Report from the Commission to the Council, the European Parliament and the European Economic and Social Committee - 2007 annual report on PHARE, Turkey pre-accession, CARDS and transition facility {SEC(2008) 3075}
Date: 2008-12-22
Institutions: European Commission
Subjects: EU aid, EU programme, Türkiye, accession to the European Union, enlargement of the Union, pre-accession strategy, report, transitional period (EU)

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.12.2008 
COM(2008) 880 final 

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

2007 ANNUAL REPORT ON PHARE, TURKEY PRE-ACCESSION, CARDS AND 
TRANSITION FACILITY 

{SEC(2008) 3075} 

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Introduction 

Since 2007,  EU pre-accession funding has been channelled through a  single instrument, the 
Instrument  for  Pre-accession  Assistance  (IPA),  designed  to  deliver  focused  support  to  both 
candidate  and  potential  candidate  countries.  IPA  supersedes  five  previous  EU  financial 
instruments - Phare1, ISPA2, SAPARD3, the Turkey pre-accession instrument4 and CARDS5. 

This report deals with the implementation of Phare, Turkey pre-accession instrument, CARDS 
and  Transition  Facility6  programmes  during  the  year  2007.  It  should  be  noted  that  as  2006 
was  the  final  programming  year  under  Phare,  the  Turkey  pre-accession  instrument  and 
CARDS,  no  new  programmes  under  these  instruments  were  launched  in  2007.  The  2007 
programming for candidate and potential candidates took place under the new instrument IPA, 
and  it  will  be  reported  on  through  the  2007  annual  IPA  report,  as  foreseen  in  the  IPA 
regulation 1085/2006 (Art. 13(6)). 

The  objectives  of  Phare  pre-accession  assistance  were:  to  assist  candidate  and  acceding 
countries in their efforts to strengthen their public administrations and institutions to function 
effectively  inside  the  European  Union;  to  promote  convergence  with  the  European 
Community’s legislation; to reduce the need for transition periods; and to promote Economic 
and Social Cohesion (ESC). 

The object of the CARDS programme was to support the participation of the countries of the 
Western Balkans (Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic 
of  Macedonia,  Montenegro  and  Serbia,  including  Kosovo  under  UNSCR  1244/99  in  the 
Stabilisation  and  Association  process  (SAp).  This  process  seeks  to  promote  stability  within 
the region whilst also facilitating closer association with the European Union. 

This report also contains information on the Transition Facility for new Member States which 
was  introduced  to  allow  for  the  continuation  of  institution  building  support  with  a  view  to 
strengthening  and  consolidating  institutional  and  administrative  capacity  to  implement  the 
acquis communautaire.  

1. 

THE YEAR IN REVIEW 

1.1.  Main evolutions of the Enlargement Process in 2007 

In  2007,  progress  was  achieved  on  the  basis  of  the  renewed  consensus  on  enlargement,  as 
defined at the December 2006 European Council. 2007 began with the accession of Bulgaria 
and  Romania.  The  year  also  saw  a  number  of  important  developments  in  Turkey  and  the 

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PHARE, Council Regulation (EEC) No 3906/89 of 18 December 1989 
Instrument  for  Structural  Policies  for  Pre-Accession  (Council  Regulation (EC)  No 1267/1999  of 
21 June 1999) 
Special  Accession  Programme  for  Agriculture  and  Rural  Development  (Council  Regulation  (EC) 
No 1268/1999 of 21 June 1999) 
Council Regulation (EC) No 2500/2001 of 17 December 2001 
Community  Assistance  for  Reconstruction,  Development  and  Stabilisation  (Council  Regulation  (EC) 
No 2666/2000 of 5 December 2000) 
Article 31 of the Bulgaria and Romania Accession Treaty 

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Western  Balkans:  progress  in  accession  negotiations  and  the  Stabilisation  and  Association 
process,  the  Kosovo  status  talks,  and  the  launch  of  the  new  Instrument  for  Pre-accession 
Assistance, IPA. 

