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

29.6.98

EN

Official  Journal  of  the  European  Communities

C 202/53

LITHUANIA:  ACCESSION  PARTNERSHIP

(98/C 202/06)

1.

INTRODUCTION

2. OBJECTIVES

the  European  Council 

In  the  opinion  which  it  submitted  to  the  Council  in  July
1997,  in  accordance  with  the  provisions  of  Article  O  of
the Treaty, the Commission provided its recommendation
regarding  Lithuania’s  application  for  membership  of  the
European  Union.  The  Commission  considers 
that
negotiations  for  accession  to  the  European  Union  should
be  opened  with  Lithuania  as  soon  as  it  has  made
the  conditions  of
sufficient  progress 
in  satisfying 
membership  defined  by 
in
Copenhagen.  This  recommendation  derives  from  the
analysis  contained 
the
Commission  is  of  the  view  that  Lithuania  (i)  presents
stable  institutions,  guarantees  the  rule  of  law,  human
rights  and  the  protection  of  minorities,  (ii)  has  made
in  the  creation  of  a  market
considerable  progress 
economy,  but  it  would  face  serious  difficulties  in  coping
with  competitive  pressure  and  market  forces  within  the
Union  in  the  medium  term,  and  (iii)  has  made  some
progress  in  transposing  and  implementing  the  acquis
relating particularly to the single market and should with
considerable  further  effort  become  able  to  participate
fully  in  the  single  market  in  the  medium  term.

the  opinion, 

in  which 

in 

The  Europe  Agreement  will  remain  the  basis  for  the
European  Union’s  relations  with  Lithuania.  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, 

its  meeting 

At 
in  Luxembourg 
in  December  1997
the  Accession
the  European  Council  decided 
that 
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  Lithuania  and  on  the  basis
of  the  principles,  priorities,  intermediate  objectives  and
conditions  which  have  been  decided  by  the  Council.

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  Lithuania’s
application  for  membership  of  the  European  Union,  the
financial  means  available  to  help  Lithuania  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  Lithuania,  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
that
meeting 
membership  requires:

the  Copenhagen  criteria  which  state 

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

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

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

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

4. PRIORITIES  AND  INTERMEDIATE  OBJECTIVES

The  Commission’s  opinions 
the  Council’s
examination  of  these  have  highlighted  the  extent  of  the

and 

C 202/54

EN

Official  Journal  of  the  European  Communities

29.6.98

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  Lithuania  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.

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

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

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

4.1. Short  term  (1998)

— Economic  reform:  establishment  of  medium-term
economic policy priorities and joint assessment within
the framework of the Europe Agreement; acceleration
of  large  scale  privatisation  and  progress  towards  the
restructuring  of  the  banking,  energy  and  agri-food
sectors;  enforcement  of 
for
enterprises.

financial  discipline 

— Reinforcement  of 

institutional  and  administrative
in  particular  major  efforts  on  public

capacity: 

administration  reform,  border  control,  customs,
taxation and finance as well as preparation of training
strategy for civil servants and the judiciary, veterinary
and  phytosanitary  administrations,  particularly  as
regards  facilities  at  external  borders,  institutional
strengthening in the area of environment, begin to set
up  structures  needed  for  regional  and  structural
policy.

— Internal  market:  including  further  alignment  in  the
areas  of  intellectual  and  industrial  property,  public
procurement,  financial  services,  phytosanitary  and
veterinary,  upgrading  of  independent  standardisation
and  conformity  assessment  structures.  Adoption  of  a
new competition law and establishment of transparent
State  aids  inventory.

— Justice  and  home  affairs:  in  particular  further  efforts
to  implement  measures  to  combat  corruption  and
organised  crime,  and  improve  border  management
and  conditions  in  facilities  for  refugee  reception.

— 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 

— Energy:  in  particular  establishing  a  comprehensive,
long-term,  energy  strategy  and  decommissioning  plan
for  the  nuclear  power  plant  Ignalina  according  to
commitments  entered  into  in  the  Nuclear  Safety
Account  Agreement.

4.2. Medium  term

— Economic  reforms:  consolidate 

the  privatisation
process  and  restructuring  of  the  banking,  energy  and
agri-food 
framework
(bankruptcy and competition legislation, simplification
of  business  regulations  including  licensing).

sectors  and  align 

legal 

— 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 Lithuania 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.

