February 2002
Juraj Zamkovsky


According to the ´Accession Partnership´ document the stability of institutions guaranteeing democracy and the rule of law are listed as the first conditions for the accession of any candidate country. In order to ensure implementation of these conditions, the EU has provided Slovakia hundreds of millions of Euros in non-repayable assistance. The official aims of government agencies, however, are too often in sharp conflict with real political experience and the financial instruments reserved for their implementation - in this instance a part of funds for pre-accession assistance - may even work against the precise thing they intended to promote. Money assigned for the development of democracy can thus be used to construct institutions which are essentially undemocratic and non-transparent, directing further finances not on the basis of overall social priorities, but on the basis of the political inclinations of the limited group of people in power.

The growing suspicion of the systematic misuse of EU assistance for Slovakia exploded into an international scandal at the end of March 2001. Up to that point, the non-governmental organisations (NGOs) had unsuccessfully attempted to attract the attention of representatives of the Slovak Government and Brussels to the non-transparent system of management of EU pre-accession assistance, which was creating fertile ground for abuse. The authorities took almost no notice of their incentive. Their attention was only drawn by the publication of important documents from the wife of the Director of the Department of Foreign Assistance of the Slovak Republic Government Office, Roland Toth - a key figure in the system of management of the EU funds on the Slovak side - which confirmed many previous indications of abuses and corruption. A delegation of the Committee on Budgetary Control of European Parliament led by Herbert Bosch which came to Slovakia in June 2001 to monitor the implementation of EU programs and control systems stated that „Early warnings had not been taken seriously, investigations started too late and initially the impression was given that there was a lack of will to investigate the case in depth“. [1] There is no doubt that without a favourable environment in Bratislava and Brussels, which lacked effective control mechanisms for asserting openness and for preventing corruption, it would not have been possible to construct such a closed and durable system for manipulating EU pre-accession assistance as emerged in Slovakia. Since March 2001, official audits, media and NGOs revealed a number of shocking findings which generated pressure for changes on both EU and Slovak sides of aid (mostly PHARE) management. Unfortunately, despite the fact that Brussels and Bratislava announced political closure of the ´Toth case´, the adopted measures are far from being satisfactory and should be considered only as a first step towards healing the whole system. PHARE Slovakia has been utilising aid from PHARE funds since the split of Czech and Slovak Federal Republic in 1993. By the end of 2001, a total of €440.3 million had been provided to Slovakia, while more than half of this sum was received between 1999 and 2001. In 2000, after the signing of Agenda 2000, two priority areas were specified for the PHARE Programme: building institutions capable of guaranteeing the stability of the country after accession (30 %) and investment into the infrastructure necessary for ensuring conformity with EU standards (70 %). According to Friends of the Earth Slovakia (FoE-S) a number of cases confirm the fact that „pre-accession assistance is approached in Slovakia mostly as an opportunity to obtain substantial funding to settle current problems in places where the political elite cooperates with the managers of aid programmes, while completely ignoring the main political purpose of such programmes - to enhance the ability of the country to effectively administer public funds in a democratic way.“ [2] Among the most notable deficiencies allowing abuse and manipulation of decision-making regarding PHARE programmes, FoE-S listed the following: Alarming state of professional capabilities at the Slovak and EU institutions One of the factors that blocks reforms on one hand and on the other hand eliminates the direct responsibility of officials is the system of recycling bureaucrats within the public administration. This is not the sole domain of the EC, but is also practised to a great extent in Slovakia. Those who failed to fulfil their duties or were dismissed from their posts due to irregularities or even abuses were often immediately employed at another agency, often participating in making decisions concerning a substantially larger amount of EU funds than before. In Slovakia, there is no available mechanism or standard for assessing the quality of work of the staff involved in pre-accession assistance and a long-term and consistent strategy for building professional capacities (e.g. through training) is missing as well. In addition, there is the risk that know-how may be stripped from the institutions administering the EU aid by their officials who were forced to leave due to the scandal mentioned above or those who will most likely leave due to gradually decreasing salaries. It is possible that these people, trained from the EU funds, used their public service to build private monopolies which will provide services for public agencies in the future, once again using EU funds. Improper institutional framework Mismanagement of pre-accession