Special Report No 13/2010 ‘Is the new European Neighbourhood and Partnership Instrument successfully launched and achieving results in the Southern Caucasus (Armenia, Azerbaijan and Georgia)?’
Date: 2011-02-01
Institutions: European Court of Auditors
Subjects: Armenia, Azerbaijan, EU policy, European neighbourhood policy, Georgia

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Is the new european neIghbourhood and 

partnershIp Instrument successfully launched 

and achIevIng results In the southern caucasus 

(armenIa, azerbaIjan and georgIa)?

en

 
 
 
 
special r eport no  13 

 2010

Is the new european 
neIghbourhood and   
partnershIp Instrument  
successfully launched 
and achIevIng results  In 
the southern  caucasus 
(armenIa,  azerbaIjan 
and georgIa)?

(pursuant to article 287(4), second subparagraph, tfeu)

european court of audItors

european court of audItors 
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1615 luxembourg
luXembourg

tel. +352 4398-1
fax +352 4398-46410
e-mail: euraud@eca.europa.eu
Internet: http://www.eca.europa.eu

special r eport no 13 

 2010

a great deal of additional information on the european union is available on the Internet. 

It can be accessed through the europa server (http://europa.eu).

cataloguing data can be found at the end of this publication 

luxembourg: publications office of the european union, 2011

Isbn 978-92-9207-928-4

doi:10.2865/61682

© european union, 2011 

reproduction is authorised provided the source is acknowledged.

Printed in Luxembourg

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

contents

3

Paragraph

Acronyms And  AbbreviA tions

i–vii  

summ Ary

1–6 

7–9 

introduction

Audit scoPe  And  APPro Ach

10–66 

observAtions

10–34 

Were the first AnnuAl Action ProgrAmmes Well designed?

12–17 

a strategIc framework  Is  In place

18–27 

 InsuffIcIent clarIty and prIorItIsatIon reduces the benefIts of  multIannual  programmIng   
by dg releX

28–31 

t wo year programmIng and desIgn process  Involves rIsks to the relevance of the assIstance

32–34 

35–56 

36–39 

 programmIng and desIgn of assIstance are not suffIcIently guIded by a structured dIalogue 
wIth benefIcIary states

 hAs the imPlementAtion of the first AnnuAl Action ProgrAmmes led to timely And 
successful Achievements?

 armenIa:  reform process was strengthened  In assIstance prIorIty 
traInIng ’ but progress Is stIll very fragIle

‘vocatIonal  educatIonal 

40–44 

azerbaIjan:  unsatIsfactory progress  In assIstance prIorIty 

‘energy ’

45–52 

 georgIa:  modest progress  In assIstance prIorIty 
In assIstance prIorIty 

‘economIc rehabIlItatIon and confIdence buIldIng ’

‘publIc  fInance  management’ and no progress 

53–56 

all countrIes:  t wInnIng under  enpI was stIll  In the start-up phase

57–66 

 hAs the commission AdequAtely exPloited the delivery tools AvAilAble under the 
euroPeAn neighbourhood And PArtnershiP instrument?

58–59 

the  commIssIon varIed the way 

In whIch  It provIded fInancIal assIstance

60–63 

shIft to sector budget support was  InsuffIcIently prepared, affectIng performance

64–66 

use of delIvery tools has not been selectIve enough

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 
4

67-75 

conclusions And recommend Ations

Annex i 
Annex ii 

Annex iii 

Annex iv 

Annex v 

– 

– 

– 

–  rAnge of tools for delivering AssistAnce under enPi  
– 

 ArmeniA: sPecific conditions of sector suPPort ProgrAmme for 
vocAtionAl And educAtionAl trAining, second vAriAble instAlment 
(5 million euro)
 AzerbAijAn: sPecific conditions of sector suPPort ProgrAmme for 
energy reform, second vAriAble instAlment (5 million euro)
 sPecific conditions of sector suPPort ProgrAmme for Public finAnce 
mAnAgement in georgiA, second vAriAble instAlment (5 million euro)
 georgiA: risks to vAlue for money in AdditionAl eu Post-crisis 
AllocAtion

rePly  of the commission

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 
 
 
 
 
 
acronyms and abbrevIatIons

5

AP: annual programme

dg relex: directorate g eneral for external r elations

ec: e uropean commission

enP: e uropean neighbourhood p olicy

enPi: e uropean neighbourhood and p artnership Instrument

eu: e uropean union

europeAid: directorate g eneral for external c ooperation programmes

gfsm: g overnment finance statistics m anual

medA:  mediterranean development assistance (measures to accompany the reform of economic  
and social structures in the m editerranean non-member countries)

PAo: programme administration o ffice

Pfm: public finance m anagement

tacis: technical assistance to the c ommonwealth of Independent states

vet: vocational education and training

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

6

summary

i.
the european neighbour hood and  par tner-
s h i p   I n s t r u m e nt   wa s   l a u n c h e d   i n   2 0 0 7   a s   a 
n e w   f r a m e w o r k   f o r   p l a n n i n g   a n d   d e l i v e r -
i n g   a s s i s t a n ce   to   1 7   p a r t n e r   co u nt r i e s   a n d 
te r r i to r i e s.   I t   b e c a m e   t h e   m a i n   i n s t r u m e nt 
for  e u  f inan c ial  suppor t  to  the   th ree  coun-
t r i e s   i n   t h e   s o u t h e r n   c a u c a s u s   ( a r m e n i a , 
a z e r b a i j a n ,   g e o r g i a )   w h i c h   a r e   o f   s t r o n g 
e co n o m i c   a n d   s t rate gi c   i nte re s t   fo r   t h e   e u 
( see paragraphs  1 to 6 ).

ii. 
t h e   o b j e c t i v e   o f   t h e   a u d i t   w a s   t o   a s s e s s 
w h e t h e r   t h e   n e w   e n pI   w a s   s u c c e s s f u l l y 
l a u n c h e d   a n d   a c h i e v i n g   r e s u l t s   i n   t h e 
s o u t h e r n   c a u c a s u s .   t h e   o v e r a l l   q u e s t i o n 
is an swered by  addressin g t hree sub - que s-
tion s:

( a) 

were the first annual action programmes 
well d esign ed?

( b) 

has  th e  implem entat ion   of  th e  f i r st   a n-
n u a l   a c t i o n   p r o g r a m m e s   l e d   t o   t i m e l y 
an d successful ach ievements?

( c) 

has the commission adequately exploit-
ed the deliver y tools available under the 
eu ro p e a n   ne i g h b o u r h o o d   a n d   pa r t n e r-
sh ip I n strument ?

iii. 
t h e   c o u r t ’s   a u d i t   e x a m i n e d   t h e   p l a n n i n g 
s y s t e m   t o   d e f i n e   e u  a s s i s t a n c e   p r i o r i t i e s , 
the achievements of the first annual ac tion 
p r o g r a m m e s   a n d   t h e   d e p l o y m e n t   o f   t h e 
var ious  deliver y  tools.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

77

summary

vi. 
c o n c e r n i n g   t h e   d e l i v e r y   t o o l s ,   t h e   c o m-
m i s s i o n   s u c c e e d e d   i n   v a r y i n g   t h e   w a y   i n 
w h i c h   i t   p r o v i d e d   f i n a n c i a l   a s s i s t a n c e   b y 
b r i n g i n g   i n   s e c t o r   b u d g e t   s u p p o r t   a n d 
tw i n n i n g.   howe ve r   t h e   p re d o m i n a n t   to o l, 
s e c t o r   b u d g e t   s u p p o r t ,   w a s   i n s u f f i c i e n t l y 
prepared,  com promisin g  pe r for man ce.  th e 
u s e   o f   d e l i ve r y   t o o l s   h a s   n o t   b e e n   s e l e c t -
ive en ough  (se e  paragraphs  5 7  to 6 6 ) .

vii. 
on   t h e   b a s i s   o f   t h e s e   o b s e r v a t i o n s ,   t h e 
c o u r t   m a k e s   r e c o m m e n d a t i o n s   w h i c h 
c o u l d   h e l p   t h e   c o m m i s s i o n   t o   i n c r e a s e 
t h e   e f f e c t i v e n e s s   o f   t h e   a s s i s t a n c e   g i v e n 
t o   a r m e n i a ,   a z e r b a i j a n   a n d   g e o r g i a   ( s e e 
p a r a g r a p h s   6 7   t o   7 5 ) .   ke y   r e c o m m e n d a-
t i o n s   a r e   s t r e a m l i n i n g   t h e   p r o g r a m m i n g 
a n d   d e s i g n   p r o c e s s   a n d   u s i n g   t h e   t o o l   o f 
sec tor budget  suppor t  more selec t ive ly.

iv. 
a s   r e g a r d s   p r o g r a m m i n g   a n d   d e s i g n ,   t h e 
c o m m i s s i o n   a p p l i e d   a   m u l t i a n n u a l   p l a n-
n i n g   s ys te m   to   d e f i n e  e u  a s s i s t a n ce   p r i o r -
ities in line with the enpI  r egulation. how -
e v e r   t h e   u s e f u l n e s s   o f   t h e   p r o g r a m m i n g 
w o r k   w a s   r e d u c e d   b y   i n s u f f i c i e n t   c l a r i t y 
a n d   p r i o r i t i s a t i o n .   t h e   l e n g t h y   p r o g r a m-
m i n g   a n d   d e s i g n   p r o c e s s   d i d   n o t   s u i t   t h e 
f a s t   c h a n gi n g   a n d   co n f l i c t - a f fe c te d   e nv i r-
o n m e nt   o f   t h e   s o u t h e r n   ca u c a s u s,   e n d a n-
gering the relevance of the assistance. pro -
g r a m m i n g   a n d   d e s i g n   o f   a s s i s t a n c e   w e r e 
not sufficiently guided by a struc tured dia-
l o g u e   w i t h   t h e   b e n e f i c i a r y   c o u n t r i e s   ( s e e 
paragra phs 10 to  34).

v.
a c h i e v e m e n t s   o v e r a l l   w e r e   m i x e d .   w h i l e 
t h e   p r o g r a m m e   f o r   vo c a t i o n a l   a n d   e d u-
c a t i o n a l   tr a i n i n g   i n   a r m e n i a   p o s i t i v e l y 
i n f l u e n c e d   a n d   s t r e n g t h e n e d   t h e   r e f o r m 
p r o c e s s ,   h a r d l y   a n y   c o n c r e t e   s t e p s   h a d 
b e e n   t a k e n   t o w a r d s   a c h i e v i n g   p r o g r e s s 
fo r   e n e r g y   r e fo r m   i n   a z e r b a i j a n .  t h e   p r o -
g r a m m e   f o r   p u b l i c   f i n a n c e   m a n a g e m e n t 
r e f o r m   i n   g e o r g i a   p r o g r e s s e d   v e r y   l i t t l e 
d u r i n g   i t s   f i r s t   1 2   m o n t h s   b u t   c h a n g e   w a s 
s t i m u l a te d   i n   t h e   s e co n d   ye a r.   I n   t h e   co n-
f l i c t   re g i o n   o f   a b k h a z i a ,   t h e   e n pI   h a s   n o t 
yet proved to be an appropriate instrument 
for economic rehabilitation and confidence 
building. the twinning tool was still in the 
star t-up p hase (s ee p aragrap hs  3 5  to 5 6 ).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 IntroductIon

8

1. 

2. 

3. 

fo l l ow i n g   t h e   e n l a rg e m e nt   o f   2 0 0 4   t h e   eu ro p e a n   u n i o n   ( e u ) 
ha s  so u ght  to  avoid  new   d ividin g   li ne s   i n   europe   and   to  pro -
mote stabilit y and prosperit y within and beyond the new bor-
d e r s   o f   t h e   e u.   a   n e w   eu ro p e a n   n e i g h b o u r h o o d   po l i c y   ( e n p ) 
was developed, based on ac tion plans agreed bet ween the eu 
an d eac h par t ner  countr y.

th e   e n p   a i m s   to   g o   b e yo n d   t h e   ex i s t i n g   pa r t n e r s h i p   a n d   co -
o p e r a t i o n   a g r e e m e n t s   t o   o f f e r   n e i g h b o u r i n g   c o u n t r i e s   t h e 
p r o s p e c t   o f   a n   i n c r e a s i n g l y   c l o s e r   r e l a t i o n s h i p   w i t h   t h e   e u. 
t h e   o v e r a l l   g o a l   i s   t o   f o s t e r   t h e   p o l i t i c a l   a n d   e c o n o m i c   r e -
form processes, promoting closer economic integration as well 
a s   a p p r ox i m a t i o n   t o   e u   s t a n d a r d s   a n d   s u s t a i n a b l e   d e v e l o p -
ment.

t h e   e u r o p e a n   n e i g h b o u r h o o d   a n d   p a r t n e r s h i p   I n s t r u m e n t 
( e n p I ) 1  w a s   l a u n c h e d   i n   2 0 0 7   a s   a   n e w   f r a m e w o r k   f o r   p l a n -
ning and delivering assistance. with an envelope of 5,6 billion 
e u ro   fo r   t h e   p e r i o d   2 0 0 7 – 1 0 ,   t h e   e n p I   p rov i d e s   a s s i s t a n ce   to 
1 7   p a r t n e r   c o u n t r i e s   a n d   t e r r i t o r i e s :   t e n   i n   t h e   m e d i t e r r a n e -
a n   re gi o n 2,   fo u r   i n   e a s te r n   eu ro p e 3  a n d   t h re e   i n   t h e   s o u t h e r n 
caucasus (armenia, a zerbaijan, georgia) (see Map — Southern 
 Caucasus). by replacing tacis 4 and meda 5, the enpI became the 
main instrument for eu financial suppor t to these countr ies.

1  regulation (ec) no 1638/2006 
of the european parliament and 

of the council of 24 october 

2006 laying down general 

provisions establishing a 

european neighbourhood and 

partnership Instrument (oj l 310, 

9.11.2006). the regulation 

applies from 1.1.2007 to 

31.12.2013.

2  algeria, egypt, Israel, jordan, 
lebanon, libya, morocco, 

palestinian territories, syria, 

tunisia.

3  belarus, moldova, russian 
federation, ukraine.

4  technical assistance to the 
commonwealth of Independent 

states.

5  financial and technical 
measures to accompany the 

reform of economic and social 

structures in the framework 

of the euro-mediterranean 

partnership.

m A P

s o u t h e r n   c Au c A s u s

Conflict region
of Abkhazia

Russia

Black sea

Conflict region of
South Ossetia

Georgia

T'Bilisi

Caspian sea

Vanadzor

Ijevan

Armenia
Yerevan

Azerbaijan

Baku

Turkey

Source: eurostat.

Iran

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

4. 

5. 

6. 

th e   m o s t   s i gn i f i c a n t   co m p o n e n t s   o f   t h e   e n pI   a re   t h e   a n n u a l 
a c t i o n   p r o g r a m m e s ,   d e v o t i n g   3 1 1   m i l l i o n   e u r o   t o   t h e   t h r e e 
s outher n caucasus countr ies for the per iod 2007–10 6. I n add-
ition to these national allocations, the countr ies benefit from 
enpI multi- countr y, cross-border and regional programmes, as 
wel l  as  fro m pro grammes fin an ced  by  s peci f ic  budg e t  lin e s.

the  enpI  of fers  a b roader range  of tools fo r  d el iver i n g as s is t -
ance (see Annex I) than the former  tacis instrument, including 
twinning 7 and sec tor budget suppor t. the commission defines 
s e c to r   b u d g e t   s u p p o r t   a s  ‘ t h e   t r a n s fe r   o f   f i n a n c i a l   re s o u rce s 
from an ex ter nal financing agenc y to the national  treasur y of 
a par tner countr y in suppor t of a sec tor programme, following 
t h e   r e s p e c t   b y   t h e   l a t t e r   o f   a g r e e d   c o n d i t i o n s   f o r   p a y m e n t . 
t h e   f i n a n c i a l   r e s o u r c e s   t h u s   r e c e i v e d   a r e   p a r t   o f   t h e   g l o b a l 
re s o u rce s   o f   t h e   p a r t n e r   co u nt r y,   a n d   a re   co n s e q u e nt l y   u s e d 
i n   a c co rd a n ce   w i t h   t h e   p u b l i c   f i n a n c i a l   m a n a g e m e n t   s y s te m 
of t he  par tn er co unt r y ’.

while the s outher n caucasus is on the fr inge of the enp  east -
ern region (only georgia, via the black  sea, shares a sea border 
w i t h   t h e   e u) ,   t h e   co u n t r i e s   a re   o f   s t ro n g   e co n o m i c   a n d   s t ra-
te gi c   i nte re s t   fo r   t h e   e u.  th e   co u r t   h a s   n e ve r   p re v i o u s l y   t a r -
gete d t he  s o ut her n cau cas us  region for a per for m ance  audi t, 
w h e re a s   t wo   a u d i t s   c ove re d   t h e   a d j o i n i n g   e a s te r n   eu ro p e a n 
s t ate s   o f   f i r s t l y   t h e   ru s s i a n   fe d e rat i o n   ( 2 0 0 6 ) 8,   t h e n   b e l a r u s, 
moldova and uk raine (2008) 9. the other region within the enp, 
the m editer ranean countr ies, was the subjec t of a special r e -
po r t  p ub l ishe d in  20 06 10.

9

6  the funds are allocated as 
follows: armenia 98,4 million 

euro, azerbaijan 92,2 million 

euro and georgia 120,4 million 

euro. following the 2008 conflict 

in georgia, the commission 

decided to increase georgia’s 

allocation by 61,5 million euro 

(see Annex V).

7  secondment of 
national experts by public 

administrations of eu member 

states to the beneficiary 

countries on a full-time and 

long-term basis. twinning 

contracts constitute the legal 

documents, which commit both 

parties to achieving the results 

desired.

8  special report no 2/2006 
concerning the performance of 

projects financed under tacis in 

the russian federation (oj c 119, 

19.5.2006).

9  special report no 9/2008 
concerning the effectiveness 

of eu support in the area of 

freedom, security and justice for 

belarus, moldova and ukraine 

(oj c 71, 25.3.2009).

10  special report no 5/2006 
concerning the meda 

programme (oj c 200, 

24.8.2006).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

audIt  scope and approach

10

the objec tive of the audit was to assess whether the new enpI 
was successfully launched and achieving results in the s outh-
ern caucasus. the audit focused on the first enpI annual action 
p ro gra m m e s   w h i c h   we re   a p p rove d   by   t h e   co m m i s s i o n   i n   t h e 
p e r i o d   o c t o b e r   t o   d e c e m b e r   2 0 0 7 .   t h e s e   p r o g r a m m e s   h a v e 
a   m u l t i a n n u a l   p e r i o d   o f   e xe c u t i o n   a l l o w i n g   p a y m e n t s   u p   t o 
2013 .

11  the corresponding payments 
took place in 2008 and 2009.

12  the commission contracts 
a consortium to monitor the 

programmes.

t h e   o v e r a l l   a u d i t   q u e s t i o n   i s   a n s w e r e d   b y   a d d r e s s i n g   t h r e e 
sub - qu est ion s:

(a ) 

were  th e first  annu al  ac tion  program mes  we ll  de si gn ed?

(b) 

h a s   t h e   i m p l e m e n t a t i o n   o f   t h e   f i r s t   a n n u a l   a c t i o n   p r o -
gramm es l ed to  t imely  and s ucce ss ful  a ch ie ve m ents ?

(c) 

h a s   t h e   c o m m i s s i o n   a d e q u a t e l y   e x p l o i t e d   t h e   d e l i v e r y 
to o ls  avail abl e under t he en pI?

fi r s t l y,   t h e   a u d i t   ex a m i n e d   t h e   s t rate gi c   p l a n n i n g   s ys te m   fo r 
d e t e r m i n i n g   t h e   a s s i s t a n ce   p r i o r i t i e s   p r i n c i p a l l y   a t   co m m i s-
sion headquar ters (dg  releX and  europea id in brussels).  s ec-
o n d l y,   o n   t h e   s p o t   m i s s i o n s   we re   c a r r i e d   o u t   b e t we e n   m a rc h 
a n d   n o v e m b e r   2 0 0 9   i n   e a c h   o f   t h e   t h r e e   c o u n t r i e s   t o   v e r i f y 
th e  firs t  o p eratio nal   ac hieve me nt s  and   t he   de liver y  tools   a p -
p l i e d 1 1.  th e s e   m i s s i o n s   i n c l u d e d   v i s i t s   to   t h e   e c   d e l e g a t i o n s 
and to national implementing bodies as well as to monitoring 
un its 12.

7. 

8. 

9. 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

13  these agreements form 
the legal basis of the relations 

between the eu and the three 

countries. they were concluded 

for an initial period of 10 years 

and are automatically renewed 

thereafter year by year provided 

that neither party gives written 

notice of denunciation.

observatIons

11

W e r e  t h e   f i r s t   A n n uAl   Ac t i o n 
P r o g r Am m e s   We l l   d e s i g n e d ?

10.  

t h e   e n p I   re g u l a t i o n   re q u i re s   m u l t i a n n u a l   p ro g r a m m i n g   a n d 
s t r a t e g y   p a p e r s.   m u l t i a n n u a l   p ro g r a m m i n g   h e l p s   t o   i d e n t i f y 
re c i p i e n t   co u nt r y   n e e d s   a n d   to   t ra n s l ate   t h e m   i nto   s t rate gi c 
d e ve l o p m e nt   o b j e c t i ve s.  th e   s u b s e q u e nt   d e s i gn   p h a s e   t u r n s 
development objectives into programme and project pro  posals 
(identification and formulation) and concludes with a decision 
on  a f inancial co nt r ib ut ion .

11 .  

th e   co u r t   e x a m i n e d   w h e t h e r   t h e   p l a n n i n g   s y s t e m   i d e n t i f i e s 
an d  p r io r it ises  the  need s  of  th e  reci pie nt  countr ie s  i n   a  c lea r 
and timely way, based on a struc tured dialogue with the bene -
ficiar ie s.

A   s t r At e g i c   f r Am e W o r k   i s   i n   Pl Ac e

12.  

th e   d e ve l o p m e nt   o f   t h e   f i r s t   a n n u a l   a c t i o n   p ro gra m m e s   wa s 
t h e   r e s u l t   o f   a   s t r a t e g i c   p l a n n i n g   p r o c e s s .   t h e   s t e p s   o f   t h i s 
p r o c e s s ,   t h e   r e l a t e d   d o c u m e n t s   a n d   t h e   l i n k s   b e t w e e n   t h e 
d o c u m e nt s   we re   a n a l ys e d   by   t h e   co u r t   ( s e e   D i a g ra m   I) .   two 
di r e c t o r a t e s   g e n e r a l   o f   t h e   c o m m i s s i o n   a r e   r e s p o n s i b l e :  
d g   r e l e X   c a r r i e s   o u t   t h e   m u l t i a n n u a l   p r o g r a m m i n g   w h i l e 
 eu rop ea id d esigns  and imp l ement s the  ye ar ly  progra mm es.

13.   af ter intensive p rep arato r y wor k by  th e  commiss ion, th e e np 
a c t i o n   p l a n s   w e r e   b i l a t e r a l l y   a g r e e d   i n   n o v e m b e r   2 0 0 6   b e -
t ween th e eu and  ar men ia, a zer baij an an d g eorgia. toget he r 
w i t h   t h e   pa r t n e r s h i p   a n d   co o p e rat i o n   agre e m e nt s   o f   1 9 9 9 1 3, 
th ey  fo r m the  m ain p ol ic y fram ewor k  fo r  th e e n pI.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

12

d i A g r A m   i

o v e r v i e W   o f   Au d i t e d   d o c u m e n t s   l i n k e d  to   P l A n n i n g   P r o c e s s

Steps in the process

Related documents / Legal basis

Policy settings

Partnership and Cooperation Agreement (1999-2009)1

ENP action plan

2007–11

Programming
(DG RELEX)

Country Strategy Paper

2007–13

National indicative programme

2007–10

2007 annual action programme

(approved in 2007 with multiannual
period of execution)

Financing agreements

(concluded in 2007 and 2008 with 
payments possible up to 2013)

Design
(EuropeAid)

1  automatically renewed year by year if no notice of termination.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

14  encompassing enpI country 
programmes, multi-country 

programmes, cross-border 

cooperation programmes as well 

as thematic programmes and the 

stability Instrument.

13

14.   b a s e d   o n   t h i s   f ra m e wo r k ,   d g   r e l e X   d e ve l o p e d   t wo   s t rate gi c 

docu me nt s fo r e ach of t he t h ree  countr i es :

(a) 

t h e   2 0 0 7 – 1 3   co u nt r y   st rate g y   pa p e r.  th i s   p a p e r   d o e s   n o t 
c o n t a i n   a n y   f i n a n c i a l   f o r e c a s t   b u t   p r o v i d e s   a n   o v e r v i e w 
o f al l  fu tu re ec a ssis tance pr ior ities 14 to be covered in  t he 
nex t  s eve n ye ars;

(b) 

the 2007–10 national indicative programme. this document 
translates the assistance priorities of the countr y strategy 
paper into funding pr ior ities for the nex t four years under 
t h e   n a t i o n a l   a l l o c a t i o n   o f   t h e   e n pI .   I t   i n c l u d e s   a n   e s t i-
mate of the overall amount needed and gives an indicative 
b reak down o f reso urces  for  th e  se le c ted  pr io r it ie s.

15.   nex t, europeaid designed the 2007 annual ac tion programmes 
(see D iagra m II).  different assistance pr ior ities were fixed for 
t h e   t h re e   c o u n t r i e s   b a s e d   o n   t h e   p r i o r i t y   a re a s   i d e n t i f i e d   i n 
th e nat ional  indicative p ro gram me s :

(a) 

i n   a r m e n i a   h i g h e s t   p r i o r i t y   w a s   gi ve n   to   vo c a t i o n a l   e d u -
cat io n   and  trainin g  ( v e t ). th e  commiss ion   con siders   t hat 
p ro gres s in this area s ho uld h el p to  red uce  pove r t y in  t he 
me dium  a nd lo ng ter m (s ee  paragraph s  3 6  to  3 9 ) ;

(b) 

i n   a z e r b a i j a n ,   h i g h e s t   p r i o r i t y   w a s   g i v e n   t o   t h e   e n e r g y 
sec tor, with an emphasis on renewable energy sources and 
ene rgy  efficien c y ( see p aragraphs  4 0  to  4 4 ) ;

(c) 

i n   g e o r g i a ,   pu b l i c   fi n a n c e   m a n a g e m e n t   w a s   t h e   h i g h e s t 
priorit y, with eu suppor t designed to contribute to foster -
ing economic growth and reducing pover t y in the medium 
a n d   l o n g   t e r m   ( s e e   p a r a g r a p h s   4 6   t o   4 8 ) .   e c o n o m i c   r e -
habilitation and confidence building in conflic t zones was 
a f ur t her pr ior it y ( see p aragraph s  4 9  to 5 2 ).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

14

d i A g r A m   i i 

o v e r v i e W   o f  t h e  20 07  A n n uA l   Ac t i o n   P r o g r A m m e s

A R M E N I A

Annual action programme 2007: 21 million euro

16 million euro

5 million euro

Support to poverty reduction strategy
through reforms in vocational education
and training

Twinning projects between Armenian
administrations and their equivalents
in EU Member States

15 million euro
Sector budget support

1 million euro
Technical assistance

A Z E R B A I J A N

Annual action programme 2007: 19 million euro

14 million euro

Energy reform support programme

5 million euro

Twinning projects between Azeri
administrations and their equivalents
in EU Member States

13 million euro
Sector budget support

1 million euro
Technical assistance

G E O R G I A

Annual action programme 2007: 24 million euro

16 million euro

4 million euro

4 million euro

Support to public
finance management
reforms

Rehabilitation in 
Georgian/Abkhazian 
conflict zone

Twinning projects between
Georgian administrations and their 
equivalent in EU Member States

15 million euro
Sector budget support

1 million euro
Technical assistance

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

15

16.  

