persons, of which only 18 had finally been chosen by the company.131

The main reasons for difficulties related to policy co-ordination and administrative workload in the framework of ESF-interventions as well as the solutions found to resolve these obstacles had been the following. • A first more general issue was the initially strong conflict between the Land government and the Burgenland labour market service AMS. This was mainly a result of the traditional separation between national labour market policy (mainly implemented through the Land office if the AMS) and regional economic development policy (mainly implemented through the Länder) in Austria. Over the lifetime of the programme, co-ordination between the Burgenland AMS and the Land's own labour market activities has however increased.132 This can partly also be attributed to the establishment of an ESF-counselling within the Regional Management Burgenland that had also the task to improve co-ordination among the various policy actors (see also chapter 6.1.2.). • A second general problem had been the splitted “ownership” of different ESF- measures according to the principle of main end-beneficiaries: For example, measure 2.5 was mainly carried out by the Land and aimed at realising major projects, whereas measure 5.1 was implemented by the Burgenland AMS according to its own labour market policy standards. Due to the different end- beneficiaries and the different target groups, a merger of different labour market measures contained in different priorities of the Objective 1 programme was generally considered problematic. • Measure 5.3 contained Objective 4-similar actions that had been new for the Austrian context and the AMS at the beginning of the programming period. Due to this „start-up situation“, the measure was characterised by a significantly delayed implementation during the first two years (initially lacking funding dossier ; then slow administrative-technical handling of the increasing number of support dossiers). In order to speed up the implementation process and the administrative assessment/approval of dossiers, additional human capacity was contracted in 1996 that has led to the establishment of an ESF-counsellor within the Regional Management Burgenland (RMB) in 1997. The setting up of an efficient support structure had needed some time, but once established it has produced good results.133 • During the first phase of the programme implementation (1995-1997), one could observe little - if no - synergy among the different Funds-interventions.134 A number of examples illustrate however that the degree of synergy between the Funds interventions (especially ESF-ERDF) has improved over time: a first example are the qualification measures that have been carried out in the larger context of an ERDF-supported location of a new company in the southern Burgenland business park Heiligenkreuz (Lyocell) and the qualification measures in the field of information technology. ESF-EAGGF synergies were difficult to develop, as training in the field of agriculture and forestry is not a domain of the

131 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 132 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 133 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 134 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. - 67 -

AMS.135

ERDF-interventions

Besides the dominant role of ESF-funded measures in the field of education and training for specific segments of the labour market, one can also observe positive contributions that have been made by ERDF-funded measures as concerns the extension of basic infrastructures for education and training.

A first example is the project that equipped the localities of the „institute for economic support“ of the Burgenland Chamber of economy (Wirtschaftsförderinstitut) with laboratories, auditoriums and other technical instruments on a surface of 5821 sq.m. (measure 1.4.). A second example is the support attributed to the creation and extension of institutions for higher education in Burgenland (measure 2.3). The projects in this field (Fachhochschulen) have important long-term structuring effects in Burgenland. The initial expectations will however come into effect only in mid-term period. Actors are currently concerned in raising the number of students in order to design a fully-fledged educational programme.

A final example is the project on setting up a “system for regional continuos education and educational counselling“ (one of the 2 projects supported in the framework of measure 5.4.).136 The basic aims of the project were to improve regional access to educational counselling and educational measures and the quality of education offer and to set up structural conditions for a professionalised continuing education of adults. ERDF-support to construction and equipment activities has permitted to set up 3 regional education centres that have been created in Oberwart (regional office south), Jennersdorf and in Eisenstadt/Halbturn (regional office north). Each office provides for a continuous and broadly structured educational offer based upon a professional organisation, which recognises and supports local potentials. The offer covers a broad range of political, personal or vocational education activities in fields such as languages, night school system, key qualifications, regional specific education or educational counselling. The regionalised system helps to improve the access of people to continuos education and stimulates the readiness of people to accept such an offer, especially in the rural and lagging behind regions of southern Burgenland.

4.1.2.5. Rural Development137

Although financially rather low at the overall Objective 1 programme level, EAGGF- measures during the years 1995-1999 have considerably stimulated the overall stability, strength and diversification of the agriculture and forestry sector in

135 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 136 Burgenländische Volkshochschulen: Projekt “Regionale Weiterbildung und Bildungsberatung” 137 Burgenländische Landwirtschaftskammer: Die Ziel 1-Chance für die Burgenländische Landwirtschaft. Mitteilungsblatt der Bgld. Landwirtschaftskammer. Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1- Programms Burgenland. Wien, April 1998. Minutes of Monitoring Committee meetings (5. Begleitausschußsitzung am 07. Oktober 1998). Agrarabteilung des Amtes der Burgenländischen Landesregierung: Stand der Umsetzung des Programmplanungsdokumentes, Prioritätsachse Landwirtschaft und Naturschutz. - 68 -

Burgenland. With the amount of public support spent138, a considerable volume of investments could be initiated (around 2.8 billion Austrian shilling). Around 4000 farmers participated in the framework of projects aiming at processing and marketing, diversification, biomass, environmental investment, the renewal of rural villages or qualification and counselling. These projects supported in the field of agriculture and forestry had not only contributed to preserve existing employment in rural areas, they have also actively created new jobs. In total, the official sources indicate around 3000 newly created or preserved jobs.

Agricultural support provided for by the Objective 1 programme has contributed at a certain extent to balancing intra-regional disparities in Burgenland (see also overview table below). In this context, one has however to consider the relatively small financial part of the EAGGF-section within the programme and the high proportion of projects that can not be located geographically (18%): • 49,3% of the public support spent under measures 4.1-4.4 has gone to the southern- and middle-Burgenland districts (Oberpullendorf, Oberwart, Güssing, Jennersdorf), whereas 32.8% was spent in the northern part of the Land. The remainder of the public support has been attributed to horizontal activities that can not be localised geographically. • If one looks at the amount of private investment mobilised by this public support, the picture slightly changes: 43.1% of the total private investment was mobilised in districts of northern Burgenland against 40.7% in southern and middle Burgenland. The particular dynamic nature of northern Burgenland’s agriculture is also highlighted if one considers that alone 30% of the private investment was mobilised in the district Neusiedl am See. • One can however observe a north-south discrepancy with regard to the quality of projects submitted: the most interesting project examples (also with regard to that innovatory content) can mostly be found in the northern part of Burgenland, whereas the southern parts mainly had a slow and less ambitious reaction with regard to projects.139

The impact of the programme’s EAGGF-interventions on the environment and natural resources of rural areas in Burgenland is generally positive. This statement must however be balanced against the fact that a relatively small amount of finance was available. A more detailed assessment of environmental impacts is given in the next chapter (section 4.1.3.) There is however not sufficient evidence to underpin a positive statement that the different Funds of the programme have jointly worked towards common objectives. In fact, agriculture and rural development had been only supported by the EAGGF and even the training and counselling activities in the field of agriculture and forestry (measure 4.4) had been subject to EAGGF funding.

In order to provide a more transparent assessment of the specific outputs and results achieved by the broad variety of interventions supported under priority 4 of the Objective 1 programme, they will be grouped into 2 broader categories: • Interventions that aim directly at improving individual agricultural holdings

138 Between 1995-1999, a total of over 1 billion Austrian shilling of public support (EAGGF: 381 million shilling; Federal level: 426 million shilling; Land: 316 million shilling) had been spent in the context of the highly diversified and complex structure of support schemes that were included in priority 4 of the Objective 1 programme. 139 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 69 -

(grouped under measure 4.1.), such as the support of investment at the level of individual holdings, the Community subsidy scheme for young farmers, EU compensation subsidy for agriculture in less favoured areas or the support scheme for an improvement of processing and marketing conditions of agricultural products in specific sectors. • Interventions that support so-called „joint projects“ (measures 4.2-4.4), such as the classical Objective 5b rural development support for direct marketing or diversification and other activities in the field of infrastructure, reparcelling of agricultural, greening measures and training.

Interventions that aim directly at improving individual agricultural holdings)

Initially, there had been problems in Austria to integrate support measures that aim directly at improving individual agricultural holdings into the EAGGF-support, mainly due to the fact that such activities had previously always been supported by the domestic regional development policy and its related funding instruments.140

The support of investment at the level of individual holdings had the overall aim to improve the income and the conditions of living, working or production in the field of agriculture and forestry. Investment support mainly has as a direct effect to adapt the structures of individual holdings concerned by the intervention and to contribute - indirectly - to secure the existence of such enterprises. After an initial hesitation in 1996, these measures have been extensively used by the Burgenland agriculture. They have initiated a real "boom of investment" that contributed to improve the efficiency of agricultural production in Burgenland.141 The interventions mostly focused on investments in farm buildings or presentation areas and cowsheds. Another dominant category of investment had been agricultural machines (see overview table below). Investment was only supported when a plan for the improvement of the individual holding had been elaborated.

Already before Austria's accession to the European Union, young farmers taking over agricultural holdings had been supported by a specific investment subsidy with high funding rates and a support scheme for interest related to loans contracted. After the accession in 1995, Austria had included the Community subsidy scheme for young farmers into the Objective 1 programme. During the years 1995 to 1999, a total of 63 young farmers had been supported in Burgenland with settlement subsidies of around 7.9 million Austrian shillings.

The EU compensation subsidy for agricultural holdings in less favoured areas mainly has a direct effect on stabilising personal incomes of those benefiting, whereas its indirect effects are generally a contribution to stabilise the existence of holdings in the field of agriculture and forestry. Under the Objective 1 programme, around 7000 peasants in Burgenland have received a total of 286 million Austrian shillings from the EU compensation subsidy for agriculture in less favoured areas and from related national support funding. Taking into account that the total number of holdings has decreased between 1995/99 from 20,193 to 16,081 and that in the

140 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 141 Those 1288 farmers having used the direct support available for individual holdings investment (113 million Austrian shillings) had themselves contributed with own investments of around 633 million Austrian shillings. In addition, they have also mobilised around 272 million Austrian shillings of national “agricultural investment loans” (Agrar-Investitonskredite). - 70 - same time the total number of employment in Burgenland’s primary sector was reduced by 1,600 persons (1995: 10.600 ; 1999: 9000), one might conclude that direct positive income effects and stabilisation effects of the subsidy have only been weak or even did not exist at all. This assumption is only partially valid, as one can observe an increase in the number of holdings with a cultivated surface above 50 ha in Burgenland and a rather stable situation of the total number of full time holdings existing in Burgenland between 1995 and 1999 (see statistical annex, tables O, Q ).

With the accession of Austria to the European Union, the support scheme for an improvement of processing and marketing conditions of agricultural products had been introduced in the Objective 1 programme in Burgenland. The sectoral support measures contribute - as one important direct effect - to the creation or the securing of employment in the field of agriculture and forestry. As an indirect effect, they also secure and improve the market access of products from the regional agriculture. Over the years, a total of 110 and projects had been approved in different sectors. As Burgenland's agriculture is mainly concentrated on plant-growing rather than on animal based activities, most of the sector-specific projects can be found in this category (wine growing, cereal, fruit and vegetables: 92 projects). A majority of projects aimed at improving standards for quality and hygiene or at improving the structure of production and cost. Some projects also aimed at improving the protection of the environment, the innovation at the level of processes and products, the increased non-seasonally bound production and the marketing of products issuing from ecological agriculture.

The specific achievements of sector-support provided for by the Objective 1 programme could be summarised as follows (see also overview table below).

Initially, the request for support in the wine growing and producing sector was very low but has considerably increased during the years 1998 and 1999. At the end of the programming period, this sector was the leading category in the measure with 54 projects submitted (out of 110). The investment boom since the end of 1998 was also favoured by an increased market demand for high-quality products and the relatively low construction and financing costs for measures in this field. The projects approved mainly focused on self-marketing holdings with grape deliverers (regional heat enterprises) and on production co-operatives (Genossenschaften). Through investments in wine cellar techniques, the share of high-quality wine in the enterprises concerned could be improved. The investments in the field of sewage water treatment also contributed to improve the overall environment.

The second most important category is investment in the field of animals for slaughter and meat production. These projects aimed at realising EU standards for hygiene and contributed also to rationalise production and processing. Projects in traditional small-scale butcher enterprises helped to improve the quality segment of their production, whereas projects in the field of slaughtering had only been implemented at the level of employment intensive slaughtering targeting the regional demand via direct marketing. The latter initiatives significantly contributed to deepen the entire product cycle with the aim to raise the quality standards and to foster the consumer's trust in local products.

Most of the projects supported in the field of cereal production improved the - 71 -

quality during the reception and processing phase. Most of the enterprises supported purchased modern equipment, improved their stocking capacity or created new stocking and processing capacities for biologically produced wheat.

In the sector of fruit and vegetables, the main emphasis of investment was on improving the production and cost structure. Investment projects have modernised general stocking capacities or enlarged high-level stocking capacities and have supported the purchasing of modern packaging and etiquetteage machinery, the creation of new packing storage facilities or the improvement of the inner-company logistics and the purchase of specific machines and deep freeze storage facilities.

In the sector of seeds, most of the projects aimed at reaching and realising European cost and quality standards. In the milk and milk product sector, the following investments were supported since 1996: reaching of changed or new prescriptions for hygiene, rationalisation and improvement of efficiency in the field of production and logistics, improvement of individual products and innovation in production processes and creation of new market potentials.

Interventions that support so-called „joint projects“ (measures 4.2-4.4),

Right after Austria's accession to the Community, especially the Objective 5b-alike horizontal measures had been a new approach in Burgenland, but also in Austria as a whole. The measures of the Objective 1 programme have mainly concentrated on direct marketing, rural tourism or other key projects and to a lesser extent on improving location factors for example by supporting the creation of rural roads. Most of the public support attributed to and of investments mobilised by the 256 approved “joint projects” had concentrated on energy production based on biomass, the wine producing sector and infrastructure.

The direct effects of these measures are difficult to determinate, due to the broad spectrum of interventions made. As a direct effect, they contribute to improve the income basis of holdings concerned by the measures and help, as an indirect effect, to secure the economic existence base or to stimulate the creation of additional production or income possibilities. According to the Federal ministry of agriculture, the measures in the field of rural development have produced good results, especially in the middle and southern parts of Burgenland. They could help to compensate losses of income, improve the accessibility and help to stabilise the population in the rural areas. Another important issue was also the contribution of the agricultural measures to biomass based alternative energy production. The setting up of a specific counselling structure within Burgenland (BABBI) was an important factor that significantly contributed to the success of the diversification measures carried out in the field of the Objective 5b similar measures.142

The specific achievements of support provided to so-called “joint projects” under the Objective 1 programme can be summarised as follows.

Energy production based on biomass is the most important segment of joint projects according to the amount of public support attributed (30.9%) and private investment mobilised under the priority (24.4%). As energy production based on

142 Interview with the Federal ministry for agriculture, forestry, environment and water management. - 72 -

renewable biological resources has a good tradition in southern Burgenland, the biomass activities have developed well over the programme's lifetime.143 Biomass energy production projects directly raise the regional gross value added by substituting the purchase of "external" energy resources and by initiating new small-scale local economic circles. As an indirect effect, such projects also contribute to the protection of the environment and to overall sustainability (e.g. with regard to the carbon dioxide emissions) and to improve local living conditions. The main individual measures supported under the Objective 1 programme concentrate on 18 biomass heat production units that have been established in various rural villages, mostly in southern Burgenland. At date, a total of 19 biomass heat production units do exist in Burgenland, which produce 20.512 kW and connect 1843 households to this source of alternative energy provision. The biomass heat units dominantly use biological material coming from within Burgenland (purchased at Burgenland wood owners), wherefore they contribute to launch new small-scale economic processes and help to improve the overall quality of forestry. As an indirect benefit, the increased use of renewable energy production also contributes to protect the environment by lowering the regional CO2 emissions. In the future, Burgenland intends to install a "competence centre for biomass" in southern Burgenland (Güssing) that will be the first example of this kind in an Austrian-wide context

The wine-producing sector is the second most important segments in this field, as projects have been attributed 13.8% of public funding and mobilised 18.7% of the total volume of private investment. Activities span from basic grape growing installations over the production of virus free planting species to counselling projects in vinary or marketing initiatives.

As regards the absolute number of projects supported under this heading the Objective 1 programme, direct marketing initiatives rank first among all the different categories. They account however for a relatively low proportion of public funding attributed by the programme (5.6%) and private investment mobilised (4.7%). The initiatives are very wide-ranging, reaching from peasants markets and village shops over joint butchering installations to marketing events for bio-production. With all these protects one could achieve a significant raise in the value-added production of rural enterprises.

The infrastructure projects received 13.6% of the overall public funding available and have mobilised 8.9% of the private investment. They mainly concentrate on the extension of the rural road network and greening measures. Such investments dominantly focused on establishing and preserving biotops or biotop- networks with the benefit to improve the ecological value of the agricultural landscape.

143 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 73 -

Overview Table: Results for the most important measures in the field of agriculture, forestry and rural development, supported under the Objective 1 programme Burgenland (1995-1999) Number I. Public support II. Private investment III. Total cost of (EU, national, regional) mobilised (I+II) projects Million % Million % Million % ATS ATS ATS Regional distribution of interventions under measures 4.1 -4.4 within Burgenland (at district level) Neusiedl/Lake (north) - 260 23.6 809 30 1,069 28.1 Eisenstadt (north) - 54 4.9 204 7.6 258 6.8 Mattersburg (north) - 47 4.3 150 5.5 197 5.2 Oberpullendorf - 228 20.7 527 19.5 755 19.9 (middle) Oberwart (south) - 155 14.1 282 10.4 437 11.5 Güssing (south) - 105 9.5 231 8.6 336 8.8 Jennersdorf (south) - 55 5.0 60 2.2 115 3.0 Horizontal 198 18.0 436 16.1 634 16.7 Total - 1,102 100 2,699 100 3,801 100 Measure 4.1. a Investment at the level of individual holdings Cowsheds 73 18 15.9 85 13.4 103 13.8 Other farm buildings or 627 53 46.9 378 59.7 431 57.8 presentation areas Agricultural machines 397 12 10.6 84 13.3 96 12.9 Plastic tunnels, hail 52 3 2.7 13 2.1 16 2.1 protection, renewal of plants Other 139 27 23.9 73 11.5 100 13.4 Total 1,288 113 100 633 100 746 100 Measure 4.1. b Sector plan support Wine growing 54 148 55.2 331 53.0 479 53.7 Cereal 28 25 9.3 67 10.7 92 10.3 Fruit / Vegetables 10 25 9.3 57 9.1 82 9.2 Meat / Animals 8 38 14.2 83 13.3 121 13.6 Eggs / poultry 3 15 5.6 38 6.1 53 5.6 Seeds 4 11 4.1 34 5.5 45 5.0 Milk 3 6 2.2 14 2.2 20 2.2 Total 110 268 100 624 100 892 100 Measures 4.2., 4.3 and 4.4 Joint projects Direct marketing 58 26 5.6 28 4.7 54 5.1 Wine producing sector 44 64 13.8 112 18.7 176 16.6 Energy from biomass 43 143 30.9 146 24.4 289 27.2 Infrastructure 5 63 13.6 53 8.9 116 10.9 Animals 9 25 5.4 49 8.2 74 7.0 Rural holiday 4 25 5.4 51 8.5 76 7.2 Fruit / Vegetables 11 24 5.2 41 6.9 65 6.1 Forestry 30 23 5.0 36 6.0 59 5.6 Training 10 30 6.5 22 3.7 52 4.9 Other 42 40 8.6 60 10.0 100 9.4 Total 256 463 100 598 100 1,061 100

Source: Mitteilungsblatt der Burgenländischen Landwirtschaftskammer („Die Ziel 1-Chance für die Burgenländische Landwirtschaft“), own calculations for % and private investment - 74 -

4.1.3. A summary assessment of wider matters related to effectiveness

If one looks at the financially most important measures of the Objective 1 programme 1995-1999, one can identify a number of key factors that have significantly affected the absorption of programme resources: • In the context of ERDF-funded interventions, an important factor that has facilitated the commitment of significant amounts of public funding designated to productive investment support (measure 1.1., industry and crafts ; measure 3.1. tourism) was certainly the Land’s quick success in attracting new external investors and the intensive support provided to existing local enterprises. Another important factor strongly contributing to the absorption of programme resources was the relatively high share of financial amount available for basic infrastructure investment (app 16% of public funding committed). • In the context of ESF-funded interventions, the most important factor facilitating a timely commitment of a majority of planned public funding has certainly been the routine based implementation of more “traditional” activities that were carried out by the AMS as end-beneficiary (measure 5.1-5.3). Due to that, these measures could generally achieve excellent results with regard to participation compared to the initially set targets. In addition, one could also observe significantly high integration rates on the labour market. • In the context of the EAGGF-funded interventions, the most important factor that has facilitated a timely commitment of a large majority of planned public funding was certainly the routine-based implementation of the financially most important measures (4.1 and 4.2.) of the programme. In addition, a number of important positive external factors144 had significantly contributed to the success of the sectoral support measures within Burgenland: Firstly, the growing interest of the consumers for biologically produced food was particularly important for regional products of Burgenland to have increased access to neighbouring urban markets such as Vienna or Graz. Secondly, consumers re-gained significant confidence and interest in Austrian wines after long years of lacking interest for these products since the glycol scandal back in 1986. This revival process also supported the quality-orientated changes that had been launched by specific actions supported under the Objective 1 programme in Burgenland. Finally, the growing interest of the consumers in health and wellness tourism that is particularly developed in Burgenland was also the success factor for certain support measures aiming at the agricultural sector. One can quote some examples such as direct marketing measures for locally and biologically grown products or the creation of farm based overnight stay capacities with direct access to the neighbouring health spas.

Leverage effects145 at the level of the entire Objective 1-programme as well as for ESF-interventions can not be calculated due to incomplete data as regards total cost (see appropriateness assessment, financial tables). On the ground of financial execution data at the 31st of December 1999, leverage effects are calculated only for ERDF-interventions and EAGGF-interventions (by excluding technical assistance).

144 Interview with the Federal ministry for agriculture, forestry, environment and water management. 145 Calculated as: total cost minus total public support (or ERDF-support) divided by total public support (or ERDF-support) - 75 -

• ERDF-interventions: Leverage effect for total public support = 1.80 ; leverage effect for ERDF-support = 6.11. • EAGGF-interventions: Leverage effect for total public support = 1.69 ; leverage effect for EAGGF-support = 7.34.

According to the combination of funding under the various priorities of the Objective 1 programme, Funds-specific synergy effects were initially intended to take place mainly between the ERDF and the ESF. This combination can be observed especially in the framework of priority 2 and in a lesser degree in the framework of priority 1. However, due to a lacking integration structure within the programme, the mid-term evaluation highlighted that synergy effects will mainly be achieved at the level of individual projects.146 This assumption can be confirmed if one looks at results achieved by the end of the programming period.

Some observers even consider that the EAGGF and in particular the ESF have led a life "in parallel" within the programme.147 The lack of co-operation between the different Funds during the previous programming period 1995 to 1999 (especially in the case of the ERDF and the ESF) can partly be explained by the rather conflictive relations between the previous Land head of government and the Burgenland labour market service AMS. As soon as there had been a change at the top of the Land government (due to elections), also the mutual relationship has improved. 148

One can however quote some examples at project level, where synergy effects have materialised: • In the case of several projects, a good co-operation between the ERDF and the ESF can be observed: one example is the Lyocell Company, where the location on the site has been financed by the ERDF and targeted training measures were provided by the ESF.149 • Interesting synergy effects could also be observed in the context of projects supported under measures of the priority 3 (tourism, ERDF) and of priority 4 (agricultural and forestry, protection of the environment EAGGF). Cross-sectoral fertilisation could be observed between projects aiming at the hotel sector and the wine-growing sector in Burgenland. A differentiation between the projects funded through the ERDF and the EAGGF was achieved by defining different funding priorities and by further specifying "target groups" that would receive funding (all enterprises with more than 10 beds had been considered a target group for priority 3).150

The synergy effects of the Objective 1 programme with other national or regional programmes have been relatively strong. • With regard to the ERDF-interventions of the Objective 1 programme, one can summarise the situation as follows: A large number of national or regional funding schemes had been directly included into the programme interventions, mainly as a basis to assure national co-financing. The already complex Austrian support scheme structure for regional economic development - now supplemented by additional European instruments - sometimes created significant difficulties during

146 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 147 Interview with the Austrian Conference for Spatial Planning (ÖROK). 148 Interview with the Federal Chancellery (BKA). 149 Interview with the Federal Chancellery (BKA). 150 Minutes of Monitoring Committee meetings (2. Begleitausschußsitzung am 14. Oktober 1996). - 76 -

the implementation phase of many Structural Funds programmes and also negatively affected their effectiveness. In the specific case of Burgenland, however, one can observe a highly concentrated support instrument structure at Land level with only the Federal level displaying a highly fragmented nature. However, the practice of mixed financing between the Land and Federal levels has created at several occasions mutual conflicts, which were mainly due to delayed approval of projects that have been submitted to the mixed committee established for selection.151 • Due to the close links established between the ESF-funded interventions of the Objective 1 programme and the national labour market policy, one can observe that the general positive effects of ESF-support in Austria (e.g. increase of planning security and the independence due to the multiannual programming process; support to the AMS-decentralisation process) had been stronger in Burgenland than in other Austrian Länder. 152

The main factors that have influenced the effectiveness of the Objective 1 programme in Burgenland can be summarised as follows (positive and negative factors).

The most important aspects that influenced positively or negatively on an effective implementation of the ERDF-interventions were the following: • The strategy to build upon the established funding and support structure in Austria can certainly be considered a very positive aspect in the beginning. In the case of Burgenland, the creation of a single support instrument for economic development (WiBAG) was certainly an additional advantage, even if the regional actors had to get used to the new intervention methods in the framework of the Structural funds.153 • A second important positive factor in the case of Burgenland was the strong „ownership relation“ between the political level and the strategic objectives of the programme: this enhanced leadership and co-ordination among the Land actors and bundling of resources.154 • The strong degree of institutional concentration within Burgenland as regards administrative implementation of the programme can be considered - compared to the situation prevailing in other Austrian Länder at that date - a very positive aspect.155 • The programme clearly lacked of targeted support for SMEs in the context of the ERDF-interventions, which can not be considered very effective.156 Another negative aspect was the massive obstruction coming from local authorities concerned by the planned water conduction system around the Neusiedl Lake, which has caused considerable delays during the implementation process. 157

The most important aspects that influenced positively or negatively on an effective implementation of the ESF-interventions in Burgenland were the following: 158

151 Interview with the Federal Chancellery (BKA). 152 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 153 Interview with the Federal Chancellery (BKA). 154 Interview with the Federal Chancellery (BKA). 155 Interview with the Federal Chancellery (BKA). 156 Interview with the Federal Chancellery (BKA). 157 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 158 Interview with the Federal ministry for economy and labour affairs (former BMAGS). - 77 -

• The partnership based agreement for project co-ordination was functioning very well. • Measure 5.1. was characterised by highly professional implementation due to the pre-existing experience of labour market actors in this field. • A general factor is the significant progress towards a stronger professionalisation of the intervention structure and the improvements with regard to the better networking between the policy operated by the Burgenland labour market service and the Land's own activities in the field of actively market policy.

Whether and how the growth generated by the Structural Funds programme created/contributed to additional pressures on the environment can not be answered in general. The only precise source is a pilot study on “environmental impact assessment of Objective 1 projects in Burgenland” that had been carried out in 1998/1999.159 A detailed summary assessment was made at the level of different environmental categories such as soil, water, air, noise, nature and landscape, waste, energy and raw material.

