Information from the Commission - Bulgaria: Accession Partnership
Date: 1998-06-29
Institutions: European Commission
Subjects: Bulgaria, EU aid, EU programme, accession to the European Union, cooperation policy, financial aid

29.6.98

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C 202/1

I

(Information)

ACCESSION  PARTNERSHIPS

BULGARIA:  ACCESSION  PARTNERSHIP

(98/C 202/01)

1.

INTRODUCTION

recommended 

the  Commission 

In  the  opinion  which  it  submitted  to  the  Council  in  July
1997,  in  accordance  with  the  provisions  of  Article  O  of
the  Treaty, 
that
negotiations 
for  accession  should  be  opened  with
Bulgaria  as  soon  as  it  has  made  sufficient  progress  in
satisfying  the  conditions  for  membership  defined  by  the
European  Council  in  Copenhagen.  This  recommendation
derives  from  the  analysis  contained  in  the  opinion,  in
which  the  Commission  is  of  the  view  that  (i)  Bulgaria  is
on  the  way  to  satisfying  the  political  criteria  with  regard
to  the  existence  of  stable  institutions,  guarantees  for  the
rule  of 
law,  human  rights  and  the  protection  of
minorities,  (ii)  Bulgaria’s  progress  in  the  creation  of  a
market economy has been limited and the country would
consequently  not  be  able  to  cope  with  competitive
pressure  and  market  forces  within  the  Union  in  the
medium  term,  and  that  (iii)  despite  the  progress  that  has
been  made,  it  is  uncertain  whether  Bulgaria  will  be  in  a
position  to  apply  the  acquis,  in  the  medium  term  and,
moreover,  substantial  administrative  reform  will  be
indispensable  if  Bulgaria  is  to  apply  and  enforce  it
effectively.

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

for  membership, 

in  a  single 

to  prepare 

framework, 

that 

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

2. OBJECTIVES

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

3. PRINCIPLES

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

the  Copenhagen  criteria  which  state 

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

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

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

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

4. PRIORITIES  AND  INTERMEDIATE  OBJECTIVES

and 

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

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

sufficient;  it  will  also  be  necessary  to  ensure  that  it  is
actually  applied  to  the  same  standards  as  those  which
apply  within  the  Union.  In  all  of  the  areas  listed  below
there  is  a  need  for  credible  and  effective  implementation
and  enforcement  of  the  acquis.

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

4.1. Short  term  (1998)

— Economic  reform:  establishment  of  medium-term
economic policy priorities and joint assessment within
the  framework  of  the  Europe  Agreement;  pursuit  of
the  programme 
the  government,
launched  by 
including transparent privatisation of State enterprises
and  banks  and  restructuring  measures  in  industry,
financial  sector  and  agriculture  and  measures  to
encourage  increased  foreign  direct  investment.

— Reinforcement  of 

institutional  and  administrative
capacity:  adoption  of  the  draft  civil  service  law  and
progress  in  public  administration  reform  as  well  as
institutional  strengthening  in  the  areas  of  internal
financial  control  capacity,  environment,  customs
policy,  reinforcement  of  phytosanitary  and  veterinary
administrations,  particularly  as  regards  facilities  at
external borders, begin to set up structures needed for
regional  and  structural  policy.

— Internal  market:  further  alignment  including  in  the
areas  of  intellectual  and  industrial  property  rights
(strengthening of enforcement of protection), financial
services,  taxation,  the  adoption  of  the  necessary
legislative framework for State aid monitoring and the
establishment  of  a  first  State  aid  inventory,  the
adoption  of  a  new  competition  law.

— Justice  and  home  affairs:  concrete  steps  to  combat
corruption  and  organised  crime  and  improve  border
management.

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

establishment 

detailed 

The  Accession  Partnership  indicates  that  Bulgaria  will
have  to  address  all  issues  identified  in  the  opinion.  The
annex  provides  a 
these.
summary 
Incorporation of the acquis into legislation is not in itself

checklist  of 

— Energy:  in  particular  establishing  a  comprehensive,
long-term,  energy  strategy  and  respect  of  nuclear
safety standards and realistic closure commitments for
certain  units  as  entered  into  in  the  Nuclear  Safety
Account  Agreement.

