|| EUROPEAN COMMISSION

Brussels, 1.12.2010

SEC(2010) 1430 final/2

CORRIGENDUM Annule et remplace le document SEC(2009) 1430 final du 25.11.2010 Correction de l'année de la cote

COMMISSION STAFF WORKING DOCUMENT

BACKGROUND DOCUMENT TO THE REPORT FROM THE COMMISSION TO THE PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

2009 ANNUAL REPORT ON THE IMPLEMENTATION OF THE INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA) COM(2010) 687

TABLE OF CONTENTS

INTRODUCTION………………………………………………………………………………………………..............5

PART I: COUNTRY SECTION………………………………………………………………………………….....9

1........... ALBANIA................................................................................................................... 9

1.1........ The year in review......................................................................................................... 9

1.2........ IPA programming and implementation in 2009......................................................... 10

1.2.1..... MIPD 2009-2011....................................................................................................... 10

1.2.2..... Programming exercise.............................................................................................. 11

1.2.3..... Implementation Modalities and Structures............................................................. 16

1.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 18

1.3........ Coherence, compatibility and coordination of aid..................................................... 21

1.4........ Monitoring.................................................................................................................. 22

2........... BOSNIA and HERZEGOVINA............................................................................... 23

2.1........ The year in review....................................................................................................... 23

2.2........ IPA programming and implementation in 2009......................................................... 23

2.2.1..... MIPD 2009 – 2011.................................................................................................... 23

2.2.2..... Programming exercise.............................................................................................. 25

2.2.3..... Implementation Modalities and Structures............................................................. 28

2.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 29

2.3........ Coherence, compatibility and coordination of aid..................................................... 31

2.4........ Monitoring.................................................................................................................. 31

3........... CROATIA.................................................................................................................. 32

3.1........ The year in review....................................................................................................... 32

3.2........ IPA programming and implementation in 2009......................................................... 32

3.2.1..... MIPD 2009-2011....................................................................................................... 32

3.2.2..... Programming exercise.............................................................................................. 33

3.2.3..... Implementation Modalities and Structures............................................................. 39

3.2.4..... Overview of IPA Implementation in 2009.............................................................. 40

3.3........ Coherence, compatibility and coordination of aid..................................................... 44

3.4........ Monitoring.................................................................................................................. 45

4........... THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA............................. 46

4.1........ The year in review....................................................................................................... 46

4.2........ IPA programming and implementation in 2009......................................................... 46

4.2.1..... MIPD 2009-2011....................................................................................................... 46

4.2.2..... Programming exercise.............................................................................................. 48

4.2.3..... Implementation Modalities and Structures............................................................. 55

4.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 55

4.3........ Coherence, compatibility and coordination of aid..................................................... 61

4.4........ Monitoring.................................................................................................................. 62

5........... KOSOVO (under UNSCR 1244/99)......................................................................... 63

5.1........ The year in review....................................................................................................... 63

5.2........ IPA programming and implementation in 2009......................................................... 63

5.2.1..... MIPD 2009-2011....................................................................................................... 63

5.2.2..... Programming exercise.............................................................................................. 64

5.2.3..... Implementation Modalities and Structures............................................................. 66

5.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 66

5.3........ Coherence, compatibility and coordination of aid..................................................... 69

5.4........ Monitoring.................................................................................................................. 69

6........... MONTENEGRO........................................................................................................ 71

6.1........ The year in review....................................................................................................... 71

6.2........ IPA programming and implementation in 2009......................................................... 71

6.2.1..... MIPD 2009-2011....................................................................................................... 71

6.2.2..... Programming exercise.............................................................................................. 73

6.2.3..... Implementation Modalities and Structures............................................................. 77

6.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 78

6.3........ Coherence, compatibility and coordination of aid..................................................... 82

6.4........ Monitoring.................................................................................................................. 83

7........... SERBIA..................................................................................................................... 84

7.1........ The year in review....................................................................................................... 84

7.2........ IPA programming and implementation in 2009......................................................... 84

7.2.1..... MIPD 2009-2011....................................................................................................... 84

7.2.2..... Programming exercise.............................................................................................. 85

7.2.3..... Implementation modalities and structures.............................................................. 89

7.2.4..... Overview of IPA projects/contracts implemented in 2009.................................... 89

7.3........ Coherence, compatibility and coordination of aid..................................................... 95

7.4........ Monitoring.................................................................................................................. 95

8........... TURKEY.................................................................................................................... 97

8.1........ The year in review....................................................................................................... 97

8.2........ IPA programming and implementation in 2009......................................................... 97

8.2.1..... MIPD 2009-2011....................................................................................................... 97

8.2.2..... Programming exercise.............................................................................................. 99

8.2.3..... Implementation Modalities and Structures........................................................... 104

8.2.4..... Overview of IPA projects/contracts implemented in 2009.................................. 106

8.3........ Coherence, compatibility and coordination of aid................................................... 111

8.4........ Monitoring................................................................................................................ 112

PART II: MULTIBENEFICIARY AND REGIONAL PROGRAMMES………………………...114

9........... MULTI-BENEFICIARY......................................................................................... 114

9.1........ The year in review..................................................................................................... 114

9.2........ IPA programming and implementation in 2009....................................................... 114

9.2.1..... MIPD 2009-2011..................................................................................................... 114

9.2.2..... Programming exercise............................................................................................ 116

9.2.3..... Implementation Modalities and Structures........................................................... 119

9.2.4..... Overview of IPA projects/contracts implemented in 2009.................................. 119

9.3........ Coherence, compatibility and coordination of aid................................................... 134

9.4........ Monitoring................................................................................................................ 134

PART III: FINANCIAL DATA……………………………………………………….........................................136

INTRODUCTION

The IPA instrument

Since 1 January 2007, EU pre-accession funding has been channelled through a single, unified instrument, the Instrument for Pre-accession Assistance (IPA), designed to deliver focused support to both candidate countries[1] and potential candidates[2]. IPA (Council Regulation No 1085/2006 of 17 July 2006) is the successor to the former pre–accession instruments PHARE[3], ISPA[4], SAPARD[5], the Turkish pre-accession instrument[6] as well as the financial instrument for the Western Balkans, i.e. CARDS[7].

In order to achieve each country's objectives in the most efficient way, IPA is structured in five different components:

I. Transition Assistance and Institution Building, aimed at financing institution building measures and associated investment;

II. Cross-Border Co-operation (CBC), to support cross-border cooperation between candidate countries/potential candidates and with EU Member States. It may also fund relevant participation in trans-national co–operation programmes (Structural Funds) and Sea Basin programmes (European Neighbourhood and Partnership Instrument - ENPI);

III. Regional Development, which finances investments and associated technical assistance in areas such as transport, environment and economic cohesion;

IV. Human Resources Development, to strengthen human capital and help combat exclusion;

V. Rural Development, which finances rural development-type measures and contributes to the sustainable development of rural areas. It also provides assistance to the restructuring of agriculture and its adaptation to EU standards in the areas of environmental protection, public health, animal and plant health, animal welfare.

Components I and II are open to all beneficiaries. Components III, IV and V are open to candidate countries only, and are designed to mirror Structural, Cohesion and Rural Development Funds in order to prepare candidate countries for the management of such EU funds upon accession. This requires beneficiary countries to have adequate administrative capacity and structures to take responsibility for the management of assistance. For potential candidates, regional-, human resources- and rural development–type measures can be implemented through Component I.

Within the Commission, DG Enlargement (ELARG) manages component I and part of component II. DG Regional Policy (REGIO) manages the part of component II under shared management with Member States and is responsible for component III. DG Employment, Social Affairs and Equal Opportunities (EMPL) is responsible for component IV and DG Agriculture and Rural Development (AGRI) has responsibility for component V. DG ELARG leads in the coordination of the instrument as a whole and defines the overall Enlargement strategy (the Enlargement Strategy Paper and the annual Progress Reports that constitute the so called ‘Enlargement package’, published every autum).

As part of the ‘Enlargement package’, and in accordance with Article 5 of the IPA Regulation, the Multiannual Indicative Financial Framework (MIFF) provides the indicative breakdown of the overall IPA envelope by country and by component for a three year rolling period. The MIFF acts as the link between the political framework within the ‘Enlargement package’ and the budgetary process.

Based on MIFF allocations, and on the priorities identified within the political framework defined by the accession strategy, Multi-annual Indicative Planning documents (MIPDs) are established for each country and for the multi-beneficiary programme. They give a three-year strategic perspective and represent the Commission's view of major areas of interventions and main priorities that beneficiary countries are expected to develop in detail in the programming documents. The MIPDs are reviewed annually.

Annual or multi-annual programmes are then designed in accordance with the relevant MIPDs.

Component I assistance is programmed by the Commission in the form of annual/national and multi-beneficiary programmes, managed either by the Commission, directly or indirectly, or by the beneficiary, or jointly with other donors, as appropriate. Annual/national programmes consist of Financing Proposals prepared by the Commission on the basis of Project Fiches submitted by the IPA beneficiaries, or prepared by the Commission in the case of regional and horizontal Multi-beneficiary programmes, following consultation with stakeholders and donors and after the positive opinion of the IPA Management Committee.

IPA Component II cross–border cooperation encompasses two strands: cross–border cooperation between candidate countries/potential candidates and cross–border cooperation between them and neighbouring EU Member States. Additionally, IPA Component II may also support the participation of candidate countries and potential candidates in Structural Funds' transnational cooperation programmes (financed by the European Regional Development Fund – ERDF, in the context of the European Territorial Cooperation objective) and in the European Neighbourhood Policy Instrument (ENPI) Sea–Basin cooperation programmes.

