REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 2011 ANNUAL REPORT ON FINANCIAL ASSISTANCE FOR ENLARGEMENT (IPA, PHARE, CARDS, TURKEY PRE-ACCESSION INSTRUMENT, TRANSITION FACILITY)
Date: 2012-11-20
Institutions: European Commission
Subjects: Albania, Bosnia and Herzegovina, Croatia, EU financing, Iceland, Kosovo, Montenegro, North Macedonia, Serbia, Türkiye, pre-accession aid

EUROPEAN 
COMMISSION 

Brussels, 20.11.2012  
COM(2012) 678 final 

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

2011 ANNUAL REPORT ON FINANCIAL ASSISTANCE FOR ENLARGEMENT 
(IPA, PHARE, CARDS, TURKEY PRE-ACCESSION INSTRUMENT, TRANSITION 
FACILITY) 

{SWD(2012) 385 final}

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

2011 ANNUAL REPORT ON FINANCIAL ASSISTANCE FOR ENLARGEMENT 
(IPA, PHARE, CARDS, TURKEY PRE-ACCESSION INSTRUMENT, TRANSITION 
FACILITY) 

Summary 

This  Report  covers  the  most  significant  developments  regarding  the  implementation  of  pre-
accession assistance in 20111, including considerations on future perspectives. 

Details  on  specific  activities  undertaken  during  the  reporting  period  can  be  found  in  the 
technical  Staff  Working  Document  complementing  this  report2,  covering  in  one  single 
document both IPA3 and preceding instruments for pre-accession and for the Western Balkans 
(i.e. PHARE, CARDS4, Turkey Pre-accession Instrument and the Transition Facility).  

Falling at a crucial point of 2007-2013 financial perspectives, the 2011 Annual Report is an 
occasion to look at the present successes and lessons learnt, in order to have an even better 
performing instrument in the next Multiannual Financial Framework which is currently under 

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More specific management-reporting aspects concerning these programmes and expenditure - such as 
governance  &  accountability,  risks  &  controls,  legality  &  regularity,  error  rates  &  potential 
consequences on reasonable assurance - can be found in the 2011 Annual Activity Report (AAR) of DG 
Enlargement. In line with the Commission's obligation to provide detailed information to the Council 
and the European Parliament, it publishes annually a report on pre-accession assistance. The previous 
report  was  published  in  2011  for  the  budget  year  2010  and  is  publicly  available  under  the  following 
link: http://ec.europa.eu/enlargement/instruments/how-does-it-work/index_en.htm. 
Commission Staff Working Document – Accompanying the document 'Report from the Commission to 
the European Parliament, the Council and the European Economic and Social Committee - 2011 Annual 
Report  on  financial  assistance  for  enlargement  (IPA,  PHARE,  CARDS,  Turkey  Pre-accession 
Instrument and the Transition Facility). 
The Instrument for Pre-Accession Assistance (IPA) has an overall budget of EUR 11.5 billion for the 
period  2007-2013.  Beneficiaries  of  IPA  are  Albania,  Bosnia  and  Herzegovina,  Croatia,  the  former 
Yugoslav  Republic  of  Macedonia,  Montenegro,  Serbia,  Turkey,  Iceland  (as  of  2011)  as  well  as 
Kosovo*. This designation is without prejudice to positions on status, and is in line with UNSCR 1244 
and  the  ICJ  Opinion  on  the  Kosovo  declaration  of  independence.  IPA  supports  reforms  in  the 
beneficiary countries and their progressive alignment with the standards and policies of the European 
Union and the acquis, with a view to preparing them for future EU membership. 
Originally  created  in  1989  as  the  Poland  and  Hungary:  Assistance  for  Restructuring  their  Economies 
(PHARE) programme, Phare has expanded from Poland and Hungary to currently cover ten countries. 
It  assists  the  eight  of  the  ten  2004  accession  Member  States:  the  Czech  Republic,  Estonia,  Hungary, 
Latvia,  Lithuania,  Poland,  Slovakia,  and  Slovenia,  as  well  as  those  countries  that  acceded  in  2007 
(Bulgaria  and  Romania),  in  a  period  of  massive  economic  restructuring  and  political  change.  Phare 
means  lighthouse  in  French.  Until  2000  the  countries  of  the  Western  Balkans  (Albania,  former 
Yugoslav  Republic  of  Macedonia,  and  Bosnia  and  Herzegovina)  were  also  beneficiaries  of  Phare. 
However, as of 2001 the CARDS programme (Community Assistance for Reconstruction, Development 
and  Stability  in  the  Balkans)  has  provided  financial  assistance  to  these  countries.This  Regulation 
repeals the OBNOVA Regulation and amends the Phare Regulation, and establishes a single framework 
for  assistance  to  the  countries  of  South-Eastern  Europe:  the  CARDS  programme  (Community 
assistance  for  reconstruction,  development  and  stabilisation).  The  instrument  for  pre-accession 
assistance (IPA) replaces it starting in 2007. 

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discussion.  The  Report  briefly  sets  out  the  economic  and  political  context  in  which  EU-
funded activities took place. It highlights the progress made to improve strategic planning and 
programming documents, providing summary reports on project implementation, their results 
and the on-going enhancement of donor coordination. Analysis of past experience, provided 
also  by  evaluations  and  conclusions  from  the  IPA  2011  Conference,  is  used  to  draw 
recommendations for further improving the impact of IPA funds up to and beyond 2013.  

*** 

1. 

