[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 12.1.2007

SEC(2007) 11

COMMISSION STAFF WORKING DOCUMENT

Annex to theREPORT FROM THE COMMISSION TO THE COUNCILAND THE EUROPEAN PARLIAMENT 2005 REPORT ON PHARE, PRE-ACCESSION AND TRANSITION INSTRUMENTS {COM(2007) 3 final} COUNTRY SECTIONS & ADDITIONAL INFORMATION

TABLE OF CONTENTS

PART I: COUNTRY SECTION 5

I.1. Bulgaria 6

I.2. Croatia 16

I.3. Cyprus 21

I.4. Czech Republic 25

I.5. Estonia 29

I.6. Hungary 33

I.7. Latvia 36

I.8. Lithuania 39

I.9. Malta 43

I.10. Poland 46

I.11. Romania 50

I.12. Slovakia 63

I.13. Slovenia 67

I.14. Turkey 71

PART II: ADDITIONAL INFORMATION ON IMPLEMENTATION AND PROGRAMME MANAGEMENT ISSUES 84

II.1 Technical and Financial assistance 85

II.1.1 Twinning 85

II.1.2 Taiex 86

II.1.3 SIGMA 87

II.2 Information on multi-country and horizontal programmes 88

II.2.1 Participation in Community Programmes, Agencies and Committees 94

II.2.2 Information on multicountry programmes in co-operation with IFIs 95

II.3 Programme Management Issues - Monitoring and Evaluation 99

II.3.1 Monitoring and interim Evaluation 99

II.3.2 Ex-post evaluation 100

II.3.3 Other activities of monitoring and evaluation function 100

PART III: FINANCIAL DATA 101

III.1 Phare funds by year 1990 – 2005 102

III.2 Phare funds by country 1990 – 2005 103

LIST OF ACRONYMS

AC Acceding Country

BSP Business Support Programme

CAP Common Agricultural Policy

CBC Cross Border Cooperation

CC Candidate Country

CEB European Development Bank

CFCA Central Financing and Contracting Agency

CFCD Central Financing and Contracting Department

CFCU Central Finance and Contracts Unit

CFP Common Forestry Policy

CMO Common Market Organisations

CPER Country Phare Evaluation Review

CPMA Central Programme Management Agency

CSO Civil Society Organisation

DIS Decentralised Implementation System

EAG Evaluation Advisory Group

EAGGF European Agricultural Guidance and Guarantee Fund

EBRD European bank for reconstruction and development

EC European Communities

ECR European Commission Representation

EDIS Extended Decentralised Implementation System

EFTA European Free Trade Association

EIB European Investment Bank

ENPI European Neighbourhood and Partnerships Instrument

ESC Economic and Social Cohesion

ESF European Social Fund

EU European Union

FDI Foreign Direct Investment

FIFG Financial Instrument for Fisheries Guidance

GDP Gross Domestic Product

IA Implementing Agency

IACS Integrated Administration and Control System

IB Institution Building

IFI International Financial Institutions

IPA Instrument for Pre-Accession

IT Information and Telecommunication

JHA Justice and Home Affairs

JMC Joint Monitoring Committee

KIDSF Kozloduy international decommissioning fund

MAP Multi Annual Programming

MEDA Euro-Mediterranean Partnership

NAO National Authorising Officer

NAC National Aid Coordinator

NDP National Development Plan

NF National Fund

NGO Non-Governmental Organisation

NPAA National Programme for the Adoption of the Acquis

NP National Programme

NPP Nuclear Power Plant

OLAF European Antifraud Office

OP Operational Programmes

PAO Programme Authorising Officer

PAP Pre-Accession Programme

PIFCA Public Internal Financial Control Agency

QSG Quality Support Group

REACH Registration, Evaluation and Authorisation of Chemicals

RTA Resident Twinning Advisor

SF Structural Funds

SIGMA Support for Improvement in Governance and Management

SME Small and Medium Sized Enterprises

SMSC Sector Monitoring Sub-Committee

TA Technical Assistance

TAIEX Technical Assistance Information Exchange Unit

TSE Transmissible Spongiform Encephalopathy

UIBE Unallocated Institution-Building Envelope

UNDP United Nations Development Programme

VAT Value Added Tax

PART I: COUNTRY SECTION

I.1. BULGARIA

1.1. The year in review

Political developments

Bulgaria fulfils the political criteria for EU membership.

Since the October 2005 report, there has been progress in a number of areas, including the reform of the judiciary. As regards the justice system, the new penal procedure code and a legal framework for legal aid entered into force. Constitutional amendments have entrusted the prosecution service with the responsibility for leading investigations. Amendments to the Law on the Judiciary have been adopted.

Bulgaria has taken a number of measures to fight corruption. A code of ethics was adopted for the executive branch. An anti-corruption strategy for 2006-2008 was adopted. Constitutional amendments have reduced the scope of immunity of members of parliament. The prosecutor general presented requests for lifting the immunity of ten members of parliament. Five voluntarily abstained from their immunity and the immunity was lifted for a sixth one by a vote in parliament; the other cases are still being examined. This allowed investigations into high-level corruption cases to be launched.

Bulgaria has made progress in the field of public administration, in particular with the adoption of amendments to the laws on administration and on civil servants, and a new Code of Administrative Procedure. As regards ill-treatment in custody, there has been some reduction of incidents, while conditions have improved in certain detention centres. Policy initiatives were taken for the disabled and for the mental health care system. Social support for the disabled has been increased.

However, certain outstanding issues remain to be addressed. The accountability, transparency and efficiency of the justice system needs further strengthening. Further efforts are needed to consolidate implementation of the random allocation of cases throughout the country. More objective and transparent mechanisms are needed for assessing the quality of magistrates' work. Any ambiguities regarding the independence of the judiciary need to be removed. There were bottlenecks in the pre-trial process due to procedural rules and insufficient investigators. There have been few tangible results in combating organised crime.

The structures to coordinate and implement the anti-corruption policy need strengthening in order to perform their roles effectively. Indictments, prosecutions, trials, convictions and dissuasive sentences remain rare in the fight against high-level corruption. Bulgaria needs to present clear evidence of results in this area.

The strategy to decentralise the administration has not been adopted yet. Bulgaria remains a country of transit and to a lesser extent a country of origin and destination for trafficking in human beings. There continue to be cases of ill-treatment of detainees. Living conditions in many child welfare and mental health care institutions need to be improved by implementing policy initiatives, and alternative care systems created. Social inclusion of the Roma minority still requires substantial efforts. Further efforts are needed to combat all forms of intolerance, particularly by fully applying existing legislation on broadcasting and other activities aiming to combat any form of racism, discrimination or xenophobia.

Macroeconomic developments and structural reforms

Bulgaria is a functioning market economy. The continuation of the current reforms should enable it to cope with competitive pressure and market forces within the Union in the near term. Bulgaria has broadly maintained macroeconomic stability and advanced structural reforms.

Progress has continued since the October 2005 report. Useful steps were taken to contain the external deficit. The privatisation process and the liberalisation and restructuring of utilities are well advanced. Some additional progress has been made in improving the business environment and in reducing non-wage labour costs.

However, the current account deficit widened and warrants continued prudent fiscal and wage policies. Deepening of structural reforms requires improving the functioning of the judicial system and further easing the regulatory burden on businesses. The regulatory framework for the labour market needs to be made more flexible.

Progress in meeting the acquis communautaire

Bulgaria has reached a considerable degree of alignment with the acquis.

The October 2005 report concluded that Bulgaria would be ready by accession in a large number of areas. A number of other areas required increased efforts, and 16 areas gave rise to serious concern.

Since then, further progress has been made. Bulgaria should be ready by accession in the following additional areas if the current pace of progress is maintained: public procurement, mutual recognition of industrial product specifications; freedom to provide non-financial services; most agriculture Common Market Organisations; aviation; excise duties; taxation implementing structures; postal services liberalisation; regional policy legislation; chemicals and genetically modified organisms, noise legislation; visa policy; and customs preparations.

Progress has also been made in a number of areas, which no longer give rise to serious concern but still require increased efforts to complete preparations: the insurance sector, the protection of intellectual property rights, the paying agency for agriculture, the milk common market organisation, animal diseases control measures, veterinary border inspection posts; animal welfare, trade in live animals and animal products, veterinary aspects of public health; institutional and financial management structures for regional policy, as well as Schengen preparations and the management of the future EU external borders.

Increased efforts are also needed for: mutual recognition of professional qualifications; financial services, information society services, protection of personal data; legislation to fight money laundering; agriculture trade mechanisms; the Common market organisations on wine and alcohol and on beefmeat; legislation in the veterinary and phytosanitary sector; most aspects of fisheries; sea transport; VAT, direct taxation rules; labour law, social dialogue, social inclusion, anti-discrimination policy, the European Social Fund, public health; energy market liberalisation; nuclear energy and nuclear safety, in particular the commitments to early closure and subsequent decommissioning of the reactors of the Kozloduy plant ; steel industry restructuring; electronic communications; programming, monitoring and procurement capacity for regional policy; horizontal environmental legislation, water quality, integrated pollution prevention and control, waste management; consumer protection; asylum, judicial co-operation; fight against drugs; protection of the EU's financial interests; and the translation of the acquis into Bulgarian.

