C URRENT T OPIC

The Phare Programme Monika âunderlíková, National Bank of The Phare Programme was established in 1989 on the basis of a decision by the Council of Ministers of the European Union (EU), the aim being to support the economic and political transformation of , and, from 1990, the Czechoslovak Federal Republic. At the Copenhagen Summit of 1993, the Phare Programme was included among the means for expediting the accession preparations of EU candidate countries; it was further expanded in 1996 to encompass 13 countries of Central and Eastern Europe, and became the main form of financial and technical cooperation between the EU and candidate countries in the pre-accession period. The financial support provided to the accessi- the EU, and with the accreditation of selected on process from the Phare Programme was aimed implementation agencies, Slovakia took full res- at institution building, for which the EU set a limit ponsibility for the prepared projects. In accordan- of 30% of the allocated funds, and at econo- ce with Council Regulation (EC) No 1266/1999, mic and social cohesion – covering mainly inve- the EC Delegation now simply coordinates and stments – for which it was possible to draw up monitors the financed programmes. to 70% of the funds provided that projects were The basic allocations were made on the basis co-financed at a minimum level of 25%. of financial memoranda signed by the Slovak The financial allocations were conditioned on Government and the EC. Since the Phare Fund the fulfilment of the Copenhagen criteria for the represented public funds of the European Union, accession of associate countries to the EU. The they had to be used transparently. The financing criteria were set down in the accession documents of projects was conducted in accordance with the – the Accession Partnership and the National Plan principles of public procurement, and until last for the Adoption of the Acquis Communautai- year it was governed by “The Practical Guide to re. The fulfilment of the objectives was evalua- Contracting under the Budget of the European ted by the European Commission on a regular Union“. All projects are at present contracted basis until Slovakia became a member of the EU. solely under the Public Procurement Act. A country receiving EU funds through the Phare Responsibility for the programming and mana- Programme was also required to ensure a func- gement of projects at the sectoral level lies with tioning infrastructure. In 1996 the Government the respective sector coordinators. Insofar as it Office of the Slovak Republic took over from the concerns the Slovak banking sector, the Phare Ministry of Foreign Affairs of the Slovak Repu- Programme has been carried out since 1993 by blic as the body responsible for the coordinati- the project management unit established at the on of pre-accession assistance – under the lea- National Bank of Slovakia (NBS). The Phare Pro- dership of the deputy prime minister for Euro- gramme for the banking sector, including pro- pean integration, serving also as the national coor- jects for the NBS, came under the category of dinator for foreign assistance. In 1998, as part institution building and it was aimed at prepa- of the gradual decentralization of the manage- ring the entry of Slovakia into the single market ment of the Phare Programme, two bodies were of the European Union and the European Sys- established under the Ministry of Finance of the tem of Central Banks. Projects carried out in the Slovak Republic (MF SR): the National Fund, which banking sector followed priorities of the Acces- administered the funds provided for the whole sion Partnership and the National Plan for the country, and the Central Financial and Contrac- Adoption of the in the ting Unit, which took over from the project units chapters of Freedom to Provide Services (3), Free the organization of tenders and the execution of Movement of Capital (4) and Economic and contracts for the appointed implementation units. Monetary Union (11). Phare technical assistan- In 2002, the MF SR became the payment aut- ce most frequently took the form of know-how, hority for all EU funds provided to Slovakia. EU specialist courses, seminars and fellowships, con- funds represent income of the state budget and sultations, expert opinions and institutional coo- are subject to budgetary discipline. All such pay- peration. ments are made through the State Treasury. Over thirteen years, the project management The changes included a shift in competences unit at the NBS prepared almost 60 projects under from the European Commission to its Delegati- the Phare Programme, representing an allocati- on in Bratislava, which approved all the program- on of more than EUR 17 million. Most of the mes. The activities of the EC Delegation were funds were contracted to projects for commer-

decentralized following Slovakia's accession to cial banks. As the implementation of the indivi- BIATEC

