EU-Report Accession Bulgaria

Community Assistance

Three pre-accession instruments have been financed by the European Community to assist the applicant countries of Central and Eastern Europe with their pre-accession preparations: the Phare programme; SAPARD, which provides aid for agricultural and rural development; and ISPA, which finances infrastructure projects in the fields of environment and transport. The support provided by these programmes is focused on the Accession Partnership priorities which are intended to help the candidate countries meet the criteria for membership.

For the years 2000-2002, total financial assistance to Bulgaria amounts to around EUR 100 million annually from Phare, EUR 53 million from SAPARD, and between EUR 83 and 125 million from ISPA.

The Phare programme has been providing support to the countries of Central and Eastern Europe since 1989, helping them through a period of fundamental economic and social transition and political change. Its current ``pre-accession'' focus was established in 1997, in response to the Luxembourg European Council's launching of the present enlargement process.

Phare provides the applicant countries of Central and Eastern Europe with support for institution building, investment to strengthen the regulatory infrastructure needed to ensure compliance with the acquis, and investment in economic and social cohesion. This support comprises co-financing for technical assistance, ``twinning'' and investmentsupport projects, to help these countries with their efforts to adopt the acquis and strengthen the institutions necessary for implementing and enforcing the acquis. Phare also helps the candidate countries develop the mechanisms and institutions that will be needed to implement Structural Funds after accession and is supported by a limited number of measures (investment and grant schemes) with a regional or thematic focus. In the context of the Action Plans for strengthening administrative and judicial capacity, particular emphasis is placed on the issue of institution building and associated investment intended to ensure compliance with the acquis. For 2002, the Commission has mobilised special financial assistance of up to EUR 250 million to accompany negotiating countries' efforts, over and above the indicative annual allocations for each of the Phare countries, bringing total Community assistance for strengthening the administrative and judicial capacity of the negotiating countries in 2002 to around EUR 1 billion.

In addition to its annual Phare allocation, Bulgaria receives additional Phare funding in the framework of the understanding reached in November 1999 on early closure dates for Units 1 to 4 of the Kozloduy nuclear power plant. The agreement makes provision for additional Phare funding of EUR 200 million over the period 2000-2007, subject to certain conditions being met. The funds are used for nuclear decommissioning and associated measures in the energy sector, and are largely managed by the EBRD.

The Phare programme allocated commitments of EUR 1000 million to Bulgaria during the 1992-1999 period, EUR 146 million in 2000, and EUR 110.8 million in 2001. The 2002 Phare Programme for Bulgaria consists of an allocation of EUR 72 million for the National Programme, complemented by EUR 22.9 million under the Phare 2002 supplementary institution building facility. The 2002 Phare programme focuses on the following priorities:

• Economic reform and the adoption and implementation of the acquis: projects to improve the business environment and assist with the pre-accession strategy for agriculture and institution building; phytosanitary, veterinary and TSE control; company law; competition policy; consumer and health protection; gas liberalisation; wetlands management; and national conformity assessment (EUR 24 million).
• Economic and social cohesion: projects to enhance youth employment; develop ecotourism; and support the reform of vocational education and training. In addition, an unallocated amount for institution building was introduced, with the key objective of helping to implement institutional change and capacity building in support of Bulgaria's strategy for transition to the Structural Funds (EUR 14 million).
• Strengthening public administration: projects to implement the strategy for judicial reform; combat corruption (four projects); strengthen the Public Prosecutor's Office; strengthen human resource capacity in the public administration; develop customs standards and practices and border control; implement the National Schengen Action Plan; strengthen border control and management; improve regional statistics; and develop tax standards and practice. (EUR 36 million).
• Ethnic integration and civil society: projects to foster a more active and self-sustaining civil society; and promote social development in areas with disadvantaged minority populations (EUR 8 million).

Bulgaria also participates in and benefits from Phare funded multi-country and horizontal programmes, such as TAIEX, the Small and Medium-sized Enterprises Facility, SIGMA and the nuclear safety programme.

Furthermore, Bulgaria currently participates in the following Community programmes and agencies using Phare funds: Culture, Customs 2002, the Multi-annual Programme for Enterprises and Entrepreneurship, European Digital Content for the Global Networks, European Environmental Agency, Leonardo da Vinci II, Media (Plus), Socrates II and Youth. It also takes part in the Fifth Framework Research Programme, including Euratom. Phare helps meet part of the costs of participation in these programmes and agencies. In order to streamline Community legal procedures and thereby facilitate future participation by Bulgaria in Community programmes, a Decision is in the process of being adopted by the EU-Bulgaria Association Council establishing the general principles for such participation.

Overall, the impact of Phare has been positive. Effective transfer of know-how, equipment and financial resources has taken place in a number of important fields such as agriculture, customs, border police, public sector finances and the environment. Phare support in the area of customs has strengthened customs operations and management and provided a basis for the Bulgarian government's current package of broad-based reforms and improvements..

