European Scrutiny Committee Contents

10   Pre-accession assistance to the Western Balkan states and Turkey




+ ADD 1

COM(10) 793




COM(10) 622

Commission Report: 2009 Annual Report on PHARE, Turkey Pre-accession Instrument, CARDS and the Transition Facility

Commission Report: 2009 Annual Report on the Instrument for Structural Policies for Pre-accession (ISPA)

Legal base(a)—


Document originated(a) 20 December 2010

(b) 4 November 2010

Deposited in Parliament(a) 20 December 2010

(b) 18 November 2010

DepartmentInternational Development
Basis of considerationEM of 8 February 2011
Previous Committee ReportNone; but see (31251) 5226/10 HC 5-xi (2009-10), chapter 1 (24 February 2010) and (31099)

15365/09: HC 5-x (2009-10), chapter 1 (9 February 2010)

To be discussed in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionCleared


10.1  During the previous financial perspective, a number of programmes of assistance that, applied to acceding and candidate countries. The main ones were:

—  the PHARE (Poland/Hungary Assistance for Reconstruction of Economy) programme, principally involving institution-building measures (with accompanying investment) as well as measures designed to promote economic and social cohesion;

—  the ISPA programme: support for large-scale environment and transport investment;

—  the SAPARD programme: support for agricultural and rural development.

10.2  The others included Community Assistance for Reconstruction, Development and Stabilisation (CARDS) programme. This supported Western Balkans countries (Albania, Bosnia and Herzegovina, Croatia, Macedonia, and the then Federal Republic of Yugoslavia) to make progress on post-conflict stabilisation and accession to EU membership, as part of the Stabilisation and Association Process. €5.13 billion was provided under CARDS between 2000 and 2006.

10.3  The Turkey Pre-Accession instrument (TPA) ran from 2000 to the end of 2006.

10.4  All involved a process, which, over time, seeks to ensure that candidate countries are prepared for and finally enabled to access post-accession funding effectively and efficiently on their own. This process of increasingly decentralised management — DIS and EDIS — is explained at Annex 1 of this chapter of our Report.

10.5  All these instruments were replaced from 1 January 2007 by the new single, focussed Instrument for Pre-accession Assistance (IPA). Existing projects under these former programmes continued, but all new pre-accession actions came under the new IPA. It has five components: transition assistance and institution building measures (with accompanying investment); cross-border cooperation; regional development; human resources development; and rural development. The latter three are for candidate countries and are designed to mirror structural funds, thus necessitating the relevant management structures to be in place. Potential candidates can benefit from similar measures implemented through the component for transition assistance and institution building.[44]

10.6  The 10 new Member States that joined the EU in 2004 received a Transition Facility in 2004-2006. Contracting was envisaged to continue until 2008 and payment of funds until 2009. Bulgaria and Romania received a Transition Facility in 2007; implementation is expected to continue until 2010. These Transition Facilities provide continued financial assistance in a number of core areas requiring further reinforcement, as identified in the last Comprehensive Monitoring Reports before accession. Assistance is implemented under the Extended Decentralised Implementation System (EDIS).

The 2009 Annual Reports on PHARE, Turkey Pre-accession Instrument, CARDS and the Transition Facility and on the ISPA

10.7  The 2009 annual reports detail the implementation of these now-replaced EU aid instruments. Their last year of programming was 2006. Since then no new projects have been committed to under the instruments covered by these reports. The reports therefore focus on the implementation of projects committed to in 2006 and earlier budget years.

10.8  The 2009 report on PHARE, the Turkey Pre-Accession Instrument, CARDS and the Transition Facility gives an overview of implementation, with examples of successful projects and the key lessons learned for future assistance, while the accompanying addendum gives detailed project-level information for each country covered.

10.9  For the Western Balkans CARDS countries, 2001-2006 programmes are almost entirely contracted, with disbursements now over 90% completed. Progress has been slower for the Turkey Pre-Accession Instrument, with 85% of committed funds for 2002-2006 programmes contracted, and 73% disbursed by the end of 2009. The report puts this down to poor performance by Turkey's implementing agencies. The Commission reports that the improved management structures put in place for the implementation of the new IPA should lead to an improvement in contracting and payment rates for Turkey.

