Commission staff working document - Technical annexes to the report from the Commission to the Council, the European Parliament and the European Economic and Social Committee 2007 - Annual IPA report {COM(2008) 850 final}
Date: 2008-12-15
Institutions: European Commission
Subjects: EU aid, EU financing, accession to the European Union, implementing Regulation, pre-accession strategy, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.12.2008 
SEC(2008) 3026 

COMMISSION STAFF WORKING DOCUMENT 

TECHNICAL ANNEXES 

TO THE REPORT FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 
2007 ANNUAL IPA REPORT 

{COM(2008) 850 final} 

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TABLE OF CONTENTS 

COMMISSION STAFF WORKING DOCUMENT TECHNICAL ANNEXES ...................... 1 

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

1. 

ALBANIA.................................................................................................................... 9 

1.1. 

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

1.1.1.  Political developments ............................................................................................... 9 

1.1.2.  Macroeconomic developments and structural reforms ........................................ 10 

1.1.3.  Progress in meeting the acquis communautaire.................................................... 10 

1.2. 

IPA in 2007 ................................................................................................................ 12 

1.2.1.  MIPD 2007-2009....................................................................................................... 12 

1.2.2.  Programming exercise ............................................................................................. 13 

1.2.2.1.  Component I: Transition Assistance and Institution Building................................... 13 

1.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 14 

1.2.3. 

Implementation Modalities and Structures ........................................................... 14 

1.2.4.  Overview of IPA programmes implemented ......................................................... 15 

1.2.5.  Participation in Community Programmes and Agencies ..................................... 15 

1.3. 

Monitoring and Results .............................................................................................. 15 

1.3.1.  Monitoring ................................................................................................................ 15 

1.3.2.  Evaluation results and Lessons Learned ............................................................... 15 

1.3.3.  Sectors with positive results - Success story box ................................................... 15 

2. 

BOSNIA and HERZEGOVINA ................................................................................ 16 

2.1. 

The year in review...................................................................................................... 16 

2.1.1.  Political developments ............................................................................................. 16 

2.1.2.  Macroeconomic developments and structural reforms ........................................ 17 

2.1.3.  Progress in meeting the acquis communautaire.................................................... 17 

2.2. 

IPA in 2007 ................................................................................................................ 19 

2.2.1.  MIPD 2007-2009....................................................................................................... 19 

2.2.2.  Programming exercise ............................................................................................. 20 

2.2.2.1.  Component I: Transition Assistance and Institution Building................................... 20 

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2.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 20 

2.2.3. 

Implementation Modalities and Structures ........................................................... 21 

2.2.4.  Overview of IPA programmes implemented ......................................................... 21 

2.2.5.  Participation in Community Programmes and Agencies ..................................... 21 

2.3. 

Monitoring and Results .............................................................................................. 21 

2.3.1.  Monitoring ................................................................................................................ 21 

2.3.2.  Evaluation results and Lessons Learned ............................................................... 21 

2.3.3.  Sectors with positive results - Success story box ................................................... 22 

3. 

CROATIA .................................................................................................................. 23 

3.1. 

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

3.1.1.  Political developments ............................................................................................. 23 

3.1.2.  Macroeconomic developments and structural reforms ........................................ 23 

3.1.3.  Progress in meeting the acquis communautaire.................................................... 23 

3.2. 

IPA in 2007 ................................................................................................................ 24 

3.2.1.  MIPD 2007-2009....................................................................................................... 24 

3.2.2.  Programming exercise ............................................................................................. 25 

3.2.2.1.  Component I: Transition Assistance and Institution Building................................... 26 

3.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 26 

3.2.2.3.  Component III: Regional Development ..................................................................... 27 

3.2.2.4.  Component IV: Human Resources Development....................................................... 28 

3.2.2.5.  Component V: Rural Development ............................................................................ 28 

3.2.3. 

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

3.2.4.  Overview of IPA programmes implemented ......................................................... 29 

3.2.5.  Participation in Community Programmes and Agencies ..................................... 29 

3.3. 

Monitoring and Results .............................................................................................. 29 

3.3.1.  State of play for IPA Monitoring Committee and Sectoral Monitoring 

Committees ............................................................................................................... 29 

3.3.2.  Annual and final reports on implementation ........................................................ 30 

3.3.3.  Evaluation results and Lessons learned ................................................................. 30 

3.3.4.  Sectors with positive results- Success story ........................................................... 30 

4. 

FORMER YUGOSLAV REPUBLIC of MACEDONIA .......................................... 32 

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4.1. 

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

4.1.1.  Political developments ............................................................................................. 32 

4.1.2.  Macroeconomic developments and structural reforms ........................................ 32 

4.1.3.  Progress in meeting the acquis communautaire.................................................... 32 

4.2. 

IPA in 2007 ................................................................................................................ 32 

4.2.1.  MIPD 2007-2009....................................................................................................... 32 

4.2.2.  Programming exercise ............................................................................................. 33 

4.2.2.1.  Component I: Transition Assistance and Institution Building................................... 33 

4.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 34 

4.2.2.3.  Components III and IV: Strategic Coherence Framework ........................................ 34 

4.2.2.4.  Component III: Regional Development ..................................................................... 34 

4.2.2.5.  Component IV: Human Resources Development....................................................... 35 

4.2.2.6.  Component V: Rural Development ............................................................................ 35 

4.2.3. 

Implementation Modalities and Structures ........................................................... 36 

4.2.4.  Overview of IPA programmes implemented ......................................................... 36 

4.2.4.1.  Component I: Transition Assistance and Institution Building................................... 36 

4.2.4.2.  Component II: Cross-Border Cooperation ................................................................ 36 

4.2.4.3.  Component III: Regional Development ..................................................................... 36 

4.2.4.4.  Component IV: Human Resources Development....................................................... 36 

4.2.4.5.  Component V: Rural Development ............................................................................ 37 

4.2.5.  Participation in Community Programmes and Agencies ..................................... 37 

4.3. 

Monitoring and Results .............................................................................................. 37 

4.3.1.  State of play for IPA Monitoring Committee and Sectoral Monitoring 

Committees ............................................................................................................... 37 

4.3.2. 

IPA Monitoring Committee .................................................................................... 37 

4.3.2.1.  Component I ............................................................................................................... 37 

4.3.2.2.  Component II.............................................................................................................. 37 

4.3.2.3.  Component III ............................................................................................................ 38 

4.3.2.4.  Component IV............................................................................................................. 38 

4.3.2.5.  Component V.............................................................................................................. 38 

4.3.3.  Annual and final reports on implementation ........................................................ 38 

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4.3.4.  Evaluation results and Lessons learned ................................................................. 38 

4.3.5.  Sectors with positive results – Success story.......................................................... 39 

5. 

KOSOVO (under UNSCR 1244/99).......................................................................... 40 

5.1. 

The year in review...................................................................................................... 40 

5.1.1.  Political developments ............................................................................................. 40 

5.1.2.  Macroeconomic developments and structural reforms ........................................ 40 

5.1.3.  Progress in meeting the acquis communautaire.................................................... 40 

5.2. 

IPA in 2007 ................................................................................................................ 41 

5.2.1.  MIPD 2007-2009....................................................................................................... 41 

5.2.2.  Programming exercise ............................................................................................. 42 

5.2.2.1.  Component I: Transition Assistance and Institution Building................................... 42 

5.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 43 

5.2.3. 

Implementation Modalities and Structures ........................................................... 43 

5.2.4.  Overview of IPA programmes implemented ......................................................... 43 

5.2.4.1.  Component I: Transition Assistance and Institution Building................................... 43 

5.2.4.2.  Component II: Cross-Border Cooperation ................................................................ 43 

5.2.5.  Participation in Community Programmes and Agencies ..................................... 44 

5.3. 

Monitoring and Results .............................................................................................. 44 

5.3.1.  Monitoring ................................................................................................................ 44 

5.3.2.  Evaluation results and Lessons Learned ............................................................... 44 

5.3.3.  Sectors with positive results- Success story box .................................................... 44 

6. 

MONTENEGRO........................................................................................................ 45 

6.1. 

The year in review...................................................................................................... 45 

6.1.1.  Political developments ............................................................................................. 45 

6.1.2.  Macroeconomic developments and structural reforms ........................................ 45 

6.1.3.  Progress in meeting the acquis communautaire.................................................... 45 

6.2. 

IPA in 2007 ................................................................................................................ 46 

6.2.1.  MIPD 2007-2009....................................................................................................... 46 

6.2.2.  Programming exercise ............................................................................................. 47 

6.2.2.1.  Component I: Transition Assistance and Institution Building................................... 47 

6.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 48 

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6.2.3. 

Implementation Modalities and Structures ........................................................... 48 

6.2.4.  Overview of IPA programmes implemented ......................................................... 49 

6.2.5.  Participation in Community Programmes and Agencies ..................................... 49 

6.3. 

Monitoring and Results .............................................................................................. 49 

6.3.1.  Monitoring ................................................................................................................ 49 

6.3.2.  Evaluation results and Lessons Learned ............................................................... 49 

6.3.3.  Sectors with positive results - Success story box ................................................... 49 

7. 

SERBIA...................................................................................................................... 50 

7.1. 

The year in review...................................................................................................... 50 

7.1.1.  Political developments ............................................................................................. 50 

7.1.2.  Macroeconomic developments and structural reforms ........................................ 51 

7.1.3.  Progress in meeting the acquis communautaire.................................................... 51 

7.2. 

IPA in 2007 ................................................................................................................ 52 

7.2.1.  MIPD 2007-2009....................................................................................................... 52 

7.2.2.  Programming exercise ............................................................................................. 52 

7.2.2.1.  Component I: Transition Assistance and Institution Building................................... 53 

7.2.2.2.  Component II: Cross–Border Cooperation ............................................................... 54 

7.2.3. 

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

7.2.4.  Overview of IPA programmes implemented ......................................................... 55 

7.2.5.  Participation in Community Programmes and Agencies ..................................... 55 

7.3. 

Monitoring and Results .............................................................................................. 55 

7.3.1.  Monitoring ................................................................................................................ 55 

7.3.2.  Evaluation results and Lessons Learned ............................................................... 55 

7.3.3.  Sectors with positive results - Success story box ................................................... 56 

8. 

TURKEY.................................................................................................................... 57 

8.1. 

The year in review...................................................................................................... 57 

8.1.1.  Political developments ............................................................................................. 57 

8.1.2.  Macroeconomic developments and structural reforms ........................................ 57 

8.1.3.  Progress in meeting the acquis communautaire.................................................... 57 

8.2. 

IPA in 2007 ................................................................................................................ 57 

8.2.1.  MIPD 2007-2009....................................................................................................... 57 

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8.2.2.  Programming exercise ............................................................................................. 58 

8.2.2.1.  Component I: Transition Assistance and Institution Building................................... 59 

8.2.2.2.  Component II: Cross-Border Cooperation ................................................................ 59 

8.2.2.3.  Components III and IV: Strategic Coherence Framework ........................................ 59 

8.2.2.4.  Component III: Regional Development ..................................................................... 60 

8.2.2.5.  Component IV: Human Resources Development....................................................... 61 

8.2.2.6.  Component V: Rural Development ............................................................................ 61 

8.2.3. 

Implementation Modalities and Structures ........................................................... 61 

8.2.4.  Overview of IPA programmes implemented ......................................................... 63 

8.2.5.  Participation in Community Programmes and Agencies ..................................... 63 

8.3. 

Monitoring and Results .............................................................................................. 63 

8.3.1.  State of play for IPA Monitoring Committee and Sectoral Monitoring 

Committees ............................................................................................................... 63 

8.3.1.1.  IPA Monitoring Committee ........................................................................................ 63 

8.3.1.2.  Sectoral Monitoring Committees ............................................................................... 64 

8.3.2.  Evaluation results and Lessons learned ................................................................. 65 

8.3.3.  Sectors with positive results- Success story ........................................................... 65 

PART II: MULTI-BENEFICIARY AND REGIONAL PROGRAMMES ............................. 66 

9. 

The year 2007 in review............................................................................................. 66 

9.1. 

Addressing the Political Criteria ................................................................................ 66 

9.1.1.  Regional Issues and International Obligations...................................................... 66 

9.1.1.1.  Regional Cooperation Initiatives ............................................................................... 66 

9.1.1.2.  Public Administration (The Regional School for Public Administration (ReSPA)) .. 66 

9.1.1.3.  Support to Interim Civilian Administrations.............................................................. 67 

9.1.2.  Civil Society Dialogue and Development ............................................................... 67 

9.2. 

Addressing the Economic Criteria ............................................................................. 67 

9.2.1.  Tempus, Erasmus Mundus and Youth in Action.................................................. 67 

9.2.2. 

International Financing Institutions ...................................................................... 68 

9.3. 

Ability to assume the obligations of Membership and approximation to European 
Standards .................................................................................................................... 68 

9.3.1.  Customs and Taxation ............................................................................................. 68 

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10. 

IPA in 2007 ................................................................................................................ 69 

10.1.  MIPD 2007-2009 ....................................................................................................... 69 

10.2. 

Programming exercise................................................................................................ 69 

10.3. 

Implementation Modalities and Structures ................................................................ 70 

10.4.  Overview of IPA programmes implemented ............................................................. 70 

10.5. 

Participation in Community Programmes and Agencies ........................................... 70 

11. 

Monitoring and Results .............................................................................................. 70 

11.1.  Monitoring.................................................................................................................. 70 

11.2. 

Evaluation results ....................................................................................................... 70 

11.3. 

Sectors with positive results- Success story............................................................... 70 

PART III: TECHNICAL AND FINANCIAL ASSISTANCE ................................................ 71 

1. Twinning .............................................................................................................................. 71 

2. TAIEX.................................................................................................................................. 72 

3. SIGMA ................................................................................................................................. 74 

PART IV: FINANCIAL DATA............................................................................................... 76 

1. IPA funds by year................................................................................................................. 76 

2. IPA funds by country 2007 (in euro) ................................................................................... 77 

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PART I: COUNTRY SECTION 

1. 

ALBANIA 

1.1. 

The year in review  

1.1.1.  Political developments 

In  2007,  Albania  made  some  progress  on  democracy  and  the  rule  of  law,  even  though  the 
political climate remained overall tense. 

Albania's  parliament  fulfilled  its  constitutional  role  and  a  new  president  was  elected,  but 
political parties' lack of will to co-operate continued to hold back reforms, particularly in the 
electoral  and  judicial  fields.  Albania  made  some  progress  in  strengthening  its  government 
structures to implement its EU commitments and to address its development needs. There was 
less turn-over in Albania's public administration, but there remained widespread weaknesses 
in human resources management. 

In  the  field  of  justice,  the  procedures  for  evaluating  judges  improved,  the  court  system  was 
rationalised  and  the  execution  of  judgements  somewhat  accelerated.  However,  the 
performance  of  the  judiciary  remained  overall  poor.  The  government  took  a  more  strategic 
approach to the fight against corruption. Anti-corruption investigations led to the arrest of a 
number of high-level officials. However, corruption remained widespread. 

Regarding  human  rights  and  the  protection  of  minorities,  formal  instructions  to  prosecutors 
and  judicial  police  were  passed  underlining  the  need  to  respect  human  rights  in  criminal 
proceedings.  Some  improvements  were  made  to  conditions  in  detention  facilities  and  most 
pre-trial  detainees  were  transferred  to  new  dedicated  sections  in  prisons.  However,  prisons 
remained overcrowded and detention standards poor.  

Albania  made  some  progress  on  freedom  of  expression.  An  action  plan  to  develop  new 
broadcasting  legislation  was  agreed.  Steps  were  taken  to  ensure  that  the  public  radio  and 
television  steering  committee  includes  civil  society  representatives.  However,  better 
implementation of existing legislation is required. 

Despite  a  favourable  legal  framework  for  civil  society  organisations,  civil  society  groups 
remained weak and not sufficiently involved in policy-making. There was some progress on 
strengthening children's and women's rights through new legislation. Social services improved 
somewhat.  Measures  to  support  socially  vulnerable  people  and  people  with  disabilities 
remained limited. As regards property rights, the government adopted a strategy which links 
the processes of initial registration of real estate, restitution, compensation and legalisation of 
informally  constructed  buildings.  Better  management  of  restitution  and  compensation 
accelerated the processing of claims somewhat, but it remained overall slow.  

Albania  took  some  measures  to  fulfil  its  commitments  on  the  protection  of  minorities  but 
further  improvement  was  hindered  by  the  lack  of  sound  data  on  the  size  and  situation  of 
minorities. The Roma people continued to face difficult living conditions and discrimination. 

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Regarding  regional  issues  and  international  obligations,  Albania  continued  to  foster  good 
relations with other Western Balkan and neighbouring EU countries, both multilaterally and 
bilaterally. It maintained a constructive position in relation to the Kosovo issue. 

1.1.2.  Macroeconomic developments and structural reforms 

Political  consensus  on  the  essentials  of  economic  policy  was  generally  maintained  in  2007. 
Macroeconomic  stability  was  largely  achieved.  Economic  growth  continued  to  be  strong 
despite  energy  shortages.  Inflation  remained  low.  The  level  of  registered  unemployment 
(around  15%)  continued  to  decline.  Fiscal  revenue  performance  was  broadly  in  line  with 
targets  and  budget  implementation  improved.  Public  finance  reforms  advanced  further,  but 
fiscal  risks  remained.  In  general,  the  macroeconomic  policy  mix  was  adequate.  Following 
significant delays in 2006, privatisation gained new momentum in 2007. The privately-owned 
banking  sector  continued  to  grow.  Credit  expansion  remained  strong.  The  regulatory 
framework  for  banking  supervision  is  well  developed.  Trade  integration  with  the  EU 
remained fairly high. 

However,  external  deficits  widened  further,  mainly  due  to  difficulties  in  the  energy  sector. 
Some progress was made as regards the enforcement of court rulings and the establishment of 
property rights, but the shortcomings in the judicial system and law implementation hindered 
improve, 
the  business  climate.  While  company  registration  procedures  started 
administrative inefficiencies hampered market entry and exit. Some progress was achieved in 
the  area  of  supervising  financial  actors  other  than  banks,  but  there  remains  scope  for 
strengthening  it,  in  particular  regarding  the  pension  industry.  Structural  unemployment 
persisted. Shortages of qualified staff and poor infrastructure held back the development of a 
private  sector  that  should  make  a  sustained  contribution  to  the  country's  development.  The 
large informal sector, fuelled by persistent weaknesses in law enforcement and the regulatory 
framework,  reduced  the  tax  base,  hampered  the  government's  capacity  to  implement 
economic policies and affected negatively the business environment. 

to 

1.1.3.  Progress in meeting the acquis communautaire 

Albania continued to align its legislation, policies and capacity with the acquis.  

In the area of the free movement of goods, progress in adopting standards and in accreditation 
was  overall  good.  Capacity  for  metrology  and  market  surveillance  was  strengthened,  but 
legislative improvements remained pending. On consumer protection some progress has been 
made. The necessary  improvements  to  handle  complaints and to deal with the settlement of 
disputes  were  not  achieved.  Uncertainties  related  to  property  rights  continued  to  discourage 
establishment.  

Progress  was  made  on  customs  computerisation.  This  helped  Albania  to  implement  trade-
related  provisions  of  the  SAA  more  effectively.  Customs  revenue  continued  to  rise.  The 
administration of taxation was rationalised and progress was made on computerisation and on 
handling of taxpayers' appeals. However, tax collection remained low.  

The Competition Authority (ACA) was strengthened. It assessed several merger notifications 
and  imposed  fines  for  violation  of  competition  rules.  The  State  Aid  Department  was  given 
independence  from  the  Ministry  of  Economy  as  regards  reporting.  New  public  procurement 
legislation, more in line with EU standards, was approved. The Public Procurement Agency 
was  strengthened  but  its  administrative  capacity  requires  further  upgrading,  even  though  an 
independent  review  body  in  line  with  the  acquis  was  still  missing.  Albania  undertook  first 

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steps in the area of e-procurement. Regarding intellectual property rights (IPR), enforcement 
remained weak.  

In  the  field  of  employment  and  social  policies,  the  institutional  and  regulatory  framework 
improved with the adoption of a law on labour inspection. However, the capacity of the labour 
inspectorate remained limited and occupational health and safety, poor. Budget provisions for 
education  were  markedly  increased.  Implementation  of  the  national  strategies  for  pre-
university education and vocational training started and a  new law on higher education was 
approved. 

Regarding  industry  and  SMEs,  a  National  Registration  Centre  was  established  to  facilitate 
business  registration,  and  a  strategy  to  promote  SME  competitiveness  was  approved.  An 
updated  action  plan  was  established  to  address  the  informal  economy  and  to  remove 
administrative barriers to investment. Progress on agriculture was limited. Some incentives to 
increase production were introduced, but the competitiveness of the farming sector remained 
low.  Compliance  with  EU  veterinary  and  phytosanitary  standards,  required  to  benefit  from 
SAA and Interim Agreement trade concessions, remained poor. Regarding environment, some 
progress was made on horizontal legislation, but implementation remained weak.  

Progress  in  the  field  of  transport  was  limited.  Albania  ratified  the  European  Common 
Aviation Area Agreement and started the implementation of the first transitional phase. The 
improvements required as regards the safety of maritime transport were not carried out. In the 
energy  sector,  Albania  was  not  been  able  to  ensure  security  of  electricity  supply.  This 
hampered  the  social  and  economic  development  of  the  country.  Considerable  efforts  are 
required to meet the requirements of the Energy Community Treaty. 

Market liberalisation in the areas of electronic communications and information technologies 
remained  at  an  early  stage.  Regarding  financial  control,  legislation  was  prepared,  but 
inspection  capacity  remained  weak.  Progress  was  reasonable  in  the  field  of  statistics.  Most 
major statistical classifications are in place and comply with EU standards. 

In the field of justice, freedom and security progress was made in some areas. An EU-Albania 
visa  facilitation  agreement  was  signed.  The  issuing  of  biometric  passports  in  line  with  EU 
standards and the amendment of the Law on foreigners are issues that remain to be tackled. 

New infrastructure, extension of IT links and better inter-agency and cross-border police co-
operation  led  to  improved  border  control.  An  integrated  border  management  strategy  was 
adopted.  Border  crossing  point  infrastructure  nonetheless  remained  below  EU  standards. 
Laws  on  asylum  comply  with  international  standards  but  implementation  remained  weak. 
Migration  checks  at  borders  were  somewhat  more  effective,  but  there  is  still  considerable 
room for improvement.  

The  banking  system  was  better  used  to  fight  money  laundering;  most  public  administration 
salaries  are  now  paid  through  banks.  However,  concrete  results  in  the  fight  against  money 
laundering remained insufficient. Regarding the fight against drugs, co-operation with foreign 
partners  improved  and  the  construction  of  proper  storage  infrastructure  for  seized  drugs 
started.  Significant  quantities  of  drugs  were  seized  but  were  still  low  compared  with  the 
amounts which are estimated to be trafficked through Albania.  

