5 EU Pre-accession Assistance to Serbia
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; further information requested
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| Document details | European Court of Auditors' (ECA) Special Report: EU Pre-accession Assistance to Serbia
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| Legal base | Article 287(4) TFEU; —
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| Department | Foreign and Commonwealth Office
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| Document number | (36615), —
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Summary and Committee's conclusions
5.1 The Instrument for Pre-accession Assistance (IPA[27])
is the means by which the EU supports reforms in the "enlargement
countries" with financial and technical help.[28]
The IPA funds build up the capacities of the countries throughout
the accession process, resulting in progressive, positive developments
in the region. For the period 2007-13, the IPA budget was €11.5
billion; its successor, IPA II, will seek to build on the results
already achieved, with a budget of €11.7 billion for the
period 2014-20.
5.2 On 13 January 2015, the European Court of Auditors
(ECA) published this Special Report on the effectiveness of EU
pre-accession support to Serbia which became an official candidate
country in March 2012. The report covers the period 2007-13. It
looks in particular at the key area of governance.
5.3 This Special Report noted that: overall, the
Commission is managing pre-accession support to Serbia, including
the IPA projects, effectively; IPA financial assistance programming
is based on a coherent strategic framework; the approach to selecting
projects relevant to preparing Serbia for accession is gradually
improving; Serbia has been helped thereby to implement social
and economic reforms and to improve its public finance management;
and, on the whole, the audited projects delivered their planned
outputs. But the auditors also said that projects suffered from
weaknesses regarding their design, implementation and sustainability.
5.4 The Special Report sets out six concrete recommendations
to enable the Commission to address these weaknesses (which the
Commission has taken steps to take forward in the latest IPA programmes),
and four actions in relation to the Commission's structured dialogue
with Serbia on governance issues
5.5 The Minister for Europe (Mr David Lidington)
welcomes this Special Report and its recommendations, and the
level of independent scrutiny it provides of EU pre-accession
support to Serbia. As "a strong supporter of EU Assistance
programmes such as IPA", the Minister also welcomes efforts
to draw lessons from past experiences in order to inform and improve
future implementation, and ensure the effective use of EU funding.
He further welcomes the increased focus in the new IPA-II framework
on priorities identified in the EU's Enlargement Strategy; for
Serbia, he expects to see this focus on "democracy and the
rule of law, including the key area of governance, and on competitiveness
and growth". Reforms in these areas "will be vital for
Serbia as it looks to progress in its accession negotiations".
He also regards the emphasis on a sector-based approach being
adopted in IPA II as a positive step, which should help with coordination
between development agencies; increase ownership in beneficiary
countries; encourage greater efficiencies among Member States,
as their efforts will be guided by a common policy framework;
and thus provide for enhanced complementarity and a more effective
results-orientated impact on the pre-accession process.
5.6 As the Minister suggests, this ECA Special
Report has much wider implications for the enlargement process
than just Serbia's progress. As the Committee noted when it considered
the Commission's 2015 "enlargement package",[29]
2014 was seen as a year of fitful progress. Published last October,
the picture painted was thus: in Albania and Macedonia,
the opposition was boycotting parliament and thus blocking reforms;
in Kosovo, a government had yet to be formed after the
June elections; and in Bosnia and Herzegovina (BiH), the
Commission's reference to a lack of collective will suggested
that it did not expect long-standing political inertia to be resolved
by October's elections. Problems with "rule of law/good governance"
issues predominated in Montenegro — so much so that
the Commission indicated that it might slow down the accession
process (the first fruits, perhaps, of "front-loading"
the "rule of law/good governance" area, and adjusting
the rate of progress accordingly). In the case of Turkey,
there was a litany of concerns about the erosion of fundamental
freedoms and the separation of powers. Serbia was the country
about which the Commission appeared to be most hopeful —
even though it was the least supportive of what was regarded as
a benefit of the accession process, viz., alignment with the EU's
foreign policy priorities, with the new Government preferring
to sustain active relations with Russia and to welcome President
Putin in Belgrade as recently as 16 October 2014.
5.7 The Minister for Europe welcomed the Commission's
"fair and balanced assessment of progress and challenges
in EU enlargement countries and of the enlargement process itself",
which he said was "closely aligned with the Government's
priorities on enlargement, highlighting the importance of addressing
the fundamentals first and the need for firm but fair conditionality",
and which "focuses correctly on the central challenges of
the rule of law, judicial reform and the fight against organised
crime and corruption; economic governance and competitiveness;
the importance of strengthening democratic institutions and public
administration reform, and protecting fundamental rights; and
the need for good neighbourly relations and dispute resolution".[30]
5.8 With regard to this Special Report, the Minister
says that the Council "is expected to respond … in the
form of Council Conclusions in March 2015", which he expects
will "welcome the report as a useful tool for improving the
effectiveness of EU pre-accession assistance to Serbia under IPA
II". We would also hope that those Council Conclusions will
underline this Special Report's wider implications, given the
emphasis that is now purportedly being placed in the accession
process on "up front" conditionality, centring not on
commitments by candidate countries, but on a track record of successful
implementation of programmes that address those "central
challenges" that the Minister rightly highlighted.