There remain six areas of serious concern, which require urgent action:

- setting up a proper integrated administration and control system (IACS) in agriculture (acquis chapter 7);

- building-up of rendering collection and treatment facilities in line with the acquis on TSE and animal by-products ( acquis chapter 7);

- clearer evidence of results in investigating and prosecuting organised crime networks ( acquis chapter 24);

- more effective and efficient implementation of laws for the fight against fraud and corruption ( acquis chapter 24);

- intensified enforcement of anti-money laundering provisions ( acquis chapter 24);

- strengthened financial control for the future use of structural and cohesion funds ( acquis chapter 28).

1.2. Phare in 2005

Programmes launched

For 2005, Phare allocations for Bulgaria amounted to a total of €304.4 million

- National Programme (€174,9 million)

- Cross-border Co-operation Romania (€8 million)

- Cross-border Co-operation Greece (€20 million)

- Cross-border Co-operation FYROM (€3 million)

- Cross-border Co-operation Serbia & Montenegro (€4 million)

- Cross-border Co-operation Turkey (€5 million)

- Contribution to KIDS Fund (€50 million)Kozloduy International Decommissioning Fund

- Special programme for Floods (€12,3 million)

- Horizontal and multi-country Phare programmes (€27.6 million).

The overall aim of the National programme (€174.9 million) was to assist Bulgaria's preparations for EU membership, based on the priorities identified in the latest Accession Partnership, approved in May 2004.

An additional €12,3 million from the 2005 General Budget were allocated following the floods consequences on the Bulgarian territory during the summer 2005 which necessitated additional Phare financial assistance. A programme designed to give support to rehabilitation of flood-damaged infrastructure and the preparation of flood prevention strategies was financed.

Overview of programmes implemented

Since 1992 the Phare programme provides assistance to Bulgaria through the National Programmes, the five Cross Border Co-operation Programmes, the special assistance for the decommissioning of the Kozloduy nuclear power station and the multi-beneficiary programmes.

The end of 2005 saw the successful closure of most of the projects financed from the 2002 programme, covering a range of sectors. The 2003 programmes have been contracted and their implementation is under way. Contracting of 2004 programmes has started; the contracting rate, however, remained relatively low as Bulgarian authorities have focused efforts mainly on the 2003 programmes.

In the agricultural sector, Phare projects continued to support the improvement of veterinary border control through the execution of construction works of 6 Border Veterinary Inspection Posts designated to be the future EU outer borders, as well as project for institutional building aiming at assisting the Ministry of Agriculture and Forestry (MAF) to continue its work in harmonization and implementation of legislation following the mid-term review of the acquis in regard to CAP and CFP mechanisms.

Phare support also continued via institutional building projects (twinning) and technical assistance to the Ministry of Agriculture and Forestry. One of the projects concerned the preparation of the implementation of the second pillar of the Common Agricultural Policy – rural development. Other twinning projects (with five different components) addressed other areas of the acquios such as the setting up of IACS in Bulgaria and the completion of the IACS software, as well as the equipment of the future Paying Agency that will handle CAP funds.

The harmonisation and implementation of the Bulgarian food safety legislation continued via twinning project and provision of equipment, in order to provide a high level of food safety in Bulgaria and a Rapid Alert System for Food and Feed was also established.

Within the frame of the Phare support in the sector, the system for Animal Identification, Registration and Movement Control was upgraded in order that small ruminants and pigs are also included in the relevant database.

In Transport Sector support for institution building continued with the implementation of two twinning projects which aimed the support of the maritime authorities in their efforts to overcome the deficiencies mentioned in the Regular Report and for the improvement of performance of the road transport authorities in relation with the methodology and practice on their control of the vehicles. Both twinnings were accompanied with pilot supplies of equipment necessary for the efficient enforcement of the related secondary legislation and with intensive training of the personnel. A new twinning helping the railway authorities in the introduction of the EU legislation in the field of railway safety and interoperability started in September. Assistance to the road infrastructure also continued with five on-going projects financed from the CBC programmes.

In the Environment Sector Phare Programme continued to provide assistance for the Closing of Eleshnitsa Uranium mines and construction of the WWTPs in Madan, Rudozem, Zlatograd and Razlog. Furthermore twinning projects for air quality, water management, quality of drinking water, waste shipment, fuel quality, chemicals, GMOs are ongoing. Very important projects for cross border cooperation in the area of biodiversity conservation/ sustainable development, ambient air quality management with Romania and water management of Arda river with Greece were under implementation.

An important first phase of cross border project for water management of the Mesta/Nestos River was completed with the creation of Joint Technical Working Group and elaboration of the first elements of the river basin management plan.

In the Justice Sector the Phare Programme support was focused on drafting new legislation in line with the best EU practice, institution building of the main institutions like the Supreme Judicial council, Public Prosecution Office, Ministry of Justice and Registry Agency. Important investment projects were realised in the sector during the reported period. The drafting of the three main new procedural laws was substantially assisted by Phare funded projects, these were:

- The new Administrative Procedural Code, finally drafted in mid 2005 and adopted by parliament on 29 March 2006 to be enforced as of 12 July 2006.

- The new Penal Procedural Code, finally drafted in May 2005 and adopted by parliament on 28 October 2005 in force since 29 April 2006.

- The new Civil Procedural Code finally drafted in April 2006 and submitted to parliament on 11 May 2006.

New projects were initiated in the field of judicial cooperation in civil and penal matters and with regard to remedy of civil and penal procedures.

During 2005 important institution building projects were completed which supported the National Institute of Justice, the Public Prosecution Office, the Supreme Judicial Council and the Ministry of Justice. They were related to the improvement of the legal status of magistrates and institution building of the SJC, court security, penitentiary system, including establishment of probation system. Substantial support was provided for the establishment of reliable automated information management system in the judiciary.

Within the implementation of PHARE 2002 investment projects for the IT in the Bulgarian judiciary the following results are achieved:

Courts’ system

- 751 workstations, 90 x 32-bits servers and 40 x 64-bits servers were delivered for the courts;

- Local network infrastructure was developed in all 147 courts in Bulgaria;

- Library and office equipment was delivered to the National Institute of Justice

- Court case management system was developed and was successfully installed in the courts. Experimental real work in 5 courts in Sofia and Varna region has begun;

- Document workflow management system was developed and was installed in all courts excluding: 5 regional courts, 1 district court and two supreme courts. There are 600 licences supplied to users. Training of trainers program is completed. Experimental real work in 7 courts in Sofia, Plovdiv, Veliko Tarnovo, Yambol and Pernik courts has begun;

- Unified register system was developed and was installed in 27 district courts. Experimental real work has begun in 3 locations: Sofia and Pazardjik District court and for the MoJ register of NGO;

- Conviction status certificate system really works in 60 regional courts with data transformation from old active systems, in 20 courts the new system and the old one work simultaneously;

- Relational Data Base Management System (RDBMS) was supplied, installed and the configuration was completed; the design of Data warehouse was delivered.

Public Prosecution Offices (PPOs):

Within the implementation of Phare 2000 and Phare 2002 investment projects the following has been achieved:

- The following IT equipment was delivered in PPO on cite:

- 35 servers with MS Windows 2000 server operation system;

- 56 servers with operation system MS Windows 2003 Server/ LINUX;

- 1 central server + ORACLE licences;

- 2007 Work Stations with MS Windows XP operation system;

- 870 laser printers; 126 modems; 3 multimedia projectors;

- Local network infrastructure was developed in 73 PPO cites;

- 255 ORACLE licences were delivered;

- E-mail server was delivered, which allowed all prosecutors to receive a personal official e-mail address.

In the field of Public Administration Reform and fight against corruption the Phare project supported activities that contributed to the further implementation of the Strategy for modernisation of the Public Administration and the Anti-corruption strategy.

The project BG 0203.07 Strengthening the Human Resources Capacity in the Bulgarian Public Administration resulted in the design of a new Human Resources Strategy and a new Information System for the Management of Human Resources in the Public Administration. The outputs of the project were fully taken into account and incorporated in the design of the newly established Ministry of State Administration and Administrative Reform.

Furthermore, the project BG 2003/004-937.10.01 “Strengthening the capacity of the Bulgarian Public Administration – Implementing the Strategy for Modernisation of the Public Administration in view of the Improved Service Delivery to the Public” was launched in the end of 2005 and will further contribute to the modernisation of the public administration by introducing the concept of outsourcing, quality control and integration of services.

In the field of fight against corruption , under the project BG 0203.05 “Technical assistance to implement hey measures of the Programme for the Implementation of the National Anti-corruption Strategy” new training modules were designed and have been already incorporated in the training programme of the Institute for Public Administration and European Integration (IPAEI), as well as, public awareness campaigns etc The forthcoming Multi-annual projects in the field of anti-corruption will build up on the outcomes of this project.

