Commission staff working document - Annexes to 2007 annual report on PHARE, Turkey pre-accession instrument, CARDS and transition facility - Country sections & additional information [COM(2008) 880 final]
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 
SEC(2008) 3075 

COMMISSION STAFF WORKING DOCUMENT 

ANNEXES TO 

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

COUNTRY SECTIONS & ADDITIONAL INFORMATION 

[COM(2008) 880 final] 

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TABLE OF CONTENTS 

List of Acronyms........................................................................................................................ 5 

Part I: Country section................................................................................................................ 7 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

5.2. 

5.3. 

6. 

6.1. 

6.2. 

6.3. 

7. 

7.1. 

7.2. 

7.3. 

8. 

8.1. 

8.2. 

8.3. 

Albania ......................................................................................................................... 7 

The year in review........................................................................................................ 7 

Financial assistance in 2007....................................................................................... 10 

Results and impact ..................................................................................................... 12 

Bosnia and Herzegovina ............................................................................................ 15 

The year in review...................................................................................................... 15 

Financial assistance in 2007....................................................................................... 18 

Results and impact ..................................................................................................... 21 

Bulgaria ...................................................................................................................... 24 

Summary .................................................................................................................... 24 

Phare/pre-accession financial and Transition assistance in 2007 .............................. 24 

Results and Impact ..................................................................................................... 27 

Croatia ........................................................................................................................ 29 

The year in review...................................................................................................... 29 

Pre-accession in 2007................................................................................................. 29 

Results and impact ..................................................................................................... 31 

Cyprus ........................................................................................................................ 35 

Summary .................................................................................................................... 35 

Pre-accession financial and Transition assistance in 2007 ........................................ 35 

Results and Impact ..................................................................................................... 35 

Czech Republic .......................................................................................................... 37 

Summary .................................................................................................................... 37 

Pre-accession financial and Transition assistance in 2007 ........................................ 37 

Results and Impact ..................................................................................................... 37 

Estonia........................................................................................................................ 39 

Summary .................................................................................................................... 39 

Pre-accession financial and Transition assistance in 2007 ........................................ 39 

Results and Impact ..................................................................................................... 40 

The former Yugoslav Republic of Macedonia........................................................... 41 

The year in review...................................................................................................... 41 

Financial assistance in 2007....................................................................................... 41 

Results and impact ..................................................................................................... 44 

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9. 

9.1. 

9.2. 

9.3. 

10. 

Hungary...................................................................................................................... 45 

Summary .................................................................................................................... 45 

Pre-accession financial and Transition assistance in 2007 ........................................ 45 

Results and Impact ..................................................................................................... 46 

Kosovo (under UNSCR 1244/99) .............................................................................. 47 

10.1. 

The year in review...................................................................................................... 47 

10.2. 

Financial assistance in 2007....................................................................................... 48 

10.3.  Results and impact ..................................................................................................... 51 

11. 

LATVIA..................................................................................................................... 54 

11.1. 

Summary .................................................................................................................... 54 

11.2. 

Pre-accession financial and Transition assistance in 2007 ........................................ 54 

11.3.  Results and Impact ..................................................................................................... 54 

12. 

Lithuania .................................................................................................................... 55 

12.1. 

Summary .................................................................................................................... 55 

12.2. 

Pre-accession financial and Transition assistance in 2007 ........................................ 55 

12.3.  Results and Impact ..................................................................................................... 56 

13. 

Malta .......................................................................................................................... 57 

13.1. 

Summary .................................................................................................................... 57 

13.2. 

Pre-accession financial and Transition assistance in 2007 ........................................ 57 

13.3.  Results and Impact ..................................................................................................... 58 

14. 

Montenegro ................................................................................................................ 59 

14.1. 

The year in review...................................................................................................... 59 

14.2. 

Financial assistance in 2007....................................................................................... 60 

14.3.  Results and impact ..................................................................................................... 62 

15. 

Poland......................................................................................................................... 65 

15.1. 

Summary .................................................................................................................... 65 

15.2. 

Post-accession financial assistance in 2007 ............................................................... 65 

15.3.  Results and Impact ..................................................................................................... 65 

16. 

Romania ..................................................................................................................... 66 

16.1. 

Summary .................................................................................................................... 66 

16.2. 

Phare/pre-accession financial and Transition assistance in 2007 .............................. 66 

16.3.  Results and Impact ..................................................................................................... 69 

17. 

Serbia.......................................................................................................................... 71 

17.1. 

The year in review...................................................................................................... 71 

17.2. 

Financial assistance in 2007....................................................................................... 73 

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17.3.  Results and impact ..................................................................................................... 77 

18. 

slovakia ...................................................................................................................... 79 

18.1. 

Summary .................................................................................................................... 79 

18.2. 

Pre-accession financial and Transition assistance in 2007 ........................................ 79 

18.3.  Results and Impact ..................................................................................................... 80 

19. 

Slovenia...................................................................................................................... 82 

19.1. 

Summary .................................................................................................................... 82 

19.2. 

Pre-accession financial and Transition assistance in 2007 ........................................ 82 

19.3.  Results and Impact ..................................................................................................... 83 

20. 

Turkey ........................................................................................................................ 84 

20.1. 

The year in review...................................................................................................... 84 

20.2. 

Pre-Accession in 2007................................................................................................ 84 

Part II: Additional information on implementation and programme management issues ....... 89 

21. 

Technical and Financial assistance ............................................................................ 89 

21.1. 

Twinning .................................................................................................................... 89 

21.2. 

TAIEX........................................................................................................................ 90 

21.3. 

SIGMA....................................................................................................................... 92 

22. 

Information on multi-country and horizontal programmes........................................ 92 

22.1. 

Political Criteria ......................................................................................................... 92 

22.2. 

Economic Criteria: IFI Cooperation and Competitiveness ........................................ 98 

22.3. 

European Standards.................................................................................................. 101 

22.4.  Monitoring and Interim Evaluation.......................................................................... 108 

22.5. 

Ex-post evaluation.................................................................................................... 109 

22.6.  Other activities of the monitoring and evaluation function ..................................... 109 

Part III: Financial data............................................................................................................ 110 

23. 

24. 

25. 

26. 

Phare, Turkey pre-accession and transition facility funds by year 1990 – 2007 ..... 110 

Phare, Turkey pre-accession and transition facility funds by country 1990–2007 .. 112 

Cards funds by year 2000 – 2007............................................................................. 112 

Cards funds by country 2000 – 2007 ....................................................................... 113 

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LIST OF ACRONYMS 

AC  Acceding Country 

BSP  Business Support Programme 

CAP  Common Agricultural Policy 

CBC  Cross Border Cooperation  

CC 

Candidate Country  

CEB  European Development Bank 

CFCA Central Financing and Contracting Agency 

CFCD Central Financing and Contracting Department 

CFCU Central Finance and Contracts Unit 

CFP  Common Forestry Policy 

CMO  Common Market Organisations 

CPER  Country Phare Evaluation Review 

CPMA Central Programme Management Agency 

CSO  Civil Society Organisation 

DIS  Decentralised Implementation System 

EAG  Evaluation Advisory Group 

EAGGF 

European Agricultural Guidance and Guarantee Fund 

EBRD European bank for reconstruction and development 

EC 

European Communities 

ECR  European Commission Representation 

EDIS  Extended Decentralised Implementation System 

EFTA  European Free Trade Association 

EIB  European Investment Bank 

ENPI  European Neighbourhood and Partnerships Instrument 

ESC  Economic and Social Cohesion 

ESF  European Social Fund 

EU 

European Union 

FDI  Foreign Direct Investment  

FIFG  Financial Instrument for Fisheries Guidance 

GDP  Gross Domestic Product 

IA 

Implementing Agency 

IACS  Integrated Administration and Control System 

IB 

Institution Building 

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IFI 

International Financial Institutions 

IPA 

Instrument for Pre-Accession 

IT 

Information and Telecommunication 

JHA 

Justice and Home Affairs 

JMC  Joint Monitoring Committee 

KIDSF Kozloduy international decommissioning fund 

MAP  Multi Annual Programming 

MEDA Euro-Mediterranean Partnership 

NAO  National Authorising Officer 

NAC  National Aid Coordinator 

NDP  National Development Plan 

NF  National Fund 

NGO  Non-Governmental Organisation 

NPA  National Programme for the Adoption of the Acquis 

NP  National Programme 

NPP  Nuclear Power Plant 

OLAF European Antifraud Office 

OP  Operational Programmes 

PAO  Programme Authorising Officer 

PAP  Pre-Accession Programme 

PIFCA Public Internal Financial Control Agency 

QSG  Quality Support Group 

REACH 

Registration, Evaluation and Authorisation of Chemicals 

RTA  Resident Twinning Advisor 

SF 

Structural Funds 

SIGMA 

Support for Improvement in Governance and Management 

SME  Small and Medium Sized Enterprises 

SMSC Sector Monitoring Sub-Committee 

TA 

Technical Assistance 

TAIEX 

Technical Assistance Information Exchange Unit 

TSE  Transmissible Spongiform Encephalopathy 

UIBE  Unallocated Institution-Building Envelope 

UNDP United Nations Development Programme 

VAT  Value Added Tax 

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PART I: COUNTRY SECTION 

1. 

ALBANIA 

1.1. 

The year in review 

Political developments 

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

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  poor  overall.  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 slow overall.  

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. 

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. 

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 

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(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 
the  business  climate.  While  company  registration  procedures  started 
improve, 
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 negatively affected the business environment. 

to 

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  good  overall.  Capacity  for  metrology  and  market  surveillance  was  strengthened,  but 
legislative 
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.  

improvements  remained  pending.  On  consumer  protection 

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.  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 

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low.  Compliance  with  EU  veterinary  and  phytosanitary  standards,  required  in  order  for 
Albania  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 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,  a  new  law  on  internal  audit  was 
adopted, but an appropriate inspection service was not developed. 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 
began.  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 
prosecution remained hampered by poor communication between police and prosecutors.  

Organised crime remained a serious problem, even though 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. Efforts against organised 
crime  remained  hampered  by  corruption  and  weak  witness  protection.  Albania  continued  to 
investigate and prosecute trafficking in human beings vigorously. However, Albania 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 

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protection  of  personal  data  started,  but  legislation  and  structures  do  not  yet  meet  European 
standards. 

1.2. 

Financial assistance in 2007 

Programmes launched 

As  from  2007,  the  CARDS  instrument  has  been  replaced  by  the  new  Instrument  for  Pre-
accession Assistance (IPA). No new CARDS programmes were launched. 

Overview of programmes implemented 

In  2007,  particular  emphasis  was  given  to  progress  in  the  implementation  of  the  2004 
programme in order to finalise contracting for this programme before the contracting deadline 
in September 2007. By its expiry date in September 2007, 94% of CARDS 2004 funds had 
been contracted.  

The  area  of  Justice  and  home  Affairs  remained  an  important  area  of  focus.  Programmes 
supported  the  renovation  of  the  State  Publication  Centre,  the  development  of  investigation 
techniques for the benefit of law enforcement bodies, the provision of modern equipment to 
the  Serious  Crimes  Court  and  the  High  Council  of  Justice,  the  establishment  of  a  Juvenile 
Justice System and investments to improve conditions in Albanian prisons. Support was also 
provided  to  the  training  of  courts  on  commercial  matters,  the  renovation  of  Border  Control 
Points  and  the  strengthening  of  the  capacity  of  the  Albanian  police  forces.  Substantial 
technical  assistance  in  the  field  of  justice,  police  and  customs  was  provided  through 
PAMECA, EURALIUS and CAFAO respectively.  

Assistance in the area of democratic stabilisation concentrated its efforts on the creation of a 
modern Civil Registry system in close cooperation with the Organisation for Security and Co-
operation in Europe, the Council of Europe, Norway and the US. Further programmes were 
implemented to support the development of civil society and the integration of marginalised 
persons. 

As  regards  administrative-capacity  building,  the  programme  continued  to  support  the 
implementation of public administration reform and the external audit capability. Assistance 
was  provided  to  the  Ministry  of  European  Integration  in  order  to  build  capacity  for  the 
coordination  of  the  Stabilisation  and  Association  Agreement.  CARDS  assistance  also 
provided support to line ministries  for  EU  programming  and updating the National Plan for 
the implementation of the SAA. 

As regards economic and social development, the local community development programme 
helped improve the living conditions of the targeted rural population of Albania, in particular 
in  the  less  developed  region  of  Kukes  in  North  East  Albania.  Through  the  internal  market 
programme,  assistance  was  provided  to  support  standards,  certification,  accreditation  and 
metrology,  complemented  by  activities  to  improve  market  surveillance  and  consumer 
protection in Albania. 

Support  was  also  provided  for  vocational  education  and  training  (VET)  and  higher 
education in order to improve the quality of training opportunities available. CARDS assisted 
the  preparation  of  a  separate  VET  strategy  in  order  to  improve  the  quality  of  VET  and  the 
implementation  of  a  new  Albanian  Qualifications  Framework  Law.  Investments  were  also 
made  in  equipment  and  infrastructure  to  improve  regional  vocational  training  centres  and 
schools. Assistance was also provided to higher education through the TEMPUS programme 
in  order  to  modernise  governance  at  university  level,  improve  curricula  and  develop  the 
quality of higher education. 

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In  the  area  of  environment  and  natural  resources,  the  development  of  environmental 
monitoring  systems,  the  improvement  of  hazardous  waste  management  systems  and  the 
establishment of a plan for the sustainable and integrated development of the Tirana-Durres 
region were the priorities. 

At the end of 2007, contracting rates for the CARDS 2005 and 2006 programmes had reached 
45% and 11% respectively.  

Cards management performance 

In 2007, a total of € 52.3 million was contracted and a total of € 26.3 million was paid.  

The  performance  in  implementing  the  2004  CARDS  programme  was  overall  satisfactory  in 
2007,  as  a  very  significant  part  of  the  programme  was  contracted  in  2007.  However,  this 
effort  led  to  rather  limited  contracting  for  the  2005  and  2006  CARDS  programmes  with 
contracting rates for CARDS 2005 of 45 % and for CARDS 2006 of 11 % 

Albania:  Status  of  financial  assistance  at  the  end  of  December  2007  (in  million  €)  –
CARDS/IPA annual national programmes  

Allocated  Contracted RAC  % contractedPaid 

RAL  % paid

CARDS 2001 

33.5 

30.72 

2.78 

CARDS 2002 

42.9 

42.42 

0.48 

CARDS 2003 

38.5 

38.26 

0.24 

CARDS 2004 

62.0 

58.02 

3.98 

CARDS 2005 

40.2 

18.15 

22.05 

CARDS 2006 

42.5 

4.61 

37.89 

92% 

99% 

99% 

94% 

45% 

11% 

29.16 

4.34 

87% 

38.61 

4.29 

90% 

30.32 

8.18 

79% 

21.56 

40.44 

35% 

8.63 

31.57 

21% 

1.41 

41.09 

3% 

Total 

259.6 

192.18 

67.42 

74% 

129.69  129.91 

50% 

implementation  of  CARDS 

The 
Neighbourhood Programmes and Evaluation and Audit Programmes proceeded smoothly.  

Information  and  Communication  Programmes, 

In 2007, € 9.2 million were recovered from expired PHARE programmes. An action plan for 
2008 was prepared in order to continue this exercise. 

Institution Building highlights 

Support  provided  to  the  police  sector  through  the  Police  Assistance  Mission  of  the  EU  to 
Albania (PAMECA) brought the Albanian State Police closer to EU standards. The mission 
was  composed  of  technical  assistance  drawn  from  EU  Member  States  and  led  to 
improvements in particular as regards: 1) the operation of police structures fighting organised 
crime and terrorism, 2) the functioning of the Police Academy, 3) the use of IT systems, 4) 
the  implementation  of  the  Integrated  Border  Management  (IBM)  strategy  and  Action  Plan, 
and 5) the effectiveness of community policing. 

Twinning High Council of Justice: Since late 2006 this Twinning (IT/ES) has aimed at the 
enhancement  of  the  independence  and  performance  of  the  country’s  judiciary  system  by 

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providing support to the High Council of Justice (HCJ) and its Inspectorate. Strengthening the 
organisational structure and administrative procedures of the HCJ and its Inspectorate allows 
better  fulfilment  of  the  HCJ  constitutional  and  legal  obligations  in  line  with  the  European 
standards and the requirements of the Stabilisation and Association process. 

A  Twinning  project  to  support  the  Supreme  Audit  Institution  (SAI)  commenced  in  January 
2007. The project aims at the approximation of the SAI to EU standards in the area of external 
audit, including in preparation for the future decentralisation of EU funds. 

Local  Community  Development  Programme:  In  the  light  of  combining  socio-economic 
development  needs  with  European  requirements,  this  project  has  been  part  of  the  overall 
regional development strategy revision. The main objective is to improve the living conditions 
of the population in selected regions through the rehabilitation of physical, social and cultural 
infrastructure  to  be  implemented  in  the  frame  of  the  planned  sustainable  and  integrated 
economic and social development. As this project is implemented in a decentralised manner 
by  the  Albanian  authorities,  it  can  be  considered  that  it  also  brings  benefits  in  terms  of 
improving  Albania's  implementation  capacity  and  constitutes  a  test  for  the  future 
implementation of the Decentralised Implementation System (DIS). 

1.3. 

Results and impact 

M&E Reports in 2007 - Lessons Learned 

During the course of 2007 monitoring of CARDS projects continued to take place. In addition 
to  this,  an  evaluation  of  selected  projects/programmes  was  launched  with  the  aim  of 
identifying  strengths  and  weaknesses  in  their  design,  performance  and  management.  These 
projects/programmes were  selected  as  a  representation  of  key  actions  managed  by  the  EC 
Delegation  in  various  sectors.  In  terms  of  "lessons  learnt",  the  following  conclusions  were 
reached: 

Lessons learnt in relation to projects’ relevance: 

•  Relevance  was  closely  linked  to  adequacy  of  basic  needs  assessment  and  sustainability 

prospects.  

•  The  integration  of  a  bottom-up  approach  and  a  stronger,  more  tangible  Albanian 

engagement in realising the objectives would increase relevance of actions. 

Lessons learnt regarding effectiveness: 

•  Effectiveness was strongly related to institutional effect and impact.  

•  Good  communication  and  relationships  are  indispensable,  particularly  if  focused  on 

potential to realise sustainability. 

Lessons learnt regarding efficiency: 

•  Efficiency can be improved through setting preconditions towards beneficiaries (i.e. staff 

being engaged and trained in the course of a project/ programme)  

•  Efficiency can be improved through closer cooperation between the various actors. 

Lessons learnt related to impact: 

•  The impact should me measured and measurable continuously during the life-time cycle of 

projects in order to avoid the fading away of the natural result oriented pressure.  

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•  Impact  can  increase  if  beneficiaries  realise  sustainable  improvements  (i.e.  through. 
transparent  recruitment  and  selection  procedures  and  by  minimizing  massive  changes  of 
staff) 

Lessons learnt in the domain of sustainability: 

•  Sustainability  highly  depends  on  quality  of  the  (preferably)  joint  project/programme 

design, as well as the receptiveness and preparedness of beneficiaries.  

•  Preconditions  should  ideally  be  set  to  be  met  prior  to  and  during  implementation, 

especially on implementation process after technical assistance provision. 

Lessons learnt in the domain of management: 

•  Stronger ownership should be encouraged through engaging Albanian beneficiaries in the 

management: The “responsibility pays” approach.  

•  Use  of  the  Log  Frame  Methodology  as  a  continuous  (not  as  an  ad-hoc  or  merely 
preliminary)  managerial  tool  is  indispensable  for  committed,  objective,  strict  and  fair 
management.  

•  Managerial assistance should have a coaching character. 

Experiences with the decentralisation of EU funds showed that appropriate, timely planning 
and to take due account of the implementation capacities are elements of crucial importance. 
If this is not done properly, it has detrimental effects on quality of implementation and on the 
expected results. 

The  Local  Community  Development  Programme  (the  only  CARDS  programme  in  Albania 
implemented under the decentralised implementation system) achieved high commitment and 
disbursement rates and had a significant impact.  

Sectors with positive results 

Justice, Liberty and Security 

Some  progress  was  achieved  as  regards  police,  with  the  approval  of  the  police  law  and 
Integrated  Border  management  strategy  as  major  achievements.  Judiciary  progressed  in 
particular as regards juvenile justice reform. Assistance was provided to court administrators. 
Investments  under  CARDS  programme  focused  on  upgrading  the  penitentiary  and  court 
infrastructure (Korca, Vlora).  

European standards 

Albania  has  continued  to  make  progress  in  European  standards  fields  such  as  customs, 
competition,  certification  and  standardisation,  banking  and  public  procurement.  Sustained 
institution  building  efforts  under  CARDS  have  contributed  to  this  progress.  In  the  area  of 
standardisation,  support  was  provided  to  increase  administrative  and  technical  capacity  to 
prepare  the  National  Standardisation  Body  to  fulfil  the  9  conditions  for  full  membership  in 
CEN and CENELEC. Nearly 80% of European Norms were adopted as national standards.  

Vocational Education and Training (VET) 

The  capacity  of  the  national,  regional  and  local  VET  partners  was  strengthened  while  VET 
laws  have  been  adopted.  A  National  Qualification  Framework  in  line  with  the  Copenhagen 
Process  was  established  and  the  capacity  to  develop  curricula  was  improved  with  6  new 
curricula prepared and started to be implemented. A new VET centre was established and is 
properly functioning.  

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Success story 

Can you breathe? EU "filters" the oxygen that goes in the lungs of Albanians 

Early  in  the  morning,  as  he  shows  up  in  the  window  of  his  home  in  Kombinat,  the  eastern 
neighbourhood  of Albania’s capital, Ergys Baruti, 21 years, doesn’t struggle enough to find 
the dump in Tirana. He just follows with his eyes the trail of this noxious white smelly smoke. 
What he believes in these very moments is what local media say, his city, Tirana is estimated 
to be one of the most polluted cities in the world, behind New Delhi and Beijing. In these very 
moments he understands why his father doesn’t like his brother, Henri, to often play outside 
and  he  realises  that  in  a  few  years  the  inhabitants  of  Tirana,  including  himself  will  have 
disastrous problems with their lungs. 

Although no reliable data exists, experts said that deaths due to illnesses caused by pollution 
have  increased  by  20  percent  in  Tirana  in  the  past  two  years.  According  to  the  Institute  for 
Statistics, respiratory system diseases came third on the list of causes of death last year. 

As Albania gears up to join the European Union, pollution troubles get in the way. Albania is 
facing  a  humanitarian  catastrophe  due  to  growing  pollution,  10  times  above  the  tolerance 
level set by the World Health Organizations (WHO), according to experts in the country.  

"The biggest guarantee I see for environmental improvement is the political pressure exerted 
by  the  European  Union  to  improve  the  policy  making  in  this  field",  said  Ermal  Dizdari, 
reporter of “Panorama” newspaper on environmental issues.  

To  the  extent  that  the  quality  of  data  affects  the  quality  and  formulation  of  policies,  the 
importance  of  reliable  data  is  clear.  The  issue  of  ill-informed  policies  in  the  environmental 
ambit of Albania is addressed by the EU-funded project “Strengthening of the Environmental 
Monitoring System in Albania”.  

The  project  aims  at  building  capacities  within  the  Albanian  institutions  involved  in 
monitoring activities, and to establish an Integrated System (IEMS) for Albania in line with 
the  requirements  from  the  EU,  in  particular  the  reporting  requirements  of  the  European 
Environmental Agency (EEA). To this end, 63 monitoring stations have been built all around 
the  country  checking  all  aspects  of  the  environment,  air,  water  and  soil.  Furthermore,  the 
setting-up of a national institutional network, envisioning a National Reference Centre and six 
National  Laboratories  to  service  the  Integrated  Environment  Monitoring  System  is  at  an 
important implementing phase.  

The project is especially active in capacity building with respect to these institutions which is 
being pursued in a way as to provide sustainability. Team leader of the project, Gunnar Pritzl, 
emphasises  the  keenness  towards  students’  involvement  and  practical  training  during 
fieldwork as a means to that end.  

Apart from wanting to leave behind sustainable institutions in terms of human resources, the 
project also aims at financial sustainability and a lesser dependence on governmental funds. In 
this  respect,  the  certification  and  accreditation  of  these  institutions  fashioned  to  operate  in 
accordance to EU norms and standards does not only grant them an authoritative voice in their 
subject  matter  but  also  provides  them  with  access  to  EU  and  other  relevant  international 
bodies’ funds.  

The  project  vastly  contributes  to  Albania’s  adoption  of  the  environmental  acquis,  and  thus 
consequently to the success of the Stabilisation-Association process.  

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2. 

BOSNIA AND HERZEGOVINA 

2.1. 

The year in review 

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 during 2007. However it was finally adopted in 2008. 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 
legislation across the country continued to hamper social dialogue. Some progress was made 

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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 
limited  and 
living  conditions  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. 

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. 

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 
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.  

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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. 

the  Communications  Regulatory  Agency.  However 

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  Authority  was  challenged  by  the  difficulties  in  appointing  the 
Director General. In the field of statistics, the co-operation agreement between the country's 
statistics institutions at State and Entity level was not properly implemented.  

independence  of 

the 

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 
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  ready  by  the  end  of  2007.  Inconsistencies  between  state-  and  entity-level 
legislation  continued  to  hinder  prosecution  of  serious  crimes.  Bosnia  and  Herzegovina's 

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resources to counter terrorism remained insufficient. The State agency for data protection was 
not established. 

2.2. 

Financial assistance in 2007 

Programmes launched 

As of 2007, the CARDS programmes were replaced by the new Instrument for Pre-accession 
Assistance (IPA). No new CARDS programmes were launched. 

Overview of programmes implemented 

Contracts were awarded by the EC Delegation in Bosnia and Herzegovina in 2007 for a value 
of  EUR 44.6 million,  of  which  EUR 34.9 million  under  CARDS  regional  and  national 
programmes,  EUR 4.1 million  under  the  European  Initiative  for  Democracy  and  Human 
Rights as well as the Anti-Personnel Landmine programme. 

The largest share (EUR 12 million) was spent for supporting the Economic Development and 
Social Protection, as well as in the Justice and Home Affairs area (EUR 9.7 million). In the 
Good  Governance  and  Institution  Building  sector,  the  EC  remained  the  main  donor  in  BiH 
(EUR 6.8 million).  The  EC  was  involved  in  several  other  sectors  as  well  –  Infrastructure, 
Education,  Environment,  Cross-cutting  sectors,  and  to  a  lesser  extent  in  Agriculture  and 
Forestry, and Local Governance. 

For years, the EU has provided financial and political support for Legal and Judicial Reform, 
first to the Independent Judicial Commission and then to the High Judicial and Prosecutorial 
Council (HJPC). Indeed, the establishment of this single HJPC was the first Feasibility Study 
priority  that  BiH  fulfilled.  As  part  of  this  assistance,  the  EC  has  invested  around 
EUR 5.6 million  in  Information  Communication  Technology  (ICT),  centralised  within  the 
HJPC. EU support has also included the provision of state-of the-art equipment, now in use in 
all courts and prosecutor's offices throughout the country. An upcoming action will purchase 
legal texts and publications for the Courts and Ministry of Justice. 

In  2007,  the  EC  continued  to  support  the  Registry  for  War  Crimes  and  Organized  Crime, 
Economic Crime and Corruption. In addition, the EC has contributed EUR 3.5 million to the 
transfer  of  war  crime  cases  from  the  International  Criminal  Tribunal  for  the  former 
Yugoslavia  (ICTY)  to  the  BiH  courts.  The  EC’s  financial  assistance  has  been  a  crucial 
contribution to this multi-donor effort. 

In  the  Agricultural  Sector,  the  EC  has  focused  on  institution  building.  In  2007,  the  EC 
provided support for the creation of structures to ensure that BiH is capable of absorbing rural 
development funds under IPA. The EC’s areas of focus in 2007 were: 1) institution building, 
helping to create of administrative structures; 2) assistance for the adoption of the acquis and 
the implementation of standards (veterinary, food safety and phyto-sanitary); and 3) work on 
enhancing access to agricultural information. The EC supports Small and Medium Enterprises 
(SMEs)  and  job  creation  through  a  number  of  programmes,  including  the  enhancement  of 
Regional Development Agencies (RDAs) and their institutional strengthening. RDAs provide 
services directly to SMEs for increasing their competitiveness as well as support for regional 
growth.  Grants  were  also  provided  for  business  infrastructure  support,  the  facilitation  of 
market information, and tourism development. 

In the Education Sector, the EC has supported the development of the legislative framework 
and the adoption of laws. In 2007, almost all proposed educational laws were adopted. Thanks 
to the EC’s support, three important laws were passed and the fourth one will soon be. Since 
the  main  problem  in  Education  is  the  fragmentation  and  division  along  ethnic  lines,  the  EC 
proposed  that  all  cantonal  and  entity  ministers  be  brought  together  in  a  Conference  of 

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Ministers  and  that  this  newly  formed  body  report  to  the  Prime  Minister’s  Cabinet.  The  EC 
assisted the government in developing the institutions that are foreseen in the laws, such as an 
agency  for  pre-primary,  primary  and  secondary  education,  an  agency  for  higher  education, 
and an agency for diploma recognition. These will be responsible for the standardization and 
assessment of education (general and vocational education training), curriculum development, 
common certification, and more.  

In  2007,  the  EC  carried  out  a  functional  review  of  the  Health  Sector  and  made 
recommendations for PAR in this field. The EC has continued to support the implementation 
of these recommendations. It has also supported the strengthening of the Health Department 
in Ministry of Civil Affairs (MoCA) and has helped to develop normative acts for the sector. 
Thanks to EC funding, there are now 8 to 9 core staff within the Health Department. 

In the area of media and communication, the EC supports the formal adoption of the Public 
Broadcasting  Service  (PBS)  reform.  The  EC  also  provides  technical  assistance  (equipment 
and  training)  to  the  Communications  Regulatory  Agency,  in  order  to  adopt  European 
standards in the regulatory framework. 

The EC was also active in the field of export promotion. It provided technical assistance (TA) 
to  the  Ministry  of  Foreign  Trade  and  Economic  Relations  (MoFTER).  This  TA  helped 
establish the Export Promotion Agency in the Foreign Trade Chamber. The Agency will be 
capable of providing expert advice and recommendations to the CoM, as well as support to 
companies in exploring market linkages. The EC’s support entails the development of export 
policy papers for the development of a strategy, and on the job training. 