A  new  state  police  law  was  adopted  which  should  help  de-politicise  the  police.  The  South 
East  Europe  Police  Co-operation  Convention,  now  ratified,  and  a  strategic  agreement  with 
Europol  provided  for  intensified  international  co-operation.  Success  in  investigation  and 

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prosecution remained hampered by poor communication between police and prosecutors and 
the lack of proactive investigative techniques.  

Organised  crime  remained  a  serious  problem,  even  if  a  number  of  high-profile  organised 
crime  arrests  were  made  and  police  response  to  serious  crimes  improved.  New  tactical  and 
investigative equipment was introduced. Co-operation with Interpol also improved. However, 
many  international  arrest  requests  were  not  given  proper  follow  up  and  results  in  terms  of 
actual dismantling organised crime organisations were limited. Efforts remained hampered by 
corruption  and  weak  witness  protection.  Albania  continued  to  investigate  and  prosecute 
trafficking  in  human  beings  vigorously,  but  it  remained  a  significant  transit  country.  Few 
victims  were  willing  to  testify  against  traffickers,  due  to  weak  witness  protection.  Poor  co-
ordination hampered implementation of the national anti-trafficking strategy.  

Counter-terrorism structures in the police and the intelligence service co-operated better and 
co-operation  with  international  actors  was  good.  However,  equipment  and  training  for 
counter-terrorist analysts and investigators remained insufficient. Efforts to revise the law on 
protection  of  personal  data  started,  but  legislation  and  structured  do  not  meet  European 
standards yet. 

1.2. 

IPA in 2007 

1.2.1.  MIPD 2007-2009  

The Multi-annual Indicative Planning Document (MIPD) 2007-2009 for Albania was adopted 
on  31  May  2007.  This  strategic  document  identifies  priorities  based  on  the  assessment  of 
Albania's progress in the implementation of the Stabilisation and Association process. These 
priorities  are  grouped 
three  key  areas,  Political  Requirements,  Socio-Economic 
Requirements and European standards.  

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In  the  area  of  political  requirements,  efforts  remain  necessary  to  promote  good  governance, 
despite  the  progress  of  Albania  in  the  consolidation  of  the  stability  of  its  institutions 
guaranteeing  democracy,  the  rule  of  law,  human  rights  and  respect  for  and  protection  of 
minorities. 

Albania needs further support to improve the socio-economic situation of the country and its 
population,  particularly  improving  the  business  climate,  reduce  unemployment,  better  link 
education system with employment and strengthening the social welfare services. 

Albania  must  continue  its  efforts  to  comply  with  the  approximation  of  legislation  and 
adoption  of  EU  standards,  whereas  implementation  and  enforcement  should  be  accelerated 
through the establishment and capacity building of agencies and institutions. Sectoral policies, 
customs,  integrated  border  management  and  migration  and  asylum  policy  can  also  be 
supported.  In  addition,  IPA  can  prepare  the  country  for  decentralised  management  of  EU 
assistance through capacity building of relevant administrative departments and institutions as 
well as by establishing internal controls and audits. 

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12 

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(in € million, to nearest € 100,000) 

1.2.2.  Programming exercise 

Albania 

I Transition Assistance and Institution Building 

Of which:  

National Programme 

II Cross Border Cooperation 

Of which:  

Nuclear Safety programme 

Customs Programme 

Tempus and Erasmus Mundus Programmes 

CBC Albania – Greece 

CBC Adriatic programme 

CBC Albania – former Yugoslav Republic of Macedonia 

CBC Albania – Montenegro 

CBC Kukes region programme 

CBC participation in ERDF SE Europe programme 

2007 

54.3

49.3

0.5

1.8

2.7

6.7

0.9

3.2

1.1

0.8

0.5

0.2

Programmes  for  component  II  are  adopted  for  three  years.  Financial  commitments  are  made  annually  and 
therefore figures above are just for 2007 

1.2.2.1.  Component I: Transition Assistance and Institution Building 

The  2007  IPA  component  I  National  Programme  for  Albania  was  presented  to  the  IPA 
Management  Committee  on  27  July  2007  and  was  adopted  by  the  Commission  on  20 
September 2007. The number of projects within this programme was limited to seven, which 
should  help  to  improve  implementation  rates.  In  order  to  facilitate  the  management  of  the 
programme by the EC Delegation, the contracting deadline for the 2007 National Programme 
was exceptionally extended to "n + 3" (instead of the standard "n + 2").  

The programme supports Albania to comply with the political criteria through support to the 
police  mission  PAMECA  III  and  assistance  to  prepare  the  accreditation  for  decentralised 
management  of  EU  funds.  In  the  economic  area,  the  programme  funds  support  to  the  SME 
sector  through  a  joint  programme  with  the  European  Bank  for  Reconstruction  and 
Development  (EBRD).  The2007  National  Programme  also  assists  the  country  to  align  with 
the  acquis  through  projects  on  statistics  alignment,  water  management  and  support  to  the 
General Directorate of Tax of Albania.  

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1.2.2.2.  Component II: Cross-Border Cooperation 

IPA  Component  II  supports  the  participation  of  Albania  in  two  bilateral  cross–border 
programmes with neighbouring candidate/potential candidate countries: Montenegro and the 
former  Yugoslav  Republic  of  Macedonia.  With  regards  to  cross–border  cooperation  with 
Member  States,  IPA  Component  II  finances  a  bilateral  programme  Albania–Greece  and  the 
participation  of  Albania  in  the  multilateral  cross–border  programme  "Adriatic",  where 
Albania,  Bosnia  and  Herzegovina,  Croatia,  Montenegro  and  Serbia  cooperate  with  Greece, 
Italy  and  Slovenia  across  the  Adriatic  Sea.  Moreover,  IPA  Component  II  also  finances  a 
unilateral programme concerning the development of the Kukes region of Albania, bordering 
Kosovo,  as  well  as  the  participation  of  Albania  in  the  ERDF  transnational  programme 
"South–East Europe". 

All  Component  II  programmes  involving  Albania,  except  those  with  Member  States,  were 
presented to the IPA Committee on 29/30 October and were adopted by the Commission on 
18/20  December.  Although  being  prepared  in  2007,  the  cross–border  programmes  with 
Member States (with Greece and the Adriatic) were adopted in March 2008. To be noted, as a 
condition for its implementation, the CBC programme with Greece – which should be put into 
operation  according  to  the  transitional  arrangements  referred  to  in  Article  99  of  the  IPA 
Implementing  Regulation  No  718/2007  –  required  a  parallel  adoption  decision  covering  the 
Greek side of the border (adopted in September 2008).  

1.2.3. 

Implementation Modalities and Structures  

IPA 2007 National Programme: 

The  2007  component  I  National  Programme,  with  the  exception  of  one  project,  will  be 
implemented on a centralised basis by the European Commission in accordance with Article 
53a of the Financial Regulation and the corresponding provisions of the Implementing Rules. 
The Implementing Authority is the Delegation of the European Commission in Albania. 

The  project  concerning  technical  assistance  to  SMEs  will  be  implemented  by  the  European 
Commission  in  joint  management  with  the  EBRD  following  Article  53d  of  the  Financial 
Regulation  and  the  corresponding  provisions  of  the  Implementing  Rules.  To  this  end,  the 
Commission and the EBRD will conclude a Contribution Agreement. 

Albania's  participation  in  horizontal  nuclear  safety,  customs  and  education  programmes  is 
also  funded  from  its  component  I  envelope.  These  programmes  are  not  included  in  the 
component I national programme as they will be implemented on a multi-country basis and be 
managed centrally by the European Commission in Brussels.  

Preparation of Decentralised Implementation System: 

Regarding preparations for the Decentralised Implementation System (DIS), Albania aims at 
full DIS accreditation for IPA. It has taken a number of initiatives in this respect: The Council 
of Ministers adopted in September 2007 a decision setting up structures and defining roles for 
DIS. The responsibility for DIS is now with the Ministry of Finance (MoF) which intends to 
integrate  the  Programme  Management  Unit  (PMU)  of  a  previous  decentralised  CARDS 
project  into  the  new  Central  Finance  and  Contracting  Unit  (CFCU).  The  Commission 
provided  comments  on  a  draft  proposal  on  role  and  structure  of  the  CFCU.  The  IPA  2007 
National Programme foresees a project to support the country in the DIS process, starting in 
2008.  

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1.2.4.  Overview of IPA programmes implemented 

In  2007,  only  the  implementation  of  the  project  for  the  police  mission  PAMECA  under  the 
Albania  National  Programme  2007  started.  The  call  for  proposals  for  PAMECA  III  was 
published, including a suspensive clause, shortly after the adoption by the Commission of the 
National Programme and was open until 14 January 2008.  

1.2.5.  Participation in Community Programmes and Agencies 

In  2007,  Albania  did  not  participate  in  Community  programmes  and  Agencies.  However,  a 
memorandum of understanding was concluded on 17 December 2007 for participation in the 
Research  Framework  Programme  7  No  funds  have  been  allocated  under  IPA  2007  for 
participation in Community programmes. 

1.3.  Monitoring and Results 

1.3.1.  Monitoring 

No  monitoring  of  IPA  projects  was  carried  out  in  2007  as  the  IPA  2007  programmes  were 
only adopted at the end of the year and the actual implementation only started in 2008. 

1.3.2.  Evaluation results and Lessons Learned  

So far there are no evaluation results of IPA programmes in 2007 as the implementation only 
started  in  2008.  For  the  first  year  of  IPA  no  lessons  learned  can  be  identified  as  the 
implementation only started in 2008. 

1.3.3.  Sectors with positive results - Success story box  

For  the  first  year  of  IPA,  no  sectors  with  positive  results  can  be  identified  as  the 
implementation of IPA programmes only started in 2008. 

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15 

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2. 

BOSNIA AND HERZEGOVINA  

2.1. 

The year in review 

2.1.1.  Political developments 

In  2007,  Bosnia  and  Herzegovina's  progress  slowed  down.  Complex 
institutional 
arrangements,  disregard  for  the  Dayton/Paris  peace  agreement  and  nationalist  rhetoric 
undermined the country's reform agenda. Lack of progress on this and other important issues 
continued to delay the signature of the Stabilisation and Association Agreement (SAA), even 
though some positive developments in November allowed the initialling of the Agreement on 
4 December. 

Bosnia and Herzegovina's system of governance continued to involve significant international 
presence.  The  Office  of  the  High  Representative/EU  Special  Representative  (OHR)  worked 
closely  with  the  European  Commission  to  bring  Bosnia  and  Herzegovina  closer  to  the  EU. 
However,  the  authorities  of  Bosnia  and  Herzegovina  did  not  demonstrate  capacity  to  take 
further political ownership and responsibility. The Peace Implementation Council decided to 
postpone the closure of OHR. 

Following  the  elections  in  October  2006,  which  were  generally  in  line  with  international 
standards, the government of Republika Srpska was formed in November 2006, but the state-
level  government  and  that  of  the  Federation  of  Bosnia  and  Herzegovina  needed  more  than 
four  months  to  be  constituted.  Little  progress  was  made  in  improving  state-entity  co-
ordination,  and  overall  performance  of  the  executive  and  legislative  institutions  remained 
poor. The prevailing political climate led discussions on constitutional reform to a stall. 

The public administration reform co-ordinator's office was strengthened and initial steps were 
taken  to  implement  the  public  administration  reform  strategy.  An  EU  supported  public 
administration  reform  fund  was  set  up.  Regarding  the  judicial  system,  Bosnia  and 
Herzegovina reduced its dependence on the international community through the replacement 
of  international  judges  and  prosecutors  by  local  ones.  However,  the  fragmentation  of  the 
judicial  system  and  disparities  in  the  legal  framework  continued  to  hamper  the  operation  of 
the judiciary. Bosnia and Herzegovina's co-operation with the International Criminal Tribunal 
for the former Yugoslavia (ICTY) improved and reached a generally satisfactory level.  

Bosnia  and  Herzegovina  achieved  limited  progress  in  the  fight  against  corruption.  The 
National Anti-Corruption Strategy was not properly implemented.  

As  regards  human  and  minority  rights,  full  compatibility  of  Bosnia  and  Herzegovina's 
legislation  with  the  European  Convention  of  Human  Rights  was  not  achieved,  as  this  is 
dependent on a reform of the Constitution. Shortcomings remained as regards the prevention 
of ill-treatment by law enforcement bodies, the fight against impunity, the prisons system and 
the access to justice and equality before the law. Religious intolerance remained an issue. In 
the field of freedom of expression and media, the Federation public broadcasting law was not 
adopted. Bosnia and Herzegovina made progress in addressing the backlog of human rights-
related cases, but court rulings were not always properly implemented. 

Overall  implementation  of  legislation  protecting  the  rights  of  women,  children  and  socially 
vulnerable  people  was  poor.  The  complex  system  of  government  and  the  fragmentation  of 

EN 

16 

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legislation across the country continued to hamper social dialogue. Some progress was made 
as regards the support provided by the authorities to civil society development, even though 
the sector remained weak overall. 

Intolerance and ethnic discrimination remained present, and the minorities-related legislation 
was  not  always  properly  implemented.  Many  refugees  and  internally  displaced  persons  did 
not  benefit  from  basic  pension  and  health  provisions  and  socio-economic  integration  of 
returnees remained a problem. The implementation of the national strategy for the Roma was 
living  conditions  and 
limited  and 
discrimination.  

the  Roma  minority  continued 

to  face  difficult 

On  the  whole  Bosnia  and  Herzegovina's  relations  with  its  neighbours  were  good,  although 
certain  strains  appeared  in  particular  in  relation  to  the  ruling  of  the  International  Court  of 
Justice  on  Bosnia  and  Herzegovina's  lawsuit  against  Serbia  and  Montenegro  for  genocide. 
Little progress was made in addressing the outstanding trade and border-related matters. 

2.1.2.  Macroeconomic developments and structural reforms 

In  2007,  economic  growth  remained  high  and  accelerated,  while  the  external  balance 
improved.  The  currency  board  arrangement  continued  to  underpin  macroeconomic  stability 
and inflation receded to the low levels recorded before the introduction of the VAT in January 
2006.  The  introduction  of  VAT  increased  fiscal  revenue.  Foreign  direct  investment  (FDI) 
increased significantly and helped finance the external deficit. The financial sector developed 
rapidly while price competitiveness was to a large extent preserved. 

However, the overall political climate and weak domestic consensus on the fundamentals of 
economic policy led to a slow-down of reforms both at entity and other levels of government. 
Despite robust economic growth, unemployment remained very high. Public spending, and in 
particular social spending, rose significantly, weakening the quality of fiscal adjustment and 
adding to fiscal risks. Significant structural rigidities continued to hamper the functioning of 
the labour market. The restructuring of state-owned enterprises advanced slowly and progress 
in  the  liberalisation  of  network  industries  was  limited.  The  business  environment  remained 
affected  by  significant  administrative  inefficiencies,  weak  enforcement  of  creditor  and 
property  rights  and  sizeable  intervention  of  the  state  in  the  productive  sector.  The  large 
informal  sector  hampered  the  government's  capacity  to  implement  economic  policies  and 
affected negatively the business environment. 

2.1.3.  Progress in meeting the acquis communautaire 

Overall, Bosnia and Herzegovina made limited progress in aligning its legislation and policies 
with the acquis.  

Preparations  in  the  field  of  standardisation,  certification  and  market  surveillance  advanced, 
though  slowly.  A  lack  of  conformity  assessment  bodies  and  procedures  continued  to  hinder 
export  capacity.  The  establishment  of  a  market  surveillance  structure  based  on  appropriate 
product legislation and the phasing out of pre-market controls was not carried out. In the area 
of  services,  right  of  establishment  and  company  law,  registering  businesses  and  obtaining 
licenses  remained  burdensome.  Banking  supervision  was  not  brought  to  the  State  level  and 
remained an Entity responsibility. 

No  significant  further  development  took  place  in  the  area  of  free  movement  of  capital,  but 
Bosnia and Herzegovina's preparations in this area are on track. Limited additional progress 

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17 

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was made in relation to customs rules where, in particular, rules of origin, valuation and free 
zones  would  have  needed  more  attention.  As  for  taxation,  VAT  collection  was  higher  than 
expected,  but  no  system  for  the  reallocation  of  the  collected  revenue  to  the  Entities  and  the 
Brčko District was agreed.  

Bosnia  and  Herzegovina  is  progressing  steadily  in  the  area  of  anti-trust  control.  Some 
progress  was  also  been  made  with  regard  to  state  aid  through  the  establishment  of  a 
preliminary state aid inventory. The Public Procurement Agency and the Procurement Review 
Body  saw  their  operation  improved.  Little  progress  was  made  regarding  the  enforcement  of 
intellectual property rights. 

Social  and  employment  legislation  and  policies  remained  fragmented.  Some  progress  was 
made  in  the  field  of  education,  notably  through  the  adoption  of  a  higher  education  law 
supporting the participation  in  the  Bologna process. Separation of children  in  schools along 
ethnic lines remained an issue. 

Little  additional  progress  has  been  made  towards  ensuring  the  existence  of  a  real  internal 
market within Bosnia and Herzegovina. In this context, the State laws on obligations, leasing 
and pharmaceutical products have not been adopted. 

The  industry  policy  strategy  and  the  SME  Development  strategy  were  not  adopted.  Little 
progress  was  made  in  the  field  of  agriculture.  The  development  of  a  comprehensive 
agricultural  strategy  was  not  achieved,  although  some  steps  were  taken  to  establish  the 
necessary  State-level  legal  framework.  Implementation  of  the  food  safety,  veterinary  and 
phytosanitary legislation remained poor. In the field of environment, the long expected State-
level environmental law to create the framework for a nationwide, harmonised environmental 
protection was not adopted and the state environment agency was not set up. 

Sustained, albeit slow, progress continued regarding Bosnia and Herzegovina’s involvement 
in developing the trans-European transport network. Bosnia and Herzegovina advanced in the 
implementation  of  the  first  transitional  phase  the  European  Common  Aviation  Area 
Agreement (ECAA).  

In the electricity sector, transmission was unbundled. Reforms in the gas sector saw particular 
delays.  A  country-wide  energy  strategy  remained  pending.  The  requirements  of  the  Energy 
Community Treaty were only partly met. 

As regards information society and media, some progress was made in terms of liberalisation 
of the telecommunication sector and approximation of audiovisual legislation with the acquis 
by  the  Communications  Regulatory  Agency.  In  the  field  of  statistics,  the  co-operation 
agreement  between  the  country's  statistics  institutions  at  State  and  Entity  level  was  not 
properly implemented.  

In the area of justice, freedom and security, the lifting of visa requirements for all EU citizens 
was confirmed and the readmission and visa facilitation agreements at EU-level were signed. 
Further  progress  was  in  the  areas  of  asylum  and  migration.  As  regards  the  fight  of  money 
laundering, the staff of the Financial Intelligence Unit increased and some progress was made. 
An office for the prevention of the abuse of narcotics was established, but a State-level drug 
policy in line with EU standards remains to be developed. 

Implementation of tools such as computer-based investigations, criminal analysis systems and 
forensics  contributed  to  the  work  of  the  police.  A  strategic  agreement  with  Europol  was 

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concluded. However, little progress was made to implement the overall police reform aiming 
at unifying police forces in the country. 

There  is  still  room  for  improvement  in  fighting  organised  crime.  The  2005-2007  national 
action  plan  for  combating  trafficking  in  human  beings  was  implemented,  but  no  follow-up 
strategy  was  not  ready  by  the  end  of  2007.  Inconsistencies  between  state-  and  entity-level 
legislation  continued  to  hinder  prosecution  of  serious  crimes.  Bosnia  and  Herzegovina's 
resources to counter terrorism remained insufficient. The State agency for data protection was 
not established. 

2.2. 

IPA in 2007 

2.2.1.  MIPD 2007-2009 

The  Multi-annual  Indicative  Planning  Document  (MIPD)  2007-2009  for  Bosnia  and 
Herzegovina was adopted on 1 June 2007.  

The MIPD identifies a continuing and considerable challenge for Bosnia and Herzegovina to 
comply with the political requirements of the Stabilisation and Association Process (SAp) by 
increasing  the  effectiveness  of  the  executive  and  legislative  bodies,  improving  the  co-
ordination between State and Entities and to agree on the reform of its police structure. IPA 
can  assist  in  the  strengthening  of  administrative  capacity,  can  support  domestic  efforts  on 
constitutional  reform,  and  can  assist  in  the  reform  of  the  police  and  the  judicial  system. 
Substantial  political  risks  relate  to  this  core  reform  areas  and  resistance  of  key  political 
stakeholders may impede the success of the reforms. The Commission considers those risks in 
the programming of its assistance. To support the fulfilment of the political requirements, the 
MIPD  places  further  emphasis  on  civil  society  and  the  development  of  independent  and 
professional media. IPA can further assist in the fight against corruption and support Bosnia 
and Herzegovina to improve the situation of returnees, minorities and vulnerable groups. 

Several economic indicators raise concerns, among which the high unemployment rates and 
external  imbalances.  In  addition,  slippages  in  public  spending  create  obstacles  to  social  and 
economic  recovery.  To  assist  the  country  to  comply  with  the  economic  requirements  of  the 
SAp, IPA can support stabilising the macro-economic environment and improving the quality 
of  public  spending  to  create  a  favourable  business  climate.  In  addition,  the  reform  of  the 
education  system  and  of  the  labour  market  shall  contribute  to  foster  employment.  Further 
sectors  supported  under  the  economic  requirements  are  trade,  health,  SME  and  regional 
development. 

Bosnia  and  Herzegovina  made  so  far  only  limited  progress  in  the  approximation  of  its 
legislation  and  policies  with  the  acquis.  To  assist  the  country  to  comply  with  the  acquis 
related requirements of the SAp, IPA can support the development and the implementation of 
strategies and policies to approximate to the European acquis in the areas of internal market, 
sectoral policies and justice, freedom and security. The emphasis of the assistance is placed 
on  agriculture  and  rural  development,  transport  and  energy.  Examples  of  further  supported 
sectors are environment, quality infrastructure, customs and taxation.  

The focus of the assistance in the Cross-Border Cooperation component is on the support of 
Bosnia  and  Herzegovina's  participation  in  the  cooperation  with  its  neighbour  countries 
Croatia,  Montenegro  and  Serbia,  on  its  participation  in  the  Adriatic  IPA  cross-border 
programme  with  Member  States  and  on  its  participation  in  the  ERDF  transnational 
programmes "South East Europe" and "Mediterranean ". 

