SLOVAKIA: ACCESSION PARTNERSHIP (98/C 202/09)

1. INTRODUCTION

In the opinion which it submitted to the Council in July 1997, in accordance with the provisions of Article O of the Treaty, the Commission recommended that negotiations for accession should be opened with Slovakia as soon as it has made sufficient progress in satisfying the conditions of membership defined by the European Council in Copenhagen. This recommendation derives from the analysis contained in the opinion, in which the Commission is of the view that Slovakia does not fulfil in a satisfying manner the political conditions set out by the European Council in Copenhagen but could satisfy the economic criteria in the medium term and is firmly committed to taking on the acquis, particularly concerning the internal market even if further progress is still required to ensure its effective application of the acquis.

The Europe Agreement will remain the basis for the European Union's relations with Slovakia. However the pre-accession strategy will be reinforced to enable assistance to be directed towards the specific needs of each applicant so as to provide support for overcoming particular problems identified in the opinion. As the Commission indicated in Agenda 2000: 'The reinforced pre-accession strategy has two main objectives. First, to bring together the different forms of support provided by the Union in a single framework, the Accession Partnerships, and to work together with the applicants, within this framework, on the basis of a clearly defined programme to prepare for membership, involving commitments by the applicants to particular priorities and to a calendar for carrying them out. Second, to familiarise the applicants with Union policies and procedures through the possibility of their participation in Community programmes.`

At its meeting in Luxembourg in December 1997 the European Council decided that the Accession Partnerships would be the key feature of the enhanced pre-accession strategy, mobilising all forms of assistance to the applicant countries within a single framework. This Accession Partnership has been decided by the Commission, after consulting Slovakia and on the basis of the principles, priorities, intermediate objectives and conditions which have been decided by the Council.

2. OBJECTIVES

The purpose of the Accession Partnership is to set out in a single framework the priority areas for further work identified in the Commission's opinion on Slovakia's application for membership of the European Union, the financial means available to help Slovakia implement these priorities and the conditions which will apply to that assistance. This Accession Partnership provides a framework for a number of policy instruments which will be used to help the candidate countries in their preparations for membership. These will include, inter alia, the National Programme for the Adoption of the Acquis to be adopted by Slovakia, the Joint Assessment of Economic Policy Priorities, the Pact against Organised Crime and the internal market road maps. Each of these instruments is different in nature and will be prepared and implemented according to specific procedures. They will not be an integral part of this Partnership but the priorities they contain will be compatible with it.

3. PRINCIPLES

The main priority areas identified for each candidate country relate to their ability to assume the obligations of meeting the Copenhagen criteria which state that membership requires:

- that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities,

- the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and market forces within the Union,

- the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.

At its meeting in Madrid, the European Council stressed the need for the candidate countries to adjust their administrative structures to ensure the harmonious operation of Community policies after accession and at Luxembourg it stressed that incorporation of the acquis into legislation is necessary, but not in itself sufficient; it is necessary to ensure that it is actually applied.

4. PRIORITIES AND INTERMEDIATE OBJECTIVES

The Commission's opinions and the Council's examination of these have highlighted the extent of the efforts which still have to be made in certain areas by the candidate countries to prepare for accession and took the view that none of these countries fully satisfies all of the Copenhagen criteria at the present time. This situation will require the definition of intermediate stages in terms of priorities, each to be accompanied by precise objectives to be set in collaboration with the countries concerned, the achievement of which will condition the degree of assistance granted and the progress of the negotiations under way with some countries and the opening of new negotiations with the others. The priorities and intermediate objectives have been divided into two groups - short and medium term. Those listed under the short term have been selected on the basis that it is realistic to expect that Slovakia can complete or take them substantially forward by the end of 1998. In view of the short time span, and taking into account the administrative capacity required to achieve them, the number of priorities selected for the short term has been limited. The priorities listed under the medium term are expected to take more than one year to complete although work may and should also begin on them during 1998.

Slovakia will be invited to draw up a National Programme for the Adoption of the Acquis (NPAA) by the end of March which should set out a timetable for achieving these priorities and intermediate objectives and, where possible and relevant, indicate the necessary staff and financial resources.

