The Phare Programme - Annual Report 1995
Date: 1996-07-23
Institutions: European Commission
Subjects: Central and Eastern Europe, EU financing, EU programme, European integration, development policy

Phare 

European Commission: 
The Phare 
Programme 
Annual Report 
1995 

Brussels 23.07.1996 Com (96) 360 
final 

The  main  priorities  for  Phare  funding  are  common  to  all 
countries,  and  include  restructuring  of  state  enterprises 
including  agriculture,  private  sector  development,  reform 
of 
legislation  and  public  administration, 
reform  oi'  social  services,  employment,  education  and 
health, development  of energy, transport  and  telecommuni 
cations  infrastructure,  and  environment  and  nuclear  safety. 

institutions, 

For  countries  that  have  signed  Europe  Agreements,  Phare 
is  the  financial  instrument  of  the  European  Union's  pre-
accession  strategy  which  will  lead  them  to  full  member 
ship. 

What is Phare? 

The  Phare  Programme  is a European  Community  initiative 
which  supports  the  development  of  a  larger  democratic 
family  of  nations  within  a  prosperous  and  stable  Europe. 
Its  aim  is to  help  the  countries  of  central  Europe  rejoin  the 
future 
mainstream  of  European  development 
membership  of the  European  Union. 

through 

Phare  does  this  by  providing  grant  finance  to  support  its 
partner  countries  through  the  process  of  economic  transfor 
mation  and  strengthening  of  democracy  to  the  stage  where 
they  are  ready  to  assume  the  obligations  of  membership  of 
the  European  Union. 

In  the  first  six  years  of  operation  to  1995,  Phare  has  made 
available  ECU  5,416.9  million  to  eleven  partner  countries, 
making  Phare  the  largest  assistance  programme  of  its  kind. 

Phare  works  in  close  cooperation  with  its  partner  countries 
to  decide  how  funds  are  to  be  spent,  within  a  framework 
agreed  by  the  European  Community.  This  ensures  that 
Phare  funding 
to  each  government's  own 
reform  policies  and  priorities. 

is  relevant 

Phare  provides  know-how  from  a  wide  range  oi  non 
commercial,  public  and  private  organisations  to  its  partner 
countries.  Phare  acts  as  a  powerful  catalyst  by  unlocking 
funds  for  important  projects  from  other  donors  through 
studies,  capital  grants,  guarantee  schemes  and  credit  lines. 
It  also  invests  directly  in  infrastructure,  which  will  account 
for  more  Phare  funds  as the  integration  process  progresses. 

Contents 

Commissioner's  statement 
Phare  1995 financial  overview 
Political developments  in  1995 
Phare in  1995 
Operational  management of Phare 
Albania 
Bulgaria 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Poland 
Romania 
Slovakia 
Slovenia 
1990 - 1995 funds  committed by country 
1990 - 1995 funds  committed by sector 
Phare funding  by country 
Phare funding  by sector 
Phare financial  performance 
Major programmes launched in  1995 

2 
3 
3 
6 
10 
13 
14 
16 
18 
19 
20 
21 
23 
25 
27 
29 
30 
32 
34 
40 
44 
47 

Commissioner's statement 

Over  the  last  year  the  Phare  Programme  has  greatly 
increased its role as a provider of grant finance  and know-
how  to  the  countries  of  central  Europe.  As  political 
relations between  those countries and the European  Union 
have progressed, Phare has embraced a new purpose. 

In  1995, therefore, Phare began to function  as the  financial 
instrument  of 
the  European  Union's  pre-accession 
strategy.  Unveiled  at  the  European  Council  in  Essen, 
December  1994, the  pre-accession  strategy  is  the  means 
whereby  the  central  European  countries  can  progress 
towards  full  membership  of  the  European  Union.  It  is 
designed  to  help  them  bridge  the  gap  between  their 
political  and economic  systems and those of the European 
Union. 

In  1995, the  European  Commission  published  its  White 
Paper  on  the  preparation  of  the  partner  countries  for 
integration  into  the  internal  market.  Phare  is  supporting 
the  implementation  of  the White  Paper, which  guides  the 
partner  countries  in  their  efforts 
to  harmonise  their 
legislation  with  that  of  the  European  Community.  At  the 
same  time,  1995  was  a  year  in  which  Phare  focused  on 
to 
sectors  whose  development 
integration,  such  as  infrastructure  investment  and  cross-
border cooperation. 

is  closely 

linked 

Phare's  role  in the pre-accession  strategy  is also  reflected 
in the new programming  cycle. National  and  cross-border 
programmes  are  now  mapped  out  over  a  multi-annual 
period.  This  means  that  Phare  operates  in  the  framework 
of medium-term objectives, and can respond more  flexibly 
to  the  needs  of  the  partner  countries.  As  shown  in  this 
Report,  Phare  has  also  made 
its 
operational  procedures. This has been  possible  because of 
the  dedication  and  commitment  of  the  Commission  staff 
who work on Phare. 

improvements 

in 

the 

objective 

The  Dayton  peace  agreement  reached 
in  December 
required  the  help  of  the  international  community.  In  the 
same  month,  the  European  Commission  and  the  World 
Bank  organised  the  first  meeting  of  donors  for  Bosnia-
Herzegovina,  with 
identifying 
reconstruction  needs  and  mobilising  donor  assistance. A 
programme  was  prepared  and,  on  the  basis  of  a  multi 
lateral  plan,  the  first  phase  of  the  Phare  Essential  Aid 
Programme  (worth  ECU  62.5  million)  was  launched  in 
January  1996.  Above  all,  this  programme  illustrates  the 
concrete  support  given  by  the  European  Union  to  the 
peace  process  which  will  eventually  bring  Bosnia-
Herzegovina into the scope of Phare  funding. 

of 

As a new  millennium  approaches, the enlargement  of  the 
European  Union  is  an  ambitious  project  which  requires 
the  support  of  both  the  Union  and  the  central  European 
countries  preparing  to join.  Phare  is  at  the  heart  of  that 
project.  As  the  European  Commissioner  responsible  for 
the Programme  in  1995 and who will take the Programme 
forward  in  1996,1 commend this Annual Report to you. 

Hans van den Broek 
Member of the European  Commission 

Phare 1995 financial overview 

In  1995, the Phare  Programme  committed  a total  of ECU 
1,154.7 million to its partner countries. This is an increase 
of  19 per cent on  1994 (ECU 973 million), and represents 
a  commitment  rate  of  99.4  per  cent.  Total  commitments 
over the life  of the Programme  (1990 to  1995) now equal 
ECU 5,416.9  million. 

During  1995,  Phare  contracted  funds 
totalling  ECU 
1,142.9  million.  This  represents  an  increase  on  1994's 
total  contracts  (ECU  665  million)  of  72 per cent  and  is a 
significant  achievement  for  the  Programme.  Phare  also 
paid ECU 762.4 million  in  1995 which was an increase of 
5 per cent. 

In  total,  therefore,  62.3  per  cent  of  all  Phare  funds 
committed  have  been  contracted,  and  of  the  contracted 
funds  85.9 per cent have been paid. 

The  following  chart  shows the breakdown  of  Phare  funds 
committed year on year, 1990 - 1995. 

1990 

1991 

1992 

1993 

1994 

1995 

It  should  be  noted  that  the  1995  Phare  Annual  Report 
contains figures  from  all five budget lines managed within 
the  framework  of  the  Phare  Programme.  Owing  to 
reporting  software  limitations,  figures  contained  in  the 
1994  Phare  Annual  Report  only  included  two  budget 
lines. This therefore  accounts for  the small  discrepancy  in 
the historical figures  between the  1994 and the  1995 Phare 
Annual Reports. 

Political developments in 1995 

the  European  Community  and 

Phare is at the heart of the political and economic relations 
the  partner 
between 
countries  of  central  Europe.  Those  countries  are  now 
preparing  for  full  membership  of  the  European  Union. 
The  pre-accession  strategy, adopted  at  the  Essen  Council 
in  December  1994,  provides  the  framework  for  their 
preparations.  Phare  is  the  financial  instrument  of  that 
strategy. 

Pre-accession strategy 

The  pre-accession  strategy  is  the  path  which  leads  the 
central  European  countries  with  Europe  Agreements 
towards  full  membership  of  the  European  Union.  It  is 
designed  to  help  the  partner  countries  bridge  the  gap 
between  their  political,  economic  and  legal  systems  and 
those of the European Community. 

The  strategy  for  accession  was  adopted  at  the  Essen 
Council  in  December  1994.  This  represented  a  clear 
turning  point  in  the  relationship  between  the  European 
Union and its partner countries. 

The  strategy  has 
three  main  elements:  the  Europe 
Agreements,  the  structured  dialogue,  and  the  Phare 
Programme. 

Europe Agreements 

The  Europe  Agreements  are  the  framework  for  bilateral 
relations  between  the  European  Communities  and  their 
Member  States on the one hand, and the partner  countries 
on  the  other.  Developed  by  the  European  Community  in 
1990  and  then  signed  with  individual  countries  over  the 
following  years,  the  Europe  Agreements  cover  trade 
related issues, political, economic and cultural  cooperation 
and  list  Phare  and  the  European  Investment  Bank  as 
providers of financial  assistance. They are based on shared 
understandings  and  values,  and  prepare  the  way  for 
progressive  convergence  in  a  wide  range  of  areas. Given 
that  accession  to  the  European  Union  is  now  the  explicit 
goal of the partner countries, the Europe Agreements have 
become  the  framework  within  which  these  countries 
prepare for membership. 

Country 

Bulgaria 

Czech Republic 

Estonia 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Europe Agreement 
signed 

Europe Agreement 
came into force 

Official  application 
for EU membership 

March  1993 

October 1993 

June 1995 

February  1995 

February  1995 

December  1991 

February  1994 

June 1995 

June  1995 

December  1991 

February  1993 

October  1993 

June  1996 

February  1994 

February  1995 

February  1995 

December  1995 

January  1996 

November  1995 

March  1994 

October  1995 

December  1995 

April  1994 

June 1995 

June 1995 

June  1996 

The  Europe  Agreements  acquired  greater  political 
significance  following  the  European  Council  summit  in 
Copenhagen 
in  1993.  There,  the  European  Council 
explicitly  agreed  that  "the  associated  countries  in  central 
and  eastern  Europe  that  so desire  shall  become  members 
of the European  Union. Accession  will take place as soon 
as an  associated  country  is able to assume  the  obligations 
of  membership  by  satisfying  the  economic  and  political 
conditions required". 

Under  the  Agreements,  the  partner  countries  commit 
themselves  to approximating  their  legislation,  particularly 
in  the  areas  relevant  to  the  internal  market, to  that  of  the 
European  Community. 

One of the key elements of the Europe Agreements  is the 
Association  Councils.  These  are  a  series  of  bilateral 
meetings  between 
the  European  Communities,  their 
Member  States  and  each  of  the  partner  countries. During 
1995,  these  Association  Councils  have  concentrated  on 
the  implementation  of  the  pre-accession  strategy  and 
regional  cooperation. 

The  Association  Councils  are  complemented  by 
Association  Committees, which review  all areas under the 
Europe  Agreements,  and 
Joint  Parliamentary 
Committees. 

the 

Structured  dialogue 

The  second  instrument  of the pre-accession  strategy  is the 
'structured  dialogue'.  Dialogue  has  always  been  a 

cornerstone  of  the  European  Community's  cooperation 
with  the  central  European  countries.  As  they  emerged 
from  decades  of  isolation  from  the  rest  of  Europe,  it 
played  an  essential  part  in  bringing  about  an  improved 
understanding of their requirements and interests. 

The  Copenhagen  European  Council  in  June  1993  agreed 
on  a  multilateral  framework  of  regular  meetings  at 
ministerial  level  between  the  Union  and  the  partner 
countries. This  framework  was  endorsed  at  Essen,  where 
the  specific  arrangements  of  the  structured  dialogue  were 
set out. 

The  structured  dialogue  fulfils  an  essential  role  in 
preparing  the  partner  countries  for  membership  of  the 
Union, enabling  discussion  of  issues of common  concern, 
in areas  where  solutions  require  action  at European  level. 
The areas of policy  range from  cultural  cooperation  to the 
Common Foreign and Security Policy (CFSP). 

The  discussion  of  issues  of  common  concern  also  allows 
prospective  members  to  become  more  involved  in  the 
European  Union's  activities before  accession  negotiations 
begin  and  more  familiar  with  the  institutions  of  the 
European  Union  and  how  they  function.  As  a  result,  the 
structured  dialogue 
close  working 
enhances 
relationship essential to the European  integration process. 

the 

The  heads  of  government  of  the  partner  countries  were 
invited  to  the  European  Councils  at  Cannes  and  Madrid. 
Ministers also met to discuss a wide range of issues with a 

trans-European  angle,  such  as 
telecommunications, 
transport,  environment  and  scientific  research,  as  well  as 
other  matters  related  to  the  European  Community's 
internal  market.  In  the  field  of  justice  and  home  affairs, 
cooperation  has  focused  on  the  fight  against  organised 
crime. 

A new focus for Phare 

Developed  initially  as  an  immediate  response  to  the 
challenges  facing  the  central  European  countries,  the 
Phare  Programme  is now  also the  financial  instrument  of 
the pre-accession  strategy. 

The  pre-accession  strategy,  as  outlined  at  the  Essen 
Council,  states  that  "integration  will  be  supported  by  the 
European  Union's  Phare  Programme  which  will  develop 
on  an  indicative  basis  into  a  medium-term  financial 
to  promote 
instrument  with 
intra-regional 
infrastructure 
cooperation". 

improved  possibilities 

development 

and 

to 

its  funds 

In  concrete  terms,  this  means  that  Phare  is  devoting  a 
the  co-financing  of 
greater  share  of 
infrastructure  development  projects  and  to  promoting 
cross-border  cooperation.  Phare 
introducing 
measures  to  promote  cooperation  between  the  partner 
countries  and  to  place  a  greater  emphasis  on  investment 
support. 

is  also 

To  prepare  the  partner  countries  for  participation  in  the 
internal  market,  it  was  decided  to  support  their  efforts  to 
harmonise  their  legislation,  standards  and  norms  with 
those  existing  within  the European  Community. This will 
involve the provision  of significant  support for  the system 
of  public  administration  to  ensure  that  the  necessary 
legislation can be implemented  effectively. 

In  its progress  report  on  the pre-accession  strategy  which 
it  submitted  to  the  European  Council  in  December  1995, 
the  European  Commission  stated  that  further  emphasis 
still  needed  to  be  placed  on  support  for  investment  and 
infrastructure.  It  also  stated  that  Phare  would  also  be 
supporting  a number of  projects  in the area of justice  and 
home  affairs. 

to 

increase 

the  efficiency  of 

In  order 
the  Phare 
Programme,  the  European  Commission  coordinates  its 
assistance  activities  with  the  other  donors  supporting  the 
central European countries, such as the European  Bank for 
Reconstruction  and  Development  (EBRD)  or  the  World 
Bank.  Emphasis  is  given  to  particular  sectors  in  order  to 
heighten the impact of assistance. 

The Cannes European Council 

The  European  Commission,  in  accordance  with  the 
conclusions  of  the  Essen  summit,  presented  its  White 
Paper  on  the  preparation  of  the  partner  countries  for 
integration  into  the  internal  market  of  the  European 
Community.  The  Cannes  European  Council  concluded 
that  "the  preparation  of  the  associated  countries  for 
integration  into the internal  market  is, as was affirmed  by 
the  Essen  European  Council,  the  main  element  of  the 
strategy of preparation for accession." 

to  an 

increase 

The  Council  also  agreed 
the 
Programme's  financial  envelope  until  1999.  The  Phare 
budget  will rise from  ECU  1,154  million  in  1995 to ECU 
1,634 million  in  1999, a total  of  ECU  6,693  million  over 
the  period,  thereby  reinforcing  the  commitment  of  the 
European Union to accession. 

in 

Before  the  publication  of  the  White  Paper,  the  partner 
countries had already begun approximating legislation and 
moving  towards  the  economic  freedoms  on  which  the 
internal  market  is founded.  However, with the prospect of 
full  membership  of  the European  Union  moving  closer, it 
was  decided  to  produce  a  document  which  sets  out  the 
body of essential internal market legislation. 

for 

funding 

is  already  being  used 

Phare 
the 
implementation  of  the  White  Paper.  Above  all,  this  is  a 
technical  manual  which  forms  a  key  element  of  the  pre-
accession  strategy.  As  it  guides  the  partner  countries 
through  the  legislation,  structures  and  broad  economic 
conditions  essential  to  the  functioning  of  the  internal 
market, the White Paper's purpose  is to clarify  the task of 
approximating  national  laws  to  those  of  the  European 
Union. 

For  each  of  the  twenty-three  sectors  of  internal  market 
legislation, the White Paper proposes a logical sequence in 
which  to  tackle  the  approximation  exercise.  While  it  is 
considered  vital  to lay  down  priorities  for  action,  it is the 
countries  themselves  who  identify  those  areas  where  the 
greatest impact will be achieved. 

The  White  Paper  marks  the  beginning  of  a  process  in 
which the partner countries play the leading role. The task 
of  enacting,  implementing  and  enforcing  the  necessary 
laws  can  be  carried  out  only  by  the  partner  countries 
themselves.  Support  will  be  provided  by  the  European 
Union  and  its Member  States, but  it is  important  that  this 
is  coordinated  so  that  the  provision  of  assistance  is  both 
efficient  and  effective. 

and 

legislation 

the  necessary 

It  is  for  this  reason  that  the  White  Paper  recommended 
that  the  Commission  sets  up  and  manages  a  Technical 
Assistance  Information  Exchange  Office.  This  is  being 
supported by the Phare multi-country  programme and will 
be the focal  point for the provision of advice and expertise 
on 
implementation 
structures.  It  will  house  an  internal  market  database 
through  which  all  interested  parties  will  have  access  to 
information  concerning  the  support  available  under  Phare 
and other European  Union  programmes. It will  also serve 
as  a  clearing  house,  matching  requests  for  support  from 
the  partner  countries  with  specialists  and  programmes 
available  at national  and European  levels. In this way, the 
Office  will  direct  support  provided  by  Phare  and  by  the 
various  other  public  and  private  sector  sources,  towards 
the needs of the partner countries. 

countries. The  Commission  also  presented  reports  on  the 
progress  made  in  the  pre-accession  strategy,  and  on  the 
impact of enlargement on the European Union's policies. 