17.  

t h e   a s s i s t a n c e   i s   m a i n l y   g i v e n   i n   t h e   fo r m   o f   s e c t o r   b u d g e t 
s u p p o r t ,   w i t h   a n   e l e m e n t   o f   t e c h n i c a l   a s s i s t a n c e   t o   s u p p o r t 
i m p l e m e n t a t i o n .   I n   a d d i t i o n ,   a l l   t h r e e   2 0 0 7   a n n u a l   a c t i o n 
pro gramme s  incl ud ed  a tw inn ing  fac ilit y   for  the  cooperat io n 
between beneficiar y countr y administrations and their equiva -
lents  in eu m em be r s t ate s.

the last step in the design phase was the conclusion of finan-
c i n g   a g r e e m e n t s   b e t w e e n   t h e   c o m m i s s i o n   a n d   t h e   b e n e f i-
ciar y states. the financing agreements determine general and 
specific conditions as well as the technical and administrative 
provis ion s of  the s up p o r t.

in s u f f i c i e n t   c l Ar i t y   An d   Pr i o r i t i sA t i o n 
r e d u c e s  t h e   b e n e f i t s   o f   m u lt iAn n u Al 
Pr o g r Am m i n g   by   d g   r e l e x

18.   we a k n e s s e s   i n   t h e   l i n k s   b e t w e e n   e n p  a c t i o n   p l a n ,   c o u n t r y 
strategy paper and national indicative programme contr ibute 
t o   i n s u f f i c i e n t   c l a r i t y   i n   p l a n n i n g.   t h e   e f fe c t i v e n e s s   o f   p r o -
gra m m i n g   i s   re d u ce d   by   i n s u f f i c i e nt   p r i o r i t i s at i o n   ( s e e   p a ra-
grap hs 1 9 to 27).

19.   clarity is compromised when the same subjec t is treated with-
i n   i n d i v i d u a l   d o c u m e n t s   i n   d i f f e r e n t   w a y s .   fo r   i n s t a n c e ,   i n 
a r m e n i a ,   t h e   s u b j e c t   o f   e d u c a t i o n   i s   cove re d   i n   t h e   co u n t r y 
strate gy   pap er  u nde r  t wo   he ad in gs:  ‘e conomic   an d  s ocial  re -
f o r m ,   p o v e r t y   r e d u c t i o n   a n d   s u s t a i n a b l e   d e v e l o p m e n t ’  a n d 
‘p eo p l e -to -p eo p le contac ts’.  fur th er more, t he  s ame  pr ior it ies 
are sometimes refor mulated and restruc tured from one docu-
me nt  to the nex t. I n g eo rgia , for ex ample, t he issue of  public 
fi n a n ce   m a n a g e m e n t   a p p e a r s   u n d e r   d i f fe re n t   p r i o r i t y   h e a d-
ing s t hro ug hou t th e s trategi c do c um ent s.

20.  

three different time frames are used at strategic level. the enp 
ac tion plan covers five years, while the countr y strategy paper 
covers the entire seven years of the eu’s financial perspec tives 
and  th e natio na l ind icative progra mm e  cover s  fo ur   ye ar s.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

16

21.  

22.  

th e  enp  ac tio n  p la n  sh oul d  provide  a  ke y   re fe re nce   poi nt  for 
s e t t i n g   a s s i s t a n c e   p r i o r i t i e s ,   l a y i n g   o u t   a   r a n g e   o f   p r i o r i t y 
a re a s,   s p e c i f i c   a c t i o n s   a n d   g e n e r a l   o b j e c t i ve s.   ho we ve r,   t h e 
m a ny   p r i o r i t y   a c t i o n s   a n d   t h e i r   w i d e   fo r m u l at i o n   u n d e r m i n e 
th e attemp t at  pr ior it is ation ( se e B ox  1) .

15  development and 
cooperation Instrument; 

european development fund.

the countr y strategy paper 2007–13, der ived in par t from the 
enp  ac tio n  p la n,  gives  a  g oo d  over v ie w  of   th e  co untr y ’s  si tu-
atio n  bu t  doe s  no t  hel p   mu ch   to  n ar row  down   pr i or it ie s.  th e 
consequent national indicative programme 2007–10, covering 
a shor ter, four-year period, reduces the number of main prior -
itie s bu t  int rod uces  new  s u b -pr ior i ti es.  th us, a wide  ran ge of 
sub jec t s  remains   eligib l e  fo r  fin an ci al  a s sis tan ce  ( se e   B ox  2) . 
t h i s   c o n t r a s t s   w i t h   t h e   p r a c t i c e   i n   o t h e r   a r e a s   o f   e x t e r n a l 
 a s s i s t a n ce 1 5,   w h e re   u s u a l l y   o n l y   t wo   fo c a l   s e c to r s   a re   i d e nt i-
fie d.

b o x   1 

W i d e   Pr i o r i t y   s e t t i n g   i n   e nP   Ac t i o n   P l An :   e x AmPl e   A r m e n iA

the enp action plan for armenia determines eight priority areas for cooperation including 54 specific 
actions. these priority areas are complemented by a further 248 actions listed under seven ‘general 
objectives’, subdivided into 20 sub-objectives, subdivided into 62 sub-sub-objectives.

b o x   2

W i d e   r An g e   o f   s u b j e c t s   f o r   Po s s i b l e   f i nAn c iAl   As s i s t An c e 
i n   n At i o nAl   in d i c At i v e   P r o g r Am m e :  e x AmPl e   A z e r b Ai jAn

the national indicative programme for azerbaijan has three very widely formulated priority areas (e.g. 
‘support for democratic development and good governance’), 10 sub-priorities (e.g. ‘environment’) and 
19 specific objectives (e.g. ‘facilitate trade and improve the investment climate and the employment 
and social situation in a sustainable manner’).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

23.  

24.  

25.  

26.  

17

th e nat ion al indic ative p rogramm e add s li ttl e to th e  count r y 
s t r a t e g y   pa p e r,   a p a r t   f r o m   g i v i n g   t h e   i n d i c a t i v e   b u d g e t   f o r 
th e p r io r it ie s se l ec ted for  ye ars 20 0 7 – 10 . I t  do es  n ot  propose 
a  time scal e  for   imp l ementing  pr i or i ti es.  m oreover,  lon g- ter m 
impac t, specific objec tives, expec ted results and indicators of 
achievement are only described in a rather general and broad 
way. nor is there specific guidance on sec tors suitable for the 
twinn ing  ins trument  or  for  sec tor   budg et   suppor t. th e  latter 
i s   e n co u r a g e d   a n d   re c o m m e n d e d   o n l y   ve r y   g e n e r a l l y  ‘a s   t h e 
firs t  cho ice … w herever neces sa r y  con di tio ns  are   met ’ 16. 

16  see 2007–10 national 
indicative programme for 

armenia.

A r e A s  s e l e c t e d  f o r  A s s i s t A n c e  d i d  n o t  d e r i v e  c l e A r l y  e n o u g h 
f r o m   t h e  p r o g r A m m i n g  d o c u m e n t s

the countr y strategy paper and national indicative programme 
prov ided al l t he areas w here th e as s ist an ce coul d  be  given  in 
the nex t seven year per iod (2007–13), including indicative al-
l o c at i o n s   fo r   t h e   n ex t   fo u r   ye a r   p e r i o d   ( 2 0 0 7 – 1 0 ) .   wi t h i n   t h e 
co mm issio n, res p onsib il it y for  de ter m in i ng  whe re  to fo c us in 
ye ar on e (2007) fell  to e uro pea id ( see paragraph  1 2 ). 

I n   d e c i d i n g   w h e r e   t o   f o c u s ,   e u r o p ea i d   w a s   s t r o n g l y   g u i d e d 
by its commitment to channel at least 50 % of the communit y 
a i d   v i a   n a t i o n a l   s y s t e m s   ( s e e   p a r a g r a p h   5 8 ) .   I n   t h i s   w ay,   t h e 
s u i t a b i l i t y   o f   a n   a r e a   f o r   s e c t o r   b u d g e t   s u p p o r t   b e c a m e   a n 
impor tant factor for determining assistance in the 2007 annual 
ac t io n p rogrammes.

for example, in ar menia ve t was selec ted as the main area to 
b e   c o v e r e d   i n   t h e   f i r s t   a n n u a l   a c t i o n   p r o g r a m m e .   ho w e v e r, 
none of the strategic documents highlight ve t; it is concealed 
among the 25 specific objec tives of the seven sub -priorities in 
the 2007–10 national indicative programme (see Diagram  III). 
I n   g e o r g i a ,   p u b l i c   fi n a n c e   m a n a g e m e n t ,   t h e   m a i n   f o c u s   o f 
t h e   a n n u a l   a c t i o n   p ro gra m m e   h a d   o n l y   m a rgi n a l   i m p o r t a n ce 
w i t h i n   b o t h   t h e   c o u n t r y   s t r a t e g y   pa p e r   p r i o r i t i e s   ( w h e r e   i t 
i s   t h e   l a s t   i n d e n t   w i t h i n   t h e   f i f t h   p r i o r i t y )   a n d   t h e   n a t i o n a l 
indicative programme, where it is mentioned within the third 
sub -p r io r it y o f t he firs t p r io r it y  area.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 
18

d i A g r A m   i i i

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special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19

27.   wh e n   u s i n g   s e c to r   b u d g e t   s u p p o r t   a s   t h e   p r i n c i p a l   to o l,   t h e 
e u  w i l l   o n l y   b e   a b l e   t o   a d d r e s s   m e a n i n g f u l l y   a r o u n d   h a l f   o f 
th e su b -p r io r it ies def in ed by t he  20 0 7 – 10  n at ion al ind ic at ive 
programmes, since sec tor budget suppor t involves a relatively 
h i g h   s h a r e   o f   t h e   a v a i l a b l e   a n n u a l   f u n d i n g.   fo r   i n s t a n c e ,   i n 
a zerbaijan during the four-year period, sec tor budget suppor t 
pro gra mmes  w il l  o nl y cover  four   out o f 1 0  sub -pr i or i ti es.

17  according to the enpI 
regulation, strategy papers 

shall be reviewed at mid-term or 

whenever necessary and may be 

revised.

28.  

29.  

t W o  y eAr   Pr o g r Am m i n g   An d   d e s i g n   Pr o c e s s 
i n v o lv e s   r i s k s  to  t h e   r e l e vAn c e   o f  t h e 
As s i s t An c e 

th e 20 07 annual  ac tion  p ro gramme  res ulted  f rom  a  program-
ming (dg releX) and design process ( europeaid) lasting more 
t h a n   t w o   y e a r s .   I n   g e o r g i a   f o r   e x a m p l e ,   t h e   f i r s t   p a y m e n t s 
under the 2007 annual ac tion programme took place in febru-
ar y 2008, while the first strategic needs assessment in view of 
t h e   co u n t r y   s t r a te g y   pa p e r   o c c u r re d   i n   nove m b e r   2 0 0 5   ( s e e 
Ta bl e).

t h e   c o u n t r y   s t r a t e g y   pa p e r,   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e 
and annual programme were subjec t to a series of quality con-
t ro l   a n d   co n s u l t at i o n   p ro ce d u re s   b e fo re   t h e y   we re   a p p rove d 
by the commission. the process comprised mainly assessments 
f ro m   t h e   co m m i s s i o n’s   q u a l i t y   s u p p o r t   g ro u p s,   t h e   co m m i s-
sion’s inter-ser vice consultation procedure, review by the enpI 
management committee of the member states and scrutiny by 
th e e u rop ea n p ar l ia ment.

30.   w h i l e   e a c h   p r o g r a m m i n g   s t e p   h a d   i t s   o w n   j u s t i f i c a t i o n ,   t o -
g e t h e r   t h e y   co nt r i b u te d   to   a   l e n g t hy   p l a n n i n g   s c h e d u l e.  th e 
m a i n   r e a s o n   f o r   t h e   l o n g   s t a r t - u p   p h a s e   o f   t h e   e n pI   i s   t h a t 
th e qu al it y  co nt rol and ap p roval pro ced ure s were  c ar r ie d ou t 
in  t wo  su cce ssive  s tages :  f irs t  un de r   th e  re s pon s ibil i t y   of   dg 
releX for the 2007–13  countr y strategy paper and the 2007–10   
natio na l  indicat ive  p rogram me,  an d   s ubse que ntly   un de r   eur-
opea id for the 2007 annual ac tion programme. however, these 
succes sive pro cedu res in dg  re leX an d  europea id tak e place 
on l y w he n t he co untr y st rategy  paper  or th e n ational in dic a-
tive p ro gramme are introdu ced  or  re vi s ed 17.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

20

tAb l e

e nPi   Pr o g r Am m i n g   s t ePs   An d   d e s i g n   Pr o c e s s   f o r  2 00 7 
A n n uAl   Ac t i o n   P r o g r Am m e   ( e x AmPl e   ge o r g iA)

Phases

Key processing steps

Time

Main  
responsible DG

Planning  
instrument

First concept paper and mission to Tbilisi by 
DG RELEX

Programming mission to Tbilisi

Main drafting

Georgia Country Team meeting

Presentation of draft Country Strategy Paper /  
national indicative programme (NIP) to 
Georgian authorities

Assessment by interservice Quality Support 
Group

Submission of comments by Georgian 
authorities

Inter-service consultation

Meeting of ENPI Management Committee

Consultation of European Parliament

Agreement by Georgia on the NIP’s budget 
and priorities

Approval by Commission

Quality control
+
redrafting
+
democratic scrutiny

Formal approval

Nov. 2005

June 2006

July 2006

Sept. 2006

Sept. 2006

RELEX

Oct. and Nov. 2006

Nov. 2006

Dec. 2006

Dec. 2006

Feb. 2007

March 2007

Country Strategy 
Paper 2007–13
+
national indicative 
programme  
2007–10

Main drafting

Identification and formulation of measures to 
be financed (including mission to Georgia)

End 2006/start 2007

Assessment by operational
quality support group 
(in two consecutive steps) of 
(1) identification fiches
(2) action fiches

Inter-service consultation

Meeting of ENPI Management Committee

Consultation of European Parliament

Approval by Commission

Signature of financing agreements with 
Georgia

Quality control
+
redrafting
+
democratic scrutiny

Formal approval

First payments

Feb. 2007
April 2007

May 2007

July 2007

Sept. 2007

Oct. 2007

Dec. 2007/Jan. 2008

Feb. 2008

EuropeAid

National programme 
2007
+
financing  
agreements

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

21

31.   a  r i s k   o f   s u c h   a   l o n g   s c h e d u l e   i s   t h e   l o s s   o f   re l e va n ce   o f   t h e 
assistance. a fur ther issue is whether the strategy could cover 
a shor ter period than the seven years of the financial perspec-
tives. I n t he fast  changin g and con fl ic t-af fe c te d e nv iron me nt 
of t he s o ut her n c au cas us   co untr ies,  loss es of  rele va n ce  a r i se 
inev itab l y for su c h a l o ng -te r m  st rateg y,  c allin g  for  mi d-te r m 
re v i s i o n s.  t h e   au g u s t   2 0 0 8   w a r   b e t we e n   g e o r g i a   a n d   ru s s i a 
cre ated  significant   n ew  needs  ( se e  A nn ex  V) .  I n  ar m enia,  t he 
major political crisis during the first half of 2008 18 led to needs 
no t  covered   by  th e  strateg y,  wit h  t h e  res ult   t hat   e u  advisor y 
gro u ps   were  est ab lis hed  to  give   di re c t   ad v ice   to  th e  g ove r n-
m e n t   ( s e e   p a r a g r a p h   6 5 ) .   a n o t h e r   e x a m p l e   o f   a   n e w   d e v e l-
o p m e n t   i s   t h e   i n c r e a s e d   p o l i t i c a l   w i l l   t o   l a u n c h   t h e   ea s t e r n 
par tnership 19. generally, the countries’ situation changed con-
s i d e r a b l y   b e c a u s e   o f   t h e   w o r l d w i d e   f i n a n c i a l   a n d   e c o n o m i c 
cr isis.

18  the country was badly 
affected by a political crisis 

during the first half of 2008 

following contested presidential 

elections in february 2008.

19  joint declaration of the 
prague eastern partnership 

summit, prague, 7 may 2009.

20  the change took place in 
february 2008.

P r o g r Am m i n g   An d   d e s i g n   o f   As s i s t An c e   Ar e 
n ot   s u f f i c i e n t ly   g u i d e d   by   A   s t r u c t u r e d 
d iAlo g u e   Wi t h   b e n e f i c iAr y   s t At e s

32.  

the par tnership principle demands that the counterpar ts from 
beneficiar y countries are included to the greatest possible ex-
tent in the programming and design of all operations. for the 
southern caucasus countries several factors made a systematic 
and  b al anced  d ial o gu e dif ficult:

(a) 

t he co mm issio n was t hin ly repre sented  on  th e  s pot  in  ar-
menia and a zer baijan. the regional d elegation in yerevan 
(a r m e n i a )   h a d   ye t   t o   b e   t r a n s fo r m e d   i n t o   a   f u l l y   f l e d g e d 
delegation 20; the delegation in baku (a zerbaijan) was first 
es tab l is hed   in  feb ru ar y   2 00 8  but  on ly  be came  f ully   oper-
at io nal  in 2009;

(b) 

the commission’s focus on inter nal procedures in the pro -
g r a m m i n g   ( d g   r e l e X )   a n d   d e s i g n   p r o c e s s   ( e u r o p e a i d ) 
 l i m i t e d   t h e   o p p o r t u n i t i e s   fo r   a   d i a l o g u e   w i t h   t h e   b e n e f-
i c i a r y   c o u n t r i e s :   w h i l e   t h e   c o m m i s s i o n   h a s   e s t a b l i s h e d 
various rules and guidelines for its internal dialogue, there 
we re   n o   s p e c i f i c   g u i d e l i n e s   fo r   s t r u c t u re d   d i a l o g u e   w i t h 
t he b ene ficiar y  countr y ;

(c) 

t h e   na t i o n a l   c o o r d i n a t i n g   un i t s   w i t h i n   t h e   b e n e f i c i a r y 
co u nt r i e s   f a i l e d   to   b r i n g   to g e t h e r   t h e   d i f fe re nt   p o s i t i o n s 
and  intere st s ins ide t he count r y an d t hus  could n ot  ac t a s 
an effec tive interlocutor bet ween the commission and the 
g ove r nment s.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

22

33.   as  a re su lt,  t he consu l tatio ns  with  n ati on al a ut h or it ie s,  ot h er 
d o n o r s   a n d   c i v i l   s o c i e t y   o r g a n i s a t i o n s   o n   p r i o r i t y   s e t t i n g   i n 
t h e   c o u n t r y   s t r a t e g y   pa p e r,   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e 
and annual ac tion programme were limited. the dialogue was 
mainly driven by the commission headquar ters (dg  releX and 
euro p ea id),   res tr ic ting  a  direc t  exchan ge   o f   vi e ws   to  t he   fe w 
d a y s   o f   i n - c o u n t r y   m i s s i o n s .   fr o m   t h e   c o m m i s s i o n’s   s u b s e -
q u e n t   re p o r t s   o f   t h e s e   v i s i t s   i t   w a s   n o t   a l w ay s   e v i d e n t   w h a t 
had  b een discu ss ed.

34.   as a result of weaknesses in dialogue the three countries some -
t i m e s   m i s u n d e r s t o o d   t h e   d i f f e r e n t   p u r p o s e s   o f   t h e   v a r i o u s 
planning documents as well as the nature of the new deliver y 
to o ls.  neit her  we re  the  countr ies  always   awa re  of   whe n   t he ir 
c o m m e n t s   o n   p r i o r i t i e s   o r   p ro g r a m m e s   c o u l d   s t i l l   i n f l u e n c e 
th e d ecisio n-mak ing o f the  c ommiss ion .

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

23

21  continue implementation 
of a sound policy for macro-

economic stabilisation; continue 

improvement in public finance; 

making available documents 

relating to the implementation 

of the programme.

h As  t h e   i mPl e m e n t At i o n   o f  t h e   f i r s t 
A n n uAl   Ac t i o n   P r o g r Am m e s   l e d  to  t i m e ly 
An d   s u cc e s s f u l   Ac h i e v e m e n t s ?

35.  

t h r e e   y e a r s   a f t e r   t h e   l a u n c h   o f   t h e   e n pI   i n   2 0 0 7 ,   t h e   c o u r t 
e x a m i n e d   h ow   t h e   e u’s   d e c i s i o n s   to   p rov i d e   f i n a n c i a l   a s s i s t -
a n c e   h a d   b e e n   t r a n s l a t e d   i n t o   a c t i v i t i e s   o n   t h e   g r o u n d   a n d 
t o   w h a t   e x t e n t   t h e s e   a c t i v i t i e s   h a d   c o n t r i b u t e d   t o w a rd s   t h e 
ac hieveme nt  of t he p rogram me s’ inten de d re s ult s.

A r m e n iA :  re f o r m   Pr o c e s s   WAs   s t r e n g t h e n e d 
i n   As s i s t An c e   Pr i o r i t y  ‘ v o c At i o nAl 
ed u c At i o nAl   tr Ai n i n g’  b u t   Pr o g r e s s   i s   s t i l l 
v e r y   f r Ag i l e

36.  

the first sec tor budget suppor t programme for ve t under the 
enpI was launched in januar y 2008 (see paragraph 15(a)) with 
the overall objec tive of suppor ting the gover nment ’s pover t y 
r e d u c t i o n   s t ra te g y.  th e   p u r p o s e   w a s   to   i n c re a s e   t h e   q u a l i t y 
o f   t h e  v e t  s e c to r   a n d   b r i n g   t h e   s t r u c t u re   a n d   co nte x t   o f   t h e 
v e t  s y s t e m   i n   l i n e   w i t h   l a b o u r   m a r k e t   s k i l l   n e e d s,   t h u s   p ro -
m o t i n g   e m p l o y a b i l i t y   o f   t h e   a c t i ve   p o p u l a t i o n   a n d   b u s i n e s s 
co mp et itiven ess.

37.   payment of the sec tor budget suppor t depended on the fulfil -
me nt  of  g eneral con ditions 21 an d of specif ic con dition s relat-
i n g   t o  v e t.  t h e   l a t t e r   i n c l u d e d   t h e   s e l e c t i o n   a n d   u p g r a d e   o f 
regional ve t centres and the building up of national ve t insti-
tutions. the budget suppor t was payable in three instalments 
o f   5   m i l l i o n   e u r o   e a c h ,   t h e   f i r s t   b e i n g   f i xe d   a n d   t h e   s e c o n d 
a n d   t h i r d   b e i n g   v a r i a b l e   d e p e n d i n g   o n   t h e   d e g re e   t o   w h i c h 
co ndit io ns  we re ful fil led.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

24

38.  

t h e   c o m m i s s i o n   p a i d   t h e   f i r s t   f i xe d   i n s t a l m e n t   o f   5   m i l l i o n 
euro in june 2008.  to determine how much of the second vari-
a b l e   i n s t a l m e n t   t o   p ay,   t h e   co m m i s s i o n   c o n t r a c t e d   e x t e r n a l 
e x p e r t s   a t   t h e   e n d   o f   2 0 0 8   t o   re v i e w   t h e   p ro g re s s   o f   t h e   re -
forms. on the basis of the exper ts’ conclusion that not all con-
ditions had been met, although reasonable progress had been 
mad e,  in ja nua r y 2009,  the  commiss ion  released 3, 25  millio n 
e u r o   o u t   o f   t h e   5   m i l l i o n   e u r o   m a x i m u m   ( s e e   A n n e x   I I ) .  t h e 
re d u c e d   p a y m e n t   p ro m p t e d   t h e   g o ve r n m e n t   t o   t a k e   f u r t h e r 
ac t io n, s uch as p roviding  equipment fo r  re gio nal ve t  cent res 
and allocating ex tra staff to the ve t depar tment of the  m inis-
tr y o f  e du catio n and s cie nce. 

39.   o verall, the cour t concluded that the first sec tor budget sup -
p o r t   p r o g r a m m e   u n d e r   t h e   e n pI   p o s i t i v e l y   i n f l u e n c e d   a n d 
s t r e n g t h e n e d   t h e   v e t   r e f o r m   p r o c e s s   i n   a r m e n i a .   h o w e v e r 
p ro gre s s   wa s   s t i l l   ve r y   f ra gi l e   a s   t h e   s u p p o r t   p ro gra m m e   d i d 
no t  tac k l e cer ta in  struc t ural   obst ac le s:

(a) 

t h e   s e c to r   p ro gra m m e   h a d   n o t   ye t   s u f f i c i e nt l y   a d d re s s e d 
t h e   d e m a n d   s i d e   o f  v e t,   s u c h   a s   h ow   to   g a u g e   t h e   n e e d s 
o f em p loye rs an d the u nem ploye d;

b o x  3 

l Ac k   o f   f u n d i n g   i n   r e g i o nAl   v e t   c e n t r e s

renovation at Ijevan college comprised a new roof, installing gas central heating and replacing the 
windows by the entrance and the central stairway. while a modern heating system supplanted wood-
burning stoves in the classrooms, its effectiveness was undermined by the failure to replace more than 
about 10 % of the windows. the old windows were ill-fitting and revealed frequent cracks.

at vanadzor, by contrast, all the windows had been replaced. but the new gas central heating relied on 
old radiators which had not been used for around 20 years. the extent of the renovations thus  appeared 
insufficient, with no money even to upgrade the very basic toilet facilities. 

equipment procured for Ijevan consisted of general items (classroom and office furniture, computers, 
sports equipment), material for basic courses plus items for specialised courses (vehicle repairs and 
wood-processing). while welcoming the new supplies, the college director mentioned the need to 
refurbish rooms to install everything. the money was not yet available. the college was experiencing 
funding problems generally, since student numbers had fallen by 230 (from 780) over the previous two 
years, due to yerevan state university opening a branch in Ijevan.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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(b) 

the fragmented government responsibilit y for ve t institu-
tions, causing difficulties for sector coordination. out of 82 
st ate -ru n co lle g es,  o nl y  51  fall un der  th e res pon sibi li t y  of 
t he m inis tr y of edu catio n and  s cience  with  t he  remaind er 
u nder t he resp o ns ib ilit y of oth er  m ini s tr ie s;

(c) 

w i t h o u t   s i g n i f i c a n t   i n c r e a s e s   i n   r e g u l a r   f u n d i n g,   p a r t i c -
u l a r l y   f r o m   t h e   s t a t e ,   v e t  r e f o r m   c a n   a c c o m p l i s h   l i t t l e . 
t h e    a u d i t o r s ’  s i t e   v i s i t   t o   t w o   c o l l e g e s   t a r g e t e d   b y   t h e 
 p r o g r a m m e   ( I j e v a n   a n d   va n a d z o r )   r e v e a l e d   h o w   l a c k   o f 
funding was undermining the objec tive to transform them 
i n t o   s u s t a i n a b l e   r e g i o n a l   v e t  c e n t r e s .   t h e   e x t e n t   o f   t h e 
re n ova t i o n s   a p p e a re d   to   b e   i n co h e re nt   a n d   m i n i m a l   ( s e e 
B ox   3).

A z e r b Ai jAn :  un sA t i s fAc to r y   Pr o g r e s s   i n 
As s i s t An c e   Pr i o r i t y  ‘ en e r g y ’

40.   a z e r b a i j a n   h a s   r a p i d l y   b e c o m e   a   s i g n i f i c a n t   p r o d u c e r   o f   o i l 
and gas, as well as an emerging transit countr y for supplies to 
t h e   e u  f ro m   t h e   ca s p i a n   ba s i n   a n d   ce n t r a l   as i a .  th e   i m p o r t -
a n c e   o f   t h e   e n e r g y   s e c t o r   fo r   b o t h   s i d e s   h a s   b e e n   r e f l e c t e d 
i n   a  ‘ s p e c i f i c   m e m o r a n d u m   o f   u n d e r s t a n d i n g   o n   a   s t r a t e g i c 
p a r t n e r s h i p   b e t w e e n   t h e   e u   a n d   t h e   r e p u b l i c   o f   a z e r b a i j a n 
in t he  fiel d of  energy ’,  con cl ude d i n nove m ber  2 00 6.