29.6.98

EN

Official  Journal  of  the  European  Communities

C 202/55

— Reinforcement  of 

improved  operation  of  the 

institutional  and  administrative
capacity:  development  of  anti-fraud  unit  and  State
audit  office  and  of  budget  and  financial  control
mechanisms; 
judicial
system;  training  for  the  judiciary  in  Community  law
and its application; reinforcement of justice and home
affairs  institutions  (ensuring  sufficient  and  properly
trained  personnel,  in  particular  police,  border  guards,
ministries  and  courts),  strengthening  of  the  nuclear
safety  authority, 
tax
administrations  to  ensure  readiness  to  apply  the
acquis  and 
food  control
the  reinforcement  of 
administration.

reform  of  customs  and 

public 

procurement 

including  alignment  of  capital
— Internal  market: 
liberalisation, 
legislation,
audiovisual  policies,  indirect  taxation  and  statistics,
further  alignment  and  effective  enforcement  of
competition  law,  in  particular  State  aid  control;
reinforcement  of  competition  authorities,  upgrading
of 
assessment
structures,  establishment  of  a  market  surveillance
system  and  alignment  of  horizontal 
technical
industrial  products,  promotion  of
legislation  on 
enterprise  development,  including  SMEs,  alignment
with  the  acquis  in  the  fields  of  telecommunications,
consumer  protection  and  the  internal  energy  market.

standardisation 

conformity 

and 

— Justice  and  home  affairs:  development  of  effective
border  management,  fight  against  organised  crime  (in
particular  money  laundering,  drugs  and  trafficking  in
human  beings)  and  corruption,  implementation  of
migration policy and asylum procedures, 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  alignment  with  the  agricultural
(including  veterinary  and  phytosanitary
acquis 
matters, 
in  particular  external  border  controls),
attention  to  environmental  aspects  of  agriculture  and
land  registration  and
biodiversity,  completion  of 
land  market.
establishment  of  a 
functioning 
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  energy
strategy  based  on  efficiency  and  diversification
including  respect  of  nuclear  safety  standards  and
realistic  nuclear  power  plant  closure  commitments
(NSA).

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

infrastructure,  notably 

labour  market  structures  and 

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

further  development  of 

enforcement  of 

— Environment: 

the 

planning 

including 

capacities, 

development 

of
monitoring  and  implementation  control  structures
and
continuous 
and 
implementation of approximation programmes related
to  individual  legal  acts.  A  particular  emphasis  should
be  given  to  drinking  water,  the  waste  sector  and  air
pollution  as  well  as  nuclear  safety.  Environmental
protection  requirements  and  the  need  for  sustainable
development  must  be  integrated  into  the  definition
and  implementation  of  national  sectoral  policies.

— Regional  policy  and  cohesion:  introduce  the  legal,
administrative  and  budgetary 
for  a
national policy to address regional disparities through
an  integrated  approach,  in  order  to  participate  in
European  Union 
after
membership.

structural  programmes 

framework 

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  145  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,  Lithuania  is  eligible  for  support  from  the
‘catch-up’  facility  envisaged  for  1998  to  finance  projects
to  privatisation/restructuring,  promotion  of
relating 
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
financing
and 
Lithuania, 

international 

the  EIB 

C 202/56

EN

Official  Journal  of  the  European  Communities

29.6.98

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  Lithuania  will  have  access  to  funding  from
multi-country  programmes  directly  related  to  the  acquis.

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

In  addition,  the  subsequent  allocation  of  financial
assistance  will  be  closely  tied  to  the  respect  by  the
Lithuanian 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
Lithuania  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 

— Investment  support  (around  70 %),  in  order  to  make
the  necessary  investments  possible  for  the  adaptation
the  Community
of  Lithuanian 

infrastructure 

to 

in 

covering 

particular 

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  and  technological  development  framework
programme;  (ii)  compliance  with  Community  norms,
in  particular  as  regards  environment,  agriculture,
industry,  occupational  safety  and  health,  transport
and  telecommunications;  (iii)  co-financing  of  large
scale  infrastructure (1)  and  (iv)  small  and  medium-
sized  enterprises  development (2).

5.2. Role  of  international  financial  institutions

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

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

6.

