Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents

53 EU Pre-accession Assistance to Serbia

Committee's assessment Politically important
Committee's decisionCleared from scrutiny
Document detailsEuropean Court of Auditors' (ECA) Special Report: EU Pre-accession Assistance to Serbia
Legal baseArticle 287(4) TFEU; —
DepartmentForeign and Commonwealth Office
Document number(36615), —

Summary and Committee's conclusions

53.1 The Instrument for Pre-accession Assistance (IPA) is the means by which the EU supports reforms in the "enlargement countries" with financial and technical help.[ 384] 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. The EU enlargement strategy and the revised IPA regulation are paying increasing attention to financial and economic governance in the accession countries.

53.2 Since 2007, the EU's IPA financial support to Serbia has amounted to approximately €170 million per year. Governance, identified by the Commission as the most challenging area, received a quarter of the IPA funding. Accession negotiations with Serbia were formally opened on 1 January 2014.

53.3 On 13 January 2015, the European Court of Auditors (ECA) published this Special Report on the effectiveness of EU pre-accession support to Serbia. The report covers the period 2007-13. It looks in particular at the key area of governance. It concluded that, overall, the Commission was managing pre-accession support to Serbia, including the IPA projects, effectively; but projects suffered from weaknesses regarding their design, implementation and sustainability.

53.4 The previous Committee noted the implications not only for assistance to Serbia at this critical juncture but also for the wider enlargement process. It therefore asked the then (and current) Minister for Europe (Mr David Lidington) to provide it with a copy of the Council Conclusions and to illustrate how the wider lessons of this Special Report had been noted and endorsed in them (see paragraphs 52.08-52.15 below for details).

53.5 We agree with the Minister that the Council Conclusions (which we reproduce at the Annex to this chapter of our Report) fit the bill. We note in particular that the Council:

—  emphasises the crucial nature of the phase of the integration process that the EU and Serbia has now entered;

—  welcomes the fact that the Commission is putting increasing emphasis on governance issues in planning its further financial and non-financial assistance to Serbia; and

—  underlines the relevance of the findings of this audit for the wider Enlargement process.

53.6 We look forward to seeing evidence of these messages being taken on board by the Commission/EEAS, both with regard to Serbia and other countries involved in the enlargement process, when the 2016 "enlargement package" is submitted for scrutiny this autumn, and in reports on IPA II implementation.

53.7 In the meantime, we now clear this European Court of Auditors' Special Report from scrutiny.

Full details of the documents: European Court of Auditors' (ECA) Special Report No. 19/2014 EU Pre-accession Assistance to Serbia: (36615), —.


53.8 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 ensure economy, efficiency and effectiveness.[ 385]

53.9 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.[ 386]

53.10 The then (and current) Minister for Europe (Mr David Lidington) welcomed the Report and its recommendations, and the level of independent scrutiny it provided of EU pre-accession support to Serbia. As "a strong supporter of EU Assistance programmes such as IPA", the then Minister also welcomed 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 welcomed the increased focus in the new IPA-II framework on priorities identified in the EU's Enlargement Strategy; for Serbia, he expected 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 would "be vital for Serbia as it looks to progress in its accession negotiations". He also regarded 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 would 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.[ 387]

The previous Committee's assessment

53.11 The previous Committee agreed with the Minister's suggestion that this ECA Special Report has much wider implications for the enlargement process than just Serbia's progress. As it had noted when considering the Commission's 2015 "enlargement package",[ 388] 2014 was seen as a year of fitful progress. 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. 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. 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, including welcoming President Putin in Belgrade as recently as 16 October 2014.[ 389]

53.12 The Minister for Europe had 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".[ 390]

53.13 With regard to this Special Report, the Minister said that the Council expected to respond in the form of Council Conclusions in March 2015, which he expected would welcome the report as "a useful tool for improving the effectiveness of EU pre-accession assistance to Serbia under IPA II". The then Committee expressed the hope that those Council Conclusions would also underline this Special Report's wider implications, given the emphasis that was 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 addressed those "central challenges" that the then Minister had rightly highlighted.

53.14 The previous Committee therefore asked the Minister to provide a copy of those Council Conclusions in due course, and to illustrate how the wider lessons of this Special Report had been noted and endorsed in them.

53.15 In the meantime, the Special Report was retained under scrutiny.[ 391]

The then Minister's letter of 7 April 2015

53.16 The then (and current) Minister confirms that the 15 March 2015 Council Conclusions did indeed welcome the Special Report as a useful tool for improving the effectiveness of EU pre-accession assistance to Serbia under IPA II, and endorse the recommendations made in the report. He also professes himself satisfied that the wider implications of the Report's findings are reflected in the conclusions "which specifically cite relevance to the wider EU Enlargement process in the first paragraph" and "also invite the Commission to inform the IPA Management Committee, which my department attends, regularly on the issues raised by the Special Report and to ensure they are addressed systematically". This, the then Minister says, "will provide an ongoing mechanism to ensure that wider lessons are followed up on".