The Accession Partnership indicates that Slovakia will have to address all issues identified in the opinion. The annex provides a summary checklist of these. Incorporation of the acquis into legislation is not in itself sufficient; it will also be necessary to ensure that it is actually applied to the same standards as those which apply within the Union. In all of the areas listed below there is a need for credible and effective implementation and enforcement of the acquis.

Drawing on the analysis of the Commission's opinion and the Council's examination of this, the following short and medium-term priorities and intermediate objectives have been identified for Slovakia.

4.1. Short term (1998)

- Political criteria: free and fair presidential, national and local elections in 1998; ensuring effective opposition participation in parliamentary oversight committees and supervisory boards; the adoption of legislative provisions on minority language use and related implementing measures.

- Economic reform: establishment of medium-term economic policy priorities and joint assessment within the framework of the Europe Agreement; implementation of policies aimed at tackling internal and external imbalances and sustaining macroeconomic stability; progress on structural reforms, and on privatisation and restructuring of enterprises, finance, banking, and energy intensive heavy industries.

- Reinforcement of institutional and administrative capacity: including the adoption of a civil service law and development of public administration reform strategy with emphasis on the strengthening of administration dealing with European Union accession, institutional strengthening in the area of environment, veterinary and phytosanitary administrations, particularly as regards facilities at the external borders, beginning to set up structures needed for regional and structural policy.

- Internal market: including continued legislative alignment in the fields of standards and certification, State aids (progress towards adoption of a law), intellectual property (alignment of legislation), public procurement (including transparency), bankruptcy and agriculture (veterinary and phytosanitary fields), establishment of standardisation and conformity assessment structures.

- Environment: continue transposition of framework legislation, establishment of detailed approximation programmes and implementation strategies related to individual acts. Planning and commencement of implementation of these programmes and strategies.

4.2. Medium term

- Political criteria: further steps to ensure respect for the Constitution and rights of the opposition, to guarantee the independence of the judiciary, and to foster and strengthen the functioning of the institutions of democracy, NGOs, independence of the media (in particular radio and television) and the policies and institutions protecting the rights of minorities.

- Economic policy: regular review of the joint assessment of economic policy priorities, within the Europe Agreement framework, focusing on satisfying the Copenhagen criteria for membership of the Union and the acquis in the area of economic and monetary policy (coordination of economic policies, submission of convergence programmes, avoidance of excessive deficits); while Slovakia is not expected to adopt the euro immediately on accession, it is expected to pursue policies which aim to achieve real convergence in accordance with the Union's objectives of economic and social cohesion, and nominal convergence compatible with the ultimate goal of adoption of the euro.

- Reinforcement of institutional and administrative capacity: the State audit office, financial control and internal audit functions, customs, banking and financial market supervisory bodies, regional development institutional structures and budgetary mechanisms; improved operation of the judicial system, training for the judiciary in Community law and its application; reinforcement of justice and home affairs institutions (ensuring sufficient and properly trained personnel, in particular police, border guards, ministries and courts), strengthen the nuclear safety authority, reform of customs and tax administrations to ensure readiness to apply the acquis and the reinforcement of food control administration.

- Internal market: including further alignment of legislation in the fields of competition (anti-trust and State aids monitoring and transparency), indirect taxation, intellectual property (enforcement), financial services, data protection and audio-visual, reinforcement of standardisation and conformity assessment structures, establishment of a market surveillance system and alignment of technical legislation on industrial products, promotion of enterprise development, including SMEs, alignment with the acquis in the fields of telecommunications, consumer protection and the internal energy market.

- Justice and home affairs: further development and strengthening of JHA institutions (with a view in particular to ensuring the accountability of the police, and the independence of the judiciary), to further develop effective border management; to fight organised crime (in particular money laundering, drugs and trafficking in human beings) and corruption, and to align visa policy with that of the European Union and to complete alignment to international conventions, improve capacity to handle asylum and migration questions, notably in view of the Schengen acquis.

- Agriculture: including alignment with the agricultural acquis (including veterinary and phytosanitary matters, in particular external border controls), attention to environmental aspects of agriculture and biodiversity. Development of the capacity to implement and enforce the common agricultural policy, in particular the fundamental management mechanisms and administrative structures to monitor the agricultural markets and implement structural and rural development measures, adoption and implementation of the veterinary and phytosanitary requirements, upgrading of certain food-processing establishments and testing and diagnostic facilities, restructuring of the agri-food sector.