41.  

the sec tor budget suppor t programme under the enpI focuses 
o n   t w o   a r e a s   u n d e v e l o p e d   i n   a z e r b a i j a n :   r e n e w a b l e   e n e r g y 
sources and energy efficienc y (see paragraph 15(b)). the total 
assistance of 13 million euro is planned to be disbursed over a 
three -year per iod through an initial fixed instalment of 3  mil-
lion euro and two subsequent variable instalments of 5 million 
euro  eac h.

42.   w h i l e   t h e   re l e a s e   o f   t h e   f i r s t   f i xe d   t r a n c h e   d e p e n d s   o n l y   o n 
t h e   f u l f i l m e n t   o f   t w o   g e n e r a l   c o n d i t i o n s ,   t h e   r e l e a s e   o f   t h e 
s u b s e q u e n t   5   m i l l i o n   e u r o   v a r i a b l e   i n s t a l m e n t s   i n   f u l l   a l s o 
requires the fulfilment of five specific conditions. these com-
prise the approval by the government of a comprehensive en-
ergy strategy, three measures in the fields of renewable energy 
sou rces  and e nergy  efficien c y ( ac t ion  plan s,  a  ne w l egislat ive 
f ra m e wo r k ,   t h e   c re at i o n   o f   a   s t ate   a g e n c y )   a n d   t h e   a d o p t i o n 
of a pfm a c t io n p lan (s ee A n nex  III).

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43.   at   t h e   m o m e n t   o f   t h e   co u r t ’s   o n - t h e - s p o t   v i s i t   i n   nove m b e r 
2 0 0 9 ,   a z e r b a i j a n   h a d   n o t   y e t   r e q u e s t e d   a n y   p a y m e n t .   tw o 
yea rs  of   stagnat ion   had  fol l owe d  th e  commiss ion’s  f inanc ing 
d e c i s i o n   i n   d e c e m b e r   2 0 0 7   ( s e e   B ox   4 ) .   ha rd l y   a ny   c o n c re t e 
steps had been taken towards achieving the programme objec-
tives. the  s ec to r  st rateg y  was  n ot   rev is ed   an d  a  se c tor   poli c y 
dialogue was not established. s o far then, the offered eu sec -
tor budget suppor t could scarcely create any incentive or lev -
erag e to  sp eed u p  t he intend ed re for m  proces s.

44.   never theless, a zerbaijan showed some interest in developing 
re n e wa b l e   e n e rg y   s o u rce s.   fo r   ex a m p l e,   i n d e p e n d e nt l y   f ro m 
eu suppor t, three pilot wind turbines were erected in 2008 and 
2 0 0 9   o n   t h e   c o a s t a l   p l a i n   n o r t h   o f   ba k u   a n d   m e a s u r e s   w e r e 
b e i n g   t a k e n   fo r   t h e   c re at i o n   o f   a   f i r s t   w i n d   f a r m   i n   t h e   s a m e 
area. however, studies by various donors highlighted the lack 
of a national framework for private inter vention in the renew -
able field, such as a guarantee of access to the elec tricity grid. 
power fu l   natio nal   p roducer s  n eed   to  agre e   to  ch an g es   in   th e 
direc tio n o f state p o lic y in order   to  e nsu re pro gres s.

b o x   4 

A z e r b Ai jAn :  li t t l e   Pr o g r e s s   i n  t h e  t W o  y eAr s   f o l lo Wi n g 
t h e   co m m i s s i o n ’s   f i nAn c i n g   d e c i s i o n   o n  t h e   en e r g y   re f o r m 
suP Po r t   P r o g r Am m e

the preparatory period for the implementation of the energy reform support programme was ex-
ceptionally long compared to the other two countries. after the commission’s financing decision in 
december 2007, two years passed: a one-year process of reflection in azerbaijan before the signing 
of the corresponding financing agreement in december 2008, followed by a further year to define the 
internal implementation modes for the new sector budget support tool. a reason was lengthy internal 
approval procedures in azerbaijan, combined with insufficient information from the commission on 
the new assistance tool.

the internal implementation modes introduced by azerbaijan emphasised the procurement and spend-
ing of the eu assistance (13 million euro), whereas only the compliance with the conditions of the 
support programme would ensure the release of funds by the commission.

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ge o r g iA :  mo d e s t   Pr o g r e s s   i n   As s i s t An c e 
Pr i o r i t y   ‘ P u b l i c   fi nAn c e   m AnA g e m e n t ’ A n d   n o 
Pr o g r e s s   i n   As s i s t An c e   Pr i o r i t y   ‘ eco n o m i c 
r e hAb i l i t At i o n   An d   co n f i d e n c e   b u i l d i n g ’

45.   a s   e x p l a i n e d   i n   p a r a g r a p h   1 5 ( c ) ,   a s s i s t a n c e   i n   g e o r g i a   w a s 
gi ve n   p r i n c i p a l l y   to   t h e   a re a   o f  ‘p u b l i c   fi n a n ce   m a n a g e m e n t ’ 
(p fm) .  ‘e c o n o m i c   r e h a b i l i t a t i o n   a n d   c o n f i d e n c e   b u i l d i n g   fo r 
abk hazia/w ester n g eorgia’ was chosen as a fur ther pr ior it y.

p u b l i c f i n A n c e m A n A g e m e n t

4 6 .   th e   e n pI   s e c t o r   b u d g e t   s u p p o r t   p ro g r a m m e   fo r   p fm  re fo r m 
( 1 5   m i l l i o n   e u ro ) ,   l a u n c h e d   i n   d e ce m b e r   2 0 0 7 ,   a i m e d   to   a d-
d re s s   t h e   g o a l   o f  ‘i m p rov i n g   e f f i c i e n c y   i n   p u b l i c   s e r v i ce   a n d 
t h e re by   co nt r i b u t i n g   to   p ove r t y   re d u c t i o n’.  th e   b u d g e t   s u p -
por t was payable in three equal instalments of 5 million euro, 
the first being fixed and the second and third each a combin-
a t i o n   o f   f i xe d   a n d   v a r i a b l e   i n s t a l m e n t s.   s e ve n   s p e c i f i c   c o n-
d i t i o n s   t a rg e te d   t h e   ove ra l l   p l a n n i n g   a n d   m o n i to r i n g   o f   t h e 
pfm reform agenda as well as advances in six areas of the  pfm 
system. Annex IV shows the specific conditions for the second 
i n s t a l m e nt.

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47.  

48.  

th e pfm p ro gramme b egan s lowly, wit h i nsu ffi ci e nt  effo r t o n 
t h e   g e o rgi a n   s i d e   to   e n g a g e   i n   re fo r m .  th e   d e l e g at i o n   co m-
plained about the difficulty of constructive dialogue with their 
georgian counterpar ts. never theless, in  december 2008 euro -
peaid released par t of the second instalment, paying 4 million 
e u ro   o u t   o f   a   m a x i m u m   o f   5   m i l l i o n   e u ro.  th i s   d i s b u r s e m e n t 
decision was based on t wo successive ex ter nal reviews of the 
p ro gre s s   m a d e :   o n e   co n c l u d i n g   n e g a t i ve l y   ( n ove m b e r   2 0 0 8 ) 
a n d   a   s u b s e q u e n t   o n e   c o n c l u d i n g   p o s i t i v e l y   o n   t h e   b a s i s   o f 
new evidence made available at the time (december 2008). the 
cour t noted that, given the ver y difficult situation in g eorgia 
a s   f ro m   au g u s t   2 0 0 8 ,   t h e   co m m i s s i o n   co n s i d e re d   t h e   e f fo r t s 
i n   p fm  re fo r m s   a s   s u f f i c i e nt   to   a l l ow   t h e m   to   re l e a s e.   ne ve r -
th el ess, the  co ur t  al s o o b ser ves th at n ot all con dit ion s se t  to 
rel ea se  this instal ment had b ee n  me t.

to summarise, the pfm programme progressed ver y little dur -
ing its first 12 months. however, the beginning of 2009 saw an 
e n c o u r a g i n g   c h a n g e   o f   a t t i t u d e   f ro m   t h e   g e o r g i a n   s i d e.   fo r 
example, having shown hostilit y in 2008 towards the concept 
o f   i n te r n a l   a u d i t ,   t h e   g ove r n m e n t   a d o p te d   a n   I n te r n a l   au d i t 
st rate g y   i n   2 0 0 9 .  th e i r   i n c re a s e d   re ce p t i ve n e s s   towa rd s   p fm 
reform might be explained by changed basic conditions. af ter 
the twin shock of the august 2008 conflic t with russia and the 
global recession, the georgian economy depended on outside 
aid, leading the gover nment to pay more attention to inflows 
of eu b udg et  s up p or t.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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e c o n o m i c  r e h A b i l i t A t i o n   A n d  c o n f i d e n c e  b u i l d i n g 

49.   af ter  g eo rgia’s  indep en dence  f rom   the   s ovie t  union   in   1 99 1 , 
conflicts with secessionist movements in the areas of abk hazia 
a n d   s o u t h   os s e t i a   h a d   e n d e d   w i t h   ce a s e f i re   a gre e m e nt s   a n d 
a  s itu at io n  of  ‘no   war,   n o  p eace’.   sin ce  th en,   t he  e u  h ad  been 
s u p p o r t i n g   p ro g r a m m e s   fo r   s o c i a l   a n d   e c o n o m i c   re h a b i l i t a-
t i o n   i n   b o t h   a r e a s .   a n d   i n   g e o r g i a n   g o v e r n m e n t - c o n t r o l l e d 
a r e a s ,   t h e   e u  h a d   f i n a n c e d   m e a s u r e s   t o   s u p p o r t  ‘i n t e r n a l l y 
displaced persons’. the august 2008 war bet ween georgia and 
russ ia rep rese nted a s et b ac k for  th e se  programme s, wi th  t h e 
p e a ce - b u i l d i n g   p ro ce s s   b e t we e n   g e o rgi a   a n d   i t s   b re a k- away 
ter r ito r ies la rg el y des troyed.

50.  

t h e   f i r s t   p r o g r a m m e   u n d e r   t h e   e n pI   ( t e c h n i c a l   a s s i s t a n c e ) 
e n v i s a g e d   4   m i l l i o n   e u r o   f o r   e c o n o m i c   r e h a b i l i t a t i o n   a n d 
co n f i d e n ce - b u i l d i n g   m e a s u re s.  th i s   p ro gra m m e,   fo c u s i n g   o n 
re h a b i l i t a t i o n   i n   t h e   b re a k- aw ay   re gi o n   o f   a b k h a z i a ,   d i d   n o t 
mater ial is e as, al ready b efore  th e august 2 00 8 war, th e f un ds 
were de fac to blocked, although the financing agreement had 
b e e n   s i g n e d   b y   b o t h   t h e   c o m m i s s i o n   a n d   t h e   g e o r g i a n   a u-
t h o r i t i e s   i n   j a n u a r y   2 0 0 8 .   po l i t i c a l   c o n c e r n s   o n   t h e   p a r t   o f 
bo th g eo rgia an d a b k hazia h ave prevented any  pro gre s s:

(a) 

t h e   g e n e r a l   w o r r y   o f   t h e   g e o r g i a n   a u t h o r i t i e s   h a s   b e e n 
that ex ternal suppor t to abk hazia could stabilise its break-
away  s tat us.   fo r  examp le,   t hey   fe ared  t hat  s ch ools  i n  ab -
k h a z i a   co u l d   b e   s u p p o r te d   w h e re   t h e   g e o rgi a n   l a n g u a g e 
m i g h t   n o t   b e   u s e d   o r   t a u g h t ,   o r   t h a t   p r o j e c t s   c o u l d   b e 
implemented directly by local non- governmental organisa-
t ions  (ngos), favo u r ing  s eparat ism ;

(b) 

t h e   a b k h a z   a u t h o r i t i e s   s e e m e d   t o   p e r c e i v e   t h e   e u ’s   a c -
t i o n s   a s   b e i n g   o n l y   i n   l i n e   w i t h   g e o r g i a n   i n t e r e s t s   s i n c e 
t h e   g e o r g i a n   g o v e r n m e n t   a l o n e   a g r e e s   t o   a n d   s i g n s   t h e 
p rogramme.

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22  the taIeX instrument 
(technical assistance 

Information exchange 

office), previously reserved 

for eu candidate countries, 

was also made available to 

neighbourhood countries.

23  however, in azerbaijan, 
three tacis-financed twinning 

contracts started in 2008.

51.  

52.  

to   co n c l u d e   u p   to   t h e   e n d   o f   2 0 0 9 ,   t h e   e n p I   h a d   n o t   p rove n 
to   b e   a n   a p p ro p r i ate   i n s t r u m e nt   fo r   e co n o m i c   re h a b i l i t at i o n 
and  co nfidence b u ild ing in t he con f lic t  region  of  a bk haz ia.

I n   c o n t r a s t   t o   a b k h a z i a ,   w h e re   t h e   d o o r s   we re   s t i l l   o p e n   fo r 
d i s c u s s i o n ,   t h e r e   h a s   b e e n   n o   c o o p e r a t i o n   b e t w e e n   s o u t h 
 oss et ia and  g eo rgia  since th e conflic t,  and all e u recon str uc -
t i o n   p r o j e c t s   u n d e r   w a y   h a v e   c o m e   t o   a   s t a n d s t i l l .   t h e r e   i s 
n o   b a s i s   ( s u c h   a s   p o l i t i c a l   w i l l   o r   j o i n t   i n t e re s t )   fo r   c o n t i n u-
i n g   w i t h   re h a b i l i t at i o n   p ro gra m m e s.   co n s e q u e nt l y   t h e   co m -
mis sio n re all oc ated 6  mill io n euro or i gin a lly i nte nde d for  t he 
georgia/south ossetia conflic t zone in the 2008 annual ac tion 
programme to the needs of new ‘inter nally displaced persons’ 
in georgian government- controlled areas, especially to fur ther 
housing suppor t. I t should be noted that the implementation 
of similar measures involved r isks relating to value for money 
(see  A nn ex  V) .

A l l   co u n t r i e s : t Wi n n i n g   u n d e r   e nPi  WAs   s t i l l 
i n  t h e   s tAr t - uP   PhAs e

53.  

th e 200 7 annu al  ac tio n p rogramm es  of fer  a  twinn in g facilit y, 
a l l o c a t i n g   1 4   m i l l i o n   e u r o   i n   t o t a l   t o   t h e   t h r e e   c o u n t r i e s 2 2. 
t h e   c o m m i s s i o n   e n v i s a g e d   t h a t   t h e   f i r s t   tw i n n i n g   p r o j e c t s 
s h o u l d   s t a r t   i n   2 0 0 8 .   ho we ve r,   i t   w a s   o n l y   i n   ju n e   2 0 0 9   t h a t 
the first twinning contrac t under the enpI was signed in  geor-
gia.   I n  ar menia  and  a zer b aij an,  several  cont rac t s  were   un de r 
p r e p a r a t i o n   i n   t h e   s e c o n d   h a l f   o f   2 0 0 9   b u t   n o t   y e t   s i g n e d . 
t h u s,   t h e   s t a r t   o f   t h e  tw i n n i n g   t o o l   u n d e r   t h e   e n pI   w a s   d e -
layed 23.

54.   a main reason lay in the reluc tance of the countr ies to devote 
resources to build up the necessar y management struc ture for 
twinning. potentially, the incentive for approximation through 
twinning is lowered by the lack of eu accession perspec tives.

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55.   a  p r o g r a m m e   a d m i n i s t r a t i o n   o f f i c e   (pa o )   w a s   r e q u i r e d   i n 
e a c h   c o u n t r y   t o   m a n a g e   t h e  tw i n n i n g   t o o l.  th e   co m m i s s i o n 
s u p p o r t e d   t h e   e s t a b l i s h m e n t   o f   t h e s e   paos   t h ro u g h   s u c c e s-
sive tac is p roje c t s. however,  at  t he en d of th ese proj ec t s,  th e 
paos   we re   n o t   ye t   a b l e   to   s te e r   a n d   d i re c t   t h e   tw i n n i n g   to o l 
i n d e p e n d e nt l y.   I n s te a d   o f   b u i l d i n g   u p   c a p a c i t y,   t h e   e x te r n a l 
ex pe r t s  fro m  t he  tac is  projec ts   tende d  to  take  ove r   th e  func -
tion  of  th e pao . 

56.  

t h e   c o m m i s s i o n   p r o v i d e d   f u r t h e r   t e c h n i c a l   a s s i s t a n c e   c o n-
trac ts involving pr ivate consultants to prepare ter ms of refer-
ence for twinning projec ts. thus the early experience of twin-
ning involved substantial private sec tor input in a field where 
th e k nowle dg e sh ou l d b e the  pre s er ve  o f  publ ic  bodi e s.

3

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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h As  t h e   co m m i s s i o n   Ad e q u At e ly   e xPlo i t e d 
t h e   d e l i v e ry  to o l s   AvAi l Ab l e   u n d e r 
t h e   eu r oPeAn   ne i g h b o u r h o o d   An d 
PAr t n e r s h iP   in s t r u m e n t ?

57.  

th e ef fe c tive nes s o f t he as s istance de pe nd s to a  l arg e  ex tent 
on   w ise   u se  o f  th e  different   m ode s  of   de liver y.  th e  cour t  ex-
amin ed whe the r t he co mmission  applied adequately the  n ew 
tool of sec tor budget suppor t and employed the various tools 
ava ila bl e ap p ro p r iatel y. 

24  mainly transfer of expertise 
and know-how, including 

training but also supplies and 

assistance to catalyse and 

support investments.

58.  

59.  

th e   co m m i s s i o n  vAr i e d  t h e   WAy   i n  Wh i c h   i t 
Pr o v i d e d   f i nAn c iAl   As s i s t An c e

t h e   n e w   t o o l   m o s t   s t r o n g l y   f a v o u r e d   b y   t h e   c o m m i s s i o n   i s 
s e c to r   b u d g e t   s u p p o r t.  th e   co m m i s s i o n ,   i n   l i n e   w i t h   c u r re nt 
w o r l d w i d e   t h i n k i n g   a m o n g s t   m a n y   d o n o r s ,   c o n s i d e r s   t h a t 
s u p p o r t   t o   g o ve r n m e n t   b u d g e t s   o f fe r s   g re a t e r   p o t e n t i a l   fo r 
d e ve l o p m e n t   t h a n   p ro j e c t - b a s e d   a s s i s t a n c e.  t h ro u g h   b r i n g-
i n g   i n   s e c to r   b u d g e t   s u p p o r t   a n d  tw i n n i n g,   t h e   co m m i s s i o n 
managed a change from the technical assistance projec ts pre -
domin at in g u nd er tac is 24.

the use of sec tor budget suppor t is also in line with the ‘ euro -
p e a n   c o n s e n s u s   o n   d e v e l o p m e n t ’  o f   d e c e m b e r   2 0 0 5 ,   w h i c h 
aims to channel 50 % of government-to-government assistance 
t h ro u g h   co u nt r y   s ys te m s.   howe ve r,   w h i l e   t h e   p r i m a r y   o b j e c -
tive  of   eu  deve lo p ment  coo peration  is  pove r t y   re duc t ion ,   it s 
c o o p e r a t i o n   w i t h   t h e   s o u t h e r n   c a u c a s u s   c o u n t r i e s   h a s   t h e 
pr in cip al  o b jec t ive  o f  b r inging  th em   c los er   to  t he   e u.  for  ex-
ample, in the countr y strategy paper for georgia, the commis-
s i o n   u n d e r l i n e d   t h a t   t h e   s u p p o r t   fo r   c l o s e r   e u– g e o rgi a   e co -
nomic and social integration should constitute the main focus 
o f   a s s i s t a n ce.   I n   t h i s   w ay,   a cco rd i n g   to   t h e   co u n t r y   s t rate g y 
pa p e r,   t h e   e u   s h o u l d   h a ve   a   r o l e   d i s t i n c t   f r o m   o t h e r   d o n o r s 
who  were  fo cus ing o n devel opm ent.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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sh i f t  to   s e c to r   b u d g e t   s uP Po r t   WAs 
i n s u f f i c i e n t ly   Pr ePAr e d,  Af f e c t i n g 
Pe r f o r m An c e

60.  

s everal fac tors show that the commission did not sufficiently 
p re p a re   t h e   s h i f t   t o   s e c t o r   b u d g e t   s u p p o r t ,   u n d e r m i n i n g   i t s 
implementation (see problems described in paragraphs 39, 43 
and  47): 

(a) 

conclusions on the pre - conditions for effec tive use of sec-
tor budget suppor t were not sufficiently documented (see 
p aragrap hs 61 and 6 2) ;

(b) 

it   wa s  wro ng ly  as s umed   th at  th e  par t ne r   co untr i es   would 
have a good understanding of the new sec tor budget sup -
p o r t   t o o l   f r o m   e a r l i e r   e x p e r i e n c e   w i t h   s i m i l a r   t y p e s   o f 
me asu re (see  p aragraph  63 ) ;

(c) 

locally the commission lacked exper tise in the mechanisms 
o f sec tor b u dge t su p p or t. th e d eleg ations  had to rely ex-
t e n s i v e l y   o n   t h e   w o r k   o f   e x t e r n a l   e x p e r t s   f o r   t h e   t e c h-
nical aspec ts of implementation modes (e.g. designing the 
matr ices of conditions or inter preting whether conditions 
were  sat isfac to r il y  m et).

61.   according to its own guidelines, before embark ing on a sec tor 
suppor t programme, the commission should examine the situ-
ation in seven ‘ key assessment areas’ (see Box 5). the commis-
sion car r ied out such assessments but did not ar r ive at clear ly 
documented conclusions. the assessments also tended to give 
substantial weight to what the beneficiar y countries promised 
to   d o   i n   t h e   f u t u re.  th i s   we a k n e s s   w a s   p a r t i c u l a r l y   p re v a l e n t 
in assessing the existence of effec tive systems for monitor ing 
a n d   s e c t o r   c o o r d i n a t i o n .   fo r   e x a m p l e   i n   g e o r g i a ,   t h e   c o m-
mission  recognised  the  weak  per for mance  monitor ing  system 
i n   p l a ce   b u t   co n c l u d e d   o n l y  ‘ t h at   t h e   f u l l   i nt ro d u c t i o n   o f   t h e 
m e d i u m -te r m   ex p e n d i t u re   fra m e wo r k   e nv i s a g e s   t h at   re l i a b l e 
and relevant per for mance indicators will be introduced ’.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

34

62.  

63.  

fu r t h e r m o re,   t h e   co u r t   fo u n d   n o   e v i d e n ce   t h at   t h e   co m m i s-
s i o n ,   b e fo re   o p t i n g   fo r   s e c t o r   b u d g e t   s u p p o r t ,   a s s e s s e d   t h e 
a l t e r n a t i ve s   fo r   i m p l e m e n t i n g   a   s e c t o r   s u p p o r t   p r o g r a m m e, 
nam el y p o ol  fu nding  and ec proj e c t pro ced ure s 25.

25  europeaid guidelines on 
support to sector programmes 

(july 2007).

I n   i t s   p l a n n i n g   d o c u m e n t s   t h e   c o m m i s s i o n   e x p r e s s e d   c o n-
f i d e n c e   t h a t   t h e   b u d g e t   s u p p o r t   m e c h a n i s m   w o u l d   b e   w e l l 
u n d e r s to o d   by   t h e   b e n e f i c i a r y   co u nt r i e s   a s   t h e y   a l re a d y   h a d 
experience of similar measures. however, in prac tice the coun-
t r i e s   h a d   l e a r n t   f e w   l e s s o n s   f r o m   t h e s e   e a r l i e r   e x p e r i e n c e s . 
al th ou g h  t he   fo o d  sec u r it y  programm e s  i n  th e  count r ie s  had 
p rov i d e d   b u d g e t   s u p p o r t   fo r   m a ny   ye a r s,   t h e y   we re   to o   s p e -
c i f i c   to   s e r ve   a s   a   u s e f u l   g u i d e   fo r   t h e   i nt ro d u c t i o n   o f   s e c to r 
bud ge t  sup p o r t  envisaged  under  t he  e npI.   for in stan ce, food 
se cu r it y pro gramm es did no t foc us  o n refor m  o f a sin g le  se c -
tor, did not involve the same ministries and tended to provide 
bud ge t  sup po r t  in fixed as oppo se d to var iabl e  tranc he s.

b o x   5 

se v e n   k e y   As s e s s m e n t   Ar eAs   f o r   s e c to r   s uP Po r t 
Pr o g r Am m e s

(1) the stability of the macro-economic framework (2) the credibility and relevance of a programme to 
improve public finance management systems (3) the coherence and consistency of the sector policy 
and overall strategic framework (4) the credibility, comprehensiveness and transparency of the an-
nual sector budgets, including a medium-term strategic budgeting perspective (5) the existence and 
effectiveness of a government-led system of sector and donor coordination (6) the existence and ef-
fectiveness of a performance monitoring system (7) the existence and effectiveness of a programme 
to strengthen institutional capacities.

Source: europeaid guidelines on support to sector programmes (july 2007).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

26  Including 3 million euro 
technical assistance to get sector 

budget support off the ground.

27  regulation (ec) no 1889/2006 
of the european parliament and 

of the council of 20 december 

2006 on establishing a financing 

instrument for the promotion 

of democracy and human rights 

worldwide (oj l 386, 29.12.2006, 

p. 1).

28  2006 was the first year of 
significant revenues from oil and 

gas exports.

35

us e   o f   d e l i v e r y  to o l s   hAs   n ot   b e e n   s e l e c t i v e 
e n o u g h

64.  

essentially the 2007 annual ac tion programmes offer only t wo 
m a i n   to o l s :   s e c to r   b u d g e t   s u p p o r t   a n d  tw i n n i n g   ( 7 2   % 2 6  a n d 
2 2   %   re s p e c t i ve l y   o f   t h e   t o t a l   b u d g e t   a l l o c a t i o n   o f   a l l   t h re e 
c o u n t r i e s ) .  tr a d i t i o n a l   s u p p o r t   t h ro u g h   t e c h n i c a l   a s s i s t a n c e 
p r o j e c t s   o n l y   p l a y e d   a   r o l e   i n   t h e   r e h a b i l i t a t i o n   o f   c o n f l i c t 
zo n e s   i n   g e o rgi a   ( 6   % ) .  th i s   e m p h a s i s   o n   s e c to r   b u d g e t   s u p -
po r t   and tw inning   w ith in  the   annual  ac tion   programm e s  has 
its  lim itat io ns:

(a) 

d i r e c t   f i n a n c i a l   a s s i s t a n c e   t o   c i v i l   s o c i e t y   a n d   t h e   p r i-
v a t e   s e c t o r   i s   o n l y   p o s s i b l e   i n   s p e c i f i c   p ro g r a m m e s   s u c h 
a s   t h e   i n s t r u m e n t   f o r   t h e   p r o m o t i o n   o f   d e m o c r a c y   a n d 
h u m a n   r i g h t s 2 7  b u t   h a r d l y   u n d e r   t h e   e n pI   a n n u a l   a c t i o n 
p ro g r a m m e ;   a t   t h e   s a m e   t i m e   t h e   v i s i b i l i t y   o f   t h e   e u  a s-
s i s t a n c e   i s   l e s s   e v i d e n t   t h r o u g h   t h e   p r e d o m i n a n t   u s e   o f 
se c to r b udg et su p p or t;

(b) 

ra pid, f lexibl e and t ail or-made so lut io ns  to  spe c if ic   prob -
l e m s   a re   ve r y   d i f f i c u l t   to   f i t   i nto   t h e   f ra m e wo r k   o f   s e c to r 
b ud ge t  sup po r t  and tw innin g ( see paragraph  65) .

65.  

66.  