5.9 We would therefore like the Minister to provide
us with a copy of those Council Conclusions in due course, and
to illustrate how the wider lessons of this Special Report have
been noted and endorsed in them.
5.10 In the meantime, we shall retain the document
under scrutiny.
Full details of
the documents: European
Court of Auditors' (ECA) Special Report No. 19/2014 —
EU Pre-accession Assistance to Serbia: (36615), —.
Background
5.11 The European Court of Auditors (ECA) carries
out audits, through which it assesses the collection and spending
of EU funds. It examines whether financial operations have been
properly recorded and disclosed, legally and regularly executed.
It also, via its Special Reports, carries out audits designed
to assess how well EU funds have been managed so as to ensu re
economy, efficiency and effectiveness.[31]
5.12 Since 2007, the EU's financial support to Serbia
through the IPA has amounted to approximately €170 million
per year. Governance, identified by the Commission as the most
challenging area for Serbia, received a quarter of the IPA funding.
The EU complements the IPA funding with some non-financial means
to help Serbia prepare for EU membership.
5.13 The EU enlargement strategy and the revised
IPA regulation are paying increasing attention to financial and
economic governance in the accession countries. Accession negotiations
with Serbia were formally opened on 1 January 2014.
ECA Special Report 19/2014
5.14 This Special Report, EU Pre-accession Assistance
to Serbia, examines whether the Commission managed pre-accession
support to Serbia during the 2007-13 period effectively and, in
greater depth, its support for the key area of governance.
5.15 The audit examined the IPA programming process
and 15 IPA-funded projects from the 2007, 2008 and 2009 IPA annual
programmes for Serbia, with a particular focus on the projects'
results. The non-financial assistance audited included the EU-Serbia
dialogue on governance issues and cooperation to prepare Serbia
for decentralised management of EU funds.[32]
The Court also reviewed another sample of 10 IPA projects from
the 2010, 2011 and 2012 annual programmes to check whether governance
and the fight against corruption were cross-cutting issues in
projects where good governance was not a primary objective.
5.16 When this Special Report was published on 13
January 2015, in an accompanying press release under the headline
"Pre-accession support to Serbia is on track", the ECA
said that EU support of about €1.2 billion over the 2007-13
period had been globally effective in preparing Serbia for EU
membership. The ECA noted that: overall, the Commission is managing
pre-accession support to Serbia, including the IPA projects, effectively;
IPA financial assistance programming is based on a coherent strategic
framework; the approach to selecting projects relevant to preparing
Serbia for accession is gradually improving; Serbia has been helped
thereby to implement social and economic reforms and to improve
its public finance management; and, on the whole, the audited
projects delivered their planned outputs. But the auditors also
said that projects suffered from weaknesses regarding their design,
implementation and sustainability.
5.17 The EU auditors recommend that, in order to
improve the programming, design and implementation of IPA projects
in Serbia, the Commission should:
— make
the project prioritisation and selection processes more transparent
and improve their documentation;
— improve the lessons-learnt process by
developing a dedicated database incorporating lessons drawn from
past projects in Serbia and other relevant beneficiary countries;
— systematically document the needs assessment
underlying the expected outputs from projects and contracts;
— reinforce the principle of conditionality:
in particular, the beneficiary's capacity to do what is required
for a high-quality project should be verified in advance and in
specific, measurable terms;
— set up a system for a regular brief progress
report in order to ensure an appropriate audit trail for the entire
project; and
— put in place a system to check the usefulness
of project outputs (including studies, analyses, procedures, protocols
and training materials) in the medium and long term.
5.18 With regard to the increasing emphasis that
the Commission is putting on governance issues when planning its
financial and non-financial assistance to Serbia, the ECA Member
responsible for the report commented thus:
"The EU-Serbia dialogue created a link between
political priorities and policy formulation. Learning from its
past pre-accession support, the Commission successfully supported
Serbia in addressing key areas such as good governance, the rule
of law and the fight against corruption.
"Despite gradual improvement in managing the
IPA, the Commission needs to further improve the second generation
IPA used in the 2014-2020 period."
