Transmission of 21 July 06 at 20:30 CET | Shot list and full transcript

New financial instrument for EU financial assistance to Western Balkans

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00:08 Cutaways of European Commission building

00:20 Cutaways of Michael Leigh, Director-General of Enlargement DG, European Commission in his office

00:41 Interview with Michael Leigh

“Since we transferred the responsibility for the countries for the Western Balkans (WB) for external relations to enlargement, we’ve been given the clear message that for us the region is preparing itself for eventual membership in the EU. It therefore seemed to be logical that instead of this multiplicity of previous financial instruments, there should just be one financial instrument, which we’re calling the Instrument for Pre-Accession (IPA), which is intended to prepare the countries in the region for eventual membership in the EU.”

01:24 What has changed with IPA?

“What we’ve done this time is greatly simplify the procedures, bringing within one instrument funds for financial support, which are intended to help with building up the institutions, cross-boarder cooperation, cooperation with neighboring countries, regional cooperation, training the modernization of agriculture. In the past these different subjects were dealt with by different instruments. This time they’ve been all brought together, so that means we have more flexibility, we are also giving a greater role to the countries themselves in the process of programming how this money should be spent, what the priorities should be and in the actual functioning of implementation, so our partner countries will assume increasing responsibility themselves for implementation. All this builds on our previous experience but it goes beyond that so we have a new unified approach.”

02:27 Construction of a motorway in Wroclaw, Poland

03:02 Modernization of a railway in the Czech Republic

03:29 The message of the new instrument

“The message is that the future of the countries of the WB lies within the EU, we would like you to take increasing responsibility yourselves for spending this money from the EU, deciding on priorities, ensuring sound financial management, we would like you to upgrade your institutions so you can handle these funds increasingly yourselves following correct procedures, we see you as having a greater degree of ownership of this process than in the past, now that we all embarked on a single journey, a single process, which is intended to lead eventually to membership.”

04:17 what countries will benefit from this assistance

“They will all benefit from this instrument but there are different components to the instrument and there are some intended to help countries prepare for immediate evolution in the direction of membership, so those countries which are candidate, which for the time being means Croatia and the FYRO Macedonia, will have access to a wider range of facilities under this instrument including those which are meant to lead directly to the kind of parallel funds existing in the EU for members, so in fact the closer you get to membership, the broader the scope of the components under this new program that you will have access to.”

05:10 How does a country get access to more components?

“When you are still in a relatively early phase of transition and when you are still dealing with some basic constitutional issues about the nature of your state, its composition, the functioning of its institutions, it’s logical that we should mainly support the process of institution building, administrative reform and also good neighboring relations, cooperation with neighboring countries. Once those basics are in place, other subjects become more important preparing eventually for involvement in EU regional policies, agricultural policies, social policies and others. The access to different aspects of this fund follows the progress in the transition process of the countries.”

05:57 Culture of raspberries

07:03 Sheep farm

07:51 Vineyard in Slovenia

08:30 The process of implementing IPA

“In some countries, we still have the European Agency for Reconstruction (EAR) which is active in implementing our programs. This is the case e.g in Serbia or FYRO Macedonia, now as this instrument is phased in the Agency will be phased out, so that by the end of 2008, the Agency will cease to function, it was an agency for Reconstruction, I’m happy to say by then reconstruction will be very largely completed. We then go through the process where by first of all the European Union delegation in the countries concerned take responsibility for implementing these funds in the country. They then go through a process of training, mentoring, guiding the responsibilities of each country, so that they can take over in a decentralized way. So we go from the Agency which will be phased out, a role for the EU delegation which is a kind of transitional role to a situation which we call decentralized implementation, when the funds are implemented directly by the authorities of the countries concerned. This is how our structural funds work inside the EU itself. So we will be moving step by step towards a situation which is closer to that that prevails inside the EU and therefore when the countries are ready to assume this responsibility, we’ll actually allow them to prepare to assume the responsibilities that come with membership.”

10:22 Through which European institutions is this support provided?

“So, we are providing support through this new instrument but I’d also say through the European investment bank when it comes to loans, which are also being increased significantly during this period. By the way we expect to see loan guarantees from the EU budget under the EIB doubling during this period for the countries of the WB. So we are backing up the efforts of the countries themselves to prepare for eventual membership through the provision for grants under the new instrument of the EU and loans from the European Investment Bank.”


“We would like to see the countries in the region building on the experiences of the new member states and the candidate countries and building up their own capacity to handle these funds properly and to implement the programs. We’re ready to help with that, to share the experience we’ve had with new member states and the new member states themselves are ready to share their experience. But we do need to see before we can grant the status of decentralized implementation that the countries are really capable of sound financial management using these funds effectively and ensure the European taxpayer that their money will be well spent, I think that we are on the road towards that but still quite a bit progress needs to be made.”