THE YEAR IN REVIEW: THE POLITICAL AND ECONOMIC CONTEXT 

Further  positive  developments  took  place  in  the  enlargement  countries  over  the  past  year, 
including  progress  in  EU-related  reforms  in  most  candidate  countries5  and  potential 
candidates6.  The  enlargement  process  continued  to  move  ahead  in  2011.  The  Treaty  of 
Accession of Croatia was signed in December. Accession negotiations with Iceland continued 
to advance. The Commission announced a new positive agenda for Turkey. In Montenegro, 
the reform process continued, allowing the Commission to propose the opening of accession 
negotiations7.  In  October,  the  Commission  delivered  its  opinion  on  Serbia's  application  for 
EU  membership,  recommending  that  the  European  Council  grants  Serbia  the  status  of 
candidate and that accession negotiations are opened as soon as it achieves further progress in 
meeting a key priority concerning Kosovo. Further steps were taken regarding the European 
perspective  of  Kosovo,  including  as  regards  visa  and  trade  issues.  Progress  was  achieved 
within the framework of the Belgrade-Pristina Dialogue. 

Following  the  global  economic  crisis,  in  2011  all  enlargement  countries  embarked  upon  a 
path of recovery but only Turkey managed to recover to a considerable extent. The Western 
Balkan  countries  are  confronted  with  high  and  rising  unemployment  rates,  while  fiscal 
consolidation and the reform of labour markets remain most urgent economic priorities. In a 
number  of  countries  important  reforms  were delayed.  Enforcement  of  good  governance, the 
rule of law and administrative capacity continue to represent major political challenges. 

2. 

TOWARDS A MORE EFFICIENT AND EFFECTIVE DELIVERY OF ASSISTANCE: LINKING 
ASSISTANCE  MORE  CLOSELY  TO  THE  ENLARGEMENT  POLICY  PRIORITIES  AND  THE 
SECTOR APPROACH 

Towards a new IPA Regulation for 2014-2020 

At  the  strategic  level,  2011  was  marked  by  preparations  for  the  new  instrument  for  pre-
accession  assistance  for  the  post-2013  period.  The  result  of  the  extensive  stakeholder 
consultation  that  had  been  launched  with  the  2010  IPA  Conference  fed  into  an  ex  ante 
evaluation on the  future  pre-accession assistance instrument and contributed substantially to 
shape  the  proposal  for  the  IPA  II  Regulation  that  the  Commission  adopted  on  7  December 
2011,  as  part  of  a  package  of  external  action  instruments.  In  line  with  stakeholders'  input, 
provided  at  the  2011  IPA  Conference,  the  Commission  proposal  reflected  the  vision  of  a 

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Croatia,  the  former  Yugoslav  Republic  of  Macedonia,  Iceland,  Montenegro  and  Turkey.  Serbia  was 
granted candidate status in March 2012. 

Albania, Bosnia and Herzegovina and Kosovo. 
Accession negotiations were opened on 29 June 2012. 

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renewed  IPA  instrument  that  should  make  financial  assistance  for  pre-accession  more 
strategic and result-oriented, based on longer term planning and programming in line with the 
enlargement  strategy  and  priorities;  more  coherent  as  to  the  support  provided  under  the 
current  components;  more  flexible  and  tailored  to  address  beneficiary  countries'  needs  and 
capacities in an enlargement context; more efficient, effective and simple, in the framework of 
a  common  approach  applying  to  all  EU  internal and  external  action  instruments  in  the  next 
2014-2020  Multi-Annual  Financial  Framework8.  Public  administration  reform,  good 
governance,  the  rule  of  law  and  the  fight  against  corruption  and  organised  crime  as  well  as 
socio-economic development and regional cooperation will remain a key focus of future pre-
accession assistance.  

Work on the new instrument will continue in 2012 and 2013. While the proposal for the IPA 
II Regulation is subject to discussion and negotiation in Parliament and Council, with view to 
adoption by ordinary legislative procedure by the end of 2012 or early 2013, the Commission 
will  prepare  the  draft  IPA-specific  Implementing  Regulation  and  the  strategic  planning 
documents, thus completing the framework for programming and delivering IPA II assistance. 
The  strategic  planning  framework  will  be  inspired  by  the  methods  in  use  in  the  EU  for 
structural funds, with an overall IPA Common Strategic Framework setting the general policy 
for  the  assistance  and  country/multi-country  strategy  papers  for  the  full  period  of  the  next 
multiannual  financial  framework.  The  preparation  of  sector  (multi-annual)  operational 
programmes to implement the strategy papers will follow. The above will require enlargement 
countries  to  set  up  comprehensive  national  strategies  that  IPA  II  can  support.  In  IPA 
countries, the main focus should be on securing strong local ownership and broad consensus 
on  the  strategies  to  be  put  in  place,  and  on  improving  the  capacity  to  plan,  implement  and 
monitor  their  implementation  and  to  integrate  this  into  the  broader  preparations  for  EU 
membership.  

3. 

