Report from the Commission - 2002 Report on phare and the pre-accession instruments for Cyprus, Malta and Turkey {SEC(2003) 910}
Date: 2003-08-11
Institutions: European Commission
Subjects: Cyprus, EU programme, Malta, Türkiye, accession to the European Union, pre-accession aid, report

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.08.2003
COM(2003) 497 final

REPORT FROM THE COMMISSION

2002 REPORT ON PHARE AND THE PRE-ACCESSION INSTRUMENTS FOR
CYPRUS, MALTA AND TURKEY

{SEC(2003) 910}

TABLE OF CONTENTS

Summary.......................................................................................................................3

Abbreviations................................................................................................................5

1.

The year in review ........................................................................................................6

1.1. Main evolutions of the Enlargement Process in 2002 ...........................................6

1.2. The Conclusions of the 2002 European Councils..................................................9

1.3. ISPA and SAPARD and the Co-ordination of the
Community Pre-accession assistance ...........................................................................9

1.4. Bridging towards Structural Funds ......................................................................10

2.

Implementation of the Programmes............................................................................12

2.1. General overview: implementing the Phare guidelines .......................................12

2.2. General overview: Financial and technical assistance.........................................13

2.3. National Programmes ..........................................................................................16

2.4. Phare Cross-Border Co-operation........................................................................18

2.5. Multi-beneficiary Programmes ............................................................................19

2.6. Participation in Community Programmes and Agencies.....................................33

2.7. Co-operation with the EIB and International Financial Institutions....................35

3.

Programme Management............................................................................................35

3.1. Moving towards extended decentralisation (EDIS).............................................35

3.2. Monitoring and Evaluation ..................................................................................36

4.

Financial Overview and performance.........................................................................40

2

SUMMARY

This  is  the  annual  report  by  the  European  Commission  to  the  European  Parliament,
the  Council  of  the  European  Union  and  the  European  Economic  and  Social
Committee,  assessing  the  progress  of  Phare.  Moreover,  for  the  first  time  this  report
covers also the pre-accession instruments for Cyprus, Malta and Turkey.1

The Phare Programme is one of three pre-accession instruments financed by the
European  Communities  to  assist  the  applicant  countries  of  central  Europe  in  their
preparations for joining the European Union. Originally created to assist Poland and
Hungary in 1989, today the Phare Programme encompasses the 10 candidate countries
of  central  and  eastern  Europe  -  Bulgaria,  the  Czech  Republic,  Estonia,  Hungary,
Latvia,  Lithuania,  Poland,  Romania,  Slovakia  and  Slovenia.  In  addition,  the  three
non-Phare  countries,  Cyprus,  Malta  and  Turkey,  receive  pre-accession  assistance
either directed towards  financing activities on priority operations in order to prepare
the  countries  for  accession  (Cyprus  and  Malta),  or  to  provide  an  accession-driven
approach to financial assistance (Turkey).

Between 2000-2002, Phare provided some € 5 billion in co-financing for Institution
Building support via Twinning and Technical Assistance, and for Investment Support.
The  objective  is  to  assist  the  candidate  countries  in  their  efforts  to  strengthen  their
public  administrations  and  institutions  to  function  effectively  inside  the  Union,  to
promote  convergence  with  the  European  Community’s  extensive  legislation  and
reduce  the  need  for  transition  periods,  as  well  as  to  promote  Economic  and  Social
Cohesion (ESC).

In 2002, total Phare commitments amounted to € 1,699 million. Programming was
based  on  the  Guidelines  for  Phare  which  were  further  revised  in  2002  in  order  to
accompany  changes  to  the  Cross  Border  Co-operation  (CBC)  Regulation,  to
accommodate  the  unique  approach  required  in  the  area  of  nuclear  safety  and  to
emphasise  the  transition  to  Extended  Decentralisation  Implementation  System
(EDIS).

Concerning  Cyprus,  Malta  and  Turkey,  pre-accession  assistance  programmes
amounted  to  a  total  of  €  168  million  in  2002.  As  regards  Malta  and  Cyprus,  this
funding  was  largely  dedicated  to  Institution  Building  aimed  at  preparing  the  two
countries for accession. In the case of Turkey, pre-accession financial assistance had
an accession-driven emphasis, as the procedures for programming and implementing
the  pre-accession  financial  assistance  programme  to  Turkey  now  mirror  those  of
Phare.

The  European  Commission  has  increasingly  transferred  responsibility  for  the
management  and  implementation  of  Phare  programmes  to  the  authorities  in  the

1

The  present  report  is  prepared  in  accordance  with  art.  10  of  Council  Regulation  (EEC)  No
3906/89 of 18 December 1989 (“Phare Regulation”), art. 11 of Council Regulation (EC) No
555/2000 of 13 March 2000 on the implementation of operations in the framework of the pre-
accession strategy for the Republic of Cyprus and the Republic of Malta and art. 11 of Council
Regulation  (EC)  No  2500/2001  of  17  December  2001  concerning  pre-accession  financial
assistance for Turkey.

3

                                                
candidate  countries,  to  prepare  them  for  the  decentralised  approach  to  programme
management established under the Structural Funds. 2002 saw an increased emphasis
on  National  Programmes  designed  to  address  specific  weaknesses  identified  in  the
annual Regular Reports.

A technical document which is presented as an annex to this Report contains sections
on  the  programming  and  implementation  of  the  Phare  Programme  in  the  ten
beneficiary  countries,  and  on  the  pre-accession  instruments  for  Cyprus,  Malta  and
Turkey.

4

CARDS

CBC

CEECs

CFSP

DIS

EAGGF

EBRD

EC

EDIS

EFTA

EIB

ABBREVIATIONS

Community  Assistance  to  Reconstruction,  Development  and
Stabilisation in the Balkans

Cross Border Co-operation

Central and Eastern European Countries

Common Foreign and Security Policy

Decentralised Implementation System

European Agricultural Guidance and Guarantee Fund

European Bank for Reconstruction and Development

European Commission

Extended Decentralisation Implementation System

European Free Trade Association

European Investment Bank

EMCDDA

European Monitoring Centre for Drugs and Drug Addiction

EMU

ERDF

ESC

EU

GDP

HLWG

IFIs

ISPA

MEDA

NAC

NDPs

NGO

Economic and Monetary Union

European Regional Development Fund

Economic and Social Cohesion

European Union

Gross Domestic Product

High Level Working Group

International Financial Institutions

Instrument for Structural Policies for Pre-Accession

Mediterranean Co-operation Investment Programme

National Aid Co-ordinator

National Development Plans

Non-Governmental Organisation

SAPARD

Special  Accession  Programme  for  Agriculture  and  Rural
Development

SF

SIGMA

SMEs

TACIS

TAIEX

Structural Funds

Support  for  Improvement  in  Governance  and  Management  in
Central and Eastern European Countries

Small – Medium Enterprises

Technical Assistance for the Community of Independent States

Technical Assistance Information Exchange Office

5

1. 

THE YEAR IN REVIEW

1.1.  Main evolutions of the Enlargement Process in 2002

Regular reports

On  9  October  2002,  under  the  title  “Towards  the  Enlarged  Union”,  the
Commission  adopted  the  2002  enlargement  package,  consisting  of  the
Strategy  Paper  and  Report  of  the  European  Commission  on  the  progress
towards  accession  by  each  of  the  candidate  countries,  and  the  individual
Regular Reports for each of the thirteen candidate countries.

In  its  Regular  Reports,  the  Commission  assesses  the  progress  made  by  the
candidate  countries  in  fulfilling  the  accession  criteria.  On  the  basis  of  a
detailed  analysis,  the  Commission  concluded  that  all  candidate  countries
have  made  considerable  progress  over  the  last  year  in  implementing  the
accession criteria.

In  the  Commission's  assessment,  Cyprus,  the  Czech  Republic,  Estonia,
Hungary,  Latvia,  Lithuania,  Malta,  Poland,  the  Slovak  Republic  and
Slovenia  fulfil  the  political  criteria.  Bearing  in  mind  the  progress  achieved
by those countries and their track record in implementing their commitments
and  taking  account  of  their  preparatory  work  in  progress,  the  Commission
considered that these countries will  have fulfilled the economic criteria  and
those  relating  to  the  Community  acquis  and  will  be  ready  for  EU
membership  from  the  beginning  of  2004.  It  therefore  recommended
concluding the accession negotiations with those countries by the end of the
year, with the aim of signing the Accession Treaty in the spring of 2003.

With  Bulgaria  and  Romania  having  set  2007  as  their  indicative  date  for
accession,  the  Commission  will  strongly  support  the  two  countries  in
achieving that objective, which will continue to be guided by the principles
of  differentiation  and  own  merits.  The  Commission  indicated  that  it  would
propose,  on  the  basis  of  the  analysis  of  the  2002  Regular  Reports,  detailed
roadmaps  for  these  two  countries,  including  increased  pre-accession
assistance.

As  regards  Turkey,  the  Commission  stressed  the  significant  headway
already  made,  for  example,  vis-à-vis  constitutional  reform,  the  far-reaching
reforms of August 2002 and the reform of the judiciary, but considered that
substantial efforts were still necessary. In this context, and with a view to the
next  stage  of  Turkey's  candidacy,  the  Commission  recommended  that  the
European  Union  enhances  its  support  for  the  country's  pre-accession
preparations and makes significant funds available for that purpose.

The  Commission  further  indicated  that  it  would  continue  monitoring  the
implementation  of  necessary  reforms  up  until  accession,  as  well  as  all
commitments in the field of the Community acquis by each of the acceding
countries. The Commission proposed including specific safeguard clauses in

6

the  internal  market  and  justice  and  home  affairs  fields  in  the  Accession
Treaty, in addition to a general economic safeguard clause.

On  9  October,  President  Prodi  and  Commissioner  Verheugen  presented  the
enlargement  package  to  the  European  Parliament.  On  22  October,  the
Council expressed broad agreement with the Commission’s conclusions and
recommendations,  and  on  24-25  October,  the  European  Council  meeting  in
Brussels endorsed the Commission’s findings and recommendations.

Accession negotiations

Ministerial conferences:

Several  series  of  accession  conferences  were  held  during  the  year.  The
ministerial conference  on  28 June,  organised under the  Spanish Presidency,
was attended by all candidate countries with the exception of Bulgaria. The
first  ministerial  conference  on  1  October  under  the  Danish  Presidency  was
preceded  by  two  preparatory  conferences  at  deputies  level  on  28  June  and
29/30  July.  Further  deputies  conferences  were  convened  with  some  of  the
candidates  (on  18  October, 24  October  and  8  November),  and  a  ministerial
conference with Bulgaria and Romania was held on 18 November.

At  the  latter  date,  the  Chapters  remaining  open  with  the  ten  countries
included  in  the  first  wave  of  accession  in  2004  concerned  agriculture,
financial  and  budgetary  provisions,  other  issues  (including  matters  such  as
the creation of a Transition Facility for Institution Building, implementation
and  management  of  pre-accession  funds  in  the  new  Member  States,
safeguards,  contributions  of  the  new  Member  States  to  the  capital  of  EIB,
etc.), institutions for three candidates (Czech Republic, Hungary and Latvia)
and five left-over Chapters (Competition for Hungary and Poland, Transport
for the Czech Republic, Taxation and Customs Union for Malta).

The Commission participated in four bilateral informal conferences with the
candidates  organised  by  the  Presidency  at  deputies  level  (in  October  and
November) and in one at ministerial level (in December). As a result of the
preparatory  work  carried  out,  all  the  above  Chapters  were  closed  at  the
European  Council  at  Copenhagen  on  12-13  December  following  the
agreement reached on budgetary expenditures and on other arrangements on
specific  pending  issues.  For  Bulgaria  and  Romania,  a  total  of  23  and  15
chapters were provisionally closed at the end of the Danish Presidency.