Assistance to cross–border cooperation under Component II is delivered on the basis of multi–annual cross–border programmes currently covering the period 2007-2011, jointly drawn up by the participating countries, and is granted through annual financing decisions which are also subject to the positive opinion of the IPA Management Committee. Concerning participation in the ERDF transnational programmes or the ENPI Sea–Basin programmes, IPA assistance is granted through annual Financing Decisions on a country–by–country basis.

Similarly to Structural Funds, programming of Components III and IV is made through multi-annual programmes, prepared initially for three years, but which can be extended to cover additional years. On the basis of the Strategic Coherence Frameworks and in consultation with relevant stakeholders, candidate countries draft multi-annual operational programmes per component (Component IV) or per theme (transport, environment, regional competitiveness - Component III) which are then agreed with the Commission for formal adoption, following consultation of the relevant Member States Committee: Coordination Committee for the funds (COCOF) for Component III and COCOF and European Social Fund (ESF) Committee for Component IV.

Based on the approach used for preparing the rural development programmes for the Member States, Component V assistance is programmed on a multi-annual basis covering the period 2007-2013. However, in line with the MIPD, the financial envelope was initially specified for the years 2007-2009 only and is subject to a yearly update in order to include financial allocations for the subsequent years. After consultations with stakeholders, the programmes as well as the modifications are adopted by the Commission following consultation of the EU Member States in the Rural Development Committee (RDC).

In view of the time necessary to set up the fully decentralised implementation system on the basis of which assistance under component V can be delivered, and based on related SAPARD[8] experience, financial allocations for Component V follow normally a phasing-in approach with a back loading of IPA Rural Development funds. Funding for the first four years of the implementation period (2007, 2008, 2009 and 2010) therefore represents a lower percentage of the full Component V allocation, which is due to increase considerably in the following years. Croatia represents the only exception to this rule as it was the only candidate country which set up the SAPARD system to profit from SAPARD funds prior to the implementation of the IPA Rural Development component.

Implementation modalities

Pre-accession assistance is implemented through a variety of management modes which take into account the different levels of preparedness of the beneficiary countries. In practice, by the end of the reporting period seven different kinds of management modes could be distinguished:

o Centralised direct – central: funds are managed by the Commission services in Brussels (e.g. horizontal and multi-beneficiary programmes such as Nuclear Safety and Tempus, parts of the Multi-beneficiary-programme proper);

o Centralised direct – de-concentrated: funds are managed by the EU Delegations under the supervision of Commission services in Brussels (e.g. most of Component I and Component II for Albania; Component I for Serbia, Components I and II for Montenegro, Component I for Kosovo, Components I and II of IPA 2007 and 2008 for Bosnia and Herzegovina);

o Centralised indirect: management of funds is delegated to third parties such as specialised EU bodies or national or international public sector bodies (some projects under IPA 2008 Component I for Albania and under IPA 2009 Component I for Bosnia and Herzegovina);

o Decentralised with ex-ante control: funds are managed by accredited national authorities of the beneficiary , but procurement is subject to ex ante control by the EU Delegation (Components I to IV in Croatia and Turkey and Components III and IV in the former Yugoslav Republic of Macedonia);

o Decentralised without ex-ante control: funds are managed by accredited national authorities of the beneficiary and are not subject to ex-ante controls by the EU Delegation (component V in Croatia[9], Turkey and in the former Yugoslav Republic of Macedonia[10]);

o Shared: funds are managed by a managing authority located in participating Member States (Component II CBCs with Member States);

o Joint: funds are jointly managed with International Organisations, such as the EBRD, Sigma, UN agencies (e.g. part of the Multi-beneficiary-programme, infrastructure support projects in Albania and in Bosnia and Herzegovina under Component I of IPA 2009, parts of Component I for Kosovo).

PART I: COUNTRY SECTION

1. ALBANIA 1.1. The year in review

Albania applied for EU membership in April 2009. After the Council requested the Commission on 16 November 2009 to prepare an Opinion on Albania's application, a Questionnaire was sent to Albania in December 2009. The Stabilisation and Association Agreement (SAA) entered into force in April 2009 and up to the end of the reporting period implementation was progressing smoothly on the whole. Albania continued to make progress in addressing the political criteria in line with the European Partnership. Parliamentary elections were held in June 2009, which were assessed by the OSCE/ODIHR as meeting most international standards, but further efforts were needed to address recommendations for future elections. According to the OSCE/ODIHR report, tangible progress with regard to voter identification, legal framework and voting took place, but the politicisation of technical processes, such as the vote count, remained to be addressed. After the elections, the opposition Socialist Party (SP) started a parliamentary boycott, which by the end of the reporting period had not yet come to an end. Political dialogue between the two main parties deteriorated and continued to be a major source of concern.

The main issues in Albania revolved around strengthening democracy and the rule of law, reforming the judicial system, and continuing with efforts to fight corruption. The capacity of the Albanian institutions in these areas remained to a large extent limited, in particular as regarded the judiciary's independence, transparency and efficiency, the implementation of public administration reform and the fight against corruption and organised crime, even if an important work was done in the framework of the visa liberalisation dialogue.

Some progress was registered regarding human rights and the protection of minorities, for which the legal framework was broadly in place. However, further efforts were needed in order to improve the enforcement of legislation in a number of fields. Areas of special concern were the situation of the Roma population and freedom of expression. In relation to the latter, the joint EU-Council of Europe Action plan on media reform aimed at improving the overall climate of media regulation in Albania.

In addition, the implementation of the SAA, which started after final ratification on 1 April 2009, demanded strong administrative capacities in almost all acquis related areas in order to meet the requirements identified in the SAA. Structural reforms were not yet fully implemented and more efforts were needed in the economic area to improve the business environment.

The economy of Albania maintained macroeconomic stability despite the global crisis. However, economic growth slowed down in 2009 as a consequence of reduced exports, remittances and credit growth. Nevertheless, Albanian growth rates exceeded those of regional neighbours.

In their assessment of Albania’s implementation of the roadmap for visa liberalisation in June 2009, Commission services concluded that, despite the important progress made, Albania had not yet fully met all the agreed benchmarks. The Commission continued to monitor the implementation of benchmarks by the country, while intensifying cooperation with the Albanian authorities. In this context, until the end of the year Albania made good progress in meeting the criteria.

For more details on developments in 2009 in Albania’s preparation for EU membership, please refer to the Commission’s 2009 Progress Report on Albania[11].

1.2. IPA programming and implementation in 2009 1.2.1. MIPD 2009-2011

As a potential candidate country, in 2009 Albania benefited from IPA Components I and II. The Multi-annual Indicative Planning Document (MIPD) 2009-2011 was adopted on 31 July 2009.

The indicative allocations to Albania under the Multi-annual Indicative Financial Framework (MIFF) for the period 2009-2011 amounted to EUR 269.4 million, as specified in Table 1 below. Assistance was in line with the recommendations of the 2008 Enlargement Strategy[12] and Progress Report as well as with the priorities stated in the European Partnership and addressed the requirements under the SAA.

More specifically for the period 2009–2011, EU assistance to Albania should address key issues such as public administration reform and rule of law enforcement, in particular as regarded good governance and anti-corruption measures. This emphasis was reflected in a further increase of funds allocated to the area of political requirements for the IPA 2009 envelope compared to previous programmes. Strengthening of the administrative capacity with a view to the implementation of the SAA was given a high priority, to support the Albanian authorities in fulfilling the requirements of that agreement. There was also a need to further support structural reforms in the country and invest in related infrastructure, in particular in the area of regional development and acquis related infrastructure.

The strategic objectives identified in the MIPD 2009-2011 responded to the European Partnership priorities, the 2008 Progress Report and the SAA requirements. Assistance was supposed to support the implementation of Albania’s 2007 National Strategy for Development and Integration, the 2007-2012 National Plan for the Approximation of the Legislation and the SAA, as well as other relevant strategies in areas related to the EU integration process.

The 2009-2011 MIPD foresaw that IPA support under Component I for the corresponding period, amounting to EUR 237.9 million (see Table 1 below), should assist Albania in the following main areas:

Political criteria: Particular attention was paid to assisting Albania in addressing fundamental issues such as good governance and the rule of law. IPA support contributed primarily to improving the political system so as to ensure better functioning of the executive, legislative and judiciary, a more effective fight against corruption and organised crime, strengthened public administration, financial control and better involvement of civil society in the political process. The preparation for decentralised management of EU assistance also required intensive support.

Economic criteria: To ensure complementarity with other donors, EU support under this axis concentrated on economic, fiscal and trade policies and the banking system, structural reforms to support regional development (including cultural heritage activities), social policies, education and employment and development.

Ability to assume the obligations of membership: priority was given to supporting Albania’s progressive alignment with the acquis in the areas of internal market, agriculture and rural development, food safety, veterinary and phytosanitary policy, environment, energy, transport, integrated border management, visa and migration, fight against organised crime with a focus on obligations under the SAA. Support was provided for the establishment and capacity building of agencies and institutions required for the implementation and enforcement of sectoral policies.

Support programmes: these programmes were foreseen to allow Albania to participate in EU agencies and institutions, as well as in EU-funded programmes.

With regard to support for Cross-Border Co-operation under IPA Component II, amounting to EUR 31.5 million for the period 2009 – 2011, the MIPD foresaw that it should address cross-border activities between Albania and EU Member States as well as with adjacent candidate countries and potential candidates.