10.10  PHARE continues to be implemented in Bulgaria, Romania and Croatia, as previously committed funds are disbursed. Disbursement rates for the PHARE 2005 programme are 77.1% for Bulgaria and 79.6% for Romania, and for the 2006 programme 65.1% and 69% respectively. In Croatia, PHARE 2005 and 2006 programmes have completed contracting, and the disbursement rate is currently around 60%. Although this figure was lower than for Romania and Bulgaria, it was higher than forecast, partly due to increased staffing levels in the Central Financing and Contracting Agency.

10.11  Transition Facility activities were completed in 2009 for the countries that acceded in 2004, with the Commission reporting that the facility achieved the expected results in strengthening public administration and implementation of the acquis. Bulgaria and Romania only achieved a contracting ratio of 70% by their deadline, which the report puts down mainly to the suspension of the accreditation of Bulgaria's implementing agency in 2008 due to unreliable management systems.

10.12  The 2009 report for the ISPA provides an overview of implementation and the accompanying document gives a financial breakdown of projects. Since the accession of Bulgaria and Romania in 2007, Croatia has been the only remaining recipient of ISPA assistance. Of the six ongoing ISPA projects in environment, transport and technical assistance, one has been physically completed, and all contracting for the remaining projects was due to be completed in early 2010. Projects are now in their implementation phase and the currently low rate of payments is therefore expected to increase during 2010 and 2011.

10.13  Evaluations in several partner countries have found that the performance of assistance has varied — more successful in increasing the capacity of institutions, and in modernising infrastructure, equipment, practices and procedures; but showing weaknesses in partner countries' capacity to programme, implement and monitor assistance.

10.14  The reports draw several lessons for current and future pre-accession assistance from experiences in 2009. The Commission says that it is taking several steps to increase the effectiveness of the current Instrument for Pre-Accession, including improving links between programming and political priorities, improving project objectives and indicators, using clearly defined conditionalities, and increasing the focus and results impact of projects through improved monitoring systems. The reports also make recommendations for future programming that include better assessment for absorption capacity, increasing the capacities of the beneficiary institutions that deal with EU assistance, and improved links to national strategies. The reports point out though that partner countries will need to address the issue of high staff turnover to ensure the sustainability of the results of projects.

The Government's view

10.15  The Parliamentary Secretary at the Department for International Development (Mr Stephen O'Brien) begins by saying that he has combined these two documents into his one Explanatory Memorandum of 8 February 2011 "because both refer to the continuing implementation of EU aid instruments relating to pre-accession". He comments on the Reports as follows:

"The UK supports the Commission's initiative to improve the effectiveness of pre-accession funding. The key concern for the UK is to ensure that lessons learned from these funding instruments, now in their final years of implementation, are fed into the current Instrument for Pre-accession (IPA)."

10.16  Referring to his separate EM on the Commission's 2009 Report on the 2009 IPA report,[45] the Minister says that:

—  the Commission has been working to improve IPA's effectiveness, impact, sustainability and ownership by beneficiary countries through a series of lesson-learning conferences and workshops;

—  one of the key achievements has been a movement towards sector-based strategic planning rather than a piecemeal project-based approach;

—  the UK has actively participated in this process;

—  the lessons detailed in these reports are being used by the Commission, particularly in cementing the link between political priorities and assistance, in the recognition of the need for greater capacity in implementing agencies for decentralised implementation, and through the application of the Results Orientated Monitoring system (ROM) to IPA programmes, which last move should lead to better monitoring and a more useful assessment of impact for IPA programmes;

—  the UK continues to work closely with the Commission to ensure pre-accession funds are put to the best possible use, and believes that lessons are still being learned in the final implementation phases of pre-2007 programmes for current and future assistance.

10.17  The Minister also notes that, as previously announced, DFID's bilateral programmes in Bosnia & Herzegovina and Serbia will close early this year, leaving Kosovo as the sole remaining DFID bilateral programme in the region. Nonetheless, the Minister says, he will maintain oversight of IPA through British Embassies in the region, through staff in the UK Permanent Representation in Brussels, through secondments to the Commission (DG Enlargement) and by ensuring the UK plays an active role on the IPA Management Committee.


10.18   We are reporting this information to the House because of the level of interest in both the accession process and the degree of effectiveness of the EU's technical assistance programmes.

10.19  As the Minister says, the present and future is now with the all-embracing Instrument for Pre-Accession (IPA). As we say in our consideration of the 2009 IPA Annual Report,[46] it is notable that, this year and in contrast to previous years, the Minister has some encouraging words to say about improvements in effectiveness and evaluation, which we welcome. However, as we also note there, the proof will be in the meta-evaluation to be carried out this year, about which we look forward to hearing more from the Minister in due course.