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19 

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2.2.2.  Programming exercise 

BOSNIA AND HERZEGOVINA 

I Transition Assistance and Institution Building 

Of which:  

(in € million, to nearest € 100,000) 

National Programme 

Nuclear Safety programme 

Customs Programme 

Tempus and Erasmus Mundus Programmes 

II Cross Border Cooperation 

Of which:  

CBC Adriatic programme 

CBC Bosnia & Herzegovina and Croatia 

CBC Bosnia & Herzegovina and Serbia 

CBC Bosnia & Herzegovina and Montenegro 

CBC participation in ERDF SE Europe programme 

2007 

58.1

49.7

0.5

4.5

3.4

4.0

1.3

1.0

0.7

0.5

0.5

Programmes  for  components  II,  III,  IV  and  V  are  adopted  for  three  years.  Financial  commitments  are  made 
annually and therefore figures above are just for 2007 

2.2.2.1.  Component I: Transition Assistance and Institution Building 

The  IPA  2007  National  Programme  for  Bosnia  and  Herzegovina  was  presented  to  the  IPA 
Management  Committee  in  September  2007  and  was  adopted  by  the  Commission  on  20 
December 2007. 

The programme assists Bosnia and Herzegovina to comply with the political requirements of 
the Copenhagen criteria by supporting the social inclusion and return, the rule of law, and the 
public  administration  and  constitution  reform.  The  socio-economic  requirements  are 
supported  by  assistance  to  labour  and  economic  development,  and  to  health  and  education. 
IPA  assists  to  approximate  to  the  acquis  by  supporting  the  establishment  of  regulatory 
systems  in  the  financial  sector,  justice  and  home  affairs,  an  improved  quality  infrastructure, 
energy and telecommunication as well statistics and information systems. The IPA National 
Programme further assists the country by supporting activities in the field of agriculture and 
rural development, environment and transport. 

2.2.2.2.  Component II: Cross-Border Cooperation 

IPA  Component  II  supports  the  participation  of  Bosnia  and  Herzegovina  in  three  bilateral 
cross–border  programmes  with  Croatia,  Montenegro  and  Serbia.  Concerning  CBC  with 
Member  States,  IPA  Component  II  finances  the  participation  of  Bosnia  and  Herzegovina  in 
the  IPA  CBC  Adriatic  programme.  Finally,  in  2007  the  IPA  Component  II  finances  the 
participation of Bosnia and Herzegovina in the ERDF transnational programme "South-East 
Europe".  The  2007  Component  II  programmes  involving  Bosnia  and  Herzegovina  were 

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adopted in December 2007, except the IPA Adriatic programme, which was prepared in 2007 
but adopted in March 2008. 

2.2.3. 

Implementation Modalities and Structures  

IPA 2007 National Programme: 

The programme will be implemented on a centralized basis by the European Commission, EC 
Delegation  to  Bosnia  and  Herzegovina,  in  accordance  with  Article  53a  of  the  Financial 
Regulation and the corresponding provisions of the Implementing Rules. 

Bosnia  and  Herzegovina's  participation  in  horizontal  nuclear  safety,  customs  and  education 
programmes  is  also  funded  from  its  component  I  envelope.  These  programmes  are  not 
included  in  the  component  I  national  programme  as  they  will  be  implemented  on  a  multi-
country basis and be managed centrally by the European Commission in Brussels.  

Preparation of Decentralised Implementation System: 

The  Director  of  the  Directorate  for  European  Integration  remains  the  National  Aid 
Coordinator  (NAC)  for  previous  EU  assistance  and  is  also  acting  as  National  IPA 
Coordinator. In 2007, no significant progress was made to prepare for DIS. The recruitment of 
staff  for  key  positions  in  the  National  Fund  and  the  future  Operating  Structure  within  the 
Ministry of Finance and Treasury started in June 2006 but was postponed in March 2007 due 
to  a  lack  of  office  space  despite  the  fact  that  the  work  of  a  Technical  Assistance  team  to 
support the Ministry had already started. Recruitment was re-launched in May 2007 but only 
50%  of  staff  have  been  recruited  and  begun  to  receive  training.  The  Council  of  Ministers 
appointed  a  National  Authorising  Officer  (NAO)  and  the  head  of  the  National  Fund.  The 
Directorate for European Integration is preparing a DIS Strategy aiming for accreditation by 
February 2009. 

2.2.4.  Overview of IPA programmes implemented  

In 2007, no IPA programmes were implemented in Bosnia and Herzegovina.  

2.2.5.  Participation in Community Programmes and Agencies 

Bosnia and Herzegovina did not yet participate in any Community Programmes or Agencies 
in  2007.  No  funds  have  been  allocated  under  IPA  2007  for  participation  in  Community 
programmes. 

2.3.  Monitoring and Results 

2.3.1.  Monitoring 

No  monitoring  of  IPA  projects  was  carried  out  in  2007  as  the  IPA  2007  programmes  were 
only adopted at the end of the year and the actual implementation only started in 2008. 

2.3.2.  Evaluation results and Lessons Learned  

So far, there are no evaluation results of IPA programmes in 2007 as the implementation only 
started  in  2008.  For  the  first  year  of  IPA  no  lessons  learned  can  be  identified  as  the 
implementation only started in 2008. 

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2.3.3.  Sectors with positive results - Success story box  

For  the  first  year  of  IPA,  no  sectors  with  positive  results  can  be  identified  as  the 
implementation of IPA programmes only started in 2008. 

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3. 

CROATIA 

3.1. 

The year in review 

3.1.1.  Political developments 

EU accession negotiations began with Croatia on 3 October 2005 and are progressing well.  

Implementation  of  strategies  for  reforming  the  judiciary  and  fighting  corruption  has 
continued.  The  case  backlog  before  the  courts  has  been  reduced.  Some  first  results  are 
appearing in the fight against corruption. Croatia has taken further steps to address problems 
of  minorities  and,  to  a  lesser  extent,  refugee  return.  Full  cooperation  with  ICTY  has 
continued.  Croatia  ratified  the  new  Central  European  Free  Trade  Agreement  (CEFTA),  and 
has continued to participate actively in regional cooperation, for example in the establishment 
of the new Regional Cooperation Council.  

However,  considerable  challenges  remain  in  key  areas,  such  as  reform  of  the  inefficient 
judicial  system,  public  administration  reform  and  fighting  corruption,  which  remains 
widespread. Increased attention needs to be paid to minority rights, especially refugee return. 
The prosecution of war crimes requires further attention. Further regional cooperation is vital, 
as  are  efforts  to  solve  outstanding  bilateral  problems  with  neighbours,  especially  on  border 
delimitation.  

3.1.2.  Macroeconomic developments and structural reforms 

Economic  growth  has  increased  and  macroeconomic  stability  was  maintained.  The  general 
government  deficit  was  reduced  significantly.  Inflation  remained  low.  Private  investment 
picked up further. Employment rose and the business environment improved. The stability of 
the  financial  sector  increased.  The  government's  economic  policy  capacity  was  further 
strengthened. 

However,  rising  external  imbalances  can  become  a  risk.  Structural  reforms,  including  the 
restructuring  of  the  shipbuilding  and  steel  sectors  moved  forward  only  slowly.  State 
intervention in the economy remained significant. Inefficiencies in public administration and 
the judiciary continued to hamper private sector development. The external debt has not been 
reduced, highlighting the need for tighter fiscal policies. 

3.1.3.  Progress in meeting the acquis communautaire 

Croatia has improved its ability to take on the obligations of EU membership. Preparations for 
meeting EU requirements are moving forward at a steady pace and alignment with EU rules is 
high in some sectors. However, significant efforts lie ahead in order to reach full alignment. 
In most areas there has been some progress, principally in terms of legislative alignment but 
also  as  regards  administrative  capacity  building.  In  some  chapters  such  as  transport  and 
environment,  good  progress  made  in  previous  years  has  been  sustained.  However,  further 
efforts are needed regarding the implementation of the first transitional phase of the European 
Common  Aviation  Area  Agreement  (ECAA).  In  other  chapters  such  as  public  procurement 
and  taxation,  progress  has  remained  limited.  As  regards  the  overall  level  of  alignment  and 
administrative capacity, much remains to be done. 

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3.2. 

IPA in 2007 

3.2.1.  MIPD 2007-2009 

The Multi-annual Indicative Planning Document (MIPD) 2007-2009 for Croatia was adopted 
on  20  June  2007.  It  is  based  on  an  indicative  financial  envelope  of  €438.4  million   for  the 
period 2007-2009. 

The overall objective of the pre-accession assistance provided to Croatia under IPA is to assist 
the country in meeting the accession criteria, i.e. the political and economic criteria, as well 
as the adoption, implementation and enforcement of the acquis communautaire. In addition, 
IPA  assistance  aims  to  support  policy  development  as  well  as  preparation  for  the 
implementation  of  the  Community's  common  agricultural  policy  and  the  cohesion  policy 
with a view to EU membership.  

Pre-accession assistance for Croatia under IPA will be implemented according to the five IPA 
components available to Candidate Countries.  

Under  Component  I,  pre-accession  assistance  to  Croatia  will  inter  alia  support  public 
administration reform, judicial reform, and anti-corruption policy. Assistance will also focus 
on  structural  reforms  in  public  finance,  economic  restructuring,  business  environment, 
statistics, land reform and labour market reform.  

In  addition,  pre-accession  assistance  will  support  institutional  capacity  building  for  acquis 
transposition  and  implementation  according  to  the  priorities  identified  in  the  Accession 
Partnership, the screening reports and subsequent negotiations in the different chapters of the 
acquis.  Finally,  capacity  building  can  also  be  provided  for  the  management  of  IPA  projects 
and  to  re-enforce  institutional  capacity  for  the  management  of  EU  Structural  Funds  upon 
accession.  Croatia’s  participation  in  Community  Programmes  will  also  continue  to  receive 
financial support under Component I. 

Assistance  to  Cross-border  Cooperation  (CBC)  provided  under  Component  II  aims  at 
improving  co-operation  and  good  neighbourly  relations  of  Croatian  border  regions  with  the 
neighbouring border areas and familiarising Croatia with the rules and procedures governing 
the  European  Territorial  Cooperation  objective  under  Structural  Funds.  The  MIPD  foresees 
continuing CBC with Slovenia, Hungary and Italy and developing bilateral CBC programmes 
with Bosnia and Herzegovina, Montenegro, and Serbia.  

Components  III  and  IV  aim  at  supporting  Croatia  in  policy  development  as  well  as 
preparation for the implementation and management of the Community’s cohesion policy, in 
particular  regarding  the  European  Regional  Development  Fund,  the  Cohesion  Fund  and  the 
European  Social  Fund.  In  terms  of  pre-accession  assistance  under  Components  III  and  IV, 
the 
priorities  comprise  acquis-related 
development of a European transport network together with support to the productive sector, 
in  particular  to  SMEs;  Component  IV  priorities  encompass  investment  in  employment, 
education, social inclusion and human capital formation. 

in  environmental  protection  and 

investment 

Component  V  aims  at  supporting  Croatia  in  policy  development  as  well  as  preparation  for 
the  implementation  and  management  of  the  Community’s  common  agricultural  policy. 
Assistance  under  Component  V  will  target  three  main  priority  axes.  The  first  will  provide 
assistance  to  the  adaptation  of  the  agricultural  sector  and  the  implementation  of  the  acquis 

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communautaire  concerning  the  common  agricultural  policy.  The  second  aims  at  preparing 
Croatia  for  the  implementation  of  agri-environmental  measures  and  the  third  at  sustainable 
development of rural areas. 

Coherence  and  concentration  of  assistance  will  be  necessary  for  the  effectiveness  of  IPA 
assistance  under  all  components.  Where  appropriate,  effective  coordination  and 
complementarity with other IPA components will be ensured. 

(in € million, to the nearest € 100,000) 

3.2.2.  Programming exercise 

CROATIA 

I Transition Assistance and Institution Building 

Of which:  

National Programme 

Nuclear Safety programme 

II Cross Border Cooperation 

Of which:  

Tempus and Erasmus Mundus Programmes 

CBC Croatia and Hungary 

CBC Croatia and Slovenia 

CBC Adriatic Programme 

CBC Croatia and Serbia 

CBC Croatia and Bosnia & Herzegovina 

CBC Croatia and Montenegro 

CBC participation in ERDF SE Europe and ERDF Mediterranean programmes 

III Regional Development  

Of which:  

Regional Competitiveness Programme 

Transportation Programme 

Environmental Programme 

IV Human Resources Development 

V Rural Development  

2007 

49.6

45.4

0.5

3.7

9.7

1.4

1.7

3.9

0.8

1.0

0.4

0.5

45.1

11.1

17.0

17.0

11.4

25.5

Programmes  for  components  II,  III,  IV  and  V  are  adopted  for  three  years.  Financial  commitments  are  made 
annually and therefore figures above are just for 2007 

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3.2.2.1.  Component I: Transition Assistance and Institution Building 

The IPA 2007 National Programme for  Croatia was adopted on 20 December 2007 with an 
IPA contribution of € 45.4 million.  

Under  the  political  criteria  heading  of  the  MIPD,  the  IPA  2007  National  Programme  will 
address  the  fight  against  corruption  through  project  "Strengthening  Capacities  of  USKOK" 
and  project  "Improving  Anti-Corruption  Inter-Agency  Cooperation".  The  project  "Capacity 
Building for Personal Data Protection" will contribute to progress in the area of human rights 
and the protection of minorities.  

Under the economic criteria, the IPA 2007 National Programme will contribute to improve 
the  business  environment  through  the  project  "Development  of  Regulatory  Impact 
Assessment".  

The IPA 2007 projects in the area of ability to assume the obligations of membership will 
focus  on  institutional  and  administrative  capacity  building  for  acquis  transposition  and 
implementation  in  the  following  chapters:  Competition  Policy  –  "Implementing  Croatian 
Competition  and  State  Aid  Policies";  Information  Society  and  Media  –  "Reinforcement  of 
Croatian  Telecommunications  Agency";  Agriculture  –  "Management  and  Control  of 
Agricultural Funds"; Energy – "Energy Administrative Data Management"; Social Policy and 
Employment  –  "Health  and  Safety  at  Work";  Justice,  Freedom  and  Security  –  "National 
Border Management Information System – Phase III" and "Combating Drug Trafficking and 
Abuse";  Environment  –  "Chemical  Safety";  Customs  Union  –  "Customs  Laboratory 
Development" and "Equipment for Anti-smuggling Units". 

Supporting  programmes  under  IPA  2007  will  continue  to  provide  for  administrative 
capacity  building  for  strategy  development,  project  preparation  and  implementation, 
institution  building  support  and  SAA  and  acquis  implementation  through  a  "Technical 
Assistance  Facility".  Capacity  building  under  this  project  may  also  be  provided  for  the 
management of IPA projects and to reinforce institutional capacity for the management of EU 
structural  funds.  Under  the  same  MIPD  heading,  IPA  2007  will  support  "Preparatory 
measures  for  participation  in  the  Lifelong  Learning  and  Youth  in  Action  programmes". 
"Participation  in  Community  Programmes  and  Agencies"  will  also  continue  to  receive 
financial support under IPA 2007.  

3.2.2.2.  Component II: Cross-Border Cooperation 

Under  Component  II,  Croatia  participates  in  three  multi-annual  cross-border  programmes 
(CBC)  with  neighbouring  IPA  countries:  CBC  Croatia-Bosnia  and  Herzegovina,  CBC 
Croatia-Montenegro and CBC Croatia-Serbia adopted respectively on 10 December 2007, 12 
December 2007, and 20 December 2007.  

These cross-border cooperation programmes aim at reconciliation, encouraging the creation of 
cross-border networks and partnerships and developing joint cross-border actions with a view 
to revitalizing the economy, protecting the nature and the environment and increasing social 
cohesion in the programming area. They also include technical assistance. 

A  programme  financing  the  participation  of  Croatia  in  the  ERDF  European  Territorial  Co-
operation  transnational  programmes  "South-East  Europe"  and  "Mediterranean"  was  also 
funded  under  the  IPA  Cross-border  Co-operation  component  for  2007  and  adopted  on  12 
December 2007. 

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In  2007,  the  following  cross-border  programmes  between  Croatia  and  Member  States  were 
also prepared: CBC Adriatic, CBC Hungary-Croatia, and CBC Slovenia-Croatia1.Components 
III and IV: Strategic Coherence Framework 

In accordance with the provisions of the Article 154 of the Commission Regulation (EC) n° 
718/2007  Croatia  has  established  the  Strategic  Coherence  Framework  (SCF)  for  2007-2013 
covering  IPA  Components  III  (Regional  Development)  and  IV  (Human  Resources 
Development). 

Within  the  Strategic  Coherence  Framework  the  supporting  socio-economic  analysis  and 
subsequent  strategy  identified  the  key  objectives  and  priorities  implemented  through  four 
multi-annual Operational Programmes (three in component III and one in component IV) with 
a  strong  strategic  focus.  IPA  with,  its  similarities  to  the  European  Regional  Development 
Fund  and  Cohesion  fund,  is  a  precursor  of  Structural  Funds.  The  SCF  is  also  considered  as 
"mini NSRF".  

The preparation of the SCF in Croatia has been coordinated by the Strategic Coordinator who 
consulted the Commission throughout the whole process. The Commission services verified 
the content of the SCF and concluded that it contains all the relevant elements. Subsequently 
on  18  June  2007  the  Commission's  position  on  the  SCF  was  transmitted  to  the  national 
authorities in the form of a letter addressed to the Strategic coordinator. 

3.2.2.3.  Component III: Regional Development 

Three  multi-annual  operational  programmes  were  adopted 
"Regional 
Competitiveness OP" adopted on 29 November 2007, "Transport OP" adopted on 7 December 
2007  and  "Environment  OP"  adopted  29  November  2007.  The  IPA  resources  allocated  to 
each programme are:  

in  2007: 

Component III programmes  

2007 

2008 

2009 

Total 

Regional Competitiveness 

11,050,250 

11,600,000 

12,699,500 

35,349,750 

Transport 

17,000,250 

18,000,000 

18,500,250 

53,500,500 

Environmental Protection 

16,999,500 

18,000,000 

18,500,250 

53,499,750 

In  component  III  one  of  the  fundamental  principles  of  Cohesion  policy  has  been  applied. 
Concentration  (thematic  and  geographical)  of  the  assistance  on  limited  number  of  strategic 
priorities  and  on  disadvantaged  areas  (in  Regional  Competitiveness  OP)  will  maximise  the 
development impact of the IPA intervention 

The  strategy  under  component  III  foresees  concentration  of  resources  in  the  transport 
(Transport OP) and environment (Environment OP) and regional competitiveness (Regional 
Competitiveness OP) sectors. It covers acquis-related investments in environmental protection 
(waste water, drinking water and waste management) and sustainable transport (railways and 
inland waterways). Along with these efforts directed at basic infrastructure, further assistance 

1 

They  were  adopted  in  2008  (25  March  2008  for  CBC  Adriatic,  13  March  2008  for  CBC  Hungary-
Croatia, and 27 February 2008 for CBC Slovenia-Croatia). 

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is aimed at modernising and restructuring the productive capacity of disadvantaged regions in 
particular by providing services to enterprises, particularly small and medium sized.  

Moreover, under the three Operational Programmes resources will be utilised to introduce into 
the  national  framework  the  strategic  planning  and  management  principles  guiding  the 
implementation of EU structural instruments, also via learning by doing process.  

Within  each  of  the  OP  a  separate  priority  on  Technical  Assistance  has  been  introduced  to 
support the national structures managing IPA as well as ensuring project preparation of high 
standards.  A  comprehensive  institutional  set  up  (Operating  Structure  consisting  of  a  few 
bodies  specific  for  each  OP/priority)  built  for  IPA  will  continue  with  some  modifications 
under Structural funds regime. 

In the course of 2007, the Croatian authorities carried out the maturity of several projects in 
the  filed  of  solid  and  waste  water  including  the  transport  sector.  Besides,  the  Commission 
officials  in  close  cooperation  with  the  Croatian  authorities  undertook  pre-appraisal  site 
missions.  The  ultimate  goal  was  to  ensure  an  adequate  quality  project  pipeline.  In  fact,  in 
December 2007, the HR authorities submitted their first solid waste major project application.  

3.2.2.4.  Component IV: Human Resources Development 

A multi-annual operational programme "Human Resources Development" under Component 
IV for Croatia was adopted on 7 December 2007 and consists of 4 priority axes: "Enhancing 
access  to  employment  and  sustainable  inclusion  in  the  labour  market",  "Reinforcing  social 
inclusion  of  people  at  a  disadvantage",  "Enhancing  human  capital  and  employability",  and 
Technical Assistance. 

Component IV  

2007 

2008 

2009 

Total 

Human Resources Development 

11.4 

12.7 

14.2 

38.3 

3.2.2.5.  Component V: Rural Development 

A multi-annual "Programme for agriculture and rural development" under Component V for 
Croatia was prepared in 20072 and consists of 3 priority axes: "Improving market efficiency 
and implementation of Community standards", "Preparatory actions for implementation of the 
agri-environmental  measures  and  local  rural  development  strategies",  and  "Development  of 
the rural economy". 

Component V 

2007 

2008 

2009 

Total 

Rural Development 

25.5 

25.6 

25.8 

76.9 

3.2.3. 

Implementation Modalities and Structures  

As regards previous EC financial instruments (CARDS and Phare), decentralised management 
powers with ex-ante control were conferred to Croatia by the Commission in February 2006.  

2 

The programme was adopted by the Commission on 25 February 2008. 

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The EC and the Government of the Republic of Croatia signed the Framework Agreement on 
the  rules  for  co-operation  concerning  EC  financial  assistance  to  Croatia  under  IPA  on  27 
August 2007. By the end of 2007, the authorities of Croatia had not yet submitted a request to 
the Commission for decentralised management of IPA funds with ex-ante control.3 

Croatia's participation in horizontal nuclear safety and education programmes is also funded 
from  its  component  I  envelope.  These  programmes  are  not  included  in  the  component  I 
national  programme  as  they  will  be  implemented  on  a  multi-country  basis  and  be  managed 
centrally by the European Commission in Brussels. 

3.2.4.  Overview of IPA programmes implemented 

No  IPA  programmes  were  implemented  in  2007,  as  the  first  IPA  programmes  were  only 
adopted at the end of 2007. 

3.2.5.  Participation in Community Programmes and Agencies 

€4.6  million  are  allocated  from  IPA  2007  Component  I  to  co-finance  the  participation  of 
Croatia in, inter alia, the following indicative list of Community Programmes and Agencies in 
2008 or 2009: CUSTOMS 2013, Fiscalis 2013, IDAbc, Seventh Framework Programme for 
Research, Technological Development and Demonstration Activities, Community Programme 
for  Employment  and  Social  Solidarity  -  PROGRESS,  MEDIA  2007,  Competitiveness  and 
Innovation  Framework  Programme  (CIP),  Culture  Programme,  Civil  Protection  Financial 
Instrument,  Europe  for  Citizens,  Programme  of  Community  Action  in  the  Field  of  Health, 
European Monitoring Centre for Drugs and Drug Addiction. 