TOWARDS  A  MORE  EFFICIENT  DELIVERY  OF  ASSISTANCE: 
GRADUALLY  IMPLEMENTING  THE  SECTOR  APPROACH  TO  THE 
ENLARGEMENT POLICY PRIORITIES  

The sector approach 

In  2011  the  Commission  continued  to  work  towards  introducing  a  more  comprehensive 
approach and to gradually extend it to all policy priorities of pre-accession assistance. With 
the  support  of  the  European  Training  Foundation,  in  June  it  organised  a  three-day  pilot 
training  on  sector  support,  designed  for  the  Enlargement  context  and  to  give  staff  in 
Headquarters and EU Delegations in enlargement countries a more in-depth understanding of 
how  support  through  sector  programmes  or  more  systematic  programme-based  approaches 
can help improve sustainable and more results oriented pre-accession assistance. Case studies 
and  examples  of  practical  applications  and  experience  were  used,  including  from  Kosovo 
in  Education),  Turkey  (evaluating  Public  Finance 
(developing  a  sector  approach 
Management)  and  Serbia  (indicator  setting  for  the  Justice  sector).  The  aim  was  to  help 
participants develop an approach to programming based on national sector policies and action 
plans  and  improved  needs  assessment  and  risk  analysis.  This  would  ultimately  allow 
alignment with beneficiary countries' systems and institutions, thereby building capacity and 

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Cf. Proposal for a Regulation of the European Parliament and of the Council on the Instrument for Pre-
accession Assistance (IPA II), COM (2011) 838 final, 7.12.2011. 

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increasing  aid  absorption.  Feed-back  on  the  training  was  overall  positive.  Knowledge  and 
commitment were reinforced through engaged and positive discussion.  

The  overall  conclusion  drawn  from  the  training  was  that  the  change  from  a  project-based 
approach to a sector-wide approach takes time and can only take place progressively. There is 
no ready-made 'recipe' for implementing the sector approach, no unique model applicable for 
all countries.  

As a follow-up to this training, the Commission set up a dedicated "task force" to make the 
sector  approach  operational  in  all  the  policy  priorities  of  the  Enlargement  countries.  Other 
steps  envisaged  included  the  revision  of  the  IPA  Programming  Guide  and  programming 
templates,  for  programming  on  a  multi-annual  basis  already  for  the  period  2012-2013  and 
progressively  in  line  with  a  sector  approach  thereafter.  A  first  revision  of  the  programming 
templates  was  completed  by  the  end  of  2011;  resulting  in  sector  identification  fiches  to  be 
prepared  by  beneficiary  countries  as  a  preliminary  step  to  drawing  up  programmes  and,  if 
needed,  project  identification  fiches.  Further  revisions  of  the  programming  templates  will 
continue in 2012, together with a general revision of the Programming Guide.  

In  2012  the  Commission  will  also  continue  to  provide  seminars  and  workshops  on  sector 
approaches to staff in EU Delegations and to beneficiaries. A Joint Commission/World Bank-
implemented  project  on  Monitoring,  Indicators  and  Evaluation  in  the  Western  Balkans  and 
Turkey, for which discussion started in 2011, should also begin in 2012. The relevance of this 
project  and,  generally,  of  monitoring  and  evaluation  work  in  the  wider  context  of 
implementing  the  sector  approach  rests  on  the  expectation  that  performance  assessment 
frameworks  setting  clearer  objectives  and  measurable  indicators  for  a  sector  will  allow 
progress to be quantified and that regular monitoring will help ensure that where a programme 
in  a  given  sector  is  not  achieving  its  objectives,  action  can  be  taken  to  put  implementation 
back on track.  

The main lessons learned from evaluations 

An evaluation to support the preparation of pre-accession financial instruments beyond 2013 
found  that  there  is  a  strong  rationale  for  a  future  pre-accession  financial  instrument.  The 
preferred option of the evaluators was the continuation of the current programme with similar 
levels of EU funding. The evaluation concluded also that the economic and wider benefits to 
the EU of enlargement, involving the current beneficiaries, would more than offset the cost to 
the EU of a new financial instrument.  

The first part of a thematic evaluation of EU's support to civil society in the Western Balkans 
and Turkey provided an assessment of the intervention logic, and concluded that interventions 
are relevant to the objectives identified in the MIPDs9. However, measurement of progress is 
challenged by the lack of sufficiently SMART10 indicators and the wide definition of strategic 
objectives.  

An evaluation of Twinning in Turkey concluded that the vast majority of Twinning projects in 
Turkey  achieved  their  objectives,  and  the  presence  of  synergies  between  Twinning  projects 
and other EU and/or donor-funded projects was a key factor supporting that success. The most 
common  reasons  for  those  Twinning  projects  failing  to  deliver  included:  lack  of  political 

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Multiannual Indicative Planning Documents. 
Specific, Measurable, Achievable, Realistic and Time-bound. 

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commitment, problems with procurement, inadequate expert mobilization from Member State 
institutions, and outdated needs assessment.  

A  strategic  interim  evaluation  of  regional  cooperation  in  the  Western  Balkans  and  Turkey 
found that programming could be improved by increasing beneficiaries' ownership of regional 
programmes, and through better interaction with the stakeholders. The evaluation also found 
that coherence between IРА regional and national programmes needs to be increased through 
more  systematic  information  sharing  during  the  programming  phase.  Overall  objectives 
should  be  linked  more  closely  with  project  objectives,  and  should  be  made  measurable 
through SMART indicators. The evaluation concluded that efficiency and effectiveness have 
been slowly improving.  

A  thematic  evaluation  of  IPA-funded  information  and  communication  activities  concluded 
that whilst the overall objectives of IPA-funded information and communication activities are 
clear and coherent at Headquarters and Delegation level, specific objectives are too broad and 
do not meet the SMART criteria. IPA information and communication funds have generally 
been deployed in an efficient manner. However, efficiency could be increased by downscaling 
activities with limited effectiveness and greater concentration of resources on fewer activities. 
Information and communication activities are clearly visible and effective for audiences with 
an interest in enlargement but less so for “non-informed” audiences and the broader public. 