The  Madrid  Council  announced 
the  European 
Union's  intergovernmental  conference  (IGC) would begin 
in  March  1996. While  the  conference  will  have  no  direct 
impact  on  the  Phare  Programme,  it  will  shape  the 
European Union's institutions for the next century. 

that 

In  the  course  of  1995,  the  following  countries  made 
official  applications  for  full  membership  of  the  European 
Union:  Bulgaria, Estonia, Latvia, Lithuania, Romania and 
Slovakia. Poland and Hungary applied in  1994. The Czech 
Republic  decided  to  wait  until  the  beginning  of  1996, 
while Slovenia submitted  its application  in June  1996. 

Madrid Council and enlargement 

In  December  1995, at  the  Madrid  summit,  the  European 
Commission  submitted  its  study  on  alternative  strategies 
for  the development  of relations  in the field  of  agriculture 
the  partner 
between 

the  European  Community  and 

The  Madrid  Council  "hopes  that  the  preliminary  stage of 
negotiations  will  coincide  with  the  start  of  negotiations 
with  Cyprus  and  Malta".  These  should  begin  six  months 
after  the  conclusion  of  the IGC, which  is due  to finish  in 
mid-1997. 

Phare in 1995 

1995  was  a  year  of  both  continuity  and  change  for  the 
Phare  Programme.  In  many  areas,  the  Programme 
continued  the  work  started  in  1994.  This  meant  that 
infrastructure  projects continued to be of great importance, 
the 
gained 
momentum,  and  Phare  continued  to  provide  know-how 
and grant finance to its partner countries. 

cross-border 

cooperation 

programme 

In  other  areas,  however,  Phare  made  some  fundamental 
changes. The  new  role  as  the  financial  instrument  of  the 
pre-accession  strategy,  and 
this 
its 
represented,  meant 
organisational  structure,  while  continuing  to  improve  its 
programming  process, create  a  new  monitoring  structure 
and enhance its financial  management. 

that 
to  modify 

that  Phare  had 

the  challenge 

The  following  sections  outline  both  the  changes  which 
Phare made in  1995 and the areas in which  it continued to 
concentrate its  efforts. 

Concentration on infrastructure investment 

In  1995, Phare  continued  to concentrate  on  infrastructure 
projects  and  intensified  the  work  begun  in  1994.  The 
Essen  European  Council  in  December  1994  recognised 
the  increasing  importance  of Phare's  work  in this  area by 
increasing  the  limit  of  Phare  spending  allowed  on 
infrastructure  to  25  per  cent  from  a previous  level  of  15 
per cent. This increased  the Programme's  ability  to play a 
complementary  role  to  its  traditional  provision  of  know-
how by providing targeted grant funds  in key areas. 

In practice, this means that Phare has been able to unblock 
projects  which may otherwise have stalled, by providing a 
International  Financial 
financing 
the 
Institutions  or  private 
governments  of  the  partner  countries. Phare's  investment 
in infrastructure  is subject to a number of ground rules. 

investors 

between 

bridge 

sector 

and 

The most important of these are that 

• 

the  project  must  be  a  stated  priority  for  the  partner 
country.  This  is  in  line  with  the  spirit  of  the  pre-
accession  strategy  which  places  the  responsibility  for 
determining  the  priorities  along  the  road  to  accession 
with  the  partner  countries  themselves.  The  partner 
country  is  therefore  required  to  contribute  counterpart 
funds  itself to the project. 

Environmental  projects  have  also  been  identified  which 
tackle  regional  'hot  spots'  in  air  and  water  pollution, 
especially  where  there  is  a  cross-border  impact.  Other 
areas  include  projects  of  nature  conservation  such  as 
coastal  zone  and  wetlands  management,  environmental 
projects  which have immediate health benefits  such as the 
clean-up  of  rural  water  supplies  or  industrial  and  military 
sites, and the introduction of cleaner technologies. 

•  Phare's  contribution  must  bring  a  clear  additional 
benefit  to  the  project  which  would  not  otherwise  be 
present.  This  might 
include,  amongst  others, 
unblocking  a  high  priority  project  which  cannot  go 
ahead  because  a  country  is  unwilling  to  support  a 
project  where  the  costs  are  concentrated  in  its  own 
areas  but  the benefits  span  several  countries; or  where 
Phare's  money  would  attract  additional  commercial 
finance through the multiplier  effect. 

In  the  field  of  energy,  infrastructure  projects  which  have 
received  Phare  investment  include  the environmental  and 
safety  upgrading  of  power  plants,  projects  aimed  at 
increasing  energy  efficiency  and  renewable  energy,  and 
local projects with clear environmental  benefits. 

Finally, Phare has helped to fund  the development of rural 
telephony  pilot  projects  -  a  significant  step  towards 
creating the communications  infrastructure  vital  in today's 
global business environment. 

•  Phare's  contribution  must  complement  and  not 
compete with the normal actors in this area, such as the 
partner  country  governments,  private  operators, 
commercial  lenders  and  the  International  Financial 
Institutions. 

Cross-border cooperation 

The Phare cross-border programme, established  in  1994 at 
the  initiative  of  the  European  Parliament,  continued  to 
play an essential part in the pre-accession  strategy. 

. 

the  project  must  be  supported  by  an  overall  strategy 
which is in line with European Union standards. 

and 

private 

telecommunications 

Phare's  infrastructure  investment  in  1995 has continued to 
concentrate  on  the  areas  of  transport,  the  environment, 
energy, 
sector 
development.  In  particular  it  has  been  focused  on  two 
broad  but  critical  areas.  The  first  of  these  are  trans-
European  networks, recognised  as  a priority  sector  in the 
1992 Maastricht Treaty and still an integral requirement of 
an  effective  internal  market.  This  caused  a  number  of 
infrastructure  improvements  to  be  identified 
in  1995, 
including  roads  and  railways  linking  Berlin  and  Warsaw; 
Dresden  and  Prague;  Nuremberg  and  Prague;  Trieste, 
Ljubljana  and Budapest; a telematic platform  in the Baltic 
Sea and a Baltic ring electricity  network. 

The  second  area  concerns  projects  which  assist  the 
countries  of  central  Europe  in  the  transition  from  a 
centrally-planned  economy  to  a  market  economy.  In  the 
area  of  transport,  this  has  included  the  restructuring  and 
modernisation  of  both  road  and  rail  networks,  the 
elimination  of  border  crossing  bottlenecks,  and  the 
development of traffic  management systems. 

Whereas  in  1994  efforts  focused  on  the  creation  or 
adaptation of the necessary  institutional  framework  for the 
and 
communication,  programming, 
monitoring  of  the  programme,  1995  saw  a  number  of 
concrete steps being taken. 

implementation 

Phare  worked  closely  with  Directorate  General  for 
Regional  Policies,  which  manages  INTERREG,  in  order 
to  ensure  coherence  with  regional  cooperation  aims  and 
practices.  Commission  Regulation  N°  1628/94  on  cross-
border  cooperation  between  the  Member  States  and  the 
central  European  countries  in the framework  of the  Phare 
Programme,  provides  the  rules  for  financing  actions  of  a 
structural  nature  in  border  regions  of  central  European 
countries  sharing  a common  border  with  Member  States, 
in  harmony  with  the  European  Union  structural  policies, 
and  with  INTERREG  II  in particular. Joint  Programming 
and  Monitoring  Committees  composed  of  the  appropriate 
authorities  from  both  sides  play  the  principal  role  in 
the  planning  and 
assuring  overall  coordination 
implementation  stages, and in monitoring the programmes 
selected. 

in 

have 

focused 

Although  the  bulk  of  the  Phare  cross-border  cooperation 
projects 
the  development  of 
on 
infrastructure,  transport,  telecommunications  and  energy, 
the  new  approach  adopted  for  1995-1999  will  include 
more "soft"  actions  such as tourism, human  resources and 
culture. This  has been  underpinned  by the  setting  up of a 
Small Project Fund Facility. 

In  1994,  the  central  European  countries  eligible  for 
participation  were Albania, Bulgaria, the Baltic  states, the 
Czech  Republic,  Poland  and  Slovenia.  In  1995, Hungary 
and  Slovakia  were  added  to  the  list  (owing  to  Austria's 
accession  to  the European  Union)  as  well  as  new  border 
regions  in the Czech  Republic  and  Slovenia. The  eligible 
border  regions  were  determined  by  the  partner  countries 
the  European 
collaboration  with 
themselves 
Commission 
to  ensure  coherence  with 
INTERREG. 

in 
in  order 

In  1995  the  Phare  Management  Committee  gave  a 
favourable  opinion  on  cross-border  projects  for  Albania, 
Bulgaria,  the  Czech  Republic,  Estonia,  Hungary,  Latvia, 
Lithuania, Poland,  Slovakia  and  Slovenia. These  projects 
transport,  environment,  agriculture, 
mainly  concerned 
human resources and economic development and a budget 
of ECU  169 million was agreed. 

from 

funding 

regarding 

cooperation 

programmes 

the 
Sectoral 
environment  and  interregional  cooperation  were  also 
given  a  favourable  opinion.  This  type  of  programme 
involves 
International  Financial 
an 
Institution  and/or a European  Union  Member  State. Phare 
provides  for  the  necessary  support  during  the  project 
appraisal  and  preparation  period  as  well  as 
its 
implementation.  A  wide  range  of  measures  is  eligible, 
such  as  the  abatement  of  air  pollution,  waste  water 
management  and  minimising  the environmental  effects  of 
transport projects. 

As  for  the  interregional  cooperation  programme,  already 
built  upon  the  ECOS  and  Ouverture  instruments  of  the 
European  Union,  it  is  the  first  time  funding  has  been 
provided  for  cities  and  regions  in  all  Phare  partner 
countries  and  those  of  the  European  Union.  Over  100 
interregional cooperation projects are being  funded. 

to 

Looking  to  the  future,  as  the  countries  of  central  Europe 
the  Phare  cross-border 
come  closer 
infrastructure 
cooperation  programme  will  shift  from 
project  implementation  and  evaluation, towards  increased 
training,  administration  and  development  of  socio 

integration, 

economic  structures.  This  will  allow  the  programme  to 
respond better to the needs of the integration process. 

Opening of Community programmes 

In  1993, at the Copenhagen  Summit, heads of the Member 
States took  the political  decision  to offer  to the associated 
central  European  countries  the  possiblity  of  participating 
in Community programmes. 

On 4 December  1995, the Commission  and the Council, in 
agreement  with  the  European  Parliament,  concluded 
Additional  Protocols  to  the  Europe  Agreements  with 
Bulgaria,  the  Czech  Republic,  Hungary,  Poland,  and 
Romania 
legal 
to  provide 
framework  for their participation  in these programmes. An 
Additional  Protocol  was  also  signed  with  Slovakia, 
pending 
the  European  Parliament's  agreement.  The 
additional protocols for the Baltic states are integrated into 
the Europe Agreements with each country. 

the  necessary 

in  order 

legislation 

for  Europe 

This  will  allow  the  partner  countries  to  participate  in  the 
Socrates,  Leonardo,  and  Youth 
III 
programmes.  It  will  also  allow  those  countries  whose 
is  compatible  with  European 
audiovisual 
Community  law to participate in the Media II programme. 
Other  programmes  covering 
the  fields  of  culture, 
environment,  health,  energy  and  the  internal  market  will 
have  to  be  adapted  in  order  to  take  into  account  future 
participation  by  the  central  European  countries.  Corine 
(satellite mapping), LIFE (environment), SAVE II (energy 
efficiency) 
(energy  cooperation)  are 
examples  of  programmes  which  have  been  designed  for, 
or extended to, the central European countries. 

and  Synergy 

In  1995, a budget  of  ECU  9.9  million  was committed  for 
the  preparation  of  the  associated  countries'  participation 
through  information  sessions,  visits  and  training  for 
national  administrators, the  transmission  of  the  necessary 
documentation,  and  establishment  of  the  appropriate 
national  structures  or information  offices  for  the  purposes 
of acquiring a better understanding of these programmes. 

Specific  programmes  under 
the  Fourth  Framework 
Programme for Research and Development have also been 
opened under certain conditions to the partner countries. 

Coordination with other donors 

to 

increase 

the  efficiency  of  European 
In  order 
Community  assistance,  and  particularly  that  of  the  Phare 
Programme,  the  European  Commission  coordinates  its 

assistance  activities  with  the  other  donors  supporting  the 
central European countries. Since the G7 summit of heads 
of  state  and  government  held  in  Paris  in  July  1989, the 
Commission  has  the  official  task  of  coordinating  the 
activities of all those donors. 

In  this  capacity,  and  given  the  importance  of  Phare,  the 
Commission  works  closely  with  the  G-24  countries,  as 
well  as the International  Financial  Institutions  such  as the 
World  Bank,  the  European  Bank  for  Reconstruction  and 
Development  (EBRD),  the  European  Investment  Bank 
(EIB) and the Organisation  for Economic Cooperation and 
Development (OECD). 

Phare  and  the  OECD  have  collaborated,  for  example, on 
the  SIGMA  programme  (Support  for  Improvement  in 
Governance  and  Management  in  central  and  eastern 
Europe). SIGMA provides support to the partner countries 
to develop  coherent  reform  strategies  and  efficient  public 
institutions.  An  example  of  Phare/EBRD  co-financing  is 
the  environment  project  preparation  facility,  a  horizontal 
programme  launched  at  the  end  of  1995 which  facilitates 
the  implementation  of  critical  environmental  projects  in 
the central European countries. 

In  March  1995,  at  the  High  Level  meeting,  the  G-24 
donors  together  analysed  the  reforms  undertaken  during 
the  first  five  years  of  transition  in  central  Europe.  The 
general  conclusion  was  that  this  transition  is  irreversible. 
The  donor  organisations  committed 
to 
continuing  active support  for  the integration  of the central 
European  countries 
international  economic 
the 
community. Moreover, their assistance will be designed to 
fit into and enhance the pre-accession  strategy. 

themselves 

into 

in  mind, 

these  objectives 

With 
the  European 
Commission's  coordination  work  will  be  strengthened  on 
the  ground, in  the partner  countries, with  emphasis  being 
given  to  distinct  sectors  in  order  to heighten  impact. The 
organisations will work together at programme and project 
level. 

In  1995, the profile of foreign-aid  coordination  was raised 
in  the  public  eye.  The  peace  agreement  reached  by  the 
republics of the former  Yugoslavia requires the support of 
the  international  community.  In  December  1995,  the 
European  Commission  and the World  Bank  organised  the 
first  meeting  of  donors  for  Bosnia-Herzegovina.  The  key 

objectives  were  to identify  the needs  of  the country  in its 
task  of  reconstruction,  and  to  mobilise  the  donors' 
assistance. Above  all, this  illustrates  the concrete  support 
given by the European  Union to the peace process, and its 
role as the world  community's  aid coordinator  for  central 
Europe. 

Phare and former Yugoslavia 

1995  marked  the  year  in  which  reconstruction  of  the 
former Yugoslavia began. The financing  plan approved by 
the  European  Commission  for  support  to  the  peace 
process  allocated  ECU  600  million,  to  be  spent  over  the 
period  1996-99. 

Likewise,  in  the  light  of  the  Dayton  peace  agreement, 
reached  in  December  1995,  it  was  of  utmost  importance 
that the  short  and  medium-term  reconstruction  of  Bosnia-
Herzegovina  start  as  quickly  as  possible.  A  number  of 
international  institutions,  notably  the  World  Bank,  the 
International  Monetary  Fund  (IMF),  the  European  Bank 
for  Reconstruction  and  Development  (EBRD),  and  the 
European  Community  prepared  a  programme  for  that 
purpose.  The  first  phase  of  the  Phare  Essential  Aid 
Programme was elaborated  on the basis of the multilateral 
plan,  and  a  first  tranche  of  aid  worth  ECU  62.5  million 
was due to be launched immediately  in January  1996. 

The Court of Auditors 

In  November  1995,  the  Court  of  Auditors  delivered  its 
report on the financial  and operational  performance  of the 
European Commission  during  1994. The Court recognised 
that  the  efforts  made  by  Phare  management  had  led  to a 
number of improvements in the Programme. 

The  Court  did,  however,  highlight  scope  for  further 
improvement,  in  particular  better  use  of  the  PHACSY 
financial  reporting  system; greater  rigour  in the  tendering 
process;  and  a  more  operational  use  of  the  results  of 
studies  conducted  using  Phare  funds,  especially 
to 
encourage real investments. 

As  outlined  in  the  section  below,  both  the  financial 
management  systems  and  the  operational  procedures  for 
Phare  were  already  being  reviewed  during  the  course  of 
1995  and  improved.  A  new  monitoring  unit  was  also 
established. 

Operational management of Phare 

Since its inception  Phare has sought to involve its partner 
countries  as  much  as  possible  in  the  strategic  and 
operational  activities  of the Programme. It has, therefore, 
adapted  its  structure  over  time  to  accommodate  the 
changing needs of its partners, to increase cooperation and 
coordination  between  the Commission  and the countries, 
and to heighten  the impact of the programmes  carried out 
within the Phare  framework. 

This  process  of  operational  improvement  continued  in 
1995.  The  internal  structure  of  the  Directorate  and  the 
management  of  the  Programme  were  changed  so  as  to 
forge  closer  links  between  work  on  Phare,  the  Europe 
Agreements and the pre-accession  strategy. 

Management  processes  were  improved. The financial and 
management  reporting  systems  were  overhauled,  and the 
number  of  standardised  and  regular  independent  audits 
increased.  A stand-alone  monitoring  and assessment  unit 
the 
was  created  with 
operational  quality  of  Phare  programmes  and  ensuring  a 
more  cost-effective  use  of  funds.  This  will  support  the 
process  of  decentralisation  which 
in 
importance as the pre-accession  strategy runs its course. 

intention  of 

improving 

increasing 

the 

is 

Finally, the emphasis on increasing  openness  in the Phare 
Programme  was  maintained 
targeted 
communications  programme  to  other  European  Union 
institutions, European  Union  Member  States - notably the 
public  services  and  commercial  sectors  -  and  partner 
countries. 

through 

a 

responsibility  for  all  aspects  of  relations  with  the central 
European  countries.  This  was  designed  to  focus  on  all 
aspects of each country's  pre-accession  needs at the same 
time as improving  the performance  of the Programme by 
enabling  a faster,  co-ordinated  response to country  issues, 
and  operational  synergy  between  the  Delegations  in the 
partner countries and staff  in Brussels. 