On  6  November  2007,  the  Commission  presented  its  annual  strategy  paper,  together  with 
country  progress  reports  and  Accession/  European  partnership  proposals  for  the  candidates 
and  potential  candidates7  and  Kosovo.  The  Commission's  strategy  paper  confirmed  the 
principles  and  objectives  of  the  enlargement  strategy.  It  drew  attention  to  a  number  of 
significant  challenges  in  the  countries  concerned.  It  stated  that  higher  priority  will  be  given 
from  an  early  stage  to  basic  governance  issues,  including  institution-building,  judicial  and 
administrative reform and the prevention of organised crime and corruption. This approach is 
in line with the recommendations emerging from Directorate General Enlargement's internal 
evaluation of public administration reform in the enlargement countries.  

Accession negotiations with Croatia and Turkey continued to make progress. For Croatia, by 
December 2007, sixteen chapters had been opened, two of which were provisionally closed. 
In  Turkey's  case,  six  chapters  were  opened,  one  of  which  has  been  closed.  In  line  with  the 
December  2006  Council  conclusions,  there  are  eight  negotiation  chapters  which  will  not  be 
opened until Turkey implements the Additional Protocol to the Association Agreement. DG 
Enlargement  monitored  the  implementation  of  the  Association  Agreement  with  Turkey  and 
the  Stabilisation  and  Association  Agreements  (SAA)  with  Croatia  and  the  former  Yugoslav 
Republic  of  Macedonia.  None  of  the  three  countries  had  made  sufficient  progress  in 
addressing the priorities which have been set.  

2007 saw progress towards the completion of SAA with the countries of the Western Balkans. 
Albania  continued  the  implementation  of  its  Interim  Agreement.  An  SAA  with  Montenegro 
was signed in October 2007. SAA negotiations with Serbia were resumed in June 2007 and 
led  to  the  initialling  of  the  SAA  in  November.  An  SAA  with  Bosnia  and  Herzegovina  was 
initialled in December. The signature of these SAAs was conditional on the fulfilment of the 
relevant conditions.  

Concerning  the  Western  Balkans,  the  Commission  continued  to  foster  the  Stabilisation  and 
Association  process  and  coordinate  the  implementation  of  the  Thessaloniki  agenda.  By  the 
end of 2007, visa facilitation and readmission agreements had been concluded with Albania, 
Bosnia  and  Herzegovina,  the  former  Yugoslav  Republic  of  Macedonia,  Montenegro  and 
Serbia. The strategy paper announced the launch of a dialogue on the conditions for visa-free 
travel and the provision of further higher education scholarships for students from the region. 

Kosovo  status  talks  under  the  auspices  of  the  Special  Envoy  of  the  UN  Secretary  General, 
Martti  Ahtisaari,  were  concluded  in  2007  but  did  not  produce  a  final  status  settlement.  The 
subsequent direct Kosovo status talks between the two parties mediated by a EU-US-Russia 
troika  did  not  result  in  an  agreement.  The  EU,  including  the  Commission,  continued  to 
provide advice and support to this process and to reforms in Kosovo. 

At  the  May  summit  of  the  South-East  Europe  Cooperation  Process  (SEECP)  in  Zagreb,  the 
decision  was  taken  to  move  towards  regional  ownership  of  the  process  of  regional  co-
operation.  Since  the  Stability  Pact  had  largely  accomplished  its  mission,  the  process  of 

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Candidates: Croatia, former Yugoslav republic of Macedonia, Turkey. 
Potential candidates: Albania, Bosnia and Herzegovina, Montenegro, Serbia, Kosovo under UNSCR 
1244 

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replacing  it  by  a  new  Regional  Cooperation  Council  (RCC)  linked  to  the  SEECP  began.  A 
Secretary-General of the RCC was appointed, and Sarajevo was designated as the seat of its 
secretariat. In July, the new Central European Free Trade Agreement (CEFTA) entered into 
force. 

Communicating  enlargement  continued  to  be  a  priority.  For  the  third  anniversary  of  EU-10 
enlargement  on  1  May,  activities  included:  a  special  web  section  on  the  EUROPA  web-site 
dedicated  to  case  studies,  a  facts  and  figures  section  and  a  picture  gallery;  audiovisual 
material on Europe by Satellite; visits for journalists to three of the new Member States; and a 
series of seminars co-organised with Chambers of Commerce in seven Member States.  