I n   a r m e n i a ,   d i re c t   e n p  o b j e c t i ve s   we re   f i n a n ce d   o u t s i d e   t h e 
enpI .  to   as sist   t he  re for m  p rocess   in   line   wi th   t he   e np  a c tion 
plan, t he d el eg atio n estab l ish ed the  ‘ e u advisor y group’ wit h 
fundin g fro m t he st ab il it y I nstr um ent. th e e u advisor y  group 
was supposed to offer comprehensive suppor t to a number of 
ke y b od ie s su ch as ministr ies  by prov idi n g pe r son al adv ise r s. 
t h i s   d e l i v e r y   t o o l   c o m e s   i n   a d d i t i o n   t o  tw i n n i n g ,   r e q u i r i n g 
co o rdinatio n. 

t h e   c o u r t   fo u n d   s e c t o r   b u d g e t   s u p p o r t   t o   b e   t h e   p r e fe r r e d 
a i d   m o d a l i t y   i n   t h e   t h r e e   c o u n t r i e s ,   w i t h o u t   r e s u l t i n g   f r o m 
a   d e t a i l e d   e v a l u a t i o n   b e t w e e n   d i f f e r e n t   t o o l s .   c o n c e r n i n g 
 a ze r b a i j a n ,   t h e re   we re   d o u b t s   a b o u t   w h e t h e r   s e c to r   b u d g e t 
sup p or t shou l d b e us ed in  a count r y  be n ef it in g f rom in cre as-
ing oil and gas expor ts 28. thus the question of appropriateness 
o f   b u d g e t   s u p p o r t   wa s   ra i s e d   i n   t h e   e n pI   m a n a g e m e nt   co m-
m i t t e e   m e e t i n g   o f   s e p t e m b e r   2 0 0 7 .   ne v e r t h e l e s s ,   t h e   c o m-
mis sio n op ted fo r sec tor b u d get  s uppor t  as th e  ma i n s uppor t 
t o o l   i n   a z e r b a i j a n .   d u r i n g   t h e   a u d i t ,   r e p r e s e n t a t i v e s   o f   t h e 
g o v e r n m e n t   s t r e s s e d   t o   t h e   a u d i t o r s   t h a t   t h e   c o u n t r y   p r e -
fer re d technic al as s istance to bu dge t  s uppor t.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

conclusIons and 
recommendatIons

36

67.  

the commission set the new enpI in motion in the three coun-
tr ies  o f t he s o ut her n c au cas us,  h owe ver  with  mixe d re sults.

68.  

69.  

70.  

W eAk n e s s e s   i n  t h e   Pl An n i n g   Pr o c e s s   f o r 
t h e   f i r s t   A n n uAl   Ac t i o n   P r o g r Am m e s

I n   l i n e   w i t h   t h e   e n p I   r e g u l a t i o n ,   t h e   c o m m i s s i o n   a p p l i e d   a 
multiannual planning system to define eu assistance priorities. 
ho w e v e r,   w e a k n e s s e s   i n   t h e   l i n k s   b e t w e e n   e n p  a c t i o n   p l a n , 
c o u n t r y   s t r a t e g y   pa p e r   a n d   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e 
co nt r ib ute  to   ins uff ic ient  cl ar it y   in  pla nn i ng.  clar it y   was  fur -
t h e r   r e d u c e d   a s   t h e   s a m e   p r i o r i t i e s   w e r e   r e f o r m u l a t e d   a n d 
re s t r u c t u re d   f ro m   o n e   d o c u m e nt   to   t h e   n e x t .  th e   u s e f u l n e s s 
of  p ro gramming is redu ced by  in s uf f ic i ent  pr io r it isat i on.

these three successive documents did not sufficiently nar row 
d ow n   p r i o r i t i e s.  th e   a re a s   s e l e c te d   fo r   a s s i s t a n ce   i n   t h e   f i r s t 
annual ac tion programmes did not derive clearly enough from 
the se  st rate gic   do cu ments.  I n stead,   th e  s uit abil it y   of  a n  area 
for sec tor budget suppor t became an impor tant fac tor for de -
te r m i n i n g   a s s i s t a n ce   i n   t h e   2 0 0 7   a n n u a l   a c t i o n   p ro gra m m e s. 
m o re o ve r   t h e   t h re e   d o c u m e n t s   c o ve r   d i f fe re n t   t i m e   p e r i o d s 
(fi ve,  se ven and  fo ur years  re spec ti ve ly) .

t h e   p r o g r a m m i n g   a n d   d e s i g n   p r o c e s s   t o o k   o v e r   t w o   y e a r s 
b e f o r e   t h e   a p p r o v a l   o f   t h e   f i r s t   a n n u a l   a c t i o n   p r o g r a m m e s . 
the main reason was that qualit y control and approval proce -
d u re s   o c c u r re d   i n   t w o   s u c c e s s i ve   c y c l e s   i n   t wo   d i f fe r e n t   di-
rec torates- general, dg  releX and  europea id. the total length 
o f   t h e   p r o c e s s   d o e s   n o t   s u i t   t h e   f a s t   c h a n g i n g   a n d   c o n f l i c t -
 re l ate d   e nv i ro n m e nt   o f   t h e   s o u t h e r n   ca u c a s u s,   e n d a n g e r i n g 
th e  rel evance  o f t he  as s istan ce.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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71.   pro g r a m m i n g   a n d   d e s i g n   o f   a s s i s t a n c e   we re   n o t   s u f f i c i e n t l y 
guided by a struc tured dialogue with beneficiar y countries, as 
t h e   p ro ce s s   w a s   l a rg e l y   d r i ve n   by   t h e   i nte r n a l   p ro ce d u re s   o f 
the   co mmis sio n.  dial o gu e  was  also  hind ered  by  t h e   commis-
sion’s thin presence on the spot in armenia and azerbaijan and 
b y   t h e   l a c k   o f   a n   a p p r o p r i a t e   n a t i o n a l   i n t e r l o c u t o r   t o   b r i n g 
to g et her the  countr ies’ interes ts.

re c o m m e n d At i o n   1

w i t h   t h e   e s t a b l i s h m e n t   o f   t h e   e u r o p e a n   e x t e r n a l   a c t i o n 
s er v ice, th e o p p o r tunit y should b e t aken to s treamlin e th e 
p ro gr ammin g an d d esign p ro cess . In this co nte x t th e co m -
missi o n sh o ul d co nsi d e r : 

(a)  p rov i din g fo r an o rganis ati o nal s tr u c ture that s tre n g th -
e n s   t h e   l i n k s   b e t w e e n   t h e   s t r a t e g i c   d o c u m e n t s   ( p r o -
gr ammin g)  an d  th e  annual  a c ti o n  p ro gr amm es  (d esign) 
an d avo i ds su ccessi ve c ycl es of ap p rov al;

(b)  rationalising the strategic documents (look ing for possi -
b iliti es to m e rg e d o cum e nt s an d to har m o nis e th e tim e 
p e r i o ds  cove re d );

(c)  prioritising f ur ther during pro gramming, with the guid -
i n g   o b j e c t i v e   o f   o f f e r i n g   n e i g h b o u r i n g   c o u n t r i e s   t h e 
p r o s p e c t   o f   a n   i n c r e a s i n g l y   c l o s e r   r e l a t i o n s h i p   w i t h   
th e eu .

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

38

mi x e d   Ac h i e v e m e n t s   i n  t h e 
i mPl e m e n t At i o n   o f  t h e   f i r s t   A n n uAl 
Ac t i o n   P r o g r Am m e s

72.   o v e r a l l ,   a c h i e v e m e n t s   w e r e   m i xe d .  w h i l e   t h e   s e c t o r   b u d g e t 
suppor t programme for ve t in armenia managed to strengthen 
the process of reform, the programme targeting energy reform 
i n   a ze r b a i j a n   m a d e   u n s a t i s f a c to r y   p ro gre s s.  th e   p ro gr a m m e 
f o r   p fm  r e f o r m   i n   g e o r g i a   b e g a n   t o   s t i m u l a t e   c h a n g e   i n   i t s 
seco nd  year af ter  l it tl e ac tivit y by th e  g eorgian counte r par ts 
d u r i n g   t h e   f i r s t   1 2   m o nt h s.  th e   e n p I   p rove d   to   b e   n o t   ye t   a n 
ap p rop r iate   instrument  fo r  e con omi c   re habi l it ati on   and  con-
fid ence  b uil ding  in the co nfl ic t  regio n of  a bk haz ia.

73.  

I n   al l   t hree  co untr ies   t he twin n ing  compon ent  f un ded  un d e r 
t h e   e n pI   r e m a i n e d   i n   t h e   p r e p a r a t o r y   p h a s e ,   l a r g e l y   d u e   t o 
the countr ies’ reluc tance to devote resources to the struc ture 
nee ded  fo r managing t he to ol.

re c o m m e n d At i o n   2

t h e co m missi o n sh o ul d: 

(a)  f o r ar m e nia: w i th th e aim o f a chi ev in g sus t ainab l e  im -
p r ove m e nt   i n   t h e   v e t  a r e a ,   g i ve   at te nt i o n   to   is su e s   s o 
f ar ne gle c te d in the reform pro cess: the demand side of 
v e t  (n e e d s   o f   e m p l oy e r s   a n d   u n e m p l oy e d ),   s e c t o r   co -
o rdinatio n by th e g over nm ent and th e lack of ade quate 
(re gul ar) nati o nal  f un din g;

(b)  f o r   a z e r b a i j a n :   e x a m i n e   w h e t h e r   t h e   c o u n t r y,   a f t e r   a 
p e r i o d   o f   c o n s i d e r a b l e   d e l ay,   r e m a i n s   w i l l i n g   t o   f u l f i l 
t h e   c o n d i t i o n s   s e t   f o r   p r o g r e s s   i n   t h e   a r e a   o f   e n e r g y 
re f o r m;

(c)  f o r  g e o rg ia:   ass e ss   f u l f ilm e nt   o f   co n di ti o ns   s e t  f o r   th e 
s e c to r   b u d g e t   su p p o r t   p r o g r a m m e   i n   th e   f i e l d   o f   pu b -
l i c   f i n a n c e   m a n a g e m e n t   m o r e   r i g o r o u s l y,   w i t h   r e g a r d 
to   e co n o m i c   r e h a b i l i t at i o n   a n d   co n f i d e n ce   b u i l d i n g   i n 
co n f l i c t   z o n e s ,   co n s i d e r   u s i n g   i n s t r u m e n t s   o t h e r   t h a n 
en pI;

(d )  for twinning in all thre e countries: ensure the re cipient 
g ove r n m e n t s ’   co m m i t m e n t   t o   b u i l d   u p   t h e i r   o w n   c a p -
a ci t y  f o r m ana gin g th e to o l .

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

39

ne W   d e l i v e r y  to o l s   i n t r o d u c e d,   b u t   u s e 
o f   s e c to r   b u d g e t   s uP Po r t   n ot   s e l e c t i v e 
e n o u g h

74.   b y br inging in sec tor budget suppor t and twinning, the com-
mission has succeeded in introducing alternatives to the tech-
nica l ass ist ance p ro jec ts  t hat pre vi ous ly pred om inate d. how -
eve r,  sec to r  budg et   su p p o r t  was  int rod uce d  w i th   i n suf fi cie nt 
p r e p a r a t i o n ,   a f f e c t i n g   p e r f o r m a n c e .   w h i l e   t h e   c o m m i s s i o n 
as s e ss ed   t h e  pre co n dit io ns   for   i ts  ef fe c t ive   u se,  t he y  di d  n ot 
ar r ive  at   cl ear l y   docu mented  co nc lus ion s  a n d  te nde d   to  give 
substantial weight to what the beneficiar y countries promised 
to   d o   i n   t h e   f u t u re.  th e y   we re   a l s o   to o   o p t i m i s t i c   w h e n   t h e y 
a s s u m e d   t h at   e a r l i e r   ex p e r i e n ce s   wo u l d   gi ve   t h e   co u nt r i e s   a 
good understanding of how the new tool should wor k . finally 
t h e   c o m m i s s i o n   d i d   n o t   p r o v i d e   s u f f i c i e n t   s t a f f   o n   t h e   s p o t 
wit h ap p ro pr iate  exp er t ise.

75.  

t h e   2 0 0 7   a n n u a l   a c t i o n   p r o g r a m m e s   e s s e n t i a l l y   o f fe r e d   t h e 
countries t wo deliver y tools, sec tor budget suppor t and twin-
ning. the emphasis on these t wo tools restr ic ted the possibil-
i t y   o f   d i r e c t   e n pI   a s s i s t a n c e   t o   c i v i l   s o c i e t y   a n d   t h e   p r i v a t e 
sector and did not allow the annual action programmes to give 
swif t and agile solutions to par ticular problems. fur thermore, 
t h e   p r e d o m i n a n t   u s e   o f   s e c t o r   b u d g e t   s u p p o r t   r e d u c e d   t h e 
visibility of the eu assistance. In the case of  a zerbaijan, sec tor 
budget suppor t did not address the countr y ’s need for techni-
cal assistance. s ec tor budget suppor t is not automatically the 
r ight  to ol  fo r all  co u nt r ies at all ti me s.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

40

re c o m m e n d At i o n   3

t h e c o m missi o n sh o ul d:

(a)  ch o os e s e c to r b u d g e t sup p o r t m o re s e l e c ti ve l y by co n -
s i d e r i n g   a l l   a v a i l a b l e   o p t i o n s   i n   e n p I   a n d   d e v e l o p   a 
m o re  b alan ce d d e p l oy m e nt  o f th e   di f f e re nt  to o ls;

(b)  improve the preparation and documentation of the deci-

si o ns  to  l au n ch b u d g e t  sup p o r t  o p e r ati o ns;

(c)  provide suf f icient qualif ie d s t af f for it s implement ation 
a s   s e c to r   b u d g e t   s u p p o r t   r e q u i r e s   d i f f e r e n t   a n a l y t i c a l 
sk ills f ro m p roj e c t  f in an cin g;

(d )  i d e n t i f y   p o s s i b i l i t i e s   t o   m a k e   s e c t o r   b u d g e t   s u p p o r t 
m o r e   v i s i b l e   a n d   e n s u r e   t h e   m o n i t o r i n g   o f   t h i s   n e w 
to o l;

(e)   help to strengthen the general framework for public ad -
ministration in the re cipient countries by using comple -
m e nt a r y  m e asure s  to   tw innin g  (e.g .  g e n e r al  h o r i z o nt al 
sup p o r t to  th e  p u b li c  s e r v i ce).

t h i s   r e p o r t   w a s   a d o p t e d   b y   c h a m b e r   I I I ,   h e a d e d   b y   m r   ja n 
k InŠ t, m emb er of the cour t of auditor s, in lu xemb ourg at it s 
m e e tin g of 16 n ove mb e r 2010.

For the Court of Auditors

vítor m anuel da sIlva calde Ira
President

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

41

A n n e x   i

r An g e   o f  to o l s   f o r   d e l i v e r i n g   As s i s t An c e   u n d e r   e nPi 1

t y Pe s   o f   m eAs u r e s

1.   community assistance shall be used to finance programmes, projects and any type of measure 

contributing to the objectives of this r egulation.

2.   community assistance may also be used:

(a) to finance technical assistance and targeted administrative measures, including those co -
operation measures involving public-sector experts dispatched from the member states and 
their regional and local authorities involved in the programme;

(b) to finance investments and investment-related activities;

(c) for contributions to the eIb or other financial intermediaries, in accordance with  article 23, 

for loan financing, equity investments, guarantee funds or investment funds;

(d) for debt relief programmes in exceptional cases, under an internationally agreed debt relief 

programme;

(e) for sectoral or general budget support if the partner country’s management of public spend-
ing is sufficiently transparent, reliable and effective, and where it has put in place properly 
formulated sectoral or macroeconomic policies approved by its principal donors, including, 
where relevant, the international financial institutions;

(f ) to provide interest-rate subsidies, in particular for environmental loans;

(g) to provide insurance against non-commercial risks;

(h) to contribute to a fund established by the community, its member states, international and 

regional organisations, other donors or partner countries;

(i) to contribute to the capital of international financial institutions or the regional develop -

ment banks;

( j) to finance the costs necessary for the effective administration and supervision of projects 

and programmes by the countries benefiting from community assistance;

(k) to finance microprojects;

(l) for food security measures.

1  article 15 of regulation (ec) no 1638/2006.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

42

A n n e x   i i

A r m e n iA :  s Pe c i f i c   co n d i t i o n s   o f   se c to r   suP Po r t   P r o g r Am m e 
f o r  v o c At i o nAl   An d   ed u c At i o nAl   tr Ai n i n g ,  se co n d   vAr iAb l e 
in s t Al m e n t   ( 5  m i l l i o n   e u r o )

Conditions

Weight

Available 
amount  
(million euro)

Actual amount 
disbursed  
(million euro)

1. 

Rehabilitation works and supplies of upgraded equipment are on-going in 
the selected VET centres:
• 
• 

Contracts for rehabilitation works signed for the full amount
Equipment supply tenders ready to be launched

2.  Mapping of donors’ interventions in education is prepared 

3. 

4. 

5. 

6. 

7. 

Internal monitoring capacities of the Ministry reinforced and monitoring 
mechanism for sector policy support programme 2007 set up 

Preparation and approval of decision on establishment of the National 
Centre for VET development

Revised organisational chart of VET department, in accordance with 
the functional review proposed by the Task Force and approved by the 
Ministry of Education and Science, is adopted by the government

Job descriptions and competence profiles for VET Department staff devel-
oped, adopted by the Task Force and endorsed by the Civil Service Council 

The Task Force becomes the National VET Council as a tripartite body 
responsible to give guidance on the development of national VET system: 
Task and responsibility of the National VET Council clearly defined
• 
Legal acts on establishment of the Council approved
• 

40 %

10 %

10 %

10 %

10 %

10 %

10 %

100 %

2

0,5

0,5

0,5

0,5

0,5

0,5

5 

1,5

0,5

0,25

0,5

0,25

0,25

0

3,25

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

43

A n n e x   i i i

A z e r b Ai jAn :  s Pe c i f i c   co n d i t i o n s   o f   se c to r   suP Po r t 
P r o g r Am m e   f o r   en e r g y   re f o r m ,  se co n d   vAr iAb l e   in s t Al m e n t 
( 5  m i l l i o n   e u r o )

Specific conditions

1. 

Policy framework

Weight  
(variable 
tranche)

Available 
amount 
(million euro)

Actual amount 
disbursed  
(million euro)

Comprehensive and fully integrated sector strategy approved by government

25 %

1,25

2. 

Renewable Energy Sources and Energy Efficiency action plans

Time bound APs to implement Renewable Energy Sources and Energy Efficiency 
strategies during energy reform support programme to 2010 agreed with other 
institutions and approved by Ministry of Industry and Energy Decree

3. 

Renewable Energy Sources and Energy Efficiency Legislative Framework

Draft legislation on use of Renewable Energy Sources and adoption of Energy 
Efficient submitted to Parliament

4. 

State Agency for Renewable Energy Sources and Energy Efficiency

State Agency for Renewable Energy Sources and Energy Efficiency, 
subordinated to Minister of Industry and Energy, established, its rights and 
responsibilities defined and operation provided

5. 

Public Finance Management

Public Finance Management AP approved

15 %

0,75

20 %

1,00

20 %

1,00

20 %

1,00

0

0

0

0

0

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

44

A n n e x   i v

s Pe c i f i c   co n d i t i o n s   o f   se c to r   suP Po r t   P r o g r Am m e   f o r 
P u b l i c   fi nAn c e   m AnA g e m e n t   re f o r m   i n   ge o r g iA ,  se co n d 
vAr iAb l e   in s t Al m e n t   ( 5  m i l l i o n   e u r o )

Specific conditions

Indicators

1.  Planning and Monitoring of PFM Reform Agenda

Weight 
(variable 
tranche)

Available 
amount 
(million euro)

Actual amount 
disbursed 
(million euro)

The Ministry of Finance will update 
the PFM Strategic Vision following 
the results of the Public Expenditure 
and Financial Accountability (PEFA) 
and will further develop an action 
plan with deadlines and milestones 
required to update the broader PFM 
reform agenda.

2.  MTEF-based Budget Process 

Budget planning and Mid-Term 
Expenditure Framework (MTEF) 
process is further strengthened by 
improving medium term sector 
planning along with improved 
sector costing and integrating this 
into the annual budget formula-
tion process. Content of the MTEF 
2009–12 contributions is improved 
in three selected line ministries and 
coverage is extended to include 
regional government strategies.

PFM action plan with time bound 
result based indicators endorsed by 
relevant agencies

N/A

Basic Data and Directions (BDD) 
2009–12 is extended to include 
broad outline of regional govern-
ment strategies and priorities;
Ministry of Justice, Ministry of 
Energy and Ministry of Labour and 
Social Affairs have costed strategies 
that clearly show a linkage between 
policy, expenditure planning and 
annual budget formulation;
One selected region has a costed 
strategy that clearly shows a linkage 
between medium term expendi-
ture planning and annual budget 
formulation

3.  Treasury Accountancy Systems

The first phase of Government 
Finance Statistics Manual (GFSM) 
2001 has been completed. 

Treasury General Ledger incorporat-
ing GFSM 2001 budget classification 
is operational

4.  External Audit

The Chamber of Control has 
prepared Audit Management Policy 
and Procedural Guidelines. Draft 
Law on the Chamber of Control 
adopted.

The Chamber of Control new 
management policy and corporate 
development strategy has been 
revised and adopted;

Auditing guidelines are available 
and used as basic training materials 
for all staff

3

3

0,4

0,2

0,2

0,4

0,2

0

N/A

20 %

10 %

10 %

e
h
c
n
a
r
t
d
e
x
i
F

e
h
c
n
a
r
t
e
l
b
a
i
r
a
V

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

 
 
45

A n n e x   i v

s Pe c i f i c   co n d i t i o n s   o f   se c to r   suP Po r t   P r o g r Am m e   f o r 
P u b l i c   fi nAn c e   m AnA g e m e n t   re f o r m   i n   ge o r g iA ,  se co n d 
vAr iAb l e   in s t Al m e n t   ( 5  m i l l i o n   e u r o )

Specific conditions

Indicators

5. 

Internal Control Systems and Internal Audit

Weight 
(variable 
tranche)

Available 
amount 
(million euro)

Actual amount 
disbursed 
(million euro)

A policy paper and an action plan 
for the gradual introduction of a 
harmonised public internal financial 
control system (managerial 
accountability and internal audit) is 
approved by the government.

6.  Public Procurement

An action plan based on working 
group recommendations aimed 
at restructuring the public 
procurement legal and regulatory 
framework have been submitted to 
government and adopted.

7.  Revenue Services

Revenue Corporate Strategy drafted. 
Procedure Guidelines drafted. Pro-
cedures for all aspects of customs 
control and taxpayers system on risk 
analysis are further developed and 
approved by the Ministry of Finance.

Cabinet minutes approving the 
policy paper and action plan

20 %

0,4

Working group recommendations;
Action plan approved by the Cabinet

10 %
10 %

0,2
0,2

A methodology, system and 
standard for the development and 
maintenance of all Revenue Service 
procedures are in use

20 %

0,4

100 % 

5,00

0

0
0

0,4

4

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

46

A n n e x   v

ge o r g iA :  ri s k s  to  v Alu e   f o r   m o n e y   i n   Ad d i t i o nAl   e u   
Po s t - c r i s i s   Al lo c At i o n

the eu responded to the crisis of  august 2008 by extending political and financial support to 
georgia, pledging a sum of up to 500 million euro at a donor conference in october 2008. these 
funds draw on several financial instruments including enpI.  although the 2007–10 enpI national 
indicative programme was not modified, the commission decided to increase georgia’s national 
enpI allocation by 61,5 million euro committed through special measures as an important part of 
the humanitarian assistance package.

the additional enpI allocation has mainly supported the resettlement in  georgia proper of per-
sons displaced during the fighting of 2008. the delivery mode is targeted budget support for the 
housing needs of ‘internally displaced persons’ to be implemented by the municipal development 
fund of georgia 1. by july 2009 the  commission had made two payments (9,8 million euro and 
12,1 million euro) to the state budget for the construction of houses including related water and 
electricity networks.

the underlying expenditure was verified by external auditors as being compliant with applicable 
legislation and rules. however a value for money audit has not yet been carried out inspite of the 
high risks involved: no open tender applied by the municipal development fund for contracted 
companies; weak progress in internal and external control of the pfm area; negative experiences 
in s outh ossetia’s forerunner programme with regard to the quality of shelter construction.

1  the municipal development fund of georgia is a legal entity of public law, established in 1997 by a decree of the president of georgia 
within the state programme for municipal development.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

summAry

iv. 
t h e   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e   i s   a n 
indicative multiannual programming docu -
ment specifying the priorities for european 
ne i g h b o u r h o o d   a n d   p a r t n e r s h i p   I n s t r u-
m e nt   (e n pI )   b i l ate ra l   a s s i s t a n ce   i n   a   gi ve n 
p a r t n e r   co u nt r y.  th e   a n n u a l   p ro gra m m i n g 
e x e r c i s e   i s   a   c y c l e   t h a t   l a s t s   a r o u n d   o n e 
y e a r   —   f r o m   i d e n t i f i c a t i o n   t o   a   c o m m i s-
sion d ecision — thereby ensur ing the rele -
va nce  of t he ass is t ance.

fu r t h e r m o re,   t h e   e n p I   i s   n o t   t h e   o n l y   to o l 
a v a i l a b l e   t o   a d d r e s s   i s s u e s   i n   t h e   s o u t h 
c a u c a s u s .   t h e   I n s t r u m e n t   f o r   s t a b i l i t y   i s 
p r e c i s e l y   d e s i g n e d   t o   a d d r e s s   i m m e d i a t e 
n e e d s   s te m m i n g   f ro m   a   c r i s i s.  th i s   i n s t r u-
m e n t   h a s   i n d e e d   b e e n   u s e d   to   re s p o n d   to 
s p e c i f i c   r e q u e s t s   f r o m   p a r t n e r   c o u n t r i e s 
(e.g. t he p os t- el ec tio n c r isis in a r m enia) .

v. 
d e s p i t e   i n i t i a l   d e l a y s,   n o t a b l y   i n   t h e   c a s e 
o f   a ze r b a i j a n   ( s e e   t h e   co m m i s s i o n’s   re p l y 
to   o b s e r vat i o n   4 3 )   a n d   s o m e   i s s u e s   re s u l t -
i n g   f r o m   a d j u s t m e n t   t o   e x t e r n a l   f a c t o r s 
( s u c h   a s   i n   g e o r g i a ) ,   t h e   o v e r a l l   a c h i e v e -
m e nt s   o f   t h e   b u d g e t   s u p p o r t   a n d   o f  tw i n-
n i n g   a r r a n g e m e n t s   l a u n c h e d   i n   t h e   s o u t h 
ca u c a s u s   co u n t r i e s   a re   p o s i t i ve.  tw i n n i n g 
a r r a n g e m e n t s   a r e   n o w   o p e r a t i n g   i n   a l l 
th ree cou nt r ies. 