CONDITIONALITY

steps 

further 

Community  assistance  will  be  conditional  on  respect
by  Lithuania  of  its  commitments  under  the  Europe
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 

(1) Concerning  investment  projects  in  general,  Lithuania  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
investment  capital  available  to  small

the  shortage  of 
enterprises.

29.6.98

EN

Official  Journal  of  the  European  Communities

C 202/57

7.

IMPLEMENTATION  OF  PRE-ACCESSION
ASSISTANCE

The  provision  of  financial  assistance  to  Lithuania  will
depend  on  the  maturity  of  projects  proposed  by  the
Lithuanian  Government  for  inclusion  in  a  financing
memorandum.  Where  projects  need  to  be  tendered  the
Commission  will  only  finance  those  projects  which  are
ready  for  tendering  at  the  stage  of  the  signature  of  the
financing memorandum. In addition any previous/existing
commitments  in  the  same  sector  must  have  been  fully
contracted  or  be  on  track.  In  order  to  ensure  efficient
implementation,  projects  to  be  financed  must  not,  in
principle, fall below a threshold of ECU 2 to 3 million, in
particular  in  the  case  of  infrastructure  projects.  If  these
principles  lead  to  a  situation  where  Lithuania  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  Lithuania  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
the
the  general  accession  process  and 
between 
programming  of  the  Community  financial  assistance.

and 

institution 

promotion 

The Government of Lithuania 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 

In  cooperation  with  the  Government  of  Lithuania,
the  Commission  will  pursue  a  policy  of 
further
decentralisation  of  the  implementation  of  the  financial
assistance  where  certain  pre-conditions  are  met,  and  to
the  extent  permitted  by  the  European  Communities’
Financial  Regulation,  in  particular  Article  105(3).  This
will be done with the intention to establish, within limits
and  in  a  gradual  manner,  a  relationship  between  the
Commission and Lithuania 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  Lithuania, 
in
particular  in  the  field  of  investment.  The  Commission’s
decision on this matter will be taken following, inter alia,
examination  of  the  Lithuanian  national  procurement  law
for respect of and compatibility with the basic provisions
the  European  Community’s  public  procurement
of 
rules  and 
including  equal
participation in tenders and the provisions of Article 118.
Any  decision  on  the  use  of  national  procurement  rules
will  be  taken  by  the  Commission  on  a  case-by-case  basis
and  will  be  confirmed 
individual  financing
memoranda.

its  Financial  Regulation, 

in  the 

individual 

jointly  with 
in 

the  Commission 
the 

implementation  of  assistance  under 

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

8. MONITORING

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

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

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

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

thereafter.  These 

reviews  will 

C 202/58

EN

Official  Journal  of  the  European  Communities

29.6.98

ANNEX

Lithuania 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  should  be  sustained  to  improve  the  operation  of  the  judicial  system,  to  intensify  the  fight  against
corruption  and  to  improve  prison  conditions.

2.

Economic criteria

The liberalisation process should be completed by removing remaining price controls and State monopolies
of  a  commercial  character,  and  progressing  in  areas  of  relative  price  adjustment,  large  scale  privatisation,
bankruptcy  proceedings  as  well  as  the  enforcement  of  financial  discipline  for  enterprises.  Substantial
enterprise restructuring is still required. Energy sector reform needs to be completed, agriculture modernised
and  the  banking  sector  consolidated.  In  terms  of  adapting  the  legal  framework,  further  effort  is  needed  in
areas of bankruptcy and competition legislation, property registers and simplification of business regulations
including licensing requirements.

Particular  attention  should  be  given  to  completing  the  government’s  banking  sector  restructuring  plan
(mainly  by  means  of  restructuring,  privatisation  and  recapitalisation  of  State-owned  banks  and  liquidation
of  insolvent  banks)  completing  large-scale  privatisation  and  establishing  suitable  conditions  for  investment
in  fields  such  as  the  environment,  energy,  transport  and  research  and  development.

Economic policy needs to stimulate proper training of the labour force with a view to increasing flexibility
and  orientation  towards  a  market  economy.