CARDS management performance 

The  performance  in  managing  CARDS  programmes  was  overall  satisfactory.  2001-2004 
CARDS  national  programmes  can  be  considered  as  fully  contracted.  Contracting  and 
payments  for  CARDS  2005  and  2006  are  on  track.  As  a  result,  the  IPA  2007  Annual 
Programme  adopted  on  20  December  2007  will  start  without  any  significant  backlog  from 
CARDS. 

Bosnia and Herzegovina: Status of financial assistance at the end of December 2007 (in 
million €) – CARDS annual national programmes 

Allocated ContractedRAC % contracted 

Paid 

RAL  % paid 

CARDS 2001  105.2 

98.58 

6.62

CARDS 2002  60.5 

59.30 

1.20

CARDS 2003  50.6 

49.94 

0.66

94% 

98% 

99% 

92.06 

13.14 

87% 

56.53 

3.97 

93% 

45.09 

5.51 

89% 

CARDS 2004  62.1 

61.84 

0.26

100% 

50.07 

12.03 

81% 

CARDS 2005  44.0 

39.71 

4.29

CARDS 2006  43.8 

29.25 

14.55

90% 

67% 

32.21 

11.79 

73% 

13.30 

30.50 

30% 

Total 

366.2 

338.62  27.58

92% 

289.26 

76.94 

79% 

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In  the  framework  of  the  2006  CARDS  regional  programme,  a  total  of  €  3.5  million  was 
provided to support the Office of the High Representative (OHR) in 2007. 95% had been paid 
by the end of the year. 

implementation  of  CARDS 

The 
Neighbourhood Programmes and Evaluation and Audit Programmes proceeded smoothly.  

Information  and  Communication  Programmes, 

Institution Building highlights 

For  the  preparation  of  decentralised  implementation  of  IPA  in  BiH,  the  EC  Delegation 
embarked on a coaching and training programme for the BiH authorities to get ready to take 
over responsibility for planning, programming and implementing financial assistance. While 
until  recently,  the  EC  was  covering  the  project  cycle  alone,  with  little  involvement  of  the 
government,  the  EC  Delegation  has  had  a  strategy  of  transfer  of  'ownership'  of  the 
programmes  to  the  BiH  authorities.  This  process  prepares  the  decentralisation  of  the 
management of assistance, and includes:  

–  Coaching and training the Directorate of European Integration (DEI) on strategic planning, 

project preparation and assessment 

–  Setting  up  a  structured  network  of  counterparts  for  project  planning,  design  and 
implementation  in  all  line  ministries  and  state  agencies,  the  Senior  Programme  Officers 
(SPO's) 

–  Anticipating IPA obligations by helping setting up a National Fund and a Central Finance 
and Contracting Unit (CFCU) in the Ministry of Finance and Treasury – 10 BiH officials 
have now been appointed and fully trained. 

This action of the EC Delegation has been cited as one of two Success Stories in the recent 
audit report of the European Court of Auditors on the management of the Cards Programme 
2001-2006. 

Public Administration Reform (PAR) was one the sixteen priorities in the Feasibility Study 
and is one of the six key European Partnership priorities. The EU assists the BiH government 
in PAR through strengthening the systems of public administration and through administrative 
capacity  building  of  selected  key  sectors.  The  EU  has  supported  the  PAR  Coordinator’s 
Office (PARCO) with the design and implementation of a national PAR Strategy and Action 
Plan.  A  range  of  EU-funded  actions  has  strengthened  the  systems  of  public  administration. 
The  General  Secretariat  (GS)  of  the  Council  of  Ministers  (CoM)  receives  support  to  work 
towards  full  national  responsibility  for  policy  formulation  and  decision-making,  and  to  help 
strengthen  policy  coordination  between  all  levels  of  government.  An  e-government  project 
aims to enhance the efficiency of the CoM through comprehensive and crosscutting IT, while 
a  Human  Resources  Management  Information  System  aims  to  create  a  single  personnel 
database for the Civil Service Agencies (CSAs). 

Donor co-ordination has been ensured throughout the entire project management cycle from 
project  design  to  implementation.  Recently,  the  role  of  the  ECD  has  changed  whereby  the 
Delegation  is  seen  more  and  more  as  the  lead  donor  in  the  country.  In  particular,  the 
Delegation is a core donor involved in setting up donor coordination mechanisms through the 
following activities: 

–  Support  to  the  BiH  Ministry  of  Finance,  Directorate  for  European  Integration  and 
Directorate  for  Economic  Planning  to  set  up  an  Aid  Coordination  Committee  (together 
with DFID), 

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–  Key  member,  and  regular  Chair,  of  the  Donor  Coordination  Forum,  which  gathers  the 
international Donor Community on a quarterly basis, including contributions to an Annual 
Donor Mapping report (together with UNDP) 

–  Monthly Coordination meetings with the EU Member States 

At sector level, this is particularly evident in the agricultural, regional, and SME portfolios. In 
the agricultural sector for example, the World Bank will design its new programmes in line 
with the structures required under the acquis. 

2.3. 

Results and impact 

M&E Reports in 2007 - Lessons Learnt 

Lessons learnt derived from monitoring of projects in 2007 can be summarised as follows: 

•  There has been a lack of cooperation between regional and national projects. Information 

to local beneficiaries should be improved in order to avoid possible overlaps. 

•  In order to have successful national projects it is essential to involve beneficiaries, as soon 
as  possible,  from  the  design  phase.  The  highest  the  involvement  of  the  beneficiaries,  the 
higher the level of 'ownership' in country. 

•  Project  design  should  be  linked  not  only  to  EU  strategic  documents,  but  also  to 
country/national strategies. Sometimes the framework where project exists is rather weak. 

•  European  Integration  projects  are  change  instruments  to  develop  the  country.  Political 
consensus  is  required  as  to  which  level  of  authority  is  best  fit  to  implement  required 
changes.  Where  there  is  a  comparative  advantage  to  work  at  State  level  for  coordination 
purposes, Entities should contribute more actively and positively. 

•  During  the  project  design  it  is  highly  important  to  take  into  consideration  absorption 
capacity  of  the  local  institution.  Sometimes  projects  have  too  many  components,  or 
objectives and expected results are beyond the absorption capacity of the local institution. 

•  Preconditions for project implementation are of utmost importance. If they are not met by 
the time the projects should start, this may jeopardise the results expected. This has been 
the case for example in the case of the construction of border crossing points, where vested 
interests  prevented  the  timely  implementation  of  pre-requisites  for  construction  and 
derailed the projects. BiH should take on such issues with more determination. 

•  The political environment sometimes do not follow the same strategic direction, i.e. state 

and entity strategies are often not compatible with each other, 

•  Most projects designed for harmonisation and approximation of the acquis face difficulties 

due to different approaches on different BiH levels of authority. 

•  Donor coordination does exist in BiH but it is not always effective, as it is carried out by 
the international community itself, and not by the government. BiH authorities need to take 
the lead in aid co-ordination, especially in the wake of the new IPA instrument. 

•  Internal organization analysis required by the institution for the good project design is still 

weak. This calls for furthering assistance in the area of public administration reform. 

•  Twinning  projects  have  done  very  well.  Absorption  capacity  remains  weak  however  and 
twinning light projects or technical assistance may still be a preferred tool when the BiH 
counterpart administration is not yet fully equipped and up and running. 

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•  Financial  sustainability  is  the  most  important.  Sustainability  is  better  achieved  where 

political support is matched with BiH financial contributions. 

Sectors with positive results 

Some  of  the  recent  successes  achieved  include:  establishment  of  Quality  infrastructure 
institutions  at  the  state-level,  supporting  BiH  to  join  CEFTA,  establishment  of  the  Export 
Promotion  Agency,  development  of  animal  disease  programme,  supporting  BiH  in  attaining 
approval to export fish and fish products to the EU, implementation of waste recycling pilot 
programs, development of investment priority lists in the water sector, rehabilitation of wild 
land  fills,  support  to  the  civil  aviation  agency  to  develop  air  traffic  strategies  which  are 
subsequently being implemented with EBRD loan funds.  

In  spite  of  the  complex  structure  of  the  country  and  the  difficult  political  environment 
important  successes  could  be  achieved  especially  in  the  fields  of  Public  Administration 
Reform (PAR), justice and migration, asylum and visa: 

A  functional  system  of  coordination  of  PAR  activities  on  State  and  Entity  level  could  be 
established with the driving support of the EC. The Office of PAR on state level and the PAR 
coordinators  nominated  by  the  Entities'  governments  and  District  Brcko  create  a  common 
forum  on  working  level  where  activities,  progress  and  projects  are  designed  and  discussed. 
The PAR Strategy and the Action Plan adopted in 2006 by the governments of all levels in 
BiH  build  a  common  framework.  The  PAR  Fund,  which  pools  the  donor  funds  of  several 
donors, provides a financial tool to implement projects in the field of PAR and to ensure full 
local "ownership".  

In  sectors  of  health  and  education  functioning  of  public  administration  was  improved 
through establishment of conferences of ministers in both sectors. Process of coordination and 
decision  making  has  been  considerably  improved.  In  education  sector  a  set  of  laws  was 
adopted providing legislative framework for establishment of three agencies that are going to 
be  responsible  for  development  of  standards  in  education,  assessment  of  outcomes  of 
learning,  accreditation  and  diploma  recognition.  Process  of  establishment  of  the  agencies  is 
ongoing.  

With the establishment of High Judicial and Prosecutorial Council, the establishment of a 
modern  Case  Management  System  and  a  data  network  connecting  all  courts,  prosecutor's 
offices  and  cadastre  offices  in  the  country  and  the  intensive  training  of  judges  and 
prosecutors, the EC could actively support the judicial sector and is clearly the leading donor.  

With EC support, the sector of law enforcement agencies could be substantially modernised 
by  providing  modern  equipment,  training  and  the  establishment  of  the  country-wide  SDH 
system which provides a modern data communication network between all law enforcement 
agencies and their offices and its link to judiciary. 

The  EC  helped  to  install  a  modern  Immigration  Management  System  (IMS)  which 
modernised the whole procedure and management of visas and permits of stay for foreigners.  

Success story 

A wealth of economic opportunities 

The potential for economic growth 

As  a  result  of  continuous  political  problems  since  the  1990s  in  Bosnia  and  Herzegovina, 
overall economic performance has either stagnated or declined. Consequently, unemployment 
has  remained  persistently  high,  productivity  is  less  than  50%  of  that  in  central  European 
countries, and financial sector reform and privatisation has been slow.  

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Nevertheless,  since  2001  there  have  been  signs  of  a  gradual  recovery.  The  improved 
economic  performance  is  being  attributed  to  indications  that  preliminary  structural  reforms 
are beginning to bear fruit in a region which is now  considered to be  capable of significant 
growth.  In  a  concerted  effort  to  capitalise  on  this  potential,  the  European  Union  Regional 
Economic Development (EU RED) project was set up in Bosnia and Herzegovina in March 
2003. 

Working together for success 

Working closely with newly created Regional Development Agencies (RDAs), The project is 
aiming  to  improve  the  economic  environment  by  creating  a  framework  for  sustainable 
economic development in the country. The key stakeholders include new and existing RDAs, 
local  authorities  and  state  governments,  the  business  sector,  educational  establishments, 
international bodies and NPOs (non-profit organisations). The project is working closely with 
all  these  main  actors  to  revive  and  strengthen  the  economy,  thereby  preparing  Bosnia  and 
Herzegovina for integration into the EU’s Structural Funding scheme and eventual accession. 
The project has five main objectives: 1) the creation of 5 Regional Development Agencies; 2) 
the development of regional economic strategies; 3) the establishment of a National Regional 
Development Forum; 4) the management of a grant Fund; 5) overall project management. 

What can the regions offer? 

As  a  first  step,  regional  profiles  were  developed  for  the  five  proposed  regions.  The  North-
West, offering high-quality agricultural land, forests and natural resources, can support agro-
processing, wood processing and tourism. The South- West – currently experiencing a tense 
political  situation  between  rival  Serbs,  Muslims  and  Croats  –  is  promoting  aluminium 
processing,  engineering,  agriculture,  forestry  and  textiles.  The  Central  region,  previously 
known  as  the  industrial  basin  of  Bosnia  and  Herzegovina,  is  now  an  area  of  high 
unemployment despite its coal, steel, engineering, wood and leather industries. The Sarajevo 
region  is  one  of  the  most  developed  with  its  airport,  university,  banking,  tourism, 
manufacturing  industries  and  trade.  Finally,  the  North-East  is  best  known  for  its  salt  mines 
and chemical industry, both of which are now in decline, hence the high unemployment rate 
there. 

Shared concerns 

The  project  will  play  a  leading  role  in  developing  integrated  regional  strategies  in  co-
operation  with  RDAs,  municipalities,  business  associations  and  other  relevant  players.  The 
ultimate aim is to establish a network of RDAs able to interact with the National Forum on 
Regional  Development  to  promote  coherent  regional  economic  policy  at  national  level.  The 
National  Forum  will  be  made  up  of  experts  whose  mission  is  to  influence  and  promote 
regional policy at national level, to discuss shared economic concerns of regional and national 
significance, and to promote more effective and relevant regional policies and actions. One of 
the  main  components  of  the  project  is  to  set  up  and  run  a  Fund  to  provide  targeted  grant 
support for regional development projects. Priority areas include creating the right economic 
conditions  for  small  and  medium-sized  enterprises  (SMEs)  to  develop;  supporting  export-
related opportunities, and mobilising labour supply and skills training. Examples of the type 
of  projects  suitable  for  funding  include  the  setting  up  of  business  centres  incubators  and 
technology  parks;  advising  SMEs;  developing  regional  branding  for  agriculture  and 
horticulture;  devising  trade  and  investment  promotion  schemes;  and  establishing  vocational 
training  services.  These  grants,  as  well  as  the  technical  assistance  to  RDA’s  and  Local 
Development  Agencies  (LDAs),  are  crucial  in  supporting  and  accelerating  the  process  of 
social and economic reform in a region which badly needs it. 

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3. 

BULGARIA

1 

3.1. 

Summary 

In  2007,  Bulgaria  implemented  both  pre-accession  and  post-accession  assistance  to  address 
the  remaining  needs  related  to  IB  for  the  implementation  of  the  acquis,  in  line  with  the 
Extended Decentralised Implementation System (EDIS). 

Since July 2007 implementation is carried out under the entire responsibility of the Bulgarian 
authorities  applying  national  procurement  rules.  Four  implementing  agencies  are  fully 
responsible for daily implementation of projects. 

The National Aid Coordinator (NAC) continued to exercise the programming function for the 
Transition Facility programme and monitoring of both Pre-accession and Transition Facility 
Programmes. The National Authorizing Officer (NAO) carries out the financial supervision. 

3.2. 

Phare/pre-accession financial and Transition assistance in 2007 

The  Transition  Facility  has  been  established  by  the  Act  of  Accession  to  fund  certain  IB 
actions  in  Bulgaria  to  address  the  continued  need  for  strengthening  institutional  capacity  in 
certain  areas  through  actions  which  cannot  be  financed  by  the  Structural  Funds  or  by  the 
Rural  Development  Fund.  As  such,  this  is  an  extension  of  the  assistance  provided  until 
accession under the Phare programme. The implementation of EU assistance available under 
the  TF  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.  

Programming  

A total of €31,487,600 was allocated to Bulgaria under the 2007 TF budget for Bulgaria. 

This programme is mainly based on the Commission's 2006 Monitoring Report on the state of 
preparedness for EU membership for Bulgaria and Romania that identifies a number of areas 
where  improvement  is  needed  regarding  implementation  and  enforcement  of  the  acquis. 
Supplementary  information  was  provided  through  the  outcome  of  peer  reviews,  monitoring 
missions,  and  expert  reports.  The  programme  will  also  assist  the  Bulgarian  administration 
with the implementation and enforcement of new acquis. Moreover, it takes into account the 
need for further progress towards the achievement of the benchmarks in the areas of judicial 
reform, the fight against corruption and organised crime set out in the Commission Decision 
of December 2006 establishing a mechanism for cooperation and verification of progress in 
Bulgaria1  as  well  as  the  findings  of  the  Report  on  Bulgaria's  progress  on  accompanying 
measures  following  Accession.  To  this  end,  an  Unallocated  Institution  Building  and 
Cooperation and Verification Mechanism Envelope has been created to assist Bulgaria to take 
into  account  the  findings  of  the  Report  and  to  ensure  follow-up  under  the  cooperation  and 
verification mechanism.  

The  Phare  Management  Committee  approved  the  Transition  Facility  2007  National 
Programme  for  Bulgaria  on  5  October  2007.  The  programme  was  then  approved  by  the 
Commission through its Decision C(2007) 5277 of 5 November 2007, which was notified to 
the national authorities on the same day. 

1 

Information  refers  to  the  reporting period 2007.  Serious implementation  difficulties  appeared  in  early 
2008 and the accreditation of two implementing agencies (CFCU, Ministry of Regional Development 
and Public Works was temporarily withdrawn in July 2008. See: COM(2008)496). 

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The Transition Facility 2007 National Programme for Bulgaria provides €31,487,600 for: 

POLITICAL CRITERIA: €1.5301 million 

–  Civil Society Development in the area of anti-corruption fighting 

–  Further  Strengthening  of  Policies,  Practices  and  Capacity  towards  Roma  Integration  in 

Bulgaria 

INTERNAL MARKET: €0.690 million 

–  Strengthening  the  capacity  of  the  National  Enquiry  Point  within  the  State  Agency  for 

Metrological and Technical Surveillance 

–  Further strengthening the administrative capacity of the Financial Supervision Commission 

aiming at the efficient implementation of the acquis 

AGRICULTURE AND FOOD SAFETY: €1.944 million 

–  Improvement of phytosanitary control 

–  Strengthening the official control of feeding stuffs by the National Grain and Feed Service 

–  Improvement of the administrative capacity of the "Monitoring and coordination of Paying 
agency activities" Unit within MAF to implement its functions in compliance with Council 
Regulation (EC) 1290/2005 and (EC) 885/2006 

–  Improvement  of  the  diagnostic  and  laboratory  system  for  animal  health  control  against 

classical swine fever and high pathogenic avian influenza 

–  Improving  the  efficiency  of  FADN  via  building  up  of  an  integrated  IT  system  for  data 

entry, control, validation and use at national and regional level 

–  Strengthening the capacity of State Fund "Agriculture" for electronic data exchange in its 
role  as  a  Paying  agency  and  establishment  of  interface  between  the  PA  systems  and  DG 
Agriculture information systems 

–  Support for the implementation of the Common Market Organisations in the meat sector 

ENVIRONMENT: €5.0195 million 

–  Strengthening the capacity of the water management authorities for the implementation of 

economic instruments for water management according to the 

–  Water Framework Directive (WFD) 2000/60/EC 

–  Strengthening the administrative capacity with the aim to ensure the efficient enforcement 

of the EU waste management acquis 

–  Implementation and enforcement of Directive 2007/105/EC amending Directive 96/82/EC 
(Saves  II  Directive)  on  the  control  of  major  accident  hazards  involving  dangerous 
substances 

–  Implementation  and  enforcement  of  Directive  2006/21/EC  amending  Directive 

2004/35/EC on the management of waste from extractive industries 

–  Strengthening the administrative capacity for practical implementation of legislation of the 
management  of  waste  in  the  fields  of  electrical  and  electronic  equipment  (WEEE)  and 
batteries and accumulators at national and regional level 

–  Strengthening  the  institutional  capacity  for  the  implementation  of  the  Nature  Protection 

acquis 

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–  Further development of the Executive Environment Agency's (EEA) calibration laboratory 

and quality control system for ambient air quality measurements 

JUSTICE AND HOME AFFAIRS: €11.68 million 

–  Enhancement of the administrative capacity of the police in counteraction to drug crimes at 

national and regional level 

–  Enhancement of the Ministry of Interior's capacity to fight organised crime 

–  Development  of  the  institutional  capacity  of  the  Ministry  of  Interior  for  building  up  the 
VIS national interface for connecting the border control system and visa system to the EU 
Visa Information System and for connecting the visa system to VISION Network 

–  Further strengthening of the Ministry of Interior through unification and standardisation of 

the vocational training of the officers of the Ministry of Interior 

–  Enhancement of the capacity of the Bulgarian police through the introduction of European 

models and methods for crime analysis 

–  Strengthening the uniform application of the new procedural legislation in Bulgaria 

–  Strengthening the public management of the judiciary and court administration 

–  A further step towards higher quality of training in the judiciary 

–  Further strengthening the forensic capacity of the expert services of the Ministry of Interior 

for collection and examination of material traces for crime scenes 

–  Improving and extending the level of training in the field of countering organised crime in 

the Bulgarian Ministry of Interior 

–  Effective  implementation  of  the  EU  acquis  in  the  field  of  migration  policy  and  further 

strengthening the Migration Directorate’s institutional capacity 

–  Elaboration  and  strengthening  of  the  Human  Resources  Management  system  in  the 

Ministry of Interior in the fight against corruption among its personnel 

–  Strengthening the role of the Bulgarian Prison Service 

CUSTOMS AND FINANCE: €3.22 million 

–  Further  computerisation  of  the  Bulgarian  Customs  Administration  in  line  with  the  EU 

Electronic Customs Initiative 

–  Enhancement of the implementation mechanisms of the Intrastate System in Bulgaria 

–  Interim Evaluation of Phare and Transition Facility Programmes 

–  Development  of  a  national  system  for  administering  the  excise  duty  entirely  by  the 

Customs Administration 

ADMINISTRATIVE REFORM AND CAPACITY: €6.586 MILLION 

–  Strengthening the legal and administrative capacity for Mental Health Reform 

–  Strengthening  the  capacity  of  the  Ministry  of  Culture  to  secure  development  and 

implementation of a National Audiovisual Policy, including copyright protection 

–  Unallocated Institution Building and Cooperation and Verification Mechanism Envelope 

EMPLOYMENT, SOCIAL POLICY AND EDUCATION: €5.0195 million 

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–  Strengthening  the  capacity  of  the  Agency  for  Social  Assistance  through  trainings  of 
experts, working in the field of child protection and experts working in the Inspectorate of 
the Agency 

Implementation 

–  Phare 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Phare programme 68.20 % of 
the  funding  has  been  disbursed.  There  are  several  projects  whose  period  of  execution  of 
contracts  has  not  expired  yet  according  to  the  corresponding  Financing  Agreements. 
Furthermore the Bulgarian authorities have requested extensions of the execution period for 
the 2004 programme which have been approved. 

–  Phare 2005 – rate of contracting (EDIS extensions)  

At the end of the contracting period for the 2005 National programme on 30 November 2007, 
73.40% of the programmes had been contracted. However, the contracting period of several 
projects has been extended and was on-going. 

–  Institution Building highlights 

As  of  1  July  2007,  the  responsibility  for  the  implementation  of  the  twinning  projects  was 
taken over by the Administrative Office, while the overall coordination for twinning is carried 
out by the NCP of the Ministry of Finance. 

In 2007, a number of projects continued to be implemented through the twinning instrument. 
The projects funded from the Phare programme included inter alia assistance to the Ministry 
of Justice on various subjects involving the judiciary reform process, the Ministry of Interior 
on  border  control  systems,  asylum  and  Scheme  Information  System  SIS  II,  the  Ministry  of 
Health  on  surveillance  systems  of  communicable  diseases  and  healthcare  for  vulnerable 
groups, the Ministry of Labour and Social Policy on social dialogue, the Ministry of Finance 
on  Structural  Fund  preparation,  tax  harmonisation,  the  Ministry  of  Transport  regarding 
cohesion  fund  preparation  for  transport  infrastructure  projects  and  other  institutions  such  as 
the  Bulgarian  Statistical  Office,  the  Personal  Data  Protection  Commission,  the  Financial 
Supervision Commission, the Energy Efficiency Agency.  

In addition, several new twinning contracts were prepared in 2007 for approval mainly with 
the Ministry of Interior as a beneficiary on border police, crime victims support and probation 
service.  

As  to  the  2007  Transition  Facility  Programme  for  Bulgaria,  twinning  remains  an  important 
instrument  for  implementation.  Altogether  the  Programme  includes  a  total  of  22  standard 
twinning  projects  and  5  twinning  light  projects  in  areas  such  as  Agriculture,  Environment, 
Justice and Home Affairs with the majority of projects in the field of reform of the judiciary, 
police, organised crime, but also in the area of border matters and migration issues, and social 
policy. 

In 2007, Twinning continued to remain a successful instrument in Bulgaria in many areas and 
has helped the Bulgarian administration to further strengthen its capacities to implement and 
enforce EC legislation 

3.3. 

Results and Impact 

State of play for JMC / SMSC development 

The  JMC  continues  to  supervise  progress  of  EU-funded  assistance  in  2007  and  to  provide 
recommendations on the management of Phare and Transition Facility programmes. In 2007, 

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the JMC meeting took place in May 2007. It was the first meeting chaired by the Bulgarian 
authorities.  At  the  meeting  issues  such  as  further  improvement  of  project  management  and 
reporting were discussed and proposals for remedial actions were made.  

Each  monitoring  sector  is  covered  by  the  relevant  Sectoral  Monitoring  Sub-Committee 
(SMSC).  Each  SMSC  session  normally  meets  twice  a  year  in  accordance  with  the  annual 
schedule agreed within the JMC. Two rounds of SMSC meetings took place in 2007, the first 
round  took  place  in  April  and  May,  the  second  round  was  organised  between  October  and 
November  2007.  The  ten  monitoring  sectors  cover:  Public  Sector/Development  of 
administrative capacity, Public Finance, Justice and Home Affairs, Economic Development, 
Agriculture, Environment, Transport, Social Development 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  the  Phare  and  Transition  Facility  programmes  in 
Bulgaria  lies  with  the  NAC  services  within  the  Ministry  of  Finance.  Activities  in  this  area 
were  carried  out  on  the  basis  of  the  Action  Plan  on  decentralisation  of  monitoring  and 
evaluation,  which  was  endorsed  by  the  EC  in  May  2007.  The  contract  for  carrying  out  the 
Interim Evaluation for the year 2007 was signed in December 2006 for 12 months. 

In 2007, one Consolidated Monitoring Report was issued for the JMC meeting in May 2007. 
The report provides a consolidated country review of the findings of the Interim Evaluations 
finalized in 2007. The report concludes that most of the projects have a positive impact and 
positively  supported  Bulgaria's  accession  process,  but  the  efficiency  needs  further  close 
attention.  The  report  also  included  recommendations  concerning  improvement  of  the 
implementation system. The NAC has taken relevant steps to address the issue. 

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4. 

CROATIA 

4.1. 

The year in review 

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. 

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. 

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. 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.  In  the  chapter  of 
information society and media good progress made in previous years has been sustained.  

4.2. 

Pre-accession in 2007 

Programmes launched 

As of 2007 the Phare pre-accession programmes were replaced by the new Instrument for Pre-
Accession Assistance. No new programmes were launched. 

Overview of programmes implemented 

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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.  This 
decision also allowed for the further decentralisation of elements of CARDS 2003 and 2004. 

Throughout  2007,  further  contracting  of  CARDS  2004,  Phare  2005  and  Phare  2006  (CBC 
programmes), and further disbursement of CARDS 2002, 2003 and 2004, and Phare 2005 and 
Phare 2006 (CBC programmes) took place.  

The CARDS 2002 programme amounts to a total of €59 million consisting of €3 million of 
centralised funds for the Tempus programme, €48.5 million of deconcentrated funds managed 
by  the  EC  Delegation  in  Zagreb  and  €7.5  million  of  funds  under  decentralised  (DIS) 
management.  Under  deconcentrated  management,  the  contracting  rate  was  96.4%  with  a 
disbursement  rate  of  91.8%  at  the  end  of  2007.  Under  DIS,  these  rates  were  respectively 
93.8% and 84.7%. 

The CARDS 2003 programme amounts to a total of €62 million consisting of €3 million of 
centralised funds for the Tempus programme, €29,633,585 of deconcentrated funds managed 
by  the  EC  Delegation  and  €29,366,415  of  funds  under  DIS.  Under  deconcentrated 
management, the contracting rate was 99.2% with a disbursement rate of 69.4% at the end of 
2007. Under DIS, these rates were respectively 97.7% and 69.5%. 

The CARDS 2004 programme amounts to a total of €81 million consisting of €4 million of 
centralised funds for the Tempus programme, €30,426,370 of deconcentrated funds managed 
by  the  EC  Delegation  and  €46,573,630  of  funds  under  DIS.  Under  deconcentrated 
management, the contracting rate was 99.96% with a disbursement rate of 66.1% at the end of 
2007. Under DIS, these rates were respectively 94.6% and 20.2%. 

The  Phare  2005  national  programme  amounts  to  a  total  of  €71,500,000  and  is  fully 
decentralised  except  for  the  TEMPUS  and  Community  programmes  funds.  Out  of 
€62,882,000 of decentralised funds, 88.34% had been contracted, and 13.92% had been paid 
by the end of 2007. 

In addition to the Phare 2005 national programme, the Phare 2005 Nuclear Safety programme 
amounts  to  €641,000  and  is  fully  decentralised.  By  the  end  of  2007,  66.53%  of  funds  had 
been contracted. Disbursement had not yet started. 

Also  under  Phare  2005,  the  Cross-border  programmes  (CBC)  Croatia-Italy  and  Croatia-
Slovenia-Hungary amount to €3 million each and are fully decentralised. By the end of 2007, 
60.39%  had  been  contracted  and  27.98%  paid  for  CBC  Croatia-Italy,  and  90.72%  had  been 
contracted and 61.92% paid for CBC Croatia-Slovenia-Hungary. 

Under  Phare  2006,  the  national  programme,  the  Nuclear  Safety  programme  and  the  Cross-
border programme (CBC) Croatia-Italy amount respectively to €61,062,000, €1,649,000 and  

€3  million,  are  fully  decentralised  (except  for  the  TEMPUS  and  Community  programmes 
within  the  national  programme  envelope),  and  contracting  had  not  yet started  by  the  end  of 
2007.  The  Phare  2006  Cross-border  programmes  (CBC)  Croatia-Slovenia-Hungary  amounts 
to €3 million, of which 72.68 % had been contracted and 15.57% had been disbursed by the 
end of 2007. 

CARDS and Phare management performance 

Although  the  results  of  projects  programmed  show  that  the  interventions  reflected  well  the 
needs under the political and economic criteria as well as the ability to assume the obligations 
of  membership,  there  have  been  serious  efficiency  problems  as  regards  absorption 

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capacity  as  well  as  timeliness  and  quality  of  the  submitted  tendering  and  contracting 
documents, resulting in last-minute commitment, as it has been the case with the Phare 2005 
programme.  Besides,  physical  implementation  of  the  Phare  2005  programme  will  only  be 
ensured within an extended disbursement period.  