In  addition,  a  thematic  evaluation  of  EU  pre-accession  multi-beneficiary  assistance  to 
Western Balkans and Turkey in the fields of environment and disaster risk reduction was also 
completed.  It  found  that  objectives  are  too  broad  and  not  sufficiently  linked  across  the 
different programming stages. Also, a key contribution of the multi-beneficiary programmes 
has  been  the  promotion  of  beneficiaries'  institutional  change  towards  working  together  on 
environment  and  disaster  risk  reduction  issues  by  encouraging  networking  and  sharing 
experiences.  The  impact  and  sustainability  of  programmes  is  hampered  by  uneven 
commitment and ownership of the beneficiary countries, which often dedicate limited human 
and financial resources and sometimes do not plan follow-up actions beyond EU assistance. 
Multi-annual  long-term  projects  have  proved  to  be  effective  in  creating  sustainable  links 
between participants beyond the projects implementation. However, the evaluation also found 
that dissemination and visibility activities are not fully effective in promoting sustainability. 

Cooperation with the donor community on aid effectiveness  

In 2011 the Commission continued to pursue the donor coordination agenda on various issues. 
Maximising aid effectiveness and demonstrating results and impact was one of them. During 
a  key  meeting  hosted  by  the  OECD  in  February  2011,  some  clear  issues  emerged.  This 
meeting  concluded  that  there  was  a  need  for  donor-initiated  measurement  systems  to  help 
strengthen  related  systems  in  beneficiary  countries  and  to  support  rigorous,  long–term  data 
collection  that  meet  the  needs  of  multiple  parties.  Future  practice  should  promote  greater 
convergence  between  the  demand  and  the  supply  side  in  results  reporting.  Joint  monitoring 
and  evaluation  could  help  overcome  attribution  problems  in  assessing  the  effectiveness  of 
programmes and strategies and the complementarity of efforts supported by different partners. 
The issue of results was also a key topic at the 4th High Level Forum on Aid Effectiveness in 
Busan in November 2011.  

The Commission has followed up on the 'results' issue through a dedicated EU Expert Group 
on Results created in November 2011 with the participation of experts from Member States 
and other donors. One objective of the group, to be pursued in 2012, is to develop a common 

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EU  approach  to  results  as  indicated  in  the  Council  Conclusions  of  14  May  2012  on  the 
Communication  'An  Agenda  for  the  Change'.  In  2012,  the  Commission  will  look  into  the 
possibility for a common EU results framework to be developed so that it can also represent a 
reference  framework  for  measuring  and  communicating  the  results  of  future  pre-accession 
assistance.  

In 2012, the Commission will also continue work on making data on pre-accession financial 
assistance available according to the IATI11 standard for publishing aid information. 

The  importance  of  better  communicating  results  and  adopting  a  more  results-oriented 
approach  to  programme  design  was  raised  by  the  Organization  for  Economic  Co-operation 
and  Development,  Development  and  Co-operation  Directorate  members  also  in  the 
framework of discussions on the OECD DAC Peer Review of the EU 2011-2012, to which the 
Commission  contributed.  With  regard 
the  Commission 
highlighted  how  aid  effectiveness  principles  were  being  incorporated  into  the  Enlargement 
policy and related financial instrument (IPA): ownership and alignment have a key role in the 
pre-accession process; the sector approach is gradually being extended in the management of 
IPA  assistance,  with  focus  on  key  sectors  in  the  enlargement  countries  such  as  justice  and 
home affairs; cooperation with other donors, including European and International Financial 
Institutions (for example in the framework of the WBIF12) and EU Member States (through 
Twinning) is increasing; budget support is already considered as a possible aid modality, and 
should  continue  to  be  so  under  IPA  II  when  necessary  pre-conditions  and  guarantees  are  in 
place.  

to  pre-accession  assistance, 

The  Commission  stressed  also  the  strong  political  leverage  for  reforms  provided  by  the 
prospect  of  EU  membership  while  recalling  that,  in  the  context  of  preparing  beneficiary 
countries  to  join  the  EU,  pre-accession  assistance  also  has  a  development  objective  (it 
qualifies  as  official  development  assistance  (ODA),  except  in  the  case  of  Croatia).  Further 
developments in line with a more result-oriented approach were to be expected from IPA II, 
with  increased  focus  on  indicators  to  measure  results  and  impact  and  the  possibility  for 
financial top-ups to reward good performance.  

Work  will  continue  in  2012  to  make  sure  that  pre-accession  assistance  is  in  line  with  the 
various  initiatives  within  the  Commission,  the  Member  States  and  the  wider  donor 
community, to improve donor coordination and aid effectiveness and to demonstrate results.  

4. 

HIGHLIGHTS FROM PROGRAMME IMPLEMENTATION AND COMPLETION IN 2011 

Implementation modalities and structures: 

Performance  in  2011  showed  a  substantial  progress  compared  to  earlier  years  in  terms  of 
contracting in most beneficiaries, especially those heading towards a decentralised assistance 
management system. 

For  Croatia,  2011  marked  the  culmination  of  its  accession  negotiations  with  the  European 
Union,  with  the  closure  of  the  accession  negotiations  on  30  June  2011,  followed  by  the 
signature of the Accession Treaty on 9 December 2011.  

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The International Aid Transparency Initiative. 
Western Balkan Investment Framework, see below. 