aid was, however, more the result of an institutionalised system than merely the result of inadequate personnel. Investigations of the Slovak Supreme Audit Office, unpublished EC reports and NGO analysis repeatedly signalled a poor administrative structure which was chaotic in regard to competencies, enabling the interconnection of competencies that were mutually incompatible or which allowed overlapping authorities. For example, the Central Finance and Contracting Unit (CFCU), a key institution for the financial management of PHARE projects was established in 1998 to strengthen the institutional capacity of the Slovak Government in order to effectively implement the targets of PHARE. The EU provided €1.1 million for this purpose, and almost 100 % of the CFCU budget was covered by PHARE funds. Salaries of the CFCU experts reached up to €1,900 monthly, which was well above the Slovak average and more than the gross monthly income of a member of the government. It was expected that the CFCU would prepare the conditions for the assumption of its tasks by the relevant governmental institutions when EU resources for this unit would not be available and the competencies of the CFCU would be transferred to other state institutions. The CFCU, however, did not allocate adequate funds to train employees of the other agencies and it failed in meeting this strategic goal. It turned into an isolated and untransparent institution. This is a serious problem because PHARE contributions to the CFCU over three years (starting in 2001), fall to 60 %, 30 %, and 0 %. Thus, after Slovakia's accession to the EU, when the competencies of the CFCU should integrate into the existing government structures, Slovakia will not have the personnel or institutions ready to administer structural funds. It is then hard to expect an increase in the system's efficiency. Moreover, the CFCU (responsible for implementation [3]) was subordinated directly to the Department of Foreign Assistance (responsible for programming [4]), which, together with competencies being exceeded and a lack of information for regions and government departments, created conditions enabling the manipulation of PHARE finances to a significant extent. [5] On the other hand, the inaccurate delimitation of the powers and duties of key officials on the Slovak side resulted in a high concentration of competencies under R. Toth, the Executive National Aid Coordinator and the Director of the Department of Foreign Assistance. Weak monitoring and no supervision The system of management of EU assistance in Slovakia lacked monitoring for quality-level and was limited to the quantitative evaluation of projects. The significantly larger structural funds which will be available after Slovakia's accession to the EU, however, require a system which is incomparably more sophisticated with monitoring targeted at quality control. Instead of building a durable monitoring system compatible with the country´s future needs from the very beginning, the EC invested a lot of money into a system which will soon be unusable. Lack of monitoring and supervision by the EC Delegation in Bratislava and by the Slovak authorities determined the culture of decision-making to a significant extent; it ensured critical control over the PHARE funds in Slovakia to a limited group of people. As a result, instead of being a steady wall against abuses of foreign aid, the system of management of PHARE funds even encouraged their manipulation. For example, the €500,000 sewage treatment facility at Zohor, was already debatable at the project level. This facility was not even completed according to the terms of reference. Its actual capacity after completion in September 1999 only reached one-quarter of its projected capacity, despite the fact that it was supposed to serve a village with less than 4,000 inhabitants. Two years after the facility was set into operation, about 60 % of its capacity is now utilised, although, according to local residents, it is unlikely that all households will be connected to it due to a lack of funds for the construction of a municipal sewage system. Additionally, a new housing estate is planned for the village in the long term; in which case, the facility´s capacity will be insufficient. The facility itself is astonishing in its illogical structure. Firstly, unnecessarily expensive building materials were used for the facility´s construction although significantly cheaper alternatives were available. Secondly, these expensive materials are completely inoperative, and are even fitted in a detrimental manner (for example, hardly any of the special double-glazed windows in the operational section can be opened, thus retaining a permanently high level of humidity in the building, which leads to the rapid destruction of wooden panelling). The Delegation of the EC registered this project as unsatisfactory. [6] According to the Chairman of the Slovak Supreme Audit Office (SAO), Jozef Stahl, his institution did not have the authority until February 2001 to oversee the utilisation of foreign funds. As soon as the SAO was given this competence, it tried to use it in practice, only to meet with resistance from the Government Office. According to Stahl, at the beginning of 2000, the Government Office knowingly misinformed the EC by stating that no independent audit office existed in Slovakia, although the SAO was established in 1993. Stahl was also surprised that the EC showed no interest in knowing who supervised the efficiency of the utilisation of its funds in Slovakia, or