Agriculture:

In  line  with  the  roadmap  endorsed  at  the  Laeken  European  Council,  all
remaining  negotiating  issues  (direct  payments,  production  quotas,  rural
development,  etc.)  arising  under  this  Chapter  were  addressed  by  the  EU
during  the  first  half  of  the  year.  To  that  end,  the  Commission  adopted  an
Issues Paper on 30 January 2002, to offer the Member States a basis for the
discussion of the issues concerned, with a view to formulating new common
positions.  Rejecting  in  particular  the  idea  of  a  two-speed  common
agricultural policy in the long-term, the Commission underlined the need to

7

strive to restructure agriculture and the agri-food industries in the candidate
countries,  and  to  improve  competitiveness  in  these  areas.  On  13  June,  the
European Parliament welcomed the Commission's document. The accession
negotiations were concluded in December 2002 at the Copenhagen Summit.
An agreement on Chapter 7, including agreement on direct payments and on
reference  quantities,  was  reached.  This  agreement  is  reflected  in  the
Accession Treaty.

Financial framework for the accession negotiations:

On 30 January,  from the start of the Spanish Presidency, in  order to  enable
the  Council  to  assess  within  a  common  framework  the  financial  issues
connected  with  the  negotiations  in  a  number  of  sensitive  areas,  the
Commission  presented  a  communication  on  the  expenditure  linked  with
enlargement over the period 2004-2006. The financial framework envisaged
provisions  for  commitment  appropriations  totalling  €  40.16  billion,  and
payment appropriations totalling € 28.019 billion, reflecting the adjustments
to the scenario agreed at the Berlin European Council in 1999 under Agenda
2000. The areas covered were agriculture, structural measures and the budget
allocation  for  internal  policies  and  funds  specific  to  the  settlement  of  the
Cypriot  question.  A  provisional  compensation 
regime  was  also
recommended so that no new Member State finds itself in a significantly less
favourable budgetary situation than in the year preceding enlargement.

This  approach  by  the  Commission  was  endorsed  by  the  Committee  of  the
Regions  in  an  own-initiative  opinion  of  16  May.  Parliament  also  gave  its
opinion  on  this  communication  in  a  resolution  of  13  June.  The  Brussels
European  Council  on  24-25  October  highlighted  certain  elements  of  this
financial framework, namely direct payments, the overall level of allocations
for  structural  measures,  own  resources  and  possible  budget  imbalances.  It
also  stated  that  the  Union's  expenditure  should  continue  to  respect  the
imperatives  of  budgetary  discipline  and  effectiveness  and  stressed  that  the
enlarged  Union  should  have  sufficient  resources  to  ensure  the  smooth
functioning of its policies to the benefit of all its citizens. Further to what had
been  agreed  at  the  Brussels  European  Council  and  subsequent  adaptations
resulting from the negotiations, the Copenhagen European Council Heads of
State  and  Government  made  a  final  financial  offer,  which  was  accepted  by
the  candidate  countries.  The  offer  put  the  total  cost  of  the  enlargement
package  at  €  40.8  billion,  very  near  the  figure  initially  proposed  by  the
Commission (see above).

Updating the accession partnerships:

On  28  January,  following  the  political  agreement  it  reached  in  December
2001,  the  Council  formally  adopted  a  series  of  decisions  updating  the
principles,  priorities,  intermediate  objectives  and  terms  of  the  accession
partnerships with all the candidate countries other than Turkey.

Administrative and judicial capacity:

8

On the basis of its Strategy Paper “Making a success of enlargement”, and in
line  with  the  Laeken  European  Council  conclusions,  in  early  2002  the
Commission launched an Action Plan for each of the countries participating
in the negotiations to strengthen their  administrative and judicial capacities.
The  point  of  departure  for  these  Action  Plans  was  the  revised  Accession
Partnerships. On 5 June, the Commission reported on progress in this regard.
This  initiative  was  welcomed  by  the  Brussels  European  Council,  and  the
Justice  and  Home  Affairs  Ministers  of  the  EU  Member  States  met  their
counterparts from the candidate countries.

1.2. 

The Conclusions of the 2002 European Councils

The  Seville  European  Council  on  21-22  June  welcomed  the  decisive
breakthroughs made in the negotiations during the first half of the  year  and
considered that the process was entering its final phase.

On 24-25 October, the European Council in Brussels endorsed the findings
and recommendations of the Commission’s enlargement package adopted on
9  October.  In  Copenhagen  on  28  October,  the  leaders  of  the  candidate
countries  met  Mr  Anders  Fogh  Rasmussen,  Danish  Prime  Minister  and
President  of  the  European  Council,  Mr  Javier  Solana,  High  Representative
for  the  CFSP,  Mr  Romano  Prodi,  President  of  the  European  Commission,
and  Mr  Günter  Verheugen,  Member  of  the  Commission  responsible  for
Enlargement. At the meeting, the EU representatives presented the details of
the financial framework for accession and the negotiating positions adopted
at the Brussels European Council.

As  recommended  by  the  Commission,  on  12-13  December,  the  European
Council at Copenhagen concluded the accession negotiations with Cyprus,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the
Slovak Republic and Slovenia. The Copenhagen European Council endorsed
the  Commission’s  communication  on  roadmaps  for  Bulgaria  and  Romania,
including the proposals for a significant increase in pre-accession assistance.
It also confirmed that, depending on further progress in complying with the
membership  criteria,  the  objective  is  to  welcome  Bulgaria  and  Romania  as
members  of  the  European  Union  in  2007.  With  regard  to  Turkey,  the
European  Council  at  Copenhagen  indicated  that  if,  on  the  basis  of  a  report
and  a  recommendation  from  the  Commission,  the  European  Council  in
December 2004 decides that Turkey fulfils the Copenhagen political criteria,
the  European  Union  will  open  accession  negotiations  with  Turkey  without
delay.

1.3. 

ISPA  and  SAPARD  and  the  Co-ordination  of  the  Community  Pre-
accession assistance

Together with Phare2, Agenda 2000 proposed structural aid for the applicant
countries  (under  the  ISPA  instrument),  as  well  as  aid  for  agricultural

2

Phare funding finances projects in all policy sectors except in the field of Development.

9

                                                
development  (under  the  SAPARD  instrument).  Both  ISPA  and  SAPARD
came into effect on 1 January 2000, and are budgeted until the end of 2006.

ISPA  (Instrument  for  Structural  Policies  for  Pre-Accession)  is  directed
mainly towards aligning the applicant countries on Community infrastructure
standards, and finances major environmental and transport infrastructure.

ISPA is managed on a similar basis as Phare, has a current annual budget of
€  1.040  million  and  comes  under  the  responsibility  of  the  Regional  Policy
Directorate General.

Together with the 80 projects decided in 2002, the Commission has approved
a  total  of  249  ISPA  projects  for  the  period  2000  to  2002,  amounting  to  €
8.753 million, of which the EU finances € 5.648 million (64.5 %), with the
remainder  being  co-financed  by  the  beneficiary  states  and  international
financial  institutions.  As  in  2001,  the  amounts  committed  in  2002  were
divided fairly equally between the environmental and transport sectors.

SAPARD  (Special  Accession  Programme  for  Agriculture  and  Rural
Development) aims to help candidate countries deal with the problems of the
structural adjustment in their agricultural sectors and rural areas, as well as in
the  implementation  of  the  acquis  communautaire  concerning  the  CAP
(Common Agricultural Policy) and related legislation. In short:

SAPARD  finances  agricultural  and  rural  development  projects  through  a
Structural  Funds-type  programme,  and  is  managed  on  a  fully  decentralised
basis at the level of candidate countries with no ex-ante involvement by the
Commission

SAPARD has an annual budget of € 520 million (at 1999 prices)

SAPARD comes under the responsibility of DG Agriculture.

With  5  countries  having  started  their  operations  in  2001,  the  SAPARD
the
Programme  now  operates 
“Commission decisions on conferral of management of aid on implementing
agencies”  in  2002  to  Slovakia,  the  Czech  Republic,  Poland,  Romania  and
Hungary.

in  10  candidate  countries  following 

The  Co-ordination  Committee  of  the  Commission  at  Directors  level
convened  three  times  in  2002.  A  General  Assistance  Document  was
presented  at  the  Phare  Management  Committee  on  29  April  2002.  The
document  gives  an  overview  of  the  three  pre-accession  instruments,  their
priorities  and  implementation  in  2002.  A  separate  annual  report  on  co-
ordination of pre-accession assistance will provide more detailed information
on co-ordination between Phare, ISPA and SAPARD.

1.4. 

Bridging towards Structural Funds

‘Phare  2000  Review  –
The  Communication 
Strengthening  Preparations  for  Membership’,  still  provides  the  strategic

from  Mr  Verheugen 

10

focus for Phare programming, emphasising, inter alia, the need to bridge to
Structural Funds through Economic and Social Cohesion support.

In  2002,  Phare  continued  to  deepen  its  support  for  ESC  as  a  means  of
moving  towards  the  programmatic  approach  of  the  Structural  Funds.  ESC
investment, based on the preliminary National Development Plans (pNDPs)
is being used to pilot-test the type of activities which will be financed from
Structural Funds on accession.

In 2002, ESC investments were implemented more and more in the format of
grant schemes (similar to the ‘measures’ in Structural Funds terminology) in
the  field  of  Human  Resource  Development,  productive  investments  and
business  related  infrastructure.  The  wider  use  of  schemes  constitutes  an
important step towards Structural Funds approaches.

including  Twinning 

In  this  framework,  Phare  is  increasingly  providing  assistance  (through
Twinning  – 
short-term  Technical
Assistance), to help the countries to put in place the necessary administrative
and  budgetary  structures  for 
the  Structural  Funds.  These  concern
programming  (finalising  a  Development  Plan  and  preparing  a  Single
Programming Document or a Community Support Framework), preparing  a
project pipeline, management, evaluation and control.

‘Light’-and 

In  2002,  Commission  services  (DGs  Regional  Policy  and  Enlargement)
pursued  the  roadmap  in  three  phases,  covering  the  period  2001-2003,  for
moving  from  pNDPs  to  Structural  Funds  programming  documents.  In
particular,  by  early  2002,  all  candidate  countries  had  finalised  their  revised
pNDPs. These were jointly  assessed by  DG  Enlargement  and  DG  Regional
Policy (in co-ordination with the other Structural Funds DGs), with the aim
of  providing  the  candidate  countries  with  useful  recommendations  for  the
forthcoming preparation of the Structural Funds programming documents.

In  2002  a  Phare  phasing-out  strategy  was  established  in  order  to  ensure  a
smooth transition for the countries acceding on 1st May 2004.

The 2003 Phare programming exercise will be the last one for the countries
acceding  in  May  2004.  While  ISPA  and  SAPARD  will  be  replaced,  upon
accession, by the Cohesion Fund and the EAGGF (rural development), Phare
does  not  have  a  unique  and  direct  successor.  In  order  to  address  this
unprecedented transition from pre-accession aid to structural support, an ad-
hoc  phasing-out  strategy  for  Phare  was  adopted  by  the  Commission  on  6
September 2002 [C(2002)3303-1].

The  “bridging  Phare  to  Structural  Funds”  added  value  of  this  strategy  is,
inter  alia,  strengthened  by  an  early  programming  of  Phare  2003  ESC  and
CBC  actions,  and  a  closer  association  of  the  Structural  Funds  DGs  to  the
Phare  2003  programming,  with  the  aim  of  aligning  as  far  as  possible  the
operations to the strategies of the forthcoming Structural Funds programmes.
Moreover, from an administrative viewpoint, the candidate countries may be
interested  in  having  the  Phare  ESC  and  CBC  operations  under  the

11

responsibility  of  the  future  Structural  Funds  implementing  authorities,  thus
streamlining the number of structures managing Community instruments.

Malta and Cyprus do not receive ESC (nor ISPA and SAPARD) investment
and  they  have  not  been  asked  to  prepare  pNDPs.  However,  pre-accession
assistance  has  been  given  to  help  develop  the  documents  and  structures
required to programme and implement Structural Funds on accession.

