VIII.  TRADE AND PROJECT FINANCING

EU programs provide a wide range of support in the form of grants, loans
and co-financing for training, feasibility studies, infrastructure projects
in the environmental, transportation, energy and other key sectors.
From a commercial perspective, these initiatives create significant market
opportunities for European firms of American parentage.

Union initiatives are designed to support projects within its Member
States and EU-wide "economic integration" projects that cross over
borders.  In addition, the EU provides assistance to countries, such as
those in Central and Eastern Europe (CEE) that are seeking eventual
membership in the Union.  The European Bank for Reconstruction and
Development (EBRD) has co-financed some economic restructuring
projects in these countries, as has the European Investment Bank (EIB),
whose scope also covers ACP/Lome signatory countries and
Mediterranean countries.

A Word About EU Funds

The Structural Funds were created in 1975 to assist economically weak
and depressed regions that required industrial restructuring, and
agricultural reconversion.  Recently, the EU earmarked 141 billion ECU
(approximately US$ 161 billion) for projects under this program during
the 1994-1999 period.  Structural fund tenders are subject to EU public
procurement legislation, provided that the tender meets the EU threshold
requirements.  There are no overt prohibitions against the  participation
of U.S. companies.  Structural Fund projects are co-financed by national
authorities.

The Poland and Hungary Assistance for Restructuring of the Economy,
PHARE, was established in 1989.  It now grants assistance to twelve
countries in Central and Eastern Europe.  The EU program of Technical
Assistance to the CIS, TACIS, was set up in 1990 with the same objectives
as PHARE, but the geographical focus lies in the former Soviet Union.  In
1994, PHARE's budget totals 958 million ECU (approximately US$ 1.09
billion); TACIS's 510 million ECU (approximately US$ 581 million).  Unlike
other EU funds, participation is restricted to European or local
companies (whether or not of American parentage), whose products have
undergone the last substantial manufacturing transformation in Europe.

The Cohesion Fund, with a 15.15 billion ECU 1993-1199 budget
(approximately US$ 17.27 billion) seeks to improve the cohesion with
other European countries by funding infrastructure and environmental
projects in Ireland, Portugal, Spain and Greece.  These projects are
generally cofinanced by national authorities, and/or the European
Investment Bank.

In addition, the European Union has created research programs, such as
Thermie and Impact, which are part of a larger EU research and
technology policy, as well as educational programs, such as Erasmus and
Sokrates.  The Union initiatives, which are a very small but highly visible
part of the Structural Funds, are also worth mentioning.

It is important for private sector representatives to meet with EU,
American and other officials in the donor countries in order to become
acquainted with the programs, and to bring to their attention any
difficulties encountered related to the tendering procedures.  In
addition, company representatives should be sure to visit with local
officials in the recipient countries who play an invaluable role in
assessing the needs of their country, developing the projects, evaluating
the bids, and ultimately helping to award the final contracts.