how this was carried out. [7] Absence of clear rules, non-transparency and low public participation The absence of unambiguous, binding and enforceable rules regulating both the preparation for basic strategic documents requested by the EC for using pre-accession assistance and the PHARE programming and implementation was closely linked to issues such as duties and responsibilities of officials in these processes, for which no legal framework was established. Therefore, the whole project cycle provided the ground for the selective directing of funds by those who controlled the system. The absence of clear rules at the Department of Foreign Assistance headed by Roland Toth was also affirmed by an internal audit at the Government Office as early as summer 2000. [8] Serious findings of this audit were kept confidential and the Slovak Government did not inform the EC about them until June 2001. The preparation of the National Regional Development Plan and sectoral and regional operational plans was paralysed by the ever-changing rules, and the incompetence of the official apparatus, supplied with chaotic and often contradictory instructions from the EC. This reflected in the resulting quality of the documents, which were supposed to become a kind of filter for the future selection of the projects and naturally, in delays in their completion. One of the major reasons for chaos in PHARE programming was selective transfer of information between Bratislava and Brussels and provision of incomplete or late information about decision-making procedures, deadlines and grant conditions for potential beneficiaries and public. [9] This opened up the possibility for few key Slovak and EC officials to arbitrarily decide as to which projects would be submitted for approval, and which would not. The projects were allegedly often prepared by a small circle of applicants who were well informed in advance, and who were the only people able to meet the deadlines and the minimum demands on the quality of projects. Chaos, as an organized process in PHARE programming, was pointed out by 16 NGOs in their letter to Prime Minister Mikulas Dzurinda as early as August 1999. NGOs stated that „the turbid waters of the rapid process increase the risk of nepotism and the corrupt misuse of EU assistance.“ [10] Media also published information about frequent manipulation of the tender process, corruption behind the selection of PHARE funded experts and consulting companies, and conflicting interests of officials involved in both programming and implementation. Maria Kadlecikova, Vice Premier for European Integration, who replaced Pavol Hamzik after his dismissal from this post in May 2001, stated that the scandal around use of EU funds in Slovakia involved „nepotism, conflicts of interests, influencing and especially non-transparency“. [11] However, it was impossible to prove 90 % of these allegations due to missing or even destroyed documentation, she added. The Slovak legislation did not provide effective enforceable tools to prevent the misuse of authority, conflict of interests (with the exception of high-level state officials) and the manipulation of public funds. A part of the problem was undoubtedly the absence of a civil service act in Slovakia (it was passed in Parliament in July 2001 and will enter into force in April 2002) and effective regulation of the financial control of the public institutions, including pre-accession funds. For example, a part of state employees undertake to refrain from business activities, for which they receive a 25 % supplement to their wages; however, supervision of this undertaking was almost non-existent. It is expected that for the large majority of the problems connected to the mismanagement of the PHARE funds up to March 2001 it will not be possible to attribute criminal responsibility to specific people. A starting over at the late phase of PHARE The ´Toth case´ was sparked on 12th March 2001 by a letter with over 70 supplemental pages from Toth's wife to Prime Minister Dzurinda, in which she called attention to the widespread, coordinated misappropriation of funds from the PHARE programme and the misuse of authority by her husband and his team. A few days later, Toth was dismissed from his function as Director of the Department of Foreign Assistance of the Slovak Republic Government Office and Executive National Aid Coordinator. This provoked a mass reaction in the media and a temporary freeze of the current tenders and contracts for Slovakia by the EC. Subsequently, Friends of the Earth-Slovakia, Slovak Prosecutor-General, the police, the European Anti-Fraud Office (OLAF) and later also the Slovak Supreme Audit Office (SAO) initiated separate investigations. Due to powerful political and public pressure, Pavol Hamzik was dismissed from the post of Deputy Prime Minister for European Integration. In June, a mission of Budgetary Control Committee of the European Parliament (EP) visited Slovakia. Its final resolution presented at the EP stated that „the Toth case spotlighted a whole series of structural shortcomings in the system, which currently make it difficult, if not impossible, to exercise effective control over the use of EU funds in Slovakia and public expenditure in general.