- Energy: implementing a comprehensive long-term energy strategy based on efficiency and diversification which foresees the alignment with and implementation of European Community energy legislation, the completion of the Mochovce nuclear power station according to internationally agreed safety principles, and implementation of a realistic programme for the closure of the Bohunice plant.

- Transport: further efforts on alignment with acquis in particular in road transport (market access, safety rules and taxation) and rail, and to provide necessary investment for transport infrastructure, notably extension of trans-European networks.

- Employment and social affairs: development of appropriate labour market structures and joint review of employment policies as preparation for participation in European Union coordination of employment policies, alignment of labour and occupational health and safety legislation, in particular early adoption of the framework directive on health and safety at work, further development of an active social dialogue; further development of social protection; enforcement of equal opportunities between women and men, undertake steps to bring public health standards into line with European Union norms.

- Environment: including the development of monitoring and implementation control structures and capacities, continuous planning and implementation of approximation programmes related to individual legal acts. A particular emphasis should be given to air, water and the waste sector as well as integrated industrial pollution control and risk management. Environmental protection requirements and the need for sustainable development must be integrated into the definition and implementation of national sectoral policies.

- Regional policy and cohesion: establishment of a legal, administrative and budgetary framework for an integrated regional policy in order to participate in European Union structural programmes after membership.

5. MAIN INSTRUMENTS FOR COMMUNITY TECHNICAL AND FINANCIAL ASSISTANCE

5.1. Programming of financial resources

The Phare allocation for the period 1995 to 1997 has totalled ECU 95 million. Subject to the approval of the Phare budget for the remaining period, the Commission will confirm the allocations for 1998 and 1999. In addition, Slovakia is eligible for support from the 'catch-up` facility envisaged for 1998 to finance projects relating to privatisation/restructuring, promotion of foreign direct investment and the fight against corruption. Financial proposals will be submitted to the Phare Management Committee as provided for in Council Regulation (EEC) No 3906/89. Joint financing by the applicant countries will be systematically required for all investment projects. The Commission will work with Slovakia, the EIB and international financing institutions, in particular the EBRD and World Bank, with a view to facilitating the co-financing of projects relating to pre-accession priorities. Financial assistance from the year 2000 onwards will comprise aid for agriculture and a structural instrument which will give priority to measures similar to the Cohesion Fund. In addition Slovakia will have access to funding from multi-country programmes directly related to the acquis.

The Phare programme is the main financial instrument of the reinforced pre-accession strategy. Phare's prime objective is to help prepare Central and East European countries for accession by focusing the assistance it provides on the adoption of the Community acquis and in particular on the priorities identified in this Accession Partnership and in the National Programme for the Adoption of the Acquis. Each year the Commission will sign a financing memorandum with Slovakia in which Slovakia will undertake to meet a number of the priorities identified in this Accession Partnership and the Commission will undertake to contribute financially to their realisation. Programming of Community financial assistance will take into account the priorities and timetable of the NPAA.

In addition, the subsequent allocation of financial assistance will be closely tied to the respect by the Slovak Government of the commitments made in the NPAA. Certain pre-accession activities can be reinforced now (e.g. support for institution building) but others, such as the financing of major investment projects designed to meet the requirements of the acquis in areas such as environment and nuclear safety will have to be programmed over a period of five to six years.

From 1998 Phare assistance will be channelled through the following types of actions:

- Institution building (around 30 %), which involves the strengthening of democratic institutions, rule of law, public administration and all entities responsible for public services in order to establish the necessary institutional and administrative structures and train the people required to apply the acquis. Institution building support will be implemented, inter alia, through, training actions, technical assistance and twinning of institutions and administrations in Slovakia with relevant bodies in the Member States. Initially this twinning will focus on priority areas such as finance, agriculture, environment, justice and home affairs.

- Investment support (around 70 %), in order to make the necessary investments possible for the adaptation of Slovak infrastructure to the Community acquis. This support will concentrate on: (i) structural actions, covering in particular agricultural restructuring, regional development and investment in human and intellectual capital, which could include Phare contributions to participation in the research and technological development framework programme; (ii) compliance with Community norms, in particular as regards environment, agriculture, industry, occupational safety and health, transport and telecommunications; (iii) co-financing of large scale infrastructure (1) and (iv) small and medium-sized enterprises development (2).