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4.2. Medium  term

— Political criteria: further efforts to integrate the Roma
individual

and  consolidation  of  protection  of 
liberties.

— Economic  reform:  complete  the  privatisation  process.

Strengthen  market  economy  institutions.

— Economic  policy: 

the 

regular 

review  of 

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

— Reinforcement  of 

for 

system, 

training 

judiciary 

law  and 

the 
its  application; 

institutional  and  administrative
capacity: completion  of  reform  at  all  levels,  including
training  for  civil  servants;  improved  operation  of  the
in
judicial 
Community 
further
development  of  the  National  Audit  Office  and
internal  financial  control  structures;  establishment  of
anti-trust 
aid  monitoring  bodies;
improvements  in  accounting,  auditing  and  statistics
and 
regulatory  authority;
reinforcement  of  justice  and  home  affairs  institutions
(ensuring sufficient and properly trained personnel, in
particular  police,  border  guards,  ministries  and
courts), reform of customs and tax administrations to
ensure  readiness 
the
reinforcement  of  food  control  administration.

strengthening  nuclear 

the  acquis  and 

to  apply 

State 

and 

upgrading 

— Internal  market:  including  alignment  of  competition
policy,  State  aids,  customs,  taxation,  audiovisual
legislation  (including
policies,  public  procurement 
transparency), 
standardisation,
of 
conformity assessment structures and establishment of
a  market  surveillance  system  and  harmonisation  of
technical  legislation  on  industrial  standards.  Further
alignment  of 
effective
enforcement  of  competition  laws,  reinforcement  of
competition  authorities,  promotion  of  enterprise
development,  including  SMEs,  alignment  with  the
acquis  in  the  fields  of  telecommunications,  consumer
protection  and  the  internal  energy  market.

competition 

and 

law 

(in particular money laundering, drugs and trafficking
in  human  beings)  and  corruption,  and  to  align  visa
policy  with  that  of  the  European  Union  and  to
complete  alignment  to 
international  conventions,
notably  in  view  of  the  Schengen  acquis.

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

structural  and 

implement 

— Fisheries:  development  of  capacity  to  implement  and

enforce  the  common  fisheries  policy.

— Energy:  implementation  of  a  comprehensive  policy
based  on  efficiency  and  diversification 
including
respect  of  Bulgaria’s  commitments  on  the  phased
closure  of  certain  units  of  Kozloduy  nuclear  power
nuclear  waste
plant, 
management plan.

decommissioning 

and 

— Transport: further efforts on alignment with acquis in
particular  in  maritime,  air  and  road  freight  transport
(safety  rules)  and  to  provide  necessary  investment  for
transport 
extension  of
trans-European  networks.

infrastructure,  notably 

as 

policies 

preparation 

employment 

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

in  particular  early  adoption  of 

— Justice  and  home  affairs:  development  of  effective
border  management  and  frontier  control  systems,
implementation  of  migration  policy  and  asylum
procedures as well as the fight against organised crime

— Environment:  development  of  monitoring  and
implementation  control  structures  and  capacities,
continuous 
of
approximation programmes related to individual legal
acts.  A  particular  emphasis  should  be  given  to  the

implementation 

planning 

and 

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waste  and  water  sectors  and  air  pollution,  including
institutional  requirements.  Environmental  protection
requirements 
sustainable
development  must  be  integrated  into  the  definition
and  implementation  of  national  sectoral  policies.

need 

and 

the 

for 

— Regional  policy  and  cohesion:  introduction  of  legal
basis  and  development  of  administrative  structures
and  budgetary  procedures.  Strengthen 
financial
instruments  and  control  mechanisms  in  order  to
participate  in  European  Union  structural  programmes
after  membership.