“ [12] In October, the same committee conditioned the release of €15 million of 2001 pre-accession aid allocated for Slovakia by submission of final reports by OLAF and SAO. Four weeks later, the Slovak Vice Premier for Integration Maria Kadlecikova announced „revolutionary changes at the Office of Government“ and a set of measures to improve the financial management of pre-accession funds was submitted to the EC. In the meantime, several institutional reforms took place. For example, programming for PHARE CBC was transferred from the Office of Government to the Ministry of Construction and Regional Development (August 2001) and, most importantly the position of the Executive National Aid Coordinator was cancelled (December 2001). The web sites related to pre-accession aid were significantly improved and a coordination directive on EU aid was adopted. The approved €500,000 project for the Stupava motorway junction was cancelled. Walter Rochel, a head of the EC Delegation in Bratislava ended his mission in Slovakia earlier than expected, in December 2001. However, the above mentioned steps should have been taken at least four years ago, say Friends of the Earth, and must not be considered a satisfactory solution. The key question is to ensure that EU taxpayers money will comply both with long-term priorities of Slovakia and the EU and criteria of sustainability. ISPA Instrument for Structural Policies for Pre-Accession (ISPA), is the EU´s financial instrument to speed up compliance in the ten CEE candidate countries with the EU legislation for the transport and environment sectors (in a ratio of 1:1) from 2000 to 2006. ISPA can be used to finance infrastructure projects in the public sector with a minimum budget of €5 million, while at least 25 % of the funds must be secured by the applicant for assistance from other sources. The framework for project identification and a set of criteria for project selection and approval is provided by the national ISPA strategies for both sectors. These strategies should concentrate on the investment planning and should consider sectoral and geographical priorities as well as economic effectiveness. Environmental sector Slovakia failed in the timely preparation of both strategies and structures for the effective use of ISPA funds. According to Slovak NGOs the process of developing the National ISPA strategy for environment was not transparent and lacked public participation. The document did not undergo an environmental impact assessment and should be amended. [13] This is one of the reasons why the portfolio of projects within this sector entirely consists of simple, end of the pipe solutions for environmental problems (sewage treatment plants) rather than projects focussing on the prevention of the problems. In 1999, Slovakia submitted six environmental projects to Brussels but none of them was accepted because of their low quality. Moreover, Slovakia was urged to complete its National ISPA strategy for environment. In late 2000, the first set of investment projects were approved by the ISPA Management Committee, but still without an approved strategy. [14] The projects included three municipal wastewater treatment plants. Slovakia is the only candidate country which failed to utilise the available funds from the ISPA programme in 2000 earmarked for the country, and this occurred despite exceptions enabling a disproportionate distribution of fund utilisation (27 % for environmental projects, and 73 % for a project in the area of transport). [15] The unspent €4 million was provided for Slovenia. According to Carsten Rasmussen, ISPA desk officer at DG Regio, the low quality of the submitted projects may cause Slovakia to lose an additional € 20 million in 2002. The staffing and technical equipment of both the programming and implementation units at the Ministry of Environment is insufficient. Low salaries result in frequent fluctuation of the staff and prevent the building of capacities for effective use of the much bigger structural funds which will substitute ISPA after accession. The selection process is not transparent and lacks clear rules. Until recently, there was no public information system and an extremely weak control and monitoring system on both the Slovak and the EU sides. Such an environment encouraged irregularities and perhaps even corruption. In spring 2001, for example, media gave information concerning the active participation of Roland Toth, former Executive National Aid Coordinator (responsible for PHARE programming) and at the same time Director of Department of Foreign Assistance (direct superior to CFCU, central implementation agency) in the activities of the Bioclar company, engaged in the construction of ISPA-funded sewage treatment plants. [16] But even now, a few months after the government announced strict measures to combat corruption, the situation does not seem solved. „We see certain political background in decision-making“, C. Rasmussen added in early 2002. [17] In 2001 six projects received technical assistance (with approximately €180,000 for each) to be technically finalised and eligible for submission to the ISPA Management Committee. One of them was project called ´Protection of drinking water from Water Dam Starina´. WOLF Forest Protection Association, an NGOs active in forest and water protection in the region strongly opposed the project from the very beginning and developed comprehensive arguments why it should not be supported. According to WOLF, the project would only increase the danger to the Starina reservoir for drinking water while contributing to other environmental damages in the region as well. Its voice was ignored by both the EC and Slovak Ministry of Environment. Only after wasting ISPA funds for technical assistance, growing NGO protests and the personal site visits of C. Rasmussen in the region in late 