Many  Phare  programmes  do,  however,  involve  several 
partner countries. So as not to lose the overview  necessary 
to  manage  these,  separate  horizontal  and  sectoral  units 
were  created  with  responsibility  for  policy  coordination 
and  the  management  of  multicountry  and  horizontal 
programmes.  These  ensure  that  cooperation  between 
countries 
that  opportunities  for 
is  maintained  and 
synergies are identified  and implemented. 

The  Directorate  began  to work  on this  new geographical 
basis  from  June  1995  onwards  so  as  not  to  lose  the 
momentum created by the Essen and Cannes Councils and 
the launch of the pre-accession  strategy. 

Phare  also  launched  an  initiative  to  address  the  issue of 
staff,  both  at  Headquarters  in  Brussels  and  in  the 
Delegations.  Studies  are underway  to identify  those  tasks 
which are core to managing  the Phare Programme, which 
fall  within  the  executive  competence  of  Commission 
service, and which will therefore  need to be carried out by 
Commission  staff.  Other  tasks  identified  as non-core can 
then  be contracted  out, thereby  using  existing  staff  in the 
most efficient way. 

Operational structure 

A new programming approach 

The  Directorate  which  manages  the  Phare  Programme 
within  Directorate  General  IA  (Europe  and  the  New 
Independent  States, Common  Foreign and Security  Policy 
and External Missions) was reorganised in  1995. 

Up  until  this  point, the Phare  service  had been  organised 
largely  on a  sector  basis, with  staff  divided  into  sectoral 
units such as agriculture or infrastructure.  It became  clear, 
however,  that  an  integrated  geographical  structure  was 
needed  to reflect  the needs  of  the pre-accession  strategy 
and 
the  structured 
relationship  and financial  cooperation  which  were  critical 
to its success. 

the  Europe  Agreements,  and 

Therefore,  in July  1995, the Commission  reorganised  the 
Directorate responsible  for Phare on a country  by country 
basis.  Three  geographical  units  were  created,  with 

1995 saw the streamlining  and improvement  of the Phare 
programming  approach.  The Essen  and Cannes  Councils 
had  provided  a  clearer  definition  of  common  objectives 
and  the  opportunity 
therefore  to  target  funds  more 
effectively.  They  had  also  provided  Phare  with  a  multi-
annual  financial  horizon  with  the  intention  that  the 
Programme  be allied  more  closely  with  the medium  term 
strategic ambitions of the partner countries. 

This resulted  in new, multi-annual  indicative  programmes 
being  prepared  in  1995  for  four  countries  (the  Czech 
Republic,  Hungary,  Poland  and  Slovakia),  with  multi-
annual  indicative programmes  planned for the other Phare 
countries  by  the  middle  of  1996.  These  are  prepared  in 
partnership  with  the  countries  concerned  and  cover  the 
period  up until  and including  1999. They  lay out for each 
of  the  countries  its  objectives,  priority  sectors,  activities 

10 

to  each 

and  timeframes,  including  an  indication  of  funds  to  be 
allocated 
indicative 
programmes  were  produced  for  eleven  cross-border 
programmes,  covering  all  partner  countries  except 
Romania. 

sector.  Multi-annual 

This  new  approach  has  benefits  for  both  the  partner 
countries  and 
the  partner 
the  Member  States.  For 
countries,  it  brings  accession 
into  a  sharper  focus, 
provides  a  series  of  concrete  objectives,  and  allows  them 
to  build  the  Phare  Programme  into  their  medium  term 
restructuring programmes and strategies for accession. For 
the Member States, it gives them an opportunity  to make a 
strategic  contribution  and 
longer,  more 
comprehensive view of each country's Phare priorities. 

take  a 

to 

Whilst  the  multi-annual 
indicative  programmes  have 
given  Phare  a  medium-term  perspective,  it  should  be 
remembered  that  the  implementation  of  the  programmes 
remains  subject  to  an  annual  budgetary  procedure.  This 
means  that  the  allocation  of  funds  which  appears  in  the 
multi-annual programme is purely indicative and  therefore 
only  a  statement  of  intent.  Each  year,  the  Commission 
allocates the appropriate funds  to each country based  on a 
country  operational  programme  which  includes  all  the 
programme  components  in  one  document.  This  is  based 
on  the  multi-annual  indicative  programme,  but  need  not 
faithfully  reproduce it. This allows an additional  flexibility 
to  both  the  country  and  Phare,  should  circumstances  or 
priorities change. 

Nevertheless,  the  introduction  of  multi-annual  indicative 
programmes  has  eased  the  pressure  caused  by  the  annual 
programming  round,  has  cut  down  the  time  lag  between 
commitment,  contracting  and  payment,  and  significantly 
simplified  the programming process. 

Changes in implementation 

is 

Implementation 
the  most  critical  area  of  Phare 
programmes. The ability to manage the individual  projects 
on  the  ground  determines  the  degree  of  their  impact  and 
thus the effectiveness  of the use of public money. 

thus 

Certain limits are set by the Council's financial  regulation, 
attributing  full  responsibility  for  the  use  of  funds  to  the 
Commission, 
to  which 
responsibility  can  be  delegated  to  the  partner  countries. 
Nevertheless,  1995  saw  continued  attempts  to  reconcile 
this  potential  conflict  and  to  arrive  at  an  implementation 
process which was both effective  and stringent. 

the  extent 

limiting 

towards 

in  1995 

Further  progress  was  made 
the 
decentralisation  of  the  implementation  process. This  was 
started  in  1994  with  the  publication  of  the  Decentralised 
Implementation  System  manuals,  a  response  to  the  need 
for  a  common  operating  system  across 
the  whole 
Programme  and  an  attempt  to  reconcile  the  management 
skills and habits of partner administrations with respect for 
the Phare Regulation. 

During  1995, further  work  was done, in conjunction  with 
the  partner  countries,  on  improving  the  Decentralised 
Implementation  System. This concentrated on 

.  simplifying  the  programming  approach,  with  special 
attempts to reduce the overall workload by establishing 
a  closer  link  between  the  documents  needed  for  both 
programming  and  implementation.  This  will  reduce 
duplication of  effort. 

• 

transferring  implementation  responsibility  at  the  two 
most important levels - firstly, from  the Commission  to 
the  partner  country,  and  secondly,  from  Phare  staff  in 
Brussels 
the  country 
delegations.  In  practice  this  will  mean  a  gradual 
transfer  from  ex  ante  approval  to  ex  post  monitoring 
and  assessment,  without 
the  overall 
supervisory responsibility of the Commission. 

to  Commission 

sacrificing 

staff 

in 

•  clearly  defining  the  roles  and  responsibilities  of  the 
main  implementation  players, particularly  the  Brussels 
headquarters  and  the  Delegations.  This  has  involved 
agreeing  job  descriptions  which  again  will  reduce 
duplication  of  effort,  allow  more  efficient  use  to  be 
made of the resources  available  and  increase  the levels 
of understanding between the teams. 

Work was also done in  1995 on making the Decentralised 
Implementation  System  manuals 
themselves  more 
accessible  and  user  friendly.  These  will  be  reissued, 
covering all the new procedures, in  1996 and be backed up 
the 
by  additional 
Programme Management Units. 

the  Delegations  and 

training  for 

Financial management 

The  complexity  and  range  of  the  Phare  Programme, 
combined  with  the  Commission's  responsibilities  for 
supervision, require a sophisticated  financial  management 
system.  Launched  in  1994,  the  PHACSY  system  was 
designed  to  gather  all  programming  information  directly 

from  the  Programme  Management  Units, and  to  use  this 
as a monitoring  tool. PHACSY  was refined  in early  1995 
and reissued in a new, more user-friendly  format. 

the 

Prior  to  this  it  was  merged  with  Desiree, the  main  Phare 
information  database,  which  was  in  turn  fully  integrated 
with  SINCOM,  the  financial  management  system  of  the 
entire  Commission.  This  has  made 
financial 
management  process  for  Phare  more  streamlined  and 
accurate,  has  reduced  duplication  and  wasted  effort,  and 
has  extended  the  reach  of  the  system  among  PMUs. By 
the end  of  1995, about  95% of  all  available  management 
information  from  PMUs  was  contained  in  PHACSY  and 
efforts  will  be  made  in  1996  to  obtain  the  remaining 
information.  This  has  been  supported  by  the  increased 
number of independent financial  audits in  1995 which will 
continue into  1996. 

Monitoring and assessment 

Crucial  to the process of ensuring  greater  decentralisation 
while maintaining the Commission's responsibilities  is the 
creation  of  an  effective  monitoring  and  assessment 
system.  When  the  Directorate  responsible  for  Phare  was 
restructured  in  1995, a new  unit was created  with  specific 
responsibility for monitoring and assessment. 

The  unit  is  responsible  for  the  implementation  of  a 
monitoring  and  assessment  system  which  will  be 
independent,  credible  and  based  on  the  principle  of 
common  ownership  and 
involvement  of  the  partner 
countries. In doing  so, it was asked to move to a standard 
system  which  could  be  widely  applied  across  all  Phare 
projects. 

In  1995, the  foundations  were  put  in  place  for  the  new 
monitoring  and  assessment  system.  A  regional  structure 
was  created,  with  three  regional  offices  staffed  with 
independent  consultants  from  the  European  Union  and 
local  experts. It  is planned  that  these  offices  will  become 
fully  operational  in the first  half of  1996 and that over four 
hundred projects will be both monitored and assessed each 
year. 

The process developed  is primarily  an operational  tool  for 
all  those  involved  in the Phare  Programme. By  providing 
a  regular  assessment  of  the  status  and  progress  of  Phare 
projects,  the  new  unit  will  be  able  to  identify  and  share 
best  practice  across  all  the  partner  countries,  pinpoint 
poorly  performing  projects  and  suggest  remedial  action, 
and  provide  rapid  feedback  to  those  designing  future 
programmes.  As  the  monitoring  and  assessment  system 

12 

to  dovetail  with 

regular 
has  been  designed 
programming  process, 
information  will  allow 
the 
programmes  to  be  adapted  more  closely  to  the  needs  of 
the partner countries. 

the 

Communications 

Since  1993,  Phare  has  actively  responded  to  increasing 
interest  shown  by  European  Community  institutions  and 
advisory  bodies,  Member  States  and  partner  countries  in 
the Programme. 

3.2  million 

1995,  Phare 

In 
on 
spent  ECU 
communications.  It  published  67  separate  titles  in  18 
languages  and  distributed  over  800,000  copies  in  26 
countries. The Information  Unit responded  to over 60,000 
telephone  enquiries,  letters  and  faxes,  and  about  5,000 
personal  visits. Information  Unit staff  also made over  100 
speeches  and  presentations  on  the  Phare  Programme  to 
conferences  and workshops, mainly in the Member States. 

to 

identify  and 

to  satisfy  people's 

In  1995,  the  research  programme  was  continued  in 
find  appropriate 
partner  countries 
mechanisms 
information  needs. 
Delegation  information  programmes  became  much  more 
focused  on  communicating  with  decision-makers  and 
opinion-formers  about  pre-accession  and  what  it  may 
mean  to  join  the  European  Union.  These  programmes 
include  local-language  publications,  media  relations,  the 
development  and implementation  of contact programmes, 
and  the  creation  of  local  communications  databases. The 
bimonthly  "European  Dialogue"  magazine  was  launched 
and,  by  the  beginning  of  1996, was  being  mailed  in  six 
centra]  European  languages  to  20,000  decision-makers 
and  opinion-formers  in  the  region.  Specific  communi 
cations  programmes  were 
the  Czech 
Republic,  Hungary,  Poland  and  Slovakia.  Television 
documentaries  about 
the  European  Union  began 
appearing  increasingly  in  the  partner  countries  to  give 
more  information  about  the  Union  to  the  general  public 
as well. 

launched 

in 

Contracts  were  also  drawn  up  during  1995  to  launch  a 
Phare  'on-line'  information  service  on  the  Internet.  This 
will  provide  contract  information,  access  to  the  Phare 
address  book,  and  other  general  information  on  Phare. It 
will  also  give  people  an  opportunity  to  communicate 
easily  with Phare through an e-mail  facility. This will be a 
further 
communication 
programme,  will  lead  to  greater  speed  of  access  to 
information,  and  will  make  the  communications  process 
more efficient  and cost  effective. 

for  Phare's 

forward 

step 

Albania 

The  Albanian  economy  has  begun  to  recover  from  the 
collapse  of  an  economic  system  whose  closed  and 
centrally-planned  structure  was  more  pronounced  than 
that  of  other  former  communist  countries.  In  1995,  it 
achieved one of the highest growth rates (11.3 per cent) of 
all the central  European  countries. Inflation  fell  to 6.0 per 
cent,  a  result  of  a  disciplined  monetary  policy,  and 
unemployment  also  dropped 
to  14  per  cent.  The 
privatisation  process  is  on  track,  with  all  the  remaining 
state  enterprises  being 
joint-stock 
companies  in April  1995. This has made possible  a mass-
privatisation programme which will begin in 1996. 

transformed 

into 

During  1995, progress  was  also  made  towards  bringing 
Albanian  institutions  and  laws  closer  to  those  of  the 
European  Union's  standards. New  civil, penal  and  labour 
codes  were  adopted  resulting  in  a  more  robust  judicial 
framework.  Albania  also  signed  the  convention  of  the 
Council of Europe for the protection of minorities and was 
granted full  membership of the Council in July  1995. 

In  1995, Phare  continued  to provide  considerable  support 
to  Albania's  progress  towards  reform.  Albania  is  no 
longer  dependent  on  essential  aid  and  therefore  Phare's 
focus  within  the  country  has  evolved  to  reflect  the 
country's considerable economic  improvement. 

ECU  35 million  was therefore  allocated  through  the  1995 
indicative programme for the development of 

. 
the transport, telecommunications and energy  sectors 
.  an  effective  higher  education  system  through  the 

. 

• 

Tempus programme 
local  community  infrastructure  through  the  Albanian 
Development Fund 
the  private  sector,  public  administration  and  judicial 
systems. 

Within  this,  Phare's  priorities  in  1995  shifted  from  the 
agricultural  sector  towards  infrastructure  development, 
particularly  roads  and  ports,  telecommunications  and 
energy. Development  in these areas is essential  if Albania 
is  to  participate  fully  in  the  single  market.  The  main 
infrastructure  priority  for  1995  was  the  rebuilding  and 
upgrading  of  the  East-West  corridor.  This  meant  that 
Phare  financed,  together  with  the  European  Investment 
Bank, the following  projects 

•  upgrading  of 

the  Durres-Elbasan  and  Pogradec-
Kapshtica sections (a total of  146 km) of the East-West 
corridor 

.  developing the Durres ferry terminal. 

Funds allocated by sector 1995 
ECU 88 million 

Education, training 
and research 3.5 

Financial  sector 35 

Infrastructure 
(energy, transport, 
telecom.) 34 

These  projects  demonstrate  the  important  role  Phare  can 
play  in unlocking funds  from  other international  financing 
institutions. 

In other areas, Phare also played  a leading role. Work has 
been  done  on 
improving  primary  healthcare  and 
developing  hospitals,  programmes  have  been  set  up  to 
strengthen  local  government,  and  measures  have  been 
taken  to  channel  funds  directly  to  small-scale  projects 
which  will  have  a  direct  and  beneficial  impact  on  local 
communities.  Phare  will  also  continue  to  support  the 
energy  sector,  placing  emphasis  on  the  preparation  of  a 
national strategy, policy and legislative framework  and the 
provision of pre-investment studies in key areas. 

the 

increased 

Absorption  capacity  of  the  Phare  Programme  in  Albania 
continued  to  be  satisfactory  with  around  73  per  cent  of 
total  committed  Phare  funds  contracted  by  the  end  of 
emphasis  on 
1995.  Nevertheless, 
infrastructure  projects  which  require  longer  periods  of 
preparation  as well  as more complex  tendering  processes, 
coupled  with the logistical  limitations  on the pace of  land 
registration  and  the  inability  of  the  banking  sector  to 
provide  the  necessary  credit  lines  when  needed,  have 
resulted  in  some  slowing  down  in  implementation  and 
payment during  1995. 

Looking forward, the stable economy  will allow the Phare 
Programme  in  Albania  to  plan  for  the  longer  term  and  a 
multi-annual  indicative  programme  covering  the  period 
1996  to  1999  is  being  developed.  Albania  also  hopes  to 
make  progress  towards  its  goal  of  association  with  the 
European  Union.  In  March  1995 Albania  made  a  formal 
request to open negotiations for a specific  agreement. 

13 

Funds allocated by sector in 1995 
ECU 83 million 

Education, training 
and research 21 

Environment and 
nuclear  safety  7 

Infrastructure 
(energy, transport, 
telecom.) 48 

The  1995  transport  programme  confinanced,  with  the 
European  Bank  for  Reconstruction  and  Development  and 
the World  Bank, a major  project  for railway  rehabilitation 
(approximately  400  km). 
the 
restructuring of the Sofia urban transport system. 

supported 

It  also 

In the energy  sector, Phare  supported  the improvement of 
energy  efficiency  (electricity,  district  heating  and  gas), 
pre-investment  studies  and  measures  to  promote  the 
introduction of the 'acquis communautaire'. 

In  1995, a  multi-annual  indicative  programme  for  cross-
border  cooperation  with  Greece  was  also  approved. 
Covering  the  period  1995-1999,  the  programme  was 
allocated  an  indicative  budget  of  ECU  115  million.  Set 
against the background of good bilateral relations between 
the  two  countries,  the  programme  will  support  the 
development  of  Bulgaria's  border  regions  with  Greece, 
within  the  overall  Bulgarian  policy  of  regional  co 
operation.  Key  areas  of  work  are  transport,  environment, 
economic development and human resources. 

implementation 
A  closer  monitoring  of  programme 
enabled occasional problems and delays to be identified  at 
an  early  stage  and  remedied,  and  political  stability  has 
allowed medium-term planning to be considered. 

Bulgaria 

Bulgaria's  social  and  economic  transformation  has  not 
been  easy.  The  changes  in  government,  combined  with 
levels  of  parliamentary  support,  resulted  in 
varying 
relatively  slow  decision-making  in key  areas of  structural 
reform. In addition, the collapse of the Comecon  markets, 
the  Gulf  crisis,  and  the  UN  sanctions  against  former 
Yugoslavia  also affected  economic  growth. Nevertheless, 
the basis  for  a market  economy  has  been  created  and  the 
foundations  have  been  laid  for  a  democratic  and  civil 
society. 