10.20  In the meantime, we clear these documents from scrutiny.

Annex: Decentralisation in the contracting process[47]

Decentralisation involves the transfer of responsibility in the programming and implementation of the pre-accession instruments from the Commission to the Contracting Authority of the recipient country. The latter becomes responsible for the tendering and contracting, as well as the financial and administrative management of the projects. There are two steps in the decentralisation process: the first and usual one based on ex-ante approval (DIS) and the second "extended" one based on ex-post control (EDIS). Under the Commission's ex-ante controls, decisions concerning procurement and the award of contracts require prior approval by the Commission Delegation in the recipient country before they are taken by the Contracting Authority.


The ex-ante control carried out by the Commission Delegations involves:

1.  Approving the content of the tender dossier before the tender is launched.

2.  Approving the composition of the evaluation committee (which is responsible for recommending a bidder to the Contracting Authority).

3.  Checking and approving the evaluation report.

4.  Endorsing the contract, through the signature of the Head of Delegation on the contract itself, not as a party to the contract but to confirm that the project can receive EU financing.

The main actors are the National Aid Co-ordinator, the National Authorising Officer, the National Fund, the Programme Authorising Officer in the respective Implementing Agency, EC Delegations and the final beneficiaries.

The National Aid Co-ordinator (NAC) is responsible for ensuring co-ordination both at the level of programming (with the aim of ensuring a close link between the general accession process and the use of Community financial assistance) and at the level of monitoring and assessment. This person is usually a high-ranking official appointed by the government.

The National Authorising Officer (NAO) is the NAC's financial counterweight (also appointed by the government) and is responsible for the National Fund, which deals with:

  • financial management of all programmes
  • requests to and the receipt of funds from the Commission
  • redistribution of funds to the relevant beneficiaries
    • financial reporting to the Commission.

It is located in a national ministry with central budgetary competence, such as the Ministry of Finance.

The Implementing Agencies (IAs) are located within a ministry or administration in the recipient country and fall under the authority of the NAO. A Programme Authorising Officer (PAO) is in charge of each agency and is responsible for the sound financial management of the programme(s) to be implemented by the IA and monitoring project implementation. One of the implementing agencies is the Central Financing and Contracting Unit (CFCU). The role of the Implementing Agencies is to carry out the tendering and contracting elements of the programme whereas project selection and monitoring remain the responsibility of the ministries/administrations directly benefiting from the assistance. In addition, the CFCUs manage Institution Building programmes, which are multi-sectoral by nature, as well as being the specialised agency for the administrative and financial management of twinning operations.


The participation of the new Member States in Community funds (above all in the area of regional and agricultural policy) and the replacement of large EC Delegations by smaller Representations (as in the older Member States), whose primary function is information and communication, requires Member States to adapt their administrations in order to cope with a framework of ex-post control. As such, all countries which previously were eligible for the Phare programme, Bulgaria and Romania, Croatia and Turkey are presently moving towards an Extended Decentralisation Implementation System (EDIS) whereby the Commission's ex-ante approval on project selection, tendering and contracting is waived in accordance with Council regulation 1266/1999.

Four procedural stages have to be undergone before EDIS can be granted. With the assistance of the Commission, candidate and acceding countries are required to undertake the first three themselves:

1. Gap assessment: assessing the target national institutions (principally the National Fund and the Implementing Agencies) in order to determine to what extent the conditions for EDIS are currently met and to identify specific actions, changes and improvements required.

2. Gap filling: the responsible national authorities must then implement the recommendations of the Gap Assessment Report (GAR).

3. Compliance Assessment: the national authorities determine whether the pre-conditions are fulfilled so that a formal EDIS application can be submitted to the Commission.

The fourth and final stage — Preparation for a Commission decision to confer decentralised management under Article 12(2) of the Co-ordination Regulation 1266/1999 — remains the exclusive responsibility of the Commission services.

44   See full information on the history and present arrangements pertaining to EU pre- and post-accession financial assistance.


45   Which we consider in chapter 9 of this Report: see (32295) 17052/10 + ADD 1 and (32197) 16293/10. Back

46   See (32295) 17052/10 + ADD 1 and (32197) 16293/10 at chapter 9 of this Report. Back

47   See for full information. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 1 March 2011