In  addition,  IPA  2007  Component  I  for  Croatia  provided  €857,775  of  IPA  funding  for 
preparatory  measures  for  participation  in  the  Lifelong  Learning  and  Youth  in  Action 
programmes.  Participation  in  these  programmes  is  conditional  on  the  fulfilment  by  the 
candidate countries of requirements concerning the capacity of national structures – called the 
National Agency – to ensure sound financial management of the programmes without ex-ante 
control of the Commission.  

3.3.  Monitoring and Results 

3.3.1.  State  of  play  for  IPA  Monitoring  Committee  and  Sectoral  Monitoring 

Committees 

Programme  implementation  under  IPA  in  Croatia  shall  be  monitored  through  the  IPA 
monitoring committee assisted for each component by Sectoral Monitoring Committees. Each 
committee shall satisfy itself as to the effectiveness and quality of the implementation of the 
programmes  and  operations.  They  may  make  proposals  to  the Commission and  the national 
IPA  co-ordinator,  with  a  copy  to  the  national  authorising  officer,  for  decisions  on  any 
corrective  measures  to  ensure  the  achievements  of  programme  objectives  and  enhance  the 
efficiency of the assistance provided. 

3 

In  2008,  Croatia  submitted  a  request  to  the  Commission  for  decentralised  management  of  IPA  funds 
with ex-ante control. It is only if the operating structures are deemed adequate that the Commission will 
initiate the process of conferral of management powers. The conferral of management mission carried 
out  by  the  Commission  in  May  2008  concluded  with  a  formal  opinion  on  the  preparedness  of  the 
bodies/authorities  responsible  for  the  programmes  and  the  Commission  has  initiated  the  process  of 
conferral of management powers. 

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No formal committee took place in 2007, as the first IPA programmes were only adopted at 
the end of 2007 and implementation had not yet started.4 

However, in December 2007, three Shadow Sectoral Monitoring Committees took place for 
the Operational Programmes of Transport, Regional Competitiveness and environment. These 
meetings allowed to elaborate a number of issues relating to the rules of the procedure internal 
functioning of the committees. Advice and counselling was provided by the Commission in 
preparing  a  Strategic  Work  Plan  including  an  action-oriented  Technical  Assistance  plan. 
Besides, in 2007 a number of missions took place to advance and conclude the preparation of 
actions needed to pave the way for the programmes implementation. The Sectoral Monitoring 
Committee for the OP Human resources development also met for the first time in December 
2007.  Additionally;  the  first  informal  Sectoral  Monitoring  Committee  for  the  rural 
development programme took place in November 2007.  

3.3.2.  Annual and final reports on implementation  

No  IPA  report  on  implementation  was  submitted  by  the  national  authorities  in  2007,  as  the 
first IPA programmes were only adopted at the end of 2007 and implementation had not yet 
started. 

The first sectoral annual reports shall be submitted by the Operating Structures to the national 
IPA co-ordinator, the national authorising officer  and to the  Commission,  after examination 
by the aforementioned sectoral monitoring committees and for the first time in 2008.5 

On the basis of these reports, the national IPA co-ordinator shall send the IPA annual report 
on  implementation,  covering  all  IPA  components,  to  the  Commission  and  the  national 
authorising officer, after examination by the IPA Monitoring Committee and for the first time 
in 2008. 

3.3.3.  Evaluation results and Lessons learned  

During 2007 multi-annual operational programmes under components III and IV were subject 
to  ex-ante  evaluations  carried  out  in  accordance  with  Structural  Funds  guidelines  and 
requirements, forming an integrant part of the process for the adoption of the programmes.  

An  ex-ante  evaluation  was  carried-out  by  independent  experts  for  the  Rural  Development 
programme. The conclusions/recommendations of this report were taken into consideration in 
preparing the final version of that programme.. 

No  additional  IPA  evaluations  were  carried  out  in  2007,  as  the  first  IPA  programmes  were 
only adopted at the end of 2007 and implementation had not yet started. 

3.3.4.  Sectors with positive results- Success story  

No  IPA  programmes  were  implemented  in  2007,  as  the  first  IPA  programmes  were  only 
adopted at the end of 2007. 

4 

5 

The  first  Sectoral  Monitoring  Committees  are  scheduled  to  take  place  in  May  or  June  2008,  to  be 
followed by the first IPA Monitoring Committee in July 2008. 
The exceptions are Component II, where the first sectoral annual reports shall be submitted in 2008, and 
Component V, where the first sectoral annual report shall be submitted within six months of the end of 
each full calendar year of programme implementation. 

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4. 

FORMER YUGOSLAV REPUBLIC OF MACEDONIA 

4.1. 

The year in review 

4.1.1.  Political developments 

The  former  Yugoslav  Republic  of  Macedonia  made  progress  in  addressing  the  Copenhagen 
political  criteria.  During  2007  frequent  tension  and  problems  in  achieving  constructive 
dialogue between major political actors undermined the effective functioning of the political 
institutions  and  led  to  a  slowdown  in  reforms.  However,  following  the  publication  of  the 
Commission's  critical  Progress  Report  in  November  2007  some  significant  further  reforms 
were adopted concerning the judiciary, reform of the police, and inter-ethnic relations. 

4.1.2.  Macroeconomic developments and structural reforms 

There has been further progress towards establishing a functioning market economy. It should 
be able to cope with competitive pressures and market forces within the Union in the medium 
term, provided that it vigorously implements its comprehensive reform programme in order to 
reduce significant structural weaknesses. 

4.1.3.  Progress in meeting the acquis communautaire 

The former Yugoslav Republic of Macedonia has made further efforts to improve its ability to 
assume the obligations of membership. There was some progress in the fulfilment of the short 
term  priorities  of  the  European  partnership.  The  country  still  faces  major  shortcomings  in 
implementing and effectively enforcing legislation. Adequate human and financial resources 
to fully implement the SAA are lacking. Large scale replacement of qualified staff following 
political  changes  hampered  efforts  to  improve  administrative  capacity.  Some  progress  has 
been  made  in  the  implementation  of  the  first  transitional  phase  of  the  European  Common 
Aviation Area Agreement (ECAA).  

4.2. 

IPA in 2007 

4.2.1.  MIPD 2007-2009 

Based on the assessment of strategic needs and priorities set out in section 1 the pre-accession 
assistance strategy for the period 2007-2009 is concentrated on four areas of activity: 

1. Support Institution Building 

2. Improve cross-border cooperation 

3.  Prepare  the  beneficiary  for  participation  in  the  Community's  cohesion  policy  and  rural 
development instruments 

4. Prepare for decentralised management of EU funds 

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4.2.2.  Programming exercise 

Former Yugoslav Republic of Macedonia 

2007 

(in € million, to the nearest € 100,000) 

I Transition Assistance and Institution Building 

Of which:  

National Programme Part I 

National Programme Part II  

Nuclear Safety programme 

Customs programme 

II Cross Border Cooperation 

Of which:  

Tempus and Erasmus Mundus Programmes 

former  Yugoslav  Republic  of 

CBC 
Macedonia and Bulgaria 

CBC former Yugoslav Republic of Macedonia and Greece 

CBC former Yugoslav Republic of Macedonia and Albania 

CBC participation in ERDF SE Europe programme 

III Regional Development  

Of which:  

IV Human Resources Development 

V Rural Development  

Transport Priority 

Environment Priority 

Technical Assistance Priority 

41.6

12.0

22.9

0.5

0.5

5.7

4.2

0.7

0.8

2.2

0.5

7.4

5.6

1.4

0.4

3.2

2.1

Programmes  for  components  II,  III,  IV  and  V  are  adopted  for  three  years.  Financial  commitments  are  made 
annually and therefore figures above are just for 2007 

4.2.2.1.  Component I: Transition Assistance and Institution Building 

Due to the urgent need to continue the support to the Police Reform which had started under 
the CARDS programme,  it  was decided to split the 2007 component I National Programme 
into two parts.  

The  first  part  (€  12  million)  contained  projects  linked  to  the  Police  Reform  and  a  Project 
Preparation Facility. The relevant Financing Agreement  with the former Yugoslav Republic 
of Macedonia was signed on 30 October 2007. 

Part  II  of  the  national  programme  (€  22.94  million)  was  adopted  by  the  Commission  on  16 
November  2007;  Signature  of  the  Financing  Agreement  took  place  end  of  May  2008.  This 

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second  part  aims  at  supporting  the  implementation  of  the  Public  Administration  Reform 
Strategy,  the  Judicial  Reform  as  well  as  capacity  building  for  decentralised  management  of 
EU  funds.  Under  Socio-economic  Requirements  the  programme  will  assist  municipalities 
with building the essential infrastructure to support both social and economic development As 
regards Acquis related activities substantial support will be given to the tax administration to 
the  statistical  office  and  customs.  Additionally  the  programme  supports  the  participation  of 
the country in certain Community Programmes 

The  Framework  Agreement  between  the  European  Commission  and  the  former  Yugoslav 
Republic  of  Macedonia,  which  gives 
the 
the 
implementation  of  all  IPA  programmes  between  2007  and  2013,  was  also  signed  on  30 
October 2007. The necessary ratification by the Parliament took place on 30 January 2008. 

legal  and  financial  framework  for 

4.2.2.2.  Component II: Cross-Border Cooperation 

With the support of IPA Component II, in 2007 the former Yugoslav Republic of Macedonia 
participate  in  a  bilateral  programme  with  Albania  and  in  two  bilateral  programmes  with 
neighbouring  Member  States  Bulgaria  and  Greece.  IPA  Component  II  also  finance  the 
participation  of  the  former  Yugoslav  Republic  of  Macedonia  in  the  ERDF  European 
Territorial Co-operation transnational programme "South-East Europe". 

4.2.2.3.  Components III and IV: Strategic Coherence Framework 

As  required  by  Article  154  of  Commission  Regulation  (EC)  N°  718/2007,  the  Former 
Yugoslav Republic of Macedonia prepared a Strategic Coherence Framework (SCF) for the 
period  2007-2013,  covering  IPA  components  III  and  IV.  Its  purpose  is  to  set  the  overall 
strategic framework for programming of resources in the context of the national priorities for 
social and economic development and Community priorities for cohesion, thus constituting a 
key  reference  document  for  programming  IPA  regional  development  and  human  resources 
development components. The SCF is a key document to introduce structural funds strategic 
planning to candidate countries (a "mini NSRF"), reinforcing the role of IPA assistance under 
components III and IV as a precursor to structural funds. 

The  preparation  of  the  Strategic  Coherence  Framework  was  coordinated  by  the  Strategic 
Coordinator  for  IPA  regional  development  and  human  resources  development  components. 
Throughout  its  preparation  extensive  coordination  has  taken  place  within  the  national 
administration, particularly the line ministries who will be involved in the implementation of 
components III and IV programmes. Once finalised, it was transmitted to the Commission for 
information  and  verification  of  consistency  with  the  requirements  of  the  regulation,  but  the 
Strategic Reference Framework remains a national document.  

Over the period 2007-2013, assistance under Component III will be rebalanced from transport 
sector to environment sector. The percentage of resources allocated to the environment sector 
will  be  progressively  aligned  with  other  candidate  countries,  in  line  with  the  needs  of  the 
country, the development of adequate strategies and investment planning and the capacity to 
prepare and implement infrastructure investments in the environment sector. 

4.2.2.4.  Component III: Regional Development 

The  multi-annual  Operational  Programme  (OP)  for  Component  III  was  prepared  by  the 
national authorities during the year 2007 in close cooperation with the Commission. The OP 
obtained  the  favourable  opinion  of  EU  Member  State  Coordination  Committee  of  the 

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34 

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Structural Funds. The Regional Development OP was adopted by Commission Decision on 29 
November 2007.  

Component III 

2007 

2008 

2009 

Total 

III-Regional Development 

7.4 

12.3 

20.8 

40.5 

Its  overall  objective  is  to  support  the  sustainable  development  of  the  country  through  the 
improvement  of  transport  and  environment  infrastructure.  Assistance  in  the  transport  sector 
focuses  on  the  continuation  of  the  development  of  the  South  East  Europe  Core  Regional 
Transport  Network  (corridors  VIII  and  X).  This  strategy  is  strongly  supported  by  Member 
States and IFIs who provide substantial funding (namely Greece and the EIB), to permit the 
completion of strategic transport corridors which will benefit the whole region. The priorities 
shall be progressively shifted from corridor X to corridor VIII as well as from road to rail.  

Concerning  assistance  in  the  environment  sector,  clearly  targeted  investments  will  focus  on 
waste  water  treatment  and  solid  waste  management  where  the  impact  to  the  population  and 
natural environment is the greatest. 

Within  the  operational  programme,  a  separate  priority  on  technical  assistance  has  been 
introduced,  to  support  national  structures  managing  IPA,  including  ensuring  project 
preparation of high standards for current programmes and for future programming periods.  

The institutional set-up which has been set in place for the management of IPA component III 
programme concentrates financial management in the Ministry of Finance (Central Financing 
and  Contracting  Department,  National  Fund)  that  delegates  some  technical  tasks  to  the  line 
ministries concerned (transport and environment). 

4.2.2.5.  Component IV: Human Resources Development 

Concerning  Component  IV,  the  OP  "Human  Resources  Development"  was  adopted  on  7 
December 2007. It encompasses three priority axis: "Employment – Attracting and retaining 
more people  in employment",  Education and  Training – Investing in human capital through 
better education and skills", and "Social Inclusion – Promoting an inclusive labour market".  

Component IV 

2007 

2008 

2009 

Total 

IV – Human Resources Development 

3.2 

6.0 

7.1 

16.3 

4.2.2.6.  Component V: Rural Development  

It should also be noted that for Component V, , a multi-annual "Operational programme for 
the  Rural  Development"  was  prepared  in  20076  and  consists  of  3  priority  axes:  "Improving 
market  efficiency  and  implementation  of  Community  standards",  "Preparatory  actions  for 
implementation  of  the  agri-environmental  measures  and  local  rural  development  strategies" 
and "Development of the rural economy". 

6 

The programme was adopted by the Commission Decision C/2007/677 on 25 February 2008. 

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35 

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Component V 

2007 

2008 

2009 

Total 

V – Rural Development 

2.1 

6.7 

10.2 

19.0 

4.2.3. 

Implementation Modalities and Structures 

The IPA Regulation stipulates that implementation of Components III, IV and V is subject to 
the conferral of management by the Commission to the beneficiary country. This is expected 
to  take  place  in  late  2008  –  early  2009.  For  Components  I  and  II,  direct  centralised 
management – i.e. the Commission (EC Delegation to Skopje) acting as contracting authority 
on behalf of the beneficiary country – is allowed for an initial phase as long as conferral of 
management power (decentralised implementation system – DIS) has not been granted. 

The  former  Yugoslav  Republic  of  Macedonia's  participation  in  horizontal  nuclear  safety, 
customs  and  education  programmes  is  also  funded  from  its  component  I  envelope.  These 
programmes  are  not  included  in  the  component  I  national  programme  as  they  will  be 
implemented on a multi-country basis and be managed centrally by the European Commission 
in Brussels.  

In  2007  the  Commission  has  supported  through  CARDS  the  national  authorities  in  their 
preparation for decentralised management. Assistance has been provided to the structures and 
authorities  as  defined  in  article  21  of  the  IPA  Implementing  Regulation  to  prepare  for  their 
DIS  accreditation.  This  is  being  done  via  hands-on  support  to  the  designated  bodies,  the 
elaboration of project implementation manuals, manual of procedures, programme operational 
guidelines,  draft  texts  of  implementing  agreements  amongst  the  different  structures  and 
authorities.  

4.2.4.  Overview of IPA programmes implemented 

4.2.4.1.  Component I: Transition Assistance and Institution Building 

The  tender  of  the  project  "Integrated  Border  Management"  was  launched  and  evaluated  in 
2007.  The  evaluation  of  the  tender  proposals  for  the  national  project  on  "Reforms  in  the 
Customs  Administration"  is  ongoing.  Several  Framework  Contracts  under  the  "Project 
Preparation Facility Support" project fiche are in progress. 

4.2.4.2.  Component II: Cross-Border Cooperation 

The programmes were adopted towards the end of 2007. There was no implementation of IPA 
projects in 2007. The CBC programme between the former Yugoslav Republic of Macedonia 
and Albania expects the first launch of a Call for proposals under people-to-people actions by 
September 2008.  

4.2.4.3.  Component III: Regional Development 

The  operational  programme  was  adopted  towards  the  end  of  2007.  There  was  no 
implementation of IPA projects under Component III in 2007. 

4.2.4.4.  Component IV: Human Resources Development 

The  operational  programme  was  adopted  towards  the  end  of  2007.  There  was  no 
implementation of IPA projects under Component IV in 2007. 

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4.2.4.5.  Component V: Rural Development 

There was no implementation of IPA projects under Component V in 2007. 

4.2.5.  Participation in Community Programmes and Agencies 

The  IPA  programme  2007  foresees  a  Community  contribution  of  €  0.94  million  to  the 
participation  of  the  former  Yugoslav  Republic  of  Macedonia  in  Community  Programmes. 
These  funds  are  to  cover  around  85  %  of  the  cost  for  the  "entry  tickets"  for  the  various 
programmes and agencies.  

For  some  programmes,  Memoranda  of  Understanding  (MoU)  were  signed  in  2007  (7th 
Framework Research Programme, PROGRESS, CIP- EIP) for other programmes this will be 
the case in the second half of 2008 (CIP-ICT, CIP-IEE, Europe for Citizens, Media, Fiscalis 
2013and Customs 2013).  

Whereas CARDS has paid for the "entry tickets" for 2007 and 2008 for the 7th Framework 
Research Programme and CIP-EIP, IPA 2007 will pay for the outstanding ones.  

In addition, IPA 2007 Component I for the former Yugoslav Republic of Macedonia provided 
€ 900,000 of IPA funding for preparatory measures for participation in the Lifelong Learning 
and  Youth  in  Action  programmes.  Participation  in  these  programmes  is  conditional  on  the 
fulfilment  by  the  candidate  countries  of  requirements  concerning  the  capacity  of  national 
structures  –  called  the  National  Agency  –  to  ensure  sound  financial  management  of  the 
programmes without ex-ante control of the Commission.  

4.3.  Monitoring and Results  

4.3.1.  State  of  play  for  IPA  Monitoring  Committee  and  Sectoral  Monitoring 

Committees 

Programme  implementation  under  IPA  shall  be  monitored  through  the  IPA  Monitoring 
Committee  assisted  for  each  component  by  Sectoral  Monitoring  Committees.  Each 
Committee shall satisfy itself as to the effectiveness and quality of the implementation of the 
programmes  and  operations.  They  may  make  proposals  to the  Commission  and the  national 
IPA-coordinator,  with  a  copy  to  the  national  authorising  officer,  for  decisions  on  any 
corrective  measures  to  ensure  the  achievement  of  programme  objectives  and  enhance  the 
efficiency of the assistance provided. 

4.3.2. 

IPA Monitoring Committee 

The set up of the IPA monitoring committee is planned for the first half 2008  

4.3.2.1.  Component I 

The set up of the Component I Sectoral monitoring is planned for the first half 2008. 

4.3.2.2.  Component II 

The set up of the joint monitoring committees of the cross–border programmes is planned for 
the first half 2008. 

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37 

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4.3.2.3.  Component III 

The first Sectoral Monitoring Committee was held on 10 December 2007 in Skopje under a 
provisional form. It provided the basis for a wider partnership involvement in overseeing the 
future  implementation  of  the  programme  and  resolved  key  procedural  issues  (membership, 
internal  rules  of  procedures,  etc).  The  strategic  role  of  the  SMC  will  increase  as  the 
implementation of the programme becomes effective upon the conferral of management and 
signature of the financing agreement. 

4.3.2.4.  Component IV 

The set up of the sectoral monitoring committee for the OP Human Resources Development is 
planned for the second half 2008. 

4.3.2.5.  Component V 

The first shadow Sectoral Monitoring Committee took place on 25 October 2007. The set up 
of  the  sectoral  monitoring  committee  (IPARD  Monitoring  Comitte)  for  the  IPA  Rural 
Development programme is planned for the first half 2008. 

4.3.3.  Annual and final reports on implementation 

No  IPA  report  on  implementation  was  submitted  by  the  national  authorities  in  2007  as  the 
first IPA programmes were only adopted at the end of 2007 and implementation had not yet 
started. 

The first sectoral annual reports shall be submitted by the national operating structures to the 
national  IPA  co-ordinator,  the  national  authorising  officer  and  to  the  Commission,  after 
examination by the aforementioned sectoral monitoring committees, and for the first time in 
20087. 

On the basis of these reports, the national IPA co-ordinator shall send the IPA annual report 
on  implementation,  covering  all  IPA  components,  to  the  Commission  and  the  national 
authorising officer, after examination by the IPA Monitoring Committee and for the first time 
in 2008. 

4.3.4.  Evaluation results and Lessons learned 

An  ex-ante  evaluation  was  carried-out  by  independent  experts  for  the  Rural  Development 
programme. The conclusions/recommendations of this report were taken into consideration in 
preparing  the  final  version  of  the  programme.  Additionally  multi-annual;  operational 
programmes under components III and IV were subject to ex-ante evaluations carried out in 
accordance with Structural Funds guidelines and procedures  

No  additional  IPA  evaluations  were  carried  out  in  2007,  as  the  first  IPA  programmes  were 
only adopted at the end of 2007 and implementation had not yet started. 

7 

The exceptions are Component II cross–border programmes, where the first sectoral annual reports shall 
be  submitted  "in  the  second  year  following  the  adoption  of  the  programme"  (i.e.  in  2009),  and 
Component V, where the first sectoral annual report shall be submitted within six months of the end of 
each full calendar year of programme implementation. 

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4.3.5.  Sectors with positive results – Success story 

No IPA projects have been finalised in the course of 2007. 

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39 

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5. 

KOSOVO (UNDER UNSCR 1244/99)8 

5.1. 

The year in review  

5.1.1.  Political developments 

In  November  2005,  former  Finnish  President  Martti  Ahtisaari  was  appointed  the  special 
envoy  of  the  UN  Secretary  General  (UNSG)  to  prepare  a  proposal  for  the  future  status  of 
Kosovo. Following a number of status consultations and a final high-level meeting between 
Belgrade and Pristina on 10 March 2007, Mr Ahtisaari delivered a Comprehensive Proposal 
for  the  Kosovo  Status  Settlement  to  the  UNSG  on  15  March.  The  UNSG  forwarded  Mr 
Ahtisaari's Proposal to the UN Security Council. Belgrade and Pristina maintained divergent 
positions as  to  whether  Kosovo should  be independent or be an autonomous part of Serbia; 
whereas the Kosovo Assembly confirmed its satisfaction with the Ahtisaari Proposal, it was 
rejected  by  Serbia.  On  1  August,  the  UNSG  endorsed  a  new  initiative  on  determining 
Kosovo's  status  via  further  negotiations,  mediated  by  an  EU-US-Russia  troika.  Direct  talks 
between Pristina and Belgrade under the auspices of the troika started on 28 September. On 
10 December 2007, the troika reported to the UNSG that the negotiations had failed to bring 
about an agreed outcome. 