Previous Committee Reports

Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 5 (25 February 2015); also 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).

Annex: Council conclusions on Special Report No. 19/2014 by the Court of Auditors: "EU Pre-Accession Assistance to Serbia"

1.  "The Council thanks the Court of Auditors for its Special Report No 19/2014 and takes good note of the conclusions and recommendations therein. The Council notes that the objective of the audit was to assess whether the Commission is managing pre-accession assistance (IPA) to Serbia effectively and, in greater depth, its support for the key area of governance. While it was not the aim of the audit to address the performance of the Serbian authorities in dealing with the areas covered by IPA, the Special Report comes at a timely moment, in a crucial phase of the integration process of Serbia after the opening of accession negotiations in January 2014. The audit covered projects from the 2007-13 programming period, with a particular focus on the results and on whether governance and the fight against corruption were cross-cutting issues for projects where good governance was not a primary objective. The Council underlines the relevance of the findings of this audit to the management of pre-accession assistance for the beneficiaries, and the wider Enlargement process.

2.  "The Council welcomes in particular the conclusion of the Court that, overall, the Commission is managing pre-accession support to Serbia effectively and that the financial assistance, along with other forms of support, effectively helps Serbia to implement social and economic reforms and to improve governance in the country. The Council also welcomes that based on the experience gained in other IPA beneficiaries the Commission is putting increasing emphasis on governance issues in planning its financial and non-financial assistance to Serbia. Furthermore, the Council welcomes that IPA financial assistance is based on a coherent strategic framework and the approach to select projects relevant to prepare Serbia for accession is gradually improving. At the same time, the Council notes the conclusion that the audited projects produced their planned outputs, but also suffered from weaknesses regarding their design, implementation and sustainability. The Council notes positively the Court's observation that, when drawing up the latest IPA annual programmes, the Commission took steps to address the shortcomings identified by the Court in the earlier projects, including the need for more systematic coordination of IPA projects with those of other donors.

3.  "In this regard, the Council takes good note of the Court's specific recommendations to the Commission to improve the programming, design, implementation and sustainability of IPA projects in Serbia. The recommendations on the management of non-financial assistance include support to the Serbian authorities to further rationalise their national strategies, to finalise a fully-fledged public finance management roadmap, to improve the consultation mechanism of civil society organisations in the IPA programming, to assess systematically the need for specific anti-corruption or other good-governance measures during project design, and to take steps to integrate the Commission's audit work on the national pre-accession structures into the countrywide assessment of public finance management.

4.  "The Council thanks the Commission for its reply attached to the Special Report No 19/2014 and takes positive note in particular of the statement that some of the specific recommendations addressed in the sector evaluations have already been reflected in the new IPA Regulation (EU) No 231/2014, the common implementing Regulation (EU) No 236/2014 and draft framework agreements to be concluded with each individual beneficiary. The Council also takes positive note that the decentralised implementation system process has been built up for the management of pre-accession funds, and that the Commission's commitment on a public expenditure and financial accountability assessment is going to be carried out. The Council invites the Commission to inform the IPA Management Committee regularly on the issues raised by the Court of Auditors' Special Report and to ensure that they are addressed systematically, including through EU-Serbia Stabilisation and Association Committee meetings, as appropriate.

5.  "Finally, in line with the Council conclusions of 11 December 2012, 17 December 2013 and 16 December 2014, the Council recalls that pre-accession assistance should, inter alia, increase flexibility and simplify procedures, while ensuring sustainability, visibility, accountability and full transparency of actions undertaken, strengthen ownership, have enhanced coherence between the financial assistance and the overall progress made in the implementation of the pre-accession strategy and improve results and impact. The role of civil society should also be enhanced both in programmes implemented through government bodies and as direct beneficiaries of EU assistance."[ 392]

384   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. See for full information. Back

385   See for full details of the ECA's work. Back

386   See for the ECA Report. Back

387   See Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 5 (25 February 2015) for further details. Back

388   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

389   Thus, on 21 April 2015, European Council President Donald Tusk noted in his statement following his with Prime Minister of Serbia Aleksandar Vuèiæ: "We also discussed foreign and security challenges. I underlined the importance of Serbia's foreign policy approach being guided by its number one strategic objective: to join the European Union. I expressed the EU's expectation that Serbia progressively aligns with the European Union's positions in the process up to accession": see press release. Back

390   See Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 5 (25 February 2015). Back

391   Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 5 (25 February 2015). Back

392   See  Back

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