4747

reply of the 
commIssIon

r egarding g eorgia, it should be noted that 
the european neighbour hood and  par tner-
s h i p   I n s t r u m e n t   ( e n p I )   i s   n o t   i n t e n d e d   t o 
b e   t h e   m a i n   i n s t r u m e n t   t o   p r o v i d e   c o n-
f l i c t - r e l a t e d   a s s i s t a n c e ,   b u t   i s   a   s t r o n g 
s u p p l e m e nt   to   t h e   co n f l i c t- re l ate d   i n s t r u-
ments, including the I nstrument for stabil-
it y. the I nstrument for stabilit y can initiate 
p r o j e c t s   s w i f t l y   t o   r e s p o n d   t o   c r i s e s ,   b u t 
c a n n o t   b e   p r o g r a m m e d   n o r   r u n   p r o j e c t s 
ove r   t h e   m e d i u m   t e r m ,   w h i c h   i s   w h e n   t h e 
e np I ca n t ake over. 

v i. 
the introduc tion of a new instrument inev-
i t a b l y   e n t a i l s   a   p e r i o d   o f   a d a p t a t i o n .  t h e 
i n t r o d u c t i o n   o f   t h e   e u r o p e a n   ne i g h b o u r -
h o o d   a n d   pa r t n e r s h i p   I n s t r u m e nt   (e n pI )   i s 
n o   e x c e p t i o n .   n e v e r t h e l e s s ,   t h e   s u c c e s s -
f u l   l a u n c h   o f   a l l   t h e   a c t i o n   p ro gra m m e s   i n 
t h e   re gi o n   i s   a n   i n d i c at i o n   t h at   t h e re   h ave 
been  n o maj or flaws in th e pre parat io ns.

v ii. 
t h e   co m m i s s i o n   i s   c o n t i n u i n g   t o   wo r k   o n 
f u r t h e r   s t r e a m l i n i n g   o f   t h e   p r o g r a m m i n g 
p r o c e s s   i n   o r d e r   t o   t a k e   i n t o   a c c o u n t   t h e 
l e s s o n s   l e a r n e d   a n d   m a k e   t h e   a s s i s t a n c e 
more ef fec tive. 

s e c t o r   b u d g e t   s u p p o r t   w a s   t h e   p r e f e r r e d 
f o r m   o f   a i d   i n   2 0 0 7   d u e   t o   t h e   p o t e n t i a l 
l e ve r a g e   i n   t e r m s   o f   e n h a n c e d   p o l i c y   d i a -
logue with  th e par tn er countr ies  a nd own-
e r s h i p   o n   t h e i r   p a r t   t h a t   i t   e n t a i l s.   I t s   u s e 
is adequately assessed and direc t links and 
s y n e r g i e s   a r e   m a i n t a i n e d   w i t h   c o m p l e -
m e nt a r y   fo r m s   a n d   a c t i o n   ( e. g.   t h e   p ro j e c t 
approac h and  twinn in g). 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

48

reply of the
commIssIon

pu b l i c   f i n a n ce   m a n a g e m e nt   i s   a   k e y   c ro s s-
c u t t i n g   i s s u e   t h at   to u c h e s   u p o n   a n d   i n f l u-
e n c e s   e a c h   a n d   e ve r y   d e c i s i o n   t a k e n   b y   a 
p u b l i c   a d m i n i s t rat i o n   a n d   e f fe c t i ve   u s e   o f 
th e eu a ssistan ce in the  par t ner  count r y.

2 0. 
t h e   e n p  a c t i o n   p l a n   s e t s   o u t   a   r e f o r m 
a g e n d a   a n d   t h u s   g i v e s   f o c u s   t o   t h e   w o r k 
o n   i m p l e m e n t a t i o n   o f   t h e   a g r e e m e n t   i n 
the contex t of the enp. the enp ac tion plan 
i s   n e g o t i ate d   o n   t h e   b a s i s   o f   t h e   p c a.   th e 
enp ac tion plan was concluded initially for 
a   d u r a t i o n   o f   f i v e   y e a r s ,   b u t   w i l l   r e m a i n 
v a l i d   u n t i l   a   s u cce s s o r   d o c u m e n t   re p l a ce s 
i t .   t h e   c o u n t r y   s t r a t e g y   p a p e r   ( c s p)   i s 
a   p r o g r a m m i n g   d o c u m e n t   a n d ,   a s   s u c h , 
c o r re s p o n d s   t o   t h e   c yc l e   o f   t h e   e u ro p e a n 
co m m i s s i o n   f i n a n c i a l   f r a m e wo r k .   I n   c a s e s 
where an ac tion plan is revised ear lier and, 
a s   a   re s u l t,   s u b s t a nt i a l   c h a n g e s   to   t h e  c s p 
a r e   n e c e s s a r y,   i t   i s   p o s s i b l e   t o   r e v i s e   t h e 
c s p.   t h e   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e 
( n I p ) ,   w h i c h   s p e c i f i e s   t h e   s u p p o r t   t o   b e 
p ro v i d e d   u n d e r   t h e   e u ro p e a n   ne i g h b o u r -
h o o d   a n d   pa r t n e r s h i p   I n s t r u m e n t   (e n pI ) , 
h a s   a   s h o r te r   t i m e   f ra m e,   a l l ow i n g   gre ate r 
d e t a i l   t h a n   t h e   c s p.   fi n a l l y,   t h e   m i d -te r m 
r eview of the csp offers an oppor tunit y to 
update pr ior ities so that they can be taken 
i n t o   a c c o u n t   i n   t h e   n e x t   n a t i o n a l   i n d i c a-
tive programme (nIp)  plan n ing pe r i od.

observAtions

18. 
there are t wo strategic programming docu-
ments — the countr y strategy paper (csp), 
w h i c h   c o v e r s   a l l   e u r o p e a n   un i o n   a s s i s t -
a n c e   o v e r   s e v e n   y e a r s ,   a n d   t h e   n a t i o n a l 
i n d i c a t i v e   p r o g r a m m e   (nIp)   f o r   b i l a t e r a l 
eu ro p e a n   ne i g h b o u r h o o d   a n d   pa r t n e r s h i p 
I n s t r u m e n t   (e n pI )   a s s i s t a n c e ,   w h i c h   c o v -
e r s   fo u r   p l u s   t h re e   ye a r s   ( 4 + 3 )   to   t a k e   i nto 
account the results of the mid-ter m review 
o f   t h e   c o u n t r y   s t r a t e g y   pa p e r   ( c s p) .   t h e 
co m m i s s i o n   co n s i d e r s   t h at   t h e re   i s   a   c l e a r 
link between these two documents because 
each nIp responds to the analysis provided 
by   t h e   re s p e c t i ve   c s p.  th e   n at i o n a l   i n d i c a-
t i ve   p ro gra m m e s   re f l e c t   t h e   e n pI’s   o b j e c t -
i v e   o f   s u p p o r t i n g   t h e   b r o a d   c o o p e r a t i o n 
a g e n d a   o f   t h e   e u r o p e a n   n e i g h b o u r h o o d 
po l i c y   ( e n p ) .   t h e   n I p   s p e c i f i e s   t h e   p r i o r -
i t i e s   o f   e u  a s s i s t a n c e ,   b a s e d   o n   s t r a t e g i c 
p r i o r i t i e s,   b u t   g e n e ra l l y   d o e s   n o t   i n d i c ate 
t h e   fo r m   o f   a i d   ( a p a r t   f ro m   p rov i d i n g   g e n-
e r a l   g u i d a n c e   u n d e r   t h e  ‘ I m p l e m e n t a t i o n’ 
s e c t i o n   o f   t h e   n I p ) .   p r i o r i t i e s   c a n n o t   b e 
d e l i m i t e d   t o o   n a r r o w l y   i n   o r d e r   t o   l e a v e 
some flexibilit y for adapting to new polic y 
developments and a changing environment 
(see  als o p ara grap h 20).

19. 
I t   i s   n o r m a l   t h a t   c e r t a i n   p r i o r i t i e s   i n   t h e 
csp reappear in the  nIp . the countr y strat-
e g y   pa p e r s   (c s ps )   fo r   t h e   s o u t h   c a u c a s u s 
c o u n t r i e s   c o v e r   t h e   s e v e n   y e a r s   o f   t h e 
f i n a n c i a l   f ra m e wo r k   a n d   s e t   t h e   ove ra rc h -
i n g   a i m s   o f   e u   a s s i s t a n c e   t o   t h e   c o u n t r y 
c o n c e r n e d   d u r i n g   t h i s   t i m e   f r a m e .   t h e 
n a t i o n a l   i n d i c a t i v e   p r o g r a m m e s   (nIp s ) 
a d o p te d   w i t h i n   t h e   f ra m e wo r k   o f   t h e   c s ps 
s e t   p r i o r i t i e s   fo r   t h e   eu ro p e a n   ne i g h b o u r -
h o o d   a n d   pa r t n e r s h i p   I n s t r u m e n t   (e n pI ) 
b i l a t e r a l   p r o g r a m m e   f o r   f o u r   p l u s   t h r e e 
y e a r s   t o g e t h e r   w i t h   s p e c i f i c   i n d i c a t i v e 
financial allocations for each pr ior it y area. 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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b ox 2   – Wid e  range o f sub jec t s  fo r 
p o ss ible financ ial  assist ance  in   
nat ion al  indic at ive p ro gramme: 
ex ample Azerbaijan
t h e   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e   (nIp) 
has been designed to allow sufficient flexi-
b i l i t y   f o r   i m p l e m e n t i n g   e u r o p e a n   u n i o n 
a s s i s t a n ce   i n   t h e   e vo l v i n g   p o l i c y   e nv i ro n-
m e n t   o f   t h e   p a r t n e r   c o u n t r y   a n d   a g a i n s t 
a   b r o a d   e u r o p e a n   n e i g h b o u r h o o d   po l i c y 
(e n p)  agen da. 

2 3. 
w h i l e   t h e   c o u n t r y   s t r a t e g y   p a p e r   ( c s p) 
e x p l a i n s   t h e   ove ra l l   co m m i s s i o n   re s p o n s e 
o v e r   s e v e n   y e a r s ,   t h e   n a t i o n a l   i n d i c a t i v e 
p r o g r a m m e   (nIp)   s e t s   p r i o r i t i e s   f o r   e u r o -
p e a n   n e i g h b o u r h o o d   a n d   p a r t n e r s h i p 
I n s t r u m e nt   (e n pI )   b i l ate ra l   a s s i s t a n ce   d u r -
i n g   fo u r   a n d / o r   t h re e   ye a r s.  th e   nIp  s p e c i-
f i e s   t h e   p r i o r i t i e s   o f   e u  a s s i s t a n c e,   b a s e d 
o n   s t ra te gi c   p r i o r i t i e s,   b u t   g e n e r a l l y   d o e s 
n o t   i n d i c a t e   t h e   f o r m   o f   a i d   ( a p a r t   f r o m 
p r o v i d i n g   g e n e r a l   g u i d a n c e   u n d e r   t h e 
‘ I m p l e m e n t a t i o n’  s e c t i o n   o f   t h e   nIp) .   t h i s 
f l e x i b i l i t y   i s   a l s o   e s s e n t i a l   a s   i t   m a k e s   i t 
p o s s i b l e   to   f ro nt l o a d   p ro gra m m e s   t h at   a re 
a t   a n   a d v a n c e d   s t a g e   o f   p r e p a r a t i o n   a n d 
b a c k l o a d   t h o s e   w h e r e   p r e p a r a t i o n s   a r e 
m o re   t i m e - co n s u m i n g.  th i s   f l ex i b i l i t y   a l s o 
a l l o w s   f a c t o r i n g   i n   b u d g e t a r y   v a r i a t i o n s 
dec ided  by th e budg etar y  auth or it y.

21. 
the europ ean  neig hb ou r hoo d po lic y ( e np ) 
ac tion plan does indeed ser ve as a key ref-
e re n ce   d o c u m e nt   fo r   t h e   eu ro p e a n   ne i g h-
b o u r h o o d   a n d   p a r t n e r s h i p   I n s t r u m e n t 
(e n pI ) .   ho w e v e r,   i t s   s c o p e   i s   s i g n i f i c a n t l y 
b r o a d e r,   a s   i t   o u t l i n e s   a   n a t i o n a l   r e f o r m 
a g e n d a   a c ro s s   t h e   m a ny   a re a s   c o ve re d   b y 
t h e   e n p,   s o m e   o f   w h i c h   r e c e i v e   e u r o p e a n 
union as sist ance.

b ox 1 – Wide  priorit y se tt ing in  enP 
ac tion  plan:  ex am ple  Arme nia
the europ ean  neig hb ou r hoo d po lic y ( e np ) 
ac tion plan sets out mutually agreed polit-
i c a l   p r i o r i t i e s   f o r   t h e   e u r o p e a n   un i o n ’s 
co o p e rat i o n   w i t h   ar m e n i a .  th e   e n p  a c t i o n 
p l a n   cove r s   t h e   f u l l   ra n g e   o f   t h e   eu ro p e a n 
un i o n ’s   r e l a t i o n s h i p   w i t h   a r m e n i a   a n d 
t h e r e f o r e   n a t u r a l l y   n e e d s   t o   b e   c o m p r e -
hensive. a relatively broad  enp ac tion plan 
also provides greater flexibilit y in the con-
t e x t   o f   t h e   r a p i d l y   e vo l v i n g   p o l i c y   f r a m e -
wor k in  a r menia. 

22 . 
t h e   m a i n   o b j e c t i v e   o f   t h e   c o u n t r y   s t r a t -
e g y   pa p e r   (c s p)   i s   to   o u t l i n e   t h e   s t ra te gi c 
pr ior ities of the european union assistance 
t o   a   g i ve n   p a r t n e r   c o u n t r y   w i t h i n   a   g i ve n 
f u n d i n g   p e r i o d .   t h i s   s e r v e s   a s   t h e   b a s i s 
fo r   t h e   ove r a l l   eu ro p e a n   un i o n   a s s i s t a n ce 
o v e r   s e v e n   y e a r s   c o v e r i n g   n o t   o n l y   t h e 
eu ro p e a n   ne i g h b o u r h o o d   a n d   pa r t n e r s h i p 
I n s t r u m e n t   (e n pI )   b u t   a l s o   o t h e r   i n s t r u-
m e nt s.  th e   n at i o n a l   i n d i c at i ve   p ro gra m m e 
(nIp)   s e t s   o u t   t h e   p r i o r i t i e s   fo r   e n pI   b i l at -
eral assistance over three or four years. the 
need to focus assistance on fewer priorities 
f o r   r e a s o n s   r e l a t i n g   t o   a i d   e f f e c t i v e n e s s 
a n d   e f f i c i e n c y   h a s   t o   b e   b a l a n c e d   a g a i n s t 
t h e   n e e d   fo r   t h e   eu ro p e a n   co m m i s s i o n   to 
s u p p o r t   t h e   b ro a d   co o p e r a t i o n   a n d   grow -
i n g   p o l i t i c a l   a n d   s e c to ra l   a g e n d a   w i t h   t h e 
e n pI   co u nt r i e s.   th i s   re q u i re s   t h e   eu ro p e a n 
co m m i s s i o n   to   b e   a b l e   to   a s s i s t   e f fo r t s   to 
h a r m o n i s e   w i t h   eu ro p e a n   un i o n   s t a n d a rd s 
in a  wide  range  of areas.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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on   t h e   l a c k   o f  ‘g u i d a n ce’  fo r   tw i n n i n g   a n d 
s e c t o r   b u d g e t   s u p p o r t ,   t h e   c o m m i s s i o n 
s t re s s e s   t h e   d e m a n d - d r i ve n   n a t u re   o f   t h e 
f o r m e r   a n d   t h e   s u b s e q u e n t   a s s e s s m e n t 
p ro ce s s   fo r   t h e   l at te r.   b o t h   t y p e s   o f   a c t i o n 
a r e   p r o p e r l y   i d e n t i f i e d   a n d   c o n s e q u e n t l y 
d e s i g n e d   i n   l i n e   w i t h   p a r t n e r   c o u n t r i e s ’ 
reform needs throughout the programming 
p e r i o d .   b e c a u s e   o f   t h e i r   d y n a m i c   n a t u r e 
a n d   t h e   n e e d   to   re s p o n d   to   d e ve l o p m e nt s 
i n   s p e c i f i c   p o l i c i e s ,   g u i d a n c e   c a n   b e   i n i-
t i a l l y   p rov i d e d   i n   b ro a d   te r m s   at   t h e   l e ve l 
o f   p r i o r i t y   a re a s   i d e n t i f i e d   i n   t h e   co u n t r y 
s t r a t e g y   p a p e r / n a t i o n a l   i n d i c a t i v e   p r o -
grammes.

25. 
s e c t o r   b u d g e t   s u p p o r t   w a s   a   r e s p o n s e   t o 
t wo   s p e c i f i c   c h a l l e n g e s :   f r a g m e n t a t i o n   o f 
a i d   a n d   l a c k   o f   o w n e r s h i p,   i n   a c c o r d a n c e 
with the principles of the paris declaration. 
t h e   co m m i s s i o n ,   i n   l i n e   w i t h   t h e   m e m b e r 
s t a t e s ,   c o m m i t t e d   i t s e l f   t o   c h a n n e l   — 
whenever conditions allow — at least 50  % 
o f   co m m u n i t y   a i d   v i a   n at i o n a l   s ys te m s,   a s 
c a l l e d   fo r   b y   t h e  ‘e u r o p e a n   co n s e n s u s   o n 
d e v e l o p m e n t ’  o f   d e c e m b e r   2 0 0 5 ,   f u r t h e r 
r e i n f o r c e d   b y   t h e   2 0 0 8   a c c r a   a g e n d a   f o r 
a c t i o n   f o r   a c c e l e r a t i n g   a n d   d e e p e n i n g 
implem ent atio n o f the p ar is d ec la rat ion .

2 6. 
vo c at i o n a l   e d u c at i o n   a n d   t ra i n i n g   ( v e t )   i s 
l i n k e d   to   a   n u m b e r   o f   p r i o r i t y   a re a s   i n   t h e 
n a t i o n a l   i n d i c a t i v e   p r o g r a m m e   (nIp)   a n d 
the ac tion plan, such as economic develop -
m e n t ,   s o c i a l   c o h e s i o n ,   s u s t a i n a b l e   d e v e l -
opment an d pe ople -to -pe ople conta c ts. 

during the identification stage for the 2007 
a n n u a l   a c t i o n   p r o g r a m m e,   t h e   c o n s e n s u s 
b e t we e n   t h e   co m m i s s i o n   a n d   t h e   p a r t n e r 
co u nt r y   wa s   to   t a c k l e   p ove r t y   re d u c t i o n ,   a 
priorit y in the nIp and also in the  european 
ne i g h b o u r h o o d   po l i c y   (e n p)   a c t i o n   p l a n 
a n d   t h e   pove r t y   r e d u c t i o n   st rate g y   pa p e r, 
in ar menia. I n these documents, education 
was identified as the key to pover t y reduc-
tion. the limited resources available under 
t h e   2 0 0 7   a n n u a l   a c t i o n   p r o g r a m m e   m a d e 
it e ssential to focus on one  s pec if ic  a spe c t 
o f   e d u c a t i o n .  v e t,   w i t h   i t s   re g i o n a l   fo c u s, 
w a s   h i g h l y   re l e v a n t   to   b o t h   s u b - p r i o r i t i e s 
o f   t h e   t h i r d   p r i o r i t y   a r e a   o f   t h e   n a t i o n a l 
indicative programme (suppor t for  pover t y 
r educ tion), which accounts for 40 % of the 
a l l o c a t i o n   u n d e r   t h e   n a t i o n a l   i n d i c a t i v e 
p ro gra m m e   fo r   2 0 0 7 – 1 0 .  th e   u rg e nt   n e e d s 
for assistance in this area are undisputable 
w i t h   a   p ove r t y   rate   o f   2 5 , 6   %   o f   t h e   p o p u-
l a t i o n   i n   2 0 0 6   ( I n t e r n a t i o n a l   m o n e t a r y 
fund  data) .

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special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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the european neighbour hood and  par tner-
s h i p   I n s t r u m e nt   (e n pI )   d e c i s i o n   p ro ce s s   i s 
l e n g t hy   b e c a u s e   p ro gra m m i n g   d o c u m e nt s 
a r e   s u b m i t t e d   t o   t h e   c o m i t o l o g y   p r o c e d -
u r e .   si n c e   c o - d e c i s i o n   a p p l i e s   ( w h i c h   i s 
n o t   t h e   c a s e   u n d e r   ta c i s ) ,   t h e   e u r o p e a n 
pa r l i a m e nt   a l s o   h a s   a   fo r m a l   r i g ht   o f   s c r u-
t i n y   b e f o r e   t h e   c o m m i s s i o n   d e c i s i o n   i s 
a d o p t e d .   m o r e o v e r,   i n   t h e   p r o g r a m m i n g 
p r o c e s s   t h e   p a r t n e r s h i p   p r i n c i p l e   e s t a b -
lished in ar ticles 4 and 5 of the enpI  r egu-
l a t i o n   i s   t u r n e d   i n t o   c o n s u l t a t i o n s   w i t h 
c i v i l   s o c i e t y   r e p r e s e n t a t i v e s ,   e u r o p e a n 
un i o n   m e m b e r   s t a t e s ,   o t h e r   d o n o r s   a n d 
i n t e r n a t i o n a l   f i n a n c i a l   i n s t i t u t i o n s ,   t h u s 
fur t her  ex ten ding  th e proces s.

th e   co m m i s s i o n   p o i nt s   o u t   t h at,   w h i l e   t h e 
q u a l i t y   c o n t r o l   a n d   a p p r o v a l   p r o c e d u r e s 
follow a set path, ir respec tive of the scope 
of the ac tion, what has been ‘car r ied out in 
t wo   s u cce s s i ve   s t a g e s’  i s   d i f fe re n t   i n   b o t h 
c o n t e n t   a n d   n a t u r e :   d g   r e l e X   i n t e r v e n e s 
a t   t h e   l e v e l   o f   t h e   m u l t i a n n u a l   p r o g r a m-
m i n g   d o c u m e nt s   (co u nt r y   st rate g y   pa p e r /
n a t i o n a l   i n d i c a t i v e   p r o g r a m m e ) ,   w h e r e a s 
europeaid goes a stage fur ther with imple -
m e n t a t i o n   o f   t h e   nIp  b y   m e a n s   o f   a n n u a l 
ac tion programmes identifying the specific 
program me s and  proje c t s to be f in an ce d.

27. 
t h e   l i s t   o f   s u b - p r i o r i t i e s   i n   t h e   n a t i o n a l 
indicative programme (nIp) is to be under -
stood as indicative. I n prac tice, this means 
that, in close cooperation with the par tner 
c o u n t r y,   t h e   co m m i s s i o n   s e l e c t s   f ro m   t h e 
i n d i c a t i v e   l i s t   i n   t h e   nIp  t h e   s u b - p r i o r i t y 
( o r   s u b - p r i o r i t i e s )   t h a t   a p p e a r ( s )   t h e   b e s t 
c a n d i d ate ( s )   fo r   s u p p o r t   i n   a ny   gi ve n   ye a r 
w i t h o u t   a ny   o b l i g at i o n   to   cove r   t h e   e nt i re 
l i s t   o f   s u b - p r i o r i t i e s   w i t h i n   t h e   nIp ’s   t i m e 
frame.

28. 
t h e   c o m m i s s i o n   a c t u a l l y   s t a r t e d   p r e p a r -
at i o n   o f   t h e   2 0 0 7   a c t i o n   p ro gra m m e   s u f f i-
ciently ahead of the entr y into force of the 
e n pI   r e g u l a t i o n   e n s u r i n g   t i m e l y   c o m m i t -
ment  of t he  al l o cated fu nd s.

29– 30. 
t h e   c o m m i s s i o n   w e l c o m e s   t h e   a c k n o w -
ledgment by the  cour t of the fac t that this 
process took place with the introduc tion of 
the european neighbour hood and  par tner-
s h i p   I n s t r u m e n t   (e n pI ) ,   b u t   a l s o   w a n t s   t o 
c l a r i f y   t h a t   s u b s e q u e n t   c o u n t r y   s t r a t e g y 
paper/national indicative programme (csp/
nIp)   p r o g r a m m i n g   i s   a c t u a l l y   p e r f o r m e d 
i n   p a r a l l e l   t o   a n n u a l   p r o g r a m m i n g   ( f o r 
e x  a m p l e,   t h e   m i d - te r m   re v i e w   p ro ce s s   fo r 
t h e   2 0 1 1 – 1 3   nIp  i s   t a k i n g   p l a ce   a t   a ro u n d 
t h e   t i m e   o f   t h e   2 0 1 0   a n n u a l   p ro gra m m i n g 
or  2011 id ent ificat ion  exerc ise).

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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31. 
th e   co m p re h e n s i ve   co n s u l t at i o n s   a l l ow   a n 
i n c l u s i v e   p r o g r a m m i n g   p r o c e s s .   s h o r t e n -
ing the process might lead to cer tain gains 
b u t   co u l d   a l s o   a d ve r s e l y   a f fe c t   t h e   d e gre e 
o f   i nvo l ve m e nt   o f   o t h e r   s t a k e h o l d e r s   ( e. g. 
l i n e   di re c to rate s - g e n e ra l   w i t h i n   t h e   co m-
mission, european union  m ember states or 
t h e   e u r o p e a n   pa r l i a m e n t ) .   t h e   e u r o p e a n 
ne i g h b o u r h o o d   a n d   p a r t n e r s h i p   I n s t r u-
m e nt   (e n pI )   i s   n o t   d e s i gn e d   to   re s p o n d   to 
c r i s i s   s i t u a t i o n s ,   b u t ,   i n s t e a d ,   t o   s u p p o r t 
m e d i u m -   a n d   l o n g - t e r m   re fo r m   p ro c e s s e s 
i n   t h e   f r a m e w o r k   o f   t h e   e u r o p e a n   ne i g h-
b o u r h o o d   p o l i c y   (e n p) .   t h e s e   r e q u i r e   a 
longer-ter m vision reflec ted in the countr y 
strategy paper (csp), but also have to allow 
mid-ter m adjustments to respond to evolv-
ing pr ior ities and needs. consequently, the 
ea s te r n   pa r t n e r s h i p   l a u n c h e d   i n   2 0 0 9   w a s 
f u l l y   r e f l e c t e d   i n   t h e   m i d - t e r m   r e v i e w   o f 
t h e   r e l e v a n t   c s ps   a n d   t h e   d r a f t i n g   o f   t h e 
n e w   nIp s   fo r   2 0 1 1 – 1 3 .   a s   fo r   t h e   c r i s e s   i n 
g e o r g i a   a n d   a r m e n i a ,   t h e   I n s t r u m e n t   f o r 
s t a b i l i t y   w a s   t h e   e u r o p e a n   un i o n’s   m a i n 
cr isis response instrument and thus effec t-
ively supp l emented th e enpI s up p o r t.

32. 
pro g r a m m i n g   t a s k s   a re   c a r r i e d   o u t   b y   t h e 
c o m m i s s i o n   d e p a r t m e n t s   c o n c e r n e d ,   i n 
c l o s e   d i a l o g u e   w i t h   p a r t n e r   c o u n t r i e s . 
I m p o r t a nt l y,   t h e   eu ro p e a n   pa r l i a m e nt   a n d 
m e m b e r   s t a t e s   a r e   a l s o   i n v o l v e d .   d u r -
i n g   t h e   p r o g r a m m i n g   p r o c e s s ,   t h e r e   w a s 
c o n t i n u o u s   c o n t a c t   b e t w e e n   c o m m i s s i o n 
d e p a r t m e n t s   a n d   t h e i r   g o ve r n m e n t   c o u n-
ter par ts. 

3 2. ( a) 
a t   t h e   t i m e   o f   t h e   p r o g r a m m i n g   e x e r c i s e 
fo r   t h e   2 0 0 7   a c t i o n   p ro gr a m m e,   t h e   d e l e -
g a t i o n s   i n   ye r e v a n   a n d   b a k u   h a d   n o t   y e t 
b e e n   f o r m a l l y   e s t a b l i s h e d .   b o t h   d e l e g a-
t i o n s   w e r e   o f f i c i a l l y   o p e n e d   i n   2 0 0 8   a n d 
b e c a m e   f u l l y   o p e r a t i o n a l   i n   t h e   c o u r s e   o f 
2 0 0 9 ,   w i t h   t h e   d e vo l u t i o n   p ro ce s s   ve r i f i e d 
by   t h e   eu ro p e a n   co m m i s s i o n   d e p a r t m e nt s 
c o n c e r n e d   i n   l a t e   2 0 0 9   a n d   e a r l y   2 0 1 0 
respec t ive ly.

today all three countr ies in the s outh cau-
c a s u s   h a v e   f u l l y   f l e d g e d   e u r o p e a n   un i o n 
d eleg ations.