2001, the EC expressed objections concerning the project and the Ministry of Environment stopped any further works on it in December 2001. CEPA, a Slovak member organization of CEE Bankwatch Network and Friends of the Earth draws attention to another issue: the danger of channelling ISPA funds in favour of private companies. Currently, ISPA provides funds for new sewage treatment systems in the process of transforming water and sewage facilities. If private multinational companies will succeed in their long-term efforts to privatize services of the water sector after the transfer of ownership from state to municipalities then ISPA-funded investments will serve mostly private interests. On the other hand, there are attempts to design ISPA and PHARE projects according to the needs of major regional polluters who have strong links to the political elite in the region. The success of such efforts represents not only a direct violation of the ´poluter pays´ principle, one of the elements of EU´s environmental policy, but also provides another unfair public subsidy by-passing the EU´s regulations on state aid and competitiveness. NGOs also called the EU for considering a change in the requirement for a minimum limit of €5 million for individual ISPA projects. They argued that such a limit represented a direct incentive for developing overestimated projects for which capacities far exceed the real needs. [18] This position was repeatedly supported also by Minister of Environment and other representatives of the state administration and municipalities in Slovakia. Surprisingly, the Slovak press agency published information in December 2001, that the EU will support also smaller projects from ISPA program. [19] Although Brussels is not in favour of decreasing the €5 million limit for one project it could potentially support clusters of smaller projects submitted at once. Transport sector Overall priorities of ISPA in transport sector include „infrastructure projects which encourages sustainable forms of moving people and goods, particularly projects which are of Community interests, identified at the Helsinki and Crete conferences“. [20] However, transport infrastructure plans proposed by the Slovak Government to its EU partners at these conferences were developed during the period of the authoritarian government of Vladimir Meciar in a highly non-transparent manner lacking any independent cost-benefit, least-cost, and opportunity cost analyses as well as strategic environmental impact assessment. Therefore, trans-European network (TEN) corridors in Slovakia merely copy old governmental schemes developed without any public participation. As a result, they represent an explicit negation of what could be considered as policy encouraging sustainable forms of transport: the plans prefer individual transport at the expenses of public transport and the construction of international corridors at the expenses of developing local networks. According to a list of priority projects in transport sector for 2000-2006 period €458.9 million are planned for construction of highways and roads and €588.5 million for railway infrastructure. More then 81 % of the planned investments are to be concentrated in West-North Slovakia as a part of multimodal corridors No. Va and VI (as defined in Transport Infrastructure Needs Assessment - TINA) and the only project outside these corridors is 26 km highway section located in East Slovakia. [21] In this respect the ISPA investment strategy contradicts the very spirit of EU´s regional policy and instead of alleviating sharp social and economic disparities among the regions it will further deepen them. For example, investments are not planned to fix deteriorating regional and local rail infrastructure and machinery but instead the most developed railway sections in the country will be modernized. In terms of the proposed highway projects, they represent a key segment of the state highway program, the largest public infrastructure investment in the country. The program does not only contribute to the growing indebtedness of Slovakia but it also blocks a significant portion of public funds for the development of more effective, less costly, socially acceptable, regionally more balanced and environmentally more sustainable alternatives. “It is an irony that inclusion of E 50 and E 75 roads into pan-European transport corridors in the mid-nineties became the major argument of construction industry to justify this extremely wasting program”, states Friends of the Earth in its statements at the conference on structural funds held in Bratislava in February 2002. Also in the transport sector, the absence of effective public control creates a fertile ground for irregularities in the implementation phase. In December 2001, for instance, media published an article that suggested a manipulation of the tendering process concerning a €41 million railway project. [22] In January 2002, the Slovak government adopted an updated National ISPA strategy for transport. The new document, however, does not include any changes of priorities but it represents a mere extension of the list of projects within the VI. Corridor in order to make them eligible for the expected increase of ISPA funds, and after accession also Cohesion funds. The new estimated volume of ISPA-funded transport projects as proposed in the strategy is €1257.8 million. However, according to Slovak NGOs, the national transport priorities as well as the whole National ISPA strategy for transport and ISPA investment strategy must be substantially