Moreover,  in  2007  the  Commission  started  work  on  a  new  civil  society  facility,  which  will 
focus on three areas of intervention: (i) support to local civic initiatives and capacity building; 
(ii)  a  people-to-people  dialogue  programme  familiarising  all  types  of  stakeholders  with  EU 
policies, institutions and bodies, and; (iii) support to (international) partnership actions. 

1.2.  Main conclusions of the 2007 European Council 

The  General  Affairs  and  External  Relations  Council  of  December  2007  welcomed  the 
enlargement strategy with the following conclusions: 

"In line with the enlargement strategy agreed by the December 2006 European Council and 
the  Council  conclusions  of  11  December  2006,  the  Council  welcomes  the  Commission's 
communication on the enlargement strategy and main challenges 2007-2008 of 6 November 
and  takes  good  note  of  the  analysis  and  recommendations  contained  therein.  The  renewed 
consensus  on  enlargement,  which  is  based  on  consolidation  of  commitments,  fair  and 
rigorous conditionality and better communication, together with the capacity to integrate new 
members, continues to form the basis of the EU's enlargement strategy. An improved quality 
of the enlargement process will ensure that enlargement continues to foster peace, democracy 
and  stability  throughout  the  continent  and  to  bring  concrete  benefits  in  terms  of  increased 
trade, investment and economic growth.  

Next year is crucial to further consolidate and implement the EU's enlargement strategy and 
support the transition process in the Western Balkans. The Council recalls various proposals 
made  on  this  issue  and  that  the  future  of  the  Western  Balkans  lies  in  the  European  Union. 
Against  this  background,  the  consistent  implementation  of  the  renewed  consensus  is  more 
important than ever.  

The  Council  reaffirms  that  the  pace  of  the  negotiations  depends  notably  on  the  negotiating 
countries'  progress  in  addressing  opening  and  closing  benchmarks  as  well  as  the 
requirements of the Negotiating Frameworks, including the implementation of the Accession 
Partnerships,  currently  in  course  of  revision,  with  each  country  being  judged  on  its  own 
merits.  The  Council  recalls  that  chapters  for  which  technical  preparations  have  been 
completed  will  be  opened  in  accordance  with  established  procedures,  in  line  with  the 
Negotiating Frameworks. In this context, the Council looks forward to the Intergovernmental 
Conferences  with  Turkey  and  Croatia  later  this  month.  It  is  also  essential  that  the 
enlargement  policy  maintains  fair  and  rigorous  conditionality  at  all  stages  of  the 
negotiations.  In  this  regard  the  Council  welcomes  the  Commission's  intention  to  continue 
enhancing the quality of the enlargement process by tackling key priorities in areas of public 
administration  and  judicial  reform  and  the  fight  against  corruption  at  an  early  stage,  by 
making full use of benchmarks and impact studies, and by bringing more transparency into 

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the process. This will be instrumental for ensuring broad and sustained public support for the 
enlargement process." 

The subsequent December 2007 European Council then went on to endorse these conclusions: 

"The  European  Council  takes  note  of  the  communication  from  the  Commission  on  the 
Enlargement  Strategy  and  endorses  the  General  Affairs  and  External  Relations  Council 
conclusions of 10 December." 

2. 

PROGRAMMING  AND  IMPLEMENTATION  OF  THE  PROGRAMMES:  GENERAL 
OVERVIEW 

2.1. 

Phare, Turkey pre-accession and CARDS 

With the introduction of IPA in January 2007, there were no new commitments in 2007 under 
Phare,  the  Turkey  Pre-Accession  Instrument  or  CARDS.  The  focus  on  implementation  of 
previous years' programmes, including the reduction of backlogs where necessary.  

Detailed information about Phare, Turkey Pre-accession financial assistance and CARDS can 
be found in the Annex - Part I: Country section - to this report. 

2.2. 

Transition Facility 

The Transition Facility for Bulgaria and Romania was established by article 31 of the Act of 
Accession  to  fund  certain  institution  building  actions  to  address  the  continued  need  for 
strengthening institutional capacity in certain areas through actions which cannot be financed 
by Structural Funds or by the Rural Development Fund. As such, this is an extension of the 
assistance provided before accession under the Phare programme. The implementation of EU 
assistance  available  under  the  Transition  Facility  is  managed  by  the  Memorandum  of 
Understanding on the Implementation of the Transition Facility signed between the Bulgarian 
authorities  and  the  European  Commission  on  21  June  2007  and  between  the  Romanian 
authorities and the European Commission on 5 September 2007. 