5.2. Role of international financial institutions

Cooperation between Slovakia and the international financial institutions will receive a new impetus and a new focus through the Accession Partnership. The grant resources made available under the Accession Partnership will serve as seed money and a catalyst for larger amounts of development finance from the IFIs. This process will be developed by the Commission in liaison with the candidate countries, the EIB and the IFIs, in particular the EBRD and the World Bank with a view to facilitating the co-financing of projects relating to pre-accession priorities.

Under a new lending mandate covering the period 1997 to 1999, the EIB can make available ECU 3 520 million in Central and Eastern Europe. The new pre-accession facility approved by the EIB's governors in early 1998 increases this amount to ECU 7 billion. EIB loans shall be used in all sectors eligible for EIB financing to facilitate the accession process.

6. CONDITIONALITY

Community assistance will be conditional on respect by Slovakia of its commitments under the Europe Agreement, further steps towards satisfying the Copenhagen criteria and progress in implementing this Accession Partnership. Failure to respect these general conditions could lead to a decision by the Council on the suspension of financial assistance on the basis of Article 4 of Council Regulation (EC) No 622/98.

7. IMPLEMENTATION OF PRE-ACCESSION ASSISTANCE

The provision of financial assistance to Slovakia will depend on the maturity of projects proposed by the Slovak Government for inclusion in a financing memorandum. Where projects need to be tendered the Commission will only finance those projects which are ready for tendering at the stage of the signature of the financing memorandum. In addition any previous/existing commitments in the same sector must have been fully contracted or be on track. In order to ensure efficient implementation, projects to be financed must not, in principle, fall below a threshold of ECU 2 to 3 million, in particular in the case of infrastructure projects. If these principles lead to a situation where Slovakia cannot absorb its full indicative allocation, the allocation will be reduced accordingly. The difference between the indicative and final allocation will be transferred to the horizontal SME and/or the large scale infrastructure facility. No subsequent compensation of this amount will be made.

The Government of Slovakia is invited to put in place an implementation structure which ensures coherence and complementarity between all types of European Union financial assistance and national resources. A national coordinator will be responsible for ensuring a close link between the general accession process and the programming of the Community financial assistance.

The Government of Slovakia will establish (preferably in the Ministry of Finance) during 1998 a national fund for investment promotion and institution building functioning under the responsibility of a National Authorising Officer (NAO). As the central entity through which Phare and other forms of Community financial assistance will be channelled, the national fund will be responsible for the management of these funds under decentralised implementation in order to increase transparency and reduce dispersion of funds. It will have overall responsibility for management of funds including respect of provisions of the financing memorandum and be accountable to the Commission for the use of the funds. It will also ensure and supervise the flow of national and other co-financing resources as set out in the financing memorandum. The detailed functions and responsibilities of the national fund will be set out in the individual financing memoranda.

In cooperation with the Government of Slovakia, the Commission will pursue a policy of further decentralisation of the implementation of the financial assistance where certain pre-conditions are met, and to the extent permitted by the European Communities' Financial Regulation, in particular Article 105(3). This will be done with the intention to establish, within limits and in a gradual manner, a relationship between the Commission and Slovakia where responsibility is shared along the lines of the relationship existing with the Member States for implementing the Structural Funds.

In this context, the possibility of applying national procurement procedures in the tendering and contracting of Phare projects may be explored by the Commission, if so requested by the Government of Slovakia, in particular in the field of investment. The Commission's decision on this matter will be taken following, inter alia, examination of the Slovak national procurement law for respect of and compatibility with the basic provisions of the European Community's public procurement rules and its Financial Regulation, including equal participation in tenders and the provisions of Article 118. Any decision on the use of national procurement rules will be taken by the Commission on a case-by-case basis and will be confirmed in the individual financing memoranda.

The monitoring of programme implementation shall be carried out jointly with the Commission through procedures established in the individual financing memoranda. In order to ensure effective monitoring of implementation of assistance under the Phare programme, each Phare programme will incorporate quantified physical and financial objectives which will be specified in the financing memorandum. In order to gauge their effectiveness all operations financed under the Phare programme will be subject to ex-post evaluation to appraise their impact with respect to their objectives.

8. MONITORING

The implementation of the Accession Partnership will be monitored in the framework of the Europe Agreement. This will commence in 1998 before the Commission presents its first regular report to the Council reviewing the progress made by Slovakia including implementation of the Accession Partnership.

