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Enlargement

4. Financial Assistance

The EU supports financially the reform process and the overall development of the Western Balkans and Turkey from the Instrument for Pre-Accession Assistance (IPA), from EIB loans, and by means of better coordination with the International Financial Institutions (IFIs), and other donors.

Systematic pre-accession financial aid is provided to candidate and potential candidate countries in order to help them establish necessary political, economic and institutional reforms in line with EU standards.

The financial assistance aims to support political reform, in particular institution building, strengthening the rule of law, human rights, protection of minorities and the development of civil society i.e.,

• supporting local civic initiatives;
• visitor programmes to EU institutions for groups with influence over decision making and society, such as journalists, young politicians, trade union leaders, teachers etc;
• activities carried out in partnership between civil society organisations in the beneficiary countries and the EU leading to a transfer of knowledge and networks.

A functioning market economy is a prerequisite to joining the EU. A country must also be able to cope with competitive pressure and market forces within the EU. Assistance is therefore provided to support economic reform, leading to economic growth and better employment prospects. Assistance in the adoption of the EU’s legal framework improves quality of life as candidate and potential candidates align to and gradually adopt EU rules, for example, concerning protection of the environment and the fight against crime, drugs and illegal immigration. Furthermore, pre-accession aid encourages regional co-operation and contributes to sustainable development and poverty reduction.

EU funding aims at medium to long-term changes in society and its economy as a whole. The pace of reform and that of the accession process go hand in hand.

Instrument for Pre-accession Assistance (IPA)

In 2007, the Instrument for pre-accession assistance (IPA) was introduced as a single, unified tool designed to deliver focussed support to beneficiary countries. The total pre-accession funding for the current financial framework 2007-2013 is set to EUR 11.5 billion.

It replaced previous pre-accession instruments (Phare, ISPA, SAPARD and the former instruments for Turkey), and CARDS which covered assistance to the Western Balkans.

IPA offers support through its five components:

• Transition Assistance and Institution Building
• Cross-Border Cooperation (CBC)
• Regional Development
• Human Resources Development
• Rural Development

The last three components are reserved to candidate countries (currently Croatia, the former Yugoslav Republic of Macedonia and Turkey), as they aim to prepare for the management of structural and cohesion funds and rural development after accession. However, the other Western Balkan countries can benefit from similar measures under the first component.

Current IPA support is focused on the priorities identified in the 2007 Commission enlargement strategy paper: state-building, rule of law, reconciliation, administrative and judicial reform, the fight against corruption and organised crime, as well as strengthening support for economic reforms and civil society development. IPA attaches particular importance to the beneficiary countries' ownership of implementation.

Cross-border cooperation among the beneficiary countries, as well as between them and the neighbouring EU member states facilitates people-to-people contacts and joint activities by the border regions, and contributes to good neighbourly relations and reconciliation. Support for such cooperation has been increased.