9 EU enlargement: pre-accession finance
| Committee's assessment
| Politically important |
| Committee's decision | Cleared from scrutiny
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| Document details | 2013 Annual Report on Financial Assistance for EU Enlargement
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| Legal base | —
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| Department | Foreign and Commonwealth Office
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| Document numbers | (36371), 13769/14 + ADD 1, COM(14) 610
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Summary and Committee's conclusions
9.1 The prospect of EU membership is open to all
European states that respect and promote the fundamental values
of the EU. The current enlargement agenda covers the Western Balkans,
Turkey and Iceland. The Instrument for Pre-Accession (IPA) is
an EU fund which supports prospective EU countries to reform towards
EU standards and with the acquis through both financial
and technical assistance, which is regarded as vital if aspirant
countries are to meet the conditionality requirements prior to
accession. IPA allocations amounted to €11.5 billion for
the 2007-13 period, with €1.8 billion allocated for 2013.
9.2 This Annual Report covers the progress made on
the implementation of IPA assistance in 2013. It also reflects
on lessons learnt from evaluations and suggests areas of focus
to improve the impact of IPA funds beyond 2014. (see paragraphs
9.5-9.7 below for further details).
9.3 The Minister for Europe (Mr David Lidington)
highlights a number of largely-positive developments in 2013.
Looking ahead, he notes that the experience of previous pre-accession
assistance and developments in the EU's wider enlargement agenda
have led to the development of the "fundamentals first"
principle, whereby — closely linked to the Copenhagen Criteria
and the conditionality of the Stabilisation and Association Process
— the rule of law, stability and the proper functioning
of democratic institutions, fundamental rights, economic criteria
and reconciliation, good neighbourly relations and regional cooperation
will be prioritised as part of future assistance to enlargement
countries.
9.4 The new Instrument for Pre-Accession Funding
(IPA II) replaced IPA in 2014. Allocations for IPA II covering
the period 2014-20 amount to €11.7 billion: IPA II will be
linked more closely to EU enlargement policy priorities and individual
country strategies, resulting in a more results-orientated and
strategic approach (see paragraphs 9.13-9.24 below for full details
of the Minister's comments on the report and other background).
9.5 Elsewhere in this Report we deal with the
Commission's annual enlargement "package": its Communication
on EU enlargement strategy and the associated country progress
reports on Montenegro, Serbia, Turkey, the former Yugoslav Republic
of Macedonia, Albania, Bosnia and Herzegovina and Kosovo.[31]
The challenges facing all the candidate and aspirant countries
are vividly set out therein.
9.6 As noted in that related Report, the Government
is only able to provide an initial position on the country progress
reports, as there is time for further developments before the
adoption of conclusions on EU enlargement at the December General
Affairs and European Councils. There is much emphasis in the Commission
Communication on encouraging the west Balkan states to work together
on regional projects, particularly in energy and transport. We
have therefore asked the Minister to include in his update information
on the changes embodied in the IPA-II that will enable the EU
to focus on fewer and bigger projects. As we have noted there,
with the incoming President of the Commission having publicly
stated that there will be no further enlargement during the next
five years, concern is bound to arise that public support for
EU-inspired reforms may be undermined unless the economic benefits
are more tangible. Such are the challenges faced by the new IPA
II and those involved in its effective implementation.
9.7 For now, we clear this annual report from
scrutiny.
Full details of the document:
Commission 2013 Annual Report on Financial Assistance for Enlargement
(IPA, PHARE, CARDS, Turkey Pre-Accession Instrument, Transition
Facility): (36371), 13769/14 + ADD 1, COM(14) 610.
Background
9.8 Between 2007 and 2013, €11.47 billion of
EU assistance is programmed for the Western Balkans, Turkey and
Iceland through the Instrument for Pre-Accession (IPA), with €1.8
billion allocated for 2013.
9.9 For each candidate country, the EU sets a negotiating
framework, which establishes the general guidelines for the accession
negotiations. Negotiations take place between the EU Member States
and candidate countries, at the level of ministers and ambassadors.
For the EU, it is important to obtain guarantees on the date and
effectiveness of each candidate's alignment with the relevant
part of EU rules (acquis). The negotiations also cover
financial arrangements (such as the new Member's contribution
to the revenue of the EU budget and the expected volume of transfers
to that Member within the overall expenditure from the EU budget)
as well as possible transitional arrangements, requested either
by the Member States or by the candidate country. For the purpose
of the accession negotiations the EU legislation is divided into
35 subject-related chapters.
9.10 The IPA is the principal funding instrument
to support their efforts to strengthen democratic institutions,
reform public administration, develop civil society and advance
regional cooperation and with the acquis through both financial
and technical assistance — all with the ultimate aim of
acceding to the EU.