The relevant sections of the Accession Partnership will be discussed in the appropriate subcommittee. The Association Committee will discuss overall developments, progress and problems in meeting its priorities and intermediate objectives as well as more specific issues referred to it from the subcommittees. The Association Committee will report to the Association Council on the implementation of the Accession Partnership.

The Phare Management Committee will ensure that financing decisions are compatible with the Accession Partnerships.

The Accession Partnership will be amended as necessary in accordance with Article 2 of Regulation (EC) No 622/98. The Commission will propose a review of this partnership before the end of 1999 and at regular intervals thereafter. These reviews will include consideration of the need to further specify intermediate objectives in the light of the progress made by Slovakia in meeting the objectives set out in this partnership.

(1) Concerning investment projects in general, Slovakia will be required to fulfil the principle of complementarity by means of contributing a minimum amount of 25 % to jointly financed projects.

(2) A horizontal facility for SMEs will be available to remedy the shortage of investment capital available to small enterprises.

ANNEX

Slovakia will have to address all issues identified in the opinion. The purpose of this Annex is to provide a summary checklist of these issues. These are formulated as recommendations for action. They are listed in the order in which they appear in the opinion without any ranking in terms of importance or urgency. The priority areas for action by each candidate are set out as priorities and intermediate objectives in the Accession Partnership itself.

1. Political criteria

Although established as a parliamentary democracy the operation of Slovak institutions is characterised by the fact that the Government does not sufficiently respect the powers devolved by the Constitution to other bodies or the rights of the opposition. The treatment of the Hungarian minority should be improved and the situation of the Roma needs attention from the authorities. Further steps are therefore necessary to ensure respect for the Constitution and rights of the opposition, to foster and strengthen the functioning of the institutions of democracy, NGOs, an independent media (especially in TV and radio) and the policies and institutions protecting the rights of minorities. Substantial efforts will have to be made to provide better guarantees of the independence of the judicial system and of satisfactory conditions for its operation. The fight against corruption also needs to be made more effective.

2. Economic criteria

In order to guarantee economic stability, macroeconomic policies need to be sufficiently restrictive, and they need to be better coordinated. Structural problems within the Slovak economy (the bad debt problem, the slow pace of enterprise and financial sector restructuring and the lack of foreign direct investment) need to be tackled in a timely and transparent way. There is a need for more transparent and market based economic policies. Further steps should be taken to facilitate enterprise restructuring and foreign direct investment. The financial sector needs to be reinforced and progress is needed in the regulation of the bankruptcy process and capital markets. The Slovak Price Law and the Enterprise Revitalisation Act represent a major step back from market mechanisms and should be reviewed.

3. Ability to assume the obligations of membership

3.1. Internal market without frontiers

The four freedoms

General framework - major efforts are needed to strengthen implementation and enforcement structures in public procurement (in particular the utilities sector and review procedures), intellectual and industrial property rights and data protection.

Free movement of goods - alignment with the European Union system needs to accelerate. Emphasis needs to be put on improving the framework legislation as well as establishing independent standardisation and conformity assessment infrastructures. New approach Directives need to be adopted. Approximation of other sectoral Directives (in particular, foodstuffs, motor vehicles and pharmaceuticals) is necessary. Then, once the sectoral legislation is fully harmonised, a market surveillance mechanism will have to be set up to become fully operational in the longer term.

Free movement of services - further efforts are needed to align legislation in insurance, accountancy and auditing. Although significant progress towards legislative alignment has been achieved in the areas of company law, banking, securities and free movement of capital, further work is needed to achieve full alignment with European Community rules and requirements in these areas.

Free movement of persons - amendments to the current legislation on foreigners and on employment of foreigners will have to be adopted to bring legislation fully into line with European Union principles on free movement of workers. Concerning mutual recognition of diplomas, further adjustments are needed to bring the legislation fully in line with the acquis. Further efforts must be made to ensure the necessary legislative and enforcement measures as regards the coordination of social security schemes.