Turkey does not receive ESC (nor ISPA and SAPARD) investment as such,
but  similar  investments  are  financed  within  its  National  Programme,  as
provided  for  in  the  Turkey  Regulation.  A  NDP  was  requested,  in  March
2003,  to  form  the  basis  for  further  developing  these  investments  along
Structural Funds lines.

2. 

IMPLEMENTATION OF THE PROGRAMMES

2.1. 

General overview: implementing the Phare guidelines

Programming in 2002 was based on the revised guidelines for Phare (SEC
(1999) 1596), and approved by the Commission on 13 October 1999. These
guidelines built on the changes decided in 1998 and took account of the new
ISPA and SAPARD regulations that took effect from 2000. These Guidelines
were further revised on 6 September 2002 [C(2002) 3303-2] to:

– 

– 

accompany changes to the CBC Regulation

accommodate  the  unique  approach  required  in  the  field  of  nuclear
safety

– 

emphasise the transition to EDIS

Besides the amendment to the Phare CBC Regulation (EC) No. 2760/98 (see
2.4.), the revised Phare Guidelines convey two important messages related
to co-operation with non-EU, non-candidate countries and transnational and
inter-regional  co-operation.  Namely,  candidate  countries  have  been
encouraged to make use of their Phare National Programme funds to support
actions  of  a  cross-border  nature  at  their  external  borders,  thus  addressing
potential  new  dividing  lines  on  the  future  border  of  the  Union.  Moreover,
candidate  countries  have  also  been  invited  to  continue  to  use  their  Phare
National Programme funds in order to fund their participation in Interreg III
B (transnational) or Interreg III C (inter-regional) programmes.

Building  on  the  Checklist  of  Actions  necessary  to  implement  a  fully
decentralised  implementation  system  -  known  as  Extended  Decentralisation
Implementation  System,  or  EDIS  -  circulated  at  the  end  of  2001,  the
Commission,  in  2002,  prepared  a  roadmap  for  EDIS,  setting  out  the  four
stages  required  to  achieve  EDIS.  In  addition,  High  Level  Working  Groups
were established in each Phare country to oversee the transition to EDIS and
a  new  Phare  multi-annual  programme  was  put  in  place  to  help  countries
finance the necessary changes.

12

The European Commission has increasingly transferred responsibility for the
management and implementation of Phare  programmes  to  the authorities in
the candidate countries. As a result, there has been increasing emphasis on
National Programmes designed to address specific weaknesses identified in
the  annual  Regular  Reports.  In  2002,  however,  a  number  of  new  multi-
country  or  horizontal  programmes  was  introduced  to  address  emerging
high  priority  accession  issues  that  could  be  better  tackled  through  the
economies  of  scale  of  such  programmes.  These  programmes  covered
municipal infrastructure, municipal finance, environmental protection, public
administration reform through SIGMA, anti-fraud measures, participation of
Phare countries in Community Agencies, steel restructuring and preparations
for EDIS.

Pre-accession  assistance  to  Malta  and  Cyprus  is  governed  by  a  separate
regulation (EC) No 555/2000, adopted on 13 March 2000.  In  general, these
programmes broadly follow Phare methodology and comitology.

A  new  regulation  on  pre-accession  assistance  to  Turkey  –  (EC)  No
2500/2001 – entered  into force on  30 December  2001,  and in  2002,  for  the
first time, governed the annual programming exercise. This was the first year
that  a  Turkey  Financing  Proposal  was  submitted  to  the  Phare  Management
Committee, followed, in November 2002, by a planning document covering
in  2003.  The  Commission  adopted  programming  and
assistance 
implementation  guidelines  –  C(2002)5146  –  on  20  December  2002,  which
are  closely  based  on  similar  guidelines  already  adopted  for  the  Phare
candidate countries.

2.2. 

General overview: Financial and technical assistance

the  guidelines  (SEC  (1999)  1596  and  C 

Under 
(2002)  3303-2),
approximately  30  %  of  Phare  resources  are  earmarked  for  Institution
Building,  the  main  instrument  of  which  is  Twinning  or  Twinning  Light
(secondment  of  experts  from  Member  States  to  the  candidate  countries  to
help develop the capacity to implement specific aspects  of the acquis). The
other 70 % is earmarked for investments designed to improve the regulatory
framework to implement the acquis and to promote ESC.

Following  the  Strategy  Paper  in  November  2001,  Action  Plans  were
developed  in  early  2002  with  each  negotiating  country  to  establish  the
priority actions related to administrative and judicial capacity that need to be
addressed  before  accession.  Supplementary  national  allocations  were  made
available (within the overall Phare Envelope) to support this enhanced focus
on  Institution  Building  and  associated  investment.  Accordingly,  in  2002,
Institution Building accounted for 40 % of commitments within the national
programmes  and  Institution  Building  and  associated  investment  combined
accounted  for  71  %.  Thus,  investment  to  support  ESC  fell  to  29  %  of  the
national programmes.

13

In  2002,  total  Phare  commitments  amounted  to  €  1,699  million,
comprising:

(cid:1)  National Programmes: € 1,168 million, of which:

Bulgaria:

€ 95 million

Czech Rep:€ 85 million

Estonia:

€ 30 million

Hungary: € 112 million

Latvia:

€ 32 million

Lithuania: € 62 million

Poland:

€ 394 million

Romania: € 266 million

Slovakia: € 57 million

Slovenia: € 35 million

(cid:1)  cross border co-operation: € 163 million

(cid:1)  regional and horizontal programmes: € 260 million

(cid:1)  nuclear safety: € 108 million

In  addition,  pre-accession  assistance  programmes  were  agreed  for  Malta,
Cyprus and Turkey:

Malta€ 10 million

Cyprus

€ 12 million

Turkey

€ 146 million

14

Support in the area of Gender Equality

In  the  course  of  2002,  most  candidate  countries  received  support  for  projects  in  the
area  of  Gender  Equality.  These  have  been  financed  through  the  Phare  National
Programmes  and  through  MEDA  for  Cyprus,  Malta  and  Turkey,  as  well  as  through
several Phare civil society programmes such as the Access Programme.  In Romania,
for  example,  Access  2000  supports  five  Gender  Equality  programmes  amounting  to
an  EC  contribution  of  €  174,448.  Moreover,  new  projects  in  this  field  worth  €
4,795,212 were launched in the candidate countries in 2002.

The main areas Phare funding is aimed at are:

(cid:1) 

(cid:1) 

(cid:1) 

(cid:1) 

increasing the general knowledge and skills of the public administration in order
to integrate the principal of gender equality into their activities;

the promotion of more equal access to educational opportunities;

raising awareness about domestic violence, and

raising the role of women in business and political governance.

For the period 1999 – 2002, projects financed under Phare National Programmes for
the CEECs and under MEDA for Cyprus, Malta and Turkey, totalled € 10,624,230. In
the  same  period,  projects  financed  under  Phare  multi-beneficiary  programmes
amounted  to  €  1.57  million.  Moreover,  the  participation  the  candidate  countries  in
several  Community  programmes  in  this  field  has  been  co-financed  with  €  0.94
million.

In  Poland,  for  example,  a  €  2.067  million  Phare  2002  Twinning  project,
“Enhancement  of  policies  on  the  equal  treatment  of  women  and  men”  received  €  2
million in Phare support. The key aims of this project are:

(cid:1) 

(cid:1) 

the  enhancement  of  the  capacity  of  public  administration,  in  order  to  strengthen
and enforce gender equality policies and gender mainstreaming;

to  improve  the  understanding  of  issues  related  to  gender  equality  and  gender
mainstreaming  through  establishing  monitoring  and  policy  evaluation  systems,
and

(cid:1)  awareness-raising,  by  promoting  the  values,  principles  and  practices  underlying

gender equality in Polish society.

15

2.3. 

Support to Institution Building

Twinning

Twinning was launched in May 1998 as the main  instrument for  Institution
Building.  It aims at helping the candidate countries in their development of
modern  and  efficient  administrations,  with  the  structures,  human  resources
and  management  skills  needed  to  implement  the  acquis  communautaire  to
the same standards as the current Member States.

Twinning’s  targeted  pre-accession  assistance  is  based  on  the  long-term
secondment  of  civil  servants  and  accompanying  short-term  expert  missions
and training.

A  total  of  693  Twinning  projects  have  already  been  funded  by  the
Community between 1998 and 2002.

The 2002 programming exercise encompassed 191 Twinning projects across
all candidate countries including, for the first time, Turkey. The distribution
of Twinning projects in candidate countries for 2002 is as follows:

(cid:1)  Bulgaria - 16

(cid:1)  Cyprus - 1

(cid:1)  Czech Republic - 19

(cid:1)  Estonia - 11

(cid:1)  Hungary - 14

(cid:1)  Latvia - 12

(cid:1)  Lithuania - 14

(cid:1)  Malta - 6

(cid:1)  Poland - 32

(cid:1)  Romania - 30

(cid:1)  Slovakia - 13

(cid:1)  Slovenia - 11

(cid:1)  Turkey - 12

Overall the highest number of projects for 2002 relates to Justice and Home
Affairs, Public Finance and Internal market and Agriculture and Fisheries.

Furthermore,  the  candidate  countries  are  being  offered  the  possibility  of
drawing on Member States’ expertise through “Twinning Light”, in order to

16

address  well-circumscribed  projects  of  limited  scope  which  emerge  during
the negotiation process as requiring adaptation. In 2002, this instrument has
been increasingly used by the candidate countries.

The  Court  of  Auditors  has  analysed  Twinning  as  the  main  instrument  to
support Institution Building in candidate countries; the report, together with
the Commission's response was published on the European Court of Auditors
website in May 2003.

TAIEX

2002 was a year of expansion for TAIEX (Technical Assistance Information
Exchange  Office)  in  terms  of  the  number  of  events,  whether  seminars  and
workshops,  expert  exchange  programmes  or  study  visits  of  government
officials  to Member  State  administrations,  with  the  total  rising  to  802  from
492 a year earlier. This reflected a growth in requests in 2002 to 1,158 from
818  in  2001.  The  number  of  experts  mobilised  also  rose  correspondingly
from 11,257 in 2001 to 18,600 in 2002.

Over  and  above  the  usual  areas  of  assistance,  namely  agriculture,  financial
and  institutional  matters,  justice  and  home  affairs,  ports  and  border
management, private sector, and others, new services were started leading to
a number of important initiatives. Amongst these were:

A series of Peer Reviews for all 12 negotiating countries from spring 2002
contributing  to  the  on-going  monitoring  process.  During  2002,  205  peer
reviews were completed in 17 sectors and involving the mobilisation of over
800 experts.

Two new publicly accessible databases were added to the various database
tools  already  offered  by  TAIEX  to  help  facilitate  and  monitor  the
approximation  progress.  The  Law  Approximation  Database  gives  an  up-to-
date  overview  of  the  legislation  adopted  by  each  candidate  country  in  their
transposition  of  the  acquis  communautaire,  while  CCVista  is  an  electronic
database of over 63,000 translations of binding acts in all candidate country
languages.

Expansion  of  the  Regional  Training  Programme,  whereby  regional
administrations receive tailored training to support the implementation of the
acquis  at  the  local  level,  extending  its  scope  of  activities  to  cover  ten
candidate countries. In 2002, 148 local government officials were enrolled in
training programmes covering the key sectors of the acquis relevant to local
government. In Poland, the country chosen for a pilot version of the scheme,
nearly 2000 local officials received training in their own language in 2002.

In addition, 2002 saw the extension of TAIEX into Turkey.

17

Support to investment

Investments  accounted  for  60  %  of  the  resources  committed  within  the
National  Programmes  in  2002,  31  %  of  which  was  for  investment  in  the
regulatory structures to implement the acquis.