The  amounts  allocated  to  the  National  programmes  for  the  2007  Transition  Facility  are  as 
follows: 

Bulgaria 

€ 31.5 million 

Romania 

€ 46.5 million 

During 2007, the ten new Member States (Cyprus, Czech Republic, Estonia, Hungary, Latvia, 
Lithuania,  Malta,  Poland,  Slovakia  and  Slovenia)  which  have  benefited  from  the  special 
Transition Facility for institution building created by article 34 of the Act of Accession since 
2004,  continued  the  contracting  of  projects  under  the  2005  and  2006  Transition  Facility 
programmes  and  the  implementation  under  the  2004,  2005  and  2006  Transition  Facility 
programmes.  This  report  covers  the  final  year  for  contracting  of  the  Transition  Facility 
programme for these ten new Member States. 

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2.3.  Moving towards Extended Decentralisation Implementation System (EDIS)  

The Commission's objective is to enable the recipient countries of pre-accession assistance to 
manage  Community  funds  under  EDIS  in  order  to  acquire,  before  accession,  sufficient 
practical experience in the management of a fully decentralised system, and thus prepare them 
to  effectively  manage  Structural  Funds  upon  accession  (in  a  shared  management 
environment). The decision by the Commission to allow the relevant implementing agencies 
to  operate  under  EDIS  will  be  given  upon  demonstration  of  their  having  appropriate 
resources,  structures  and  systems  in  place  for  the  effective  and  timely  management  of 
Community assistance.  

The ten new Member States that joined the EU in 2004 have all operated under EDIS since 
2005. 

With regard to Phare and post-accession Transition Facility assistance, Bulgaria has operated 
under  an  Extended  Decentralised  Implementation  System  (EDIS)  since  July  2007.  This 
implies that contracting and implementation of assistance has been, since then, under the full 
responsibility  of  the  Bulgarian  authorities.  The  assistance  still  to  be  implemented  (around  € 
700 million) is managed by four accredited Implementing Agencies8.  

Though the system as such has been set up and accredited on the basis of commitments taken 
by the Bulgarian authorities, shortcomings in terms of practical implementation and handling 
of  the  assistance  remained  to  be  addressed  in  2007.  The  Commission  has  taken  action  to 
ensure  that  weaknesses  highlighted  in  the  accreditation  are  given  the  necessary  attention  by 
the relevant Bulgarian authorities9. 

Romania has also operated under EDIS since the beginning of 2007, which means that is fully 
responsible  for  both  tendering  and  implementation  of  the  financial  assistance  programmes. 
The accredited Implementing Agencies10 are managing over € 1.3 billion, representing Phare 
2004/2005  programmes  under  implementation,  and  Phare  2006  under  contracting  and  the 
further support after accession under the Transition Facility. 

The  Romanian  system  also  showed  some  deficiencies  during  its  first  operating  year,  with 
mandatory  conditions  for  its  proper  operation  not  being  fully  met.  The  Commission  has 
expressed  some  concerns  over  the  capacity  of  Romanian  agencies  to  ensure  a  sound 
management  of  EU  funds  and  decided  to  ask  the  responsible  authorities  to  address  the 
remaining shortcomings and to provide proof that progress has been reached in ensuring that 
pre-accession  programmes  are 
implemented  under  a  sound  extended  decentralised 
implementation system.  

As  a  consequence,  substantial  action  has  been  taken  by  the  authorities  in  addressing  the 
remaining key issues. Romania managed to have a very good absorption rate for the 2005 pre-

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CFCU,  Ministry  for  Regional  Development  and  Public  Works,  the  Ministry  for  Labour  and  Social 
Policy, the Ministry of Economy and Energy 
The 2007 Annual Activity Report raised a reservation concerning potential irregularities in management 
of PHARE funds under extended decentralised management by two Bulgarian Implementing Agencies 
(Central Finance and Contract Unit and Ministry of Regional Development and Public Works). On 23 
July  2008,  the  accreditation  of  the  two  implementing  agencies  was  temporarily  withdrawn,  see 
COM(2008)496 
CFCU, Ministry of European Integration, Ministry of Labour 

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accession  Phare  programme.  There  is  evidence  that  efforts  are  being  made  for  the  proper 
management of pre-accession and post-accession funds that still remain to be contracted. 