Also weak administrative capacity in several Croatia’s public administration bodies, lack of 
ownership by the Programme Implementation Units (PIUs) on their own projects, insufficient 
co-ordination among stakeholders, as well as insufficient control on the process by the CFCU 
(Central Finance and Contracting Unit) hampered the effectiveness of EC assistance.  

The  follow-up  audit  on  DIS  conducted  by  ELARG  in  2006  highlighted  these  deficiencies 
resulting in the aforementioned weak absorption and administrative capacities that need to be 
remedied. 

In  light  of  the  above,  ELARG  decided  in  December  2007  to  temporarily  suspend  the 
endorsement of contracts under the Phare national programme 2006 till the Commission 
is satisfied about improvements judged against a set of benchmarks.  

NDPs – State of Play 

The  Croatian  Government  adopted  a  national  development  strategy  entitled  Strategic 
Development Framework 2006-2013 in August 2006, which identifies a series of priorities 
that should promote Croatia’s social and economic development. The Strategic Development 
Framework remained valid in 2007. 

In  addition,  the  Croatian  Government  adopted  in  2007  the  National  Programme  for  the 
Accession  of  the  Republic  of  Croatia  into  the  EU  (NPAEU)  which  is  the  fifth  annual 
programme which contains activities to be undertaken on the way towards EU integration, as 
well  as  short  and  mid  term  priorities  in  the  harmonisation  of  Croatian  legislation  with  the 
acquis. 

Institution Building highlights 

One  of  the  main  challenges  facing  the  candidate  countries  is  the  need  to  strengthen  their 
administrative  and  judicial  capacity  to  implement  and  enforce  the  acquis.  The  European 
Commission  mobilises  significant  human  and  financial  resources  to  help  them  with  this 
process,  using  the  mechanism  of  twinning  administrations  and  agencies  with  the  ones  from 
the Member States. 

During  2007,  26  new  twinning  contracts  (including  'twinning  light')  for  a  total  amount  of 
approximately  €22.2  million  were  signed,  including  12  contracts  under  CARDS  2004 
programme and 14 contracts under Phare 2005 programme. 

In addition to these newly started projects, there were, by the end of 2007, 4 running twinning 
projects  which  had  started  in  2006,  for  a  total  amount  of  approximately  €3.5  million:  3 
projects under CARDS 2003 programme and 1 project under CARDS 2004 programme. 

Moreover,  10  twinning  projects  for  a  total  amount  of  approximately  €7.9  million  were 
finished during 2007: 1 under CARDS 2002 programme, 7 under CARDS 2003 programme, 
and 2 under CARDS 2004 programme. 

4.3. 

Results and impact 

State of play for JMC/SMSC development 

Two series of six Sectoral Monitoring Sub-Committee (SMSCs) meetings each were held in 
May  and  November  2007.  These  meetings  considered  the  state  of  play  for  a  total  of, 
respectively, 99 and 90 decentralised CARDS and Phare projects. The six sectors covered by 

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the SMSCs were: Public Administration Reform, Public Finance & Statistics; Internal Market, 
Competition  &  Agriculture;  Economic  &  Social  Cohesion;  Energy  &  Environment;  and 
Social Sector, Civil Society & Minority Rights. 

This process culminated in the Joint Monitoring Committee (JMC) which took place on 10-11 
December  2007.  The  JMC  reviewed  the  financial  status  of  programmes  as  of  1  December 
2007  (tender  launches,  contracting,  payments).  It  discussed  a  JMC  Synopsis  Report 
containing  conclusions,  recommendations  and  follow-up  actions,  as  well  as  the  CARDS 
interim evaluation report, a summary of 2007 internal audit findings related to CARDS and 
Phare, a summary of irregularities reporting, and the 2008 monitoring and interim evaluation 
plan. 

The  JMC  also  conducted  a  thorough  review  of  the  functioning  of  DIS.  In  light  of  the 
aforementioned difficulties encountered, the Commission decided to temporarily suspend the 
endorsement  of  contracts  under  the  Phare  national  programme  2006  till  the  Commission  is 
satisfied about improvements judged against a set of benchmarks (see section 4.2 CARDS and 
Phare management performance). 

M&E Reports in 2007 - Lessons Learned 

An ad-hoc independent evaluation report covering decentralised CARDS assistance from the 
2003  and  2004  national  programmes  was  released  in  December  2007.  This  report 
encompasses  four  sector  clusters:  "Social",  "Internal  Market,  Competition  and  Agriculture", 
"Justice  and  Home  Affairs",  and  "Other".  These  clusters  are  drawn  from  five  monitoring 
sectors  and  based  on  a  sample  of  16  projects  (12  from  CARDS  2003  and  4  from  CARDS 
2004).  All  projects  are  being  implemented  under  DIS.  The  total  amount  of  assistance 
evaluated in the report is €20.25 million. 

The report provided the following lessons that can be drawn as regards CARDS assistance:  

•  Although  largely  relevant,  CARDS  support  has  been  hampered  by  weaknesses  in 
project design. To maintain relevance, the assistance in some clusters has been the subject 
of significant changes to their original funding and implementation arrangements, largely 
due to obsolete original designs and contracting requirements.  

•  The  uneven  efficiency  of  the  assistance  is  a  result  of  delays,  mixed  beneficiary 
performance  and  the  generally  good  work  of  contractors  and  twinning  experts.  The 
performance of the assistance in the preparatory stage, characterised by extensive delays, 
has  negatively  influenced  overall  efficiency.  The  performance  of  many  (but  not  all) 
beneficiaries and PIUs has also been less than optimal, although this has been offset by the 
generally good work of contractors, twinning partners and suppliers.  

•  The assistance is expected to be largely effective, with many outputs already delivered 
and in use by beneficiaries. Nearly all the interventions will deliver their planned outputs. 
This  is  largely  thanks  to  the  work  of  the  contractors  and  twinning  partners,  whose  work 
have  in  nearly  all  cases  been  effective  and  which  in  a  number  of  cases  have  already 
resulted in tangible improvements in beneficiary performance. 

•  Prospects  for  impact  are,  on  balance,  positive.  This  is  most  likely  where  policy 
objectives are clear and support for their implementation evident at senior level, or where 
assistance complements ongoing beneficiary efforts. More complex projects that promote 
intra-institutional change or wider reform agendas are likely to face greater challenges in 
delivering impact. 

•  Prospects for sustainability are mixed. This is due in part to factors that are outside the 
direct control of the beneficiaries, or where those institutions charged with implementing 

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project  results  are  under-resourced.  Otherwise,  conditions  to  ensure  the  future  use  of 
investments  are  generally  in  place,  while  staff  turnover  has  been  noted  in  only  some 
institutions. 

As regards Phare programmes, an Interim Evaluation Scheme was launched in the second half 
of 2007. Sectoral and thematic reports are expected to be issued in 2008. 

Sectors with positive results 

•  Based  on  the  aforementioned  evaluation  of  CARDS  assistance,  positive  results  were 

achieved in 2007, notably in the following sectors:  

•  In  the  "Social"  cluster,  Higher  Education  and  Good  Governance  I/II  projects,  inter 
alia, are expected to be effective. The former has provided the beneficiaries with the tools 
for  membership  of  the  European  Quality  Assurance  Network  in  Higher  Education.  The 
grantees of the latter intervention are on schedule to deliver their planned results that will 
contribute towards improving civic engagement in the grant scheme’s target areas.  

•  Interventions  evaluated  under  "Internal  Market,  Competition  &  Agriculture"  show 
signs  of  having  the  positive  impact  intended.  The  system  established  under  the  Plant 
Health project is already  functional and  contribute  to the  plant health sector meeting EU 
requirements.  The  Phytosanitary  Inspection  project  has  developed  the  basis  for  the 
introduction  of  key  measures  in  the  sector  such  as  a  pilot  passport  system  and  a  plant 
health register. 

•  Within "Justice and Home Affairs", the Border Management II project is expected to be 
effective in introducing EU standards in the field of border checks and in preparing Croatia 
to implement the Schengen acquis. The criminal intelligence system developed under the 
Criminal  Intelligence  II  project  will  support  the  delivery  of  planned  results.  The 
Combating  Money  Laundering  project  has  been  particularly  effective  and  has  already 
delivered  some  important  outputs,  principally  the  protocol  on  cooperation  between 
government agencies operating in this field. 

The list of aforementioned sectors providing positive results is not exhaustive. Other sectors 
include,  inter  alia,  assistance  with  Administrative  Decentralisation  and  Water  Management 
which  is  expected  to  provide  outputs  that  fit  in  with  ongoing  strategic  and  legislative 
developments.  

Implementation of Phare assistance is relatively too recent to assess results in specific sectors. 

Success story 

"Support to National Development Planning" Project 

The  purpose  of  this  CARDS  2003  project  was  to  set  foundations  for  the  management  of 
structural instruments in Croatia by establishing structures and systems for programming and 
management of IPA components III and IV. 

IPA  was  designed  to  prepare  the  candidate  countries  for  the  management  of  funds  post-
accession. In order to utilise full potential of the new financial instrument, candidate countries 
were  expected  from  the  outset  to  define  an  institutional  setup  for  components  III  and  IV 
which  would  continue  to  manage  structural  instruments  after  accession.  Since  Croatian 
authorities had no experience on which they could build such a strategic decision, the project 
supplied  a  wealth  of  experiences  from  other  countries  including  analysis  of  advantages  and 
disadvantages of each of them for Croatia, which allowed the Government to design the IPA 
implementation system and appoint responsible persons even before the IPA legal basis was 
completed. 

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In addition, the project supported the NIPAC, Strategic Co-ordinator and Operating Structures 
with  multi-annual  programming  for  components  III  and  IV.  Further  to  the  National 
Development  Plan  in  force  the  project  enabled  the  inter-ministerial  co-ordination  group  to 
make selection of operations  and  investment projects to be funded  between 2007 and 2009. 
Project  experts  worked  closely  with  the  beneficiaries  in  drafting  the  Strategic  Coherence 
Framework and four operational programmes. Independently from those activities, the project 
also  provided  the  expert  team  which  carried  out  ex  ante  evaluation  of  the  operational 
programmes  and  ensured  country-wide  consultations  based  on  the  EU  regional  policy 
partnership principle. After the Commission accepted the three-annual funding of the OPs, the 
project worked  on  the  development  of  the  monitoring  and  evaluation  system  for  IPA 
components III and IV and prepared the institutions for meeting visibility requirements. 

In 2007 the project was particularly active in consolidating the capacity of the beneficiaries in 
order to pave the way for introduction  of  structural instruments at accession.  In  order to do 
that it drafted the Structural and Cohesion Funds Readiness Strategy and Action Plan, which 
allowed  Croatia  to  meet  the  opening  benchmark  for  negotiations  under  Chapter  22.  The 
working methods of the project were such to engage the beneficiaries as much as possible so 
that  in  few  years  they  can  take  part  in  the  programming  and  management  of  structural 
instruments relying much more on their own capacity. 

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5. 

CYPRUS 

5.1. 

Summary 

In 2007, Cyprus continued to implement successfully the post-accession assistance to address 
the  remaining  needs  related  to  IB  for  the  implementation  of  the  acquis,  in  line  with  the 
Extended Decentralised Implementation System (EDIS). 

Since  July  2004  implementation  is  carried  out  under  the  entire  responsibility  of  the  Cyprus 
authorities applying national procurement rules. A number of implementing agencies are fully 
responsible for daily implementation of projects. 

The National Aid Coordinator (NAC) continued to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision. 

Since the closure of the Phare Transition Team in the Representation in Nicosia as of end July 
2005, DG Enlargement continues to exercise the residual functions related to the Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

5.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 TF programme 78.76 % of the 
funding  had  been  disbursed.  The  Cypriot  authorities  did  not  request  any  extension  for  the 
2004 programme. The payments can still be executed within 6 months after the expiry of the 
contracts execution period. 

–  TF 2005 – rate of contracting  

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 98.35% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €19  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Cyprus  from 
Transition Facility programmes (2004-2006). 

During  the  period,  there  was  substantial  overall  progress  towards  the  achievement  of 
objectives  and  results  of  the  EU  assistance.  The  projects  under  TF  2004  projects  were 
successfully completed and achieved its results, which further contributed to the enhancement 
of  Cypriot  public  administration.  However,  under  TF  2004  there  was  one  exception  under 
project  "Capacity  Building  in  the  Field  of  Metrology  in  Cyprus",  where  not  all  the  results 
were achieved. This will be rectified by the Cypriot authorities from national funds.  

There were quite substantial savings under TF 2005 programme, which were reallocated into 
Unallocated  Institution  Building  Facility.  The  UIBF  was  successfully  contracted  and  has 
proven to be an effective tool in meeting the remaining needs of acquis-related issues. 

5.3. 

Results and Impact 

State of play for JMC / SMSC development 

In 2007, one Joint Monitoring Committee (JMC) meeting took place in March 2007, in line 
with  the  revised  JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which 

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established  an  integrated  monitoring  and  evaluation  system  over  the  programmes  under 
implementation. The second one was implemented by written procedure in October 2007. 

The JMC meeting was fruitful and helped to address the problems concerning implementation 
of  the  ongoing  projects,  to  discuss  horizontal/systemic  issues  and  to  identify  possible 
solutions.  The  ISRs  were  of  good  quality  and  provided  a  sound  basis  for  a 
discussion/feedback.  

In  the  year  2007,  the  monitoring  system  was  reorganised  in  Cyprus.  It  was  affected  due  to 
simplified  procedures  introduced  by  the  European  Commission  and  due  to  the  rather  small 
number of projects under TF 2005 and 2006 programmes.  

Within this reorganisation, a Programme Monitoring Committee (PMC) was established as a 
main coordinating body that meets twice a year and is chaired by the NAC. The PMC assesses 
progress towards the objectives and targets of the projects by reviewing actual output, the rate 
of  implementation,  financial  flows,  etc.  and  makes  relevant  recommendations.  The  PMC's 
discussion is based on the Quarterly Progress Reports of the projects as well as the Monthly 
Financial Reports.  

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  and  evaluation  of  the  pre-accession  and  Transition 
Facility  programme  in  Cyprus  lies  with  the  Planning  Bureau,  as  the  executive  body  of  the 
NAC.  

In 2007, two evaluation reports were released, both prepared by the external contractor. The 
Interim  Evaluation  Report  was  issued  on  02  February  2007  and  covered  Transition  Facility 
2004  and  2005.  The  Country  Summary  Evaluation  Report  was  released  in  June  2007  and 
covered 2003 Pre-Accession programme, TF 2004 and 2005. 

The  reports  conclude  that  most  of  the  projects  have  a  positive  impact  and  are  rated  as 
satisfactory, but more should be done in terms of efficiency, though it has improved compared 
to previous reports. Serious risks have been dealt with, certain processes have been speeded 
up and deliverables have been under close scrutiny. In terms of impact, there is a potential for 
wider  beneficial  impact  beyond  the  immediate  objectives  of  the  projects.  The  realization  of 
this potential will however, require appropriate follow-up actions 

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6. 

CZECH REPUBLIC 

6.1. 

Summary 

In  2007,  the  Czech  Republic  continued  to  implement  successfully  the  post-accession 
the 
assistance 
implementation of the acquis, in line with the EDIS. 

the  remaining  needs  related 

institution  building  for 

to  address 

to 

Since December 2004 implementation is carried out under the entire responsibility of Czech 
authorities  applying  national  procurement  rules.  The  Central  Finance  and  Contract  Unit 
(CFCU), the Civil Society Development Foundation (NROS), Czech Invest (CI), the National 
Training Fund (NTF) and the Centre for Regional Development (CRD) are fully responsible 
for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continues to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision.  

Since the closure of the Representation's Phare Transition Team in Prague in July 2005, DG 
Enlargement  exercises  residual  functions  related  to  the  Commission  responsibilities 
(monitoring, payments, closure, etc.) in line with the Financial Regulation. 

6.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
91.40 % of the funding has been disbursed. The Czech authorities requested no extension for 
the 2004 programme. The payments can still be executed within 6 months after the expiry of 
the contracts execution period. 

–  TF 2005 – rate of contracting  

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 86.91% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €32  million  of  post-accession  assistance  from  national  allocation  (not 
including horizontal and multi-country programmes) has been allocated to the Czech Republic 
from Transition Facility programmes (2004-2006).  

Implementation  of  Transition  Facility  in  the  Czech  Republic  is  considered  generally 
successful  in  areas  such  as  Nuclear  Safety,  Justice  &  Home  Affairs,  Social  Protection  & 
Health, Environment, Agriculture and Finance & Banking & Internal Market. 

As  regards  twinning,  the  Czech  Republic  has  taken  advantage  to  a  limited  extent  of  the 
Twinning instrument, since three Twinning Light projects were unsuccessfully circulated and 
subsequently not contracted. 

6.3. 

Results and Impact 

State of play for JMC / SMSC development 

In  2007,  one  Joint  Monitoring  Committee  (JMC)  meeting  took  place  in  June  2007,  and  the 
second one was carried out through written procedure in winter 2007 in line with the revised 
JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which  established  an 
integrated monitoring and evaluation system over the programmes under implementation. 

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The JMC meeting was fruitful and helped to address the problems concerning implementation 
of  the  ongoing  programmes,  to  discuss  horizontal/systemic  issues  and  to  identify  possible 
solutions.  Several  immediate  actions  were  agreed  upon  and  deadlines  set  for  their 
implementation. 

In  the  year  2007,  two  rounds  of  Sector  Monitoring  Sub-Committee  (SMSC)  meetings  took 
place  (in  April  and  October).  There  are  six  sectors  to  be  monitored  in  the  Czech  Republic: 
Social  protection  and  health,  Agriculture/Environment,  Civil  Society  Development,  Nuclear 
Safety, Justice and Home Affairs and Internal Market, Finance and Banking. 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  and  evaluation  of  Phare  and  the  Transition  Facility 
programme in the Czech Republic lies with the Ministry of Finance (MoF). Activities in this 
area were carried out on the basis of the Action Plan on decentralisation of Monitoring and 
Evaluation, which was endorsed by the EC in May 2005.  

In  2007,  5  IE  reports,  two  Country  Evaluation  Summary  Reports  on  Transition  Facility 
programmes in the Czech Republic were issued. 

The Phare Country Evaluation Summary report provides a consolidated country review of the 
findings of the Interim Evaluation Reports that were prepared between April and May 2007 
and  September  and  October  2007.  It  concludes  that  the  efficiency  of  the  use  of  Phare 
assistance  continues  to  be  threatened  by  high  staff  turnover,  a  resulting  lack  of  institutional 
memory, and insufficient staff numbers. The Transition Facility Country Evaluation Summary 
report identifies projects managed by the Ministry of Health as problematic, due to their poor 
institutional ownership.  

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7. 

ESTONIA 

7.1. 

Summary 

In 2007, Estonia continued to implement successfully the post-accession assistance to address 
the remaining needs related to institution building for the implementation of the acquis, in line 
with the EDIS. 

Since  November  2004  implementation  is  carried  out  under  the  entire  responsibility  of 
Estonian  authorities  applying  national  procurement  rules.  The  Ministry  of  Finance,  Central 
Financing  and  Contracting  Department  (CFCD) 
the  daily 
implementation of the projects. 

is  fully  responsible  for 

The National Aid Coordinator (NAC) continued to exercise the monitoring of both Phare and 
the Transition Facility Programmes. The National Authorizing Officer (NAO) carries out the 
financial supervision.  

Since  the  closure  of  the  Phare  Transition  Team  in  the  Representation  in  Tallinn  as  of  July 
2005, DG Enlargement continues to exercise the residual functions related to the Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

7.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
85.18 % of the funding has been disbursed. The Estonian authorities requested no extension 
for the 2004 programme. The payments can still be executed within 6 months after the expiry 
of the contracts execution period. 

–  TF2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 86.54% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €18  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Estonia  from 
Transition Facility programmes (2004-2006). 

In 2007, Estonia made very good progress in implementing the Transition Facility 2004 and 
2005 projects. TF 2004 projects were all completed by the execution deadline, some even far 
prior  to  it.  On  the  other  hand,  some  of  the  projects  faced  very  tight  implementation  period 
because  of  changes  needed  to  be  introduced  in  the  project  fiches  for  various  reasons. 
However, in conclusion it can be said that all projects contributed to meeting the remaining 
needs of acquis and enhanced the Estonian administrative system.  

The  projects  under  TF  2005  are  also  progressing  well  and  no  major  problems  have  been 
encountered. Some of them had been already completed during 2007 or earlier. 

In  2007  there  were  quite  significant  changes  in  the  structures  of  the  Ministry  of  Finance  of 
Estonia, which were related to the EDIS system and implementation of the TF programmes. 
These  changes  however  did  not  affect  the  implementation  of  the  projects  under  Transition 
Facility Instruments. 

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7.3. 

Results and Impact 

State of play for JMC / SMSC development 

In 2007, one Joint Monitoring Committee (JMC) meeting took place in February 2007, in line 
with  the  revised  JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which 
established  an  integrated  monitoring  and  evaluation  system  over  the  programmes  under 
implementation. The second one was by written procedure in June 2007. 

In  2007,  no  Sector  Monitoring  Sub-Committee  (SMSC)  meetings  have  taken  place. 
Monitoring  reports  have  been  prepared  twice  during  the  year  and  approved  via  written 
procedures  by  the  SMSC  members.  There  are  eight  sectors  to  be  monitored  in  Estonia: 
Justice,  Home  Affairs,  Finance,  Environment,  Internal  Market  and  Transport,  Agricultural, 
Social sector, and Education. 

M&E Reports in 2007(lessons learned) 

Overall responsibility for monitoring and evaluation of the Phare programme in Estonia lies 
with  the  Ministry  of  Finance  (MoF).  Currently,  the  Foreign  Financing  Department  provide 
services to the NAC in the State Budget Department. Activities in this area were carried out 
on the basis of the Action Plan on decentralisation of monitoring and Evaluation, which was 
endorsed by EC in February 2005. 

In  2007,  Thematic  Evaluations  were  introduced.  The  topics  of  these  could  be  selected  by  a 
country but should have been approved by DG Enlargement. A contract for evaluation with 
external contractor was signed in 2007. The following evaluation reports were prepared and 
released during the year:  

(1) 

(2) 

(3) 

Transition Facility Interim Evaluation Country Summary Report VI 

Interim Evaluation Report of 2004 Transition Facility Programme 

Utilizing Phare/TF evaluation recommendations 

In  addition,  Phare  Interim  Evaluation  Report  on  Home  Affairs  Sector  was  prepared  and 
released in August 2007.  

The  main  recommendations  were  related  to  the  need  for  creating  a  sustainable  knowledge 
base so that the experience and knowledge acquired from the projects would not be lost; best 
practice should be more widely spread, increasing the role of Steering Committees, involving 
IT  experts  from  the  start  of  the  project  (in  the  future)  if  the  projects  are  technically 
complicated, more active application of the recommendations of previous evaluations. Also, 
in  order  to  become  a  Twinning  provider,  system  should  be  put  in  place  and  a  respective 
strategy should be created, which addresses organisational and operational aspects.  

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8. 

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA 

8.1. 

The year in review 

Political developments 

The pace of reforms in the former Yugoslav Republic of Macedonia was, on the whole, slow 
for  most  of  the  year.  The  country  made  some  progress  in  addressing  the  political  criteria. 
However,  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  publication  of  the  2007  Progress  Report  there  were  signs  of  reforms 
gaining  momentum.  Improved  cooperation  among  political  parties  and  between  the  Prime 
Minister  and  the  President  has  led  to  increasing  consensus  on  EU-related  reforms.  These 
include appointments to the Judicial Council by Parliament and the adoption of laws on the 
Public Prosecutor's Office, on the Council of Public Prosecutors and on the Composition of 
the  Committee  on  Inter-ethnic  Relations.  Progress has  also  been  made  in  police  reform  and 
decentralisation.  Ensuring  good  neighbourly  relations  and  finding  negotiated  and  mutually 
acceptable  solutions  to  unresolved  issues  with  neighbours,  in  line  with  the  Council 
conclusions of December 2007, remains essential. 

Macroeconomic developments and structural reforms 

The  economy  of  the  former  Yugoslav  Republic  of  Macedonia  registered  a  markedly 
accelerated growth. Macroeconomic stability has been maintained and structural reforms have 
further progressed, but the persistence of very high unemployment remains a major cause of 
concern. Institutional weaknesses and deficiencies in the rule of law still hamper the smooth 
functioning of the market economy and affect the business climate. 

Regarding  the  economic  criteria,  the  former  Yugoslav  Republic  of  Macedonia  is  well 
advanced  in,  and  has  further  moved  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. 

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. 

8.2. 

Financial assistance in 2007 

Programmes launched 

As of 2007, the CARDS programmes were replaced by the new Instrument for Pre-accession 
Assistance. No new programmes were launched. 

Overview of programmes implemented 

During  2007,  the  CARDS  programme  was  the  main  programme  delivering  the  needed 
assistance  for  addressing  the  European  priorities  of  the  country.  The  implementation 
concerned the annual programmes from 2002 until 2006. 

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The former Yugoslav Republic of Macedonia received a total allocation of €231 million under 
CARDS  programmes  between  2002–2006.  This  allocation  concentrated  on  several  sectoral 
objectives  referring  to  the  priorities  identified  in  the  Progress  Report  and  the  European 
Partnership for the former Yugoslav Republic of Macedonia. These priorities translated into 
the following financial allocations by priority: 

•  Democracy and the rule of law: €56.6 million 

•  Economic & social development: €59.2 million 

•  Justice and home affairs: €62.6 million 

•  Environment and natural resources: €6.3 million 

•  Other: €35.3 million 

The key programming documents for CARDS 2002-2006 were the CARDS Country Strategy 
Paper 2002-2006, Multi-annual Indicative Programmes of 2002-2004 and of 2005-2006 and 
annual action programmes for each annual programming cycle. The programming documents 
were prepared with reference to the Stabilisation and Association Agreement, annual progress 
reports, European Partnership, and the National Plan for the Adoption of the Acquis. 

The CARDS Programme was mainly managed by the European Agency for Reconstruction. 
Starting its operations in 2002, the EAR took over responsibility for the previous programmes 
and took forward the implementation of CARDS. 

In the year 2007 procurement processes were underway for the completion of the contracting 
of the CARDS assistance.  

Strengthening the public administration 

Assistance  was  provided  in  the  set-up  of  the  Directorate  for  Personal  Data  Protection  as  an 
independent  and  legitimate  state  body.  A  separate  twinning  programme  partnering  officials 
from  the  Macedonian  and  Dutch  finance  ministries  is  aimed  at  improving  transparency, 
effectiveness and efficiency in the use of public funds.  

Helping bring about economic reform 

To further the country's economic development, the EU commenced a new Human Resources 
Development  Fund  programme  seeking  to  improve  the  level  of  competence  of  managers  in 
the business community through improved access to training and services and to increase the 
competences  of  local  business  service  providers.  Through  a  separate  EU-supported 
programme to the SME Development, the aim is to support economic growth and improve the 
business climate in the country by fostering the development and performance of SMEs.  

Aligning environment rules with EU best practices 

In  order  to  promote  environment  friendly  management,  the  National  Strategy  for 
Environmental  Approximation  was  developed.  With  the  help  of  EU  funding,  the  project 
provided  gap  analyses  of  19  relevant  environmental  directives  and  broad  analyses  of  the 
remaining  legislation.  Additionally,  new  environment  projects  were  put  in  place  in  the 
following  areas:  elimination  of  industrial  hotspots,  municipal  waste  water  management  and 
healthcare risk waste management. The aim is to catalyse IFI funding in the relevant fields.  

Supporting police reform 

Under  a  twinning  arrangement,  the  Ministry  of  Interior  received  assistance  from  the  Police 
Academy of Brandenburg (Germany) for the implementation of the Law on Police. Under a 
separate initiative with a member state (France), international police experts were deployed to 

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support the implementation of the National Police Reform Strategy at the regional and local 
levels.  

Towards a more independent judiciary 

The  IT  Centre  for  the  Judiciary  was  established  in  securing  an  efficient  and  independent 
judicial system and to contribute to better communication among the judicial institutions. In 
penitentiary  reform,  a  grant  arrangement  was  launched  with  the  Council  of  Europe  with  a 
focus on the full implementation of professional standards in prison administrations.  

Increasing trade opportunities 

In  an  effort  to  boost  the  country’s  agricultural  sector,  the  EU  continued  to  support  the 
National Animal Identification System aiming to complete the establishment of an integrated 
animal identification, holding registration and movement control system for small ruminants. 
In  a  separate  programme,  the  EU  provided  assistance  for  the  establishment  of  a  National 
Vineyard Monitoring and Management System.  

Strengthening the civil society 

A  platform  was  established  among  the  civil  society  organisations  in  the  country.  The  EU 
assistance programme targeted civil society organisations to help them assess the quality and 
the  governance  system.  In  furthering  social  cohesion,  a  Roma 
accountability  of 
Representative Body was established to lobby on behalf of the Roma community for greater 
participation of the Roma community in public life.  

Preparing the country for new IPA funding 

The European Agency for Reconstruction played an important role in translating the priorities 
into  project  ideas  in  the  framework  of  the  newly  launched  Instrument  for  Pre-Accession 
Assistance. The Agency committed eight different service contracts funded under CARDS to 
assist the country with the programming of the Instrument for Pre-accession Assistance (IPA). 
To support the programming of IPA, the drafting of the compulsory documents (16 of them) 
was completed and assistance was provided in tendering the first projects under IPA. 

CARDS management performance 

The  CARDS  programme  implementation  during  2007  concerned  the  programmes  2002  till 
2006. The objectives for CARDS delivery for 2007 were completion of payments for the 2002 
and  2003  programmes,  completion  of  the  contracting  for  the  2004  programmes,  and 
contracting bulk of allocations for the 2005 and 2006 programmes. 

In 2007, a total of 41 contracts - 4 works contracts, 10 supply contracts, 18 service contracts 
and 9 grants - were signed for a total value of €37.1 Million.  

In  2007,  a  total  of  €39.3  Million  was  paid.  Payments  for  the  2002  programme  were 
completed. 

The  Agency  portfolio  in  the  former  Yugoslav  Republic  of  Macedonia  amounts  to  some 
€326.5  million.  It  covers  projects  financed  under  CARDS  (2002-2006),  projects  financed 
under  Phare  (1997-2000)  and  the  Emergency  Response  Programme  (2001).  As  of  14  April 
2008, 97% of these funds have been contracted of which 92% have been paid.  