Competition

Approximation of legislation in the field of anti-trust should be completed. In the field of State aid, the inventory should cover all existing aid which encompasses existing State aid granted by all granting authorities, including aid granted under the Revitalisation Act. This inventory must be continuously updated in accordance with Community practice. A national legal framework on State aid which regulates the monitoring and admissibility of State aid must be created. A review of all existing aid measures should be undertaken and those measures which are not compatible with the Europe Agreement must be modified or abolished. The monitoring authority on State aid needs to have the power, sufficient and qualified staff and procedures and practical tools to effectively monitor all new aid measures on a systematic basis. Certain exclusive rights and State monopolies which are not compatible with the Community acquis must be progressively adjusted and/or abolished.

3.2. Innovation

Education, training and youth

Further reforms are necessary to achieve a qualitative improvement of the Slovak education system at all levels. With a view to the adaptation of the workforce to the ongoing process of economic restructuring, and given the need to ensure compatibility of standards with those in the European Union Member States, continued reform of the vocational education system is of importance.

Research and development

The legal and financial framework for research and development needs to be consolidated in order to stabilise the sector and give it a clear perspective for future development.

Telecommunications

Important decisions are needed to establish and implement a satisfactory policy for the telecommunications sector. Far reaching new legislation is needed to secure compliance with European Union Directives, in particular to create a properly constituted regulatory authority. At the same time, the acquis now requires governments to ensure that a modern telephone service is available everywhere at an affordable price. Meeting this obligation will require significant investment in the system.

Audiovisual

Existing Slovak audiovisual legislation will need to be amended in particular with regard to the promotion of European and independent production.

3.3. Economic and fiscal affairs

Economic and monetary union

Central Bank legislation needs to be made fully compatible with Community rules and the banking sector needs to be restructured, in line with market economy principles and practices.

Taxation

Particular efforts are needed as regards the VAT rate structure and the VAT refund scheme to foreign taxable persons. The significant discrepancies between the Slovak excise regime and European Union requirements need to be addressed. In the field of excise duties particular attention should be given to the setting up of a warehousing system for the movement of goods under duty suspension arrangements. Tax structures and the level of excise rates need to be aligned on the Community model.

Statistics

Efforts will be needed to address the issues of transparency, confidentiality and dissemination and to register improvement in national and regional accounts and the business register. Improvements are also needed in the regional statistical system following the reform of the territorial division of the country.

3.4. Sectoral policies

Industry

To enhance competitiveness, further efforts should be made to pursue policies aimed at promoting open and competitive markets and taking on the instruments which make up Community industrial policy, relating both to the operation of markets (product specification and market access, trade policy, State aids and competition policy) and measures related to industry's capacity to adapt to change (stable macroeconomic environment, technology, training, etc.). Further efforts are needed to restructure certain industries, especially those which are energy intensive.

Agriculture

Further alignment to the Community acquis is still necessary. Particular efforts are needed in relation to implementation and enforcement of veterinary and phytosanitary requirements and upgrading of establishments to meet Community standards (this is particularly important with regard to the inspection and control arrangements for protecting the European Union external border); strengthening of the administrative structures to ensure the necessary capacity to implement and enforce the instruments of the common agricultural policy, and further substantial restructuring of the agro-food sector to improve its competitive capacity.

Energy

Efforts need to be stepped up in particular with regard to compliance with Community energy legislation. In particular, matters such as the adjustment of monopolies including import and export issues, access to networks, energy pricing, emergency preparedness including the building up of mandatory oil stocks, State interventions in the solid fuels sector, and the development of energy efficiency and fuel quality standards need to be addressed. Nuclear safety requires continued particular attention. Safety standards should be tackled appropriately and realistic programmes implemented quickly. Longer term solutions for waste need attention. The independence of the safety authority should be supported.

Transport

Efforts must be made to ensure the adoption of legislation and its effective implementation in regard to road haulage (particularly market access, safety standards and taxation) and railways. Steps must be taken to facilitate investment in TENS. At a national level there is a need to develop specific strategies for transport infrastructure development and financing. Slovak administrative structures, including inspection bodies, should be significantly strengthened at all levels.

Small and medium-sized enterprises

Steps need to be taken to simplify legislation and the administrative environment to make it more SME friendly, strengthen the support infrastructure, improve the tax environment and develop SME access to financing and their ability to penetrate new markets.

3.5. Economic and social cohesion

Employment and social affairs

Social reforms need to be further developed, the social dialogue needs to be ameliorated and the health system to be improved. Slovakia needs to make substantive progress in the fields of health and safety at work and labour law to ensure alignment with European Union standards. Efforts to effectively implement the acquis need to be continued.