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The  implementation  of  EU  financial  assistance  in  2011  in  Croatia,  also  in  line  with  the 
priorities  selected  for  the  MIPD  2011-2013,  accompanied  these  developments  by  providing 
support  for  completing  reforms  and  building  up  capacity  in  the  key  areas  necessary  for 
assuming  the  obligations  of  membership,  such  as  justice  and  home  affairs  or  public 
administration reform, as well continuing the efforts of preparing Croatia for the use of post-
accession  funds.  The  2011  IPA  programme  of  EUR  39.159  million  is  consistent  with  these 
priorities. 

A Special Report by the Court of Auditors, finalised after a meeting between the Commission 
and  the  Court  in  October  2011,  concludes  that  EU  pre-accession  assistance  is  making  a 
significant contribution to supporting Croatia's preparations to manage structural and cohesion 
funds.  It  also  stressed  that  further  progress  in  capacity-building  to  manage  EU  funds  is 
needed.  

In 2011, positive developments in the management of the financial assistance were observed 
in Turkey. The country is continuously improving the capacities of key institutions in charge 
of  programming,  implementation  and  monitoring  of  EU  funds.  The  implementation  of  IPA 
projects,  under  all  IPA  components,  is  now  well  underway  and  is  starting  to  show  a 
substantial impact as all necessary operating structures for the management of IPA funds are 
about to be granted conferral of management powers.  

Important reforms have improved the programming of funds, with the new MIPD 2011-2013 
adopted  in  June  2011  following  the  sector  approach  logic.  The  first  steps  towards  a  more 
strategic, focused and inclusive approach to programming has been taken while programming 
2011  funds  for  Transition  Assistance  and  Institution  Building  (Component  I)  focused  on  a 
limited number of sectors identified in the MIPD, with larger projects on the priorities of the 
accession process as well as aligned with sector priorities, for a total value of EU contribution 
of EUR 229.968 million. Following the elections in June 2011, particular emphasis has been 
given to the justice, home affairs and fundamental rights sector priorities aiming to implement 
the  necessary  reforms  to  build  an  independent  and  efficient  judiciary,  law  enforcement 
services as well as developing civil society dialogue. 

Efforts  were  also  made  to  improve  the  monitoring  of  funds  by  reforming  the  monitoring 
system,  setting  out  the  roles  and  responsibilities  of  each  institution  and  the  various  tools 
available for this purpose as well as strengthening the capacities of Turkish authorities.  

Following  Iceland's  application  for  EU  membership  in  July  2009  and  due  to  the  country's 
level  of  economic  and  social  development  and  its  extended  degree  of  alignment  with  EU 
legislation (Iceland is a member of the European Economic Area (EEA) and Schengen), IPA 
financial  support  to  Iceland  is  to  be  exclusively  implemented  under  IPA  Component  I 
'Transition Assistance and Institution Building'. 

The  Multi-annual  Indicative  Planning  Document  (MIPD)  2011-2013,  which  is  the  key 
strategic planning document for financial assistance under IPA in Iceland, was adopted on 8 
April 2011.  

Based  on  the  priorities  set  in  the  MIPD  2011-2013,  an  IPA  National  Programme  2011  for 
Iceland was adopted on 2 December 2011. The MIPD sets out two strategic objectives to be 
financed under IPA assistance. On the one hand, to further enhance Iceland's ability to assume 
the  obligations  of  membership  by  supporting  institutional  capacity  building  for  acquis 
transposition  and  implementation  and,  on  the  other,  to  reinforce  Iceland's  institutional 

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capacity in its preparations for participation in and implementation of Structural and other EU 
funds. 

The 2011 Programme will support seven projects. The budget is EUR 12 million and balance 
between the two priority axes set in the MIPD was taken into consideration. 

The former Yugoslav Republic of Macedonia continued accession-related reforms with the 
support  of  IPA,  though  core  challenges  remained  in  2011.  For  the  first  time  the 
implementation  of  all  IPA  Components,  except  Component  II  -  Cross-border  cooperation, 
took  place  under  decentralised  management,  which  implies  that  the  management  of 
programmes  is  undertaken  by  the  relevant  national  authorities,  currently  subject  to  ex  ante 
controls by the European Commission.  

Public administration efficiency was low, reflecting heavy procedures, weaknesses in staffing 
and a high turnover of officials. In comparison to previous years, greater efforts were made by 
the beneficiary country to utilise the available funds from all IPA Components, although there 
were evident delays in procurement. Limited availability of appropriate experts to draft tender 
documents  or  evaluate  proposals  hampered  the  procurement  process  mainly  affecting  IPA 
Components  I,  III  and  IV.  The  level  of  commitment  and  capability  differed  between  line 
Ministries. Greater awareness and commitment are needed to strengthen capacity in order to 
successfully  absorb  IPA  funds.  This,  moreover,  requires  greater  ownership  in  the  area  of 
strategic programming and project preparation in the future.  

The  2011  Component  I  National  Programme,  with  an  EU  contribution  of  EUR  28.903 
million,  was  approved  along  a  streamlined  sector-clustering  of  the  projects  along  the  main 
reform  priorities  of  the  country.  EU  support  previously  programmed  under  IPA  2007-2008 
and managed by the EU Delegation has been fully contracted. 

Montenegro  continued,  throughout  2011,  its  efforts  to  address  the  key  priority  areas 
highlighted  in  the  2010  Commission  Opinion.  The  progress  achieved  by  the  country  was 
confirmed  by  the  recommendation  of  the  European  Commission  in  October  2011  to  open 
accession  negotiations.  Assistance  to  Montenegro  under  IPA  in  2011  further  supported  the 
progress and reform efforts of the national authorities, as highlighted by the Commission's on-
going monitoring and reporting. 