The  Commission  is  closely  monitoring  the  operation  of  the  system,  as  the  capacity  of  the 
agencies managing the funds still needs to be strengthened and procedures in place need to be 
effectively applied in order to ensure that implementation  of projects  is timely and efficient 
and that results are effectively achieved.  

the  Western  Balkans,  only  Croatia  operates  under 

the  Decentralised 
Concerning 
Implementation System (DIS). The Commission decided to confer the management of Phare 
and  CARDS  programmes  to  the  Croatian  institutions  under  the  authority  of  the  National 
Authorising Officer on 7 February 2006 while maintaining the ex-ante control requirement for 
tendering and contracting. A follow-up audit on DIS conducted by DG Enlargement in 2006 
highlighted several management deficiencies resulting in weak absorption and administrative 
capacities  that  need  to  be  remedied.  In  light  of  this,  DG  Enlargement  decided  in  December 
2007  to  temporarily  suspend  the  endorsement  of  contracts  under  the  Phare  national 
programme 2006 until the Commission is satisfied with improvements judged against a set of 
benchmarks.  

A highly critical follow-up audit report on the functioning of DIS in Turkey was finalised at 
the beginning of June 2007. Through reinforcement of the staffing of the Central Finance and 
Contracts Unit (CFCU) and the adoption of legislation strengthening the CFCU, the imminent 
suspension  of  DIS  could  be  averted.  Other  critical  shortcomings  identified  for  urgent 
addressing  through  an  Action  Plan  by  Turkey  concerned  the  insufficient  supervision  of  line 
ministries  through  the  Programme  Authorising  officer  (PAO),  a  flawed  practice  of  dealing 
with  irregularities,  a  sub-standard  quality  control  of  procurement  files  through  the  PAO,  as 
well as late procurement and contracting. Significant progress was achieved in strengthening 
DIS in the second half of 2007, including an acceleration of contracting, the reinforcement of 
the  CFCU  and  the  assertion  of  the  authority  of  the  PAO  over  the  Senior  Programming 
Officers (SPO) structures in the line ministries.  

2.4. 

Co-ordination of the Community Pre-accession assistance 

•  SAPARD11  aims  to  help  candidate  countries  deal  with  the  problems  of  the  structural 
adjustment  in  their  agricultural  sectors  and  rural  areas,  as  well  as  in  implementing  the 
acquis  communautaire  concerning  the  Common  Agricultural  Policy  (CAP)  and  related 
legislation.  

•  ISPA12  is  directed  mainly  towards  aligning  the  applicant  countries  on  Community 
infrastructure standards. It finances major environmental and transport infrastructure.  

Coordination  between  the  different  pre-accession  instruments  was  carried  out  at  the 
programming phase. The last programming exercise for SAPARD and ISPA instruments took 
place in 2006. As of 2007, all former pre-accession instruments have been replaced by IPA. 

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For general information on SAPARD, we refer to the website of DG Agriculture. 
For general information on ISPA, we refer to the website of DG Regional policy. 

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3. 

CO-OPERATION WITH THE EIB AND INTERNATIONAL FINANCIAL INSTITUTIONS 

The co-operation with the European Investment Bank (EIB) and other IFIs, in particular the 
European  Bank  for  Reconstruction  and  Development  (EBRD),  and  the  Council  of  Europe 
Development  Bank  (CEB)  in  association  with  Kreditanstalt  für  Wiederaufbau  (KfW),  are 
organised under the amended Memorandum of Understanding of 26 April 2006 between the 
European Commission and participating IFIs for the enlargement countries.  

Implementation  of  horizontal  programmes  has  offered  wide  possibilities  of  IFI  co-operation 
by  allowing  the  extension  of  IFI  loans  combined  with  EU  grants.  These  horizontal 
programmes have complemented the investment projects financed by national programmes.  

Four types of programmes have been developed as follows. 