3 2. (b) 
un d e r   t h e   e u r o p e a n   ne i g h b o u r h o o d   a n d 
p a r t n e r s h i p   I n s t r u m e n t   (e n pI ) ,   t h e   d i a-
l o g u e   w i t h   p a r t n e r   c o u n t r i e s   i s   a   s t r u c -
t u r e d   a n d   w e l l - e s t a b l i s h e d   p r o c e s s   i n 
l i n e   w i t h   t h e   i n te r n a l   p ro gr a m m i n g   c yc l e. 
r e g a r d i n g   d e v e l o p m e n t   o f   t h e   c o u n-
t r y   s t r a t e g y   pa p e r   (c s p)   a n d   t h e   n a t i o n a l 
i n d i c a t i v e   p r o g r a m m e   (nIp) ,   g u i d a n c e   o n 
t h e s e   a s p e c t s   i s   p r o v i d e d   b y   t h e   i n t e r -
ser vice qualit y  suppor t group. th e gen eral 
program min g  guidelines   for   t he   2 0 0 5   e npI 
c s p/nIp s   i n c l u d e d   i n - c o u n t r y   d i s c u s s i o n s 
as an impor tant par t of the process of pre -
p a r i n g   t h e   c s p / n I p.  th e   re v i s e d   g u i d e l i n e s 
f o r   t h e   2 0 0 9   m i d - t e r m   r e v i e w   a r e   c l e a r e r 
o n   t h i s   p o i nt ,   re q u i r i n g   t wo   p ro gra m m i n g 
m i s s i o n s   w i t h   g o v e r n m e n t   c o n s u l t a t i o n s 
i n   t h e   p ro c e s s   o f   p re p a r i n g   n e w   nIp s.  th e 
nIp s   fo r   2 0 1 1 – 1 3   h a v e   t o   t a k e   a c c o u n t   o f 
the dialogue with par tner countr ies dur ing 
th e programmin g per iod.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

32.  (c) 
t h e   na t i o n a l   c o o r d i n a t i n g   un i t s   (n c u s ) 
w e r e   i n f o r m e d   a b o u t   t h e   i n t r o d u c t i o n   o f 
e u r o p e a n   ne i g h b o u r h o o d   a n d   p a r t n e r -
s h i p   I n s t r u m e n t   (e n pI )   p r o c e d u r e s ,   b u t 
t h e   n c u s   w e r e   l e a r n i n g   t h e i r   r o l e   a s   t h e 
programming was under way. never theless, 
t e c h n i c a l   a s s i s t a n c e   p r o j e c t s   t o   s u p p o r t 
n c u s   h a v e   a d d r e s s e d   i n i t i a l   s h o r t c o m-
i n g s   b y   e n h a n c i n g   t h e i r   r o l e   a s   a n   e f f e c -
t i v e   c o u n t e r p a r t .   s i n c e   t h e   l a u n c h   o f   t h e 
enpI,  ncus are the commission’s first entr y 
p o i n t   to   t h e   g ove r n m e n t   w h e n   d i s c u s s i n g 
implementation and programming matters 
under  the enpI.

33. 
c o n s u l t a t i o n s   w i t h   n a t i o n a l   a u t h o r i t i e s , 
o t h e r   d o n o r s   a n d   c i v i l   s o c i e t y   o r g a n i s a -
tions on pr ior it y-setting are major steps at 
t h e   l e ve l   o f   b o t h   co u nt r y   st rate g y   pa p e r s /
n a t i o n a l   i n d i c a t i v e   p r o g r a m m e s   a n d   o f 
a n n u a l   a c t i o n   p r o g r a m m e s .   t h i s   i s   n o t 
o n l y   d o c u m e n t e d   i n   t h e   v a r i o u s   m i s s i o n 
re p o r t s,   b u t   a l s o   re f l e c t e d   i n   t h e   re l e v a n t 
‘a c t i o n   f i c h e s’  w h i c h   a re   p re p a re d   i n   c l o s e 
n e g o t i a t i o n   w i t h   t h e   p a r t n e r   c o u n t r i e s . 
th e   ex te nt   a n d   f re q u e n c y   o f   t h e s e   co n s u l-
tations depend heavily on the existence of 
a   d e l e g a t i o n   i n   t h e   p a r t n e r   c o u n t r y.   s e e 
re p l y   to   p a ra gra p h   6 0   ( c )   fo r   t h e   t i m i n g   o f 
t h e   o p e n i n g   o f   f u l l y   f l e d g e d   d e l e g a t i o n s 
in t he  re gion . 

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commIssIon

3 4. 
I n   t h e   c a s e   o f   t h e   i n t r o d u c t i o n   o f   s e c t o r 
b u d g e t   s u p p o r t   a n d   tw i n n i n g   u n d e r   t h e 
e u r o p e a n   ne i g h b o u r h o o d   a n d   p a r t n e r -
ship I nstrument (enpI) — which was a new 
i n s t r u m e n t   i t s e l f   i n   2 0 0 7   —   t h e   p a r t n e r 
c o u n t r i e s   w e r e   w e l l   i n f o r m e d   o f   t h e   p u r -
p o s e   o f   t h e   d i f fe r e n t   s t r a t e g y   p a p e r s   a n d 
p ro gra m m i n g   d o c u m e nt s   ( a d   h o c   i n fo r m a-
tion/training seminars were also organised 
for relevant stak eh olders ).

c o m m i s s i o n   s t a f f   i n f o r m e d   t h e i r   c o u n -
t e r p a r t s   i n   e a c h   p a r t n e r   c o u n t r y   a b o u t 
t h e   p r o c e d u r e s   a n d   t h e   r a t i o n a l e   f o r   t h e 
p r o g r a m m i n g   d o c u m e n t s   d u r i n g   t h e   p r o -
g r a m m i n g   m i s s i o n s .   si n c e   p r i o r i t i e s   w e r e 
d i s c u s s e d   w i t h   p a r t n e r   c o u n t r i e s ,   t h e y 
had the oppor tunit y to influence the com-
m i s s i o n’s   d e c i s i o n s.  th e   n ow   f u l l y   f l e d g e d 
e u r o p e a n   un i o n   d e l e g a t i o n s   i n   a l l   t h r e e 
co u nt r i e s   a l l ow   c l o s e r   d i a l o g u e   w i t h   p a r t -
n e r   c o u n t r i e s   t h a n   w a s   t h e   c a s e   d u r i n g 
p l a n n i n g   o f   t h e   n a t i o n a l   i n d i c a t i v e   p r o -
gram me for  2 007 –10 .

3 6. 
s e e   r e p l y   t o   p a r a g r a p h   3 9 ( a ) .   t h e   m a i n 
a i m   o f   t h e   vo c at i o n a l   e d u c at i o n   a n d   t ra i n-
i n g   ( v e t )   s u p p o r t   p ro gr a m m e   i n   t h e   2 0 0 7 
a c t i o n   p r o g r a m m e   w a s   t o   l a y   t h e   i n s t i-
t u t i o n a l   a n d   s t r u c t u r a l   f o u n d a t i o n s   f o r 
o p e r a t i n g   a   f u l l y   f l e d g e d  v e t  re fo r m   p ro -
gram me.

3 9. 
t h e   c o m m i s s i o n   w e l c o m e s   t h e   p o s i t i v e 
ack nowledgment by the cour t of the euro -
p e a n   un i o n’s   s u p p o r t   f o r   t h e   v e t  r e f o r m 
process in  ar me nia. 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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commIssIon

3 9. ( c) 
t h e   c o m m i s s i o n   a c k n o w l e d g e s   t h a t   t h e 
n e e d s   fo r   re f u r b i s h m e n t   wo r k s   i n   t h e   c o l-
l e g e s   c o n c e r n e d   a re   s u b s t a n t i a l   a n d   t h a t , 
i n   s o m e   c a s e s,   u p g r a d i n g   o f   t h e   f a c i l i t i e s 
h a s   n o t   b e e n   c o m p l e t e d   d u e   t o   t h e   s c a l e 
o f   t h e   wo r k   to   b e   p e r fo r m e d.   fo r   a l l   i n s t i-
t u t i o n s   co n ce r n e d,   t h e   wo r k   re m a i n i n g   to 
be done was identified by ex ternal consult-
ants in early 2010 and has been annexed to 
t h e   2 0 0 9  v e t   fo l l ow- u p   re fo r m   p ro gra m m e 
c o n d i t i o n a l i t y   m a t r i x   i n   o r d e r   t o   s e t   s p e -
c i f i c   t a r g e t s   f o r   t h e   w o r k   t o   b e   r e v i e w e d 
d u r i n g   t h e   re l e va nt   d i s b u r s e m e nt   ve r i f i c a-
tion  mission . 

4 3. 
th e   d e l ay   i n   i m p l e m e nt at i o n   o f   t h e   s e c to r 
b u d g e t   s u p p o r t   (s b s)   o n   e n e r g y   w a s   d u e 
t o   t h e   g o v e r n m e n t   o f   a z e r b a i j a n’s   s l o w 
a d a p t at i o n   to   a   n e w   m e t h o d   o f   i m p l e m e n -
t a t i o n ,   i n c l u d i n g   i t s   r e l a t e d   e f fo r t s   t o   s e t 
u p   a n   i n t e r n a l   m e c h a n i s m   t o   m a n a g e   t h e 
p r o g r a m m e   ( s e e   t h e   r e p l y   t o   o b s e r v a t i o n 
3 2   ( c ) ) .  th e   m e c h a n i s m   wa s   a p p rove d   by   a 
g o v e r n m e n t a l   d e c r e e   i n   no v e m b e r   2 0 0 9 . 
s i n c e   t h e   t i m e   o f   t h e   a u d i t ,   t h e   c o m m i s -
sion   received   a  request  for   pay ment  of  t he 
f i r s t   t r a n c h e   o f   t h e   2 0 0 7   s b s,   w h i c h   w a s 
releas ed in june  20 10 . 

t h e   s t e e r i n g   c o m m i t t e e   w a s   s e t   u p   i n 
e a r l y   2 0 1 0   a n d   t h e   d e l e g at i o n   h a s   a l re a d y 
s t a r te d   t h e   p o l i c y   d i a l o g u e   o n   i m p l e m e n-
t a t i o n   o f   t h e   c o n d i t i o n s   f o r   t h e   s e c o n d 
t r a n c h e .   t h e   g o v e r n m e n t   o f   a z e r b a i j a n 
h a s   a l r e a d y   i m p l e m e n t e d   o n e   k e y   c o n d i-
t i o n   fo r   t h e   s e co n d   t ra n c h e,   by   s e t t i n g   u p 
a n d   s t a f f i n g   a n   ag e n c y   fo r   r e n e wa b l e   a n d 
alter native energy  s ources, by presidential 
dec ree.

39.  (a) 
the  2007  ac t io n  p rogramme  fo r   vo cat ion al 
e d u c a t i o n   a n d   t r a i n i n g   ( v e t )   i n   a r m e n i a 
w a s   p r i m a r i l y   c o n c e r n e d   w i t h   l a y i n g   t h e 
f o u n d a t i o n s   f o r   v e t  r e f o r m ,   i . e .   b u i l d i n g 
t h e   i n s t i t u t i o n a l   c a p a c i t y   f o r   p o l i c y   f o r -
m u l a t i o n ,   p e r f o r m a n c e   m o n i t o r i n g   a n d 
organisation and suppor ting the refur bish-
ment effor ts for deliver y of ve t in colleges 
t h ro u g h o u t   t h e   co u nt r y.   h owe ve r,   t h e  v e t 
p ro gra m m e   d i d   i nt ro d u ce   d e ve l o p m e nt   o f 
c o m p e t e n c y - b a s e d   c u r r i c u l a   b y   s e c t o r a l 
committee s le d by emp loyers.

t h e   fo l l o w - u p   p ro g r a m m e   t o   s u p p o r t  v e t 
r e f o r m   i n   t h e   2 0 0 9   a c t i o n   p r o g r a m m e   i s 
fo c u s i n g   o n   d e v e l o p i n g   r e l e v a n t  v e t  c u r -
r i c u l a   t o   m e e t   l a b o u r   m a r k e t   n e e d s   a t 
n a t i o n a l   a n d   re gi o n a l   l e ve l s   a n d   p u r s u i n g 
re f u r b i s h m e nt   e f fo r t s   i n  v e t   co l l e g e s   ( s e e 
t h e   co m m i s s i o n’s   re p l y   t o   o b s e r v a t i o n   ( c ) 
below).

39.  (b) 
un d e r   t h e   2 0 0 7   a n n u a l   a c t i o n   p ro gra m m e, 
t h e   na t i o n a l   v e t  co u n c i l   w a s   e s t a b l i s h e d 
as a tr ipar tite body precisely to respond to 
t h e   f ra gm e nte d   n at u re   o f  v e t  i n   t h e   co u n-
t r y.   I t   i s   r e s p o n s i b l e   f o r   o v e r a l l   g u i d a n c e 
a n d   c o o r d i n a t i o n   f o r   d e v e l o p m e n t   o f   t h e 
n at i o n a l  v e t   s ys te m .  th i s   b o d y   re p re s e nt s 
a l l   t h e   s t a k e h o l d e r s   —   i n c l u d i n g   t h e   l i n e 
m i n i s t r i e s   re s p o n s i b l e   fo r  v e t  —   e m p l o y -
ers and social par tners. one of the outputs 
f ro m   t h i s   co u n c i l   h a s   b e e n   t h e   d e c i s i o n   to 
f u r t h e r   s t r e a m l i n e   r e s p o n s i b i l i t y   f o r   v e t 
i n s t i t u t i o n s.   as   a   re s u l t ,   o n e   o f   t h e   co n d i-
t i o n s   b e i n g   d e ve l o p e d   u n d e r   t h e   2 0 0 9   fo l-
l o w - u p   s u p p o r t   p ro g r a m m e   fo r  v e t  i s   t h e 
a d o p t i o n   o f   a   s t r a t e g y   fo r   t r a n s fe r r i n g   a l l 
m i d d l e   p ro fe s s i o n a l   a n d   p re l i m i n a r y   e d u-
cation institutions to place them under the 
a d m i n i s t rat i ve   a u t h o r i t y   o f   t h e   m i n i s t r y   o f 
educat ion and  s cie nce.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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commIssIon

4 5. 
t h e   c o m m i s s i o n   u n d e r l i n e s   t h a t   t h e 
i n c r e a s i n g   p o l i t i c a l   t e n s i o n s   b e t w e e n 
g e o r g i a   a n d   t h e   ru s s i a n   f e d e r a t i o n 
f r o m   no v e m b e r   2 0 0 7   l e a d i n g   t o   t h e   w a r 
i n   a u g u s t   2 0 0 8   w e r e   n o t   c o n d u c i v e   t o 
progress with implementation of the assist-
a n c e   p r i o r i t i e s .   b y   t h e   n a t u r e   o f   e v e n t s , 
government priorities had a different focus 
at  th at t ime  an d th rough out 2 00 9 . 

4 7. 
t h e   c o m m i s s i o n   d e c i d e d   t o   r e l e a s e   4 
m i l l i o n   e u r o   ( i n s t e a d   o f   t h e   m a x i m u m   o f 
5  m i l l i o n   e u r o   a v a i l a b l e   u n d e r   t h e   s e c -
o n d   i n s t a l m e n t ) ,   b e c a u s e   n o t   a l l   t h e   c o n-
d i t i o n s   s e t   t o   r e l e a s e   t h e   i n s t a l m e n t   h a d 
b e e n   m e t .   ba s e d   o n   t h e   f i n d i n g s   o f   t h e 
t w o   e x t e r n a l   m i s s i o n   r e p o r t s ,   a n d   i n   p a r -
ticular in view of the renewed commitment 
b y   t h e   g o v e r n m e n t   t o w a r d s   p u b l i c   f i n a n-
c i a l   m a n a g e m e n t   f o l l o w i n g   t h e   br u s s e l s 
d o n o r s   c o n f e r e n c e   e n d   o f   o c t o b e r   2 0 0 8 , 
t h e   co m m i s s i o n   d e e m e d   t h at   t h i s   a m o u nt 
adequately reflec ted the achievements and 
a c t i o n s   t a k e n   by   t h e   g ove r n m e nt   o f  g e o r-
gia in p fm r efor ms.

b ox 4 – Aze rba ija n:   littl e pro g re s s 
in  the t wo yea rs  follow ing  the 
commiss ion’s f ina nc ing de cisio n  o n  t he 
en ergy reform  s upp or t pro gra m m e
with regards to infor mation on the budget 
s u p p o r t   m o d a l i t y,   b o t h   h e a d q u a r t e r s   a n d 
t h e   d e l e g a t i o n   h a v e   i n f o r m e d   t h e   g o v -
e r n m e n t   o f   a z e r b a i j a n   a b o u t   t h e   b u d g e t 
s u p p o r t   f o r m   o f   a i d   d u r i n g   s e v e r a l   m e e t-
i n g s   f r o m   2 0 0 7   o n w a r d s .   I n   a d d i t i o n ,   t h e 
c o m m i s s i o n   o r g a n i s e d   t w o   b u d g e t   s u p -
p o r t   s e m i n a r s   fo r   t h e   re l e va nt   a ze r b a i j a n i 
s t a k e h o l d e r s   t o   i n f o r m   t h e m   a b o u t   t h e 
new  mod alit y.

s ee also  s ee t he rep l y to ob ser vat ion  4 3 .

I t   i s   a   n a t i o n a l   p r e r o g a t i v e   o f   a   p a r t n e r 
countr y to choose the inter nal mechanism, 
w h i c h   i t   co n s i d e r s   a d e q u ate   to   i m p l e m e nt 
a (bu dget s up p or t ) p ro gramme. 

a c c o r d i n g   t o   a z e r b a i j a n i   l e g i s l a t i o n ,   t h e 
beneficiar y shall take responsibilit y for the 
p r o p e r,   e f f e c t i v e ,   e f f i c i e n t   a n d   t a r g e t e d 
u s e   o f   t h e   f u n d s   r e c e i v e d   f o r   t h e   i m p l e -
m e nt at i o n   o f   t h e   p ro gra m m e   a cco rd i n g   to 
t h e   r e q u i r e m e n t s   o f   t h e   a c t i o n   p l a n ,   f o r 
the accurac y of repor ts and required infor -
m a t i o n   a n d   t h e i r   d u e   s u b m i s s i o n   t o   t h e 
co o rd i n ato r   a n d   t a k e   a p p ro p r i ate   re s p e c t -
ive meas ures. 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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4 9. 
t h i s   c o m m e n t   i s   n o t   s p e c i f i c   t o   t h e   e u r o -
p e a n   un i o n .   t h e   w a r   w a s   a   s e t b a c k   fo r   a l l 
d o n o r- f u n d e d   a c t i v i t i e s,   w i t h   p ro gra m m e s 
c e a s i n g   c o m p l e t e l y   i n   s o u t h   os s e t i a   a n d 
inter rupted or  delayed in  a bk haz ia.

5 0. 
si n c e   t h e   t i m e   o f   t h e   a u d i t ,   t h i s   p r o -
gra m m e   wa s   u n b l o c k e d   t h a n k s   to   p o l i t i c a l 
co n s u l t at i o n s   a n d   e f fo r t s   by   t h e   eu ro p e a n 
un i o n   d e l e g at i o n .   I m p l e m e nt at i o n   s t a r te d 
in  ear ly  20 10 . 

5 0. (a) 
th e   eu ro p e a n   un i o n   h a s   a l w ays   b e e n   f i r m 
o n   n o n - r e c o g n i t i o n   o f   t h e   i n d e p e n d e n c e 
o f   t h e   b re a k away   re gi o n s.  wh e n   p re p a r i n g 
the rehabilitation and confidence -building 
p ro gra m m e s,   t h e   eu ro p e a n   un i o n   co n s u l t s 
the g eorgian gover nment and ensures that 
t h e re   a re   n o   p e rce i ve d   r i s k s   o f   co n s o l i d at-
i n g   t h e   s t a t u s   q u o.  t h e   g e o r g i a n   g o v e r n-
m e n t   i s   o p e n   to   co n t i n u a t i o n   o f   t h e   eu ro -
pean union assistance and programmes for 
conf idence - building.

5 0. (b) 
so far, the abk haz de fac to authorities have 
g e n e r a l l y   b e e n   o p e n   t o   d i s c u s s i o n s   w i t h 
t h e   e u r o p e a n   u n i o n   ( e u )   a n d   t o   c o n t i n u -
ation of the eu’s ac tivities and programmes, 
i n c l u d i n g   t h e   e co n o m i c   re h a b i l i t at i o n   a n d 
confidence -building measures.

48. 
th e   eu ro p e a n   co m m i s s i o n   a gre e s   t h at   t h e 
increased receptiveness was mainly due to 
t h e   c h a n g e   i n   t h e   b a s i c   co n d i t i o n s   ( p e a ce 
and reduced ex ter nal threats) and that this 
c o n t r i b u t e d   t o   r e n e w i n g   t h e   i n t e r e s t   i n 
public finance management (pfm) refor ms. 
th e   e c  co n s i d e r s   t h at   a   p a r t   o f   s u c h   a   n e w 
proa c tive   at t itu de,   was   d r iven  by  t he   joint 
d onors conference for g eorgia of 22 o c to -
b e r   2 0 0 8 ,   w h e re   t h e   g ove r n m e n t   c o m m i t -
t e d   t o   p fm  re fo r m s   i n   o rd e r   t o   e n s u re   t h e 
best possible use of the substantial pledge 
received (3,44 b il l ion  euro) . 

si n c e   t h e   t i m e   o f   t h e   a u d i t ,   a n   i n t e r n a l 
a u d i t   s y s t e m   i s   b e i n g   d e v e l o p e d   a n d 
u n d e r g o i n g   p i l o t   t e s t s   a n d   t h e   b u d g e t 
c l a s s i f i c a t i o n   a p p l i e s   i n t e r n a t i o n a l   g o v -
e r n m e n t   f i n a n c e   s t a t i s t i c s   ( g f s)   s t a n d-
ards. I n apr il 2009, the chamber of  control 
a d o p t e d   i t s   s t r a t e g i c   d e v e l o p m e n t   p l a n 
fo r   2 0 0 9 – 1 1 .   I n   nove m b e r   2 0 0 9 ,   t h e   fi s c a l 
c o m m i t t e e   w a s   s e t   u p   u n d e r   t h e   bu d g e t 
a n d   fi n a n c e   c o m m i t t e e   o f   pa r l i a m e n t   t o 
m o n i t o r   t h e   p u b l i c   f i n a n c e   m a n a g e m e n t 
re fo r m s   c l o s e l y.   at   t h e   e n d   o f   m a rc h   2 0 1 0 , 
t h e   m i n i s t e r   o f   f i n a n c e   e s t a b l i s h e d   t h e 
co o rd i n at i o n   co u n c i l   fo r   t h e   i m p l e m e nt a-
t i o n   o f   2 0 0 9 – 1 3   p u b l i c   fi n a n c e   m a n a g e -
ment  r efo r m  s t rateg y. 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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t h e   s t r a t e g y   f o r   i m p l e m e n t a t i o n   o f   t h e 
m e a s u r e s   m e n t i o n e d   w a s   b a s e d   o n   r i s k 
p re ve nt i o n   u s i n g   t a rg e te d   b u d g e t   s u p p o r t 
b a s e d   o n   r e i m b u r s e m e n t   o f   e x p e n d i t u r e 
submitted to  pr ior  control.

5 3. 
I m p l e m e nt at i o n   o f   t h e   to o l   s t a r te d   i n   2 0 0 8 
a n d   w a s   g e n e r a l l y   a p p l i e d   t h r o u g h o u t   t h e 
r e g i o n   i n   2 0 0 9 .   t h e   c o m m i s s i o n   r e i t e r a t e s 
t h e   d e m a n d - d r i v e n   n a t u r e   o f   t w i n n i n g , 
resulting in considerable effor ts on in ter nal 
coordination in the par tner countr y to estab-
l i s h   a   l i s t   o f   p r i o r i t i e s   a n d ,   c o n s e q u e n t l y, 
draf t proposals for projec ts. another aspec t 
i s   re l a t e d   t o   t h e   t i m e   re q u i re d   fo r   t h e   t e n-
d e r i n g   a n d   c o n t r a c t i n g   p r o c e d u r e s ,   w h i c h 
a l s o   i nvo l ve   eu ro p e a n   un i o n   m e m b e r   st ate 
administrations.

5 4. 
this form of aid was welcomed by the par t -
n e r s   a n d   a   s i gn i f i c a nt   p ro j e c t   p i p e l i n e   h a s 
been built up since its inception under the 
eu ro p e a n   ne i g h b o u r h o o d   a n d   pa r t n e r s h i p 
I n s t r u m e n t   ( e n p I ) .   b e i n g  ‘d e m a n d - d r i ve n’, 
t h e   q u a l i t y   a n d   e n d - r e s u l t   w i l l   d e p e n d 
o n   t h e   b e n e f i c i a r y   m a k i n g   a v a i l a b l e   t h e 
resources an d ke eping up its co mm it m ent. 

51. 
t h e   a p p r o p r i a t e n e s s   o f   t h e   e n p I   i n   p o s t -
conflic t rehabilitation can only be assessed 
i n   t h e   l o n g - t e r m .   a l t h o u g h   t h e   e u r o p e a n 
neighbourhood and  par tnership Instrument 
(e n pI )   i s   n o t   t h e   m a i n   e u r o p e a n   un i o n 
i n s t r u m e nt   fo r   co n f l i c t- re l ate d   a s s i s t a n ce, 
i t   s t ro n g l y   s u p p l e m e nt s   s u c h   i n s t r u m e nt s. 
fo r   e x a m p l e,   p r o j e c t s   f i n a n c e d   u n d e r   t h e 
e u r o p e a n   un i o n   I n s t r u m e n t   f o r   s t a b i l i t y 
c a n n o t   b e   p ro gra m m e d   n o r   co nt i n u e   ove r 
the longer ter m. the enpI can complement 
t h e   I n s t r u m e n t   f o r   s t a b i l i t y   b y   p r o g r a m-
m i n g   a n d   c o n t i n u i n g   p r o j e c t s   t h a t   h a v e 
p rove d   e f fe c t i ve   u n d e r   t h e   I n s t r u m e nt   fo r 
s t a b i l i t y.   s e e   a l s o   t h e   r e p l y   t o   p a r a g r a p h 
v  o f   t h e   s u m m a r y.   m o re o ve r,   s i g n a t u re   o f 
enpI programmes by the  g eorgian gover n-
m e n t   c a n   b e   i m p o r t a n t   f o r   e n s u r i n g   t h e 
p o l i t i c a l   b a c k i n g   o f   t h e   g o v e r n m e n t   f o r 
c o n f i d e n c e - b u i l d i n g   a n d   p e a c e f u l   re s o l u -
tion of co nfl ic ts.

52. 
a s   i s   t h e   c a s e   f o r   o t h e r   d o n o r s ,   t h e r e   i s 
still no political will or other basis for con-
t i n u i n g   t h e   e u r o p e a n   un i o n   p r o g r a m m e s 
p l a n n e d   f o r   s o u t h   os s e t i a ,   g e o r g i a .  t h i s 
h a s   l e d   t o   r e a l l o c a t i o n   o f   f u n d s   f r o m   t h e 
2 0 0 8   a n n u a l   a c t i o n   p ro g r a m m e   u n d e r   t h e 
e u r o p e a n   ne i g h b o u r h o o d   a n d   p a r t n e r -
s h i p   I n s t r u m e n t   (e n pI ) .   t h i s   w a s   t a k e n 
i n t o   c o n s i d e r a t i o n   w h e n   p l a n n i n g   t h e 
n a t i o n a l   i n d i c a t i v e   p r o g r a m m e   (nIp)   f o r 
2 0 1 1 – 1 3   a n d   w i l l   b e   t a k e n   i n t o   a c c o u n t 
f o r   i d e n t i f y i n g   n e w   c o n f i d e n c e - b u i l d i n g 
a n d   r e  h a b i l i t a t i o n   p r o g r a m m e s   r e g a r d -
i n g    g e o rg i a’s   b re a k aw ay   re g i o n s   ( i . e.   p ro -
g r a m m e s   w i l l   o n l y   f o c u s   o n   s u c h   r e g i o n s 
where there may be interest, acceptance or 
minimum tolerance for continued european 
union conf id ence -b u ild ing p ro gramm e s) .