5. MAIN  INSTRUMENTS  FOR  COMMUNITY

TECHNICAL  AND  FINANCIAL  ASSISTANCE

5.1. Programming  of  financial  resources

The  Phare  allocation  for  the  period  1995  to  1997  has
totalled  ECU  212  million.  Subject  to  the  approval  of  the
Phare  budget  for  the  remaining  period,  the  Commission
will  confirm  the  allocations  for  1998  and  1999.  In
addition,  Bulgaria 
is  eligible  for  support  from  the
‘catch-up’  facility  envisaged  for  1998  to  finance  projects
relating 
to  privatisation/restructuring,  promotion  of
foreign direct investment and the fight against corruption.
Financial  proposals  will  be  submitted  to  the  Phare
Management  Committee  as  provided  for  in  Council
Regulation  (EEC)  No  3906/89.  Joint  financing  by  the
applicant  countries  will  be  systematically  required  for  all
investment  projects.  The  Commission  will  work  with
Bulgaria, the EIB and international financing institutions,
in  particular  the  EBRD  and  World  Bank,  with  a  view  to
facilitating  the  co-financing  of  projects  relating  to
pre-accession priorities. Financial assistance from the year
2000  onwards  will  comprise  aid  for  agriculture  and  a
structural instrument which will give priority to measures
similar  to  the  Cohesion  Fund.  In  addition  Bulgaria  will
have  access  to  funding  from  multi-country  programmes
directly  related  to  the  acquis.

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

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

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

institutions  and  administrations 

in 

covering 

particular 

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

infrastructure (1) 

technological 

development 

small 

and 

(iv) 

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

this  Accession  Partnership  and 

in 

5.2. Role  of  international  financial  institutions

Cooperation  between  Bulgaria  and  the  international
financial  institutions  will  receive  a  new  impetus  and  a
new  focus  through  the  Accession  Partnership.  The  grant
resources made available under the Accession Partnership

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

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

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will  serve  as  seed  money  and  a  catalyst  for  larger
amounts  of  development  finance  from  the  IFIs.  This
process  will  be  developed  by  the  Commission  in  liaison
with  the  candidate  countries,  the  EIB  and  the  IFIs,  in
particular the EBRD and the World Bank with a view to
facilitating  the  co-financing  of  projects  relating  to
pre-accession  priorities.

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

6. CONDITIONALITY

steps 

further 

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

satisfying 

towards 

7.

IMPLEMENTATION  OF  PRE-ACCESSION  ASSISTANCE

inclusion 

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

The Government of Bulgaria is invited to put in place an
implementation  structure  which  ensures  coherence  and
complementarity  between  all  types  of  European  Union
financial  assistance  and  national  resources.  A  national

coordinator  will  be  responsible  for  ensuring  a  close  link
between 
the
the  general  accession  process  and 
programming  of  the  Community  financial  assistance.

and 

institution 

promotion 

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

implementation 

in  order 

to 

a 

of 

policy 

pursue 

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

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

Financial  Regulation, 

following, 

including 

in  the 

its 

jointly  with 
in 

The  monitoring  of  programme  implementation  shall  be
carried  out 
through
procedures  established 
financing
memoranda.  In  order  to  ensure  effective  monitoring  of
implementation 
Phare
assistance 
programme,  each  Phare  programme  will  incorporate
quantified physical and financial objectives which will be

the  Commission 
the 

individual 

under 

the 

of 

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specified  in  the  financing  memorandum.  In  order  to
gauge their effectiveness all operations financed under the
Phare programme will be subject to ex-post evaluation to
appraise  their  impact  with  respect  to  their  objectives.

progress  and  problems  in  meeting  its  priorities  and
intermediate  objectives  as  well  as  more  specific  issues
referred  to  it  from  the  subcommittees.  The  Association
Committee  will  report  to  the  Association  Council  on  the
implementation  of  the  Accession  Partnership.

8. MONITORING

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

The  relevant  sections  of  the  Accession  Partnership  will
be  discussed 
in  the  appropriate  subcommittee.  The
Association Committee will discuss overall developments,

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

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

thereafter.  These 

reviews  will 

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ANNEX

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

1.

Political criteria

Efforts are needed to reinforce democratic institutions by practices more in keeping with the rule of law at
all  levels  of  the  State  apparatus.  Considerable  efforts  must  be  made  to  combat  corruption,  improve
administration  of  justice  and  provide  fuller  protection  for  individual  freedoms.  Democratic  control  of  the
police  and  secret  service  need  to  be  assured.  Increased  efforts  to  fully  integrate  minorities  (Roma)  are
needed.

2.