The bulk of IPA assistance was programmed under IPA Component I – Transition Assistance 
and Institution Building National Programme, with an overall EU contribution of EUR 26.494 
million. Implementation of IPA funds continued to be primarily the responsibility of the EU 
Delegation  in  Podgorica.  In  parallel,  the  Montenegrin  authorities  started  preparations  for 
moving  towards  decentralised  management.  In  light  of  having  received  candidate  country 
status in December 2010, IPA funds in Montenegro also supported the national authorities in 
the  necessary  preparations  for 
the  Regional 
Development,  Human  Resources  Development,  as  well  as  Agriculture  and  Rural 
Development IPA components. 

the  management  of  assistance  under 

EU  financial  assistance  to  Albania  has  played  an  important  role  during  2011  in  further 
supporting  the  country  on  its  way  towards  European  integration.  On-going  projects  in  the 
areas of justice and home affairs, public administration reform and the fight against corruption 
have further advanced and have shown concrete results. This support has been important for 
Albania  in  order  to  fulfil  relevant  key  priorities  listed  in  the  2010  Commission  Opinion  on 
Albania's application for membership of the European Union.  

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There has been overall progress in infrastructure projects, in particular in the transport sector 
(construction  of  rural  roads),  while  progress  in  the  water  sector  (construction  of  water 
treatment plants) has been slower partly due to unresolved property right issues. The Albanian 
authorities also need to focus on long-term maintenance of infrastructure projects.  

Many  technical  assistance  projects  continued  to  support  different  line  Ministries  and  state 
institutions, with the result that many relevant pieces of legislation for the acquis alignment 
have been prepared. However, in 2011 the political stalemate between the ruling coalition and 
the  opposition,  which  was  overcome  by  a  political  agreement  in  November,  prevented 
substantial progress on the adoption of key legislation.  

The share of funds contracted under the IPA programmes 2007, 2008, 2009 and 2010 is very 
high, continuing the positive trend that began in 2009.  

Concerning the preparation for the decentralised management of IPA funds, further progress 
has  been  made.  Under  IPA  Component  I,  the  key  structures  and  systems  have  been  put  in 
place and Albania submitted its application for the conferral of management in the beginning 
of  2012.  European  Commission  auditors  are  currently  analysing  the  application.  Work  has 
also continued on IPA Components II-V, with Component V more advanced than the others.  

2011 also saw further progress towards a sector-based programming. Some questions remain 
open regarding its practical implementation, notably the need for the Albanian Government to 
develop a realistic medium-term budget perspective for the sector strategies in place.  

During 2011, Serbia received pre-accession financial assistance from IPA under the first two 
IPA components (Transition Assistance & Institution Building and Cross-border Cooperation) 
which were still managed by the EU Delegation in Belgrade. The EU contribution regarding 
IPA Component I, allocated in 2011, was EUR 178.556 million. 

Serbia continued preparations for decentralised management of EU funds for Components I, 
II,  III  and  IV  by  completing  the  Gap  Plugging  phase  in  December  2011.  As  a  result  of  the 
latter, IPA-financed Technical Assistance for carrying out the Compliance Assessment began 
in January 2012. 

The  IPA  2011  National  Programme  was  adopted  by  the  European  Commission  on  8  July 
2011.  Particular  attention  was  paid  to  preparing  for  the  progressive  introduction  of  a  sector 
approach. 

The improvement of financial absorption capacity has continued. At the end of 2011, the EU 
Delegation was managing a portfolio of 708 on-going projects including substantial amounts 
for sectors such as public administration reform (EUR 26.3 million), justice and home affairs 
(EUR 11.95 million) and social development (EUR 32.1 million). 

Sector  prioritisation  was  achieved  by  8  sector  working  groups,  formed  for  the  first  time  by 
governmental and non-governmental stakeholders, on the basis of the Multi-annual Indicative 
Planning  Document  (MIPD)  2011-13,  the  Annual  Progress  Report,  the  Serbian  Needs 
Assessment  for  international  assistance  as  well  as  an  assessment  of  the  quality  of  existing 
strategic documents. 

Throughout 2011, EU financial assistance to Bosnia and Herzegovina played an important 
role  to  support  the  country  on  its  way  towards  European  integration.  IPA  continued 
supporting the country's efforts to comply with the requirements of the EU accession process 

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and to fulfil its obligations under the Stabilisation and Association Agreement and the Interim 
Agreement.  2011  priorities  strongly  focused  on  public  administration  reform  and  the 
strengthening  of  the  rule  of  law,  in  addition  to  alleviating  the  heavy  consequences  of  the 
economic  and  financial  crisis.  The  EU  contribution  allocated  in  2011  was  EUR  92.885 
million. 

The implementation of EU financial assistance in 2011 showed tangible results, including the 
adoption  of  the  revised  action  plan  for  the  public  administration  reform  strategy,  the 
introduction of the electronic publication of public procurement notices, the installation of 34 
permanent  GPS  Station  Networks  throughout  the  country,  which  facilitated  the  accurate 
measuring  of  land  parcelling.  Further  tangible  results  were  the  creation  of  a  Small  and 
Medium Enterprise (SME) Council, the construction of sewage collectors in Zivinice, and the 
successful implementation of the first ever country-wide rabies vaccination campaign. 

