EU-Report Accession Bulgaria

Chapter 21: Regional policy and co-ordination of structural instruments

Bulgaria has made some progress in this area since the last Regular Report in preparing for the implementation of structural policies.

No particular developments have taken place as regards territorial organisation.

As regards the legislative framework, the Council of Ministers passed a regulation adopting a Strategy on the Preparation for EC Structural Funds in May 2002, whereby the Ministry of Finance was designated as the co-ordinator for the preparation and implementation of Structural and Cohesion Funds assistance.

Following the adoption of the Strategy for Structural Funds, the envisaged institutional structure for Structural and Cohesion Funds assistance was clarified. The Ministry of Finance will be the authority responsible for the co-ordination of programming of Structural Funds assistance. In addition, it will become the Managing Authority for the Community Support Framework and for the Cohesion Fund. A number of operational programmes (OP) are envisaged, namely a Regional OP (to be managed by Ministry of Regional Development), an OP on Competitivity of Bulgarian Industry (to be managed by Ministry of Economy), a Development of Human Resources OP (to be managed by Ministry of Labour) and an OP on Rural Development (managed by the Ministry of Agriculture). The future paying authority for all Structural Funds and the Cohesion Fund will be the Ministry of Finance (``Directorate National Fund'').

In March 2002, a new department of programming and co-ordination was established within the General Directorate for Regional Policy of the Ministry of Regional Development. Within the above-mentioned Department, 25 experts for the 28 District Units were appointed. They will participate inter alia in programming and implementation of CBC and ESC projects and have the role of improving the coordination between the Ministry of Regional Developments and district authorities.

As regards programming, the Strategy clarified that the Agency for Economic Analysis and Forecasts at the Ministry of Finance will be responsible for co-ordinating and updating the National Development Plan. The regulation of the Ministry of Regional Development adopted in November 2001 sets out that the National Plan for Regional Development will form an integral part of the National Development Plan. Furthermore, the role and status of the Commissions for Economic and Social Cohesion in the six planning regions was addressed. These were established through legislation adopted in 2000 and include representatives of local administration as well as economic and social partners. Apart from this, little has been done to prepare for the application of the partnership principle.

No progress has been made in the area of monitoring and evaluation.

No significant developments can be reported with respect to financial management and control as well as statistics.

Overall assessment

Concerning territorial organisation, Bulgaria has already agreed with the Commission on its provisional NUTS classification (six planning regions corresponding to NUTS II). More work is necessary to adopt the framework legislation needed to implement the acquis under this chapter.

Bulgaria has started to design the necessary institutional structures for the implementation of the Structural Funds and the Cohesion Fund after accession. Bulgaria must now implement the government decision of May 2002. The mechanisms of coordination and management for the implementation of the strategy on structural funds will need to be refined. Much needs to be done to improve the administrative capacity of the managing and paying authorities. Inter-ministerial co-ordination remains limited. Further clarification is necessary as regards the definition of tasks and responsibilities to be performed by the bodies or authorities involved in the preparation and implementation of Structural and Cohesion Funds assistance.

Considerable further efforts are needed to bring administrative capacity up to the level required for Structural Funds and Cohesion Fund implementation.

With regard to programming, there is little capacity to discuss and clarify development priorities both at national and regional level and to identify proper projects. Co-ordination and co-operation between ministries, as well as with relevant agencies and other stakeholders, remains limited. These factors have led inter alia to rather unsatisfactory management of some of the pre-accession funds that help Bulgaria prepare for the Structural and the Cohesion Funds. More progress is needed in further developing the National Development Plan so that it can serve as the basis for the establishment of a development plan as required by the Structural Funds regulations. Further efforts are necessary to enhance the quality of this document and to make it compatible with requirements under the structural funds acquis. This includes further embedding the National Development Plan in national policy-making as well as consultation of relevant stakeholders, including economic and social partners. Since there is no regional partnership structure, transparent involvement of regional and local stakeholders, including economic and social partners, is not yet in place. There is a need to strengthen the existing Commissions for Economic and Social Cohesion and to undertake further steps to enhance the application of the partnership principle.

Work on ensuring compliance with the acquis requirements for monitoring and evaluation has hardly advanced.

Appropriate systems of financial management and control need to be established, i.e. in setting up of bodies, structures and specific procedures for financial control, auditing, certification of expenses and correction of irregularities. Particular attention needs to be given to an adequate separation of functions within the implementation structure. Bulgaria's budget legislation does not provide for multi-annual budget programming and flexibility required for the implementation of Structural Funds programmes.

As regards statistics, as outlined in the last Regular Report, further efforts are necessary to bring these up to the level required for regional policy planning, in particular for exante evaluation. There is still a lack of regional statistics.

Conclusion

In its 1997 Opinion, the Commission concluded that Bulgaria's administrative capacity to manage integrated regional development programmes needed to be improved. It added that in particular, administrative and budgetary procedures needed to be strengthened. Furthermore, it was concluded that significant reforms were still necessary, including the establishment of efficient inter-ministerial co-ordination and the introduction of appropriate counterpart funds, before Bulgaria would be able to apply Community rules and to channel effectively the funds from EC structural policies.

Since the Opinion, Bulgaria made little progress reaching a low level of readiness for the acquis in this area. However, work has started to gather speed recently with in particular the adoption of the Strategy for Structural Funds.

Negotiations on this chapter continue.

Bulgaria should focus further efforts on strengthening the capacity for future implementation of structural funds in key ministries, including appropriate control, monitoring and evaluation mechanisms. Bulgaria needs to prepare a coherent development plan as required by the Structural Funds regulations and integrate it into the national budgetary and policy-making framework.

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