financial rather than strategic issues tends to lead to funds being spent where they are most easily absorbed instead of where they might be most effective.

_Sources_ : Commission Communication February 2004, “Third Report on Economic and Social Cohesion”, COM (2004) 107(final). European Commission, “The Verification of Additionality for Objective 1,” The New Programming Period 2000-2006: methodological working paper 5, Directorate-General XVI: Regional Policy and Cohesion. European Commission

# _Internal Policies_

_Internal policies_ heading comprises of three elements: existing policies, nuclear safety, and institution building. Mainly expenditures on education, culture, social affairs, energy, environment and research, related to the implementation of the _acquis_ , are financed under this heading. Commitments under existing policies are additional resources to the €200 mn commitment under PHARE program for the 2000-2004.

Considering _Existing Policies_ , payments are made according to the schedule in Table 8. In a similar way as for the Cohesion Fund payments, we sum up the commitments for 2007, 2008 and 2009 each multiplied by the respective share of payments in commitments. For the period 20072009, the total payment appropriations under this heading are estimated at €171 mn in current prices.

**Table 8: Payments Schedule for Existing Policies**

|**Type of Appropriations, in € mn, current**|**prices**|**2007**|**2008**|**2009**|
|---|---|---|---|---|
|CommitmentAppropriations2007|93|36%|25%|20%|
|CommitmentAppropriations2008|96||36%|25%|
|CommitmentAppropriations2009|100|||36%|
|_Total Calculated Payment Appro_|_priations:_|**34**|**58**|**79**|

_Note:_ Disbursements are made over 5 years.

Bulgaria is also entitled to payments for _Nuclear Safety_ , as the country has committed to decommissioning units 1 to 4 of the Kozloduy Nuclear Power Plant. In 2007-2009, the assistance stands at €153 mn in current prices. These payments aim to assist the country in the process and to address its consequences. They also cover measures for environmental upgrading, modernization of the conventional energy production, transmission and distribution sectors in Bulgaria and measures to improve energy efficiency, to enhance the use of renewable energy sources and to improve security of energy supply.

As per the Accession Treaty, in the first year of accession Bulgaria and Romania will receive a _Transition Facility_ of €82 mn in 2004 prices for strengthening these countries’ administrative and judicial capacity. This amount however has not been allocated between Bulgaria and Romania yet. Therefore, we have made two assumptions in order to incorporate these commitments into the 2007-2009 financial envelop for Bulgaria and Romania. The assumptions are:

- (i) The total amount of €82 mn has been distributed between Bulgaria and Romania according to a key, which takes into account the population size of the two countries. Thus, Bulgaria is assumed to receive 24.7 % of the committed €82 mn in 2004 prices, which amounts to €20.3 mn in 2004 prices for the three-year period of 2007-2009.

- (ii) Payments under the heading Institution Building have been determined using the same schedule as for the existing policies, and as described in **Table 9** below. The estimated amount of payments in current prices under this heading stands at €14 mn for 2007-2009.

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