The European Union Office in Kosovo (EUO) continued managing the implementation of EU 
assistance to Kosovo. It managed to exceed its financial targets, both in terms of contracts and 
payments. The preparations of the IPA 2011 Annual Programme (AP) for Kosovo have been 
completed,  allocating  EUR  62.900  million,  and  programming of the  2012 and 2013  Annual 
Programmes  has  started.  Kosovo's  participation  in  IPA  Cross-Border  Cooperation  (CBC) 
programme  proceeded  well  in  2011;  the  first  Financing  Agreements  for  Programmes,  with 
preparations  of  the  CBC-programmes  with  Albania  and  the  former  Yugoslav  Republic  of 
Macedonia  were  signed,  as  well  as  an  additional  programme  with  Montenegro  which  was 
finalised  and  subsequently  adopted  in  December  2011.  In  terms  of  projects,  important 
successes  include  the  reconstruction  of  the  last  five  bridges  on  the  M2  Road  connecting 
Kosovo  to  the  former  Yugoslav  Republic  of  Macedonia.  In  addition,  during  2011,  Kosovo 
carried  out  the  first  population  and  housing  census  after  almost  three  decades,  providing 
valuable  statistical  information  on  the  population  and  the  living  conditions,  important  for 
policy planning in the coming decade. The latter was funded through a trust fund co-financed 
by IPA 2010. 

5. 

TAIEX13

 TURNS FIFTEEN 

2011  marked  the  fifteenth  anniversary  of  TAIEX.  While  the  basic  principles  at  the  core  of 
TAIEX operations remain, the instrument is constantly kept up-to-date in order to respond to 
current  challenges  in  the  Enlargement  regions,  with  almost  EUR10  million  spent  in  IPA 
beneficiary countries. 

The key assets that have made and still make TAIEX a success story are: 

– 

– 

OWNERSHIP: TAIEX is mainly a demand-driven instrument; beneficiaries identify 
and submit requests for specific and customised assistance. Events are tailor-made to 
meet beneficiaries' requests; 

GAP-FILLING:  TAIEX  can  be  complementary  to  larger  assistance  activities 
(Twinning,  technical  assistance)  and  can  provide  expertise  to  "fill  the  gaps"  not 
covered by other support programmes; 

13 

Technical Assistance and Information Exchange.  

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– 

– 

RESPONSIVENESS:  assistance 
timeframes; 

is  generally  delivered  within  short, 

tight 

PEER-TO-PEER: TAIEX relies on Member States' public officials who implement 
EU legislation in practice and are willing and able to share their technical expertise 
with counterparts from beneficiary administrations. 

Medium-term  technical  assistance,  a  sequence  of  short-term  interventions  which  is  agreed 
beforehand and then implemented, has increased in the sectors of agriculture and food safety. 
For the moment this approach is used in TAIEX assistance to Iceland and Kosovo. 

Outside  classic  TAIEX  events,  the  People-to-People  programme  (P2P)  has  consolidated  its 
contribution to strengthening civil society's role in the democratic process in the Enlargement 
context. In 2011, a new programme, the Local Administration Facility (LAF), was launched 
with the aim of strengthening the capacity of local and regional authorities to prepare for EU 
accession.  For  the  practical  implementation  of  TAIEX  events,  the  European  Commission 
relied  on  the  external  support  of  the  service  provider  ‘Gesellschaft  für  Internationale 
Zusammenarbeit’ (GIZ).  

6. 

REGIONAL COOPERATION AND PROGRAMMES  

Progress has been made in regional cooperation in the Western Balkans in the areas of justice 
and home affairs, statistics, energy, environmental and civil protection, cultural heritage and 
refugee  return.  The  Regional  School  of  Public  Administration  (ReSPA)  is  now  fully 
operational.  New  bilateral  agreements  on  police  cooperation  and  on  mutual  legal  assistance 
are encouraging signs for the commitment of several Western Balkan countries to strengthen 
judicial cooperation. Similar efforts promoting and facilitating local and regional cooperation 
at  government  level  as  well  as  through  the  inclusion  of  Non-Governmental  Organisations 
have  been  undertaken  with  the  aim  of  moving  forward  to  lasting  reconciliation,  notably 
through the Igman Initiative, the RECOM initiative on reconciliation and the Sarajevo Process 
on refugee return. 

The  European  Commission,  in  cooperation  with  the  Norwegian  Ministry  of  Foreign  Affairs 
organized  the  4th  Meeting  of  the  Steering  Committee  of  the  Western  Balkans  Investment 
Framework (WBIF) in June 2011 in Hamar, Norway. This approved grants worth more than 
EUR  21  million  for  19  projects  in  the  region.  These  included  for  example  a  pre-feasibility 
study  for  the  Regional  Project  of  Ionian  Adriatic  gas  Pipeline  (520  km  total  length) 
contributing to the construction of a regional gas ring, a feasibility study on an electrical 400 
kV  Interconnection  between  Serbia,  Montenegro  and  Bosnia  and  Herzegovina  and  the 
preparation  for  the  construction  and  further  development  of  the  Regional  Centre  for 
Entrepreneurial Learning in Croatia.  

At the 5th meeting of the WBIF Steering Committee in December 2011 in Luxembourg, 22 
grants, with a total value of EUR 59 million, were approved. It is expected that those grants 
could eventually trigger loans and funds from the International Financial Institutions (IFIs) of 
more than EUR 1 billion for investments in infrastructure. The Steering Committee approved 
the  Western  Balkan  Enterprise  Development  and  Innovation  Facility  (EDIF),  funded  under 
the IPA 2011 Multi-Beneficiary programme as the first action in Private Sector Development 
to be financed by the WBIF. 

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In 2011, and since the creation of the WBIF in December 2009, the pipeline of projects has 
grown to represent 123 grants for a value of EUR 220 million, that will trigger nearly EUR 5 
billion in loans and a total potential investment of nearly EUR 10 billion across the five key 
sectors – energy, environment, transport, social issues and private sector development.  