In the Social Sector, Phare support was both in the form of institutional building measures and investment activities. The following priority policy areas were addressed through institutional building measures: further harmonization of the vocational training system both to the socio economic developments in the country and to the broader EU reform in educational and training systems (development of vocational qualification standards, assessment of vocational training needs on national level, drafting life long learning strategy, etc.); enhancement of the inspection activities within the General Labor inspectorate as a major body observing the enforcement of the labor law (development of guidelines for effective inspection activities, provision of trainings, etc.) and establishment of new database for monitoring of labor market developments and future ESF type of measures (upgrade and further development of the existing database). Furthermore a number of TA projects supported the enhanced capacity of national authorities to effectively implement strategies in the area of employment and life long learning and to utilize in the most efficient way Phare support (enhanced management capacity). Supply and works projects aimed to improve the training facilities within the professional schools are also under way. Investment activities were primarily focused on the creation of new employment opportunities and the enhancement of entrepreneurship. In addition an investment scheme supporting enterprises within the chemical industry was launched for the purposes of timely insurance of OSH conditions within companies from high risk industries.

In the sector of Economic and Social Cohesion , support continued to focus on the preparation of Bulgaria for the management of Structural Funds (SF) and on the promotion of cross border co-operation (CBC). Support for preparation for SF is provided by IB projects for the line ministries which will function as Managing Authorities of the future Structural Funds Operational Programmes and by investment projects, mainly grant schemes. In the area of Cross-Border Cooperation, projects in Transport, Environment, Energy and grant schemes are under implementation for both CBC Programmes between Bulgaria – Greece and Bulgaria- Romania. As a continuation of the External Border Initiative Programme a new CBC Programme has been launched with Turkey and a new Neighbourhood Programmes with Serbia & Montenegro and the Former Yugoslav Republic of Macedonia is being implemented for the first time.

Phare management performance

The total budget for 2003 Phare Programme was almost €120 million. In the end of November 2005 which was the deadline for contracting ( except for the projects that received contracting extensions) 148 contracts amounting to €77.631 million, which in terms of FM budget correspond to €83.233 million were contracted and the contracting rate of Phare 2003 FM was 85.55% . The budget amount of €14.060 million i.e. 14.45% corresponding to 48 contracts, is reported as non-contracted and is considered as a loss . The procurement gains representing the balance between the contract budget and contracted amount, total €5.601 million i.e. 5.76% .

There are 34 extended contracts representing an amount of MEUR 22.5. The contracting deadline for the 22 contracts (overall amount €14.38 million) is 30 of May 2006. For the other 12 projects the contracting deadlines are 16 and 17 July 2006 respectively.

NDPs – State of Play

On 22 December the draft National Development Plan and the six draft Operational Programmes were formally approved by the Bulgarian Cabinet. On 2 May 2006 the Commission received a draft of the Bulgarian National Strategic Reference Framework (NSRF) and five out of the six operational programmes. Formal negotiations on the NSRF and the Operational Programmes are scheduled for the second half 0f 2006.

Institution Building highlights

During the year 2005, a total of around €58,994 million of pre-accession assistance from national allocation (not including horizontal and multi-country programmes and participation in Community Programmes) has been deployed in the Republic of Bulgaria from Phare programme for financing Institution Building Projects.

The Twinning instrument continues to be used successfully in many priority areas and helped Bulgaria to prepare for the implementation of EU policies and laws. Up to now a total of 142 fully-fledged twinning projects for a total amount of around €139 million and 32 twinning light projects amounting to around €6 million have been financed out of the Phare Programme.

In May 2005 the common twinning manual for all twinning projects financed out of Community budget was published and its application started the following month. Consequently, most of the contracts financed under Phare 2004 were drafted and negotiated considering the new requirements. Thus, until the end of the year two thirds out of 40 projects started to be implemented.

The 2004 Unallocated Envelope proved to be a useful instrument for ah-hoc specific needs which accommodated requests for financing of 3 twinning light, 3 standard twinnings and 5 technical assistance projects.

In addition, another 15 fully fledged twinning projects were programmed during year 2005 and selection process completed for all of them. Additional funds of €6,322 million were allocated to the Institution Building Envelope for further programming during 2006.

1.3. Results and impact

State of play for JMC/SMSC development

During 2005, Bulgarian authorities continued with their considerable efforts in improving their self-monitoring capacities. Apart from the nine Sectoral Monitoring Sub-committees, operative since 2001, which continued to hold regular sessions twice during 2005, the regular Monthly Progress Meetings for all sectors which were initiated in 2005 were organized with the participation of all involved parties: Contracting Authorities, Beneficiary Institutions, NAC, NAO and the Delegation. These meetings served to remedy problems occurring prior to procurement and during implementation and to agree on realistic and prompt timetables for upcoming tendering.

The seventh annual meeting of the Joint Monitoring Committee was held on 12 December 2005 in Sofia. It reviewed the findings of the Phare Sectoral Monitoring Sub-committees, the ISPA Monitoring Committee and the SAPARD Monitoring Committee meetings held in 2005. The Bulgarian National Aid Coordinator services also presented reports on the following issues of overall concern to pre-accession assistance management:

- Reporting by PHARE Sectoral Monitoring Sub-Committees (SMSC) and discussions

- General Discussions on the monitoring process of Phare Programme

- Extended Decentralisation – EDIS: reporting by the National Authorising Officer on state-of-play with respect to policy and implementation of PHARE/ISPA projects.

- OLAF - reporting by the National Authorising Officer on the state-of-play regarding the monitoring of irregularities and reported cases to OLAF

- Lessons learned from previous Phare contracting cycles – methodological approach of the Country Summary Review performed by ECOTEC.

- Procurement of PHARE 2004 and 2005, Programming 2006 – state-of-play - reporting by NAC Services and EC

- Indicative timetable for the meetings of the PHARE SMSCs, ISPA, SAPARD Monitoring Committees and the JMC in 2006

Corrective measures were agreed on a number of sectors with specific issues of project management. The conclusions and recommendations from Phare 2003 contracting, completed in November, were highlighted with a view to ensure further improvements in implementation of all ongoing programmes and smoother contracting of Phare 2004 funds.

M&IE Reports in 2005 - Lessons Learned

Of the 14 Sector Interim Evaluation reports conducted in 2005, 8 were rated “satisfactory” whereas 4 were evaluated as “barely satisfactory” and 2 as “unsatisfactory” by the external independent evaluator.

The Country Summary Evaluation Report made the following key recommendations:

- The Bulgarian institutions responsible for the implementation of works projects should take appropriate measures to prevent delays occurring in the preparation and implementation of infrastructure projects.

- A formal structure for quality control of programming, particularly for project fiches, is needed at Commission Services in Brussels and in the NAC to improve the quality of programming documents.

- Bodies responsible for the management of grant schemes should consider ways to improve monitoring project effectiveness."

Positive Results in Implementation – Success Stories

BG 0203.01 BG 02 JH 01B Strengthening of the National Institution for Judicial Professional Qualifications This project was completed successfully in 2005. Through its implementation the National Institute of Justice was assisted to become a modern and efficient institution, responsible and capable to perform its activities on initial and continuous magistrates' training. The initial training programme for junior magistrates was elaborated, in cooperation with other projects and donors. The first 6-month initial training of all magistrates started during the project implementation. The curricula for on-going magistrates’ training were also devised mainly on EU law matters. The resource centre for the NJI was established which is available on the NJI, chat-room for the junior magistrates and their permanent trainers, CDR, available in the NJI. All sources of pedagogical materials are available electronically. The proper establishment of the NIJ is considered as one of the biggest success in the reform process of the judiciary. |

BG0102.03 Grant scheme for development of Bulgarian cultural tourism (Total amount of grant contracts: €4 726 753; Phare co-financing: €3 545 065.75, Bulgarian national co-financing: €1 181 687.25) The main objective of the grant scheme has been improvement of the quality and the marketability of the Bulgarian cultural tourism product. The project has been successfully completed in 2004 with assistance being provided to 19 grant beneficiaries. The following activities have been performed within the grant scheme scope: Creation of integrated tourist products in the sphere of cultural tourism (including marketing strategies and business plans) and stimulation of the use of all tourism-connected resources. Promotion of the development of private initiative and creation of new jobs. Provision of opportunities for extension of the tourist season, incl. marketing and improvement of the knowledge and skills of tourist services (companies and human resource). Better exploitation of the Bulgarian cultural heritage by investments in cultural monuments restoration and related infrastructure development. |

Tasks ahead

Four major tasks are to be accomplished before accession, which are as follows:

- Full closure of the PHARE 2005 and 2006 programming cycles with the signature of the corresponding Financing Agreements. In view of avoiding delays as much as possible Bulgarian beneficiaries and Implementing Agencies are stressed not to wait for the signature of the Financing Agreement in order to start with the tendering procedures.

- Completion of the programming exercise in relation to the Transition and Schengen Facilities

- Conferral of the EDIS accreditation before the date of accession, thus avoiding the triggering of the relevant ‘suspensive’ clause in Article 27 of the Accession Treaty. According to the preliminary schedule the final reports of the auditors under Stage III on Compliance Assessment for Phare should be received by mid July 2006 and by the end of July the official request for accreditation would be submitted to the EC

- Preparation for the closure of the Delegation.