Conclusions of the pilot study Soil: 33 projects supported will have a positive impact on the related objectives formulated. These are mainly smaller projects (4% of public funding attributed) that are dominantly carried out under priority 4 agriculture, forestry and nature protection and aim at reducing soil erosion. For 34 projects supported (25% of public funding attributed), the environmental impact on soil is unclear: these are mainly industrial or commercial projects and projects in the field of tourism that cover significant new constructions or an enlargement of existing buildings. 2 projects that received a very insignificant amount of support were rated having an assumptive negative impact (gravel production, delocalisation of a productive unit out of the inner city centre). Water: The environmental objectives are positively influenced by 71 projects, which were mainly supported under priority 1 and 3 (27% of the public funding attributed). They reduce pollution of groundwater or the transfer of phosphates into the lake Neusiedl. 15 projects are expected having an assumptive negative environmental impact on water (3% of the public funding attributed). These projects mainly aim at enlarging the public bath area around the lake Neusiedl, at creating gravel extraction zones or air enlarging the tourism activities around the lake Neusiedl.

Air and The positive impacts on the environmental categories air and noise are expected to be more noise: important than the negative impacts: a total of 55 projects has been rated having positive impacts (21% of public funding attributed), as they aim at achieving outputs under the defined noise or emission thresholds. In addition, three projects were expected having a reduction effect on individual traffic and road traffic. Most of them are projects in fields such as distance heating or bio heating, the creation of rail connections for industrial and crafts enterprises and the extension of the telecommunications infrastructure.

Nature Positive impacts are mainly expected from 45 projects that had been supported under priority 4 and agriculture, forestry and nature protection (7% of public funding attributed). Examples are the land- compensation payments and the support to agriculture, which contribute to preserve the scape multifunctional aspects of rural landscapes. For some projects, mostly in the field of tourism close to the lake Neusiedl, the environmental impact had been rated unclear.

Waste, The Objective 1 programme Burgenland has made a significant positive contribution to reach the: for energy 78 projects with a total volume of public support attributed of around 380 million Austrian shillings, a and raw positive effect on the reduction of the use of energy is assumed. Another 25 projects are expected to material positively contribute to a reduction of other raw material (public support attributed: 760 million Austrian shillings) and 22 projects will contribute to reduce the production of industrial and commercial waste (around 790 million Austrian shillings of public support attribute). These are mainly projects that aim at improving the efficiency of enterprises through production process innovations (supported under priority 1) and projects that aim at producing or using alternative sources of energy such as wind energy or biomass and at enlarging distance the network of heating provision (supported under EAGGF-priority 4).

159 Österreichisches Institut für Raumplanung: Umweltwirkungen von Strukturfondsprogrammen am Beispiel des Ziel 1 Programmes Burgenland. Wien, September 1999. - 78 -

SUMMARY TABLE: Core Indicators (where Outputs planned Results achieved available) Employment Jobs created (gross) General: 7300 ERDF: 2387 new planned jobs Jobs safeguarded (gross) (unspecified) 6067 jobs secured EAGGF: 3000 jobs (not specified) Energy Installed capacity 18 biomass heat production units Infrastructure established networks Telecommunicati Digital telephone lines - ons and IT related start-up firms Information Society Environment Capacity improvement for • Sewage water: 243.000 inhabitant water treatment and units purification plants • Fresh water: 187.000 water Capacity improvement for provision units. fresh water provision treatment R&DTI Firms supported for RDTI 15 enterprises supported, of which 3 are projects SMEs RDTI collaboration 15 counselling projects. projects 1 environmental enterprise project. SMEs Number of existing SMEs SMEs supported: supported • ERDF-measure 1.1: 155 SMEs Number of new SMEs • ERDF-measure 2.1.: 3 created • ERDF-measure 3.1.: 105 Number and value of aid schemes Support to tourism (mainly SMEs): 2149 Number of business assured quality beds and 914 new service networks quality beds. supported Financial Engineering For other indicators, no evidence. levels Human Resource Number of beneficiaries Initial targets for Total for measures 5.1-5.3. (AMS): Development in employment participants: 14,312 registered persons (participants unemployed Measure 1.1: 1200 in measures and advised participants) women Measure 3.2: 1200 in school Measure 3.3: 1136 Participants in measure 5.1.-5.3. (without Number of projects Total: 3536 advised participants): Number of SMEs • Participants total: 12,369 involved in continuous • Participants female: 5876 (47,5%) training • Participants male: 6493 (52.5%) Improvements to education and training systems - 79 -

SUMMARY TABLE: Core Indicators (where Outputs Results achieved available) planned Rural Level of investments in farm 4000 farmers participating in projects development holdings Investment in Change in output/incomes 3000 new jobs crated and preserved (not agricultural Number assisted specified) holdings and Number assisted introducing diversification of diverse activities and share of 63 young farmers supported in their new activities these activities instalment. Number assisted introducing investments with environmental 1288 investment projects supported at aims the level of individual holdings (support Average age 113 million ATS ; total cost 446 million Number of equivalent full time ATS). Setting up of equivalent jobs young farmers Share of allowance on total farmer 7000 farmers received support from the income compensation subsidy for less favoured Less favoured Change in size farmer population areas. areas Number of hectares assisted increase or modernisation in 110 sector-plan projects supported (wine processing capacity growing, meat, cereals, fruit and increase or modernisation in vegetables). Competitiveness marketing establishments of agricultural Production timing and quantity 256 “joint projects” supported in the field products Reduction of production and of direct marketing, biomass, wine Improving marketing costs growing, infrastructure, training etc) processing Number of hectares assisted procedures and Levels of polluting emissions, marketing of waste production and use of agricultural natural resources products - 80 -

4.2. Programme effects

This section describes and analyses the various programme effects related to the overall social-economic situation, sectoral development and horizontal issues. In addition, it identifies key influences on the effectiveness of the programme and the main factors causing this.

4.2.1 Programme effects on overall social and economic changes (thematic priorities) and on “horizontal issues” (equal opportunities, environment)

The more global effect of the Objective 1 programme 1995-1999 was certainly that a dynamic economic development process has been initiated within the Land, which covered various specific sectors (e.g. crafts and industry, tourism, agriculture). This positive process was partly also the result of an initially well-prepared economic development strategy, which subsequently allowed the programme to realise most of its „achievable“ material goals.

At a more general level, the Objective 1 programme has also contributed to generate changes in the way of policy making or in the overall behaviour as regards the European integration process: in the opinion of the Burgenland Chamber of Economy, the programme contributed to increase the overall efficiency of Austria‘s the regional economic development policy (also in Burgenland), which previously contributed mainly to make the poor even poorer and the rich more richer. In the view of the Burgenland Chamber of agriculture, the most important achievements of the programme had been its contribution to increase the security for planning of agricultural activities, to create stronger awareness on agricultural and rural development in Burgenland and to help creating a regional identity (especially with the Objective 5b-alike measures and the LEADER programme).160

Support to business development and SMEs or business related infrastructure

Business support provided for under measure 1.1. (industry and crafts) and measure 3.1. (tourism) has generated the most important employment effects resulting from the programme: compared to the overall outputs achieved by all ERDF-measures, these two measures have alone realised 85% of all gross new jobs created and the total amount of preserved jobs. These two measures also significantly contributed to support existing SMEs in Burgenland. In the context of productive investment support, one must however observe that more could have been done for local SMEs (see above), especially if one considers the significant amount of financial support that was attributed to the so-called “lead projects”.

If one compares the initial problem definition of the Objective 1 programme, one can say that the effects of the ERDF-supported infrastructure measures linked to business development had also been rather positive. Burgenland’s basic capacities with regard to fresh water provision or sewage water treatment could be enlarged by measure 1.2 (support infrastructure for industry/crafts development) and by measure

160 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 81 -

3.5 (support infrastructure for tourism development). A very important but less successful infrastructure “lead project” was the establishment of the business park Heiligenkreuz in southern Burgenland (measure 1.3.), as it still needs additional accompanying activities to fully play its role as a “development pole”.

Within this larger context, a first problematic aspect has certainly been the “lead- project approach”: although necessary to some extent, already the mid-term evaluation has highlighted that a strong concentration of financial means on a limited number of "lead projects" (e.g. support to the business park of "Heiligenkreuz" and to the attraction/location of a major chemical industry factory on this site in southern Burgenland) bears significant risks. In addition, it is difficult to initially estimate the deriving structuring effects on the sub-regional economy of the areas concerned by such projects. The same sceptical assessment was made for the major investment projects in the field of tourism, where also uncertainty about the induced structuring effects had been raised.161 But also other actors such as political parties in Burgenland have increasingly criticised the "lead project approach": the "Green" partly recognised the utility of lead projects in the field of tourism development in southern and middle Burgenland, which were considered to be in line with the concept of endogenous potentials development (e.g. stimulating health and spa tourism). One of the major projects of the programme, the installation of the Lenzing Lyocell company location in southern Burgenland (Heiligenkreuz), was however heavily criticised: the significant amount of support that had been paid for the jobs created, not calculating the necessary investment for the sewage treatment station, was considered too much.162

Another problematic issue in the field of productive investment and economic infrastructure support, partly resulting from the lead-project approach adopted, was the geographically adverse location of investment and employment effects. Due to a lack of more recent data, this aspect can only be explained on the ground of an assessment made in the mid-term evaluation of 1997: whereas considerable volumes of ERDF-co-financed interventions generally concentrated stronger on the southern parts of Burgenland due to the dominance of infrastructure investments and the high capital intensity of larger industrial projects, related employment effects do not follow this favourable picture of sub-regional distribution as they mainly concentrated in the northern parts of the Land.163 One can assume this overall picture remaining valid up to the year 1999/2000, as most of the support for important investment and infrastructure projects had already been committed by the year 1997.

Support to training schemes, educational infrastructure and R&D

Although the relatively small proportion of funding available for ESF-measures within the Objective 1 programme can generally be considered a major weaknesses of the 1995-1999 programming period,164 the significantly positive outputs achieved by measures 5.1.-5.3. (very high number of participants; significant integration rates) have certainly created positive effects on the labour market. The main effect resulting

161 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 162 http://burgenland.gruene.at/Themen/umwelt.htm 163 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 164 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 82 - from high participation rates in training and counselling activities was that they temporarily relieve pressure on Burgenland’s labour market.

Mainly as a result of the very small proportion of funding resources available under the programme for business oriented research & development support (measures 2.1 and partially 2.2), but also due to the weak SME-participation (see section 4.1.2.3.), programme effects had been rather limited.165 Important effects on basic R&D framework conditions will however result from the infrastructure support given by the programme. Measures 2.2 and 2.3. have contributed to create new and modern potentials in the field of telecommunication, education or R&D-facilities (technology centres). Beyond their short-term effects, these projects normally tend to create more long-term oriented and structuring effects on Burgenland.

Support to agriculture, forestry and rural development

Despite the relatively small proportion of support available under EAGGF-measures (compared to the dominance of the ERDF), funding provided for by the programme could help to further develop existing strengths or to give new impulses within Burgenland. The overall effects of EAGGF-measures 4.1-4.4 on agriculture, forestry and rural development are highly diverse and complex with regard to their actual manifestation. Interventions such as the compensation subsidy for less favoured areas, the support to investment at the level of individual holdings or the sector specific interventions certainly improve the economic basis of existence in the agriculture and forestry sector and therefore also contribute to stabilise rural areas. The determination of direct employment effects resulting from individual measures is however rather complicated. The measures are also likely to significantly contribute improving the living conditions and the demographic development in rurally and peripheral areas of Burgenland outside the urban industrial core zones. Additional positive effects on the natural living conditions are expected to result from the measures that aim at re-parcelling agricultural land (together with the accompanying measures) and the improvement of the forestry economy in relation with a more significant use of bioenergy production.

Based upon a more recent publication that summarises the outputs of priority 4, one can identify the most important general effects as follows:166 • Support for investment at the level of individual holdings had been extensively used by the Burgenland agriculture and could initiate a real "boom of investment" that contributed to improve the efficiency of agricultural production in Burgenland. A very good success rate was also achieved by sector-specific projects that aimed at processing and marketing, but also in the field of wine producing. In these areas, the Objective 1 programme has had an important impulse function. Also here, a considerable push in private investment was initiated, especially in the wine-growing sector. • Additional impulses have been initiated by so-called “joint projects”, which have contributed with their collective approach to initiate new connections and co- operations spanning above the sector of agriculture and forestry. Such networking has had a particular positive impact on the rural regions. Another good

165 Only 10 R&D projects in enterprises were supported (of which 3 had been in SMEs) under measure 2.1 out of a total of 26 projects. Within measure 2.2, only 3 industrial and commercial projects were supported, but a total of 358 new planned jobs are foreseen. 166 Burgenländische Landwirtschaftskammer: Die Ziel 1-Chance für die Burgenländische Landwirtschaft. Mitteilungsblatt der Bgld. Landwirtschaftskammer. - 83 -

example for new impulses has been the field of renewable energy use based on biomass: the support provided for under the Objective 1 programme has initiated a considerable push in private investment (especially in the southern parts of the Land). • The projects supported under the various measures in the field of agriculture and forestry had not only contributed to preserve existing employment in rural areas, they have also actively created new jobs. In total, the official sources indicate around 3000 newly created or preserved jobs.

Another important “immaterial effect” was the elimination of a rather hesitant position of Burgenland’s agricultural sector with regard to the European Union's Common Agricultural Policy. 167

The contribution to equal opportunities168

The overall effects of the Objective 1 programme on equal opportunities can not be clearly identified, as gender mainstreaming was not an important and specified target within the strategy. The various Funds interventions have however partially promoted positive effects. • In the field of regional economic development and ERDF-support, the overall objective of gender mainstreaming was considered at that date an "over-complex target". This was mainly due to the significant changes the Austrian regional policy system itself was undergoing right after the accession to the European Union. In addition, the main type of interventions did not qualify to define specific targets with regard to gender mainstreaming. • After an initially too strong support for the male segment of the Land's labour market within the ESF-funded measures that were implemented by the labour market service AMS, the focus was shifted in 1998 towards better taking into consideration the role of women (mostly by taking over salaries subsidies for women). This reorientation could help to improve the programme's impact on equal opportunities. • Some of the EAGGF-funded measures (especially Objective 5b-alike measures) within the Objective 1 programme Burgenland have indirectly contributed to some extent to equal opportunities, as women in rural areas are frequently actors of or directly concerned by the measures (e.g. direct marketing, farm based holiday offers).

During the life cycle of the programme, one can observe significant progress towards a growing awareness of issues related to gender mainstreaming. Actors are more conscious about this issue at the end of the programme and a political willingness has developed in Burgenland to address this issue. At date, however, the technical know-how still lacks with regard to practically implementing concrete measures. In an Austrian wide perspective, the new Objective 1 programme for Burgenland 2000- 2006 covers this issue to a very strong extent.169

167 Interview with the Federal ministry for agriculture, forestry, environment and water management. 168 Interview with the Federal Chancellery (BKA). Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). Interview with the Federal ministry for agriculture, forestry, environment and water management. 169 Interview with the Federal ministry for economy and labour affairs (former BMAGS). - 84 -

The contribution to sustainable development 170

Environment and sustainable development had not been an explicit top priority in the initial Objective 1 programme 1995-1999, mainly due to the significant time pressure in elaborating the Structural Funds planning document and the rather novel nature of environmental issues in the context of regional development. The whole aspect was mainly taken into consideration according to the formal requirements that had been defined by the European Commission. In the Objective 1 programme 1995-1999, the Land's position was however to indirectly consider existing positive environmental potentials of Burgenland as a basis for social and economic development (see: description of the general environmental situation of Burgenland in the programme’s chapter 1.6.). However, no quantification of environmentally relevant targets at strategy level had been made in the Objective 1 programme 1995-1999. At the level of individual priorities, environmental aspects had been stronger dealt with. Especially the priority agriculture and forestry and nature protection aims explicitly at an improvement of the overall environmental situation. Also the sub-regional priority- setting of the programme interventions (regionalisation approach) took into consideration specific geographical environmental aspects.171

The Objective 1 programme‘s impact on the environment and its contribution to sustainable development can be summarised according to the final results of a „pilot study“ assessing the environmental impact of the Objective 1 programme Burgenland.172 At the end of the programme's life cycle, one can consider the programme outputs as credible and positive in this respect: • In the case of all those projects supported under the Objective 1 programme Burgenland for which an impact on defined environmental objectives was expected to take place, one can observe that the positive impacts are largely dominant. • Especially in the field of waste, energy and reduction of raw materials or the improvement of the quality of the air and water, positive effects can be observed in a majority of projects that have also received the largest share of public funding. • Unclear environmental impacts are mainly expected from projects that involve new construction or enlargement of buildings (environmental category nature and landscape). • Only a small proportion of projects with a rather limited share of public support attribute has an assumptive negative impact on various environmental categories.

170 Österreichisches Institut für Raumplanung: Umweltwirkungen von Strukturfondsprogrammen am Beispiel des Ziel 1 Programmes Burgenland. Wien, September 1999. 171 Within the northern Burgenland area around the lake Neusiedl, the preservation of natural resources and the use of the cross-border national park Neusiedler See was particularly mentioned. In southern Burgenland (area Lutzmannsburg and Bad Tatzmannsdorf), the use of natural resources and the development of biological agriculture should initiate a boost in the development of tourism accommodation enterprises. Also in southern Burgenland (are Unteres Pinkatal-Stremtal), tourism development should be stimulated through supporting in particular biological agriculture and the use of renewable energies. These specific aims contained in the previous Objective 1 programme did however not cover all environmental aspects relevant to Burgenland. 172It was carried out by the end of the programme‘s implementation phase (1998/1999) with support from the technical assistance budget. Based on the monitoring data gathered by the Regional Management Burgenland in addition to the national monitoring system, the pilot study has assessed more than 600 projects with a total volume of public funding of around 4.5 billion Austrian shillings (total cost 12.9 billion Austrian shillings). - 85 -

Overview table: Programme contributions to overall social and economic changes (based on stakeholder interviews) Very Strong Adequate Weak Why is this? (Evidence base*) strong Supporting innovation E E Strong: Establishment of technology and research and centres development Weak: Lack of finance (enterprise) Supporting skills E Little financial means available, but development high participation and integration rates. Overcoming territorial E Lack of finance imbalance Promoting rural ADB E Little financial means available, but diversification good results achieved. Promoting E Increase of necessary environmental infrastructure infrastructure capacities, business development parks, educational and R&D facilities. Supporting SMEs E Too dominant lead project approach, more support could have been attributed to local SMEs. Good results of the start up of enterprise initiative. Improving E Increase of necessary environmental environmental infrastructure capacities. infrastructure Improving energy E Establishment of biomass based infrastructure heating units in rural areas. Improving renewable ADB Establishment of biomass based energy infrastructure E heating units in rural areas and and resource creating additional activities for local efficiency producers of renewable energy (setting up of a bioenergy cluster in southern Burgenland). Contributing to urban --- -- regeneration Modernising the --- -- fishing sector Supporting E telecommunications infrastructure and developing an Information Society * criteria for each to be provided E = evaluator ; ADB = Agricultural department of the Land government Burgenland - 86 -

4.2.2. Key influences on the effectiveness of the programmes and main factors causing this

Please state what were the key influences on the effectiveness of the programme, as well as the factors causing this.

Influence Suggested factors Actual factors

Programming Preparation of programme • Good preparation of the programme Strong consistent strategy • Rather efficient application and selection process. Programme ‘flexibility’ i.e. ability • Relatively clear strategic approach with a regionalised to adjust and react approach (however unclear links of the strategy to Application and selection SWOT analysis made). process • Strong links with national / regional programmes A clear strategic approach (related to other SF or domestic strategies) Partnership Strong partnership working • Good inter-administrative vertical co-operation (Land High level of civic participation level and Federal level). Strong political commitment (at • Strong political commitment (Land level and Federal what level?) level). • Conflictive horizontal co-operation with social partners. Concentration Highly targeted or focused Not very well balanced programme: over-focussed programme (state on what) productive investment and infrastructure interventions (ERDF), little scope for labour market policy (ESF) and for interventions in the field of agriculture, forestry and rural development. Additionality Strong individual projects Strong financial commitment of the Federal level

Implementation Strong organisational structures • Complex but rather efficient management, in place implementation and monitoring structures. Support and guidance put in • Good system of technical support structures (RMB, place for projects ESF-counselling, BABBI) Monitoring and follow up of • Satisfactory monitoring system issues during implementation Synergy effects Wider influence on domestic • Rather weak synergy effects between the different policies and programmes Funds. • Strong linkage to national / regional programmes. Other Dissemination and exchange of - experience arrangements - 87 -

What factors were the most important ones in securing the effectiveness of Objective 1 interventions? Success factor Evidence base

1. Productive investment • High output of new jobs created and preserved support (crafts, industry and • Dominant support to SMEs tourism) and basic • Significant improvement of tourism offer infrastructure support • Infrastructure: modernise the local potentials and create new potentials important for local economic development. 2. Traditional labour market • Excellent participation rate measures and new • Significant integration rates measures introduced • Relatively good success in gender balance • New measure supporting start-ups of enterprise 3. Agricultural and rural • Contribution to create/secure jobs development measures • Stimulation of an important investment boom • Increase of productivity and stabilisation of the overall adaptation process in Burgenland. • Stimulating specific local potentials (wine growing, biological agriculture, biomass energy production)

Which (if any) factors adversely affected the effectiveness of Objective 1 interventions?

Obstacles Evidence base

1. Dominant position of lead- High proportion of funding attributed to these lead projects project approach in the (industry/crafts/tourism), whereas more support should have been made available ERDF-section for SMEs 2. Financially too weak ESF- Very good success has been achieved wit the traditional measures, but more section in general could have been done in this field with new or specifically targeted ESF-measures for southern and middle Burgenland. 3. Weak coherence between ESF-measures should have been linked more coherently between each other, labour market measures indifferent to the main end-beneficiary in charge of implementing the actions. implemented by the AMS and the Land. - 88 -

4.3. An assessment of the “Community Added Value”

COMMUNITY DIMENSION Issue Yes No Evidence* Contribution to economic and social cohesion

1. Additional growth X Share of Burgenland’s GRP in the national GDP has remained the same 2. Increase in the level of investment X 3. Productivity gains X See impact assessment 4. Greater economic integration X No improvement of the national position of the Land, remaining problems intra-Land problems. Community priorities

5. Infrastructure provision, particularly trans- X Improvement of water related European networks infrastructure (fresh water provision, - Effectiveness of infrastructure sewage treatment) - Accessibility New telecommunication infrastructure - energy efficiency and diversification - new information technologies - connections to drinking water and waste recycling systems 6. Regional competitiveness X X Yes: R&D infrastructure improvement - public and private expenditure on R&D No: weak enterprise based R&D activities - employment in R&D - potential for job creation through local development initiatives 7. Human resources X X Yes: improved employability, higher - improved employability employment - reducing long-term employment No: lowering unemployment rate - employment rate 8. Environment X Improvement of water based - Fund contributions to compliance with environmental infrastructure. environmental standards 9. Equal opportunities X Relatively high participation rates in ESF- - rate of employment among women funded training measures - number of women setting up a business Balanced and sustainable development

10. Better distribution of economic activities X No improvement of the intra-Land over the Union disparities - regional convergence - degree of concentration of economic activities - Quality of growth (sustainability index) Issue Yes No Evidence* *) provide evidence for or against each statement - 89 -

SPECIFIC CRITERIA AND OTHER ASPECTS Issue Yes No Evidence* Financial criteria

11. Additionality X Shifts due to re-programming - Changes in structural expenditure of national origin (annual average) 12. Financial leverage effect - national public co-financing mobilised under the Structural Funds - private sector expenditure Criteria related to the Structural Funds method

13. Quality of multi-annual programming X Rather well due to the newcomer situation - degree of integration between national and in 1995. Community priorities - degree of coherence between national and Community programming 14. Enlarged partnership X Large partnership, but conflictive relations - extent of the partnership during 1995-99 - degree of efficiency 15. Control – Audit X Audits took place. No evidence on share of - share of projects audited projects 16. Development of monitoring systems based X Environmental impact pilot study. on quantified objectives - share of measures covered by financial and physical monitoring information 17. Extension of evaluation work in the public X Improvement of the overall culture of administrations evaluation in Austria. - external evaluations - budget for evaluations - evaluation structures - quality of evaluations Cross-border and Transnational co-operation and Networking

18. Added Value of co-operation activities X Complementarity with the INTERREG IIA - joint cross-border of transnational programmes, in which Burgenland management committees participates. - joint projects involving administrations and/or firms - co-operation projects with non-member countries 19. Innovative actions No evidence - multiplier effects in terms of volume of investment mobilised and jobs created in the region - degree of transferability of actions (mainstreaming) 20. Networking and exchange of experiences No evidence - initiatives and seminars on exchanges of experiences on the Structural Funds Other (please specify)

Issue Yes No Evidence* *) provide evidence for or against each statement - 90 -

4.4. An assessment of changes to policy and practice

Please identify and summarise, for each level, whether and to what extent the programmes led to changes in policy at (a) local level, (b) regional level and/or (c) national level Policy change Programme influence Significance of change Significance of programme influence Changes at Local Level ------Changes at Regional Level Increased awareness on Learning from successful High ? specific local development and less successful needs, of intra-regional interventions disparities Strengthening Learning from successful High high endogenous potentials interventions (SMEs, tourism, agriculture) Recognised need to Learning from successful High High improve human potentials and interventions (ESF) and less successful aspects (low ESF-share) Changes at National level ------

To what extent have the programmes led to changes in practice and to what extent has this been carried over into other activities? Practice change Programme influence Significance of change Significance of programme influence Efficiency improvement of Pluri-annual planning High High national regional policy Geographical focus efficiency Increase of planning Pluri-annual planning High High security in the labour market policy Increase of planning Pluri-annual planning High High security in the agricultural policy - 91 -

5. AN ANALYSIS OF THE IMPACT OF OBJECTIVE 1 INTERVENTIONS173

Right after the accession of Austria to the European Union and still at date of the mid-term evaluation, it was difficult to find appropriate data at a regional level that would allow an overall assessment of the overall impact of the Objective 1 interventions. The main reason was that Austria still had been in course of producing adequate “data-pools” that were in line with the European statistical system of national accounts. More recently, the Austrian Statistical Office (Statistik Austria, ÖSTAT) has issued regionalised data on specific macro-economic variables in Burgenland for the years 1995-1999, which are included in the statistical annex of this study (evolution of gross value added, of gross fixed capital formation, of total employment and of employees).

Based upon these more recent data, a “bottom-up assessment” of the impact resulting from Structural Funds interventions in Burgenland shall be carried out. In a first step, this bottom-up approach starts with an assessment of potential impacts that programme interventions might have produced at the level of more general cohesion indicators (GRP, GRP/capita, gross value added, income levels etc). In a second step, the bottom up assessment is deepened by evaluating more precisely the impact that Objective 1 programme interventions had on specific aspects of the Burgenland economy such as investment, employment and labour productivity or on other specific goals formulated in the programme. But even on the ground of detailed statistical data that are now available for Burgenland, it will be difficult to establish a direct “cause and effect-link” at the macro- and meta-level.

As a working hypothesis for the bottom-up impact assessment it is assumed that Objective 1 interventions generally tend to have an important impact (additional positive impulses; partially also negative impulses such as rationalisation based on offsetting employees) in those specific sectors of the regional economy, that • are directly targeted by the programme through investment support (e.g. industry and crafts, tourism sector, R&D services provided for by enterprises; agriculture and forestry), • experience an overall capacity increase through the establishment of additional infrastructures in the context of the programme (e.g. water supply/wastewater treatment sector; R&D or educational facilities), • are indirectly concerned by private or public construction activities that are linked to the above mentioned activities supported by the programme (e.g. construction and building sector).