Economic  criteria

A  sustained  and  consistent  effort  is  needed  to  consolidate  the  economic  situation  and  economic  reforms,
including  full  implementation  of  the  Government’s  economic  and  structural  reform  programme  which  will
address many of the challenges faced. Privatisation of State enterprises, including banks needs to be pursued.
Measures  need  to  be  taken  to  restructure  industry,  the  financial  sector  and  agriculture,  and  to  complete
price  liberalisation,  encourage  increased  foreign  direct  investment  and  establish  a  comprehensive  energy
policy.  Completion  and  strengthening  of  market  economy  institutions  is  necessary.  In  agriculture,  priority
must be given to the land restitution process and removal of bureaucratic obstacles to the functioning of the
land market. Agricultural wholesale markets and agro-food enterprises need to be privatised and opened to
competition.

3.

Ability  to  assume  the  obligations  of  membership

3.1.

Internal  market  without  frontiers

The  four  freedoms

G e n e r a l   f r a m e w o r k   —   substantial  further  efforts  are  required  in  the  area  of  public  procurement,
enforcement of intellectual property rights and personal data protection in order to bring Bulgaria fully into
line  with  EC  legislation  and  standards.  Further  efforts  are  needed  to  implement  company  law,  particularly
to ensure the judiciary has sufficient knowledge and experience on company and commercial law issues. As
regards  accounting  and  auditing,  significant  efforts  are  needed  to  ensure  the  full  application  of  legislation.

F r e e   m o v e m e n t   o f   g o o d s   —  the framework legislation which will enable Bulgaria to take up the basic
principles  of  the  European  Union  system  needs  to  be  adopted.  This  will  enhance  the  shift  from  mandatory
to voluntary standardisation. Then the standardisation and conformity assessment infrastructures (including
the separation of regulatory, standardisation and product certification functions) need to be reinforced and
the alignment with new approach Directives accelerated. Technical legislation on chemicals, motor vehicles,
foodstuffs  and  pharmaceuticals  will  also  have  to  be  completed.  Once  the  sectoral  legislation  is  fully
harmonised,  a  market  surveillance  mechanism  will  have  to  be  set  up  to  become  fully  operational  in  the
longer  term.

F r e e   m o v e m e n t s   o f   c a p i t a l   —  as further economic stabilisation is achieved, liberalisation of outward
capital  movements  will  have  to  be  enhanced.  Restrictions  concerning  acquisition  of  real  estate  and  land  by
non-residents  must  be  removed.

F r e e   m o v e m e n t   o f   s e r v i c e s   —   progress  on  financial  services  needs  to  be  sustained  and  to  follow
closely  the  structural  reform  programme.  On  banking  laws,  further  alignment  with  Stage  I  measures,  and

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new  legislation  for  Stage  II  measures,  including  provisions  for  bank  deposit  guarantee  schemes  and  money
laundering,  are  necessary.  Further  steps  need  to  be  taken  to  fully  liberalise  the  insurance  market.  In  the
restructuring  of  the  financial  sector,  attention  must  be  paid  to  transparency  and  strengthening  of  the
supervisory  structure.

F r e e   m o v e m e n t   o f   p e r s o n s   —  further efforts are needed to establish legal provisions determining the
rights  of  entry  and  residence  enjoyed  by  a  worker’s  family  and  the  equal  treatment  of  European  Union
workers in general. Significant efforts are needed to enhance cooperation in the field of mutual recognition
of  diplomas  and  professional  qualifications  with  Member  States  as  well  as  enforcement  of  the  respective
public bodies. Further efforts must be made to ensure the necessary legislative and enforcement measures as
regards  the  coordination  of  social  security  schemes.

Competition

Competition  law  must  be  made  fully  compatible  with  European  Community  competition  laws.  Structural
reforms  are  required  for  the  effective  implementation  of  the  legislation,  in  particular  by  enhancing  the
administrative  powers  of  the  Committee  for  the  Protection  of  Competition.  In  the  field  of  State  aid,  a
credible control system should be established. In particular, full transparency should be created through the
establishment and updating of a comprehensive State aid inventory in accordance with Community practice.
Moreover,  the  necessary  legislation  must  be  created.  The  State  aid  monitoring  authority  should  receive
sufficient  powers  to  review  existing  aid  and  monitor  new  aid  and  it  should  have  sufficient  and  qualified
staff. Exclusive rights and State monopolies which are not compatible with the Community acquis must be
progressively  adjusted  and/or  abolished.