11:49 Cutaways of the Slovak Mission to the EU in Brussels

12:00 Cutaways of Maros Sefcovic, ambassador of Slovakia to the EU

12:28 Interview with Maros Sefcovic on the previous financial instruments for pre accession

“We didn’t understand at the beginning how complicated the process is, we had to train the people, to beef up the number of the personnel because simply we can do it with the number of the people dealing with the funds at the beginning and it took us some time so I can say that actually last years we are still finishing with absorbing or spending pre accession aid, now we rang among number three-four in successful grade if I can say or in the percentage of the volume of the money absorbed among the new member states so it means that we are in the top club but nevertheless it took us a few years to finally fight through the mechanism to learn how to prepare the projects, how to deal with aid, how to install the control mechanism and therefore my suggestion would be at the beginning to agree upon the priorities and to agree that you need a good well qualified and properly trained staff.”

13:36 What are the results concretely in Slovakia?

“If you look at the cities in Slovakia for example you would see that they’ve gone through a very rapid way of modernization, the centers of all cities in Slovakia are very modern, very attractive, the tourists and the citizens like them a lot, you would see they’ve made quite a progress in spreading of internet, in improving the facilities for tourists, you’ll see very clear results of what could be done if there’s putting in place the good combination of the government priorities, EU spending, private initiative and of course municipal interest which is always very important.”

14:26 Cutaways of Bratislava

15:10 Sefcovic: advice to the candidate and potential candidates on how to use IPA

“I think that training in Brusselsand establishing of personal contacts with the colleagues from the Commission is very important. Of course be very careful with the execution of the projects and subsequent control because if this is not in place and later on it’s discovered that some of the projects were not executed properly, it leads to the slowing down, to more control and to lowering of the absorption capacity. So if I have to sum it up, pick up your priority, train your people, execute projects well and control how the process is going in regular periods of time.”

15:57 Cutaways of Dirk Meganck, director for financial assistance in European Commission DG Enlargement

16:21Interview with Dirk Meganck on how IPA is structured

“This is organized around so-called components. The first one is the so-called institution building component, which is the component to support to bring financial assistance to the candidate countries to build up their structures, to reinforce their administrative capacity, the public resources as well as soft investments in terms of twining, technical assistance, to train people in terms of what we call … investments in infrastructure. Then we have a second component, cross-boarder component to support cross-boarder operations, cross-boarder relations between potential and candidate countries with EU countries and secondly also very important for the WB continue support regional cooperation between the different WB countries which is very important for that region.

We have three components, the third component, three components which have the objective to prepare the candidate countries to be able to manage EU funds, the big volume of EU funds that they will receive when they become members.”

17:54 On the payment agencies

‘The countries should have an implementing agency or agencies, they can organize different implementing agencies for different sectors and that agency will be responsible not only for the payment but for the contracting and the payments. And the first phase is under control of the Commission and then when they have built up the necessary structures, they are fully autonomous, so the Commission doesn’t intervene anymore and it’s up to the beneficiary country to manage , of course we have exposed control etc.”

18:37 On the amount of money contained in IPA

“We have been able to manage to offer the candidate countries and the potential candidate countries the first year at least the same amount of money as they have received in the previous year, 2006. We’re starting with a relatively modest increase, 2008-2009, but then over time till 2013 a significant increase of money. So the envelop that we have is a significant volume of money where the beneficiary countries will have to invest a lot to spend the money because this money cannot be spent by the Commission alone in centralized management.”

19:22 Cutaways of border crossing, trucks passing through customs control (Croatia)

19:42 Construction of the new part of the Breganaborder crossing, financed by the EU

20:09 Roads in Croatia

20:28 Interview with Istvan Szent-Ivanyi, rapporteur on IPA in the European Parliament

“So far it was the case if a country cannot use the money which has been available for them, they could lose that, now the country has the opportunity to re-allocate from one component to another one, but if it’s unable to use the money none of the components, then another country can go for that. I hope very much that it could upgrade their efforts and upgrade the preparation in all potential and candidate countries. Therefore I think it’s a big step forward.”

21:05 On decentralization

“They should prepare and set up the institutions for decentralized implementation because that’s the basic thing in that regulation. It will be implemented in a different way than it has been so far: not in a centralized implementation decided by Brusselsor the EAR but between the delegation and the host country authorities: in Skopjeor in Zagrebor in Ankara.”

21:41What country has access to what component

Macedoniaand the candidate countries have free access for all five components. All the other potential candidate countries can have practically access only to the first and second and they can manage some projects under the first and second in third, fourth, fifth if they have a decentralized implementation, if they are prepared to manage but you don’t have that problem (Macedonia)”

22:08 Cutaways of Mr Szent-Ivanyi