Annexes to COM(2012)678 - 2011 annual report on financial assistance for enlargement (ipa, phare, cards, turkey pre-accession instrument, transition facility)

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dossier COM(2012)678 - 2011 annual report on financial assistance for enlargement (ipa, phare, cards, turkey pre-accession instrument, transition ...
document COM(2012)678 EN
date November 20, 2012
agreement in November, prevented substantial progress on the adoption of key legislation.

The share of funds contracted under the IPA programmes 2007, 2008, 2009 and 2010 is very high, continuing the positive trend that began in 2009.

Concerning the preparation for the decentralised management of IPA funds, further progress has been made. Under IPA Component I, the key structures and systems have been put in place and Albania submitted its application for the conferral of management in the beginning of 2012. European Commission auditors are currently analysing the application. Work has also continued on IPA Components II-V, with Component V more advanced than the others.

2011 also saw further progress towards a sector-based programming. Some questions remain open regarding its practical implementation, notably the need for the Albanian Government to develop a realistic medium-term budget perspective for the sector strategies in place.

During 2011, Serbia received pre-accession financial assistance from IPA under the first two IPA components (Transition Assistance & Institution Building and Cross-border Cooperation) which were still managed by the EU Delegation in Belgrade. The EU contribution regarding IPA Component I, allocated in 2011, was EUR 178.556 million.

Serbia continued preparations for decentralised management of EU funds for Components I, II, III and IV by completing the Gap Plugging phase in December 2011. As a result of the latter, IPA-financed Technical Assistance for carrying out the Compliance Assessment began in January 2012.

The IPA 2011 National Programme was adopted by the European Commission on 8 July 2011. Particular attention was paid to preparing for the progressive introduction of a sector approach.

The improvement of financial absorption capacity has continued. At the end of 2011, the EU Delegation was managing a portfolio of 708 on-going projects including substantial amounts for sectors such as public administration reform (EUR 26.3 million), justice and home affairs (EUR 11.95 million) and social development (EUR 32.1 million).

Sector prioritisation was achieved by 8 sector working groups, formed for the first time by governmental and non-governmental stakeholders, on the basis of the Multi-annual Indicative Planning Document (MIPD) 2011-13, the Annual Progress Report, the Serbian Needs Assessment for international assistance as well as an assessment of the quality of existing strategic documents.

Throughout 2011, EU financial assistance to Bosnia and Herzegovina played an important role to support the country on its way towards European integration. IPA continued supporting the country's efforts to comply with the requirements of the EU accession process and to fulfil its obligations under the Stabilisation and Association Agreement and the Interim Agreement. 2011 priorities strongly focused on public administration reform and the strengthening of the rule of law, in addition to alleviating the heavy consequences of the economic and financial crisis. The EU contribution allocated in 2011 was EUR 92.885 million.

The implementation of EU financial assistance in 2011 showed tangible results, including the adoption of the revised action plan for the public administration reform strategy, the introduction of the electronic publication of public procurement notices, the installation of 34 permanent GPS Station Networks throughout the country, which facilitated the accurate measuring of land parcelling. Further tangible results were the creation of a Small and Medium Enterprise (SME) Council, the construction of sewage collectors in Zivinice, and the successful implementation of the first ever country-wide rabies vaccination campaign.

The European Union Office in Kosovo (EUO) continued managing the implementation of EU assistance to Kosovo. It managed to exceed its financial targets, both in terms of contracts and payments. The preparations of the IPA 2011 Annual Programme (AP) for Kosovo have been completed, allocating EUR 62.900 million, and programming of the 2012 and 2013 Annual Programmes has started. Kosovo's participation in IPA Cross-Border Cooperation (CBC) programme proceeded well in 2011; the first Financing Agreements for Programmes, with preparations of the CBC-programmes with Albania and the former Yugoslav Republic of Macedonia were signed, as well as an additional programme with Montenegro which was finalised and subsequently adopted in December 2011. In terms of projects, important successes include the reconstruction of the last five bridges on the M2 Road connecting Kosovo to the former Yugoslav Republic of Macedonia. In addition, during 2011, Kosovo carried out the first population and housing census after almost three decades, providing valuable statistical information on the population and the living conditions, important for policy planning in the coming decade. The latter was funded through a trust fund co-financed by IPA 2010.