Continuity was ensured between the MIPD 2008-2010 and the MIPD 2009-2011, as developments in the country did not justify a radical change. In line with the 2008 Enlargement Strategy, continued focus was put on support for projects in the context of the political criteria. More emphasis was laid on the protection of cultural heritage, which were in line with demands from the European Parliament and the so called "Ljubljana Process" initiated by the European Commission and the Council of Europe. Furthermore, activities were introduced to help soften the effects of the financial crisis. This included for example major infrastructure projects (IPA 2009 included EUR 23 million for municipal water and sewerage infrastructure).

Table 1: MIFF[13] allocations per component, in million EUR

Component || 2009[14] || 2010 || 2011 || 2009-2011

I. Transition Assistance and Institution Building || 70.9 || 82.7 || 84.3 || 237.9

II. Cross-Border Cooperation || 10.3 || 10.5 || 10.7 || 31.5

TOTAL || 81.2 || 93.2 || 95.0 || 269.4

1.2.2. Programming exercise

The IPA 2009 national programme for Albania focused on the objectives identified in the 2009-2011 MIPD. It encompassed 16 projects grouped under 4 strategic priority axes. Experience with the so far limited implementation of IPA assistance in Albania as well as findings of evaluations conducted by DG Enlargement - specifically, the evaluation on public administration reform[15] - suggested that planning and programming of IPA assistance needed to consider the following lessons:

Ø Ownership by the beneficiary was essential for the effective targeting of assistance and for achieving expected results. As a result, in 2009 the Commission undertook significant efforts to involve Albania's institutions in planning and programming of EU assistance. The Ministry for European Integration (MEI) benefited from substantial institutional and capacity-building support. The introduction of the function of Senior Programme Officers (SPO) within the European Integration units in line ministries and the leading role of the MEI in the programming process should help increase ownership in the future.

Ø The absorption capacity of the authorities needed to be ensured. This depended on project maturity in terms of adequate staffing in the relevant institutions, mobilisation of civil society and a political consensus on key reform activities.

Ø Timely planning of future assistance was essential to addressing key areas. Past experience with delays in implementation of CARDS and IPA showed the need to ensure that projects did not become obsolete because of late implementation.

Ø The link between EU assistance and sectoral strategies and action plans of the Albanian institutions needed to be ensured. The aim was to design assistance in relation to Albanian strategic plans, which in turn should address the requirements of the EU integration process.

Ø Particular attention needed to be paid to projects preparedness and maturity.

The above mentioned points were raised at several occasions with the beneficiary during the programming meetings of IPA 2009 and were taken as much as possible into account in the preparation of the IPA 2009 programme.

IPA 2009 addresses key issues such as police reform and rule of law enforcement, in particular as regards anti-money laundering, witness protection and further improvement of the justice system. All in all, EUR 9.8 million are provided to support justice and home affairs, which constitute about 14% of the overall programme amount. At the same time, the national programme also meets the requirements to continue preparation of the Albanian administration for decentralised management as well as to assist with preparations for the population Census in 2011, support civil society and help with advancing on important acquis related issues such as industrial property rights, food safety and data protection.

Two large infrastructure projects are also included in the 2009 programme, one in the environment sector (water supply and sewerage) and one in the transport sector (local roads). In consultation with the Albanian government, it was agreed that the local road project and parts of the water project shall be implemented via the municipal window of the Infrastructure Project Facility (which at the end of 2009 was merged into the Western Balkan Investment Framework – cf. Part II of this document) in cooperation with International Financial Institutions. This should also be seen in the context of Commission's efforts to respond to the need for measures to help Albania soften the effects of the financial crisis.

In general, projects were chosen on the basis of their maturity or readiness to be implemented. This means that a minimum of preparatory or design work had to be available, in order to be able to start projects soon after the signature of the Financing Agreement. At the same time, conditionalities were systematically introduced in the project fiches regarding the sustainability of interventions, once being finalised (e.g. maintenance plans).

There was a trend towards less but bigger projects in programming of IPA assistance to Albania in 2009. This was mainly due to the fact that IPA 2008 included a rather high number of small projects. At the same time, under the pressure of the effects of the financial crisis the European Commission decided to focus more on larger infrastructure projects, in order to support the demand side of the public sector for necessary works.

As regards the types of contracts, Component I of the 2009 programme foresees altogether 5 action grants in the areas of judicial reform, support to civil society and improvement of industrial property rights. In addition, alongside with 7 work contracts concerning boarder control, protecting cultural heritage, the Kukes region and environmental infrastructure (water supply and sewerage system), the programme also includes 7 supply contracts as well as an indicative number of about 23 service contracts. Finally, 3 twinning projects are envisaged in the area of anti-money laundering, fight against corruption and judicial reform.

The programming process for IPA 2009 was carried out with close involvement of the beneficiary institutions, in particular the Ministry of European Integration. There was a moderately improved ownership on the Albanian side during the programming exercise, in particular regarding preparation of project fiches. The quality of the project fiches, which were produced by the beneficiary, was much better than in previous years. The preliminary project list for IPA 2009 had been presented to the Member States and their agencies in Tirana at the end of 2008. Later, during the first half of 2009 the list was circulated amongst IFIs, multi-lateral donors and civil society organisations. Finally, the programme was presented to the IPA Committee on 25 September 2009 and adopted in December of that year.

Table 2: Indicative financial allocations for the year per component, in million EUR

ALBANIA || 2009

I. Transition Assistance and Institution Building || 71.36

Of which: National Programme (Including Kukes region programme, i.e. funds transferred from IPA Component II to IPA Component I) || 69.86

Nuclear Safety Programme* || 0.50

Tempus Programme* || 1.00

II. Cross-Border Cooperation || 9.83

Of which: ||

CBC FYROM - Albania || 0.85

CBC Montenegro – Albania || 0.85

CBC Greece – Albania || 1.63

CBC Adriatic || 5.90

ERDF South-East Europe + MED || 0.60

TOTAL || 81.19

* The Nuclear Safety Programme and Tempus Programme are coordinated and implemented under the relevant Multi-beneficiary IPA 2009 programmes.

As for programming of IPA 2010, the exercise began in early 2009, in order to achieve an earlier adoption than for the 2009 programme. A first programming mission took place in May 2009. However, due to the outcome of the elections of June 2009 and the consequent changes in government, the outcome of this first mission had to be substantially revised. By the end of the year a final project list was agreed between the Beneficiary and the European Commission and presented also to other donors.

1.2.2.1 Component I: Transition Assistance and Institution Building

Component I aims at achieving the objectives listed in Art 2 of the IPA regulation in line with the above enlisted priority areas. Within the dimension of “strengthening democratic institutions”, support for enhancing government's services to citizens and businesses will be provided through IPA 2009 by building an e-Government infrastructure that is in line with EU Personal Data Protection standards. Furthermore, strengthening of European Integration structures and preparation for Decentralised Management System of IPA funds (DIS) shall give impetus to Public Administration reform.

In order to strengthen the rule of law, IPA 2009 continues to emphasise support to horizontally important areas such as blue border management, anti-money laundering and financial crime investigation structures as well as witness protection. Activities in these fields are expected to further strengthen the fight against organised crime and corruption. Furthermore, citizens' trust into the judiciary is expected to further improve by supporting the strengthening of the legislative and institutional justice system and the establishment of a probation service and alternative measures to detention.

Component I of the 2009 programme aims also at supporting media freedom and the media sector in developing an independent, high-quality public service broadcasting system, including the digitalisation of broadcasting, and at developing a regulatory environment in line with European standards. As a result, an effective, transparent and predictable regulatory framework for the media is expected to be in place, as well as improved performance of the Broadcasting Authority. In this context, the joint EU-Council of Europe Action plan on media reform aims at improving the overall climate of media regulation in Albania.

IPA 2009 supports also civil society in order to create a genuine partnership with the authorities for the democratic stabilisation and the economic and social development of the country. As a result, it is expected that dialogue between the authorities and civil society will improve. In addition, it is envisaged that the independence and integrity of civil society organisations will be further strengthened to fulfil a "watchdog" function, and that transparent mechanisms for disbursement of local funds for civil society organisations will be developed.

Concerning the protection of minorities and vulnerable groups (including Roma, women, children, the handicapped and mentally ill) support is provided through the civil society facility. Furthermore, sound data on minorities will be gathered through the Census preparation project, which will be the basis for developing policies to overcome their vulnerable and economically fragile situation and protect them against discrimination.

Table 3: Indicative financial allocations for the year 2009 under the National Programme, per priority axis and per project, in million EUR

Priority Axis || Projects || Budget

Political Criteria || 21.8

|| Support for Blue Border Management || 4.0

|| Support/ Twinning for Anti-Money Laundering and Financial Crime Investigation Structures || 1.5

|| Technical Assistance/Twinning for the Justice System || 3.3

|| Fight against corruption and organised crime: Witness and Special Persons Protection || 1.0

|| Support for enhancing Decentralised Management System || 1.5

|| Support for the Population and Housing Census 2011 || 8.0

|| Project Preparation Facility || 1.0

|| Civil Society Facility || 1.5

Socio-economic Criteria || 14.46

|| Infrastructure: Secondary and local roads || 9.0

|| Support for Cultural heritage || 5.0

|| Kukes Region || 0.46

Ability to assume the obligations of membership || 31.6

|| Improvement of water supply and sewerage systems || 23.1

|| Improvement of industrial property rights || 1.0

|| Consolidation of the food safety system || 3.5

|| Building and e-government infrastructure that is in line with EU Personal Data Protection standards || 4.0

Participation in EU Programmes || 2.0

|| Support for participation to EU Programmes: in particular Competition and Innovation Framework Programme (CIP), Europe Citizens, 7th Research Framework Programme (FP 7) || 2.0

TOTAL || 69.86

1.2.2.2 Component II: Cross-border Cooperation

The overall objective of cross-border cooperation (CBC) programmes is to promote cooperation between people, communities and institutions, aiming at sustainable development, stability and prosperity of bordering areas.