If one looks at the initial set of strategic targets that have been defined for the Objective 1 programme, one can see that the programme has achieved some of the quantitative results defined and others not.

173 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Amt der Burgenländischen Landesregierung: Ex-ante Evaluierung, Ziel 1 Burgenland 2000 (informal working document). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000). Burgenländische Landwirtschaftskammer: Die Ziel 1-Chance für die Burgenländische Landwirtschaft. Mitteilungsblatt der Bgld. Landwirtschaftskammer. - 92 -

Potential impacts on general cohesion indicators

Already in 1997, the mid-term evaluation observed that the Objective 1 programme would not be able to contribute significantly to change Burgenland’s GRP-share in the national GDP. More recent statistical data confirm this general statement for the entire programming period.174 A similar situation can be observed if one looks at evolution of the gross regional product/gross domestic product per capita between 1995 and 1999. Both indicators suggest that Structural Funds support in Burgenland could not change the overall position of the Land in the Austrian wide settings of regional convergence (see statistical annex, table A).

If one considers however the average annual impulse that results from the total cost of ERDF- and EAGGF-funded measures between 1995-1999 (204 million Euro), one can observe that these impulses contributed with around 5% to the average annual GRP realised in Burgenland (see overview table below). Without the annual impulses resulting from the programme measures, Burgenland’s share of the Austrian GDP would have been only at 2.07% in 1995 (instead of 2.18%), at 2.08% in 1997 (instead of 2.19%) and at 2.1% in 1999 (instead of 2.2%).

An alternative perspective for assessing general macro-economic impacts is to look at the share of financial impulses resulting from the Objective 1 programme 1995-1999 in Burgenland’s gross value added. Already the ex-ante evaluation for the new Objective 1 programme 2000-2006 assumed that most of the total public expenditure resulting from the programme (all measures confounded) contributed to directly raise the gross value added within Burgenland.175 The ex-ante evaluation also proceeded to a preliminary quantification of the broader economic effects of the previous programme on the regional economy. During the programming period 1995 to 1999, the Objective 1 programme has induced an overall annual value added of around 1.9 billion Austrian shillings, which is around 4% of the total gross value added of Burgenland in the year 1995. Of these 1.9 billion Austrian shillings, around 1.3 billion Austrian shillings were resulting from the expenditure of the public sector and the private investors (assuming that around 30% of the private investments in Burgenland have an impact on the gross value added). The public and private expenditure of the programme therefore amounts at about 2.5% of the Burgenland gross value added in 1995. The sustainable employment additionally resulting from the programme and the realised gross value added is evaluated at 625 million Austrian shillings, which is around 1.3% of the gross value added of the Land. This initial assessment can largely be confirmed by the bottom-up assessment of this ex- post evaluation: The average annual impulse resulting from the total cost of ERDF- und EAGGF-supported projects amounts to 5% of Burgenland’s average gross value added realised each year between 1995 and 1999. The share of public expenditure foreseen for these measures (EU, Federal level, Land) is alone at about 2% per year

174 Although Burgenland's average annual growth rate of the gross regional product (+3.6%) had been above the average annual growth rate of Austria’s gross domestic product (+3.3%) between 1995 and 1999, Burgenland's share in the Austrian gross domestic project has remained more or less constant over the same time period (2.2%). 175 Positive effects are assumed for wages and salaries (e.g. for training activities in the framework of priority 5 and in the framework of technical assistance), but also for the income transfers to agricultural holdings (within the measures of priority 4) and the expenditure that had been made in the framework of infrastructure equipment in all priorities and measures. The ex-ante evaluation also assumed that private investors contributions to the programme had raised the gross value added of Burgenland, although these effects were mainly of a temporary nature. In addition, a sustainable increase of the gross value added will also result from the realised growth in production and employment in Burgenland. - 93 -

(see table below).

Although one can observe a rather positive development in Burgenland as regards the convergence of income levels and the purchasing power during the years 1995-1999 (see: chapter 3.1.), it is difficult to clearly identify the economic impact of the Structural Funds interventions on these variables. As already mentioned above, the ex-ante evaluation for the new Objective 1 programme 2000-2006 assumes positive effects of the programme on wages and salaries that result mainly from ESF- funded training activities in the framework of priority 5 and from technical assistance (priority 6). Similar effects also result from income transfers to agricultural holdings provided for under the EAGGF-measures of priority 4 and the expenditure that had been made in the framework of infrastructure equipment in all priorities and measures (ERDF-interventions).

It was already highlighted in the appropriateness analysis that the Objective 1 programme could not significantly contribute to achieve a greater intra- regional balance in Burgenland. In fact, already the mid-term evaluation of 1997 has highlighted that this was not a weakness of the programme itself, but rather a consequence of the relatively limited amount of financial support available compared to the real amount necessary to achieve such progress. Without the existence of the Objective 1 programme, however, intra-regional disparities within Burgenland would have even further increased. As more recent sub-regional data on this issue are not available to the evaluator and due to the fact that the basic problem could not be changed during the lifetime of the programme, the overall assumption made in 1997 is still assumed to be valid at date.

Potential impacts on investment in Burgenland

A first step is to assess the extent to which EU-Structural Funds interventions have contributed to the overall volume of investment realised in Burgenland. In this wider context, one has however to consider that a part of positive impulses resulting from the programme’s interventions will certainly have an impact “outside” of the region and that some of the investments would have occurred anyway without public funding support. A general assessment of this type has already been made in the mid-term evaluation of 1997, which concluded that Objective 1-programme interventions have made a significant contribution to raise investment in Burgenland. The calculation was however rather approximate, as a precise calculation of the annual investment rate was not possible due to lacking data for the Burgenland GRP.

One can however repeat this basic exercise of the mid-term evaluation on the ground of recently available data for gross fixed capital formation (GFCF) in Burgenland: The programme’s annual contribution to investment in Burgenland between 1995-1999 can be calculated if one puts into relation the average annual impulse resulting from the programme’s interventions that are expected to have a more or less direct impact on investment (e.g. total cost, total public expenditure committed or total EU- contribution committed for ERDF-and EAGGF-interventions) with the average annual investment volume realised in Burgenland during the years 1995-1999. According to this rather simple model-constellation, one can say the following (see also overview table below): • The average annual impulse resulting from the total cost of projects supported under various ERDF- and EAGGF measures has contributed each year with - 94 -

17.8% to the annual average gross fixed capital formation in Burgenland between 1995 and 1999. The programme has therefore made a significant contribution to raise the annual level of investment in the Land. The most important annual contributions result from projects realised under ERDF-measures 1.1-1.4 (8.7%), as tourism or agriculture projects account only for annual contribution rates of respectively 3.4% and 3.7%. • The average annual impulse resulting from total public funding committed for ERDF- and EAGGF-measures (EU, Federal level, Land) has alone represented 6.5% of the annual average gross fixed capital formation in Burgenland between 1995 and 1999. The EU-contribution alone has a share of 2.4% and within this section one can observe a dominant position of funding impulses resulting from the ERDF.

A second step is to determinate the extent to which programme interventions have contributed to raise Burgenland’s annual investment rates between 1995- 1999. If one compares the evolution of annual investment rates at Länder level in Austria, one can clearly observe that Burgenland has achieved a significantly positive development during the years 1995-1999.176 If one compares now the real development of investment rates in Burgenland with an assumptive “baseline scenario” (investment rate in absence of specific programme related impulses), one can observe the following (see also overview table below): Without the annual impulse of the total cost generated by the programme, annual investment rates in Burgenland would be 5% below the average annual investment rate actually realised between 1995-1999. Without the annual impulse of the total committed public expenditure of the programme, the average annual investment rate in Burgenland would be nearby 2% lower than the average investment rate actually realised between 1995-1999.

A third step is to assess how specific categories of programme interventions (e.g. sector specific investment support, infrastructure) might have stimulated the development of absolute investment realised by specific economic sectors in Burgenland. Some conclusions with respect to this question can be drawn if one compares the average annual financial impulses that result from different types of interventions funded by specific measures of the Objective 1 programme (e.g. investment support for crafts, industry or tourism; R&D support; infrastructure support) with the absolute value of gross fixed capital formation realised by different sectors or sub-sectors of the Burgenland economy. It must however be considered that many projects had only been in their initial planning or construction phase at the beginning of the programme (1996/1997),177 wherefore their potential impact on investment was not very significant in the first years. This is also confirmed by looking at the development of absolute GFCF-values between 1995-1999: one can observe that several sectors and sub-sectors in Burgenland potentially concerned by programme interventions mostly experienced their “peak years” for GFCF-rates significantly above the initial value in 1995 during the second half of the implementation process (see also overview table below, years marked with grey shading). Finally, at least for the ERDF-funded interventions, one should also refer back to the table showing the sector-specific distribution of financial flows resulting

176 If the Austrian-wide annual investment rate had been around 23%, Burgenland could constantly realise the second highest investment rates after Tirol during these years and occupied even the first place before Tirol in 1997 with an investment rate of 28.9% (see: statistical annex). 177 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). - 95 - from the programme (see section 4.1.1.1.)

Looking at the annual financial impulses that result from the total cost of investment support to crafts and industry (ERDF-measure 1.1.), it can be assumed that they have certainly contributed to significantly raise the annual gross fixed capital formation (GFCF) realised in Burgenland by the entire secondary sector: at the level of the entire secondary sector one can observe important shares of the annual impulses that vary however during the years 1997 (36%), 1998 (30%) and 1999 (41%), mainly due to the fact that the absolute GFCF has strongly increased between 1995-1998. If one looks only at the GFCF of the sub-sector “production of goods”, the corresponding annual shares of the annual impulse even increase further (1997: 52% ; 1998: 46%; 1999: 66%).

Looking at the annual financial impulses that result from the total cost of investment support to the tourism sector (ERDF-measure 3.1.), one can observe an astonishing phenomenon: The annual impulses resulting from the programme measure are significantly above the absolute GFCF-values for the years 1995, 1997 and 1999 and have a share in 1998’s GFCF of about 61%. But even if one assumes a relatively high GFCF for the year 1996 with non-existing data (35 million Euro), it would not be possible to reach the total impulse for the years 1995-1999. Possible explanations could be that projects were still in the phase of realisation during the years 2000-2001 ( delayed GFCF effect) or that other sub-branches might also have profited from the programme impulses (support to golf areas, swimming pools or activities in the field of cultural, leisure or entertainment assumed effect on the sub-sector “other public or private services”). Whatever should be the precise reason, one can assume that financial impulses resulting from the programme interventions were responsible for most of the GFCF realised in the “tourism and restaurant sector” during the years 1995- 1999. This would also correspond with a weakness of the sector that was observed previous to the start of the programme in 1995, the lacking willingness of Burgenland‘s tourism enterprises to make necessary investments.

Looking at the annual financial impulses that result from the total cost of support to agriculture and forestry (EAGGF-measures 4.1.-4.2.), one has to assume that they have certainly contributed to sustain the “investment boom” that can be observed in this sector during the years 1996-1998: the share of annual funding impulses in the gross fixed capital formation (GFCF) of the primary sector is very high, but it varies during the years 1995 (57%), 1996 (44%), 1997 (46%), 1998 (51%) and 1999 (71%) mainly due to significant absolute GFCF-increase between 1995-1997.

For several other types of intervention (infrastructure support, enterprise based R&D-support), it is already more difficult to establish a precise “cause and effect-link” between the financial impulses resulting from programme and sector- specific GFCF values. For the broad range of infrastructure measures supported by the programme, one can make the following basic assumptions: impulses that result from environmental infrastructure investment (ERDF-measures 1.2. and 3.5) had certainly an impact on the GFCF of various sectors such as the “energy and water supply-sector” and the “other public and private services sector” (sewage water treatment). The same cross-sector impact- assumption can be made for telecommunication or R&D infrastructures, which - 96 -

were partly realised in the framework of ERDF-measure 2.2. (telecommunication networks) and of ERDF-measure 2.3. (technology centre): they tend to contribute to the GFCF of the “transport and news transmission sector” and the “data processing/R&D and enterprise related services sector”. For enterprise based R&D-support, one can make the following basic assumptions: impulses that result from ERDF-measures 2.1 and partially also from measure 2.2. strongly tend to contribute to the GFCF of the “data processing/R&D and enterprise related services sector” in Burgenland.

Potential impacts on the labour market in Burgenland

As regards employment creation, the initial Objective 1 programme 1995-1999 has formulated rather ambitious and specified targets (e.g. creation of 7300 employments, of which 6000 are lasting employments in the field of crafts and industry, 1000 employments in the context of technology intensive SMEs and 300 employments in technology centres). The programming document did however not specify whether this overall figure only refers to “newly created jobs” or to the sum of newly created and secured jobs. Based upon the most recent data available (monitoring, other sources), the actual results achieved by the Objective 1 programme in terms of gross employment creation are the following: • The annual report for the year 2000 indicates that public support provided for by the ERDF-funded measures 1.1, 2.2 and 3.1 has contributed to create 2387 new jobs (indicated as “planned new jobs”) and to secure 6067 existing jobs. • The projects supported under the EAGGF-measures have contributed to preserve existing employment’s in rural areas and have also contributed to create new jobs: in total, official sources indicate around 3000 newly created or preserved jobs (no further distinction is made). • For the ESF-interventions, monitoring data available to the evaluator do not allow to determine direct employment effects.

The rather vague definition of employment objectives in the programme and the partially lacking information on other parts of the programme makes it difficult to precisely measure the goal-achievement rate for this indicator and to calculate overall gross and net employment effects. In addition, the mid-term evaluation has already highlighted the problematic definition of “maintained” or “secured jobs”.178 If one puts the total amount of newly created and secured jobs (ERDF+EAGGF: 11,454) in relation to the initially defined overall target (7.300 jobs), the Objective 1 programme would have achieved an overall goal achievement rate of nearby 157%. This is however a rather questionable approach, wherefore an assessment of real gross employment effects should mainly focus on those jobs that are clearly identifiable as “newly created jobs” (2387). Considering this, one could say that only the ERDF-interventions have reached a goal achievement rate of around 56%. The real success-rate of the programme will however be somewhere in-between the above mentioned figures, as they are both the broadest possible upper level and the lowest objectively measurable level.

178 According to the programme monitoring, secured jobs are all those jobs existing in an enterprise at the beginning of an investment, whereas in reality not all jobs in a given company are automatically secured by such an investment. Therefore, a precise determination of actually secured jobs through programme interventions is not possible on the ground of the monitoring data. - 97 -

Overview Table: Impact of selected Objective 1 programme interventions on specific macro-economic variables in Burgenland between 1995-1999 Evolution of specific macro-economic variables in Burgenland 1995 1996 *) 1997 1998 1999 Average 1995-1999 Gross regional product 3,771 3,913 4,008 4,168 4,346 4,041 (GRP), in million EUR Gross value added at 3,576 3,704 3,780 3,926 4,055 3,808 basic prices (GVA), in million EUR Gross fixed capital 1,046 - 1,159 1,184 1,206 1,149 formation (GFCF), in million EUR Investment rate (IR) 27.7 - 28.9 28.4 27.7 28.4 (in %) Impact of selected Objective 1 – programme interventions on specific macro-economic variables in Burgenland (absolute figures in million EUR) Measures Measures Measures Measures Measure Total 1.1.-1.4 2.1.-2.3. 3.1-3.5. 4.1.-4.4 5.4 ERDF ERDF ERDF ERDF EAGGF ERDF EAGGF Absolute figures, 1995-1999 **) 503 107.4 198.3 213.5 2 1024.2 Average annual 100.6 21.5 38.7 42.7 0.4 204.8 impulse 1995-99 Total Annual impulse / 2.5% 0.5% 1% 1.1% - 5% cost average GRP Annual impulse / 2.6% 0.6% 1% 1.1% - 5.4% average GVA Annual impulse / 8.7% 1.9% 3.4% 3.7% 0.3% 17.8% average GFCF IR baseline -----23.4% scenario ***) Absolute figures, 1995-1999 **) 157.6 45.8 87.1 79.5 1.8 371.8 Total Average annual public impulse 1995-99 31.5 9.2 17.4 15.9 0.4 74.4 expen- Annual impulse / 0.8% 0.2% 0.4% 0.4% - 1.8% diture average GRP Annual impulse / 0.8% 0.2% 0.5% 0.4% - 2% average GVA Annual impulse / 2.7% 0.8% 1.5% 1.4% 0.4% 6.5% average GFCF IR baseline -----26.6% scenario ***) Absolute figures, 1995-1999 **) 54.4 18.3 40.0 25.6 0.6 138.9 EU- Average annual contri- impulse 1995-99 10.9 3.7 8 5.1 0.1 27.8 bution Annual impulse / 0.3% 0.1% 0.2% 0.1% - 0.7% average GRP Annual impulse / 0.3% 0.1% 0.2% 0.1% - 0.7% average GVA Annual impulse / 0.9% 0.3% 0.7% 0.4% - 2.4% average GFCF IR baseline -----27.7% scenario ***) Source: Statistik Austria ; Objective 1 programme Burgenland, annual report 2000 ; own calculations *) No data available for gross fixed capital formation and investment rates in this year **) Figures related to commitments realised. ***) Investment rate without the impacts resulting from relevant output category of the Objective 1 programme interventions (total cost, public expenditure, EU-contribution) - 98 -

Overview Table: Measure-specific financial impulses resulting from the Objective 1 programme and gross fixed capital formation at the level of specific sectors in Burgenland Measure specific annual impulses resulting from the Objective 1 programme, in million EUR Investment R&D support for Investment Support for Support for support for enterprises and support for agriculture various industry and infrastructure tourism and forestry infrastructures crafts (ERDF (ERDF-measure (EAGGF (ERDF-measures (ERDF-measure measures 3.1) measures 1.2., 1.3., 1.4. 2.3. 1.1.) 2.1.-2.2.) 4.1.-4.2) 3.2., 3.5., 5.4.) Total cost, average annual impulse 1995-99 80.8 13.8 23 41 42.2 Total public expenditure, average 18 4.4 7.8 15 22.1 annual impulse 1995-99 EU-contribution, average annual impulse 7.2 2 3.8 4.8 7.1 1995-99 Gross fixed capital formation in Burgenland, in million EUR 1995 1996 *) 1997 1998 1999

Total, primary sector (Agriculture, Forestry 72 93 89 80 58 and Fisheries) Total, secondary sector: 176 - 226 270 195 2.1. Coal mining, mining, gas extraction 42 - 100 43 52 etc. 2.2. Production of 109 - 155 174 123 goods 2.3. Energy and water supply 27 - 29 39 35 2.4. Construction and building 36 - 38 53 33 3. Total, third sector: 798 - 844 834 953 3.1. Retail trade, commerce, repairing of 47 - 64 45 62 cars and consumer goods 3.2. Hotels and restaurants 17 - 15 36 16 3.3. Transport and news transmission 76 - 63 82 90 (telecommunication) 3.4. Banking and insurance branch and 14 - 16 38 22 related activities 3.5. Real estate, location, data 458 449 518 493 622 processing, R&D, enterprise related services 3.6. Public administration, national 68 63 74 53 52 defence, social insurance 3.7. Educational activities 20 18 16 12 14 3.8. Services in the field of health, veterinary and 29 33 29 33 35 social affairs 3.9. Other public or private services 69 73 49 42 40 3.10. Private households 0 0 0 0 0 4. Total, Burgenland: 1,046 - 1,159 1,184 1,206 Source: Objective 1 programme Burgenland, annual report 2000 (own calculations), Statistik Austria (GFCF). *) Lack of GFCF figures for 1996 for certain economic sectors ; „peak years“ with significant GFCF increase compared to the initial level in 1995 are marked in grey. - 99 -

Considering only the “newly created jobs”, one should now try to determine gross labour market effects in Burgenland that result from the jobs created by Objective 1 programme interventions. One important focus could be to determine of the gross effect on unemployment. A precise identification of this effect would however need a very sophisticated calculation model that considers also migration and activity rate changes (which in turn are influenced by the intervention or are even completely independent of it),179 wherefore the present evaluation will follow a less complex calculation model similar to the one already adopted in the mid-term evaluation.180 If one repeats the calculation method of the mid-term evaluation with the most recent results (total new jobs created: 2387; 1996 figures for unemployment) and calculates in addition also a spread of the total effect over the years 1996-2000 (“average per- annum contribution”), the following statement can be made: during these 5 years, the total number of new jobs created solely by the ERDF-interventions has contributed to lower each annual unemployment rate by a gross effect of nearby 0.6%.

In order to get an impression of net employment effects generated by the Objective 1-programme interventions, one has to take into consideration deadweight and displacement or multiplication effects. Due to the fact that such effects are not quantifiable with the set of empirical data available, already the mid-term evaluation had to make an alternative assessment for Burgenland that assumed a realistic quantification with an impact of around +/-10% on the jobs created up to 1996 (998): as a result, net employment effects were localised in a margin between 850 jobs (lower level) and 1050 jobs (upper level).181 On the ground of actual results achieved by ERDF-interventions at the end of the programme period, one can repeat the calculation of the mid-term evaluation: Under similar assumptions (deadweight, displacement or multiplication effects), the absolute net employment effects of ERDF-interventions have to be located +/-10% between the gross effect. The upper level is 2626 jobs created, whereas the lower level is 2148 jobs created. Based on these figures, one can also identify the margin in which net effects of ERDF- interventions on unemployment have to be localised. If one repeats the above mentioned calculation for the most recent results (net jobs created by 2000; 1996 figures for unemployment), one can say that the ERDF-interventions have contributed to lower unemployment rates between 1996-2000 by an annual net effect between 0.5% and 0.63%.

The real dimension of all gross or net employment effects that have been calculated above for ERDF-interventions in the field of productive investment must however be estimated higher in each case, as additional direct or indirect labour market effects result from other programme interventions.182

179 European Commission, Regional Policy and Cohesion: MEANS Handbook No. 6: Evaluating the contribution of the Structural Funds to Employment, 1996. 180 In order to determine the gross effect on unemployment, the mid-term evaluation has put the number of new jobs created by the interventions by 1996 (998) in relation to the total number of unemployed people registered in Burgenland in the same year (1996: 7201 / unemployment rate: 8.6%): the evaluation concluded that programme interventions have contributed - on a calculation basis only - to lower the 1996 unemployment rate by a gross effect of 1.2%. Taking into consideration raising unemployment rates between 1993 and 1996, the evaluation also highlighted that the unemployment rate would have been significantly higher in that year without the job effects resulting from the interventions. Source: Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 181 Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. 182 Whereas it is generally difficult to determine real job-creation effects resulting from ESF-funded training measures (estimates are aggregate variables that can not be compared to gross job creation of e.g. ERDF- - 100 -

Instead of an overall conclusion on employment impacts based upon the above- mentioned figures, one should consider some rather limitative remarks that have been made in the ex-ante evaluation of the new Objective 1 programme 2000-2006. In the view of the evaluation, a precise assessment of the1995-99 programme's impact on employment and unemployment rates is considered very difficult and problematic. This is mainly due to the significant structural changes the Burgenland labour market is actually undergoing. As in many other EU-member states, also in Austria one can observe a de-coupling of employment development, employment- ratios and unemployment rates: today, the increase of the total number of employment is frequently accompanied by stagnating or increasing unemployment rates, whereas the total volume of labour available in many sectors had been distributed to more people employed (part-time work). Therefore, the Objective 1 programme 1995-1999 might well have contributed to create new employment in Burgenland, but did not make a significant contribution to lower unemployment rates. The only feasible indicator would be to estimate the programme's impact on the increase of the total volume of employment, but not its impact on unemployment rates or ratios of employment. 183

Potential impacts on labour productivity in Burgenland

If one looks at the combined evolution of the gross value added and total employment in Burgenland between 1995-1999 (see statistical annex, tables B, C), one can observe the following: the relative increase of the gross value added in Burgenland between 1995 and 1999 had been with +13.4% above the national rate (+12.3%), whereas the increase of employment in Burgenland was with +1.3% below the figures observable at an Austrian-wide level (+3%). A preliminary conclusion from these figures could be that Burgenland’s economy has made comparatively stronger efforts to raise its productivity during the years 1995-1999 than the whole national economy.

The most interesting developments in Burgenland compared to the Austrian-wide situation can however be found at the level of 3 specific economic sectors or sub- sectors, which are a main focus of the programme interventions and that had already been examined above.

Burgenland's primary sector: Between 1995-1999, one can generally observe a strong increase of gross value added and a decrease of employment.184 Baring in mind that the programme has significantly contributed to raise the annual level of investments in the primary sector during the years 1995-1999 (see above) and assuming that labour market effects were dominantly that of preserving existing employment (3000 jobs created or preserved), one can say that the Objective 1

funded measures), newly created jobs will certainly result from ESF-support to start-up of enterprises. Unfortunately no actualised data for the outputs achieved by such ESF-measures are available (measure 5.1.: start up of enterprises founded by unemployed ; measure 1.5.: general start up of enterprise initiative). Within the above-mentioned calculation, the employment effects resulting from EAGGF-interventions were not considered. Finally, employment effects resulting from ERDF-funded infrastructure investment were not considered that are estimated by the ex-ante evaluation at around 280 persons employed as a result of construction measures. 183 Amt der Burgenländischen Landesregierung: Ex-ante Evaluierung, Ziel 1 Burgenland 2000 (informal working document). 184 The primary sector has experienced a significant increase in its gross value added (Burgenland: +1.9%, Austria: -4.9%), whereas the level of employment has considerably stronger decreased in Burgenland (-15.1%) than in the national context (-9%). - 101 -

programme interventions of the EAGGF have dominantly contributed to raise the overall productivity of Burgenland’s agriculture and forestry sector. This conclusion also corresponds with the structural features of the overall reduction process of production units in Burgenland between 1995-1999.185

Burgenland’s sub-sector “production of goods”: Between 1995-1999, one can generally observe a relative increase of gross value added and a decrease of employment.186 Baring in mind that especially programme measure 1.1 (crafts and industry) has significantly contributed to raise the annual level of investments in this sub-sector during years 1995-1999 (see above) and that the most important gross labour market effects result from these interventions (jobs secured: 5.384 ; new planned jobs: 1.631), one can say the following: ERDF- interventions have dominantly contributed to raise the overall labour productivity in this sub-sector instead of significantly increasing its overall level of employment. This general observation does not neglect the positive employment effects realised, as newly planned jobs created by measure 1.1 roughly correspond to 11% of all employees working in the production of goods sector in Burgenland in 1999 (employees: 14.500). But their overall impact might be more that of influencing a sector-internal substitution between “traditional” and “modern” segments of employment.

Burgenland’s sub-sector “hotel and restaurants”: Both, employment and gross value added have positively progressed between 1995 and 1999.187 It was already highlighted above that especially programme measure 3.1. (extension/improvement of the tourism offer) has very significantly contributed to raise the annual level of investments in this sub-sector during years 1995-1999 (one can even assume that the totality of investments have been realised by the programme interventions, see above) and that the second highest gross labour market effects result from these interventions (jobs secured: 683 ; new planned jobs: 398). Therefore, and differently to the production of goods sector, one can say that the interventions of measure 3.1 have made both a decisive and very important contribution to raise the overall level of productivity in the tourism/restaurant sector and a contribution to raise the level of total employment in this sub-sector in Burgenland (increase of total employment between 1995/99: +500).