5.1.2.  Macroeconomic developments and structural reforms 

Kosovo's official GDP per capita was 1,118 € / year in 2006. Growth estimates for 2007 stood 
at 3.5 %. Inflation remained low until 2007 (1,6 in 2006) but could well peak to 12 % in 2008. 
The  level  of  unemployment  is  substantial  (47  %  in  2006),  and  growing.  The  size  of  the 
informal  economy  is  significant  although  no  estimates  are  available.  As  a  result,  actual 
expendable  revenue  per  capita  could  be  higher  and  is  boosted  by  remittances  from  abroad. 
Public finances in Kosovo were healthy, with the budget showing a surplus of 6.5 % of GDP. 
The Euro is the de facto currency of Kosovo. Fiscal policy is conducted on the basis of the 
Medium Term Expenditure Framework. As concerns foreign trade, the balance of payments 
showed a deficit of 24 % of GDP. FDI has grown steadily from less than 1 % of GDP in 2004 
to  12  %  in  2007.  However,  this  would  include  investment  in  small  scale  commercial 
undertakings,  with  limited  value  added  and  representing  a  modest  contribution  to  GDP.  No 
bilateral  trade  agreements  exist  with  the  EU.  Kosovo  benefits  from  autonomous  trade 
preferences granted to the countries of the region, allowing for free access to the EU market. 
Kosovo is part  of CEFTA. Membership  of the IMF would open the door to involvement of 
IFIs. The EBRD and EIB only have a limited presence in Kosovo. 

5.1.3.  Progress in meeting the acquis communautaire 

Kosovo  is  participating  in  the  Stabilisation  and  Association  process  (SAp).  Meetings  of  the 
SAp Tracking Mechanism were held in March and November 2007 (check). In March 2007, a 
new  structure  of  sectoral  meetings  for  the  STM  was  established  in  the  areas  of  good 
governance,  economy,  internal  market,  innovation  and  infrastructure.  The  new  structure 
provides  the  mechanism  for  a  more  detailed  analysis  of  the  conformity  of  the  legislation, 
practices  and  policies  in  Kosovo  in  European  standards.  The  EU  provides  guidance  to  the 
authorities  on  reform  priorities  through  the  European  Partnership.  Progress  on  these  reform 

8 

Under United Nations Security Council Resolution 1244 of 10 June 1999. 

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priorities is encouraged and monitored through the STM. Some progress has been made in the 
implementation  of  the  first  transitional  phase  of  the  European  Common  Aviation  Area 
Agreement (ECAA).  

5.2. 

IPA in 2007 

5.2.1.  MIPD 2007-2009  

The Multi-annual Indicative Planning Document 2007-2009 for Kosovo was adopted by the 
Commission  on  1  June  2007.  It  follows  the  EU  policy  for  the  Western  Balkans,  the 
Stabilisation  and  Association  process  (SAp).  The  Commission's  Enlargement  Strategy 
Communication of November 2007 confirmed that Kosovo merited particular attention, with 
the  EU  and  Member  States  needing  to  take  the  lead  in  the  international  community  in  line 
with the EU's crucial role in a post-status Kosovo. 

Therefore,  the  major  challenges  for  Kosovo  that  should  be  addressed  by  the  Multi-annual 
Indicative Planning Document (MIPD) are: 

Political Criteria: EC assistance under this heading should focus in particular on support to 
the development of civil society, minority rights and the rule of law in Kosovo. More efforts 
should  be  devoted  to  help  the  authorities  develop  a  reform  agenda  that  promotes  fiscal 
sustainability,  good  governance  of  public  expenditure,  sound  financial  management  and 
knowledge society. 

Economic  Criteria:  EC  assistance  should  also  be  used  in  support  of  developing  Kosovo’s 
economy and improving the socio-economic environment of all communities in a sustainable 
way. This should require measures that can catalyse IFI and private sector investment, taking 
due account of the limitations the status issue imposes on such investment. 

The  European  agenda:  In  addition  to  the  above,  EC  assistance  should  continue  to  support 
Kosovo's European vocation and its integration into the Western Balkans region as a whole. 
Guided  by  European  Partnership  priorities,  a  gradual  approximation  to  EC  legislation  in 
specific sectors, increased attention to the rule of law in the wider sense, and preparations for 
Kosovo's participation in Community programmes should be some salient features. 

The indicative funding available for the period 2007 – 2009 amounts to €259.1 million9 for 
Component  I  (Transition  Assistance  and  Institution  Building)  and  Component  II  (Cross-
Border Co-operation). 

9 

Additional  allocation  of  €60  million  to  the  IPA  Component  I  in  Kosovo  was  included  in  EU  2008 
Budget to accompany the expected challenges resulting from status resolution. 

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41 

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5.2.2.  Programming exercise 

KOSOVO (under UNSCR 1244)  

I Transition Assistance and Institution Building –  

Of which: 

(in million euro, to the nearest 100,000 euro) 

Annual Programme 

Customs Programme 

Tempus and Erasmus Mundus Programmes 

2007 

68.3

62.0

3.5

2.8

5.2.2.1.  Component I: Transition Assistance and Institution Building 

The  total  annual  allocation  for  Kosovo  in  2007  was  €  68.3  million,  all  of  which  will  be 
implemented under component I.  

The € 62 million IPA annual programme for Kosovo was adopted by the Commission on 28 
November 2007. It included € 2.8 million originally allocated to component II. 

The IPA annual programme contained the following projects: 

Political Requirements (27 %) 

•  Building  the  capacity  of  Kosovo's  institutions  to  develop  EU  compatible  legislation  and 

policy, € 6 million 

•  Strengthening the Rule of Law, € 7 million 

•  Return, Reintegration and Cultural heritage in Kosovo, € 3.7 million 

Socio-economic Requirements (53 %) 

•  Developing  an  enabling  economic  environment  for  all  of  Kosovo's  communities,  €  11 

million 

•  Reconstruction of roads and bridges, € 8 million 

•  Support to local government and decentralisation, € 12.4 million 

•  Education in Kosovo: Inter-culturalism and the Bologna Process, € 1.4 million 

European Standards (10 %) 

•  Meeting EU Standards in Energy Sector, € 3 million 

•  Meeting EU Standards in Food Safety and Veterinary Services, € 2 million 

•  Meeting EU Standards in Public Procurement, € 1.5 million 

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The programme has a facility for project preparation of € 1 million and a reserve of € 5million 
(10 %). 

5.2.2.2.  Component II: Cross-Border Cooperation 

In  2007,  the  conditions  for  programmes  under  Component  II  in  Kosovo  were  not  met.  The 
funds for Component II have been included in Component I. 

5.2.3. 

Implementation Modalities and Structures 

IPA  programmes  in  Kosovo  shall  be  implemented  under  centralised  management  by  the 
European Commission. The programmes could also be implemented using joint management 
with  International  Organisations.  As  any  other  IPA  beneficiary,  Kosovo  has  to  establish  a 
Roadmap  for  the  decentralisation  of  the  management  of  EU  funds,  initially  with  ex  ante 
controls by the Commission. Kosovo is at very early stage. As the first step, Kosovo needs to 
appoint  the  NIPAC,  which  could  be  either  the  Director  of  the  Agency  for  European 
Integration  under  the  Deputy  Prime  Minister's  Office  or  the  Deputy  Prime  minister.  The 
discussions on "Roadmap for DIS" are expected to start in 2008-2009. The EC is in process of 
supporting  the  Kosovo's  authorities  to  take  more  ownership  of  the  annual  programming 
process. 

IPA Framework Agreement for Kosovo was signed on 19 December 2007. 

IPA 2007 programme 

Programming  task  Manager  is  Unit  C3  (Kosovo  issues  unit),  DG  Enlargement.  The 
Implementing Authority is the European Commission except for the two following actions - 
Activity  2  of  Project  3  "Return,  Reintegration  and  Cultural  Heritage"  and  Project  7 
"Education  in  Kosovo:  Inter-culturalism  and  the  Bologna  Process"  which  shall  be 
implemented by joint management with the Council of Europe. 

Implementation Task Manager is the Operations Section of the EC Liaison Office in Kosovo 
except for Activity 1 of Project 1 "Legal and Policy Advice to Kosovo's Authorities" where 
the Implementation Task Manager is DG Enlargement's Institution Building unit. 

Kosovo's participation in horizontal customs and education programmes is also funded from 
its  component  I  envelope.  These  programmes  are  not  included  in  the  component  I  annual 
programme as they will be implemented on a multi-country basis and be managed centrally 
by the European Commission in Brussels.  

5.2.4.  Overview of IPA programmes implemented 

5.2.4.1.  Component I: Transition Assistance and Institution Building 

11 IPA 2007 tender forecasts were published in December 2007 with a suspension clause on 
availability  of  funds  depending  on  the  signature  of  the  Financing  Agreement  (expected  in 
2008). 

5.2.4.2.  Component II: Cross-Border Cooperation  

Funds are included in Component I. 

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5.2.5.  Participation in Community Programmes and Agencies 

There  is  no  framework  agreement  concerning  participation  of  Kosovo  in  Community 
programmes. Kosovo did not participate in Community Programmes in 2007. 

5.3.  Monitoring and Results 

5.3.1.  Monitoring 

Kosovo  is  included  in  the  target  area  of  the  ROM  project  managed  by  DG  Enlargement's 
Regional and horizontal programmes unit . Information on IPA 2007 projects to be monitored 
was provided to the contractor of the ROM project. 

5.3.2.  Evaluation results and Lessons Learned  

So far there are no evaluation results of IPA programmes in 2007 as the implementation only 
started  in  2008.  For  the  first  year  of  IPA  no  lessons  learned  can  be  identified  as  the 
implementation only started in 2008. 

5.3.3.  Sectors with positive results- Success story box 

Given  that  the  IPA  Financing  Agreement  was  not  signed  in  2007  (see  2.3),  IPA 
implementation in 2007 has been very limited. 

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6. 

MONTENEGRO 

6.1. 

The year in review  

6.1.1.  Political developments 

Following  political  developments  in  2006  marked  by  the  independence  of  Montenegro  and 
Parliamentary  elections,  2007  was  characterised  by  intensive  European integration activities 
and debates on the country’s new Constitution. The Constitution was adopted in October 2007 
and is broadly in line with European standards. The Stabilisation and Association Agreement 
with the EU  was signed on 15 October 2007; an Interim Agreement was also  signed  which 
entered  into  force  in  January  2008.  However,  compliance  with  the  requirements  of  the 
Agreement suffers from a weak administrative capacity across most sectors. Progress on these 
reform priorities is encouraged and monitored by the enhanced permanent dialogue.  

In January 2007, the first political dialogue meeting between the EU (troika) and Montenegro 
was held. In September 2007, the EU and Montenegro signed agreements on visa facilitation 
and readmission. The new arrangements will simplify procedures for issuing visas to certain 
categories of citizens of Montenegro, including students, scholars, businesspeople, journalists 
and tourists. 

6.1.2.  Macroeconomic developments and structural reforms 

Thorough analysis of Montenegro’s economy is hindered by weak statistics and a large grey 
economy.  

The general government balance surplus increased from 3.4% of GDP in 2006 to a surplus of 
8.5%  in  2007.  Surplus  and  privatization  receipts  amounting  to  3.2%  of  GDP  led  to  an 
equivalent increase in government deposits with the banking system and further reductions in 
government arrears, as well as to a reduction of domestic and foreign debt. 

The trade deficit  increased  to almost 60% of GDP in 2007, from 40% in 2006. However, a 
surge in net foreign direct investment (from about €500 million to €700 million) helped close 
the gap in the balance of payments. Significant inflows of foreign direct investment (FDI) and 
rapid  credit  growth  have  caused  a  large  current  account  deficit,  increasing  the  risk  of 
macroeconomic instability in the near to medium term.  

The major sectors driving economic activity are construction, financial services and tourism, 
with FDI playing a major role in each.  

6.1.3.  Progress in meeting the acquis communautaire 

The  SAA  agreement  and  the  Interim  Agreement  between  the  EU  and  Montenegro  were 
signed  on  15  October  2007.  Sustained  effort  is  needed  for  the  strengthening  of  the 
administrative  capacity  to  perform  commitments  as  from  the  entry  into  force  of  the  Interim 
Agreement. In May 2007 the government adopted an Action Plan for the implementation of 
the European Partnership and started implementation. 

Support  has  been  provided 
legal 
harmonisation in key areas relevant to the acquis, e.g. data protection, intellectual property 
rights, telecommunications, veterinary, fisheries. 

to  relevant  government 

institutions 

to  assist 

in 

EN 

45 

   EN 

Progress has been made towards the environmental requirements of the acquis following the 
adoption of a number of legal acts transposing the relevant EU environmental acquis. Further 
progress  will  be  achieved  through  the  establishment  of  an  independent  Environmental 
Protection  Agency  which,  when  it  becomes  operational,  will  assume  responsibility  for 
inspection, permitting, enforcement and dissemination of environmental data. 

Some  progress  has  been  made  in  the  implementation  of  the  first  transitional  phase  of  the 
European Common Aviation Area Agreement (ECAA).  

The  legal  framework  in  the  domain  of  public  procurement  has  been  reviewed  and  the 
administrative  capacity  of  the  Public  Procurement  Commission  has  been  strengthened. 
Training has been provided to governmental procurement units in the application of the new 
public  procurement  legislation,  system  and  procedures,  which  have  been  independently 
assessed as being well-aligned with the acquis. 

Initial  progress  has  been  made  on  the  development  of  the  infrastructure  for  metrology, 
standards,  testing  and  quality  (MSTQ)  in  compliance  with  the  acquis  and  WTO 
requirements.  National  needs  have  been  analysed,  the  long-term  MSTQ  strategy  has  been 
reviewed and the legal framework assessed for its degree of compatibility with the acquis. 

Support to the fisheries sector has established adequate administrative structures which move 
towards acquis goals and advance the competitiveness of the sector. 

6.2. 

IPA in 2007 

6.2.1.  MIPD 2007-2009  

During  the  year  2007,  the  MIPD  2007-2009  was  adopted  on  1  June  2007,  and  the  MIPD 
2008-2010  was  prepared.  Both  are  in  line  with  the  recommendations  of  the  Enlargement 
Strategy, the European Partnership, and the SAA.  

IPA Component I will support Montenegro in the following areas: 

•  Political  criteria.  An  increased  importance  is  given  to  this  priority  axis  which  will  thus 
focus  on  the  consolidation  of  democratic  institutions,  reform  of  the  judiciary,  public 
administration  reform  including  decentralisation  and  local  government,  fight  against 
corruption  and  organised  crime,  human  rights  and  protection  of  minorities,  anti-
discrimination,  as  well  as  the  media.  Civil  society  development  will  be  given  special 
attention  for  the  promotion  of  dialogue;  small  grants  will  assist  environment,  anti-
discrimination, gender equality, social inclusion, health, business advocacy, and consumer 
protection10. 

•  Economic  criteria.  This  priority  axis  will  concentrate  on  employment  generation, 
education,  research,  social  inclusion,  health,  business  environment,  budget  and  fiscal 
management,  rural  development,  food  safety,  environment,  energy,  transport,  as  well  as 
infrastructure  and  other  activities  which  will  prepare  the  country  for  future  Structural 
Funds. 

10

It will be complementary to the EIDHR programme dealing with democracy and human rights 

EN 

46 

   EN 

                                                 
 
•  Ability  to  assume  the  obligations  of  membership.  IPA  will  assist  the  introduction  and 
implementation  of  the  EU  acquis  in  all  areas;  the  overall  coordination  of  the  European 
integration process; strengthening Montenegro's administrative capacity to implement the 
SAA;  preparing  for  the  Decentralised  Implementation  System  (DIS)  for  EU  funds 
management; and participation to Community Programmes. 

IPA Component II will support cross-border cooperation activities between Montenegro and 
adjacent  Candidate  and  potential  Candidate  Countries  and  with  EU  Member  States  in  the 
context of the IPA Adriatic programme. It will also support the participation of Montenegro in 
ERDF transnational programmes under the European Territorial Cooperation objective of the 
Structural Funds. 

6.2.2.  Programming exercise 

MONTENEGRO 

I Transition Assistance and Institution Building 

Of which:  

(in million euro, to nearest 100,000 euro) 

National Programme 

Nuclear Safety programme 

Customs Programme 

Tempus and Erasmus Mundus Programmes 

II Cross Border Cooperation 

Of which:  

CBC Adriatic programme 

CBC Montenegro and Croatia 

CBC Montenegro and Bosnia & Herzegovina 

CBC Montenegro and Serbia 

CBC Montenegro and Albania 

CBC participation in ERDF SE Europe and ERDF Mediterranean programmes 

2007 

27.5

23.9

0.2

1.9

1.5

3.9

0.7

0.5

0.6

0.6

0.6

0.9

Programmes  for  component  II  are  adopted  for  three  years.  Financial  commitments  are  made  annually  and 
therefore figures above are just for 2007 

6.2.2.1.  Component I: Transition Assistance and Institution Building 

The  programming  exercise  for  IPA  2007  was  done  mainly  by  the  European  Agency  for 
Reconstruction (EAR), in close coordination with the National IPA Coordinator (NIPAC) and 
the Secretariat for European Integration (SEI).  

The 2007 National Programme (Component I) focuses on the continuation of reforms in areas 
such as judiciary, public administration, the fight against corruption and organised crime, as 
well  as  in  the  overall  process  of  transposing  and  implementing  the  EU  standards  in  various 

EN 

47 

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areas.  Thirteen  projects  have  been  identified  for  a  total  amount  of  €  23.87  million.  It  was 
adopted on 21 November 2007. 

Under  "Political  criteria",  there  are  three  projects  for  a  total  amount  of  €  6  million  
supporting Civil society; Fight against organised crime and corruption; and Judiciary Reform.  

Under "Socio-economic Requirements", there are three projects for a total amount of € 9.20 
million  supporting  the  establishment  of  a  National  Qualification  Framework;  Transport 
Sector Management and Infrastructure; and Energy market approximation.  

Under " European Standards", there are six projects for a total amount of €
 7.45 million on 
the  following  sub-sectors  Legal  Harmonisation;  Veterinary  services;  Statistical  office 
MONSTAT;  Public  procurement  system;  Quality  Infrastructure  (standardisation  and 
metrology); and Tax Administration.  

In addition, an amount of € 1.22 million  is foreseen for Project preparation facility, technical 
assistance and contingencies; while Tempus and Nuclear assistance projects are managed by 
Headquarters. 

6.2.2.2.  Component II: Cross-Border Cooperation 

IPA Component II encompasses four cross–border programmes between Montenegro and its 
Western Balkan neighbours: Croatia, Bosnia and Herzegovina, Serbia and Albania. Moreover, 
it includes the participation of Montenegro in the IPA Adriatic cross–border programme with 
Member  States.  IPA  Component  II  also  supports  the  participation  of  Montenegro  in  two 
ERDF  transnational  cooperation  programmes:  "South–East  Europe"  and  "Mediterranean". 
Due  to  its  small  land  area,  Montenegro's  entire  territory  is  part  of  one  or  the  other  CBC 
programme. 

IPA CBC combines cohesion and external relation objectives and supports activities such as: 
(1)  development  of  cross-border  economic,  social  and  environmental  activities  of  border 
areas; (2) addressing common challenges in particular in the field of environment and public 
health  and  development;  (3)  promoting  "people  to  people"  type  actions,  including  among 
NGOs and local authorities. 

6.2.3. 

Implementation Modalities and Structures  

Montenegro's participation in horizontal nuclear safety, customs and education programmes is 
also  funded  from  its  component  I  envelope.  These  programmes  are  not  included  in  the 
component I national programme as they will be implemented on a multi-country basis and be 
managed centrally by the European Commission in Brussels.  

Related  to  DIS  accreditation,  i.e.  granting  decentralisation  with  ex-ante  controls,  a  strategy 
has been established in accordance with the Commission's guidance "Roadmap for DIS" and 
with  the  assistance  of  SIGMA.  IPA  will  support  its  implementation,  and  it  is  foreseen  that 
Montenegro could be granted conferral of management power in three years time. 

Montenegro has nominated the national IPA co-ordinator (NIPAC); the competent accrediting 
officer (CAO); the national authorising officer (NAO); and the Program Authorising Officer 
(PAO).  

A first audit mission by DG Enlargement is due in July 2008. 

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48 

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6.2.4.  Overview of IPA programmes implemented  

During 2007, no IPA programmes were implemented in Montenegro. 

6.2.5.  Participation in Community Programmes and Agencies 

On  the  basis  of  SAA  protocol  8  on  the  participation  of  Montenegro  in  Community 
programmes, Montenegro is participating in the 7th Framework Programme R&D – EC, and 
the Entrepreneurship and Innovation Programme 

6.3.  Monitoring and Results 

6.3.1.  Monitoring 

No  monitoring  of  IPA  projects  was  carried  out  in  2007  as  the  IPA  2007  programmes  were 
only adopted at the end of the year and the actual implementation only started in 2008. 

6.3.2.  Evaluation results and Lessons Learned  

So far there are no evaluation results of IPA programmes in 2007 as the implementation only 
started  in  2008.  For  the  first  year  of  IPA  no  lessons  learned  can  be  identified  as  the 
implementation only started in 2008. 

6.3.3.  Sectors with positive results - Success story box  

For  the  first  year  of  IPA,  no  sectors  with  positive  results  can  be  identified  as  the 
implementation of IPA programmes only started in 2008. 

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49 

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7. 

SERBIA 

7.1. 

The year in review  

7.1.1.  Political developments 

Parliamentary elections took place in 21 January 2007 and were conducted in accordance with 
international  standards.  However,  the  ensuing  period  highlighted  sharp  divisions  among 
political  parties.  This  led  to  a  slow-down  in  the  overall  pace  of  reform.  The  Kosovo  issue 
continued  to  dominate  the  political  agenda.  Following  several  months  of  uncertainty  a  new 
reform-oriented  government  was  formed  in  May  2007.  It  achieved  early  positive  results  on 
cooperation  with  the  ICTY,  which  enabled  the  Commission  to  finalise  negotiations  on  a 
Stabilisation  and  Association  Agreement  (SAA).  The  SAA  was  initialled  on  7  November 
2007.  