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 efforts are needed to address the weakness of public administration,
particularly  in  order  to  strengthen  the  capacity  of  various  structures  necessary  to  implement  and  enforce
internal  market  legislation,  including  stepping  up  border  controls  at  European  Union  external  frontiers.
Efforts must be made to accelerate approximation in the field of public procurement, particularly as regards
the  telecommunication,  transport,  energy  and  water  sectors.  Adoption  and  implementation  of  intellectual
and  industrial  property  legislation  to  bring  it  in  line  with  the  acquis  must  be  strengthened.  As  regards
accounting  and  auditing,  efforts  are  needed  to  align  professional  requirements  for  auditors  with  the  eighth
Directive, while the shortage of qualified accountants and auditors has to be addressed. Improvement must
be  made  in  protection  of  personal  data,  notably  through  the  establishment  of  an  independent  monitoring
authority  and  by  bringing  secondary  legislation  into  line  with  the  framework  Directive.

F r e e   m o v e m e n t   o f   g o o d s   —   adoption  of  the  framework  legislation  which  will  enable  Lithuania  to
take  up  the  basic  principles  of  the  European  Union  system  needs  to  be  completed.  Independent
standardisation  and  conformity  assessment  infrastructures  need  to  be  set  up  and  further  alignment  with
sectoral legislation made both on new approach Directives and in the foodstuffs, pharmaceuticals, chemicals
and  motor  vehicles  sectors.  A  market  surveillance  mechanism  will  have  to  be  set  up  to  become  fully
operational  in  the  longer  term,  once  the  technical  legislation  is  fully  harmonised.

F r e e   m o v e m e n t   o f   c a p i t a l   —  further efforts are required to complete the liberalisation of Lithuania’s
capital  markets,  for  instance,  residual  restrictions  concerning  cross-border  acquisitions  for  investment
companies  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   —   further  efforts  need  to  be  made  to  ensure  full  free  establishment  in
banking,  securities  and  insurance  through  alignment  and  implementation  of  legislation.

29.6.98

EN

Official  Journal  of  the  European  Communities

C 202/59

F r e e   m o v e m e n t   o f   p e r s o n s   —   as  regards  mutual  recognition  of  professional  qualifications,  efforts
must  be  made  to  ensure  adoption  of  the  necessary  legislative  and  enforcement  measures.  Further  efforts
must  be  made  to  ensure  the  necessary  legislative  and  enforcement  measures  as  regards  the  coordination  of
social  security  schemes.

Competition

Proceedings  for  the  adoption  of  a  new  competition  act  which  should  further  align  the  competition  rules
with  European  Community  competition  rules  must  be  finalised.  In  the  field  of  State  aid,  full  transparency
should be ensured through the establishment and continuous updating of a comprehensive aid inventory in
accordance with Community practice. A review of all existing aid measures should be undertaken and those
measures  which  are  not  compatible  with  the  Europe  Agreement  must  be  modified  or  abolished.  A  credible
enforcement  of  the  Decree  on  State  aid  monitoring  is  necessary  through  the  introduction  of  the  necessary
procedures  and  practical  means  to  monitor  all  new  aid  measures  on  a  systematic  basis.  Certain  exclusive
rights  and  State  monopolies  which  are  not  compatible  with  the  Community  acquis  must  be  progressively
adjusted  and/or  abolished.

3.2.

Innovation

Education,  training  and  youth

Institutional reforms and curricula development should support education in those professional areas which
contribute  directly  to  accession.  Efforts  are  needed  in  developing  European  Studies  curricula,  new  courses
on  regulated  professions,  application  of  modern  technologies  and  establishment  of  quality  assurance
systems.

Research  and  technological  development

Improvements  must  be  made  aiming  at  reorganising  institutions  and  replacement  of  central  funding  by  a
competitive  merit-driven  funding  system.

Telecommunications

Substantially strengthened legislation is needed to underpin the existing liberalised market, to promote both
competition  and  investment  and  to  comply  with  European  Union  Directives.  At  the  same  time  the  acquis
now  requires  governments  to  ensure  that  a  modern  telephone  service  is  available  everywhere  at  an
affordable  price.  Meeting  this  obligation  will  require  significant  investment  in  the  system.

Audiovisual

Existing legislation will have to be amended to include provisions for the freedom of reception, jurisdiction,
the promotion of European works, advertising and sponsorship rules, protection of minors and the right of
reply.

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.

Taxation

Substantial  efforts  are  needed  to  align  VAT  legislation  with  the  Community.  Particular  efforts  need  to  be
made  as  regards  the  scope  of  the  exemptions  from  VAT  and  the  VAT  refund  scheme  applicable  to  foreign
taxable  persons.