Potential impacts on other explicit programme goals and on other aspects

As concerns the Objective 1 programme target of raising the export activities of Burgenland’s industry, one can see from the most recent data available (see statistical annex, table J) that in general this aim has been fully achieved (by 173%). It is however difficult to say whether programme interventions had clear direct effects on this aspect and whether they can be quantified or not. In any case, the evolution of Burgenland’s industrial exports is dominantly positive: with the exception of 1997,

185 Small-sized holdings (0 to 5 ha) have witnessed decrease-rates above the Land’s total rate (-20%), whereas the number of agricultural holdings with a larger surface did even significantly increase. 186 The increase of gross value added (1995/1995: +20.3%) was clearly above the national rate (1995/1995: +16%), whereas the relative decrease of employment in Burgenland had been stronger (1995/1995: -9.4%) than in the national context (1995/1995: -4.2%). 187 The evolution of employment between 1995-1999 was with +8.6% positively above the national values (+5.4%) and the increase of gross value added had with +38.1% been even very significantly above the national increase rate (+15.1%). - 102 - the overall export volume of Burgenland’s industry grew each year and has reached nearby 9.4 billion Austrian shillings in the year 2000.188

An interesting and unexpected development took place over the lifetime of the Objective 1 programme as regards the impact of interventions on the economic structure of Land Burgenland (especially the productive sector): Whereas the Land authorities had initially expected a boost in industrial development for the northern part of Burgenland, the real effects show that the programme mainly stimulated the service sector (wherefore the real effect has to be described as that of a stronger tertiarisation).189

6. THE MANAGEMENT AND IMPLEMENTATION SYSTEMS ESTABLISHED FOR OBJECTIVE 1-INTERVENTIONS

6.1. Institutional Arrangements

6.1.1. An overview on programme management structures

6.1.1.1. General Introduction

Already before Austria’s accession to the EU, an intense debate on necessary adaptations of the existing national model for structural policy interventions and especially the Austrian regional policy (so called "co-operative spatial planning policy") to the EU-Structural Funds system was launched. Several features of the Austrian political system190 made however clear that in particular the national vertical and horizontal co-ordination and communication structures would have to be improved with respect to the partnership approach laid down in the Structural Funds regulations.

With Austria’s accession to the European Union, Austrian authorities decided that an implementation of the new Structural Funds programmes should be carried out mainly on the ground of the existing national instruments and structures set up for regional policy, labour market policy and agricultural policy. The whole implementation process of EU-Structural Funds interventions in Austria has

188 Exports to western European markets are by volume the most important, but display rather small annual increase rates between 1994 and 2000. The most significant increase in export can be observed toward countries of the former Eastern block including Yugoslavia: their share in the total export volume has increased from 16% in 1994 to 25% in the year 2000. Exports to extra-European countries are the smallest segment, but they also tend to grow with constantly positive increase rates. 189 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 190 Collaboration within the Austrian institutional system (vertical and horizontal co-operation) was in general often constrained by political rivalry and administrative "turf wars". The dominant principle of consensus seeking enables the system however to work effectively but at the expense of fragmentation and duplication of effort. Due to the Federal nature of the State, responsibilities for labour market policy, regional economic development policy and agricultural policy were traditionally been segregated at date of the country’s accession to the European Union. Especially the Austrian regional policy is highly fragmented as concerns the levels of actors and the funding schemes involved. Furthermore, an adequate vertical and horizontal co-operation model able to cope with the EU-partnership requirements was only in a basic stage of development due to the split of competencies. Sources: Mayerhofer (1995), Tondl (1996), European Policy Research Centre (1997), Mayerhofer/Palme (1994). - 103 - therefore become rather complex. A discussion paper elaborated by an official of the Federal Chancellery indicates, that more than 100 administrative units at European and national level are involved in the implementation process and that 26 different monitoring bodies were set up for the 32 regional programming documents adopted in the programming period 1995-1999.191

This highly complex overall structure of administrative responsibilities is characterised by two common features (see also table below): 192 • Firstly, the overall financial and administrative responsibility for each of the three EU-Structural Funds is attributed to a specific "Fund-corresponding Federal Ministry" (fondskorrespondierendes Bundesministerium) that has the budgetary responsibility vis-à-vis the Federal Ministry of Finance and the European Union. • Secondly, due to specific nature of Structural Funds interventions and the Federal distribution of competencies in Austria, programme related co-ordination is carried out either by the Fund-corresponding Ministry responsible for regional policy interventions jointly with the Länder concerned (Objective 1, 2 and 5b), or by a Fund-corresponding Ministry alone (in the case of single Funds interventions: Objective 3, 4 and 5a).

Overview Table: Administrative responsibilities for the implementation of EU-Structural Funds interventions in Austria Overall financial and administrative responsibility Co-ordination of the Objective (Funds-corresponding Ministries) Programme Federal Chancellery Federal Ministry of Federal Ministry of (BKA) Agriculture (BMLF) Employment (BMAGS) Objective 1 X X X Land Government / Federal Chancellery Objective 2 X X Land Government / Federal Chancellery Objective 3 X Federal Ministry of Employment (BMAGS) Objective 4 X Federal Ministry of Employment (BMAGS) Objective 5a X Federal Ministry of Agriculture (BMLF) Objective 5b X X X Land Government / Federal Chancellery Structural ERDF EAGGF ESF Funds

191 Huber (March 1996), discussion paper. 192 Federal ministry for labour and social affairs: BMAGS (1997) - 104 -

General features of national policies linked to the Structural Funds193

Due to the Federal State structure, the responsibilities in the field of Austria‘s domestic regional development policy are shared between the national government, the Länder and the local authorities. Already before the adhesion to the European Union, an intensive co-operation between the three levels of government in the field of regional policy was established. The Länder governments prepare economic strategies, spatial development policy programmes and sub- regional development plans, in co-operation with specific "regional development organisations" (Regionalmanagements). The Federal chancellery (Bundeskanzleramt, BKA) co-ordinates the policies at the different levels with the help of the “Austrian Conference on Spatial Planning” (Österreichische Raumordnungskonferenz, ÖROK), a platform for mutual co-operation, grouping together representatives from government authorities at all levels and social partners.

The mobilisation of financial means for Austria‘s regional development policy and the tasks to manage these funds is distributed between the Federal level and the Länder.194 In order to co-ordinate the use of financial means within this rather complex system, intensive contacts had been established between the different funding departments of the Federal level and the Land level. However, the over- complexity of the system frequently hinders those applying for financial support to overview the entire possibilities offered by the different structures. In addition, the high degree of fragmentation also causes delays and considerable administrative extra cost for those preparing an application, especially if several funding instruments from different administrative levels are combined in so-called "financial support packages" (combined funding between various Federal instruments and/or Land level instruments).

With Austria’s accession to the European Union, the Federal government and the Länder agreed that the implementation of the new Structural Funds programmes should be carried out on the ground of the existing national instruments for structural policy.195 Due to this, the Structural Funds interventions had been closely linked to the highly fragmented Austrian funding system for regional policy. At date of the accession, around 50 funding schemes existing at Federal level and 100 funding schemes existing at Land level had been notified to the Community. For the specific

193 European Commission: European Cohesion Forum, April 1997. Workshop J, contribution of Mr. Schicker entitled "Erfahrungen eines Mitgliedstaates - Österreich". OECD, Territorial Development Service: Local Economic and Employment Development. Local Partnerships in Austria. October, 1999. European Commission, DG EMPL-Peer Review Programme 2000: Territorial Employment Pacts in Austria: Joint use of opportunities. Vienna, May 10-11,2001. Final Report. Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1-Gebiet Burgenland. 194 Within this historically grown system for national regional development policy, funding is operated by the public administrations at various levels directly and - especially in the case of territorial authorities (Länder and local authorities) - also by external organisms or legally autonomous companies. The specific framework conditions of a Federal state, but also the interests related to such a differentiation of policy, particularly hinder a merging of the numerous organisms involved in regional policy funding. 195 One motivation was the interest of many funding units to effectively participate in the implementation process of the new Structural Funds programmes and to establish the broadest possible base for the mobilisation of national co-financing. Another important motivation was to use the established but rather complex support structure in Austria in order to avoid further complication. - 105 - field of economic development, already 8 important funding actions existed at Federal level, not taking into consideration the activities of the Federal ministries themselves.196 The implication of such a large number of national funding institutions in the implementation process of Structural Funds programmes was initially questioned by the European Commission, mainly due to reasons of efficiency and co-ordination. However, a later study carried out for the European Commission revealed that only a few number of these funding instruments were effectively involved in the implementation of the programmes (around 8 -10 instruments). 197

In the vertical dimension (Federal Level–Land level), the administrative implementation of Structural Funds interventions for regional economic development in Austria was carried out by the different administrative units responsible for the existing support instruments at Federal level and/or at Land level. According to the specific topics or issues covered by a project, financial means and support was therefore attributed by specific Federal administrations and Land administrations autonomously, but also jointly through the elaboration of a global "package of cross- financing". In the latter case, one can observe that the traditional shortcomings of the national cross-financing system also appeared in the framework of the Structural Funds interventions (considerable administrative burdens, lengthy decision-making and co-ordination procedures between the administrations involved, delays with regard to project approval).

Overall responsibilities for the national labour market policy in 1995 had been with Federal Ministry of labour, health and social affairs, BMAGS (now: Federal Ministry of economic affairs and labour), which also formulated the general goals. The effective pursuit, through the design and implementation of policy is the task of the public “labour market service” (Arbeitsmarktservice, AMS). On the ground of the Labour Market Service Act of 1994, the AMS has adopted a decentralised structure with significant autonomy in policy design at the Land level. The labour market service has at its disposal specific 9 “Land Offices” (Landesgeschäftsstellen, LGS)198 and 110 regional directorates at district level (Regionale Geschäftsstellen, RGS). The nine Länder offices determine the nature of labour market measures to be used to achieve the set targets. Since the decentralisation, social partners have been called upon to play a major role in the steering of the public “labour market service”. In the partnership structures at each level, the employers are represented by the “Chamber of economy” (Wirtschaftskammer) and the “Federation of industrials” (Industriellenvereinigung), while workers are represented by the “Chambers of workers and employees” (Kammer für Arbeiter und Angestellte) and the “Austrian trade union federation”. The removal of the AMS from direct government control has facilitated a much grater involvement of the social partners in the decision making process.

According to the share of competencies between the different Federal ministries, the BMAGS had the overall responsibility for planning and administrating ESF-

196 A specific support structure of the Federal ministry for economic affairs (BÜRGES Förderungsbank GesmbH). The ERP-fund. A company for financial guarantee (Finanzierungsgarantie GesmbH). The Austrian local authorities credit bank (Österreichische Kommunalkredit AG). The fund supporting research into productive sector (Forschungsförderfonds für die gewerbliche Wirtschaft). An agency for innovation (Innovationsagentur GesmbH). The Austrian trust the agency for tourism (Österreichische Hotel- und Fremdenverkehrstreuhand GesmbH. The Austrian control bank (Österreichische Kontrollbank AG). 197 Interview with the Austrian Conference for Spatial Planning (ÖROK). 198 The Land offices have considerable autonomy, reflecting the AMS's aim to achieve decentralised decision making and greater co-operation with regional and local authorities. - 106 - interventions (Objective 3 and 4, ESF-Community Initiatives). In these cases, the BMAGS is at the same time "Funds-corresponding Ministry" and administrative unit responsible for the co-ordination of the programmes (including secretariat function for the Monitoring Committees). The labour market service AMS was generally charged with the implementation of all ESF-interventions that cover aspects of the Austrian Labour Market Service Act and paragraph 18 of the Unemployment Insurance Act. Due to a comprehensive integration approach adopted by the AMS199, it was not necessary to create new support structures for the ESF funded labour market policy interventions. As a short conclusion, it can be remarked that the implementation structures regarding the ESF interventions are slightly more "centralised" compared to those for the ERDF.

The implementation of the broad variety of EAGGF-interventions is rather complex: In the field of more classical interventions (support for holdings in less favoured areas; young farmers support etc.) and sector-specific support for individual holdings, the Austrian authorities mainly used pre-existing national or Land level structures and instruments in the field agricultural funding management. The vertical chain of responsibilities started at the Federal ministry for agriculture and forestry, continued with the Land administrative departments responsible for agriculture and forestry. At Land level, the implementation of specific interventions sometimes involved the Chambers of agriculture as lower / additional operational units.200 The basic vertical responsibilities between the Federal level and the Länder also applies for the new type of interventions supported under the Objective 5b-programmes, but within this context a broad variety of different support- and counselling structures had been set up at Länder level to ease up the implementation process: these functions were sometimes attributed to specific institutions that have close links to the Chambers of agriculture (LFI) or had been implemented by specific agricultural regional management office.201

Horizontal and vertical co-ordination for Structural Funds in Austria202

Due to the great number of Federal, Land or local level actors that were involved in implementing and monitoring EU-programmes for regionalised Structural Funds objectives (Objective 1, 2, 5b) or regionalised Community Initiatives, various co- ordination levels with specific tasks had been set up in Austria. And again here, the whole structural set-up is highly complex and characterised by a broad variety of different co-operation procedures at different levels.

At Federal level, two main co-ordination tasks can be identified, (i) the Austria- wide co-ordination and (ii) the co-ordination concerning the ongoing programme implementation: The Austria-wide co-ordination of EU regional policy issues with the national regional policy is a task of the "Austrian Conference of Spatial Planning" (Österreichische Raumordnungskonferenz, ÖROK). In its framework, general questions are discussed and clarified between the ÖROK-members and specific decisions are taken. The information transfer regarding EU regional policy matters

199 All issues related to the attribution of ESF support had been integrated by the AMS in its objective and planning architecture (labour market objectives of the Federal ministry of labour and social affairs; long-term planning of the AMS; annual labour market objectives of the AMS; working programmes of the AMS Land offices). 200 Interview with the Federal ministry for agriculture, forestry, environment and water management. 201 Österreichische Raumordnungskonferenz: Ex-post Evaluierung der Ziel 5b- und LEADER II Programme 1995- 1999 in Osterreich: Band I Ziel 5b. Schriftenreihe 161/I. Wien, 2002. 202 Bundeskanzleramt, Abteilung IV/4 (January 1996) - 107 - and the dialogue with the Commission is carried out by the Federal Chancellery (Bundeskanzleramt, BKA), where a specific "Focal Point" is also charged with thematic co-ordination of EU-regional policy matters. The Federal chancellery was mainly an information-, co-ordination- and negotiation platform in the vertical partnership process (with regard to the Länder and the European Commission). In this broader context, the co-ordination task is considered to be the main aspect of the work carried out by the Federal chancellery.203 The ongoing supervision of programme implementation is a task of the Monitoring Committees (MCs), which are assisted in this task by the "Co-ordination Units" at Länder level, the Federal Chancellery and the "Funds-corresponding Ministries" (as regards the financial implementation). A common secretariat of the MCs is established at the offices of the ÖROK. The task of co-ordinating the MCs is carried out by the "ÖROK-Sub Committee on Regional Economy" (ÖROK-Unterausschuß Regionalwirtschaft). The Programme-MCs (Programm-Begleitausschüsse), which exist at Land level for each Objective, are informed by the ÖROK on agreed implementation rules with regard to financial monitoring, evaluation procedures, publication, administration of funds for technical assistance etc. Furthermore, "Joint Meetings" (Gemeinsame Sitzungen) of the "Programme MCs" for each objective are foreseen.

Vertical co-ordination between each of the three Structural Funds and the final beneficiaries is carried out by the so-called "Fund-corresponding Ministries" (fonds- korrespondierende Bundesministerien). In this context, the Federal Chancellery (BKA) is responsible for ERDF-funding, the Federal Ministry of Labour, Health and Social Affairs (BMAGS) for the ESF, and the Federal Ministry for Agriculture and Forestry (BMLF) for the EAGGF. The Fund-corresponding Ministries collect regular reports on programme implementation, drafted by the funding agencies at Federal or Land level. On this ground the Fund-corresponding Ministries draft aggregate reports on the level of programme implementation for their relevant Structural Fund, which then serve the Monitoring Committees and the "Programme Co-ordination Points" as a comprehensive and up-dated source for information. Co-ordination on financial matters affecting the programmes or their priorities takes place within a vertical co-operation procedure.204 Co-ordination on matters related to project selection and project funding at the level of a specific measure of the programme takes place between the public and private actors concerned (Federal or Land authorities, private partners), mainly via long-standing "informal contacts" (telephone, written, joint project meetings). Some existing formal co-ordination procedures such as the "evaluation committees" (Beurteilungskommissionen), which were set up in the field of regional development support between the Federal and Land level in the framework of the Federal Ministry of Public Economy and Transport (RIP and RIF programmes), were also used. However, the Austrian authorities did not foresee the creation of new formal co-ordination bodies for project selection.

203 Interview with the Federal Chancellery (BKA). 204 At the beginning of the implementation phase (1996), the competent administrative units in Austria informed the Monitoring Committees on the internal division of EU-monies that are at the disposal for the individual measures. The competent administrative units decided upon the distribution of the EU-monies within the financial plan for the remaining implementation period (1997-1999). They had to take into account the results of the mid- term review and the "common position", which is to be elaborated within the MCs between the co-financing partners. - 108 -

Implementation structures for Objective 1 Burgenland 205

Within Burgenland, no specific department was created within the Land administration that should deal with the implementation of future EU funding. The Land preferred to build upon existing administrative organisational structures and adapted the number and qualifications of the staff. The organisation of funding management differed according to the relevant Structural Fund concerned. For all tasks that had not been delegated to third parties, the relevant functionally responsible administrative units within the Land administration had been in charge. These units were involved in the project selection and approval process, in mobilising the financial support and in controlling the progress of "their" specific projects concerned. However, a specific unit within the Land administrations of Burgenland called "European office and statistics" (Stabsstelle Europabüro und Statistik) was attributed the task to assure over-arching co-ordination between the different actors involved in the administration of the Objective 1 programme.206

Compared to the rather complex situation existing in other Austrian Länder, the degree of fragmentation in Burgenland regarding funding instruments involved in the implementation of ERDF-Objective 1 measures was relatively limited. A main reason for this was that previous to the accession to the EU, the Land government had decided to re-organise its own regional funding instruments by creating a single actor ("Burgenland Economic Service AG", Wirtschaftsservice Burgenland AG, WiBAG).207 In the framework of the ERDF-interventions for the Objective 1 programme 1995-1999, the WiBAG was charged with the implementation of support measures for economic affairs and tourism on the ground of two trusteeship contracts concluded in July 1994 and February 1995. Within the WiBAG, two "evaluation committees" (Beurteilungskommissionen) have been established, one for economic affairs and one for tourism. Their task was to approve the projects presented and to organise the related cash flow. The WiBAG therefore was overall responsible for the initial evaluation of projects, the decision on the co-financing rate, the claim of payments and the actual payment, the periodic control of projects, the final check of individual projects and the control of an adequate use of the financial means actually spent.

The implementation of ESF-funded measures in Burgenland was mainly conditioned by the Federal distribution of competencies and based on already

205 Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1999). Interview with the Austrian Conference for Spatial Planning (ÖROK). Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996). 206 This unit had already been strongly involved in the preparation of the Objective 1-programming document. It was now responsible for reporting to the Federal and European levels, for drafting annual reports on the programme implementation progress, for supervising the respect of rules laid down in the programming document, for elaborating the current financial tables and for implementing technical assistance. Finally, it assured internal information and training for other related departments of the Land government. 207 Based upon the Land's law on economic development (Landes-Wirtschaftsfördergesetz, WiföG), two former publicly owned external companies active in the field of economic development have been merged by July 1994 into one single company called "Burgenland Economic Service AG" (Wirtschaftsservice Burgenland AG, WiBAG). According to the Land's law on economic development, the WiBAG was charged on a trusteeship basis with carrying out specific support measures such as the initial evaluation for and the implementation or control of non- reimbursable subsidies as well as the coverage of sureties. - 109 - existing Austrian instruments.208 The formal administration of ESF-interventions at measure level was carried out by the relevant end-beneficiaries, but for each measure only one actor had be nominated “main end-beneficiary”. Due to the close links of Objective 1 interventions with the active labour market policy in Austria, a significant share of the ESF-funds had been connected to national measures. The administration of labour market interventions in the sense of the Austrian labour market service act are implemented by the AMS (Arbeitsmarktservice), which acted on behalf of the BMAGS and in own responsibility as end-beneficiary. In addition, a limited number of other ESF-measures in the Objective 1 programme had been implemented directly by other end-beneficiaries209, especially by the Land Burgenland in co-operation with the AMS (initial measures 1.5, 2.4 and 2.5). The ESF-funded interventions for which the Land Burgenland was acting as main end- beneficiary had been implemented by the WiBAG. Procedures in these cases had generally been comparable to the implementation structure prevailing for the ERDF- funded interventions.

As a result of this, the implementation structure of ESF-funded interventions in Burgenland was highly complex. General decision-making on the allocation of financial means was made in co-operation between the Burgenland AMS and the Land government. The institutional forum for these proceedings are monthly organised co-ordination meetings, where planned projects had been discussed independently from the status of the end-beneficiary. The discussions in the co- ordination meetings had and unofficial status were not a formal support decision. At the beginning of each year, a support programme was jointly elaborated in the co- ordination meeting that defined the funding priorities (and shares) of the Burgenland AMS and the Land government.210

For implementing the broad variety of EAGGF-interventions summarised under priority 4 of the Objective 1 programme, Austrian authorities mainly based themselves on pre-existing national or Land-level instruments. This approach also included an active use of the established structures in the field agricultural funding management. Within Burgenland, the administrative responsibility was formally with the Land‘s administrative department responsible for agriculture and forestry. The implementation structure in Burgenland at measure level are however highly complex: • The responsibility for implementing investment support to individual agricultural

208 According to the Federal constitution of Austria, competencies in the field of labour market policy are with the Federal ministry for labour and social affairs, which is also generally responsible for the administration and co- ordination of ESF-interventions. The BMAGS also co-ordinated the Austrian-wide elaboration, production and distribution of information and publication material in collaboration with the labour market service (AMS) and other end beneficiaries. 209 All labour market interventions that were not regulated by the Austrian labour market service act and all other projects not directly linked to the labour market had been implemented by other competent administrative units as end-beneficiaries. In case of an equal share of co-financing at the national level, a main responsible and end beneficiary has to be communicated to the Federal ministry for labour and social affairs. These administrative units have then the direct responsibility for implementing the measure or delegate the implementation responsibility to a third party. If such projects could not be identified on the ground of the dispositions contained in the Objective 1 programming document, relevant project proposals for ESF-funding were submitted by the competent administrative units to the BMAGS for appraisal and final approval. 210 The annual support programme mainly concerned projects carried out by independent organisms (Täger) active on the labour market (courses, project based measures). For these, co-financing had been provided for by the Land individually for each project. Support to individuals (integration subsidy on enterprise level, support to apprenticeship etc) was mainly financed by the Burgenland AMS. The qualification of employees was financed jointly by the AMS and the Land Burgenland (25%), and one-third of the share was mobilised by the Land Burgenland. - 110 -

holdings had been attributed to the Burgenland Chamber of agriculture. • The responsible unit for co-ordination and implementation of sector plan support measures was the Federal ministry for agriculture and forestry together with the Land Burgenland. At Federal level the implementation responsibility of sector plan support has been attributed to the ERP-fund, which was also in charge of implementing larger industrial and commercial projects funded under the ERDF- measures of the programme. The projects received by the Land administration Burgenland are checked by the ERP-fund with regard to basic economic criteria. After the approval through the ERP fund, the necessary funding from the Land is approved by a government decision. • The implementation of diversification measures is also shared: project development and preparation as well as the eligibility check and the pre-selection is carried out by the "Burgenland Agriculture Counselling Initiative" BABBI (see section 6.1.2. below), which acts in close co-operation with the Land government. The project approval is made by the Land based on a government decision. • The Land government department for agriculture is in charge of implementing accompanying measures for the reparcelling of agricultural land, which are carried out on the ground of joint measures. • The support to projects in the field of biomass was implemented mainly by the Land government's agricultural department, which is however supported by a specific counselling agency.

6.1.1.2. An analysis of Programme Monitoring Committee (MC) activities211

In line with the Austrian-wide standard clauses adopted for the management of Structural Funds programmes, a monitoring committee has been set up in Burgenland that dealt with the implementation of the Objective 1 programme and the Operational Programme for LEADER II. All aspects regarding the formal working conditions within the Objective 1 / LEADER II monitoring committee in Burgenland had been clearly defined in the internal rules of procedure.

As regards the membership on the Objective 1 monitoring committee (MC) and especially the participation of economic and social partners, Burgenland has adopted a specific solution that significantly differed from the general approach chosen by other Austrian Länder. Already during the first MC-meeting in January 1996, a debate on the draft internal rules of procedure has led to a discussion on the partnership based working modalities within the committee. The Austrian side clearly highlighted that the way of representing economic and social partners would need more time to be agreed upon in the national context. The Burgenland-internal queries on the MC-participation of economic and social partners had still not been resolved when the second MC-meeting was held in October 1996. Only at date of the third monitoring committee meeting in September 1997, the internal rules of procedure had been finally adopted.

According to the final version of the internal rules of procedure, only “administrative” partners involved in the programme implementation were members with full voting

211 Internal rules of procedure, Objective 1 and LEADER II Monitoring Committee Burgenland. Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 2000) - 111 - rights in all questions.212 As regards the social and economic partners represented on the MC213, the Land government had decided not to attribute them full voting rights mainly based on the argument "who does not pay does not vote". Despite this limitation, the Objective 1 MC was characterised by a broad representation of all interests concerned by programme. Already during the debate on a first draft of the "internal rules of procedure" at date of the first MC-meeting in January 1996, the representative of the European Investment Bank stated that he would not participate on the monitoring committee on regular basis and therefore did not insist on its voting right position.

According to the internal rules of procedure, the MC was to be chaired alternatively by a representative of the Federal level (Federal chancellery-BKA) and by a representative of the Land Burgenland. In reality, the representative of the Burgenland government chaired 4 of the 6 monitoring committees held in total, whereas the representative of the Federal chancellery chaired the remainder 2 meetings. The MC-secretariat was established at the ÖROK. The secretariat convoked meetings in close co-operation with the two persons chairing the MC and the Directorate General XVI of the European Commission. In agreement with the chair of the monitoring committee, the secretariat elaborated minutes of each monitoring committee meeting that were sent to the members 3 weeks after the gathering. The activities of the Objective 1 programme secretariat were financed from the technical assistance budget.

In accordance with the standard clauses adopted for Austrian monitoring committees, the Burgenland monitoring committee had the general task of steering and assuring the implementation and evaluating the measures of the Objective 1 programme and the measures of the Community initiative LEADER II in Burgenland. While observing a clear distribution of roles and respecting the competencies with regard to external representation and co-ordination as well as the implementation, evaluation and control of Community actions vis-à-vis the Community level, the Objective 1 programme monitoring committee in Burgenland was attributed the following more specific tasks214. Based upon this task definition, decision-making within the

212 4 representatives of the Federal level (Fund-corresponding Federal ministries: Federal chancellery - BKA; Federal ministry for labour and social affairs - BMAS; Federal ministry for agriculture and forestry - BMLF; Federal ministry for research - BMF). 4 representatives of the Land Burgenland (LAD, financial department, department for agriculture and that the WiBAG). One representative of each other co-financing Federal ministry (Federal ministry for environment, youth and family) and of each corresponding department within the Land Burgenland. One representative for each autonomously co-financing unit (ERP-fund, labour market service AMS), but only for issues related to co-financing. One representative for each competent directorate general of the European Commission and one representative of the European Investment Bank. 213 One representative of each the Austrian federation of local authorities (Österreichischer Gemeindebund) and the Austrian federation of towns and cities (Östrerreichischer Städtebund). One representative of each the Federal chamber of workers (Bundesarbeitskammer), the Austrian trade unions association (Österreichischer Gewerkschaftsbund), the Austrian presidential conference of chambers of agriculture (Präsidentenkonferenz der Landwirtschaftskammern Österreichs), the Austrian association of industrials (Vereinigung Österreichischer Industrieller), and the Austrian chamber of economy (Wirtschaftskammer Österreich). In addition, the internal rules of procedure did foresee 3 members with an observatory status that represent the neighbouring Austrian Länder to Burgenland (Vienna, Niederösterreich, Steiermark). 214 The MC exchanges information on all questions regarding the preparation, the adoption, the implementation, the evaluation and the control of the programming document. It supervises the respect of goals and development priorities or other technical prescriptions of the Objective 1 programme and deals with questions related to public relations. In particular, it discusses and decides upon a number of specific issues such as, (1) changes of the programming document for which the MC is competent in line with the rules and implementation prescriptions of the programme, (2) standardised elaboration of annual reports and a final report as well as the implementation of evaluation and control measures, (3) indicators for the financial and material implementation of measures designated to implement the operational programme and (4) all other questions regarding the preparation, the adoption, the implementation, evaluation and control of measures. - 112 - programme monitoring committee was based upon partnership and every decision had been taken unanimously between the present members with voting rights (those members having full voting rights in all questions and those members having only partial full voting rights).