In  the  area  of  democracy  and  the  rule  of  law  there  was  some  progress  in  implementing  the 
new  constitution  which  entered  into  force  in  November  2006.  A  constitutional  law  was 
adopted,  however  several  provisions,  in  particular,  on  the  judiciary  still  need  to  be 
implemented in line with European standards. 

The work of the parliament has been hindered by the political situation. The first sitting of the 
parliament  after  its  inauguration  following  the  January  2007  elections  was  adjourned  for 
almost three months due to the protracted negotiations to form a government. Delays in the 
formation  of  the  government  and  sharp  political  divisions  had  a  negative  impact  on 
parliamentary activities. 

As  regards  regional  issues  and  international  obligations,  Serbia  played  a  positive  role  in 
improving  regional  co-operation,  including  notably  the  South  East  Europe  Co-operation 
Process  (SEECP),  the  Regional  Co-operation  Council  (RCC)  and  the  amended  Central 
European Free Trade Agreement (CEFTA).  

The  government,  in  its  programme,  gave  a  clear  commitment  to  fulfil  its  international 
obligations.  The  Serbian  authorities  subsequently  improved  co-operation  with  the  ICTY, 
leading  to  the  arrest  of  two  indictees  and  their  transfer  to  The  Hague.  A  National  Security 
Council  was  established.  The  National  Council  for  Co-operation  with  ICTY  was  also 
reinstated. However, Serbia did not achieve full co-operation with the ICTY that should lead 
to the arrest of the remaining fugitives.  

Serbia participated in 2007 in discussions under the auspices of the UN Secretary General's 
Envoy  for  Kosovo  on 
its 
recommendations  and  has  maintained  that  Kosovo  should  remain  an  integral  part  of  the 
country, whilst offering substantial autonomy. Serbia continued to discourage Kosovo Serbs 
from participating in the provisional institutions of self-government and elections in Kosovo.  

the  future  status  of  Kosovo.  Serbia  however  rejected 

Visa  facilitation  and  readmission  agreements  have  been  concluded  between  the  European 
Union  and  Serbia.  The  visa  facilitation  agreement  will  foster  people-to-people  contacts  and 
increase  opportunities  for  travel,  especially  for  the  younger  generation.  The  agreement 
contains a joint declaration from the parties to start a discussion on visa liberalisation and a 
statement  that  the  agreement  should  be  seen  as  a  first  concrete  step  towards  full  visa 
liberalisation.  The  Readmission  Agreement  set  out  clear  conditions  and  procedures  for  the 

EN 

50 

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authorities of both Serbia and the EU Member States for taking back people who are illegally 
residing  on  their  territories.  The  effective  implementation  of  the  agreements,  as  well  as 
progress  in  key  areas  such  as  border  management,  document  security  and  the  fight  against 
organised crime, will open the way towards a visa-free regime. 

7.1.2.  Macroeconomic developments and structural reforms 

Serbia’s  economy  continued  to  grow  strongly  but  progress  in  macroeconomic  stabilisation 
was  mixed.  The  reversal  of  fiscal  consolidation  added  to  fiscal  and  macroeconomic  risks. 
Much  needed  structural  reforms  continued  slowly  and  the  high  level  of  unemployment 
remained a major challenge. 

As  regards  the  economic  criteria,  Serbia  made  some  progress  towards  establishing  a 
functioning market economy. Further reform efforts must be pursued to enable Serbia to cope 
in the medium term with the competitive pressures and market forces within the Union. 

The authorities to a large extent maintained the main elements of a sound economic policy. 
The  economy  continued  to  expand  strongly.  The  inflow  of  foreign  capital  remained 
significant. Declining inflation contributed to a stable environment for economic actors. The 
budget remained in surplus and investment activity improved markedly. 

The  privatisation  of  state-owned  banks  is  well  advanced  and  competition  among  banks  is 
strong.  The  new  government  has  shown  limited  willingness  to  revive  the  process  of 
privatising  state-owned  companies.  The  SME  sector  grew  in  importance.  Foreign  trade  and 
investment continued to grow and economic integration with the EU advanced. 

However,  despite  strong  economic  performance,  unemployment  remains  very  high.  Further 
progress in privatisation is needed and a competitive and dynamic private sector has not yet 
been  fully  established.  Fiscal  policy  turned  expansionary  in  2007.  Public  sector  wages 
increased substantially. This contributed to a sizeable increase in expenditures as a percentage 
of  GDP  in  2007  and  added  to  external  imbalances  and  inflationary  pressures.  The  lack  of 
flexibility in the labour market remains an obstacle for job creation. Investment was hampered 
by  excessive  bureaucratic  requirements  and  complex  legislation.  Commercial  courts 
continued to suffer from limited capacity and expertise. The large informal sector, fuelled by 
weaknesses in law enforcement and the regulatory framework, reduces the tax base, hampers 
the government's capacity to implement economic policies and affects negatively the business 
environment. 

In general terms, Serbian economy performed well. However, there were a number of major 
imbalances mainly inflation, unemployment and the growing balance of payment deficit.  

7.1.3.  Progress in meeting the acquis communautaire 

The  government  placed  emphasis  in  its  programme  on  European  integration,  but  the  results 
were  mixed.  In  August  2007  the  government  adopted  an  action  plan  on  harmonisation  with 
the  acquis  in  an  attempt  to  accelerate  the  reform  process.  The  Serbian  administration 
participated  in  SAA  negotiations  in  a  professional  manner  and  this  helped  to  improve 
coherence among the various Ministries  and  agencies. Policy co-ordination,  however, needs 
to be further improved. 

EN 

51 

   EN 

As regards European Standards, SAA negotiations showed that Serbia has the administrative 
capacity to progress towards the EU. Serbia will be well placed to implement a future SAA if 
this capacity is properly utilised. 

Serbia  made  some  progress  in  addressing  Partnership  priorities  in  the  areas  of  the  internal 
market.  Serbia  has  shown  progress  in  approximating  with  European  standards  on  a  number 
sectoral polices. In the area of industry and SME Serbia is fully committed to the process of 
the  European  Charter  for  Small  Enterprises.  Serbia's  preparations  in  the  area  of  agriculture 
slowed  down.  Efforts  need  to  be  maintained  and  expanded  into  a  number  of  more  specific 
areas  such  as  veterinary  and  phytosanitary  issues  and  food  safety.  Progress  was  made  on 
improving  the  quality  and  reliability  of  statistics  on  labour  market  and  business  activities, 
whilst  further  progress  is  needed  on  agriculture  statistics  and  strengthening  administrative 
capacity.  

Further  progress  has  been  made  in  the  implementation  of  the  first  transitional  phase  of  the 
European Common Aviation Area Agreement (ECAA).  

7.2. 

IPA in 2007 

7.2.1.  MIPD 2007-2009  

Having signed the IPA Framework Agreement on 20 November 2007 with the Commission, 
Serbia  will  receive  pre-accession  financial  assistance  from  2007  onwards.  The  Serbian 
government played an active role in the preparation of the 2007-2009 Multi-Annual Indicative 
Planning  Document  (MIPD)  which  was  adopted  in  June  2007.  The  MIPD  sets  out  the 
priorities for EU financial assistance under the new IPA for the period 2007-2009. 

7.2.2.  Programming exercise 

(in million euro, to the nearest 100,000 euro) 

SERBIA 

I Transition Assistance and Institution Building 

Of which:  

National Programme 

Nuclear Safety programme 

Customs Programme 

II Cross Border Cooperation 

Of which:  

Tempus and Erasmus Mundus Programmes 

CBC Serbia and Bulgaria 

CBC Serbia and Romania 

CBC Serbia and Hungary 

CBC Adriatic programme 

CBC Serbia and Croatia 

2007 

181.5

164.8

5.5

1.5

9.7

8.2

1.3

1.6

1.3

0.3

1.0

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52 

   EN 

CBC Serbia and Bosnia & Herzegovina 

CBC Serbia and Montenegro 

CBC participation in ERDF SE Europe programme 

1.1

0.5

1.1

Programmes  for  component  II  are  adopted  for  three  years.  Financial  commitments  are  made  annually  and 
therefore figures above are just for 2007 

7.2.2.1.  Component I: Transition Assistance and Institution Building 

The  2007  National  Programme  for  Serbia  under  the  IPA  Transition  Assistance  and 
Institution  Building  Component  was  adopted  by  the  Commission  on  20  December  2007.  It 
aims at assisting Serbia to implement the necessary reforms needed to fulfil EU requirements, 
make  progress  in  the  Stabilisation  and  Association  process  and  to  lay  the  foundations  for 
fulfilling  the  Copenhagen  criteria  as  well  as  to  implement  the  European  Common  Aviation 
Area Agreement.. 

More  specifically,  the  2007  IPA  National  Programme  with  a  total  budget  of  around  €  165 
million comprises 37 projects. 2007 IPA is addressing priorities in the following axes: 

•  Political Requirements, with a budget allocation of € 56 million  

•  Socio Economic Requirements, with a budget allocation of € 71 million  

•  European Approximation of Sectoral Policies, with a budget allocation of € 34.5 million  

Among others, the 2007 IPA Programme is providing assistance to the following projects: 

The  Municipal  Support  Programme  with  a  budget  of  €  22  million  builds  on  the  strong 
record  under  the  CARDS  programme  of  reforming  central/local  government  relations, 
promoting  decentralisation  and  supporting  administrative  reform  at  municipal  level.  The 
specific  objective  of  this  programme  is  to  improve  the  capacities  for  good  governance  and 
municipal management at the local level, to improve local services to citizens and to enhance 
local economic development by strengthening local organisations, the Standing Conference of 
Towns and Municipalities and the local-central government cooperation. 

The Support to Refugees and Internally Displaced Persons (IDP) project with a budget of 
€ 10 million  which is addressing an issue of major importance for Serbia. To date the EU has 
been  supporting  actions  such  as  the  closure  of  collective  centres  and  the  provision  of  legal 
assistance. This project is designed to support IDP/refugees living in private accommodation 
to  integrate  into  society,  temporary  accommodation  will  be  supplied  to  the  most  vulnerable 
groups  and  direct  legal  assistance  will  be  provided  for  those  who  wish  to  return  to  Croatia, 
Bosnia and Herzegovina, etc.  

The Support to the Establishment of the Ombudsman Office with a budget of € 1 million 
will contribute the enhancement of the principles of the rule of law, human rights and good 
governance  in  Serbia  through  greater  accountability  of  public  administrative  bodies.  The 
project  will  support  the  operations  of  the  Serbian  Ombudsman  Office  as  an  independent 
institution in line with EU standards.  

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53 

   EN 

The  Regional  Economic  and  Social  Development  Programme  with  a  budget  of  €  21 
million  will  support  the  balanced  regional  economic  development  in  Serbia  which  is  a 
strongly  underlined  priority  in  the  MIPD.  This  project  will  increase  the  capacity  of  central 
government  to  design  and  implement  an  integrated  regional  development  policy  in  Serbia. 
Regional  Development  Agencies,  Municipalities  and  other  local  stakeholders  will  be 
supported  to  implement  national  regional  policies  and  actions  including  direct  operational 
agreements to the Regional Development Agencies.  

The Health Sector Reform Emergency Medical Services with a budget of € 10 million  will 
improve  Emergency  Medical  Services  (EMS)  in  Serbia  as  part  of  the  overall  reform  of  the 
health  system.  The  supply  of  vehicles  and  the  training  of  Emergency  Medical  Services 
personnel  will  address  a  major  gap  in  the  implementation  of  the  EMS  reform  strategy.  The 
logistical reach capacity and quality of service delivery of Emergency Medical Services will 
be  extended  on  a  full  national  territorial  level.  The  project  is  aiming  to  purchase  of  200 
emergency  vehicles,  to  purchase  training  machines  in  Belgrade,  Novi  Sad,  Niš  and 
Kragujevac and to train the staff who will use the vehicles and the other equipment.  

The Danube River Information System (RIS) with a budget of € 11 million  will enhance 
the speed, the safety and the efficiency of traffic on the Danube by building a dedicated RIS 
(telematic information service), conforming to the requirements of the EU RIS Directive. This 
consists  of  a  major  project  for  the  country  since  Serbia  has  an  extensive  inland  waterway 
network comprising of three international rivers and a channel network of almost 2,000 km of 
inland  waterways  and  the  Danube  River  with  its  588  km  passing  through  the  country  is 
considered to be one of the most important components of transport infrastructure in the entire 
region.  

The Emissions Reduction from Nikola Tesla thermal power plant with a budget of € 12 
million is a major project for Serbia in order to fulfil its environmental obligations under the 
Energy  Community  Treaty,  (Directive  2001/80/EC  for  large  combustion  plants).  As  such, 
polluting emissions must be reduced from Nikola Tesla thermal power plants which require 
the  reconstruction  of  two  electrostatic  precipitators  (air  filters)  this  project  will  provide  the 
technical assistance and works to address this need.  

The  Programming  of  IPA  2008  National  Programme  was  also  initiated  during  2007.  The 
priorities  of  the  programme  are  determined  by  the  Multi-annual  Indicative  Planning 
Document (MIPD) 2008-2010 which was also under preparation in 2007. These priority axes 
are:-  Political  Criteria,  Economic  Criteria  and  Ability  to  assume  obligations  of 
membership.  

7.2.2.2.  Component II: Cross–Border Cooperation 

Cross–border  cooperation  helps  reconciliation  and  good  neighbourly  relations,  while  also 
facilitating the integration of the beneficiary countries into the EU. 

IPA  Component  II  encompasses  three  multi–annual  (2007–2009)  bilateral  cross–border 
programmes  with  neighbouring  candidate/potential  candidate  countries  (Croatia,  Bosnia  and 
Herzegovina,  Montenegro)  and  three  bilateral  cross–border  programme  with  neighbouring 
Member States (Hungary, Romania, Bulgaria). The programmes aim at promoting economic, 
social and environmental development of border regions, mainly through activities involving 
local communities.  

EN 

54 

   EN 

In view of the previous participation of Serbia – Montenegro in the INTERREG 2000–2006 
Adriatic  programme,  Serbia  has  been  granted  a  phasing–out  participation  in  the  IPA  cross–
border Adriatic programme with Member States, with a limited support of Component II.  

Finally, Component II is also financing the participation of Serbia in the ERDF transnational 
programme "South–East Europe". 

7.2.3. 

Implementation Modalities and Structures  

Serbia's participation in horizontal nuclear safety, customs and education programmes is also 
funded from its component I envelope. These programmes are not included in the component 
I national programme as they will be implemented on a multi-country basis and be managed 
centrally by the European Commission in Brussels.  

In Serbia, the DIS working group established within the government produced a Strategy for 
the implementation of Decentralized Implementation System. In addition, the working group 
will  prepare  in  2008  capacity  building  plans  for  DIS  institutions  and  will  make  preparatory 
activities for signing the Memorandum of Understanding for the introduction of DIS.  

In  addition,  during  2008  the  Government  should  start  establishing  national  institutions 
relevant  for  implementation  of  DIS.  According  to  the  SIGMA  report  on  DIS  accreditation, 
national institutions require 24 to 36 months for set-up.  

A first audit mission by DG Enlargement is due in July 2008. 

7.2.4.  Overview of IPA programmes implemented  

No  IPA  programmes  have  been  implemented  in  Serbia  during  2007.  The  workload  was 
concentrated  mainly  in  the  preparation  of  tenders  under  the  2007  National  Programme,  in 
order to be launched in 2008.  

7.2.5.  Participation in Community Programmes and Agencies 

Serbia  signed  the  Memoranda  of  Understanding  for  the  7th  Framework  Programme  (FP7). 
The IPA programme  2007  foresees  a  Community  contribution  of  €  2  million  to  support  the 
participation of Serbia in Community Programmes. These funds are to co-finance the "entry 
tickets" for various programmes and agencies.  

7.3.  Monitoring and Results 

7.3.1.  Monitoring 

No  monitoring  of  IPA  projects  was  carried  out  in  2007  as  the  IPA  2007  programmes  were 
only adopted at the end of the year and the actual implementation only started in 2008. 

7.3.2.  Evaluation results and Lessons Learned  

So far there are no evaluation results of IPA programmes in 2007 as the implementation only 
started  in  2008.  For  the  first  year  of  IPA  no  lessons  learned  can  be  identified  as  the 
implementation only started in 2008. 

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7.3.3.  Sectors with positive results - Success story box  

For  the  first  year  of  IPA,  no  sectors  with  positive  results  can  be  identified  as  the 
implementation of IPA programmes only started in 2008. 

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8. 

TURKEY 

8.1. 

The year in review 

8.1.1.  Political developments 

Turkey  continues  to  sufficiently  fulfil  the  Copenhagen  political  criteria.  Following  the 
constitutional  crisis  in  spring,  early  parliamentary  elections  were  held  in  full  respect  of 
democratic  standards  and  of  the  rule  of  law.  However,  limited  progress  was  achieved  on 
political  reforms  in  2007.  Significant  further  efforts  are  needed  in  particular  on  freedom  of 
expression,  on  civilian  control  of  the  military,  and  on  the  rights  of  non-Muslim  religious 
communities.  Further  progress  is  also  needed  on  the  fight  against  corruption,  the  judicial 
reform, trade union rights, and women's and children's rights. 

8.1.2.  Macroeconomic developments and structural reforms 

The  Turkish  economy  continued  to  grow  rapidly,  with  high  inflows  of  foreign  investment. 
The  monetary  and  fiscal  policy  mix  was  broadly  adequate.  Inflationary  pressures,  growing 
external imbalances and weaker fiscal discipline in 2007 may affect macroeconomic stability. 
Structural reforms have slowed down and labour market rigidities hamper job creation. 

As regards economic criteria, Turkey can be regarded as a functioning market economy. It 
should be able to cope with competitive pressure and market forces within the Union in the 
medium  term,  provided  that  it  implements  its  comprehensive  reform  programme  to  address 
structural weaknesses. 

8.1.3.  Progress in meeting the acquis communautaire 

Turkey improved its ability to take on the obligations of membership. Progress was made 
in  most  areas,  in  particular  in  the  chapters  on  free  movement  of  goods,  financial  services, 
trans-European Networks, and science and research. Alignment is advanced in certain areas, 
such  as  free  movement  of  goods,  intellectual  property  rights,  anti-trust  policy,  energy, 
statistics,  enterprise  and  industrial  policy,  health  protection,  and  science  and  research. 
However,  alignment  needs  to  be  pursued,  in  particular  in  areas  such  as,  free  movement  of 
services,  state  aid,  agriculture,  fisheries,  food  safety,  consumer  protection  veterinary  and 
phytosanitary  policies,  and  environment.  A  number  of  obligations  by  Turkey  under  its 
Customs  Union  with  the  EU  remain  unfulfilled.  Turkey's  administrative  capacities  to  cope 
with the acquis need further improvement. 

8.2. 

IPA in 2007 

8.2.1.  MIPD 2007-2009 

The  Multi-annual  Indicative  Planning  Document  (MIPD)  is  the  strategic  programming 
document  for  IPA  in  Turkey.  It  is  established  for  a  three  year  rolling  period,  with  annual 
reviews.  The  first  MIPD  for  Turkey  2007-2009  was  given  a  favourable  opinion  by  the  IPA 
Committee  on  16  February  2007  and  then  adopted  through  written  procedure  by  the 
Commission  on  30  April  2007.  The  IPA  instrument  in  Turkey,  as  reflected  in  the  MIPD, 
consists  of  five  components:  (IPA-I)  the  Transition  Assistance  and  Institution  Building 
component;  (IPA-II)  the  Cross-Border  Cooperation  component;  (IPA  III,  IV  and  V)  the 
Regional, Human Resources and Rural Development components. 

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Within the Institution Building component the focus of assistance in the area of the political 
criteria is on the institutions that are directly concerned by the reforms: the judiciary and the 
law  enforcement  services.  A  second  priority  supports  the  continued  development  of  civil 
society organisations. Among the issues to be addressed, priority is given to human rights and 
fundamental  freedoms;  gender  issues;  and  the  fight  against  corruption.  As  concerns  the 
adoption and implementation of the acquis, the main areas of activity, reflecting the volume 
of  legislation  to  be  transposed  and  implemented  as  well  as  the  investments  required,  is: 
agriculture  and  food  safety;  justice,  liberty  and  security  (particularly  border  management; 
migration  and  visa  policy;  and  international  cooperation  among  law  enforcement  agencies); 
and environment. The promotion of the Civil Society Dialogue is to be implemented through 
grants supporting cooperation between EU and Turkish civil society organisations and by the 
co-financing of Turkey's participation in Community Programmes, notably the education and 
youth programmes.  

The introduction of EU Structural Funds' territorial cooperation objective is addressed by the 
Cross-border  Cooperation  component.  Budgetary  allocations  in  2007  are  divided  between 
the  bilateral  Bulgaria-Turkey  cross-border  programme  and  participation  in  the  ENPI  Black 
Sea basin programme. 

EU  assistance  helps  to  prepare  the  beneficiary  country  for  participation  in  Community's 
cohesion policy and rural development instruments from day one of accession. In view of the 
limited  funds  available,  the  multi-annual  planning  strategy  laid  down  in  the  MIPD  pursued 
both  sectoral  and  geographical  concentration  of  funds.  The  objectives  of  the  revised  Lisbon 
Strategy  have  also  been  taken  into  account,  bearing in  mind  the  state  of  Turkey's  economic 
development.  

The  Human  Resources  Development  component  supports  a  single  OP  addressing  three 
major  areas  of  intervention:  employment,  education  and  social  inclusion,  which  are  to  be 
implemented  by  four  priority  axes:  attract  and  retain  more  people  in  employment,  enhance 
investment in human capital, increase adaptability of workers and promote an inclusive labour 
market. 

The Rural Development component sets out three priority axes: adaptation of the agricultural 
sector  and  implementing  of  Community  standards,  preparatory  actions  for  agri-environment 
measures and Leader and development of the rural economy. 

(in € million, to nearest € 100,000) 

8.2.2.  Programming exercise 

TURKEY 

I Transition Assistance and Institution Building 

Of which:  

National Programme 

Nuclear Safety programme 

II Cross Border Cooperation 

Of which:  

CBC Turkey and Bulgaria 

CBC participation in ENPI Black Sea cooperation programme 

2007 

256.7

256.2

0.5

2.1

1.1

0.5

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III Regional Development  

Of which:  

Regional Competitiveness Programme 

Transport Programme 

Environment Programme 

IV Human Resources Development 

V Rural Development  

167.5

41.9

58.6

67.0

50.2

20.7

Programmes  for  components  II,  III,  IV  and  V  are  adopted  for  three  years.  Financial  commitments  are  made 
annually and therefore figures above are just for 2007 

8.2.2.1.  Component I: Transition Assistance and Institution Building 

The  National  Programme  (NP)  2007  for  Component  I  is  based  on  37  projects,  which  were 
elaborated  by  beneficiaries  (notably  Ministries)  and  agreed  upon  by  the  relevant  Turkish 
national  authorities  (NIPAC,  NAO)  and  the  European  Commission.  The  NP  2007  supports 
measures in the areas of the political criteria, the adoption and implementation of the acquis 
communautaire and the promotion of the civil society dialogue. After obtaining the favourable 
opinion  of  the  IPA  Committee  on  29  October  the  National  Programme  was  adopted  by 
Commission Decision on 20 December 2007. 