Please see Table below: Key figures at a glance, 21st April 2008 

1997-2000 

2001 

2002 

2003 

2004 

2005 

2006  Total 

Allocation* 

79.5 

56.5 

33 

36 

53.5 

34.5 

33.5 

326.5 

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(€ million) 

Committed/ 

Allocated % 

Paid/ 

Committed % 

100% 

100% 

100% 

100% 

100% 

95% 

72% 

97% 

100% 

100% 

100% 

99% 

85% 

82% 

49% 

92% 

Institution Building highlights 

The  twinning  mechanism  was  extensively  used  during  2007  in  many  priority  areas  and 
helped the country prepare for the implementation of EU policies and laws. In 2007 two new 
twinning  projects  were  launched:  public  internal  financial  control  with  the  Netherlands  and 
harmonisation of labour  legislation  with Slovakia. In 2007, we completed twinning projects 
conducted by Germany on police reform processes and competition authority. The twinning 
project  with  the  Netherlands  and  Hungary  was  also  completed  during  2007  tackling  drugs 
related crimes. The twinnings on the police education with the Netherlands, on statistics with 
Germany  and  Slovenia,  on  air  quality  with  Finland  and  Austria,  on  money  laundering  with 
Spain, and on Prosecutor’s office with Italy continued with their operations. To date, a total of 
11 fully-fledged twinning projects for a total amount of €13.2 million have been financed out 
of the CARDS Programme. In addition, a further 1 fully fledged twinning project (on energy) 
and 4 twining light projects (on policy planning, on insurance supervision agency, on public 
revenue  office  and  on  decentralised  implementation  system)  were  programmed  during  2007 
under IPA’s component I. The selection process is underway for most of them. 

Grants  awarded  to  eligible  EU  member  state  institutions  has  been  used  as  additional 
instrument for institutions building specifically targeting the policing reforms in the country. 
In  2007  one  grant  project  (with  France)  was  launched  under  CARDS  funds.  The  year  2007 
saw the completion of a grant project with Germany taking forward the implementation of the 
police reform priorities. To date, a total of 3 grant projects for a total amount of €10 million 
have been financed out of the CARDS Programme.  

Other institutions building instruments have included technical assistance (service contracts), 
direct  award  grants  to  specialised  international  organisations  and  grants  to  civil  society 
organisations. 

8.3. 

Results and impact 

M&E Reports in 2007 - Lessons Learned 

The step-by-step establishment of the administrative structure for decentralised management 
of  EU  funds  and  the  requirements  for  the  management  of  IPA  are  leading  elements  in  the 
evolving  organisational  set-up  for  the  programming  and  subsequent  management  of  EU 
funded  projects.  While  it  remains  a  challenge  to  allocate  both  sufficient  resources  to  the 
management  structures  and  to  develop  and  implement  the  appropriate  regulations, 
improvements  can  be  noted  in  the  involvement  of  different  government  agencies  in  the 
development of the projects. 

Despite  a  general  improvement,  significant  disparities  between  different  government  bodies 
persist.  Where  the  Ministry  of  Interior  for  instance  is  taking  a  more  leading  role  in  both 
project  development  and  project  management,  other  ministries  continue  to  face  serious 
difficulties  in  assuming  their  (contractual)  responsibilities.  Continued  support  to  build 
capacities in project development and management will remain necessary. 

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Further  structural  improvements  in  public  administration  remain  a  priority.  Three  core 
functions  stand  out.  Firstly  the  budget  planning  process  needs  to  ensure  that  sufficient 
resources are allocated to the ministries and departments to maintain the investments and – in 
some  cases  –  appropriately  implement  core  work  processes.  Secondly,  human  resource 
management  does  not  only  need  to  guarantee  sufficient  staff  to  implement  the  relevant 
mandate, but also sufficiently qualified staff and a stable staff establishment. And thirdly, the 
activities of an individual ministry or department do not only need to refer to a sector strategy, 
but  also  be  well  coordinated  with  other  stakeholders  in  the  process,  which  include  other 
departments in the same ministry, other governmental bodies as well as the support activities 
of the international community. 

Although  addressing  these  structural  public  administration  issues  through  capacity  building 
projects will remain necessary, highlighting these issues in the sub-committees proves to be 
an excellent tool to focus attention. 

Sectors with positive results - Success story 

Higher  education  gets  a  boost:  EU  committed  €2.37  million  to  extend  the   campus  of  South 
East European University  

The South East European University (SEEU) was established in Tetovo in October 2001, and 
soon  became  a  strong  promoter  of  interethnic  relations  and  understanding,  by  offering  a 
tolerant, multi-lingual, multi-cultural approach to teaching and scientific research. Today the 
University  has  a  student  population  of  8,000  in  12  undergraduate  and  13  post-graduate 
programmes. To help the university cope with its fast growth, the EU, through the European 
Agency  for  Reconstruction  provided  €2.37  million  to  extend  the  university  campus  and 
provide additional teaching and office space and administration services. The extension of the 
campus was supported by the EU following a special decision of the European Commission. 
The SEEU was able to contribute €0.47M to the costs of construction. The new premises of 
the  Business  Centre  for  Education  and  Post-graduate  Studies  at  the  South  East  European 
University (SEEU) were opened on 17 September 2007.  

9. 

HUNGARY 

9.1. 

Summary 

In  2007,  Hungary  continued  to  implement  successfully  the  post-accession  assistance  to 
address  the  remaining  needs  related  to  institution  building  for  the  implementation  of  the 
acquis, in line with the EDIS. 

Since  June  2004  implementation  is  carried  out  under  the  entire  responsibility  of  Hungarian 
authorities  applying  national  procurement  rules.  The  CFCU-Central  Finance  and  Contract 
Unit, the ESF-European Social Fund Agency and the VATI-Hungarian Public Company for 
Regional Town Planning are fully responsible for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continues to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision.  

Since the closure of the Phare Transition Team in the Representation in Budapest as of July 
2005, DG Enlargement continues to exercise the residual functions related to the Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

9.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

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–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
67.41 % of the funding has been disbursed. The Hungarian authorities requested no extension 
for the 2004 programme. The payments can still be executed within 6 months after the expiry 
of the contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 88.56% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €36  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Hungary  from 
Transition Facility programmes (2004-2006).  

Implementation  of  Transition  Facility  in  Hungary  is  considered  successful  in  most  areas, 
where  most  projects  are  reaching  foreseen  objectives  and  the  assistance  provides  real  value 
added to scarce public funds. 

As  regards  twinning,  Hungary  has  taken  advantage  to  a  limited  extent  of  the  Twinning 
instrument,  since  three  Twinning  Light  projects  were  unsuccessfully  circulated  and 
subsequently not contracted. 

9.3. 

Results and Impact 

State of play for JMC / SMSC development 

In  2007,  two  JMC  meetings  took  place  in  February  and  June  2007,  in  line  with  the  revised 
JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which  established  an 
integrated monitoring and evaluation system over the programmes under implementation. 

In  the  year  2007,  following  the  Commission's  simplification  proposal  regarding  the  JMC 
functioning, in Hungary the Sector Monitoring Sub-Committee (SMSC) meetings and reports 
implementation  review  meetings  (IRM)  were 
were  abandoned.  However,  monthly 
strengthened and evaluations aligned and adapted to the simplified monitoring scheme. IRM 
became the central tool of the monitoring system. The monitoring sectors were reduced to the 
following:  Agriculture,  Social  and  Health,  Political  Criteria,  Environment,  Internal 
Market/Transport, Public Finance and Customs, Justice and Home Affairs. 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  of  the  Phare  and  Transition  Facility  programmes  lies 
with the National Aid Coordinator (NAC) in the National Development Agency. Activities in 
this  area  were  carried  out  on  the  basis  of  the  Evaluation  Plan  on  decentralisation  of 
Monitoring and Evaluation contracted by the NDA on the ground of the requirements of the 
European Commission. 

The independent evaluator prepared Interim Evaluation reports in order to evaluate all Phare 
sectors  in  2007.  The  evaluator  prepared  also  the  Country  Summary  Evaluation  Review 
(CSER) for the JMC of February and June 2007. 

The conclusions available from the Interim Evaluation reports are that, on the whole, the EU 
assistance  has  been  well  implemented,  and  this  assistance  has  satisfactory  supported  the 
institution building related to the accession process.  

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Depending  on  the  sector,  the  effectiveness  was  considered  satisfactory  and  management 
efficiency  to  overcome  delays  adequate.  The  contracting  and  implementation  were  still 
lagging behind the originally planned schedule.  

10. 

KOSOVO (UNDER UNSCR 1244/99) 

10.1.  The year in review 

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. 

Macroeconomic developments and structural reforms 

Kosovo's official GDP per capita was 1118/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. 

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 
priorities is encouraged and monitored through the STM. 

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10.2. 

Financial assistance in 2007 

Programmes launched 

As of 2007 the CARDS programmes were replaced by the new Instrument for Pre-accession 
Assistance. No new programmes were launched. 

Overview of programmes implemented 

While 2007 is the first year of a new financial assistance programme, the Instrument for Pre-
Accession  (IPA),  the  European  Agency  for  Reconstruction  (EAR)  remained  responsible  for 
the implementation of the ongoing EC assistance under the CARDS instrument, amounting to 
some €170 million and involving over 80 projects. 

The  main  developments  of  the  CARDS  programme  managed  by  the  European  Agency  for 
Reconstruction in 2007 include the following: 

Enhancing economic and social sustainability of minority communities  

The  CARDS  funds  are  supporting  employment  generation  and  community  development  in 
disadvantaged  minority  communities,  directly  assisting  the  returns  process  in  coordination 
with the Kosovo government and United Nations Mission in Kosovo (UNMIK). This requires 
a  direct  involvement  at  the  field  level,  providing  direct  support  for  the  resettlement  and 
stabilisation  of  returnees  in  their  communities.  At  the  same  time,  it  is  also  necessary  to 
provide  assistance  at  the  central  level,  building  the  institutional  capacity  of  the  Ministry  of 
Communities and Returns to effectively coordinate the process. A special emphasis was put 
on assisting the reconstruction of Kosovo’s religious sites damaged in March 2004.  

Building democracy through media and civil society 

The  CARDS  Programme  contributes  to  strengthen  skills  and  professional  standards  of 
journalists and media operators in Kosovo through an ad hoc programme aimed at developing 
the  media  sector  to  operate  as  an  independent,  responsible  and  efficient  service  for  all 
Kosovo’s  communities.  The  civil  society  programme  aims  to  build  the  capacity  of  civil 
society  organisations  (including  local  NGOs,  the  social  partners,  and  community  and 
professional  associations)  to  play  a  key  role  in  the  development  of  the  economic  and 
democratic governance.  

Guiding Kosovo on the path towards Europe 

CARDS  Programme  continues  to  build  the  institutional  capacity  of  the  PISG  (Assembly, 
ministries,  and  municipalities)  to  more  effectively  perform  their  governance  roles  and  to 
strengthen the rule of law, in line with European Partnership priorities and EU best practice 
approaches,  while  also  taking  into  account  the  issues  arising  from  the  gradual  transfer  of 
competencies  from  UNMIK.  Priority  interventions  focused  on:  providing  further  support  to 
the  Agency  for  European  Integration;  building  the  professionalism  of  the  civil  service; 
improving  public  finance  management;  providing  sector  support  to  build  up  institutional 
capacity in the justice sector; reforming the juvenile justice system; and further strengthening 
border and boundary management. 

Fighting poverty through sustainable industrial and rural development 

The  CARDS  economic  and  social  development  programme  aims  to  promote  sustainable 
development as a key step in combating poverty. Assistance is provided to increase domestic 
and foreign direct investment; develop a quality standards infrastructure to improve industrial 
competitiveness  and  exports;  support  enterprise  development  in  disadvantaged  areas  and 
among  marginalized  groups;  strengthen  corporate  finance;  proceed  on  the  privatisation 
process and incorporate public owned utilities. The development of rural economy is targeted 

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through further institution building support to the Ministry of Agriculture, Forestry and Rural 
Development,  and  the  support  to  improve  natural  resource  management.  The  EU's 
commitment  towards  economic  sustainability  is  tackling  two  more  key  sectors:  as  concerns 
Kosovo’s transport policy, CARDS programme supported the preparation of a strategy based 
on the multimodal transport approach; the establishment of a demand-driven system, based on 
closer  ties  with  the  business  sector,  is  instead  driving  the  Agency’s  effort  assisting  the 
Vocational Education and Training sector. 

Shaping Kosovo’s participation in the Energy Community of South East Europe 

The  rehabilitation  of  the  energy  sector  remains  a  key  pre-condition  for  the  economic 
development of Kosovo. The CARDS Programme in this field is tackling different aspects at 
the same time: assisting the Ministry of Energy and Mining and the Energy Regulatory Office 
to formulate and implement energy policies; strengthening the capacities of the independent 
Transmission System and Market Operator (TSMO) to be a reliable partner of the south-east 
Europe  energy  community;  providing  support  to  initiatives  aimed  at  expanding  production 
capacities (like the World Bank’s Power Lignite Initiative). At the same time the Agency is 
providing  both  capacity  building  assistance  to  strengthen  the  human  resources’  quality  and 
skills,  as  much  as  concrete  technical  support  to  complete  the  physical  rehabilitation  of  the 
infrastructural and mechanical resources of the energy company KEK. 

Strengthening local government to support democratic governance 

The CARDS support to local governance follows a cross-sector approach. Projects providing 
assistance  to  local  government  institutions  can  be  found  in  different  operation  sectors, 
reflecting  the  multi-faceted  responsibilities  increasingly  assumed  by  local  authorities.  The 
programme assisted 21 of the 30 Kosovo municipalities in preparing their local development 
strategies, with a specific emphasis on the rural development aspect. Rural development was 
also the objective of two pilot projects run in cooperation with municipalities to test modern 
market-based approaches to land consolidation. Reconstruction of physical infrastructures is 
the  main  objective  of  several  municipal  development  projects  under  implementation  in  all 
municipalities  that  achieved  sensitive  progresses  in  fulfilling  the  UN  Standards  for  Kosovo. 
At  the  central  level,  the  CARDS  Programme  is  building  the  institutional  capacity  of  the 
Ministry  of  Local  Government  to  effectively  perform  its  mandate  and  providing  hands-on 
advice directly to the municipalities to improve service delivery to citizens. The development 
of an integrated Public Investment Programme is also providing support to local government 
reforms and will ultimately improve the delivery of public services at the local level.  

CARDS management performance 

The assistance provided by the European Union - including the CARDS programme is aimed 
at  facilitating  Kosovo’s  progress  towards  the  creation  of  a  democratic  and  multi-ethnic 
society. During 2007 the EAR with the support of the European Commission has managed to 
contribute  to  the  achievement  of  this  overarching  objective  through  the  projects  mentioned 
above. Only in 2007 EAR managed to contract more than € 70 million and disburse more than 
€  51  million  of  the  CARDS  Programme.  The  cumulative  portfolio  managed  by  the  EAR  in 
Kosovo  amounts  to  €1.1  billion.  As  of  31  December  2007,  99%  of  these  funds  had  been 
contracted and 93% paid. Almost 87% of the CARDS 2006 programme has been contracted, 
thus showing the Agency’s capacities to deliver, quickly and effectively, quality assistance in 
line with EU priorities for Kosovo. 

Challenges & other issues 

The Agency  for  European Integration as a co-ordination body for  EU  integration  matters 
still needs support to develop its administrative capacity. 

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Efficiency of Public Administration in Kosovo is gradually increasing, however, the overall 
performance still remains weak in relation to policy-making, and foregoing strategic planning, 
and legislation implementation and enforcement.  

There are several gaps identified limiting Access to Justice for vulnerable groups. The report 
assessing the “Access to Justice for Minority Communities in Kosovo”, released in July 2007, 
while  praising  the  good  legislative  framework  existing  in  Kosovo  to  grant  protection  of 
minorities’ rights, underlines that the implementation of the relevant norms is still quite low.  

Institution Building highlights 

The CARDS programme during 2007 has continued supporting the institutions of Kosovo by 
building their capacity to effectively perform their mandates. Some of the highlights covering 
the reporting period include: 

•  In  close  coordination  with  the  EU  Police  and  Justice  Planning  Team  in  Kosovo,  the 
CARDS  Programme  is  providing  support  to  the  Ministry  of  Justice,  with  a  view  to 
develop  and  strengthen  the  justice  structure  in  order  to  guarantee  an  area  of  freedom, 
security  and  justice  for  all  Kosovo  citizens,  in  accordance  with  EU  standards  and  best 
practices;  

•  Supporting  the  Ministry  of  Internal  Affairs  (MoIA)  to  facilitate  a  smooth  transfer  of 
powers from UNMIK to the Ministry established by the end of 2005. In cooperation with 
UNICEF  a  joint  project  was  launched  to  reform  of  the  juvenile  justice  system.  The 
project is aimed at establishing a juvenile justice system based on children’s rights and to 
promote a juvenile crime prevention programme; 

•  Improving  border/boundary  management  in  Kosovo  in  order  to  facilitate  the  flow  of 
goods  and  people  in  the  region,  while  combating  trans-national  crime  and  improving  the 
level of inspection and border/boundary control, in line with the Guidelines for Integrated 
Border  Management  in  the  Western  Balkans.  This  includes  establishing  the  Integrated 
Border  Management  (IBM)  system  and  infrastructure  works  at  three  border  police 
stations; 

•  Assisting  local  institutions  to  combat  financial  and  economic  crime  including;  money 

laundering; financing of terrorism; and confiscating the proceeds of crime;  

•  The Modernisation of Kosovo Courts which rolled out a Case Management Information 
System  to  all  minor  offence,  district  and  municipal  courts,  the  Supreme  Court  and  the 
Public Prosecutors Offices; 

•  Rehabilitation of the Dubrava Detention Centre and building new workshops to be used 
for training detainees, possibly helping them to return to a gainful employment after their 
time in the centre;  

•  Support  to  the  Statistical  Office  of  Kosovo  (SOK)  through  several  components:  to 
further  improve  the  regular  production  and  dissemination  of  relevant,  accurate  and 
comparable official statistics and support to SOK to prepare for the population and housing 
census.  CARDS  funds  are  also  supporting  via  a  grant  to  the  Council  of  Europe  the 
International Monitoring Operation chaired by Eurostat to observe and provide guidance in 
all phases of the census 

•  Support  to  local  government  institutions  can  be  found  in  different  operation  sectors, 
reflecting  the  multi-faceted  responsibilities  increasingly  assumed  by  local  authorities. 
Complementary to this is the €15 million programme to upgrade the social and economic 
infrastructure of a number of municipalities throughout Kosovo; 

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•  Support to the public finance management sector including the second phase of the project 

to support the Office of the Auditor General (OAG) of Kosovo;  

•  Support to Kosovo’s institutions to implement a coherent public investment programme 
to  further  strengthen  the  capabilities  of  the  Ministry  of  Economy  and  Finance  and  the 
budget  organisations  in  all  ministries  and  municipalities  to  better  manage  and  control 
public spending; 

•  Support  to  the  Public  Procurement  System  contributed  to  the  establishment  of  a 

professional and efficient public procurement system, in line with the EU acquis; 

•  Supporting  the  Public  Internal  Financial  Control  and  Internal  Audit  with  a  view  to 
increase the capacity of the internal audit function of Kosovo Government and to improve 
the effectiveness and efficiency of public spending;  

•  Supporting  Kosovo  on  the  path  towards  Europe  by  building  the  capacities  of  the 
government to more effectively perform their governance in line with the EU partnership. 
This  includes  the  project  called  Capacity  Building  on  European  Integration  (CBEI) 
which  aims  at  strengthening  the  capacity  of  Kosovo  institutions  to  implement  EU 
compatible reforms and the Young Cell Scheme project which provides scholarships for 
Kosovo  graduate  students  to  attend  Master’s  degrees  in  European  Studies  at  some  of 
Europe’s most prominent universities. 

10.3.  Results and impact 

Monitoring and Evaluation Reports in 2007 - Lessons Learned 

The  EAR  /  Advisor  for  Monitoring  and  Social  Development  Programming  and  Quality 
Assurance  Division,  has  produced  a  thorough  paper  on  lessons  learned  from  Monitoring 
(covering  the  period  from  2004-2006)  since  the  adoption  of  the  Monitoring  Action  Plan  in 
September 2004. 

The  paper  was  compiled  based  on  careful  study  of  all  Monitoring  Reports/Fiches  produced 
since  September  2004,  and  the  lessons  introduced  there  focus  on  those  problems  which  are 
both  recurrent  (as  they  have  been  coming  up  repetitively  in  a  number  of  projects)  and 
structural  (in  the  sense  that  they  permeate  a  diversity  of  sectors  and  are  encountered  in  a 
number of Operational Centres, including Pristina Centre as well). 

The Monitoring Reports and Project Fiches produced in 2007 for the projects implemented in 
Kosovo have been thoroughly studies by the MN& E team in Pristina and they have come up 
with  a  conclusion  that  a  considerable  improvement  has  been  achieved  in  most  of  the  issues 
addressed  in  the  above  mentioned  paper,  while  some  others  remain  still  valid  without 
significant  changes.  It  is  worth  to  emphasise  the  very  good  progress  done  in  some  of  the 
projects  in  the  treatment  of  cross-cutting  issues  (CCIs).  Besides  the  CCIs  treatment,  other 
issues  which  have  been  substantially  improved  in  the  past  months  are:  the  quality  of 
contractor’s  reporting,  visibility,  even  ToRs  which  have  been  drafted  in  a  more  reasonable 
manner.  This  is  mainly  a  contribution  of  the  monitors’  permanent  recommendations  to 
Programme  Manager  and  Task  Managers  to  the  relevant  issues,  including  here  proper 
integration of cross-cutting issues. 

Sectors with positive results 

Return and Reintegration 

The  Agency  facilitated  the  return  of  27  families  belonging  to  the  Roma,  Ashkali  and 
Egyptian communities to their rebuilt houses in the Kline/Klina municipality. 

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An  additional  78  projects  were  approved  to  receive  grants  aimed  at  securing  or  creating 
jobs  within  minority  communities  through  the  programme  supporting  Stabilisation  of 
Communities (SSC), bringing the total to 152 approved projects. 

Justice and Home Affairs 

The  EAR  managed  programme  supporting  the  Ministry  of  Justice  released  two  reports 
assessing  the  “Access  to  Justice  in  Gender  related  cases”  and  the  “Access  to  Justice  in 
Environment  related  cases”.  While  the  first  report  praised  the  efforts  made  by  the 
Government  of  Kosovo  to  promote  gender  equality,  the  second  found  that  citizens  lack 
sufficient  knowledge  about  the  exercise  of  their  environmental  rights.  It  also  found  that 
lengthy  and  expensive  legal  procedures  are  preventing  the  most  vulnerable  groups  from 
bringing environmental legal disputes before the courts. 

The  project  to  establish  an  Integrated  Border  Management  system  was  completed  in 
December. It will strengthen the fight against trans-border crime while facilitating legitimate 
border flows. 

The project to modernise Kosovo’s courts was completed by the end of December. Thanks to 
the  project,  all  Courts’  and  Prosecutors’  offices  are  now  using  new  software  for  registering 
and tracking cases facilitating an improved and faster processing of judicial cases. 

Rural Development 

A  new  primary  school  located  in  Fushë  Kosovo/Kosovo  Polje  was  inaugurated  at  the 
beginning of November. The new building can accommodate 322 pupils in conditions that are 
appropriate for educating children. 

The  Marketing  Support  Project  aiming  at  establishing  a  financially  sustainable  and 
practical  Marketing  Information  System  in  the  Kosovo  agribusiness  sector  was 
successfully completed in December. The project was implemented in close cooperation with 
the Ministry of Agriculture, Forestry and Rural Development (MAFRD). 

The magazine “Forbes”, one of the world’s leader source of financial information and news, 
included  the  “Kreditimi  Rural  i  Kosove”  LLC  (formerly  Rural  Finance  Project  of  Kosovo) 
amongst the “World’s Top 50 Microfinance Institutions”. The “Kreditimi Rural i Kosove” 
is a beneficiary of EC-funded technical assistance. 

Success story 

There are a number of projects under the CARDS programme which could be considered as 
successful  stories  based  on  some  of  the  issues  raised  in  the  lessons  learned  document 
produced  by  the  monitoring  team.  There  are  a  few  of  them  which  are  characterised  by  an 
excellent  up-take  and  mainstreaming  of  CCIs.  Below  are  three  brief  descriptions  on  three 
projects which are considered to be success stories in 2007. 

Support to the Assembly 

The Parliament is the bulwark of any democracy. Since 2000, the EU has provided some €3.5 
million to support the Assembly of Kosovo, strengthening its ability to take on its important 
role in a participatory and transparent way and in close cooperation with civil society. An EU-
funded  project  being  implemented  in  2007  is  bringing  the  experience  of  EU  parliaments  to 
Kosovo. Under the project, officials from the Kosovo Assembly, the Prime Minister’s Office 
and  the  Ministry  of  Labour  recently  completed  training  on  drafting  legislation  and  on 
harmonising laws with the EU. The €1.5 million, two-year project started in January 2006 and 
is implemented by a consortium composed of four European Parliaments: France’s Assemblée 

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Nationale,  Germany’s  Bundestag,  the  Chambre  des  Représentants  de  Belgique  and  the 
National Assembly of Slovenia, plus the Institute International de Paris La Défense. 

Construction of three border police station buildings 

The EU has completed the €1.3 million construction of three border police station buildings at 
border crossings with Albania. The construction of the three stations (Qafa e Prushit and Qafa 
e  Morines  in  Gjakova/o  municipality,  and  Vermnica  in  Prizren  municipality)  is  part  of  the 
effort to improve overall border management in Kosovo. Upgrading infrastructure at border 
crossings is one of three components prepared under an EU project to support the transfer of 
responsibilities from international to local police, develop border management in accordance 
with Schengen standards and review current applicable legislation. 

Fund for agro-processing and Industrial revitalisation (FAIR) 

Fighting  unemployment  remains  a  major  challenge  in  Kosovo,  with  the  EU  providing 
substantial  aid  for  the  least  developed  areas.  The  Fund  for  Agro-processing  and  Industrial 
Revitalisation (FAIR) offers financial and technical support to entrepreneurs, selected through 
a  competitive  application  process.  Both  existing  and  new  businesses  may  apply  for  FAIR 
grants  ranging  from  50,000  to  200,000  EUR  for  technological  investments  in  the 
manufacturing  sector.  The  proposed  investment  must  be  located  in  the  northern  part  of 
the  municipalities  of  Mitrovicë/Mitrovica,  Zveçan/Zvecan, 
Kosovo, 
Vushtrri/Vucitrn, Zubin Potok and Leposavic/Leposaviq. The entrepreneurs selected will also 
receive professional advice in areas such as finance, production, marketing and management. 
FAIR is funded by the European Union, co-funded by the Grand Duchy of Luxembourg and 
implemented by the International Organisation for Migration (IOM). 

specifically 

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11. 

LATVIA 

11.1. 

Summary 

In 2007, Latvia continued to implement successfully the post-accession assistance to address 
remaining  needs  related  to  institution  building  for  the  implementation  of  the  acquis,  in  line 
with the Extended Decentralised Implementation System (EDIS).  

Since  May  2004  procurement  is  carried  out  under  the  entire  responsibility  of  the  Latvian 
authorities applying national procurement rules. The Ministry of Finance, Central Financing 
and Contracting Agency (CFCA) and the Society Integration Foundation are fully responsible 
for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continued to exercise the programming function for the 
Transition  Facility  programmes  and  monitoring  of  both  Phare  and  Transition  Facility 
Programmes. The National Authorizing Officer (NAO) carries out the financial supervision.  

Since the closure of the Phare Transition Team in the Representation in Riga as of July 2005, 
residual  functions  related  to  the  exercising  of  Commission  responsibilities  (monitoring, 
payments, closure, etc.) have been fully exercised by the Commission headquarters. 

11.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
72.59 % of the funding has been disbursed. The Latvian authorities requested no extension for 
the 2004 programme. The payments can still be executed within 6 months after the expiry of 
the contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 92.07% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €19  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Latvia  from 
Transition Facility programmes (2004-2006).  

Phare and Transition Facility assistance continue to be successful in the fields of civil society 
and society integration, with long term impact on cooperation among different ethnic groups 
and  civil  society  non-government  stakeholders.  Other  institution  building  sectors  with 
satisfactory  results  include  projects  related  to  police  training  and  some  institutional  fine 
tuning  in  the  area  of  health  and  safety  at  work  with  the  strengthening  of  several  related 
institutions and the Central Statistical Bureau.  

In  2007,  Twinning  continued  to  be  the  main  implementing  instrument  in  many  areas  of  the 
acquis in Latvia and has helped the Latvian administration to further strengthen its capacities 
to implement and enforce EC legislation. On the whole Latvia has made good use of Phare 
and  Transition  Facility  assistance.  Institution  building  with  the  support  of  Phare  and  the 
Transition Facility and investment with Phare assistance progressed well. 

11.3.  Results and Impact 

State of play for JMC / SMSC development 

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In 2007, one Joint Monitoring Committee (JMC) meeting took place in January 2007, in line 
with  the  revised  JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which 
established  an  integrated  monitoring  and  evaluation  system  over  the  programmes  under 
implementation. The second JMC meeting was by written procedure in September 2007. 

Each  monitoring  sector  is  covered  by  the  relevant  Sectoral  Monitoring  Sub-Committee 
(SMSCs). Each SMSC normally meets twice a year in accordance with the annual schedule 
agreed  within  the  JMC.  Two  rounds  of  SMSC  meetings  took  place  in  2007,  the  first  round 
took place in April and May 2007, the second round was organised in October 2007. The 13 
monitoring  sectors  cover:  Civil  Society;  Society  Integration;  Justice;  Home  affairs;  CBC; 
Agriculture; Environment and nuclear safety; Energy and Market and Anti-trust surveillance; 
Public  Finance;  Statistics;  Regional  development;  Social  matters;  Health  sector.  For  each 
sector a monitoring report is produced. 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  and  evaluation  of  the  Phare  programme  in  Latvia  lies 
with  the  Ministry  of  Finance  (MoF).  A  new  contract  with  the  independent  evaluator  was 
signed in August 2007 for a duration of 12 months. 

In  2007,  two  consolidated  monitoring  reports  were  issued  –  one  for  the  JMC  meeting  in 
January and one for the JMC in September. The reports provide a consolidated country review 
of  the  findings  of  the  Interim  Evaluations  finalised  in  2007.  Two  consolidated  reports 
concluded  that  Transition  Facility  assistance  has  supported  successfully  Latvia's  accession 
process.  Transition  Facility  assistance  is  in  Latvia  highly  relevant,  the  projects  are  well 
adapted to beneficiaries' needs, and they correspond to the needs in the sectors. The efficiency 
of  projects'  implementation  needs  some  further  attention;  however,  the  impact  of  the 
evaluated projects is significant. 