The 1999  guidelines called  for  investment  support  to  be  re-oriented  to  take
account  of  the  launching  of  ISPA  and  SAPARD.  Moreover,  the  Phare
Review  of  2000  underlined  the  need  to  assist  candidate  countries  in  their
preparation  for  Structural  Funds.  In  2002,  the  Commission  continued  to
promote  moves  towards  the  approaches  required  for  Structural  Funds  as
quickly  as  was  sustainable  and  feasible,  taking  into  account  the  specific
features  of  each  candidate  country.  Substantial  investments  were  made  to
support  ESC  in  2002,  though  the  actual  percentage  fell  to  29  %  of  total
National Programme commitments, given the need to place priority, in 2002,
on the needs identified in the Action Plans.

However,  Institution  Building  to  support  ESC,  targeted  at  authorities  or
bodies  responsible  for  the  preparation  and  implementation  of  Structural
Funds assistance on accession, almost doubled in 2002.

Moreover,  the  process  of  preparing  National  Development  Plans,  to
underpin  the  programming  of  investment  in  ESC  and  to  prepare  for
Structural  Funds,  was  completed  in  2002  and  programming  for  CBC  has
been more closely aligned with the National Development Plans and moved
towards Interreg.

2.4. 

Phare Cross-Border Co-operation

In  2002,  all  Phare  Cross-Border  Co-operation  (CBC)  programmes  were
implemented on the  basis  of  Joint  Programming  Documents  (JPDs),  jointly
established in 2000-2001 by the authorities on both sides of the border. The
Phare CBC Regulation of December 1998 introduced substantial changes in
the  way  cross-border  co-operation  programmes  operate,  and  was  aimed  at
aligning Phare CBC with Interreg practices. In this context, the introduction
of Joint Programming Documents and the set up of joint structures  (i.e.  the
Joint  Co-ordination  Committees)  represented  a  quantum  leap  in  moving
towards Interreg.

Joint  Programming  Documents  covering  the  2000-2006  period,  were
established for each EU-CC (candidate country) border (here in the form of
joint  Phare  CBC/Interreg  III  A  programming  documents)  and  each  CC-CC
border  (except  the  Baltic  Sea  areas).  In  the  Baltic  Sea  area,  the  joint
CBC/Interreg  III  B  programming  document  was  approved  by 
the
Commission  in  June  2001.  The  implementation  of  the  Joint  Programming
Documents reached the cruising speed in the course of 2001.

Further  improvements  in  better  aligning  the  Phare  CBC  programme  with
Interreg  were  introduced  at  the  end  of  2000,  in  the  context  of  the
Communication  “Phare  2000  Review  –  Strengthening  preparation  for
indicative  financial
enlargement”.  Improvements 

include  multi-annual 

18

allocations per border, and a programme oriented approach for Phare through
the  introduction  of  “grant  schemes”.  The  latter  allows  for  a  more
decentralised  implementation  of  Phare  projects,  which  would  be  similar  in
size  and  nature  to  Interreg.  These  are  currently  put  into  practice  in  the
context of the Joint Programmes for 2000-2006.

Two  types  of  “schemes”  co-exist  -  Small  Project  Funds  for  grants  up  to  €
50,000 and ESC schemes for grants between € 50,000 and € 2 million. On all
borders, Small Project Funds (SPF) continued to operate, using between 10
%  and  20  %  of  the  total  programme's  appropriation.  Schemes  for  grants
between € 50,000 and € 2 million are implemented in the framework of ESC
support  in  one  of  the  areas  of  human  resources  development,  support  to
productive sector and business related infrastructure. Moreover,  Phare  CBC
is supporting larger stand-alone projects of a cross border value.

For  the  years  2000-2003,  Phare-CBC  has  an  annual  budget  of  €  151
million,  allocated  between  the  different  candidate  countries  and  taking
objective criteria into account (population, GDP per capita and surface of the
In  2002  Phare-CBC  programmes  were
border 
operational at fourteen borders. Moreover, a further € 12 million is allocated
to the Baltic-CBC programme (Poland, Latvia, Lithuania and Estonia) where,
given  the  peculiarity  of  the  Baltic  Sea  area,  a  transnational  approach  in
conjunction with the Interreg III B programme must be followed.

regions  concerned). 

Finally,  in  keeping  with  the  continued  effort  being  made  to  ensure
consistency with the Interreg approach, the Phare CBC Regulation (EC) No
2760/98  was  amended  by  Regulation  (EC)  No  1596/2002  of  6  September
2002,  in  order  to  further  align  the  eligible  actions  with  the  Interreg  III  A
practice.

The  Phare  CBC  Regulation  is  not  applicable  to  Malta,  Cyprus  and  Turkey.
While  in  Malta  and  Cyprus  no  specific  CBC-type  activities  have  been
financed  through  the  pre-accession  assistance,  in  Turkey  it  is  planned  to
initiate actions of a cross-border nature with Bulgaria in the framework of the
2003 National Programme.

2.5.  Multi-beneficiary Programmes

All multi-beneficiary programmes are financed under Phare and cover the ten
central  and  eastern  European  candidate  countries.  Unless  otherwise
indicated, Cyprus, Malta and Turkey do not participate in these programmes.

Phare Networking Programme

The  Networking  Programme  provides  acquis-related  assistance  in  priority
areas  where  it  is  in  the  nature  of  the  problems  that  country-specific  action
cannot cover the needs and meet the objectives. This is particularly the case
where  the  targeted  result  itself  implies  communication  and  networking
between the candidate countries or between these countries and the Member
States.

19

In addition, the programme also reflects the idea that enlargement is a social
project  involving  all  citizens  and  proposes  support  to  co-ordinators  and
beneficiaries  of  pre-accession  assistance  to  publicise  its  impact.  The  output
generated  will  be  complementary  to  the  Communication  Strategy  for
Enlargement  and  can  be  fed  into  its  dissemination  channels.  It  will  also
enhance the effectiveness of assistance by providing project participants with
the  opportunity  to  learn  from  the  successes  (and  failures)  of  their  peers  in
other candidate countries.

The Networking Programme is composed of 4 components:

(cid:1)  eEurope+

This  component  supports  monitoring  and  benchmarking  the  impact  of
eEurope+,  the  candidate  countries’  initiative  to  join  the  Union’s  efforts  to
turn  Europe  into  the  most  competitive  and  dynamic  knowledge-based
economy  in  the  world.  It  will  thus  allow  the  Phare  candidate  countries  to
become actively involved in the eEurope initiative launched by EU Heads of
State  and  Government  as  part  of  the  Lisbon  Strategy.  In  2002,  a  tender
procedure  was  launched  to  award  a  service  contract  to  assist  the  candidate
countries’ statistical offices in gathering and interpreting the data required for
benchmarking. Work under this contract should start in spring 2003. Several
supporting  contracts  (mainly  for  travel  and  accommodation)  were  also
awarded in 2002.

(cid:1)  Internal Market

This  component  supports  beneficiary  administrations  and  bodies  in  the
candidate  countries  relying  on  efficient  communication  and  co-operation
with  partner  organisations  in  the  Member  States  and  in  other  candidate
countries.  A  contract  of  more  than  €  1.6  million  (with  5  %  EFTA
contribution)  was  concluded  to  assist  the  candidate  countries  in  creating  a
quality 
testing-certification-
inspection,  market  surveillance),  capable  of  operating  to  the  same  high
standards  as  equivalent  structures  in  the  EU  and  EFTA.  In  addition,  2
contracts (total value close to € 3.2 million) were signed aiming to improve
the  interconnectivity  of  taxation  and  customs  IT  systems  in  the  candidate
countries with similar systems in the Member States.

accreditation, 

infrastructure 

(metrology, 

(cid:1)  Civil Society

the  reduction  of  drug  demand  and 

the
This  component  addresses 
participation  of  disabled  people  in  the  social  and  economic  spheres,  i.e.  2
areas  in  which  the  implementation  of  the  acquis  is  to  a  large  extent  in  the
hands of civil society  actors.  In  this  context, networking with Civil  Society
organisations  in  the  existing  Member  States  is  an  important  factor  for  the
strengthening of Civil Society organisations in the candidate countries. A € 1
million “spontaneous grant” was awarded to the European Disability Forum
for  a  project  aimed  at  strengthening  the  national  organisations  of  disabled
people  in  the  candidate  countries,  and  at  promoting  the  creation  of  these
umbrella  bodies  where  these  do  not  yet  exist.  Furthermore,  the  project  will

20

provide  information  on  how  disability  organisations  can  use  the  accession
process  and  accession  itself  to  improve  the  situation  of  disabled  people  in
their countries, while contributing to the action plans on the European Year
for  the  Disabled  in  each  country.  As  for  the  reduction  in  the  demand  for
drugs,  a  call  for  proposals  addressed  to  non-governmental  organisations
(NGOs) of the EU and candidate countries resulted in the award of grants for
a total value of around € 1.7 million.

(cid:1)  Dialogue and information dissemination

This  component  will  enable  beneficiaries  and  aid  co-ordinators  to  provide
feedback about pre-accession assistance e.g. through a Networking website,
the  publication  of  a  quarterly  newsletter  and  the  publication  of  Phare
‘Highlights’  brochures.  The  contract  also  supports  the  networking  between
the participants of projects under the Programme’s Civil Society component,
as  well  as  between  the  beneficiaries  of  projects  in  favour  of  Roma
communities  set  up  under  the  National  Phare  Programmes.  A  service
contract worth close to € 1.5 million was concluded to this end.

SME Finance Facility

The SME Finance Facility’s objective is to persuade financial intermediaries
-  banks,  leasing  companies  or  investment  funds  in  the  central  and  eastern
European  candidate  countries  -  to  expand  and  sustain  their  financing
operations to SMEs. In order to help financial intermediaries overcome their
lack  of  experience  and  to  cover  the  special  administrative  costs  and  risks
involved, the Facility provides them with access to finance and with specific
incentives. The Facility is co-financed by International Financial Institutions
(IFIs)  namely  the  European  Bank  for  Reconstruction  and  Development
(EBRD),  the  European  Investment  Bank  (EIB)  and  the  Council  of  Europe
Development  Bank  in  co-operation  with  Kreditanstalt  für  Wiederaufbau
(KfW).

The Facility projects are set up under two co-ordinated ‘Windows’: the Loan,
Guarantee and Leasing Window and the Equity Window, and take the form
of loan or equity finance for the local financial intermediary, combined with
tailored  packages  of  non-reimbursable  financial  incentives.  The  financial
intermediaries  lend  or  lease  to  individual  micro-enterprises  or  SMEs,  or
provide 
financial
intermediaries also channel additional funds from their own resources to the
recipient businesses.

them  with  equity  capital. 

In  certain  cases, 

the 

The SME Facility was launched by the Commission and the EBRD in April
1999.  In  2000  CEB  and  KfW  joined  the  Facility,  followed  by  the  EIB  in
2001.

The year 2002 was characterised by:

(cid:1)  a  strong  expansion  of  Facility  projects  supporting  local  financial

intermediaries in financing leasing operations with SMEs;

21

(cid:1)  an  increased  focus  on  reducing  regional  disparities  concerning  local

intermediaries’ experience and capacity to provide SMEs finance;

(cid:1)  Commission  Decisions  about  new  Phare  contributions 

totalling  €
50 million  to  EBRD,  CEB/KfW  and  EIB  to  meet  the  continued  demand
for support under the Loan, Guarantee and Leasing Window.