In  1995,  the  economic  improvement  begun  in  1994 
continued. Gross  Domestic  Product  grew  by  2.5 per cent, 
inflation  and  unemployment 
fell  and  privatisation 
progressed. This, plus a greater political stability, created a 
more constructive environment for the management of the 
Phare  Programme 
programme 
in  Bulgaria 
management  structures became more stable, and  therefore 
more  efficient. 

and 

The  1995  Phare  Programme  supported  projects  in  the 
following  areas in Bulgaria for a total of ECU 60 million 

the approximation of legislation 
the promotion of private agriculture 
human resources development 
transport development 
energy and nuclear  safety. 

Phare  provided  ECU  5  million  in  1995  for  a  number  of 
agricultural  projects.  These  included  policy  support  to  the 
Ministry  of  Agriculture  and  Food  Industry, registering  and 
rights  and  other 
land  ownership 
restoring  historic 
transactions,  restructuring  and  privatising  state-owned 
industries, and the development of production and marketing 
structures. 

In  the  area  of  education,  Phare  continued  to  support  the 
Tempus  programme  for  the  reform  of  higher  education. 
Based  on  a  1993 pilot  project,  a  programme  was  started 
for  the development  of post-secondary  vocational  training 
and  the  financial  management  of  secondary  education. 
The  programme  also  supported  the  creation  of  a  higher 
education accreditation  and assessment agency. 

14 

As  a  result,  part  of  the  backlog  of  uncommitted  funds 
dating  from  previous  years  was  cleared  and  the  overall 
contracting  rate  increased  from  48 per cent  in  1994 to 56 
percent in 1995. 

The  1995  programme  for  the  approximation  of  laws 
aimed  at  developing  a  comprehensive  match  between 
Bulgarian 
legislation. 
and  European  Community 
Accordingly, Phare assisted  with the drafting  of new  laws 
and  provided  training  to  target  groups  in  the  public 
administration  as well  as the judiciary. It  is  also  intended 
that  the  programme  will  draw  on  the  information  and 
experts  made  available  by  the  Technical  Assistance 
Information  Exchange  Office,  established  in  Brussels  in 
1996. 

In  February  1995,  the  Europe  Agreement  with  the 
European  Communities  and  their  Member  States  came 
into  force  and  the  first  Association  Council  was  held  in 
May  1995, at  which  the  two parties  discussed  Bulgaria's 
progress  within  the  pre-accession  strategy.  Phare  is  the 
main instrument to support that strategy. 

In  December  1995,  Bulgaria  submitted 
its  official 
application  for  membership. The government has declared 
European  integration  to  be  among  its  main  priorities  and 
has  established  an  inter-ministerial  European  integration 
structure. 

15 

Czech Republic 

1995 was the year when  the country's  Europe  Agreement 
with the European Union came into force, and the national 
economy continued  the substantial progress already made. 
In  the  same  year,  the  country  was  the  first  from  central 
Europe  to  be  accepted,  as  of  1 January  1996,  into  the 
Organisation  for Economic Cooperation  and Development 
(OECD),  a  move  which  endorsed  the  economic  reforms 
carried out by the Czech government. 

The continued  policy  mix of  macroeconomic  stabilisation 
and,  on  the  microeconomic  level,  price  liberalisation, 
deregulation  and  privatisation  enjoyed  positive  results. 
Growth  was  strong  and  unemployment,  at  3.5  per  cent, 
was  low. In  1995, the  koruna,  the  national  currency, was 
made fully  convertible. 

The entry  into force  of  the Europe  Agreement  meant  that 
the Czech Republic could take part fully  in the  'structured 
dialogue'  with 
this 
framework  the  first  Association  Council  took  place  in 
April  1995,  and 
the  Joint 
Parliamentary  Committee  in  May  where  the  White  Paper 
on the internal market was discussed. 

the  European  Union.  Within 

first  meeting  of 

the 

this  new  direction 

In  1995, the Phare Programme in the Czech Republic took 
a  new  direction  in  the  support  it  provides.  As  with  the 
other  associated  countries, 
is 
characterised  by  the  direct  linkage  of  Phare  to  the 
preparation  of  the Czech  Republic  for  membership  of the 
European  Union,  with  a  special  focus  on  improving  the 
infrastructure  in the areas bordering Germany  and Austria 
and  on  strengthening 
the  institutions  central  to  the 
integration process and future  membership. 

The  Czech  Republic  was  allocated  a  total  of  ECU  110 
million,  including  ECU  71  million  for  the  1995  country 
operational  programme, together  with  ECU  8 million  for 
the Tempus programme, and ECU  25 million  and ECU  6 
million  for  cross-border  cooperation  with  Germany  and 
Austria respectively. 

Funds allocated by sector 1995 
ECU 110 million 

Social development  Other 3 
and employment  2 

Private  sector 

Public  institutions 
an<^ administrative  reform  5 

support 1 

Infrastructure  (energy 
transport, telecom.) 91 

focus  of  Phare  during  1995  was 

The  main 
the 
development of the Czech Republic's infrastructure.  Phare 
has  contributed  to  the  construction  of  the  Berlin-Decin-
Prague-Breclav-Vienna  rail  corridor  and  a  number  of 
infrastructure  investment initiatives under the cross-border 
cooperation  programme. It has also, since  1995, started to 
support  socio-economic  development  and  tourist  projects 
in the border region, including the renovation  of historical 
monuments. 

Since  the  accession  of  Austria  to  the  European  Union  at 
the  beginning  of  1995,  some  67  per  cent  of  the  Czech 
Republic's  border  is  shared  with  member  states  of  the 
European  Union. This, plus  the dramatic  increase  in road 
and  rail  traffic  (particularly  between  the  Czech  Republic 
and  Germany),  has  increased  the  focus  on  the  border 
regions and the structural and environmental  impact that is 
being made. 

the  Phare 

cooperation 
Accordingly, 
programme  is  financing 
improvements  to  roads  and 
railways, improving  or creating  new  border crossings and 
introducing  measures  to  reduce  bottlenecks.  Phare  will 

cross-border 

also improve the quality of air and water in the regions by, 
amongst  other  projects,  building  new  gas  and  steam 
pipelines, introducing  environment-friendly  technology  in 
heat  and  power  generation,  improving  sewage  systems 
and  building  new  water  treatment  plants  to  reduce  river 
pollution and improve drinking-water standards. 

Phare  has  also  contributed  to  the  strengthening  of  Czech 
legislative  and  institutional  capacity  by  financing  expert 
assistance  and  training  to  Czech  civil  servants  and  by 
supporting  the  ministries  and  institutions  central  to  the 
integration  process,  such  as  customs,  statistics,  industrial 
property,  competition  and  standards  administration.  A 
considerable part of this effort  has focused  on assisting the 
Czechs  to  ensure  the  approximation  of  their  laws  with 
European Union legislation. 

the  Phare  multi-annual 

Looking  forward, 
indicative 
programme  for  1995-99  was  signed  and  approved,  with 
increasing emphasis placed on investment  support and the 
use of Phare as a medium-term  financial  instrument. With 
a total budget of between  ECU  300 million  and ECU  330 
million, including cross-border  cooperation, the  indicative 
programme will be devoted to the following  priority areas 

• 

. 

the  ultimate  goal  of  adopting 

legislative  integration  with the European  Communities, 
with 
'acquis 
communautaire' 
infrastructure  integration  with  the  European  Union, 
particularly  in  the  fields  of  transport,  energy  and  the 
environment 

the 

including  SME  and 
•  socio-economic  development, 
and 
regional 
promotion, 
export 
promotion  of  foreign  direct  investment  and  social 
security  reform. 

development, 

17 

Estonia 

Estonia has undergone a remarkable economic recovery in 
the past few  years. In terms  of trade liberalisation  and the 
macroeconomic  aspects  of  reform,  the  country  is  well 
advanced.  This  was  reflected  in  GDP  growth  in  1995, 
with  a six per cent increase being recorded  for  the second 
consecutive  year.  Importantly,  foreign  investment  also 
remained  at  the  high  level  achieved  during  the  previous 
year.  These  results  have  been  made  possible  by  the 
substantial progress made in the area of structural  reform. 

Two  areas  of  the  economy  will,  however,  need  special 
attention  over the coming  period:  the relatively  high  level 
of  inflation,  and  the  trade  deficit,  which  was  running  at 
approximately  ECU 300 million at the end of the year. 

the  European  Union 

Estonia  submitted  its  formal  application  for  membership 
of 
in  November  1995,  and 
participates  in the structured  dialogue of the pre-accession 
strategy.  In  November,  the  European  Union  signed  an 
agreement  with  Estonia  to  open  a  Delegation  of  the 
European Commission  in Tallinn. 

The privatisation  process  was accelerated  in  1995, helped 
by  Phare's  contribution  to  the  Privatisation  Agency. 
Though  work  remains  to  be  done  in  the  large,  state-run 
enterprises, the privatisation  of small  enterprises  is almost 
complete,  with  small  and  medium-size  enterprises  now 
accounting  for  over  40  per  cent  of  employment.  The 
privatisation  of  the  economy  was  further  helped  by  the 
Estonian  government's  efforts 
legal 
framework  for  the  national  stock  exchange,  which  is 
expected to open in the first  half of  1996. 

to  create 

the 

Phare's  focus  in  1995  was  to  help  Estonia  build  on  its 
economic success and prepare itself for eventual  accession 
to the European  Union. Estonia's  Europe  Agreement  was 
signed  in June  1995, and now awaits ratification  by all the 
European  Union Member States. Estonia remains the only 
central  European  country  not 
to  have  requested  a 
transitional  period  within  which  to  liberalise  its  trade 
policy. 

Phare funding  for  Estonia  increased  to ECU  24 million  in 
1995. This  brings  the  total  amount  committed  to  Estonia 
for  the period  1991-1995 to ECU 68.5 million. Continued 
cooperation  between  the  Estonian  government  and  the 
Phare  Programme  has  resulted  in  a steady  increase  in the 
amount of funds  committed. 

18 

Funds allocated by sector 1995 
ECU 24 million 

Social  development 
and employment  2.9 

Public  institutions 
and  administrative 
reform  2.8 

Education, training 
and research 4.2 

Private  sector 
development  and 
enterprise  support  9.1 

nfrastructure 
(energy, transport, 
telecom.) 5 

In  the  agricultural  sector,  Phare  has  continued  to  support 
planning  processes,  the  development  of  rural  credit 
facilities,  land  registration  and  land  privatisation.  In 
addition,  Phare  will  focus  on  institutional  and  human 
resources  development  in  the  Ministry  of  Agriculture. 
This will help to improve the efficiency  of  agro-industries 
through  the  provision  of  professional  advice  to  farmers, 
the training of advisors in farm  and business analysis, and 
the provision of support for rural credit agencies. 

the 
Phare  also  provided  support  during  1995  for 
development  of  an  energy  strategy  aimed  at  achieving 
greater energy  efficiency;  reducing the levels of pollution; 
investing  in  transport  infrastructure;  and  reforming  the 
social safety  and health systems. 

Within  the  framework  of  the  multi-annual  indicative 
programme, which has been allocated a budget of ECU 84 
million  for  the period  1995-1999, Phare will  focus  on the 
following  priority  sectors 

•  European  integration 
•  export development 
•  regional  development 
•  public 

sector  management 

development. 

and 

infrastructure 

It  is  planned  that  throughout  the  period  the  focus  of  the 
programmes  will  shift 
to  both  public  and  private 
investment,  particularly  in  the  areas  of  agricultural  and 
regional  development.  The  change  in  focus  is  partly 
emphasis  placed 
intended 
previously on urban development, but also to take account 
of the pre-accession  strategy. 

to  counterbalance 

the 

Hungary 

Among  the  first  countries  to  benefit  from  Phare  support, 
Hungary  has  established  a  system  of  democratic  political 
the 
institutions  which  enjoys  general  support  from 
country's  main  social and political  forces, and has made a 
serious  effort  to  develop  harmonious  relations  with  its 
neighbouring countries. 

Its  history  as  the  most  market-oriented  of  the  former 
Comecon  countries  also  enabled  Hungary  to  attract  the 
largest  inflow  of  foreign  investment  in the region  (40.5% 
of  the  region's  total  in  the  1989-94 period).  Privatisation 
laws,  aimed  at  speeding  up  the  privatisation  of  state 
companies,  were  rapidly  introduced  and  all  the  basic 
structures of a market economy have been established. 

Nevertheless,  in  1995,  the  Hungarian  government  was 
faced  with serious macroeconomic  strains which led to the 
adoption  of  a  stabilisation  plan  intended  to  reduce  the 
budget  and  current  account  deficits  and  accelerate  public 
finance  reform. 

Phare's  support 
in  1995,  therefore,  concentrated  on 
supporting  the  government  in  its  move  towards  further 
economic  orthodoxy, and  in helping  Hungary  achieve  the 
pre-accession  strategy  measures  outlined  in  the  White 
Paper. Hungary was the first  former communist country to 
submit  its application for full  membership of the European 
firm 
Union 
commitment  to  the  pre-accession  process  has  meant  that 
Phare  has  placed  a great  deal  of  focus  on  supporting  the 
harmonisation  of  legislation  and  restructuring  the  public 
administration. 

(April  1994),  and 

the  government's 

In  practice  this  has  meant  providing  sector  and  legal 
analyses, drafting  new  legislation  and  translating  existing 
into  Hungarian,  establishing 
Community 
training 
structures,  providing 
necessary 
sessions  for  public  officials  and  other  decision-makers, 
and  organising  public  relations  actions  targeted  at  key 
target audiences. 

legislation 
institutional 

Another area of great importance is the transformation  and 
reform  of  the  Hungarian  transport  and  communications 
infrastructure.  In  its  current  state  it  partly  discourages 
domestic  and  foreign  investment  and  contributes  to  the 
uneven  economic  development  of different  regions within 
the country. Phare  is actively  supporting  the  development 
of  appropriate  standards  and  is  cofinancing,  amongst 
road  building, 
others, 
railway lines and combined transport terminals. 

improvements, 

infrastructural 

Funds allocated by sector 1995 
ECU 92 million 

Social  development 
and employment  2 

Integrated  regional 

measures 

Private  sector 
development 
and enterpri 
support 6 

Public  institutions and 
administrative  reform  3 

Infrastructure 
(energy, transport. 

Environment  and 
nuclear safety  12 

In  1995  the  Phare  multi-annual  indicative  programme 
(1995-1999)  was adopted  to give  support  worth ECU 425 
million in the following  priority areas 

•  European  integration,  including  approximation  of  laws 

and public administration  reform 

•  education  and 

training  with  emphasis  on 

the 

establishment of a human resources development  fund 

•  economic  development, 

focusing  on  agriculture, 
privatisation  and restructuring, small and medium-sized 
enterprises  development,  regional  development,  trade 
and investment promotion, tourism  development 

•  public finance  and social sector reform 
• 

infrastructure  development  with  emphasis  on  road  and 
transit,  water 
communications, 
rail 
management, energy and the environment 

transport, 

•  participation  in European Community programmes. 

For  the  year  1995,  ECU  85  million  was  allocated  to 
support these priorities. 

the 

1995  also  saw 
first  cross-border  cooperation 
programme between Hungary and Austria. A multi-annual 
indicative  cross-border  cooperation  programme,  covering 
the period  1995-1999, has been agreed with the Hungarian 
authorities  on  the  basis  of  their  bilateral  cooperation  with 
Austria. 

19 

Latvia 

In  1995,  Latvia  once  again  enjoyed  a  substantial 
improvement  in  the  economy,  following  the  recession  in 
the early  1990s. Economic growth was particularly  strong 
in  the  service, construction  and  forestry  sectors  although, 
as  a  result  of  necessary  restructuring,  both  the  industrial 
and agricultural  sectors continued to decline. 

Efforts  to  privatise  small  and  medium-sized  enterprises 
proved  successful  in  1995,  although  progress  has  been 
much slower with regard to larger enterprises. The process 
has  been  supported  by  the  creation  of  a  single  national 
privatisation  agency. The agency will progressively  tender 
the  remaining  state-owned  companies  over  the  course  of 
the next few  years, and in the meantime enterprises still in 
the  public  sector  will  be  managed  by  a  State  Property 
Fund. 

In  the  area  of  private  sector  development,  Latvia  still 
needs  to  complete  and  simplify  the  legal  basis  which  is 
investment.  Phare  has  been 
essential  for  attracting 
providing  assistance  both  to  the  Latvian  Privatisation 
Agency and the State Property Fund. 

Like  the  other  countries  of  central  Europe, Latvia  places 
strong  emphasis  on  the  approximation  of  legislation  as a 
key  step  towards  eventual  accession  to  the  European 
Union. The reform  of public administration  is an essential 
part of this effort,  and a Phare-funded  scheme will train as 
many civil servants as possible by the year 2000. 

Despite  its  economic  success,  the  Latvian  economy 
suffered  a  number  of  setbacks  in  1995. In  June  1995 the 
main  commercial  bank,  Bankas  Baltija,  was  declared 
insolvent,  precipitating  a  general  banking  crisis.  The 
European  Union  pledged  to give ECU  2.5  million  to help 
the financial  sector. 

A  further  economic  setback  was  caused  by  a  shortfall  in 
government  revenue  as  a  result  of  tax  evasion.  This 
resulted  in  a  budget  crisis  in  the  first  half  of  1995  and 
for  1995  of 
to  a  state  budget  deficit 
contributed 
approximately 4.8 per cent of Gross Domestic Product. 

took  a  number  of  steps 

In  1995,  Latvia 
towards 
membership of the European Union. A Europe Agreement 
was  signed  in June  1995 and  Latvia  submitted  its  formal 
application  for  membership  of the European  Union  on 27 
October  1995.  The  country  participates  fully 
in  the 
structured dialogue of the pre-accession  strategy. 