12. 

LITHUANIA 

12.1. 

Summary 

In  its  third  year  of  accession,  Lithuania  continued  to  implement  successfully  the  post-
accession  assistance  to  address  the  remaining  needs  related  to  institution  building  for  the 
implementation of the acquis, in line with the EDIS. 

Since May 2004 procurement is carried out under the entire responsibility of the Lithuanian 
authorities applying national procurement rules. The Ministry of Finance, Central Programme 
Management  Authority  (CPMA)  is  now  responsible  for  ex-ante  control  and  twinning.  The 
CPMA is fully responsible for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continued to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision.  

Since  the  closure  of  the  Phare  Transition  Team  in  the  Representation  in  Vilnius  as  of  July 
2005, residual functions related to the exercising of Commission responsibilities (monitoring, 
payments, closure, etc.) have been fully exercised by the Commission headquarters. 

12.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

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At the end of the period for execution of contracts for the 2004 Transition Facility 70.64 % of 
the funding has been disbursed, while one project has been extended and was on-going. The 
payments  can  still  be  executed  within  6  months  after  the  expiry  of  the  contracts  execution 
period. 

–  TF2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 97.33% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €36  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Lithuania  from 
Transition Facility programmes (2004-2006).  

During  the  period,  there  was  substantial  overall  progress  towards  the  achievement  of 
objectives and results of the EU assistance. TF 2004 projects were successfully completed and 
mostly  achieved  its  results.  The  Unallocated  Envelope  under  the  TF  2005  programme  was 
successfully  contracted,  8  projects  were  approved.  Assistance  has  been  provided  and 
knowledge shared in the fields of social security, sustainable agriculture,  customs,  maritime 
safety etc. 

12.3.  Results and Impact 

State of play for JMC / SMSC development 

In 2007, two JMC meetings took place in March and October 2007. At these meetings issues 
such  as  further  improvement  of  project  management  and  reporting  were  discussed  and 
proposals for remedial actions were made. 

Each  monitoring  sector  is  covered  by  the  relevant  Sectoral  Monitoring  Sub-Committee 
(SMSCs). In 2007 1 round of SMSC meetings took place from February until August 2007. 
The  sectors  cover  Agriculture  and  Fisheries,  Justice  and  Home  Affairs,  Nuclear  Safety, 
Energy  and  Transport,  Public  Administration,  Public  Finance  and  Customs,  Environment, 
Internal Market and Statistics. For each sector a monitoring report is produced. 

M&E Reports in 2007 (lessons learned) 

Overall responsibility for monitoring and evaluation of the Phare/TF programmes in Lithuania 
lies with the NAC Office which is in the Ministry of Finance.  

The  final  report  of  the  project  2004/016-925-05-01  'Evaluation  of  EU  funded  programmes 
(2006-2007)' states that the IE of Phare and TF assistance in 2006-2007 showed more than 2/3 
of  the  recommendations  were  fully  or  largely  implemented,  less  than  1/4  were  partly 
implemented  and  a  small  part  of  recommendations  lost  their  relevance  or  there  were  no 
information on their status. The largest number of partly implemented recommendations was 
in the sector of Agriculture. 

The  Country  Evaluation  Summary  Report,  prepared  in  February  2007,  indicated  that  taking 
into consideration the implementation results of the Phare and Transition Facility Programmes 
it can be concluded that the overall programme implementation performance is good. Taking 
into  account  that  no  interim  evaluations  of  the  programmes  were  foreseen  in  this  reporting 
period,  it  has  been  agreed  to  replace  the  preparation  of  the  CSR  by  conducting  the  interim 
evaluation  of  the  Agriculture  sector  which  covers  quite  a  big  number  of  projects  under 
implementation. 

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13. 

MALTA 

13.1. 

Summary 

In 2007, Malta continued to implement successfully the post-accession assistance to address 
the remaining needs related to institution building for the implementation of the acquis, in line 
with the EDIS. 

Since  June  2004  implementation  is  carried  out  under  the  entire  responsibility  of  Maltese 
authorities  applying  national  procurement  rules.  The  Department  of  Contracts  (DoC)  within 
the Ministry of Finance is fully responsible for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continued to exercise monitoring of both Pre-accession 
and Transition Facility Programmes. The National Authorizing Officer (NAO) carries out the 
financial supervision.  

Since the closure of the Phare Transition Team in the Representation in Valletta as of January 
2005, DG Enlargement continues to exercise the residual functions related to the Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

13.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
80.36  %  of  the  funding  has  been  disbursed.  The  Maltese  authorities  requested  no  extension 
for the 2004 programme. The payments can still be executed within 6 months after the expiry 
of the contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 87.29% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €21  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Malta  from 
Transition Facility programmes (2004-2006).  

In  2007,  Malta  continued  the  implementation  of  Transition  Facility  projects.  Overall,  the 
implementation  has  been  rather  successful  and  many  remaining  needs  as  regards  the 
application  of  acquis  were  addressed.  The  projects  also  contributed  to  the  enhanced 
administrative capacity in Malta's public service. The TF support involved projects in the area 
of  market  surveillance,  health  and  safety,  intellectual  property,  border  control,  assistance  to 
the  Malta  Maritime  Authority  and  justice  sector,  social  security  coordination,  improving  air 
quality, food safety, information security, etc.  

In  the  context  of  implementation  and  achievement  of  results  the  project  2004/16762.05.01 
"Capacity  Building  in  the  Food  and  Veterinary  Regulation  Division,  MRAE"  should  be 
highlighted,  as  according  to  external  monitoring  experts,  this  was  a  very  successful  project 
and was one of the best examples of the EU Twinning exercise.  

Regarding  Unallocated  Institution  Building  Facility,  Malta  has  fully  absorbed  the  funds 
available under TF 2004, and partially under TF 2005. The small-scale projects, implemented 

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under this facility have proved to be very efficient and have generated good and sustainable 
results.  

13.3.  Results and Impact 

State of play for JMC / MSC development 

In 2007, two JMC meetings took place in May and November 2007. In connection with the 
monitoring simplification procedure, a new JMC mandate was introduced in Malta in 2007, 
which established an enhanced monitoring and evaluation system over the programmes under 
implementation. 

For  the  year  2007,  two  rounds  of  Monitoring  Sub-Committee  SMSC)  meetings  have  taken 
place  in  March  and  October  2007.  Due  to  small  number  of  programmes,  the  Maltese 
authorities have abolished the sector-approach and review each project separately.  

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  and  interim  evaluation  of  the  Pre-Accession  and 
Transition Facility programmes in Malta lies with the NAC services located at the Office of 
the Prime Minister (OPM). Activities in this area were carried out on the basis of the Action 
Plan  on  decentralisation  of  monitoring  and  Evaluation,  which  was  endorsed  by  EC  in 
February 2005.  

In  2007,  two  evaluation  reports  were  released:  Country  Summary  Evaluation  Report  on  30 
April 2007 and Second Interim Evaluation report 2007 of on-going projects on 9 November 
2007. Due to the small size of the Malta programmes, the interim evaluation is carried out on 
the overall programmes and not on a sector basis.  

According to the reports in terms of relevance, the projects were assessed to be satisfactory. 
Overall, the projects were acquis related, built on previous support, addressed the needs of the 
beneficiary in terms of reinforcing technical and administrative capacities. Project efficiency 
has been assessed as satisfactory and has improved during the evaluation period compared to 
the previous reporting periods. This is much due to the enhanced cooperation of the different 
counterparts.  On  the  other  hand,  delays  in  tendering  and  contracting  have  still  affected  the 
efficiency. Effectiveness was rated as satisfactory as the majority of the projects had achieved 
or  would  achieve  its  overall  objective.  A  small  number  of  projects  encountered  some 
difficulties, mainly due to external factors, which meant some activities could not be realised. 
It  should  be  mentioned  that  one  project  implemented  by  the  Ministry  of  Health  and  two 
projects implemented by the Ministry of Finance were rated as highly satisfactory. However, 
in  some  cases  staff  turnover  still  had  an  adverse  effect  on  the  effectiveness.  Impact  and 
sustainability have been rated as satisfactory. The most important benefits include acquisition 
of knowledge and skills in implementation of the acquis and drafting the legislation, manuals 
and guidelines and equipping various institutions in order to enforce and implement acquis-
related obligations.  

However, it should be mentioned that the Maltese authorities have made continuous efforts to 
ensure  sustainability  of  the  results.  In  this  direction  measures  have  been  undertaken  to  hire 
necessary staff, to build necessary premises or to follow that the strategies or other legislative 
documents prepared within the projects will be adopted on an appropriate level.  

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14. 

MONTENEGRO 

14.1.  The year in review 

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, business people, journalists 
and tourists. 

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  declined  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.  

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 

Progress has been made towards the environmental requirements of the acquis following the 
establishment  of  an  institutional  structure  for  an  independent  Environmental  Protection 
Agency  which,  when  it  becomes  operational,  will  assume  responsibility  for  inspection, 
permitting, enforcement and dissemination of environmental data. 

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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.. 

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

14.2. 

Financial assistance in 2007 

Programmes launched 

As of 2007, the CARDS programmes were replaced by the new Instrument for Pre-accession 
Assistance (IPA). No new CARDS programmes were launched. 

Overview of programmes implemented 

Democratic stabilisation 

Internally Displaced Person (Refugees) return  

Technical assistance to help the Commissariat for Displaced Persons (MCDP) addressed the 
problems facing IDPs.  

Civil society  

The following programmes are implemented: technical assistance for trade unions to enhance 
their  capacity  to  play  a  constructive  role  in  public  administration  reform;  support  for 
partnership  projects  to  address  the  priorities  of  the  Development  and  Poverty  Reduction 
Strategy  Action  Plan,  including  the  elderly,  raising  awareness  about  women’s  reproductive 
issues; increasing employment opportunities of the disabled and integrating Roma in schools; 
training to Trade Union or Civil Servants and Judiciary.  

Good governance and institution-building 

Judiciary 

Judicial  reform  strategy  supported  by  EU  assistance  was  adopted  by  the  government.  A 
Probation Service was established in the Ministry of Justice with EU and Council of Europe 
support;  funding  was  allocated  to  the  construction  of  a  forensics  centre  while  widening 
training capacity of the Police Academy; a draft Law on data protection was prepared with the 
Ministry of Interior and relevant governmental departments. 

Border crossings 

Follow up was given to the improvement of the IT system of the Ministry of Interior; a new 
border control facility at Scepan Polje on the border with Bosnia and Herzegovina has been 
completed;  access  roads  to  Scepan  Polje  and  the  border  crossing  with  Croatia  have  been 
upgraded. 

Public administration 

The  following  activities  are  implemented:  assistance  to  the  Human  Resource  Management 
Authority;  fostering  local  government  decentralisation  ;  assistance  to  the  Ministry  of  EU 
Integration,  International  Economic  Relations  and  to  the  Secretariat  for  EU  Integration  for 

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IPA programming ; assistance to the Montenegrin Statistical Office (MONSTAT) focused on 
the National Accounts and GDP compilation in accordance to ESA 95 Standards; support to 
telecommunications  regulatory  agency  ;  technical  assistance  for  “Implementation  of 
Budgetary  and  Salary  system  Reforms”  to  the  Ministry  of  Finance,  Ministry  of  Internal 
Affairs and Public Administration and Human Resources Management Authority  

Economic and social development 

Energy 

EU  experts  helped  prepare  a  mid-term  energy  efficiency  action  plan  now  under 
implementation;  

Economy 

Support was provided to the updating of government’s Private Sector Development Strategy 
covering  the  period  from  2007  to  2010;  Turn  Around  Management  and  Business  Advisory 
Services  programmes  provided  assistance  to  small  and  rural  businesses  and  other  target 
groups, i.e. women, minorities and disadvantaged groups in less developed regions  

Environment 

Support has been provided during the preparation of the first major project to be funded by an 
EIB loan of €57 million; and upgrading of Podgorica’s wastewater treatment plant has been 
completed.  Additional  rehabilitation  of  the  coastal  region  sewerage  system  is  ongoing; 
institutional  model  has  been  agreed  for  an  Environmental  Protection  Agency  and  a  Project 
Implementation Unit, pending formal adoption of relevant legislation. 

Transport 

CARDS-funded (€3 million) road improvement projects have been completed. Additional IFI-
funded (€20 million) road and rail infrastructure projects are under implementation. 

Agriculture and fisheries 

Support to the fisheries sector in Serbia and Montenegro has assisted the public and private 
sectors  to  implement  the  National  Fisheries  Strategy;  physical  facilities  in  the  food  safety 
laboratories have been upgraded.  

Internal market 

Support has been given to the harmonisation of the legal and institutional framework of the 
public  procurement  system;  in  addition,  coordination  between  the  bodies  in  charge  of 
metrology,  standards,  testing  and  quality  (MSTQ)  under  a  common  reform  agenda  was 
achieved.  

Labour market and education 

The first EU-funded project in support of labour market reform has attained major milestones: 
(i)  a  draft  National  Employment  Strategy  (NES)  aligned  with  the  EU  2005  Guidelines  for 
Growth  and  Jobs;  (ii)  a  discussion  paper  (White  Paper)  on  what  sort  of  competences,  skills 
and attitudes the workforce in Montenegro would have to have by 2017.  

Cross-border cooperation 

Two  grant  contracts  under  the  INTERREG  III  B  CADSES  and  fourteen  under  the 
INTERREG III A Adriatic were awarded during 2007.  

CARDS management performance 

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In 2006, the European Agency for Reconstruction was given responsibility for a further €19.5 
million  in  Montenegro,  bringing  its  cumulative  portfolio  of  EC  assistance  programmes  to 
€129 million.  

By year-end 2007, 96% of this cumulative total had been contracted, and 88% spent; and 78% 
of CARDS 2006 was contracted.  

Institution Building highlights 

Supporting public administration reform and EU integration structures 

The  Agency  provided  support  for  civil  service  training  through  the  Human  Resources 
Management  Authority.  It  also  offered  assistance  to  EU  integration  structures  in  the 
Secretariat for EU integration and in line ministries for training on EU programming. 

14.3.  Results and impact 

Sectors with positive results 

Helping refugees and IDPs 

An  EU  assistance  programme  targeting  Roma  Internally  Displaced  Persons  (IDPs)  from 
informal  KONIK  settlements  facilitated  the  return  of  22  Roma,  Ashkalia  and  Egyptian 
families to Kosovo (the Municipality of Pec/Peja). The Programme also aimed at supporting 
social  inclusion  of  RAE  displaced  persons  by  organised  literacy  and  Albanian  language 
courses  for  a  total  of  80  youths  and  regular  health-related  counselling  for  80  RAE  adults, 
mostly women. 

Within  a  housing  and  economic  livelihood  assistance  programme  worth  €2.4  million, 
displaced persons in Montenegro have been provided with alternative housing solutions and 
income  generation  support.  The  project  constructed  24  prefabricated  houses  for  27  Roma 
families  living  in  the  municipality  of  Berane  and  delivered  building  material  and  income 
generation support to some 60 displaced persons.  

Economic Development  

Direct business advisory services have been provided to a total of 10 medium sized and more 
than  80  small  enterprises  through  the  Turn  Around  Management  Assistance  (TAM)  and 
Business  Advisory  Services  (BAS)  programmes  in  cooperation  with  EBRD.  More  than  two 
thirds  of  the  beneficiaries  were  SMEs  from  the  less  developed  rural  regions  of  the  country, 
and women, and SMEs owned and managed by women or representatives of minorities and 
other disadvantaged groups.  

Energy  

In the field of energy, the Government has decided to unbundle the electricity utility EPCG 
following the advice of European experts into 5 legally separate companies, in line with the 
most recent EU directives and policy on the subject. A completely independent Transmission 
Company  will  be  established  and  operational  by  the  end  of  2008,  while  the  Generation, 
Distribution and Supply companies will be first established as legally independent companies 
by  May  of  2008  within  a  holding  structure,  and  will  become  completely  independent 
companies during 2009. In turn, the Energy Regulatory Agency has successfully implemented 
the first phase of the tariff reform of the electricity sector. 

Environmental infrastructure  

The  wastewater  treatment  plant  serving  the  capital  city  of  Podgorica  has  been  fully 
rehabilitated,  with  a  view  to  minimising  pollution of  the Moraca River and the ecologically 
sensitive  waters  of  Skader  Lake.  The  qualities  of  Adriatic  coastal  waters  have  also  been 

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improved  following  the  successful  rehabilitation  of  sections  of  the  sewerage  system  of  the 
coastal region. 

Transport Infrastructure 

Traffic  congestion  during  the  tourist  season  has  been  reduced  on  the  Adriatic  coastal  roads 
following the completion of 6km of third lanes at critical sections between Petrovac and Bar. 

Catalysing IFI funding 

Support to developing the project implementation capacity of the Ministry of Transport and 
the Ministry of Environment has been instrumental in attracting additional IFI funding of €70 
million.  The  additional  funds  will  be  used  to  upgrade  the  rail  and  environmental 
infrastructure. 

Agriculture and rural development 

Major actions in the fishery sector and in animal identification and registration (bovines) have 
been  undertaken  during  2007,  with  this  being  the  baseline  for  improved  food  safety  levels. 
These actions will benefit consumers and improve the competitiveness of the agriculture and 
food sectors.  

Supporting civil society  

EU assistance significantly contributed to the development of a legislative framework dealing 
with  employment,  vocational  education  and  training  for  the  disabled.  It  enabled  access  to 
employment  opportunities  for  the  disabled  coupled  with  public  campaign  and  advocacy 
among employers.  

Internal market 

As a new sector of cooperation within the Agency’s remit in the country, the first actions in 
the Internal Market area have had a medium or small scope, paving the way to the large scale 
operations foreseen for 2008 in key domains such as quality infrastructure, trade, competition, 
state aid, consumer protection and public procurement.  

Labour market and education 

First actions have been taken in this fundamental area of social policy, which has made the 
EU  the  leader  in  the  area  of  employment  and  human  resource  development  policies.  The 
action  included  the  enhancement  of  the  educational  aspects  under  the  EU  Charter  of  Small 
Enterprises and the furtherance of labour market statistics. 

Cross-border cooperation 

Two  grant  contracts  under  the  INTERREG  III  B  CADSES  and  fourteen  under  the 
INTERREG  III  Adriatic  were  awarded  by  the  Agency  during  2007.  These  are  the  first 
projects in the area of cross border cooperation in Montenegro. They will certainly contribute 
to  the  preparation  of  further  projects,  which  are  to  meet  the  demanding  standards  of  the 
upcoming  IPA  calls  for  proposals  for  bilateral  borders  and  multilateral  actions  with  the 
participation of EU Member States. 

Success story 

Animal Identification System 

Development of the agriculture and food sector is one of the corner-stones of Montenegro’s 
economic  development  strategy.  Significant  support  has  been  provided  to  the  sector, 
exemplified by implementation of an animal identification system. Approximately €1 million 
of  EU  financial  support  in  consultancy  services  and  €0.7  million  in  supplies  (IT  hard  and 

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software, office equipment and vehicles) assisted the Veterinary Directorate and the Ministry 
of Agriculture to set up and operate the system for the identification and registration of cattle. 

In  the  European  Partnership,  cattle  identification  and  registration  is  marked  as  a  short  term 
priority  that  has  now  been  accomplished.  The  SAA  equally  refers  to  the  identification  and 
registration of sheep, goats and other animals as medium and long-term priority – this being 
the  baseline  for  better  animal  health  and  food  safety,  thus  benefiting  consumers  and  the 
development of the market economy in the agriculture and food sectors. The action has been 
decisive in enabling Montenegro to go faster than any other country in the region towards a 
sound identification and registration system, including a central electronic database. No other 
EU Member State or Western Balkan Country was able to build up its I&R system in less than 
two years, which should be assessed as a good omen for the future operations in the veterinary 
and food safety domains. 

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15. 

POLAND 

15.1. 

Summary 

In 2007, Poland continued to implement successfully the post-accession assistance to address 
the remaining needs related to institution building for the implementation of the acquis, in line 
with the EDIS. 

Since  February  2005  implementation  is  carried  out  under  the  entire  responsibility  of  Polish 
authorities  applying  national  procurement  rules.  The  Central  Finance  and  Contracts  Unit 
(CFCU),  the  Polish  Agency  for  Enterprise  Development  (PAED)  and  the  Implementing 
Authority  for  European  Programmes  (formerly  Implementing  Authority  for  Phare  Cross-
Border Cooperation Programmes, IA-CBC) are fully responsible for the daily implementation 
of the projects. 

The National Aid Coordinator (NAC) continues to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision.  

Since  the  closure  of  the  Phare  Transition  Team  in  the  Representation  in  Warsaw  as  of  July 
2005,  DG  Enlargement  continues  to  exercise  the  residual  functions  related  to  Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

15.2. 

Post-accession financial assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
75.45 % of the funding has been disbursed, while one project has been extended by 4 months 
and was on-going. The payments can still be executed within 6 months after the expiry of the 
contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on 
15 December 2007, 86.13 % of the programme had been contracted.  

–  Institution Building highlights 

A  total  of  around  €115  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Poland  from 
Transition Facility programmes (2004-2006).  

Implementation  of  Transition  Facility  in  Poland  is  considered  generally  successful  and 
projects provide notable value added. 

In  order  to  address  unforeseen  needs,  additional  assistance  from  the  Institutional  Building 
unallocated envelopes was provided for projects mainly in Public Administration, Justice and 
Home Affairs and Agriculture sectors. 

15.3.  Results and Impact 

State of play for JMC / SMSC development 

In 2007, two JMC meetings took place in June and December 2007, in line with the revised 
JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which  establish  an 
integrated monitoring and evaluation system over the programmes under implementation. 

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The  JMC  meetings  were  fruitful  and  helped  to  address  the  problems  concerning 
issues  such  as  further 
implementation  of 
simplification  of  the  monitoring  system,  improvement  of  project  management  and  reporting 
were discussed and proposals for remedial actions were made. 

the  ongoing  programmes.  In  particular, 

In  the  year  2007,  two  rounds  of  Sector  Monitoring  Sub-Committee  (SMSC)  meetings  have 
taken place. The first round of SMSC meetings took place in March-April and second round 
in  October.  There  are  six  sectors  to  be  monitored  in  Poland:  Environment  and  Transport; 
Agriculture;  Internal  Market;  Justice  and  Home  Affairs;  Public  Administration;  Regional 
Programmes (Cross-Border Co-operation, and Economic and Social Cohesion). 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  of  the  Phare  and  Transition  Facility  programmes  in 
Poland  lies  with  the  NAC  department  within  the  Office  of  the  Committee  for  European 
Integration (UKIE). Activities in this area were carried out on the basis of the Action Plan on 
decentralisation of monitoring and Evaluation, which was endorsed by EC in February 2005. 
The contract for carrying out the Interim Evaluation in the Transition Facility programmes in 
the year 2007 was signed on 17 August 2006 and expired on 15 December 2007.  

In 2007, two Consolidated Monitoring Reports were issued - one for the JMC in June and one 
for the JMC in December. The reports provide a consolidated country review of the findings 
of  the  Interim  Evaluations  and  Thematic/Ad  Hoc  evaluations  finalized  in  2007.  Two 
consolidated  reports  concluded  that  TF  assistance  has  successfully  supported  Poland’s 
accession  process.  TF  assistance  is  in  Poland  highly  relevant,  the  projects  have  been  well 
adapted  to  beneficiaries'  needs,  and  they  correspond  to  direct  needs  in  the  sectors.  The 
efficiency  of  projects  implementation  needs  some  further  attention;  however,  the  impact  of 
the evaluated  projects is significant. The reports included also recommendations concerning 
improvement of implementation system. 

The  main  conclusion  available  from  the  Thematic/Ad  Hoc  reports  is  that  the  indicators 
applied  in  the  projects  implemented  under  the  Transition  Facility  Programmes  need  to  be 
improved in many projects. The NAC has taken relevant steps to address the issue.  

16. 

ROMANIA 

16.1. 

Summary 

In  2007,  Romania  implemented  both  pre-accession  and  post-accession  assistance  to  address 
the  remaining  needs  related  to  IB  for  the  implementation  of  the  acquis,  in  line  with  the 
Extended Decentralised Implementation System (EDIS). 

Since  January  2007  implementation  is  carried  out  under  the  entire  responsibility  of  the 
Romanian authorities applying national procurement rules. Three implementing agencies are 
fully  responsible  for  daily  implementation  of  projects  (two  of  them  accredited  in  December 
2006 and one in April 2007). 

The National Aid Coordinator (NAC) continued to exercise the programming function for the 
Transition Facility programmes and monitoring of both Pre-accession and Transition Facility 
Programme. The National Authorizing Officer (NAO) carries out the financial supervision. 

16.2. 

Phare/pre-accession financial and Transition assistance in 2007 

The  Transition  Facility  has  been  established  by  the  Act  of  Accession  to  fund  certain  IB 
actions  in  Romania  to  address  the  continued  need  for  strengthening  institutional  capacity  in 
certain areas through actions which cannot be financed by the Structural funds or by the Rural 

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Development Fund. The implementation of EU assistance available under the TF is managed 
by  the  Memorandum  of  Understanding  on  the  Implementation  of  the  Transition  Facility 
signed  between  the  Romanian  authorities  and  the  European  Commission  on  5  September 
2007.  

Programming  

A total of €46,500,000 was allocated to Romania under the 2007 TF budget for Romania. 

Although the most urgent needs as regards acquis implementation have been addressed before 
Accession,  the  Transition  Facility  provides  further  support  in  order  to  consolidate  the 
functioning of administrative structures on par with those of other Member States. The 2006 
Commission Comprehensive Monitoring Reports for Romania and the continuous monitoring 
process  by  the  Commission  of  the  Romania  preparation  for  accession  constitute  the  main 
sources  of  information  for  identification  of  institutional  weaknesses  that  the  Transition 
Facility could assist in addressing. 

Following  accession,  priority  sectors  and  actions  were  identified  in  consultation  both  with 
national  authorities  and  Commission  services  on  the  basis  of  the  relevant  follow  up  actions 
from  pre-accession  monitoring  as  well  as  other  needs  for  reinforcing  institution  building 
where shortfalls are still perceived. Particular account was taken of results of the Mechanism 
for  Cooperation  and  Verification  of  progress  in  Romania  to  address  specific  benchmarks  in 
the areas of judicial reform and fight against corruption. 

The  Phare  Management  Committee  approved  the  Transition  Facility  2007  National 
Programme  for  Romania  in  5  October  2007.  The  programme  was  then  approved  by  the 
Commission through its Decision C(2007) 5793 of 2007, which was notified to the national 
authorities on 30 November 2007. 

The Transition Facility 2007 National Programme for Romania provides €46,500,000 for: 

JUSTICE FREEDOM AND SECURITY: €8.75 million 

–  Unification of the Jurisprudence of Courts and Prosecutor Offices in Romania 

–  Strengthening the Public Ministry’s Institutional Capacity 

–  Strengthening the Capacity to Fight Cyber Crime 

–  Strengthening the Capacity to Fight Economic and Financial Crime 

–  Improving the System of Romanian Judicial Statistics 

–  Strengthening  the  Romanian  Probation  System  and  the  Inter-Institutional  Cooperation  on 

Victim Protection 

–  Support for Strengthening the Insolvency Mechanism 

–  Assistance  for  Enhancing  the  Respect  of  Human  Rights  in  Prisons  and  Improving  the 

Efficiency of the Romanian Penitentiary System 

–  Enhancement of National Anticorruption Department Investigative Capacities 

–  Bringing anti-corruption capacities in Ministry of Internal Affairs up to EU Standards 

–  Building civil society support against corruption 

–  Improving the Management of Human Resources of the Romanian Police 

–  Improving the Witness Protection Capacity 

–  Fight against Money Laundering and Terrorism Financing 

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–  Improving the Administrative Capacity in the Field of Migration and Asylum 

–  Integrated IT system for the International Police Cooperation Centre 

AGRICULTURE: €4.87 million 

–  Strengthening  the  institutional  capacity  of  National  Sanitary  Veterinary  and  Food  Safety 

Authority (NSVFSA) 

–  Efficient operation of IACS/LPIS 

–  Support for Common Agricultural Policy adaptation 

–  Improving the Farm Accountancy Data Network in Romania 

–  Implementation of the milk quota system 

SOCIAL POLICIES AND EMPLOYMENT: €4.75 million 

–  Supporting the Development of Occupational Health Services 

–  Reform of the Mental Health Care System 

–  Integration  of  Youth  from  Minorities  and  Disadvantaged  Groups  into  the  Romanian 

Society 

ENVIRONMENT: €2.52 million 

–  Further  implementation  and  enforcement  of  the  environmental  acquis  in  the  IPPC  and 

SEVESO II sectors 

–  Support  in  developing  the  administration  capacity  to  manage  the  National  Green  House 

Gases (GHG) Emissions Registry 

–  Setting-up  the  National  Integrated  Registry  on  flora,  wildfauna  species  and  Romanian 

natural habitats of Community interest 

–  Support 

to  National  Environmental  Guard  administration 

to  ensure  appropriate 

enforcement of the environmental legislation at EU border 

CUSTOMS AND PUBLIC FINANCES: €10.09 million 

–  Reinforcement of the Customs Administration 

–  Public Finance Management 

–  Tax administration reform 

–  Strengthening  the  Administrative  Capacity  in  Implementing  the  EU  Acquis  within  the 

Public Procurement Field 

ENERGY AND NUCLEAR SAFETY: €3.07 million 

–  Promotion of market based instruments for E-RES, energy efficiency and emission rights 

–  Strengthening the effectiveness of the operation of the electricity market 

–  Strengthening Security of Energy Supply in Romania 

–  Radiological Safety in Uranium Mining and Milling Facilities 

–  Support  to  ANDRAD  to  develop  technical  and  technological  solutions  for  a  new 

radioactive waste treatment facility 

ADMINISTRATIVE CAPACITY: €12.45 million 

–  Administrative capacity and Cooperation and Verification Mechanism Facility 

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Implementation 

–  Phare 2004 – finalisation of payments 

At  the  end  of  the  period  for  execution  of  contracts  for  the  2004  pre-accession  programme 
62.17  %  of  the  funding  has  been  disbursed.  There  are  several  projects  whose  period  of 
execution  of  contracts  has  not  expired  yet  according  to  the  corresponding  Financing 
Agreements.  Furthermore  the  Romanian  authorities  have  requested  extensions  of  the 
execution period for the 2004 Phare programme which have been approved. 

