Financial assistance for fighting crime: the PHARE programme

5.4. Financial assistance for fighting crime: the PHARE programme

PHARE was started as a Community programme in 1989 and its initial aim was facilitating the transition to market economy in Poland and Hungary. It was however extended to the other CEE – associated, and later applicant – countries.⁴⁰ In the period between 1990 and 1994 the programme’s aim was assistance with economic transition and the main areas where the funds were utilised were: ‘private sector development and enterprise support; education, health, training and research;

infrastructure (energy, transport and telecommunications); environment and nuclear safety; agricultural restructuring; humanitarian and food aid; public institution and administrative reform; and social development and employment.’⁴¹ After the Essen EU Summit in 1994, the PHARE programme was transformed into a policy instrument for enlargement, and its main task was the preparation of the recipients

40 Some of the assistance for non-accession countries Albania, Bosnia and Herzegovina and the FYR of Macedonia was also financed by the PHARE budget. PHARE, for a time, became the world’s largest assistance programme. A. Pusca ed., European Union: Challenges and Promises of a New Enlargement. New York, NY, USA: International Debate Education Association, 2003, p. 33.

41 G. Pridham, Experimenting with Democracy: Regime Change in the Balkans. London, UK:

Routledge, 1999, p.156.

for EU membership.⁴² The support provided by the programme was in most cases technical assistance at governmental and ministerial level whereas the investment support was limited. The priority setting, programming, project planning and supervision of the implementation were all centrally controlled at the European Commission Headquarters in Brussels.⁴³

This arrangement was altered by the decisions of the Luxemburg Summit in December 1997 which stated that PHARE would become a key structural instrument (similar to the EU Cohesion Fund for member states) which would ‘focus on accession by setting two priority aims: the reinforcement of administrative and judicial capacity (about 30% of the overall amount) and investments related to the adoption and application of the acquis [i.e. the EU’s body of treaties, laws and practices] (about 70%).’⁴⁴ In 1998 PHARE was further re-adjusted via the so-called National Programmes for the Adoption of the Acquis (NPAA) in order to develop closer relations with the relevant ministries. This change was designed to make the assistance more applicant-focused and respond to the individual needs of each candidate country, which now had the opportunity to set their own policy agenda.

Nevertheless, the role of the EU in priority setting had not been altered in practice as the priorities identified by individual countries were directly linked to the need to comply with EU requirements.⁴⁵ The EU assistance was presented as ‘demand-driven’, but was in fact ‘accession-driven’ which put more emphasis on the role of the applicant country as a future member-state, rather than a state in its own right.⁴⁶ Linking the development agenda to membership also demanded priority be given to JHA policies as prescribed by the EU, i.e. changes of criminal law and increased law enforcement with a focus on fighting organised crime.⁴⁷

42 Ibid.

43 A. Bothorel, ‘The history and development of the PHARE programme’ in Overview of the PHARE Programme and the New Pre-Accession Funds, Proceedings of a seminar at the EU Information Centre in Budapest, 1999 [online] http://europa.eu.int/comm/enlargement/pas/PHARE/publist.htm accessed 30/07/2004.

44 G. Pridham, 1999, op.cit , p.157.

45 In these circumstances the applicant countries’ agenda was in fact an ‘accession agenda’ rather than a development and growth agenda.

46 A. Bothorel, op. cit.

47 This move to accession prioritisation was an additional complication of the CEE countries’

transition because of the multiplication of demands, and their various sources like the local electorate, the EU, other international institutions, the USA, etc. In some cases there were contradictions and mutual exclusion of some of those demands but the increasing politicisation of EU membership in the applicant countries led to increasing convergence of local and EU agendas. Local elites presented

The area of Justice and Home Affairs became a key area in PHARE after 1998. The new element in the programme was the so-called twinning strategy meant to

‘facilitate capacity building or institution building in the applicant countries through interaction with EU experts in a joint attempt at developing the structures and systems, human resources and management skills needed to implement the acquis’.⁴⁸ In 1998 around 30 percent of the PHARE budget was prescribed for institution building and the rest was for investment support, i.e. purchase and delivery of technical equipment.⁴⁹ Missions in the JHA area had already started in Hungary, the Czech Republic and Slovakia in 1997, and after 1998, they expanded in nine applicant countries from CEE including Bulgaria, Romania and the Baltic countries.