As per end of 2002 the financial status of the Programme was the following
(amounts in € million):

BUDGET

LGLW

EW

EU/EBRD

EU/CEB/KfW

EU/EIB

EU/EBRD

TOTAL

Phare EBRD Phare CEB/
KfW

Phare

EIB

Phare EBRD

1999

2000

2001

2002

25

30

30

20

TOTAL

105

125

150

150

100

525

0

21

30

15

66

0

113

150

75

338

0

0

30

15

45

0

0

300

150

450

25

25

0

0

0

0

0

0

200

314

690

375

25

25

1,579

Municipal Finance Facility

The  Commission  launched  a  new  Multi-Beneficiary  Programme,  the
Municipal  Finance  Facility  in  co-operation  with  the  EBRD,  the  Council  of
Europe Development Bank/Kreditanstalt für Wiederaufbau  (CEB/KfW)  and
the EIB. A total of € 44 million has been allocated to this Programme in 2002
for the ten central and eastern European candidate countries.

The  depth  and  strength  of  the  municipal  credit  markets  in  the  candidate
countries is  an  important  aspect  of  the  functioning  of  their  financial  sector.
There  are  numerous  municipalities  in  the  candidate  countries  which  have
investment  needs  in  areas  such  as  water  supply,  sewerage,  roads,  public
transport, solid waste,  heating etc.  At the  same  time,  smaller  municipalities
in  particular  have  still  limited  access  to  long  term  credits  needed  for
infrastructure  investment.  Market-based  municipal  lending  broadens  the
range  of  finance  available  to  municipal  authorities  for  ensuring  sustainable
living conditions to their populations.

By tailoring financial packages to the needs of local banks, the new Facility
aims  to  assist  the  financial  sectors  in  the  candidate  countries  to  expand
lending 
infrastructure
investments,  to  extend  loans  over  longer  maturities,  and  to  enhance  the
capacity to assess and monitor the related risks and to manage loans.

the  financing  of  small 

to  municipalities  for 

22

The  mechanism  of  the  Municipal  Finance  Facility  is  similar  to  the  SME
Finance  Facility  mechanism.  Loan  and  risk-sharing  instruments  from
resources of the EBRD, CEB/KfW and the EIB will be combined with non-
reimbursable financial incentives for local financial intermediaries. It is also
foreseen  that  a  limited  amount  of  Technical  Assistance  for  municipalities
will  be  funded  by  Phare  to  strengthen  the  demand  side  of  the  municipal
credit market.

EIB Special Programme for Border Regions

Municipal Infrastructure Facility

In 2002, the Commission and the EIB launched a special Multi-Beneficiary
Programme for candidate countries with EU border regions - the Municipal
Infrastructure  Facility.  A  total  of  €  35  million  was  allocated  to  this
Programme in 2002.

The Programme comes in response to the Nice European Council, which had
called  upon  the  Commission  to  propose  a  programme  to  strengthen  the
border  regions’  overall  competitiveness  in  the  view  of  enlargement.  An
analysis  revealed  that  the  lack  of  adequate  transport  and  environmental
infrastructure  in  the  candidate  countries’  border  regions  with  the  EU  is  a
persisting problem to regional development.

The  objective  of  the  Facility  is  to  contribute  to  the  social  and  economic
development of border regions in the candidate countries and the integration
with their neighbouring regions in the current EU Member States.

The  Facility  combines  loans  from  EIB  resources  with  non-reimbursable
Phare  support  to  accelerate  the  completion  of  small  local  infrastructure
investments,  and  to  increase  the  related  funding  sources  available  to
municipalities via local  banks. Support will  mainly focus  on the funding of
small local transport and environmental infrastructure investments.

The  eligible  border  regions  are  based  on  the  Communication  of  the
Commission  on  the  Impact  of  Enlargement  in  Border  Regions3:  Estonia;
Zachodniopomorskie,  Lubuskie,  Dolnoslaskie  (Poland);  Severovychod,
Severozapad, Jihozapad, Jihovychod (Czech Republic); Zapadné Slovensko,
Bratislavsky  (Slovak  Republic);  Nyugat  Dunantùl  (Hungary);  Slovenia;
Yuzhen Tsentralen, Yugozapaden (Bulgaria).

Business Support Programme

The programme was set up to strengthen the role of business representative
organisations in the central European candidate countries so that they could
assist  business  operators  in  these  countries  to  adapt  to  the  challenges  of
accession to the EU, and in particular to the changes arising at company level
as a result of the need to adapt to the Community acquis. To this end, support
was given to the development of partnerships and Twinning operations with

3

COM (2001) 437

23

                                                
sectoral  and  horizontal  business  representative  organisations  in  the  existing
Member States.

During a first phase of the programme (BSP I), grants amounting to a total of
€ 22 million were awarded to 17 projects. The projects covered a wide range
of  business  sectors  and  activities,  including  chambers  of  commerce,  small
and  medium  sized  craft  enterprises,  the  furniture  and  wood  industry;
producer’s co-operatives, social enterprises and participative enterprises, the
chemical  industry;  the  food  and  drink  industry,  the  iron  and  steel  industry;
the textile and clothing industry, animal production and the information and
communication technology industry.

The  projects  focused  on  topics  such  as  reinforcing  the  democratic  and
independent  operation  of  business  representative  organisations,  developing
the  efficiency  of  these  organisations  as  interest  groups  at  national  and
international  level,  assisting  businesses  in  the  central  European  candidate
countries  to  understand  the  Internal  Market  and  to  adapt  themselves  to  the
related  Community  acquis,  and  on  providing  know-how  about  corporate
development.

In addition, support for two special projects was also provided – the first in
the  area  of  industrial  property,  and  the  second  for  the  benefit  of
representative organisations in the agricultural sector.

In  most  cases,  projects  have  supported  the  development  of  a  practical
approach  on  how  to  adopt  the  acquis.  Conferences,  seminars,  workshops,
training and consulting missions represent the main types of project activities
undertaken.  In  addition,  almost  all  projects  organised  internships  and
secondments  of  representatives  from  business  support  organisations  in  the
candidate  countries  to  similar  organisations  in  the  EU  or  to  the  European
umbrella  organisation.  Other  activities  that  have  been  carried  out  include
needs  assessment  surveys,  development  of  platforms  for  statistical  data
exchange  and  extranet/intranet  sites,  making  specific  information  available
on-line on the acquis and the preparation of tenders to other EU programmes.

Results and outcomes achieved to date suggest a general improvement in the
level  of  knowledge  and  awareness  on  subjects  related  to  EU  accession,  as
well  as  an  understanding  of  the  role  and  responsibility  of  business  support
organisations  in  the  EU.  Partnerships  have  also  been  established  between
business support organisations in the candidate countries and the EU.

In  2002,  a  Call  for  Proposals  was  launched  for  the  second  phase  of  the
Business Support Programme (BSP 2). From a total budget of € 15 million,
10  projects  have  been  awarded  grants  to  address  the  needs  of  business
representative organisations in the industrial sector only. The aim of the BSP
2  programme  is  to  assist  the  business  representative  organisations  by
strengthening their  understanding,  implementation  and  enforcement  of  their
sectorally relevant acquis.

24

Environmental programme

2002  saw  the  closing  down  of  the  €  6.25  million  Regional  Environmental
Accession  Project  (REAP).  REAP  activities  aimed  to  enhance  compliance
with EU environmental legislation in a number of sensitive areas such as air
quality, water quality and waste management, and in particular at improving
levels of implementation capacity. In addition, information and guidance was
provided to municipalities to whom the responsibility of implementing many
of the directives has been devolved. Furthermore, REAP helped to build the
networks  needed  to  ensure  that  NGOs  and  the  general  public  are  better
informed and integrated in the approximation process.

REAP was succeeded by a new € 1.5 million Multi-Beneficiary Programme
in 2002 for the environment whose main focus is on:

– 

– 

– 

– 

developing financing and implementation strategies, and assessing the
compliance of investments with the environmental acquis;

assisting  the  candidate  countries  in  central  and  eastern  Europe  to
monitor  progress  in  the  transposition  and  implementation  of  the
environmental  acquis,  and  monitoring  specific  commitments  made
during negotiations;

promoting  improved  implementation  and  enforcement,  exchange  of
experience  and  information  at  national  and  regional  level,  scoping  to
determine key problem areas;

promoting partnership between the local  authorities, building capacity
in order to carry out the obligations of the acquis.

Malta, Cyprus and Turkey have been invited to participate in  most  of  these
activities  at  their  own  expense.  The  Turkish  National  Pre-accession
Assistance  Programme  for  2002  includes  possibilities  to  finance  Turkish
participation in the activities related to the implementation of environmental
legislation.

Phare Horizontal Programme Justice and Home Affairs

In  order  to  strengthen  the  administrative  capacity  of  the  judiciary  and  law
enforcement  bodies  in  the  central  European  candidate  countries,  the
programme financed assistance in the fields of:

(cid:1)  “training  of  judges  in  EC  law”  (€  1.3  million).  The  project  aimed  at
establishing  a  training  scheme  and  methodology  for  each  participating
candidate  country  and  to  provide  a  common  practical  manual  for  judges
on EC law. The project ended in March 2002;

(cid:1)  “migration, visa, and external  border management” (€ 3.0 million). The
project  dealt  with  issues  related  to  the  functioning  of  an  immigration
service,  detention,  expulsion  and  return;  with  visa  policy  and  practises;

25

and  with  the  Schengen  acquis  and  combating  illegal  immigration
networks. The project ended in May 2002;

(cid:1)  “judicial  co-operation  in  criminal  matters”  (€  1.5  million).  The  project
addressed  issues  such  as  extradition,  mutual  legal  assistance  and
confiscation. The project ended in November 2002;

(cid:1)  “rule  of  law”  (€  3.1  million).  The  project  focused  on  4  aspects  of  the
functioning  of  the  judicial  systems  in  the  10  central  European  candidate
countries: an independent judicial system; the status and role of the public
prosecutor;  court  procedures  and  execution  of  judgements;  safety  of
jurors.  The
victims, 
implementation of this project continues into 2003.

judges,  prosecutors,  defence 

lawyers  and 

The  projects  were  implemented  by  the  European  Institute  of  Public
Administration  (training  of  judges)  and  consortia  of  Member  States  who
made  available  professional  staff  and  practitioners  from 
their  own
governmental  departments,  as  well  as  project  management  teams.  With  the
exception  of  the  project  on  the  training  of  judges,  the  projects  were  built
according  to  a  common  structure:  a  desk  research  phase  was  followed  by
fact-finding  and  assistance  missions  by  Member  State  officials  to  the
beneficiary  countries.  The  joint  work  of  experts  from  the  beneficiary
countries  and  the  Member  States  lead  to  “Recommendations”  or  “National
Action  Plans”  with  clear  indications  of  practical  steps  that  the  candidate
countries  agreed  to  take  after  the  end  of  the  projects.  In  addition,  these
projects also included a number of training seminars based on the “train the
trainers” concept.

Fight against drugs

The  EU  Action  Plan  on  Drugs  2000-2004,  adopted  at  the  Feira  European
Council,  called  on  the  Commission  and  the  Council  to  ensure  that  the
candidate  countries  adopt  the  Community  acquis  and  best  practice  in  the
field of drugs, and that their implementation is satisfactory.

A  €  2  million  EMCDDA  -  CEEC  Co-operation  Project  started  in  February
2001 and was implemented by EMCDDA.  The project aimed at integrating
the  12  negotiating  countries  into  the  activities  of  the  EMCDDA  and
establishing  structural  links  with  the  REITOX  network  (Réseau  européen
d’information sur les drogues et les toxicomanies). Co-financing for Turkey's
membership of the EMCDDA was provided in its 2002 National Programme.

The  National  Focal  Points  were  further  strengthened,  institutionalised  and
prepared  to  participate  in  such  activities  through  a  strong  institution  and
capacity building component. A specific website offering expert advice and
know-how  to  the  National  Focal  Points  of  the  candidate  countries  has
subsequently been created at EMCDDA, and is regularly up-dated.

This  project  ended  on  20  September  2002  with  positive  results  (further
political awareness-raising, however, is needed in such a soft acquis area). It
was  followed  at  the  end  of  November  2002  by  an  Agency  project  of  18

26

months  (€  0.5  million).  This  project  has  already  resulted  in  more  political
commitment  in  the  drugs  field  expressed  by  the  CEECs  at  a  High  Level
Conference held in Athens on 5-6 March 2003.