I.2. CROATIA

2.1. The year in review

Political developments

Following a positive assessment on 3 October 2005 from the International Criminal Tribunal for the former Yugoslavia (ICTY) Chief Prosecutor that full cooperation with the ICTY had been achieved, the European Council concluded on the same day that Croatia had met the outstanding condition for the start of accession negotiations and a bilateral Intergovernmental Conference (IGC) opening the negotiations was held.

The Commission started the so-called screening process on 20 October 2005, through which Croatian legislation is compared in detail with EU legislation. The screening will enable the EU to decide upon the opening of individual chapters for negotiations.

On 9 November 2005, the Commission published its Croatia 2005 Progress Report. The report takes into consideration progress since the Commission Opinion of April 2004 on Croatia’s application for EU membership and covers the period to 30 September 2005.

In February 2006, a revised Accession Partnership for Croatia was adopted by the Council. It covers in detail the priorities for accession preparations, in particular implementation of the acquis . Croatia has made progress in a number of areas, most significantly in the area of regional cooperation . While some progress has been made in the field of refugee return , such as with regard to housing repossession and reconstruction, a number of deadlines have not been met. There is a need for further significant efforts from Croatia, particularly as regards implementing housing care programmes for former tenancy rights holders and creating the economic and social conditions necessary for sustainable refugee return. As regards minority rights , implementation of the Constitutional Law on National Minorities has been slow and the need to improve the position of minorities, in particular the Serb minority, remains an urgent priority. Implementation of a new Roma strategy has begun, but major challenges still lie ahead.

Despite some progress in the field of the judiciary , the scope of the challenges faced will require continued serious attention. The comprehensive strategy for judicial reform needs to be properly implemented. There has been progress in establishing a legal framework for tackling corruption , but these efforts need to be followed up with real implementation on the ground including improved coordination of the government bodies and agencies involved.

Macroeconomic developments and structural reforms

Concerning macroeconomic developments and structural reforms, Croatia has made some progress, most notably in the area of land reform. Croatia needs to continue to address the present macroeconomic imbalances – mainly government deficit, current account deficit and external debt, as well as structural problems that may impair its capacity to stay on a path of strong growth. Progress also needs to continue on structural reforms and on advancing privatisation and enterprise restructuring. A number of foreseen measures need to be implemented without delay.

Progress in meeting the acquis communautaire

As to the priorities related meeting the acquis communautaire, Croatia has made some progress in terms of legislative alignment with the acquis , in particular in areas such as the free movement of goods, and public procurement, and in the field of telecommunications, including with respect to strengthening the capacity of the regulator.

Croatia needs to continue legislative alignment across the board, however, while at the same time strengthening administrative and judicial structures that are necessary for the effective enforcement of the acquis. In many cases enforcement is weak and administrative capacity remains uneven.

In particular, increased efforts will be needed to align legislation with the acquis and to effectively implement and enforce in the following fields: Free Movement of Capital, Company Law, Information Society and Media, Fisheries, Transport, Energy, Consumer and Health Protection, Customs Union and Financial Control.

Croatia will need to make considerable and sustained efforts to align legislation with the acquis and to effectively implement and enforce it in the following fields: Free Movement of Goods, Public Procurement, Freedom of Movement for Workers, Rights of Establishment and Free Movement of Services, Financial Services, Competition Policy, Agriculture and Rural Development, Food Safety, Taxation, Social Policy and Employment, Regional Policy, Judiciary and Fundamental Rights, and Justice, Freedom and Security.

Very significant efforts will be required in the area of Environment, including substantial investment and the strengthening of administrative capacity for the enforcement of the acquis.

2.2. Phare in 2005

Programmes launched

The pre-accession strategy for Croatia was adopted by the Commission on 6 October 2004. Croatia as a candidate country benefits from all three pre-accession financial instruments, Phare for institution-building and economic and social cohesion, ISPA for environment and transport infrastructures and SAPARD for rural development (from 2006). Croatia also remains eligible for the CARDS Regional Programme in 2005 and 2006.

Croatia received a total allocation of €87 million under the Phare 2005 programme. This allocation included the National Programme of €71.5 million, €6 million for Cross-Border Cooperation projects, €6 million for Croatia’s participation in Phare multi-country/horizontal programmes, €1 million for the participation in TAIEX and €2.5 million for administrative costs.

The key programming documents for Phare 2005 were the Opinion of the Commission on the application for membership of Croatia, the European Partnership of 2004 and the proposed Accession Partnership and the Progress Report (both November 2005).

The year 2005 was the first year that Croatia benefited from pre-accession assistance through the Phare instrument. The Commission presented three financing proposals (National Programme and 2 CBC programmes) for opinion to the Phare Management Committee in October 2005; the subsequent Commission Decisions on the approved proposals were taken in December 2005 and the Financing Agreements were send for signature to Croatia by mid-December 2005.

Overview of implemented programmes

Phare National Programme 2005

The Phare National Programme 2005 concentrates on eight sectoral objectives referring to the priorities identified in the Opinion and the European Partnership for Croatia:

Objective 01 / Democracy and rule of law

Objective 02 / Human rights and protection of minorities

Objective 03 / Economic criteria

Objective 04 / Internal market and trade

Objective 05 / Sectoral policies

Objective 06 / Cooperation in justice and home affairs

Objective 07 / Supporting programmes

Objective 08 / Economic and social cohesion

These priorities translate into the following financial allocations by priority:

1 Democracy and rule of law €2.312.000

2 Human rights and protection of minorities €1.300.000

3 Economic criteria €5.165.000

4 Internal market and trade €13.175.000

5 Sectoral policies €29.415.000

6 Cooperation in justice and home affairs €5.000.000

7 Supporting programmes €10.133.000

8 Economic and social cohesion €5.000.000

Phare CBC Programmes 2005

The CBC programmes with Italy and Slovenia/Hungary concentrate on the following objectives:

- Promoting sustainable economic and social development in the border areas;

- Working together to address common challenges, in fields such an environment, public health, and the prevention of and fight against organised crime;

- Ensuring efficient and secure borders;

- Promoting local, ‘people-to-people’ type of actions.

The budget allocations in 2005 are:

1. CBC with Italy €3.000.000

2. CBC with Slovenia/Hungary €3.000.000

Phare management performance

The following implementation structure exists in Croatia for the implementation of pre-accession assistance:

- A National Fund (NF) located within the Ministry of Finance to administer the funds allocated under the responsibility of a National Authorising Officer (NAO). The NF will also be responsible for the national accreditation of the SAPARD Agency.

- The Central Finance and Contracting Unit as the Implementing Agency for Phare and ISPA.

- The Memorandum of Understanding on the Establishment of the National Fund, which provides a legal basis for the introduction of a decentralised implementation system for EU pre-accession assistance, was signed in May 2005.

- Croatia submitted a request to the Commission for accreditation of its decentralised implementation system on 25 May 2005 (Phare) and 18 July 2005 (ISPA). Subsequently, the Commission services have assessed the national and sectoral programme/project management capacity, financial control procedures and structures regarding public finance in Croatia.

- Based on these assessments, the Commission decided to confer the management of aid on a decentralised basis to the CFCU of Croatia, while maintaining the ex-ante control requirement. This decision was taken on 07 February 2006 .

- The technical, legal, and administrative framework within which the Phare programme continues to be implemented is set out in the General Conditions annexed to the Framework Agreement signed between the Commission and Croatia.

NDPs – State of Play

The Croatian Government is in the process of adopting a national development strategy entitled Strategic Development Framework 2006-2013, which identifies a series of priorities that should promote Croatia’s social and economic development.

Institution Building highlights

NA

2.3. Results and impact

State of play for JMC/SMSC development

The Monitoring Sub-committee under the “Memorandum of Understanding on the Establishment of the CFCU” took place on 24 March and 05 October 2005. The 7 monitoring reports on the decentralised CARDS 2002 projects were drafted by the beneficiaries (with help of technical assistance) and were substantially better than the ones drafted for the previous Monitoring Subcommittee (June 2004). The Monitoring Sub-Committee agreed on a number of recommendations and remedial actions to be taken.

In order to avoid the parallel running of two monitoring systems it was agreed at the Joint Monitoring Committee of 05 December 2005 to set-up one Joint Monitoring Committee with a number of sub-committees. Under the “Memorandum of Understanding on the Establishment of the National Fund”, one annual Joint Monitoring Committee will be held, with 6 Sectoral Monitoring Sub-committees meeting twice annually each. The 7 already decentralised CARDS 2002 projects will be dispersed across the Sectoral Monitoring Sub-Committees, thereby integrating the old monitoring system into the new one.

Tasks ahead

Implementation of Phare 2005 will start with the signature of the Financing Agreement by the Croatian National Aid Coordinator (signed on 17 May 2006).