The cross-border programme for 2007-2009 between the former Yugoslav Republic of Macedonia and Albania was adopted by Commission Decision in December 2007. The Financing Proposal for the year 2009 was adopted by Commission Decision in September 2009. The latter only added the 2009 financial allocation for both countries and did not touch at the substance of the programme. The overall objective of the programme is to promote sustainable development in the cross-border area.

The cross-border programme between Albania and Montenegro 2007-2009 was adopted by Commission Decision in December 2007 and the Financing Proposal for the year 2009 was adopted by Commission Decision in August 2009. No programme revision was undertaken as the 2009 Financing Proposal only added the yearly financial allocation to this programme.

Considering the status of Kosovo[16] and since the conditions to have a fully fledged joint cross-border programme between Albania and Kosovo were not met, IPA 2007, 2008 and 2009 funds were allocated to the Albania national programme for unilateral projects in the Kukes region bordering Kosovo. Although financed with IPA component II funds, this programme was implemented under component I, exceptionally transferring the funds from one IPA component to another. In October 2009, the Commission recommended to progressively activate the IPA cross-border co-operation component for Kosovo[17], notably with Albania, under IPA 2010 programming.

The cross-border programme between Greece and Albania 2007-2013 was jointly developed by the Albanian and Greek authorities and adopted after revision in November 2008. The programme builds on the 2000-2006 INTERREG programme between the two countries. The Financing Proposal for the year 2009 was adopted by Commission Decision in August 2009 and did not imply any programme revision. The overall objective of the programme is to increase living standards by promoting sustainable local development in the border area.

Since 2007, Albania is part of the IPA Adriatic cross-border cooperation programme together with Italy, Slovenia, Greece, Croatia, Bosnia and Herzegovina, Montenegro and, in phasing-out, Serbia. This programme is a continuation of the 2004-2006 Italy-Adriatic INTERREG and Italy-Albania Neighbourhood programmes. The Financing Decision for the year 2009 was adopted by the Commission in August 2009. The global objective of the programme is to strengthen sustainable development of the Adriatic region.

Albania is also participating in the ERDF transnational programme since, respectively, 2007 for the "South-East Europe" part and 2009 for the "Mediterranean" part, under the European Territorial Co-operation objective of the Structural Funds 2007-2013. The Financing Decision for its participation for the year 2009 was adopted by the Commission in August 2009. The programme supports Albanian participation to joint transnational co-operation activities with partners from EU Member States and familiarises the country with territorial co-operation programmes under EU Structural Funds.

1.2.3. Implementation Modalities and Structures

As in the previous reporting year, in 2009 the majority of the projects under IPA 2007 and 2008 component I and II were implemented on a centralised (de-concentrated) basis by the European Union Delegation to Albania in accordance with article 53(a) of the Financial Regulation (FR)[18] and the corresponding provisions of the implementing rules (IR)[19]. However, IPA 2008 foresees 5 projects to be implemented by indirect centralised management with Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) and the Austrian Development Agency (ADA). As this represented a novelty for the Commission as well as for the Member States’ agencies concerned in the enlargement context, it took a relatively long time to negotiate the corresponding delegation agreements, which were finally signed in June 2009. This management mode allowed the Delegation to free human resources for project implementation. At the same time, the chosen development agencies had a proven track record in the field for which they signed delegation agreements with the Commission. The selection was based on a transparent process, to which all present and accredited agencies were invited.

Further exceptions to the centralised (de-concentrated) management more are the infrastructure support projects (rural roads and water infrastructure) in Part I of the 2009 IPA programme. As already mentioned, these projects will be implemented by joint management with the Council of Europe Development Bank (CEB) in cooperation with Kreditanstalt für Wiederaufbau (KfW). Joint management with CEB/KfW was chosen on the basis of their broad experience in the water sector in Albania and with a view to pooling different sources of finance in order to allow implementation of large infrastructure projects, which represent a priority for the beneficiary. This should be seen also in the context of the European Commission's efforts to soften the impact of the financial crisis on the countries of the Western Balkans.

Finally, as in the previous reporting year, the horizontal nuclear safety and education (Tempus) programmes will be implemented on a centralised basis by the European Commission in Brussels, in the framework of the Multi-Beneficiary Programme.

The process leading to decentralised management of IPA funds is a challenging administrative capacity-building exercise for the Albanian government on the road towards EU integration and shall become one of its main medium-term priorities in the years to come. In January 2009, a project funded under the IPA 2007 programme started to support the Albanian administration in its decentralised management process for IPA component I and helped in starting to set up the structures and manuals for Albania's financial management and control system of IPA funds. A European Commission fact-finding mission to Tirana took place in May 2009 and provided guidance to the Ministry of Finance on the necessary steps for the process. The mission made substantial recommendations with regard to Albania's set-up of an Audit Authority and provided clarification about the competent accrediting and national authorising officer functions. As a follow-up to the Commission's recommendations, in the summer of 2009 the Albanian Ministry of Finance revised its 2008 roadmap for the decentralised management of component I; the DIS structure was approved by the Albanian Council of Minister in June 2009; key nominations were made in autumn 2009, Senior Programming Officers in line ministries were nominated and the legal frame of the Audit Authority was created in October 2009 and started to be staffed in December 2009; the staff of the Albanian Central Financing and Contracting Unit was trained on Commission's programming and contracting rules. By the end of 2009, Albania had established most of the framework for the management and control system.

As for preparations for the IPA Rural Development component (component V), in October 2009 a project funded under the IPA 2008 programme started to support the Albanian Ministry of Agriculture, Food and Consumer Protection to design and develop a rural development strategy and relevant IPA Rural Development structures, building upon current Albanian ones. By the end of 2009 Albania was able to present a draft roadmap/concept paper for IPA Rural Development preparations.

While by the end of the reporting period progress seemed solid on component I and promising on component V, the process leading to decentralised management of IPA funds was still at a very early stage for components II, III and IV. Key challenges remained, regarding: the establishment of a National Fund; drafting of roadmaps towards decentralised management of component II; kicking-off preparations for the structures' set-up for components II, III, IV, V; starting drafting the Strategic Coherence Framework and Operational Programmes for components III and IV and the IPA Rural Development programme for component V; the need for strong coordination and ownership of the process at governmental level and regular reporting to the Commission. In order to address these challenges, at the end of 2009 the European Commission was preparing for a joint-mission to Tirana of the four General Directorates responsible for the five IPA components, to officially launch preparations for decentralised management of IPA II, III, IV and V in early 2010. Furthermore, IPA 2009 programming included a project that built upon the ongoing IPA 2007 DIS project and aimed at supporting further preparation requirements for all IPA components.

1.2.4. Overview of IPA projects/contracts implemented in 2009

In 2009, IPA 2007 projects were under implementation and IPA 2008 projects started to be contracted. For the exact implementation figures, please see tables below.

1.2.4.1 Component I: Transition Assistance and Institution Building

Tables 4: Status of implementation of IPA financial assistance (Component I) as at 31st December 2009 (in million EUR) per annual programme and distribution of total committed funds (2007-2009 allocations) by priority axes

|| Committed || Contracted || RAC[20] || %Contracted || Paid || RAL[21] || %Paid

IPA 2007 || 49.27 || 23.48 || 25.79 || 47.66% || 6.61 || 42.66 || 13.42%

IPA 2008 || 64.04[22] || 26.49 || 37.55 || 41.36% || 8.06 || 55.98 || 12.59%

IPA 2009 || 69.86 || 0.00 || 69.86 || 0.00% || 0.00 || 69.86 || 0.00%

TOTAL || 183.17 || 49.97 || 133.20 || 27.28% || 14.67 || 168.49 || 8.01%

Priority Axes || % of 2007-2009 allocations

Political criteria || 31.29%

(of which civil society) || (0.82%)

Economic criteria || 20.20%

Ability to assume membership obligations || 46.71%

Support programmes || 1.80%

TOTAL || 100.00%

During 2009, some significant IPA projects started and/or were ongoing in Albania under Component I, as follows:

IPA 2007 projects

The project 'Police Assistance Mission of the EU to Albania (PAMECA III – EUR 5.5 million) started its activities in 2008. The project team was composed of a group of experts drawn from 3 Member States (United Kingdom, Austria and Sweden) and spams across the entire spectrum of activities of the Albanian State Police, including organized crime, terrorism, integrated border management, human, financial and material resources management, community policing and others. In 2009 the team was fully completed and focused on important areas, such as customs police, criminal intelligence and general policing. Up to the end of the reporting period, the project proved successful in highlighting areas needing further improvement towards building a credible Police Force in Albania, and in identifying suitable strategic and tactical actions to achieve that goal. The key principle of the project was to build sustainable capacity and not to replace it.

The project of technical assistance to the preparation of the Albanian Authorities for the EU Decentralised Implementation System (DIS) started in January 2009 and foresaw EUR 1 million of IPA funds. The overall objective of the project was to adequately prepare the Albanian Authorities for absorbing EU financial assistance, putting into place efficient structures and strengthening the capacities of key institutions for technical management of decentralized programmes in order to ensure sound management of DIS. During the reporting year, the project supported the Albanian authorities in revising the DIS roadmap and in setting-up the main structures.