Over the lifetime of the Objective 1 programme Burgenland, the monitoring committee has met 6 times. An initial meeting was held in January 1996, which was followed by a second meeting in October 1996 in Eisenstadt.215 In the year 1997, the monitoring committee came together for its 3rd and 4th meetings respectively in September and December.216 During the years 1998 and 1999, only one meeting of the MC had been organised respectively in October (5th meeting217) and July (6th meeting218). Decisions that were taken during the 6 monitoring committee meetings between 1996-1999 (also by using the written procedure) mainly concentrated on the following aspects: • annual use of the means for technical assistance, • changes of the original text of the programming document, • adoption or changes of the funding guidelines, • changes of the financial tables (ongoing adaptation of the ESF figures according to the accountability, shifting between ERDF measures, use of the means resulting from indexation for the years 1996 to 1999, shifting of the annual financial tables of the EAGGF), • inclusion of the start up of enterprise initiative of the Land Burgenland within the Objective 1 programme.

During the 6 meetings of the monitoring committee, the average number of participants was 37. The highest number of participants (47) could be observed in the first monitoring committee meeting in January 1996 and the lowest at date of the last monitoring committee meeting in July 1999 (31 participants). The role played by the different actors within the monitoring committee can be summarised as follows:219 • The Burgenland administrative representatives had considerable influence on all

215 In the 2 MC meetings organised in Burgenland during the year 1996, decisions had been made on the adoption of the internal rules of procedure, on minor changes to the programming document (according to point 5.1 literature b of the standard clauses), on the use of the means for technical assistance, on the adoption of the financial tables for the coming year and on standardised reporting structures for the annual reports. In addition, a description of the monitoring system was given during the first monitoring committee meeting (ERDF, ESF, EAGGF) and a detailed presentation on the progress of implementation of the different programme priorities took place during the second meeting in October 1996. 216 During the two monitoring committee meetings organised in 1997, decisions were taken on the annual report 1995/1996, on the use of financial means resulting from the indexation and on the use of means for technical assistance in 1997. During the third monitoring committee meeting in September 1997, a demand for changes of the financial tables 1996 for the ESF was adopted and a merger of measures 2.4 and 2.5. was decided. The fourth monitoring committee adopted a number of changes in the measure sheets of the programming document, which also resulted in a more general formulation of the initially more precise job creation targets (maintaining however the overall quantitative target). In addition, an extensive debate on the first results and the recommendations of the mid-term evaluation took place during the third and fourth monitoring committee meeting in 1997. 217 During the monitoring committee meeting of 1998, several shifts in the financial tables had been decided upon and the use of indexation means and technical assistance was adopted. In addition, the most recent annual report was discussed and a progress report for the ongoing year was presented. Finally, a newly created initiative for start-ups of enterprises had been discussed within the meeting. 218 At date of the last monitoring committee meeting in October 1999, decisions had been taken with regard to the use of financial means for technical assistance and for indexation, but also final shifts within the financial tables and the changes had been adopted. In addition, the annual report 1998 and a progress report for the current year 1999 were discussed and a progress report had been given on the "start-ups of enterprises initiative". 219 Interview with the Austrian Conference for Spatial Planning (ÖROK). Interview with the Federal ministry for economy and labour affairs (former BMAGS). - 113 -

phases of the work within the monitoring committee (preparation of meetings and drafting of documents, steering of the meetings, follow up of monitoring committee meetings). The major players within the monitoring committee where the ERDF-representatives from the Land administration, especially the representative of „European Office“ of the Land government (chair) and the director of the Land owned „Economic Service Burgenland“ (WiBAG). • The representatives from the Federal ministries have generally played a less active role then the Land level actors. An exception was the representative of the Federal chancellery (BKA), who initially wanted to play a more leading role within the monitoring committee. This ambition was however disputed to him by the Land actors. The other representatives of Federal ministries (e.g. Ministry of labour and social affairs, Ministry of agriculture and forestry, Ministry of finance etc.) merely limited their involvement to making individual statements with regard to specific issues of their concern. • The untypical approach of restricted voting rights for social and economic partners adopted in Burgenland has strongly affected their willingness to effectively participate in the ongoing work. This lack of co-operation and initiative is however not considered too important by the National Secretariat of the EU programme monitoring committee's (ÖROK). In fact, their direct involvement was also not too intensive in other Austrian programme monitoring committees on which social partners had full voting rights. In fact, voting rights of social partners within monitoring committees are considered merely a "marginal aspect", as the main emphasis of their involvement should concentrate on strategic discussion. • The role of observers from the neighbouring Länder (e.g. Vienna, Niederösterreich) was mainly that of listening to the proceedings of the programme and that of gathering/distributing information. • During the previous programming period, non-governmental organisations only played a very insignificant within the monitoring committee. Their role has however substantially increased during the new programming period 2000-2006, especially in the field environmental interest representation and gender mainstreaming.

The main benefit resulting from the partnership work process in the MC is frequently seen in their contribution to re-integrate the sometimes "sectoralised nature" of Structural Funds implementation. Joint work within the MC also contributed to increase interministerial co-operation at the Federal level. 220 In general, however, the partnership based work process in the MC is considered rather, especially in the context of a multi-funds programme. A specific issue of criticism is the overloading of the MC-meetings with technical aspects related to the programme management that should not be discussed in the broader framework of such a forum for strategic policy making. In addition, the technical details of operational changes of the programme should have been agreed upon before MC-meetings in order to allow for a broader strategy debate among the actors on relevant issues. 221

220 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 221 Interview with the Federal ministry for economy and labour affairs (former BMAGS). - 114 -

6.1.2. Other groups involved in the management of the programme222

Other actors involved in the management of the Objective 1 programme had mainly been various counselling structures set up in Burgenland, which provided i.e. support to the various administrative units within Burgenland and technical assistance to project applicants.

The most important of these structures is the Regional Management Burgenland (Regionalmanagement Burgenland GesmbH, RMB), which had received financial support for its broad range of activities from the technical assistance budget between 1995 and 1999. As other Regional Managements in Austria, general tasks of the RMB were to facilitate contacts between project promoters and the competent administrative funding authorities or to provide technical support to projects (e.g. give a first project related orientation, help to find more specific advice, provide orientation to actors with regard to the administrative funding structures, carry out conflict management). Other activities of the RMB concentrated on assuring information and publicity towards the Burgenland population, on organising specific events and on providing assistance to SMEs.223

In May 2000, an additional RMB-office in the southern part of Burgenland was opened (within the technology centre Pinkafeld). The main task of the new RMB- office is to provide information on Europe and counselling on support possibilities, to manage the natural reserve, to give advice on project development and to accompany projects. In addition, the RMB was also entrusted with managing the elaboration process of the new Objective 1 programme 2000-2006.224

By January 1997, the RMB has employed a specific person for ESF-counselling. The main tasks of the ESF-counselling covered three main areas. The support to an initiation of meaningful areas for the use ESF co-financing,225 technical assistance,

222 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1997, Jahresbericht 1999, Jahresbericht 2000 ). Burgenländische Agrar Beratungs- und Betreuungs-Iinitiative, BABBI: Burgenland und die EU. 223 As an associated member of the EURO-INFO-CENTRE network, the RMB had also mobilised efforts to facilitate the access of SMEs to information and counselling with regard to the Single European Market and to provide support for their internationalisation process. By the end of the programming period, the regional management was also active in organising specific events for Burgenland SMEs such as the "metal industry branch cluster event" (March 2000) and an event on awareness raising of SMEs with regard to the Internet (May 2000). The metal industry branch cluster event at the objective to bring together enterprises of this sector that are willing to co-operate in order to better use synergies within the sector. With regard to the awareness-raising event on Internet for SMEs, three specific conferences had been organised in Northern, middle and southern Burgenland. 224 The RMB was in charge of co-ordinating and organising the meetings and of drafting the relevant documentation in co-operation with the competent administrative units of the Land government, of the Federal level and of the Directorate Generals of the European Commission. Through the employment of an ESF- councillor, the RMB could introduce the experiences made in the working group on human resources and actively contributed to elaborate individual activities. In addition to the above-mentioned activities, the RMB also contributed to the organisation and co-ordination of the following actions: February 1999: contribution to the Burgenland working group on the new programming document, including experts of the Federal chancellery and the Austrian Conference for Spatial Planning. Organising a bottom-up approach event for SMEs in July 1999 to facilitate their participation in elaborating the new programming document. 225 The main activities should concentrate on information and public relations with regard to measures 1.5, 5.1 and 5.3 of the Objective 1 programme. In addition, SMEs should be counselled with regard to qualification in the framework of the existing funding guidelines of the AMS. The counselling activities should also help to bring together enterprise-based and extra-enterprise based actors in the field of qualification. Finally, the counselling had also the task to contribute to a further development of the contents of measure 1.5, 5.1 and 5.3. - 115 - counselling226 and the co-ordination of various administrative actors involved in ESF funding.227 The main geographical focuses of ESF-counselling activities were the 3 districts of southern Burgenland. Through a continuity of actions, the ESF counselling established itself as a first-stop-shop for regional SMEs as regards the advice for support in the field of human resources. During the year 1999, the ESF- councillor participated in various projects that aim at initiating sector specific or local "qualification alliances" (Qualifizierungsverbund). Examples are the promotion of a qualification alliance in the field of health and spa tourism or of various "district level qualification alliances" in southern Burgenland. In addition to these aspects, the ESF councillor within the Regional Management Burgenland also participated in the working group on human resources that was set up for the elaboration of the new programming document 2000 to 2006.

In order to support the emergence and implementation of “joint projects” in the field of agriculture, forestry and rural development, the Burgenland Chamber of agriculture and the Burgenland Land government agreed to set up an "agricultural counselling and accompaignment initiative" (Burgenländische Agrar Beratungs- und Betreuungs-Initiative, BABBI). BABBI was founded as a non-profit-making association between the Burgenland Chamber of agriculture, the Burgenland office of the Social Security Agency for Peasants (Sozialversicherungsanstalt der Bauern) and the Burgenland agricultural bank (Raiffeisenlandesbank).228 Over time additional organisations have joined the association, wherefore BABBI is currently composed of six members. The main activity of BABBI concentrated on initiating, co-ordinating, advising and accompanying joint projects in the field of agriculture.

6.1.3. The vertical partnership229

In the vertical partnership between national actors and Community level actors, a considerable learning process has taken place over the lifetime of the programme. However, a negative aspect experienced was the sometimes rigid and inflexible position of the Commission representatives during the partnership based work within the monitoring committee.

Generally speaking, one can say that the quality of the vertical inter-administrative co-operation in Austria was good: Co-operation between the administrative units responsible for the ERDF-interventions at Federal level and at Land level was very good and efficient. In order to further improve vertical co-operation between the Land level and the Federal level, the Land government had initially even suggested

226 Counselling of existing independent labour market project-structures (Träger) in Burgenland with regard to the development and implementation of projects and development of projects for the Burgenland AMS. In addition, the counselling should also assist in the ongoing programme monitoring, pre-check projects submitted and advise the AMS in the process of implementation. 227 One main function was to provide support to the AMS in its collaboration with the Burgenland Land government, the regional management and the WiBAG. Other tasks consisted in supporting the administration of ESF-operations and in implementing the ESF monitoring, but also in assuring co-operation with the "operational service" of the labour market service Burgenland. Finally, it should operate as a contact point for transnational projects and programmes in the field of labour market policy, qualification and employment. 228 To run the BABBI, the initially 3 partners received financial support of the Objective 1 programme between 1st of April 1996 until the 31st December 1999 that came to 100% from the technical assistance priority. 229 Interview with the Federal Chancellery (BKA). Interview with the Austrian Conference for Spatial Planning (ÖROK). Interview with the Federal ministry for agriculture, forestry, environment and water management. Interview with the Federal ministry for economy and labour affairs (former BMAGS). Minutes of Monitoring Committee meetings (4. Begleitausschußsitzung am 16. Dezember 1997). - 116 -

Federal institutions to participate in the Land-level committee meetings for project selection from the beginning on, but the latter had declined this offer. Also the degree of vertical co-operation between administrative labour market policy actors was positive, but the Ministry for labour and social affairs (BMAGS) had sometimes to put pressure on the Land in order eliminate implementation problems in some ESF- funded measures (e.g. measures 2.4 and 2.5). In the framework of EAGGF- interventions, the degree of co-operation between the various administrative levels involved was very good. This was mainly due to pre-existing and long-lasting vertical contacts and working traditions between the national funding structures involved in implementing agricultural support measures.

In the Austrian-internal vertical partnership between the Federal level and the Länder, one could sometimes observe tensions that arose during the implementation process. The main reason for these tensions had been delayed grant permission approvals for individual projects that were subject to mixed co-financing between the Federal level and the Land level, mostly resulting from the complex decision-making process for project selection. Such problems also occurred sometimes in the case of the Burgenland Objective 1 programme.

6.1.4. The horizontal partnership230

Problems encountered in the wider horizontal partnership of the Objective 1 monitoring committee were dominantly a result of the Burgenland-specific option that excluded economic and social partners from the group of members with full voting rights (voting rights except on financial matters). With regard to this result, social and economic partners have maintained a rather critical position during the lifetime of the programme. Despite their regular presence during MC-meetings, the restrictive approach chosen by the Burgenland government has led to a rather conflictive horizontal co-operation. The absence of voting rights for Burgenland’s social and economic partners was also one cause of their lacking willingness to effectively participate in the ongoing work of the monitoring committee.231 Especially the Burgenland Chamber of employees and workers had been concerned by this rather conflictive relationship within the MC.232

In addition to these more basic conflicts, all representatives of the social partners in Burgenland (Chamber of economy, Chamber of employees and workers, Chamber of agriculture) stated that joint work within the MC was frequently over-technical and over-administrative. Therefore, little if no place was left over for general strategic discussions on the programme. Especially the representatives of the Burgenland Chamber of employees and workers consider that such discussions could have improved to some extent implementation process of the programme. 233

As a summary, one can observe that the involvement of social and economic

230 Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996, 2. Begleitausschußsitzung am 14. Oktober 1996, 3. Begleitausschußsitzung am 29. September 1997). 231 Interview with the Austrian Conference for Spatial Planning (ÖROK). 232 They had sometimes been treated very harshly and could only "participate and be quite." In this case it was not astonishing that the representatives did not actively engage themselves in the daily issues of the programme. Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). 233 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 117 - partners in Burgenland was not very active. This did however not distinguish the Burgenland situation from a general phenomenon that could be observed in other Austrian Structural funds programmes (e.g. Objective 5b programmes).

6.1.5. An assessment of the capacity to manage the Objective 1 Programme

To what extent did the organisations involved have the capacity to manage the Objective 1 programmes in 1994? Sufficient Only with Not Evidence base difficulties sufficient Time X • Implementation problems due to administrative issues sometimes occurred in the beginning, but had been clarified over time. • Despite some minor tensions, one can generally observe and improvement of vertical inter-administrative co-operation between the Land and the Federal level. Knowledg X Good preparation before the adhesion. e Numbers X (General) X (ESF) • General: Valid support from the assistance units such as of staff RMB and BABBI. • ESF: Initial delays in implementation, improvement after the creation of ESF-counselling within the RMB.

6.2. The project selection process234

Within the initial Objective 1 programme Burgenland, each “measure sheet” contained at least one (frequently 3-5) general but non-quantified project selection criteria. In the field of ERDF-support measures, the selection criteria are generally clear and relevant to the purpose of the specific sub-objectives pursued. The same is true for ESF-funded interventions and the technical assistance priority. The measure- sheets of EAGGF-interventions did not list specific selection criteria, which can mainly be a consequence that other national or EU-support schemes have been used as implementation framework (which in turn contain specific selection criteria).

For the project based implementation of the Objective 1 programme, a rigorous but rather complex project appraisal system was established in Burgenland.235 As a general rule, one can say that project proposals submitted for funding under the Objective 1 programme had normally been received by the Fund-competent administrative units at Land level and then introduced in the administrative process (elaboration of a dossier). After this procedure, proposals were submitted to specific selection organisms that had been set up in Burgenland for each fund (ERDF, ESF,

234 Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1999). Minutes of Monitoring Committee meetings (5. Begleitausschußsitzung am 07. Oktober 1998). Agrarabteilung des Amtes der Burgenländischen Landesregierung: Stand der Umsetzung des Programmplanungsdokumentes, Prioritätsachse Landwirtschaft und Naturschutz. Minutes of Monitoring Committee meetings (3. Begleitausschußsitzung am 29. September 1997). AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1- Gebiet Burgenland. 235 The information available does not allow to determinate how long on average it did take to approve a project. Specific references (where possible) will be made in the context of each decision making process. - 118 -

EAGGF) in order to ensure a co-ordinated and unified selection procedure. These so called "funds-specific co-ordination meetings" (fondsspezifische Koordinierungssitzungen) had an advisory status for the Land government and came together on a regular basis (every 6-8 weeks). They were composed of representatives from the most important functional administrative units and from the overall co-ordination unit at Land level, the unit "European office and statistics". During these co-ordination meetings, the projects submitted for funding under the Objective 1 programme were checked with regard to their basic eligibility (e.g. correspondence to the general development objectives) and specific funding recommendations were elaborated for the Land government. Within this process, the „European Office“ played an important role: it took over the organisation and the chair in "fund specific co-ordination meetings" for project selection and also assured the secretariat function. In addition, the European Office checked on the coherence of EU projects with the programme.

The general selection and approval process for ERFD projects in Burgenland can be summarised by 7 basic steps: • Arrival of the project proposal at the competent administrative funding unit, registration of the proposal and elaboration of an administrative document. • Preparation of an administrative funding dossier: categorisation of the project according to the programme's priorities and measures, visualisation of the financial planning for the entire life cycle of the project, description and evaluation, elaboration of notes as regards the degree of completion of the application, circulation to other competent administrative units, co-ordination of the co- financing rate with other co-financing units. • Submission of the project dossier to the "funds specific co-ordination meeting" and elaboration of a funding proposal for the Land government. • Decision of the Land government regarding the precise funding rate of ERDF- means and means from the Land budget. • The competent WiBAG "evaluation committee" (on economic affairs or on tourism) decides the funding approval. • Transmission of the funding approval and the funding contract from the WiBAG to the project leader. • Registration of the project in the monitoring system.

The specific Burgenland model composed of the close links with the WiBAG and a rather simple structure for project management (high tendency towards "lean management") can be considered a good practice example for Austria during that period. 236

Those ERDF-projects being subject to a "mixed financial participation" of Land support schemes and of various Federal funding instruments had also been submitted to a specific „committee for mixed funding“, which allowed the different (national) funding institutions to articulate their position as regards the specific projects presented for selection. Due to the involvement of different levels of government and the rather complex evaluation and selection process, one could observe long approval periods that lasted for some projects up to 4 and 5 months. The delayed approval was at various occasions criticised by the Burgenland government.237 But the main reasons for delays had been mostly incomplete funding

236 Interview with the Austrian Conference for Spatial Planning (ÖROK). 237 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 119 - dossiers that were submitted by project leaders (in about 90% of the cases registered).238 Also in this context, a significant learning process between all actors involved can be observed over the lifetime of the programme. 239

Support decisions on ESF-projects in the field of labour market policy were made independently by the Burgenland AMS and the Land government. • Within the context of ESF-funded interventions for which the AMS Burgenland was acting as main end beneficiary, projects had been first submitted to the AMS Advisory Council that issued a funding recommendation. In a second step, projects were submitted to the board of the Burgenland AMS. Except in those cases where the board finally decided on a project, final decisions on project approvals were normally made by the director of the Burgenland AMS. The implementation of measure 5.1and 5.2 were generally characterised by a routine based implementation. For measure 5.3. one could however observe some initial administrative difficulties, which was partly due to the fact that activities supported had been new for the Austrian context and the AMS.240 • Within the context of ESF funded interventions for which the Land Burgenland acts as main end beneficiary (measures 1.5, 2.4 and 2.5), the task of the WiBAG was to advice project applicants, to check on project submissions and to elaborate a pre-selection for the „fund specific co-ordination meeting“. Already during the preparation phase, a continuous exchange of information was normally organised between the Burgenland AMS and the WiBAG in order to co-ordinate the attribution of funding for continuous training. As the Land Burgenland had no formal legal base to approve funding for labour market projects, a formal government decision funding was needed for each recommended project. This aspect has led to time-consuming approval processes, which the Land in turn tried to counterbalance by so-called "en-bloc decisions". This very complex decision-making procedure has in practice led to significant delays in the commitment and payment of financial support coming from the Land.

Partly due to the broad variety of different EAGGF-interventions supported under the Objective 1 programme within Burgenland and partly as a result of lacking information, only procedures for the most important support schemes will be described: • The responsibility for implementing investment support to individual agricultural holdings had been attributed to the Burgenland Chamber of agriculture. The Chamber only accepted projects that were accompanied by a plan indicating the detailed improvements of the holding. • Projects in the field of sector plan support were received by the Land administration Burgenland and had been „pre-selected“ by the EAGGF-specific co-ordination committee at Land level. Due to the delegation of implementation responsibilities by Federal ministry for agriculture and forestry to the ERP-fund, projects had also been checked by the ERP-fund with regard to basic economic criteria (within the „Sector Plan Advisory Council" of the ERP-fund). After the approval through the ERP fund, necessary funding from the Land was approved

238 Interview with administrative actors in Burgenland involved in the programme management (Land administration, AMS, Chamber of agriculture). 239 Interview with the Federal Chancellery (BKA). 240 A significantly delayed implementation could be observed during the first 2 years, mainly as a result of the slow administrative-technical handling of the support dossiers. In order to speed up the implementation process and the administrative assessment/approval of dossiers, additional human capacity was contracted in 1996 that has led to the establishment of an ESF-counsellor within the Regional Management Burgenland in 1997. - 120 -

by a government decision. • Support to the preparation of projects in the field of diversification measures has been provided for by the "Burgenland Agriculture Counselling Initiative" (BABBI). Later, the same organism also checked their eligibility and pre-selected them in close co-operation with the Land government. The project approval was made by the Land based on a government decision.

6.3. The financial management systems241

In Austria, the so-called "Fund-corresponding Federal ministries" normally received the financial means of the relevant Structural Funds programmes, which were then distributed towards the administrative units responsible for project implementation. The Funds-corresponding ministries also collected and further prepared the annual reports (then transferred to the corresponding DGs of the European Commission) and had been in of the relevant fund-specific monitoring systems set up in Austria (See section 6.4 below). According to the information available, neither were problems experienced in the creation and implementation of the financial management systems nor has the financial system itself evolved or changed during the period 1995-1999.

The mechanism for the financial management of ERDF-measures within the Objective 1 programme can be described as follows: The EU contributions that co- finance Land level measures were registered in the Federal budget under heading for the Federal chancellery (BKA) as the „Fund-corresponding ministry“ and were then distributed to the Land according to the previously agreed rate of co-financing. The EU contributions that co-financed Federal measures were registered in the Federal budget under the heading of the relevant Ministry competent for the implementation.

For all the ERDF-projects in Burgenland, payments of the EU contribution and the Land contribution were carried out by the WiBAG or the Land. If specific ERDF- projects were supported according to the guidelines of the Land's economic development law (WiföG) and if specific prescriptions were contained in the trusteeship contracts with the Land, the WiBAG also took over the role as a paying authority. The payment of the co-financing means coming from the Federal level had been carried out totally separated from this approach at Land level by the competent administrative services of the national government.

The WiBAG itself made financial claims to the Land and normally received the means via a summary account transfer composed of ERDF-means and Land-means. Within the WiBAG, the summary account transfer had been split on different accounts according to the funding priorities (for general economic affairs and for tourism) and according to their specific origin (the ERDF means and Land means). The Austrian Court of Auditors therefore concluded that a transparent separation and distinction of financial means at project level had existed within WiBAG. The duration between a

241 Annual Report for the Objective 1 Programme (Ziel 1 Burgenland, Jahresbericht 1995). Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996, 5. Begleitausschußsitzung am 07. Oktober 1998). Agrarabteilung des Amtes der Burgenländischen Landesregierung: Stand der Umsetzung des Programmplanungsdokumentes, Prioritätsachse Landwirtschaft und Naturschutz.. Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). - 121 - financial claim from the WiBAG to the Land and the reception of the summary transfer on the accounts of the company was between three weeks and one month.

Based upon an initial financial claim coming from a project, a first payment was made by WiBAG only if more than 50% of the foreseen project cost were effectively spent. At the date of each payment, the WiBAG checked projects upon their progress, the eligibility of specific measures and the planned use of financial means etc. If these general checks of WiBAG had been concluded positively, the financial means normally transited about one week on the accounts of the company. If there had been irregularities or delays caused by the project leaders, the transiting duration was at the maximum 3 months. In a specific report on Burgenland, the Austrian Court of Auditors concluded that the transiting duration of financial means as well as the proceedings of WiBAG had been in conformity with the technical prescriptions on the financial implementation of interventions as laid down in the Objective 1 programming document.

The financial management of ESF-interventions was regulated by the standard clauses and in parallel by a number of national technical prescriptions.242 Financial means of the ESF were first received by the Federal ministry of finance, who transfers them to the Federal ministry of labour and social affairs. The latter then transfers the ESF-means to the relevant end-beneficiaries within Austria. According to the technical prescriptions of the standard clauses, end beneficiaries are • the labour market service (AMS) for all ESF interventions that are administered and financed by the service on the ground of the Austrian labour market service act, • the Federal offices for social affairs and disabled (BSB) for ESF interventions it in favour of disabled persons that are administered and financed by the offices on the ground of the Austrian act on employment of disabled, • the Federal ministry for labour and social affairs (BMAGS) for ESF interventions on the labour market covered by the Objective 1 programme that are directly administered and co-financed by the ministry. For all other funding cases that were not covered by the above-mentioned end- beneficiaries, other administrative bodies with technical competencies that take over the majority of national co-financing and assure direct responsibility for the implementation of measures (or organise the delegation of tasks to third parties) were acting as end beneficiaries.

The BMAGS assured in its function as Fund-corresponding national administration that financial amounts not attributed according to the rules of the programme had been claimed back and were re-used again according to the rules. In addition, the payment and receipt of Community financial means was subject to a general control of the Austrian Court of Auditors. The Court examined whether activities had been in line with existing laws, administrative regulations and other technical prescriptions and whether they had been in conformity with the principles of efficient, economic and target orientated use of financial means.

The financial management of EAGGF-measures in the programme operated inversely to the vertical chain of responsibilities in the implementation process: The

242 such as the rules of the Federal budget act, the Federal financial act, the Labour Market Service Act, the Act on Employment of Disabled and through regulations of the Federal ministry for labour and social affairs regarding the implementation of measures supported by the ESF in the field of labour market policy. - 122 -

Burgenland Chamber of agriculture (as the lowest operational level for implementing the measures) claimed the related co-financing means of the Land from the agricultural division of the Land government administration Burgenland and the Federal and European level contributions from the Federal Ministry of agriculture and forestry. In the field of investment support, projects were only accepted if a plan for the improvement of the individual holding had been elaborated. Payments were made only when related proofs had been presented.