I.3 CYPRUS

3.1. Extended Decentralised Implementation System (EDIS)

In its first year after accession, Cyprus continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since July 2004 implementation is carried out under the entire responsibility of the Cyprus authorities applying national procurement rules. Through its Decision (C(2004)2614), adopted and notified on 15 July 2004, the European Commission decided to confer the management of pre-accession aid on an EDIS basis to the following Cypriot authorities: the Cyprus Police; the State General Laboratory (Ministry of Health); the National Regulatory Authority (Office of the Commissioner of Telecommunications and Postal Regulation), the Department of Electronic Communications (Ministry of Communications and Works); the Department of Customs and Excise (Ministry of Finance); the Department of Agriculture (Ministry of Agriculture, Natural Resources and Environment); the Department of Forests (Ministry of Agriculture, Natural Resources and Environment); the Water Development Department (Ministry of Agriculture, Natural Resources and Environment); the Veterinary Services (Ministry of Agriculture, Natural Resources and Environment); the Planning Bureau; the Department of Merchant Shipping (Ministry of Communications and Works); the Mental Health Services (Ministry of Health); the Statistical Service (Ministry of Finance); the VAT Service (Ministry of Finance); the Cyprus Productivity Centre (Ministry of Labour and Social Insurance); the Ministry of Commerce, Industry and Tourism; the Environment and Management of Municipal Waste Unit (Ministry of Interior); and the Department of Labour Inspection (Ministry of Labour and Social Insurance).

Following the EDIS decision, the Cypriot authorities decided to designate the following additional implementing agencies for the purpose of implementing the Transition Facility programme: the Public procurement directorate of the Treasury of the Republic; the Environment service (Ministry of Agriculture, Natural Resources and Environment); Asylum service (Ministry of Interior); Ministry of Health; the Public Works Department (Ministry of Communication and Works); and the Public Administration and Personnel Department (Ministry of Finance). Assurance has been received from the National Authorising Officer (NAO) that adequate procedures have been put in place and all of the additional Implementing Agencies (IAs) are subject to the same management and control systems as those IAs accredited for the extended implementation of pre-accession aid and will, hence, comply with the criteria as set out in Art 164 FR.

All the above mentioned implementing agencies are now fully responsible for daily implementation of projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The NAO carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Nicosia as of end July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been transferred to the Commission headquarters.

3.2. Phare/pre-accession financial and Transition assistance in 2005

i) Programming

For the period 2004-2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Cypriot authorities and the European Commission on 17 November 2004.

A total of €6,400,000 was allocated to Cyprus under the 2005 Transition Facility budget for Cyprus.

Although the most urgent needs as regards acquis implementation have been addressed before accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through Multi-country/Horizontal programmes, Sigma, TAIEX, etc.

The Phare Management Committee approved the Transition Facility 2005 National Programme for Cyprus in October 2005. The programme was then approved by the Commission through its Decision C(2005) 4745 of 8 December 2005, which was notified to the national authorities on the same day.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, and investments to provide the necessary equipment in order to implement the acquis .

The Transition Facility 2005 National Programme for Cyprus provides for:

ENVIRONMENT €0.658 million

- Upgrading the capacity of the Department of Labour Inspection for the assessment and management of air quality in Cyprus

TRANSPORT POLICY €1.770 million

- Strengthening of the administrative capacity of the Cyprus Port Authority

- Study and implementation of intelligent transport systems and development of a geographical information system to incorporate information regarding Trans-European Networks as part of an EU-wide GIS

SOCIAL POLICY AND EMPLOYMENT €1.9 million

- Technical Assistance for the improvement of the capacity of the Cyprus competent authority, the social partners and the workers in the construction industry, mineral extracting industry and dockworks on health and safety at work issues

ADMINISTRATIVE CAPACITY €2.072 million

- Training of Cyprus Civil Service organisations on specialised EU issues

- Unallocated Institution Building Facility

ii) Implementation

- Pre-Accession 2001 and 2002 – finalisation of payments in 2005

At the end of the respective disbursement periods for the 2001 and 2002 pre-accession programmes, respectively 66% and 69.7% of the funding has been disbursed. These rates apply only to the projects managed by the Cypriot under EDIS. The Cypriot authorities requested no extension for the 2002 programme. An extension has been already granted for the 2001 programme.

- Pre-accession programme 2003 – rate of contracting

At the end of the contracting period for the 2003 National Pre-Accession programme on 31 July 2005, 100% of the programmes had been contracted. The programme was subject to a modification in July 2003 involving reallocation between a project managed under EDIS and a bi-communal project managed centrally by the Commission.

No extensions of contracting period were possible for the projects from pre-accession 2003 programme.

- Institution Building highlights

During the year 2005, a total of around €4,520 million of pre-accession assistance from national allocation (not including horizontal, multi-country programmes, participation in Community Programmes and bi-communal projects implemented on a centralised basis) has been disbursed from the Commission to Cyprus from the 2002-2003 National Pre-accession programmes and the 2004 Transition Facility.

Implementation of pre-accession aid in Cyprus is considered satisfactory in overall terms though in some sectors delays in tendering and contracting have been experienced and remedial actions had to be taken to decrease the risk of loss of EU funding.

As regards twinning, Cyprus has taken advantage to a limited extent of the Twinning Light instrument, since the Twinning Light has proven a flexible tool for ad-hoc interventions to fill gaps with regard to the implementation of the acquis .

A third of the annual pre-accession aid to Cyprus has been committed for bi-communal projects aiming to contribute to the reconciliation of the two Cypriot communities. Bi-communal projects are in the main managed centrally by the European Commission which has contracted the United Nations Development Programme (UNDP) for its implementation. The main focus of these projects is the rehabilitation of the walled city of Nicosia in accordance with the Nicosia Master Plan and support to SMEs.

3.3. Results and Impact

i) - State of play for JMC / SMSC development

In 2005, two Joint Monitoring Committee (JMC) meetings took place in March and September 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which establishes an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meetings were fruitful and helped to address the problems concerning implementation of the ongoing programmes, to discuss horizontal/systemic issues and to identify possible solutions. Several immediate actions were agreed upon and deadlines set for their implementation.

In the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings took place just ahead of the Joint Monitoring Committee. Due to the small size of the Cyprus pre-accession programme, there is only one SMCS. There are three sub sectors monitored in Cyprus (Sub-sector 1: Internal Market; sub-sector 2: Economic and Social Development; and sub-sector 3: Rural and Environmental Development).

ii) - Monitoring and Evaluation Reports in 2005

Overall responsibility for monitoring and evaluation of the pre-accession and Transition Facility programme in Cyprus lies with the Planning Bureau, as the executive body of the NAC. The second and last interim evaluation report undertaken through a contract centrally managed by the Commission services was undertaken in 2005.

Following decentralisation of the evaluation activities, the Cypriot authorities have signed a contract with the independent evaluator in February 2006. Within the framework of this contract, two interim evaluations and one country evaluation summary will be carried out starting in 2006.

The 2005 interim evaluation report underlines that project implementation has improved considerably since the 2004 interim evaluation report which can be attributed to the experience gained by the stakeholders in project management, as well as to the effect of accession on the country’s generally favourable environment .

Relevance is rated highly satisfactory. Projects with substantial technical components (e.g.: design, tender documentation and terms of reference or procurement and installation of equipment) tend to be subject to management problems. Hence, in most cases, their rating of efficiency is unsatisfactory to barely satisfactory. The non-technical projects are well managed and consequently rate satisfactory to highly satisfactory. In all projects there has been strong monitoring and budgetary control contributing to efficiency of implementation. Overall, effectiveness is rated satisfactory; the immediate objectives of most projects have been achieved at a satisfactory to highly satisfactory degree. The effectiveness of technical projects is barely satisfactory to satisfactory. Overall, project impact is rated highly satisfactory, reflecting the degree of achievement of the wider objectives and the influence of the conductive environment. The generally good quality and design of projects had enhanced impact. Overall, sustainability is highly satisfactory.

I.4. Czech Republic

4.1. Summary

In its first year after accession, the Czech Republic continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since December 2004 implementation is carried out under the entire responsibility of Czech authorities applying national procurement rules. The Central Finance and Contract Unit (CFCU), the Civil Society Development Foundation (NROS), CzechInvest (CI), the National Training Fund (NTF) and the Centre for Regional Development (CRD) are now fully responsible for the daily implementation of the projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Prague as of July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

4.2. Phare/pre-accession financial and Transition assistance in 2005

i) Programming

For the period 2004-2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Czech authorities and the European Commission on 27 September 2004.

A total of €11,800,000 was allocated to the Czech Republic under its 2005 Transition Facility National Programme.

Although the most urgent needs as regards acquis implementation have been addressed before accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through Multi-country/Horizontal programmes, Sigma, TAIEX, OLAF, etc.

The Phare Management Committee approved the Transition Facility 2005 National Programme for the Czech Republic in July 2005. The programme was then approved by the Commission through its Decision C(2005)2830 of 26 July 2005, which was notified to the national authorities on the same day.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, and investments to provide the necessary equipment in order to implement the Acquis.