–  Phare 2005 – rate of contracting (EDIS extensions)  

At the end of the contracting period for the 2005 National programme on 30 November 2007, 
84.88% of the programmes had been contracted. However, the contracting period of several 
projects has been extended and was on-going. 

–  Institution Building highlights 

Following the accreditation for EDIS granted on 14 December 2006, the responsibilities and 
the tasks related to twinning have been officially taken over by the Administrative Office, the 
twinning  team  within  CFCU,  DG  Enlargement  being  responsible  for  issuing  the  Steering 
Committee Opinion on twinning contracts. 20 such opinions have been issued during 2007 for 
2006  twinning  contracts  which  continue  to  be  useful  in  many  priority  areas  and  helped 
Romania to prepare for the implementation of EU policies and laws. 

In  order  to  address  unforeseen  needs,  additional  assistance  from  the  Institutional  Building 
unallocated envelopes 2005 and 2006 continues to be provided for projects mainly in Public 
Administration, Finance and Audit sectors.  

16.3.  Results and Impact 

State of play for JMC / SMSC development 

In 2007, two JMC meetings took place in July and December 2007, in line with the revised 
JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which  establishes  an 
integrated monitoring and evaluation system over the programmes under implementation. 

In  the  year  2007,  two  rounds  of  Sector  Monitoring  Sub-Committee  (SMSC)  meetings  took 
place in spring and autumn. There are 10 sectors to be monitored: SMSC 1 – ESC and CBC, 
SMSC  2  –  Justice,  SMSC  3  –  Home  Affairs,  SMSC  4  –  Finance,  SMSC  5  –  Public 
Administration,  SMSC  6  –  Agriculture  SMSC  7  –  Internal  Market  SMSC  8  –  Social 
(including minorities) SMSCs 9 and 10 – Environment and Transport. 

M&E Reports in 2007 (lessons learned) 

The overall responsibility for monitoring of the Phare programmes in Romania lies with the 
Central Evaluation Unit within the Authority for the Coordination of Structural Instruments in 
the Ministry of Economy and Finance. Activities in this area were carried out with the support 
of an Interim Evaluation Phare external contractor which started the effective implementation 
of  the  contract  in  May  2007,  on  the  basis  of  the  Interim  Evaluation  workplan  approved  in 
December  2006.  Two  extra  activities  as  thematic  evaluations  were  included  in  the  contract, 
over the revision of indicators and on procurement.  

During 2007, one consolidated Country Summary Evaluation Report was issued, for the Joint 
Monitoring  Committee  in  December,  to  support  decision  making.  The  reports  provide  a 
consolidated country review of the findings of the Interim Evaluations finalized until October 
2007 (Internal Market, Social, Environment, Transport, Public Administration, and Finance) 

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and  the  Thematic  Evaluation  of  Phare  procurement  procedures  and  practices  (proposed  in 
response to concerns over the performance of contracting). 

The  Country  Summary  Report  concluded  that  the  overall  performance  is  positive.  Phare 
supported  programmes  are  successfully  implemented,  generally  deliver  the  expected  results 
and  contribute  to  the  impacts  that  are  sought.  However,  the  delays  in  reaching  the 
implementation  stage  are  undermining  the  efficiency  and  have  a  degrading  effect  on 
relevance, effectiveness and impact.  

The main conclusion available from the Thematic report on procurement is that Romania was 
not well prepared for the implementation of Phare projects under national public procurement 
rules at the time of EDIS accreditation at the end of 2006. While a number of issues have been 
solved during 2007, some serious structural and process issues need to be urgently addressed. 
The  implementation  practices  of  the  national  public  procurement  rules  are  heavily 
bureaucratic  leading  to  less  competition  in  public  tenders.  The  majority  of  Phare  funds  are 
still  contracted  immediately  before  the  end  of  the  commitment  period  leaving  often 
insufficient time for the implementation of projects. 

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17. 

SERBIA 

17.1.  The year in review 

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 
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. 

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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. 

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. 

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

that  Serbia  has 

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 progressed well in the area 
of agriculture. However, 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, 

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whilst  further  progress  is  needed  on  agriculture  statistics  and  strengthening  administrative 
capacity. 

Some progress was made in meeting European Partnership priorities in the area of transport. 
There  were  some  improvements  in  the  energy  sector,  notably  in  liberalising  the  internal 
energy market. There has been little progress in the area of information society and media.  

There has been some progress in the field of justice, freedom and security. Visa facilitation 
and  readmission  agreements  have  been  concluded  between  the  European  Union  and  Serbia. 
There have been some improvements in the area of border control including the handover of 
state borders from the Serbian military to the Ministry of Interior. There have been improved 
results in tackling illegal migration but there has been little progress in the area of asylum. 

Money laundering constitutes a serious problem in Serbia.  

Some progress was made in fighting organised crime and important cases were brought to a 
conclusion, including the convictions and sentencing of those found guilty of the murder of 
former  Prime  Minister  Djindjic.  However,  organised  crime  continues  to  pose  a  serious 
problem for Serbia and more concerted efforts are needed.  

Progress  was  made  in  combating  trafficking  human  beings  through  improved  regional  co-
operation  and  the  adoption  of  a  national  strategy.  Serbia  has  been  recognised  as  a  source, 
transit and destination country. Serbia is still at an early stage in developing a comprehensive 
approach to combating terrorism. The ratification of a number of international conventions is 
still  pending.  There  was  little  progress  in  the  area  of  protection  personal  data  and  current 
legislation is not in line with European standards 

17.2. 

Financial assistance in 2007 

Programmes launched 

As of 2007, the CARDS programmes were replaced by the new Instrument for Pre-accession 
Assistance (IPA). No new CARDS programmes were launched. 

Overview of programmes implemented 

Democratic stabilisation 

Refugees and IDPs  

•  A  programme  to  support  minorities,  anti-discrimination  legislation  and  mediation 

launched.  

•  2nd  phase  of  institution-building  support  to  the  Commissariat  for  Refugees  and  IDPs 

launched. 

•  A  new  assistance  project  (€1.5  million)  aiming  at  providing  durable  solutions  for  the 
displaced  through  the  provision  of  housing  solutions  and  income-generation  support 
started.  

•  24 families - a total of 142 people - moved to a new block of 44 apartments built in the 
eastern Serbian town of Petrovac and 10 new apartments were handed over to IDPs who 
had lived in a collective centre in Jagodina. 

•  €1 million contract with the OSCE to provide targeted assistance to the Roma community 

in Serbia. 

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•  The Government  of Serbia adopted a decision  to  sign  a  Council  of  Europe  Development 
Bank (CEB) loan agreement to build 1,000 flats for refugees. It will be implemented with 
the support of a Programme Implementation Unit financed by the EC.  

Civil Society 

•  Under the Media Fund, 18 contracts with media outlets have been signed for a total of €1.8 

million. The objective is to support quality production and investigative reporting.  

•  In May, the Agency launched a project to provide technical assistance to Radio Television 
Serbia.  The  project  aims  to  support  high-quality journalism,  management  and  training  of 
RTS staff.  

•  A  €2  million  project  supporting  the  restoration,  conservation  and  access  to  the  Yugoslav 

Film Archive started.  

Good governance and institution building 

Judicial System 

•  The SENA software application for case management has been installed in Serbian courts. 

•  Following  the  delivery  in  2006  of  a  DNA  testing  laboratory,  training  for  laboratory 

personnel has been completed. 

•  A twinning project with the Ministry of Justice assisted in EU law approximation.  

Police 

•  A  twinning  project  with  the  Organised  Crime  Directorate  of  the  Ministry  of  the  Interior 

helped to modernise investigative techniques. 

•  The installation and testing of communication and IT equipment for the Organised Crime 
Directorate (€2.5 million) and Juvenile Detention Centres (€1 million) was completed. The 
delivery of equipment for prisons (€2.5 million) is ongoing.  

•  An  international  conference  was  held  to  discuss  effective  methods  of  prevention  and 

combat of World Wide Web crime. 

Border Crossings 

•  A  new  twinning  project  is  assisting  the  Ministry  of  the  Interior  to  improve  its  internal 
strategic planning capabilities, cross border policing and implementation of the Integrated 
Border Management Strategy. 

•  Works  to  reconstruct  the  Preševo  crossing  (border  with  FYROM)  started  in  the  autumn, 
whilst  the  contract  for  the  Dimitrovgrad  railway  station  site  (border  with  Bulgaria)  was 
awarded and works will start in early 2008. 

Public Administration  

•  A study visit to Slovenia took place in September for employees of the Human Resource 
Management Service, High Civil Service Council and Appeal Board of the Government. 

•  A  review  of  pay  and  grading  options  was  carried  out  and  recommendations  presented  to 
the  Ministry  of  Labour,  Employment  and  Social  Affairs,  together  with  proposed 
amendments to the draft Public Service Pay Law.  

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•  A  preparatory  study  to  support  the  reform  of  the  pension  system  in  Serbia  has  been 

launched.  

•  A €2 million project is  assisting the  Ministry of Finance to improve the budget planning 

and preparation process. 

•  A  €1.8  million  twinning  project  has  been  launched  to  strengthen  the  capacity  of  the 
Ministry of Economy and Regional Development to create, negotiate and implement trade 
policy and to negotiate international trade agreements. 

•  A €1.5 million assistance project on Consumer protection started.  

•  Phase  III  of  the  Policy  and  Legal  Advice  Centre  project  will  continue  to  provide  legal 
advice  to  the  Serbian  administration  on  such  issues  as  public  procurement,  state  aid  and 
financial services.  

•  An  assistance  project  to  the  Serbian  Statistical  Office  has  been  completed  by  the  Italian 

Statistical Office. 

Health 

•  The Agency celebrated €100 million of EU funds contracted for the Serbian health sector 

since the beginning of the Agency’s work in Belgrade.  

•  A  capacity  building  project  assisting  the  Ministry  of  Health  to  implement  a  €50  million 

emergency EIB health loan closed successfully.  

•  The project “Improving preventive services in Serbia” closed successfully. 

•  The €2.5 million project “Support to the implementation of Capitation Payment in Primary 

Health Care in Serbia” started in September. 

•  As part of a project to develop a modern Health Information System for basic health and 
pharmaceutical services, pilot tests in Pancevo have led to customisations of patients’ basic 
Electronic Health Records.  

•  A  €4  million  service  contract  for  “Training  in  Health  Service  Management”  has  been 

awarded. 

•  The Agency awarded contracts to supply equipment worth a total of €3.55 million to the 

public health laboratories.  

Local Government 

•  Under the Municipal Infrastructure Support programme, projects totalling €34 million have 

been completed or are underway in 9 municipalities across the country.  

•  The Agency launched a €20 million programme to assist local authorities in the north-east 

of Serbia, to modernise municipal administration.  

•  Technical Assistance projects supported the Ministry of Public Administration and Local 

Self Government in finalising laws on decentralisation. 

Economic and social development 

Enterprise Development 

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•  The national strategy for Foreign Direct Investments prepared by the Ministry of Economy 
and Regional Development has been developed with the assistance of experts provided by 
the programme. 

•  The  €4.5  million  programme  “Support  to  Enterprise Development and Entrepreneurship” 

closed. This included the financing of 26 projects by a dedicated fund. 

•  An EU-funded project is supplying accurate digital maps to the Serbian Geodetic Authority 

for its updating of the land register (cadastre). 

•  An  Integrated  Socio-economic  Development  Plan  based  on  the  Rehabilitation  of  the 
Middle Danube River Basin and Inland Waterway System of Serbia has been completed.  

Vocational education and training  

•  In  the  context  of  the  implementation  of  an  EIB  loan  of  €25  million  for  the  education 
sector,  an  EAR  technical  assistance  project  provided  intensive  training  to  build  loan 
management capacity within the Ministry of Education. 

•  Contracts  have  been  signed  to  supply  specialised  IT  equipment  to  VET  schools  worth 

€3.64 million. Deliveries are ongoing.  

•  Two  twinning  projects  on  Modernisation  of  the  National  Employment  Service  (€1.5 
million)  and  Support  to  Development  of  National  Employment  Policy  (€1.5  million) 
started.  

Agriculture 

•  125 vans (worth €880,000) were handed over to the Serbian Veterinary and Phytosanitary 
Directorates together with basic equipment worth €700,000 for performing veterinary and 
phytosanitary inspections at 14 border posts.  

•  A  new  €1.4  m  twinning  initiative  between  the  Serbian  Ministry  of  Agriculture  and  the 

province of Rioja will support the Serbian wine sector. 

•  A draft Rulebook for food establishments other than slaughterhouses has been produced, as 
well  as  an  action  plan  for  phased  alignment  with  the  Acquis  of  animal  waste  disposal 
practices and infrastructure.  

•  More than 30 staff of the Veterinary Directorate of the Ministry of Agriculture underwent 

training in drafting legislation aligned with the Acquis.  

•  A  procedures  manual  for  preparation  of  the  national  rural  development  programme  has 

been drafted. 

Infrastructure and energy 

•  A  capacity  building  project  for  the  transport  sector  was  completed  in  January,  with  the 

delivery of a draft Strategy and Policy for this sector. 

•  The  Agency  awarded  the  contracts  to  supervise  rehabilitation  works  of  the  (i)  Belgrade 
Gazela Bridge across the Sava River and (ii) of the E-75 motorway Belgrade – Novi Sad 
along the Corridor X. The works will be financed by an EIB/EBRD loan. 

•  The first of the major environmental improvement projects in thermal power stations – air 

filters for Kostolac A power plant (€5 million) – was successfully completed. 

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•  A contract has been signed for the procurement of the Capacity Allocation System for the 
electricity  transmission  system  operator,  and  implementation  is  underway.  Hardware  and 
software for the System has been delivered to the beneficiary EMS – Elektromreža Srbije. 

•  Works for the second major environmental project - ash disposal in Nikola Tesla B power 

plant, with a budget of €30 million – are ongoing. 

•  The pre-feasibility study for Stavalj Coal Mine and Thermal Power Plant was successfully 

completed. 

•  The  first  season  of  works  on  the  modernisation  of  District  Heating  in  five  cities  (€20 

million) has been concluded. 

•  The supply of hardware and software for the Serbia electricity market (market management 

system) has been completed, and all tests finalised. 

Environment 

•  The  Agency  launched  a  project  to  provide  technical  assistance  for  medical  waste 
management. It includes the installation in hospitals of equipment for treatment of medical 
waste.  

•  An  Action  Plan  for  the  Water  Management  Information  System  (WMIS)  has  been 

prepared. 

•  Action plans and feasibility studies for the remediation of three heavily polluted sites have 

been prepared. 

•  Training  was  provided  on  EU  accession  and  coordination  with  the  environmental  Acquis 
for staff of the Ministry of Science and inter-ministerial coordinators from other ministries. 

Regional Cooperation 

•  Under the Neighbourhood Programmes (NP) with Hungary and Romania - Implementation 

of 72 projects is ongoing. 

•  Under the CADSES programme – seven projects are under implementation. 

•  Under  the  Italy  Adriatic  Neighbourhood  Programme  2004-2006  -  17  projects  are  under 

implementation and two more are in the contract preparation stage. 

CARDS management performance 

The cumulative portfolio of CARDS programmes in Serbia is €1.288 billion. By the end of 
the year, 90% of this total had been contracted and 77% had been spent. 

Institution Building highlights 

The Serbian Development and Assistance Coordination Unit (DACU) that deals with EU and 
other  external  funds  was  transferred  from  the  former  Serbian  Ministry  of  International  and 
Economic Relations to the Ministry of Finance.  

The Government established DIS working group which started to prepare an Action Plan for 
implementation of Decentralized Implementation System in. It receives support from SIGMA 
and other donors.  

17.3.  Results and impact 

M&E Reports in 2007 - Lessons Learned 

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 List of conducted and planned evaluations 2007 (status on 31 December 2007) 

Type/ 
Code (X) 

Project- 
Programme 

Final/Mid-term 
Evaluation 

Mid-term/Final 
Evaluation 

on of the contribution by 
Serbia’s participation in the 

Energy Market 
ICB support Serbia 

Sector/ 
Location 

Energy/ 

Status 

Final Report 

Serbia, Kosovo, Montenegro 

Jan 08 

Public Administration/ 

Ongoing 

Institutional Capacity Building 

Evaluation 
Report  on  CCI 
Seminar 

Cross-Cutting 
Centres 

Issues 

all 

Cross-Cutting Issues (generic) 

Final Report 

May 07 

Mid-term 
Evaluation 

TAM/BAS 
Serbia 

programmes 

in 

SME Sector Development/ 

Ongoing 

All Centres 

One of our main concerns regarding the implementation of the assistance is the pace of public 
administration  reform  at  central  government  level.  Serbia  continued  to  exhibit  weak  inter-
ministerial  relations  which  undermined  the  implementation  policy  crucial  to  addressing  key 
socio-economic challenges (unemployment, high trade deficit) and the demands of European 
integration  (implementation  of  regulatory  and  policy  reforms  supported  under  the  CARDS 
programme).  We  have  learnt  that  alignment  of  external  assistance  with  Serbia  strategic 
planning cycles, and budgeting processes is essential. 

The European Agency for reconstruction had to work in a rapidly changing environment and 
needed to adapt swiftly to new challenges. This was addressed through training – in technical 
subjects such as economic reform, in administrative issues such as the development of skills, 
and not least in applying instruments such as Twinning. Other useful lesson was to realise the 
usefulness of reacting promptly and properly to audits, either by the Court of Auditors or by 
the EC’s Internal Audit Service, and to continually monitor and evaluate our programmes and 
projects.  

Sectors with positive results –Success stories 

EC  support  for  environment,  transport,  health,  energy,  trade  and  support  to  minorities  was 
successful. (See some examples below). 

One billion euros of EU funding contracted in Serbia 

With  the  signature  of  a  million-Euro  contract  for  a  road  construction  feasibility  study  in 
January,  the  total  amount  of  EU-funded  contracts  signed  by  the  European  Agency  for 
Reconstruction in Serbia passed the one-billion-euro mark. 

Solving the problem of ash disposal in Serbian power plants 

The majority of Serbia power stations burn coal, and Nikola Tesla power plant (“TENT B”) 
near Belgrade, produces 1.7 million tons of ash every year. The use of outdated methods of 
disposal  causes  serious  pollution  to  both  air  and  groundwater.  A  €28  million  project  will 
improve the system for transporting and depositing the ash, with positive effects on the health 
of the local population. The project was officially launched on 3 October. 

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District heating projects in Serbia 

Five Serbian cities have signed agreements with the EAR to reconstruct, improve and extend 
key parts of the central heating systems. The peak demand for electricity in Serbia is driven 
by the use of electricity for space heating in housing, so increasing the share of district heating 
has the effect of reducing that peak demand.  

New equipment for Public Health Institutes  

New  equipment  for  laboratories  in  Serbian  public  health  institutes  was  delivered.  The 
equipment,  worth  €1.4  million,  will  improve  the  routine  laboratory  work  and  enhance  the 
quality of services in 30 public health laboratories. 

Facilitating trade flows 

A  €1.8  million  twinning  project  will  strengthen  Serbia’s  capacity  to  create,  negotiate  and 
implement trade agreements. The project began in November and supports Serbia in enforcing 
foreign  trade  law,  implementing  the  Stabilisation  and  Association  Agreement  (SAA),  and 
speeding up the country’s entry into the World Trade Organisation (WTO).  

Modernising Serbia’s southernmost border crossing  

Building  works  have  started  at  the  Preševo  border  crossing  between  Serbia  and  the  Former 
Yugoslav Republic of Macedonia. The first phase of works will cost €5.6 million and will last 
14 months. The crossing is located on the E75 – a key part of European transport corridor X.  

Targeted assistance to the Roma community in Serbia 

A €1 million contract with OSCE to provide targeted assistance to  the  Roma  community in 
Serbia  started.  The  programme  is  consistent  with  the  Poverty  Reduction  Strategy  of  the 
Government and the developmental goals pursuant to the Decade of Roma Inclusion, 2005-
2015. 

18. 

SLOVAKIA 

18.1. 

Summary 

In  2007,  Slovakia  continued  to  implement  successfully  the  post-accession  assistance  to 
address  the  remaining  needs  related  to  institution  building  for  the  implementation  of  the 
acquis, in line with the EDIS. 

Since  October  2004  implementation  is  carried  out  under  the  entire  responsibility  of  Slovak 
authorities  applying  national  procurement  rules.  The  Central  Finance  and  Contracting  Unit 
(CFCU),  the  Regional  Development  Support  Agency  (RDSA)  and  the  National  Agency  for 
Development  of  Small  and  Medium  Enterprises  (NADSME)  are  fully  responsible  for  the 
daily implementation of the projects. 

The  National  Aid  Coordinator  (NAC)  continues  the  monitoring  of  both  Phare  and  TF 
Programmes. The National Authorizing Officer (NAO) carries out the financial supervision.  

Since  the  closure  of  the  Representation's  Phare  Transition  Team  in  Bratislava  in  July  2005, 
DG  Enlargement  exercises  residual  functions  related  to  the  Commission  responsibilities 
(monitoring, payments, closure, etc.) in line with the Financial Regulation. 

18.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

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At the end of the period for execution of contracts for the 2004 Transition Facility programme 
87.82 % of the funding has been disbursed. The Slovak authorities requested no extension for 
the 2004 programme. The payments can still be executed within 6 months after the expiry of 
the contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 89.89% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €29  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Slovakia  from 
Transition Facility programmes (2004-2006).  

Implementation  of  Transition  Facility  in  Slovakia  is  considered  generally  successful  in  and 
projects provided notable added value. 

The Twinning instrument continues to be used successfully in many priority areas and helped 
Slovakia to prepare for the implementation of EU policies and laws. 

18.3.  Results and Impact 

State of play for JMC / SMSC development 

In 2007, two JMC meetings took place in January and July 2007, in line with the revised JMC 
Mandate introduced in the new Member States in May 2004, which established an integrated 
monitoring and evaluation system over the programmes under implementation. 

Further  to  the  simplification  of  the  monitoring  system  in  Slovakia,  the  SMSCs  were  not 
abandoned,  since  they  were  considered  as  an  effective  tool  with  higher  level  of  members’ 
decision-making power. The decreased amount of ESC projects effected the merging of two 
sectors, which resulted in the following monitoring sectors: Justice, Home and Social Affairs 
and Cross-border Cooperation. 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  and  evaluation  of  the  Phare  and  Transition  Facility 
programme  in  Slovakia  lies  with  the  Aid  Co-ordination  Unit,  as  the  executive  body  of  the 
NAC, at the Office of the Government. Activities in this area were carried out on the basis of 
the Action Plan on decentralisation of monitoring and Evaluation, which was endorsed by the 
EC in March 2005. 

The work of the external contractor for the interim evaluation of Transition Facility projects 
started  in  April  2006  and  lasted  until  November  2007.  The  last  Country  Interim  Evaluation 
report  was  issued  in  June  2007  and  covered  3  sectors:  JHA,  Internal  Market  and  ESC.  The 
conclusions that were made were the following: Most of the Transition Facility Programmes 
remain relevant, even when looking at them from an early ex-post perspective. In addition to 
the accession to the Schengen agreement, the Fight against Corruption has been re-introduced 
in  the  priority  areas  of  the  Transition  Facility  assistance.  The  key  problem  of  efficiency 
remains  the  delay  in  programme  implementation,  though  measures  have  been  taken  to 
improve the situation. The evaluation of effectiveness was mostly based on the 2004 projects, 
as almost none of the 2005 or 2006 ones was at the implementation stage at the time of the 
report. Some early tangible effects could be reported, for instance in the improved work of the 
General  Prosecution,  the  implementation  of  the  National  Programme  for  the  Fight  against 
Drugs or the Public Finance Management Reform. Evaluation of sustainability and impact is 

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rather positive. Most of the Transition Facility interventions should be sustainable, such as in 
the sub-sectors of agriculture, judicial support, finance or customs.  

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19. 

SLOVENIA 

19.1. 

Summary 

In  2007,  Slovenia  continued  to  implement  successfully  the  post-accession  assistance  to 
address  the  remaining  needs  related  to  institution  building  for  the  implementation  of  the 
acquis, in line with the EDIS. 

Since  17  September  2004  implementation  is  carried  out  under  the  entire  responsibility  of 
Slovenian authorities applying national procurement rules. The Ministry of Finance, Central 
Financing  and  Contracting  Department  is  responsible  for  ex-ante  control  and  twinning.  The 
Ministry  of  Finance,  Central  Financing  and  Contracting  Department  (CFCD)  is  fully 
responsible for the daily implementation of the projects. 

The National Aid Coordinator (NAC) continues to exercise the monitoring of both Phare and 
Transition  Facility  Programmes.  The  National  Authorizing  Officer  (NAO)  carries  out  the 
financial supervision.  

Since the closure of the Phare Transition Team in the Representation in Ljubljana as of July 
2005, DG Enlargement continues to exercise the residual functions related to the Commission 
responsibilities (monitoring, payments, closure, etc.) in line with the Financial Regulation. 

19.2. 

Pre-accession financial and Transition assistance in 2007 

Implementation 

–  TF 2004 – finalisation of payments 

At the end of the period for execution of contracts for the 2004 Transition Facility programme 
68.78 % of the funding has been disbursed. The Slovak authorities requested no extension for 
the 2004 programme. The payments can still be executed within 6 months after the expiry of 
the contracts execution period. 

–  TF 2005 – rate of contracting 

At  the  end  of  the  contracting  period  for  the  2005  Transition  Facility  programme  on  15 
December 2007, 82.92% of the programmes had been contracted.  

–  Institution Building highlights 

A  total  of  around  €17  million  of  post-accession  assistance  from  national  allocation  (not 
including  horizontal  and  multi-country  programmes)  has  been  allocated  to  Slovenia  from 
Transition Facility programmes (2004-2006).  

In  2007  the  implementation  of  the  Transition  Facility  projects  in  Slovenia  proceeded 
reasonably  well.  There  were  no  major  problems  with  the  implementation  of  the  Transition 
Facility projects. The value added and the impact of the TF was much larger in the previous 3 
years when the majority of the projects were implemented. 

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Implementation  of  Transition  Facility  is  considered  successful  in  the  following  areas: 
Agriculture, Justice and Home Affairs, Agriculture, Internal Market. 

19.3.  Results and Impact 

State of play for JMC / SMSC development 

In 2007, two JMC meetings took place in June and in December 2007, in line with the revised 
JMC  Mandate  introduced  in  the  new  Member  States  in  May  2004,  which  established  an 
integrated monitoring and evaluation system over the programmes under implementation. 

In  the  year  2007,  two  rounds  of  Sector  Monitoring  Sub-Committee  (SMSC)  meetings  took 
place.  The  first  round  of  SMSC  meetings  took  place  in  March-April  and  second  round 
between  September  and  October.  In  Slovenia  the  following  sectors  are  monitored: 
Agriculture,  Economic  and  Financial  Issues,  Internal  Market,  Justice  and  Home  Affairs, 
Environment, Energy and Transport. 

M&E Reports in 2007 (lessons learned) 

Overall  responsibility  for  monitoring  of  the  Phare  programme  in  Slovenia  lies  with  the 
National Aid Coordinator (NAC) with the Government Office for European Affairs (GOEA).  

Only the projects related to Economic and financial issues, Internal Market, Agriculture and 
Justice and Home Affairs sectors were subject to interim evaluation in 2007. The government 
Office for European Affairs signed a contract with an external evaluator on 25 October 2005 
to perform interim evaluations in years 2006 and 2007.  

The independent evaluator also prepared two Country Evaluation Summary Reports (CSER) 
in May and in November 2007.  

The  conclusions  available  from  the  Interim  Evaluation  reports  are  that,  overall  the 
implementation of the evaluated Transition Facility assistance was rated satisfactory and there 
were  no  major  problems  or  critical  situations.  However,  the  implementation  of  2  of  the 
evaluated  projects  was  rated  as  unsatisfactory,  12  as  satisfactory  and  5  were  rated  highly 
satisfactory.  

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20. 

TURKEY 

20.1.  The year in review 

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. 

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. 

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,  consumer  and  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,  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. 

20.2. 

Pre-Accession in 2007 

Programmes launched 

Financing Agreements for two further components of the National Programme 2006 (Parts 
Ib  and  II)  were  signed  on  19.07.2007  after  conditions  for  the  strengthening  of  certain  DIS 
institutions  had  been  met.  The  June  2007  Joint  Monitoring  Committee  confirmed  the 
establishment of absolute deadlines for the submission of procurement files for the ECD ex-
ante  control  and  the  subsequent  launching  of  tenders  and  publication  of  calls  for  proposals, 
the non-respect of which will result in the loss of the related EU funding. If adhered to by the 
DIS institutions, these deadlines will lead to a further acceleration of procurement under NP 
2006 compared to NP 2005. The established procurement deadlines under NP 2006 were by 
and large adhered to in the course of 2007.  

As  of  2007,  the  Turkish  pre-accession  instrument  was  replaced  by  the  Instrument  for  Pre-
Accession Assistance (IPA).  

Overview of programmes implemented 

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At  the  endof  2007,  €1281  million  of  EU  funds  were  under  implementation  in  Turkey  (incl. 
National  Programmes/NP  2002-2006  EADP,  Admin  Coop,  PCP  which  were  funded  under 
MEDA). At the end of the year, the contracting deadline for the following funds was over: 

The NP 2002  amounted to €126 million, of which €112 million (89%) were contracted and 
€105 million (83%) were disbursed. 

The NP 2003  amounted to €144 million, of which €122 million (85%) were contracted and 
€113 million (79%) were disbursed. 

The NP 2004  amounted to €236 million, of which €194 million (82%) were contracted and 
€169 million (72%) were disbursed. 

The NP 2005 (97% under DIS) amounted to €278 million, of which €234 million (84%) were 
contracted and €87 million (31%) were disbursed. 

In addition to the Turkey Pre-Accession Instrument, the implementation of other programmes 
was  continued:  The  MEDA  Programmes  (1996-2001),  EIDHR/Gender  and  Environment 
Programmes,  Communication  Strategies  (2002-2006),  ATA  (2002-2007),  FEMIP,  Small 
Projects Programme. Excluding MEDA, these programmes together amounted to €36 million, 
with  the  inclusion  of  the  de-concentrated  part  of  the  NP2005  which  is  amounting  to  €  8.45 
million. 

At the end of 2007 the contracting deadline was outstanding for the following funds: 

The NP 2006 (parts I and II, both fully under DIS) amounted to €442 million, of which €86 
(including PCP) million (20%) were contracted and €62 million (14%) were disbursed. 