5. TAIEX[13] TURNS FIFTEEN

2011 marked the fifteenth anniversary of TAIEX. While the basic principles at the core of TAIEX operations remain, the instrument is constantly kept up-to-date in order to respond to current challenges in the Enlargement regions, with almost EUR10 million spent in IPA beneficiary countries.

The key assets that have made and still make TAIEX a success story are:

– ownership: TAIEX is mainly a demand-driven instrument; beneficiaries identify and submit requests for specific and customised assistance. Events are tailor-made to meet beneficiaries' requests;

– gap-filling: TAIEX can be complementary to larger assistance activities (Twinning, technical assistance) and can provide expertise to "fill the gaps" not covered by other support programmes;

– RESPONSIVENESS: assistance is generally delivered within short, tight timeframes;

– peer-to-peer: TAIEX relies on Member States' public officials who implement EU legislation in practice and are willing and able to share their technical expertise with counterparts from beneficiary administrations.

Medium-term technical assistance, a sequence of short-term interventions which is agreed beforehand and then implemented, has increased in the sectors of agriculture and food safety. For the moment this approach is used in TAIEX assistance to Iceland and Kosovo.

Outside classic TAIEX events, the People-to-People programme (P2P) has consolidated its contribution to strengthening civil society's role in the democratic process in the Enlargement context. In 2011, a new programme, the Local Administration Facility (LAF), was launched with the aim of strengthening the capacity of local and regional authorities to prepare for EU accession. For the practical implementation of TAIEX events, the European Commission relied on the external support of the service provider ‘Gesellschaft für Internationale Zusammenarbeit’ (GIZ).

6. REGIONAL COOPERATION AND PROGRAMMES

Progress has been made in regional cooperation in the Western Balkans in the areas of justice and home affairs, statistics, energy, environmental and civil protection, cultural heritage and refugee return. The Regional School of Public Administration (ReSPA) is now fully operational. New bilateral agreements on police cooperation and on mutual legal assistance are encouraging signs for the commitment of several Western Balkan countries to strengthen judicial cooperation. Similar efforts promoting and facilitating local and regional cooperation at government level as well as through the inclusion of Non-Governmental Organisations have been undertaken with the aim of moving forward to lasting reconciliation, notably through the Igman Initiative, the RECOM initiative on reconciliation and the Sarajevo Process on refugee return.

The European Commission, in cooperation with the Norwegian Ministry of Foreign Affairs organized the 4th Meeting of the Steering Committee of the Western Balkans Investment Framework (WBIF) in June 2011 in Hamar, Norway. This approved grants worth more than EUR 21 million for 19 projects in the region. These included for example a pre-feasibility study for the Regional Project of Ionian Adriatic gas Pipeline (520 km total length) contributing to the construction of a regional gas ring, a feasibility study on an electrical 400 kV Interconnection between Serbia, Montenegro and Bosnia and Herzegovina and the preparation for the construction and further development of the Regional Centre for Entrepreneurial Learning in Croatia.

At the 5th meeting of the WBIF Steering Committee in December 2011 in Luxembourg, 22 grants, with a total value of EUR 59 million, were approved. It is expected that those grants could eventually trigger loans and funds from the International Financial Institutions (IFIs) of more than EUR 1 billion for investments in infrastructure. The Steering Committee approved the Western Balkan Enterprise Development and Innovation Facility (EDIF), funded under the IPA 2011 Multi-Beneficiary programme as the first action in Private Sector Development to be financed by the WBIF.

In 2011, and since the creation of the WBIF in December 2009, the pipeline of projects has grown to represent 123 grants for a value of EUR 220 million, that will trigger nearly EUR 5 billion in loans and a total potential investment of nearly EUR 10 billion across the five key sectors – energy, environment, transport, social issues and private sector development.