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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t h e   p r o j e c t   a p p r o a c h   w a s   e x t e n s i v e l y 
u s e d   u n d e r  ta c i s   to   e n g a g e   p a r t n e r   co u n-
t r i e s   i n   s u b s t a n t i a l   p o l i c y   r e f o r m s .   ho w -
e v e r,   i t   b e c a m e   a p p a r e n t   t h a t   i n d i v i d u a l 
p ro j e c t s   wo u l d   n o t   b e s t   s e r ve   t h e   s e c t o r -
w i d e   a p p r o a c h   n e c e s s a r y   fo r   c o m p r e h e n-
s i ve   re fo r m s.   I n s te a d,   i t   b e c a m e   c l e a r   t h at 
s e c t o r   b u d g e t   s u p p o r t   o f f e r e d   g r e a t e r 
p o te nt i a l   to   s t i m u l ate   p o l i c y   d i a l o g u e   a n d 
t o   p l a n   c o m p re h e n s i ve   re fo r m s   i n   a   g i ve n 
sec tor.

5 9. 
t h e   c o m m i s s i o n   p o i n t s   o u t   t h a t   p o v e r t y 
reduc tion remains a major objec tive in the 
s o u t h e r n   c a u c a s u s,   a s   s t a t e d   i n   t h e   t h re e 
c o u n t r y   s t r a t e g y   pa p e r s / n a t i o n a l   i n d i c a-
t i v e   p r o g r a m m e s ,   a n d   t h a t   t h e   s u p p o r t 
fo r   c l o s e r   e co n o m i c   a n d   s o c i a l   i nte grat i o n 
w i t h   e u r o p e   i s   a l s o   a   m e a n s   t o   p r o m o t e 
growth , th us  t ac k lin g pover t y  reduc ti on .

t h e   c o m m i s s i o n   s e e s   n o   c o n t r a d i c t i o n 
b e t w e e n   b r i n g i n g   p a r t n e r s   c l o s e r   t o   t h e 
e u r o p e a n   un i o n   a n d   u s i n g   c o u n t r y   s y s-
tems,  th e  rationale  bein g  to  enh ance   pa r t-
n e r s h i p   b y   i n c r e a s i n g   o w n e r s h i p   o n   t h e 
par t ner  countr y ’s side.

6 0. 
the introduc tion of a new instrument inev-
i t a b l y   e n t a i l s   a   p e r i o d   o f   a d a p t a t i o n .  t h e 
i n t r o d u c t i o n   o f   t h e   e u r o p e a n   ne i g h b o u r -
h o o d   a n d   pa r t n e r s h i p   I n s t r u m e nt   (e n pI )   i s 
n o   exce p t i o n .   ne ve r t h e l e s s,   t h e   s u cce s s f u l 
launch of all the ac tion programmes in the 
re g i o n   s u g g e s t s   t h a t   t h e re   we re   n o   m a j o r 
design  flaws.

55– 56. 
t h e   c o m m i s s i o n   p o i n t s   o u t   t h a t   a ny   s u p -
p o r t   g r a n t e d   t o   t h e   pr o g r a m m e   a d m i n i s-
t r a t i o n   o f f i c e   ( pa o ) ,   n o r m a l l y   e m b e d d e d 
i n   t h e   n a t i o n a l   a d m i n i s t r a t i o n ,   e n t a i l s 
capacit y-building. results have been mixed 
f r o m   o n e   c o u n t r y   t o   a n o t h e r,   m a i n l y   d u e 
t o   i n t e r n a l   s t r u c t u r a l   a n d   f u n c t i o n a l   d i f-
f i c u l t i e s   a n d / o r   w e a k n e s s e s   i n   t h e   p a r t -
n e r   c o u n t r y .   ta c i s   t e c h n i c a l   a s s i s t a n c e 
p ro j e c t s   i n   p ro g re s s   a t   t h e   t i m e  tw i n n i n g 
w a s   l a u n c h e d   i n   t h e   r e g i o n   h a v e   b e e n   a 
v a l u a b l e   a s s e t   a n d   h a v e   m a d e   i t   p o s s i b l e 
t o   b r i d g e   c a p a c i t y   g a p s   w h e n   a n d   w h e r e 
necessa r y.

58. 
su b s t a n t i a l   s e c t o r - w i d e   r e f o r m s   r e q u i r e 
o w n e r s h i p   o f   t h e   r e f o r m   p r o c e s s   o n   t h e 
p a r t   o f   t h e   p a r t n e r   co u nt r y   a n d   a   co n s o l i-
dated  ass istan ce p rogramme.

s e c t o r   b u d g e t   s u p p o r t   w a s   a   r e s p o n s e   t o 
t wo   s p e c i f i c   c h a l l e n g e s :   f r a g m e n t a t i o n   o f 
a i d   a n d   l a c k   o f   o w n e r s h i p,   i n   a c c o r d a n c e 
with the principles of the paris declaration. 
t h e   co m m i s s i o n ,   i n   l i n e   w i t h   t h e   m e m b e r 
s t a t e s ,   c o m m i t t e d   i t s e l f   t o   c h a n n e l   —  
w h e n e v e r   c o n d i t i o n s   a l l o w   —   a t   l e a s t 
5 0  %   o f   co m m u n i t y   a i d   v i a   n at i o n a l   co u n-
t r y   s ys te m s,   a s   c a l l e d   fo r   by   t h e  ‘ eu ro p e a n 
co n s e n s u s   o n   d e ve l o p m e n t ’  o f   d e c e m b e r 
2 0 0 5 ,   f u r t h e r   re i n fo rce d   by   t h e   2 0 0 8   acc ra 
a g e n d a   f o r   a c t i o n   f o r   a c c e l e r a t i n g   a n d 
d e e p e n i n g   i m p l e m e n t a t i o n   o f   t h e   p a r i s 
d eclaratio n.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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60.  (a) 
the effec tive use of sec tor budget suppor t 
i s   a s s e s s e d   b y   a   s e c t o r   r e a d i n e s s   a s s e s s-
ment which explores ‘ the seven key assess-
m e n t   a r e a s ’  i n   d e t a i l   d u r i n g   t h e   i d e n t i -
f i c a t i o n   p h a s e ,   a s   c a n   b e   s e e n   f r o m   t h e 
co nte nt   o f   t h e  ‘i d e nt i f i c at i o n   f i c h e’  fo r   t h e 
2007 national programme and is evidenced 
b y   t h e   c o n c l u s i o n s   o f   t h e   q u a l i t y   s u p p o r t 
groups.

60.  (b) 
t h e   c o m m i s s i o n   c o n s i d e r e d   t h a t   e a r l i e r 
e x p e r i e n c e   i n   t h e   p a r t n e r   c o u n t r i e s   i n 
d e a l i n g   w i t h   f o o d   s e c u r i t y   p r o g r a m m e s 
w o u l d   p r o v i d e   a   g o o d   s t a r t i n g   p o i n t   f o r 
introdu cing se c to r b u dget s up p o r t.

6 1. 
w h e n   p r e p a r i n g   t h e   s e c t o r   r e a d i n e s s 
a s s e s s m e n t s ,   t h e   c o m m i s s i o n   p a y s   t h e 
utmost   attent ion  to  th e  ter m s  o f   refe re nce 
t o   m a k e   s u r e   t h a t   a l l   k e y   f a c t o r s   a r e   c o n-
s i d e re d   to   t h e   f u l l e s t   p o s s i b l e   e x te n t .  th e 
r e s u l t s   o f   s u c h   a s s e s s m e n t s   d e p e n d   v e r y 
m u c h ,   o n   t h e   o n e   h a n d,   o n   t h e   a cce s s i b i l-
i t y,   a v a i l a b i l i t y   a n d   r e l i a b i l i t y   o f   q u a n t i-
t a t i v e   a n d   q u a l i t a t i v e   d a t a   i n   t h e   p a r t n e r 
c o u n t r y   a n d ,   o n   t h e   o t h e r,   o n   t h e   q u a l-
i t y   o f   t h e   e x p e r t   s u p p o r t .   t h e   o b s e r v a-
t i o n   t h a t   s u b s t a n t i a l   w e i g h t   i s   g i v e n   t o 
what ben efic iar y countr ies  prom is e d to do 
i n   t h e   f u t u r e   i s   p a r t   o f   t h e   c o m m i s s i o n’s 
d y n a m i c   a p p ro a c h   t o   a s s e s s i n g   t h e   s e ve n 
k ey  a reas.

60.  (c) 
r elevant and sufficient training was organ-
ised, both at headquar ters and in the coun-
t r y,   fo r   t h e   b e n e f i t   o f   d e l e g at i o n   s t a f f   a n d 
p a r t n e r   c o u n t r i e s ’  r e p r e s e n t a t i v e s   a l i k e . 
u s e   o f   e x t e r n a l   e x p e r t i s e   i s   i n h e r e n t   i n 
p r o j e c t   c y c l e   m a n a g e m e n t .   t h e   c o m m i s-
s i o n   w i s h e s   to   re c a l l   h e re   t h at,   at   t h e   t i m e 
o f   i n c e p t i o n   o f   t h e   e u r o p e a n   ne i g h b o u r -
h o o d   a n d   pa r t n e r s h i p   I n s t r u m e n t   (e n pI ) , 
t wo   o f   t h e   t h re e   d e l e g at i o n s   i n   t h e   re gi o n 
(a r m e n i a   a n d   a ze r b a i j a n )   we re   s t i l l   b e i n g 
e s t a b l i s h e d .   t h e   d e l e g a t i o n   i n   a r m e n i a 
b e c a m e   a n   o f f i c i a l l y   f u l l y   f l e d g e d   d e l e g a-
t i o n   i n   2 0 0 9 .   t h e   d e l e g a t i o n   i n   a z e r b a i-
j a n   w a s   o p e n e d   i n   2 0 0 8   a n d   b e c a m e   f u l l y 
operational in 2009.

6 2. 
s ee reply  to para graph  58 .

6 3. 
the food secur it y programme (fsp) wor ked 
w i t h   a   r a n g e   o f   m i n i s t r i e s ,   p r i n c i p a l l y 
w i t h   t h e   m i n i s t r y   o f   a g r i c u l t u r e,   b u t   a l s o 
w i t h   t h e   m i n i s t r y   o f   fi n a n c e,   t h e   m i n i s t r y 
o f   e d u c a t i o n   a n d   t h e   m i n i s t r y   o f   he a l t h , 
labour  an d s oc ial a ssis tan ce.

s o m e   o f   t h e s e   m i n i s t r i e s   h a v e   b e e n   ( o r 
w i l l   b e )   a m o n g   t h e   m a i n   re c i p i e nt s   o f   o n e 
( o r   m o r e )   e u r o p e a n   c o m m i s s i o n   b u d g e t 
s u p p o r t   ( b s )   o p e r a t i o n ( s ) .   t h e   e u r o p e a n 
c o m m i s s i o n   t h e r e f o r e   c o n s i d e r s   t h a t   t h e 
f s p  c o n t r i b u t e d ,   t o   a   c e r t a i n   e x t e n t ,   t o 
m a k i n g   t h e   ca u c a s i a n   co u nte r p a r t s   awa re 
o f   b u d g e t   s u p p o r t   o p e r a t i o n s   a n d   o f   t h e 
p ro ce d u re s   fo r   i m p l e m e nt i n g   b u d g e t   s u p -
por t.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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6 5. 
t h e   e u r o p e a n   un i o n   a d v i s o r y   gr o u p   w a s 
established in response to a request by the 
pre s i d e n t   o f   a r m e n i a ,   i n   t h e   a f t e r m a t h   o f 
t h e   e l e c t i o n s   i n   fe b r u a r y   2 0 0 8 ,   to   p rov i d e 
s u p p o r t   f o r   i m p l e m e n t a t i o n   o f   t h e   e u r o -
p e a n   ne i g h b o u r h o o d   po l i c y   (e n p)   a c t i o n 
p l a n   a t   a   t i m e   o f   i n t e r n a l   p o l i t i c a l   c r i s i s . 
t h i s   a d v i s o r y   g r o u p   w a s   f u n d e d   f r o m   t h e 
I nstrument for stabilit y, which is an instru-
m e n t   f o r   c r i s i s   p r e v e n t i o n   a n d   r e s p o n s e 
t h a t   c a n   b e   d e p l o y e d   r a p i d l y.  t h e   fo l l o w -
u p   f u n d i n g   w i l l   b e   p rov i d e d   f ro m   t h e  e n pI 
bilateral allocation . 

r e g a r d i n g   c o o r d i n a t i o n   o f   a c t i v i t i e s ,   t h e 
eu ro p e a n   un i o n   a d v i s o r y   gro u p   h a s   e s t a b -
l i s h e d   a n   o p e n   l i n k   w i t h   t h e  tw i n n i n g   pro -
g r a m m e   a d m i n i s t r a t i o n   o f f i c e   (pa o )   t o 
make en sure com plem entar y  ac ti on .

64.  (a) 
t h e   t e c h n i c a l   a n d   f i n a n c i a l   c o o p e r a t i o n 
r e s u l t i n g   f r o m   t h e   m u l t i a n n u a l   s t r a  t e g i c 
framework (countr y strategy paper/national 
i n d i c a t i v e   p r o g r a m m e )   i s ,   b y   n a t u r e ,   g o v -
e r n m e n t a l   c o o p e r a t i o n .   I t   i s   b a s e d   o n   a 
s e l e c t e d   n u m b e r   o f   p r i o r i t y   a r e a s   j o i n t l y 
a g r e e d   w i t h   t h e   p a r t n e r   c o u n t r i e s.   I n   p a r -
allel,  the  thematic  budget  line  instruments 
a l l o w   t a c k l i n g   a d d i t i o n a l   a r e a s / p r i o r i t i e s 
a n d   s u p p o r t i n g   n o n - g o v e r n m e n t a l   s t a k e -
h o l d e r s   n o t   i n c l u d e d   i n   t h e   co u n t r y   s t r a t -
egy p aper/national indicative programme. 

as regards the issue of visibilit y, one of the 
m a i n   a s p e c t s   o f   s e c t o r   p o l i c y   s u p p o r t   v i a 
b u d g e t   s u p p o r t   i s   t h e   i n c r e a s e   i n   o p p o r -
t u n i t i e s   f o r   v i s i b l e   d i a l o g u e   b e t w e e n   t h e 
e c  a n d   t h e   p a r t n e r   c o u n t r y   s u c h   a s   c e r e -
m o n i e s   f o r   s i g n i n g   f i n a n c i n g   a g r e e m e n t s 
a n d   d i s b u r s e m e n t   o f   f u n d s   f o r   s e c t o r 
refor m  pro gram mes.

64.  (b) 
the commission reiterates the principles of 
f l e x i b i l i t y   a n d   a d a p t a b i l i t y,   w h i c h   u n d e r-
p i n   t h e   m u l t i a n n u a l   s t r a t e g i c   f r a m e w o r k 
( c o u n t r y   s t r a t e g y   pa p e r / n a t i o n a l   i n d i c a -
tive programme). I n the light of the jointly 
s e t   p r i o r i t i e s ,   a n n u a l   a c t i o n   p r o g r a m m e s 
a r e   p r e p a r e d   t o   t a c k l e   s p e c i f i c   p r o b l e m s . 
a s   r e g a r d s   c o n t e n t ,   t h e   o b j e c t i v e s ,   a c t i v -
i t i e s   a n d   b e n c h m a r k s   f o r   s e c t o r   b u d g e t 
suppor t are tailor-made to provide suppor t 
for resolving the problems and needs iden-
t i f i e d .   a s   e x p l a i n e d   b e l o w,   o t h e r   i n s t r u-
m e n t s   a r e   a v a i l a b l e   t o   d e a l   w i t h   u r g e n t 
issues or  cr ise s/ emergenc ies.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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conclusions And  
recommendAtions

6 8. 
th e  count r y   strategy   paper s  (cs ps)   for   th e 
s o u t h   ca u c a s u s   co u nt r i e s   cove r   t h e   s e ve n 
y e a r s   o f   t h e   f i n a n c i a l   f r a m e w o r k   a n d   s e t 
t h e   o v e r a r c h i n g   a i m s   o f   e u r o p e a n   un i o n 
c o o p e r a t i o n   w i t h   t h e   c o u n t r y   c o n c e r n e d 
during this time -frame. the national indica-
tive programmes (nIp s) adopted within the 
framewor k of the csps set pr ior ities for the 
eu ro p e a n   ne i g h b o u r h o o d   a n d   pa r t n e r s h i p 
I n s t r u m e nt   (e n pI )   b i l ate ra l   p ro gra m m e   fo r 
t h re e   t o   fo u r   ye a r s.   na t u r a l l y,   c e r t a i n   p r i-
or itie s in t he cs p reappear in  t he  nIp .

t h e r e   a r e   o n l y   t w o   s t r a t e g i c   p r o g r a m-
m i n g   d o c u m e n t s   —   t h e   c o u n t r y   s t r a t e g y 
p a p e r   ( c s p) ,   w h i c h   c o v e r s   a l l   e u r o p e a n 
un i o n   a s s i s t a n c e   o v e r   s e v e n   y e a r s ,   a n d 
t h e   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e   (nIp) 
for  bilateral  europe an  n eigh bour hood  an d 
pa r t n e r s h i p   I n s t r u m e n t   (e n pI )   a s s i s t a n c e, 
which covers four plus three years (4+3) to 
t a k e   i n t o   a c c o u n t   t h e   r e s u l t s   o f   t h e   m i d -
te r m   re v i e w   o f   t h e   co u nt r y   st rate g y   pa p e r 
( c s p ) .   t h e   c o m m i s s i o n   c o n s i d e r s   t h a t 
t h e re   i s   a   c l e a r   l i n k   b e t we e n   t h e   s t r a te gi c 
d o c u m e n t s   b e c a u s e   e a c h   n I p   re s p o n d s   t o 
t h e   a n a l y s i s   p r o v i d e d   b y   t h e   r e s p e c t i v e 
c s p.   t h e   n a t i o n a l   i n d i c a t i v e   p r o g r a m m e s 
re f l e c t   t h e   e n pI ’s   o b j e c t i ve   o f   s u p p o r t i n g 
the broad cooperation agenda of the euro -
pean  ne igh bour h ood   polic y (en p) .  th e nIp  
s p e c i f i e s   t h e   p r i o r i t i e s   o f   e u  a s s i s t a n c e , 
based on strategic pr ior ities, but generally 
d o e s   n o t   i n d i c a t e   t h e   f o r m   o f   a i d   ( a p a r t 
from providing general guidance under the 
‘ I m p l e m e n t a t i o n’  s e c t i o n   o f   t h e   nIp) .   pr i-
or ities cannot be delimited too nar rowly in 
order to leave some flexibilit y for adapting 
t o   n e w   p o l i c y   d e v e l o p m e n t s   a n d   a   c h a n-
ging  environme nt.

66. 
th e   co m m i s s i o n’s   a s s e s s m e nt   at   t h at   t i m e 
w a s   p o s i t i v e   r e g a r d i n g   t h e   2 0 0 7   a n n u a l 
a c t i o n   p r o g r a m m e   ( a a p) .   I t   i s   t h e r e f o r e 
n o t   a   c o n t r a d i c t i o n   t o   s u p p o r t   a   r e f o r m 
s t r a t e g y   w i t h   s e c t o r   b u d g e t   s u p p o r t   i n 
a   c o u n t r y   t h a t ,   d e s p i t e   a   h i g h   r a t e   o f 
i n c o m e,   re m a i n s   l a r g e l y   u n d e rd e ve l o p e d. 
the real aim of sec tor budget suppor t/gen-
e r a l   b u d g e t   s u p p o r t   i s   t o   e n h a n c e   p o l i c y 
d i a l o g u e   b e t w e e n   t h e   e u  a n d   a z e r b a i j a n 
a n d   s e t   a   r a n g e   o f   o b j e c t i v e s   i n   o r d e r   t o 
achieve valuable refor ms, whether the sec-
t o r   i s   r i c h   o r   p o o r.   I n   a d d i t i o n ,   w h i l e   i t   i s 
i m p o r t a n t   to   b o o s t   p o o r   s e c to r s   l i k e   r u ra l 
d e v e l o p m e n t   ( i d e n t i f i e d   i n   t h e   2 0 0 9   a n d 
2 0 1 0   a n n u a l   a c t i o n   p ro gra m m e s ) ,   i t   i s   a l s o 
s t rate gi c   —   i n   m a c ro e co n o m i c   te r m s   —   to 
stabilise sec tors benefiting from large allo -
cations o f nat io nal  b u dgetar y res o u rce s.

t h e   c o m m i s s i o n   a s s e s s e d   p o s i t i v e l y   t h e 
b u d g e t   s u p p o r t   m o d a l i t y   a f te r   a   l o n g   p ro -
c e s s   o f   i d e n t i f i c a t i o n   a n d   p o l i c y   d i a l o g u e 
w i t h   t h e   g o v e r n m e n t   o f   a z e r b a i j a n   a n d 
b a s e d   i t s   o p i n i o n   o n   g o v e r n m e n t   f o r m a l 
s t a t e m e n t s .   a l l   o f f i c i a l   c o r r e s p o n d e n c e s 
w i t h   t h e   m a i n   s t a k e h o l d e r s   i . e.  m i n i s t r y   o f 
fi n a n c e,   m i n i s t r y   o f   en e r g y   a n d   I n d u s t r y, 
m i n i s t r y   o f   eco n o m i c   d e ve l o p m e nt   a l ways 
c o n f i r m e d   t h e   g o v e r n m e n t   c o m m i t m e n t 
t o   t h e   o b j e c t i ve s   a n d   t h e   m o d a l i t y   o f   t h e 
progra mme.  the  co ur t 's  st ateme nt re gard-
i n g   t h e   p r e fe r e n c e   o f   t h e   g o v e r n m e n t   o n 
‘ k n o w   h o w ’  i n s t e a d   i n  ‘ b u d g e t   s u p p o r t ’  i s 
to be considered as non- official, and there -
fo re   n o t   re p re s e n t i n g   t h e   fo r m a l   p o s i t i o n 
of t he gover nment o f a zer b aijan

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

69. 
the europ ean  neig hb ou r hoo d po lic y ( e np ) 
a c t i o n   p l a n   i s   a   p o l i t i c a l   d o c u m e n t   t h a t 
s h o u l d   b e   d i s t i n g u i s h e d   f r o m   t h e   c o u n -
t r y   s t r a t e g y   pa p e r   (c s p)   a n d   t h e   n a t i o n a l 
i n d i c a t i v e   p r o g r a m m e   (nIp) ,   w h i c h   a r e 
p r o g r a m m i n g   d o c u m e n t s .   t h e   c s p  i s   a 
p ro gra m m i n g   d o c u m e nt   a n d,   a s   s u c h ,   co r -
r e s p o n d s   t o   t h e   c y c l e   o f   t h e   e u r o p e a n 
co m m i s s i o n   f i n a n c i a l   f r a m e wo r k .   I n   c a s e s 
w h e r e   a n   a c t i o n   p l a n   i s   r e v i s e d   e a r l i e r 
and, as a result, substantial changes to the 
c s p  a r e   n e c e s s a r y   i t   i s   p o s s i b l e   t o   r e v i s e 
t h e   c s p.  t h e   nIp ,   w h i c h   s p e c i f i e s   t h e   s u p -
p o r t   t o   b e   p r o v i d e d   u n d e r   t h e   e u r o p e a n 
ne i g h b o u r h o o d   a n d   p a r t n e r s h i p   I n s t r u-
m e n t   (e n pI ) ,   h a s   a   s h o r t e r - f r a m e ,   a l l o w -
i n g   g r e a t e r   d e t a i l   t h a n   t h e   c s p.   t h e   r e l a-
tively broad scope of the enpI  nIp s reflec ts 
t h e   c o m p re h e n s i ve   n a t u re   o f   c o o p e r a t i o n 
u n d e r   t h e   e n p,   w h i c h   t h e   e n pI   i s   d e s i gn e d 
t o   s u p p o r t .   I t   a l s o   a l l o w s   a   r e s p o n s e   t o 
evolving pr io r it ies  and needs. 

f i n a l l y,   t h e   a r e a ( s )   s e l e c t e d   f o r   s u p p o r t 
u n d e r   a   p a r t i c u l a r   a n n u a l   p ro g r a m m e   a re 
d e r i ve d   f i r s t   f ro m   t h e   p r i o r i t y   a re a s   t o   b e 
c o v e r e d   a n d   t h e i r   s u b - p r i o r i t i e s .   a n n u a l 
ac tion programmes (aaps) would not focus 
o n   a n   a re a   n o t   c o ve re d   b y   t h e   s u b - p r i o r i-
t i e s   s e t .   fi n a l   s e l e c t i o n   o f   a   s p e c i f i c   a r e a 
f o r   a   g i v e n   y e a r   d e p e n d s   o n   t h e   s p e c i f i c 
c o n t e x t   i n   t h e   c o u n t r y   a t   t h a t   p o i n t   i n 
time. 

62

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commIssIon

s e c t o r   b u d g e t   s u p p o r t   w a s   a   r e s p o n s e   t o 
t wo   s p e c i f i c   c h a l l e n g e s :   f r a g m e n t a t i o n   o f 
a i d   a n d   l a c k   o f   o w n e r s h i p,   i n   a c c o r d a n c e 
with the principles of the paris declaration. 
t h e   co m m i s s i o n ,   i n   l i n e   w i t h   t h e   m e m b e r 
s t a t e s ,   c o m m i t t e d   i t s e l f   t o   c h a n n e l   — 
whenever conditions allow — at least 50  % 
o f   co m m u n i t y   a i d   v i a   n at i o n a l   s ys te m s,   a s 
c a l l e d   fo r   b y   t h e  ‘e u r o p e a n   co n s e n s u s   o n 
d e v e l o p m e n t ’  o f   d e c e m b e r   2 0 0 5 ,   f u r t h e r 
r e i n f o r c e d   b y   t h e   2 0 0 8   a c c r a   a g e n d a   f o r 
a c t i o n   f o r   a c c e l e r a t i n g   a n d   d e e p e n i n g 
impleme nt ation of th e p ar is  d ec laration. 

