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Economic and Social Cohesion

There are two priorities of the Phare programme. The first priority is Institution Building 

The second priority of the Phare programme is to support Economic and Social Cohesion (ESC) in the candidate countries. Support for investment in ESC takes the form of measures similar to those supported in Member States through the European Regional Development Fund (ERDF) and the European Social Fund (ESF). In this respect Phare promotes the functioning of the market economy and helps build the capacity to cope with competitive pressure and market forces within the EU, which is key to fulfilling the obligations of membership. Considerable investment is required to ensure that the enterprises and infrastructure in candidate countries comply with Community standards, as well as to establish an appropriate institutional and regulatory context. In order to avoid over-lapping with the ISPA and SAPARD programmes, Phare does not support large-scale investment projects in the areas of transport, environment or agriculture, except for regulatory infrastructure that is not eligible for ISPA or SAPARD.

ESC is a complex objective, and can only be fulfilled if each country has a coherent and integrated overall strategy that takes into account the need both to promote competitiveness and to reduce internal disparities. Therefore, each country has been required to draw up a National Development Plan (NDP) that maps out its strategy, priorities and programmes for promoting economic and social cohesion on its national territory. This Plan constitutes the key steering document for programming Phare ESC measures and can be updated as candidate countries’ own strategies on ESC develop. The intention is that the NDP should continue to evolve towards the development plan and programming documents used inside the Union in the Structural Funds Objective 1 framework.

In addition to the national authorities, the regional and local authorities of the new Member States and candidate countries are required to be increasingly involved in the process of programming and implementing ESC actions. This issue is particularly relevant in the new Member States that are participating in EU Regional Policy & Agricultural programmes since May 2004. Phare Institution Building support is made available to ensure that these three levels can play their intended role, in line with each Country’s institutional arrangements. Relevant non-governmental actors with experience in the field of economic and social development should also be involved in this process.