EU takes firmer grip on Phare funding

Date: 06/03/1997

By Mark Turner

A RADICAL overhaul of the Union's assistance programme for central and eastern European countries (CEECs) will completely change the way the EU is preparing for enlargement.

Under plans to be discussed by the European Commission later this month, money spent under the Phare programme will be targeted far more closely on those areas where the CEECs have furthest to go along the road to membership.

EU experts will also set up more direct contacts with eastern governments, replacing their much-maligned tendency to do business via highly paid external consultants.

More importantly, where funds were previously allocated in response to requests from eastern political leaders, they will now be spent where the Commission feels they are most needed.

“The intention is to stop Phare being a demand-driven programme,” said one Commission official. “There is a tendency at the moment for every minister within a coalition government to ensure he gets funding for his particular interests.

“Since ministers' portfolios often overlap, they end up competing for funds for the same areas, resulting in a vast waste of resources. The new-style Phare will mark a dramatic revolution.

“The central and eastern European countries will have to accept the EU's opinion on where the money should go.”

The Commission has been steadily building a detailed picture of central and eastern European administrations and economies since last summer. Although it does not intend to publish its analysis (avis) of each of the ten CEEC applications until after the Intergovernmental Conference, officials are already quite clear where the major challenges lie.

Phare money will in future be aimed at areas like administrative reform, improving justice and home affairs structures, and large infrastructure projects.

The move marks the next stage in Phare's rapid evolution from emergency aid instrument to fully-fledged enlargement programme.

“In its short life, it has progressed through all the classical stages of development assistance: from exchange of know-how to infrastructure-building, support to central institutions, project financing and secondary loans,” said the official. “Never before have all these things been tried in such quick succession.”

But given the political pace set by governments following the collapse of the Soviet system, Phare has scarcely kept up.

Keen to ensure the newly-independent countries of central and eastern Europe did not slide back into Communism, EU leaders' first aim was to ease the immediate pain which followed the region's almost universal economic collapse.

This was followed by a growing commitment to the development of its market economies as recovery began and, eventually, bringing the CEECs into the EU's political structures.

The latest stage reflects a growing realisation in the West of just how great that task still is and the pressing need to target resources far more accurately.

Due to the lack of trained experts in the field, however, the EU has until now placed a heavy reliance on consultants. This has been unpopular with the recipient countries, given the tendency to send in staff with no public administration background.

Hoping to answer such criticisms, the Commission will aim to replace these where possible by direct contacts. But insiders have voiced doubts about this, given the lack of personnel in the East and the budget austerity being practised by western European administrations.

Central and eastern European diplomats claim to be positive about the proposals, but are waiting to see how they will be implemented.

“A concentration of Phare funds has seemed like a good idea ever since it was first discussed at the Copenhagen summit in 1993. On both sides there is a lot of bureaucracy and difficulties in using it to its full effect; hopefully this will go some way in helping that,” said a Polish official.