Phare's assistance to Latvia has focused  on the provision of 
know-how.  This  has  concentrated  in  particular  on  public 

20 

Funds allocated by sector 1995 
ECU 32.5 million 

Social  development 
and  employment 

Public  institutions 
and administrative  reform  1.3 

Education, training 
and research 2 

Financial  sector  2.5 

Infrastructure 
(energy, transport, 
telecom.)  9.2 

Private  sector 
development  and 
enterprise  support  8.3 

administration  reform,  privatisation,  the  development  of 
small  and  medium-sized  enterprises  and  the  improvement 
of  the  banking,  agriculture,  telecommunications,  energy, 
transport, health and higher education sectors. During  1995, 
however, Phare  support  was  broadened  to  include  support 
for  economic  reform,  institutional  and  human  resources 
development and infrastructure  development 

the  energy  sector 

Within  Phare's  efforts  to  support  Latvian  infrastructure 
development, 
received  particular 
attention. The country  has no hydrocarbon  resources, and 
is  to  a  great  extent  dependent  on  energy 
imports. 
However,  there  are  domestic  sources  which  can  be 
developed, notably hydropower, wood and peat and Phare 
has  financed  studies  to  examine  the  feasibility  of  their 
development. 

Phare  funds  for  Latvia  were  ECU  32.5  million  in  1995. 
This brings the total  of  funds  committed  to Latvia for  the 
period  1991-1995 to ECU  108 million. Looking  forward, 
the  multi-annual  indicative  programme,  signed  in  1995, 
will  focus  on  the  following  priority  sectors  during  the 
period  1996-99 

• 

•  private  sector  development:  this  includes  restructuring 
and  privatisation,  banking,  small  and  medium-sized 
enterprise  development,  foreign  investment  and  trade 
promotion and agricultural  reform 
institutional  integration,  human  resources  and  social 
sector, 
cooperation,  public 
administration  reform, higher education, public  finance 
and accounting, and social sector reform 
infrastructure 
environment and transport  development. 

the  energy  sector, 

-  focusing  on 

including 

statistical 

• 

Lithuania 

The  Lithuanian  economy  emerged  from  deep  recession 
following  the dissolution  of the Soviet  Union  and, having 
declined  in  1992 and  1993, Gross Domestic Product grew 
by  1.5 per cent in  1994 and 5 per cent in  1995. 

The privatisation  process has been  satisfactory  and, in the 
small companies sector, has progressed rapidly, conducted 
mainly through  the exchange of vouchers or through  local 
investors.  By  mid-1995,  a  new  law  on  privatisation  was 
passed by the parliament outlining the relative responsibil 
ities  of  the  economic  ministries,  state  institutions,  and 
local authorities. The law clearly  marks a commitment by 
the government to complete the privatisation process. 

In  addition,  a  privatisation  agency  was  created  in  1995 
which,  assisted  by  a  resident  Phare  advisor,  has  rapidly 
become  operational.  The  agency  is  a  semi-autonomous 
body  whose  objective  is  to  prepare  and  implement  the 
remaining  privatisation  programme  under  the  supervision 
of  the  Prime  Minister's  office.  Both  the new  law  and  the 
operations  of  the  agency  are  expected  to  boost  the 
privatisation  process,  with  an  additional  focus  put  on 
to  provide  further 
restructuring  companies 
those 
technical  competence  or  financial  means 
companies already privatised. 

in  order 

to 

small 

enterprises 

independent 

and  medium-sized 

As part  of  the  development  of  the private  sector, in  1995 
the government  also started to define  the legal  framework 
for 
and  a 
development  agency  has  been  established  as  a  non-profit 
and 
institution.  Entrepreneurs,  however, 
continue  to  suffer  from  a  lack  of  finance  for  capital 
formation. To a certain extent this has been helped by the 
investment  (some  ECU  254 
rapid  growth  in  foreign 
million  between  1989  and  1994)  although 
is 
significantly  less than the other Baltic  states. The problem 
of coordination  among the various economic  development 
agencies  established  over  the  past  few  years  is  being 
addressed by the government. 

this 

Funds allocated by sector 1995 
ECU 42 million 

Social  development 
and employment  4.4 

Public  institutions 
and administrative  reform 5.S 

Education, training 
nd research  3.5 

Infrastructure 
(energy, transport, 
telecom.)  19 

to  that  of 

its  legislation 

As part of this, Lithuania  made efforts  in  1995 to begin to 
the  European 
approximate 
Community's  'acquis  communautaire'.  Phare  helped  this 
process  by  supporting  the  development  of  legislation  in 
financial  services  (banking  law,  insurance  and  securities), 
commercial  law,  labour  law,  European  Community  and 
international law, and constitutional and administrative law. 

An  amendment  to the  Lithuanian  constitution, relating  to 
the purchase of land by foreigners  and made necessary by 
the  Europe  Agreement,  is  expected  to  be  passed  by  the 
parliament 
the  first  half  of  1996.  The  Europe 
Agreement is also expected to be ratified  during  1996. 

in 

In  1995, Phare  committed  ECU  38  million  to  Lithuania, 
an  increase  of  ECU  4  million  on  the  previous  year.  This 
money  was  focused  on  the  priority  areas  outlined  in  the 
1994-1995 indicative programme: economic development, 
investment 
infrastructure 
programme,  European  integration  and  human  resources 
development. 

development, 

the  public 

Lithuania's formal  application  to join the European  Union 
was presented  in December  1995 and was reinforced  by a 
declaration adopted by the Lithuanian  parliament. 

The  Europe  Agreement  was  signed  by  Lithuania  during 
June  1995  and  the  country  has  subsequently  actively 
participated  in  all  the  meetings  organised  within  the 
framework  of  the  structured  dialogue.  Moreover,  the 
government  has  been  active  in  setting  up  both  the 
institutional  and  legislative  framework 
the 
European Integration process. 

to  begin 

Phare's  contribution  to  the  development  of  the  private 
sector  has  been  to  help  to  launch  a  network  of  Business 
Advisory  Centres  and  a  Euro-Correspondence  Centre  in 
Vilnius.  It  has  also  continued  to  provide  one  resident 
advisor  to  the  Lithuanian  Investment  Promotion  Agency 
which was set up in  1993 to promote the country. 

21 

largest 

Phare has also been  active in the agricultural  sector which 
has suffered  a decline over the past few  years but remains 
the  economy.  The 
sector  of 
the  second 
privatisation  of  holdings  has  led to a break-up  of  the  land 
into  small  parcels  and  this,  together  with  the  limited 
availability  of  capital,  business  skills  and  know-how, 
continues to depress the sector. Phare has therefore  helped 
to  develop  policies  aimed  at  strengthening  economic 
planning  in  the  sector  and  to  deliver  business  and 
technical advice and credit and loan finance. 

Phare  was  also  active  in  programmes  focusing  on  public 
administration  reform,  where  a policy  design  programme 
in  March  1995;  the  health  sector, 
was  completed 
particularly  in  primary  healthcare;  and  the  provision  of 
strategic  advice  in  the  social  sector  and  labour  market 
area, 

22 

Poland 

In  1995, Poland moved significantly  further  along the road 
of economic  reform.  Over half  of  national  income  is now 
generated  by  the  private  sector,  the  transformation  to  a 
market economy  is established  and economic  performance 
is  becoming 
independent  of  political 
developments. 

increasingly 

The  country's  economic  progress  was  reflected  most 
clearly  in the  1995 growth  rate: after  a 5 per cent  increase 
in  1994, Gross  Domestic  Product  grew  by  7  per  cent  in 
1995 due to a strong surge in exports and  investment. 

On  the  back  of  this  economic  performance,  the  Polish 
government  officially 
launched  the  mass  privatisation 
programme  in  November  1995.  The  programme  created 
15  national  investment  funds  run  by  professional  asset 
managers. Each  of the funds  acts as the holding  company 
for  some  500  medium-sized  enterprises  being  privatised, 
with  the  public  able  to  buy  shares  in  the  funds  at  a 
symbolic  price.  The  European  Community,  through  its 
Phare  Programme  provided  support  to this programme by 
financing  the  public  awareness  campaign,  as  well  as  the 
printing  and  distribution  of  share  certificates.  The 
state-owned 
privatisation  of 
enterprises will be continued  in  1996. 

remaining  4,400 

the 

Funds allocated by sector 1995 
ECU  174 million 

Private sector development 
and enterprise  support 9 

Public  institutions 
and administrative  reform  2 

Agricultural  restructuring  13 

Environment  and 
nuclear  safety  22 

The  multi-annual  indicative  programme  focuses  on  the 
following  key  areas,  which  were  chosen  in  line  with  the 
Polish government's economic strategy for  1994-1997 

•  bringing  industrial  relations  closer  to  those  existing  in 
structural 
environmental 

economy, 
and 

counteracting 

improving 

the  market 
unemployment 
protection 

As part of this privatisation  process, renewed  efforts  were 
made to restructure and privatise the banking sector which 
is still 60 per cent state-owned. Phare continued to provide 
support  to  the  banking  work-out  unit  in  charge  of  this 
process  and  decisive  acceleration  in  this  area  is  expected 
in  1996. 

Under  its  Phare  Programme  for  Poland  in  1995,  the 
European  Union  committed  ECU  174  million.  This 
amount  is  part  of  the  multi-annual  indicative  programme 
for  Poland,  whose  budget  for  1995  to  1999  totals  ECU 
1,015 million of grant funds. 

The  main  objective  of  Phare  support  within 
this 
framework  is  to  facilitate  Poland's  participation  in  the 
process of European  integration  by  supporting  the process 
of socio-economic  transformation. 

•  continuing  institutional  reforms  in  the  fields  of  social 

security, social services and the financial  sector 
increasing the competitiveness of the Polish economy. 

. 

Within  the  1995  Phare  programme  for  Poland,  the 
continued  support  for  the  development  of  the  country's 
infrastructure  represented  52  per  cent  of  the  funds 
committed. Of this, ECU 22 million were attributed  to the 
co-financing,  with  the European  Investment  Bank  and the 
European  Bank  for  Reconstruction  and  Development,  of 
the modernisation  of the E-20  railway  line  linking  Berlin, 
Warsaw, Minsk and Moscow. 

ECU  53  million  were  attributed 
to  cross-border 
cooperation  in  1995. The  funds  are  to  be  attributed  in  a 
concentrated  manner,  with  only  eight  regions  on  the 
border  with  Germany  and  the  Baltic  Sea  receiving  funds. 
Ultimately, 
the 
infrastructure  on Poland's western border until it reaches a 

the  programme  aims 

to  develop 

23 

Other  major  areas  of  support  under  the  1995  Phare 
programme 
tourist 
for  Poland 
development and the educational  sector. 

included  agriculture, 

The  significant  acceleration  of  Phare  implementation  in 
1995  was  encouraging  and  reflected  the  enhancement  of 
relations  between  Poland  and  the  European  Union  which 
could  be  observed  in  1995. Within  the  framework  of  the 
Europe Agreement, the bilateral  Association  Council  held 
its  second  meeting  in July  1995. The  Council  focused  on 
three  issues:  Poland's  strategy  for  integration  into  the 
European  Union;  intra-regional  cooperation;  and  trade-
related issues. 

level  similar  to  that  achieved  in  the  eastern  part  of 
Germany.  Funds  are  mainly  concentrated  on  transport 
infrastructure  and the environment, 55 per cent of which is 
devoted to border crossings. Further infrastructure  support 
is 
regional 
through 
development  activities  financed  by  Phare  in  various 
regions  of  Poland,  for  which  ECU  20  million  were 
committed. 

continued 

generated 

being 

The  continued  importance  of  the  environmental  sector 
was  reflected 
in  the  extension  of  financing  for  the 
National Environment Fund by ECU  18 million. This was 
in  accordance  with  a  recommendation  by  the  European 
Parliament  to  maintain  Phare  funding  for  environmental 
clean-up projects. 

24 

Romania 

For  Romania,  1995  was  a  year  of  steady  economic 
progress and stronger political relations with the European 
Union.  Official  government  figures  for  the  year  1995 
show  a 6.9 per cent  increase  of gross  domestic  product, a 
halving of the inflation  rate to 27.8 per cent, a reduction in 
the unemployment  rate from  10.9 per cent to 8.9  per cent 
and  a  16.3  per  cent  increase  in  the  average  real  wage. 
However, the deterioration of the balance of payments and 
of  the public's  confidence  in the  national  currency  which 
occurred  in  the  last  part  of  the  year  shows  that,  even  if 
impressive  achievements  have  been  recorded,  not  all  the 
macroeconomic  conditions  for  sustainable  growth  are  in 
place. 

At the microeconomic  level  in  1995, the State  Ownership 
Fund  managed  to divest  itself  of over 650 companies, the 
best annual performance  to date in terms of the number of 
companies.  This  brings  the  total  number  of  privatised 
companies in Romania to  1,524, representing  some  10 per 
cent  of  the  total  employed  workforce.  Moreover,  in  June 
1995  a  revised  Mass  Privatisation  Programme  was 
launched. Under  this new  programme, Romanian  citizens 
will  receive  a  significant  shareholding  in  up  to  4,000 
Romanian  enterprises.  The  State  Ownership  Fund  will 
retain  significant  residual  stakes  which  will  be  sold  for 
cash  by  one  of  several  methods:  auction, public  offering, 
trade  sale.  Public  interest  in  the  programme  was  limited 
and  an  extension  of  the  subscription  period  up  to  March 
1996  was  established.  The  programme  will  facilitate  the 
decentralisation  of the productive sector and will prove an 
important step towards a functioning  market economy. 

For  1995,  Phare  committed  ECU  66  million 
to 
programmes  in  Romania  for  implementation  foreseen 
over two to three  years. This  amount  is part  of  the multi-
annual  financial  perspective  for  Romania,  whose  budget 
totals  ECU  550  million. 
for 
Assistance  for  the  period  1990-1994  totalled  ECU  542 
million. 

the  1995-1999  period 

In  1995,  Phare  was  particularly  active  in  implementing 
assistance  in  the  areas  of  privatisation  and  industrial 
restructuring.  Support  was  provided  for  the  implementa 
tion  of  the  government's  Mass  Privatisation  Programme, 
which included a public awareness campaign  to maximise 
public  understanding  and 
involvement.  In  addition, 
substantial  Phare  assistance  is  being  granted  to  the  State 
Ownership  Fund  to  assist  in  the  disposal  of  its  residual 
stakes. 

Funds allocated by sector 1995 
ECU 66 million 

Education, training 
and research  18 

In  the  restructuring  of  the  major  state-owned  enterprises, 
progress was slow  in  1995. There was a substantial  Phare 
contribution  in  terms  of  the  preparation  of  financial 
recovery  plans  for  26  heavily-indebted  enterprises,  but 
these plans have not yet been put into  effect. 

Phare  continued  to  help  the  development  of  small  and 
medium-sized  enterprises  (SMEs)  through  support  to  a 
network of SME advisory centres backed up by a grant aid 
scheme. Phare also financed  an assistance  programme  for 
banks to help them in doing business with SMEs. 

Beyond 
the  enterprise  sector,  there  was  substantial 
progress in other areas of reform. For example, the reform 
of  vocational  education  is  gathering  pace  with  major 
Phare  assistance  both  to the process  at  national  level  and 
to  a  key  group  of  25  vocational  schools  around  the 
country. In addition, the new  Education  Law  foresees  the 
development  of  university  autonomy,  and  a  Phare 
programme has been developed to support this approach. 

Restructuring  of  the  research  and  technology  sector, 
which  played  a big  role  in  the  centralised  economy,  was 
also initiated under support from  Phare. 

Phare has been  active  in supporting  decentralised  projects 
developed  by  local  partnerships  between  public  and 
private sector bodies in towns throughout the country. The 
most  developed  programme  in this  area  is focused  on the 
development of active employment measures. 

25 

Phare grants  worth  ECU  50,000 were awarded  to  projects 
in 21 towns in  1995. The number of towns will increase in 
this  nature  under 
1996.  Additional  programmes  of 
preparation  in  1995  include  support  to  local  economic 
development and social services. 

and  citizens; 

In its efforts  to develop civil  society, Phare has  supported, 
through  the  Democracy  programme,  the  implementation 
of  19  micro-projects  in  the  following  areas:  training  of 
young  politicians;  encouraging  dialogue  between  local 
government 
strengthening  Romanian 
organisations  and  their  cooperation  with  authorities  at 
local  and  national  levels;  promoting  children's  rights; 
Hungarian-Romanian  dialogue  and  other  multi-cultural 
activities.  In  the  health  sector,  Phare  contributed  to  the 
development  of  techniques  to  preserve  vaccines  in  rural 
areas. 

The  Europe  Agreement  between  Romania  and 
the 
European  Communities  and  their  Member  States  came 
into  force  in  February  1995.  The  first  meeting  of  the 
Association  Council  took  place  in  April  1995.  At  the 
Association  Committee  in  October  1995,  access  to  the 
Phare  cross-border  and  implementation  of  multi-country 
programmes  were  discussed,  together  with  commercial 
funding  issues. 

In June  1995, the country  submitted  its formal  application 
for  membership  of  the  European  Union.  Declaration  of 
support  for  Romania's  accession  was  signed  by  all  the 
parties attached  to the application. Likewise, the "national 
strategy  for  accession",  which  accompanied  Romania's 
formal  application, placed  great  emphasis  on  the  national 
consensus  driving  Romania's  political,  social  and 
economic transition. 

supported 

the  development 

Phare 
of  Romanian 
infrastructure  both  directly  through  co-financing,  with  the 
European  Investment  Bank, of a major  road  rehabilitation 
project  and, indirectly, through the financing  of  feasibility 
studies  and  other  preparatory  work  in  the  sectors  of 
transport, telecommunications and energy. 

In  line  with  the  White  Paper  on  the  internal  market, 
Romania  began  work  on  the  harmonisation  of  national 
legislation  with that of the European  Community. Priority 
has  been  given  to  competition,  state  aids,  public  and 
financial  services, and the free  movement of people. 

26 

Slovakia 

an 

achieved 

Slovakia 
impressive  macroeconomic 
performance  in  1995. It  recorded  high  GDP  growth  and 
low  inflation,  while  the  trade  balance  remained  positive 
and  the  government  deficit  fell  significantly.  The  only 
negative  elements  were  the  unemployment  rate  and  the 
low level of foreign  investment. 

After  the  spectacular  economic  turnaround  in  1994, when 
the economy  expanded  by  4.8  per cent, real  GDP growth 
accelerated  further  in  1995  to  reach  7.4  per  cent.  Higher 
real  wages  and  some  increase  in  employment  promoted 
private  consumption,  and  economic  growth  was  finally 
having  a  positive  impact  on  investment.  Despite  the 
acceleration  in  economic  growth,  inflation  fell  below  10 
per  cent,  thanks  mainly  to  a  continued  tight  monetary 
policy. 

Higher  growth  also  led  to  higher  import  levels,  which 
reduced  the  current  account  surplus  and  the  contribution 
of net exports to growth. 