Conclusions

2011 saw an important step on the path towards making assistance to the Enlargement countries more strategic, coherent, and result-oriented as an integral part of the Enlargement strategy. The legal and strategic planning framework that the Commission has proposed for delivering pre-accession assistance from 2014 onwards will reinforce its link with the political monitoring and reporting and will put in place a framework aiming for results, achieving impact and rewarding performance. This will contribute to increasing even further the added value of EU funds allocated to Enlargement countries by creating stronger incentives for the transformation of their societies, legal systems and economies needed to become an EU Member State, for the mutual benefit of the Union and of IPA beneficiary countries and their citizens.

Status of implementation of IPA financial assistance as at 31st December 2011, as a percentage of total committed funds (2007 – 2011):

At 31st December 2011 IPA Component I, implemented by Enlargement DG:

EUR Million || Committed || Contracted || Percentage || Paid || Percentage

Albania || 348.37 || 233.69 || 67.1% || 102.45 || 29.4%

Bosnia and Herzegovina || 389.83 || 186.98 || 48.0% || 103.26 || 26.5%

Croatia || 206.06 || 100.62 || 48.8% || 71.19 || 34.5%

the former Yugoslav Republic of Macedonia || 174.02 || 66.66 || 38.3% || 48.53 || 27.9%

Iceland || 12.00 || 0.00 || 0.0% || 0.00 || 0.0%

Kosovo || 475.10 || 341.42 || 71.9% || 211.48 || 44.5%

Montenegro || 134.24 || 89.83 || 66.9% || 61.02 || 45.5%

Serbia || 857.39 || 593.38 || 69.2% || 380.14 || 44.3%

Turkey || 1,164.66 || 597.40 || 51.3% || 425.14 || 36.5%

Multi Beneficiary || 729.18 || 597.32 || 81.9% || 431.30 || 59.1%

Total || 4,490.85 || 2,807.30 || 62.5% || 1,834.51 || 40.8%

At 31st December 2011 IPA Component II, implemented by Enlargement DG:

EUR Million || Committed || Contracted || Percentage || Paid || Percentage

Albania || 18.59 || 2.76 || 14.8% || 2.16 || 11.6%

Bosnia and Herzegovina || 12.52 || 4.77 || 38.1% || 3.12 || 24.9%

Croatia || 12.52 || 4.42 || 35.3% || 2.09 || 16.7%

the former Yugoslav Republic of Macedonia || 15.53 || 1.97 || 12.7% || 1.05 || 6.7%

Kosovo || 3.00 || 0.06 || 2.0% || 0.03 || 1.0%

Montenegro || 14.94 || 5.45 || 36.5% || 3.62 || 24.2%

Serbia || 16.37 || 6.57 || 40.1% || 4.63 || 28.3%

Turkey || 7.00 || 1.13 || 16.2% || 0.49 || 7.0%

Total || 100.47 || 27.13 || 27.0% || 17.19 || 17.1%

At 31st December 2011 IPA Component II, implemented by Regional Policy DG:

EUR Million || Committed || Paid || Percentage

Adriatic || 166.49 || 45.22 || 27.2%

Slovenia-Croatia || 28.95 || 11.28 || 39.0%

Hungary-Croatia || 35.54 || 12.57 || 35.4%

Hungary-Serbia || 33.97 || 12.33 || 36.3%

Romania-Serbia || 36.01 || 10.17 || 28.3%

Bulgaria-Serbia || 21.26 || 5.78 || 27.2%

Bulgaria-the former Yugoslav Republic of Macedonia || 12.14 || 3.30 || 27.2%

Bulgaria-Turkey || 18.49 || 5.02 || 27.2%

Greece-the former Yugoslav Republic of Macedonia || 10.20 || 3.93 || 38.5%

Greece-Albania || 7.67 || 2.95 || 38.5%

Total || 370.72 || 112.54 || 30.4%

At 31st December 2011 IPA Component III, implemented by Regional Policy DG:

EUR Million || Committed || Paid || Percentage

Croatia || 257.35 || 78.03 || 30.3%

the former Yugoslav Republic of Macedonia || 109.20 || 26.96 || 24.7%

Turkey || 1,055.50 || 333.11 || 31.6%

Total || 1,422.05 || 438.09 || 30.8%

At 31st December 2011 IPA Component IV, implemented by Employment, Social Affairs and Inclusion DG:

EUR Million || Committed || Paid || Percentage

Croatia || 69.98 || 22.20 || 31.7%

the former Yugoslav Republic of Macedonia || 33.50 || 9.61 || 28.7%

Turkey || 299.70 || 64.51 || 21.5%

Total || 403.18 || 96.32 || 23.9%

At 31st December 2011 IPA Component V, implemented by Agriculture and Rural Development DG:

EUR Million || Committed || Paid || Percentage

Croatia || 129.40 || 25.78 || 19.9%

the former Yugoslav Republic of Macedonia || 47.50 || 10.25 || 21.6%

Turkey || 463.00 || 80.94 || 17.5%

Total || 639.90 || 116.96 || 18.3%

[1]               More specific management-reporting aspects concerning these programmes and expenditure - such as governance & accountability, risks & controls, legality & regularity, error rates & potential consequences on reasonable assurance - can be found in the 2011 Annual Activity Report (AAR) of DG Enlargement. In line with the Commission's obligation to provide detailed information to the Council and the European Parliament, it publishes annually a report on pre-accession assistance. The previous report was published in 2011 for the budget year 2010 and is publicly available under the following link: http://ec.europa.eu/enlargement/instruments/how-does-it-work/index_en.htm.

[2]               Commission Staff Working Document – Accompanying the document 'Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee - 2011 Annual Report on financial assistance for enlargement (IPA, PHARE, CARDS, Turkey Pre-accession Instrument and the Transition Facility).

[3]               The Instrument for Pre-Accession Assistance (IPA) has an overall budget of EUR 11.5 billion for the period 2007-2013. Beneficiaries of IPA are Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, Turkey, Iceland (as of 2011) as well as Kosovo*. This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence. IPA supports reforms in the beneficiary countries and their progressive alignment with the standards and policies of the European Union and the acquis, with a view to preparing them for future EU membership.

[4]               Originally created in 1989 as the Poland and Hungary: Assistance for Restructuring their Economies (PHARE) programme, Phare has expanded from Poland and Hungary to currently cover ten countries. It assists the eight of the ten 2004 accession Member States: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia, as well as those countries that acceded in 2007 (Bulgaria and Romania), in a period of massive economic restructuring and political change. Phare means lighthouse in French. Until 2000 the countries of the Western Balkans (Albania, former Yugoslav Republic of Macedonia, and Bosnia and Herzegovina) were also beneficiaries of Phare. However, as of 2001 the CARDS programme (Community Assistance for Reconstruction, Development and Stability in the Balkans) has provided financial assistance to these countries.This Regulation repeals the OBNOVA Regulation and amends the Phare Regulation, and establishes a single framework for assistance to the countries of South-Eastern Europe: the CARDS programme (Community assistance for reconstruction, development and stabilisation). The instrument for pre-accession assistance (IPA) replaces it starting in 2007.

[5]               Croatia, the former Yugoslav Republic of Macedonia, Iceland, Montenegro and Turkey. Serbia was granted candidate status in March 2012.

[6]               Albania, Bosnia and Herzegovina and Kosovo.

[7]               Accession negotiations were opened on 29 June 2012.

[8]               Cf. Proposal for a Regulation of the European Parliament and of the Council on the Instrument for Pre-accession Assistance (IPA II), COM (2011) 838 final, 7.12.2011.

[9]               Multiannual Indicative Planning Documents.

[10]             Specific, Measurable, Achievable, Realistic and Time-bound.

[11]             The International Aid Transparency Initiative.

[12]             Western Balkan Investment Framework, see below.

[13]             Technical Assistance and Information Exchange.