reviewed and screened in a transparent and participatory process of strategic environmental assessment. SAPARD The National Programme for the Adoption of the Acquis (NPAA) adopted and updated each year by the candidate countries in consultation with the EC sets out how the country concerned will prepare for accession in each sector. The NPAA includes a timetable for achieving the objectives and, where possible, the costs and human resources required. In agriculture, the most specific type of support for achieving this is through the Special Accession Programme for Agriculture and Rural Development (SAPARD). SAPARD is to provide financial assistance for restructuring the agriculture and rural sectors of candidate countries leading up to accession. It has two main priorities: to help each country implement the acquis communaire and to solve priority and specific problems related to developing a sustainable agricultural sector and rural areas. Candidate countries take full responsibility for managing investment projects from selection to final payments and must comply with the EC legislation for implementing the European Agricultural Guidance and Guarantee Fund. SAPARD will thus help the countries to prepare for effective utilization of the EU structural funds after accession. For the period 2000 and 2006, the EU allocated approximately €18.3 million per year for SAPARD for Slovakia. Since Slovakia still has not fulfilled the conditions for starting the program, the EC agreed that funds allocated for 2000 and 2001 may be utilised up to the end of 2002. All SAPARD projects will be co-financed by the EU and the candidate country. For non-commercial projects and public sector projects, SAPARD contribution may reach a maximum of 75 %, with a 25 % co-financing from the candidate country. For revenue generating investment, the minimum rate for private investment is 50 %. Technical assistance can be funded up to 100% from SAPARD. The conditions for the transfer of allocated funds to the candidate countries include adoption of a seven-year Rural Development Plan; accreditation of a special SAPARD agency and development infrastructure for effective implementation of selected measures as defined in the Rural Development Plan. Rural Development Plan Although allocation of funds for each candidate country begins in 2000, due to various objections by the EC the RDP was endorsed by the STAR Committee of the DG Agriculture in October 2000. The RDP should be updated on annual basis (the newest RDP update for Slovakia was approved by the STAR Committee in February 2002). The RDP sets out the measures which Slovakia believes are necessary to implement the acquis and resolve priority problems within the agricultural sector, including the eligibility rules for funding and the intended beneficiaries. The measures under three priorities were defined by the EC and each country could pick some of them according to the national preference. Slovakia selected the following ones: [23] Priorities / Measures Improvement of the agricultural production sector including the food industry 1. Investment in agricultural enterprises 2. Improvement of processing and marketing of agricultural and fish products 3. Setting-up of producer groups Sustainable rural development 4. Diversification activities in rural areas 5. Forestry 6. Agricultural production methods designed to protect the environment and maintain the countryside 7. Land consolidation Development of human activities 8. Development of human resources 9. Technical assistance The original intention of the Slovak Ministry of Agriculture was to focus the SAPARD funds mostly for development of regions with unfavorable natural conditions for the agriculture. Brussels, however, rejected this idea arguing that SAPARD does not represent any program to protect social or natural environment but rather it should improve competitiveness, production, processing and marketing of the Slovak agriculture and forestry. Results of interference from the EC during preparation of the RDP is, therefore sometimes questionable from the sustainability point of view. For example, a list of future SAPARD investments in the forestry sector include mostly logging and transport machinery and equipment for primary timber processing. [24] Similarly, based on pressure from Brussels the small farmers, forest owners and entrepreneurs in tourism will be handicapped. For example, in tourism development only the facilities with more than 10 beds will be eligible for SAPARD support. In the last update of the RDP conditions for small farmers for receiving support further worsened. SAPARD Agency The agency will hold the sole responsibility for selecting and managing projects, arranging finance and carrying out controls. Although it has been operating since 1st January 2000 and it employs around 90 staff, the agency has still not been able to obtain EC accreditation. There are eight regional SAPARD agencies operating in each NUTS3 regional unit in Slovakia. [25] The quality of personnel, the lack of structures for implementation of individual measures and deficiencies reported by the audit company were the major reasons for not obtaining accreditation. Slovakia still has not submitted the needed documentation regarding the selected measures for approval to Brussels. It is assumed that implementation of each measure will proceed according to the plan, methodology, and be administered within a clear structure. Slovak officials at the SAPARD agency expect that by the end of May five measures will be accredited (with the rest by the end of 2002) and that first projects could be supported in 2002. Otherwise Slovakia will lose the allocated sum. CONCLUSION To date, the experiences with pre-accession assistance in Slovakia show that the transformation of society towards democracy, transparency and sustainability has not become a real Government priority. Therefore, neither adequate support in technical nor political terms has been provided for this purpose. Additionally the EU has also been incapable of creating effective mechanisms to ensure that Slovakia fulfils the basic goals of such a transformation. This opens a few pertinent questions. First, how much greater would the effect of the EU funds up to now have been if the decisions regarding them had been made transparently and democratically, with respect for societal priorities? Second, what measures will Brussels and Bratislava take to thoroughly replace the present system with a new, transparent, and democratic system for objectively administrating the pre-accession and subsequent structural funds? Third, how much will it cost and will these measures be implemented in time? The recent corruption scandal placed these questions temporarily on the top of the political agenda in Slovakia. It is in the general interest of both Slovakia and the EU to take seriously the lessons from it and to translate them into real political practice. NOTES: [1] Report #1/2001 by the committee delegation on its visit to Slovakia from 19th to 22nd June 2001. [2] Proposals and Recommendations for Reforming the Management of PHARE Funds in Slovakia. FoE-S, October 2001. [3] The implementation process of the PHARE Programme in principle consists of five phases: procurement, contracting, financing, monitoring, and evaluation. [4] The programming consists of preparation of programming stage, identification of projects, projects preparation, submission of projects for approval by the EC, and preparation and signing of Financing Memorandum. [5] It is, therefore, important to consider Slovakia´s experiences with the CFCU since similar units are also being established in other countries. [6] An internal 1999 EC audit evaluated the entire PHARE CBC programme in Slovakia as being unsatisfactory, which is the second worst level on a scale of five. [7] „A Clear Road to Union Funds“, Pravda, 28th April 2001. [8] Gabriela Kaliska: „Former Government Official Denies Accusation“, Pravda, 7th April 2001. [9] Naturally, absence of information and changing rules heavily affected the effectiveness of participation of NGO representatives in different committees, working groups and commissions at various phases of both programming and implementation. [10] For example, representative of the EC Delegation confirmed, that the Executive National Aid Coordinator Roland Toth spread disinformation during programming of PHARE ECOSOC in October 2000. [11] Daily SME, 4th September 2001. [12] Report #1/2001 by the committee delegation on its visit to Slovakia from 19th to 22nd June 2001. [13] Due to approval of the Implementation plan for Chapter on Environment by the EC in December 2001 the Ministry of Environment plans to ammend the National ISPA strategy for environment in order to udpate priority actions as defined in the implementation plan. [14] The then version of the National ISPA strategy for environment was classified by the EC as unsatisfactory. It has to be noted, however, that one of the reasons for delay in submitting the national ISPA strategy was missleading and unclear instructions from the EC. [15] ISPA report, DG Regio, February 2001. [16] At that time R. Toth´s post concentrated a determining power in both programming and implementation of projects funded from pre-accession assistance, especially PHARE. Gabriela Kaliska: „Former Government Official Denies Accusation“, Pravda, 7th April 2001. [17] Katarina Zackova: „Slovakia is even not able to use ISPA funds which are offered“, TREND, 16th January 2002. [18] According to NGOs the ISPA-funded wastewater treatment plant in Banska Bystrica could be replaced by significantly less expensive sewage system. Current limit for ISPA projects poses a risk that smaller cities and villages will submit projects of large-scale facilities in order to meet eligibility criteria. Source: Position Paper of the Slovak NGOs. Consortium ETP Slovakia, REC Slovakia and DAPHNE, November 2000. [19] „The EÚ will support also smaller regional projects“, SME, 11th December 2001. [20] ISPA: Sectors receiving assistance. Source: http://www.europa.eu.int/comm/regional_policy/activity/ispa/sector_en.htm [21] Position Paper of the Slovak NGOs. Consortium ETP Slovakia, REC Slovakia and DAPHNE, November 2000. [22] „Prime Minister to Railways, Railways to Prime Minister“, SME, 11th December 2001. „Changes in Selection Committee Did Not Endanger Tender“, SME, 7th December 2001. [23] Thanks to NGO participation in preparation of the RDP, a measure #6 was included as a part of second priority. [24] The export of logs from Slovakia was restricted by licenses prior to 1996. From 1997, due to agreements between the EU and Slovakia, timber volume quotas were relaxed and, subsequently, export of wood substantially increased. In 1998, Slovakia managed to decrease the export of raw wood by introducing export quotas. However, these quotas were cancelled due to the pressure from the EU by the end of that same year. In 1999, Slovakia exported the largest amount of timber in the last ten years. SAPARD may support this tendency. [25] NUTS - Nomenclature of Territorial Statistical Units.