In 1998 25 out of 110 twinning projects amounting to €75 million, were in the area of JHA, and the costs for them amounted to €14 million, plus €6 million support from the Catch-Up Facility.⁵⁰ In total, for the period 1997-1999, the budget for projects on JHA ‘institution building’ in the applicant countries was approximately

€50 million, and the number of projects came to approximately 47.⁵¹ Most of the projects focused on border control, judicial institutions, police training and the fight against organised crime in that order of priority.⁵² The most active partners were

membership as panacea for the economic and social ills, not only because of increased investment but because of the normative power of the Union which was capable of bringing law and order – an idea promoted by the EU itself.

48 European Commission Enlargement Directorate General, ‘Twinning in Action’, October 2001 [online] http://europa.eu.int/comm/enlargement accessed 04/04/2004.

49 A. Bothorel, 1999, op.cit.

50 The PHARE Programme Annual Report 1998 [online]

http://europa.eu.int/comm/enlargement/pas/PHARE/ar98/index_ar98.htm accessed 30/07/2004. The Catch-Up Facility was an additional support programme for Romania, Slovakia, Latvia, Lithuania and Bulgaria, financing projects in areas where problems have been identified by the Commission’s Opinions on these countries (one of them being corruption). Ibid.

51 Different sources give different figures, therefore the numbers mentioned in the text must be considered approximate but they nevertheless demonstrate the increasing emphasis on JHA in the provision of financial assistance from the EU to its future members.

52 For the same period, 1998/99, out of 47 projects 18 were on strengthening of the borders and customs according to the Schengen requirements; 11 were on strengthening the independence and functioning of the judiciary; another 11 were on strengthening law enforcement/police and the rest on various issues such as law approximation/adoption. Fight against organised crime is included in 6 projects only – in the Czech Republic, Hungary, Romania and Slovenia. Composite Paper on the Commission Reports, October 13, 1999, Annex 4

[online] http://europa.eu.int/comm/enlargement/report_10_99/pdf/en/annex4_en.pdf accessed 04/04/2004.

Germany (18 projects), France (9 projects), Austria (6 projects), the UK and the Netherlands (5 projects each).⁵³

The number of projects in the JHA area in the following three years was 96, which in total made 144 projects for the period from 1997 to 2002. The JHA projects came second in number only to the area of Public Finance which had 162 projects.⁵⁴ Justice and Home Affairs was one of the multi-beneficiary PHARE programmes covering the fight against organised crime but issues, connected with a broader understanding of organised crime were addressed under other programmes such as the Catch-Up Facility (corruption, customs intelligence, the fight against drugs).

Furthermore, in 2001 the European Commission launched a new project on co-operation in criminal matters in seven of the candidate countries: Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia. The project leader was the United Kingdom, with France and Italy as consultants, and Austria, Belgium, Germany, Netherlands and Spain contributing expertise.⁵⁵ All the projects involved EU partners with very few exceptions where the projects are managed exclusively by the applicant state. There was a disproportional involvement of some member states, and especially the UK, compared to other member state partners. Thus the PHARE project displayed a peculiar ‘division of labour’ among the EU member states where experts from the UK, for example, were particularly active in the measures against organised crime with regards to police training and identification of necessary technical equipment, etc. Developing law enforcement/policing and use of the latest

53 There was a geographical division of countries of ‘interest’ for example the Scandinavian member states are most active in the Baltic republics, Germany had interests in Central European candidates, etc. As the JHA is a territorial policy area, such regional cooperation was necessary. However, in cases such as transfer of know-how and expertise such considerations were not necessary but the EU did encourage ‘twinning’, seen as more important than the actual quality of assistance. Thus, a Joint Action adopted by the Council for establishing a mechanism for collective evaluation of the JHA acquis implementation by the applicants allows for one or more member states to ‘give particular assistance in preparing and maintaining for a particular candidate comprehensive reports which would form the basis of evaluation’, Joint Action OC 98/429/JHA.

54 European Commission, Towards The Enlarged Union, Strategy Paper and Report of the European Commission on the Progress Towards Accession by Each of the Candidate Countries, Brussels, 2002 [online] http://europa.eu.int/comm/enlargement/ accessed 04/04/2004; Enlargement Strategy Paper Report on progress towards accession by each of the candidate countries [online]

http://europe.eu.int/comm/enlargement/report_11_00/pdf/strat_en.pdf accessed 04/04/2004. There is no detailed information on the type of the projects in the Strategy Papers (former Composite Paper) after 1998. Only the one published in 1998 (see note 19) provides such information. The subsequent reports give only the number of projects.