Experts from the non-Phare candidate countries, Cyprus, Malta and Turkey,
were  and  are  being  invited  to  participate,  at  their  own  cost,  in  the  selected
regional or horizontal activities of common interest.

Phare 2000 Multi-Beneficiary Drugs Programme

In 2001, the Commission began preparations for projects in the framework of
the  Phare  Multi-Beneficiary  Drugs  Programme  2000,  which  addresses  the
transnational drug problem through enhanced and co-ordinated action in line
with the EU Drug Strategy and Action Plan 2000-2004.

The EU Drug Strategy calls for a multi-disciplinary and integrated approach
to  drugs.  Its  aims  include  reinforcing  the  fight  against  drug  trafficking  and
stepping  up  police  co-operation  between  states,  encouraging  multi-agency
co-operation,  progressively 
the  candidate  countries  and
intensifying international co-operation.

integrating 

The  Strategy  identifies  preparation  of  enlargement  as  one  of  the  main
challenges  for  the  European  Union,  and  the  Phare  programme  as  the  main
instrument for  pre-accession support to  develop institutional capacity  in the
candidate countries for adopting and implementing the EU acquis in the field
of drugs.

The Joint Declaration on Drugs by the Member States, Commission and the
candidate  countries,  signed  at  the  Ministerial  level  on  28  February  2002,
emphasises  the  importance  of  the  EU  Drug  Strategy  and  Action  Plan  as  a
model  for  national,  global,  balanced  and  integrated  drug  policies  in  the
candidate  countries.  The  Declaration  also  emphasises  the  importance  of
developing  sufficient  administrative  capacity  and  co-ordination  between
relevant authorities to tackle the drug problem.

Under  the  2000  Drug  Programme,  three  intervention  areas  have  been
prepared:

(1) 

Strengthening Cross Border Co-operation in Drug Law Enforcement,
aimed  at  the  disruption  of  major  drug  trafficking  channels  and
dismantling international criminal organisations in drug trafficking -
the
In  December  2001,  Eurocustoms  was  entrusted  with 
implementation  of  a  preparatory  phase  for  a  Phare  Regional  Drug
Law  Enforcement  Project  (€  0.5  million),  with  the  objective  of
identifying 
the  candidate  countries’  needs  and  preparing  a
programming  document.  A  multi-volume  final  report  has  been
produced.  The  implementation  phase  of  18  months  (€  4.9  million)
began  at  the  end  of  October  2002.  It  will  cover  detailed  work
programmes  for  national  and  regional  activities  which  reflect
comments  received  from  EC  Delegations,  Country  Teams  and  DG

27

(2) 

(3) 

Justice  and  Home  Affairs.  This  project  is  going  on  well  with  good
collaboration from the beneficiary countries.

Transposing  the  Anti-Money  Laundering  acquis  in  the  candidate
countries  to  provide  a  European  framework  to  combat  money
laundering  with  a  view  to  enhancing  co-operation  and  working
relationships  between  the  institutions  of  the  anti-money  laundering
chain  at  a  national,  regional  and  international  level  -  In  February
2002,  the  Dutch  Ministry  of  Justice  was  entrusted  with  the
implementation of the Phare anti-money laundering project, worth € 2
million.  A  half-year  report  from  December  2002  gives  a  good
overview  of  the  activities  carried  out  in  each  module  of  the  project.
This project produces good results.

Transposing the acquis and EU standards in the candidate countries
in the  field of synthetic  drugs  and  their  precursor  chemicals,  with  a
specific  focus  on  strengthening  the  institutions  responsible  for
enforcing the legislation, on improving co-ordination amongst  them,
regional inter-agency  co-operation  and  the  information  exchange  to
monitor precursor chemicals and reduce their diversion - In February
2002,  the  Dutch  Ministry  of  Justice  was  entrusted  with  the
implementation of this Phare project worth € 1.5 million. This project
is progressing well.

ECOS-Ouverture Programme

The programme’s aim is to strengthen local authorities in central and eastern
Europe through co-operation with their EU counterparts, particularly those in
the  less-favoured  areas  of  the  Union.  This  interregional  support  measure
encourages  co-operation  between  relevant  authorities  through  joint  projects
for the exchange of experience and expertise. Originating in 1990, it has been
financed by Phare and ERDF since 1994 to the tune of nearly € 50 million.

2002 was the last year during which the 32 projects financed under the Phare
1998  budget  for  a  total  amount  of  €  7.35  million  were  implemented.  The
main  themes  of  co-operation  were  economic  development  (18)  and
environment  (7)  while  the  remaining  projects  focused  on  cultural  (4)  or
administrative (3) aspects. With an average budget of nearly € 245,000, the
Phare partners played a more significant role in these projects than in earlier
generations  of  the  programme.  Romania  was  particularly  interested  in  the
programme and Romanian partners were present in one-third of all selected
projects.  This  is  closely  followed  by  Hungarian  (7)  and  Slovenian  (6)
partners. One third of all projects had 2 or more Phare partners.

Regarding  project  management,  in  general  there  was  smooth  interaction
between project promoters  and the European  Commission. Almost  20 % of
the projects were visited by the Commission staff on the spot, and another 30
%  were  met  in  Brussels.  As  a  result,  it  was  felt  that  the  quality  of  reports
improved during the lifetime of the projects.

28

It  has  been  noted  that  in  many  cases  the  local  authorities  involved  in  the
projects  have  started  to  develop  follow-up  actions  and  to  look  into  the
possibility of applying for Community funding under other programmes.  In
order to bridge the processing of funding applications, candidate country and
Member  State  partnerships  have  often  declared  their  intention  to  continue
their co-operation on a self-financed basis.

LIEN Programme

The  LIEN  (Link  Inter  European  NGOs)  Programme  seeks  to  stimulate  the
activity  of  and  encourage the co-operation  between  non-profit  making  non-
governmental organisations that are active in the social field and to assist the
disadvantaged groups of the population. Since 1992, about 350 projects have
been selected and received Phare grants totalling about € 48 million.

The  40  projects  that  had  been  selected  during  the  last  LIEN  Call  for
Proposals  in  1999  ended  in  2002.  These  projects  covered  all  Phare
beneficiary countries as well as Albania, Bosnia-Herzegowina and the former
Yugoslav Republic of Macedonia.

A large part of the projects (14) were implemented by NGOs working for the
benefit of women with limited access to health and employment, youngsters
and  elderly  as  well  as  ethnic  minorities  (14  projects).  Another  15  projects
were  related  to  help  for  the  disabled  (blind,  physically  and  mentally
disabled), the sick (HIV) and addicts (drugs). The remaining funds were used
to  support  employment-projects  (5)  or  other  projects  (6),  such  as  mine
awareness  training  camps  in  Bosnia-Herzegowina.  Many  of  the  Phare-
partners adopted new methodological and management concepts.

The  majority  of  the  project  promoters  have  applied  for  funding  from  other
sources  to  carry  on  with  their  activities;  some  20  %  secured  further  EU-
support (e.g. within the frame of the Access programme).

Partnership Programme

The Partnership Programme has been endowed with Phare funds since 1993
to  promote  dialogue  and  co-operation  on  matters  of  local  development
between  private  and  public  non-profit  organisations  in  the  countries  of
central  and  eastern Europe.  It  provided  grant-finance  for  local  development
projects  initiated  by  at  least  2  non-profit  organisations  that  wish  to  build  a
sustainable partnership with a view  to mutually  exchange  skills, knowledge
and experience. 2002 was the Programme’s final year, with around 30 % of
the  projects  funded  under  the  1997  Partnership  programme  finishing  their
activities.

The projects of this last Partnership generation showed a particular focus on:

(cid:1)  local  and  regional  development  (improvement  of  local  and  regional
services, regional planning, rural and agricultural development, tourism);

(cid:1)  business and enterprise development;

29

(cid:1)  socio-economic  development  (promotion  of  workers  rights  and  social
dialogue,  promotion  of  consumer  interests,  strengthening  of  associations
representing co-operatives and other).

Many of the projects will continue to carry out their activities through other
sources of support.

Phare Access Programme

The  Phare  Access  Programme  aims  at  strengthening  civil  society  in  the
candidate  countries  by  promoting  the  implementation  of  the  acquis
communautaire in policy areas in which governmental activities are absent or
are complementary to those of the third sector, as well as by raising popular
awareness and acceptance in these areas.

Moreover, the inclusion and participation of individuals and groups who risk
being economically, socially or politically marginalised in the transformation
process  shall  be  encouraged  through  the  activities  financed  under  Access.
The  programme  may  support  activities 
following  sectors:
environmental protection, socio-economic development and social activities.

the 

in 

Access provides co-financing  grants to  support  projects carried  out by non-
governmental  organisations  (NGOs)  and  non-profit  organisations  (NPOs).
Macroprojects are carried out in partnership with organisations from at least
two  different  countries  (Phare  accession  countries  and  the  EU  countries),
whereas  microprojects  can  be  carried  out  by  a  single  organisation  based  in
one  of  the  candidate  countries.  Furthermore,  the  programme  includes  a
Networking  Facility,  which  provides  support  for  NGOs/NPOs  in  the
candidate countries to participate in activities organised at EU level.

During  2002,  the  majority  of  projects  under  the  Access  Programme  1999
(total budget: € 20 million) came to an end. Furthermore, calls for proposals
under  the  Access  Programme  2000  (total  budget:  €  20  million)  have  been
launched and the implementation of most projects began. Contrary to Access
1999, which was managed by the Delegations of the European Commission
in  the  ten  countries  of  Central  and  Eastern  Europe  (“deconcentrated”),  the
implementation  of  Access  2000  is  under  the  responsibility  of  the  candidate
countries’  authorities,  under  the  supervision  of  the  European  Commission
(“decentralised”).

As  for  the  Phare  Programming  2001,  civil  society  programmes  have  been
part  of  the  Phare  National  Programmes.  For  2001,  this  is  the  case  for
Bulgaria,  the  Czech  Republic,  Hungary,  Latvia,  Poland  and  Romania  (total
Phare  contribution:  €  20.5  million)  and  for  2002  for  Bulgaria,  the  Czech
Republic,  Estonia,  Hungary  and  Latvia  (total  Phare  contribution:  €  9.6
million).  The  objectives  of  these  programmes  and  the  activities  financed
under  them  are  similar  to  those  supported  previously  by  the  Access
Programme.

30

Nuclear safety

During  2002,  the  Commission  services  established  a  further  nuclear  safety
programme funded from the Phare pre-accession financial instrument. As in
the  previous  year,  the  design  of  the  programme  took  guidance  from  the
recommendations of the June 2001 Council Report on Nuclear Safety in the
Context  of  Enlargement.  Thus,  it  aimed  to  support  the  Phare  beneficiary
countries in taking measures to implement these recommendations, to which
the  Commission’s  Regular  Reports  on  the  progress  of  candidate  countries
towards  EU  accession,  as  well  as  the  Accession  Partnerships,  had  made
reference. The programme allocated financial assistance to 22 projects with a
total  budget  amounting  to  €  18.098  million.  Both  the  strategy  and  the
detailed projects are described in the Financing Proposal that is available on
the web-site of DG Enlargement 4.