9.11 The IPA covers current candidate countries (Croatia
prior to 1 July 2013, Iceland, Macedonia, Montenegro, Serbia and
Turkey) and potential EU candidate countries (Albania,[32]
Bosnia & Herzegovina and Kosovo). According to the OECD definition,
it is estimated that approximately 90% of IPA funding counts as
ODA.
9.12 The IPA is divided into five components. Potential
candidate countries are only eligible for funding under components
1 and 2 (transitional assistance and cross border cooperation),
while candidate countries also receive funds from components 3-5
(regional development, human resource development and rural development).
9.13 In his Explanatory Memorandum of 23 October
2014, the Minister for Europe (Mr David Lidington) describes the
support that IPA provides prospective EU countries as "vital
if aspirant countries are to meet the conditionality requirements
prior to accession". IPA allocations amounted to €11.5
billion for the 2007-13 period. As well as covering progress made
on the implementation of IPA assistance in 2013, the Minister
says that it also reflects on lessons learnt from evaluations
and suggests areas of focus to improve the impact of IPA funds
beyond 2014.
9.14 The Minister notes that the report sets out
how the new Instrument for Pre-Accession Funding (IPA II) replaced
IPA in 2014:
"Allocations for IPA II covering the period
2014-2020 amount to €11.7 billion. IPA II will be linked
more closely to EU enlargement policy priorities and individual
country strategies, resulting in a more results-orientated and
strategic approach".
9.15 The Minister then highlights the following "country-related"
features of the report:
— support for Croatia on its path to EU
accession on 1 July 2013 was a major feature of IPA country programming
during 2013, with a particular focus on strengthening capacity
in areas such as the rule of law;
— good progress in supporting ongoing accession
negotiations in Montenegro and Serbia;
— EU financial assistance played an important
role in Albania, with a sharper focus on the rule-of-law Chapters
23 and 24 which were a key issue when Albania was granted Candidate
Status in June 2014;
— in Kosovo, implementation of EU assistance
exceeded financial targets, with additional allocations provided
following progress in relations with Serbia;
— despite a fresh impetus to EU-Turkey
relations with the opening of Chapter 22,[33]
there was less positive implementation of some IPA programmes
with problems due to beneficiaries' capacity issues;
— the management of IPA funds in Macedonia
remains challenging due to staffing and managerial capacity in
key institutions;
— the EU integration process with Bosnia
and Herzegovina (BiH) is at a standstill, which is affecting the
implementation of IPA assistance there; and
— as the accession process with Iceland
is now on hold, ongoing IPA activity is being phased out and new
activity is not being commissioned.
9.16 Tables attached to the Report show the financial
situation of IPA support to EU aspirant countries by commitment,
amount contracted and amount paid, according to implementing Directorates
General in the Commission.
9.17 Other parts of the Report to which the Minister
draws attention are:
— cross-regional multi-beneficiary programmes
have continued to support priorities in the wider Enlargement
Strategy, including in areas such as rule of law, criminal justice
and public administration reform, with around 9% of available
funds allocated to fund them;
— in 2013, a 15% increase in Technical
Assistance and Information Exchange Assistance (TAIEX), with
2,118 TAIEX events/assignments in 2013, the highest on record,
and closely aligned with wider enlargement policy and assistance
priorities (as illustrated by the large increase in events in
support of Croatia in the run-up to accession;
— lessons learnt following evaluations
completed during 2013: a thematic evaluation on the Rule of Law,
Judicial Reform, and Fight against Crime in the Western Balkans
suggested that EU programmes had made an important contribution
to work in this area. In particular, the Report pointed to legal
and institutional frameworks that had been put into place as a
result of EU assistance. The Commission states that reforms in
these areas resulted in tangible results, including the passing
of laws and a sharper focus on the importance of an independent
judiciary. It acknowledged that further improvement is achievable
through securing greater political buy-in, clearer priorities
and more local administrative capacity in recipient countries.
These conclusions have been incorporated into the programming
for IPA II;
— a wider interim evaluation of IPA
in the Report concluded that outputs were better delivered in
countries operating under centralised management; however, translating
project outputs into results was not as successful as expected;
— the Report concludes that IPA needs to
be supported by a clearer political process to enhance the effectiveness
of its programmes; IPA implementation was in line with expectations
but needs to be more flexible to offer more rapid deployment.
9.18 With regard to other lessons learnt, the Minister
also notes that the Commission recalls how the experience of previous
pre-accession assistance and developments in the EU's wider enlargement
agenda have led to the development of the "fundamentals first"
principle, whereby — closely linked to the Copenhagen Criteria
and the conditionality of the Stabilisation and Association Process
— the rule of law, stability and the proper functioning
of democratic institutions, fundamental rights, economic criteria
and reconciliation, good neighbourly relations and regional cooperation
will be prioritised as part of future assistance to enlargement
countries.