IPA 2008 projects

The "Project Against Corruption" in Albania (PACA) funded under IPA 2008 and featuring a EUR 2 million contribution from the European Commission was signed in July 2009 and implementation started in September of that same year. The project is conducted by the Council of Europe and focuses on assisting the Albanian government in enhancing the effectiveness of implementation of the Cross Cutting Strategy against Corruption, a declared Government priority in line with the European Partnership objectives. The project aims at building the capacity of the Albanian administration (Line Ministries, State Police) and independent institutions such as the General Prosecutor's Office, the High Inspectorate for the Declaration of Assets and the High Council of Justice to adopt, implement and monitor internal mechanisms to counter and reduce corruption. The project also features a pilot component on anti-corruption in the education sector, and has an implementation period of 30 months.

In October 2009, the EUR 2.2 million project "Supporting Albanian SMEs to become more competitive on the EU-market" started its implementation. This strategic project aims at supporting the Ministry of Economy, Trade and Energy (METE) and Albinvest[23] to develop SME policy and specific support measures in order to assist Albanian SMEs to compete in the wider EU market. The overall objective of the project is to maintain sustainable growth, increase the competitiveness of the private sector and provide a healthy business environment for investment and employment. This is of great importance as the Stabilisation and Association Agreement in force between the EU and Albania gives Albanian SMEs an enormous opportunity to expand their businesses into EU markets. The project should strengthen the capacities of METE and Albinvest to develop, implement and monitor Albanian SME policy in order to provide entrepreneurship and innovation programmes to SMEs.

In order to assist the government in achieving the main goals of the Rural Development Strategy for Albania (2007-2013), further support is provided by IPA 2008 through the project "Capacity building for Rural Development Strategy" (EUR 2 million), that started implementation in October 2009. The project aims at establishing and strengthening institutional and administrative capacities in the Ministry of Agriculture, Food and Consumer Protection to design, develop and implement the policies and the appropriate supporting means for the development of agriculture and rural areas in the framework of EU pre-accession assistance programs for IPA Rural Development.

The IPA 2008 project "Improving the consumer protection against zoonotic diseases" (EUR 5.7 million) started its implementation in December 2009. The main purpose of the project is to assist the Ministry of Agriculture, Food and Consumer Protection to strengthen the administrative and technical capacity of the veterinary service in order to plan and implement the appropriate measures conducive to the eradication and controlling of animal diseases such as brucellosis, tuberculosis, anthrax, classical swine fewer and rabies.

In December 2009, the EU Delegation signed a works contract of EUR 6.6 million for the reconstruction of rural roads in Albania. These works include reconstruction of four sections of secondary roads in Gjirokastra, Lezha and Shkodra Districts, totalling 30.7 km. The funds are part of a EUR 8 million IPA 2008 project dedicated to rural roads infrastructure.

TAIEX, Twinning and SIGMA

Altogether, seven twinning projects were launched for Albania during 2009, one of which funded by IPA 2007 and the remaining six by IPA 2008. Finance was the most relevant sector concerned by more than half of the projects launched. One project, "Strengthening the institutional capacity of the Albanian Central Bank", was successfully re-circulated in November 2009 after no proposals were received at the first launch in June. The Member States selected for leading the twinning projects were Austria, Italy, Poland and Germany. For one twinning no partner was selected by the end of the reporting period. No twinning contracts were signed in 2009. Altogether, 71 TAIEX experts assisted Albania in 2009.

SIGMA activities in 2009 revolved around the following topics: public service and administrative framework with focus on the law on administrative procedures and civil service reform, public expenditure management and assistance to the development of the public procurement system.

Regarding the evaluation of these institution and capacity building instruments, i.e. the success of twinnings vs. technical assistance, evaluation contracted by headquarters had not started yet in 2009.

1.2.4.2 Component II: Cross-border Cooperation

Tables 5: Status of implementation of IPA financial assistance (Component II) as at 31st December 2009 (in million EUR) per annual programme and distribution of total committed funds (2007-2009 allocations) by priority axes

|| Committed || Contracted || RAC || %Contracted || Paid || RAL || %Paid

IPA 2007 || 6.68 || 0.68 || 6.00 || 10.18% || 0.62 || 6.06. || 9.28%

IPA 2008 || 8.58 || 0.00 || 8.58 || 0.00% || 0.00 || 8.58 || 0.00%

IPA 2009 || 9.83 || 0.00 || 9.83 || 0.00% || 0.00 || 9.83 || 0.00%

TOTAL || 25.09 || 0.68 || 24.41 || 2.71% || 0.62 || 24.47 || 2.47%

Priority Axes || % of 2007-2009 allocations

CBC with Member States || 73.48%

CBC within Western Balkans || 22.53%

Participation to ERDF Transnational Programmes || 3.99%

TOTAL || 100.00%

Implementation of the 2007–2009 Cross-border Cooperation Programmes with Albanian was ongoing in 2009.

For programmes at borders between candidate countries/potential candidates, i.e. Albania-Montenegro and Albania-the former Yugoslav Republic of Macedonia, it took about one year from the signature of first financing agreements (March/April 2008) for national authorities to set up the programme management structures and prepare the first calls for proposals, which were published for all programmes from June to July 2009. This timing is comparable to that of Member States for CBC at intra-EU borders. The calls included IPA 2007 funds for the programmes between Albania and Montenegro and between Albania and the former Yugoslav Republic of Macedonia. Calls were closed in September-October 2009.

For the programme Albania-Greece, one call for proposals encompassing IPA 2007, 2008 and 2009 funds altogether was prepared in 2009 for launching in 2010.

As regards Albanian participation to the ERDF “South-East Europe” Transnational Programme, calls were open for project proposals in the following areas: facilitation of innovation and entrepreneurship, protection and improvement of the environment, improvement of the accessibility and development of transnational synergies for sustainable growth areas, and three grant contracts with Albanian beneficiaries were signed in winter 2009. The objectives of the selected projects were the networking for the promotion of transport corridors, the exchange of information and the protection of the environment. The quality of the applications received was considered ‘average to good’ as beneficiaries were requested to review in depth their action plan and their budget as per project cycle management requirements.

CBC Programmes can make a valuable contribution to reconciliation and good neighbourly relations, and the beneficiaries have shown great expectations with regards to the results of the programmes of this component, also in light of the fact that CBC's 'learning-by-doing' approach should significantly contribute to local capacity-building. These great expectations were reflected in the large number of applications submitted to the Calls for proposals, despite the almost symbolic amount of available funds. The amount requested with all applications received was, for Albania-Montenegro CBC programme, four times more and, for Albania-former Yugoslav Republic of Macedonia CBC programme, ten times more, than the overall amounts available under these calls.

1.3. Coherence, compatibility and coordination of aid

In order to increase effectiveness and efficiency in the delivery of assistance through donor coordination, the Commission and the Member States ensure coordination of their respective assistance programmes. This coordination is extended also to the IFIs and other non-EU donors. At local level, a consultation mechanism during the different phases of the assistance cycle was established in 2007. It provided for an early consultation on draft IPA planning (MIPDs) and programming documents with Member State embassies, local offices of IFIs, UN entities and non–EU donors.

At central level, coordination meetings with IFIs as well as with EU and non–EU donors are organised on a regular basis. They focus primarily on strategic orientations and the regional dimension of IPA planning and programming. Additionally, coordination between the Commission and Member States take place on a regular basis in the context of the IPA Committee. Meetings with Member States embassies and the local branches of the IFIs on the MIPD 2009-2011 and the IPA 2009 draft national programme were organised in December 2008.

Since November 2005, the Government of Albania receives support to improve the process of donor coordination through the Integrated Planning System (IPS), which aims at ensuring that core policy and financial processes function in a coherent, efficient and integrated manner. Assistance to this mechanism was foreseen under IPA 2007. Furthermore, the Albanian Government has significantly improved donor coordination and aligned international assistance with national priorities through the Department of Strategy and Donor Coordination (DSDC). It was created in 2005 under the Deputy Prime Minister’s Office in the Council of Ministers of the Albanian government and is responsible for national, sectoral and cross-cutting development strategy coordination.

The Delegation of the European Union has played a leading role in the past as head of the Donor Technical Secretariat (DTS), which facilitates coordination and hosts project data from all donors since 2003. This leading role is rotating between the main donors such as European Union, OSCE, World Bank, UNDP and Member States.

To facilitate the coordination among donors as well as between government and donors within each sector, Sector Working Groups have been created. The government has the leading role in calling the meetings of the Sector Working Groups, but donors can take the initiative and call meetings each time they feel there is an important issue to be discussed amongst them, or with the government. The 9 Sector Working Groups for donor coordination are currently shared as follows: 1) environment, land and agriculture; 2) infrastructure & energy; 3) economy & finance; 4) social policy sectors; 5) justice & home affairs; 6) government modernisation; 7) decentralisation; 8) youth and culture, civil society and media; 9) elections and civil registry.

Albania was selected in January 2007 as a pilot country for the UN "delivering as one" reform, which is financially supported (amongst others) by the EU. Furthermore, the Division of Labour initiative in line with the Paris Declaration and the Accra Agenda for Action is becoming more and more developed.

The Tirana Donor Coordination Conference organised by the European Commission and the Albanian Government in April 2009 was seen as a success by all participants as for the first time it was organised by the European Commission together with (and in) a beneficiary country. According to figures presented at the last donors' conference, the total amount of donors' committed funds to Albania for the period 2007-2009 was EUR 2.7 billion.

However, with view to donor presence in Albania, it was feared that due to the financial crisis some bilateral donors could reduce their foreseen resources as in some donor countries they are often linked to GDP.