Controls of the Objective 1 programme243

In order to assure an efficient control of Structural Funds interventions in Burgenland, a number of organisational changes had been made within the Land level administration (i.e. separation of administrative units responsible for functional aspects as well as for commitment and payment related aspects; systematic mutual control according to the 4-eyes principle; systematic checks of the Land accountability service). Within the Burgenland government administration, department III (finance and accountability) was responsible for financially supervising the accountability of other units of the Land administration and also involved in the internal revision process.

In November 1996, the European Court of auditors jointly with the Austrian court of auditors carried out a control. No observations had been made by the two controlling organisms. In addition, controls were operated at the level of each funding unit in Burgenland on the spot. In March 1997, a control visit of the European Commission (DG V) took place. As a result of the control, the personal cost of the RMB had to be newly structured. As a follow-up of the control in March 1997, an additional visit of the Commission's DG V was organised by the in March 1998. As a result, the visiting report stated that the RMB and the labour market service AMS had now clarified the previously observed deficiency. In addition, the competent department for financial control and auditing of the Burgenland government has controlled the financial means of the ESF and the Land attributed to the RMB in March 1998. During the month of June 1999, finally, DG XVI of the European Commission has carried out controls on the spot in Burgenland. During the control, several deficiencies regarding the monitoring and implementation of Objective 1 funding coming from the Federal BÜRGES funds had been observed. The Federal chancellery has also effected a control, identified the deficiencies and corrected them.

According to the overall impression that can be derived from the above-mentioned observations, one can consider the control system established had been of sufficient quality, rigour and strength. On the ground of the information available, the evaluator is however not able to indicate How many projects were audited between 1995 and 2001?

243 Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). Annual Reports for the Objective 1 Programme (Ziel 1 Burgenland, Jahresberichte 1997, 1998, 1999). - 123 -

6.4. The monitoring structures244

Funds-specific arrangements

The monitoring system for the ERDF-interventions was set up on the ground of a specific software program, which should allow the competent leading administrative co-ordinating units at the Federal level (BKA) and at the Land level to proceed to automatic evaluations and to be informed on the latest degree of implementation. ERDF-monitoring data were gathered at the level of the basic structure of the Objective 1 programme (e.g. priorities and measures, share of community co- financing, indicative distribution of financial means, responsible administrative level) and at the level of the actually co-financed activities (e.g. data on the approval, the volume of investments, the volume of support attributed and degree of payment etc., data on the indicators).245 Horizontal and vertical co-operation in the field of ERDF- monitoring were considered good, as no single case of double funding was registered during the programme period.

At national level, the ERDF-monitoring system was established within the ERP-funds. The activities related to monitoring had been financed by the technical assistance budget of the programme. During the lifetime of the Objective 1 programme, the quality of the national ERDF-monitoring system had been improved. In 1999, a project decision in the framework of technical assistance was taken that aimed at creating the technical capacities for a periodic electronic data exchange between the ERDF monitoring established at the ERP fund and the Directorate General XVI of the European Commission. The creation of this facility was explicitly demanded by the Commission in order to allow for more timely information on the degree of implementation of the programmes in Austria. Based upon the positive experience gained with the national ERDF-monitoring system during the 1995-1999 programming period, the activities had been continued under the new programming period 2000-2006. However, discussions on indicators have become more intensive and especially with regard to the new Objective 1 programme for Burgenland, public authorities consider requests to be over-complex and inadequate compared to the small size of the programme. 246

Within Burgenland, the Regional Management Burgenland (RMB) was acting as the Land internal ERDF-monitoring division. The RMB-monitoring unit was in charge of elaborating and actualising the project data for the Land level and for the monitoring system established at Federal level (e.g. the ERP fund).247 The payment data of Land department for finance and accountability (department III) where gathered on a

244 Minutes of Monitoring Committee meetings (1. Begleitausschußsitzung am 30. Januar 1996, 4. Begleitausschußsitzung am 16. Dezember 1997, 5. Begleitausschußsitzung am 07. Oktober 1998). Annual Reports for the Objective 1 Programme (Ziel 1 Burgenland, Jahresberichte 1999, 2000). Rechnungshof Österreich (Austrian Court of Auditors): Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1). 245 During the first monitoring committee meeting in 1996, the Austrian side proposed to elaborate data at the level of the basic structure of the programme for the next meeting of the monitoring committee and to currently gather data at the level of individual activities in regular intervals (planned 3-6 months). 246 Interview with the Federal Chancellery (BKA). 247 In this context the unit was entrusted with normal routine work for the Objective 1 programme (but also for INTERREG programmes in Burgenland), such as the gathering of project information, elaboration of the necessary statements, ongoing check on project information presented, elaboration of different analyses, elaboration of documentation for the monitoring committee meetings, elaboration of internal planning documents, co-ordination etc. - 124 - monthly basis and other project related data of the Land normally on a 3-monthly basis. With regard to the WiBAG-projects, monitoring was even actualised on a day- by-day basis. During the 4th MC-meeting in December 1997, it was decided that the RMB-monitoring system would gather information also for additional indicators on a pilot project basis (e.g. foreign direct investment; gender specific assessment of employment created at the beginning and at the end of a project; innovative nature of the project).

The monitoring system for ESF-interventions was set up according to the standard clauses defined to assure an accurate implementation of the programming document. In order to assure transparency, financial data of all relevant units in charge of administering ESF-means (end beneficiaries) were gathered separately.248 Within the context of the labour market service AMS as the most important end beneficiary of ESF-interventions, a computer based monitoring system was established that aimed at allowing gathering of data in the competency of the AMS.249 With regard to the planning of measures, projects were also submitted to an internal evaluation through the AMS. For the purpose of data gathering, the relevant end beneficiaries obliged project leaders on ground of a contractual basis to provide such information. The monitoring of ESF-funded interventions for which the Land had been the end beneficiary was carried out within the Land administration and compiled, together with the data of the Burgenland AMS, at the Federal level.

For the monitoring of EAGGF-interventions, data were transferred to the Federal Ministry of agriculture and forestry by the 4 important funding authorities.250 As the projects funded in the framework of the EAGGF would have a spatial impact, it was decided that relevant monitoring and evaluating data were included into a specific monitoring system established in Burgenland. The activities related to the GIS-based monitoring for agriculture in Burgenland had been financed by the technical assistance budget of the programme. With regard to EAGGF monitoring, no problems were encountered during the life cycle of the programme.

Overall assessment

Since the third monitoring committee meeting in September 1997, one can observe that monitoring data gathered had been used to elaborate specific progress reports on the implementation of the Objective 1 programme that were presented during these meetings.251 With regard to the quality of the monitoring data presented in these progress reports, one can summarise the situation as follows:

248 The various end-beneficiaries (AMS, Land etc.) gathered all relevant data for monitoring and evaluation, which were then transmitted to the fund corresponding Federal ministry of labour and social affairs (BMAGS). The end beneficiaries also assured that the relevant technical prescriptions of the European Union regarding financial controls were respected and that the relevant data had been made available and accessible for purposes of control. If several structures were providing national co-financing for a measure, the responsibility with regard to budgetary documentation and data gathering was with each participant. 249 Measures 5.1, 5.2 and 5.3 for which the AMS Burgenland had been the end beneficiary, were permanently checked upon in the framework of the monitoring and budgetary supervisory system. The measures had also been checked against their relevance with regard to the labour market, the sound use of support means and the respect of contractual agreements concluded. 250 Data on the compensation subsidy by the "Agrarmarkt Austria" (AMA). Data on projects related to processing and marketing according to regulation EEC no. 866 by the ERP-fund. Data on measures at the level of individual holdings (Objective 5a-similar measures) by the Burgenland chamber of agriculture. Data on all other EAGGF- measures of the Objective 1 programme by the agricultural department of the Land government administration of Burgenland. 251 Such reports have been elaborated by the AMS for the ESF-measures under its own responsibility (September 1997), by the Regional Management Burgenland for all remainder ERDF, ESF and EAGGF-programme - 125 -

• The data presented in the AMS-progress report covered both a precise overview on the financial execution and an assessment of the outputs achieved by the individual measures (e.g. number of participants, gender specific presentation of results, project specific presentation of results etc.). • The data presented in the RMB-progress reports covered mainly the financial dimension of the programme (aggregated data for commitment and payment rates at Funds and measure level), but also a summary of the main material achievements (general highly aggregated data on new jobs created and existing jobs secured; on the number of enterprises supported or the beds created etc.). • The EAGGF-progress report of the Land government gave a detailed overview on the financial execution of the programme measures and the projects supported, but the assessment of the real achievements was rather weak. In addition to the above mentioned reports, the Land government has elaborated half yearly implementation reports on the Objective 1 measures for the elected Assembly at Land level. The co-ordination and drafting of these reports was the task of the Land administration unit "European office and statistics".

An interesting example that documents the benefits of the general monitoring approach is elaboration of a „pilot study assessing the environmental impact of the Objective 1 programme Burgenland“.252Based on the monitoring data gathered by the Regional Management Burgenland in addition to the national monitoring system, the pilot study assessed more than 600 projects with a total volume of public funding of around 4.5 billion Austrian shillings (total cost 12.9 billion Austrian shillings).

6.5. Programme evaluation253

During the first MC-meeting in January 1996, the European Commission suggested to carry out a mid-term evaluation that would cover both the Objective 1 programme and the LEADER II initiative in Burgenland. Subsequently, the Austrian authorities prepared a tender for the mid-term evaluation.

The contract for elaborating the mid-term evaluation was attributed to the Austrian Institute for spatial planning (ÖIR).254 The final mid term evaluation report has formulated 16 recommendations for the Objective 1 programme (see overview table below). The mid-term evaluation was extensively debated within the Objective 1 monitoring committee, especially during the 3rd and 4th monitoring committee meeting in 1997. The quality of the mid-term evaluation is generally considered good, especially if one considers the short time framework and the generally weak culture of evaluation prevailing in Austria right after the accession to the European Union. Due to lacking experience with EU-Structural Funds interventions, the Burgenland mid-term evaluation was also considered a "precursor" in the nation-wide context.255

measures (October 1998, July 1999) and once by the Agriculture and forestry department of the Land government for the EAGGF-programme measures (October 1998). 252 Österreichisches Institut für Raumplanung: Umweltwirkungen von Strukturfondsprogrammen am Beispiel des Ziel 1 Programmes Burgenland. Wien, September 1999. 253 Minutes of Monitoring Committee meetings (1. und 2. Begleitausschußsitzung am 30. Januar 1996 und am 14. Oktober 1996, 3. Begleitausschußsitzung am 29. September 1997). 254 Evaluation work was carried out during the year 1997. In April 1998 the final long version and a short version of the evaluation report had been accomplished. 255 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 126 -

A good example that the frequency and quality of evaluation work increased between 1995 and 2000 is the decision of the 5th MC-meeting in 1998, to carry out a pilot study on the evaluation of the environmental impact of the Objective 1 programme. This study was co-financed to 50% by the ERDF and to 25% each by the Federal level and the Land Burgenland. The representatives of the Commission suggested to initiate an exchange of experience with an ongoing parallel project carried out under the Objective 2 programme Steiermark. For the purpose of this pilot study, the monitoring committee has set up an accompanying working group. During the last MC-meeting in July 1999, a first report on the pilot evaluation study was presented.256 The representatives of the Commission highlighted that the pilot study could be considered an innovatory and novel approach that could also be of importance outside of Austria.

Recommendations of the mid-term evaluation Management • Streamlining of the implementation of future programming documents (reduction of the and funding guidelines, improvement of co-ordination between Federal level and the land organisation: level). • Improvement of the monitoring system (qualitative project descriptions, indicator for the quality structure and on the regional origin of employment, environmental indicators). • Integration of environmental planning within the next programming document. ERDF part of • Launching of a start-up of enterprise initiative in southern Burgenland. the Objective 1 • Support to collective and innovatory projects in the field of an innovative regional programme: development strategy. • Extension of the infrastructure for continuous training in southern Burgenland. • Continued implementation in the field of tourism (establishment of efficient tourism organisations). ESF part of the • Implementation of innovatory measures in the field of labour market policy. Objective 1 • Improvement of the co-operation of fund corresponding administrative units. programme: • Simplification of the decision-making in the field of labour market policy orientated measures at Land level. • Implementation of the qualification measures 1.5, 2.4 and 2.5 for which the Land Burgenland is acting as end beneficiary. • Extension of the ESF counselling. EAGGF part of • Analysis of the implementation structure in order to explain problems that had occurred the Objective 1 between the different support measures. programme: • Improvement of the framework conditions in order to extend further distance heat provision on the ground of biomass. • Assessment of the real funding needs in the framework of measure 4.3. and eventually shifting of financial means to other areas. • Assessment of the effects of individual measures in the field of training and counselling for agriculture and forestry at an individual holding level (measure 4.4.).

The discussion on the forthcoming ex-post evaluation of the Objective 1 programme during the sixth monitoring committee meeting in July 1999 concluded that financial means of the technical assistance budget should be devoted to such an exercise. The representative of the MC-secretariat (ÖROK) highlighted however that the ex-post evaluation was finally not carried out, mainly as a consequence of the Commission’s decision to undertake an own ex-post evaluation.257

In addition the stimulation of a new process in the Austrian-wide context, the value added of the above mentioned evaluation exercises added to the effectiveness of the programme was mainly

256 Within this context, more than 600 projects supported by the Objective 1 programme had been assessed with regard to their environmental impact. 257 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 127 -

• to give operational suggestions helping to improve the implementation process during the remainder programme phase (mid-term evaluation: e.g. suggestion to launch a “start-up of enterprise initiative”, other operational recommendations), • to help preparing a new monitoring dimension in Burgenland for the forthcoming programming period (pilot study on environmental assessment: definition of evaluation context and criteria).

6.6. Synergy effects

Internal effects: How strong were the linkages between the priorities and measures of the programme? External effects: Did the Objective 1 programme directly support other national / regional initiatives or strategies (either through funding links or policy linkage)? Yes No Please provide examples ERDF But Support to the dominantly ESF-financed interventions under priority 5 (creation weak / extension of educational facilities). ESF But Support to ERDF-financed interventions of priority 1 (complementary weak intervention carried out by the Land). Support to ERDF-financed interventions of priority 2 (complementary intervention carried out by the Land). EAGGF X One EAGGF-priority with measures only co-finance by this Fund. Implementation in the context of the established national agriculture and forestry support structures. Other X ERDF, ESF, EAGGF: Strong linkage with existing national or support schemes national and programmes (ERDF: national funding schemes in the field of regional policy ; ESF: national labour market policy ; EAGGF: national support structure). Other X ERDF: Strong linkage with measures foreseen by the existing Land act on regional economic development.

6.7. Equal opportunities and the environment

6.7.1. Equal Opportunities

How effectively did the management and implementation system tackle Equal Opportunities? Role Effectiveness Selection criteria None ? Special working group None ? Specific projects ? ? Informal understanding ? ? Other (please state) - -

6.7.2. Environmental priorities within the programmes

How effectively did the management and implementation system tackle environmental issues? Role Effectiveness Selection criteria None Special working group Yes, monitoring committee: Working group for Good: preparation for setting up an the pilot study on environmental impact environmental monitoring system in assessment 2000-2006 Specific projects Yes: pilot study on environmental impact Good: preparation for setting up an assessment environmental monitoring system in 2000-2006 Informal understanding - - Other (please state) - - - 128 -

6.8. Conclusions: Achievements and improvements of the management, implementation and evaluation system between 1995-1999

The management and implementation system for the Objective 1 programme in Burgenland was highly complex but rather well integrated, mainly due to the existence of well-established vertical and horizontal relations among the relevant key actors. Especially the relatively less fragmented implementation structures for ERDF- interventions within Burgenland (compared those of the Federal level) have certainly contributed to promote an effective implementation of programme activities. This is also true for the EAGGF-interventions, where traditional implementation structures had been used and new support structures were created to support the implementation of novel actions in the Austrian context (BABBI). The ESF- implementation structures were well integrated in the context of traditional AMS- labour market policy measures, whereas the sequential decision making system for ESF-measures that had been implemented by the Land Burgenland proved to be less efficient (individual government decision needed for project).

The most important aspects that positively contributed to an effective implementation of the Objective 1 programme were the following: The strategy to build upon the established funding and support schemes existing in Austria can certainly be considered a very positive aspect in the beginning. Another important factor in the case of Burgenland was the strong degree of identification of the political level with the strategic objectives of the programme. This enhanced leadership and co-ordination among Land actors and a bundling of resources. Finally, the strong degree of institutional concentration within Burgenland as regards administrative implementation of the programme in combination with the creation of a single support instrument for economic development in Burgenland (WiBAG) was a very positive aspect, compared to the situation in other Austrian Länder at that date.

The aspects that have negatively affected the effectiveness of the Objective 1 programme in Burgenland can be summarised as follows:258 • The already highly fragmented Austrian system of support instruments experienced a considerable increase in complexity when the Community instruments had been added, which sometimes created significant difficulties during the implementation phase. In the specific case of Burgenland, one can however observe that fragmentation mainly resulted from the inclusion of numerous Federal support instruments (due to the fact that the Land level had previously concentrated its own support instrument structure). • Due to the fact that Burgenland had only recently restructured its own instruments for regional economic development (in 1994) when the programme came into operational effect, the practical implementation of a number of measures was sometimes hindered by the still limited working capacity of these new structures • In addition, the practice of mixed financing between the Land and Federal levels has created at several occasions mutual conflicts, which were mainly due to delayed approval of projects that have been submitted to the mixed committee established for selection.

Also in the view of major stakeholders, Austria's participation within the

258 Interview with the Federal Chancellery (BKA). - 129 -

Structural Funds management and implementation systems has produced lasting improvements with regard to data gathering, monitoring and evaluation. The ERDF-monitoring system established at the ERP-fund is considered very effective. The Structural Funds monitoring approach has generally improved the scope of data gathered for regional development in Austria, compared to the weak degree of data available previous to the first Structural Funds programming period (1995-1999).259 Over the life cycle of the Objective 1 programme 1995-1999, the awareness with regard to ESF-related monitoring and evaluation has developed from a "0" position towards a broad acceptance at the end of the programme.260 But also the experiences gained with the EAGGF-monitoring system where considered very positively, as they allowed the Austrian actors to proceed to an evaluation of their intervention policy. 261 • Especially in the case of Burgenland, the Objective 1 programme monitoring approach has particularly increased the transparency and quality of data available. A negative aspect experienced by the Austrian authorities was the over complex system of indicators with relatively unclear general objectives, which was in no means corresponding to the relatively small size of the Objective 1 programme Burgenland. 262 • The 1995-1999 programming period has also increased the culture of evaluation throughout Austria and especially the Burgenland programme can be considered a pilot with regard to the first mid-term evaluations carried out. 263 • A final interesting aspect worthwhile to highlight has been the „pilot study assessing the environmental impact of the Objective 1 programme Burgenland, which was carried out by the end of the programme‘s implementation phase (1998/1999) with support from the technical assistance budget.

Joint work within the Objective 1 monitoring committee has significantly contributed to improve the vertical co-operation between the administrations at the Federal and Land levels. This has increased the overall degree of co-ordination between the Land administrations and the Federal administration, but especially the co-operation and co-ordination between the specialised fund corresponding administrative units at both levels. The significant improvement of mutual co- operation has contributed to institutionalise mutual co-operation and to increase transparency. Over the time, it has also contributed to create a timely well co- ordinated steering structure for the overall programme management. 264 Although the formal settings of the monitoring committee have allowed a broad representation of social and economic partners in Burgenland, one must however observe that their involvement in the ongoing work has remained rather limited. The main reasons responsible for this situation in Burgenland have been discussed in detail above (limitation of voting rights).

The Structural Funds implementation model has introduced significant innovation in the Austrian system of regional structural policy prevailing in 1995.265 One aspect was the Structural Funds programming process, which had frequently been subject to initial criticism from Austrian authorities (mainly due to

259 Interview with the Federal Chancellery (BKA). 260 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 261 Interview with the Federal ministry for agriculture, forestry, environment and water management. 262 Interview with the Federal Chancellery (BKA). 263 Interview with the Federal Chancellery (BKA). 264 Interview with the Federal Chancellery (BKA). 265 Interview with the Austrian Conference for Spatial Planning (ÖROK). - 130 - rather complex technical prescriptions). Another aspect was the multiannual approach of interventions in the previously annual decision-making process on national regional policy. The specific new element that emerged with Austria was that public budgets now had to be planned over several years.

To what extent was capacity for management, implementation and evaluation improved? In what manner Management No significant improvements took place in the formal management structures at Federal level. Management structures at Land level were already highly concentrated.

Implementation No significant improvements took place in the formal implementation structures at Federal level, mainly due to the formal split of competencies contained in the Federal constitution. Implementation structures at Land level were already highly concentrated (e.g. WiBAG as single actor and funds-specific co-ordination committees). Improvements took place at the level of specific support organisations within Burgenland: creation of the ESF-counselling within the RMB, setting up of the BABBI for EAGGF- interventions Evaluation Improvements took place: Pilot activities regarding an enlargement of monitoring data to be gathered by the RMB ; pilot project on electronic data transfer ; pilot study on environmental impact assessment for programme interventions.

6.9. Differences of the 1995-99 process to the current practice (2000-2006)

The implementation and management structures have considerably changed during the new programming phase of the Objective 1 programme Burgenland (2000 to 2006). For the purpose of managing the new Structural Funds programmes in Austria, a formal joint agreement has been concluded between the Federal government and the individual Austrian Länder concerned.266

The main differences between the management and implementation system between the 1995-1999 period and the current programming phase 2000-2006 can be summarised as follows: • Under the new programme, a “managing authority” was established. The Land government Burgenland will be the managing authorities according to article 34 of the new Council Regulation No 1260/1999. The managing authority has overall responsibility for the co-ordination of the bodies involved in the programme implementation. The duties of the managing authority have been defined in detail in an agreement between it and the Federal chancellery (BKA). In addition, also a “paying authority” had been established. Three Federal ministries (which in turn can charge external institutions) will fulfil the tasks of the paying authority: the Federal chancellery is in charge of the ERDF, the Ministry for labour and social affairs is in charge of the ESF and the Ministry for agriculture is in charge of the EAGGF and FIFG. • In the future, there is in principle one implementing body (Förderstelle) responsible for the co-ordination of each measure, including the assessment of project applications, the co-ordination with other co-financing bodies and the follow-up of the implementation of projects. For some measures it can be decided to install different co-ordinating bodies for different types of projects. The

266 Bundesgesetzblatt, Ausgabe 21. Dezember 2001- Teil I: Vereinbarung zwischen dem Bund und den Ländern gemäß Art. 15a Bundesverfassung über die Regelung zur Partnerschaftlichen Durchführung der Regionalprogramme im Rahmen der Strukturfonds in der Periode 2000-2006. - 131 -

basic procedure applied in Burgenland for project preparation and selection during the previous programming phase has remained more or less the same.267 • The representation of the “civil society” has been enlarged within the monitoring committee: social partners and representative organisations for equal opportunities and sustainable development are now participating in the monitoring committee in addition to the relevant Federal ministries and co- financing implementing bodies. As in the previous programming period 1995 to 1999, the Austrian Conference on Spatial Planning will act as joint secretariat for Objective 1 and Objective 2 programmes. Its main tasks are the organisation of monitoring committees, co-ordination across programmes and, if appropriate, the tendering of joint evaluations. • The responsibilities for monitoring have remained very similar, but the system has been improved: monitoring is carried out for each Fund by the competent “co-ordinating Federal ministry”. This ministry will receive the relevant data from the managing authority and the responsible implementing bodies. The official data shall be provided electronically to all relevant parties involved, including the Commission. Financial control will be the overall responsibility of the Ministry of finance and the Fund corresponding Federal ministries. They have to ensure that the control will be separated from the bodies responsible for payments. The project co-ordinating implementing body will have the financial responsibility for the projects within their measures. The national control institutions work with the control institutions from the Commission and the European Court of auditors on the basis of bilateral agreements.

As regards the high number of different funding instruments used in Austria during the previous programming period 1995-1999, one can observe that significant simplifications have been made for the second programming period 2000-2006. Especially the number of instruments applied at Federal level to mobilise national co- financing has been significantly reduced.268 During the new programming period 2000-2006, one can also observe an improvement of the quality of horizontal co- operation in the field of programme related labour market issues: One the one hand, vertical co-operation between the labour market actors within Burgenland has improved since the Land has finally taken over its responsibilities for the local labour market policy.269 On the other, horizontal co-operation on labour market policy issues has improved since the Burgenland Chamber of workers and employees is now more strongly integrated into the joint work of the monitoring committee. 270

267 In a first step, the co-ordinating implementing body in charge of the relevant measure checks the project according to the selection criteria laid down in the programme and whether the project complies with the EU legislation. The basic set of selection and priority criteria will apply to all aid-schemes within the same priority. In the second step, the co-ordinating implementing body checks the project according to the project selection criteria laid down in the schemes used for this measure. Then, based on a recommendation of the relevant implementing body, the so-called "Fund specific co-ordinating committees" (composed of all relevant implementation bodies and other partners) determine the allocation of the EU- and national credits and decide on which implementation body will be the single contact points for each project. The managing authority chairs the meetings of the co- ordinating committee. Following a positive decision, a similar transformation letter with the one contract on the EU co-financing and the separate contracts per aid scheme in the annex will be prepared and sent to the final beneficiary by the implementing body in charge. Finally, and on the basis of the information provided by the implementing body, the paying authority makes the necessary payments on the basis of the single declaration from the final beneficiary. 268 Interview with the Federal Chancellery (BKA). 269 Interview with the Federal ministry for economy and labour affairs (former BMAGS). 270 Interview with social and economic partners from Burgenland (Chamber of workers and employees, Chamber of agriculture, Chamber of economy). - 132 -

With regard to monitoring, improvements have been in the new Objective 1 programme 2000-2006 compared to the previous period:271 The expected outputs of the programme are better quantified, especially at the operational level of individual priorities: Employment and labour market related indicators are given for all operational priorities of the programme. 4 out of 5 operational priorities give specific targets for equal opportunities (not research and development). The share of women in the labour force should increase by at least 2%. 3 out of 5 priorities specifically mention their support to sustainable development, but none of them is quantified. The setting up of an environmental monitoring system needs however further development with support from technical assistance to make it an effective tool for integrated programme management. The preparation and implementation of this monitoring system was expected to start at the beginning of the current programming period in order to contribute effectively to the implementation of the programme. The results should be presented before the mid-term review and the system was expected to produce concrete proposals for environmental indicators for evaluation and monitoring.

What improvements do you believe have been made to the process? Approach 1994-1999 Approach 2000-06 Benefit gained Reason for change • Rather complex • Less complex • Simplified project • Lessons learnt from funding instrument Funding structure at selection and funding the past structure at Federal Federal level procedures level • Large partnership, • Further enlarged • Better inclusion of • Technical but conflictual partnership, more interests from the civil prescriptions, relations harmonious relations society • Lessons learnt from • Better working the past conditions • Monitoring: No • Start in setting up of • Sound assessment of • Pilot study of 1999 systematic an environmental environmental • New prescriptions environmental monitoring impacts monitoring • Monitoring: Weak • Better quantification • Increase of • ? quantification at at measure level monitoring and measure level evaluation capacity

271 Working document of DG REGIO: Burgenland, summary of the Objective 1 programme 2000-2006. - 133 -

7. STRENGTHS AND WEAKNESSES OF THE OBJECTIVE 1 INTERVENTIONS 1994-99

Without repeating again the detailed results of previous chapters, the tables below will only establish a brief summary ranking of findings contained in the analysis of the management and implementation system (table 7.1.) and in the effectiveness and programme impact assessment (table 7.2.).