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n o t t p p : : : t n r r r o : o a j c j e e t c c BIATECo visory institutions. nical supportfortheintegrationofbothsuper- banks andthecapitalmarket,legaltech- lopment andimprovementofsupervisionover nism forsettlingnon-performingloans,thedeve- of thebankingsector'sdebtsandadraftmecha- pose oftheirsubsequentprivatization,analysis mes ofthelargestcommercialbanksforpur- on), auditsandfollow-uprestructuringprogram- tute ofBankingEducationreceivedaccreditati- ce andbankingsector(forwhichtheNBSInsti- tem intheformofdistancelearningfinan- banks, theintroductionofaspecialisttrainingsys- included theestablishmentofanassociation projects addressingconceptualquestions;these – towardsfinancingasmallernumberoflarger and theintroductionofnewaccountingstandards of mortgagebankingandtheusebankcards, tlement systems,supportforthedevelopment quality improvementofexistingpaymentandset- organization ofspecialistandlanguagecourses, tion ofnewmodelsformonetaryanalyses,the an analysisofthecapitalmarket,introduc- smaller projectsaddressingcurrentneeds–e.g. moved awayfromfinancingalargenumberof dual programmesprogressed,theECgradually ner BurseA.G.er2005 2004 andOctober2005bytheconsortiumWie- the FinancialSector",implementedbetweenJune preceding project"StrengtheningSupervisionof tal AdequacyAccord: king activitiesinaccordancewiththeBasel2Capi- basis, andonthenewassessmentofrisksinban- the transitiontosupervisiononaconsolidated tal market,insuranceindustryandpensionfunds, the implementationofEUdirectivesoncapi- addressed currentsupervisoryneedsrelatedto from successfullyaccomplishedprojectsthat Programme werecompleted.Theyfollowedon the pre-accessionmemorandafor2003Phare C t t r S 2 : : (originally alsotheFinancialMarketAuthority) National BankofSlovakia : W The projectwasthelogicalcontinuationof In October2006,thelasttwoprojectsunder 0 technical assistance 0 National BankofSlovakia AXON PROS.R.O. October 2006 December 2005 €

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i s s u i OPIC o p n e r v i s i o n project's plannedobjectiveswere100%fulfilled. According tothefinalsteeringcommittee, attended by600workersoftheFMAandNBS. total of1,188daysandorganized36seminars ted fortheproject;theyworkedtogethera may befoundonline at:http://www.vlada.gov.sk/. grammes and projects oftheEuropeanUnion tural funds.Moredetailedinformation onthepro- as arecipientoftechnicalassistance fromstruc- ber 2006. brought toasuccessfulconclusion on31Octo- maintenance oftheapplication.Theprojectwas and trainingthesupervisor'sstaffinuse and testing,deliveryoftherespectivedocuments, supervision. ThesupplyincludedSWinstallation ted bycapitalmarketentitiessubjecttoNBS lection, evaluationandarchivingofdatasubmit- be usedonadailybasisfortheelectroniccol- supervision systemforthecapitalmarketandto NBS, inordertomeettheneedsofcurrent and technical/operationalrequirementsofthe in accordancewiththefunctionalspecification was thesupplyofaSWapplication,developed of therespectivetender.Theproject'sobjective company AXONPROS.A.,Bratislava,thewinner Underthepensionfundmodule,BBAarran- • Underthecapitalmarketmodule,BBAheld • Underthebankingmodule,BBAheldaseries • vision ofcreditinstitutions. with regardtotheBasel2CapitalAccord,super- market functioningandcross-borderservices,and, financial conglomerates,electroniccommerce, insurance industry,supervisionofpensionfunds, risk-oriented supervisionofthecapitalmarketand integrated supervision,tobuildupasystemof her improvethequalityandeffectivenessof supervision, theaimofprojectwastofurt- The Slovakbankingsectorwas notidentified This projectfortheNBSwascarriedoutby to thePensionFundsAct. seminars, andproducedadraftamendment es ofsupervision,heldaserieseducational ged numerousconsultationsoncurrentissu- kets inFinancialInstrumentsDirective(MiFID). securities, andtheimplementationofMar- tive oncollectiveinvestmentintransferable vision –e.g.brokeragefirms,theUCITSDirec- tations inregardtothecurrentissuesofsuper- several seminarsandprovidedrunningconsul- rantee Fundandforinsurancemediation. ons fortheBureauofInsurers,InsuranceGua- a SWformat,andarrangedspecializedmissi- duced asupervisionframeworkplanaswell vision inlinewiththeSolvencyIIaccord,pro- organized severalseminarsonoff-sitesuper- Under theinsuranceindustrymodule,BBA with therequirementsofBasel2. manuals foron-sitesupervisioninaccordance by theNBS,anditproducedtwocompendium ning intheSWCADcalcandCADmarktused of Basel2,consolidatedsupervision,andtrai- of specialseminarsonriskswithinthescope In regardtotheintegrationoffinancialsector A totalof18foreignexpertswerecontrac-