1.4. Monitoring

The monitoring of IPA-funded projects in Albania started only in 2009. Three different projects were monitored by Result Oriented Monitoring (ROM): 1) one on preparing the Albanian authorities for decentralized management; 2) one on the police assistance mission of the European Union to Albania (PAMECA III); 3) one on fighting corruption in Albania. The exercise identified weaknesses and areas of improvement that appeared to be prevalent in all three projects. In particular, there was a need to improve the logical frameworks and produce results with suitable indicators of achievement, alongside with better standards of reporting (with emphasis on results and project purpose achievement); all projects should review the risks assessment and establish a risk management plan; more efforts were needed to ensure and increase EU visibility; inter-institutional cooperation at the national level could be improved.

2. BOSNIA and HERZEGOVINA 2.1. The year in review

The conclusions of the 2009 Progress Report for Bosnia and Herzegovina[24] confirmed that implementation of the Interim Agreement in 2009 was overall satisfactory. However there was only very limited progress in addressing key reforms. Bosnia and Herzegovina needed to reform its constitutional framework to permit its institutions to function effectively and ensure a sustainable progress towards EU integration. In particular, the country needed to be in a position to adopt, implement and enforce the laws and the rules of the EU.

In 2009 Bosnia and Herzegovina made very limited progress in addressing the political criteria. Reform implementation was slow due to the lack of consensus and political will and the complex institutional framework. The functioning of state-level institutions and legislative bodies was deficient. While some progress was made in the area of public administration, more efforts were needed on improving the judicial system, in particular on the fight against corruption and organised crime.

The European Union Police Mission (EUPM) is part of the overall EU efforts in Bosnia and Herzegovina. Since 2003 it contributes to the security and stability of the country. IPA interventions, in particular in the sectors rule of law and law enforcement are closely coordinated with the EUPM.

As regards the economic criteria, during the reporting period Bosnia and Herzegovina made little further progress towards a functioning market economy. The quality and sustainability of public finances deteriorated further and considerable efforts had to be pursued with determination to enable the country to cope with competitive pressures and market forces within the Union over the long term.

Finally, Bosnia and Herzegovina made limited progress in 2009 with regard to the alignment of its legislation and policies with European standards. Some progress was made in areas such as transport, customs, taxation, education and culture. Progress was registered also in a number of justice, freedom and security related issues, especially in fulfilling the conditions for visa liberalisation. However particular efforts remained necessary as regards the movement of goods, persons and services, social and employment policies, state aid, energy and environment.

For more details on developments in 2009 in Bosnia and Herzegovina’s preparation for EU membership, please refer to the Commission’s 2009 Progress Report, abovementioned.

2.2. IPA programming and implementation in 2009 2.2.1. MIPD 2009 – 2011

As in previous Enlargement Strategy papers and in line with findings in the 2009 Progress Report, the Commission concluded in the 2009 Enlargement Strategy that Bosnia and Herzegovina urgently needed to speed up key reforms and revise its constitutional framework in order to increase its administrative capacity to be in a position to adopt, implement and enforce EU acquis. While some progress had been made in the area of public administration, more efforts were needed on improving the judicial system, in particular the fight against corruption and organised crime. Similarly to the other economies of the Western Balkans, Bosnia and Herzegovina was severely hit by the economic crisis and the strategy concluded that the EU would assist Bosnia and Herzegovina in alleviating the impact of the crisis and paving the way for sound recovery, in coordination with the International Financial Institutions (IFIs).

The Multi-Annual Indicative Planning Document (MIPD) 2009 – 2011 for Bosnia and Herzegovina was adopted on 1 July 2009. With regard to Component I, it reflected closely the conclusions of the 2009 Strategy Paper by, as it concerned the political criteria, prioritising assistance on strengthening the administrative capacity and offering support to domestic efforts towards constitutional reform. Another priority was to support the rule of law, in particular the police, the reform of the judicial system and the implementation of an anti-corruption policy. Further objectives of the 2009-2011 MIPD were supporting the return process, minorities and vulnerable groups, civil society, the media, preservation of the cultural heritage and de-mining of mine-contaminated areas.

With regard to the economic criteria, the MIPD followed the enlargement strategy by setting assistance priorities aimed at creating employment and softening the impact of the financial and economic crisis. It foresaw support to the establishment of regulatory capacity and the enhancement of entrepreneurial know-how. It contributed to the development of the Small and Medium Enterprise (SME) sector, to promoting trade policies and, in cooperation with IFIs, to foster economic development through investing in infrastructure. Support to the education reform and to development of the national strategy on research would promote the development of the economy and society and active labour market measures should assist in combating unemployment.

The MIPD strategy with regard to Bosnia and Herzegovina's ability to assume the obligations of membership (approximation to the EU acquis) was again in line with the 2009 Strategy conclusions on needed support to the rule of law and the economy by addressing the internal market (quality infrastructure, institutional set-up of key market actors, customs and taxation, development of a single financial market), sectoral policies (agriculture and rural development, environment, energy and transport, the information society and statistics) and justice, freedom and security (integrated border management, visa, asylum and migration policy, the fight against money laundering, drugs, organised crime and terrorism).

Under Component II, IPA assistance targeted Cross-Border Co-operation through joint projects at borders with Croatia, Montenegro and Serbia and with EU Member States, through the IPA CBC Adriatic Programme and by supporting Bosnia and Herzegovina’s participation in joint projects under the European Regional Development Fund's (ERDF) transnational programmes "South-East Europe" (SEE) and "Mediterranean" (MED).

Table 1: MIFF[25] allocations per component, in million EUR

Component || 2009 || 2010 || 2011 || 2009-2011

Transition Assistance and Institution Building || 83.9 || 100.7 || 102.7 || 287.3

Cross-border Co-operation || 5.2 || 5.3 || 5.4 || 15.9

TOTAL || 89.1 || 106.0 || 108.1 || 303.2

2.2.2. Programming exercise

The 2009 IPA programme was divided into two parts in order to accelerate implementation of the assistance addressed to alleviating the impact of the financial and economic crisis. Those projects, in particular support to investments in the transport, energy and environment infrastructure, support to SMEs and to the Deposit Insurance Agency, were included in part I of the 2009 IPA National Programme. Part II of that programme continued the ‘traditional’ pre-accession support. Part I was adopted by the Commission on 11 August 2009, part II on 29 October 2009.

As concerns the political criteria, in line with the MIPD priorities the 2009 programme pursued the objectives to continue assisting the reform of the public administration. In particular, IPA 2009 assistance aimed at strengthening the national planning capacities and increasing the efficiency of the presidency, sustaining domestic efforts on the reform of the constitution, supporting the preparation for management of IPA Components III and IV, reinforcing the rule of law through support to the judiciary and strengthening anti-corruption capacities. Assistance was also provided to the promotion of civil society dialogue and to the preservation of cultural heritage.

With regard to the economic criteria, the programme assisted in the alleviation of the consequences of the financial crisis by supporting investments in transport, energy and environment infrastructure, in close cooperation with the IFIs, by contributing to SMEs development and by improving the capacities of the workforce to comply with the requirements of the labour market.

In relation to the ability to assume the obligations of membership, the programme supported the development and implementation of strategies and policies for approximation to the EU acquis in the internal market (economic and fiscal policy, quality infrastructure) and in sectoral policies such as statistics, agriculture, veterinary and phytosanitary services.

Finally, the 2009 programme allocated funds also to co-finance Bosnia and Herzegovina’s participation to EU programmes, in particular to the 7th Framework Programme for Research and to the Culture Programme.

Programming of IPA assistance in 2009 continued a trend towards less and bigger projects. In 2007, IPA started with 46 projects with an average budget of EUR 1 million, while the 2009 programme included 19 projects with an average budget of EUR 4.2 million.

Programming of 2009 IPA assistance took into account the experience gained in the planning and implementation of previous EU assistance programmes in Bosnia and Herzegovina as well as the findings of different evaluations of EU past pre-accession programmes. The most common finding was that a number of assistance projects in Bosnia and Herzegovina did not achieve the expected results because of insufficient ownership on the side of the beneficiaries. Another important element was that in Bosnia and Herzegovina IPA projects carried political risks of various degrees, i.e. most of the projects foreseen for implementing the European Partnership required reforms which were not necessarily endorsed by all competent authorities.

One of the most important lessons learned was that EU assistance should not only reflect European Partnership priorities but, in the broader sense of the Paris Declaration, should also be interlocked with Bosnia and Herzegovina's own development and action plans. Therefore, the IPA 2009 national programme aimed at promoting ownership by ensuring that projects were in line with Bosnia and Herzegovina's own reform strategies and development plans, as well as by enhanced participation of future beneficiaries in the programming process.

The programme was based on project proposals made by Bosnia and Herzegovina's authorities, in particular the Ministry of Finance and Treasury, the Directorate for European Integration and the Senior Programming Officers of the involved line ministries. The proposals had been elaborated together with the Commission services on the basis of the enlargement strategy and MIPD priorities.

For Component II, the cross-border programmes with Bosnia and Herzegovina’s neighbouring countries, Croatia, Montenegro and Serbia, were adopted in 2007 covering the period 2007-2009. Therefore, the 2009 Financing Decisions allocated the 2009 budget appropriations to the respective programmes without changing the content of the programmes adopted in 2007.

Table 2: Indicative financial allocations for the year per component, in million EUR

BOSNIA AND HERZEGOVINA || 2009

I. Transition Assistance and Institution Building || 83.90

Of which: ||

National Programme Part I || 39.00

National Programme Part II || 41.50

Nuclear Safety Programme* || 1.00

Tempus Programme* || 2.40

II. Cross-Border Cooperation || 5.21

Of which: ||

CBC Bosnia and Herzegovina - Croatia || 1.00

CBC Bosnia and Herzegovina - Montenegro || 0.50

CBC Bosnia and Herzegovina - Serbia || 0.70

ERDF Bosnia and Herzegovina (South East Europe, Mediterranean) || 0.56

CBC Adriatic || 2.45

TOTAL || 89.11

* The Nuclear Safety Programme and Tempus Programme are coordinated and implemented under the relevant Multi-beneficiary IPA 2009 programmes.