The Transition Facility 2005 National Programme for the Czech Republic provides for:

POLITICAL CRITERIA €0.85 million

- Support to the Implementation of the Anti-discrimination Act and Anti-discrimination Acquis by Civil Society Organisations (CSOs)

INTERNAL MARKET AND ECONOMIC CRITERIA €4.5 million

- Strengthening the Role of Public Internal Financial Control (PIFC)

- Reinforcement of implementation of regulatory and supervisory functions in areas of financial markets

- The Construction of the State Treasury System (2nd Phase)

- Implementation of Public Private Partnership (PPP) concept in the Czech Republic

- Strengthening of expert capacity in the State Institute for Drug Control

- Support to Enforcement of Intellectual Property Rights

ENVIRONMENT €0.22 million

- Improvement of soil protection by strengthening laboratory control of sewage sludge

JUSTICE AND HOME AFFAIRS €2.53 million

- Strengthening the Capacity of the Financial Police

- Reinforcement of the Czech Police capacity in combating Corruption and Economic Crime

EMPLOYMENT, SOCIAL AFFAIRS AND HEALTH €2.2 million

- Audit on Functionality and Security of Social Insurance Information Systems

- Strengthening of Labour Inspection Administration

- Development of national coding standards within the Czech DRG system

ADMINISTRATIVE CAPACITY €1.5 million

- Unallocated Institution Building Envelope

ii) Implementation

- Phare 2002 – finalisation of payments

At the end of the respective disbursement periods for the 2002 Phare programmes, 76% of the programmes (not including participation in Community Programmes) had been disbursed.

This data does not take into account the extensions granted to certain elements of the 2002 Phare programmes. A total of 10 projects received extensions and were ongoing.

- Phare 2003 – rate of contracting

At the end of the contracting period for the 2003 programmes, 98% of the programmes had been contracted.

No extensions of contracting period were possible for the projects from Phare 2003 programme.

- Institution Building highlights

During the year 2005, a total of around €246.9 million of pre-accession assistance from national allocation (not including horizontal and multi-country programmes and participation in Community Programmes) has been deployed in the Czech Republic from Phare programmes (National Programmes and Cross Border Co-operation Programmes 2002-2003) and Transition Facility (2004-2005).

Implementation of Phare in the Czech Republic is considered generally successful in areas such as Environment and Justice and Home Affairs.

A sector which remains problematic is Cross Border Co-operation, where remedial actions had to be taken to decrease the negative impact from excessive delays and to avoid the risk of loss of funds.

The Twinning instrument continues to be used successfully in many priority areas and helped the Czech Republic to prepare for the implementation of EU policies and laws.

4.3. Results and Impact

i) - State of play for JMC / SMSC development

In 2005, one Joint Monitoring Committee (JMC) meeting took place in June 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which establish an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meeting was fruitful and helped to address the problems concerning implementation of the ongoing programmes, to discuss horizontal/systemic issues and to identify possible solutions. Several immediate actions were agreed upon and deadlines set for their implementation.

In the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings have taken place. There are twelve sectors to be monitored in the Czech Republic: Social protection and health, Agriculture, Cross Border Co-operation, Civil Society Development, Environment, Economic and social cohesion, Energy and nuclear safety, Home Affairs, Justice and Public administration, Internal market, Business support, Finance and Banking.

ii) - Monitoring and Evaluation Reports in 2005

Overall responsibility for monitoring and evaluation of the Phare programme in the Czech Republic lies with the Ministry of Finance (MoF). Activities in this area were carried out on the basis of the Action Plan on decentralisation of monitoring and Evaluation, which was endorsed by the EC in May 2005. The contract for carrying out the Interim Evaluation was signed in April 2004.

In 2005, 13 interim evaluation reports were prepared by an independent external evaluator and were issued by the NAC covering all monitoring sectors. Two Country Summary Evaluation Reports for the Czech Republic, prepared by the independent external evaluator, were issued in May and November 2005.

The reports provide a consolidated country review of the findings of the Interim Evaluation Reports that were prepared between September 2004 and November 2005. The November Report concluded that the efficiency of the management of the Phare Programme had improved as a result of raised awareness for risk assessment and the need to take decisions on corrective actions as soon as possible. Effectiveness and sustainability were mostly considered satisfactory. However, with respect to sustainability the report noted that high staff turnover in government institutions remained the single biggest threat.

I.5. Estonia

5.1. Summary

In its first year after accession, Estonia continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since November 2004 implementation is carried out under the entire responsibility of Estonian authorities applying national procurement rules. The Ministry of Finance, Central Financing and Contracting Department is now responsible for ex-ante control and twinning. The Ministry of Finance, Central Financing and Contracting Department (CFCD) is now fully responsible for the daily implementation of the projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Tallinn as of July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

5.2. Phare/pre-accession financial and Transition assistance in 2005

For the period 2004-2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Estonian authorities and the European Commission on 16 August 2004.

i) Programming

A total of €5,590,000 was allocated to Estonia under the 2005 Transition Facility budget.

Although the most urgent needs as regards acquis implementation have been addressed before Accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through Multi-country/Horizontal programmes, Sigma, TAIEX, OLAF, etc.

The Phare Management Committee approved the Transition Facility 2004 National Programme for Estonia in June 2005. The programme was then approved by the Commission through its Decision C(2005)2035 of 6 July 2005, which was notified to the national authorities on the same day.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, and investments to provide the necessary equipment in order to implement the acquis .

The Transition Facility 2005 National Programme for Estonia provides for:

TRADE-INTERNAL MARKET €0.20 million

- Development of Market Surveillance activities in New Approach and other connected areas through improved IT solutions

SOCIAL POLICIES AND EMPLOYMENT €0.49 million

- Managing occupational risks related to asbestos

AGRICULTURE €2.23 million

- Development of GMO chain management for co-existence of genetically modified, conventional and organic crops

- Institutional Building for the Design and Implementation of the Financial Instrument for Fisheries Guidance (2007 – 2013)

- Minimalisation of the number of rabies cases among wild and domestic animals in Estonia

ENVIRONMENT €0.67 million

- Enhancing the capacity to reduce the emissions of fluorinated gases in Estonia

ADMINISTRATIVE CAPACITY €2 million

- Enhancing the capacity to reduce the emissions of fluorinated gases in Estonia

- Twinning light facility

ii) Implementation

- Phare 2002 – finalisation of payments

At the end of the respective disbursement periods for the 2002 Phare programmes, 72% of the programme had been disbursed

This data does not take into account the extensions granted to certain elements of the Phare National Programme for Estonia 2002 – Part II. A total of nine projects received extension and were ongoing.

- Phare 2003 – rate of contracting

At the end of the contracting period for the 2003 programme on 30 November 2004, 87% of the programme had been contracted.

No extensions of contracting period were possible for the projects from Phare 2003 programme and many of the projects faced the end of the commitment period in addition to Phare 2002 disbursement deadline in the end of November 2005. Approximately 10-11% (€4.2 million) from the allocated funds of the Phare 2003 programme remained unused. The main reasons for this were lower tender prices than initially planned and in case of the Twinning Light Facility the main reason was lack of interest from potential applicants.

- Institution Building highlights

During the year 2005, a total of around €88 million of pre-accession assistance from national allocation (not including horizontal and multi-country programmes) has been deployed in Estonia from Phare programmes (2002-2003) and Transition Facility (2004-2005).

Implementation of Phare in Estonia is considered successful in most areas, where most projects are reaching foreseen objectives and Phare assistance provide real value added to scarce public funds. One sector (Environment) is considered unsuccessful, mainly due to delays in implementation and other shortfalls in implementation management.

The Twinning instrument continues to be used successfully in many priority areas and helped Estonia to prepare for the implementation of EU policies and laws.

5.3. Results and Impact

i) - State of play for JMC / SMSC development

In 2005, two Joint Monitoring Committee (JMC) meetings took place in January and June 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which establish an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meetings were fruitful and helped to address the problems concerning implementation of the ongoing programmes. In particular, issues such as further improvement of project management, sectoral and financial monitoring and reporting were discussed and proposals for remedial actions were made.

In the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings have taken place. The first round of SMSC meetings took place in March-April and second round between October and November. There are nine sectors to be monitored in Estonia: Agriculture, CBC, Education, Environment, Finance, Home Affairs, Internal Market/Transport, Justice and Social sector.

ii) - Monitoring and Evaluation Reports in 2005

Overall responsibility for monitoring and evaluation of the Phare programme in Estonia lies with the Ministry of Finance (MoF). Currently, the Foreign Financing Department provide services to the NAC in the State Budget Department. Activities in this area were carried out on the basis of the Action Plan on decentralisation of monitoring and Evaluation, which was endorsed by EC in February 2005. The contract for carrying out the Interim Evalution was signed on 29 April 2005.

The independent evaluator prepared two Interim Evaluation reports in December 2005 and March 2006, and is expected to deliver a Country Phare Evaluation Review (CPER) for Estonia by mid 2006.

The conclusions available from the Interim Evaluation reports are that, on the whole, Estonia has performed well in the implementation of Phare assistance, and this assistance has successfully supported the institution building related to the accession process.

The efficiency which was considered as unsatisfactory had improved. Flexibility and strong commitment of stakeholders to projects' implementation was a positive aspect. High staff turnover remained a problem. Other problems were related to late start of tendering processes, the management of co-financing funds, changing procurement rules and introduction of EDIS. Positive impact was noted in terms of improvement of inter-ministerial cooperation.