In Bulgaria, Phare played a particularly important role in the following:

• Supporting institution building and the approximation of air quality legislation through a twinning arrangement worth EUR 0.55 million. The project has helped with a detailed analysis of and programme for improving air quality in the area of the municipality of Pernik. It has contributed to the dissemination of knowledge on air quality assessment and management and can be replicated.
• The EC allocated some EUR 0.6 million under Phare 1998 and 1999 to support systems for animal identification and veterinary surveillance and to enable bovine identification, registration and movement control. The results obtained so far significantly improve surveillance of the epidemiological situation of bovines in Bulgaria, essential if unrestricted trade with the EC is to recommence.
• The creation of the SAPARD Agency in Bulgaria was supported by a succession of Phare projects, delivered by consultants and SIGMA experts. Bulgaria was the first candidate country to secure partial accreditation of its SAPARD Agency in May 2001, allowing implementation of the SAPARD programme to commence.

The Review also provided for the possibility of further decentralisation of Phare management by waiving the requirement for ex ante approval by the Commission Delegations for tendering and contracting. For this to be possible strict pre-conditions covering programme management, financial control and structures regarding public finance must be met. An extended decentralised implementation system (EDIS) should be put in place for each negotiating country at the latest by the time of accession. High Level Working Groups are being established for each country to oversee this process, along with other key procedural steps in the run up to accession.

The Commission approved the Bulgarian SAPARD programme in October 2000. The indicative allocation for SAPARD in Bulgaria for 2002 is EUR 54.6 million at 2002 prices (allocation 2001: EUR 54 million at 2001 prices).

The operational programme is based on four priorities: Improvement of the production, processing and marketing of agricultural and forestry products as well as the processing and marketing of fishery products in compliance with the acquis; promotion of environmentally - friendly farming and environmental protection; integrated rural development aimed at protecting and strengthening rural economies and communities; investment in human resources and technical assistance.

The Multi-annual Financing Agreement (MAFA), which sets out the rules for implementing SAPARD, was signed in December 2000. The Annual Financing Agreement (AFA) setting out the Community financial commitment for the year 2000 in is in force since April 2001. The AFA 2001 was signed in February 2002. It will enter into force when Bulgaria notifies the Commission of the completion of all requisite national formalities.

The following structures are responsible for the implementation of SAPARD: the National Fund, located within the Ministry of Finance administers SAPARD funds allocated under the responsibility of the National Authorising Officer (NAO) and is responsible for the national accreditation of the SAPARD Agency; the Ministers of Finance and Agriculture have been appointed Competent Authority; the State Fund of Agriculture (SFA) has been designated as the SAPARD Agency, responsible for the implementation of the programme and for payment of financial aid to beneficiaries; the Managing Authority is the Ministry of Agriculture.

Bulgaria was the first candidate country to have its SAPARD Agency accredited and to receive provisional conferral of management authority (Commission Decision of May 2001). Its initial mandate is for the implementation, on a fully decentralised basis, of 3 out of 11 measures of the SAPARD programme (covering 61% of the amount available for Bulgaria and targeting investments in agricultural holdings, processing and marketing and diversification of economic activities).

An initial payment on account of EUR 13 million was made to the SAPARD Account in the National Fund. Up until May 2002, additional payments of EUR 1.4 million were made. By 2002 the SAPARD Agency had received 258 project applications submitted by potential beneficiaries and approved contracts for the implementation of 156 selected projects, involving around EUR 20.7 million of public support.

A Monitoring Committee has been established by the Managing Authority and has met three times.

The ISPA programming framework is governed by the environment and transport strategies drawn up by the Bulgarian authorities in agreement with the Commission. In the case of transport infrastructure, the emphasis is on completing or upgrading the main Trans-European Networks and developing border connections. Priorities include the upgrading of railway infrastructure along priority sections of TINA corridors (Transport Infrastructure Needs Assessment: 5 of the 10 priority TINA corridors pass through Bulgaria) so as to enable higher speeds and improved services, and completing the reconstruction and modernisation of major highway sections through pan-European transport corridors. As for the environment, the Bulgarian Government has focused on the improvement of water quality. Urban waste management and air pollution are also priority areas.

Three environmental projects were approved in 2001: waste water collection and treatment projects in Gorna (EUR 12.5 million) and Pazardjik (EUR 12.4 million), and a waste water treatment plant in Blagoevgrad (EUR 8.5 million). Two transport projects were approved in 2001: upgrading and electrifying the railway track between Plovdiv and Svilengrad (EUR 153 million) and a technical assistance project for the Danube bridge (both rail and road) (EUR 5.0 million).

Implementation of ISPA projects in Bulgaria is progressing slowly and the capacities of some of the implementing agencies are limited. An audit of financial management and control systems carried out in December 2001 made recommendations for the strengthening of structures and improvement of procedures. An adequate pipeline of projects should be prepared so as to be ready to take up the full future allocation of ISPA resources. Technical assistance from ISPA is available for all preparatory stages of projects, including technical, financial and economic feasibility studies, and environmental assessments. Moves towards the extended decentralisation (EDIS) of ISPA in Bulgaria are currently in progress.

The full (mid-range) allocation for Bulgaria has been committed, i.e. EUR 210.8 million, (EUR 104 million for 2000 and EUR 106.8 million for 2001). The allocation for 2002 will be between EUR 87.1 million and EUR 130.7 million.

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