55 Enlargement Weekly – 22 March 2001 [online]

http://europe.eu.int/comm/enlargement/docs/newsletter/weekly_190301.htm accessed 16/04/2004.

technology in the fight against crime is a priority of the UK’s domestic criminal justice policy,⁵⁶ which it had successfully exported to EU anti-crime policy.⁵⁷

The external financial regulations of the Union stipulate the rules for granting funds under PHARE and other programmes.⁵⁸ The PHARE projects were to be carried out by natural or legal entities from the public or private sphere, after open or restricted tenders. Those entities have to be established and conduct their business in an EU member state or in one of the programmes’ beneficiary countries but there was no specific requirement regarding ownership, i.e. they could still be EU-based company affiliates. The individual experts to be involved in a PHARE project must also be nationals of a member state or PHARE country. The same rule applied to supplies, which had to originate in the EU or in PHARE countries. Exceptions were rare and these rules were even further tightened.⁵⁹ The provision of expertise and supplies has been predominantly, if not exclusively, from the EU countries. Since the accession requirements oblige the applicant countries to comply with EU standards, these standards would subsequently require the technical supplies and expertise from EU countries, even in areas where no clear EU standards exist, such as policing.

The PHARE aid programme was in practice funding the transfer of expertise and technical products from the Union to the applicant countries. The fact that there was no requirement of ownership of the companies involved in the projects would mean that even if it seemed that it was a local company from a PHARE country, it might well not be. Measures to increase transparency of the tenders and contracts have been undertaken but they did not substantially change the EU driven ‘demand – supply’

56 See for example the List of UK Presidency seminars and special events, where half of the events (4 out of 8) focus on technology in the fight against crime (originating from the EU and North America) at http://www.homeoffice.gov.uk/euro/relat.htm accessed 25 March 2004.

57 The involvement of the UK in reforming the justice and police sectors in the applicant countries is a result of a very active British intelligence sector. This activity has even led to accusations against the UK for using its intelligence services’ assets for industrial espionage on European countries, in collaboration with American intelligence, which have been covering this activity with its fighting crime objectives, amongst other things. CORDIS News, Liikanden responds to Echelon spy network claims, 4 April 2003. Although the case was not proven, such suspicions amongst EU member states have led to problems over the transfer of data, and general distrust among EU members.

58 EU Financial Regulation, Title IX ‘Special Provisions applicable to External Aid’; PHARE Regulation - Council Regulation 3906/89 and subsequent amendments.

59 F. O’Shaughnessy, ‘PHARE tendering procedures and sources of information on PHARE’ in Overview of the PHARE Programme and the New Pre-Accession Funds, Proceedings of a seminar at the EU Information Centre in Budapest, 1999.

[online] http://europa.eu.int/comm/enlargement/pas/PHARE/publist.htm accessed 30/07/2004.

circle. As a result, even projects that were prepared by the PHARE countries set their objectives according to EU requirements and activities that would receive funding by the Union instead of prioritising their own agenda, or alternative and/or home-based providers.⁶⁰ Assets that did not comply with PHARE requirements are supposed to be provided by the applicant country and only if that country could afford funding from the national budget. As a result of these arrangements, the JHA projects under PHARE were often tailored to fit what a given institution could provide as expertise or equipment, with less regard to the real crime situation in the recipient country. The purchase of EU-made equipment has been a controversial strategy as well, since that created a technological dependence that had to be funded by national budgets in the future.

It needs to be stressed that in itself, the size of the financial aid channelled through PHARE was not significant compared to the overall budget of the EU, and the budgets of the applicant countries.⁶¹ However, the amount spent on JHA within PHARE grew from the start of the programme, which re-enforced the clear signs to the applicants of how politically significant this area would be for their future accession. The requirements which the PHARE programme was designed to meet became a priority in the applicants’ internal policies, and this was valid for the area of crime fighting and all associated policies such as border control, immigration and visa policies, etc. The relevant authorities in the applicant countries established special bodies and departments within ministries in order to administer the financial aid and those bodies had substantial influence within the government structures despite being funded by external bodies. The PHARE-funded transfer of expertise and influence on the agenda-setting of the applicants has led to the new anti-crime policies in the applicant countries being indirectly influenced by the EU requirements and the activities financed by these projects.

60 The design of those projects, on the other hand, often involved firms and experts from the EU. The rule (introduced the 1997) that firms that have been engaged in the project preparation cannot participate in the tender does not affect the possibility of those firms being linked, for example as previous partners, with companies bidding for the project.

61 The whole pre-accession aid forms around 1.7% of the EU budget which collects around 1% of its member states GNP. See for example T. Wynn, ‘The EU Budget - Public Perception & Fact. The European Union - how much does it cost, where does the money go and why is it criticised so much?’, Committee on Budgets of the European Parliament

[online] http://www.terrywynn.com/Budget/EU%20Budget%20-%20Perception%20&%20Fact.htm accessed 21/04/2009.