7.1. Process related issues

Strengths Weaknesses Programming ++ Partnership ++ - - (inter-administrative, vertical) (social partners) Implementation ++ Monitoring/evaluation ++ Other (state) + acceptable, ++ good, +++very good - slightly negative, - - bad , --- very bad

7.2. Main achievements

Strengths Weaknesses Employment + could contribute to increase the level of - could not reduce employment unemployment rate +++ very high participation rates in training measures and high integration rates Transport (Road, Rail) Not relevant Not relevant SMEs ++ (Training schemes): active demand by SMEs. - - (targeted nature of SME aid - Aid schemes ++ (general support to crafts, industry and tourism schemes) - Business services SMEs): high share of SMEs supported and - (Infrastructure): Partly - Business significant employment effects. successful business park infrastructure - weak R&D support to - Financial enterprises, in particular to engineering SMEs. - Training schemes - - (dominant lead project approach) Research and +++ - - (SME support) Development (infrastructure: technology centre) Education and Training +++ (high number of participants, high integration rates) Rural Development +++ strong participation of actors ; significant investment boom initiated ; development of local strengths, productivity gains Fisheries Not relevant Not relevant Tourism ++ strong support to SMEs in the sector ++ balanced effects : increase in productivity with increasing employment in the sector +++ significant quality improvement Burgenland as tourism destination + acceptable, ++ good, +++very good - slightly negative, - - bad , --- very bad - 134 -

8. CONCLUSIONS

Considering the implementation progress made during the lifetime of the programme, one can say that the individual measures of the Objective 1 programme had generally been appropriate instruments for tackling the initial needs identified. A more critical assessment has to be made for the "Fund-specific mix of interventions" within the Objective 1 programme.

The financial balance was certainly the major critical issue for many actors involved in the programme implementation, as the initial budgeting of interventions was not fully consistent with the regional needs that had been identified in the programming document. In the initial version of the programme, ERDF-funded interventions roughly accounted for 68% of the total public financial support foreseen (EU, Federal level, Land), whereas ESF-funded interventions only had a share of around 14% in the total public financial support foreseen. Finally, the EAGGF-funded interventions of the programme roughly accounted for 16% of the total public financial support foreseen.

Funds-specific synergy effects were initially intended to take place mainly between the ERDF and the ESF, but in practice they were mainly achieved at the level of individual projects.

Main achievements of the Objective 1 programme (1995-1999) by Funds

The ERDF-funded interventions in the field of productive investment or basic infrastructure could achieve important results that were needed on the background of the initial problem constellation in Burgenland. Productive investment support provided for especially for industry and crafts (ERDF-measure 1.1.) and for the tourism sector (ERDF-measure 3.1.) significantly contributed to support enterprises and especially small and medium-sized enterprises. They also helped to create the most important share of new jobs and assured the preservation of existing jobs. Looking at the annual financial impulses that result from the eligible cost of investment support to crafts and industry (ERDF-measure 1.1.), one can assume that they have contributed to significantly raise the annual gross fixed capital formation (GFCF) realised in Burgenland by the entire secondary sector. If one looks only at the GFCF of the sub-sector “production of goods”, the corresponding annual shares of the annual impulse are 52% for 1997, 46% for 1998 and 66% for 1999. But also for the annual financial impulses resulting from eligible cost of investment support to the tourism sector (ERDF-measure 3.1), one can assume they were responsible for most of the gross fixed capital formation (GFCF) realised in the tourism and restaurant sector during the years 1995-1999. In the context of these two ERDF-measures, also major „lead projects“ had been implemented that were intended to function as development poles in the field of business development or tourism development. Although certainly necessary if one considers the initially prevailing weaknesses in Burgenland, these "lead projects" have absorbed a large majority of public funding available under the measures. Their dominant position within the measures has - 135 - therefore to be questioned not only with regard to the overall effectiveness of the programme, but also in some cases as regards their efficiency (financial means used to achieve material outputs). Basic infrastructure investments supported by various ERDF-funded measures (measures 1.2.-1.4., 2.2.-2.3., 3.4.-3.5., 5.4.) have significantly contributed to generally improve the basic framework conditions in Burgenland. The water infrastructure facilities where necessary to accompany the economic development process in the field of industry, crafts and tourism, whereas support to other basic infrastructure (telecommunication infrastructure, Institute for higher education, technology centres, professional training) have certainly increased the Land's research and development and educational capacity. Although necessary, an important other „lead project“ in the field of infrastructure investment was the establishment of one major business park in southern Burgenland. This activity has to be considered less efficient with regard to what was initially expected by the public authorities and what had actually been achieved by the end of the programming period. There is still the necessity to accompany this particular project in order to strengthen further its overall role as a development pole in the southern part of the Land. Enterprise based research and development support under ERDF-measure 2.1 (and partially measure 2.2) was rather weak, which was mainly due to the relatively small amount of public funding available for these interventions and partly also a consequence of a lacking response from the enterprise level (especially as regards the SMEs).

Compared to the generally weak share of public financial support available for ESF- funded interventions in the programme, their result-achievement can be judged generally positive. Especially if one compares the initial targets set for the most important measures implemented by the AMS as main end-beneficiary (ESF- measures 3.1-3.3) with what has been achieved, one can say that these dominantly traditional labour market interventions had been very effective: training and counselling measures provided for under these measures were largely oriented towards the needs of the regional economy and have achieve astonishingly high participation rates and good integration rates, wherefore they have significantly contributed to relieve pressure from the Burgenland labour market. The overall share of women that participated in qualification and employment activities carried out under the 3 above mentioned measures was 47.5%, but the most important share of female participants can be observed in the framework of training, counselling and guidance of the labour force in SMEs and of those threatened by unemployment (measure 5.1: 53%). These overall results are clearly above the share of female employment that was registered in 1993. The financial amount of public support attributed to ESF-funded measures for which the Land Burgenland had been the main end-beneficiary was comparatively small. These interventions had been distributed among different programme priorities and experienced significant delays in their implementation during the first years of the programme. Only at date of the fifth and sixth monitoring committee meeting (October 1998, July 1999) one could observe a slow improvement of this negative situation. In addition, some of these measures were complemented by new interventions (measure 1.5.: start up of enterprise initiative) or had been fused under one common heading (initial ESF- measures 2.4 and 2.5 2.4) in order to assure their full implementability. Once the implementation process has begun, most of the measures have however produced relatively good results. A good example is the Burgenland "start-up of enterprise initiative" launched by the Land government, which could support a considerable number of new start-ups between 1998/1999. One can however observe that the - 136 - intervention only begins to produce significantly positive results after the year 2000.

Compared to the weak share of public financial support available for EAGGF-funded interventions in the field of agriculture, forestry and rural development (measures 4.1-4.4), their degree of result-achievement as well as their effects on the sector in Burgenland can be judged very positive. The overall effects of the broad variety of funding schemes summarised under this mono-funds priority are however highly diverse and complex with regard to their actual manifestation. Under the Objective 1 programme, around 7000 peasants in Burgenland have received a total of 286 million Austrian shillings from the EU compensation subsidy for agriculture in less favoured areas and from related national support funding. Around 4000 farmers participated in the framework of projects aiming at processing and marketing, diversification, biomass, environmental investment, the renewal of rural villages or qualification and counselling. Support for investment at the level of individual holdings had been extensively used by the Burgenland agriculture and could initiate a real "boom of investment" that contributed to improve the efficiency of agricultural production in Burgenland. A very good success rate was also achieved by sector- specific projects that aimed at processing and marketing, but also in the field of wine producing. In these areas, the Objective 1 programme has had an important impulse function and could also stimulate a considerable push in private investment (especially in the wine-growing sector). Another example are the so-called “joint projects” that have contributed with their collective approach to initiate new connections and co-operations spanning above the sector of agriculture and forestry. Such networking has had a particular positive impact on the rural regions. Within this context, a good example for new impulses have been the projects in the field of renewable energy use based on biomass: the support provided for under the Objective 1 programme has initiated a considerable push in private investment, especially in the southern parts of the Land. All projects supported under priority 4 of the Objective 1 programme have contributed to preserve existing employment in rural areas and also actively created new jobs in the field of agriculture and forestry. In total, the official sources indicate around 3000 newly created or preserved jobs. The spatial distribution of public funding that supported geographically localisable projects shows that EAGGF-measures 4.1-4.4 have also contributed to a certain extent to balancing intra-regional disparities in Burgenland: around half of it was spent in the southern- and middle-Burgenland districts Oberpullendorf, Oberwart, Güssing and Jennersdorf. This picture slightly changes if one looks at the amount of private investment mobilised by this public support: a large majority of the total private investment was mobilised in districts of northern Burgenland and alone 30% in the single district Neusiedl am See. If one looks at the annual financial impulses that result from the eligible cost of support to agriculture and forestry (EAGGF- measures 4.1.-4.2.), one can see that they have significantly contributed to sustain the “investment boom” observable in this sector during the years 1996-1998: the share of annual funding impulses in the gross fixed capital formation (GFCF) of the primary sector in Burgenland is very high, but it varies during the years 1995 (57%), 1996 (44%), 1997 (46%), 1998 (51%) and 1999 (71%) mainly due to significant absolute GFCF-increase between 1995-1997. - 137 -

Major achievements of the 1995-1999 period ERDF • Dominant share of public financial support in the programme. • Strong orientation towards investment support for businesses (industry, crafts, tourism): good results with regard to employment creation and SME support (for SMEs, more could have done). • Investment support of the programme has strongly contributed to raise the overall investment level in Burgenland’s secondary sector, but also in the tourism sector. In both sectors, progress was made to increase labour productivity. • Strong orientation towards support of basic infrastructures in various field • Important role attributed to so called “lead-projects” within these two general forms of intervention: this dominant position might be questionable in some cases. • Enterprise based research and development support was rather weak. ESF • Small share of public financial support available: frequently this was a major point of criticism. • The dominantly traditional AMS-labour market interventions had been very effective (high number of participants, high integration rates). • The measures implemented by Land Burgenland had been characterised by delays, but have produced acceptable results by the end of the programme. EAGGF • Small share of public financial support available, but very important volumes of private investment mobilised with the intervention. • Significant degree of overall participation in the measures. • Improvement of sector specific strengths and increase in productivity. • Stabilisation of the Burgenland agriculture, but also initiation of new impulses (e.g. biomass).

The Objective 1 programme for 2000-2006272

On the 9th November 1999, Austrian authorities submitted a complete version of their regional and social conversion plan for the new Objective 1 programme Burgenland (2000-2006). A summary of the ex-ante evaluation, including the ex-ante assessments of the labour market, equal opportunities and environment were included in the programming document.

As a consequence of the results achieved during the previous programming period and due to changed overall framework conditions, the ex-ante evaluation has defined new focuses for the future Objective 1 programme 2000-2006. One can generally observe that the future programme should operate a shift away from basic infrastructure measures towards the development and application of new technologies and the implementation of related training measures. The changes in focus can be summarised as follows: • An increased focus on measures for SMEs and on support for new start-ups of enterprises. • More support for networking and co-operation among enterprises in order to support the emergence of new products or to increase production and marketing of goods and services. • Increased activities to support the internationalisation of Burgenland‘s economy, especially with regard to new markets and enterprise co-operations in neighbouring countries. • A stronger technology-orientated focus in all measures, spanning from enterprise support over infrastructure to a high-ranking qualification offer.

272 Amt der Burgenländischen Landesregierung: Ex-ante Evaluierung, Ziel 1 Burgenland 2000 (informal working document). Working document of DG REGIO: Burgenland, summary of the Objective 1 programme 2000-2006. - 138 -

• A use of modern technologies to re-orientate Burgenland‘s economy alongside ecological standards.

The Commission considered the original document submitted by the Austrian authorities was of good quality. There had been no major issues regarding the strategy, the choice of priorities and measures, the allocation of budget to these priorities and the financial plan. However, the Commission had formulated a number of “guidelines” for changes/adaptations that should be considered in the negotiations with the Austrian authorities. According to these principles, negotiations between the Commission and the Austrian authorities during November 1999 and January 2000 mainly concentrated on implementation arrangements, the business aid system and the definition of targets and quantification of indicators as well as the application of the principle of sustainable development.273

The Commission in April 2000 approved the new Burgenland Objective 1 programme 2000-2006. The National co-financing within the framework of the new Objective 1 programme shows a strong reduction, but is compensated for by a strong increase in public expenditure outside the Objective 1 programme in the framework of a national regional development agreement. In addition, the larger majority of total cost would be financed by private contributions (57%).

The 3 basic aims of the new Objective 1 programme 2000-2006 are very similar to those of the previous programming period: development of Burgenland towards a modern central European region, preparation of Burgenland for the enlargement of the European Union (especially in co-operation with Hungary) and correction of internal disparities within Burgenland, especially by differentiated strategies for individual sub-regions. In addition, the new programme defines a number of horizontal objectives that have to be respected during the preparation, the implementation, monitoring and evaluation of the measures of the programme: (1) The economic performance of Burgenland and the competitiveness of the business sector have to improve to catch up with the rest of Austria and the European Union. (2) The technology level and educational level of the labour force have to increase. (3) The application of the principles of sustainable development, which implies the integration of environmental requirements and the principle of equal opportunities as

273(1) A more precise statement of the strategy in the programme as regards economic structure and labour market balances expected by 2006 and beyond had to be included in the new programming document. (2) The Commission stressed the importance of including the main criteria for project selection and prioritisation at programme level. In its view, contracting with final beneficiaries should become more business friendly and transparent. (3) A description of the organisational and funding arrangements foreseen for the clusters/competence specialisations should be included in the new programming document. (4) The organisation of measures should make clear the relative financial effort for the different types of business support in order to demonstrate the shift from classical to more innovative business aid instruments. An agreement was reached that over 70% of the Structural funds budget of business development measures would be earmarked for SMEs. (5) An improvement of the structure of indicators and quantification was needed and benchmarks or baseline indicators had to be added for some indicators. (6) For human resources, a clear overview on the foreseen skill shortages in the near future was needed. Special action would be foreseen to close these gaps. In addition, the vocational and training infrastructure should adapt to new demands. Also here, an indicative breakdown per type of action and per final beneficiaries was requested. (7) The Commission attached importance to better integrate the environmental dimension into the programme. The Austrian authorities were asked to demonstrate that objectives and priorities of the programme contribute to sustainable development. This clarification of objectives coupled with a significant strengthening of the environmental monitoring and evaluation functions will be supported in the framework of the Objective 1 programme. The aim is to deliver practical results at short notice that can also be shared with other regions and the national and Community levels. (8) As regards information society actions, special attention should be paid to developing business applications. - 139 - horizontal priorities. With regard to these objectives, a number of quantitative targets have been formulated at programme level (see below).

Quantitative targets of the new Objective 1 programme 2000-2006 • Increase in GDP per capita from 71% to 77% of the EU average. • 1500 new jobs created and 3250 safeguarded jobs as a direct result of the Objective 1 programme. • Change in labour market balance in Burgenland in total: 7000 jobs with a specific focus on the creation of high quality jobs in information technology and business services. • Increase the economic strength of middle and southern Burgenland by 4% towards the EU average. Internal disparities with North Burgenland might grow, but the programme should limit the widening gap as much as possible. • 100 enterprises (50% from Burgenland) will participate in competence and cluster networks. • Creation of 700 business start-ups. • Increase of overnight stays in the tourism sector by 4% and of the number of quality beds by at least 400. • Increase in female activity rate by 2%. • Generation and strengthening of private initiatives through public investments. • Sustainable preservation of nature or resources as a basis for social and economic development. The positive, neutral or negative effects for every single project will be identified.

For the new Objective 1 programme, a total of 6 operational priorities had been defined that strongly correspond to the priorities of the previous programme (1995- 1999). The reorientation in focus has led to slight changes in overall share of public funding available for the individual priorities (EU, Federal level, Land) and includes also a change in the operational objectives. The overall situation can briefly be summarised as follows: • Priority 1 (crafts and industry) will receive with nearby 32% the highest share of public support among all priorities of the programme. Its overall share is however below the one foreseen for such activities during the previous programming period. Within this context, SMEs are particularly supported. The main focus of this measure is to reduce unfavourable locational framework conditions in southern and middle Burgenland with the aim to decrease existing inta-regional disparities within the Land. In respect to this, lower co-financing rates to projects had been defined for the northern parts of the Land and higher rates for the southern parts. • For priority 2 (research, technology and innovation), around 11% of the public support available under the programme have been earmarked. This is only marginally above the shares that had been foreseen for such activities during the previous programming period. The main focus is put on increasing the research intensity of enterprises in Burgenland and on intensifying co-operation between the research sector and the economy. • Public financial resources available for priority 3 (tourism and culture) have been reduced (18%) compared to the previous programming period. A particular focus is now put on further developing tourism enterprises, especially through equipment support to improve quality standards and to further extend the tourism offer. These activities should help to raise the still weak quality level of tourism in Burgenland and to improve the degree of frequentation. • The share of public support available for priority 4 (agriculture, forestry and nature protection) has been decrease compared to the previous programming period (now: around 15%). • For priority 5 (human resources), public support available under the programme has been increased (22%) compared to the situation prevailing during the - 140 -

previous programming period. This should also be seen as an act documenting the shift in focus, as more emphasis is now put on improving the human resources capital of Burgenland. A particular focus is to combat long-term unemployment and youth unemployment, but also to actively support equal opportunities between men and women and the integration of groups on the labour market with particular handicaps. • A stronger share of public support is also attributed to priority 6, technical assistance (2%).

From a Funds-specific perspective, the distribution of public support available under the new Objective 1 programme 2000-2006 can be described as follows: If one looks at the total volume of public funding available (EU, Federal level, Land), one can see that the share of ERDF-funded measures in the programme (62,7%) has significantly decreased compared to the previous programming period (68%), whereas the share of ESF-funded measures was considerably increased from 14% to now 22%. The EAGGF- or FIFG-funded measures have a share in the total public support available of respectively 15% and 0.3%. If one looks at the distribution of the EU-contribution by Fund, one can see a relatively similar picture: the ERDF roughly accounts for nearby two thirds of the EU-contribution (64.2%), whereas the remainder third is distributed between the ESF (20.3%), the EAGGF (15.2%) and the FIFG (0.3%).

As a conclusion, one can say that the most important strategic or operational weaknesses of the previous programming period have been addressed in the Objective 1 programme for the new phase 2000-2006. The major changes of the new programming document compared to the previous phase are summarised in the overview table below.

Major changes in the 2000-2006 period ERDF • Dominant financial share, but smaller that in the 1995-99 period • Strong orientation towards enterprise support and towards endogenous potentials development • More priority is given to SMEs and support instruments have been redesigned • Reduced means for „lead-projects“ or basic infrastructure • Better concentration on the southern parts of the Land • More orientation towards innovation ESF • Increased budget for human resources action • Orientation towards raising the educational level of the population • Differentiated strategy at sub-regional level • Alternative job opportunities • Important focus on equal opportunities EAGGF • Smaller financial share of public support compared to 1995-99, • Oriented towards stabilisation and deepening of existing strengths FIFG - - 141 -

9. RECOMMENDATIONS

9.1. Short-term recommendations for the current programming period (2000-2006).

Based upon the findings of the appropriateness- and effectiveness-analysis as well as of the implementation and management system analysis in the present ex-post evaluation, the most important recommendations for the current programming period 2000-2002 can be summarised as follows: a.) Due to the continuing north-south disparities within Burgenland and the forthcoming enlargement, the new Objective 1 programme for 2000-2006 should focus its priority actions more on the middle and southern parts of the Land. This general recommendation should apply for all types of interventions contained in the new Objective 1 programme 2000-2006. b.) It is also recommendable to increase the programme support for human resources interventions, as more could be done in this direction. Within this context, one should however realise a stronger co-operation between the key actors on the Burgenland labour market (AMS, Land government) and deliberately create stronger synergies (and coherence) between the interventions. In addition, it is recommendable that a specific employment strategy for the middle and southern districts of Burgenland is elaborated that meets the needs of these parts of the Land (e.g. by differentiating interventions or through elaborating specific pilot projects). c.) During the programming period 2000-2006, new “lead projects” that involve significant financial amounts of programme support should not be launched. In contrary, it should be of foremost interest to strengthen the long-term viability of previously implemented lead projects in southern Burgenland (e.g. tourism, cross- border business park). One could think of further developing or improving their integration in the locally specific environment by specific “soft measures”. Only through such fine-tuned accompaignment measures, it is possible to stimulate their role as “development nodes” in these areas. d.) During the new programming period 2000-2006, measures that aim at strengthening endogenous development potentials in Burgenland should be further developed. Two important aspects could concentrate on a more targeted support for local SMEs (especially in future oriented sectors) and on a further development of activities in Burgenland‘s technology centres. Within this context, it is also necessary to intensify and adapt the programme activities as regards the specific needs in the middle and southern parts of Burgenland. Thirdly, the health and spa tourism activities in southern Burgenland should be further developed (e.g. in direction of a "wellness competence centre"). A final aspect should be to stronger build upon the important natural and environmental assets in Burgenland. That dimension should be significantly fostered in an operational dimension, especially in the field of ERDF- and EAGGF-interventions.

Most of the above mentioned recommendations were however already addressed in the new Objective 1 programming document for the period 2000-2006, wherefore - 142 - their value is mainly that of guiding the focus of the forthcoming mid-term evaluation. The evaluators should therefore verify whether these changes are really implemented in practice and in what way they have produced measurable improvements (also material) with regard to the previous situation.

9.2. Longer-term recommendations for the post 2006- period

10. BIBLIOGRAPHY

AMS Österreich (Bundesgeschäftsstelle) / AMS Burgenland (Landesgeschäftsstelle) / COMPASS-Service Büro Wien: Zwischenbericht des Arbeitsmarktservice über die Durchführung der Interventionen des ESF im Abrechnungsjahr 1997 im Ziel 1-Gebiet Burgenland.

Amt der Burgenländischen Landesregierung: • Arbeitspapier, Amt der Burgenländischen Landesregierung: Ausgewählte Indikatoren der wirtschaftlichen Entwicklung 1995 bis 1995. • Amt der Burgenländischen Landesregierung, Landesstatistik: Statistisches Jahrbuch Burgenland 2000. Eisenstadt, 2001. • Amt der Burgenländischen Landesregierung, Landesstatistik: Burgenländische Statistiken, Tourismus 2001 (Neue Folge, Heft 87). Eisenstadt 2002. • Agrarabteilung des Amtes der Burgenländischen Landesregierung: Stand der Umsetzung des Programmplanungsdokumentes, Prioritätsachse Landwirtschaft und Naturschutz. • Ex-ante Evaluierung, Ziel 1 Burgenland 2000 (informal working document).

Annual Reports for the Objective 1 Programme: • Ziel 1 Burgenland, Jahresbericht 1995 • Ziel 1 Burgenland, Jahresbericht 1996 • Ziel 1 Burgenland, Jahresbericht 1997 • Ziel 1 Burgenland, Jahresbericht 1998 • Ziel 1 Burgenland, Jahresbericht 1999 • Ziel 1 Burgenland, Jahresbericht 2000

Bundesgesetzblatt, Ausgabe 21. Dezember 2001- Teil I: Vereinbarung zwischen dem Bund und den Ländern gemäß Art. 15a Bundesverfassung über die Regelung zur Partnerschaftlichen Durchführung der Regionalprogramme im Rahmen der Strukturfonds in der Periode 2000-2006.

Bundeskanzleramt, Abteilung IV/4: Regionalpolitik und die EU, (Information sheets) Wien 1995, 1996, 1997.

Bundesministerium für Arbeit, Gesundheit und Soziales (BMAGS): ESF-Handbuch, Band I-Die Grundlagen. Wien 1997.

Burgenländische Agrar Beratungs- und Betreuungs-Iinitiative, BABBI: Burgenland und die EU.

Burgenländische Landwirtschaftskammer: Die Ziel 1-Chance für die Burgenländische Landwirtschaft. Mitteilungsblatt der Bgld. Landwirtschaftskammer.

Burgenländische Volkshochschulen: Projekt “Regionale Weiterbildung und Bildungsberatung”.

European Commission: • The impact of Structural policies on economic and social cohesion in the Union 1989-99 (Brussels/Luxembourg, 1997) • Europäische Kommission, Regionalpolitik und Kohäsion: Ziel 1 Burgenland Österreich. Einheitliches Programmplanungsdokument 1995-1999 (No. EFRE: 951313001 ; No. ARINCO: 95AT16001) • European Cohesion Forum, April 1997: Workshop J, contribution of Mr. Schicker entitled "Erfahrungen eines Mitgliedstaates - Östereich". - 144 -

• European Commission, Regional Policy and Cohesion: MEANS Handbook No. 6: Evaluating the contribution of the Structural Funds to Employment, 1996. • European Commission, DG EMPL-Peer Review Programme 2000: Territorial Employment Pacts in Austria: Joint use of opportunities. Vienna, May 10-11,2001. Final Report.

European Policy Research Centre, University of Strathclyde: EU Structural Funds and Business Aid in Austria. Draft final report to the European Commission (DG XVI), September 1997.

Förschner, M.: Der Europäische Sozialfonds. Chancen und Herausforderungen, in: Wirtschaftspolitische Blätter 3-4/1996, pp.350-358.

Huber, W.: • EU-Regionalpolitik und das Prinzip der Partnerschaft, in: Staudigl, F./ Fischler, R. (editors), Die Teilnahme der Bundesländer am europäischen Integrationsprozeß (Schriftenreihe Des Instituts für Föderalismusforschung, Band 66), Wien 1996. • Regionalpolitik in Österreich und Kohäsionspolitik der EU. Erste Zwischenbewertung nach einem Jahr EU-Strukturfonds in Österreich, Diskussionspapier 21. März 1996, (text must be considered as a not quotable document).

Mayerhofer, P.: Österreichs Regionalförderung nach dem EU-Beitritt. Bedeutungsgewinn oder Verlust an Autonomie?, in: WIFO-Monatsberichte 5/95, pp.343-355.

Mayerhofer, P. / Palme, G.: Regionaler Strukturwandel und EU-Regionalpolitik, in: WIFO-Monatsberichte 1994, pp.68-83.

Minutes of Monitoring Committee meetings: • 1. Begleitausschußsitzung am 30. Januar 1996. • 2. Begleitausschußsitzung am 14. Oktober 1996 • 3. Begleitausschußsitzung am 29. September 1997. • 4. Begleitausschußsitzung am 16. Dezember 1997 • 5. Begleitausschußsitzung am 07. Oktober 1998. • 6. Begleitausschußsitzung am 12. Juli 1999

Monitoring Committee, Internal rules of procedure: Objective 1 and LEADER II Monitoring Committee Burgenland.

OECD, Territorial Development Service: Local Economic and Employment Development. Local Partnerships in Austria. October, 1999.

Österreichisches Institut für Raumplanung: • Dokument des "Checkpoint EVA" (March 1998). Österreichische Koordinierungsstelle für Evaluation von Regionalpolitik und regionalpolitischen Programmen (Stichworte Zwischenbewertung, Zwischenevaluierung). • Österreichisches Institut für Raumplanung /MR Regionalberatung und Projektentwicklung / L&R Sozialforschung: • Zwischenevaluation des Ziel 1-Programms Burgenland. Wien, April 1998. • Österreichisches Institut für Raumplanung: Umweltwirkungen von Strukturfondsprogrammesn am Beispiel des Ziel 1 Programmes Burgenland. Wien, September 1999. - 145 -

Österreichische Raumordnungskonferenz (ÖROK): • Durchführung der EU-Regionalpolitik in Österreich. Kooperationserfordernisse und Ablauforganisation. • Ex-post Evaluierung der Ziel 5b- und LEADER II Programme 1995-1999 in Osterreich: Band I Ziel 5b. Schriftenreihe 161/I. Wien, 2002.