I.6. Hungary

6.1. Summary

In its first year after accession, Hungary continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since June 2004 implementation is carried out under the entire responsibility of Hungarian authorities applying national procurement rules. The CFCU-Central Finance and Contract Unit, the ESF-European Social Fund Agency and the VATI-Hungarian Public Company for Regional Town Planning are now responsible for ex-ante control and twinning. The Ministry of Finance, Central Financing and Contracting Department (CFCD) is now fully responsible for the daily implementation of the projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Budapest as of July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

6.2. Phare/pre-accession financial and Transition assistance in 2005

i) Programming

For the period 2004-2006, a Transition Facility has been created by Art 34 of the Act of Accession to fund certain Institution Building actions in the new Member States to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural funds. A total of €10,768,000 was allocated to Hungary under the 2005 Transition Facility budget.

Although the most urgent needs as regards acquis implementation have been addressed before Accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures of the new Member States.

Additional assistance has also been provided through Multi-country/Horizontal programmes, Sigma, TAIEX, OLAF, etc.

The Phare Management Committee approved the Transitional Facility 2005 National Programme for Hungary in July 2005. The programme was then approved by the Commission with Decision C(2005)2913 of 26 July 2005, which was then notified to the national authorities.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, and investments to provide the necessary equipment in order to implement the acquis .

The Transition Facility 2005 National programme for Hungary provides for:

AGRICULTURE €4.31 million

- Strengthening Institutional Capacities of Food Safety in Hungary

JUSTICE AND HOME AFFAIRS €1.78 million

- Establishment of a sustainable training facility for the Hungarian judiciary based on the School of Judges.

PUBLIC GOVERNMENT ADMINISTRATION AND CIVIL SOCIETY €3.17 million

- Improving Public Internal Financial Control System (PIFC), Audit Mechanisms

- Civil society organisations and the implementation of the anti-discrimination law

OTHER INSTITUTION BUILDING ACTIONS €1.5 million

- Unallocated IB Envelope

ii) Implementation

- Phare 2002 – finalisation of payments

At the end of the respective disbursement periods for the 2002 Phare programmes, 90% of the programme had been disbursed

This data does takes into account the extensions granted to certain elements of the Phare National Programme for the grant schemes, for three projects from the Part I and two projects from Part II of the programme.

- Phare 2003 – rate of contracting

At the end of the contracting period for the 2003 programme on 30 November 2005, 98% of the programme had been contracted.

No extensions of contracting period were possible for the projects from Phare 2003 programme and many of the projects faced the end of the commitment period in addition to Phare 2002 disbursement deadline in the end of November 2005.

- Institution Building highlights

During the year 2005, a total of around €68 million of pre-accession assistance from national allocation (not including horizontal and multi-country programmes) has been deployed in Estonia from Phare programmes (2002-2003) and Transition Facility (2004-2005).

Implementation of Phare in Hungary is considered successful in most areas, where most projects are reaching foreseen objectives and Phare assistance provide real value added to scarce public funds. In particular, with regard to the Internal Market area, an excellent twinning cooperation has provided the support to the implementation of the New Approach Directive. Other specific institution-building actions were funded in the fields of Agriculture, Social Policy / Employment, Customs and Public Finance.

The Twinning instrument continues to be used successfully in some priority areas and helped Hungary to prepare for the implementation of EU policies and laws.

6.3. Results and Impact

i) - State of play for JMC / SMSC development

In 2005, two Joint Monitoring Committee (JMC) meetings took place in May and in November 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which established an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meetings were fruitful and helped to address the problems concerning implementation of the ongoing programmes. In particular, issues such as further improvement of project management, sectoral and financial monitoring and reporting were discussed and proposals for remedial actions were made.

In the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings took place. The first round of SMSC meetings took place in February-June and second round between June and December. The following sectors to be monitored in Hungary are: Agriculture, CBC, Social and Health, Environment, Internal Market/Transport and Nuclear Safety, Regional Development, European Social Fund and SME, Public Finance and Customs, Justice and Home Affairs.

ii) - Monitoring and Evaluation Reports in 2005 (lessons learned)

Overall responsibility for monitoring of the Phare programme in Hungary lies with the National Aid Coordinator (NAC) in the National Development Office. Activities in this area were carried out on the basis of the Evaluation Plan on decentralisation of monitoring and Evaluation contracted by the NDO on the ground of the requirements of the European Commission.

The independent evaluator prepared Interim Evaluation reports in order to evaluate all Phare sectors in 2005. The evaluator prepared the Country Phare Evaluation Review (CPER) for Hungary in November 2005 and is expected to deliver the first 2006 CPER in June 2006.

The conclusions available from the Interim Evaluation reports are that, on the whole, Hungary has performed well in the implementation of Phare assistance, and this assistance has successfully supported the institution building related to the accession process.

Depending on the sector, the effectiveness was considered satisfactory and management efficiency to overcome delays adequate or unsatisfactory at least for seven sectors. There is a strong need for different training activities in various sectors. The absorption capacity of beneficiary for few sectors needs to be improved. Other problems were related to late start of slow covenant preparation, the management of co-financing funds, changing procurement rules and introduction of EDIS.

I.7. LATVIA

7.1. Summary

In its first year after accession, Latvia continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since May 2004 implementation is carried out under the entire responsibility of the Latvian authorities applying national procurement rules. The Ministry of Finance, Central Financing and Contracting Agency (CFCA) is now responsible for ex-ante control and twinning.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Riga as of July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

7.2. Phare/pre-accession and Transition Facility assistance in 2005

For the period 2004 – 2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Latvian authorities and the European Commission on 13 September 2004.

i) Programming

A total of €8,768,050 was allocated under the 2005 Transition Facility budget for Latvia.

Although the most urgent needs as regards acquis implementation have been addressed before accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through multi-country/horizontal programmes, Sigma, TAIEX, OLAF etc.

The Phare Management Committee gave a favourable opinion to the Transition Facility 2005 National Programme for Latvia in July 2005. The programme was then approved by Commission Decision C(2005)2914 of 2 August 2005, which was notified to the national authorities on the same day.

The Transition Facility 2005 National Programme for Latvia provides for:

- AGRICULTURE AND FOOD SAFETY €1.52 million

To take account of new developments regarding the CAP as well as underlying statistics; and to further adjust control capacities in the field of products of animal origin for human consumption;

- ENVIRONMENT AND PUBLIC HEALTH €1.81 million

To further strengthen the monitoring capability to help enforcing EC water legislation; and to further develop the public health monitoring and reporting system;

- JUSTICE AND HOME AFFAIRS €2.65 million

To assist Latvia in its efforts to integrate the non-Latvian speaking population of different origin; to develop a concept for processing of biometric data;

- INTERNAL MARKET AND STATISTICS €1.19 million

Implementation of Eurocode in structural design practice; to strengthen the capacity of human resources in the Latvian Statistical Bureau;

- OVERALL ADMINISTRATIVE CAPACITY €1.6 million

Institution Building Facility for twinning light and technical assistance; and evaluation of EU funded programmes.

ii) Implementation

- Phare 2002 – finalisation of contracting and payments

By the end of the disbursement period in beginning 2006, 87% of the 2002 programmes had been disbursed.

The financial data does take into account of extensions granted in 2004 of the contracting and disbursement periods of some projects until April 2005 and April 2006 respectively.

- Phare 2003 – rate of contracting

By the end of the contracting period in 2005, the contracting rates for the Phare programmes are 90%.

- Institution building highlights

During the year 2005, a total of around €98 million of pre-accession assistance from national allocation (not including horizontal and multi-country or nuclear programmes) has been deployed in Latvia from Phare programmes (2002-2003) and Transition Facility (2004-2005).

Phare assistance has been particularly successful in the fields of statistics, civil society and society integration. Good results have also been achieved in the area of public finance and health.

In 2005, Twinning continued to be the main implementing instrument in many areas of the acquis in Latvia and has helped the Latvian administration to further strengthen its capacities to implement and enforce EC legislation. On the whole Latvia has made good use of Phare and Transition Facility assistance. Institution building with the support of Phare and the Transition Facility and investment with Phare assistance progressed well.

7.3 Results and impact

i) State of play of JMC / SMSC development

In 2005, two Joint Monitoring Committee (JMC) meetings took place in January and June 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which establish an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meetings were fruitful and helped to address the problems concerning implementation of the ongoing programmes. In particular, issues such as further improvement of project management, sectoral and financial monitoring and reporting were discussed and proposals for remedial actions were made.

In the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings have taken place. The first round of SMSC meetings took place in April and second round between October and November. There are 13 sectors to be monitored in Latvia: Civil Society; Society Integration; Justice; Home affairs; CBC; Agriculture; Environment and nuclear safety; Energy and Market and Anti-trust surveillance; Public Finance; Statistics; Regional development; Social matters; Health sector.

ii) Monitoring and Evaluation Reports in 2005 (lessons learned)

Overall responsibility for monitoring and evaluation of the Phare programme in Latvia lies with the Ministry of Finance (MoF). The contract with the independent evaluator financed under the 2003 Phare programme was signed in February 2005.