3.2.

Innovation

Information  society

Further progress is needed on economic liberalisation in order to create more favourable conditions for the
development  of  an  information  society.

Education,  training  and  youth

Structural, financial and curricular reform initiatives need to be continued. Specific attention must be given
to  further  reform  of  the  financing  of  education  and  training,  and  to  efforts  for  upgrading  knowledge  and
skills  among  teachers  as  well  as  to  investments  in  education  infrastructure.  A  special  effort  is  needed
through  training  to  combat  the  social  exclusion  of  young  persons  and  of  the  newly  unemployed.  Social
dialogue  on  education  and  training  requires  strengthening.

Research  and  development

Greater  efforts  are  needed  if  Bulgarian  research  and  technological  development  is  to  become  efficient  and
competitive  at  European  level.

Telecommunications

The adoption of a telecommunications law is essential for compliance with European Community legislation
and  for  the  creation  of  an  independent  regulatory  authority.  At  the  same  time,  the  acquis  now  requires
governments  to  ensure  that  a  modern  telephone  service  is  available  everywhere  at  an  affordable  price.
Meeting  this  obligation  will  require  significant  investment  in  the  system.

Audiovisual

Legislation  needs  to  be  aligned  fully  with  European  Community  requirements,  with  regard  to  the  scope  of
the  legislation  (i.e.  covering  all  kinds  of  broadcaster  and  all  modes  of  transmission),  jurisdiction,  the
promotion  of  European  and  independent  production,  advertising  and  protection  of  minors.

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3.3. Economic  and  fiscal  affairs

Economic  and  monetary  union

Macroeconomic  policy  should  seek  to  keep  inflation  and  interest  rates  low  and  ensure  confidence  in  the
economy.  The  restructuring  of  the  financial  sector  must  be  continued.

Taxation

Substantial  adjustments  need  to  be  made  to  bring  VAT  legislation  into  line  with  the  requirements  of  the
Community  acquis  in  particular  with  regard  to  the  scope  of  exemptions  and  the  need  to  allow  foreign
persons to register for VAT in Bulgaria. In the field of excise duties particular attention should be given to
the  setting  up  of  a  warehousing  system  for  the  movement  of  goods  under  duty  suspension  arrangements.
Tax  structures  and  the  level  of  excise  rates  need  to  be  aligned  on  the  Community  model.

Statistics

Efforts must be made to improve the process of statistics collection to ensure the reliability, punctuality, and
dissemination of official statistics. Improvements are needed in sectors such as external trade, transport and
regional  statistics,  financial  accounts  and  coverage  of  the  business  register.  Internationally  comparable
classifications  must  be  introduced.

3.4. Sectoral  policies

Industry

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

Agriculture

Substantial  changes  to  government  policies  and  to  the  physical  and  managerial  structures  of  farming  and
agro-industries  are  needed  to  meet  the  conditions  for  accession  and  to  enable  this  sector  to  meet
competition  from  established  European  Union  enterprises.  Considerable  development  or  strengthening  of
administrative structures is needed to align with common agricultural policy organisations and mechanisms.
Priorities  include  the  establishment  of  a  functioning  land  market,  rural  banking  networks  and  State  or
private  farm  advisory  services.  Particular  efforts  must  be  made  to  build  institutional  capabilities  and
strengthen  enforcement  of  health  and  diseasae  controls  at  borders  as  well  as  internally.

Fisheries

The  fisheries  administration  must  be  strengthened  to  ensure  the  effective  implementation  of  the  common
fisheries  policy,  in  particular  as  regards  the  conservation  and  the  management  of  resources,  the
implementation  of  a  monitoring  and  control  system,  the  management  of  the  common  organisation  of  the
market in the fisheries and aquaculture sector, the implementation of a structural policy in the fisheries and
aquaculture  sector,  the  keeping  of  a  fishing  vessel  register,  the  collection  of  statistical  data  as  well  as  the
implementation  of  European  Union  fishery  policy  on  environmental  protection.