2.2.2.1 Component I: Transition Assistance and Institution Building

The IPA 2009 national programme will support the strengthening of democratic institutions and the rule of law, in particular through assistance to the judiciary for strengthening the capacity of courts and prosecutors and through support to the constitutional reform and to the anti-corruption agency, for strengthening its institutional and administrative capacities. It will support reform of the administration through i) assistance to develop and implement a road-map for the decentralisation of management of assistance under the IPA components III and IV; ii) support to the national planning process to create a comprehensive policy that fully reflects the European integration requirements; iii) assistance to the Presidency to increase its efficiency with the help of technological and organisational changes. The 2009 IPA programme will encourage networks of civil society organisations and will preserve the country's cultural heritage through the reconstruction of key monuments destroyed in the 1990s war.

The 2009 IPA programme will also contribute to the economic reform process by supporting SMEs to introduce quality management systems in accordance with international quality standards (ISO 9000), by implementing active labour market reforms to adapt the capacity of the work force to adapt to the labour market, and by supporting adult learning. The infrastructure investments, in particular in water supply and sewage systems, will create employment and thereby contribute to the alleviation of the consequences of the financial crisis.

Finally, all projects selected under the European standards priority axis will directly or indirectly support economic reforms. They will contribute to the improvement of the economic and fiscal policy-making at all levels of government, to the advancement of single market integration by improving the market surveillance system, to the strengthening of agriculture and rural development by establishing an agriculture market information system and the framework for a land parcel identification system and to increasing the capacities of the veterinary and phytosanitary services.

All projects in the 2009 programme follow closely the objectives of the MIPD 2009 – 2011. Noteworthy are the support to the judiciary, where EUR 4 million are allocated to strengthening the capacities of the courts and prosecutor offices to process war crimes and civil enforcement cases, and the support to the anti-corruption agency, where EUR 0.5 million are allocated to strengthening the agency's institutional and administrative capacity. The ‘heavy weight’ of the 2009 programme is however the assistance to investments in infrastructure, worth EUR 36 million of grant contributions, along with EUR 262 million of IFI's loans which will enable Bosnia and Herzegovina to carry out large infrastructure projects.

The predominant part of the assistance (EUR 44.5 million) will be spent on grant contracts, mainly in the form of joint management and indirect centralised management agreements with IFIs and as direct grants to the High Judicial and Prosecutorial Council (HJPC) and to the Food and Agriculture Organisation (FAO). Four twinning projects and one twinning light project (EUR 3.1 million) will be implemented with the assistance of EU Member States experts. The remaining part of the programme will be implemented through service, works and supply contracts and, in the case of the civil society support project, through calls for proposal.

It would be desirable to decrease the number of service contracts and increase the number of twinning contracts. However, experience shows that there is only a limited number of institutions in Bosnia and Herzegovina who possess the administrative and human ressources capacity to successfully absorb twinning support.

Table 3: Indicative financial allocations for the year 2009 under the National Programme (parts I and II), per priority axis and per project, in million EUR

Priority Axis || Projects || Budget

Political Criteria || 15.5

|| Judiciary || 4.0

|| Constitutional reform || 1.0

|| Preparations for IPA components III and IV || 1.0

|| Civil Society || 3.0

|| Cultural heritage || 4.0

|| Anti-corruption || 0.5

|| National planning and presidency || 2.0

Economic criteria || 47.5

|| Support to SME sector (TAM/BAS) and the Insurance Agency || 3.0

|| Improvement of regional transport infrastructure || 14.0

|| Construction of a small hydro power plant Cijevna || 5.5

|| Rehabilitation and construction of water supply and sewage collection infrastructure || 16.5

|| SME support || 3.5

|| Labour and education || 5.0

European Standards || 14.5

|| Economic and Fiscal Policy || 2.0

|| Single Market Integration || 3.9

|| Statistics - Census || 2.0

|| Agriculture and rural development || 3.4

|| Veterinary and phytosanitary services || 3.2

Supporting Programmes || 3.0

|| EU programmes || 3.0

TOTAL || 80.5

2.2.2.2. Component II: Cross-border Cooperation

The multi-annual cross-border programmes between Bosnia and Herzegovina and Croatia, Montenegro and Serbia aim at bringing together people, communities and economies of the border regions to jointly develop a cooperative area, using their human, cultural and economic resources. This will be achieved through joint projects in the field of e.g. tourism, SME support, rural development, environmental protection, social cohesion and cultural exchange.

The IPA Adriatic cross-border programme, in which Bosnia and Herzegovina participates together with Italy, Slovenia, Greece, Croatia, Albania, Montenegro and Serbia, aims at strengthening the sustainable development of the Adriatic region.

The ERDF transnational programmes "South East Europe" and "Mediterranean" allows BiH to participate in joint transnational co-operation with EU Member States and thus to prepare for territorial co-operation under the EU Structural Funds.

For more information on these programmes, please refer to the 2008 IPA Annual Report.

2.2.3. Implementation Modalities and Structures

As in the previous reporting year, also in 2009 the majority of projects under IPA 2007 and 2008 Components I and II were implemented on a centralised (de-concentrated) basis by the EU Delegation to Bosnia and Herzegovina, in accordance with article 53(a) of the Financial Regulation (FR) and the corresponding provisions of the Implementing Rules (IR). Exceptions are infrastructure support projects under Part I of the 2009 IPA programme and the Multi-beneficiary nuclear safety and education (Tempus) programmes. As already mentioned above, infrastructure support projects will be implemented by joint management with the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) in accordance with FR article 53(d) and corresponding IR provisions and by indirect centralised management through a delegation agreement with the Kreditanstalt für Wiederaufbau (KfW), in accordance with FR article 54(2)(c) and corresponding IR provisions.

The horizontal nuclear safety and education (Tempus) programmes were implemented on a centralised basis by the European Commission in Brussels.

In 2009 there was no progress in the preparation for the decentralised management of IPA. The Decentralised Implementation System (DIS) Strategy of Bosnia and Herzegovina was adopted in July 2008. However, up to the end of the reporting period no nominations were made, except for the position of the National IPA Coordinator (NIPAC), which was established in the Ministry of Finance and Treasury. The Central Finance and Contracts Unit (CFCU) and the National Fund (NF) were also placed within the Ministry of Finance and Treasury and were functional, although not yet fully staffed.

2.2.4. Overview of IPA projects/contracts implemented in 2009

Up to the end of the reporting period, progress in IPA implementation was barely measurable because of delays due to the reasons indicated below. The 2007 National Programme was adopted by the Commission in December 2007. Bosnia and Herzegovina ratified the IPA Framework Agreement in July 2008. However the Commission could not start implementing the 2007 Programme before January 2009, due to the fact that Bosnia and Herzegovina adopted legislation to exempt all IPA funded goods, services, works and grants from fees, custom duties and taxes (a prerequisite of the IPA Framework Agreement) only in December 2008. In the meantime, by the end of the reporting period, the 2008 and 2009 national programmes were also adopted.

Implementation of IPA 2007 projects begun in the first half of 2009, while tendering and contracting of IPA 2008 started mainly in the second half of 2009. Aggravating factors explaining the delays were the time needed for Bosnia and Herzegovina to sign IPA Financing Agreements (4 – 6 months) and the limited capacity of the EU Delegation in Sarajevo to evaluate the high amount of tenders.

In 2009, 45 IPA contracts were signed (32 from the IPA 2007 programme, 12 from the 2008 programme and 1 from the 2009 programme,) the majority of which (38) in the second half of the year, and thereof 15 in the last quarter. This represented a clear improvement compared to the previous year, during which only 6 IPA contracts were signed.

The 45 contracts abovementioned consisted of 22 service contracts, 12 grants, 9 supply contracts, 1 twinning light and 1 works contract.

2.2.4.1. Component I: Transition Assistance and Institution Building

Tables 4: Status of implementation of IPA financial assistance (Component I) as at 31st December 2009 (in million EUR) per annual programme and distribution of total committed funds (2007-2009 allocations) by priority axes

|| Committed || Contracted || RAC[26] || %Contracted || Paid || RAL[27] || %Paid

IPA 2007 || 49.74 || 37.58 || 12.16 || 75.55% || 8.44 || 41.30 || 16.97%

IPA 2008 || 66.75 || 9.01 || 57.74 || 13.50% || 4.47 || 62.28 || 6.70%

IPA 2009 || 80.50 || 12.00 || 68.50 || 14.91% || 0.00 || 80.50 || 0.00%

TOTAL || 196.99 || 58.59 || 138.40 || 29.74% || 12.91 || 184.08 || 6.55%

Priority Axes || % of 2007-2009 allocations

Political criteria || 27.76%

(of which civil society) || (4.98%)

Economic criteria || 36.73%

Ability to assume membership obligations || 33.30%

Support programmes || 2.21%

TOTAL || 100.00%

Because of the abovementioned implementation delays, no concrete results can be reported.

In 2009, four twinning projects under the 2008 IPA programme were launched in different sectors: internal market (pharmaceutical agency), finance (support to further EU acquis alignment in the indirect taxation authority), justice and home affairs (support to the implementation of the integrated border management strategy and action plan) and transport (assistance in institution building of the civil aviation authority). No IPA twinning projects were implemented in 2009.

Bosnia and Herzegovina benefited from SIGMA assistance in 2009 to improve the administrative law framework, to support the development of the Public Internal Financial Control (PIFC) strategies, to support the public procurement and concessions reform and to support the public administration reform.