Pelinka, A.: Österreich: EU-Mitgliedschaft als Katalysator, in: Aus Politik und Zeitgeschichte, Beilage zur Wochenzeitung "Das Parlament", B 10/96, 1. März 1996, pp. 10-17.

Rechnungshof Österreich (Austrian Court of Auditors): • Tätigkeitsbericht des Rechnungshofes in bezug auf das Bundesland Burgenland, Verwaltungsjahr 1997 (Reihe Burgenland 1998/1). • Wahrnehmungsbericht des Rechnungshofes über Teilgebiete der Gebarung im Land Burgenland (Reihe Burgenland 2000/1).

Regionalmanagement Burgenland: • Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1998. • Umsetzung der Strukturfondsförderung im Burgenland. Eisenstadt, 1999.

Schindegger, F. / Tödtling-Schönhofer, H.: EG-Integration und österreichische Raumordnungspolitik. Schriften zur Regionalpolitik und Raumplanung Nr. 21, Bundeskanzleramt, Abteilung IV/4-Raumplanung und Regionalpolitik, Wien 1992.

Tondl, G.: Neue Impulse für die österreichische Regionalpolitik durch die EU-Strukturfonds. Forschungsinstitut für Europafragen, Working Papers Nr. 19, Wien, Mai 1996.

11. INTERVIEWEE LIST

Interviews:

Date Organisms present

24.05.2002 • Federal Chancellery (Bundeskanzleramt) 24.05.2002 • Austrian Conference for Spatial Planning (Österreichische Raumordnungskonferez, ÖROK 27.05.2002 • Burgenland Land government: (statistical aspects) 28.05.2002 Representatives in Burgenland of … morning • Burgenland Land government • Burgenland Labour Market Service • Burgenland Chamber of agriculture • Regionalmanagement Burgenland 28.05.2002 Representatives of the social and economic partners in Burgenland: afternoon • Chamber of economy (Wirtschaftskammer Burgenland) • Chamber of employees and workers (Kammer für Arbeiter und Angestellte Burgenland) • Chamber of agriculture (Burgenländische Landwirtschaftskammer)

29.5.2002 • Federal ministry of economy and labour (Bundesministerium für Wirtschaft und Arbeit) 29.5.2002 • Federal ministry of agriculture, forestry environment and water resources (Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft) - 146 -

12. STATISTICAL ANNEX

Table A: Economic development in Austria and in the Länder between 1995-1999 1995 1996 1997 1998 1999 Average annual growth 1995-1999 Gross domestic product for Austria and gross regional products *) for the Austrian Länder, in million EUR at current prices Austria 172,287 178,045 182,486 189,937 196,658 +3.3%

Niederösterreich 26,081 27,507 28,869 30,698 32,458 +4.8%

Wien 48,166 49373 49,891 51,003 52,003 +2.3%

Kärnten 10,332 10,651 10,848 11,296 11,710 +3.2%

Steiermark 21,596 22,318 22,697 23,673 24,799 +3.5%

Oberösterreich 27,764 28,803 29,717 30,995 32,112 +3.7%

Salzburg 12,630 12,990 13,413 13,998 14,310 +3.2%

Tirol 14,279 14,649 14,956 15,838 16,365 +3.5%

Vorarlberg 7,668 7,844 8,087 8,278 8,795 +3.5%

Burgenland 3,771 3,913 4,008 4,168 4,346 +3.6%

Burgenland: - GRP share of Austrian GDP 2.18% 2.19% 2.19% 2.19% 2.20% Gross domestic product per capita for Austria and gross regional product per capita for Burgenland, in million EUR at current prices Austria: GDP per capita 21,410 22,090 22,610 23,510 24,300 +3.2% Burgenland: GRP per capita 13,750 14,210 14,520 15,020 15,650 +3.3% Burgenland: - GRP per capita in relation to Austrian GDP per capita (Index Austria = 100) 64.2% 63.3% 64.2% 63.9% 64.4% Source: Statistik Austria (VGR-Revisionsstand: „Volkswirtschaftliche Gesamtrechnungen 1976-2000, Hautptergebnisse“). *) Regional equivalent to GDP - 147 -

Table B: Evolution of total employment *) by economic sector in Burgenland and Austria between 1995 and 1999 1995 1996 1997 1998 1999 1995/1999 in % Burgenland: Absolute figures per year and difference between 1995 and 1999 in % Total, primary sector: 10,600 10,300 9,900 9,400 9,000 -15.1 Agriculture and Forestry **) Total, secondary sector: 27,700 27,900 27,800 26,700 26,600 -4 ***) Production of goods 17,000 16,800 16,600 15,800 15,400 -9.4 Energy and water supply 1,100 1,100 1,100 1,100 1,200 +9 Construction and building 9,200 9,600 9,600 9,500 9,800 +6.5 Total, third sector: 54,400 54,300 54,400 55,900 58,300 +7.2 ***) Commerce, repairing of cars 11,900 11,600 11,400 11,600 12,600 +5.9 and consumer goods Hotels and restaurants 5,800 5,900 6,000 6,200 6,300 +8.6 Transport and news 4,600 4,400 4,200 4,200 4,300 -6.5 transmission (telecommunication) Public administration, national 7,700 7,700 7,700 8,100 8,000 +3.9 defence, social insurance Services in the field of health, 8,300 8,400 8,300 8,500 8,800 +6 veterinary and social affairs Other public or private 3,800 3,900 4,000 4,000 4,200 +10.5 services Total employment: 92,700 92,500 92,100 92,000 93,900 +1.3 Austria: Absolute figures per year and difference between 1995 and 1999 in % Total, primary sector: 198,700 192,900 189,900 184,400 180,800 -9 Agriculture and Forestry **) Total, secondary sector: 1,047,500 1,030,000 1,026,000 1,020,700 1,011,600 -3.4 ***) Production of goods 703,800 685,600 680,100 680,600 674,200 -4.2 Energy and water supply 39,200 39,200 39,200 38,600 38,000 -3.1 Construction and building 296,000 296,700 298,300 293,300 291,500 -1.5 Total, third sector: 2,268,700 2,284,500 2,320,700 2,367,600 2,427,500 +7 ***) Commerce, repairing of cars 567,000 567,900 576,300 579,500 585,200 +3.2 and consumer goods Hotels and restaurants 236,100 236,000 239,800 244,500 248,800 +5.4 Transport and news 243,000 242,800 241,900 240,300 246,700 +1.5 transmission (telecommunication) Public administration, national 240,500 240,800 243,600 252,100 255,000 +6 defence, social insurance Services in the field of health, 259,600 261,400 264,500 269,900 277,600 +6.9 veterinary and social affairs Other public or private 154,300 156,800 160,300 162,700 167,000 +8.2 services Total employment: 3,514, 900 3,507,400 3,536,600 3,572,600 3,619, 900 +3.0 1995 1996 1997 1998 1999 1995/1999 in % Source: Statistik Austria (VGR-Revisionsstand: „Volkswirtschaftliche Gesamtrechnungen 1976-2000, Hautptergebnisse“); own calculations for evolution 1995/1999. *) Employees and independents. Regional attribution according to the place of work, „domestic concept“. **) Due to the high number of partially employed, figures for this sector are expresses as „full time employment equivalents“. The sector also includes fisheries. ***) The details for selected branches of the sector (mentioned below) do not cover all branches making up the relevant sector. - 148 -

Table C: Evolution of gross value added at basic prices by economic activity in Burgenland and Austria between 1995 and 1999 1995 1996 1997 1998 1999 1995/1999 in % Burgenland: Absolute figures in million EUR at current prices and difference between 1995 and 1999 in % Total, primary sector: 216 201 214 244 220 +1.9 Agriculture and Forestry *) Total, secondary sector: 1,132 1,208 1,253 1,285 1,333 +17.8 **) Production of goods 659 693 728 752 793 +20.3 Energy and water supply 95 96 93 101 105 +10.5 Construction and building 361 398 410 418 419 +16.1 Total, third sector: 2,228 2,294 2,312 2,397 2,502 +12.3 **) Commerce, repairing of cars 299 295 289 290 328 +9.7 and consumer goods Hotels and restaurants 134 145 163 173 185 +38.1 Transport and news 189 192 190 182 191 +1,1 transmission (telecommunication) Public administration, national 338 342 353 361 367 +8,6 defence, social insurance Services in the field of health, 247 257 212 229 231 -6.5 veterinary and social affairs Other public or private 128 131 126 131 135 +5.5 services Total gross value added at 3,576 3,704 3,780 3,926 4,055 +13.4 basic prices Austria: Absolute figures in million EUR at current prices and difference between 1995 and 1999 in % Total, primary sector: 4,120 4,200 4,164 4,221 3,918 -4.9 Agriculture and Forestry *) Total, secondary sector: 50,322 51,710 53,355 55,974 57,896 +15.1 **) Production of goods 32,329 32,769 34,343 36,123 37,517 +16.0 Energy and water supply 4,620 4,775 4,533 4,725 4,764 +3.1 Construction and building 12,782 13,522 13,841 14,515 14,968 +17.1 Total, third sector: 108,985 112,659 114,629 118,768 121,722 +11.7 **) Commerce, repairing of cars 20,871 21,424 22,039 22,697 23,372 +11.0 and consumer goods Hotels and restaurants 6,371 6,464 6,551 6,948 7,333 +15.1 Transport and news 12,032 12,233 12,489 13,108 13,122 +9.1 transmission (telecommunication) Public administration, national 10,969 11,211 11,369 11,725 12,102 +10.3 defence, social insurance Services in the field of health, 9,500 9,889 8,213 8,565 8,414 -11.4 veterinary and social affairs Other public or private 6,238 6,386 6,607 6,884 7,094 +13.7 services Total gross value added at 163,428 168,569 172,147 178,963 183,536 +12.3 basic prices 1995 1996 1997 1998 1999 1995/1999 in % Source: Statistik Austria (VGR-Revisionsstand: „Volkswirtschaftliche Gesamtrechnungen 1976-2000, Hautptergebnisse“) ; own calculations for evolution 1995/1999. *) The sector also includes fisheries. **) The details for selected branches of the sector (mentioned below) do not cover all branches making up the relevant sector. - 149 -

Table D: Share of individual sectors and branches in the Burgenland gross value added at basic prices (1999) Sector / Branch In million EUR, 1999 In % of Burgenland total 1. Total, primary sector 220 5.4 Agriculture, Forestry and Fisheries 2. Total, secondary sector: 1,333 32.9

2.1. Coal mining, mining, gas extraction etc. 17 0.4 2.2. Production of goods 793 19.6 2.3. Energy and water supply 105 2.6 2.4. Construction and building 419 10.3 3. Total, third sector: 2,502 61.7 3.1. Retail trade, commerce, repairing of cars and 328 8.1 consumer goods 3.2. Hotels and restaurants 185 4.6 3.3. Transport and news transmission (telecommunication) 191 4.7 3.4. Banking and insurance branch and related activities 253 6.2 3.5. Real estate, location, data processing, R&D, 512 12.6 enterprise related services 3.6. Public administration, national defence, social 367 9.1 insurance 3.7. Educational activities 284 7.0 3.8. Services in the field of health, veterinary and social 231 5.7 affairs 3.9. Other public or private services 135 3.3 3.10. Private households 15 0.4 4. Total, Burgenland: 4,055 100 Source: Statistik Austria (VGR-Revisionsstand: „Volkswirtschaftliche Gesamtrechnungen 1976-2000, Hautptergebnisse“) ; own calculations for % of Burgenland total 1999. - 150 -

Table E: Evolution of gross fixed capital formation (GFCF) and annual investment rate (IR) at Länder-level between 1995-1999 1995 1996 1997 1998 1999 GFCF IR GFCF IR GFCF IR GFCF IR GFCF IR *) **) *) **) *) **) *) **) *) **) Niederöster- 6,739 25.8 - - 6,877 23.8 7,292 23.8 7,400 22.8 reich

Wien 9,409 19.5 - - 10,061 20.2 10,543 20.7 11,431 22.0

Kärnten 2,395 23.2 - - 2,631 24.3 2,617 23.2 2,607 22.3

Steiermark 5,217 24.2 - - 5,834 25.7 5,959 25.2 6,018 24.3

Oberöster- 6,590 23.7 - - 7,115 23.9 7,333 23.7 7,101 22.1 reich

Salzburg 2,881 22.8 - - 3,095 23.1 3,178 22.7 3,408 23.8

Tirol 4,050 28.4 - - 4,244 28.4 4,660 29.4 4,738 29.0

Vorarlberg 1,838 24.0 - - 1,985 24.5 1,955 23.6 1,992 22.6

Burgenland 1,046 27.7 - - 1,159 28.9 1,184 28.4 1,206 27.7

Austria total, 40,173 23.3 41,315 23.2 43,012 23.6 44,725 23.5 45,902 23.3

Source: Statistik Austria (VGR-Revisionsstand: „Volkswirtschaftliche Gesamtrechnungen 1976-2000, Hautptergebnisse“); own calculations for annual investment rate 1995-1999. *) Figures in million EUR at current prices according to ESA 1995. **) The annual investment rate (in %) is calculated: Land level-GFCF divided by total Land GRP - 151 -

Table F: Number of enterprises in Burgenland by size and evolution between 1990-2001

Number of Number of enterprises *) Evolution in % employees 1990 2000 2001 2000/2001 1990/2001 **) 1-9 5,405 6,451 6,639 +2.9 +22.8

10-49 903 1,119 1,147 +2.5 +27.0

50-299 157 197 203 +3.0 +29.3

300 + 13 18 19 +5.6 +46.2

Total 6,478 7,785 8,008 +2.9 +23.6 Source: Hauptverband der österreichischen Sozialversicherungsträger *) Only those enterprises registered at the regional medical health insurance **) By end of July 2001

Table G: Number of enterprises in Burgenland by economic sectors and individual branches in 2001 *) Sector / Branch Number of enterprises In % of Burgenland total 1. Total, primary sector 488 6.0 (Agriculture, Forestry and Fisheries) 2. Total, secondary sector: 1,862 23.3

2.1. Coal mining, mining, gas extraction etc. 20 0.3 2.2. Production of goods: 794 9.9 • Of which are food processing and beverage branch • 269 • 3.7 • Of which are production of metal goods • 81 • 1.0 • Of which are production and processing of glass • 79 • 1.0 2.3. Energy and water supply 16 0.2 2.4. Construction and building 1,032 12.9 3. Total, third sector: 5,658 70.7 3.1. Retail trade, commerce, repairing of cars and consumer goods: 1,668 20.8 • Of which are retail trade • 931 • 11.6 3.2. Hotels and restaurants 1,047 13.1 3.3. Transport and news transmission (telecommunication) 499 6.2 3.4. Banking and insurance branch and related activities 133 1.7 3.5. Real estate, location, data processing, R&D, enterprise related services: 696 8.7 • Of which are real estate • 137 • 1.7 • Of which are enterprise related services • 446 • 5.6 3.6. Public administration, national defence, social 215 2.7 insurance 3.7. Educational activities 66 0.8 3.8. Services in the field of health, veterinary and social 556 6.9 affairs 3.9. Other public or private services 646 8.1 3.10. Private households 132 1.6 4. Total, Burgenland: 8,008 100 Source: Hauptverband der österreichischen Sozialversicherungsträger ; own calculations for % of Burgenland total. *) By end of July 2001 - 152 -

Table H: Evolution of start-ups of enterprises in Burgenland between 1995 and 2001 *)

1995 1997 1998 1999 2000 2001 **)

402 713 585 765 753 948

Source: Wirtschaftskammer Österreichs. *) Start-ups of enterprises within the Burgenland Chamber of Economy (Wirtschaftskammer Burgenland)

Table I: Evolution of start-ups of enterprises in Austria between 1993 and 2001 Territorial level Start-ups of enterprises Share in % Start-up- intensity *) 1993-2001 2001 1993-2001 2001 2001 **) **) **) Burgenland 5,535 948 3.1 3.5 8.8 Kärnten 10,937 1,586 6.2 5.9 6.9 Niederösterreich 34,998 5,453 19.8 20.2 9.2 Oberösterreich 25,023 3,675 14.1 13.6 7.5 Salzburg 12,547 2,010 7.1 7.4 6.9 Steiermark 23,088 3,856 13.0 14.3 8.9 Tirol 14,015 2,119 7.9 7.9 6.5 Vorarlberg 8,204 1,027 4.6 3.8 7.6 Wien 42,730 6,318 24.1 23.4 9.1 Austria 177,077 26,992 100.0 100.0 8.2 Source: Wirtschaftskammer Österreichs. *) Start-ups in % of the active members of the Chambers of Economy (Wirtschaftskammern) **) Provisional figures

Table J: Evolution of export of the Burgenland industry (in million ATS) Total Western Europe Former Eastern Extra-European block including Countries Yugoslavia 1994 5,960 4,851 970 139 1995 6,314 5,186 828 300 1994/1995 in % +5.9 +6.9 -14.6 +115.8 1996 6,685 5,359 1,007 319 1995/1996 in% +5.9 +3.3 +21.6 +6.3 1997 6,517 4,585 1,479 453 1996/1997 in % -2.5 -14.4 +46.9 +42.0 1998 7,873 5,395 1,971 507 1997/1998 in % +20.8 +17.7 +33.3 +11.9 1999 8,113 5,907 1,697 511 1998/1999 in % +3.0 +9.5 -13.9 +0.8 2000 9,369 6,338 2,351 707 1999/2000 in % +15.5 +7.3 +38.5 +38.4 Source: Statistisches Jahrbuch Burgenland, 2000. - 153 -

Table K: Evolution of the number of employees *) in Austria and in Burgenland (by political districts) between 1995-1999 1995 1996 1997 1998 1999 1995/1999 in % Austria (total) 2,631,807 2,652,023 2,625,710 2,629,901 2,649,645 +0.7 Kärnten (total) 144,954 146,419 143,721 143,977 146,305 +0.9

Niederösterreich (total) 395,631 400,139 398,126 401,783 409,378 +3,5 Oberösterreich (total) 426,858 432,469 430,442 431,384 437,707 +2.5 Salzburg (total) 180,989 183,580 180,659 180,180 179,843 -0.6 Steiermark (total) 324,737 328,905 329,637 333,913 340,523 +4.9 Tirol (total) 212,171 213,455 212,746 214,030 215,736 +1.7 Vorarlberg (total) 113,153 113,907 113,625 112,955 113,878 +0.6 Wien (total) 777,322 776,269 760,247 754,287 747,821 -0.3 Burgenland (total) 55,992 56,880 56.507 57,392 58,454 +4.4

Within Burgenland at district level

District Eisenstadt (Eisenstadt city, 20,751 20,961 20,794 20,988 21,401 +3.1 environments and city of Rust) Güssing 2,838 2,863 2,898 2,921 3,119 +9.9

Jennersdorf 2,345 2,425 2,307 2,301 2,304 -1.7

Mattersburg 7,207 7,292 7,293 7,470 7,491 +3.9

Neusiedl am See 5,880 5,959 6,031 6,107 6,290 +7

Oberpullendorf 5,730 6,114 6,003 6,407 6,535 +14.0

Oberwart 11,241 11,311 11,181 11,198 11,314 +0.6

Source: Statistik Austria and „Hauptverband der österreichischen Sozialversicherungsträger“ ; own calculations for evolution 1995/1999. *) Unselbständig Beschäftigte - 154 -

Table L: Evolution of unemployment rates in the Austrian between 1995-2000 (according to EU-labour force concept) Land April April Evolution April 2000 Evolution 1995 1999 1995/ 1999 1999/2000 Total (men, women) Total Women < 25 years In% (men, women) Burgenland 2.8 3.4 +0.6 3.6 4.0 4.8 0.2

Kärnten 5.0 4.9 -0.1 4.8 4.9 7.3 -0.1

Nieder- 3.0 3.2 +0.2 3.2 3.7 3.9 0.0 österreich Ober- 2.6 2.7 +0.1 2.6 2.7 3.6 -0.1 Österreich Salzburg 3.1 3.5 +0.4 3.0 2.9 5.0 -0.5

Steiermark 4.6 4.3 -0.3 4.1 4.6 6.0 -0.2

Tirol 4.6 4.9 +0.3 3.9 3.9 5.7 -1.0

Vorarlberg 3.4 3.5 +0.1 2.9 3.1 3.9 -0.6

Wien 5.0 6.0 +1 5.8 7.2 7.4 -0.2

Austria (total) 3.9 4.1 +0.2 3.9 4.4 5.2 -0.2

EU-15 10.7 9.3 -1.4 8.4 9.9 16.1 -0.9

Source: Eurostat , AMS, WIFO - 155 -

Table M: Evolution of unemployment in Austria and Burgenland between 1990-2001 (according to national calculation concept)

Registered unemployedEvolution Open Reg. Unemployment 1999/2000 jobs Unemployed / rate in % In% open job 1990 1999 2000 2000

Burgenland 5,659 7,296 6,840 -6.3 1,103 6.2 7.9

Kärnten 13,741 17,385 15,486 -10.9 2,281 6.8 7.5

Nieder- 26.653 35,612 31,888 -10.5 7,139 4.5 5.8 österreich Ober- 22,966 26,395 22,385 -15.2 6,004 3.7 4.0 Österreich Salzburg 7,032 10,154 9,067 -10.7 3,179 2.9 4.1

Steiermark 27,161 33,814 29,486 -12.8 3,816 7.7 6.4

Tirol 11,837 15,564 13,546 -13.0 3,539 3.8 4.9

Vorarlberg 3,587 7,138 5,960 -16.5 1,418 4.2 4.3

Wien 47,161 68,385 59,655 -12.8 7,016 8.5 7.2

Austria 165,797 221,743 194,313 -12.4 35,495 5.5 5.8 (total) Evolution of unemployment in Burgenland between 1994-2001 (absolute figures) Unemployment Log term unemployment (> than 1 year) Year Total Male Female Total Male Female

1994 6.244 3.342 2.902 645 304 340

1995 6.451 3.518 2.934 659 274 386

1996 7.201 3.987 3.215 708 273 435

1997 7.596 4.094 3.502 858 321 537

1998 7.720 4.118 3.602 853 339 514

1999 7.296 3.905 3.391 587 241 347

2000 6.840 3.692 3.148 358 150 208

2001 7.236 4.073 3.164 240 109 131

Sources: AMS, WIFO, AMS-Burgenland - 156 -

Table N: Structural features of the agriculture and forestry sector in Austria and evolution between 1995-1999

Evolution of the total number of Structure in 1999 by type of holdings holdings 1995 1999 Difference Full time holding Holding with part- Holding with legal in % time occupation personality Absolute % of Absolute % of Absolute % of Level Figures level Figures level Figures level total total total Burgenland 20,193 16,081 -20.4 3,707 23.0 11.914 74.1 460 2.9

Kärnten 22,231 21,202 -4.6 6,011 28.4 13,977 65.9 1,214 5.7

Nieder- 60,850 54,551 -10.4 25.124 46.1 28.027 51.4 1,400 2.5 österreich

Oberösterreich 45,749 41,804 -8.6 18,003 43.1 23,301 55.7 500 1.2

Salzburg 11,285 10,751 -4.7 4,467 41.5 5,673 52.8 611 5.7

Steiermark 52,624 48,582 -7.7 15,945 32.8 31,519 64.9 1,121 2.3

Tirol 19,201 18,238 -5.0 4,929 27.0 11,516 63.1 1,793 9.8

Vorarlberg 5,906 5,401 -8.6 1,538 28.5 3.216 59.5 647 12.0

Wien 1,060 898 -15.3 491 54.7 355 39.5 52 5.8

Austria 239,099 217,508 -9.0 80,215 36.9 129,495 59.5 7,798 3.6

Source: Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft: „Grüner Bericht 2000“. Own calculation for „% of level total“. - 157 -

Table O: The evolution of agriculture and forestry in Burgenland between 1995-1999 according the size of holdings Size according to cultivated surface *) Total number of holdings Structure in 1999 by type of holdings 1995 1999 Difference Full time Holding with part- Holding with in % holding time occupation legal personality Without surface 131 69 -47.3 6 60 3

Below 1 ha 2,856 1,885 -34.0 15 1,867 3

1 up to 2 ha 2,268 1,562 -31.1 56 1,497 9

2 up to 5 ha 5,014 3,836 -23.5 314 3,475 47

5 up to 10 ha 3,976 3,289 -17.1 491 2,736 62

10 up to 20 ha 2,971 2,514 -15.4 889 1,546 79

20 up to 30 ha 1,120 994 -11.3 566 388 40

30 up to 50 ha 984 930 -5.5 634 225 71

50 up to 100 ha 662 727 +9.8 580 90 57

100 up to 200 ha 142 189 +33.1 129 15 45

200 ha and more 78 86 +10.3 27 15 44

Total Burgenland 20,193 16,081 -20.4 3,707 11.914 460

Source: Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft: „Grüner Bericht 2000“.

*) Surface used by agriculture (landwirtschaftliche Nutzfläche) including the surface for forestry (Forstfläche).

Table P: Development of biological agriculture in Burgenland between 1995-2001 1995 2001 *) Number of enterprises 239 452 Total Surface laboured according to ecological 4.124 ha 12.000 ha criteria Of which are farming 3.447 ha 10.485 ha Of which are greenland 393 ha 1.080 ha Of which are fruit growing 66 ha 120 ha Of which are wine growing 167 ha 220 ha Of which are vegetable growing 51 ha 95 ha Source: Amt der Burgenländischen Landesregierung *) Provisional figures - 158 -

Table Q: The evolution of agriculture and forestry in Burgenland (1995-1999) at district level

Total number of holdings Full time holdings Holdings with part-time Holdings with legal personality occupation 1995 *) 1999 Diff. In % 1995 *) 1999 Diff. In % 1995 *) 1999 Diff. In % 1995 *) 1999 Diff. In %

Eisenstadt, city 386 291 -24.6 70 66 -22.9 305 209 -31.5 11 16 +45.5

Rust, city 111 98 -11.7 39 48 +23.1 67 45 -32.8 5 5 0

District Eisenstadt 2,882 2,098 -27.2 525 502 -4.4 2,320 1,559 -32.8 37 37 0 and environments District Güssing 3,669 2,189 -40.3 354 320 -9.6 3,226 1,799 -44.2 89 70 -21.3

District Jennersdorf 2,607 1,635 -37.3 279 181 -35.1 2,302 1,434 -37.7 26 20 -23.1

District Mattersburg 1,270 845 -33.5 240 198 -17.5 989 610 -38.3 41 37 -9.8

District Neusiedl am 4,914 3,927 -20.1 1,551 1,466 -5.5 3,306 2,417 -26.9 57 44 -22.8 See District 3,182 2,222 -30.2 455 456 +0.2 2,630 1,668 -36.6 97 98 +1.0 Oberpullendorf District Oberwart 4,868 2,776 -43.0 518 470 -9.3 4,193 2,173 -48.2 157 133 -15.3

Burgenland, total 23,889 16,081 -32.7 4,031 3,707 -8.0 19,338 11,914 -38.4 520 460 -11.5

Source: Amt der Burgenländischen Landesregierung, Landesstatistik: Statistisches Jahrbuch Burgenland 2000. Eisenstadt, 2001. Own calculations for difference 1995/1999 in %.

*) Significant differences with regard to the total number of agricultural holdings in Burgenland appear compared to the data given in the „Green Report 2000“ edited by the Federal Ministry for agriculture and forestry, environment and water management. Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft: „Grüner Bericht 2000“. The reasons for this were different accounting methods used at Land level in previous years and corrections made in more recent years.