Energy

Efforts  need  to  be  stepped  up  considerably  in  particular  with  regard  to  development  of  a  comprehensive
policy  covering  legislative  and  structural  reforms,  reform  of  the  management  of  the  energy  sector,  energy
efficiency and related acquis, emergency preparedness (including building up oil stocks), interconnection and
investment,  internal  energy  market  in  combination  with  competition  and  State  aids.  Particular  effort  needs
to  be  dedicated  to  the  upgrading  of  units  5  to  6  of  Kozloduy  NPP.  This  is  particularly  urgent  given

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Bulgaria’s  commitments  in  the  framework  of  the  NSA  agreement  on  the  phased  closure  of  units  1  to  4  at
the  Kozloduy  nuclear  power  plant.  Long-term  solutions  for  nuclear  waste  need  to  be  found.  Continued
support  to  the  safety  authority  should  be  foreseen.

Transport

Efforts must be made to ensure rapid alignment of the necessary legislation and effective implementation in
the  maritime,  air  and  road  freight,  particularly  in  respect  of  safety  and  monitoring  (rail).  Resources  should
be made available as far as possible to lay the foundations for the future extended trans-European transport
network, and rapidly to compensate for the shortcomings in the road network. At a national level there is a
need  to  develop  specific  strategies  for  transport  infrastructure  development  and  financing.

Small  and  medium-sized  enterprises

Determined  efforts  are  required  to  stabilise  the  macroeconomic  environment,  simplify  the  legal  and
administrative environment, strengthen the support infrastructure created, improve the tax environment and
develop  access  to  finance  for  SMEs.

3.5. Economic  and  social  cohesion

Employment  and  social  affairs

Within  the  framework  of  the  government’s  structural  reform  policy,  modern  labour  market  policies  and
institutions  need  to  be  developed.  Major  efforts  are  needed  in  the  area  of  labour  law  and  occupational
health  and  safety,  both  at  the  level  of  legislation  and  the  structures  for  enforcement.  The  application  of
equal  opportunity  laws  between  women  and  men  must  be  ensured.  Viable  social  protection  mechanisms
(public  and  private  sector)  must  be  established.  Continued  efforts  are  required  to  ensure  that  adequate
measures  of  social  protection  are  developed.  Administrative  capacity  in  the  field  of  social  security  for
migrant  workers  needs  to  be  developed.  An  active,  autonomous  social  dialogue  must  be  developed.

Regional  policy  and  cohesion

Bulgaria  must  introduce  an  integrated  and  efficient  regional  policy.  It  should  develop  the  administrative
structures and budgetary procedures necessary to participate fully in European Union structural policy and
efficiently  channel  the  structural  funds  after  membership.

3.6. Quality  of  life  and  environment

Environment

Substantial  efforts  are  needed  to  increase  approximation  in  areas  including  air  and  water  quality,  waste
management,  chemical  substances,  radiation  protection  and  nature  protection.  Regulations  on
environmental  impact  assessment  need  to  be  further  developed.  Particular  attention  should  be  given  to  the
quick  transposition  of  framework  Directives  dealing  with  air,  waste,  water  and  the  Integrated  Pollution
Prevention Control Directive (IPPC), as well as the establishment of financing strategies for legislation in the
water,  air  and  waste  sectors.

Major  investments  will  be  needed  for  effective  implementation  of  Community  standards  in  most  areas,
particularly  in  water  quality,  urban  waste  and  in  the  modernisation  of  industry.  Considerable  efforts  are
necessary  to  build  adequate  institutional  capacity  to  adopt,  implement  and  enforce  EC  legislation.

Consumer  protection

The draft law on consumer protection needs to be adopted urgently and adjustments particularly concerning
abusive  clauses,  controls  and  penalties  on  product  safety  need  to  be  made,  in  order  to  comply  with
Community standards. Initiatives have to be taken in the field of package travel. A strong and independent
consumer  movement,  sustained  by  public  authorities,  will  need  to  be  developed.

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3.7.