The  SME  Finance  Facility  (SMEFF)  has  aimed  at  strengthening  the  capacities  of  financial 
intermediaries (i.e. banks, leasing companies) in beneficiary countries to expand and sustain 
their financing operations to SMEs. The SMEFF projects include the provision of loans, loan 
guarantees, and leases for local financial intermediaries in combination with non-reimbursable 
financial  incentives.  In  turn,  financial  intermediaries  on-lend  or  lease  to  individual  micro-
enterprises  or  SMEs.  Since  2005,  the  only  eligible  countries  have  been  Bulgaria,  Croatia, 
Romania  and  Turkey.  At  the  end  of  December  2007,  the  total  amount  of  EU  incentives 
earmarked for projects was EUR 300 million. 

The  Municipal  Finance  Facility  (MFF)  has  intended  to  encourage  local  financial 
intermediaries  to  extend  loans  to  the  municipalities.  The  mechanism  of  the  programme  is 
similar to this one of the SMEFF. In 2007, the overall pace of development and signature of 
new projects was slower than expected owing to the high administrative costs, the delays in 
regulatory  reforms  in  some  countries,  and  the  inexperience  of  the  municipalities  to  prepare 
credit files. At the end of December 2007, the total amount of EU incentives committed into 
projects was € 60 million.  

As  requested  by  the  European  Council  in  Nice  in  2002,  the  EIB  and  the  Commission 
established  a  Municipal  Infrastructure  Facility  (MIF).  The  objective  of  the  MIF  is  to 
contribute  towards  the  social  and  economic  development  of  border  regions  of  the  EU-15 
Member  States.  To  this  end,  the  MIF  combines  loans  from  EIB  resources  with  non-
reimbursable  Phare  support  to  accelerate  the  completion  of  small  local  infrastructure 
investments.  By  the  end  of  2007,  the  Phare  allocation  had  been  fully  earmarked  for  24 
municipal projects. 

The Energy Efficiency Finance Facility (EEFF) was launched in 2006 to tackle the Climate 
Change issue. It aims at stimulating the energy efficiency investments in all types of building 
and  in  the  industry  sector  by  making  appropriate  financing  available  to  the  end-borrowers. 
The overall results of the programme will be savings in energy and a significant reduction of 
CO2 emissions.  

The  EEFF  combines  IFI  credit  lines  extended  to  financial  intermediaries  with  incentives  to 
improve the cost effectiveness of equipment and make the energy investment more attractive, 
and  fees  to  the  benefit  of  local  financial  intermediaries  to  encourage  them  to  lend  for  the 
purpose of energy efficiency financing. The implementation of the EEFF started in April 2007 
and  by  December  the  first  projects  were  approved  for  a  total  amount  of  incentives  of 
EUR 13.65 million. 

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4. 

MONITORING AND EVALUATION 

The monitoring and evaluation functions aim firstly at monitoring and evaluating the financial 
support  to  the  beneficiary  countries  in  achieving  pre-accession  objectives  by  assessing  the 
programme  performance  and  deriving  lessons  learned.  Secondly,  it  provides  accountability 
with respect to the value of money and the use of pre-accession funds. A third objective is to 
support the development of local monitoring and evaluation capacity in beneficiary countries 
as a means to strengthen their capacity to manage and control pre-accession aid. 

4.1.  Monitoring and Interim Evaluation  

In 2007, the interim evaluation (IE) scheme for Turkey generated one comprehensive country 
evaluation report for Turkey (TPAER) as well as two sector Interim Evaluation reports.  

For  Croatia,  the  IE  scheme  was  introduced  in  2007,  focusing  on  the  Phare  programme. 
Moreover, an ad hoc evaluation for CARDS Croatia has been completed in 2007. 

Specific interim evaluation results are described later on in Part II.3 in the Annex. 

4.2. 

Ex post evaluation 

The  findings,  conclusions  and  recommendations  of  the  major  ex  post  evaluation  of  Phare 
were  discussed  with  the  relevant  stakeholders  including  the  beneficiary  countries  at  an 
Evaluation Seminar in April 2007. Another seminar was held specifically following up the ex 
post evaluation report's findings on Public Administration Reform.  

Specific evaluation results are described in Part II.3. 

5. 

OTHER ACTIVITIES 

A number of other evaluation activities were undertaken by the Commission services in order 
to  improve  the  quality  of  the  programmes  for  the  year  2007,  as  well  as  to  support  the 
development  of  local  monitoring  and  evaluation  capacity.  Specific  actions  are  described  in 
Part II.3. 

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