7 0. 
t h e   c o m m i s s i o n   a c t u a l l y   s t a r t e d   p r e p a r -
at i o n   o f   t h e   2 0 0 7   a c t i o n   p ro gra m m e   s u f f i-
ciently ahead of the entr y into force of the 
e n pI   r e g u l a t i o n   e n s u r i n g   t i m e l y   c o m m i t -
ment of  the alloc ated fund s.

m o r e o v e r,   t h e   e n pI   d e c i s i o n   p r o c e s s   i s 
l e n g t hy   b e c a u s e   p ro gra m m i n g   d o c u m e nt s 
a r e   s u b m i t t e d   t o   t h e   c o m i t o l o g y   p r o c e d -
u r e .   si n c e   c o - d e c i s i o n   a p p l i e s   ( w h i c h   i s 
n o t   t h e   c a s e   u n d e r   ta c i s ) ,   t h e   e u r o p e a n 
pa r l i a m e nt   a l s o   h a s   a   fo r m a l   r i g ht   o f   s c r u-
t i n y   b e f o r e   t h e   c o m m i s s i o n   d e c i s i o n   i s 
a d o p te d.   as   fo r   l o s s   o f   re l e va n ce,   t h e   e n p I 
i s   n o t   d e s i g n e d   t o   t a c k l e   c r i s i s   s i t u a t i o n s 
( fo r   w h i c h   t h e   eu ro p e a n   un i o n   I n s t r u m e nt 
f o r   s t a b i l i t y   i s   d e s i g n e d )   b u t ,   i n s t e a d ,   t o 
accompany medium- to longer-term reform 
p r o c e s s e s   i n   t h e   f r a m e w o r k   o f   t h e   e u r o -
p e a n   ne i g h b o u r h o o d   p o l i c y   (e n p) .   t h e 
m i d - t e r m   r e v i e w   p r o c e s s   p r o v i d e d   f o r   i n 
t h e   e n pI   r e g u l a t i o n   p r o v i d e s   a n   o p p o r -
t u n i t y   to   u p d a te   a n d   a d j u s t   p ro gr a m m i n g 
to n ew condit ion s.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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recommen dat io n  1  (a)
t h e   c o m m i s s i o n   i s   a w a r e   o f   t h e   n e e d   t o 
c re ate   a n   e ve n   s t ro n g e r   l i n k   b e t we e n   p ro -
g r a m m i n g   a n d   i m p l e m e n t a t i o n .   on   t h e 
p o l i c y   s i d e ,   s i x   y e a r s   a f t e r   i t s   l a u n c h   t h e 
eu ro p e a n   ne i g h b o u r h o o d   po l i c y   (e n p)   h a s 
g r a d u a l l y   b u i l t   c l o s e r   r e l a t i o n s h i p s   w i t h 
p a r t n e r   c o u n t r i e s   b a s e d   o n   e n p  a c t i o n 
p l a n s   a n d   a   s i g n i f i c a n t   n u m b e r   o f   s u b -
c o m m i t t e e s .   t h e   l a u n c h   o f   t h e   ea s t e r n 
p a r t n e r s h i p   h a s   l e d   t o   i n c r e a s e d   e f f o r t s 
to   d e e p e n   b i l ate ra l   re l at i o n s,   i nte r   a l i a   v i a 
negotiations on new association and trade 
a g r e e m e n t s .   t h e   i n c r e a s i n g l y   s t r u c t u r e d 
relations bet ween the european union and 
p a r t n e r   c o u n t r i e s   p ro v i d e   a n   o p p o r t u n i t y 
f o r   r e i n f o r c i n g   t h e   l i n k s   b e t w e e n   p o l i c y 
an d fin ancial  cooperation .

reco mmend at ion  1  (b)
I n   t h e   n e w   p r o g r a m m i n g   p e r i o d   ( p o s t -
2 0 1 3 ) ,   a   b e t t e r   d e f i n e d   p o l i c y   f r a m e w o r k 
w i l l   p r o v i d e   o p p o r t u n i t i e s   f o r   s t r e a m l i n-
i n g   d o c u m e n t s   a n d   a v o i d i n g   r e p e t i t i o n s , 
a s   r e c o m m e n d e d   b y   t h e   c o u r t .   w h i l e   t h e 
d i s t i n c t i o n   b e t we e n   a   p o l i t i c a l   d o c u m e n t 
(e u r o p e a n   ne i g h b o u r h o o d   p o l i c y   a c t i o n 
p l a n )   a n d   p ro gra m m i n g   d o c u m e nt s   (co u n-
t r y   s t r a t e g y   pa p e r   (c s p)   a n d   t h e   n a t i o n a l 
indicative programme (nIp)) reflec ts sound 
f u n c t i o n a l   l o g i c,   t h e   c o n t e n t s   o f   t h e   d o c -
u m e n t s   c o u l d   b e   s t r e a m l i n e d   a n d   t h e i r 
 timin g  ma de more  coh ere nt.

71. 
u n d e r   t h e   e u r o p e a n   n e i g h b o u r h o o d   a n d 
par tnership I nstrument (enpI), effor ts have 
b e e n   m a d e   to   s t r u c t u re   t h e   d i a l o g u e   w i t h 
p a r t n e r   co u nt r i e s   b e t te r.   r e g a rd i n g   d e ve l -
o p m e n t   o f   t h e   c o u n t r y   s t r a t e g y   p a p e r 
( c s p )   a n d   t h e   n a t i o n a l   i n d i c a t i v e   p r o -
g r a m m e   ( n I p ) ,   g u i d a n c e   o n   t h e s e   a s p e c t s 
i s   p r o v i d e d   b y   t h e   I n t e r s e r v i c e   Q u a l i t y 
su p p o r t   gro u p.   th e   g e n e ra l   p ro gra m m i n g 
g u i d e l i n e s   f o r   t h e   2 0 0 5   e n pI   c s p s /nIp s 
i n c l u d e d   i n - co u nt r y   d i s c u s s i o n s   a s   p a r t   o f 
t h e   p ro ce s s   o f   p re p a r i n g   t h e   c s p / n I p.  th e 
r e v i s e d   g u i d e l i n e s   fo r   t h e   2 0 0 9   m i d - t e r m 
r e v i e w   a r e   c l e a r e r   o n   t h i s   p o i n t ,   r e q u i r -
i n g   t w o   p r o g r a m m i n g   m i s s i o n s   w i t h   g o v-
e r n m e n t   c o n s u l t a t i o n s   i n   t h e   p r o c e s s   o f 
p re p a r i n g   n e w   nIp s.  th e   nIp s   fo r   2 0 1 1 – 1 3 
h ave   t o   t a k e   a c c o u n t   o f   t h e   c o n s u l t a t i o n s 
w i t h   t h e   p a r t n e r   c o u n t r y   d u r i n g   t h e   p r o -
gramming per iod and provide for dialogue 
a n d   a l i g n m e n t   d u r i n g   i m p l e m e n t a t i o n . 
w h i l e   t h e   l i m i t e d   c o m m i s s i o n   p r e s e n c e 
i n   ba k u   a n d   ye r e v a n   p o s e d   a   c h a l l e n g e 
t o   c l o s e   d i a l o g u e   w i t h   p a r t n e r s   d u r i n g 
t h e   p r o g r a m m i n g   o f   t h e   nIp  fo r   2 0 0 7 – 1 0 , 
t h e   n o w   f u l l y   f l e d g e d   e u r o p e a n   un i o n 
 d e l e g at i o n s   h ave   c re ate d   m o re   f avo u ra b l e 
c o n d i t i o n s   fo r   c o n t i n u o u s   e xc h a n g e s   a n d 
co operatio n.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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recommendat ion 1 (c)
t h e   m o r e   c l e a r l y   d e f i n e d   p o l i c y   f r a m e -
w o r k   o f   t h e   ea s t e r n   pa r t n e r s h i p   a n d   t h e 
i n c re a s i n g l y   s t r u c t u re d   re l a t i o n s   b e t we e n 
t h e   eu ro p e a n   un i o n   a n d   p a r t n e r   co u nt r i e s 
w i l l   a l l o w   m o r e   e f f e c t i v e   p r i o r i t i s a t i o n . 
on g o i n g   n e g o t i at i o n s   w i l l   h e l p   to   i d e nt i f y 
t h e   b o t t l e n e c k s   i n   m ov i n g   towa rd s   d e e p e r 
b i l a t e r a l   r e l a t i o n s   a n d   n e w   a g r e e m e n t s . 
t h i s   i n   t u r n   w i l l   m a k e   f u t u r e   p o l i c y   d i a -
l o g u e   m o r e   f o c u s e d   a n d   p r o v i d e   a   m o r e 
solid  basis fo r p r io r itisation.

7 3. 
tw i n n i n g   a r ra n g e m e nt s   a re   n ow   o p e rat i n g 
i n   a l l   t h re e   c o u n t r i e s.   a f t e r   i n i t i a l   d e l a y s, 
tw i n n i n g   i s   n o w   a   f u n c t i o n i n g   a i d   d e l i v -
e r y   t o o l   i n   t h e   s o u t h e r n   c a u c a s u s.  t h i s   i s 
p a r t l y   d u e   t o   p r o g r a m m e   a d m i n i s t r a t i o n 
o f f i c e s   (pa os )   h a v i n g   r e c e i v e d   c a p a c i t y -
building suppor t from technical assistance 
p r o j e c t s   u n d e r   s p e c i f i c   p r o g r a m m e s   t o 
s u p p o r t   paos,   a s   t h e s e   e n t i t i e s   n e e d e d   to 
d e ve l o p   ex p e r t i s e   o n  tw i n n i n g   i n   o rd e r   to 
launc h  this  in str um ent effic ient ly.

72. 
s i n c e   t h e   t i m e   o f   t h e   a u d i t ,   d e s p i t e   s o m e 
i n i t i a l   d e l a y s ,   n o t a b l y   i n   t h e   c a s e   o f 
a z e r b a i j a n ,   a n d   s o m e   a d j u s t m e n t   i s s u e s 
re s u l t i n g   f ro m   ex te r n a l   f a c to r s   ( s u c h   a s   i n 
g e o rg i a ) ,   t h e   o ve r a l l   a c h i e ve m e n t s   o f   t h e 
budget su pp or t  o p erations and t he  l aun ch 
of twinnin g ar rang ement s are p os iti ve. 

r egarding g eorgia, it should be noted that 
the european neighbour hood and  par tner-
s h i p   I n s t r u m e n t   ( e n p I )   i s   n o t   i n t e n d e d   t o 
b e   t h e   m a i n   i n s t r u m e n t   t o   p r o v i d e   c o n-
f l i c t - r e l a t e d   a s s i s t a n c e ,   b u t   i s   a   s t r o n g 
s u p p l e m e nt   to   t h e   co n f l i c t- re l ate d   i n s t r u-
ments, including the I nstrument for stabil-
it y. the I nstrument for stabilit y can initiate 
p r o j e c t s   s w i f t l y   t o   r e s p o n d   t o   c r i s e s ,   b u t 
cannot run projec ts over the medium ter m. 
c o n s e q u e n t l y,   a f t e r   t h e   i m m e d i a t e   c r i s i s 
p h a s e,   t h e   e n pI   c a n   t a k e   fo r wa rd   s u cce s s-
ful stabilit y I nstrument initiatives that will 
h a v e   a   c o n f i d e n c e - b u i l d i n g   e f f e c t   i n   t h e 
medium ter m.

reco mmend at ion  2  (a)
th e   fo l l ow- u p   2 0 0 9   s e c to r   b u d g e t   s u p p o r t 
p r o g r a m m e   o n   v o c a t i o n a l   e d u c a t i o n   a n d 
training ( ve t ) focuses essentially on devel-
oping deliver y of ve t based on labour mar -
k e t   n e e d s,   f ro m   d e ve l o p m e n t   o f   c u r r i c u l a 
t o   r a t i o n a l i s a t i o n   o f   e d u c a t i o n   p r o v i s i o n 
i n   t h e   re gi o n s.   fu r t h e r m o re,   a s   m e nt i o n e d 
i n   t h e   co m m i s s i o n’s   re p l y   to   p a ra gra p h   3 9 
(b), the programme will also include adop -
t i o n   o f   t h e   s t r a t e g y   f o r   t r a n s f e r r i n g   a l l 
m i d d l e   p ro fe s s i o n a l   a n d   p re l i m i n a r y   e d u-
cation institutions to place them under the 
a d m i n i s t rat i ve   a u t h o r i t y   o f   t h e   m i n i s t r y   o f 
e d u c a t i o n   a n d   s c i e n ce.   fi n a l l y,   t h e   co n d i-
tionalit y matr ix under development for the 
p r o g r a m m e   i n c l u d e s   a   s p e c i f i c   c o n d i t i o n 
to assess the gover nment ’s commitment to 
t h e   f i n a n c i a l   s u s t a i n a b i l i t y   o f   t h e  v e t   s e c -
tor  in  the  countr y.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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recommen dat io n  2  (d)
the commission considers that this recom -
mendation has already been tack led in the 
r e g i o n ,   a s   p r e v i o u s l y   e x p l a i n e d   ( s e e   t h e 
replies to pa ragraph s 5 3 to 56  an d 7 3) . 

7 4. 
t h e   c o m m i s s i o n   w e l c o m e s   t h e   p o s i t i v e 
a c k n o w l e d g e m e n t   b y   t h e   c o u r t   o f   t h e 
s u c c e s s f u l   i n t r o d u c t i o n   o f   n e w   f o r m s   o f 
s u p p o r t .  t h e   l a u n c h   o f   a l l   t h e   a c t i o n   p ro -
gra m m e s   i n   t h e   re gi o n   i n   a cco rd a n ce   w i t h 
t h e   o r i g i n a l   p l a n n i n g   i s   a   c l e a r   i n d i c a t i o n 
t h a t   n o   m a j o r   f l a w s   i n   t h e   p r e p a r a t i o n s 
h ave sur faced. 

bu d g e t   s u p p o r t   w a s   t h e   p r e f e r r e d   f o r m 
o f   a i d   i n   2 0 0 7   d u e   t o   t h e   p o t e n t i a l   l e v e r-
a g e   i n   t e r m s   o f   e n h a n c e d   p o l i c y   d i a l o g u e 
w i t h   t h e   p a r t n e r   co u n t r i e s   a n d   ow n e r s h i p 
o n   t h e i r   p a r t   t h a t   i t   e n t a i l s .   ho w e v e r,   i t s 
use is adequately assessed and direc t links 
and synergies are maintained with comple -
m e nt a r y   fo r m s   a n d   a c t i o n   ( e. g.   t h e   p ro j e c t 
approac h and  twinn in g).

w i t h   r e g a r d   t o   t h e   p r e p a r a t o r y   w o r k   f o r 
t h e   i n t ro d u c t i o n   o f   t h e   n e w   a i d   m o d a l i t y, 
t h e   c o m m i s s i o n   w i s h e s   t o   p o i n t   o u t   t h e 
followin g:

 Ū

the commission considered that ear lier 
e x p e r i e n c e   i n   t h e   p a r t n e r   c o u n t r i e s   i n 
dealing with food secur it y programmes 
w o u l d   p r o v i d e   a   g o o d   s t a r t i n g   p o i n t 
for  introducin g  s ec tor  budget  s uppor t. 
s o m e   o f   t h e s e   m i n i s t r i e s   h a v e   b e e n 
( o r   w i l l   b e )   a m o n g   t h e   m a i n   r e c i p i-
e n t s   o f   o n e   ( o r   m o r e )   b u d g e t   s u p p o r t 
operation (s) ;

recommendat ion 2 (b)
t h e   d e l a y   i n   i m p l e m e n t a t i o n   o f   t h e   s e c -
t o r   b u d g e t   s u p p o r t   o n   e n e r g y   w a s   n o t 
d u e   to   l a c k   o f   co m m i t m e nt   by   t h e   g ove r n-
m e n t   o f   a z e r b a i j a n .   on   t h e   c o n t r a r y,   t h e 
co m m i s s i o n   re co gn i s e s   a ze r b a i j a n’s   e f fo r t 
t o   s e t   a   l o g f r a m e   i n   o r d e r   t o   m a n a g e   t h e 
p ro gra m m e   ( s e e   t h e   re p l i e s   to   p a ra gra p h s 
32(c) and  43). 

t h e   m e c h a n i s m   t o   fo l l o w   b u d g e t   s u p p o r t 
o p e r a t i o n s   w a s   a p p r o v e d   b y   g o v e r n m e n-
t a l   d e c r e e   i n   no v e m b e r   2 0 0 9 .   si n c e   t h e n 
t h e   c o m m i s s i o n   h a s   r e c e i v e d   a   r e q u e s t 
f r o m   t h e   g o v e r n m e n t   f o r   p a y m e n t   o f   t h e 
f i r s t   t r a n c h e   o f   t h e   2 0 0 7   s b s,   w h i c h   w a s 
released by t he c o mm issio n in  june 20 1 0. 

recommendat ion 2 (c)
t h e   c o m m i s s i o n   i s   c o m m i t t e d   t o   a p p l y -
ing the highest degree of r igour in reviews 
o f   e a c h   b u d g e t   s u p p o r t   co n d i t i o n   i n   e a c h 
and ever y sec tor suppor ted by budget sup -
por t operations (not only in public finance 
m a n a g e m e n t )   a s   e v i d e n c e d   b y   d e t a i l e d 
a n d   co m p re h e n s i ve   d i s b u r s e m e nt   d o s s i e r s 
accompanying e ac h payme nt de c i s io n. 

r e g a rd i n g   c o n f i d e n c e - b u i l d i n g   m e a s u re s, 
t h e   c o m m i s s i o n   c o n s i d e r s   t h a t   t h i s   r e c -
o m m e n d at i o n   h a s   a l re a d y   b e e n   a d d re s s e d 
s i n c e   i t   u s e s   i n s t r u m e n t s   o t h e r   t h a n   t h e 
e u r o p e a n   ne i g h b o u r h o o d   a n d   p a r t n e r -
s h i p   I n s t r u m e n t   (e n pI )   f o r   r e h a b i l i t a t i o n 
a n d   c o n f i d e n c e - b u i l d i n g   a c t i v i t i e s   ( f o r 
e x a m p l e,   t h e   I n s t r u m e n t   fo r   s t a b i l i t y,   t h e 
e u r o p e a n   I n s t r u m e n t   f o r   d e m o c r a c y   a n d 
huma n  r ig ht s,  etc.). 

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

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t h e   b u d g e t   s u p p o r t   p ro g r a m m e   h a s   b e e n 
d e s i g n e d   t o g e t h e r   w i t h   g o v e r n m e n t   o f 
a z e r b a i j a n .   t h e   n e e d s   o f   k n o w   h o w   h a v e 
b e e n   a d d re s s e d   w i t h   o t h e r   m o d a l i t i e s   l i k e 
th e twinn in g.

as   re g a rd s   t h e   i s s u e   o f   v i s i b i l i t y,   t h e   eu ro -
pean union  delegation to georgia repor ted 
t h at   t h e   g e o rgi a n   p u b l i c  t v  s ys te m at i c a l l y 
b r o a d c a s t   i n   p r i m e   t i m e   e a c h   a n d   e v e r y 
s i g n a t u r e   a n d   d i s b u r s e m e n t   o f   b u d g e t 
s u p p o r t   o p e r a t i o n s.  th i s   c o n t r i b u t e s   c o n -
s i d e r a b l y   t o   r a i s i n g   c i t i ze n s’  aw a re n e s s   o f 
europe an un ion  aid an d ope ratio ns.

reco mmend at ion  3  (a)
w h i l e   p u r s u i n g   t h e   ( o n g o i n g )   s u p p o r t   fo r 
s e c t o r   p o l i c i e s ,   t h e   c o m m i s s i o n   i n t e n d s 
to   e n s u re   a n   a d e q u ate   b a l a n ce   o f   to o l s,   i n 
l i n e   w i t h   t h e   co n f i r m e d   p r i o r i t y   a re a s   fo l-
l o w i n g   t h e   m i d - t e r m   r e v i e w   o f   t h e   c o u n-
tr y s trategy  p aper /n at ion al in dicative  pro -
gra m m e   a n d   d e ve l o p m e nt s   i n   t h e   p o l i t i c a l 
a n d   e c o n o m i c   c o n t e x t   i n   p a r t n e r   c o u n-
tr ies.

reco mmend at ion  3  (b)
the effec tive use of sec tor budget suppor t 
i s   a s s e s s e d   b y   a   s e c t o r   r e a d i n e s s   a s s e s s-
ment which explores ‘ the seven key assess-
m e n t   a r e a s ’  i n   d e t a i l   d u r i n g   t h e   i d e n t i -
f i c a t i o n   p h a s e ,   a s   c a n   b e   s e e n   f r o m   t h e 
co nte nt   o f   t h e  ‘i d e nt i f i c at i o n   f i c h e’  fo r   t h e 
2007 national programme and is evidenced 
b y   t h e   c o n c l u s i o n s   o f   t h e   q u a l i t y   s u p p o r t 
groups.

 Ū

when preparing the sec tor readiness as-
sessments, the commission pays the ut-
most attention to the terms of reference 
to make sure that all key factors are con-
s i d e r e d   t o   t h e   f u l l e s t   p o s s i b l e   e x t e n t . 
the results of such assessments depend 
ver y mu ch, o n th e on e hand, on  t he  ac -
cessibilit y, availabilit y and reliabilit y of 
quantitative and qualitative data in the 
p a r t n e r   c o u n t r y   a n d ,   o n   t h e   o t h e r,   o n 
t h e   q u a l i t y   o f   t h e   e x p e r t   s u p p o r t .   t h e 
o b s e r v a t i o n   t h a t   s u b s t a n t i a l   w e i g h t 
i s   g i v e n   t o   w h a t   b e n e f i c i a r y   c o u n t r i e s 
p ro m i s e d   t o   d o   i n   t h e   f u t u re   i s   p a r t   o f 
th e  com miss io n’s   dynamic  ap p roac h   to 
assess ing  t he  s even key areas ; 

 Ū

releva nt  and su ffic ient  t rainin g was  or-
g a n i s e d ,   b o t h   a t   h e a d q u a r t e r s   a n d   i n 
t h e   c o u n t r y,   fo r   t h e   b e n e f i t   o f   d e l e g a-
t i o n   s t a f f   a n d   p a r t n e r   co u nt r i e s’  re p re -
sent at ive s alik e. 

75.
t h e   co m m i s s i o n   p o i n t s   o u t   t h a t   t h e   2 0 0 7 
n a t i o n a l   p r o g r a m m e   w a s   a l s o   d e s i g n e d 
b e a r i n g   i n   m i n d   t h e   o n g o i n g   a n d   p l a n n e d 
ta c i s   p r o j e c t s   i n   t h e   c a u c a s u s .   t h e   e u r o -
p e a n   n e i g h b o u r h o o d   a n d   p a r t n e r s h i p 
I n s t r u m e n t   (e n pI )   i s   n o t   t h e   s o l e   i n s t r u-
m e n t   a v a i l a b l e   t o   a s s i s t   p a r t n e r   c o u n-
t r i e s .   a s   a n   e x a m p l e ,   i n   t h e   c a s e   o f   c i v i l 
s o c i e t y,   s p e c i f i c   i n s t r u m e n t s   s u c h   a s   t h e 
e u r o p e a n   I n s t r u m e n t   f o r   d e m o c r a c y   a n d 
hu m a n   r i g h t s   ( eI d h r)   a n d   t h e   n o n - s t a t e 
ac tors and local authorities programme are 
designed to as sis t civil  s oc iet y.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

6767

reply of the
commIssIon

recommen dat io n  3  (e)
t h e   c o m m i s s i o n   h a s   b e e n   s u p p o r t i n g 
s t r e n g t h e n i n g   o f   t h e   p u b l i c   a d m i n i s t r a-
t i o n s   i n   p a r t n e r   c o u n t r i e s   b y   m e a n s   o f   a 
v a r i e t y   o f   t e c h n i c a l   a s s i s t a n c e   p r o j e c t s . 
n e v e r t h e l e s s ,   a t   t h e   l a u n c h   o f   t h e   e a s t -
e r n   p a r t n e r s h i p   i n   2 0 0 9 ,   t h e   c o m m i s-
s i o n   a c k n o w l e d g e d   t h e   n e e d   t o   r e i n fo r c e 
t h e   c a p a c i t y   o f   n a t i o n a l   a d m i n i s t r a t i o n s 
t o   m e e t   t h e   o b l i g a t i o n s   s t e m m i n g   f r o m 
a gre e m e n t s   i n   t h e   p ro ce s s   o f   b e i n g   n e g o -
t i ate d   (as s o c i at i o n   agre e m e nt s,   d e e p   a n d 
c o m p r e h e n s i v e   tr a d e   a g r e e m e n t ,   e t c . ) . 
fo r   t h i s   re a s o n ,   w i t h   e f fe c t   f ro m   2 0 1 1   t h e 
co m m i s s i o n   i s   p ro p o s i n g   to   h e l p   n a t i o n a l 
author ities under the comprehensive insti-
t u t i o n - b u i l d i n g   i n i t i a t i v e   —   w i t h   t h e   a i m 
o f   b u i l d i n g   c a p a c i t y   i n   c l u s te r s   o f   i n s t i t u-
tions for adequate application of rules and 
regulations in  key  areas.

recommendat ion 3 (c)
fo r   s o m e   y e a r s   n o w   t h e   c o m m i s s i o n   h a s 
b e e n   d e v e l o p i n g   a   c o n s i d e r a b l e   r a n g e   o f 
training for staff cover ing all areas, includ-
i n g   m a c ro - f i n a n c i a l   a n a l y s i s,   b u d g e t   s u p -
p o r t ,   p u b l i c   f i n a n c e   m a n a g e m e n t   ( p f m ) 
and  per fo r mance measu rement.

I n   e a c h   re c r u i t m e nt   p ro ce d u re,   d u e   at te n -
t i o n   i s   p a i d ,   i n   p a r t i c u l a r,   t o   a p p l i c a n t s ’ 
k n ow l e d g e   a n d   ex p e r i e n ce   o f   b u d g e t   s u p -
p o r t   a n d   p fm.   th e   e va l u at i o n   gr i d   u s e d   by 
s e l e c t i o n   b o a rd s   ex p l i c i t l y   m e nt i o n s   t h e s e 
areas.

recommendat ion 3 (d)
t h e   c o m m i s s i o n   i s   c u r r e n t l y   c o n s i d e r -
i n g   m e a s u r e s   a n d   m e t h o d s   t o   m a k e   s e c -
t o r   b u d g e t   s u p p o r t   (s b s)   m o r e   v i s i b l e . 
h o w e v e r,   t h e   c o m m i s s i o n   i s   s t r i v i n g   t o 
render such operations visible by ensur ing 
m e d i a   a n d   p r e s s   c o v e r a g e   o f   k e y   e v e n t s 
i n   t h e   i m p l e m e n t a t i o n   o f   b u d g e t   s u p p o r t 
o p e r  a t i o n s .   f o r   e x a m p l e ,   b y   h a v i n g   t h e 
 g e o r g i a n   p u b l i c  t v  s y s t e m a t i c a l l y   b r o a d-
c a s t i n g   i n   p r i m e   t i m e   e a c h   s i g n a t u r e   a n d 
d i s b u r s e m e n t   o f   b u d g e t   s u p p o r t   o p e r a -
tions. this contributes considerably to rais-
i n g   c i t i ze n s’  awa re n e s s   o f  eu ro p e a n   un i o n 
aid an d o p eratio ns.

c o n c e r n i n g   m o n i t o r i n g   o f   s b s,   t h e   c o m-
m i s s i o n   i s   a t   p r e s e n t   p i l o t i n g   a   n e w   fo r m 
of result- or iented monitor ing (r om), expli-
citly  tailo red  to   s ec tor  po lic y  sup p or t  pro -
gramme (spsp) operations. I n this contex t, 
the d elegation to g eorgia is a frontrunner, 
w i t h   o n e   o f   i t s   p ro g r a m m e s   ( 2 0 0 7   a n n u a l 
ac tion plan — public finance management, 
s ec tor budget  suppor t,  par t I) already hav-
i n g   b e e n   m o n i t o r e d   a n d   a   s e c o n d   a s s e s s-
m e nt   u n d e r   way   fo r   i t s   2 0 0 8   a n n u a l   a c t i o n 
progra mme o n sbs fo r jus tice.

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

special report no 13/2010 – Is the new european neighbourhood and partnership Instrument successfully launched and achieving results in the southern caucasus (armenia, azerbaijan and georgia)?

european court of auditors

special report no 13/2010

is the new european neighbourhood and Partnership instrument successfully launched  

and achieving results in the southern caucasus (Armenia, Azerbaijan and georgia)?

luxembourg: publications office of the european union

2011 — 67 pp. — 21 × 29.7 cm

Isbn 978-92-9207-928-4

doi:10.2865/61682

how to obtain eu publications

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specIal  report ‘Is the  new  european  neIghbourhood  and 

pa r t n e r s h I p   I n s t r u m e n t   s u cc e s s f u l ly   l au n c h e d   a n d 

achIe vIng  results  In  the  southern  caucasus  (armenIa, 

azerbaIjan  and  georgIa)?’  eXamInes  the  desIgn  and  the 

achIe vements  of  the  fIrst  annual  ac tIon  programmes. 

It  also  looks  at  the  eXploItatIon  of  the  delIvery  tools 

avaIlable under the new Instrument. the report contaIns 

d e ta I l e d   r e c o m m e n d at I o n s   w h I c h   c o u l d   h e l p   t h e 

commIssIon  Increase the  effec tIveness  of  support  gIven 

to the three countrIes.

european court of audItors