Phare committed  ECU 46 million  to Slovakia  in  1995, an 
increase on the previous year's figure of ECU 40 million. 

The  total  Phare  commitment  was  the  first  tranche  of  the 
multi-annual  indicative  programme, agreed  in  1995. This 
states  that  Phare's  support  in the medium  term  will  focus 
on the following  broad strategy areas 

•  adopting  the  'acquis  communautaire',  including  the 
modernisation  of the structures of state and society, and 
the approximation of laws, standards and regulations 

•  private sector development and restructuring 
•  human  resources  development,  including  social  sector 

reform 
infrastructure  development. 

• 

Under  the  multi-annual  indicative  programme  for  1995-
1999, committed  funds  in the future  may be modulated on 
the basis of needs and absorption  capacity. The latter  is of 
particular  importance  given  that  the  Slovak  performance 
on  past  programmes  leaves  room  for  improvement.  An 
on-going  dialogue  with  the  Slovak  authorities 
is  in 
progress  on  how 
the  efficiency  and 
effectiveness  of Phare. 

improve 

to 

Funds allocated by sector 1995 
ECU 46 million 

Public-
health 2 

Social  development 
and employmen 

Integrated 
regional 

measures 1 

Public  institutions and 
administrative  reform  5 

Agricultural  restructuring  2.6 

Civil  society and 
démocratisation 0 

Education, training 
and research 5 

Environment  and 
nuclear safety 1 

Financial  sector 3 

Infrastructure  (energy, 
transport, telecom.) 8.2 

Phare  support 
in  1995  concentrated  mainly  on  the 
provision  of  know-how  and  investment  support  to  assist 
private  sector  development.  Specifically,  Phare  supported 
the  following  projects  vital  to  assisting  Slovakia  in  its 
preparation for membership of the European  Union 

• 

and  Development 

•  a post  privatisation  fund,  a joint  Phare-European  Bank 
for  Reconstruction 
initiative 
providing  equity  capital  and  know-how  to  Slovak 
medium-sized  enterprises 
the  successful  small  and  medium-sized  enterprises 
programme  which  brings  financial  assistance  and 
know-how  transfer  to  Slovak  small  and  medium-sized 
enterprises.  The  financial 
the 
programme  have  all  been  well  subscribed,  particularly 
the small  loans fund.  This financial  assistance, together 
with  business  counselling 
through  a  network  of 
assistance  centres,  provides  small  and  medium-sized 
enterprises with a valuable service 

instruments  under 

•  continued know-how transfer to the Slovak National bank 
and the Ministry  of Finance in support of their important 
role in economic reform and European integration 
in  the  human  resources  development  area,  a  health 
programme was launched  in  1995, focusing  on primary 
health care and health  financing 

. 

•  further  support  to  the  Slovak  customs  administration, 
the  standards  office,  the judiciary  and  the civic  society 
programme 

27 

a  significant  infrastructure  initiative,  funded  in  1995, 
providing  investment  support  for  the  drilling  of  a 
geothermal well 
a Slovak-Austrian cross-border cooperation programme, 
involving  the  commitment  of  ECU  4  million  to  a 
number  of  environmental  (sewage  and  waster  water 
treatment)  projects  as  well  as  feasibility  studies  in 
transport,  socio-economic  development  and  regional 
planning fields. 

Slovakia  has  made  integration  into  western  political, 
economic  and  security 
structures,  and  particularly 
membership  of  the  European  Union,  a  priority.  On  27 
June  1995, Slovakia formally  applied to join the European 
Union. It participated  fully  in the structured  dialogue with 
the  Member  States  throughout  the  year  and  furthered  the 
implementation  of the Europe Agreement  through the first 
meeting  of  the  Association  Council  in  May  and  the  Joint 
Parliamentary  Association Committee in November. 

28 

Slovenia 

Through  a series of rapid economic adjustments,  Slovenia 
has  achieved  a  high  level  of  macroeconomic  stability. In 
terms of income per capita, the country  is at a level similar 
to that of some Member  States of the European  Union. In 
1995, the economy grew by almost 5 per cent, and the rate 
of  inflation  fell  below  10  per  cent.  65  per  cent  of  the 
country's exports are sold to the European Union. 

Slovenia's  performance  within  the  Phare  Programme  is 
impressive:  the  contracting  rates  have  been  particularly 
high with almost  100 per cent of funds  committed  in  1992 
and  1993, and  almost  60  per  cent  of  those  committed  in 
1994  being  contracted.  This  reflects  the  efficient  way  in 
which Slovenia uses Phare funds. 

In  1995, Slovenia  was allocated  ECU  16.4 million  within 
the  framework  of  the  country  operational  programme. In 
addition,  funding  committed  to  cross-border  cooperation 
(ECU  6  million)  and  the  Tempus  programme  (ECU  2.6 
million)  brought  the  total  amount  of  Phare  funding  in 
1995 to ECU 25 million. 

In  1995, Phare  had  an  immediate  impact  in  certain  key 
areas.  There  was  continuing  support  for  sector  and 
enterprise  restructuring, including  the training  of  business 
executives,  and  for  the  voucher  privatisation  scheme. 
Funds  were  used  to  unblock  the  border-crossing  to 
Hungary  at  Dolga  Vas,  a  major  transport  bottleneck  on 
one  of  the  principal  routes  into  central  Europe,  and  the 
reform  of  public  finances  and 
the  banking  sector, 
including  the  creation  of  a  new  fiscal  system,  were  also 
supported. 

the 

improvement  of 

The  cross-border  cooperation  programme  with  Austria 
involved 
the  Jezersko  border-
crossing,  and  the  reconstruction  of  the  sewage  system  in 
Gornja Radgona. A similar programme with Italy covered, 
among  others 
the 
environment,  human  resources  development,  and  cultural 
cooperation. 

infrastructure, 

transport 

areas, 

Funds allocated by sector in 1995 
ECU 25 million 

Education, training 
and research 2.6 

Infrastructure  (energy, 
transport, telecom.)  7.4 

Social  development 
and employment  4.4 

Private  sector  development 
and enterprise  support  3 

• 

through 

.  preparing  to  take  on  obligations  of  membership  (the 
the  progressive 
'acquis  communautaire') 
adaptation  of  laws,  standards  and  rules  to  achieve 
compatibility  with  those  of  the  European  Union.  This 
includes  making  provisions  for  their  implementation 
and enforcement  as well as adjustments  to take account 
of key internal Union policies, such as in agriculture. 
the  development  and  strengthening  of  economic, 
commercial  and  physical  links,  not  only  with  the 
Union,  but  also  with  associated  countries  and,  where 
appropriate,  other  neighbouring  regions.  This  is  an 
essential  element  in preparation  for  future  enlargement 
and sustainable development of the region as a whole. 
•  medium-term  economic  and  social  structural  reform. 
This  includes  raising  the  competitiveness  of  industry 
and  services 
levels,  as  well  as 
promoting  further  development  of  the  private  sector, 
investment,  export  capacity  and  capital  markets.  In 
addition,  the  social  sector  and  public  administration 
will  need  to  be  reformed,  as  well  as  the  science  and 
technology, infrastructure  and environmental  protection 
sectors, and regions facing  difficulties  with reform  will 
need to be supported. 

international 

to 

In  June  1995,  a  memorandum  of  understanding  was 
signed  between  the  National  Phare  Coordinator  and  the 
Commission  which  outlined  the  strategy  for  future  Phare 
multi-annual  assistance to Slovenia. This served as a basis 
for  the  1996-1999  multi-annual  indicative  programme 
which,  in  line  with  the  principal  government  policy 
objective  of  closer  integration  with  the  European  Union 
and  eventual  membership,  outlines  three  broad  areas 
where  Phare  will  support  Slovenia's  pre-accession 
strategy 

During 
the  year  under  review,  Slovenia's  Europe 
Agreement  was  initialled.  The  Trade  and  Economic 
Cooperation  Agreement,  signed  in  1993,  continued  to 
underpin  trade  relations  between  the  two  sides. Since  the 
signature  of  the  Europe  Agreement  on  10  June  1996, 
Slovenia  participates  fully  in  the  pre-accession  strategy 
and  the  Government  has  drafted  a  white  paper  for  a 
national  pre-accession  strategy,  and  set  up  the  structures 
for  its implementation. 

29 

1990 -1995 funds committed by country 

(in ECU million) 

m  106.5 

34 

99 
6 100 

1990  0 
1991  0 
1992  0 
1993 
1994 
1995 

1990 
1991 
1992 
1993  0 
1994  0 
1995  0 

1990  0 
1991  0 
1992 
1993 
1994 
1995 

1990 
1991  0 
1992  0 
1993  0 
1994  0 
1995  0 

10 

12 

22.5 
24 

i us 

1990  0 
1991  0 
1992  1 
1993 
1994 
1995 

1990 
1991 
1992 
1993 
1994 
1995 

25 

39 

42 

^t*$9$ftWRR 

197 

200 

225 

(208/8, 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

30 

Romania 

Slovakia 

Slovenia 

Former 
Yugoslavia 

Multi-country 
programmes 

Other 
programmes 

Note: 

The  1995  Phare  Annual  Report  contains  figures  from  all 
five budget  lines (B7-5200 Phare Democracy  Programme, 
B7-6000  Assistance  for  economic  restructuring  in  the 
countries  of  central  and  eastern  Europe  (Phare),  B7-6020 
Cross-border 
Community 
to  measures  taken  by  NGOs,  B7-6330 
contribution 
to  associated 
Opening  of  Community  programmes 
countries  of  central  Europe)  managed  within 
the 
framework  of the Phare Programme. 

cooperation, 

B7-6310 

243.2 

Owing  to  software  limitations  figures  contained  in  the 
1994  Phare  Annual  Report  only  included  two  budget 
lines. 

This  therefore  accounts  for  the  small  discrepancy  in  the 
historical  figures  between  the  1994  and  the  1995  Phare 
Annual reports. 

31 

1990 -1995 funds committed by sector 

(in ECU million) 

Agricultural 
restructuring 

Civil  society and 
démocratisation 

Critical aid 

Education, 
training and 
research 

Environment 
and nuclear 
safety 

Infrastructure 
(energy, transport, 
telecom 
munications) 

Private sector 
development and 
enterprise  support 

Public health 

Public  institutions 
and  administrative 
reform 

32 

48.2 

47.3 

1990  0 
1991  0 
1992  0 
1993  0 
1994  0 
1995 

|  2 

1990  0 
1991  0 
1992  0 
1993  Hp5 
1994  p4 
1995 

0 I 

Social 
development 
and employment 

Approximation 
of  legislation 

Consumer 
protection 

Financial 
sector 

Integrated 
regional 
measures 

Other sectors 

Note: 

The  1995  Phare  Annual  Report  contains  figures  from  all 
five  budget  lines  managed  within  the  framework  of  the 
Phare Programme. 

Owing  to  software  limitations,  figures  contained  in  the 
1994  Phare  Annual  Report  only  included  two  budget 
lines. This therefore  accounts for  the small  discrepancy  in 

the historical figures between the  1994 and the  1995 Phare 
Annual reports. 

Owing  to  the  financial  reporting  process  it  is  possible  to 
provide  more  accurate  sector  breakdown.  This  accounts 
for the increase in sectors from  9 in  1994 to  15 in the 1995 
Annual Report. 

33 

Phare funding by country 

Albania 

(in ECU million) 

Funds allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
Ô 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 

1990 
0 
16 
0 
0 
3.5 
0 
5 
0 
0 
0 
0 
0 
0 
0 
0 
24.5 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education,  training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
0 
0 
0 

~"  0 " 

0 
0 
0 
0 
0 
0 
0 
0 
0 

1991 
6 
0 
0 
0 
Ô 
0 
10 
Ô 
0 
0 
0 
0 
0 
Ô 
0 
10 

1991 
0 
25 
0 
5 
19 
10 
20 
5 
0 
0 
20 
0 
2.5 
0 
0 
106.5 

1991 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 

1992 
0 
15 
0 
1.2 
0 
35 
50 
4.4 
0 
0 
0 
0 
0 
0 
4.4 
110 

1993 
1.2 
10 
0 
2.5 
3.3 
35 
10 
0 
0 
0 
7 
0 
0 
6 
0 
75 

1994 
4.6 
5 
0 
2.4 
0 
0 
7 
23 
0 
Ô 
0 
0 
0 
7 
0 
49 

1995 
0 
0 
0 
3.5 
0 
35 
0 
34 
0 
0 
0 
8.5 
0 
0 
7 
88 

Total 
5,8 
30 
0 
9.6 
3.3 
105 
77 
61.4 
0 
0 
7 
8.5 
0 
13 
11.4 
332 

Note:  Albania  entered  the  Phare  Programme  in  1991 

1992 
0 
10 
0 

0 
()" 
21 
0 
0 
22.5 
0 
0 
15 
0 
87.5 

1992 
0 
0 
0 
0 
0 
0 
0"" 
0 
0 
0 
0 
0 
0 
0 
0 
0 

1993 
16 
0 
0 
17.5 
15.6 

5"" 
0 
13.9 
0 
""  0 
6 
0 
4 
10.5 
1.5 
90 

1993 
0 
"(T 
o 

o 
o 
o 
9 
" ô 
0 
"27" 
0 
"8 
0 
8 
60 

1994 
1.2 
0 
1.2 
12 
5 
0 
0 
62.6 
0 
0 
3 
0 
0 
0 
0 
85 

1994 

4.5 
Ô 
5.5 
0 
0 
0 
25 
0 
0 
0 
0 
14 
0 
0 
60 

1995 
" "O 
5 
0 
21 
""7 
"""" 0 
0 
48 
2 
0 
0 
0 
0 
0 
0 
83 

1995 
"""5 
0" 
0 
8 
0 
0 
0 
91 
0 
0 
1 
0 
""2 
0 
3 
110 

Total 
17.2 
56 
1.2 
63.5 
61.1 
15 
25 
150.5 
2 
0 
51.5 
0 
6.5 
25.5" 
1.5 
476.5 

Total 
16 
"4.5 

Ô 
"21.5 
0 
0 
0 
125 
0 
0 
28 
0 
24 
0 
11 
230 

Note:  Prior  to  1993 funds  were  provided  to  Czechoslovakia 

Bulgaria 

Czech Republic 

34 

Czechoslovakia 

Estonia 

GDR 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
4 
30 
0 
~W 
0 
6 
0 
0 
0 
0 
(T 
(T 

34 

1991 
0 
"IT 
~o" 
"9 
~T" 
o 
"6 
lT 
"6 
"o 
39 
"IT 
15" 
""0 
2Ï)" 
99 

1992 
""  Ô" 
IT 
4" 
"""25  " 
~~Q~ 
o 

1993 
'"" "  ô 
rr 
IF 
0  " 
~"T" 
o 

"o 
"10 
"  0 
"""  0 
31 
" I T" 
""" o "" 
~  o 
"""" 3 0" 
100 

1994 
0 
0" 
""()" 
Ô 
0 
0 
0 
0 
"""() 
0" 
0 
(")" 
"""  0 
0 
ô" 
0 

1995 

Total 

0 

0 

"4 

"38" 

35 

0 

"  0 

"21 

"  0 

"  0 

70 

"  0 
~i~5 
"  0 
50 
233 

Note:  from  1993  Phare  funding  was  provided  separately  to the  Czech  republic  and  Slovakia 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 

1991 

1992 

0 
0 
0 
0 
9 
To 

1993 
0 
0 
"0 
1.5 
0 
ô 
"0 
1) 
0 
"  0 
"""0 
0 
'"()' 
0 
10.5 
12 

1994 
0 
0 
"Ô 
4.5 
2.5 
0 

~~  Ô" 
"~  6 
"6 

o 
"8 
0 
"""""(")" 
ô 
"~[.5" 
22.5 

1995 
2.8 
0 
0 
4.2 
(") 
()'" 
O" 

"  5" 
"  "()" 
0 
9.1 
0 
Y9 
"  (V 
o 
24 

Total 
2.8 
0 
0 
11.2 
2.5 
"'() 
0 
II 
0 
0 
17.1 
0 
2.9 
""'"'() 
21 
68.5 

Note:  Estonia  entered  the  Phare  Programme  in  1992 

Funds allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
1 
20 
6 
0 
0 
0 
0 
(T 
Ï4 
35 

" 

1991 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
6 
0"" 
0 

1992 
(T 
'""(F 

"  0 
b 
ô 
6 
o 
~'"o 
o 
o 
"  "o" 
6 

1993 
_  0' 

0"" 

"  "0 
"0 
""~ô 
ô~ 
(T 
0 
()  " 
0 
'~~ô~ 
0 
0 

1994 
(T 
"o 
"o 
"" "o" 
o 
"o 
o 
o 
o 
0 
"  0 
0 
0 

1995 

Total 
0 
"  0 
0 
"  1 
20 
0 
0 
0 
"  0 
0 
0 
"14 
"35 

Note:  Support  to GDR  ceased  after  the  German  unification  in  1990 

35 

Hungary 

Latvia 

Lithuania 

36 

Funds allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
b" 

b" 
7.5 
27" 
5 
""b 
OX 
b 
b" 
26 
b 
""  3" 
"  0 
0 
8 93 

1991 

7.5 
b 
"  0 
45.5 
""  "0" 
0 
" " "0 

b" 

115 

1992 
TT3" 
5" 
b 
2T 
""" ib 
o 
b 
o 
o 
o 
H 
""To 
" 2 6" 
0 
4 
101.5 

1993 
1.5 
TÔ3" 
b" 
26" 
""'  b" 
o 

"0 
b 
b 
31 
""  0 
_.. ..... 
" To 
l 
100 

1994 
""""  b 
""'o 
"""' "o 
24"" 
T 5:5 
0 
"""  b" 
2 9" 
0 
"  0 
16.5 
__  Q. 
0 
""  0 
0" 

85 

1995 
3 
To 
"b 
16 
12" 
0 
0" 
36 
0 

"0 

6 

"5 

2 
"O 
'2 
92 

Total 
" 2 7" 
""""78.5 

0 

T 1 1 .5 

74.5""" 

19 
b" 
7 3 . 5" 

0  """ 

"'""  0 
136 

" " 15 
" 31 

10 
7 
582.8 

Funds  allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education,  training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
o 
0 
b" 
b" 
(T 
b" 
""b" 
_ _. 