The  significant  discrepancies  between  the  Lithuanian  excise  regime  and  the  European  Union  requirements
need to be addressed. In the field of excise duties particular attention should be given to the setting up of a
warehousing  system  for  the  movement  of  goods  under  duty  suspension  arrangements.  Tax  structures  and
the level of excise rates need to be aligned on the Community model. The registration of traders for excise
purposes  must  be  reviewed.

Statistics

Efforts must be made in the field of official statistics, in particular with regard to business statistics, capital
and  financial  accounts  and  regional  data.

C 202/60

EN

Official  Journal  of  the  European  Communities

29.6.98

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 European Community industrial policy,
relating  both  to  the  operation  of  markets  (product  specification  and  market  access,  trade  policy,  State  aids
and  competition  policy)  and  measures  related  to  industry’s  capacity  to  adapt  to  change  (stable
macroeconomic  environment,  technology,  training,  etc.).

Agriculture

Substantial efforts must be made to ensure the alignment of legislation with European Union requirements.
With  regard  to  veterinary  and  phytosanitary  requirements,  special  attention  must  be  paid  to  the  upgrading
of establishments and the inspection and control arrangements for protecting the European Union’s external
borders.  Administrative  structures  must  be  strengthened  to  ensure  the  implementation  and  enforcement  of
the policy instruments of the common agricultural policy. The agri-food sector must be further restructured
to  ensure  its  competitive  capacity.  In  order  to  develop  a  functioning  land  market  and  mortgage  credit
facilities,  it  is  important  to  complete  the  land  property  registration  process.

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  fishery  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

Current  efforts  need  to  be  intensified  in  particular  with  regard  to  legislative  alignment,  adjusting  State
monopolies  in  line  with  internal  energy  market  Directives  in  combination  with  European  Community
competition  law,  including  import  and  export  issues,  access  to  networks,  energy  pricing.  Special  attention
must  be  paid  to  energy  efficiency,  environmental  norms,  and  to  emergency  preparedness  including  the
building  up  of  mandatory  oil  stocks.

The capability of the nuclear regulatory authority (VATESI) to implement Western style licensing at Ignalina
Nuclear Power Plant (INPP) needs to be strongly supported. Efforts are needed to prepare a comprehensive,
long-term energy strategy and to include provisions for spent fuel handling and decommissioning of INPP in
the electricity tariff structure. A realistic plant decommissioning and closure plan for INPP, including longer
term  solutions  for  waste,  needs  to  be  prepared.

Public  awareness  with  regard  to  the  environment  and  a  nuclear  safety  ‘culture’  must  be  stimulated.

Transport

Efforts  must  be  made  to  improve  safety  (notably  in  maritime  transport),  to  harmonise  environmental
standards for air pollution and noise and to implement the acquis for road transport of goods and railways.
Steps  must  be  taken  to  lay  the  foundations  for  the  future  extension  of  the  trans-European  networks.
Inspection  bodies,  in  particular  for  transport  safety,  should  be  strengthened.  At  a  national  level  there  is  a
need  to  develop  specific  strategies  for  transport  infrastructure  development  and  financing.

Small  and  medium-sized  enterprises

Steps  must  be  taken  to  further  refine  and  increase  the  coherence  of  small  and  medium-sized  enterprise
(SME)  policy,  to  simplify  legislation  and  the  administrative  environment  to  make  it  more  SME-friendly,  to
strengthen  support  infrastructures  and  to  develop  SMEs’  access  to  financing.

3.5. Economic  and  social  cohesion

Employment  and  social  affairs

Substantial  efforts  are  needed  to  align  legislation  with  European  Union  requirements  in  such  areas  as
occupational  health  and  safety,  labour  law  and  equal  opportunities.  Social  reform  must  be  pursued  while
the  public  health  system  needs  to  be  significantly  improved.  An  active  social  dialogue  must  be  further

29.6.98

EN

Official  Journal  of  the  European  Communities

C 202/61

developed.  The  administrative  structures  must  be  strengthened  to  ensure  effective  implementation  of
legislation.

Regional  policy  and  cohesion

As part of a general framework for an integrated development strategy, a differentiated development policy
addressing  regional  disparities  must  be  introduced  and  the  administrative  and  budgetary  structures  to
manage  integrated  regional  development  programmes  under  European  Community  structural  policies  after
membership  must  be  established.