In  addition,  the  Euro-Med  Youth  Programme,  the  2006  Avian  Influenza  programme, 
Communication  Strategies,  Audit  &  Evaluation,  ATA,  EIDHR  micro  projects,  as  well  as 
EMPL/REGIO-SSTA were ongoing. Together, these programmes amounted to €28 million. 

Pre-Accession management performance 

The risk of a suspension of the decentralised implementation system in Turkey was averted by 
the Turkish authorities through a set of measures tackling the weaknesses of the CFCU and 
the line ministries.  

Following a mission carried out in January 2007, a highly critical follow-up audit report on 
the  functioning  of  the  DIS  in  Turkey  was  finalised  at  the  beginning  of  June.  Through 
reinforcement  of  the  staffing  of  the  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  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 acceleration of contracting, the reinforcement of the CFCU 
and the assertion of the authority of the PAO over the SPO structures in the line ministries. 
Important weakness persist, nevertheless, notably lack of leadership at the centre and lack of 
capacity of the NAO office. 

Preparations  for  IPA  accreditation  should  not  deflect  attention  from  further  progress  in 
improving the DIS structure, such as the need to ensure appropriate staffing and skill levels, 
ensuring  adequate  preparation  for  the  programming  phase,  accelerating  procurement, 
monitoring capacity both at programme and at project level, avoiding last minute contracting 
and reducing rejection rates during ex-ante control 

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No improvements were observed as to the monitoring functions of the EUSG and there was a 
lack of clear segregation of duties and project management capacity in the case of the projects 
where  the  EUSG  is  the  programme  beneficiary.  The  staffing  of  the  EUSG  remains 
insufficient. 

NDPs – State of Play 

The 9th Development Plan has been drafted with a view to provide the main strategic basis 
for Turkey's accession to the EU. The period and the definition of the major axis are inspired 
by IPA. The strategic approach is welcome. Its EU accession vision is appreciated. However, 
the plan provides little guidance with respect to the priorities under each policy field and does 
not  set  out  a  coherent  strategy  of  alleviating  the  regional  disparities  in  Turkey.  The 
comparatively  limited  resources  available  under  IPA  cannot  compensate  for  this  and  would 
need to be embedded into a comprehensive framework. 

Institution Building, an example 

Strengthening the  Accountability,  Efficiency and Effectiveness  of  the  Turkish National 
Police 

The  strengthening  the  accountability,  efficiency  and  effectiveness  of  the  Turkish  National 
Police  Twinning  project,  which  started  its  implementation  in  February  2005  and  had  a 
duration of 24 months, addresses the needs for improvement of quality of police services to 
the  public  and  respect  for  human rights  in  the  discharge  of  police  tasks,  pre-service  and  in-
service training, community police facilities and personnel system including promotions and 
appointments and working conditions of the Police. The project with a total volume of €2,6 
million was carried out with the Spanish Ministry of Interior, General Directorate of Security 
and  the  Turkish  Ministry  of  Interior,  General  Directorate  of  Security.  About  3000  police 
officers have been trained on issues such as human rights and community policing within the 
framework of the project. A code of ethics for police officers was developed. 

20.3. Results and impact 

State of play for JMC/SMSC development 

In  2007,  two  JMC  meeting  (June  6  and  December  18)  as  well  as  thirteen  SMSC  meetings 
were  held  to  monitor  the  implementation  of  pre-accession  assistance  up  to  2006:  Political 
Criteria;  Civil  Society  Dialogue; 
Internal  Market,  Customs  Union,  Energy  and 
Telecommunications; Public Finance, Statistics and Accession Process Support; Environment, 
Transport,  Regional  Competitiveness;  Human  Resources  Development;  Rural  Development. 
The quality of monitoring reports remains variable, and the functioning of the SMSC system 
is unsatisfactory as a result of lack of meeting preparation on the side of the line Ministries 
and the lack of an adequate participation at decision-making level. The December 2007 JMC 
has discussed the continuing weakness of the monitoring system and has requested the EUSG 
to report to the next JMC meeting on measures aimed at its strengthening. 

M&E Reports in 2007 - Lessons Learned 

Overall,  EC  assistance  to  Turkey  has  generally  been  evaluated  to  be  relevant  to  key 
accession-related issues. Only assistance to the transport sector was moderately unsatisfactory 
due  to  a  weak  design  of  projects,  overly  complex  implementation  arrangements  and 
insufficient budgetary allocations. In terms of efficiency, assistance in many sectors has been 
weak, in particular due to slow contracting. Once started, implementation has been improving. 
Overall  effectiveness  has  been  mixed,  with  better  results  in  the  internal  market  sector, 
improving  trends  in  the  environment  sector,  but  problematic  results  in  the  transport  sector. 
Impact is generally quite positive and visible, in particular in the environment, transport and 

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internal market sectors, less so in the energy sector. Also sustainability was moderately good 
over the sectors, with relatively good prospects in the environment and the transport sectors 
and  problematic  prospects  in  the  economic  and  social  cohesion,  the  infrastructure  and  the 
energy sectors. 

The  evaluations  of  EU  pre-accession  assistance  to  Turkey  show  that  particular  attention 
should be given to mitigating the risks associated with: 

–  absence of adequate planning documents and sectoral strategies resulting in weaknesses 

in needs analysis; 

–  insufficient attention to horizontal public administration reforms in the support for the 

development of administrative and judicial capacity; and 

–  weaknesses  in  programme  management  resulting  from  understaffing  and  instability  of 

the DIS institutions. 

Sectors with positive results 

Positive results have been achieved notably in the social development sector, but also in the 
environment and the internal market sectors.  

The  environment  sector  appears  to  show  generally  the  most  satisfactory  results,  while 
assistance to the transport, energy and infrastructure sectors encountered most problems. 

Success story 

İzmit Handicapped Production Centre 

Bizimköy  Handicapped  Production  Centre  is  one  of  the  projects  under  the  Marmara 
Earthquake  Rehabilitation  Programme  (MERP),  with  a  total  budget  of  28.0  Million  Euros 
including  the  co-financing  of  the  Turkish  Government  and  the  relevant  municipalities  (EC 
contribution is 20.0 Million Euros), provided in the aftermath of the earthquakes which took 
place  in  Marmara  region  in  17  August  1999.  In  this  project,  €1,3  million  covered  the 
construction of 6 facilities together with the Bizimköy Handicapped Production Centre which 
were  included  in  the  Programme  for  the  use  of  handicapped  adults,  handicapped  children, 
orphans,  women  and  young  people  at  İzmit,  Düzce,  Bolu  and  Gölcük  municipalities.  The 
construction  works  were  completed  as  of  end  2005  and  the  centres  became  operational  as 
from spring 2006. 

The objective of MERP is to help restore the living conditions in the region affected by the 
earthquake, support economic recovery and growth and to develop an institutional framework 
for disaster risk management and mitigation. 

As a result of this project, a complete production centre is constructed, 230 job opportunities 
for  handicapped  are  created,  a  model  was  formed  in  which  the  employer  is  a  foundation 
and employees are handicapped and thus the project has concretely contributed to the social 
and economic rehabilitation of handicapped people in Turkey. 

Şanlıurfa Drinking Water Project  

Şanlıurfa municipality, with its population around 500,000, had severe water shortage both in 
terms of quantity and quality due to the lack of adequate water supply system. The high rate 
of occurrence of waterborne diseases proves the inadequate water supply system. Most people 
had access to water not more than few hours per a week. This €21 million-EC grant project 
funded the construction of over 35 kilometres of large diameter water transmission pipelines, 
water reservoirs with a total capacity of more than 100,000 m3, and three pumping stations. 
The  facilities  will  be  able  to  provide  water  for  almost  1.5  million  people  –  the  projected 

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population of the city in 2020. The significant improvements in water delivery and quality in 
the  city  bring  substantial  health  and  environmental  benefits,  as  cleaner  water  means  less 
disease and better protection of the environment.  

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PART II: ADDITIONAL INFORMATION ON IMPLEMENTATION AND PROGRAMME 
MANAGEMENT ISSUES 

21. 

TECHNICAL AND FINANCIAL ASSISTANCE 

21.1.  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  but  also  to  benefit  fully  from  European  Union 
membership.  

This  major  Institution  building  initiative  has  managed  to  mobilise  significant  human  and 
financial  resources  of  the  Commission  as  well  as  of  the  Member  States  and  the  beneficiary 
countries  to  achieve  this  administrative  overhaul.  Twinning  projects  are  based  on  the 
secondment of EU public sector experts (Member state officials or mandated body experts), 
known  as  Resident  Twinning  Advisors  (RTAs)  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  from  the  Member  State  administration  or  mandated  body  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. Each twinning project has an average budget of €1 million. 
Almost one half of these projects concerns Justice, Freedom and Security issues, and Public 
Finance and internal market matters .Other areas prioritised include Agriculture and fisheries, 
Environment and Social policy. 

During  the  calendar  year  2007  the  following  project  fiches  were  circulated  with  financial 
means coming from Phare, CARDS or Transition Facility envelopes:  

Number of Phare, CARDS and Transition Facility Twinning 
projects launched in 2007 

Albania 

Bosnia Herzegovina 

Bulgaria 

Czech Republic 

5

1

22

1

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Croatia 

Estonia 

former  Yugoslav  Republic  of 
Macedonia 

Latvia 

Romania 

Serbia 

Turkey 

Total 

5

1

1

1

22

2

2

63

In addition, 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.  

21.2.  TAIEX 
TAIEX2 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 Western Balkans and Turkey partners, the TAIEX instrument also covered the 
10 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. 

The TAIEX operation continued to develop in a positive and dynamic manner in the course of 
2007.  The  total  number  of  incoming  requests  rose  sharply  from  1,049  in  2006  to  1,591,  an 
increase of 52%. The major part of applications came from the Western Balkans and Turkey 
(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  467  were 
organised for Phare beneficiary countries. 

2 

Technical Assistance Information Exchange Instrument 

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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  16,095  participants  came  from 
Phare  countries  and  2,231  experts  were  involved  in  projects  related  to  Phare  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, 
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. 

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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.  

21.3. 

SIGMA  

Since  1992,  this  Institution  building  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 
Assistance  (IPA).  This  new  contract  will  benefit  all  Candidate  and  Potential  Candidate 
countries 

22. 

INFORMATION ON MULTI-COUNTRY AND HORIZONTAL PROGRAMMES 

22.1. 

Political Criteria 

Participation in Community programmes, Agencies and Committees 

Under  the  CARDS  Regional  Programme  2005  (€2.5  million)  in  2007,  several  Grant 
Agreements  were  awarded  to  Community  Agencies  the  main  objective  of  which  were  to 
enable Western Balkan countries to participate in and to familiarise themselves with the work 
of these Agencies whose role is to prepare for their  adoption  of the  Community acquis and 
consequent upgrading of their administrative capacity where necessary:  

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•  the Agency for Safety and Health at the Workplace (ASHW),  

•  the European Environment Agency (EEA),  

•  the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA),  

•  the European Monitoring Centre for Racism and Xenophobia (EUMC),  

•  the European Maritime Safety Agency (EMSA), 

•  the European Aviation Safety Agency (EASA).  

Agencies  received  grants  up  to  a  value  of  95%  of  the  total  eligible  project  costs.  Contracts 
with  EEA  and  ASHW  were  concluded  in  December  2006  and  the  contracts  were  awarded 
during 2007. 

Return of refugees  

Three projects under CARDS 2002 regarding refugee return and local integration continued 
during 2007 and were due to end in early 2008. Main results were: 

•  Contract  132-144  (€250,000,  Help):  Provision  of  30  income-generating  grants  and 
organisation of basic business training; construction of 8 apartments; implementation of a 
community project proposed by the host community in Herceg Novi (Montenegro). 

•  Contract  132-245  (€202,000,  IAN):  provision  of  informational  assistance  (status  issue, 
access to social rights, regulation of property issue…) to 1,000 beneficiaries, provision of 
legal  assistance  (complaints,  claims,  acceleration  requests)  to  400  refugees,  provision  of 
personal  documents  (birth,  citizenship  and  marriage  certificates)  for  400  persons.  This 
project  was  particularly  successful  in  that  the  achieved  results  went  well  beyond  the 
expected  results  for  all  the  activities  and  the  quality  of  the  reporting  was  excellent.  In 
October 2007, Commissioner Spidla visited this project.  

Within CARDS 2006 there was one project under discussion: 

•  Contract  with  UNHCR  (€1  million):  the  project  regarding  the  application  of  the  "3x4" 
initiative continued according to schedule and the preparation of the third phase (financing 
proposal 
in  June  2008)  was  being  discussed  between  D3  and 
UNHCR/Brussels. 

to  be  adopted 

Social inclusion. 

"Social inclusion of and access to human rights for Roma, Ashkali and Egyptian communities 
in the Western Balkans" (Contract 148-352: CARDS 2006: €1 million). The overall objective 
is  to  ensure  social  inclusion,  protection  and  return-related  activities  to  the  Roma  people, 
internal displaced persons and other marginalised groups. A call for proposals was published 
in early 2007 and a contract was made to UNHCR in February. 

Social security coordination 

The  "Social  Institution  Support  Programme"  with  the  Council  of  Europe  (CARDS  2003, 
contract 085-023: €2 million) came to an end in February. It was renewed for a further three 
years under IPA 2007 (q.v. IPA report). 

Justice, freedom and security 

There were eight projects under implementation during 2007: 

•  CARDS  2002-2003:  "Support  to  and  Coordination  of  Integrated  Border  Management 
Strategies  in  the  Western  Balkans"  implemented  by  a  consortium  led  by  the  French 

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Ministry  of  Interior,  General  Directorate  of  National  Police,  Department  of  International 
Police Cooperation (SCTIP) (contract 081-242: €1.99 million). The project come to an end 
in  April  and  the  final  report  was  submitted  within  the  contractual  deadline  and  final 
payment made accordingly. 

•  CARDS 2002-2003: "Establishment of an Independent, Reliable and Functioning Judiciary 
and the Enhancing of the Judicial Cooperation in the Western Balkans", implemented by a 
consortium  led  by  the  Ministry  of  Justice  of  Austria  (contract  082-231:  €5  million).  The 
project  came  to  an  end  in  May.  The  final  report  was  submitted  in  November  and  final 
payment made in December. 

•  CARDS  2002-2003:  "Development  of  Reliable  and  Functioning  Policing  Systems  and 
Enhancing of Combating main Criminal Activities and Police Co-operation", implemented 
by a consortium led by the Council of Europe (contract 079-524: €4 million). The project 
came to an end on 30 June but the final report had not been submitted by the end of 2007. 

•  CARDS  2002:  "Development  of  a  reliable  and  functioning  prison  system  respecting 
fundamental  rights  and  standards  and  enhancing  of  regional  cooperation  in  the  Western 
Balkans",  implemented  by  the  Council  of  Europe  (contract  132-165:  €0.82 million), 
continued throughout 2007 and was due to end in March 2008. It was agreed to extend the 
implementation  period  by  three  months  (to  March  2008)  and  to  increase  the  resources 
available for implementation which should allow the Council of Europe to pursue a much 
more intensive implementation schedule during the second half of the project. 

•  CARDS 2005: “Second Expert Working Group Meeting” implemented by CECOFORMA 

(contract 140-045: €29,082); 

•  CARDS  2005:  “Third  Expert  Working  Group  Meeting”  implemented  by  BS  Europe 

(contract 142-429: € 24,197); 

•  CARDS  2005:  “Fourth  Expert  Working  Group  Meeting”  implemented  by  BS  Europe 

(contract 144-534: € 28,886); 

•  CARDS  2005:  “Fifth  and  Sixth  Expert  Working  Group  Meeting”  to  be  implemented  in 

January 2008 by APRI International (contract 146-607: € 59,978). 

The evaluation of the project proposals CARDS 2006 "Support to the Prosecutors' Network" 
was  still  continuing  at  the  end  of  the  year.  The  call  for  proposals  had  been  published  in 
August. 

In  December  2007  was  published  the  open  call  for  proposals  under  CARDS  2005 
"International law Enforcement Co-ordination Units" (ILECUs). The purpose of the action is 
to  create  ILECUs  and  thereby  strengthen  international  police  cooperation  with  a  view  to 
supporting  the  exchange  of  information  in  international  investigations  and  to  facilitate 
contacts on an operational level. 

Public administration 

A contribution agreement of €2.5 million was signed with OECD to implement the first phase 
of the development of ReSPA. The agreement includes the cost of the operation of the ReSPA 
its  future 
Secretariat, 
institutionalisation.  During  2007,  Danilovgrad  in  Montenegro  was  selected  to  be  the  seat  of 
the Regional School for Public Administration and all legal preparatory work is in progress. 

training  and  other  activities  related 

the  development  of 

to 

The initial task of the ReSPA team at the OECD was to determine demand for training in the 
Western  Balkans  region.  In  agreement  with  the  European  Commission,  the  OECD  would 
design  and  manage  contractors  from  within  EU  Member  Countries.  Ten  activities  were 

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developed to implement the Work Programme (WP) approved by the Steering Committee in 
January.  Additional  modules  were  incorporated  in  the  WP  after  the  first  meeting  of  the 
ReSPA Steering Committee in April, and after the first meeting of the heads of Schools and 
Institutes of Public Administration in Ljubljana in June.  

The modules developed and delivered covered:  

•  Three  Training  of  Trainers  modules  in  Skopje,  Podgorica  and  Pristina  on  negotiation 

techniques in a European environment in cooperation with EIPA; 

•  One module of Training of training managers in Athens in cooperation with EKKDA3; 

•  One  module  of  Training  junior  diplomats  at  the  Dubrovnik  Summer  School  on  the 
promotion of Foreign Direct Investments in the Western Balkans, in cooperation with the 
Diplomatic Academy of Croatia; 

•  One  module  of  Training  Policy  advisers  on  advisory  techniques,  in  cooperation  with 

NISPAcee4; 

•  Second ReSPA annual conference, Durres, Albania, on making strategies work and the use 

of adequate legal instruments to implement strategies; 

•  Regional  training  initiative  on  Public  Procurement,  in  cooperation  with  Sigma  and  ILO-

ITC5; 

•  Training  of  Senior  Budget  Officials  on  the  impact  of  the  adoption  of  an  organic  Budget 

Law on the work of Government, in cooperation with the ENA, Paris.  

A module on Human Resources Management and in particular on the profile of the European 
Senior Civil Servant was initially planned for November 2007 but postponed to March 2008 
at the request of the Italian co-organiser, SSPA6.  

The ReSPA team at the OECD contacted the NISPAcee, IASIA, EGPA and IIAS secretariats 
in  order  to  gain  formal  membership  for  ReSPA  to  those  professional  networks.  Full 
membership  will  only  be  possible  once  ReSPA  has  been  formally  and  legally  established. 
Finally,  organising  and  co-organising  ReSPA  modules  with  established  EU  Schools  and 
Institutes of Public administration, also contribute to the inclusion of ReSPA into professional 
networks.  

Four activities were carried out to implement the Institution Building dimension of ReSPA:  

•  Steering  Committee:  the  ReSPA  team  at  the  OECD  has  organised  three  sessions  of  the 
Steering Committee. The Rules of Procedure of the Steering Committee have been drafted 
and  approved  by  the  Steering  Committee  Members,  and  the  sessions  function  along  the 
lines agreed initially.  

•  The  ReSPA  team  at  the  OECD  worked  on  a  series  of  papers  and  held  a  number  of 
meetings with EC officials to advise on the institutionalisation of ReSPA phase 2 and the 
where  ReSPA  should  be  located  in  the  Western  Balkans.  The  Commission  agreed  in 
principle with the EIPA in October that it would support the further institutionalisation of 
ReSPA  in  Phase  2.  The  ReSPA  team  advised  the  Commission  on  the  future  location  of 
ReSPA in November 2007.  

3 
4 
5 
6 

Greek School of Public Administration 
Network of Schools and Institutes of Public Administration in Central and Eastern Europe 
International Training Centre of the International Labour Office 
Italian School of Public Administration 

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•  Implementation of staffing policy: the initial contract between the OECD and EC foresaw 
the establishment of a  project  team  at  the  OECD  composed  of  one  OECD  Administrator 
and three experts from the Western Balkans who would be the future core staff of ReSPA. 
At the 2nd Steering Committee, the Regional members asked for a revision of this scheme 
and suggested that one resource person should be contracted by OECD per signatory party 
of the protocol of cooperation. The ReSPA team at the OECD developed a proposal which 
was  accepted  by  the  4th  Steering  Committee  in  April  2007.  The  implementation  by  the 
ReSPA  signatories  of  this  option  took  much  longer  than  initially  envisaged.  The  first 
resource was contracted in July and the last one in November 2007. It was noted at the 5th 
Steering Committee in November that only some resources had been delivered on time and 
at  the  required  level  of  quality.  The  Chairman  invited  Steering  Committee  Members  and 
the  ReSPA  team  at  the  OECD  to  develop  ways  to  improve  the  functioning  of  the  in-
country resource persons.  

•  The ReSPA website was developed initially under the technical auspices of the OECD IT 
Services  and  later  developed  and  hosted  outside  the  OECD.  This  was  done  in  order  to 
facilitate the eventual portability of the ReSPA website and content to Danilovgrad.  

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Support to interim civilian administrations and to Stability Pact 

•  UNMIK.  Throughout  2007,  Unit  D3  remained  responsible  for  the  commitment  of  funds 
and implementation of contracts to support the running costs of UNMIK Pillar IV. From 
early 2008, financing for the running costs of UNMIK Pillar IV is to be provided under the 
Stability Instrument (DG RELEX) and the EC Liaison Office would be responsible for the 
management from March 2008. 

•  OHR.  A  Contribution  Agreement  aiming  to  fund  53%  of  the  OHR  budget  for  the 
remaining  period  of  its  operation  (contract  managed  by  the  EC  Delegation  in  BiH); 
Budget: €1 million 

•  Stability Pact. Support to the Stability Pact was maintained in 2007 and due continue until 

June 2008 when it would be replaced by the Regional Cooperation Council (RCC). 

Cross-border cooperation (CBC) 

There  was  one  project  under  implementation  namely  "Cross-Border  Institution  Building" 
(CBIB)  under  CARDS  2003  and  its  extensions  under  CARDS  2005.  Phase  I  (CBIB-1)  was 
extended for one further year as from 23 December 2007. 

CBIB-1  had  been  launched  at  the  end  of  2005  with  the  objective  of  preparing  beneficiary 
countries to implement the IPA CBC programmes at internal Western Balkans borders. The 
project  allocation  came  from  Regional  CARDS  2003  (budget:  €1.75  million)  and  its 
extensions by end December 2007 under Regional CARDS 2005 (budget: €0.875 million). In 
2007,  the  project  started  by  helping  governments  to  put  into  place  CBC  structures  and  to 
recruit  the  necessary  staff.  There  followed  training  for  the  drafting  of  eight  programmes, 
which were submitted to and approved at the IPA Committee of December 2007.  

During  two  Steering  Committees  organised  in  the  region,  it  was  made  clear  that  the  CBIB 
project  was  already  of  great  benefit  not  only  in  terms  of  regional  cooperation  and 
reconciliation  but  also  for  building  ownership  and  capacity  of  the  beneficiaries  to  draft  and 
manage  the  EU  programming  exercise.  The  CBIB  project  is  now  being  continued  to  train 
beneficiaries in the implementation of the programmes, i.e. the procurement phase, as well as 
to provide training to facilitate the preparation of projects by potential beneficiaries (mainly 
applicants for calls for proposals).  

Civil Society Dialogue and Development 

CARDS Regional Programme 2006: "Civil Society Dialogue and People to People" - a call 
for proposals was launched in December 2007 and it was expected that about seven contracts 
would be signed by mid-2008. 

There were two programmes under implementation at the end of 2007: 

•  CARDS  2002  Democratic  Stabilisation,  Support  to  the  Rule  of  law,  Good  Governance, 
Public Accountability and Freedom of Opinion. Two Grants contracts supporting "Albania 
Women's Leadership Programme" (060-191) and "Good Governance for Areas of Special 
State Concern in the support of NGOs" (060-256) ended and the final report approved. For 
the  former,  the  last  payment  was  initially  suspended  due  to  the  lack  of  audit  report  and 
miscalculation,  but  the  problem  was  later  settled.  For  the  second,  a  recovery  order  was 
initiated by the Financial Unit but the transfer of ownership requested was still missing at 
the end of the year. 

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•  CARDS  2003  Democratic  Stabilisation,  Support  to  Civil  Society  Development  and 
Network to Network and media. Several Grants contracts7 started in 2005 and contributed 
to support the local development of CSOs and their contribution to the democratic process 
in the region through:  

–  Strengthening Civil Society Organisations that Operate in the Agricultural Sector;  

–  Engaging  Civil  Society  in  Decision  Making  Process  for  Arms  Control  and 

Community Safety;  

–  Development of Multi Level Capacity Building Programme;  

–  Cooperation,  Integration  and  Community  Empowerment  of  Ethnic  Minority 

Groups;  

–  Women Resource for the Local and Democratic Development; 

–  Law of Action for Developing Civil Society; 

–  Involvement of Citizens in the Local Democratisation Process; 

–  Capacity Building of Disabled People's Organisations. 

The  final  reports  of  five  projects  (108-450,  108-452,  108-453,  108-458  and  108-459)  were 
still pending at the end of the year and it was expected that they would end in 2008. 

The  CARDS  2003  Programme  also  allocated  funds  to  support  nine  projects  (budget  €1 
million) to increase independence and development of media sector. Five (073-340, 123-315, 
123-317,  123-321,  123-323,  123-734)  finished  during  the  year  having  cooperated  in  TV 
Media co-productions by creating new partnerships, exchanging best practices and enhancing 
understanding  about  issues  considering  of  great  importance  in  the  region,  as  well  as  raising 
awareness  on  the  function  of  the  ICJ,  ICC  and  ICTY.  In  June  2007,  all  contractors  were 
invited to attend the Rhodes Film Festival to present documentaries, share experiences and do 
some networking. 

In December, the call for proposals was launched for the project "Consolidating Partnership 
between Civil Society Organisations and Public Authorities for Raising Minority Rights in the 
Region" (CARDS 2006: €2 million).  

Phare business support programme (BSP) 

One  programme  was  being  implemented  in  2007:  the  third  Phare  Business  Support 
Programme (BSP-3: budget €10 million). It addresses the needs of Business Representative 
Organisations  (BROs)  in  Bulgaria,  Romania,  Croatia  and  Turkey  by  strengthening  their 
corporate  function  and  by  providing  training  in  the  relevant  acquis  communautaire  and  to 
implement remedial measures where necessary. Following two calls for proposals, 18 projects 
were selected for funding. All projects had started their activities by the end of the year and 
were expected to continue until mid-2009.  

22.2.  Economic Criteria: IFI Cooperation and Competitiveness 

SME finance facility (SMEFF) 

The  object  of  the  SMEFF  is  to  persuade  financial  intermediaries,  i.e.  banks  and  leasing 
companies in beneficiary countries, to expand and sustain their financing operations to SMEs. 

7 

Civil society development: 100-744, 100-760, 100-770, 100-777, 100-820, 100-834, 100-847, 100-873, 
100-923, 100-926, 100-927, 100-987, 100-944; Network to network: 108-450, 108-452, 108-453, 108-
458, 108-459. 

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SMEFF  is  implemented  by  the  EBRD,  EIB  and  the  Council  of  Europe  Development  Bank 
(CEB) in cooperation with KfW. The latest SME programme, amounting to €53 million, was 
launched in 2006 and covers Romania and Bulgaria for the last time. At the end of December 
2007,  projects  were  still  being  selected  for  the  2005  and  2006  programmes  and  the  total 
amount of EU incentives earmarked for projects was €300 million. 

The  approval  of  new  projects  and  amendments  to  existing  projects  continued  apace.  Eight 
projects  were  processed:  five  under  the  SMEFF  and  three  under  the  Equity  Window  of 
SMEFF. The first project in Turkey was submitted by KfW under SMEFF. 

The  Equity  Window:  the  programme  launched  in  1999  has  not  been  successful  and  equity 
investments  have  been  below  expectations.  Following  discussions  with  the  EBRD,  some 
amendments were made to the programme. The limit to the size of investment was removed 
(previously  capped  at  €1  million),  the  investment  period  was  extended  by  one  year  for  the 
Bulgarian and Romanian Fund and the termination date was also extended by one year for the 
Baltic  Fund.  There  was  still  an  issue  about  the  management  fees  and  DG  ECFIN  was 
analysing the file.  

Investment promotion /business climate 

Two  projects  were  being  implemented  from  CARDS  2005,  having  been  launched  in  March 
and April respectively: 

•  “Defining  and  Strengthening  Sector  Specific  Sources  of  Competitiveness  in  the  Western 
Balkans  region”  (contract  131-329:  budget  €1  million);  co-financing  with  OECD  and 
implemented  by  the  OECD  Investment  Compact  with  the  objective  of  developing  and 
implementing  a  regional  sector-focused  investment  strategy.  During  2007  the  OECD 
Investment started with the analytical work and country missions necessary to develop the 
regional sector-focused investment strategy. The initial work showed that the sectors with 
most  growth  potential  for  the  region  were  automotive  components,  textiles,  business 
process outsourcing and information, and communication technologies. The first phase of 
the project will end in June 2008, when a regional sector focused investment strategy will 
be presented to the region with recommendations for policy reforms in those sectors.  

•  “Invest  in  the  Western  Balkans  Programme”  (contract  133-455):  budget  €1 million;  co-
financed by bilateral donors and implemented by FIAS/IFC8 (World Bank Group) with the 
objective  of  promoting  the  region  among  foreign  direct  investors  mainly  the  through 
promotion and marketing events and through capacity building of the region's investment 
promotion agencies. Although the initial contract had been signed in March with MIGA9, 
due to an internal reorganisation within the World Bank Group, the project team entrusted 
with the implementation of this project was transferred to the responsibility of FIAS under 
the responsibility of the IFC. 

During  2007  FIAS/IFC  activities  focused  on  marketing  and  investment  facilitation 
programmes  in  the  following  sectors:  automotive  components,  food  and  beverages  sectors, 
Information and Communication Technologies, Business Services and Textiles.  

In  2007,  six  investments  worth  €12.7  million  and  14  site  visits  were  generated.  Regional 
outreach events were implemented in various EU Member States. On-the-job training for 14 
staff  from  Investment  Promotion  Agencies  in  the  Western  Balkans  at  outreach  events  took 
place and Investment Promotion Agency staff were trained locally.  