9.19 Finally, with regard to effectiveness, the Commission
says that it has continued work to improve donor coordination
in 2013, with commitments made at the High Level Forum on Aid
Effectiveness in Busan in November 2011, including on ownership
of projects, results, transparency and accountability, to be considered
as part of the programming for IPA II.
9.20 The IPA II Regulation, adopted on 11 March 2014,[34]
introduces new elements compared to its predecessor:
— IPA II sets a new framework for providing
pre-accession assistance under the 2014-2020 multiannual financial
framework. Financial assistance will be available to candidate
countries and potential candidates, irrespective of their status;
— it introduces a reinforced link between
the financial assistance and the policy agenda, as well as a stronger
ownership by the beneficiaries;
— a comprehensive country strategy will
cover all areas of assistance for the entire seven-year period,
with a mid-term review in 2017, on the following policy areas:
reforms in preparation for Union membership and related institution
and capacity building, socioeconomic and regional development,
employment, social policies, education, promotion of gender equality
and human resources development, agriculture and rural development,
regional and territorial cooperation;
— IPA II introduces a move towards a logic
of financing policy strategies instead of individual projects
(sector approach), based on relevant national sector strategies
prepared by the beneficiaries. There will be a progressive transition
to indirect management of the funding by the beneficiaries;
— pre-accession assistance will be delivered
in a more systematic way with a focus on results and monitoring
of the assistance;
— IPA II fosters an enhanced role of civil
society both in programmes implemented through government bodies
and as direct beneficiaries of EU assistance.
9.21 The Commission says that the gradual move towards
a sector approach aims at better achieving results, impact and
added value in the assistance, and that these principles have
become key for all new external action instruments for the period
2014-20.
The Government's view
9.22 The Minister begins by underlining the Government's
and its predecessors' long-standing support for enlargement of
the European Union as "a driver of peace, prosperity and
reform across our continent", continuing thus:
"We remain strong supporters of enlargement
to all of the Western Balkans and Turkey, provided of course that
candidate countries only join the EU when they have met in full
all the conditions and standards for doing so. At the same time,
we recognise that many across Europe have been concerned by the
large-scale movement of people that has followed the accession
of new countries to the EU and this issue needs to be addressed
before any more members join."
9.23 The Minister goes on to say that he:
— remains of the opinion that EU pre-accession
assistance plays an important role and is broadly effective in
supporting countries on their path to EU membership;
— welcomes the reforms introduced by IPA
II and the emphasis on a sector-based approach, which he says
should help with coordination between development agencies; result
in better ownership among the beneficiary countries; and also
result in efficiencies among Member States as work will take place
towards a common policy framework;
— agrees with the renewed focus on the
"fundamentals first" principles in relation to the enlargement
agenda, which is being reflected in EU assistance programming:
"In particular, the emphasis on the rule
of law in the region remains a top priority for the UK. Progress
in this area amongst aspirant countries is a clear UK priority,
including for example in the fight against organised crime and
corruption, and illegal migration."
9.24 The Minister then highlights some aspects of
the Report that cause him concern:
"In Macedonia, the management of IPA funding
and procurement delays have resulted in financial losses. In Turkey,
the implementation of some IPA programmes has suffered from persistent
delays. The UK will be consulting the Commission on these issues.
"The UK is also keen to see further action
to ensure programme and project outputs result in better and more
sustainable results and long term impact. The second interim evaluation
concludes that the IPA track record in this area has not been
as good as expected."
9.25 Finally, the Minister says that the report will
be discussed at the IPA Management Committee during November 2014.
Previous Committee Reports
None, but see: Nineteenth Report HC 83-xviii (2013-14),
chapter 13 (23 October 2013).
31 See (36392), 14152/14, COM(14) 700 and the related
Country Progress Reports at chapter ?? of this Report. Back
32
Albania was granted Candidate status in June 2014. Back
33
Regional policy and coordination of structural instruments: the
acquis on regional policy and coordination of structural instruments
consists mostly of framework and implementing regulations, which
do not require transposition into national legislation. They define
the rules for drawing up, approving and implementing programmes
financed by the Structural Funds (the European Regional Development
Fund and the European Social Fund) and - for some Member States
- Cohesion Fund programmes reflecting each country's territorial
organisation. These programmes are negotiated and agreed with
the Commission. Implementation is a shared responsibility of the
Member States and the Commission. Member States must comply with
the provisions of the acquis, for example in the areas of public
procurement, competition and the environment, equality between
men and women and non-discrimination, as well as sustainable development,
when selecting and implementing projects. Back
34
Regulation 231/2014 establishing an Instrument for Pre-Accession
Assistance II (IPAII). Back
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