Regional policy and cohesion

A comprehensive differentiated policy addressing regional disparities should be introduced. The Slovak Republic's administrative capacity to manage integrated regional development programmes needs to be improved. Major efforts are needed to ensure that appropriate administrative and budgetary procedures are in place to facilitate the application of Community rules and the effective use of funds from Community structural policies after membership.

3.6. Quality of life and environment

Environment

Steps must be taken to ensure the full transposition of the environmental acquis as well as substantial progress in effective compliance. The Slovak environmental accession strategy should be finalised. Particular attention should be given to the transposition of framework Directives dealing with air, waste, water and the Integrated Pollution Prevention and Control Directive (IPPC), as well as the establishment of financing strategies for legislation in the water, air, and waste sectors requiring major investments. A considerable effort must be made to ensure implementation of the environmental legislation and to develop effective enforcement structures. A sustained high level of investment and considerable administrative effort will be needed. Public awareness should be stimulated.

Consumer protection

Further effort is required to reach full compatibility with European Community Directives on general product safety, the indication of prices and misleading advertising, consumer credit, unfair contract terms, package travel, sales away from business premises and timeshare. A strong and independent consumer movement, sustained by public authorities, will need to be developed.

3.7. Justice and home affairs (JHA)

Some important gaps need to be filled in Slovakia's legislation. The independence of the judiciary needs to be ensured. Reforms will have to be undertaken, notably in the development of visa policy toward the NIS, border management and migration control and extradition. The fight against organised crime must be strengthened, including the fight against trafficking in drugs, human beings, arms, nuclear materials, stolen cars, currency and cultural artefacts. Racketeering and money laundering need to be addressed. Particular efforts are needed to ensure police accountability and that corruption is effectively tackled in JHA institutions.

3.8. External policies

Trade and international economic relations

Preparations must be made for applying, on accession, the Community's various cooperation and preferential agreements, multilateral and bilateral commercial policy commitments and its autonomous commercial defence instruments. At the same time, national legislation in this field must be repealed.

Development

Preparations must be made for applying, on accession, the Lomé trade regime to the ACP States and participating, together with other Member States, in financing the European Development Fund.

Customs

Customs legislation must be aligned on that of the European Community and the organisation and duties of staff must be aligned on those of a modern customs administration. An effort must be made to introduce computerised systems for full participation in the customs union and the internal market. Particular attention must be paid to preparing the customs administrations for the operation of all the customs procedures with economic impact, the system of tariff suspensions and the administration of tariff quotas and ceilings. Strategic planning has to take account of the reinforcement of border posts along the external frontier that the Slovak Republic has with countries other than European Union Member States at the time of accession.

3.9. Financial questions

The necessary financial management and control mechanisms for public expenditure, with provisions to fight fraud, must be established to ensure satisfactory implementation of Community policies, especially for agriculture and the Structural Funds. Major efforts are needed to strengthen financial control and audit functions. Approximation of legislation is moreover needed to allow the system of 'own resources` to be introduced, with satisfactory provision for accounting.

4. Administrative capacity to apply the acquis

To ensure the effective implementation and enforcement of the acquis, major reform efforts must be made to strengthen Slovakia's administrative structures in virtually all European Union relevant sectors. Special efforts must be made to strengthen the authorities ensuring the correct application of internal market requirements, particularly as concerns standards and certification, intellectual property and public procurement. Regulatory and monitoring bodies must be strengthened in fields such as State aid, securities, insurance, banks, capital markets, money laundering, veterinary and phytosanitary control, food administration, environment, transport safety, telecommunications, consumer protection and the labour market. In some areas, such as data protection and capital markets, there is a need to establish independent authorities. In the area of justice and home affairs, the effective administration of the acquis will require improvements to police accountability, the independence of the judiciary and the strengthening of the institutional framework.

For all levels of the civil service there is an urgent need to upgrade professional capacities, reinforce ethical standards and promote a corporate sense of public service. Language skills will have to be considerably improved in order to facilitate contacts with European institutions as well as to allow for faster and more direct access to documents relating to European integration.

The judicial system must be strengthened in terms of resources and relevant expertise. A comprehensive upgrading of judges, in particular in European Union matters, must be carried out.