In 2005, eight evaluation reports and one country summary evaluation report were prepared by the independent external evaluator. The reports covered all the monitoring sectors which had been regrouped with the agreement of the Commission into eight evaluation sectors. The evaluation reports were provided in two parts, in May and December 2005 respectively.

The conclusions available from the Evaluation Reports are that, on the whole, the national Phare programme 2002 has achieved its results and has helped to upgrade and consolidate the Latvian administration and institutions in areas such as justice and home affairs, internal market, statistics and public finance, agriculture and food safety.

Overall, Phare assistance has brought benefits to the beneficiaries in terms of investment and increased skills and knowledge under service/twinning contracts. It allowed developing new IT systems or upgrading existing ones, introducing market surveillance systems in the food and non food sectors, including the health sector and helped strengthening the capacity of the tax administration as well as the border control and management.

I.8. LITHUANIA

8.1. Summary

In its first year after accession, Lithuania continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since May 2004 implementation is carried out under the entire responsibility of the Lithuanian authorities applying national procurement rules. The Ministry of Finance, Central Programme Management Agency (CPMA) is now fully responsible for the daily implementation of the projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Vilnius as of July 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

8.2. Phare/pre-accession financial and Transition assistance in 2005

For the period 2004 – 2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Lithuanian authorities and the European Commission on 12 November 2004.

i) Programming

A total of €9,280,000 was allocated under the 2005 Transition Facility budget for Lithuania.

Although the most urgent needs as regards acquis implementation have been addressed before accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through multi-country/horizontal programmes, Sigma, TAIEX, OLAF etc.

The Phare Management Committee gave a favourable opinion to the Transition Facility 2005 National Programme for Lithuania in July 2005. The programme was then approved by Commission Decision C(2005)2918 of 2 August 2005, which was notified to the national authorities on the same day.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, grant schemes, and investments to provide the necessary equipment in order to implement the acquis .

The Transition Facility 2005 National Programme for Lithuania provides for:

- JUSTICE AND HOME AFFAIRS €2.1 million

Further enhancement of anti-corruption efforts, strengthening prosecution of fraud, and strengthening the capacities of the police in view of crimes related to counterfeit money and other payment instruments;

- PUBLIC FINANCE €2.31 million

Protection of the Communities' financial interests and fight against fraud, and modernisation of the public sector accounting system;

- AGRICULTURE €1.96 million

Administration of import/export, market information system, farm accountancy data network (FADN) and organic agriculture, administration and control of intervention measures in agriculture, strengthening animal health control and contingency planning capacities;

- INTERNAL MARKET INCLUDING CUSTOMS UNION €1.41 million

Full integration of the Lithuanian national standards body into the European standards system, implementation of export control system and improvement of quality of customs services provided to traders;

- OVERALL ADMINISTRATIVE CAPACITY €1.5 million

Unallocated institution building envelope for twinning light and technical assistance.

ii) Implementation

- Phare 2002 – finalisation of contracting and payments

By the end of the contracting and disbursement periods in 2005/beginning 2006, 83% of the 2002 programmes had been disbursed.

The financial data does take into account of some extensions granted in 2004 of the contracting and disbursement periods until the end of January 2005/2006, and of the project "Development of the Pilot Western Cycling Circuit" until the end of March 2005/end of June/2006 respectively. The Lithuanian authorities asked for extensions of the disbursement periods regarding the projects "Support to business development" and "Promotion of adaptability, skills and social inclusion" until May 2006, and of the CBC programme until February 2006.

- Phare 2003 – rate of contracting

By the end of the contracting period in 2005, the contracting rate of the Phare 2003 programmes amounts to 90%

However, in 2005 the Lithuanian authorities requested an extension of the disbursement period of the project "Strengthening of control on infectious animal diseases in Lithuania" of the national Phare programme until November 2007.

- Institution building highlights

During the year 2005, a total of around €151 million of pre-accession assistance from national allocation (not including horizontal and multi-country, nuclear or Kaliningrad programmes) has been deployed in Lithuania from Phare programmes (2002-2003) and Transition Facility (2004-2005).

Implementation of Phare in Lithuania is considered successful in most areas such as justice and home affairs and internal market, where Phare funds and projects provided notable added value. However, it is likely that some results related to the sector "preparation for structural funds" will not be achieved or only be achieved with a delay.

In 2005, Twinning continued to be the main implementing instrument in many areas in Lithuania and has helped the Lithuanian administration to further strengthen its capacities to implement and enforce EC legislation. On the whole Lithuania has made good use of Phare and Transition Facility assistance. Institution building with the support of Phare and the Transition Facility and investment with Phare assistance progressed well.

8.3 Results and impact

i) State of play of JMC / SMSC development

In 2005, two Joint Monitoring Committee (JMC) meetings took place in February and October 2005, in line with the revised JMC Mandate introduced in the new Member States in May 2004, which establish an integrated monitoring and evaluation system over the programmes under implementation.

The JMC meetings were fruitful and helped to address the problems concerning implementation of the ongoing programmes. In particular, issues such as further improvement of project management, sectoral and financial monitoring and reporting were discussed and proposals for remedial actions were made.

For the year 2005, two rounds of Sector Monitoring Sub-Committee (SMSC) meetings have taken place. The first round of SMSC meetings took place in August and December 2004 and second round between February and May 2005. There are ten sectors to be monitored in Lithuania: Environment; Justice and Home Affairs; Public Administration, Public Finance and Customs; Economic and Social Cohesion; Preparation for Structural Funds, Cross Border Co-operation; Nuclear Safety; Energy, Transport; Social Affairs; Internal market and Statistics; Agriculture and Fisheries.

ii) Monitoring and Evaluation Reports in 2005 (lessons learned)

Overall responsibility for monitoring and evaluation of the Phare programme in Lithuania lies with the Ministry of Finance (MoF). Activities in this area were carried out on the basis of the Action Plan on decentralisation of monitoring and Evaluation, which was endorsed by the EC in March 2005. In 2005, eleven sectoral evaluation reports and two country summary evaluation reports were prepared by the independent external evaluator in January and September 2005. The relevant contract financed under the 2003 Phare programme was signed in October 2004.

According to the Country Summary Evaluation Report, parts I and II of the national Phare programme 2002 have on the whole achieved their results and have helped to upgrade and consolidate the Lithuanian administration and institutions in areas such as internal market and statistics, public administration and public finance, customs, CBC, justice and home affairs, agriculture and food safety.

The main findings of the Country Summary Evaluation Reports focused on the lack of coordination and lack of exchange of experience among various beneficiaries to manage Phare assistance, which had an impact on the efficiency of implementation. This concerns in particular the sectors of agriculture, environment and nuclear safety. The close involvement of senior officials seems often to be linked to the successful implementation of the project, as for instance the 2003 Kaliningrad transit project, where all results and project purposes have been achieved within a relatively short timeframe. The report also drew the attention on the importance of clear and comprehensive strategies which are crucial in sectors such as economic and social cohesion and the preparation of structural funds as well as the establishment of proper steering committees.

I.9. Malta

9.1. Summary

In its first year after accession, Malta continued to implement successfully both pre-accession and post-accession assistance to address the remaining needs related to institution building for the implementation of the acquis , in line with the Extended Decentralised Implementation System (EDIS).

Since June 2004 implementation is carried out under the entire responsibility of Maltese authorities applying national procurement rules. The Department of Contracts within the Ministry of Finance is now fully responsible for the daily implementation of the projects.

The National Aid Coordinator continues to exercise the programming function for the Transition Facility programmes and monitoring of both Phare and Transition Facility Programmes. The national authorizing officer (NAO) carries out the financial supervision. Due to the closure of the Phare Transition Team in the Representation in Valletta as of January 2005, residual functions related to the exercising of Commission responsibilities (monitoring, payments, closure, etc.) have been fully exercised by the Commission headquarters.

9.2. Pre-accession financial and Transition assistance in 2005

i) Programming

For the period 2004-2006, a Transition Facility has been created by Art 34 of the Act of Accession to address the continued need for strengthening institutional capacity in certain areas through actions which cannot be financed by the Structural Funds. The implementation of EU assistance available under the Transition Facility is managed by the Memorandum of Understanding on the Implementation of the Transition Facility signed between the Estonian authorities and the European Commission on 22 July 2004.

A total of €5,830,000 was allocated to Malta under the 2005 Transition Facility budget.

Although the most urgent needs as regards acquis implementation have been addressed before Accession, the Transition Facility provides further support in order to consolidate the functioning of administrative structures on par with those of other Member States.

Additional assistance was also provided through Multi-country/Horizontal programmes, Sigma, TAIEX, OLAF, etc.

The Phare Management Committee approved the Transition Facility 2005 National Programme for Malta in July 2005. The programme was then approved by the Commission through its Decision C(2005)2852 of 29 July 2005, which was notified to the national authorities on the same day.

Transition Facility funds are used to support institution building through twinning, twinning light, technical assistance, and investments to provide the necessary equipment in order to implement the acquis .

The Transition Facility 2005 National Programme for Malta provides for:

SOCIAL AFFAIRS €0.55 million

- Strengthening the Administrative Capacity of the National Labour Inspectorate

- Reinforcement of the Drugs National Focal Point in Malta

JUSTICE A