The 2009 IPA programme allocated EUR 3 million to assist the participation of Bosnia and Herzegovina in EU programmes, in particular the 7th Framework Programme for Research and the Culture Programme.

2.2.4.2. Component II: Cross-border Cooperation

Tables 5: Status of implementation of IPA financial assistance (Component II) as at 31st December 2009 (in million EUR) per annual programme and distribution of total committed funds (2007-2009 allocations) by priority axes

|| Committed || Contracted || RAC || %Contracted || Paid || RAL || %Paid

IPA 2007 || 3.96 || 0.39 || 3.57 || 9.85% || 0.31 || 3.65 || 7.83%

IPA 2008 || 4.95 || 0.00 || 4.95 || 0.00% || 0.00 || 4.95 || 0.00%

IPA 2009 || 5.21 || 0.00 || 5.21 || 0.00% || 0.00 || 5.21 || 0.00%

TOTAL || 14.12 || 0.39 || 13.73 || 2.76% || 0.31 || 13.81 || 2.20%

Priority Axes || % of 2007-2009 allocations

CBC with Member States || 42.48%

CBC within Western Balkans || 46.75%

Participation to ERDF Transnational Programmes || 10.76%

TOTAL || 100.00%

Implementation of the 2007 – 2009 Cross-border Cooperation programmes was ongoing during the reporting period. For programmes at borders between candidate countries/potential candidates, it took about one year from the signature of the of first financing agreements (March/April 2008) for national authorities to set up the programme management structures and prepare first calls for proposals, which were published for all programmes in June-July 2009. This timing is comparable to that of Member States for CBC at intra-EU borders. The calls included 2007 and 2008 IPA funds. Calls were closed in September-October 2009.

CBC Programmes can make a valuable contribution to reconciliation and good neighbourly relations, and the beneficiaries have shown great expectations with regards to the results of the programmes of this component, also in light of the fact that CBC's 'learning-by-doing' approach will significantly contribute to local capacity-building. These great expectations were reflected in the large number of applications submitted to the Calls for proposals, despite the almost symbolic amount of available funds.

At borders with Member States, the first Calls for proposals, which included 2007 – 2009 funds, were launched between March and September 2009.

With regards to participation in the ERDF transnational programme 'South-East Europe', the selection of projects following the first call for proposals was completed in 2009 and grant contracts absorbing IPA 2007 funds were signed. As of 2008, Bosnia and Herzegovina participates also in the 'Mediterranean' programme with an annual allocation of EUR 100,000. The second call for proposals was launched in the course of 2009.

2.3. Coherence, compatibility and coordination of aid

Donor coordination is ensured throughout the entire project management cycle from project design to implementation. In particular, in 2009 the European Commission as a core donor, together with DFID, was involved in setting up an Aid Coordination Committee together with the Ministry of Finance, the Directorate for European Integration and the Directorate for Economic Planning. Monthly coordination meetings continued to be held with EU Member States on programming and implementation of assistance. The European Commission also participated to, and provided regular updates on, the IPA programming process to a Donor Coordination Forum, which comprises key bilateral and multi-lateral donors. Improved donor co-ordination has resulted in a division of labour in certain areas where Member States or other donors are carrying out projects which would otherwise have been considered for Commission financing. Coordination with civil society has been performed under the responsibility of the Directorate for European Integration.

2.4. Monitoring

As described before, most IPA projects started their implementation late in the year 2009 and the Result Oriented Monitoring could assess the projects only in or shortly after the inception phase. The monitors however assessed a predominant number of projects as relevantly designed, efficient to date and with good prospects for sustainability.

3. CROATIA 3.1. The year in review

In 2009 accession negotiations with Croatia continued at a steady pace. Of the 35 negotiating chapters, by the end of that year 29 were opened for negotiations, of which 6 in 2009. 10 chapters were provisionally closed during the reporting period, out of a total of 17 that were provisionally closed by the end of that year.

As assessed in the Commission's Enlargement Strategy and Main Challenges 2009-2010 [28] during the reporting period "Croatia continues to make progress on key political reforms. Croatia continues to meet the political criteria and made progress in most areas, including intensified efforts in the field of rule of law. […] Croatia will need to step up reform efforts in the area of judiciary and fundamental rights, in particular as regards the independence and efficiency of the judiciary, the fight against corruption and organised crime, minority rights, including refugee return, and war crimes trials. Public administration reform requires particular attention […] Croatia needs to enhance efforts to establish required instruments for the management and control of Community financial instruments".

For more details on developments in 2009 in Croatia's preparation for EU membership, please refer to the Commission's 2009 Progress Report[29].

3.2. IPA programming and implementation in 2009 3.2.1. MIPD 2009-2011

The priorities set in the Commission's Enlargement Strategy and Main Challenges 2009-2010[30] and in the 2009 Progress Report, including reinforced support to the political criteria, were taken into account in the strategic choices for IPA financial assistance made in the Multi-annual Indicative Planning Document (MIPD) 2009-2011 for Croatia.[31] This MIPD, amounting to EUR 462.6 million, was adopted on 9 July 2009, following consultations conducted by the Commission with the National IPA Coordinator (NIPAC) in Croatia. At the beginning of the drafting process, in November 2008, a draft version of the MIPD was circulated to EU Member States, as well as to local branches of International Financing Institutions (IFIs) and civil society representatives. A revised version was presented to Member States representatives in the IPA Management Committee on 24 April 2009. The Committee delivered a positive opinion by written procedure on 8 May 2009.

In light of Croatia's advanced stage in the EU accession process and in view of maximising the preparation of its structures and systems, assistance was concentrated on institution building and preparations for implementation of the EU common agricultural and cohesion policies.

The 2009-2011 MIPD did not significantly differ from the 2008-2010 MIPD adopted by the Commission on 18 September 2008, as the objectives under the five IPA Components remained largely relevant, with amendments taking into account the Commission's Progress Report and Enlargement Strategy of 5 November 2008.

In particular, stronger emphasis was given, within the political criteria, to assistance needed for the judicial reform, the fight against corruption and organised crime, and the integration of the Serb minority. As regards the ability to take on the obligation of membership, the MIPD maintained sufficient flexibility in order to accompany the accession negotiation process in the most optimal manner.

The 2009-2011 MIPD included also updates on lessons learned from issues and remedial actions related to absorption capacity and management and control systems put in place by the Croatian authorities, as well as an overview on the conferral of management powers processes under the five IPA Components.

Table 1: MIFF[32] allocations per component, in million EUR

Component || 2009 || 2010 || 2011 || 2009-2011

I – Transition Assistance and Institution Building || 45.60 || 39.48 || 39.96 || 125.04

II – Cross-border cooperation || 15.90 || 16.22 || 16.54 || 48.66

III – Regional Development || 49.70 || 56.80 || 58.20 || 164.70

IV – Human Resources Development || 14.20 || 15.70 || 16.00 || 45.90

V – Rural Development || 25.80 || 26.00 || 26.50 || 78.30

TOTAL || 151.20 || 154.20 || 157.20 || 462.60

3.2.2. Programming exercise

In 2009, the programming of IPA 2009 Component I, initiated at the end of 2008, was finalised. Financing Decisions under IPA Components II were also adopted in 2009, on the basis of multi-annual programmes adopted by the Commission at the end of 2007 and beginning of 2008. As regards Components III and IV, for which programming is done on a multiannual basis and disbursements follow the “n+3 rule[33]”, Financing Decisions were adopted at the end of 2007, with financial allocations for 2007-2009. Financing Decisions adopted in 2009 consisted in the addition of the 2010 financial allocations, while revisions to the programmes content were made only in limited cases detailed in the relevant sub-sections below.

The distribution of the five IPA Components in the following table is consistent with the strategic priorities for Croatia for 2009, as set out in the Enlargement Strategy and the revised MIPD 2009-2011.

Table 2: Indicative financial allocations for the year per component, in million EUR

CROATIA || 2009

I. Transition Assistance and Institution Building || 45.60

Of which: ||

National Programme Part I || 42.10

National Programme Part II (Lifelong Learning & Youth in Action)** || 2.50

Nuclear Safety Programme* || 1.00

II. Cross-Border Cooperation || 15.90

Of which: ||

CBC Croatia – Bosnia and Herzegovina || 1.00

CBC Croatia - Montenegro || 0.40

CBC Croatia - Serbia || 0.80

CBC Croatia - Slovenia || 3.21

CBC Croatia - Hungary || 2.62

CBC IPA Adriatic || 7.31

Croatia's participation in ERDF transnational programmes "South East Europe" and "Mediterranean" || 0.56

III. Regional Development || 49.70

Of which: ||

Transportation || 18.50

Environment || 18.50

Regional Competitiveness || 12.70

IV. Human Resources Development || 14.20

V. Rural Development || 25.80

TOTAL || 151.20

* The Nuclear Safety Programme is coordinated and implemented under the relevant Multi-beneficiary IPA 2009 programme.

**Management of the allocations for these two programmes was cross-delegated to DG Education and Culture (EAC)

3.2.2.1 Component I: Transition Assistance and Institution Building

The IPA 2009 Component I programme for Croatia was adopted by the Commission on 1 December 2009, on the basis of project proposals made by the National IPA Coordinator (NIPAC) in Croatia at the end of 2008 and subsequent negotiations with the Commission. In March 2009, a draft list of projects was circulated to EU Member States and local branches of International Financing Institutions (IFIs). A revised draft programme was presented to Member States representatives in the IPA Management Committee on 25 September 2009. The Committee delivered a positive opinion by written procedure on 16 October 2009.

The 20 projects of the IPA 2009 programme were grouped under the four strategic priority axes defined in the Multi-annual