5.19 The Special Report accordingly recommends that,
in relation to non-financial assistance, the Commission:
— supports
the Serbian authorities in further rationalising their national
strategies and finalising a fully-fledged public finance management
roadmap;
— improves the consultation mechanism with
civil society organisations;
— systematically assesses the need for
specific anti-corruption or other good governance measures during
project design; and
— takes steps to integrate the Commission's
audit work on the national IPA structures into the countrywide
assessment of public finance management.
5.20 Finally, the ECA noted that, in drawing up the
latest IPA annual programmes, the Commission had taken steps to
address the shortcomings identified by the EU auditors in the
earlier IPA projects.[33]
The Government's view
5.21 In his Explanatory Memorandum of 9 February
2015, the Minister welcomes this report and its recommendations,
and "the level of independent scrutiny it provides of EU
pre-accession support to Serbia".
5.22 He continues as follows:
"As a strong supporter of EU Assistance programmes
such as IPA, the Government welcomes efforts to draw lessons from
past experiences in order to inform and improve future implementation,
and ensure the effective use of EU funding.
"As the Commission notes in its reply to the
report, IPA-funded sector evaluations have drawn lessons from
the implementation of IPA from 2007-2012, which will be reflected
in the second Instrument for Pre-Accession Assistance (IPA II).
IPA II's launch was noted in the Commission's Communication on
the Enlargement Strategy 2014-2015.[34]
It will provide €11.7 billion for the period 2014-2020, linked
more closely to enlargement policy priorities and based on a more
results-orientated and strategic approach. The Government welcomes
the launch of financial assistance through the new IPA-II framework
and its increased focus on priorities identified in the Enlargement
Strategy. For Serbia, we expect to see this focus on democracy
and the rule of law, including the key area of governance, and
on competitiveness and growth. Reforms in these areas will be
vital for Serbia as it looks to progress in its accession negotiations.
Alongside national programmes, IPA II and Twinning will continue
to provide valuable support to Serbia as it seeks to move closer
towards meeting the requirements for EU membership.
"The Government believes the emphasis on a sector-based
approach being adopted in IPA II is a positive step. This should
help with coordination between development agencies. IPA II should
also increase ownership in beneficiary countries and encourage
greater efficiencies among Member States, as their efforts will
be guided by a common policy framework. This approach should provide
for enhanced complementarity and a more effective results-orientated
impact on the pre-accession process."
5.23 Looking ahead, the Minister says:
"The Council is expected to respond to the report
in the form of Council Conclusions in March 2015. Working-level
discussions with the Commission will commence on 17 February 2015.
We expect any Conclusions to welcome the report as a useful tool
for improving the effectiveness of EU pre-accession assistance
to Serbia under IPA II."
Previous Committee Reports
None, but see (36392), 14152/14 + ADD 1 et al:
Twenty-eighth Report HC 219-xxvii (2014-15), chapter 13 (7 January
2015); and Sixteenth Report HC 219-xvi (2014-15), chapter 4 (29
October 2014).
27 Current beneficiaries are: Albania, Bosnia and Herzegovina,
the former Yugoslav Republic of Macedonia, Iceland, Kosovo, Montenegro,
Serbia, and Turkey. See http://ec.europa.eu/enlargement/instruments/overview/index_en.htm
for full information. Back
28
Iceland remains a candidate country, but its Government
decided to suspend accession negotiations in 2013. The other candidate
countries are Albania, Macedonia, Montenegro, Serbia and
Turkey. Potential candidate countries (those without formal
Candidate Status but with an agreed EU perspective) are Bosnia
and Herzegovina and Kosovo. Back
29
The Commission's Communication: Enlargement Strategy 2014-2015
and its associated country progress reports; see (36392), 14152/14
+ ADD 1 et al: Twenty-eighth Report HC 219-xxvii (2014-15),
chapter 13 (7 January 2015) and Sixteenth Report HC 219-xvi (2014-15),
chapter 4 (29 October 2014). Back
30
Ibid. Back
31
See http://www.eca.europa.eu/en/Pages/ecadefault.aspx for full
details of the ECA's work. Back
32
Decentralisation is the process whereby management of European
Union funds is delegated to the administrations of the beneficiary
countries. It implies the setting up of competent infrastructures
by the beneficiary countries and effective control of fund management
by the European institutions. See http://ec.europa.eu/enlargement/policy/
glossary/terms/decentralisation_en.htm
for full information. Back
33
See http://www.eca.europa.eu/Lists/ECADocuments/INSR14_19/INSR14_19_EN.pdf. Back
34
For the Committee's consideration of this Commission Communication
and its accompanying country progress reports, see (36392), 14152/14
+ ADD 1 et al: Twenty-eighth Report HC 219-xxvii (2014-15),
chapter 13 (7 January 2015) and Sixteenth Report HC 219-xvi (2014-15),
chapter 4 (29 October 2014). Back
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