8.2.2.2.  Component II: Cross-Border Cooperation 

Following the experience gained under the Turkey-Bulgaria 2004-06 cross-border cooperation 
(CBC) programme, the first multi-annual (2007-2009) IPA Bulgaria-Turkey CBC programme 
was  prepared  by  the  participating  country  and  adopted  by  Commission  Decision  on  20 
December 2007. The objective of the Programme is to help the border region between Turkey 
and  Bulgaria  to  overcome  development  problems  resulting  from  its  relative  isolation  and  to 
support the development of co-operative networks on both sides of the border. 

Under the leadership of the Romanian Ministry for Development, Public Works and Housing, 
which is to become the Managing Authority of the programme, the Black Sea basin countries 
(Armenia, Azerbaijan, R. Moldova and Georgia (whole territory), Bulgaria, Greece, Romania, 
Russia, Turkey and Ukraine (regions closest to the basin)) have prepared in 2007 a sea basin 
cooperation  programme  under  the  ENPI  programme  for  the  period  2007-2013.  The 
Commission decision on IPA funding for the participation of Turkey in this ENPI Black Sea 
basin programme was adopted on 20 December 2007. 

8.2.2.3.  Components III and IV: Strategic Coherence Framework 

As required by Article 154 of Commission Regulation (EC) N° 718/2007, Turkey prepared a 
Strategic Coherence Framework (SCF) for the period 2007-2013, covering IPA components 
III and IV. Its purpose is to set the overall strategic framework for programming of resources 
in the context of the national priorities for social and economic development and Community 
priorities  for  cohesion,  thus  constituting  a  key  reference  document  for  programming  IPA 
regional  development  and  human  resources  development  components.  The  SCF  is  a  key 
document  to  introduce  structural  funds  strategic  planning  to  candidate  countries  (a  "mini 
NSRF"), reinforcing the role of IPA assistance under components III and IV as a precursor to 
structural funds. 

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The preparation of the Strategic Coherence Framework was coordinated by the State Planning 
Organisation,  who performs  the role of Strategic Coordinator  for IPA regional development 
and  human  resources  development  components.  Throughout  its  preparation  extensive 
coordination  has  taken  place  within  the  national  administration,  particularly  the  ministries 
who  will  be  involved  in  the  implementation  of  components  III  and  IV  programmes.  Once 
finalised, it was transmitted to the Commission for information and verification of consistency 
with  the  requirements  of  the  regulation,  but  the  Strategic  Reference  Framework  remains  a 
national document.  

The social and economic analysis provided by the  Strategic  Coherence  Framework  justified 
the  concentration  of  resources  under  the  regional  competitiveness  and  human  resources 
development  programmes  in  the  12  NUTS  II  regions  with  a  GDP  per  capita  below  75%  of 
Turkish  national  average.  The  strategic  objectives  are  to  upgrade  the  business  environment 
and  to  development  better  entrepreneurial  capabilities  of  enterprises,  and  to  promote  the 
development human resources and skills. As regards transport and environment, concentration 
is foreseen on a limited number of projects which contribute to promote interconnectivity with 
TEN-T  network  and  intermodality,  to  promote  sustainable  development  and  approximation 
with the EU environmental acquis. 

8.2.2.4.  Component III: Regional Development  

The  multi-annual  Operational  Programmes  (OP)  for  Component  III  were  prepared  by  the 
Turkish authorities during the year 2007 in close cooperation with the Commission. All OP 
obtained  the  favourable  opinion  of  EU  Member  State  Coordination  Committee  of  the 
Structural Funds. The Regional Development OPs were adopted by Commission Decision as 
follows: OP Regional Competitiveness and OP Environment on 29 November 2007; and OP 
Transport  on  7  December  2007.  The  IPA  resources  allocated  to  each  programme  are  as 
follows: 

Programmes 

2007 

2008 

2009 

Total 

III – Transport 

58,600,000 60,800,000 60,300,000 179,700,000 

III– Environment 

67,000,000 69,500,000 67,600,000 204,100,000 

III Regional Competitiveness  41,900,000 43,500,000 54,800,000 140,200,000 

The  overall  objective  of  the  "Transport"  programme  is  to  increase  the  competitiveness  of 
Turkey  by  supporting  investments  in  transport  infrastructure  sector.  In  this  framework  the 
scope of the intervention in Turkey will cover transport infrastructure, including in particular 
interconnection,  interoperability  and  intermodality  of  national  networks  and  with  the  trans-
European networks. With regard to freight transportation efforts should be deployed in order 
to rebalance the modes of transportation in favour of rail and ports freight transportation. The 
TINA  study  (Trans  European  Network  for  Transport)  is  the  key  determinant  for  the 
identification of investment priorities in the transport sector.  

The overall objective of the "Environment" programme is to increase the competitiveness of 
Turkey by supporting investments in environment infrastructure sector. In this framework the 
scope  of  the  intervention  in  Turkey  will  cover  environment  infrastructure,  in  particular  in 
water supply, sewerage and waste water treatment and in intergraded waste management. The 
intervention  should  pursuit  a  coherent  strategy  over  medium  to  long  term  and  possibly 
mobilise  additional  financial  sources  as  EIB,  IFI's  and  donors.  The  criteria  for  projects 

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selection are the impact on the population served, the non affordability of the construction of 
specific  projects,  the  sensitivity  of  the  area.  The  implementation  will  pursuit  the  river  basin 
intergraded  approach,  the  sustainability  development  principles,  the  national  and  regional 
waste management planning and the compliance with relevant environmental acquis. 

The  overall  objective  of  the  "Regional  Competitiveness"  programme  is  to  increase  the 
competitiveness  of  the  poorest  regions  of  Turkey  by  supporting  enterprises.  This  objective 
will  be  achieved  through  four  specific  objectives:  enhancement  of  physical  and  financial 
infrastructure,  increasing  business  stock,  increasing  employment  creation  capacity  of  the 
productive sector and enhancing the added value of the production base.  

Within  each  operational  programme,  a  separate  priority  on  technical  assistance  has  been 
introduced,  to  support  national  structures  managing  IPA,  including  ensuring  project 
preparation  of  high  standards  for  current  programmes  and  for  future  programming  periods. 
The institutional set-up which will be set in place for the management of IPA component III 
programmes  concentrates  financial  management  in  experienced  structures  prepared  under 
previous  assistance  instruments  (Central  Finance  and  contracts  Unit,  National  Fund)  while 
transferring overall management and responsibility for implementation to operating structures 
within line ministries. 

8.2.2.5.  Component IV: Human Resources Development 

The  multi-annual  Operational  Programmes  (OP)  for  Component  IV  was  prepared  by  the 
Turkish authorities during the year 2007 in close cooperation with the Commission. The OP 
obtained  the  favourable  opinion  of  EU  Member  State  committees  and  the  European  Social 
Fund Committee. The HRD OP was adopted by Commission decision on 7 December 2007. 

Component IV 

2007

2008

2009 

Total 

IV – Human Resources Development 

50.2

52.9

55.6 

158.7 

8.2.2.6.  Component V: Rural Development 

Under  Component  V  a  multi-annual  operational  programme  for  "agriculture  and  rural 
development"  was  prepared  by  Turkey  during  the  course  of  2007  and  adopted  by  the 
Commission on 25 February 2008. 

Component V 

2007

2008

2009 

Total 

V – Rural Development 

20.7

53.0

85.5 

159.2 

8.2.3. 

Implementation Modalities and Structures 

Assistance  under  IPA  component  I-IV  (except  component  II  –  Turkey-Bulgaria  CBC 
programme)  will  be  implemented  through  decentralised  management,  initially  with  ex-ante 
controls  performed  by  the  Commission  on  the  tendering  of  contracts,  launch  of  calls  for 
proposals  and  the  award  of  contracts  and  grants  (the  exact  list  of  ex-ante  controls  will  be 
specified  in  the  Commission  decisions  on  the  conferral  of  management  powers  per 
component). For that purpose, a management and control system for the management of the 
different programmes has to be  established and  accredited  by  the Turkish authorities  before 

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the  conferral  of  decentralised  management  can  be  requested  from  and  be  given  by  the 
Commission. 

Decentralised management without ex-ante controls by the Commission is an objective for the 
implementation  of  assistance  under  IPA  Component  I-IV.  Turkey  is  required  to  provide  a 
roadmap  (as  part  of  Financing  Agreements)  with  indicative  benchmarks  and  time  limits  to 
achieve  this  objective.  The  minimum  criteria  for  waiving  the  ex-ante  controls  by  the 
Commission  include  the  establishment  of  a  benchmarking  system  with  quantitative  and 
qualitative  aspects  as  well  as  a  sustained  and noticeable  downward  trend  with  regard  to  the 
rejection rate due to the ex-ante controls by the Commission. 

Assistance  under  Component  V  will  be  implemented  through  decentralised  management 
without ex-ante controls from the beginning. The accreditation and conferral of management 
process is therefore expected to take longer as for the other components. 

Turkey's participation in horizontal nuclear safety, customs and education programmes is also 
funded from its component I envelope. These programmes are not included in the component 
I national programme as they will be implemented on a multi-country basis and be managed 
centrally by the European Commission in Brussels.  

For the implementation of financial assistance and in addition to the conferral of management, 
the European Community and Turkey must sign a Framework Agreement setting out general 
rules for cooperation (applicable to all components for the whole period of IPA assistance). 
Negotiations  on  a  Framework  Agreement  with  Turkey  began  in  September  2007  and  were 
still ongoing at the end of the reporting period. In addition, the Commission and Turkey must 
also sign specific Financing Agreements for each programme.  

Component I and the ENPI Black Sea programme under Component II 

On 31 October 2007, within the required deadline set by the IPA Implementing Regulation, 
the  NAO  submitted  a  deviation  report  to  the  European  Commission  and  informed  of  his 
intention to accredit for IPA Component I. On 21 November, a Prime Minister circular was 
issued  to  appoint  Board  of  Treasury  Controllers  as  the  Audit  Authority  under  IPA,  and 
Minister Simsek (Treasury) as the Competent Accrediting Officer (CAO). 

On 30 November, the European Commission was informed of the accreditation of the NAO 
and  NF  through  the  CAO,  Minister  Simsek,  and  of  the  accreditation  of  DIS  for  the 
management of IPA Component I through the NAO based on Art 76 of the IPA Implementing 
Regulation.  The  NAO  stated  that  no  high  risk  findings  remained  and  that  all  remaining 
medium risk findings would be addressed the latest by January 20. A package containing all 
documents  to  be  assessed  as  part  of  the  EC  conferral  audit  was  submitted  by  the  Turkish 
authorities to the Commission in early February 2008, in view of a possible conferral audit for 
Component I and II. 

Component II – Turkey-Bulgaria CBC 

As Turkey-Bulgaria CBC programme will be implemented through shared management with 
the  Bulgarian  Managing  Authority  in  the  lead,  no  additional  accreditation  or  conferral  of 
management as for the other Components is needed. 

Component III: Regional Development and Component IV: Human Resources Development 

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The  process  of  accreditation  of  the  structures  dealing  with  Component  III  and  IV  began  in 
2007.  By  the  end  of  that  year,  the  Gap  Assessment  and  the  Gap  Plugging  stages  were 
completed and the Compliance Assessment stage was ongoing. Due to weaknesses identified, 
the  Compliance  Assessment  stage  had  to  be  deferred  to  mid-2008.  No  application  package 
had  been  submitted  to  the  Commission  by  the  end  of  2007.  The  Commission  expects  the 
submission of the application package by end of September 2008. 

The Commission decisional procedure to adopt the template of the Financing Agreement was 
expected to be adopted in mid July 2008. The signature of the Financing Agreements can only 
take  place  after  the  conclusion  of  the  internal  accreditation  processes  and  the  subsequent 
Commission Decision conferring management powers to national authorities. 

Component V: Rural Development 

The  Rural  Development  programme  will  be  implemented  by  conferring  decentralised 
management powers without ex-ante controls to the Turkish Republic. The auditors from DG 
Agriculture and Rural Development conducted two advisory missions in May and November 
2007. Despite progress made, it appeared that the original time-table for accreditation by mid 
2008 is unrealistic as significant weaknesses remained to be addressed. 

8.2.4.  Overview of IPA programmes implemented 

The implementation of programmes will effectively start once the conferral of decentralised 
management  decision  per  component  is  taken  by  the  Commission  and  the  Framework  and 
Financing Agreements have entered into force.  

No  IPA  programmes  were  implemented  in  2007,  as  the  first  IPA  programmes  were  only 
adopted at the end of 2007. 

8.2.5.  Participation in Community Programmes and Agencies 

This  IPA  Component  I  NP  2007  foresees  Community  financial  support  of  €  58  million  for 
Turkey’s  participation,  inter  alia,  in  the  following  programmes  and  agencies  for  the  year 
2008:  Lifelong  Learning  +;  Youth  in  Action;  Culture;  IDABC;  Community  Action  field  in 
public  health;  PROGRESS;  CIP/EIP;  Customs  2013;  7th  Framework  Programme  for 
Research; European Environment Agency (EEA); European Monitoring Centre for Drugs and 
Drug Addiction. 

8.3.  Monitoring and Results 

8.3.1.  State  of  play  for  IPA  Monitoring  Committee  and  Sectoral  Monitoring 

Committees 

8.3.1.1.  IPA Monitoring Committee 

Programme  implementation  under  IPA  shall  be  monitored  through  the  IPA  monitoring 
committee  assisted  for  each  component  or  programme  by  Sectoral  Monitoring  Committees. 
Each committee shall satisfy itself as to the effectiveness and quality of the implementation of 
the  programmes  and  operations.  They  may  make  proposals  to  the  Commission  and  the 
national IPA co-ordinator, with a copy to the national authorising officer, for decisions on any 
corrective  measures  to  ensure  the  achievements  of  programme  objectives  and  enhance  the 
efficiency of the assistance provided. 

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No joint IPA Monitoring Committee took place in 2007, yet in line with requirements from 
the IPA implementing regulation some 'shadow' sectoral monitoring committees for different 
programmes were established and had their inaugural meetings. 

8.3.1.2.  Sectoral Monitoring Committees 

Component / Programme 

Date of meeting (shadow Committees) 

IPA I TAIB Sectoral Committee 

18 December 

IPA III Regional Development 
Sectoral Committees 

Environment 

Transport 

27 November 

26 November 

Regional Competitiveness 

27 November 

IPA IV Human Resource Development 
Sectoral Committee 

13 December 

IPA V Rural Development Sectoral 
Committee 

29 November 

the  basis  for  a  wider  partnership 

As  regards  component  III,  the  first  round  of  Sectoral  Monitoring  Committee  meetings 
provided 
the  future 
implementation of the programmes and resolved key procedural issues (membership, internal 
rules of procedures, etc). The strategic role of the SMC will increase as the implementation of 
the  programmes  becomes  effective  upon  the  conferral  of  management  and  signature  of  the 
financing agreements.  

in  overseeing 

involvement 

Annual and final reports on implementationPA report on implementation was submitted by 
the national authorities in 2007, as the first IPA programmes were only adopted in the end of 
2007 and implementation had not yet started. 

The  first  sectoral  annual  implementation  reports  shall  be  submitted  by  the  Operating 
Structures  to  the  national  IPA  co-ordinator,  the  national  authorising  officer  and  to  the 
Commission,  after  examination  by  the  aforementioned  sectoral  monitoring  committees  and 
for the first time in 200811. 

On  the  basis  of  these  reports,  the  national  IPA  co-ordinator  shall  send  the  annual  report  on 
implementation to the Commission and the national authorising officer, after examination by 
the IPA Monitoring Committee and for the first time in 2008. 

11 

The exceptions are Component II cross–border programmes, where the first sectoral annual reports shall 
be  submitted  "in  the  second  year  following  the  adoption  of  the  programme"  (i.e.  in  2009),  and 
Component V, where the first sectoral annual report shall be submitted within six months of the end of 
each full calendar year of programme implementation. 

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8.3.2.  Evaluation results and Lessons learned  

An ex-ante evaluation of the HRD OP was carried out in 2007 under the responsibility of the 
Ministry of Labour and Social Security. The results of the ex-ante evaluation were taken into 
account in the drafting process of the HRD OP. The final ex-ante evaluation report forms an 
integral part of the HRD OP adopted by the Commission. 

An ex-ante evaluation was also carried-out by independent experts for the Rural Development 
programme. The conclusions/recommendations of this report were taken into consideration in 
preparing the final version of the programme. 

No IPA evaluation of results was carried out in 2007, as the first IPA programmes were only 
adopted in the end of 2007 and implementation had not yet started. 

8.3.3.  Sectors with positive results- Success story 

No  results  and  success  stories  from  IPA  are  available  yet  as  no  programmes  were 
implemented in 2007. 

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PART II: MULTI-BENEFICIARY AND REGIONAL PROGRAMMES  

9. 

THE YEAR 2007 IN REVIEW  

The  Multi-beneficiary  programme  is  designed  to  complement  the  Component  I  National 
Programmes and to strengthen multi-lateral experiences in the Western Balkans and Turkey. 
It  provides  support  through  regional  and  horizontal  programmes.  The  main  activities  of 
particular importance which took place in 2007 are identified below: 

9.1. 

Addressing the Political Criteria 

9.1.1.  Regional Issues and International Obligations 

9.1.1.1.  Regional Cooperation Initiatives 

European  Community  assistance  to  regional  cooperation  has  been  provided  mainly  through 
support to the Stability Pact for South Eastern Europe and its Special Coordinator, who was 
tasked to complement the EU Stabilisation and Association process (SAp) with the Western 
Balkans. Encouraged by the international community, the Beneficiaries and Members of the 
South  East  Europe  Cooperation  Process  (SEECP)  agreed  in  May  2006  to  take  over  the 
ownership  of  certain  regional  cooperation  activities.  This  led  to  the  decision  a  year  later  to 
establish the Regional Cooperation Council (RCC). Considerable work was done in 2007 to 
establish the legal, administrative and financial basis of the RCC which formally commences 
operations  in  early  2008.  It  is  a  regionally  owned  cooperation  structure  located  in  Sarajevo 
and  has  been  co-financed  in  the  first  three  years  by  the  Beneficiaries,  the  Commission  and 
other interested donors.  

As  highlighted  in  the  Communication  on  Enlargement  Strategy  and  Main  Challenges  2007-
200812, the EU will continue to support local ownership of initiatives in regional cooperation. 
The  RCC  is  seen  as  the  key  interlocutor  for  regional  cooperation  and  therefore  financial 
support will be  provided to the RCC  Secretariat. This will be complemented by support for 
thematic or sector specific regional initiatives originally launched under the Stability Pact. 

9.1.1.2.  Public Administration (The Regional School for Public Administration  (ReSPA)) 

The Regional School of Public Administration (ReSPA) aims to improve regional cooperation 
in the field of public administration, to strengthen administrative capacity as required by the 
European  integration  process  and  to  develop  human  resources  in  line  with  the  principles  of 
the  European  Administrative  Space.  The  ReSPA 
the 
Thessaloniki agenda and continues to attract a lot of political interest. During 2007, training 
activities  were  continued  in  2007  and  it  was  agreed  that  the  European  Institute  for  Public 
Administration (EIPA) would support phase II of the project. A call for proposals to decide 
the seat of the future school was launched at the end of 2007. 

initiative  emerged  following 

12 

Communication  from  the  Commission  to  the  European  Parliament  and  the  Council  –  Enlargement 
Strategy and Main Challenges 2007-2008, COM(2007) 663, 6 November 2007 

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9.1.1.3.  Support to Interim Civilian Administrations 

The  political  uncertainties  surrounding  this  support,  in  particular  the  failure  to  reach  a 
settlement on the future of Kosovo in the Security Council, made it necessary to maintain the 
support to UNMIK Pillar IV for the whole of 2007. Commission Decisions provided for this 
support  until  the  end  of  February  2008.  An  agreement  was  reached  with  DG  External 
Relations  to  take  over  the  management  and  financing  of  the  Stability  Instrument  from 
February 2008 onwards, thus facilitating the continuation of support to UNMIK Pillar IV. 

9.1.2.  Civil Society Dialogue and Development 

In  line  with  the  Communication  from  the  Commission  on  Enlargement  Strategy  and  Main 
Challenges  2007-2008,  a  revised  strategy  on  Civil  Society  Dialogue  and  Development  was 
established in 2007. It was agreed to coordinate and streamline support by focussing on three 
areas of intervention, constituting a new civil society facility: 

(i) 

Support to local civic initiatives and capacity building efforts; 

(ii)  People-to-People programmes to EU institutions and bodies; 

(iii)  Partnership activities between organisations in the beneficiaries and the EU. 

It  was  decided  during  2007  that  the  Multi-beneficiary  programme  would  provide  horizontal 
technical  assistance  to  support  the  implementation  and  monitoring  of  both  civil  society 
is 
initiatives  and  partnership  actions  managed 
complementary to assistance given under the European Instrument for Democracy and Human 
Rights (EIDHR). 

from  Brussels.  Support  provided 

9.2. 

Addressing the Economic Criteria 

9.2.1.  Tempus, Erasmus Mundus and Youth in Action 

Education:  Multi-beneficiary  IPA  assistance  is  provided  in  Education  via  the  established 
Tempus and Erasmus Mundus programmes. The Commission offered 100 scholarships for the 
academic  year  2007/2008  to  postgraduate  students  from  the  Western  Balkans  under  the 
Erasmus Mundus programme. A further 500 scholarships are available for the academic year 
2008/2009.  Following  discussions  with  Commission  Rehn  in  April  2008,  an  additional  600 
scholarships are available for the academic year 2009/2010.  

Youth:  Non-formal  education  and  youth  intercultural  exchanges  play  an  important  role  in 
creating  an  area  of  peace,  stability,  prosperity  and  freedom.  The  Communication  on  the 
Western  Balkans  of  January  2006  indicated  that  the  Commission  will  also  create  new 
opportunities  under  the  Youth  Programme.  In  2007,  the  'Youth  in  Action'  programme 
replaced  the  Youth  programme.  This  programme  supports  projects  leading  to  improved 
intercultural  dialogue  and  tolerance  among  young  people,  social  inclusion  of  disadvantaged 
youngsters, as well as the strengthening of youth NGOs and the development of civil society. 
The  new  ‘Western  Balkan  Window’  was  established  in  2007  within  the  Youth  in  Action 
Programme to allow more projects submitted by organisations from the Western Balkans to 
be supported. Continuation of this Window will contribute to further expand the actions of the 
European  Commission  in  the  field  of  non-formal  education  and  youth  in  the  region,  and  to 
achieve  the  objectives  set  in  the  Commission  Communication  of  the  Western  Balkans  of 

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January 2006 and March 2008. Particular attention will be paid to promoting actions in this at 
national, regional and EU levels.  

