Preparation for ESF in Candidate Countries

The Instrument for Pre-Accession Assistance (IPA) helps potential candidate and candidate countries in their quest to join the EU. It improves standards of living by funding projects that fight poverty, bolster education systems, build infrastructure, and develop disadvantaged areas. In addition, implementation of IPA encourages countries to augment transparency, take anti-corruption measures, and bolster policy effectiveness. Overall, IPA provides financial assistance for the following five policy areas, or ‘components’.

I. Transition Assistance and Institution Building

II. Cross-Border Cooperation

III. Regional Development

IV. Human Resources Development

V. Rural Development

The ultimate aim of IPA funding is to help countries meet the criteria for EU membership (known as the Copenhagen Criteria) and to encourage progressive adoption of the acquis communautaire. Overall, the total pre-accession funding for all five IPA components, from 2007 to 2013, amounts to EUR 11.5 billion.

IPA is currently the only pre-accession instrument and its legal basis is Council Regulation (EC) No. 1085/2006, adopted on 17 July 2006. More specific information about the rules for implementing IPA can be found in Commission Regulation 718/2007, which was passed on 12 June 2007. For more information about IPA, please consult DG Enlargement's website. 

This IPA policy area prepares candidate countries for the programming, management and implementation of the ESF and other EU Structural Funds. In line with this goal, it provides funds to boost the quality of human resources within these countries. Based on the European Employment Strategy, it asks them to focus their IPA-financed projects around three major priorities:

1. Attracting and retaining more people in employment;
2. Improving the adaptability and flexibility of workers and enterprises through education; and
3. Strengthening social inclusion through the integration of disadvantaged people into the workforce.

In addition to these three broad goals, all projects funded under IPA Component IV should also contribute to the following horizontal purposes:

• Strengthening economic and social cohesion;
• Promoting partnerships between public bodies, social partners, NGOs and the private sector; and
• Bolstering the administrative abilities of institutions and the efficiency of public services.

The following pie chart shows the distribution of funding provided under IPA Component IV for employment, education, social inclusion, and technical assistance. Overall, EUR 250,914,151 has been allocated for Human Resources Development under IPA for the 2007-2009 period. Under a co-financing arrangement, EUR 37,637,151 (or 15% of the total amount) has been provided by national governments, while the remaining EUR 213,277,000 EUR is provided by the European Union.

Distribution of IPA Component IV funding, per priority in %, 2007-2009

For more information on the IPA Human Resources Development component in candidate countries, please see the following links: Croatia, The former Yugoslav Republic of Macedonia, Turkey.

Preparation to receive IPA funding requires two basic steps:

1. Programming, or the development of a strategy for assistance, which is based on the needs of the beneficiary country and the amount of money allocated by the European Commission. Essentially, this step decides how much funding is to be allocated to each policy area.
2. Institution-building, which involves the setting up, auditing, and independent accreditation of institutions that are responsible for managing IPA funds.

Budgetary decisions - IPA programming begins with the Multi-Annual Indicative Financial Framework (MIFF). The MIFF describes how much funding the Community is able to contribute, for each country and for each of the five IPA components. The final amounts are determined by the EU Member States, on the basis of factors such as the size, demographics, and the scale of necessary reforms in each potential candidate and candidate country. The table below shows a summary of approximate financial allocations, only for the candidate countries, in EUR millions. For a full chart, which includes the potential candidate countries, see DG Enlargement's website.

Allocation of funds – Based on the financial allocations set out in the MIFF, and the political priorities identified by the Commission and national governments, multi-annual indicative planning documents (MIPD) are prepared for each country. The MIPDs set out the specific policy objectives for pre-accession aid for a three-year period, and identify how financial allocations are going to be distributed among the five IPA components. The process of developing the MIPDs involves substantial collaboration between the EU and candidate/potential candidate countries. The Commission identifies policy areas where a particular country needs to harmonise with EU norms, while the countries themselves are responsible for developing specific measures to address the problems.

Preparing to receive IPA funds – Once the budgets and policy priorities have been decided, each country participating in IPA is required to establish institutional structures for the reception and management of funds. Each beneficiary country must establish a national IPA coordinator (NIPAC) who will be responsible for the overall coordination of assistance under IPA, a national fund for the reception of IPA finances, and a national authorising officer, who serves as a financial manager and reports any irregularities. All of these structures are accredited and monitored by the Commission. They are also regularly checked by national governments and independent auditors. This is necessary to ensure the efficient and legal use of financial aid.

Distributing IPA finances – On the basis of agreed upon Operational Programmes, IPA funding is managed and distributed to projects by a specific government ministry that is responsible for each IPA component (the ‘Operating Structure’). For example, the Ministry of Economy, Labour and Entrepreneurship (MELE) in Croatia is the Operating Structure (OS) for the Human Resources Development component in that country. This ministry is responsible for the disbursement of funds to specific projects, proposed by government agencies, local/regional authorities and NGOs. Projects to be funded are chosen according to EU rules, on the basis of calls for proposals and public tenders. Direct awards may also be conferred in specific cases. For a more detailed description of all IPA institutional structures, see the IPA Glossary.

On what basis are funds for Human Resources Development allocated?

Programming of IPA Component IV assistance begins with the drafting of a Strategic Coherence Framework. This framework serves as a general reference point for programming Component IV, featuring an analysis of human resources problems in the country, an assessment of opportunities for assistance, and a breakdown of financial allocations. Based on the Strategic Coherence Framework, assistance is specifically implemented through multi-annual Human Resources Development Operational Programmes (HRDOPs). These programmes are drafted by the beneficiary country, in close consultation with the Commission, relevant NGOs, civil society representatives and social partners. The Operational Programme (OP) contains an analysis of the specific strengths, weaknesses, opportunities, and threats in the country, as regards employment, human capital development, and social inclusion. It also provides information on the following items:

• Strategic goals of assistance (priority axes);
• Measures to be taken to reach each goal;
• Amount of funding to be allocated for each measure; and
• Indicators for measuring progress on policy implementation.

Overall, the HRDOP sets out the basis for funding particular measures, states clearly which types of projects are to be funded, and sets out the criteria for selecting them.

Which institutional structures must be set up for the reception of funds under Component IV?

The diagram below gives a description of the institutional structures required for the implementation of IPA Component IV. The most important institution is the "Operating Structure" (OS), which is found within the government ministry responsible for managing the HRD policy area of IPA. Its main task is to manage and implement the Operational Programme in accordance with the principles of sound financial management. The Operating Structure is accredited, and its finances are monitored by the certifying authorities (in red), together with the audit authority.

The national IPA coordinator oversees the Operating Structure. He or she appoints a strategic coordinator (SC) who is responsible for the overall management of all financial assistance in the HRD component. The Strategic Coordinator is always an official within the designated Operating Structure. Together with other responsible officials within that ministry, the Strategic Coordinator coordinates the drafting of the Strategic Coherence Framework and the HRDOP. IPA funds for Component IV are received in the national fund and then transferred to the Operating Structure for eventual distribution to beneficiaries.

Once programming and the establishment of institutional structures have been completed, the Operating Structure advertises a call for proposals and public tenders. Government bodies and NGOs can then submit their proposed projects. Selected projects will be carried out and IPA funds will be used to reimburse their costs, together with a smaller amount of funding from the national governments, at a co-financing rate of up to 85%. The Operating Structure also monitors project implementation and use of funds, together with independent auditors and the Commission.