3.6. Quality  of  life  and  environment

Environment

Steps  must  be  taken  to  ensure  the  full  transposition  of  the  environmental  acquis  as  well  as  substantial
progress  in  effective  compliance.  Particular  efforts  must  be  made  to  achieve  full  European  Union
compatibility  of  the  waste,  water  and  nature  legislation  and  to  ensure  the  transposition  of  the  framework
Directives  dealing  with  air,  waste,  water  and  the  Integrated  Pollution  Prevention  and  Control  Directive.
Investments must be increased, in particular as regards large combustion plants, the water sector, industry,
urban  air  pollution,  solid  and  hazardous  waste  management  and  management  of  municipal  waste.  The
recently  adopted  nuclear  framework  Act,  must  be  complemented  by  adopting  legislation  on  radiation
protection and radioactive waste management and emergency planning. A considerable effort must be made
to  develop  adequate  implementation  and  enforcement  structures.

Consumer  protection

Legislation  must  be  aligned  in  important  areas  such  as  general  products  safety,  sales  away  from  business
premises, distance selling, package travel, timeshare property, unfair terms of consumer contracts, consumer
credit  and  indication  of  prices.  A  strong  and  independent  consumer  movement,  sustained  by  public
authorities,  will  need  to  be  developed.

3.7.

Justice  and  home  affairs  (JHA)

Steps need to be taken to combat illegal immigration. Significant progress is needed on border management
and control, including completion of demarcation. The fight against organised crime, transnational financial
crime and institutional corruption must be intensified in such fields as drug trafficking, trafficking in human
beings, money laundering, car theft, security services and fraud. Steps must be taken to ensure ratification of
the  international  conventions  in  the  JHA  field.  Particular  attention  must  be  paid  to  ensuring  the  necessary
financial and human resources for institutional development and to promote police and judicial cooperation
with  European  Union  counterparts.

3.8. External  policies

Trade  and  international  economic  relations

Preparations  must  be  made  for  applying,  on  accession,  the  Community’s  various  cooperation  and
preferential  agreements,  multilateral  and  bilateral  commercial  policy  commitments  and  its  autonomous
commercial  defence  instruments.

Development

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

Customs

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

C 202/62

EN

Official  Journal  of  the  European  Communities

29.6.98

3.9. Financial  questions

Considerable  preparations  are  needed  to  establish  the  necessary  financial  management  and  control
mechanisms  to  ensure  satisfactory  implementation  of  Community  policies.  Special  attention  must  be  given
to  the  development  of  efficient  internal  control  mechanisms  and  institutions,  particularly  regarding  the
number of qualified auditors and the accounting procedures. The existing accounting system as well as the
customs  system  should  be  overhauled  to  ensure  the  efficient  administration  of  the  ‘own  resources’  system.
Considerable  improvements  are  needed  to  ensure  the  reliability  of  the  national  accounts  and  official
statistics  with  a  view  to  the  accurate  calculation  of  the  GNP  resource  as  well  as  for  drawing  up  the  VAT
own  resource  base.

4.

Administrative  capacity  to  apply  the  acquis

To  ensure  the  effective  implementation  and  enforcement  of  the  acquis,  major  reform  efforts  must  be  made
to strengthen administrative structures in virtually all European Union relevant sectors. Special efforts must
be  made  to  strengthen  the  authorities  ensuring  the  correct  application  of  Community  requirements  for  the
Single  Market  and  the  customs  authorities.  The  regulatory  and  monitoring  bodies  must  be  strengthened  in
such  fields  as  competition,  securities,  insurance,  banks,  money  laundering,  public  procurement,  agriculture,
financial control, consumer protection, transport safety as well as standards and certification, veterinary and
phytosanitary  inspections,  food  control  and  the  State  labour  inspectorate.

Increased  efforts  must  be  made  for  the  upgrading  of  staff  qualifications  on  European  Union-related  issues
and efficient public management in general. This must include the elaboration of a comprehensive national
training  strategy  for  civil  servants.

The  judicial  system  must  be  strengthened  in  terms  of  resources  and  relevant  expertise.  A  comprehensive
upgrading  of  judges,  in  particular  in  their  capacity  to  apply  Community  law,  must  be  carried  out.