9.2.2. 

International Financing Institutions 

To improve access to finance by candidate and potential candidate countries and territories, a 
strategy  was  decided  in  2007  to  develop  regional  initiatives  with  International  Financing 
Institutions (IFIs) during the coming years along three strands: 

(i) Support to private investments 

(ii) Promotion of energy efficiency investments 

(iii) Support to investments in infrastructure remediation and upgrading 

In light of this new strategic approach, it was agreed to extend the existing energy efficiency 
facility  to  the  Western  Balkans.  Significant  resources  are  now  being  devoted  to  the  newly 
established Infrastructure Projects Facility to prepare and promote infrastructure investments 
in  transport,  energy,  environment  and  the  social  sector;  these  efforts  are  being  made  in 
cooperation  with  the  EIB,  EBRD,  CEB  and  other  interested  IFIs.  At  the  same  time, 
endeavours are being continued to improve the efficiency of current facilities, including  the 
SME  facility  which  has  been  impacted  by  delays  in  implementation.  Cooperation  with  the 
European  Fund  for  Southeast  Europe  (EFSE)  to  make  loan  facilities  available  to  micro-
enterprises and households are also being continued. 

The  Commission,  the  EIB,  the  EBRD  and  the  Council  of  Europe  Development  Bank 
committed to establish a Western Balkans Investment Framework by 2010 with other IFIs and 
donors to further enhance harmonisation and cooperation in investments for socio-economic 
development in the region. 

Regarding coordination with the IFIs, the second meeting of the IFI Advisory Group, which is 
linked  to  the  implementation  of  the  Memorandum  of  Understanding  signed  with  the  IFIs  in 
mid-2006,  was  scheduled  for  January  2008.  Technical  Working  Group  meetings  were 
established  for  Transport  and  Energy  (September)  and  Environment  (October).  A  first 
meeting for the Social sector was not possible in 2007 but was held in January 2008. A two-
day  IFI  coordination  meeting  with  participants  of  all  major  IFIs,  DG  ELARG  geographical 
teams and Delegations as well as line DGs was held on 10-11 December 2007. 

9.3. 

Ability  to  assume  the  obligations  of  Membership  and  approximation  to 
European Standards 

9.3.1.  Customs and Taxation 

The project to support Customs administrations in the Western Balkans proceeded according 
to  plan  i.e.  (i)  a  second  contract  (€11.42M  (CARDS  2006  (€5.3M  and  IPA  2007  €6.12M)) 
was signed with Eurocustoms to provide assistance during the second half of 2007 and (ii) a 
consortium  was  awarded  the  contract  (€7.06M)  to  continue  to  support,  on  a  multi-country 
basis, the relevant Beneficiary Customs13 and Taxation14 administrations until early 2009. The 

13 
14 

Albania, BiH, Montenegro, Serbia and Kosovo (under UNSCR 1244). 
BiH and Kosovo (under UNSCR 1244) only. 

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Commission's policy is that the programming and implementation of support to Customs and 
Taxation will gradually evolve from having been programmed and managed horizontally (by 
the  Regional  Programmes  Unit)  to  being  managed  by  the  Geographical  Units  and 
Delegations, starting with Taxation in 2007 and with Customs from 2008. 

10. 

IPA IN 2007 

10.1.  MIPD 2007-2009  

The  Multi-beneficiary  Multi-annual  Indicative  Planning  Document  (MIPD)  2007-2009 
provides the strategic three-year plan for programming of the assistance to potential candidate 
and  candidate  countries  and  territories  through  regional  and  horizontal  programmes.  Multi-
beneficiary  actions  complement  and  add  value  to  the  support  given  under  the  Component  I 
National Programmes. Multi-beneficiary IPA assistance is programmed through regional and 
horizontal programmes: 

–  Regional programmes facilitate, in particular, the regional cooperation process among the 
Beneficiaries  of  the  Western  Balkans,  although  Turkey  may  also  partake.  These 
programmes  endeavour,  in  particular,  to  promote  reconciliation,  reconstruction  and 
political cooperation.  

–  Horizontal programmes address common needs across several IPA Beneficiaries and seek 
to  attain  efficiencies  and  economies  in  implementation  by  providing  centrally  managed 
and/or  jointly  managed  assistance  with  international  organisations  rather  than  by 
implementing  the  programmes  on  a  national  basis.  Institution  building  activities  are  also 
performed in this framework, notably through instruments such as TAIEX and SIGMA.  

Multi-beneficiary  actions  focus  therefore  on  support  that  requires  collaboration  among  the 
Beneficiaries,  such  as  regional  structures,  networks  of  experts  or  civil  servants  or  to  tackle 
needs  or  problems  of  a  cross-border  nature.  Certain  support  under  IPA  is  also  concentrated 
under  Multi-beneficiary  assistance  in  order  to  have  a  coordinated  approach  and  facilitate 
administration  and  assistance.  This  includes,  for  example,  collaboration  with  International 
Financial Institutions for the joint implementation of certain finance facilities and support to 
the  participation  in  Tempus,  Erasmus  Mundus  or  Youth  in  Action  programmes.  The  Multi-
beneficiary  MIPD  also  includes  the  IPA  support  given  to  nuclear  safety  and  radiation 
protection,  the  Interim  Civilian  Administration  in  Bosnia  and  Herzegovina,  communication 
and administration, as well as audit, evaluation and monitoring. 

The Multi-beneficiary  2007-2009  MIPD  was based on  an indicative financial envelope  of € 
401.4 million.  

10.2. 

Programming exercise 

The Accession and European Partnerships as well as the Annual Progress Reports set down 
the  priorities  for  programming  of  assistance  under  the  IPA  Multi-beneficiary  Programme 
2007-2009. In addition, the Communications from the Commission on Civil Society Dialogue 
and on the Western Balkans have been taken into account. During 2007, the Commission has 
further  endeavoured  to  establish  a  transparent  consultation  process  in  particular  with  the 
Beneficiaries. This process is aimed at enhancing, as far as possible, local ownership of the 
choices, content and design of the programmes. Consultations take place at regular intervals 
during the programming phase with amongst others, the Beneficiaries, European Commission 

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Delegations,  Stability  Pact,  International  Financial  Institutions,  Civil  Society  Organisations, 
line Directorate Generals as well as with other Donors.  

The  strategic  choices  identified  in  the  Multi-beneficiary  MIPD  2007-2009  and  the  Annual 
Programmes  were  made  based  on  guidance  provided  in  these  EU  strategic  documents,  the 
lessons learned from the programming and implementation of previous EU assistance and the 
findings from consultations with the aforementioned parties.  

10.3. 

Implementation Modalities and Structures  

The  Multi-beneficiary  programme  is  managed  through  centralised  and  joint  management. 
Centralised management is mainly in the form of implementation by the Commission services 
at  Headquarters,  but  may  also  be  possible  by  devolved  management  by  the  Commission 
Delegation  in  the  beneficiary  countries  or  by  indirect  management  through  Community 
agencies,  Community  bodies  or  national  public  sector  bodies.  Joint  management  is 
complementary  to  the  central  management  in  that  the  Commission  is  the  Contracting 
Authority and is managing the funds jointly with an international organisation.  

10.4.  Overview of IPA programmes implemented 

The  Multi-beneficiary  IPA  budget  (€108.9  million)  was  complemented  with  €  51.4  million 
which  was  transferred  from  the  National  Programmes  to  facilitate  the  implementation  of 
projects in the areas of Nuclear Safety and Radiation Protection (€ 8.2 million), Education (€ 
29.5 million) and Customs (€ 13.7 million). 

Of the total € 160.3 million (€ 108.9 million + € 51.4 million) budget, eleven contracts in the 
following  areas  were  completed  in  2007:  Customs  and  Taxation  (€  6  million),  Support  to 
UNMIK  (€  20.7  million),  Monitoring  (€  2  million),  Stability  Pact  (€  2.12  million)  and 
Participation in Community Agencies (€ 1.2 million).  

10.5. 

Participation in Community Programmes and Agencies 

The  ticket  to  participate  in  the  Programmes  or  Agencies  is  financed  through  the  National 
Programmes.  Support  was  provided  under  the  Multi-beneficiary  IPA  2007  programme  to 
facilitate the preparation of Croatia, Turkey and the former Yugoslav Republic of Macedonia 
in certain Community Agencies.  

11.  MONITORING AND RESULTS 

11.1.  Monitoring 

No monitoring activities have been carried out yet. 

11.2.  Evaluation results 

As  project  implementation  commenced  only  in  the  second  half  of  2007,  no  evaluation  has 
been completed as yet. 

11.3. 

Sectors with positive results- Success story 

As project implementation commenced only in the second half of 2007, there are neither 
results nor success stories as yet.

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PART III: TECHNICAL AND FINANCIAL ASSISTANCE 

1. TWINNING  

Twinning  has  been  designed  and  developed  by  the  Commission  as  the  main  instrument  for 
Institution  Building.  It  aims  at  helping  Candidate  and  Potential  Candidate  countries  in  their 
development  of  modern  and  efficient  administrations,  with  the  structures,  human  resources 
and  management  skills  needed  to  implement  the  acquis  communautaire  so  as  to  reach  the 
same standards throughout the Union and to benefit fully from European Union membership.  

This instrument has mobilised significant human and financial resources of the Commission 
as well as of the Member States and the beneficiary countries. Twinning projects are based on 
the  secondment  of  EU  public  sector  experts  (Member  State  officials  or  mandated  body 
experts),  known  as  Resident  Twinning  Advisors  who  are  made  available  to  the  beneficiary 
country  administrations  for  a  period  of  at  least  one-year  in  order  to  assist  these 
administrations to obtain the mandatory result defined for each and any twinning project. To 
that effect, the Resident Twinning Advisors provide technical advice and are in charge of the 
day-to-day implementation of the twinning projects. 

They  are  supported  by  a  senior  Project  Leader  in  their  home  administration,  who  is 
responsible for ensuring the overall thrust of the twinning project implementation and for co-
ordinating  all  other  inputs  which  provides  the  twinning  expertise.  In  order  to  achieve  the 
aforementioned  mandatory  results,  it  is  indeed  necessary  to  combine  different  means  of 
assistance, including short-term expertise, training, and other services (such as translation and 
interpreting) in addition to the Resident Twinning Advisor.  

More  than  1,400  twinning  projects  have  already  been  funded  by  the  Community  since 
twinning  was  launched  in  1998.  The  average  budget  for  a  twinning  project  is  €1  million. 
Almost  one  half  of  these  projects  concerns  Justice,  Freedom  and  Security  issues,  Public 
Finance and Internal Market matters. Other areas prioritised include Agriculture and fisheries, 
Environment and Social policy. 

The 2007 programming exercise (the first under IPA) at this stage encompasses 41 projects. 
To date, 16 Twinning projects have been launched. Moreover, about 25 Twinning projects are 
programmed to be launched under IPA 2007. The distribution of launched and programmed 
Twinning projects in the Candidate and Potential Candidate Countries for 2007 is as follows:  

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Number of IPA 2007 Twinning projects 
launched 

Number  of  IPA  2007  Twinning  projects 
programmed 

Kosovo 

Montenegro 

Turkey 

Total 

2 

3 

11 

16 

Albania 

Bosnia and Herzegovina 

Croatia 

former  Yugoslav  Republic  of 
Macedonia 

Serbia 

Total 

1 

5 

11 

1 

7 

25 

(In  2007  Twinning  projects  have  also  been  launched  and  implemented  in  Romania  and 
Bulgaria under the Transition Facility programme). 

The 16 Twinning projects launched to date are projects in the following sectors: Justice and 
home affairs (9), Agriculture and fisheries (3) Internal market and economic criteria (2) and 
Environment (2). 

Furthermore, the Candidate Countries and Potential Candidate Countries are being offered the 
possibility  of  drawing  on  twinning  expertise  through  “Twinning  Light”,  in  order  to  address 
well-circumscribed projects of limited scope. In 2007, this instrument has been continuously 
used by the beneficiary administrations.  

2. TAIEX 

TAIEX15 started operations in 1996 as a follow-up to the Commission’s White Paper on the 
preparation of the associated countries for integration into the internal market.  

Since then, TAIEX has evolved into an instrument providing short-term technical assistance 
to facilitate the approximation, application and enforcement of the EU legislation. 

Apart  from  the  IPA  beneficiary  countries  partners  the  TAIEX  instrument  also  covered  the 
12 new  Member  States,  the  Turkish  Cypriot  community  and  the  countries  covered  by  the 
European Neighbourhood and Partnership Instrument (ENPI). 

TAIEX  support  consists  of  expert  missions,  workshops,  peer  assessments,  study  visits  and 
training  programmes  designed  on  the  basis  of  specific  requests  and  needs  of  beneficiary 
institutions. TAIEX is demand-driven and it delivers services on a "first come, first served" 
basis.  

TAIEX also facilitates the access to several databases (CCVista, Progress, JurisVista, VetLex, 
PhyroLex  and  Avis)  that  provide  translation  of  legislative  texts  and  information  on  the 
alignment of legislation. 

15 

Technical Assistance Information Exchange Instrument 

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The TAIEX operation continued to develop in a positive and dynamic manner in the course of 
2007. The total number of incoming requests from rose sharply from 1,049 in 2006 to 1,591, 
an increase of 52%. The major part of applications came from the IPA beneficiary countries 
(45%), followed by the 10 new Member States (26%) and the ENPI countries (14%). 

During  the  year  a  total  of  1,282  events  were  organised,  representing  an  increase  of  16% 
compared  with  2006  and  about  the  same  level  as  2005.  Out  of  these  events  408  were 
organised for IPA beneficiary countries. 

The number of participants at TAIEX events went up by some 4% to 36,971 in 2007, while 
the experts engaged went up by 5% to 4,148. Out of those 11,158 participants came from IPA 
countries and 1,644 experts were involved in projects related to IPA beneficiary countries. 

The  positive  results  and  the  increasing  demand  for  assistance  clearly  demonstrate  the  need 
and  usefulness  of  TAIEX  as  an  instrument  of  know-how  transfer  and  exchange  of  best 
practice.  

TAIEX  continued  to  play  an  important  role  in  supporting  the  Turkish  Cypriot  community. 
Out  of  the  Financial  Aid  Regulation  (Council  Regulation  No  389/2006)  the  instrument  was 
allocated  €  11  million  to  encourage  the  economic  development  of  the  Turkish  Cypriot 
community with particular emphasis on the economic integration of the island, on improving 
contacts  between  the  two  communities  and  with  the  EU,  and  on  preparation  for  the  acquis 
communautaire.  In  2007  assistance  focused  on  the  preparation  and  launching  of  the 
Programme  for  the  Future  Application  of  the  Acquis  (PFAA),  which  was  finally  agreed  in 
October 2007 and which will concentrate on 12 EU policy areas. Notable progress have been 
achieved so far in the sector of environment (creation of basic conditions for the drafting of 
main  framework  legislation),  the  Green  line  Regulation  (Council  Regulation  No  866/2004) 
and the statistical sector (preparation of a“Master Plan” and of a statistical law). Basic work 
has been done to prepare strategies for the agricultural sector as well as for the reform of the 
Customs system.  

2007  was  the  first  full-operational  year  for  the  ENP  countries  and  Russia.  TAIEX  has 
received more than 200 applications from these countries against some 50 in seven months of 
operations  in  2006.  In  the  same  period,  over  3,000  participants  from  the  administrations  of 
these partner countries have been trained. 

The share of ENPI applications has increased from 5% to 14% of the total. For the majority of 
events  the  subjects  covered  topics  related  to  internal  market  issues:  this  is  understandable 
considering that the ENP is not  offering  a prospect  of accession, but rather –as stated in  all 
Action Plans- "a stake in the EU's internal market". However, also subjects related to the rule 
of law, to agriculture and to health and safety have received significant attention. 

TAIEX  offers  access  to  a  range  of  databases.  The  Progress  database  organises  all  EU 
legislation in a format that allows a continuous exchange of up-to-date information on newly 
adopted  acts  and  on  the  harmonisation  of  national  legislations.  All  data  collected  via  the 
Progress  Database  are  shared  with  the  European  commission  services  and  delegations, 
country missions and the concerned national authorities. CCVista constitutes a repository of 
all  translations  of  EU  legislation  produced  by  the  Translation  Coordination  Units  of  the 
beneficiary  countries.  It  is  a  vital  source  of  information  to  all  internet  users  who  wish  to 
consult legislation translated into various languages of the beneficiary countries. The database 
is currently being used by the candidate and Western Balkan countries. By the end of the year, 

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CCVista database contained more than 5,000 translated EU acts from Croatia and over 2,000 
from the former Yugoslav Republic of Macedonia. This represents over 55,000 OJ pages in 
the case of Croatia and almost 30,000 OJ pages in the case of the former Yugoslav Republic 
of Macedonia. The JurisVista Database is a library of translations of key judgements of EU 
jurisprudence; it is mainly used by the judiciary, academic institutions such as new Member 
State  universities  and  others  such  as  law  firms.  VetLex  offers  direct  access  to  consolidated 
versions of all EU veterinary legislation, simplifying the daily tasks of veterinary inspectors, 
border  post  officials  and  others.  Similarly,  PhytoLex  offers  consolidated  versions  of  EU 
phytosanitary legislation, while Avis is a database dedicated to animal diseases. 

The TAIEX Expert Database (ED) represents a key-instrument in the daily work of TAIEX 
assistance tasks. Launched in October 2004, the ED registers public officials from all the EU 
Member State national administrations covering a large number of fields of the EU legislation 
body and interested to participate in TAIEX activities. In 2007 more than 3,800 experts were 
present in the ED, a significant increase in comparison with 2006 (with around 2,600 public 
officials  signed  in).  Additionally,  more  than  550  "institutional"  contact  points  that  play  a 
coordination  role  within  every  ministry  of  the  Member  States  have  been  added  into  the 
database.  The  Expert  Database  is  contributing  to  a  better  identification  of  appropriate  key-
experts in a given field and a smoother and rapid response to beneficiaries' requests. 

Several  Commission  Financing  Decisions  were  adopted  in  2007  to  ensure  the  continued 
funding of the TAIEX operation. They consisted of € 6.83 million from the Transition Facility 
for  Bulgaria  and  Romania,  €  9.28  million  from  the  Instrument  of  Pre-Accession  Assistance 
(IPA) and € 5.0 million from the Pre-Accession Assistance Funds for Kosovo. Funding also 
included  €1.5  million  from  MEDA  and  €1.5  million  from  TACIS  and  €2  million  from  the 
ENPI through sub-delegation from DG AIDCO. 

An ex-post evaluation report on TAIEX was completed in 2007. It concluded that TAIEX is 
an  important  instrument  in  supporting  the  accession  process  that  has  performed  well  in 
providing short-term, demand-driven assistance and a large number of outputs. In this context, 
the  speedy  mobilisation  and  the  handling  of  administrative  details  were  in  particular 
appreciated on the recipients' side. The report recommended that TAIEX should focus more 
on networking opportunities, further increase cost-effectiveness and sustainability of actions.  

3. SIGMA  

Since  1992,  this  instrument  for assistance in horizontal  areas of  public  management  (Public 
administrative reform, public procurement, public sector ethics, external and internal financial 
control) is implemented by the OECD through a contribution agreement which is funded by 
the Commission. 

In 2007, SIGMA has worked with the two new EU Member States and the three EU candidate 
countries  as  well  as  with  potential  candidate  countries  in  the  Western  Balkans.  Within  this 
context  a  total  of  57  concrete  project  assignments  have  been  approved  by  the  European 
Commission and carried out by OECD: 24 in Bulgaria, Romania, Croatia and Turkey and 33 
in the Western Balkan countries. All of these project activities were carried out under distinct 
contracts, funded both under the Transition facility and CARDS. 

In  the  course  of  2007,  preparations  were  started  to  launch  a  new  global  contract  for  the 
continuation  of  SIGMA  programme  under  the  new  financial  Instrument  for  Pre-Accession 

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Assistance  (IPA).  This  new  contract  will  benefit  all  Candidate  and  Potential  Candidate 
countries. It will cover 2009-2010 with an increased global budget of €10.5 million. 

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PART IV: FINANCIAL DATA  

In 2007, € 1218.4 million was allocated from the EU budget to operational programmes under 
the Instrument for Pre-Accession assistance. Overall the execution rate was 100 %, although € 
50.2 million (4 %) of this was carried forward to the 2008 Budget and committed by March 
2008. This related to 8 programmes16 for which preparations were finalised towards the very 
end of the year following which there was no time for adoption in 2007.  

Due  to  the  adoption  of  most  of  the  IPA  programmes  late  in  the  year,  the  consumption  of 
payment  credits  was  lower  than  the  forecasts  made  in  the  PDB  2007.  As  a  result  of  this, 
payment credits of several IPA budget lines were returned in the Global Transfer exercise. No 
payments were executed under the IPA CBCs since the Commission Decision adopting these 
programmes  was  carried  forward  to  2008.  Concerning  the  IPA  Institutional  Building 
component, € 2.7 million were paid for Bosnia & Herzegovina, € 18.6 million for Kosovo as 
well  as  €  8  million  under  the  IPA  Regional  programmes.  No  payments  were  executed  for 
Albania, Croatia, fYROM, Montenegro, Serbia or Turkey." 

1. IPA FUNDS BY YEAR  

Year 

2007 

Funds Committed 

€ 1,218,407 million

16 

Programmes  carried-forward  were:  CBC  Hungary-Croatia;  CBC  Slovenia-Croatia;  CBC  Hungary-
Serbia; CBC Romania-Serbia; CBC Bulgaria-Serbia; CBC Adriatic; SIGMA 2007; additional funds for 
participation in the European Fund for Southeast Europe] 

EN 

76 

   EN 

                                                 
2. IPA FUNDS BY COUNTRY 2007 (IN EURO) 

Partner Country  Commitments (1)  Contracts (2)  Payments (3) 

Albania 

BiH 

Croatia 

61,000,000 

62,100,000 

5,697,918 

2,706,511 

141,227,000 

Former Yugoslav 
Republic of 
Macedonia 

58,500,000 

Kosovo 

68,300,000 

20,704,005 

18,633,605 

Montenegro 

31,400,000 

Serbia 

Turkey 

189,700,000 

497,200,000 

Multi-beneficiary 

108,980,000 

22,676,232 

7,996,785 

EN 

77 

   EN