"  "0 
"""b" 
b" 
0 
" b" 
"b" 
"0" 
0 

1991 
~~rT" 
b 
"""b" 
jT 

o" 

" IT 

b" 
"b" 
"0 

1992 
b" 
0 
0 
1.5 
"0 
" " 0" 
0 
0" 
"b" 
0 
"b" 
0 
b 
0 

'"'"15" 

1993 
b" 
b 

2 
0  " 
b" 

. . .. 

.

„_ 

0" 
"~  b" 
__  ^ 
""" b 
0 
"  0 
"0 
"T"6" 
18 

1994 
" 0" 
0 
b 
5 
"5.5" 
14.5  " 
""  b 
b" 
" b" 
"""""'b 
0 
0 
""  0 

0" 
4.5""" 

29.5 

1995 
1.3 
0 
" 0" 
2 
""Ô" 
"2.5" 
0 
9.2 
"~0 
b 
"875 
0 
"9T2 
b" 
"0 
32.5" 

Total 
1.3 
0 
0" 

10.5 
5.5" 
"17 
"  0 
9.2 
(") 
""  0" 
8.3 
0 
"92" 
0" 

34 
95 

Note:  Latvia  entered  the  Phare  Programme  in  1992 

Funds  allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 

0  " 
"  0" 
TT" 
0" 
0" 
"0  " 

0 
b 
0 
"b" 
"b"" 
b 
b" 
0 
"0 

1991 
0" 

"b 

"b" 

b"" 
b" 
0 
0 
b 
0 

"0 
"b 
0 
" b" 
0 

1992 
b" 
b" 
b"" 

1.5 
0 
0 
0 
0 
"""b" 
0 
"9.5 

b"" 
0 
b 
9 
20 

1993 

0 
2.5" 
"0 
b 
"  "b" 
0 
"0" 
0 
b" 
0 
0 
0 
'22.5 
"2T" 

1994 
... ___ 
"b"" 
b" 
6 

14.5 
b" 
16.5 
0 
0 
0 
" ""  0 
""" 0 
0 
r 
39 

1995 
5.5 
" 0" 
0 
"375" 
"b" 
""0" 
0 
19 
" "0 
0 
"9.6 
"  "0" 
"4.4" 
"0 

0 
42 

Total 
5.5 
0 
"  0 
13.5" 
1 
14.5 
"  0 
35.5 
"" "  b" 
0 
T9.1 
b" 
4.4 
0 
"32.5 
T26 

Note:  Lithuania  entered  the  Phare  Programme  in  1992 

Poland 

Romania 

Slovakia 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
10 
100 
0 
2.8 
22 
2 
0 
6 
0 
0 
38 
0 
0 
0 
0 
180.8 

1991 
7.5 
"TT 
b 
14.5 
35 
16 
0 
10 
0 
0 
56 
0 
18 
20 
3 
197 

1992 
1992 
972 
T8 
" 0" 
42 
18 
4.7 
0" 
26.4 
0 
0 
74.5 
0 
7.2 
"  0 
0 
200 

1993 
27 
30 
"b" 
"45" 
"0 
21 
"b" 
63" 
0 
""5" 
7 
" b" 
"b 

0" 
27 
225 

1994 
21.5 
2.5 
0 
"39 
12 
22 
0 
"93.8 
0 
0 
9 
0 
9 
0 
b 
208.8 

1995 
"  2"" 
13 
b 
"37 
22 
0 
"0" 
91" 
"b" 
0 
9 
0 
0 
b 
"  0 
174 

Total 
"7772 " " 
T8b;5 
b 
180.3 
"Ï09 
65.7 
0 
29072 
0 

"  ""'5  " 
193.5 
0" 
"3472  " 
"20 
30 
,185.6 

Funds allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
b" 
o 

15.5 
0 
b 
b 
"b 
o 
o 
ô 
0" 

1991 
0 
34 
0 
10 
0 
0" 
" 3 4 . 3" 
9 

b 
b" 
b 
o 
"o 
275 
22 
1343 

1992 
0 
32 

22 
0 
0 
"0 
40" 
0 
15" 
0 
20 
152 

1993 
10 
5 
0 
18 
b 
0 
"979 
0 
0 
"b 

" 7b 

0 
0 
b 

" 27 
139.9 

1994 
9.6 
0 
'""  5" 
37 
"  b 
o 
o 
25 
0 

" "0 
"2374 
0 
"0 
0 
0 
100 

1995 
0 
10 
0 
18 
b 
0 
b" 
38 
0 
"b" 
"o" 
o 
o 
o 
o 
66 

Total 
19.6 
81 
5 
96 
""  5 
5 
" 8 1 .7 
72 
0 
0 
133.4 
0 
15 
25 
69 
607.7 

Funds  allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 

1991 

1992 

1993 

0 
'  "5" 
"b 
"o"" 
"o" 
5 
b 
o 
"19" 
b 
"3" 
0 
5 
40 

0 
b 
b 
b 
b 
b" 
b 
0 

0 
o 
b 
b" 
b 
b 
b 
0 

1994 
4 
"""""5 
b 
9 
b 
5 
"b " 
6.5 
0 
0 
0" 
0 
"5.5  " 
0 
5 
40 

1995 
"T 
2J6 
0.5" 
5 

3 
"0" 
8.2 
"b 
o 
T472" 
1.5" 
""2.4" 
2" 
0.6 
46 

Total 
""'"'  9 
10.6 
0.5 
19 
1 
8 
0 
19.7 
""  0 
0 
373.2 
" T . 5" 
10.9 
2 
"ÏÔ.6" 
126 

Note: prior  to  1993 funds  were  provided  to  Czechoslovakia 

37 

Slovenia 

Funds allocated  by  sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport,  telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 

1991 
"To" 
b" 
(T 

1992 

2.3 __. 

0 
" b" 
" b 
o 
" b" 
o 
o 
" b" 

To" 
6.7 
"9" 

1993 
o 
"TT 
"TT 
"375" 
"b" 
b 
"o 

"b 
"To" 
"o 
b 
" b" 

To" 
To" 
7.5 
11 

1994 
"0 

b" 
b"" 
"5.5"" 
b" 
o 
b" 
" 6" 
" o" 

o  " 

12.5 
" o" 

0"  " 
0 
b" 
24 

1995 

b"" 
b 

Total 
"TT 
""""""" 0 

2T5" 
0 
0 
"  0 
"7"T"" 
"0 
0" 
3 
b 
"TT 
"b 
~7"6 

25 

0 

13.9 

0 

0 

0 
13.4 
0 
0 
15.5 
""""  0 
4.4 
"""""  0 
Tl .8" 
69 

Note:  Slovenia  entered  the  Phare  Programme  in  1992 

Former-Yugoslavia 

Funds  allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector  development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
0 
0 
0 

"TTbTT" 

0 
0 
0 
0 
0 
0 
0 
0" 

1991 
0 
0 
0 
6 
0 
0 
7 T" 
0 
0 
0 
0 
0 
0 
0 
Ô 

1992 
0 
0" 
b" 
0 
0" 
0" 
T"7".7"" 
b 
0" 

"0" 
"b" 
0 

0 

"0" 

0" 

3 0 7 1 T 3 7 Ï" 

4 7 .7 

1993 

25 
0 
"b 
0 

0 

0 
"b 
0 
0 
"25" 

1994 
"""" 2 
0 
O 
0 
" b" 
"0 
"  23 
0 
0" 
""" "" 0" 
" " O" 
0 
0 
" b" 

"0  " 

2 5" 

1995 
0 
0 
" O" 
0 
0 

"0 
T 5" 
"0 
""() 
"0 
"0" 
0 
"0 
0 

0 

"25"' 

Total 
2 
0 
0 
6 
0 
()" 
158 
0" 
0" 
0 
0 
0 
0 
"  0 
0 
166 

Multi-country  programmes 

Funds  allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Critical  aid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
2 13 
0 
0 
51 
0 
0 
0 
0 
0 
0 
"F 
" 
0 
7273 

1991 
11 
0 
0 
28.1 
2375 
......... 

"  b 
0 

"0 

0 

20" 
473" 
"b" 
b" 
L5 
88.T 

1992 
1.5 

0 
"24" 
"46" 
" 0" 
" 0" 
35" 
"b" 
0 
3 
6.5 
o 
0' 

Q 

116" 

1993 

0 
2078" 
""20" 
0 

24 

"b 
0 
"27.5 
10 
"b" 
0 
b" 
TÎ23 

1994 
25 
0 
"b" 
13 

13 
b" 
"b" 
31 
b" 
0 
"  b" 
""4" 
"0 
0" 
0 
86 

1995 

0 
""875" 
"20" 
0 
"0 
70.5 
"""Ô 
0 

"5 

0 
b 
b" 
"0 
TÔ4 

Total 

4 7 . 5 "" 
"  b 

"  b" 

115.7 
T22.5 
0 
5 1" 
160.5 

0" 

0 

"  55.5""" 

" 2 4 .8 

0 

0 

"  1.5 

" 5 79 

38 

Other programmes 

Funds  allocated  by sector  1990-1995 
Public  institutions  and  administrative  reform 
Agricultural  restructuring 
Civil  society  and  démocratisation 
Education, training  and  research 
Environment  and  nuclear  safety 
Financial  sector 
Criticalaid 
Infrastructure  (energy, transport, telecom.) 
Approximation  of  legislation 
Consumer  protection 
Private  sector development  and  enterprise  support 
Integrated  regional  measures 
Social  development  and  employment 
Public  health 
Other 
Total 

1990 
0 
0 
0 
0 
0 
00 
0 
0 
0 
0 
0 
0 
0 

1991 
0 
0 
0 
0.4 
0 

0 
0 
0 
0 
0 
0 
0 

"b 
13.4" 
13.4 

0 
10 
10.4 

1992 
0 
0 
5 
0 
0 

0 

0 
0 
0 
0 
0 
0 
0 
TT 
" 3 8 .6 
43.6 

1993 
0 
0 
10 
9.9 
0 

1994 
3 
0 
10 
7 
23 

1995 
0 
0 
JO 
17.8 
20 

0 

0 

0 

0 
0 
0 
0 
0 
0 
0 
0 
54^9 
74.8 

0 
2 
0 
4 
21 
0 
0 
6 

0 
0 
0 
2 
74 
32 
20 
0 
4 3 . 5"  6 74 
243.2 

119.5 

Total 
3 
0 
35 
35.1 
43 

0 

0 
2 
0 
6 
95 
32 
20 
6 
227.8 
504.9 

39 

Phare funding by sector 

Agricultural restructuring 

Civil society and démocratisation 

1990  1991  1992  1993  1994  1995 Total 

1990  1991  1992  1993  1994  1995 Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

0 

16 

0 

0 

0 

0 

Hungary 

20 

Latvia 

Lithuania 

0 

0 

Poland 

100 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

0 

0 

0 

0 

0 

Other 
Total 

0 
136 

(in ECU million) 

0 

25 

0 

0 

0 

0 

13 

0 

0 

17 

34 

0 

0 

0 

0 

0 

89 

15 

10 

0 

0 

0 

0 

5 

0 

0 

18 

32 

0 

0 

0 

0 

0 
80 

10 

0 

0 

0 

0 

0 

30.5 

0 

0 

5 

0 

4.5 

0 

0 

0 

0 

0 

0 

30 

2.5 

0 

5 

0 

0 

0 

5 

3 

0 

0 

0 

0 

78.5 

0 

5 

0 

0 

0 

0 

30 

56 

4.5 

0 

0 

0 

10 

78.5 

0 

0 

13 

10 

0 

0 

180.5 

81 

2.6 

10.6 

0 

0 

0 

0 

0 

0 

0 
17 

0 

0 
40.6  441.1 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

J)ther 
Total 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

1.2 

0 

0 

0 

0 

0 

0 

0 

0 

5 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

1.2 

0 

4 

0 

0 

0 

0 

0 

0 

5 

0.5 

0.5 

0 

0 

0 

0 

0 

0 

10 

10 

10 
16.2 

10 

10.5 

35 
15.7 

Approximation of legislation 

Consumer protection 

1990 

1991  1992  1993  1994  1995  Total 

1990  1991  1992  1993  1994  1995  Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

Other 
Total 

Albania 

Bulgaria 

0 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

Other 
Total 

40 

Critical aid 

Environment and nuclear safety 

1990  1991  1992  1993  1994  1995 Total 

1990  1991  1992  1993  1994  1995 Total 

Albania 

Bulgaria 
Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

0 

5 

0 

0 

0 

0 

0 

0 

0 

0 

10 

20 

0 

0 

0 

0 

0 

0 

0 

0 

50 

10 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

15.5 

34.3 

22 

9.9 

0 

0 

0 

0 

0 

0 

7.1 

47.7 

0 

0 

0 

0 

25 

0 

Former Yugoslavia 

30.2 

Multi-country programmes 

51 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

25 

0 

77 

25 

0 

0 

0 

0 

0 

0 

0 

0 

81.7 

0 

0 

158 

51 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

0 

3.5 

0 

30 

0 

20 

27 

0 

0 

22 

0 

0 

0 

0 

0 

Other 
0 
Total  101.7 

0 

0 
71.4  119.7 

0 
44.9 

0 
0 
25  392.7 

Other 
0 
Total  102.5 

0 

19 

0 

5 

0 

0 

10 

0 

0 

35 

(I 

0 

0 

0 

3.3 

15.6 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

5 

0 

0 

2.5 

0 

15.5 

5.5 

1 

12 

0 

0 

0 

0 

3.3 

61.1 

0 

35 

2.5 

20 

74.5 

5.5 

1 

109 

5 

1 

0 

0 

23.5 

0 
92.5 

20 

0 
38.9 

13 

23 
77.5 

122.5 

43 
82  483.4 

90 

Education, training and research 

Financial sector 

1990  1991  1992  1993  1994  1995 Total 

1990  1991 1992 

1993  1994  1995  Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

0 

0 

0 

4 

0 

1 

Hungary 

7.5 

Latvia 

Lithuania 

0 

0 

0 

5 

0 

9 

0 

0 

17 

0 

0 

Poland 

2.8 

14.5 

1.2 

8 

0 

25 

1 

0 

21 

1.5 

1.5 

42 

13 

0 

2.3 

0 

24 

2.5 

17.5 

8 

0 

1.5 

0 

26 

2 

2.5 

45 

18 

5 

3.5 

0 

20.8 

2.4 

12 

5.5 

0 

4.5 

0 

24 

5 

6 

39 

37 

9 

5.5 

0 

13 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

Other 

0 

0 

0 

0 

21.3 

0 
36.6 

10 

0 

0 

6 

28.1 

0 

7 
0.4 
90  140.5  162.2  169.9 

9.9 

3.5 

21 

8 

0 

4.2 

0 

9.6 

63.5 

21.5 

38 

11.2 

1 

16 

111.5 

2 

3.5 

37 

18 

5 

2.6 

0 

10.5 

13.5 

180.3 

96 

19 

1.3.9 

6 

115.7 

8.5 
17.8  35.1 
147.1  746.3 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

Other 
Total 

0 

0 

0 

0 

0 

0 

5 

0 

0 

2 

0 

0 

0 

0 

0 

0 
7 

0 

10 

0 

0 

0 

0 

14 

0 

0 

35 

0 

0 

0 

0 

0 

0 

0 

0 

16 

4.7 

0 

0 

0 

0 

0 

5 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

14.5 

14.5 

22 

0 

5 

0 

0 

0 

35 

105 

0 

0 

0 

0 

0 

0 

2.5 

0 

0 

0 

3 

0 

0 

0 

15 

0 

0 

0 

0 

19 

17 

14.5 

65.7 

5 

8 

0 

0 

0 

0 
40 

0 
44J 

0 
56 

0 

0 
40.5  249.2 

41 

Infrastructure 

Public health 

1990  1991  1992  1993  1994  1995  Total 

1990  1991  1992  1993  1994  1995 Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

0 

0 

0 

0 

0 

0 

Hungary 

0.8 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

0 

0 

6 

0 

0 

0 

0 

0 

Other 
Total 

_0_ 
6.8 

0 

5 

0 

II 

0 

0 

7.5 

0 

0 

10 

9 

0 

0 

0 

0 

0 

42.5 

4.4 

21 

0 

10 

0 

0 

0 

0 

0 

0 

23 

13.9 

62.6 

9 

0 

0 

0 

0 

0 

0 

25 

0 

6 

0 

29 

0 

16.5 

93.8 

25 

6.5 

6 

0 

34 

48 

91 

0 

5 

0 

36 

9.2 

61.4 

150.5 

125 

21 

II 

0 

73.3 

9.2 

19 

35.5 

91 

38 

8.2 

7.4 

0 

290.2 

72 

19.7 

13.4 

0 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Fonner Yugoslavia 

26.4 

63 

0 

0 

0 

0 

0 

5 

0 

0 

35 

24 

31 

70.5 

160.5 

Multi-country programmes 

0 

0 

2 
2 
96.8  114.9  326.4  457 3  1,044.7 

0 

Other 
total 

0 

15 

6 

10.5 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

15 

0 

0 

0 

0 

10 

0 

0 

0 

0 

0 

0 

0 

0 

(I 
26.5 

7 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

6 

13 

20 
25 
0 
0 
0 
0 
0_ 
45 

13 

25.5 

0 

0 

0 

0 

10 

0 

0 

20 

25 

0 

0 

0 

_  6 
To 1.5 

Private sector development and enterprise 
support 

Public institutions and administrative reform 

1990 

1991  1992  1993  1994  1995  Total 

1990  1991  1992  1993  1994  1995  Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

0 

0 

0 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

0 

0 

20 

22.5 

0 

39 

0 

0 

45.5 

0 

0 

0 

31 

0 

0 

II 

0 

9.5 

74.5 

40 

0 

0 

0 

3 

0 

3 

0 

0 

8 

0 

27 

0 

0 

0 

31 

16.5 

0 

0 

9 

23.4 

0 

0 

7 

70 

19 

0 

0 

27.5 

0 

0 

1 

0 

7 

51.5 

28 

70 

9.1 

17.1 

0 

6 

8.3 

9.6 

9 

0 

0 

136 

8.3 

19.1 

193.5 

133.4 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

14.5 

0 

0 

0 

0 

8 

0 

0 

Poland 

10 

7.5 

9.2 

4.6 

1.2 

11 

0 

0 

0 

0 

0 

0 

21.5 

9.6 

1.2 

16 

0 

0 

0 

0 

1.5 

0 

0 

27 

10 

0 

0 

0 

5.8 

17.2 

16 

0 

2.8 

0 

27 

1.3 

5.5 

77.2 

19.6 

9 

0 

2 

47.5 

0 

3 

1.3 

5.5 

2 

0 

5 

0 

0 

0 

3 
_0  _ 
24\6  233.9 

0 

14.2 

33.2 

12.5 

0 

0 

3 

0 

5 

15.5 

0 

55.5 

Romania 

Slovakia 

Slovenia 

Fonner Yugoslavia 

Multi-country programmes 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

11 
0 
26.5 

1.5 

0 
25.2 

10 

0_ 

65.7" 