Justice  and  home  affairs  (JHA)

Some  key  legislation  is  still  required.  There  is  a  need  for  officials  to  gain  practical  experience  of  working
with  European  Union  counterparts  and  institutions,  and  to  develop  more  effective  regional  cooperation
mechanisms  against  transnational  crime.  Reform  of  JHA  institutions  to  improve  their  efficiency  and
effectiveness  must  be  pursued  and  attention  should  be  paid  to  embedding  respect  for  the  rule  of  law.
Structural and staffing deficiencies, and institutional corruption must be tackled. Further progress on border
management  and  the  fight  against  illegal  immigration  is  needed.  The  fight  against  all  fields  of  organised
crime  including  drug  trafficking  and  trafficking  in  women  and  other  serious  crimes  needs  to  be  intensified.
Current  asylum  procedures  need  to  be  further  aligned  with  international  standards,  especially  as  concerns
interviewing  and  expulsion  procedures.  Efforts  to  strengthen  the  visa  and  admission  systems  to  bring  them
into  line  with  European  Union  systems  must  be  pursued.  Judicial  cooperation  in  penal  and  civil  matters
needs  to  be  enhanced.  Ratification  of  international  conventions  in  the  field  of  JHA  have  to  be  completed
and  implementing  regulations  need  to  be  adopted.  A  comprehensive  data  protection  system  needs  to  be
developed.

3.8. External  policies

Trade  and  international  economic  relations

Remaining balance of payments restrictions need to be phased out prior to accession. Preparations must be
made  for  applying,  on  accession,  the  Community’s  various  cooperation  and  preferential  agreements,
multilateral  and  bilateral  commercial  policy  commitments  and  its  autonomous  commercial  defence
instruments.  At  the  same  time,  national  legislation  in  the  field  must  be  repealed.

Development

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

Customs

Customs legislation must be aligned on that of the European Community. Special attention should be given
ensuring clarity in the legal framework. The organisation and duties of staff must be aligned on those of a
modern  customs  administration.  Control  by  central  customs  authorities  over  customs  offices  at  the  border
must  be  reinforced.

A  major  effort  is  needed  to  ensure  the  probity  of  the  customs  services,  as  a  whole,  and  that  staff  of  the
customs  services  have  a  good  knowledge  of  the  legislation.  Efforts  must  be  intensified  to  introduce  the
computerised  systems  necessary  for  full  participation  in  the  customs  union  and  the  internal  market.
Particular  attention  must  be  paid  to  preparing  the  customs  administrations  for  the  operation  of  all  the
customs procedures with economic impact, the system of tariff suspensions and the administration of tariff
quotas and ceilings. Strategic planning will need to take account of the reinforcement of border posts along
the external frontier that Bulgaria will have with countries other than European Union Member States at the
time  of  accession.

3.9. Financial  questions

Major  efforts  are  needed  to  establish  and  strengthen  internal  financial  management  and  control  functions.
The  National  Audit  Office  has  to  be  strengthened.  Further  cooperation  with  the  Commission  is  needed  to
align  accounting  procedures  with  European  Union  requirements.  The  tax  and  custom  services  need
restructuring  in  order  to  ensure  the  effectiveness  of  tax  collection.  The  appropriate  implementation,
monitoring,  control  and  audit  structures  for  future  funding  of  agricultural  and  regional  policies  should  be
established.

4.

Administrative  capacity  to  apply  the  acquis

To  ensure  efficiency  and  effectiveness  in  implementation  and  enforcement  of  the  acquis,  Bulgaria  needs  to
develop its public administration infrastructure at all levels. A stable and professional civil service needs to
be created with a clear statute. Institutional coordination needs to be improved and legal and administrative
procedures  simplified.

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Major  efforts  are  needed  in  strengthening  institutions  and  practice  in  the  fields  of  customs,  free  movement
of  goods  and  services,  competition,  intellectual  property,  veterinary  and  phytosanitary  controls,  food
control,  transport  safety,  labour  inspection,  environment,  consumer  protection,  standards  and  conformity
assessment  and  audit  and  financial  control  mechanisms.

The  judicial  system  must  be  strengthened  in  order  to  assure  the  effective  application  of  the  acquis.
Institutional  capacity  for  border  management  and  controls,  judicial  and  police  cooperation  and  the  fight
against  organised  crime  and  corruption  needs  to  be  enhanced.