8 
9 

FIAS: Multi-Donor Investment Climate Advisory Service; IFC: International Finance Corporation 
Multilateral Investment Guarantee Agency 

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Preparatory work commenced to design an on-line tool to allow foreign investors to compare 
18 locations within and selected locations outside the region. Some country-specific activities 
were  implemented  such  as  an  auto  components  marketing  campaign  in  Germany  together 
with  "Invest  in  Macedonia",  an  initiative  on  tourism  infrastructure  in  conjunction  with 
Albinvest, Invest Macedonia, the Montenegro Investment Agency (MIPA) and FIPA (Bosnia 
and Herzegovina) and an initiative on industrial zones with Albinvest, Invest Macedonia and 
MIPA. 

It is expected that both projects will end in 2009. The next step will be to involve the Regional 
Cooperation  Council  and  encourage  it  to  take  a  leading  role  in  developing  a  regional 
initiative. The cost of this new initiative is estimated at €3.8 million covering three years of 
implementation. 

Energy efficiency finance facility (EEFF) 

The  EEFF  was  launched  in  2006  in  response  to  the Energy Efficiency Green  Paper and  the 
Directive  on  Energy  Performance  of  buildings.  It  aims  at  stimulating  energy  efficiency 
investments in all types of building and in the industry sector by making appropriate financing 
available  to  end-borrowers.  The  overall  results  of  the  programme  will  be  savings  in  energy 
and a significant reduction of CO2 emissions. The implementation of the programme started 
in  April  2007  and  the  first  projects  were  approved  in  December  2007  for  a  total  amount  of 
incentives of €13.65 million. 

At  the  last  Steering  Committee  of  the  IFI  Facilities,  it  was  decided  to  introduce  a  more 
flexible  approach  to  make  the  EEFF  programme  easier  to  implement  in  the  beneficiary 
countries  where  awareness  of  energy  efficiency  was  still  weak  and  technical  expertise  was 
still necessary to implement the programme not always locally available. 

Municipal finance facility (MFF) 

The MFF, operated in cooperation with the EBRD, CEB/KfW and the EIB, aims at deepening 
and  strengthening  the  municipal  credit  markets  in  beneficiary  countries.  A  new  MFF 
programme  amounting  to  €17.8  million  that  had  been  launched  in  2006  was  being 
implemented with two sponsors only, and covered Romania and Bulgaria for the last time. At 
the  end  of  December  2007,  the  total  amount  of  EU  incentives  committed  into  projects  was 
€60 million.  

Municipal infrastructure facility (MIF) 

The MIF was developed in 2002 in response to the Nice European Council. An analysis had 
revealed  that  the  lack  of  adequate  transport  and  environmental  infrastructure  in  the 
beneficiary  countries’  border  regions  with  the  EU  was  a  persisting  problem  to  regional 
development.  At  the  end  of  2007,  the  Phare  allocations  from  the  2002  and  2003  budgets 
(€39.9 million) had been fully earmarked for 24 municipal projects. 

Infrastructure Projects Facility (IPF) 

The  IPF  was  announced  to  all  potential  candidate  countries/territories  and  all  beneficiaries 
were informed at regional meetings. A first identification of projects to be supported by IPF 
(transport, energy, environment and social infrastructure) indicated very good potential of the 
instrument also in complementarity with IPA national programmes. The sum of €16 million 
was  allocated  to  the  IPF  under  the  CARDS  2005  and  2006  programmes  and  a  restricted 
service tender was launched in September. The evaluation was due to take place in early 2008 
for the contractor to be in place by May when the first projects to be supported were expected.  

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The programming of additional resources under the IPA 2008 Multi-beneficiary programme 
was well advanced (q.v. IPA report). 

Education and youth 

Two programmes under CARDS 2006 were being prepared: 

•  Erasmus Mundus,  

•  Tempus 

The Call for Proposals for Erasmus Mundus was launched in December with a short deadline 
of  February  2008  for  both  the  "External  Cooperation  Window"  and  the  "Western  Balkan 
Window". An "Erasmus Mundus Day" was organised in most countries/territories covered by 
the  programme  in  order  to  make  familiar  the  universities  as  well  as  the  students  with  the 
components of the programme and the procedures to follow. The Evaluation Committees of 
the "Western Balkan Window" and "External Cooperation Window" would take place during 
the first quarter of 2008. 

The Call for Proposals for Tempus IV was due to be launched in January 2008 with a deadline 
for applications for April. A meeting would take place in early 2008 with all the Tempus Joint 
European  Projects  representatives  to  inform  them  about  the  new  components  of  Tempus IV 
and about the new procedures to be respected. "Tempus Days" would also be organised. 

22.3.  European Standards 

Quality infrastructure 

One  project  was  under  implementation  in  2007,  financed  under  CARDS  2006:  “Quality 
Infrastructure  in  the  Western  Balkans"  (contract  138-543:  budget  €1  million).  In  addition 
EFTA contributed €50,000. The contract with the Comité Européen de Normalisation (CEN) 
was  signed  in  April  2007  for  eighteen  months.  The  project  was  progressing  according  to 
schedule. 

The purpose of the contract is to improve the capabilities of quality infrastructure bodies to 
offer industry services to provide the tools to trade in the EU and EFTA market, as well as in 
the markets of the Beneficiaries. The main activities under this project are: 

•  Assessment reports about the state of technical regulations, standardisation, accreditation, 

testing-certification-inspection, metrology and market surveillance.  

•  A further series of intensive hands- on training events will be run in quality infrastructure 

field.  

•  Regional proficiency testing exercises (inter- laboratory comparisons) will be run. 

Three steering committees took place in 2007 and the final Steering Committee will be held in 
July 2008. 

Transport 

In 2007, the following projects were being prepared and/or implemented under CARDS: 

•  “Support  to  the  SEETO  Secretariat”  (contract  086-526:  €1.79  million,  CARDS  2003) 
which ended in June, to be followed by its sequel in 2008 (€1 million under CARDS 2006) 
which  would  be  a  contract  for  16  months  continuing  support  to  the  development  of  the 
South  East  Europe  Transport  Core  Network  through  a  renewed  technical  assistance 
contract to be signed in mid- 2008 for a period of 16 months with a focus on road safety 
and railways. 

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•  “Technical Assistance to the implementation of the ECAA Agreement” (budget €1 million, 
CARDS 2006): preparation of the project to give assistance to the Western Balkans Civil 
Aviation  administration  to  support  the  implementation  of  the  European  Common  Civil 
Aviation Area Agreement in each beneficiary country/territory starting in May 2008. The 
previous  project  (contract  072-517  with  Eurocontrol  under  CARDS  2002)  only  partially 
filled  expectations  thus  leaving  the  new  project  to  undertake  some  further  areas  of 
intervention. 

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Energy 

The project undertaken in 2007 was "Contribution to the budget of the Energy Community": 
budget  €2.5 million,  of  which  CARDS  2006  (€1.2 million:  contract  148-620)  and  IPA  2008 
(€1.3  million:  contract  154-260).  The  EC  contributes  98.1%  of  the  budget  of  the  Energy 
Community. 

"EC  Contribution  to  the  budget  of  the  Energy  Community  for  the  second  half  of  2007" 
(budget €1.22 million). This project is being financed from CARDS 2006 (contract 141-814)  

Project ended/concluded in 2007: 

"Support  to  the  establishment  of  the  Energy  Community  Secretariat"  (budget  €3.5  million: 
grant contract 100-231. This project was financed from CARDS. The implementation period 
of the project ended in June.  

Activities in 2007: 

•  All Contracting Parties drafted a national plan to implement Directive 2001/77/EC on the 
promotion of electricity produced from renewable energy sources in the internal electricity 
market  and  a  plan  to  implement  Directive  2003/30/EC  on  the  promotion  of  the  use  of 
biofuels  or  other  renewable  fuels  for  transport,  as  requested  by  Article  20  of  the  Treaty. 
The plans were endorsed by the Ministerial Council on 29 June 2007 in Montenegro. 

•  Preparation  of  national  “Statements  on  monitoring  of  security  of  supply”,  by  each 
Contracting Party (except by the former Yugoslav Republic of Macedonia – still missing) 
and Romania as former Contracting Party by 30 June 2007. The statements were presented 
at the PHLG meeting on 28 June 2007. 

•  According  to  Article  21  of  the  Treaty,  the  iECS  drew  up  a  list  of  Generally  Applicable 
Standards in the European Community for electricity and respectively gas, on the basis of 
information provided on the relevant web pages. This list was endorsed by the Ministerial 
Council in its meeting of 29 June 2007. 

•  The iECS prepared two further reports in the course of the Grant Contract: the Report on 
Regional  Gas  Market  Design  (unsolicited)  and  the  Final  Report  on  Compliance  with 
Electricity  Benchmarks  that  reflect  also  the  progress  of  the  Energy  Community  with  the 
development of the national and respectively regional energy markets. 

•  For the occasion of the 5th PHLG meeting and the 2nd Ministerial Council meeting on 28-
29  June  2007,  the  iECS  drafted  the  Report  on  the  Implementation  of  the  Treaty 
Establishing  the  Energy  Community  which  serves  as  an  extended  explanation  of  the 
findings  provided  in  the  much  shorter  (5  pages)  Annual  Report  on  the  Activities  of  the 
Energy  Community  to  the  European  Parliament  and  the  National  Parliaments.  The 
Ministers  authorised  the  Secretariat  to  submit  it  as  the  1st  Annual  Report  in  accordance 
with Article 52 of the Treaty (see Ministerial Council conclusion no. 6 of 29 June 2007). 

•  An important step to improve integration of South East Europe countries into the Internal 
Energy  Market  was  registered  when  the  TSOs  of  27  European  countries  reached  a 
voluntary agreement on Inter-TSO Compensation for Transit (ITC) for April - December 
2007, in June. The new agreement was signed by all signatories of the previous agreement, 
except  the  TSO  companies  of  the  Czech  Republic  and  Slovakia;  a  number  of  new  states 
(Albania,  Bosnia  and  Herzegovina,  Croatia,  Estonia,  the  former  Yugoslav  Republic  of 
Macedonia, Montenegro and Serbia) have decided to join the mechanism this year. 

•  Some progress was also registered with the general design of the SEE Regional Balancing 
Mechanism for which the ECRB/SETSO SG BM prepared with the support of SEETEC, 

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Forum  a  Common  Position  Paper,  which  was  presented  at  the  10th  Athens  Forum  for 
discussion. 

•  TERNA Italy and APG Verbund Austria prepared and presented at the 10th Athens Forum 
the Business Plan for the set up of the “SEE Auction Office Ltd.” The further development 
of the Dry-run Coordinated Auction Tool (DrCAT) will be supported by the iECS, which 
will  finance  the  second  stage,  through  a  contract  to  be  concluded  between  Energy 
Community and APG Verbund early July 2007. 

Regular meetings as follows: 

•  The  5th  PHLG  meeting  and  the  2nd  Ministerial  Council  Meeting,  on  28  June  2007  and 
respectively 29 June 2007 in Becici, Montenegro. The 3rd ECRB meeting will be held on 5 
July 2007 in Athens. 

•  The  Seminar  Electricity  Investments  in  the  Energy  Community:  Challenges  and 
Opportunities,  and  the  10th  Athens  Forum  were  organised  in  April  2007,  on  23  and 
respectively 24 -25, in Athens 

•  The 2nd Gas Mini-Forum was held in Vienna on 11 May 2007. 

•  The  Memorandum  of  Understanding  (MoU)  for  the  development  of  a  social  pillar  of  the 
Energy  Community  was  a  topic  for  discussion  in  the  5th  PHLG  meeting  where  two 
Contracting Parties have announced that are ready to sign it: the former Yugoslav Republic 
of Macedonia and Serbia. At the Ministerial Council meeting, the decision was to open the 
MoU for signature from October 2007 possibly during a Conference on the Social Aspects 
of  the  Energy  Community  (see  also  Ministerial  Council  Conclusion  No.  10  of  29  June 
2007). 

In the 2nd Quarter 2007, the transition process of the Energy Community Secretariat from the 
initial  phase  of  an  interim  body,  to  the  international  organisation  registered  significant 
progress  on  29  May  2007  with  the  signing  of  the  Headquarter  Agreement  between  the 
Republic  of  Austria  and  the  Energy  Community.  The  final  step  is  the  ratification  of  the 
aforementioned Headquarter Agreement, which is pending as of the report date. 

Customs and Taxation 

The  programming  and  implementation  of  the  support  to  Customs  and  Taxation  is  gradually 
being  taken  over  by  the  Geographical  Units  and  Delegations  and  it  is  expected  that  the 
involvement of Elarg/D3 will substantially diminish during 2008 and disappear altogether in 
2009. Nevertheless, there was much activity on the regional level in 2007. 
The  first  contract10  with  Eurocustoms  (CAFAO-1)  for  the  management  of  the  Customs  and 
Fiscal  Assistance  Office  (CAFAO)  programme  in  the  Western  Balkans  came  to  an  end  on 
30th June.  A  second  contract  (CAFAO-2),  also  with  Eurocustoms,  lasting  for  eight  months 
from 1st July, was  financed  partially  from  national CARDS 2006 funds11 and partially from 
national IPA 2007 funds 12.  

CAFAO-2 continued from CAFAO-1 to provide technical assistance to the Customs and Tax 
Administrations  in  Albania,  BiH,  fYRoM,  Montenegro,  Serbia  and  Kosovo.  Substantial 
progress  was  made  in  the  objectives  and  activities  by  continuing  institutional  strengthening 

10 
11 
12 

contracts 116-590 et seq. 
contracts 141-688, 141-696, 141-698 
contract 141-748 

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and  the  capacity  building  of  beneficiary  administrations  and  aligning  their  legislation  to  the 
EU acquis. 

Operationally speaking, CAFAO-2 ended on 31st December. The contract was to continue for 
a  further  two  months  into  2008  so  as  to  ensure  a  smooth  transfer  of  activities  to  the  new 
TACTA  project  to  be  financed  wholly  from  national  IPA  2007  budgets  (q.v.  IPA  report). 
Transfer  agreements  of  equipment  were  drawn  up  by  the  Commission  for  signature  by  the 
eventual  recipients  of  the  equipment,  much  of  which  would  be  put  at  the  disposal  of  the 
TACTA project. 

During the reporting period, several equipment supply tenders were managed by DG ELARG 
in parallel with CAFAO. They were launched centrally in Brussels on behalf of the respective 
beneficiary  administration  to  procure  specialised  equipment  (IT,  communication  and  search 
equipment, laboratory equipment etc): 

•  EuropeAid/120836  'Supply  of  equipment  for  the  Customs  Administrations  of  Serbia  and 

Montenegro' which was launched at the end of 2006: 

–  Serbia: contracts 124-819, 124-821, 124-822, 124-825 totalling €726,835; 

–  Montenegro: contracts 124-811, 124-815, 124-816, 124-817 totalling €233,404.  

•  EuropeAid/122812 'Supply of IT equipment for the Customs Administration of the former 
Yugoslav  Republic  of  Macedonia'  was  launched  and  contracts  signed  (contracts  142-777 
and 142-812 totalling €269,905).  

•  EuropeAid/126035  'Supply  of  Laboratory,  IT/Communication  &  Search  Equipment  and 
Vehicles for the Customs Administration of the former Yugoslav Republic of Macedonia' 
was launched at the end of the year, with a budget of about €900,000 and contracts were 
due to be signed in early 2008. 

An additional Customs and Taxation project was under preparation at the end of the year, to 
be known as "SEMS"13 (contract 154-684: budget €471,000) which would be financed from 
the  balance  of  the  CARDS  2005  Serbia  &  Montenegro  State  Union  Action  Programme. 
SEMS had formed an integral part of CAFAO but could not be included in TACTA because 
at the time when the tender for TACTA was launched in late 2007, DG TAXUD had not yet 
decided  whether  SEMS  should  continue  to  be  developed.  Consequently  no  IPA  budget  was 
set  aside  to  cover  SEMS.  Later,  DG  TAXUD  requested  that  SEMS  be  maintained  at  its 
current level for a further twelve months pending a definitive decision regarding its (SEMS') 
future.  Since  no  IPA  budget  existed  to  continue  SEMS,  recourse  was  made  to  remaining 
CARDS  funds.  It  was  arranged  that  the  contract  would  be  a  direct  agreement  with  Agenzia 
delle Dogane, the contractor of TACTA and complementary to that project. 

Statistics 

One  project  was  under  implementation  at  the  end  of  2007:  “Statistical  Co-operation  in  the 
Western  Balkans”  (contract  122-506)  financed  from  CARDS  2003.  The  contract  continued 
throughout the year and was due to end in March 2008. The main activities of this project are: 

•  Regional pilot projects in the area of labour market statistics, migration statistics, external 

trade statistics, purchasing power parities statistics 

•  Training activities in the countries, internships in Eurostat and EU-countries 

13 

South-east Europe Monitoring System 

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•  Participation in working groups 

•  Harmonised data collection 

A final steering committee meeting was to be held in March 2008. 

Environment 

The following CARDS projects were being implemented in 2007: 

•  “Pilot River Basin Plan for Sava River - Croatia, BiH, Serbia and Montenegro” (contract 
076-751: €2.14 million): CARDS 2003. The scope of the project was to provide technical 
assistance  aimed  at  supporting  the  governments  of  BiH,  Croatia  and  Serbia  and 
Montenegro in implementing the Water Framework Directive in these countries in general 
and in the Sava river basin in particular, with pilot projects in Vrbas River sub-basin (BiH), 
Dobra River sub-basin (Croatia) and Kolubara River sub-basin (Serbia and Montenegro). 

•  “Support 

to 

the 

implementation  of 

the  Regional  Environmental  Reconstruction 

Programme” (REReP) (contract 125-235: €1 million): CARDS 2005; 

•  A  joint  management  Contribution  Agreement  with  the  Regional  Environmental 
Centre  (REC)  was  entered  into  during  the  first  Quarter  of  2007  and  the  new 
REReP leaflet was prepared and published at the beginning of October. The 10th 
Task  Force  meeting  took  place  with  the  EC  in  Brussels  in  November.  The  final 
topics of regional workshop and study visits were agreed upon and confirmed by 
the beneficiary institutions at the 7th ELAN meeting in November in Skopje. The 
searchable  web-based  Matrix  was  upgraded  with  the  aim  to  become  more  user-
friendly and is available on the project website. The list of EC directives subject to 
progress monitoring was updated to reflect legislative changes in the EU since the 
last progress monitoring. 

•  The  first  Regional  Priority  Environmental  Investment  Programme  (PEIP) 
meeting  took  place  on  26  November  in  Brussels.  The  meeting  focused  on  the 
following topics :  

•  EC  approach  towards  financing  infrastructure  projects  –  new  initiatives  and 

project preparation facilities;  

•  EC Project Preparation Facilities (including DABLAS) and their implications for 

candidate and potential candidate countries; 

•  Progress on financing priority investment projects in Croatia, fYRoM and Turkey; 

•  Benefits of compliance with the acquis in potential candidate countries; 

•  The Work Plan for 2008 was  discussed and presented at the REReP Task Force 

meeting on 27 November 2007. 

•  “Support  to  the  'Environmental  Compliance  and  Enforcement  Network  for  Accession”' 

(ECENA) (contract 131-659): CARDS 2005.  

•  ECENA  is  a  network  of  environmental  inspectors  and  experts  of  the  Western 
Balkans  and  Turkey  to  exchange  'best  practice'  in  the  field  of  following  up 
compliance  with 
the  field  of 
environment.  In  addition  to  establishing  a  network  among  specialists  the  project 
arranges training of specialists on selected segments of the acquis, in particular on 
new  additions  to  the  environmental  acquis.  A  joint  management  Contribution 
Agreement with REC was entered into during the first Quarter of 2007. 

transposed  acquis  communautaire 

the 

in 

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•  "Danube  regional  investment  support  facility"  (DISF)  (contract  071-310:  €3.64 million): 

CARDS 2002 (This project ended in June 2007).  

•  "Environmental  project  preparation  facility"  (EPPF)  (contract  123-894:  €1.79 million): 

CARDS 2003 

Two Phare programmes were sub-delegated to DG Environment: 

1/ Phare 2005: 

•  “Developing  the  capacity  of  environmental  authorities,  through  transfer  of  best  practice 
and training to support effective use of financial resources”: the Final report was submitted 
and  approved  but  the  contractor  had  encountered  difficulties  in  collection  of  data  from 
some countries;  

•  “Capacity  building  in  implementation  of  the  environmental  acquis  at  the  local  and 

regional level”, the project was extended until July 2008. 

2/ Phare 2006:  

•  “Support  for  Investment  preparation  under  the  Danube-Black  Sea  (DABLAS)  Task 
Force”. The project is progressing well and according to schedule. Pilot projects re being 
prepared in the beneficiary countries and methodological guidance on project preparation 
is being supplied. 

•  “Supporting  the  enforcement  of  environmental  legislation  in  Acceding  and  Candidate 

countries through IMPEL and ECENA networks”.  

•  “Monitoring transposition and implementation of the EU environmental acquis”.  

•  “Developing the capacity of environmental NGOs, through transfer of best practices from 
NGOs in the EU25”. Twelve grant agreements were signed in 2007, but there were some 
minor changes to be made in grant activities. 

•  “NGO Forum”.  

•  “Service contract for twinning grants for NGOs”. A service contract was signed in 2007, 

which was giving support to the implementation of twelve grant agreements.  

Nuclear safety and radiation protection 

There were two programmes under implementation at the end of 2007:  

•  CARDS 2005 Nuclear Safety programme (2005/017-532), 

•  Phare 2006 Nuclear Safety Programme (2006/018-412), 

The  service  contract  123-776  concerning  "Management  of  medical  radioactive  waste  in 
Bulgaria, Croatia and Romania" was completed and the final draft final report approved. The 
last payment was initially suspended due to the lack of audit certificate, but situation has since 
been settled.  

A centralised project entitled: 'Technical back-up to PHARE/IPA nuclear activities" (contract 
143-474,  budget  €279,000)  is  being  implemented.  The  project  has  been  contracted  in  2007 
through  an  administrative  agreement  with  the  Petten  establishment  of  the  Joint  Research 
Centre  (Institute  of  Energy).  The  project  consists  of  providing  technical  support  to  DG 
ELARG in the implementation of the Phare and IPA nuclear projects. 

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Programme Management Issues - Monitoring and Evaluation  

22.4.  Monitoring and Interim Evaluation 

The  sectoral  interim  evaluations  of  Phare  programmes  as  well  as  of  pre-accession  financial 
instrument  for  Turkey  are  essentially  programme  management  tools  which  provide 
programme  managers  with  a  regular  performance  assessment  of  the  activities  in  all  sectors. 
Recommendations  are  systematically  put  forward  in  the  reports  for  improving  management 
and  delivery  of  evaluated  programmes/projects  and  discussed  at  debriefing  and  Joint 
Monitoring  Committee  (JMC)  meetings  for  follow-up  actions.  The  monitoring  and  interim 
evaluation system in the new Member States also provides for the feedback of monitoring and 
evaluation  results  to  decision-making  through  the  Implementation  Status  Reports  that  are 
discussed  for  corrective  actions  at  the  JMC  meetings.  Moreover,  thematic,  country  and 
consolidated  interim  evaluations  provide  recommendations  on  the  design  of  future 
programmes. 

The Interim Evaluation Scheme for Turkey generated one comprehensive country evaluation 
report for Turkey (TPAER) as well as two sector Interim Evaluation reports.  

The  key  messages  derived  from  the  country  summary  evaluation  of  Turkey  were  the 
following: 

•  The overall assessment of EU support to Turkey is that, while much has been achieved, a 
relatively  small  additional  investment  in  human  resources  in  key  DIS  institutions  would 
have facilitated better use of EU funds, and a significantly higher level of tangible impact. 
Given that DIS capacity did not develop as envisaged, EU assistance was too ambitious. 

•  The shortcomings in DIS capacity resulted in poor design of assistance due to absence of 
relevant sectoral strategies, and detailed, systematic needs analysis. Moreover, the lack of 
programming readiness was affected by insufficient progress in key legislation such as the 
Public Administration Framework Law. 

•  With  the  notable  exceptions  of  Justice  and  Home  Affairs  and  Social  Development, 
assistance  was  not  efficiently  implemented.  Poor  coordination  between  key  institutions, 
persistent understaffing in the CFCU and the EUSG, tender and contractual documents of 
low  quality,  as  well  as  rushed,  last  minute  contracting  of  much  assistance  seriously 
constrained the benefits of EU assistance.  

•  Efficiency has also been undermined by lack of effective monitoring which fails to provide 
useful  information,  and  in  many  cases,  remains  practically  non-  existent.  A  noteworthy 
development in this respect is the preparation of a Common Monitoring Manual for grant 
schemes. 

•  As a result of this inefficient implementation, overall effectiveness has been limited. Only 
three out of eighteen sector evaluations were rated as fully satisfactory, notably Justice and 
Home Affairs, Economic and Social Cohesion, and Social Development.  

•  Overall sustainability is at risk due to high levels of turnover of staff, and slow progress in 
public  administration  reform.  But  prospects  for  sustainability  improved  somewhat  as  a 
result  of  good  levels  of  commitment,  well-  planned  dissemination  of  activities,  and 
recognition of the need for sustainability at the design stage. 

No Interim Evaluation reports were issued for Croatia during 2007.  

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22.5.  Ex-post evaluation 

The  findings  of  the  ex-post  evaluation  Consolidated  Report  identified  as  a  key  risk  factor 
several  weaknesses  in  formulating  the  strategies  and  objectives  for  the  pre-accession 
assistance.  Specifically  the  findings  of  this  report  pointed  to  the  need  to  rebalance  pre-
accession  support  through  increased  attention  and  broader  support  to  the  political  criteria 
including good governance, PAR, civil society and fight against corruption. Since these key 
messages  were  echoed  in  the  2007  Enlargement  Strategy  Paper,  the  key  messages  on  the 
political  criteria  in  these  two  reports  were  mutually  reinforced.  Additionally,  the  evaluation 
report's proposal for a broader approach to public sector reform was very much welcomed by 
beneficiaries, World Bank, OECD, Council of Europe and Transparency International.  

22.6.  Other activities of the monitoring and evaluation function 

The  monitoring  and  interim  evaluation  system  involves  successive  decentralisation  of  the 
responsibilities  for  monitoring  and  interim  evaluation  to  the  Candidate  Countries.  In 
conjunction  with  DIS  accreditation,  the  responsibility  for  monitoring  is  decentralised  to  the 
Candidate  Country  (but  the  Commission  remains  ultimately  responsible  for  monitoring), 
whereas the interim evaluation (IE) function remains centralised until the Candidate Country 
has developed satisfactory monitoring and evaluation capacities. 

All  the  new  Member  States  had  their  decentralised  monitoring  and  Interim  Evaluation 
functions set up since 2005. Croatia and Turkey have decentralised monitoring function, and 
once  evaluation  capacity  is  sufficiently  built  and  following  conferral  of  management  under 
IPA, it is expected that decentralisation of Interim Evaluation will follow for these countries. 
As regards FYROM, DIS is expected to be introduced by end 2008/ spring 2009. 

During  2007,  the  Commission  started  to  prepare  the  taking  over  of  the  evaluation  function 
from the EAR. 

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PART III: FINANCIAL DATA 

23. 

PHARE, TURKEY PRE-ACCESSION  AND TRANSITION FACILITY FUNDS BY YEAR 1990 
– 2007 

Financial Overview and Performance 

The following chart shows the breakdown year by year of the funds committed in the period 
1990-2007 (€ million): 

Year 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

Funds Committed 

475.3

769.7

979.6

966.1

946.1

1,114.0

1,207.8

1,135.1

1,153.9

1,481.7

1,651.5

1,635.4

1,695.1

1,698.1

1,240.5

1,353.9

1,772.2

78.2

In  2007,  total  Phare  and  Transition  Facility  commitments  amounted  to  €  78.2  million, 
comprising: 

Transition Facility Programmes: € 78 million euros, of which 

EN 

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Bulgaria 

Romania 

31.5 million 

46.5 million 

Horizontal programmes and others: 

€ 0.2 million 

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111 

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24. 

PHARE,  TURKEY  PRE-ACCESSION  AND  TRANSITION  FACILITY  FUNDS  BY  COUNTRY 
1990–2007 

Total  Phare,  Turkey  and  Transition  Facility  commitments,  contracts  and  payments,  in  € 
million 

Partner 
Country 

Bulgaria 

Czech republic 

Croatia 

Cyprus(*) 

Czechoslovakia 

East Germany 

Estonia 

Hungary 

Latvia 

Lithuania 

Malta 

Multi-country 
programmes 

Poland 

Romania 

Slovakia 

Slovenia 

Turkey 

Total 

Commitments 

Contracts  

Payments  

2,359.6

1,786.3

1,522.9 

917.2

144.6

338.0

230.5

34.5

346.8

836.4

61.4

101.8

231.8

28.9

311.3

824.2 

9.6 

71.7 

228.9 

28.9 

307.8 

1,480.1

1,376.8

1,356.5 

423.6

810.3

57.1

381.2

760.9

46.4

376.8 

743.7 

41.6 

3,357.0

2,829.4

2,178.2 

3,996.0

3,670.0

717.6

360.3

3,657.5

2,942.8

661.8

326.7

1,861.9

1,219.6

3,607.4 

2,344.4 

656.0 

321.5 

922.7 

21,105.3

17,561.0

15,542.7 

25. 

CARDS FUNDS BY YEAR 2000 – 2007 

Financial Overview and Performance 

EN 

112 

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The following chart shows the breakdown year by year of the funds committed in the period 
2000-2007 (€ million): 

Year 

2000 

2001 

2002 

2003 

2004 

200514 

2006 

2007 

Funds Committed 

836.2

686.5

620.4

531.0

549.3

500.5

513.1

0.0

26. 

CARDS FUNDS BY COUNTRY 2000 – 2007 

Total CARDS commitments, contracts and payments, in € million 

Partner Country  Commitments  

Contracts  

Payments  

Albania 

Bosnia 
Herzegovina 

& 

Croatia 

Former  Yugoslav 
Republic 
of 
Macedonia 

Kosovo 

Montenegro 

Serbia15 

292.3

481.8

196.1

299.2

1030.3

90.4

1390.6

245.2

460.2

180.0

183.4 

411.6 

172.4 

287.6

264.1 

1025.3

126.8

1353.8

977.8 

122.1 

1192.2 

14 

Figures  include  re-use  of  recoveries  from  previous  years  (and  therefore  may  be  above  the  original 
budgetary allocations) 

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Regional 
Programme16 

Total 

456.5

421.4

375.4 

4237.1

4100.2

3699.1 

15 
16 

Includes Montenegro in 2000-2001; includes funds for the Serbia and Montenegro State Union (2005).  
Includes interim civilian administrations 

EN 

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