CONCLUSIONS 

2011  saw  an  important  step  on  the  path  towards  making  assistance  to  the  Enlargement 
countries more strategic, coherent, and result-oriented as an integral part of the Enlargement 
strategy.  The  legal  and  strategic  planning  framework  that  the Commission  has  proposed  for 
delivering pre-accession assistance from 2014 onwards will reinforce its link with the political 
monitoring  and  reporting  and  will  put  in  place  a  framework  aiming  for  results,  achieving 
impact and rewarding performance. This will contribute to increasing even further the added 
value of EU funds allocated to Enlargement countries by creating stronger incentives for the 
transformation  of  their  societies,  legal  systems  and  economies  needed  to  become  an  EU 
Member State, for the mutual benefit of the Union and of IPA beneficiary countries and their 
citizens.  

Status  of  implementation  of  IPA  financial  assistance  as  at  31st  December  2011,  as  a 
percentage of total committed funds (2007 – 2011): 

At 31st December 2011 IPA Component I, implemented by Enlargement DG: 

EUR Million 

Committed  Contracted  

Percentage 

Paid 

Percentage 

Albania 

348.37 

233.69 

67.1% 

102.45 

29.4% 

Bosnia 
Herzegovina 

and 

389.83 

186.98 

48.0% 

103.26 

26.5% 

Croatia 

206.06 

100.62 

48.8% 

71.19 

34.5% 

the 
former 
Yugoslav  Republic 
of Macedonia 

Iceland 

Kosovo 

174.02 

66.66 

38.3% 

48.53 

27.9% 

12.00 

0.00 

0.0% 

0.00 

0.0% 

475.10 

341.42 

71.9% 

211.48 

44.5% 

Montenegro 

134.24 

89.83 

66.9% 

61.02 

45.5% 

Serbia 

Turkey 

857.39 

593.38 

69.2% 

380.14 

44.3% 

1,164.66 

597.40 

51.3% 

425.14 

36.5% 

Multi Beneficiary 

729.18 

597.32 

81.9% 

431.30 

59.1% 

Total 

4,490.85 

2,807.30 

62.5% 

1,834.51  40.8% 

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At 31st December 2011 IPA Component II, implemented by Enlargement DG: 

EUR Million 

Committed  Contracted   Percentage 

Paid 

Percentage 

18.59 

12.52 

12.52 

15.53 

Albania 

Bosnia 
Herzegovina 

and 

Croatia 

former 

the 
Yugoslav 
Republic 
Macedonia 

of 

Kosovo 

3.00 

Montenegro 

14.94 

Serbia 

Turkey 

Total  

16.37 

7.00 

2.76 

4.77 

4.42 

1.97 

0.06 

5.45 

6.57 

1.13 

14.8% 

38.1% 

35.3% 

12.7% 

2.0% 

36.5% 

40.1% 

16.2% 

2.16 

3.12 

2.09 

1.05 

0.03 

3.62 

4.63 

0.49 

11.6% 

24.9% 

16.7% 

6.7% 

1.0% 

24.2% 

28.3% 

7.0% 

100.47 

27.13 

27.0% 

17.19 

17.1% 

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At 31st December 2011 IPA Component II, implemented by Regional Policy DG: 

EUR Million 

Committed 

Paid 

Percentage 

Adriatic 

166.49 

45.22 

27.2% 

Slovenia-Croatia 

28.95 

11.28 

39.0% 

Hungary-Croatia 

35.54 

12.57 

35.4% 

Hungary-Serbia 

Romania-Serbia 

Bulgaria-Serbia 

former 
Bulgaria-the 
Yugoslav  Republic  of 
Macedonia 

Bulgaria-Turkey 

Greece-the 
former 
Yugoslav  Republic  of 
Macedonia 

33.97 

36.01 

21.26 

12.14 

18.49 

10.20 

12.33 

36.3% 

10.17 

28.3% 

5.78 

27.2% 

3.30 

27.2% 

5.02 

27.2% 

3.93 

38.5% 

Greece-Albania 

7.67 

2.95 

38.5% 

Total  

370.72 

112.54 

30.4% 

At 31st December 2011 IPA Component III, implemented by Regional Policy DG: 

EUR Million 

Committed  Paid 

Percentage 

Croatia 

257.35 

78.03 

30.3% 

the 
former 
Yugoslav  Republic 
of Macedonia 

109.20 

26.96 

24.7% 

Turkey 

Total 

1,055.50 

333.11 

31.6% 

1,422.05 

438.09 

30.8% 

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At  31st  December  2011  IPA  Component  IV,  implemented  by  Employment,  Social  Affairs 
and Inclusion DG: 

EUR Million 

Committed  Paid 

Percentage 

Croatia 

the 
former 
Yugoslav  Republic 
of Macedonia 

69.98 

33.50 

22.20 

31.7% 

9.61 

28.7% 

Turkey 

Total 

299.70 

64.51 

21.5% 

403.18 

96.32 

23.9% 

At  31st  December  2011  IPA  Component  V,  implemented  by  Agriculture  and  Rural 
Development DG: 

EUR Million 

Committed 

Paid 

Percentage 

Croatia 

129.40 

25.78 

19.9% 

the  former  Yugoslav 
of 
Republic 
Macedonia 

47.50 

10.25 

21.6% 

Turkey 

Total 

463.00 

80.94 

17.5% 

639.90 

116.96 18.3% 

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