25 
3 
"81.9 

Other 
Total 

0 
0 
64  180.5  191.5  194.5 

0 

21 

95 
74 
93.4  139.2  863.1 

JDther 
Total 

0_ 
To 

42 

Social development and employment 

Other sectors 

1990  1991  1992  1993  1994  1995 Total 

1990  1991  1992  1993  1994  1995 Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

0 

2.5 

0 

15 

0 

0 

0 

0 

0 

18 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

26 

0 

0 

7.2 

15 

0 

0 

0 

0 

Other 
Totaf 

0 
35.5 

0 
48.2 

0 

0 

14 

0 

0 

0 

0 

0 

0 

9 

0 

5.5 

0 

0 

0 

0 

28.5 

0 
0 
2 

0 

2.9 

0 
2 

9.2 

4.4 

0 

0 

2.4 

4.4 

0 

0 

0 

6.5 

24 

15 

2.9 

0 

31 

9.2 

4.4 

34.2 

15 

10.9 

4.4 

0 

0 

20 
47.3" 

20 
177.5 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslav îa 

Multi-country piogrammes 

0 

0 

0 

0 

0 

14 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Other 
Total 

13.4 

"27.4" 

Integrated regional measures 

1990  1991  1992  1993  1994  1995 Total 

Albania 

Bulgaria 

Czech Republic 

Czechoslovakia 

Estonia 

GDR 

Hungary 

Latvia 

Lithuania 

Poland 

Romania 

Slovakia 

Slovenia 

Former Yugoslavia 

Multi-country programmes 

Other 
Total 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

10 

0 

0 

0 

0 

0 

0 

0 

4.3 

0 

4.3 

6.5 

0 

T6.5 

8.5 

8.5 

0 

0 

0 

0 

0 

5 

0 

0 

0 

0 

0 

0 

0 

0 

0 

15 

0 

0 

0 

0 

1.5 

1.5 

0 

0 

0 

32 
47 

0 

0 

24.8 

32 
81.8 

0 

0 

0 

4.4 

0 

0 

20 

30 

0 

1.5 

8 

0 

0 

0 

0 

0 

9 

0 

4 

13.5 

9 

0 

20 

0 

6.7 

0 

0 

10.5 

1.5 

0 

1 

16 

22.5 

27 

27 

5 

7.5 

0 

0 

0 

0 

4.5 

1 

0 

0 

5 

0 

0 

0 

0 

0 

0 

0 

0 

3 

22 

0 

0 

0 

1.5 
10 
56.5 

7 

0 

3 

0 

0 

0 

2 

0 

0 

0 

0 

0.6 

7.6 

0 

0 

11.4 

1.5 

II 

50 

21 

14 

7 

34 

32.5 

30 

69 

10.6 

21.8 

0 

1.5 

54.9 
38.6 
135.2  180.9 

43.5 

55.5 

67.4  227.8 
543 
87.6 

4.3 

Phare financial performance 

Fig. 1 - Funds committed, contracted and paid 
1990-1995 (in ECU million) 

"3"  o 

1995  saw  Phare  continuing  to  improve  its  financial 
performance.  Phare  has  reached  a  situation  where  the 
contracting  in  a  given  year  is  at  the  same  level  as  the 
commitments  in that year. 

It  is  hoped  that  further  efforts  to  be  taken  in  1996  to 
to  decentralise  Phare 
and 
streamline  procedures 
effectively  will  enable  these  levels  of  contracting  to  be 
sustained and increased. 

The  financial  performance  of  the  Phare  Programme  is 
indicated by the levels of funds  committed, contracted and 
paid and the relationship between these three over time. 

1990 

1991 

1992 

1993 

1994 

1995 

•  commitments •  contracts  payments 

Fig. 2 - Cumulative funds committed, contracted and 
paid 1990-1995 (in ECU million) 

The total amount of funds  committed, contracted  and paid 
for  each  of  the years  1990 -  1995 are  shown  in  Figure  1. 
The  cumulative  funds  committed,  contracted  and  paid 
over the same period are shown in Figure 2. 

Committed funds 

1995  saw  the  Phare  Programme  maintaining  the  high 
percentage  of  the  Phare  budget  actually  committed.  As 
with previous years, this was close to  100 per cent at 99.4 
per cent of the  1995 budget. 

44 

1992 

I commitments •  contracts  payments 

Contracted funds 

Phare's  increase  in  the  amount  of  funds  contracted 
continued  during  1995 with the largest contracted  amount 
(ECU  1,142.9 million)  of  any  year  since  the  Programme 
began. 

The  improvement  in  contracting  can  be  attributed  to  the 
following  three factors 

The  budget  year  to  which  the  contracts  signed  in  each 
calendar year refer can be seen in Figure 3. 

Fig. 3 - Contracts concluded by calendar year 
(in ECU million) 

the  distribution  of 

•  decentralisation  - implementation  structures  in  each  of 
the  partner  countries  are  now  in  place  and  the  efforts 
made  in  1994 to  standardise  procedures,  most  notably 
through 
the  Decentralised 
Implementation  System  procedures  manuals,  started to 
bear fruit  in  1995. Accordingly,  1995 was the first  year 
in  which  the  contracting  level  was  higher  among  the 
Programme  Management  Units 
in 
Brussels. 
improved  programme  quality 
in 
programme  design,  especially  in  1994,  led  to  a  faster 
execution  of  programmes  and  more  efficient  and 
effective  contracting. 
implementation  review - during the first  half of  1995, a 
systematic  and  detailed  follow  up  of  all  programmes 
was  undertaken.  Through  this  process,  programmes 
were reviewed, difficulties  in implementation  identified 
and  measures  designed  to  speed  up  implementation. 
This resulted in higher contracting levels. 

improvements 

(PMUs) 

than 

• 

• 

- 

Funding procedure 

As  part  of  the  Phare  Programme,  there  are  three  steps 
which 
the 
take 
to  the  point  where 
Budgetary  Authority 
projects are implemented and funds  disbursed. 

the  annual  budget  approved  by 

through 

Phare  has  a  financial  management  procedure  which 
matches this process. 

Commitment  -  Each  year  a  Phare  budget  is  agreed, 
indicating  the funds  which the Commission  is prepared 
to  commit  through  the  Phare  Programme  in  each 
country.  Country  operational  programmes  are  then 
designed  and  financing  proposals  prepared.  Once these 
financing  proposals  have  been  given  a  favourable 
opinion  by  the  Phare  Management  Committee  and 
funds 
decided  by 
associated  with  these  proposals  are  said  to  have  been 
'committed'.  Phare  must  commit  its  entire  annual 
budget within the year to which that budget applies. 

the  Commission, 

the  relevant 

^

I M 5

_3 

1990  budget 

1991  budget 

1992 budget 

1993  budget 

1994  budget 

1995  budget 

98.4% 

99.0% 

81.1% 

59.6% 

46.6% 

21.1% 

% contracted as of 31.12.95 

contracted in  1990 •  contracted in 1991 
•  contracted in  1992 •  contracted in 1993 
•  contracted in  1994 •  contracted in 1995 
•  not yet contracted 

Contracting  -  Once  funds  have  been  committed, 
tenders  are  issued  so  that  the  activities  outlined  in  the 
operational  programmes  can  be  put  into  practice.  As 
soon as a tender has been  successfully  completed  and a 
contract signed, the relevant funds  are said to have been 
'contracted'.  Contracting  is  a  key  measure  of  the 
implementation  of  the  Programme,  as  it  is  via  the 
contracts  that  Phare  funding 
is  unlocked  and  real 
implementation  on the ground can start. 

Payment  -  Payment  is  the  final  stage  of  the  funding 
process. It takes place over the period  of each  contract, 
reflecting  the  completion  of  each  component  of  the 
project.  As  projects  may  take  several  years,  payments 
are often  spread over the same time. It is for this reason 
that  payments  always  lag  behind  the  committed  and 
contracted amounts. 

45 

Fig. 4 - Payments in each budget year 
(in ECU million) 

Paid funds 

Payments  in  1995  were  85.3  per  cent  of  the  budgeted 
amount. This was lower than the  1994 level of 99 per cent 
mainly because of two specific  factors 

• 

• 

the  suspension  of  ECU  20  million  of  macro-economic 
aid to Albania, and 
the  difficulties 
in 
operation. 

implementing  cross-border  co 

Nonetheless, payments  increased  in  1995 by  5.5  per  cent 
over  1994. 

the  high 

Given 
level  of  contracting 
previously,  in  1994  it  is  anticipated 
payments will rise as these contracts run their course. 

in  1995  and, 
that  levels  of 

The budget year to which the payments  in each year relate 
can be seen in Figure 4. 

1990 budget 
98.3% 

1991  budget 
92.3% 

1992 budget 
77.9% 

1993 budget 
54.5% 

1994 budget 
30.4% 

1995  budget 
5,5% 

% paid as of 31.12.95 

paid in  1990  paid in  1991 •  paid in 1992 
•  paid in  1993 •  paid in  1994 •  paid in 1995 
•  not yet paid 

Cumulative contracts and payments as a 
percentage of cumulative commitments. 

Fig. 5 - Cumulative contracts and payments 
1990-1995 (%) 

These  are  important  indicators.  In  the  first  place,  they 
demonstrate  the  extent  to  which  Phare  has  cut  down  the 
time  taken  between  committing  funds  and  issuing  the 
necessary  contracts.  This  is  therefore  a  measure  of  the 
efficiency 
they 
demonstrate  the  time  taken  between  issuing  the  contracts 
and paying  the funds.  This is a both  a measure of  Phare's 
efficiency  and  an  indicator  as  to the efficiency  of  project 
management on the ground. 

of  Phare  procedures.  Secondly, 

It  is  therefore  encouraging  that  both  ratios  continued  to 
improve  in  1995. Cumulative contracts  as a percentage of 
cumulative  commitments  grew  10 per  cent  from  1994 to 
62  per  cent,  and  cumulative  payments  also  showed  a 
respectable  increase of  3 per cent to 53%. The ratios over 
time are shown in Figure 5. 

1990  1991  1992  1993  1994  1995 

31.0 

36.0 

44.0 

48.0 

52.0 

62.0 

35.0 

36.0 

39.0 

43.0 

50.0 

53.0 

Cumulative  contracts 
as percentage of 
cumulative 
commitments 

Cumulative  payments 

as percentage of 
cumulative 
commitments 

46 

Major programmes launched in 1995 

Agriculture 

Education and health 

Agricultural and rural development programme 
Poland 

ECU  13 million 

Higher education reform  programme 
Romania 

ECU  8 million 

Agricultural  and rural development programme 
Hungary 

ECU  10 million 

Programme for social safety  and health 
Estonia 

ECU  2.9 million 

Agricultural and rural development programme 
Romania 

ECU  10 million 

Agricultural  programme 
Bulgaria 

ECU  5 million 

Agriculture and land registration  programme 
Slovakia 

ECU  2.6 million 

Strategic measures for achieving 
reform  targets (SMART) 
Poland 

ECU  7 million 

Vocational education and training, 
education reform, science and technology 
Bulgaria 

ECU  9 million 

Cross-border cooperation 

Cross-border cooperation  programme 
Baltic Sea region 

ECU  14 million 

Cross-border cooperation  programme 
Czech  Republic 

with Austria 

ECU  6 million 

Cross-border cooperation  programme 
Hungary 

with Austria 

ECU  7 million 

Cross-border cooperation  programme 
Slovenia 

with Austria 

ECU  3 million 

Cross-border cooperation  programme 
Slovakia 

with Austria 

ECU  4 million 

Cross-border cooperation  programme 
Poland 

with Germany 

ECU  49 million 

Cross-border cooperation  programme 
Czech  Republic 

with Germany 

ECU  25 million 

Cross-border cooperation  programme 
Albania 

with Greece 

ECU  9 million 

Cross-border cooperation  programme 
Bulgaria 

with Greece 

ECU  23 million 

Cross-border cooperation  programme 
Albania 

with Italy 

ECU  9 million 

Cross-border cooperation  programme 
Slovenia 

with Italy 

ECU  3 million 

Energy 

Conventional energy programme 
Bulgaria 

Conventional energy programme 
Romania 

ECU  5 million 

ECU  21 million 

Energy infrastructure  development programme 
Slovenia 

ECU  4.4 million 

Energy programme 
Hungary 

Environment 

Environment programme 
Hungary 

Environment programme 
Poland 

Water management programme 
Hungary 

Infrastructure 

ECU  4 million 

ECU  7 million 

ECU  18 million 

ECU  5 million 

Infrastructure  development programme 
Estonia 

ECU  5 million 

Infrastructure  development programme 
Latvia 

ECU  6.2  million 

47 

Infrastructure  development programme 
Lithuania 

ECU  9.5 million 

Privatisation  programme 
Hungary 

ECU  5 million 

Infrastructure  development  programme 
Slovakia 

ECU  5.2 million 

Regional development and steel reconversion  programme 
ECU  5 million 
Hungary 

Infrastructure  investment programme 
Czech Republic 

ECU  60 million 

Regional development programme (STRUDER II) 
Poland 

ECU  20 million 

Programme for technical  support 
for the telecommunications  and posts sector 
Romania 

ECU  12 million 

Public investment financing  programme 
Lithuania 

ECU  5.5 million 

Transit facilitation  programme 
Hungary 

ECU  8 million 

Transport and communications  programme 
Hungary 

ECU  17 million 

Transport infrastructure  programme 
Poland 

ECU  22 million 

Transport programme 
Albania 

Transport programme 
Bulgaria 

Transport programme 
Romania 

ECU  16 million 

ECU  20 million 

ECU  5 million 

Private sector development and enterprise 
restructuring 

Banking sector programme 
Latvia 

ECU  2.5 million 

Economic development programme 
Lithuania 

ECU  9.6 million 

Economic reform  programme 
Estonia 

Economic reform  programme 
Latvia 

Economic reform  programme 
Slovenia 

ECU  6.1  million 

ECU  8.3 million 

ECU  7.6 million 

Foreign investment promotion  programme 
Czech Republic 

ECU 

1  million 

Private sector development  programme 
Slovakia 

ECU  18.7 million 

Small and medium-sized enterprise programme 
Poland 

ECU  3 million 

Tourism programme 
Hungary 

ECU 

1 million 

Tourism programme (TOURIN III) 
Poland 

ECU  6 million 

Public institution and administrative reform 

European integration  programme 
Estonia 

European integration programme 
Latvia 

European integration  programme 
Lithuania 

European  integration programme 
Slovakia 

ECU  2.8 million 

ECU  1.3 million 

ECU  5.5 million 

ECU 5.55  million 

Framework programme for the approximation 
of national law to EU law 
Bulgaria 

ECU  2 million 

Human resources development programme 
Czech Republic 

ECU  2 million 

Human resources development programme 
Lithuania 

ECU  4.4 million 

Institutional and human resources development 
programme 
Slovenia 

ECU  4.4 million 

Institutional and human resources development 
programme 
Latvia 

ECU  9.2 million 

Programme for human resources development 
Estonia 

ECU  2.7 million 

Public administration reform  programme 
Hungary 

ECU  3 million 

48 

ECU  2 million 

Programme to facilitate  transit 

ECU  30 million 

Programme for institutional  integration 
with the EU 
Czech  Republic 

Safe society programme 
Poland 

ECU  5 million 

ECU  2 million 

Social development 

Social assistance programme 
Hungary 

Social protection, labour markets 
and health programme 
Slovakia 

ECU  4.4 million 

Multi-country programmes 

Community  action for cooperation in 
the field  of economics  (ACE) 

ECU  10 million 

Cooperation  in distance  education 

ECU  10 million 

Cooperation  in higher education 

ECU  3.5 million 

Democracy  programme 

ECU  10 million 

Environment project  preparation 
facility 

ECU  15 million 

Facility to support approximation of 
environmental  legislation 

ECU  10 million 

Intellectual property  programme 

ECU  2 million 

Multilateral  cross-border 
programme 

Partnership  programme 

ECU  12.95 million 

ECU  10 million 

Programme for the energy  sector 

ECU  9 million 

Programme for the environment 

ECU  20 million 

Programme for  telecommunications 
and posts 

ECU  7 million 

Programme to promote 
the establishment and development 
of joint ventures 
(JOP extension) 

Quality  assurance  programme 

Regional  industrial property 
programme 

ECU  50 million 

ECU  30 million 

ECU  4 million 

Social protection reform  programme 
for the Europe Agreement  countries 

ECU  10 million 

Trade development  programme 

ECU  5 million 

Trans-European  cooperation  scheme 
for higher education  (TEMPUS II) 

Transport  programme 

ECU 98.1 million 

ECU  11.5 million 

Others 

Interregional  cooperation 
programme 

Know-how programme for 
preparation for integration into 
the internal  market 

Link  inter-European 
NGO programme  (LIEN) 

ECU  2 million 

General technical assistance  facility 
Albania 

ECU  7 million 

Local community development programme 
Albania 

ECU  8.5  million 

ECU  18.5 million 

Technical assistance  fund 
Czech  Republic 

ECU  3 million 

ECU  10 million 

49 

ISSN 0254-1475 • Com (96) 360 final • DOCUMENTS • EN • Catalogue number: CB-C0-96-363-EN-C 
ISBN 92-78-07160-9 • Office  for Official  Publications of the European Communities  L-2985 Luxembourg 

European Commission • Directorate General for External Relations: 
Europe and the New Independent States, Common Foreign and Security Policy, External Missions (DG IA) 
Information Unit - Phare 
Office Address  Montoyerstraat 34 Rue Montoyer  B-1000 Brussels 
Mailing Address  MO 34 3/80  Wetstraat 200 Rue de la Loi  B-1049 Brussels 
World Wide Web Address  http://europa.eu.int/en/comm/dgla/phare.html 

Tel  (+32-2) 299 16 00 / 299 14 44 / 299 15 55 
Fax  (+32-2) 299 17 77 
E-mail  phare.info@dgla.cec.be 

P/EN/08.96/02/02/11/B 

English