During  the  last  year,  the  services  of  the  Commission  dedicated  particular
efforts to putting into place the  1998 Phare Nuclear Safety Programme that
had been extended twice. After careful scrutiny of the validity of the projects
funded under this programme, and the decentralisation of the implementation
of  certain  elements  of  the  programme,  all  projects  were  contracted  at  the
central and decentralised levels by the end of 2002. Of particular importance
was the contracting of a technically challenging investment project to support
the  instrumentation  and  control  elements  related  to  the  installation  of  a
Second  Diverse  Shutdown  System  at  the  Ignalina  Nuclear  Power  Plant  in
Lithuania.  Furthermore,  the  nuclear  safety-critical  support  provided  by  EU
Technical  Support  Organisations  to  various  candidate  countries’  nuclear
safety  regulatory  authorities  in  their  review  of  the  VVER  440/213  Bubbler
Condenser capabilities should be highlighted as another important project put
into  place.  Finally, 
the
implementation of a very limited number of projects of which the usefulness
had been overcome by events. Accordingly, the technically challenging 1998
programme could be undertaken during the year 2002.

the  Commission  cancelled 

the  services  of 

2002  also  saw  the  results  of  bringing  the  Nuclear  Safety  Programmes  into
line with the Decentralised Implementation System established for delivering
the  Phare  financial  instrument  since  the  Phare  mid-term  review.  The
implementation  of  projects  funded  from  the  1999  and  2001  Nuclear  Safety
Programmes  saw  good  progress.  By  following  the  method  of  programme
design  that  also  determines  other  segments  of  the  Phare  programme,  the
design  quality  of  the  above-mentioned  2002  Nuclear  Safety  Programme
benefited from the enhanced involvement of the National Aid Co-ordinators
and  the  national  stakeholders  of  the  beneficiary  countries.  This  augmented
the  involvement  of  national  actors,  ahead  of  the  introduction  of  the  EDIS
system, as well as their actual ownership of the project results.

Finally,  the  Commission  services  continued  to  programme  three  special
programmes  to  support  decommissioning  activities  and  other  measures
related  to  the  early  closure  of  certain  nuclear  power  reactors  in  Lithuania,

4

http://europa.eu.int/comm/enlargement/

31

                                                
Slovakia,  and  Bulgaria.  The  total  allocations  decided  under  these  three
programmes  amounted,  in  2002,  to  €  90  million  and  brought  the  sum  of
Community funding for this purpose since 1999 to over € 340  million.  The
bulk  of  this  assistance  is  delivered  to  the  beneficiary  countries  via  three
International Decommissioning Support Funds, managed by the EBRD. The
European  Community  is  the  largest  single  contributor  to  these  funds.  The
European  Commission  not  only  decides  upon  the  allocation  of  Community
means to these Funds, it also chairs their Assemblies of Contributors and co-
decides  as  a  key  member  of  these  guiding  bodies  on  the  individual  grant
agreements  established  between  the  Fund  Manager  and  the  beneficiary
countries  in  support  of  individual  projects.  The  three  Funds,  established  in
2000,  made  notable  progress  during  2002  and  put  a  series  of  projects  into
place.

Statistics

The wider objective of the various Phare Multi-Beneficiary Programmes for
statistical co-operation is to improve the provision and the quality of official
statistics  from  the  candidate  countries,  especially  in  the  context  of  pre-
accession. For the currently running programmes, a strategic document was
developed covering the years 2000-2002. Based on this strategy, which was
developed  in  close  co-operation  and  with  the  participation  of  Eurostat,  the
candidate  countries  themselves,  Member  States,  international  organisations
and  other  donors,  the  2002  Multi-Beneficiary  Phare  programme  was
elaborated by Eurostat and endorsed by the Phare Management Committee in
September 2002. Although not part of the Phare programme, the other three
candidate  countries  –  Cyprus,  Malta  and  Turkey  –  are  integrated  into  these
programmes as far as possible but with different funding sources.

The 2002 programme is oriented towards strengthening the institutions of the
National  Statistics  Institute  (NSI)  of  the  candidate  countries  in  order  to
enable them to better meet the needs of their customers, to provide reliable,
accurate and timely data compliant with the acquis, to improve the quality of
available statistics  and to reinforce  confidence in the  field  of  statistics.  The
total budget provided for this programme is € 9 million.

The programme contains various types of projects, the most important ones
being sectoral projects covering gaps which still exist in the implementation
of  the  acquis  or  coping  with  new  acquis  requirements.  In  this  programme,
several  projects  on  macro-economic  statistics,  social  statistics,  agriculture
statistics and external trade statistics were included, and their implementation
will start in September 2003. The total budget for these projects is around € 5
million.  Depending  on  the  amount  of  funding  available,  Cyprus,  Malta  and
Turkey  are  included  in  some  of  these  projects,  so  that  the  transfer  of
knowledge and production of data is done in the same way as for the Phare
candidate countries.

Another  important  part  of  the  programme  concerns  all  the  statistical
assistance  activities,  like  participation  in  Eurostat’s  working  groups,
seminars,  training  courses,  seconding  trainees  to  Eurostat  or  to  a  Member
State statistical office and implementing study visits and consultations. This

32

part of the programme has a budget of € 4 million. This budget for statistical
assistance  activities  is  given  as  grants  to  statistical  offices  in  both  the
Member States and in the candidate countries. Here again, Cyprus, Malta and
Turkey  are  integrated  into  the  programme  elements,  based  on  either  their
own funding or other pre-accession instruments.

2002  also  saw  the  successful  closing  down  of  the  1999  multi-country
programme  on  statistical  co-operation  amounting  to  €  15  million,  the  full
implementation  of  the  2001  multi-country  programme  amounting  to  €  8
million and the launch of the 2001 multi-country programme amounting to €
7.39 million. All the programmes cover similar objectives in different areas
of  statistics,  and  have  contributed  significantly  to  providing  good  quality
statistical  information  for  the  enlargement  process  for  the  10  accession
countries  and  Cyprus  and  Malta.  For  Turkey,  the  integration  into  the  co-
operation mechanism has just recently started, but within a reasonable period
of  time,  it  is  expected  to  provide  results  similar  to  those  seen  in  the  other
countries.

2.6. 

Participation in Community Programmes and Agencies

In  Agenda  2000,  the  European  Commission  proposed  the  progressive
opening-up  to  the  candidate  countries  of  a  broad  range  of  Community
programmes,  as  one  of  the  intermediate  objectives  of  accession,  without
waiting for the accession date. It also proposed active participation in certain
Community Agencies or bodies, in order to better prepare these countries for
the adoption of the acquis.

As the Community programmes encompass  most Community  policies,  they
provide  a  useful  preparation  for  accession  by  familiarising  the  candidate
countries and their citizens with the Union’s policies and working methods.
Since  1997,  the  candidate  countries  have  participated  fully  in  almost  all
Community programmes open to them, in particular in education, vocational
training,  youth,  research,  energy,  the  environment,  and  small  and  medium-
sized  enterprises.  The  participation  of  candidate  countries  in  Community
programmes is a key feature of the pre-accession strategy.

2002  saw  the  full  implementation  of  the  new  procedures,  which  streamline
the  adoption  of  measures  in  order  to  facilitate  the  participation  of  the
candidate countries in Community programmes.

Candidate  countries  are  requested  to  make  a  financial  contribution  to  each
programme  in  which  they  participate.  In  most  cases  and  at  the  candidate
countries’ request, the cost of this participation is co-financed by Phare and
the  relevant  pre-accession  funds  for  Cyprus,  Malta  and  Turkey.  In  2002,
some € 116 million was committed for the participation of the 13 candidate
countries in Community programmes, amounting to about 46 % of their total
financial contribution. The majority of these funds are made available on the
basis  of  “frontloading”,  i.e.  for  the  participation  of  candidate  countries  in
Community programmes in the year 2003.

33

Agencies

A  similar  participation  of  candidate  countries  in  Community  Agencies  is
taking place.

On the basis of full participation, Bilateral Agreements were negotiated with
all 13 candidate countries to become members of the European Environment
Agency.  On  18  June  2001,  for  the  EU’s  part,  the  Council  adopted  the  13
Decisions in order to proceed to the formal conclusion of these Agreements.
As  for  the  candidate  countries,  by  the  end  of  2002  only  the  Turkish
ratification was pending. In 2002, some € 2.8 million was committed in order
to co-finance the  participation of  11  countries  that  had  made  the  respective
request.

As proposed by the Commission in 2001, negotiations on the participation of
candidate countries in the European Monitoring Centre for Drugs and Drug-
Addiction (EMCDDA) were launched on 7 March 2002  in Brussels, on the
basis of a negotiating mandate by the EU Council. By the  end of  2002,  the
negotiations had not been concluded for any country.

With  respect  to  other  Agencies,  it  has  been  decided  to  prepare  the  future
participation  of  candidate  countries.  Preparation  for  full  participation  in
Community  Agencies  is  a  fundamental  step  towards  familiarising  these
countries  with  the  Community  acquis  in  the  broadest  sense  of  the  term.  It
could serve the interests of both the Union and the candidate countries. This
involvement  will  take  the  form  of  participation  of  representatives  of  these
countries in some ad hoc meetings, groups of experts and other specific work
of mutual interest being carried out by the Agencies.

As  a  continuation  of  a  2000  Phare  programme  to  implement  preparatory
measures  in  2000-2001  as  regards  the  10  CEEC’s  participation  in  five
Community agencies, a further € 6 million Phare support was decided by the
Commission  on  24  July  2002  for  the  period  2002-2003.  Under  this
programme the following eight Agencies will receive Phare support for such
preparatory measures:

(cid:1)  European Centre for the Development of Vocational Training

(cid:1)  European Agency for the Evaluation of Medicinal Products

(cid:1)  Office for Harmonisation in the Internal Market

(cid:1)  European Agency for Safety and Health at Work

(cid:1)  European Monitoring Centre on Racism and Xenophobia

(cid:1)  Translation Centre for Bodies of the European Union

(cid:1)  The  European  Foundation  for  the  Improvement  of  Living  and  Working

Conditions

34

(cid:1)  The European Monitoring Centre for Drugs and Drug Addiction

2.7. 

Co-operation with the EIB and International Financial Institutions

Co-operation  with  the  EIB  and  other  IFIs  continued  in  2002  under  the
framework of the Memorandum of Understanding on co-operation in the pre-
accession  assistance.  Given  the  fact  that  large  infrastructure  projects  that
commonly  are subject to international  co-financing  are  now  financed  under
ISPA,  co-financing  under  Phare  was  very  limited.  The  Commission  is,
however,  exploring  ways  to  co-finance  the  ESC  component  of  the  Phare
programme with the IFIs.

The  main  co-financing  instrument  in  2002  was  again  the  SME  Facility  in
which  the  EIB,  the  EBRD  and  the  Council  of  Europe  Development  Bank  /
KfW  are  participating.  In  2002,  the  Commission  also  finalised  discussions
with the EIB on a Facility  to finance local municipalities in border regions,
as  outlined  in  the  Commission  Communication  on  Border  Regions  (of  25
July 2001 COM(2001)437final).

3. 

PROGRAMME MANAGEMENT

3.1.  Moving towards extended decentralisation (EDIS)

During  2002,  the  candidate  countries  and  the  Commission  continued  the
efforts  to  move  towards  extended  decentralisation  in  the  management  of
Phare  funds,  and  of  the  pre-accession  funds  for  Cyprus  and  Malta5.  The
implementation  of  the  stages  towards  EDIS  as  indicated  in  the  document
“Roadmap  to  EDIS  for  ISPA  and  Phare”  (sent  to  candidate  countries  in
2001)  and  the  Commission  Working  document  “Preparing  for  Extended
Decentralisation”  (sent  to  candidate  countries  in  2000)  was  pursued  in  all
twelve countries.

The  Commission  provided  €  5.9  million  for  a  horizontal  Technical
Assistance  programme  to  support  the  national  administrations  of  the  Phare
countries in this process. An allocation per country was made out the global
amount  of  €  5.9  million  according  to  estimated  needs.  The  funds  were
earmarked for support to stages 2 and 3 of the Roadmap, namely the filling
of gaps (stage 2) identified in the system through the gap assessment (stage
1) and the compliance assessment of the filled gaps of the system (stage 3).
During the second half of 2002, the Financing Memoranda were signed with
each of the countries.

As an additional support structure, High Level Working Groups were set up
in  each  of  the  Phare  countries.  The  purpose  of  those  HLWGs  is  to  address
the whole  range  of issues covering  the management  of pre-accession aid  in
the run up to accession. More specifically, the HLWGs oversee the progress
towards EDIS in each country.  It is foreseen that the  HLWGs  will convene

5

Turkey is preparing to move to Decentralised Implementation System (DIS) in 2003

35

                                                
three times during  their  lifetime.  In 2002,  a first round  of HLWG meetings
was held in all countries.

Through  discussions  at  the  HLWGs  and  in  other  contacts  between  the
Commission and the negotiating countries, the proposal to hold a horizontal
seminar  with  all  candidate  countries  was  raised.  Such  a  seminar  was
successfully organised jointly by DG Enlargement and DG Regional Policy
in  Brussels  in  November  with  a  wide  participation  from  12  candidate
countries’ administrations. The topics covered  a range of subjects including
co-ordination between Phare and ISPA in relation to EDIS, legal aspects of
EDIS,  Twinning  and  EDIS,  procurement  and  EDIS,  the  processing  of  the
EDIS application by the Commission and the transition from SAPARD and
ISPA to Structural funds.

At the end of 2002, the EDIS state of play for the twelve countries concerned
was the following:

(cid:1)  Cyprus  and  Malta  had  reached  stage  4  of  the  Roadmap  (Preparation  for
Commission  decision  to  waive  ex-ante  control  on  management  of  pre-
accession funds).

(cid:1)  Hungary had initiated stage 2 of the Roadmap (Gap plugging).

(cid:1)  Estonia  and  Slovakia  had  completed  stage  1  of  the  Roadmap  (Gap

assessment).

(cid:1)  The  remaining  countries  had  well  advanced  in  stage  1  with  an  expected

completion date early 2003.

3.2.  Monitoring and Evaluation

Phare's  monitoring  and  evaluation  function 
to  deliver
independent, timely ex ante, intermediate and ex post evaluation findings to
candidate  countries,  Commission  delegations  and  the  country  teams  in  DG
Enlargement. Its aim is to help improve the efficiency and effectiveness with
which Phare pre-accession funds are used.

is  designed 

Main activities in 2002

During 2002, the following main activities were accomplished:

(1) 

An  internal  ex  ante  evaluation  was  launched  of  programming
mechanisms for Phare in 2004 and beyond, based on a questionnaire
and interview-based survey of stakeholder opinions and a comparison
of  Phare's  programming  mechanisms  with  those  in  comparable
interventions,  such  as  CARDS,  ISPA,  SAPARD  and  TACIS.  This
will continue into the first quarter of 2003.

(2) 

The  external  interim  evaluation  scheme  generated  some  110
individual  country,  sectoral  or  thematic  intermediate  evaluation
reports. A comprehensive revision of the new scheme was carried out

36

in  July  2002,  involving  improvements  in  methodology  and  formats,
and  a  faster,  more  differentiated  reporting  system,  with  clearer
targeting of specific audiences. A state-of-the-art-monitoring template
was  also introduced. This  enables a more user-friendly synoptic  and
analytic presentation of relevant information.

(3) 

An  external  ex  post  evaluation  was  undertaken  of  Phare  national
programmes  launched  in  1997/98.  This  will  continue  into  the  first
quarter of 2003. The exercise also involves the development of local
evaluation capacity.

Ex ante evaluation

2002 saw the launch of an ex  ante  evaluation of programming  mechanisms
for Phare in 2004 and beyond. The evaluation will aim to do this based on an
the  current  method  of  Phare
assessment  of 
programming  and  an  examination  of  programming  mechanisms 
in
comparable interventions.

learned  from 

lessons 

An  important  input  to  this  evaluation  is  an  independent  report  on
programming  and  project  design  prepared  in  2001  that  covers  projects
financed from 1990 to 1999. The contractor concluded that these projects had
often  had  poorly  specified  objectives,  technically  weak  logical  frameworks
(logframes), and inadequate indicators.

Remedial measures involving the systematic checking of these features at the
project formulation stage were introduced in 2002.

Monitoring and Interim Evaluation

The Phare Monitoring and Interim Evaluation scheme adopts a participatory
approach to providing the parties involved in programme management with a
regular, reliable assessment of the implementation of all on-going measures.
Two  means  are  used:  first,  monitoring  reports  drafted  by  the  implementing
agencies  providing  the  stakeholders'  view;  and  second,  interim  evaluation
reports  giving  the  independent  view  of  the  external  evaluators.  Based  on
these findings, the Sectoral Monitoring Subcommittees and Joint Monitoring
Committee  for  each  Candidate  Country  discuss  and  decide  on  remedial
actions to improve programme implementation.

In  2002,  this  scheme  generated  some  130  individual  country,  sectoral  and
thematic  reports.  Thematic  reports  covered  nuclear  issues,  civil  society,
public administration, justice and home affairs, objective setting, Twinning,
and  SMEs.  The  main  sectors  covered  were  agriculture,  ESC,  environment,
internal  market,  justice  and  home  affairs,  public  administration/finance,
regional policy, SMEs, civil society, and transport.

Findings indicate that Phare programming, on the whole,  generates  projects
whose priorities are in line with those of the Accession Partnerships and take
into account Regular Reports and Action Plans. However, although over two-
thirds of the projects evaluated in 2002 were rated as at least satisfactory, an

37

appreciable  number  are  poorly  designed  or  prepared,  with  vague  aims,
imprecise  indicators,  poor  take-up  of  lessons  learnt,  and  no  feasibility
studies.  The  evaluators'  view  is  that  Phare's  achievements  owe  more  to  the
management skills of those implementing the programme “to get something
done” than to good project design.

From  a  sectoral  angle,  the  Interim  Evaluation  reports  show  that  generally
good  progress  was  made  during  2002  in  meeting  objectives  in  agriculture,
environment, justice and home affairs, public administration/finance and the
social sector. Outcomes were more mixed in internal market, ESC, regional
policy  and transport. The  results in  the  SME sector have also  been  uneven,
with significant effects on business support services but very limited impact
in improving the business and financial environment.

In  addition,  evaluation  findings  confirmed  that  while  Twinning  is  an
essential instrument of the accession process, it needs to be accompanied by
widespread reforms in public administration in order to be effective.

Interim  Evaluation  itself  is  now  accepted  by  almost  all  candidate  country
beneficiaries  as  an  integral  part  of  the  project  management  cycle.  Reports
receive  serious  attention,  generate  healthy  debate  among  stakeholders,  and
lead  to  sustained  consideration  of  the  recommendations  they  contain.
Following through on evaluation findings and recommendations generates a
cascade  of  beneficial  effects.  These  include  institutional  changes  within
implementing agencies; better co-ordination between municipal, regional and
national levels in the candidate countries, and between donors; improvements
in  project  design;  re-allocation  of  resources;  gaining  of  additional  co-
financing; and more attention paid to sustaining the results of projects after
completion.

Following  up  recommendations  is  also  leading  to  the  diffusion  of  an
evaluation culture that promotes accountability and, in turn, sound financial
management, to improvements in monitoring and thus management capacity
and  the  development  of  a  real  participatory  approach  to  evaluation  on  the
part  of  all  stakeholders.  In  this  regard,  the  strong  involvement  of
Commission  delegations  has  a  considerable  impact  on  the  quality  of  the
outcome of interim evaluations.

The Interim Evaluation system will be further adapted in 2003:

(cid:1)  Following on from the decentralisation of monitoring in 2000, and in the
context  of  EDIS  (see  section  3.1.  earlier  in  this  Report),  the  interim
evaluation  function  itself  will  be  fully  decentralised  to  the  authorities  of
the ten candidate countries due to accede in 2004.

(cid:1)  The  Monitoring  and  Interim  Evaluation  Scheme  will  be  introduced  in

Cyprus, Malta and Turkey.

38

Ex post evaluation

The  ex  post  evaluation  of  a  €  1  billion  sample  of  Phare  support  to  10
countries  was  completed  in  May  2003.  This  report  consists  of  ten  country
reports, each with case studies annexed, an overall consolidated report and a
summary report. The sample selected for evaluation covers projects due for
completion  at  the  end  of  2001  and  stemming  from  the  1997/98  national
programmes  of  Bulgaria,  the  Czech  Republic,  Estonia,  Hungary,  Latvia,
Lithuania, Poland, Romania, the Slovak Republic and Slovenia. The exercise
is effectively ten separate country-level ex post evaluations within the same
envelope.

Organisational aspects included the formal nomination of a country evaluator
by  the  National  Aid  Co-ordinator  (NAC);  the  approval  of  each  country's
terms  of  reference  by  this  national  evaluation  representative;  and  the
appointment  of  local  independent  evaluators  in  each  country  to  provide
country-level  evaluation  reporting  under  the  supervision  of  the  overall
evaluation  contractor.  There  is  a  built-in  component  of  local  evaluation
training
capacity-building  based  on 
workshops and a distance-learning package.

learning-by-doing  supported  by 

Other activities

During 2002, a number of measures were taken by the Commission services
in  order  to  improve  the  quality  of  projects  at  the  design  stage  of  the  2003
programming cycle:

(cid:1)  Reinforcing the application of the project formulation methodology - The
2003 Programming Guide places a stronger emphasis than hitherto on the
requirement  to  specify  appropriate  indicators  and  to  incorporate  lessons
learned.

(cid:1)  Training  of  key  actors  in  the  candidate  countries  -  External  experts
delivered  two-day  training  workshops  on  programme  and  project  design
to  officials 
in  ministries,  co-ordination  offices  and  Commission
delegations in Slovakia, Bulgaria and Latvia (workshops in Romania and
Turkey are planned for early 2003). Training in monitoring was delivered
in eight candidate countries.

(cid:1)  Quality  checks  -  The  evaluation  unit  of  DG  Enlargement  systematically
checked  early  drafts  of  project  fiches  and  logframes  for  the  2003
programming cycle and provided feedback to country teams.

In addition, the groundwork was laid for the first meeting, in early 2003, of
the  Evaluation  Advisory  Group  (EAG)  of  Member  State  and  candidate
country representatives. In the context of the financial acquis of Chapter 28
and related principles of sound financial management, the EAG is designed
to  serve  as  a  forum  for  exchanging  good  practices  on  monitoring  and
evaluation models and local capacity-building strategies.

39

4. 

FINANCIAL OVERVIEW AND PERFORMANCE

In 2002, the Phare programme committed a total of € 1,695.1 million6 to its
partner countries. The following chart shows the breakdown year by year of
the Phare funds committed in the period 1990 – 2002 (€ million):

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1990: 475.3

1991: 769.7

1992: 979.6

1993: 966.1

1994: 946.1

1995: 1,114.0

1996: 1,207.8

1997: 1,135.1

1998: 1,153.9

1999: 1,481.7

2000: 1,651.5

2001: 1,635.4

2002: 1,695.1

6

The Phare contribution to the European Training Foundation (€ 4 million) is not included in
this figure

40

                                                
Total Phare funding by country, 1990-2002, in € million

Partner country

Commitments7

Contracts8

Payments8

Bulgaria

Czech Republic

Estonia

Hungary

Latvia

Lithuania

Poland

Romania

Slovakia

Slovenia

Czechoslovakia

East Germany

1,309.70

1,004.15

766.96

285.80

587.80

215.66

1,316.95

1,060.64

354.56

672.71

3,420.43

2,007.04

593.71

295.95

230.49

34.49

266.34

380.09

2,477.37

1,426.40

430.81

215.43

231.82

28.86

Multi-country programmes

2,711.18

2,164.11

Total

13,999.97

10,489.48

827.62

490.48

195.00

968.68

249.00

330.36

2,099.49

1,084.56

343.57

195.73

228.88

28.86

1,706.64

8,748.87

7

8

Amounts committed or pre-committed in Brussels headquarters
Amounts contracted or paid by Brussels headquarters and as reported by the Local Authorities
via Perseus

41